Manage the Claims Process PMI-CP Practice Questions (Page 1)

Questions 1–5

1. 1expert · hard

   A project team is developing a risk management plan for a project with a tight schedule and a fixed-price contract. They have identified a risk of claims from subcontractors due to potential delays. The team wants to reduce the likelihood of claims while keeping costs low. Which risk response strategy would best achieve this?

   • ATransfer the risk by requiring subcontractors to obtain insurance for delay claims.
   • BAvoid the risk by not using subcontractors and performing all work with direct employees.
   • CMitigate the risk by including liquidated damages clauses in subcontracts to incentivize timely performance.
   • DAccept the risk and set aside a contingency fund for potential claims.
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2. 2application · medium

   A construction company has experienced repeated claims on past projects related to unclear specifications for underground utilities. The company is about to start a new project with similar utility work. Which preventive measure would be most effective in reducing the likelihood of claims on the new project?

   • AAssign a dispute review board at the start of the project to resolve any utility-related disputes.
   • BConduct a lessons-learned review and incorporate clarified specifications into the new project's contract documents.
   • CUse a cost-plus contract to reduce the contractor's incentive to claim for utility work.
   • DIncrease the contingency budget to cover potential claims from utility work.
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4. 3application · medium

   A dispute has arisen between an owner and a contractor over the interpretation of a performance specification. The contract includes a tiered dispute resolution clause requiring negotiation, then mediation, then arbitration. Negotiation has failed. The parties want a binding decision but wish to avoid the time and cost of litigation. What should they do next?

   • AEngage a dispute review board to provide a non-binding recommendation.
   • BSkip mediation and go directly to arbitration, since a binding decision is needed.
   • CInitiate litigation, as it provides the most authoritative interpretation of the specification.
   • DProceed to mediation, as required by the contract, before any binding method.
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5. 4application · medium

   A project team is developing a risk management plan for a large infrastructure project. They have identified a high-risk area: potential claims from landowners affected by the project. Which risk response strategy would best reduce the likelihood of claims?

   • AEngage stakeholders early and maintain transparent communication about project impacts.
   • BAccept the risk and set aside a contingency fund.
   • CAvoid the risk by not building the project.
   • DPurchase insurance to cover potential claim costs.
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6. 5foundation · easy

   What is the role of a dispute review board (DRB) in claims prevention?

   • ATo provide an informal, non-binding process for resolving disputes before they escalate
   • BTo make legally binding decisions on all claims
   • CTo represent the owner in negotiations with the contractor
   • DTo replace the need for any other dispute resolution method
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