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CIPS Exam L6M5 Topic 1 Question 10 Discussion

Actual exam question for CIPS's L6M5 exam
Question #: 10
Topic #: 1
[All L6M5 Questions]

Joanne is preparing a contract for the construction of a large shopping center.

The project includes 52 retail units, several restaurants, and a parking facility.

Joanne's company has contracted Construct Ltd under a Turnkey project.

She is using a Gantt chart as a schedule in the contract.

Q: What type of payment mechanism is being used in this contract?

Answer Options:

Show Suggested Answer Hide Answer
Suggested Answer: C

The correct answer is Activity Schedule (p.60). A Gantt chart is a time-based project planning tool, typically used in Activity Schedule contracts, where payments are tied to the completion of specific tasks. Other payment methods, such as Fixed Lump Sum and Bill of Quantity, do not rely on this approach. [P.60]


by Oretha at May 05, 2025, 01:14 AM

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Aleta
3 days ago
B) Bill of Quantity, no doubt! This is the classic way to handle a large construction project like this with multiple retail units and other facilities.
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Martha
16 days ago
I think it's most likely Fixed Lump Sum, as it provides more certainty for both parties.
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Jeffrey
22 days ago
I believe it could also be Cost Reimbursable, depending on the terms of the contract.
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Louisa
1 months ago
I agree with Malinda, because it's a Turnkey project.
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Vanesa
1 months ago
Hmm, I'm going to go with C) Activity Schedule. Seems like Joanne is using a Gantt chart, which is commonly used with this type of payment mechanism.
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Dorethea
2 days ago
Actually, B) Bill of Quantity might be the most suitable payment mechanism for this construction project.
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Gertude
10 days ago
I disagree, I believe D) Cost Reimbursable is the best option for this contract.
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Tayna
11 days ago
I think A) Fixed Lump Sum would be more appropriate for this type of project.
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Malinda
1 months ago
I think the payment mechanism is Fixed Lump Sum.
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Charolette
1 months ago
D) Cost Reimbursable is my pick. With all the various components of the project, it seems like a cost-plus arrangement would be more appropriate to cover any unforeseen expenses.
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Fannie
3 days ago
C) Activity Schedule
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Jospeh
20 days ago
B) Bill of Quantity
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Malcom
1 months ago
A) Fixed Lump Sum
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Jenelle
2 months ago
I think the answer is A) Fixed Lump Sum. In a Turnkey project, the contractor takes full responsibility for the delivery of the entire project, so a fixed lump sum payment mechanism makes the most sense.
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Joye
14 days ago
That's correct, A) Fixed Lump Sum provides clarity and predictability in terms of project costs for both parties involved.
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Audry
15 days ago
Yes, A) Fixed Lump Sum ensures that the contractor bears the risk of any cost overruns during the project.
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Emmanuel
20 days ago
I agree, A) Fixed Lump Sum is the most suitable payment mechanism for a Turnkey project like this.
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