CR Subcontractor Management & Coordination 2 — Questions and Answers
Question 1: A remodeler discovers a subcontractor has abandoned the job mid-project. The FIRST step should be:
- Immediately hire a replacement without documentation
- Issue a written cure notice or notice of default per the subcontract terms (Correct answer)
- Withhold all further payments and say nothing
- Report the sub to the licensing board before contacting them
Correct answer: Issue a written cure notice or notice of default per the subcontract terms
The subcontract typically requires a written notice of default giving the sub a cure period before termination, which protects the GC's legal position and right to recover costs.
Question 2: Workers' compensation insurance is required for subcontractors to protect against:
- Property damage claims
- Injuries sustained by the subcontractor's employees while working on the project (Correct answer)
- Equipment theft
- Warranty claims after project completion
Correct answer: Injuries sustained by the subcontractor's employees while working on the project
Workers' compensation covers medical costs and lost wages for a subcontractor's employees who are injured on the job, shielding the GC from these claims.
Question 3: A 'pay-when-paid' clause in a subcontract means:
- The sub is paid immediately upon completing each task
- The GC must pay the sub only after the GC receives payment from the owner (Correct answer)
- The sub can demand payment in advance
- Payment is made weekly regardless of billing
Correct answer: The GC must pay the sub only after the GC receives payment from the owner
A pay-when-paid clause makes the GC's receipt of owner payment a condition precedent to paying the subcontractor, shifting some owner non-payment risk to the sub.
Question 4: When evaluating competing subcontractor bids, a remodeler should be most cautious about a bid that is:
- Exactly at the average of all bids received
- Significantly lower than all other bids without explanation (Correct answer)
- Submitted on a standard AIA form
- Accompanied by a full scope of work breakdown
Correct answer: Significantly lower than all other bids without explanation
An unusually low bid may indicate the sub has missed scope items, plans to use inferior materials, or will submit excessive change orders later to recover profit.
Question 5: For specialty trades such as electrical or plumbing, the subcontract should specify that all permits will be:
- Obtained and paid for by the owner
- Pulled by the licensed trade subcontractor performing the work (Correct answer)
- Filed by the GC's project manager
- Handled by the municipality automatically
Correct answer: Pulled by the licensed trade subcontractor performing the work
Licensed specialty trade subcontractors are typically required by code to pull their own permits, as the permit ties directly to their license and creates their liability for code-compliant work.
Question 6: A subcontractor warranty clause should specify at minimum:
- A one-day callback period
- The duration of warranty coverage and what defects are covered (Correct answer)
- That the GC is solely responsible for all post-completion defects
- Only manufacturer warranties apply
Correct answer: The duration of warranty coverage and what defects are covered
A clear warranty clause defining the duration and scope of the sub's responsibility for defects ensures recourse is available if workmanship problems appear after project completion.
Question 7: Which tool is most effective for tracking subcontractor progress against schedule on a complex remodeling project?
- A verbal daily check-in only
- A Gantt chart or scheduling software with milestone tracking (Correct answer)
- Invoices submitted by the subcontractor
- A single weekly site visit
Correct answer: A Gantt chart or scheduling software with milestone tracking
A Gantt chart or scheduling software visually maps trade activities against the project timeline, allowing the GC to spot delays early and adjust sequencing before they cascade.
CR Subcontractor Management & Coordination 2
A remodeler discovers a subcontractor has abandoned the job mid-project.
The FIRST step should be: