Maintenance Planning, Budgeting, Procurement, and Contract Administration
This domain tests how you plan maintenance, build and defend budgets, buy services, and administer contracts. Expect questions on PM scheduling, capital versus operating budgets, bid comparison, contract types, change orders, and closeout.
Core rules and concepts
- Maintenance planning: choose reactive, preventive, condition-based, or predictive tasks by criticality and failure consequence. A PM that does not prevent failure or find degradation is just cost.
- Budgeting: separate operating and capital; baseline utilities by weather and occupancy; use life-cycle cost, simple payback, and NPV rather than first cost alone.
- Procurement: write a clear scope and specification; use IFB for sealed price competition, RFP when evaluating approach, and RFQ for qualifications. Prequalify bidders, require unit prices and alternates, and level bids on total delivered cost.
- Contract administration: know whether the contract is lump sum, unit price, T&M with a not-to-exceed cap, or IDIQ; control submittals, RFIs, change orders, schedules, insurance, retainage, lien waivers, and warranties.
- Closeout: punch list, testing, training, spare parts, as-builts, and final payment are contract milestones, not favors.
Worked example
A VFD retrofit is bid at $24,000 installed and projected to save 40,000 kWh/year at $0.18/kWh, or $7,200/year. Simple payback is $24,000 ÷ $7,200 = 3.3 years. During the job, a $3,000 change order is approved and measured savings fall to 30,000 kWh, or $5,400/year. Final payback is $27,000 ÷ $5,400 = 5.0 years. The project may still be sound, but the decision should use the final number and life-cycle cost, not the sales estimate.
Traps that cost marks
- Comparing bids on base price only and ignoring alternates, unit prices, and schedule.
- Using simple payback as the only financial test.
- Approving change orders without written scope and price backup.
- Confusing substantial completion with final acceptance.
- Skipping operator training and warranty documentation.