NASCLA CONTRACTORS GUIDE (VIRGINIA 8TH EDITION) & VIRGINIA UNIFORM STATEWIDE BUILDING, Exams of Organization and Business Administration

Download NASCLA CONTRACTORS GUIDE (VIRGINIA 8TH EDITION) & VIRGINIA UNIFORM STATEWIDE BUILDING and more Exams Organization and Business Administration in PDF only on Docsity!

NASCLA CONTRACTORS

GUIDE (VIRGINIA 8TH

EDITION) & VIRGINIA

UNIFORM STATEWIDE

BUILDING CODE "USBC" (

EDITION) 100% VERIFIED

ANSWERS 2024/

CORRECT STUDY SET

What are some of the advantages of a sole proprietor? Business can be sold at will Freedom in Decision Making Process Sole Ownership of Profits Low startup cost Simple Ownership Form Minimal Legal Restriction What are some of the disadvantages of a Sole Proprietor? Less Available capital Unlimited Personal Liability Possible difficulty obtaining long term financing dissolution of the business in the event of the owner's death

This is the relationship between two or more persons who join to carry on a trade or business. Each person contributes money, property,labor, or skill and each partner expects to share in the profits and losses of the business. Is classified as a Partnership What are the two different types of partnerships? General Partnership & Limited Partnership This partnership consists of one or more general partners and one or more limited partners. Limited partners have limited Liability in the company. In this partnership the partners have no personal liability for the business partnership. They are liable only for the previously agreed-upon contribution to or investment in the business. Limited Partnership This partnership consists of general partners that own the assets of the company just as individual own assets in a sole proprietorship. In this partnership all owners have personal and unlimited liability for all actions undertaken in the name of the business including debt. Each partner is responsible for the acts of others partners when they act in the name of the business. General Partnership What are some of the disadvantages of a general partnership? 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 The Virginia State statute requires that prior to a joint venture engaging in or offering to engage in contracting work in Virginia Each contracting party of the joint venture shall be properly licensed under the Virginia licensing law or a proper contractor's license shall be obtained in the name of the joint venture. What is a joint venture?

This is a special business arrangement that exists when two or more companies joint undertake a specific project. What is the purpose of Licensing & why is it required? A major purpose of licensing is to protect the health, safety, and welfare of the public. Licensing establishes entrance requirements standards of practice and disciplinary authority to protect the public from unqualified incompetent and unethical contractors. It was established to regulate businesses that construct or improve facilities on property owned by others. Virginia Board for Contractors The Board is composed of 15 governor-appointed members who serve 4 years and includes what?

• Seven Licensed Contractor members
• 3 representatives from the tradesman Licensure Program
• one local building official member What is one of the exemptions that exists in the virginia Licensing law? Any material supplier who renders advice concerning use of products sold and who does not provide construction or installation services. What is the total value of a single contract or project for a License Class A? $120,000 or More for a single contract or project What is the total value of all projects in 12 month period for a class A license class? $750,000 or More How are license classes determined? License classes are determined by Net Worth. The specific minimum net worth requirements for class A is $45,000 or more

The specific minimum net worth requirements for class B is $15,000 or more The specific minimum net worth requirements for class C is No net worth requirement How long is the original license issued for? Orginal Licenses expired two years from the last day of the month in which they were issued. What must you do to renew your license? To renew the license, the license holder must file a completed renewal form and submit appropriate fees within 30days of the license expiration date. Applicants for renewal must meet all of the initial licensure qualifications for the particular class of license. What happens if a license holder's renewal form and fees are not received within 30 days of the license expiration date? If a license holder's renewal form and fees are not received within 30 days of the license expiration date, the licensee must reinstate the license. To maintain a valid license contractors are expected to timely update the Board Office with any change in status. Changes that require notification include Change of designated employee shall be reported within 90 days; Change of a qualified individual shall be reported within 45 days; Change of a business/trade name shall be reported within 30 days; the information on the knowledge, skills, abilities of the person applying Class A- contractor license applications should include The contractor's license is revoked when a claimant is paid funds from the contractors recovery trust fund what happens? the joint venture or each one of the parties must be licensed

