CSLB Estimating, Bidding, and Cost Control

Question 1

Which type of construction estimate is most accurate and is typically used for final bidding?

Accepted Answer

Detailed quantity takeoff estimate

Answer

A detailed quantity takeoff estimate — developed from final construction documents — is the most accurate estimate type and is used for final competitive bids.

Question 2

What is 'overhead' in a contractor's estimate?

Accepted Answer

Indirect costs of running the business not directly attributable to a single project

Answer

Overhead includes indirect costs such as office rent, equipment depreciation, administrative salaries, and insurance — costs necessary to operate the business but not tied to a single project.

Question 3

A 'lump sum' (stipulated sum) contract means:

Accepted Answer

The contractor agrees to complete the scope for one fixed total price

Answer

A lump sum contract requires the contractor to complete all specified work for a single fixed price, placing the risk of cost overruns on the contractor.

Question 4

In competitive bidding, a 'bid bond' serves to:

Accepted Answer

Ensure the bidder will enter into the contract at the bid price if awarded

Answer

A bid bond guarantees that if the bidder is awarded the project, they will execute the contract at the bid price — otherwise the surety pays the owner the difference.

Question 5

The term 'markup' in construction estimating refers to the percentage added to:

Accepted Answer

The total direct cost to cover overhead and profit

Answer

Markup is the percentage added to total direct project costs (labor, materials, equipment, subs) to cover overhead and generate profit.

CSLB - Contractors State License Board Practice Test

CSLB - Contractors State License Board Practice Test

CSLB Estimating, Bidding, and Cost Control