CIPS L6M5 Exam - 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:

AFixed Lump Sum

BBill of Quantity

CActivity Schedule

DCost Reimbursable

Show Suggested 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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Jose

2 months ago

Gantt charts are great for scheduling, but payment type is key too!

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Lawrence

2 months ago

I agree, Fixed Lump Sum makes the most sense here.

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Vi

3 months ago

Really? I thought it could be Cost Reimbursable.

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King

3 months ago

52 retail units? That's a huge project!

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Micheline

3 months ago

It's definitely a Fixed Lump Sum since it's a Turnkey project.

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Kattie

3 months ago

Cost Reimbursable seems unlikely for a Turnkey project, but I guess it could be possible. I need to double-check my notes on this.

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Georgeanna

4 months ago

I feel like Activity Schedule might be relevant here since Joanne is using a Gantt chart, but I’m not confident about that.

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Carylon

4 months ago

I remember practicing a similar question where the payment mechanism was linked to the project type. Could it be Bill of Quantity?

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Buffy

4 months ago

I think the Turnkey project usually implies a Fixed Lump Sum payment, but I'm not entirely sure.

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Letha

4 months ago

I'm a bit confused here. The Turnkey project aspect suggests a Fixed Lump Sum, but the mention of a Gantt chart has me wondering if it could be an Activity Schedule. I'll have to review my notes on construction contract payment mechanisms to be sure. Hopefully, I can eliminate a couple of the options and make an educated guess.

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Lavonda

4 months ago

Okay, let me see if I can break this down. Turnkey projects usually involve a single contractor taking responsibility for the entire project, so a Fixed Lump Sum payment makes sense. The Gantt chart is likely just being used for scheduling, not the payment mechanism. I'm going to go with A - Fixed Lump Sum.

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Justine

5 months ago

Hmm, I'm not sure about this one. The question mentions a Gantt chart, which makes me think it could be an Activity Schedule payment mechanism. But the Turnkey project aspect is throwing me off a bit. I'll have to think this through carefully.

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Arlette

5 months ago

This looks like a straightforward question about payment mechanisms in construction contracts. I think the key information is that this is a Turnkey project, so the payment mechanism is likely to be a Fixed Lump Sum.

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Maile

8 months ago

I'm cracking up at the idea of Joanne trying to negotiate a 'Turnkey' contract with the construction company. I bet that went over about as well as a leaky faucet in a five-star hotel!

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Hollis

7 months ago

D) Cost Reimbursable

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Octavio

7 months ago

C) Activity Schedule

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Laura

8 months ago

B) Bill of Quantity

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Chauncey

8 months ago

A) Fixed Lump Sum

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Aleta

8 months 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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Launa

8 months ago

C) Activity Schedule

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Bronwyn

8 months ago

B) Bill of Quantity

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Johnson

8 months ago

A) Fixed Lump Sum

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Martha

9 months ago

I think it's most likely Fixed Lump Sum, as it provides more certainty for both parties.

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Jeffrey

9 months ago

I believe it could also be Cost Reimbursable, depending on the terms of the contract.

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Louisa

9 months ago

I agree with Malinda, because it's a Turnkey project.

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Vanesa

10 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

8 months ago

Actually, B) Bill of Quantity might be the most suitable payment mechanism for this construction project.

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Gertude

9 months ago

I disagree, I believe D) Cost Reimbursable is the best option for this contract.

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Tayna

9 months ago

I think A) Fixed Lump Sum would be more appropriate for this type of project.

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Malinda

10 months ago

I think the payment mechanism is Fixed Lump Sum.

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Charolette

10 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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Vicente

8 months ago

I agree, a cost reimbursable payment mechanism provides more flexibility in dealing with unforeseen expenses in a project of this scale.

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Major

8 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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Odelia

8 months ago

D) Cost Reimbursable

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Fannie

8 months ago

C) Activity Schedule

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Jospeh

9 months ago

B) Bill of Quantity

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Malcom

9 months ago

A) Fixed Lump Sum

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Jenelle

10 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

9 months 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

9 months 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

9 months ago

I agree, A) Fixed Lump Sum is the most suitable payment mechanism for a Turnkey project like this.

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