What is a requirement for a joint venture? a material supplier who advises a contractor Who does not need to be licensed? a fine of 500 dollars per day of the violation plus penalties for a misdemeanor The penalty for a contractor who undertakes work without the proper class of a license is what? It should include the business address of the of the designated employee What does the application for licensure must include? The primary purpose of licensing is to protect the health and welfare of the public What is the primary purpose of licensing? A full time employee with a minimum of 30 hours a week The board rules and regulations a qualified individual must be 30 days If a licensee's name changes it must be reported to the board within a maximum of how many days? $360 Dollars What is class A initial license fee not including the recovery fee? immediately If a stop work order is issue when must the work be stopped? Building Official the local building department has the_______ in charge? It must comply with the current code for the new construction If any additions are to be made to a building what must it comply with? 5

A building official issues a certificate of occupancy for a building that meets all the requirements for a certificate within a MAXIMUM of how many working days after the certificate was requested? 90 days an appeal of the local building official decision to refuse to grant modification to the USBC what is the maximum days 45 days If a contractor is assessed a fee to support the transaction recovery fund must pay the fee with a minimum of how many days from when fee notice was mailed 12 months What is the maximum period of time that a verified claim for payment from the transaction recovery fund must occur $400, Contractors will be assessed a fee if the transaction recovery fund balance is less than Residential This type of structure may be subject to recovery from the transaction recovery fund? Attorney's Fees Payments made by the Transaction Recovery Fund to claimants may include an amount for 30 days An appeal of a final decision of a county on an erosion control plan MUST be filed within a MAXIMUM of how many days? 30 days Temporary erosion and sediment control measures MUST be removed within a MAXIMUM of how many days after the final site stabilization? The business, or any part of it, can be sold, altered, or exchanged at will

Which of the following statements about a sole proprietorship Partnership This business organization allows people to share financial resources? profit margin All of the following are considered general conditions that could affect costs directly associated with a specific project EXCEPT Conceptual estimate Which of the following estimating methods is typically used by the architect rather than the contractor? calculating the number of hours or days it is needed Equipment needs for a project are BEST estimated by assume ideal conditions A contractor should do all of the following when estimating a project EXCEPT Both overestimating and underestimating costs could have disastrous consequences. Which of the following is a TRUE statement about estimating? Labor burden What should be added to wage rates to ensure accuracy in estimating labor for a project? project overhead Costs that relate to construction activity but are NOT easily identifiable for a specific project are considered low estimates decrease profits and high estimates decrease volume The two basic laws of construction estimating are Materials, labor, equipment, and overhead costs.

What MUST be included in an estimate for a job? cover company overhead costs A reason for using a lower than usual profit markup for a specific project could be to part of the contract A contract refers to an insurance agreement that the contractor is REQUIRED to have. This is considered The subcontractors are prime contractors An owner hires a construction manager for a project. Which of the following is TRUE with regard to subcontractors? specifically state this in the agreement A contractor plans to use materials or methods other than those standard in the industry. The contractor should cost plus contract An agreement that calls for a contractor to be paid actual costs for labor and materials plus a fixed fee for the contractor's overhead and profit is called a offer, acceptance, and consideration The three PRIMARY elements of a contract are Light fixture costs What may be covered by an allowance in a contract? verify that the representative has the authority to bind the corporation A contractor is about to sign an agreement with a representative of a corporation. The contractor should a reasonable amount of time A bid that does NOT specifiy how long it remains open or in effect is considered to be open for

