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AACE International CCP Exam - Topic 5 Question 10 Discussion

Actual exam question for AACE International's CCP exam
Question #: 10
Topic #: 5
[All CCP Questions]

Which of the following is a disadvantage to using target contract as a method of contracting?

Show Suggested Answer Hide Answer
Suggested Answer: B

A target contract is a form of contract where both the owner and contractor agree on a target cost, and both parties share any cost savings or overruns. This contract type encourages efficiency but has some drawbacks.

Key Points:

Disadvantages of Target Contracts:

No Competitive Bidding for Targets: The target cost is typically negotiated rather than competitively bid, which could lead to less competitive pricing.

Other Points: While target contracts encourage timely and economical completion and allow for early start and flexibility, the lack of competitive bidding for the targets can be a significant disadvantage.

Conclusion: The correct answer is B. No opportunity to competitively bid the targets because this is a specific disadvantage associated with target contracts.


by Benton at Sep 17, 2024, 05:46 PM

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Ariel
3 months ago
A is actually a benefit, not a disadvantage!
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Isadora
3 months ago
Wait, how can you start without a clear scope? That sounds sketchy.
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Carry
3 months ago
C seems like a huge red flag to me.
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Fallon
4 months ago
I agree, B makes it less transparent.
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Magda
4 months ago
B is definitely a downside, no competitive bidding is risky.
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Ronnie
4 months ago
I’m a bit confused about the advantages and disadvantages. I thought the flexibility in controlling the work was a good thing, but maybe it can lead to problems too?
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Quentin
4 months ago
I think we had a practice question about this, and I recall that the lack of competitive bidding was highlighted as a potential drawback.
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Jamey
4 months ago
I’m not entirely sure, but I feel like starting work without a clear scope could lead to issues later on. That might be a disadvantage too.
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Samira
5 months ago
I remember discussing target contracts in class, and I think one downside is that they might not allow for competitive bidding, which could affect pricing.
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Francisca
5 months ago
Yep, that's what I was thinking too. The "no opportunity to competitively bid the targets" option seems to capture the main downside of using target contracting. I'll go with that one.
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Dana
5 months ago
Ah, I think I've got it. The lack of competitive bidding is likely the key disadvantage here. That would limit the owner's ability to get the best price and terms for the work.
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Sharika
5 months ago
I'm a bit unsure about this one. The options seem to cover different aspects of target contracting, but I'm not sure which one is the clear disadvantage. I'll have to review my notes and try to reason through this.
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Mari
5 months ago
Okay, let's see. The options mention things like competitive bidding, scope definition, and flexibility in controlling the work. I'll need to weigh those factors to determine the main downside.
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Nathalie
5 months ago
Hmm, this one seems tricky. I'll need to think carefully about the pros and cons of target contracting to identify the key disadvantage.
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Daren
5 months ago
I think I remember practicing questions about starting with general information in fraud examinations. It makes sense to gather context first.
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Matthew
1 year ago
Option B all the way! Competitive bidding is the way to go, unless you want to end up with the contractor's cousin getting the job.
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Chantell
1 year ago
True, but it's important to weigh the pros and cons before making a decision.
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Sol
1 year ago
But target contracts can also provide flexibility in controlling the work.
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Shenika
1 year ago
I agree, competitive bidding ensures fairness and transparency.
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Felix
1 year ago
A might sound good, but I'd rather take my time and do it right than rush through it. Slow and steady wins the race, am I right?
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Lenora
1 year ago
D) Flexibility in controlling the work
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Chery
1 year ago
I agree, taking your time can lead to better results in the long run.
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Berry
1 year ago
B) No opportunity to competitively bid the targets
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Lanie
1 year ago
A) Encourages economic and speedy completion
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Launa
1 year ago
But on the other hand, target contracts encourage economic and speedy completion, which can be beneficial.
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Willodean
1 year ago
I agree with Fausto, not being able to competitively bid can lead to higher costs.
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Jerilyn
1 year ago
D sounds great, but I bet the 'flexibility' comes with a hefty price tag. No thanks!
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Kayleigh
1 year ago
C is pretty tempting, but starting work without a clear scope? Yikes, recipe for disaster if you ask me.
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Fausto
1 year ago
I think the disadvantage is B) No opportunity to competitively bid the targets.
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Mollie
1 year ago
I think option B is the correct answer. How can you have a fair competition without bidding?
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Andra
1 year ago
Without competitive bidding, it can lead to potential issues with fairness and transparency in the contracting process.
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Laticia
1 year ago
I agree, option B is a disadvantage because there is no opportunity to competitively bid the targets.
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