General Contractor License Project Management and Supervision 5 — Questions and Answers
Question 1: A general contractor issues a backcharge to a subcontractor. This typically occurs when:
- The subcontractor completes work ahead of schedule
- The GC incurs costs to correct, complete, or clean up after a subcontractor's failure (Correct answer)
- The owner reduces the scope of the subcontract
- A subcontractor requests additional mobilization fees
Correct answer: The GC incurs costs to correct, complete, or clean up after a subcontractor's failure
Backcharges recover costs the GC spent remedying a subcontractor's breach of contract, such as cleanup, rework, or protection of other work.
Question 2: Which document is used to formally request information or clarification from the architect or engineer during construction?
- Change Order (CO)
- Request for Information (RFI) (Correct answer)
- Submittal transmittal
- Notice of Non-Compliance
Correct answer: Request for Information (RFI)
An RFI is the formal mechanism for contractors to ask the design team for clarification on drawings or specifications without assuming the resolution themselves.
Question 3: What is the 'pay-if-paid' clause in a subcontract, and why is it significant?
- It requires the GC to pay subcontractors immediately upon invoice
- It conditions the GC's obligation to pay the sub on the GC first receiving payment from the owner, shifting owner nonpayment risk to the sub (Correct answer)
- It establishes a retainage-free payment schedule
- It prevents the owner from withholding retainage
Correct answer: It conditions the GC's obligation to pay the sub on the GC first receiving payment from the owner, shifting owner nonpayment risk to the sub
Pay-if-paid clauses transfer the risk of owner nonpayment from the GC to the subcontractor; enforceability varies by state, with some states restricting or prohibiting them.
Question 4: During project closeout, which of the following should the general contractor compile and deliver to the owner?
- Only the final payment application
- As-built drawings, warranties, operations and maintenance (O&M) manuals, and final lien waivers (Correct answer)
- Only subcontractor contact information
- A summary of safety incidents only
Correct answer: As-built drawings, warranties, operations and maintenance (O&M) manuals, and final lien waivers
Complete project closeout documents include as-builts, manufacturer warranties, O&M manuals, training records, and final lien releases to transfer full building responsibility to the owner.
Question 5: What is retainage in a construction contract, and what is its typical percentage?
- A bonus paid for early completion, typically 5%
- A portion of each progress payment withheld by the owner (typically 5–10%) until substantial or final completion to ensure contract performance (Correct answer)
- An escrow account for subcontractor disputes
- A fee charged by the architect for shop drawing review
Correct answer: A portion of each progress payment withheld by the owner (typically 5–10%) until substantial or final completion to ensure contract performance
Retainage incentivizes contractors to complete all punch list items and protects owners against defective work or incomplete scopes; many states regulate maximum retainage percentages.
Question 6: A superintendent's PRIMARY responsibility on a construction site is to:
- Negotiate change orders with the owner
- Direct and coordinate daily field operations, subcontractors, and workforce to execute the work per plans and schedule (Correct answer)
- Process all pay applications for subcontractors
- Handle all permit applications
Correct answer: Direct and coordinate daily field operations, subcontractors, and workforce to execute the work per plans and schedule
The superintendent is the on-site manager responsible for daily construction activities, quality control, safety compliance, and coordinating subcontractors to meet project milestones.
Question 7: When a project owner issues a 'Notice of Termination for Convenience,' the contractor is generally entitled to:
- Nothing, because the owner can terminate without compensation
- Recovery of costs incurred to date, a reasonable profit on work performed, and demobilization costs (Correct answer)
- Full contract value including work not yet performed
- Only direct material costs, not overhead or profit
Correct answer: Recovery of costs incurred to date, a reasonable profit on work performed, and demobilization costs
A termination for convenience clause allows owners to end the contract without cause but requires fair compensation for work performed, profit on completed work, and reasonable wind-down costs.
General Contractor License Project Management and Supervision 5
A general contractor issues a backcharge to a subcontractor.
This typically occurs when: