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CIPS L6M5 Exam (page: 2)
CIPS Strategic Programme Leadership
Updated on: 25-Dec-2025

Viewing Page 2 of 18
L6M5 PDF 83 Questions

Joey is preparing an NEC contract for the construction of a new school.
He includes a lump-sum price of £5 million.
The contractor receives payment upon completion of specific milestones.
Q: In which section of the contract should this be detailed? Answer Options:

  1. Option A
  2. Z Clause
  3. W1 Option
  4. X Clause

Answer(s): A

Explanation:

In NEC contracts, pricing mechanisms are detailed in Options A-F (p.36). W clauses handle dispute resolution, X clauses cover secondary options, and Z clauses are additional conditions. [P.36]



Robyn has created a contract for a construction project and has used "The Red Book."
Q: Which professional organization is responsible for creating this contract? Answer Options:

  1. JCT
  2. NEC
  3. CIPS
  4. FIDIC

Answer(s): D

Explanation:

The Red Book is part of the FIDIC "Rainbow Suite" of contracts (p.40). FIDIC contracts are categorized by color, each serving a specific purpose in construction and engineering projects. [P.40]



In a fixed lump sum contract, this pricing mechanism does not allow for any changes in price. Is this statement TRUE?
Fixed lump sum contracts are widely used in construction and infrastructure projects.
Answer Options:

  1. Yes ­ the price is fixed before the contract is signed
  2. Yes ­ the contractor assumes all risks should they exceed the budget
  3. No ­ price changes are allowed as it is impossible to predict prices concretely in advance
  4. No ­ price variations are permitted if they are written into the contract

Answer(s): D

Explanation:

Fixed Lump Sum contracts allow limited price changes under specific conditions (p.55), such as client variation requests, force majeure, or inflation adjustments. Firm Fixed Price contracts, however, do not allow any changes. [P.55]



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:

  1. Fixed Lump Sum
  2. Bill of Quantity
  3. Activity Schedule
  4. Cost Reimbursable

Answer(s): C

Explanation:

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]



In which scenario would a Cost Reimbursable contract be most suitable? Answer Options:

  1. A research project where the exact scope of work is unknown at the onset
  2. A construction project where raw material prices may fluctuate
  3. The creation of a new product, where time is critical, and the client wishes to reward the contractor for speedy delivery
  4. The manufacturing of food items, where the client may return raw materials that do not meet specifications

Answer(s): A

Explanation:

Cost Reimbursable contracts are widely used in research projects where the exact scope is uncertain (p.69). These contracts allow for flexibility in cost adjustments based on project progress. Option B describes a contract using cost-plus pricing, and Options C and D do not fit this contract model. [P.69]



Viewing Page 2 of 18



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