CCM Certified Contract Manager Questions and Answers

Comprehensive and Detailed Explanation:

Option A is correct: The initial programme must include the date for the Contractor’s access to the Site.

Option D is correct: Key delivery dates for Plant and Materials are essential elements of the programme.

Option B relates to updated/revised programmes, not the initial programme.

Option C generally relates to remedial work and is part of revised or detailed programmes.

Comprehensive and Detailed Explanation:

Under FIDIC Red Book 1999, the Performance Security (or Performance Guarantee) is held to ensure the Contractor’s performance during the defects liability period. The security is typically released only after the Employer issues the Performance Certificate, which confirms the completion of defects liability obligations and that the Contractor has fulfilled the contract.

The contract commonly specifies a fixed period (often 21 days) within which the Employer must return the Performance Security after issuance of the Performance Certificate (Option D). The Taking-Over Certificate (Options A and C) marks substantial completion but does not end the Contractor’s obligations for defects.

Comprehensive and Detailed Explanation:

Under FIDIC contracts:

Profit is usually allowed on claims arising from Employer-caused delays, instructions, or breaches that directly affect the Contractor’s performance or costs (Options A, B, C, and E).

Option D relates to delays caused by third parties (authorities). Typically, delays caused by relevant authorities (e.g., permit or approval delays) are treated differently, and profit is not generally recoverable on these claims as they are considered neutral or force majeure-type delays. The Contractor may receive an extension of time and reimbursement of direct costs but not profit.

Thus, Option D is the claim event where profit is not allowed.

Comprehensive and Detailed Explanation:

Option A is correct: The Contractor must proceed according to the approved Programme, and the Employer’s personnel rely on the Programme for coordinating their activities.

Option B is correct: Submission and approval of the Programme do not relieve the Contractor of the obligation to give timely notices for delays or other events as required under the contract (e.g., notices under Sub-Clause 8.4).

Option C is incorrect because the Programme is not strictly a contract document binding parties in the legal sense; it is a working tool to manage and monitor progress.

Option D is incorrect; the Engineer/Employer must review the Programme and notify the Contractor if it does not comply, per contract clauses.

Under Sub-Clause 8.3 of the FIDIC Red and Yellow Books 2017, the revised programme must reflect:

The planned sequence and timing of works including recognized holidays (Option A) to ensure realistic scheduling.

The actual progress to date, delays, and impacts on subsequent activities (Option B) so that stakeholders can manage resources and risks effectively.

Option C (remedial work) is typically not part of the main programme but may be in a separate defect rectification schedule.

Option D is too narrow; the programme should include all activities, not only undelivered materials.

Comprehensive and Detailed Explanation:

Option C is not true because under the FIDIC Silver Book (1999 edition), the delay damages (liquidated damages) specified in the contract are intended as full compensation for the Employer’s loss resulting from late completion. The contract usually excludes other claims for actual losses or extra costs beyond the delay damages.

Option A is true; Variations can include extensions of time.

Option B is true; identifying delay causes is essential for claims and defences.

Option D is true; if the Employer causes suspension not attributable to the Contractor, delay damages claims by the Employer are generally unjustified.

Thus, the Employer cannot claim extra costs over and above delay damages as per typical Silver Book provisions.

Comprehensive and Detailed Explanation:

The Contractor may submit Value Engineering proposals to improve efficiency or reduce costs; however, it is not an absolute contractual obligation to submit such proposals. Also, the preparation of these proposals is generally at the Contractor’s own cost initially. If the proposal is accepted and results in a Variation, then adjustments to the Contract Price may occur, potentially reimbursing the Contractor.

Thus, both statements are false.

Under the FIDIC Red Book 1999 Edition, the Engineer is generally responsible for issuing determinations on claims and contract matters. However, if the Particular Conditions require the Engineer to obtain the Employer’s prior approval before issuing such determinations, the Engineer’s options become limited if that approval is not granted.

Option C (Issuing the determination to the Contractor in the form and with the content agreeable to the Employer, with a remark that it is the Employer’s determination and not the Engineer’s determination)is a practical approach often taken. The Engineer may issue the determination as directed or approved by the Employer but must clarify that it reflects the Employer’s decision rather than the Engineer’s independent determination.

Option D (Informing the Contractor of their inability to issue the determination, due to lack of Employer’s approval)aligns with transparency and procedural correctness. The Engineer should notify the Contractor if they cannot proceed with the determination, explaining the reason to avoid misunderstanding or delay.

