General Contractor License Project Management 3 — Questions and Answers
Question 1: A general contractor is preparing a bid for a lump-sum contract. Which cost element is most commonly overlooked that can lead to project losses?
- Labor wages listed in the plans
- General conditions and overhead costs (Correct answer)
- Material quantities from the drawings
- Subcontractor scope items
Correct answer: General conditions and overhead costs
General conditions (site trailer, supervision, temporary utilities, insurance) and overhead are frequently underestimated, eroding project profit margins.
Question 2: What is the primary purpose of a preconstruction meeting held before work begins on a project?
- To negotiate final contract terms with the owner
- To establish project communication protocols, schedules, and coordination procedures (Correct answer)
- To conduct a final safety inspection of the site
- To obtain the building permit from the local jurisdiction
Correct answer: To establish project communication protocols, schedules, and coordination procedures
Preconstruction meetings align all stakeholders on project procedures, communication channels, submittal requirements, and schedule milestones before work starts.
Question 3: Under a cost-plus contract with a Guaranteed Maximum Price (GMP), what happens if final project costs fall below the GMP?
- The owner keeps all savings automatically
- Savings may be shared between the owner and contractor per the contract terms (Correct answer)
- The contractor must refund the unused contingency to the government
- The contract is void and must be renegotiated
Correct answer: Savings may be shared between the owner and contractor per the contract terms
GMP contracts typically include a savings clause that specifies how cost savings below the maximum price are split between owner and contractor.
Question 4: Which document establishes the contractor's quality control requirements and inspection procedures for a construction project?
- Project schedule baseline
- Quality Control Plan (QCP) (Correct answer)
- Submittal register
- Site safety program
Correct answer: Quality Control Plan (QCP)
A Quality Control Plan defines inspection checkpoints, testing requirements, deficiency correction procedures, and responsibilities for maintaining work quality.
Question 5: A subcontractor walks off the job due to a payment dispute with the general contractor. Under the terms of a standard subcontract, what is the general contractor's MOST appropriate immediate action?
- File a mechanic's lien against the subcontractor
- Declare the subcontractor in default and issue a cure notice (Correct answer)
- Terminate the subcontract immediately without notice
- Withhold payment from all other subcontractors as leverage
Correct answer: Declare the subcontractor in default and issue a cure notice
Most subcontracts require a written cure notice giving the subcontractor an opportunity to remedy the default before termination can proceed.
Question 6: What is the purpose of 'punch list' work in the final phase of construction?
- To document safety violations for OSHA reporting
- To identify and complete minor deficiencies before final acceptance (Correct answer)
- To calculate final contract retainage amounts
- To prepare as-built drawings for permit closeout
Correct answer: To identify and complete minor deficiencies before final acceptance
A punch list catalogs remaining minor items that must be corrected or completed before the owner grants final acceptance and releases retainage.
Question 7: A general contractor is managing multiple subcontractors on a large commercial project. Which scheduling technique is MOST effective for identifying resource conflicts between trades?
- Bar chart scheduling alone
- Resource-loaded CPM schedule (Correct answer)
- Look-ahead schedules only
- Milestone chart tracking
Correct answer: Resource-loaded CPM schedule
A resource-loaded CPM schedule assigns labor and equipment resources to each activity, making conflicts between concurrent trades visible and manageable.
General Contractor License Project Management 3
A general contractor is preparing a bid for a lump-sum contract.
Which cost element is most commonly overlooked that can lead to project losses?