CR Subcontractor Management & Coordination 2

Question 1

A remodeler discovers a subcontractor has abandoned the job mid-project. The FIRST step should be:

Accepted Answer

Issue a written cure notice or notice of default per the subcontract terms

Answer

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:

Accepted Answer

Injuries sustained by the subcontractor's employees while working on the project

Answer

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:

Accepted Answer

The GC must pay the sub only after the GC receives payment from the owner

Answer

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:

Accepted Answer

Significantly lower than all other bids without explanation

Answer

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:

Accepted Answer

Pulled by the licensed trade subcontractor performing the work

Answer

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.

CR - Certified Remodeler Practice Test

CR - Certified Remodeler Practice Test

CR Subcontractor Management & Coordination 2