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:

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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Maile

24 hours 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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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

4 days ago

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

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Gertude

12 days ago

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

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Tayna

13 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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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

16 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

17 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

22 days ago

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

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