Contracts: Questions



Question
A contractor is working on a fixed price contract that calls for a single, lump sum payment upon satisfactory completion of the contract. About halfway through the contract, the contractor’s project manager informs the contract administrator that financial problems are making it difficult for the contractor to pay employees and subcontractors. The contractor asks for a partial payment for work accomplished. Which of the following actions by the buyer is most likely to cause problems for the project?
a. Starting to make partial payments to the contractor
b. Making no payments to the contractor
c. Paying for work accomplished to date
d. Negotiating a change to the contract

What do you think the correct answer is? Kindly share the reasoning behind your answer.

The source I got this question from indicates (d) as answer. I feel (b) should be the correct answer as making no payments to the contractor would certainly halt (or delay) the project.

Contract term is single,lumpsum payment at the end of satisfactory completion of the work. But contractor;s request is different than agreed contract.


 


Hence d is the answer.


 


thanks,


 


Raj

 

Answer is B.

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good luck