General Contractor License Planning and Estimating 5 — Questions and Answers
Question 1: What is the purpose of a 'schedule of values' submitted by the contractor?
- To list all subcontractors and their license numbers
- To break the contract price into line items for progress billing purposes (Correct answer)
- To document material costs only
- To request an advance payment from the owner
Correct answer: To break the contract price into line items for progress billing purposes
A schedule of values allocates the total contract price across work items so that monthly pay applications can be measured against actual progress.
Question 2: Which of the following best describes 'value engineering' during the planning phase?
- Increasing scope to add value for the owner
- Analyzing project components to achieve required function at lower cost without sacrificing quality (Correct answer)
- Estimating project value for insurance purposes
- Adjusting bids to match the engineer's estimate
Correct answer: Analyzing project components to achieve required function at lower cost without sacrificing quality
Value engineering systematically reviews design and materials to find cost-effective alternatives that meet the same functional requirements.
Question 3: A contractor estimates 500 cubic yards of concrete at $150/CY. A 10% waste factor applies. What is the adjusted material cost?
- $75,000
- $82,500 (Correct answer)
- $80,000
- $85,000
Correct answer: $82,500
500 CY × 1.10 waste factor = 550 CY × $150 = $82,500.
Question 4: What is the significance of the 'Notice to Proceed' (NTP) in project planning?
- It is the contractor's formal acceptance of a subcontract
- It is the owner's written authorization for the contractor to begin work, starting the contract clock (Correct answer)
- It is required before a bond can be issued
- It signals completion of the punch list
Correct answer: It is the owner's written authorization for the contractor to begin work, starting the contract clock
The NTP is the formal owner directive that officially starts the project and triggers the contract's time for completion.
Question 5: When preparing a bid, why is it important to review addenda issued before bid closing?
- Addenda set subcontractor payment terms
- Addenda modify the bid documents and all bidders must price the same revised scope (Correct answer)
- Addenda extend the contract duration automatically
- Addenda list preferred subcontractors
Correct answer: Addenda modify the bid documents and all bidders must price the same revised scope
Addenda are formal revisions to bid documents, and failing to include them in your estimate can result in scope gaps or bid disqualification.
Question 6: Which planning tool visually shows project tasks over a timeline using horizontal bars?
- Network diagram
- Pareto chart
- Gantt chart (Correct answer)
- Ishikawa diagram
Correct answer: Gantt chart
A Gantt chart displays project activities as horizontal bars plotted against a calendar timeline, making it easy to see schedule and sequence.
Question 7: What does 'liquidated damages' mean in a construction contract?
- Damages the contractor can claim for owner-caused delays
- A pre-agreed daily penalty the contractor pays the owner for failing to finish on time (Correct answer)
- The cost of repairing defective work
- Insurance payouts for on-site accidents
Correct answer: A pre-agreed daily penalty the contractor pays the owner for failing to finish on time
Liquidated damages (LDs) are a specified daily dollar amount the contractor owes the owner for each day past the contract completion date.
General Contractor License Planning and Estimating 5
What is the purpose of a 'schedule of values' submitted by the contractor?