Practice Free CCM Certified Contract Manager Exam Questions Answers With Explanation

Under the FIDIC Silver Book 1999, the priority of documents is defined in the Appendix to the Contract Agreement and reflected in Sub-Clause 1.5 [Priority of Documents]. This hierarchy determines which document prevails in case of discrepancies or inconsistencies.

The correct order begins with the Contract Agreement, which forms the legal foundation of the contract. It is followed by the Conditions of Contract (General and Particular Conditions), which define rights, obligations, and risk allocation.

Next in priority are Addenda, which include clarifications and modifications issued during the tender stage. These are crucial because they may amend earlier tender documents and must take precedence over them.

After Addenda come the Employer’s Requirements, which define the technical scope, specifications, and performance criteria of the project. Finally, the Contractor’s Tender is ranked last, as it reflects the Contractor’s offer based on all preceding documents.

This hierarchy ensures consistency and clarity, especially in EPC/Turnkey projects where design responsibility lies with the Contractor but is guided by the Employer’s Requirements. Proper understanding of document priority is essential for resolving ambiguities and managing contractual risks effectively.

Option D correctly captures the difference between Yellow and Silver Books (1999):

In the Yellow Book, the Contractor may raise concerns after contract close.

In the Silver Book, the Contractor must scrutinize and report on Employer’s Requirements during the tender period, and after contract close this duty lapses.

Other options misunderstand timing or scope of scrutiny.

In the FIDIC Silver Book (1999 and 2017 editions), which is tailored for EPC/Turnkey contracts, the Employer is responsible for notifying the Contractor of the Commencement Date (Sub-Clause 8.1). Unlike other FIDIC contracts where the Engineer might notify commencement, the Silver Book places more responsibility on the Employer due to the nature of the contract where the Contractor is largely responsible for design and execution with fewer Engineer roles.

The Employer’s formal notification of the Commencement Date signals the official start of the Contractor’s obligations and triggers timelines under the contract.

The Engineer or Resident Engineer typically does not issue such notice in the Silver Book framework.

Under FIDIC Red Book 2017, Clause 21 (Dispute Avoidance/Adjudication Board), particularly Sub-Clause 21.3, provides for the DAAB’s role in dispute avoidance, including informal assistance during site visits. This is a proactive mechanism designed to resolve issues before they escalate into formal disputes.

Key procedural requirements include: (1) both Parties must agree that they want DAAB involvement (Option A), (2) a joint written request must be submitted to the DAAB before assistance is provided (Option C), and (3) both Parties must be present during any informal discussions to ensure transparency and fairness (Option D). These steps ensure neutrality, equal participation, and procedural integrity.

Option B is incorrect and therefore the correct answer to the question. The Engineer has no formal role in authorizing or issuing a “non-objection letter” for DAAB informal assistance. The DAAB operates independently of the Engineer, and its involvement is strictly based on joint agreement between the Employer and Contractor. Introducing Engineer approval would contradict the independence and dispute avoidance function of the DAAB.

Thus, Option B does not belong to the required steps and is not supported by FIDIC provisions.

Option B is correct: A Variation is a formal change to the Works instructed by the Engineer via a Notice (Sub-Clause 3.5). This includes changes to design or execution such as slopes on a road.

Option A is a proposal, not yet a Variation. Positive interest does not constitute a Variation.

Option C is partially correct but depends on formal instruction after proposal acceptance; the question specifies the Engineer instructs the Variation, but since it was a request for proposal first, the Variation instruction comes later. Without explicit instruction, this is not yet a Variation.

Option D is invalid as verbal instruction plus a Notice denying cost claims does not constitute a proper Variation.

Under the FIDIC Silver Book 1999, Clause 9 governs Tests on Completion, while Clause 12.4 addresses Tests after Completion. These provisions define performance verification before and after Taking-Over.

Option A is correct. Under Sub-Clause 9.4 [Failure to Pass Tests on Completion], if the Works fail the Tests on Completion, the Employer has several options, including accepting the Works subject to a reduction in the Contract Price. This reflects the commercial flexibility within FIDIC, allowing completion despite minor deficiencies, with financial adjustment.

Option D is also correct. Under Sub-Clause 12.4 [Failure to Pass Tests after Completion], if the Works fail post-completion performance tests, the Contractor may be required to pay performance damages. Once these damages are paid, the Works may be deemed to have satisfied the required performance levels. This mechanism ensures that operational deficiencies are compensated financially rather than requiring physical rectification in all cases.

