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V04 Q37

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V04 Q37 [#permalink] New post 05 Nov 2008, 21:56
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Corporate Financial Officer: The proposal for our firm’s new office building is unnecessarily extravagant, overly spacious, and ridiculously expensive. The absolute maximum budget for this project is $9 million.

Building Contractor: Our architects have redrawn the blueprints to remove the atrium and sculpture garden, and our landscape artists have reduced the complexity of the surrounding gardens. We will now be able to complete the project at one-tenth the original estimated cost.

Which of the following, if true, most undermines the soundness of the contractor’s proposal to complete the project at a fraction of the original cost?

A The original estimated cost of the project was $100 million.
B The contracting firm was originally hired based on the originality of its atrium design.
C Corporate officers have already paid a deposit of $2 million.
D The firm expects to hire 100 new employees by the time the building project is completed.
E Architects working on the revised plans did not discard all expensive elements.

Situation:A building contractor offers revised blueprints to a client who claims the original plans were too expensive.

Reasoning:Which is the most serious flaw in the contractor’s proposal? The main concern of the financial officer is that the plans are larger, and therefore more expensive, than his firm can afford. Because the financial officer sets the maximum budget at $9 million, any evidence that the contractor’s new plans will be more expensive than this figure will greatly undermine the soundness of his proposal.

1. If the original cost of the project was $100 million, then one-tenth of this cost will be $10 million, which is $1 million more than the company can afford.
2. The elimination of the atrium does not undermine the soundness of the contractor’s plan, no matter if that design was originally appealing to the corporate officers.
3. The amount of the deposit has no bearing on the final total cost.
4. This option is tempting because it makes it seem as if the firm will need a larger building, but it actually has no bearing on the soundness of the contractor’s plan.
5. The corporate officer did not ask that all expensive elements be discarded, but only that the project cost no more than $9 million.

The correct answer is A.

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This answer is incorrect. The question states "Which of the following, if true, most undermines the soundness of the contractor’s proposal to complete the project at a fraction of the original cost?"

Just because the revised project will cost more than the CFO can afford, it doesn't affect the contractor's proposal to complete the project at a fraction of the original cost.

ie. If the project cost $1 billion, and then the contractor came back with $100 million, it is still sufficiently larger than the CFO's budget, but would still be a fraction of the original cost.
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Re: V04 Q37 [#permalink] New post 06 Nov 2008, 00:47
Yes, I agree. I will go with D. Awaiting comments from dzyubam.
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Re: V04 Q37 [#permalink] New post 06 Nov 2008, 07:32
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You raised a good point with impressive reasoning. However if we focus on "soundness" of the proposal, the proposal is still not sound as it is over 9m. In that case, the proposal is not likely to be approved. If not approved, there is no reason that the proposal be completeed at a fraction of the original cost. Therefore, the proposal is not sound.

Lets also look at the question: Which of the following, if true, most undermines the soundness of the contractor’s proposal (to complete the project at a fraction of the original cost)?

Consider only the highlighted part. If we pay a close attention, it reveals that the project has not been awarded to the contractor. From the not highlighted part, it seems that the project is awareded already but that not true. The project is still under aproval process.

Henece the contractor's proposal for the project is not sound because its estimated costs exced the CFO's and becasue of that reason the contractor is not likely to get the project..
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Re: V04 Q37 [#permalink] New post 06 Nov 2008, 21:27
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GMAT TIGER wrote:
You raised a good point with impressive reasoning. However if we focus on "soundness" of the proposal, the proposal is still not sound as it is over 9m. In that case, the proposal is not likely to be approved. If not approved, there is no reason that the proposal be completeed at a fraction of the original cost. Therefore, the proposal is not sound.

Lets also look at the question: Which of the following, if true, most undermines the soundness of the contractor’s proposal (to complete the project at a fraction of the original cost)?

Consider only the highlighted part. If we pay a close attention, it reveals that the project has not been awarded to the contractor. From the not highlighted part, it seems that the project is awareded already but that not true. The project is still under aproval process.

Henece the contractor's proposal for the project is not sound because its estimated costs exced the CFO's and becasue of that reason the contractor is not likely to get the project..


That is where I have difficulty in understanding. Does soundness of proposal mean the win probability is 100%? To me no. Soundness of proposal is a relative term. It could be sound from a technical perspective, commercial perspective, etc. But, it may not guarantee a win.
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Re: V04 Q37 [#permalink] New post 06 Nov 2008, 22:35
scthakur wrote:
GMAT TIGER wrote:
You raised a good point with impressive reasoning. However if we focus on "soundness" of the proposal, the proposal is still not sound as it is over 9m. In that case, the proposal is not likely to be approved. If not approved, there is no reason that the proposal be completeed at a fraction of the original cost. Therefore, the proposal is not sound.

Lets also look at the question: Which of the following, if true, most undermines the soundness of the contractor’s proposal (to complete the project at a fraction of the original cost)?

Consider only the highlighted part. If we pay a close attention, it reveals that the project has not been awarded to the contractor. From the not highlighted part, it seems that the project is awareded already but that not true. The project is still under aproval process.

Henece the contractor's proposal for the project is not sound because its estimated costs exced the CFO's and becasue of that reason the contractor is not likely to get the project..


That is where I have difficulty in understanding. Does soundness of proposal mean the win probability is 100%? To me no. Soundness of proposal is a relative term. It could be sound from a technical perspective, commercial perspective, etc. But, it may not guarantee a win.


The issue is in a proposal stage not in an approved stage. so the soundnesess is about the cost not about others, whcih comes only after the approval..
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Re: V04 Q37 [#permalink] New post 07 Nov 2008, 00:52
GMAT TIGER wrote:
The issue is in a proposal stage not in an approved stage. so the soundnesess is about the cost not about others, whcih comes only after the approval..


Well, I differ on this. Soundness of a proposal during evaluation can be determined by technical, commercial, legal, or any other content.
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Re: V04 Q37 [#permalink] New post 07 Nov 2008, 08:01
scthakur wrote:
GMAT TIGER wrote:
The issue is in a proposal stage not in an approved stage. so the soundnesess is about the cost not about others, whcih comes only after the approval..


Well, I differ on this. Soundness of a proposal during evaluation can be determined by technical, commercial, legal, or any other content.



"Technical, commercial, legal, or any other content" are not the content of the passage. Therefore they are out of scope.
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Re: V04 Q37 [#permalink] New post 07 Nov 2008, 10:23
[quote="GMAT TIGER "Technical, commercial, legal, or any other content" are not the content of the passage. Therefore they are out of scope.[/quote]


Thanks. That clarifies. I got driven away by "Building Contractor: Our architects have redrawn the blueprints to remove the atrium and sculpture garden, and our landscape artists have reduced the complexity of the surrounding gardens", although the question specifically asks "....of the contractor’s proposal to complete the project at a fraction of the original cost..".
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Re: V04 Q37 [#permalink] New post 11 Nov 2008, 02:38
Thanks, guys.

Our verbal Tests have some arguable points and I'm not the one to judge what is an error and what is not. Eventually, we'll contact our verbal expert to get some feedback on the most argued questions. This one will be placed on the list among others.

+1 for everyone.
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Re: V04 Q37 [#permalink] New post 21 Feb 2012, 03:14
IMO the answer is E.
The Architect claims that the plan was revisited to reduce the cost.
The cost could be reduced by discarding expensive elements.

However, Architects working on the revised plans did not discard all expensive elements.

Hope this is correct.
Re: V04 Q37   [#permalink] 21 Feb 2012, 03:14
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