[amp_mcq option1=”For submission of a competitive bid for a lump-sum contract” option2=”For a unit price contract” option3=”For preparation of a definitive estimate to help negotiate contract” option4=”All of these” correct=”option4″]
The correct answer is D. All of these.
A project contractor relies on the cost of the estimate for all of the following reasons:
- To submit a competitive bid for a lump-sum contract. The contractor needs to know the estimated cost of the project in order to determine how much to bid.
- For a unit price contract. The contractor needs to know the estimated cost per unit of work in order to determine how much to charge for each unit of work.
- For preparation of a definitive estimate to help negotiate contract. The contractor needs to know the estimated cost of the project in order to prepare a definitive estimate that can be used to negotiate the contract price.
The cost of the estimate is also used to determine the project’s budget, to track the project’s progress, and to identify potential cost overruns.