Professional Practice Architecture Practice Test

How much percentage fee does the Owner pay if all Contract Documents are received?

1. 75%

2. 85%

3. 100%

4. 90%

The correct answer is: 90%

In the context of construction contracts and project delivery, the percentage fee that an owner pays upon receiving all contract documents typically reflects the completion of the documentation necessary to proceed with a project. When an owner receives all these documents, it signifies that the project is ready to move into the construction phase, and the necessary agreements and terms have been documented. Paying a fee of 90% in this scenario suggests that the owner recognizes the substantial completion and readiness for execution of the project, but it also allows for a final 10% to be held back, often referred to as retainage, which is common practice in many construction projects. This retainage ensures that the contractor fulfills all aspects of the contractual obligations and provides a degree of security for the owner against potential issues that may arise during construction. The selection of 90% as the fee percentage reflects the industry standards where full payments are not typically made until all obligations, including punch list items, final inspections, and approvals, have been fully addressed. This approach helps in safeguarding the owner's interests until all contractual conditions are satisfied comprehensively. The other percentages imply that the work would either be deemed less than fully ready (like 75% and 85%) or misrepresent the standard practice regarding retainage and