Midterm Examination

Construction Project Management

Coverage: Chapters 1–17 (the planning half of the book). Format: Open book, open notebook, closed device. 120 minutes. Total: 100 points.

Instructor notes — read before using this

How to subset it. The syllabi use different midterm scopes:

Syllabus Midterm covers Use these sections
15-week university Ch 1–7, 11 A, B, C1, C2, D1, D3, E1 (60 points, 75 minutes)
Two-semester, Semester I Ch 1–7 A, B, C1, D1, E1 (50 points, 60 minutes)
Two-semester, Semester II Ch 18–26 Use the final's Part B and C instead
Self-paced All of it, unproctored The whole paper

Why open book. Every answer in this book is public — the quiz answers sit behind <details> blocks and Appendix J has worked solutions. Assessing recall would be assessing nothing. This paper assesses whether a student can do the work with the reference material in front of them, which is also the condition under which they will do it professionally.

Timing warning. Part C takes students longer than instructors expect. If you are running 90 minutes rather than 120, drop C3 and reduce Part E to one question.

Calculators permitted and required. Answers without shown work receive no credit in Parts C and D, even when correct.

PART A — Definitions and Distinctions (16 points)

Two or three sentences each. Precision matters more than length.

A1. (2) Distinguish substantial completion from final completion, and name one thing each one triggers.

A2. (2) What is the difference between the estimating contingency and the construction contingency, and who typically owns each?

A3. (2) Define total float and free float, and give one sentence on when they differ.

A4. (2) What does an order of precedence clause do, and name one thing it does not resolve.

A5. (2) Distinguish a hold point from a witness point in an inspection and test plan.

A6. (2) What is SFCA, and why is it not derivable from concrete volume?

A7. (2) Distinguish bid shopping from legitimate post-bid scope clarification.

A8. (2) What is the difference between a payment bond and a performance bond, and who is protected by each?

PART B — Short Answer (18 points)

A paragraph each.

B1. (4) Kestrel bid the same building two ways: hard-bid design-bid-build and CM at Risk with a GMP. The GMP came in higher. Explain why the higher number can be the better value for the owner, and name the two places the difference actually sits.

B2. (4) A project manager says: "We're 60% through the budget and about 60% built, so we're fine." State what is wrong with this reasoning and what number should have been quoted instead.

B3. (4) Explain why general conditions are time-dependent, and use that fact to explain why every schedule slip is automatically a cost overrun even when no additional work is performed.

B4. (3) A scheduler shows you a network with 40 days of float on the enclosure path. Name three schedule defects that could make that float illusory.

B5. (3) Why does the book claim that the most profitable decision most contractors make is the decision not to bid? Support it with the hit-rate arithmetic.

PART C — Calculations (36 points)

Show all work. An answer without work receives no credit.

C1 — Quantity takeoff and unit cost (12 points)

A foundation package requires 14,200 SFCA of wall formwork.

The crew is 1 foreman at $46.00/hr base, 3 carpenters at $34.00/hr base, and 1 laborer at $26.00/hr base. The burden multiplier is 1.48 for all classifications. The crew produces 640 SFCA per 8-hour crew-day. Material (form ties, release agent, lumber consumables) is $0.62/SFCA. Equipment is allocated at $180/crew-day.

(a) (3) Compute the burdened crew cost per hour. (b) (2) Compute the crew cost per day. (c) (3) Compute the unit cost per SFCA, including material and equipment. (d) (2) Compute the total cost for 14,200 SFCA. (e) (2) Production drops to 540 SFCA per crew-day. Compute the new unit cost, and state in one sentence why the percentage increase in unit cost is not equal to the percentage drop in production.

C2 — CPM (14 points)

Activity Duration (WD) Predecessors
A 4 —
B 7 A
C 5 A
D 6 B
E 9 C
F 3 D, E
G 5 E
H 4 F, G

(a) (5) Run the forward pass. Give ES and EF for every activity. (b) (5) Run the backward pass. Give LS and LF for every activity. (c) (2) Compute total float for every activity and identify the critical path and the project duration. (d) (2) Activity C slips 4 days. State the new project duration and whether the critical path changed. Explain in one sentence.

C3 — Markup, margin, and general conditions (10 points)

A project has a cost of work of $8,400,000. General conditions are estimated at $620,000 over a 410-calendar-day contract.

(a) (2) Compute the general-conditions daily burn rate. (b) (3) The company requires a 6.5% margin on the final contract amount. Compute the required markup percentage and the contract amount. (Ignore bonds and insurance.) (c) (2) A colleague instead applies a 6.5% markup to cost. Compute that contract amount and the margin it actually delivers. (d) (3) The project finishes 22 calendar days late with liquidated damages of $1,900/CD. Compute the total cost of those 22 days and express it as a percentage of the margin from (b).

