NASCLA Contractor's Guide Questions and Answers: Construction Management Essentials, Exams of Law

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The standard industry mark-up is? CORRECT ANSWER 15%

• Bus Law & Proj Mgmt pg 7- Which of the following is important to consider in order to avoid inaccuracies when making an accurate project estimate? A) Units of measure B) Time involved C) Overhead Costs D) Productivity time CORRECT ANSWER A) Units of measure
• Bus Law & Proj Mgmt pg 6- A crucial drawback of a ________ is double taxation. CORRECT ANSWER C Corp Class B fires are flammable liquids and require a special type of extinguisher to control them. Which of the following are considered Class B Extinguishers? A) Foam B) Carbon Dioxide C) Dry chemical D) All of the above CORRECT ANSWER D)
• OSHA 1926.150 Table F-, pg 213 Form _______ is mandatory to be assigned as an S Corporation. CORRECT ANSWER Form 2553, know as the sub chapter S election. Filing this form can be used to convert a C Corp to and S Corp

• Bus Law & Proj Mgmt pg 2- _________ insurance will protect against movable machinery left at the location or while being transported. CORRECT ANSWER Equipment Floater Class ____ fires are considered ordinary combustibles. A) A B) B C) C D) D CORRECT ANSWER A) Class A
• OSHA 1926.150 Table F-1, pg 213 A _____ bond promises the person building will complete the job for the amount quoted, will sign the agreement and will provide _____ and _____ bond. CORRECT ANSWER Bid bond, Performance and Payment
• Bus Law & Proj Mgmt pg 4- A ______ bond guarantees the owner that the contract work will be completed according to its terms including price and time. CORRECT ANSWER Performance bond
• Bus Law & Proj Mgmt pg 4- The Miller Act calls for ______ and ______ bonds for all Federal projects costing more than $100,000. CORRECT ANSWER Performance and Payment bonds
• Bus Law & Proj Mgmt pg 4- A _______ bond promises to subcontractors and vendors they will be compensated for their efforts and materials. CORRECT ANSWER Payment bond

• Bus Law & Proj Mgmt pg 4- There are _____ parts of a contract CORRECT ANSWER 4 parts - Offer and Acceptance
  • Consideration
  • Competent Parties
  • Legal Purpose What is the primary advantage of a design/bid/build delivery method? CORRECT ANSWER Known project cost before construction
• Const Proj Mgmt pg 102 & 256 Which of the following are considered Project Closeout phase documents? A) Certificate of substantial completion B) Lien releases C) Consent on Surety D) All of the above CORRECT ANSWER D)
• Construction Jobsite Mgmt pg 128 OSHA ______ captures individual incident information about workplace injuries and illness. CORRECT ANSWER Form 301
• Construction Jobsite Mgmt pg 248 & Bus Law Mgmt 12- OSHA mandates that the company keep records of Forms 300, 300A and 301 for ______ years. CORRECT ANSWER 5 years
• Bus Law & Proj Mgmt pg 12-

OSHA _______ is essentially a numerical summary of incidents for a particular location. CORRECT ANSWER Form 300A

• Construction Jobsite Mgmt pg 248
• Bus Law & Proj Mgmt pg 12- Soil types, are determined by particle _______. CORRECT ANSWER particle size.
• Principles and Practices of Commercial Const pg 8 ________ is the simplest method of providing temporary support for an existing building. CORRECT ANSWER Shoring
• Principles and Practices of Commercial Const pg 104 A subcontractor bond does what? CORRECT ANSWER it protects the GC in the event that the sub does not fully perform the contract Alternative dispute resolution includes A) Negotiation B) Mediation C) Arbitration D) All of the above CORRECT ANSWER D) All of the above
• Bus law The deadline for submitting your employee's W2 for the previous year is CORRECT ANSWER The last day of February
• Bus Law

