A finish hardware allowance is bought out below the stated allowance amount. What should happen?
Correct Answer
C) Reconcile the underrun according to the contract, often by crediting the owner.
Allowance balances are reconciled according to contract terms.
Why This Is the Correct Answer
Allowance balances are reconciled according to contract terms.
Why the Other Options Are Wrong
Option A: The contractor should keep the entire underrun automatically
In procurement and contracting, Keep the entire underrun automatically. is the wrong selection for Allowance underrun: the choice would not get the project to Reconcile the underrun according to the contract, often by crediting the owner.
Option B: The contractor should hide invoices from the owner
The trap in B is Hide invoices from the owner. That selection is wrong because the action skips the timing, documentation, or field-control step needed for Allowance underrun.
Option D: Convert the allowance to bid security
Choice D (Convert the allowance to bid security.) is rejected because it shifts the question into contract administration money flow.
Memory Technique
Remember allowance underrun by its jobsite consequence: the correct move points to Reconcile the underrun according to the contract, often by crediting the owner.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Allowance underrun" to confirm that Allowance balances are reconciled according to contract terms.
More NASCLA Questions
Bid instructions require bid security with each sealed bid. Which purpose should the estimator associate with that requirement?
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