AACE International CCP Exam - Topic 1 Question 18 Discussion

Actual exam question for AACE International's CCP exam

Question #: 18
Topic #: 1

[All CCP Questions]

In a fixed price contract the:

AContractor has no risk in the project

BContactor assumes all the performance risk

CContractor is paid for actual costs

DOwner has all the risk

Show Suggested Answer

Suggested Answer: C

In a fixed-price/lump-sum contract, the agreed price is fixed and generally not subject to adjustment based on fluctuations in costs, unless explicitly stated in the contract terms. Payment for adjustments in construction costs due to fluctuations in resource prices or delays is typically not allowed unless there is a specific provision for such adjustments, which is rare in fixed-price contracts. Therefore, the correct answer is C. In no situation.

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by Tresa at Feb 07, 2025, 11:55 AM

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Talia

5 months ago

Surprised to see people think A is true, that's not how it works!

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Carla

6 months ago

C is definitely wrong, they don’t get paid for actual costs.

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Regenia

6 months ago

Wait, isn't it the owner who has the most risk in these deals?

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Gene

6 months ago

Totally agree, fixed price means the contractor is on the hook!

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Vince

6 months ago

B is correct, contractor takes on the performance risk.

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Shay

6 months ago

I’m leaning towards A, but I’m not confident. I thought fixed price meant the contractor had to deliver within the budget, which sounds risky.

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Felix

7 months ago

I feel like option C is wrong because fixed price contracts don’t pay for actual costs, right? It’s more about the agreed price.

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Helga

7 months ago

I remember practicing a question like this, and I think the owner has some risk too, but the contractor definitely has to manage performance.

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Cory

7 months ago

I think the contractor takes on a lot of the risk in a fixed price contract, so maybe option B? But I'm not completely sure.

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Carman

7 months ago

Wait, I'm confused. Isn't the whole point of a fixed price contract that the contractor gets paid a set amount regardless of actual costs? I'll have to review my notes on this.

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Louvenia

7 months ago

Okay, I've got this. In a fixed price contract, the contractor takes on the performance risk, so option B is the correct answer. I'm feeling confident about this one.

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Josue

7 months ago

Hmm, I'm a bit unsure about this one. I know fixed price contracts involve some risk for the contractor, but I can't quite recall the specifics. I'll have to think this through carefully.

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Dong

7 months ago

This seems like a straightforward question about contract types. I'll need to remember the key differences between fixed price and other contract structures.

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Devorah

12 months ago

Well, at least the contractor won't have to worry about going over budget. That's a silver lining, right?

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Danica

10 months ago

C) Contractor is paid for actual costs

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Sheron

11 months ago

B) Contactor assumes all the performance risk

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Alexia

11 months ago

A) Contractor has no risk in the project

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Kiley

12 months ago

C? Really? That's just plain wrong. In a fixed price contract, the contractor is paid a set amount, not actual costs.

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Pok

12 months ago

D seems a bit too extreme. The owner has some risk, but not all of it. I'm going with B.

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Karl

10 months ago

I'm also going with B. It seems like the most reasonable option for a fixed price contract.

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Mattie

11 months ago

Yeah, B seems like the most balanced choice. The contractor should have some risk in the project.

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Christiane

11 months ago

I think B is the best option too. It's important for the contractor to have some stake in the project.

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Lorrie

11 months ago

I agree, B makes more sense. The contractor should assume some performance risk.

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Allene

12 months ago

I was going to choose A, but I guess that wouldn't make much sense since the contractor is the one taking on the risk.

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Christiane

11 months ago

C) Contractor is paid for actual costs

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Lashaun

11 months ago

That's correct, the contractor takes on the risk in a fixed price contract.

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Noel

11 months ago

B) Contactor assumes all the performance risk

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Audria

1 year ago

I think B is the correct answer. In a fixed price contract, the contractor assumes all the performance risk.

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Barrett

11 months ago

Yes, the contractor bears all the performance risk in a fixed price contract.

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Jeannetta

1 year ago

That's correct, the contractor takes on the risk in a fixed price contract.

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Yun

1 year ago

I agree, in a fixed price contract the contractor assumes all the performance risk.

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Celeste

1 year ago

I'm not sure about that. I think the answer might be C) Contractor is paid for actual costs.

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Maxima

1 year ago

I agree with Alex. In a fixed price contract, the contractor takes on the risk of completing the project within budget.

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Alex

1 year ago

I think the answer is B) Contractor assumes all the performance risk.

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