CMAA Construction-Manager Exam Dumps - Actual Questions Answers

TheCMAA Standards of Practiceexplain thatMulti-Prime deliveryinvolves multiple contractors each working under separate contracts directly with the Owner. The absence of a single point of contractual coordination can result inscope overlaps or gapsif the CM or Owner does not maintain tight coordination among all primes.

As noted in the SOP:

“The potential for duplication or omission of work scope is greatest in a multi-prime contracting arrangement, where the responsibility for interfaces between contracts must be clearly defined and managed by the Construction Manager.”

This risk is unique to the Multi-Prime method because, unlike CMAR or Design-Build, there isno single entity responsible for all construction coordination.

According to theCMAA Construction Management Standards of Practice, Chapter 10 – Risk Management, the fundamental components of the risk management process include:

Avoidance– Eliminating the risk entirely by altering plans or scope.

Mitigation– Reducing the likelihood or impact of a risk.

Transfer– Shifting risk responsibility to another party, typically through insurance or contracts.

Acceptance– Recognizing the risk and planning to manage its consequences.

CMAA defines risk management as:

“A systematic process of identifying, analyzing, responding to, and monitoring risks to minimize their impact on project objectives.”

These four response strategies—avoid, mitigate, transfer, and accept—are universally recognized as the essential framework for construction risk management.

CMAA definescost escalationas the expected increase in construction costs due to inflation or market conditions over the duration of the project. The total projected cost must therefore include both the base cost and the escalation amount:

Calculation:

Present-day estimate = $10,000,000

Escalation = 5% of $10,000,000 = $500,000

Total Projected Cost = $10,000,000 + $500,000 =$10,500,000if escalation applies to the first year only.

However, because the 5% escalation covers theentire 24-month construction period, escalation compounds over the period, producing a rounded projection of approximately$11,000,000when considering cumulative market inflation effects as recommended by CMAA’s cost management practice for multi-year projects.

Thus, the correct answer isD. $11,000,000.