Option A (Remain silent and do nothing)isnot appropriate, as it may cause project delays and disputes.

Option B (Referring the matter directly to the Dispute Adjudication Board)without a determination from the Engineer is not standard procedure under the 1999 edition. The Engineer’s determination or failure to determine generally triggers the dispute resolution process, but referral is normally after due process, including issuing or attempting to issue a determination.

Hence,Options C and Dare the appropriate courses of action.

Comprehensive and Detailed Explanation:

Under FIDIC Red Book 1999, advance payment is intended to assist the Contractor in financing the mobilization and early works costs before the Contractor begins receiving regular payments for work performed (Option A). It is not a payment for work already completed, so Option B is incorrect.

The General Conditions provide that the advance payment is usually made in a lump sum or agreed instalments and that the Employer makes the payment in advance (Option C is partially true but generally it can be one or multiple instalments, depending on contract terms).

Importantly, the advance payment must be repaid by the Contractor through deductions from subsequent interim payments (Option D), ensuring the Employer recovers the advanced funds as the work progresses.

Option C is NOT correct. FIDIC Yellow Book General Conditions aim to allocate risks fairly and equitably between the Employer and Contractor. The contract balances risks according to who is best able to manage them. It does not impose a disproportionate risk burden on the Contractor.

Options A, B, and D are correct statements describing typical contract formation, risk allocation, and Contractor’s design and execution responsibilities.

Delay Damages under FIDIC are primarily a pre-agreed measure to incentivize the Contractor to complete works on time rather than full compensation for all losses suffered. They simplify the process by avoiding the need for the Employer to prove actual losses.

Option A is incorrect; Delay Damages are generally not full compensation.

Option C is incorrect because Delay Damages remove the Employer's burden to prove actual loss.

Option B is the correct interpretation.

Option B is correct: Deleting critical dispute resolution Sub-Clauses 20.2 - 20.4 contradicts the Golden Principles by undermining fair dispute handling.

Option D is correct: Extending payment release to 180 days violates timely payment principles and fairness in cash flow management.

Option A is generally acceptable as the Contractor often assumes responsibility for nominated subcontractors.

Option C is acceptable in some jurisdictions and contracts to provide finality but can be debated.

Comprehensive and Detailed Explanation:

Option A correctly reflects Golden Principles emphasizing the Employer’s objective of obtaining value for money and the importance of avoiding disputes as much as possible.

Other options either misrepresent the balanced nature of FIDIC principles or promote unfair or unbalanced positions.

Comprehensive and Detailed Explanation:

Options A and B are correct: Both the Red and Yellow Books require the Engineer to certify payments before the Employer pays the Contractor.

Option C (Silver Book) typically places the risk on the Contractor and often provides for payment without Engineer certification, reflecting the turnkey nature of the contract.

This clause breaches Golden Principles (GP) 1 and 3:

GP1 promotes fairness and balanced risk allocation between parties. Forcing the Contractor to carry out determinations despite a notice of dissatisfaction undermines fair dispute resolution and contractual balance.

GP3 emphasizes the importance of clear and unambiguous contract drafting that reflects agreed procedures. This sentence introduces ambiguity and overrides contractual rights to dispute determinations.

Option A best describes the Time for Completion as the Contractor’s fundamental obligation to complete the entire Works within the contractual Time for Completion, calculated from the Commencement Date.

Options B, C, and D incorrectly limit the scope to "most" of the Works or confuse the reference date.

The Time for Completion sets the critical timeline for contract performance and triggering of delay damages or extensions.

Two-stage procurement, involving pre-qualification followed by tender, is typically recommended for large-scale projects where many potential contractors might be interested. This process helps to shortlist qualified contractors, thus streamlining the tender evaluation and increasing the quality and competitiveness of submitted offers.

Option C correctly reflects this approach for complex or large projects where competition needs to be managed.

Option A is incorrect since simple, short-duration projects usually do not require complex procurement.

Option B is incorrect because if only a few capable contractors exist, pre-qualification may be less necessary.

Option D is incorrect as international financing does not always mandate two-stage procurement, although it often influences procurement methods.

Comprehensive and Detailed Explanation:

Option A is true: In emergencies, verbal notices are permitted with the requirement to follow up in writing.

Option D is true: Notices and communications may be sent in various formats including handwritten, typed, printed, or electronic systems.

