Business and Project Management
What is tested
This domain tests the commercial side of construction: contract formation and documents, delivery methods, scheduling, cost control, change management, submittals and RFIs, payment, and closeout. Expect scenario questions that ask who bears risk or what notice or action is required.
Core rules
- Contract types: lump sum (fixed price), unit price (priced per measured unit), cost-plus with a fee, and guaranteed maximum price (GMP). In a GMP, the contractor shares savings only if the contract says so; otherwise the owner keeps them.
- Changes: a change order is priced and signed by both parties; a construction change directive (CCD) orders work before price is agreed and is priced later.
- Schedule: the critical path is the longest path; total float = late start minus early start. Delays on critical activities move completion unless mitigated.
- Payment: pay applications are supported by a schedule of values and lien waivers; retainage is held per contract.
- Closeout: O&M manuals, as-builts, warranties, punch list, and final lien waivers.
Worked example
A project has two paths: A(3 d) to B(4 d) to C(5 d) = 12 days, and A to D(2 d) to C = 10 days. D has 2 days of total float. If D slips 3 days, its path becomes 13 days and the project is delayed 1 day. Reasoning: float absorbs only 2 days.
Traps
Treating a verbal direction as a priced change; missing contractual notice periods; assuming GMP savings belong to the contractor; confusing float with free float; releasing retainage without final waivers.