PART D — Applied Judgment (20 points)

D1. (7) You are handed a set of construction documents. The architectural drawings show a two-hour rated corridor wall with one layer of 5/8-inch Type X gypsum board each side. Specification section 09 21 16 requires two layers each side for a two-hour assembly. The life-safety plan shows the corridor as one-hour.

(a) Which document governs, and what determines that? (b) What do you do first, and within what time frame? (c) Draft the substance of the RFI in three or four sentences. (d) State what this costs if you guess wrong and build it, and why.

D2. (7) An owner asks you to "value-engineer" $2.1M out of a project that came in over budget. Your team proposes five items:

  1. A different structural bay spacing achieving the same program at lower cost — saves $640,000
  2. A cheaper facade system with lower thermal performance — saves $780,000
  3. Deferring the second-floor fit-out to a later contract — saves $520,000
  4. Reducing the construction contingency from 3% to 1% — saves $410,000
  5. Consolidating three mechanical units into one larger unit — saves $185,000

Classify each as genuine value engineering or something else, with one sentence of reasoning. Then state which one you would refuse to present to the owner and why.

D3. (6) A subcontractor's bid is $340,000 below the next lowest of five bidders on a package you estimated at close to the second-lowest number. You have ninety minutes until your own bid is due.

State what you do, in order, and what you carry in your bid if you cannot resolve it in time. Justify your decision commercially, not just cautiously.

PART E — Extended Response (10 points)

Choose ONE. Roughly one page.

E1. The book claims that construction management is the management of risk — that every contract type, schedule sequence, and contingency line exists to decide who owns which risk and what it costs.

Using three specific examples from three different chapters, defend or challenge this claim. At least one example must involve a risk that, in your judgment, is allocated to the wrong party in common practice.

E2. The book claims the project is built twice — once on paper and once in the field — and that the first build determines the second.

Trace a single failure through both builds: identify a decision made during planning, show how it propagated into the field, and quantify the difference between fixing it in each place. Use the book's canonical figures or your own project.

E3. A colleague argues that detailed preconstruction is overhead — that owners do not pay for it and that the money is better spent on field staff who actually build things.

Make the strongest possible case for their position, then rebut it. Your rebuttal must include at least one situation in which your colleague is right.

Answer Key and Marking Notes

Instructor answer key

Part A

  • A1. Substantial completion: the owner can occupy or use the work for its intended purpose; triggers warranty start, transfer of care/custody/control, cessation of LDs, retention reduction. Final completion: all work complete, punch closed, documentation delivered; triggers final payment and retention release. (Full credit for any one correct trigger each.)
  • A2. Estimating contingency covers incomplete design; construction contingency covers identified execution risk during construction. In a GMP the construction contingency is usually the contractor's to manage within the guarantee, with unused amounts subject to the savings split.
  • A3. Total float = LS − ES (= LF − EF): delay available without extending the project. Free float: delay available without delaying any successor's early start. They differ where an activity feeds a merge node — its total float may be shared with other activities on its chain while its free float is zero or smaller.
  • A4. It establishes which contract document governs when two conflict. It does not resolve a conflict between two drawings of the same discipline, or between two provisions of equal rank — that requires an RFI.
  • A5. Hold point: work stops until the inspection is performed and released. Witness point: the party is notified and may attend, but work proceeds if they do not.
  • A6. Square feet of contact area — the area of formwork touching concrete. It depends on the geometry of the member, not its volume: a thin tall wall and a thick short wall of equal volume have very different SFCA. This is where beginners lose the most money.
  • A7. Bid shopping: disclosing a subcontractor's number to a competitor to obtain a lower one after bids are in. Legitimate clarification: resolving scope ambiguity with a bidder without disclosing others' prices. The line is disclosure of a competitor's number.
  • A8. Payment bond protects subcontractors and suppliers (their remedy when they cannot lien, e.g. public property). Performance bond protects the owner against contractor default.

Part B

  • B1. (4) The GMP carries priced contingency and escalation that a hard bid either omits or hides; it also buys preconstruction input that reduces later change orders. The difference sits in (i) explicitly priced contingency and escalation, and (ii) the value of constructability input during design. Full credit requires naming both.
  • B2. (4) Percent of budget spent is cost-to-date, which says nothing about what remains. The correct question is the cost-to-complete forecast: quantity remaining × the current actual unit rate. A job 60% billed and 75% spent looks fine on this reasoning and is already in trouble.
  • B3. (4) General conditions buy time-based resources — staff, trailer, temp power, cleanup — so their cost accrues per day regardless of work performed. Extending the schedule extends that accrual. Credit for stating the daily rate concept explicitly.
  • B4. (3) Any three of: date constraints suppressing the calculation; open ends (no predecessor or successor); soft logic presented as hard; excessive or negative lags; durations padded at activity level; out-of-sequence progress not reconciled.
  • B5. (3) Must include the arithmetic: bid cost ÷ hit rate = cost per win, and a losing job at typical margins consumes the profit of several good ones. Credit for quantifying, not just asserting.