Option B is incorrect because both Tests on Completion and Tests after Completion can coexist within the same contract; they serve different purposes (pre-taking-over vs post-taking-over performance verification).

Option C is incorrect because Tests after Completion are generally carried out by or under the responsibility of the Contractor, not solely the Employer, although the Employer may witness them.

These provisions demonstrate FIDIC’s structured approach to quality assurance and risk allocation across different project stages.

Under FIDIC Red and Yellow Books 1999, Sub-Clause 8.3 [Programme] includes an important obligation related to early warning. It requires both Parties to proactively notify each other and the Engineer of any probable future events or circumstances that may adversely affect the Works, including delays, increased cost, or performance issues.

Option B is correct because the clause clearly establishes a mutual obligation: both Parties must inform each other and the Engineer, and the Engineer must also inform the Parties. This ensures transparency and enables proactive mitigation of risks.

Option D is also correct. The Contractor has a specific obligation to notify the Engineer of such events. This aligns with the Contractor’s responsibility for planning and executing the Works and maintaining an updated programme.

Option A is incorrect because the obligation arises before the Time for Completion is actually affected—it is about anticipated or probable events, not confirmed impacts.

Option C is incorrect because the Engineer does have a role in communication and must advise the Parties accordingly.

This early warning mechanism is a key feature of FIDIC contracts, promoting risk management, cooperation, and prevention of disputes rather than reactive claims handling.

Option B is correct: Notices are compulsory when required and must reference the relevant Sub-Clause to be valid.

Option D is correct: Notices are formal written communications and must comply with the contract’s prescribed procedures.

Option A is incorrect; notices are often mandatory, not merely recommended.

Option C is incorrect; notices are obligations for all Contract Participants, not just the Engineer.

Option B is correct: The Contractor must obtain approval from the Engineer/Employer before making design changes.

Option C is correct: The Contractor can submit Value Engineering proposals to improve efficiency or reduce costs.

Option A is incorrect; unilateral changes are not allowed.

Option D is incorrect; Value Engineering can be proposed even after initial submission.

Option B is correct: Deleting critical dispute resolution Sub-Clauses 20.2 - 20.4 contradicts the Golden Principles by undermining fair dispute handling.

Option D is correct: Extending payment release to 180 days violates timely payment principles and fairness in cash flow management.

Option A is generally acceptable as the Contractor often assumes responsibility for nominated subcontractors.

Option C is acceptable in some jurisdictions and contracts to provide finality but can be debated.

Under FIDIC Yellow Book 1999, Sub-Clause 4.24 (“Unforeseeable Physical Conditions”) deals with unexpected discoveries such as archaeological finds. The Engineer’s role includes ensuring site safety, notifying the Employer and relevant authorities, and managing the implications through variations.

Option B reflects best practice: securing the site, appointing guards, notifying Employer and authorities, and requesting a formal Variation Notice to cover costs and entitlement to extension of time.

Options A and D are unsafe or legally risky actions that could damage the find and breach legal obligations. Option C delays the necessary immediate protective actions.

This statement is false. Acceptance of a revised programme that shows completion within the Time for Completion does not automatically entitle the Contractor to extra payment. The Contractor must demonstrate additional costs arising from the instruction or circumstances to claim payment.

The acceptance of a compliant programme is a scheduling and administrative matter, not a compensation guarantee.

Option C is not true because under the FIDIC Silver Book (1999 edition), the delay damages (liquidated damages) specified in the contract are intended as full compensation for the Employer’s loss resulting from late completion. The contract usually excludes other claims for actual losses or extra costs beyond the delay damages.

Option A is true; Variations can include extensions of time.

Option B is true; identifying delay causes is essential for claims and defences.

Option D is true; if the Employer causes suspension not attributable to the Contractor, delay damages claims by the Employer are generally unjustified.

Thus, the Employer cannot claim extra costs over and above delay damages as per typical Silver Book provisions.

Options A and B are correct: Both the Red and Yellow Books require the Engineer to certify payments before the Employer pays the Contractor.

Option C (Silver Book) typically places the risk on the Contractor and often provides for payment without Engineer certification, reflecting the turnkey nature of the contract.