Project owner Generally, who is responsible for ensuring that a project meets all zoning requirements? is responsible for the overall construction of the project The prime contractor is one who identifies activities that must be completed before other activities can occur An ADVANTAGE of a Critical Path Method (CPM) schedule is it make sure the superintendent agrees with it. An important factor in ensuring that a schedule is followed is to does not directly supervise day-to-day field activities The PRIMARY difference between a project manager and a project superintendent is that the project manager The total resource demand for a project at any given time What can be determined by summing the project activities into an overall schedule? put the order requirements in writing The BEST business practice for special-ordered materials is to A job cost system What can be used to collect information on labor, materials, equipment, and overhead costs used during the performance of a job? Failing to disclose one subcontractor's bid to another Which of the following is considered ethical behavior? An accident at the job site that damages the neighbor's house What does a comprehensive general liability insurance policy protect a company against? Key man

What type of insurance is needed for a partnership to insure that the business does NOT go out of business if one partner dies? Insurance What protects a contractor from risk? Cleaning supplies What type of material at a construction site may be considered hazardous waste? 30 years Records of an employee's exposure to hazardous materials MUST be kept a MINIMUM of how many years? Constantly AT LEAST how often should employees watch for possible hazards at the jobsite? 30 years Medical records of work-related injuries to long-term employees MUST be kept for a MINIMUM of what duration after the employee leaves employment? 500 Approximately how many materials are currently on the EPA hazardous materials list? all employers with at least one employee Who MUST follow the Fair Labor Standards Act? 4 years Time cards must be kept for a minimum of Every 2 months how often MUST an employer report information on the number of employees and the number of new hires in order to meet the requirements of the Child Support Enforcement Act?

other expenses Losses from the sale of a company asset are considered Summary of accounts in the general ledger Where does the information for a company's financial statement come from? Assets, liabilities, and owner's equity. What is included in a company's balance sheet? owner's equity A company's net worth is equal to time cards Which of the following is considered a source document in an accounting system? two times per week An employer who withholds more than $1,000 per month from employees for state taxes MUST pay those taxes at LEAST w An employee can request to receive advance earned income credit on Form 1099 Compensation paid to independent contractors is reported on Form he taxes must be held in a separate account and not used for anything What MUST be done with the taxes withheld by an employer between the time that they are withheld and the time that they are sent to the IRS? intent to defraud by the contractor

A contractor uses funds paid by a project owner to purchase materials to start a different project. The laborers for the original project do NOT get paid by the contractor. Under the lien law, this is considered Partnering What is the name of the process when a facilitator meets with the major participants in a project, prior to the commencement of the project, to identify the shared goals of all participants? Damage to adjoining property from a crane accident Which of the following would typically be covered by a contractor's comprehensive general liability insurance policy? OSHA Who oversees compliance with Material Safety Data Sheets? General journal Where would depreciation of equipment first be entered? 5.75% What percent should the employer withhold for Virginia withholding for an employee who is to receive a separate supplemental payment for vacation? The employer is using a flat percentage rate. Homeowners who have suffered a reimbursable loss Contractor Transaction Recovery fund was created to provide some amount of monetary assistance to whom? recovery amounts per claimant are limited to 20000. The contractor transaction recovery fund is limited to how much $ The total payout from the fund per CONTRACTOR is $25 Assessment Fee

A ____________ is incorporated into the application fee for the contractor transaction recovery fund it is set at $400,000 and it will not exceed $ The minimum balance of the fund is set at how much? If the balance falls below this amount an assessment is made upon renewal of license. This additional assessment will not exceed how much for a two year period? your business and personal property when damage theft or losses occur. Property insurance typically covers Major construction defects such as poor workmanship and faulty design are not covered. What is not covered under the all risk builders risk insurance? Peril policies are written for fire and lightening but can also include events such as wind damage, explosion, and water damage terrorism or earthquake Named Peril Builders' Risk Insurance Policies includes what property insurance that you can purchase for your tools & equipment. Inland Marine/Equipment theft Insurance Basic liability coverage that covers four type of injuries including; bodily injury that results in actual physical damage or loss for individuals who are not employees, damage or loss to property not belonging to the business. Commercial General Liability (CGL) protects the transporter against damage that occurs to freight during transport Transportation floater an motor truck cargo insurance this type of coverage is beneficial if your company depends on specific individuals for continuing success of your business. especially if your legal structure is the success or ongoing existence of the company would not continued if one of the partners died or became incapacitated. Key Man Life Insurance