Social security tax for a self employed contractor is__________ CORRECT ANSWER based on the rate set forth for the self-employed in which the tax is paid

• Bus Law 3 elements of a business plan CORRECT ANSWER -cover page -executive summary -company summary -products and services -market analysis -marketing strategy -financial plan advantages of sole proprietorship CORRECT ANSWER -minimal legal restrictions -simple ownership form -low start up costs -sole ownership of profits -freedom in decision making process disadvantages of sole proprietorship CORRECT ANSWER -unlimited personal liability -less available capital -possible difficulty obtaining long-term financing -dissolution of the business on the even of the owner's death

who has limited liability in the company? CORRECT ANSWER limited partners advantages of a general partnership CORRECT ANSWER -ease of formation -direct profit rewards -larger management base than that of a sole proprietorship disadvantages of a general partnership CORRECT ANSWER -unlimited personal liability of general partners -multiple decision makers -limited life of the business -changes of partners or partnership agreement may be difficult -partnership dissolves in the event of the death of a general partner bid documents CORRECT ANSWER -invitation to bid -bid instructions -bid forms -supplements what is an invitation to bid CORRECT ANSWER gives a brief overview of the project, deadlines, and general requirements bid instructions CORRECT ANSWER contain specifics of how the bis should be completed and submitted bid forms CORRECT ANSWER bid sheet bid schedule

bidder's questionnaire on the experience financial responsibility and capability copy of the contract supplements CORRECT ANSWER includes all items important to the overall bid process such as property and soil analysis what is the estimating checklist helpful for? CORRECT ANSWER when setting up your estimating framework to make sure that you have accounted for all materials and labor what is the most effective estimating method? CORRECT ANSWER quantity take off method what is labor burden CORRECT ANSWER (30% of labor cost) medicare and social security federal unemployment insurance worker's compensation liability insurance state unemployment insurance company benefits (health insurance, vacations) what are indirect costs CORRECT ANSWER small tools and pickup trucks what are allowances CORRECT ANSWER items not specified in the project plans such as carpeting, fixtures, and lighting)

what are contingencies CORRECT ANSWER percentages added to the estimate to protect the contractor if an unanticipated problem occurs what is project overhead CORRECT ANSWER cost that covers items necessary to complete the project but not directly associated with the labor and materials examples of project overhead CORRECT ANSWER bonds, temporary storage, temporary office, security guard, utilities, dumpsters, and portable toilets what is company overhead CORRECT ANSWER the cost of doing business (expenses necessary to keep the business running) examples of company overhead CORRECT ANSWER office rent accounting fees taxes telephone legal fees administrative labor what is mark up CORRECT ANSWER applied to the direct cost of the project what happens if mark up is too low CORRECT ANSWER you may not cover the costs for project which may cause you to break even or even lose money on the porject what is a conceptual estimate CORRECT ANSWER generally prepared by the architect using cost models from previous projects

what is the benefit of a job cost recording system CORRECT ANSWER helpful in the estimating and project management what are the 4 required elements of a contract CORRECT ANSWER offer and acceptance consideration competent parties legal purpose breach of contract occurs when a party... CORRECT ANSWER refuses to perform the contract performs an act prohibited by the contract prevents the other party from performing its obligations idemnification CORRECT ANSWER absolves the indemnified party from any payment for losses and damages incurred by a third party indemnification clauses must be... CORRECT ANSWER examined carefully to ensure the proper liability is distributed between the contractor and the owner 3 types of construction contracts CORRECT ANSWER lump sum unit price cost plus lump sum contract CORRECT ANSWER contractor agrees to complete the project for a predetermined, specified price

