Discuss CIPS L6M5 Exam Topic 1 Question 25

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

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]

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17 comments · newest first

Isadora 2 months ago

Exactly, A) Fixed Lump Sum keeps it straightforward.

Mickie 2 months ago

True, but that could lead to higher costs overall.

Buddy 2 months ago

I see the point, but D) Cost Reimbursable could cover unexpected expenses.

Izetta 2 months ago

A) Fixed Lump Sum ensures no surprises in costs.

Jame 2 months ago

But with a shopping center, A) Fixed Lump Sum is safer.

Lashandra 2 months ago

I’m leaning towards D) Cost Reimbursable. Could be flexible.

Isadora 3 months ago

Agreed, A) Fixed Lump Sum makes sense. Clear budget!

Mickie 3 months ago

I think it's A) Fixed Lump Sum. It fits a turnkey project.

Skye 3 months ago

Gantt charts are great for scheduling, but they don't dictate payment types!

Jackie 3 months ago

Wait, are we sure about that? Seems too simple.

Pura 3 months ago

A Turnkey project usually means a Fixed Lump Sum, right?

Marge 4 months ago

I think it's more likely a Cost Reimbursable.

Noble 4 months ago

It's definitely a Fixed Lump Sum contract!

Blondell 4 months ago

I believe it's definitely not a Bill of Quantity, but I need to double-check if it aligns with the Activity Schedule option.

Arletta 4 months ago

I'm a bit confused; could it be a Cost Reimbursable? I feel like I read something about that in relation to Turnkey contracts.

Felix 4 months ago

I remember practicing a similar question, and I think a Turnkey project usually involves a fixed price, so maybe it's A?

Maryann 4 months ago

I think this might be a Fixed Lump Sum since it's a Turnkey project, but I'm not entirely sure.

CIPS L6M5 Exam - Topic 1 Question 25 Discussion