Under FIDIC Red Book and Yellow Book 1999, Sub-Clause 14.3 [Application for Interim Payment Certificates] governs the Contractor’s obligations when submitting statements for interim payments.

Option B is correct because the Statement must include amounts relating to Provisional Sums where applicable. These sums form part of the Contract Price adjustments and must be reflected in interim applications when instructed or executed.

Option C is also correct. Sub-Clause 14.3 explicitly requires that each Statement be accompanied by supporting documents. This includes records of progress and, importantly, the progress report under Sub-Clause 4.21 [Progress Reports], ensuring that the Engineer can properly assess the value of work done.

Option A is incorrect because FIDIC does not mandate submission “in five copies” nor submission directly to the Employer; typically, submissions are made to the Engineer, and the number of copies is not fixed in the General Conditions.

Option D is incorrect as stated. While Plant and Materials may be considered under Sub-Clause 14.5 [Plant and Materials intended for the Works], their inclusion is subject to specific conditions and certification, not simply “added and deducted” generically within every Statement.

Thus, the correct application aligns with procedural compliance, proper substantiation, and inclusion of relevant financial components as per Clause 14.

Under the FIDIC Red Book 1999, discharge becomes effective when the Contractor has received full payment certified by the Final Payment Certificate and the return of the Performance Security (Sub-Clause 14.10). Both elements must be completed for the contract to be considered fully discharged, releasing the Contractor from further obligations or liabilities under the contract.

Option A is incomplete as payment alone does not fully discharge the Contractor.

Option B is incomplete as return of Performance Security alone is insufficient.

Option D is incorrect because the contract does not require a discharge notice signed by the Employer beyond these conditions.

In FIDIC contracts (2017 editions), meetings such as progress or management meetings are key tools for communication and coordination among parties. The contract provisions and practical use reflect flexibility regarding who can request or call for such meetings.

Option A is correct: Both the Contractor and the Engineer can request or call meetings as needed to discuss project progress, issues, or coordination. This promotes proactive communication.

Option B is incorrect (and therefore included in the answer): It is not only the Engineer who can call meetings. The Contractor can also request meetings.

Option C is generally correct: Subcontractors may attend meetings only with the Engineer’s approval or if invited. This controls confidentiality and relevance of discussions.

Option D is incorrect: Only the Employer calling meetings is not correct. The Employer may do so but is not the only party authorized.

Option E is correct: The Engineer typically keeps records (minutes) of progress meetings to document discussions, decisions, and agreed actions. This is essential for contract administration.

Hence, the incorrect statements are B and D.

Option A is correct. Under Sub-Clause 11.9 (Performance Certificate) refusal or incorrect issuance by the Engineer, combined with disagreement by the Contractor, may cause a Dispute to arise.

Option B is correct. If a Party is dissatisfied with a determination, it must give a Notice of Dissatisfaction (NOD) within 28 days to escalate the matter to a Dispute, allowing either Party to refer it to the DAAB as per Sub-Clause 21.4.

Option C is incorrect. The contract does not specify a 42-day time limit for submission to DAAB after NOD; timelines vary by contract and stage.

Option D is incorrect. ‘Disagreement’ is not a formally defined term in FIDIC contracts, whereas ‘Dispute’ is.

Option D is not a new procedure introduced in the 2017 FIDIC editions.

The 2017 editions focus on dispute avoidance (A), quality management systems (B), and fair risk allocation (C), but do not explicitly require a Compliance Verification System as described.

According to FIDIC Red Book 1999, Sub-Clause 14.2, the Advance Payment Guarantee must be a bank guarantee issued by a reputable bank acceptable to the Employer. This bank guarantee serves as security to ensure that the advance payment made by the Employer will be repaid if the Contractor fails to fulfill contractual obligations. The bank guarantee is a commonly used, reliable instrument providing direct financial assurance to the Employer.

Other instruments like surety bonds or parent company guarantees may be acceptable only if explicitly agreed, but the standard requirement is a bank guarantee.

Declaration of joint and several liability is not a typical form of guarantee for advance payments.

Under the FIDIC Silver Book 1999, Sub-Clause 3.1 [The Employer’s Representative] provides that the Employer may appoint an Employer’s Representative to act on his behalf. This reflects the optional nature of this role in EPC/Turnkey contracts, where the Employer typically has a more limited involvement compared to Red Book arrangements.

