Oregon Construction Contractors (CCB) Practice Test

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What is one of the advantages of progress payments in construction contracts?

  1. They simplify the contractor's workload

  2. They allow immediate project completion

  3. They protect the owner by ensuring schedule adherence

  4. They eliminate the need for performance bonds

The correct answer is: They protect the owner by ensuring schedule adherence

One of the advantages of progress payments in construction contracts is that they protect the owner by ensuring schedule adherence. This structured payment system allows owners to financially support the contractor throughout the project's duration based on the work completed to date. As payments are tied to specific milestones or phases in the construction process, owners can monitor progress and confirm that the work is being completed as planned before releasing additional funds. This helps mitigate the risk of delays and ensures that the project stays on track, as payment is contingent upon the contractor meeting certain performance criteria. In contrast, while simplifying the workload, ensuring immediate project completion, or eliminating the need for performance bonds may seem appealing, they do not directly address the primary risk management aspect that progress payments offer to owners in terms of managing project timelines and ensuring accountability for deliverables.