Contracts and Cost Control
This domain tests the money side of practice: which contract model fits which project, how quantities and payments are measured, and how variations and claims are priced and proved.
Contract forms
Lump sum, measurement based on a bill of quantities (כתב כמויות), cost-plus, and design-build. Establish the order of precedence among contract documents, because drawings, specification and bill rarely agree perfectly.
Cost control
Measured quantities at agreed rates, monthly payment certificates, retention (often 5–10% until defects are remedied), performance bonds, advance payment guarantees, index linkage to the Construction Inputs Index, and a contingency that is not spent at the first variation.
Variations and claims
A written instruction, priced before or after execution; notice periods that must be met; delay and disruption claims that require records rather than assertions.
Worked example
A monthly certificate shows 120,000 NIS of measured work on a 1,000,000 NIS contract with 5% retention. Reasoning: retention is 6,000 NIS, so the certified payment is 114,000 NIS. If the contract is index-linked, the index is applied to the work executed in the period before retention is deducted. Payment is against measured quantities, so an item not measured on site is not certified, even if it appears in the bill.
Traps
Certifying quantities not measured; missing the notice period for a variation; assuming retention is released at handover rather than at the end of the defects period; ignoring the order of precedence between documents.