Option B is correct because the contract explicitly allows (but does not mandate) such an appointment. The Employer’s Representative can carry out duties and exercise authority as delegated by the Employer.

Option A is incorrect because while neither the Employer’s Representative nor any other party can unilaterally amend the Contract, this statement is misleading and not specific to the role defined in the Silver Book.

Option C is incorrect because the appointment is not mandatory; the Employer may choose not to appoint a Representative.

Option D is incorrect because the Employer does not need the Contractor’s agreement to appoint an Employer’s Representative. The appointment is at the Employer’s discretion, although it must be notified to the Contractor.

This reflects a key feature of the Silver Book: greater Employer control and flexibility, with fewer administrative layers compared to contracts involving an independent Engineer.

Under the FIDIC Red Book (both 1999 and 2017 editions), the Employer is responsible for the design of the Works. This design is primarily communicated to the Contractor through key technical documents included in the Contract.

Option B (Specifications) is correct because Specifications define the technical requirements, standards, materials, workmanship, and performance criteria. They are a core component of the design documentation and directly guide how the Works are to be executed.

Option A (Bill of Quantities) is also correct. While primarily used for measurement and payment, the Bill of Quantities is derived from the design and reflects the quantified scope of the Works. It is intrinsically linked to the design and provides a structured breakdown of the elements required to construct the Works.

Option C is incorrect because the Breakdown of Lump-Sum is relevant to lump-sum contracts (e.g., Silver Book), not the Red Book’s remeasurement approach.

Option D is incorrect as the Schedule of Subcontractors relates to execution planning, not design.

Option E is incorrect because the Contract Agreement is a legal document formalizing the contract, not a design document.

Thus, in Red Book contracts, the design basis is fundamentally established through the Specifications and the Bill of Quantities, supported typically by Drawings (though not listed here).

The statement is false. Under FIDIC 2017 editions, the referral of a dispute to the DAAB does not automatically suspend the Parties’ contractual obligations. The works and contract performance generally continue while the dispute is adjudicated, unless otherwise agreed or ordered.

Suspension of obligations can disrupt project progress and is not encouraged by FIDIC procedures, which emphasize dispute resolution without delaying the work.

The Contractor may submit Value Engineering proposals to improve efficiency or reduce costs; however, it is not an absolute contractual obligation to submit such proposals. Also, the preparation of these proposals is generally at the Contractor’s own cost initially. If the proposal is accepted and results in a Variation, then adjustments to the Contract Price may occur, potentially reimbursing the Contractor.

Thus, both statements are false.

Under the FIDIC Red Book (1999), the Tender Documents typically include:

The Bill of Quantities (Option B), which provides detailed quantities for priced items and forms a basis for tender pricing.

The Specifications (Option E), which define the technical requirements for the Works.

The Schedule of Guarantees (Option A) is usually provided later, during contract formation, not as part of tender documents.

Employer’s Requirements (Option C) are more commonly referenced in design-build contracts such as the Yellow Book, not the Red Book which is traditionally a design-bid-build contract.

Schedule of Baselines (Option D) is not a standard tender document in FIDIC Red Book contracts.

Under FIDIC 1999 Conditions of Contract, retention money is addressed primarily in Sub-Clause 14.9 [Payment of Retention Money]. The release of retention is typically split into two halves: the first half upon issuance of the Taking-Over Certificate, and the second half after the Defects Notification Period (DNP) has expired and all outstanding work has been completed.

However, the contract provides a safeguard for the Employer (and Engineer administering the contract) where there are outstanding defects or incomplete obligations. In the Red Book, Clause 11 [Defects Liability] governs the Contractor’s obligation to remedy defects during the DNP. Similarly, in the Yellow and Silver Books, Clause 12 [Tests after Completion] may require additional works or compliance activities after completion.

If there are works still to be executed or defects yet to be remedied, the Engineer is entitled to withhold an amount equivalent to the estimated cost of completing such works from the retention money due for release. This ensures the Employer is financially protected in case the Contractor fails to fulfill post-completion obligations.

Therefore, the statement is correct, as it accurately reflects the contractual mechanism allowing withholding of retention corresponding to outstanding liabilities under the relevant clauses.

