Estimating and Bidding Flashcards
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Read the first 7 Estimating and Bidding flashcards as text
When a general contractor includes a subcontractor's price in a bid without the subcontractor's consent, this is known as:
Answer: Bid shopping
Bid shopping occurs when a general contractor uses a subcontractor's price in the bid and then, after winning, shops that price to other subcontractors to get a lower number.
Which cost is considered a 'direct cost' in construction estimating?
Answer: Labor to install drywall
Direct costs are expenses that can be directly traced to a specific project, such as labor, materials, and equipment used for that project's specific tasks.
What is the purpose of an addendum issued during the bidding period?
Answer: To modify or clarify the bidding documents before bids are submitted
An addendum is issued by the owner or architect during the bidding period to clarify, correct, or modify the original bidding documents, and all bidders must incorporate it into their proposals.
The 'unit price' method of bidding is most commonly used when:
Answer: The quantity of work is uncertain but the type of work is known
Unit price bidding is used when the type of work is known but exact quantities may vary, allowing payment based on actual units of work completed rather than a fixed lump sum.
A contractor submitting the lowest bid on a public project is typically awarded the contract unless:
Answer: The bid is unreasonably low or the contractor is not responsible
Public agencies must award to the lowest responsive and responsible bidder, but may reject a bid if it is unreasonably low (suggesting errors) or if the contractor is not qualified.
What does 'markup' represent in a contractor's bid?
Answer: The amount added to direct costs to cover overhead and profit
Markup is the percentage added to the direct costs of a project to cover the contractor's overhead expenses and desired profit margin.
In a lump-sum contract, the contractor agrees to:
Answer: Complete the defined scope of work for a fixed total price
A lump-sum (or fixed-price) contract commits the contractor to complete all work in the contract documents for one agreed-upon total price, regardless of actual costs incurred.