Louisiana Contractors License Practice Exam

Which type of contracting typically includes obtaining financing and land for a project?

1. Fast-Track Construction

2. Design/Build

3. Turnkey Contracting

4. Cost-Plus Contract

The correct answer is: Turnkey Contracting

Turnkey contracting is a method where the contractor is responsible for every aspect of a construction project from the initial planning stages all the way to the final delivery. This comprehensive approach not only involves the construction but also includes obtaining financing, acquiring land, and handling all levels of design and construction management. This means that by the time the project is handed over to the client, it is fully operational and ready for use, which is the essence of a "turnkey" operation. The contractor essentially delivers a complete product to the client, allowing them to simply "turn the key" and start using the facility or project without needing to get involved in the underlying processes. In contrast, other types of contracting, such as fast-track construction and cost-plus contracts, generally focus on different aspects of project management and financing but do not typically cover the comprehensive management of land acquisition and financing in the same way that turnkey does. Design/build processes involve a more integrated approach between design and construction but might not encompass all financial and site acquisition responsibilities to the same extent.