This statement is true. The FIDIC suite of contracts, including Red, Yellow, and Silver Books, have evolved from earlier editions and contract models, but they retain a common structure, terminology, and approach to risk allocation. This familiarity allows professionals who know one FIDIC contract to adapt more easily to other FIDIC contracts or updated editions. For example, common terms like Engineer, Employer, Contractor, Variation, and Claims exist across editions with consistent meaning.

The modular and familiar structure supports easier contract administration, negotiation, and interpretation. However, differences in clauses, obligations, and procedures between editions (e.g., 1999 vs. 2017) require careful review. Nevertheless, the shared foundations mean prior experience provides valuable understanding, streamlining learning and application.

Option A is correct: The Engineer is entitled to receive evidence that the Contractor has paid for the necessary insurance policies.

Option C is correct: The Engineer has the role of monitoring the validity of these insurances and ensuring that renewals or extensions are arranged in a timely manner.

Option B is incorrect; the Engineer does not have the authority to take out insurance on behalf of the Contractor.

Option D is incorrect; suspension of construction activities is not automatically the Engineer’s role for insurance lapses but may require instructions from the Employer.

Option A best describes the Time for Completion as the Contractor’s fundamental obligation to complete the entire Works within the contractual Time for Completion, calculated from the Commencement Date.

Options B, C, and D incorrectly limit the scope to " most " of the Works or confuse the reference date.

The Time for Completion sets the critical timeline for contract performance and triggering of delay damages or extensions.

According to the FIDIC Silver Book, 1999 Edition (The Conditions of Contract for EPC/Turnkey Projects), the Contractor is required under Sub-Clause 8.3 (“Programme”) to submit a time programme that illustrates the sequence and timing of the works, including milestones and key events. The intended order of the works (Option A), sequence and timing of inspections and tests (Option B), and review periods (Option D) related to contract management processes such as approval of design or submissions (Sub-Clause 5.2) are integral to effective scheduling and coordination.

However, remedial work instructed under Sub-Clause 7.6, which concerns remedying defects or damage, is generally not part of the initial or revised programme. Instead, remedial works are typically handled as separate tasks or incorporated into specific defect liability or rectification schedules after the main programme has been executed. Such remedial works arise from defects liability obligations and do not belong to the original or revised time programme used to plan the main construction phases.

This distinction is important because the programme reflects planned works execution, whereas remedial work is reactive and may be scheduled separately under defects liability clauses or final project close-out arrangements.

The FIDIC Golden Principles (introduced in 2019) are intended to preserve the integrity and international recognition of FIDIC standard forms. One of the core principles (GP2) explicitly states that the Particular Conditions should not alter the fundamental balance of risk and reward as established in the General Conditions.

Option B correctly reflects this requirement. The allocation of risks in FIDIC contracts is carefully structured to ensure fairness and clarity between the Employer and the Contractor. Any significant shift in this balance through Particular Conditions would undermine the purpose of using a standardized FIDIC contract and could introduce uncertainty, disputes, and reduced bankability.

Option A is incorrect because another Golden Principle (GP1) requires that all provisions, including Particular Conditions, must be drafted clearly and unambiguously.

Option C is incorrect because even if the change appears favorable to one party (e.g., reducing Contractor risk), altering the agreed balance is still contrary to the Golden Principles.

Option D is incorrect because the Golden Principles apply to the entire contract, including both General and Particular Conditions, ensuring consistency and proper application.

Thus, maintaining the original risk/reward allocation is a fundamental requirement under the FIDIC Golden Principles.

Option D is correct because contract drafting should strategically allocate risks between parties based on who can best manage them and the Employer’s budget for risk and reward. Understanding risk appetite is key to tailoring FIDIC contracts appropriately.

Option A is exaggerated; while amendments can introduce issues, careful drafting can preserve benefits of standardization.

Option B is partly true but mixing arrangements is complex and not always straightforward.

Option C is incorrect; the Employer usually chooses the contract form.

Under FIDIC Red Book 1999, Sub-Clause 13.8 [Adjustments for Changes in Cost] governs price adjustment based on cost indices. A key provision addresses the situation where the Contractor fails to complete the Works within the Time for Completion.

In such a case, the contract protects the Employer from adverse cost escalation due to Contractor delay. The adjustment of prices is calculated using whichever index is more favourable to the Employer between:

the index applicable at the time of execution (current index), or

the index applicable 49 days before the expiry of the Time for Completion.