unit-price contract CORRECT ANSWER used for jobs where the extent of work cannot be fully determined or the actual quantities of required items cannot be accurately calculated in advance cost plus contract CORRECT ANSWER contractor is reimbursed for the actual cost of labor and materials and is paid a markup fee for overhead and profit a written agreement between the owner and contractor to change the contract CORRECT ANSWER change order why are oral agreements bad? CORRECT ANSWER not a good way to do business! get it in writing legal interpretation CORRECT ANSWER if the contract cannot be clarified based on this method, the interpretation will go against the party who wrote it 3 types of scheduling methods CORRECT ANSWER calendar bar chart critical path dates, delivery dates, payment schedules and employee vacations are what type of scheduling? CORRECT ANSWER calendar what is the main weakness of bar chart and calendar scheduling? CORRECT ANSWER do not show the interdependencies of activities shows the activity duration and sequence of tasks to be completed CORRECT ANSWER bar chart scheduling

shows the relationship between tasks CORRECT ANSWER critical path method of scheduling what is not a part of cash management? CORRECT ANSWER bidding bidding is a part of what? CORRECT ANSWER project management prohibited hiring questions CORRECT ANSWER how old are you do you have any disabilities are you pregnant are you married do you have children religion sexual orientation ethnicity employee documentation CORRECT ANSWER I- w- w- state tax form employment application policy signoffs emergency notification forms

what applies to employers that have one or more employees? CORRECT ANSWER fair labor standards act fair labor standards act CORRECT ANSWER prescribes standards for the basic minimum wage and overtime pay how many hours are in a work week CORRECT ANSWER 168 not following the FSLA results in what? CORRECT ANSWER penalties how many days do you have to complete I-9 forms? CORRECT ANSWER 3 how long must you keep immigration and I-9 forms? CORRECT ANSWER 3 years after the date of hire americans with disabilities act CORRECT ANSWER applies to employers with 15+ employees prohibits discrimination of persons with disabilities FMLA allows employees to do what? CORRECT ANSWER take up to 12 weeks unpaid job-protected leave each year creating a safe work environment is a good way to what? CORRECT ANSWER run your business if you have more than 10 employees your Emergency Action plan must be? CORRECT ANSWER written (NOT ORAL)

when is OSHA form 300 not required? CORRECT ANSWER when there are fewer than 10 employees what are the 3 OSHA forms for employers with over 10 employees? CORRECT ANSWER OSHA 300 OSHA 300A OSHA 301 how long do you keep OSHA 300? CORRECT ANSWER 5 years if a death occurs, how many hours do you have to report that to OSHA CORRECT ANSWER 8 environmental law includes... CORRECT ANSWER clean water act clean air act endangered species act national environmental policy act national historic preservation act what do contractors give to homeowners of homes that are pre-1978 CORRECT ANSWER protect your family from lead in your home pamphlet source documents CORRECT ANSWER cash receipts credit card receipts customer invoices purchase orders materials invoices

deposit slips time cards Miller Act CORRECT ANSWER Require performance and payment bonds on all federal construction projects greater than $100k Davis-Bacon Act CORRECT ANSWER Requires payment of prevailing wages on federally-financed or assisted projects. Walsh-Healey Public Contracts Act CORRECT ANSWER Requires payment of minimum wage and overtime on contracts that provide goods to the federal givernment Youth minimum wage CORRECT ANSWER Minors under 20; $4.25 during the first 90 days; cannot displace any employee to hire someone at youth rate Fair Labor Standards Act (FLSA) CORRECT ANSWER Minimum wage, youth minimum wage, overtime rate, pay at regular intervals, age restrictions (hours or work, or dangerous work) I-9 form requirements CORRECT ANSWER Within 3 days of hire; kept for 3 years after hire or 1 year after employment ends (whichever is later) FLSA youth limits CORRECT ANSWER Limits hours under 16 can work; forbids children under 18 from dangerous jobs FLSA criminal penalties CORRECT ANSWER 1st offense, fine up to $10k; 2nd imprisonment

FLSA civil penalties CORRECT ANSWER Up to $1,100 per violation 1099 Requirements CORRECT ANSWER Reporting payments of $600 or more to independent contractors