Certified Professional Public Buyer (CPPB) Practice Test

What type of compensation does a contractor receive for performing unnecessary work?

1. Incentive payments

2. Delay penalties

3. Extra work allowances

4. Performance bonuses

The correct answer is: Extra work allowances

The appropriate form of compensation a contractor receives for performing unnecessary work is extra work allowances. This type of compensation is designed to address situations where a contractor has completed tasks beyond the original scope of work, often due to changes or unforeseen circumstances initiated by the project owner or contractual obligations. Extra work allowances ensure that contractors are fairly compensated for their additional efforts and resources spent on work that was not part of the initial contract agreement. This allows contractors to recover costs and maintain their business profitability, while also recognizing the effort put into completing extra tasks. Incentive payments are typically meant to reward contractors for completing work ahead of schedule or under budget, rather than addressing work that is deemed unnecessary. Delay penalties usually relate to financial penalties for failing to meet deadlines rather than compensating for added workloads. Performance bonuses typically reward exceptional performance and the achievement of specific goals but do not specifically correlate to unnecessary work performed.