This mechanism ensures that the Contractor does not benefit from price increases occurring after the contractual completion date if the delay is attributable to the Contractor. It reflects a fundamental FIDIC principle: the Contractor bears the financial consequences of delay for which it is responsible.

Option A is incomplete because it ignores comparison with current indices.

Option B is incorrect because it does not account for Employer protection.

Option D is incorrect because the rule is predefined in the Contract, not subject to agreement.

Thus, Option C correctly reflects FIDIC’s balanced risk allocation regarding cost escalation after delay.

Under FIDIC 2017 editions, the Performance Security protects the Employer against failure by the Contractor to fulfill contractual obligations. The Employer may claim under the Performance Security in the following cases:

Option A: Failure to renew the Tender Security as required during the tendering or contract formation phase can allow Employer to make a claim, since the security guarantees the Contractor’s commitments at this stage.

Option E: Failure to extend the validity of the Performance Security when requested or required breaches contractual obligations and enables the Employer to claim under the security.

Option B is incorrect because abandonment without termination notice does not immediately entitle the Employer to claim under Performance Security; formal termination is usually required first.

Option C is incorrect because submitting a claim under Sub-Clause 20.2 (Employer’s claims) does not directly correlate with claiming under Performance Security.

Option D is irrelevant; instructions to replace works do not relate to Performance Security claims.

Under FIDIC Yellow Book 1999, Sub-Clause 5.2 [Contractor’s Documents] requires the Contractor to submit design documents to the Engineer for review. Importantly, the responsibility for planning and coordinating these submissions lies with the Contractor.

The Contractor must ensure that the programme (Clause 8.3) allows sufficient time for the Engineer’s review process, including any resubmissions that may be required if documents are not approved initially. This reflects the design responsibility placed on the Contractor in the Yellow Book, where the Contractor controls both design and execution.

The Engineer’s role is to review and respond within the time stated in the Contract, but the Engineer is not responsible for integrating this review time into the overall project schedule. Similarly, the Employer has no direct role in managing this timing.

From a contract management perspective, failure by the Contractor to allow adequate review time may lead to delays for which the Contractor bears responsibility, as such delays would not typically qualify for Extension of Time unless caused by the Engineer exceeding prescribed review periods.

Thus, proper programming and coordination of document submissions is a key Contractor obligation, making Option A correct.

Under FIDIC 2017, Employer’s Claims are governed by Clause 20.2 [Claims For Payment and/or EOT]. The first procedural step is the submission of a Notice of Claim.

Option A is correct because the Employer must notify the Engineer of the event or circumstance giving rise to the claim. This notice must clearly describe the basis of the claim, including the relevant facts (e.g., delay, cost, or Defects Notification Period extension).

Option B is also correct. FIDIC 2017 introduces a strict 28-day time bar for both Parties. The claiming Party (including the Employer) must give notice “as soon as practicable” and no later than 28 days after becoming aware (or when it should have become aware) of the event. Failure to comply may result in loss of entitlement.

Option C is incorrect because it is irrelevant and misrepresents the structured claims procedure under Clause 20.

Option D is incorrect for the first step. While later submissions (fully detailed claim under Sub-Clause 20.2.4) require detailed particulars including contractual basis, the initial notice does not require full legal substantiation—only identification of the event/circumstance.

This structured two-step process (Notice ? Fully Detailed Claim) is central to FIDIC 2017’s claims management system, ensuring early warning and proper administration of claims.

Under FIDIC Red and Yellow Books (both 1999 and 2017), once a Section or Part of the Works has been taken over by the Employer, even if a formal Taking-Over Certificate has not yet been issued, the practical effect is that the Works (or relevant Section) are considered completed and under the Employer’s control.

Clause 13 [Variations and Adjustments] allows the Engineer to instruct Variations only before the Works or a Section are taken over. After taking-over, the Contractor’s obligations shift from execution to remedying defects under Clause 11 [Defects Notification Period] . At this stage, the Contractor is no longer required to carry out new work beyond rectification unless separately agreed.

Therefore, once a Section/Part is taken over, the Engineer cannot instruct a Variation to that part of the Works. Any further work would require a separate agreement or contract, not a Variation under Clause 13.

This reflects a key FIDIC principle: Variations relate to the execution phase, not the post-completion (defects liability) phase. Thus, the statement is false.