Subcontractor & Vendor Management Flashcards
7 cards from real CPE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Subcontractor & Vendor Management flashcards as text
When a vendor offers an early payment discount of '2/10 net 30', this means:
Answer: A 2% discount is available if paid within 10 days; otherwise, full payment is due in 30 days
2/10 net 30 is a standard trade credit term meaning a 2% discount is earned by paying within 10 days, with the full invoice due in 30 days.
A general contractor using a 'sole-source' subcontractor strategy for a specialty trade is accepting which primary risk?
Answer: Limited price competition, potentially inflating subcontract cost
Without competitive bidding, sole-source procurement removes market pricing pressure, which may result in paying above-market rates for the specialty work.
A subcontractor's lien waiver upon final payment is important because it:
Answer: Releases the property from any claim the subcontractor could file for unpaid work
A final lien waiver is a legal release confirming the subcontractor has been paid in full and forfeits the right to file a mechanic's lien against the property.
During bid day, a subcontractor calls to withdraw their bid after the GC has submitted the prime bid relying on it. This situation is related to the legal doctrine of:
Answer: Promissory estoppel
Promissory estoppel may prevent a subcontractor from revoking a bid when the GC reasonably relied on it in submitting their prime bid.
Which subcontractor selection criterion is most relevant when evaluating safety performance?
Answer: Experience Modification Rate (EMR)
The Experience Modification Rate (EMR) quantifies a subcontractor's historical workers' compensation claims relative to industry average, directly measuring safety performance.
A subcontract that includes a 'no damage for delay' clause means the subcontractor can only recover:
Answer: A time extension for excusable delays but no additional compensation for delay costs
A no-damage-for-delay clause limits the subcontractor's remedy for delay to a time extension only, barring monetary recovery for delay-related costs.
When comparing vendor quotes for the same material, the estimator should verify that quotes include identical:
Answer: Delivery terms, freight costs, and applicable taxes
Delivery terms, freight charges, and taxes materially affect total material cost and must be consistent across all vendor quotes for a valid price comparison.