Certified Professional Public Buyer (CPPB) Practice Test

In a project, substantial completion indicates what?

1. The project is fully completed and cannot be modified

2. The project can be deemed complete for contractual purposes

3. The project has failed and requires additional funding

4. The project is still ongoing with many unresolved issues

The correct answer is: The project can be deemed complete for contractual purposes

Substantial completion is a significant milestone in construction projects that indicates a point at which the project is sufficiently complete in accordance with the contract documents. This status allows the owner to occupy or utilize the work for its intended purpose, even if some minor details or tasks remain unfinished. Recognizing substantial completion serves practical and legal functions, clearing the way for final payments and contract obligations to shift toward final completion. It marks the transition from the contractor's responsibilities to the owner's use of the project, even though a degree of work may still be pending. Being deemed complete for contractual purposes means that the owner can take possession and start using the project while the contractor may still have minor tasks to complete, known as "punch list" items. The other options describe conditions that do not accurately reflect the significance of substantial completion. Full completion, project failure, or ongoing issues do not align with the concept of substantial completion, which is intended as a form of completion that acknowledges a project is ready for use, albeit not fully finished.