Understanding Construction Contract Value Adjustments

What is the total value of a construction contract after three approved changes to a $1,000,000 contract?

• A. $1,150,000
• B. $1,100,000
• C. $1,000,000
• D. $800,000

Answer: (B)

The total value of a construction contract can be calculated by taking the original contract amount and adding the approved changes to it. In this case, the original contract is valued at $1,000,000. To reach the answer of $1,100,000, three approved changes to the contract must total $100,000. This can be distributed in various amounts among the three changes, but the cumulative increase must equal $100,000. Therefore, adding $100,000 to the original contract results in a new total of $1,100,000. The other options represent miscalculations or misunderstandings of the contract change process. For example, $1,150,000 could be the result of larger change orders, while $800,000 suggests there were deductions or reductions not accounted for. The base contract amount remains the same unless explicitly altered by the approved changes.

When you're knee-deep in studying for the Landscape Architect Registration Examination (LARE), it’s easy to feel overwhelmed. One key area to nail down is understanding construction contracts, especially when it comes to adjustments due to approved changes. So, let’s break it down in a way that makes sense—even if numbers aren’t your best friend!

Imagine you’re working on a construction contract valued at $1,000,000. Now, consider this: what happens when there are changes? Picture yourself sitting at your desk, slowly stacking invoices, when three adjustments come through. You might ask, "What's the new total now?" Simple, right?

The calculation is about adding the value of those changes to the base contract. In this particular case, we have three approved changes that cumulatively raise the contract by $100,000. It could be that you have one change for $30,000, another for $40,000, and the last for $30,000. No matter how you slice it, you’re still adding up to that extended cost.

So, let’s do the math together! Take the original $1,000,000 and add the total changes of $100,000. Voilà! You’re looking at a fresh contract value of $1,100,000. Isn’t that straightforward? Now, I bet you’re wondering about those other options, right?

Well, let’s dissect them. A total of $1,150,000 might suggest that there were larger changes that didn’t get reported correctly, possibly overlooking documentation. On the other end, seeing an $800,000 total could imply that some deductions were made, which isn’t what happened in our scenario—so it doesn’t fit.

With the LARE on the horizon, understanding contract adjustments might seem like just another detail, but it’s quite the important one. Embracing this knowledge isn’t just about getting numbers right—it’s about having the confidence to tackle real-world situations. Being prepared allows you that sense of assurance that all landscape architects need.

Remember, whether you’re sketching designs or negotiating contracts, knowing how to manage these numbers impacts your professional journey. So next time you think of a construction contract, don’t shy away from the math; embrace it! Each approved change isn’t just a number; it’s a step toward clarity in your projects.

Happy studying! You’ve got this!