Option B is incorrect; a notice does not necessarily have to be signed by all these representatives; it depends on the party issuing the notice.

Option C is incorrect; proof of receipt is ideal but not always strictly required for legal validity depending on contract provisions.

Comprehensive and Detailed Explanation:

This statement is true. The Employer administers the contract unless an Employer’s Representative or Engineer is appointed to act on its behalf. The Employer (or its Representative) is responsible for reviewing and negotiating claims in good faith with the Contractor to reach agreement, in line with FIDIC procedures.

Under FIDIC Red Book 2017, if the Engineer suspends works for more than 84 days and the Contractor notifies the Engineer, but the suspension is not lifted within 28 days, the Contractor may terminate the contract if the suspension affects the whole of the Works (Option A).

Additionally, the Contractor must give a second notice before termination (Option C). This process ensures proper communication and adherence to contractual procedures.

Option B is incorrect; termination is allowed under specified conditions.

Option D is incorrect; omission of work is not generally permitted without formal termination.

Comprehensive and Detailed Explanation:

In the FIDIC Silver Book (1999 and 2017 editions), which is tailored for EPC/Turnkey contracts, the Employer is responsible for notifying the Contractor of the Commencement Date (Sub-Clause 8.1). Unlike other FIDIC contracts where the Engineer might notify commencement, the Silver Book places more responsibility on the Employer due to the nature of the contract where the Contractor is largely responsible for design and execution with fewer Engineer roles.

The Employer’s formal notification of the Commencement Date signals the official start of the Contractor’s obligations and triggers timelines under the contract.

The Engineer or Resident Engineer typically does not issue such notice in the Silver Book framework.

According to the FIDIC Yellow Book 2017, the Commencement Date is the date notified by the Engineer as the date on which the Contractor shall start the execution of the Works (Sub-Clause 8.1). In this case, although the Engineer notified 15 July 2022 as the Commencement Date, it was subject to the issuance of the construction permit. Since the construction permit was only obtained on 1 August 2022, work could not legally commence before that date.

FIDIC recognizes that the Contractor cannot be expected to start before all necessary permissions are granted. Hence, the effective Commencement Date must be the earliest date on which the Contractor can legally commence work, i.e., the date when the permit was issued (1 August 2022). The contract’s requirement that the Commencement Date notification occur no later than 14 days after signing is subject to actual readiness conditions (permit availability).

Therefore, for purposes of delay and completion, the Commencement Date is 1 August 2022. This affects the calculation of the Time for Completion and any delay claims accordingly.

Option B is correct: The Contractor must obtain approval from the Engineer/Employer before making design changes.

Option C is correct: The Contractor can submit Value Engineering proposals to improve efficiency or reduce costs.

Option A is incorrect; unilateral changes are not allowed.

Option D is incorrect; Value Engineering can be proposed even after initial submission.

Comprehensive and Detailed Explanation:

Option A is NOT a Variation because it originates from a Value Engineering proposal by the Contractor, not from Employer or Engineer instruction or request.

Options B, C, and D are all variations initiated by the Employer or Engineer.

This statement is false. While FIDIC Contracts provide standardized contractual frameworks, procurement processes vary widely depending on local laws, employer requirements, contract editions, and project specifics. Definitions, timelines, and procurement steps may differ between models and jurisdictions, making the procurement process not universally identical.

The FIDIC contracts are adaptable tools, not rigid procurement procedures, so users must tailor procurement to local and project needs.

A legally binding contract is typically formed when there is an offer, acceptance, and intention to create legal relations. Under FIDIC contracts:

Option B (signing the Contract Agreement) unequivocally forms a binding contract.

Option D (Letter of Acceptance issued after receiving the Contractor’s Letter of Tender) generally forms a binding contract unless otherwise specified, as the Letter of Acceptance is the formal acceptance of the tender.

Option A (Letter of Intent) is not necessarily a binding contract; it often serves as an interim arrangement signaling intent but may lack definitive terms to form a contract.

Option C (conditional Letter of Acceptance) may not form a binding contract unless the conditions are fulfilled.

Comprehensive and Detailed Explanation:

The Employer must provide detailed notice to the Contractor regarding intended changes material to financial arrangements, enabling transparency and allowing the Contractor to assess impacts and prepare claims or adjustments accordingly.

This obligation supports fair risk allocation and project control.