General Contractor License Planning and Estimating 3 — Questions and Answers
Question 1: What is the primary purpose of a pre-bid site visit?
- To negotiate prices with the owner
- To assess site conditions that may affect the cost and method of construction (Correct answer)
- To submit a notice of intent to bid
- To obtain the building permit
Correct answer: To assess site conditions that may affect the cost and method of construction
A pre-bid site visit allows contractors to identify existing site conditions, access issues, and other factors that affect cost and planning.
Question 2: Which type of estimate is typically prepared from schematic or preliminary drawings and is least accurate?
- Definitive estimate
- Conceptual (order of magnitude) estimate (Correct answer)
- Detailed estimate
- Bid estimate
Correct answer: Conceptual (order of magnitude) estimate
A conceptual or order-of-magnitude estimate uses minimal design information and carries the widest range of accuracy, often ±30–50%.
Question 3: A general contractor's bid includes $50,000 for self-performed work and $200,000 in subcontractor quotes. Which portion typically receives a markup for managing subs?
- Only the self-performed work
- Only the subcontractor costs (Correct answer)
- Both equally
- Neither — markups only apply to materials
Correct answer: Only the subcontractor costs
Contractors typically apply a markup (often 5–10%) on subcontractor costs to cover coordination, administration, and risk.
Question 4: In the context of construction scheduling, what does 'resource leveling' mean?
- Equalizing profit across all subcontractors
- Adjusting the schedule to smooth out peaks and valleys in resource demand (Correct answer)
- Distributing materials evenly across the site
- Balancing the budget between phases
Correct answer: Adjusting the schedule to smooth out peaks and valleys in resource demand
Resource leveling adjusts activity timing to avoid over- or under-utilization of labor, equipment, or materials at any point in time.
Question 5: What is the difference between a lump-sum contract and a unit-price contract?
- Lump-sum pays per item installed; unit-price pays a fixed total
- Lump-sum is a fixed total price; unit-price pays per measured unit of work (Correct answer)
- Lump-sum includes materials only; unit-price includes labor only
- There is no meaningful difference
Correct answer: Lump-sum is a fixed total price; unit-price pays per measured unit of work
A lump-sum contract has one agreed total price, while a unit-price contract pays based on actual quantities of work measured in the field.
Question 6: What does a 'milestone' represent in a construction schedule?
- A mandatory overtime period
- A significant event or point in the project with zero duration (Correct answer)
- A budget checkpoint requiring owner approval
- The start of each subcontractor's work
Correct answer: A significant event or point in the project with zero duration
A milestone is a key event or deliverable in the schedule, shown as a point with no duration, such as 'foundation complete.'
Question 7: Which estimating method applies a cost-per-square-foot factor based on similar past projects?
- Assembly estimating
- Unit-price estimating
- Square-foot (parametric) estimating (Correct answer)
- Bottom-up estimating
Correct answer: Square-foot (parametric) estimating
Square-foot or parametric estimating uses historical cost-per-unit-area data from comparable projects to develop a quick preliminary estimate.
General Contractor License Planning and Estimating 3
What is the primary purpose of a pre-bid site visit?