FCC Estimating, Bidding & Financial Management 2 — Questions and Answers
Question 1: A contractor submits a bid and later discovers a material error in the estimate. Under Florida law, what is the contractor's BEST course of action?
- Proceed with the contract and absorb the loss
- Notify the owner immediately and request bid withdrawal before award (Correct answer)
- Wait until after award to renegotiate the price
- Subcontract all work to limit exposure
Correct answer: Notify the owner immediately and request bid withdrawal before award
Florida courts generally allow bid withdrawal for material, clerical errors if the contractor notifies the owner promptly before contract award.
Question 2: Which cost category includes project manager salary, office rent, and company vehicles when allocated across multiple projects?
- Direct job costs
- General overhead costs (Correct answer)
- Subcontractor costs
- Permit fees
Correct answer: General overhead costs
General overhead (indirect costs) covers expenses not tied to a single project but necessary to run the business, allocated proportionally.
Question 3: A contractor's bid bond is typically set at what percentage of the total bid amount?
- 1–2%
- 5–10% (Correct answer)
- 15–20%
- 25–30%
Correct answer: 5–10%
Bid bonds on public projects in Florida are commonly required at 5–10% of the bid to guarantee the bidder will enter the contract if selected.
Question 4: What does the term 'unit price contract' mean in construction bidding?
- A lump-sum price for the entire project
- Payment based on actual quantities of work at pre-agreed prices per unit (Correct answer)
- A fixed fee plus reimbursable costs
- A price per square foot for the finished building
Correct answer: Payment based on actual quantities of work at pre-agreed prices per unit
Unit price contracts establish a price for each measurable unit of work; the total is determined by multiplying unit prices by actual quantities installed.
Question 5: When preparing a Schedule of Values for a project, which principle should govern how line items are broken down?
- Maximize the number of line items regardless of size
- Front-load all items to improve early cash flow legally
- Reflect the actual cost distribution of the work (Correct answer)
- Group all subcontractor costs into a single line item
Correct answer: Reflect the actual cost distribution of the work
A Schedule of Values must honestly represent the proportional cost of each work element to support accurate progress billing.
Question 6: A subcontractor quotes $45,000 for plumbing rough-in. The general contractor adds 10% markup and 5% overhead. What is the total cost included in the bid?
- $49,500
- $51,975 (Correct answer)
- $52,650
- $54,000
Correct answer: $51,975
$45,000 × 1.10 = $49,500 (markup), then $49,500 × 1.05 = $51,975 (overhead applied to marked-up sub cost).
Question 7: Florida Statute 255.0525 governs advertisement of public construction bids. What is the minimum advertisement period for projects over $500,000?
- 7 days
- 14 days
- 21 days (Correct answer)
- 30 days
Correct answer: 21 days
Florida Statute 255.0525 requires at least 21 days of public advertisement for construction contracts exceeding $500,000.
FCC Estimating, Bidding & Financial Management 2
A contractor submits a bid and later discovers a material error in the estimate.
Under Florida law, what is the contractor's BEST course of action?