Part C1

  • (a) Base crew/hr = 46 + (3 × 34) + 26 = $174.00. Burdened = 174 × 1.48 = $257.52/hr
  • (b) $257.52 × 8 = $2,060.16/day
  • (c) Labor per SFCA = 2,060.16 ÷ 640 = $3.219. Equipment = 180 ÷ 640 = $0.281. Material = $0.620. Unit cost = $4.12/SFCA
  • (d) 14,200 × 4.12 = $58,504
  • (e) Labor = 2,060.16 ÷ 540 = $3.815; equipment = 180 ÷ 540 = $0.333; + $0.620 = $4.77/SFCA. Production fell 15.6% but unit cost rose only 15.8% on the time-based components — material is quantity-based and does not scale with production, so the overall increase is diluted. (Credit the reasoning, not the exact percentage.)

Part C2

Act Dur ES EF LS LF TF
A 4 0 4 0 4 0
B 7 4 11 10 17 6
C 5 4 9 4 9 0
D 6 11 17 17 23 6
E 9 9 18 9 18 0
F 3 18 21 23 26 5
G 5 18 23 21 26 3
H 4 23 27 26 30 3

Note: H's predecessors are F (EF 21) and G (EF 23), so H starts at 23 and finishes at 27. Project duration = 27 WD. Critical path = A–C–E–G–H (G and H carry 3 days only because the project finish is set by H at 27; set LF(H) = 27 and the path A–C–E–G–H shows TF = 0 throughout).

Marking note: accept either convention (project finish at EF of H, or a stated late finish), provided the student is internally consistent. Award (c) on the identification of A–C–E–G–H and 27 WD.

  • (d) C slips 4 days → C: 4→13, E: 13→22, G: 22→27, H: 27→31. New duration 31 WD. The critical path does not change — C was already critical, so the slip passes straight through. Full credit requires noting that a slip to an activity already on the critical path extends the project one-for-one and shifts nothing.

Part C3

  • (a) 620,000 ÷ 410 = $1,512.20/CD
  • (b) Contract = cost ÷ (1 − margin). Cost here = 8,400,000 + 620,000 = 9,020,000. 9,020,000 ÷ 0.935 = $9,647,059. Markup = (9,647,059 − 9,020,000) ÷ 9,020,000 = 6.95%
  • (c) 9,020,000 × 1.065 = $9,606,300. Margin = 586,300 ÷ 9,606,300 = 6.10% — short of the 6.5% target by 0.4 points, roughly $40,759.
  • (d) 22 × (1,512.20 + 1,900) = 22 × 3,412.20 = $75,068. Against the (b) margin of 9,647,059 − 9,020,000 = $627,059, that is 12.0% of the margin.

Part D — marking guidance

  • D1. (a) The contract's order-of-precedence clause governs; many provide that the more stringent requirement controls, and specifications commonly govern over drawings on quality. Full credit requires the student to say "go read the clause" rather than assert a universal rule. (b) Do not build it; issue an RFI immediately, within the contract's notice period. (c) The RFI must cite all three documents, state the conflict factually, propose a resolution, and request a response date. (d) Building the cheaper assembly where the more stringent governs means demolition and rework behind finished work, plus a failed inspection and a possible occupancy delay.
  • D2. Genuine VE: 1 (same function, lower cost) and 5 (same function, consolidated). Not VE: 2 (reduced performance — a scope cut with a life-cycle cost), 3 (deferred scope that returns as a change order, usually at a premium), 4 (removing contingency does not reduce cost; it transfers risk to the owner while pretending to save). Refuse #4 — a CM who lets an owner "save" money by deleting the reserve for identified risk has done the owner harm.
  • D3. Strong answers: call the bidder and scope-check specifically rather than generally; compare against the other four to see whether the gap is one bidder low or four bidders high; check for named exclusions; check the addenda acknowledgment. If unresolved, carry your own estimated number or the second-low with a stated qualification — do not carry the outlier. Award the commercial reasoning: carrying an unverified low number transfers the subcontractor's error onto your margin.

Part E — marking guidance

Assess argument quality, not position. Full credit requires specific examples with figures or named mechanisms, and — for E1 and E3 — genuine engagement with the opposing case. A student who cannot state the strongest version of the view they are rejecting has not earned the top band.

Point distribution summary

Part Topic Points
A Definitions and distinctions 16
B Short answer 18
C Calculations 36
D Applied judgment 20
E Extended response 10
Total 100

Suggested grade bands: 90+ ready for the second half · 80–89 solid · 70–79 proficient with gaps — identify which part and assign targeted Appendix B or Appendix J work · below 70 revisit Chapters 12 and 14 before proceeding, since everything downstream depends on them.