provides coverage for employees who are injured on the job. The insurances purchased by the employer. workers compensation Insurance three or more full-time or part time employees must purchase and maintain workers compensation insurance. Under Virginia law employers who regularly employ when hiring subcontractors you should verify their insurance coverage to ensure it is adequate enough to cover any liability arising from their work. Insurance coverage for subcontractors A surety bond is a risk transfer mechanism between a surety bonding company the contractor and the project owner. What is A bond? Bid Bond A ________________ guarantees that the contractor if awarded the job, will do work at the submitted bid price enter into a contract with the owner and furnish the required performance and payment bonds. Performance Bond A__________________ guarantees that the contractor will complete a contract within its time frame and conditions. Payment Bond A___________________ guarantees subcontractors and suppliers that they will paid for work if they perform properly under the contract. maintenance bond A___________________ guarantees that for a stated period typically for one year no defective workmanship or material will appear in the completed project.

10 X (Working capital) (working capital = Current Assests -- Current liabilities) (50000 x 10 = 500000 Bonding Cap What is the maximum bond Amount? The miller act is current law requiring performance and payment bonds on all federal construction projects valued greater than 100000 What is the Miller act? Are void before the work begins Waivers of Miller Act payment bond protections The price is determined AFTER costs have been established How is the cost established for manufacturing? The price is determined BEFORE actual costs are determined How is the cost established for construction? Bidding too low = Insufficient cushion Higher estimates decrease volume (Fewer bid Awards) It can have disastrous consequences Accurate estimating is important to the profitability of a construction company because An addendum is issued and it becomes part of the contract when awarded. What happens if changes are made to a bid package before due? Quantity Take Off Method Includes: Direct Cost-The 4 MS

1. Labor

2. Material
3. Equipment
4. SUBS Indirect Costs P O/H C O/H Profit (markup) One accurate method of estimating is the ____________________ ? This method you individually estimate units of materials and labor for each task you listed in your estimating frame work. Determining Labor cost for each task What is the most difficult aspect of estimating? Labor Cost per Task Required Labor hours per task X Labor Rate = Conceptual Estimate This type of estimate is prepared by the architect using cost models from previous projects. Using historical information from the past is the best way to predict overhead for the following year. how can you calculate an overhead percentage? Square-foot Method The project cost is a calculation of the square footage of the project multiplied by unit cost. Another variation of this method is using cubic feet of the project multiplied by a unit cost. Unit price method This factors all of the cost factors such as labor materials, equipment and subcontractors to come up with a unit price for the entire task. 30 to 90 day process

Once your bid is submitted it is review by the owner how long is the review process? offer, consideration, acceptance what are the required 3 primary elements of a contract? Counter offer A________________ is not considered acceptance. Contract provisions make it clear to prevent disputes What is the purpose of contract provisions? Liquidated or stated damages These type of damages are written into a contract usually when there is a breach in contract. Per Day rate for liquidated damages EX: contract specifies $400 dollars per day assessment and contractor finishes 30 days late $ in liquidated damages is assessed to contractor. Breach of contract happen occurs if contracts are not completed within the time frame specified in the contract this is specify in contract for the loss of use this is specified in contract Lump Sum Contract In this type of contract the contractor agrees to complete the project for a predetermined specified price. The contractor essentially assumes all of the risk under this contract because the contractor is responsible for additional cost associated with unforeseen circumstances. Unit Price Contract This type of contract may be used for jobs where the extent of work cannot be fully determined or the actual quantities of required items can not accurately be calculated in advance. cost plus contract

using this contract the contractor is reimbursed for the actual cost of labor and materials and is paid a markup fee for overhead and profit. The owner may pay the actual costs plus a percentage markup or a fixed fee markup. single prime This method is a traditional form of contracting. The project owner typically hires an architectural firm to design the project. The contractor then performs the work. Design/ Build In this method the owner contracts with one company to complete the process from start to finish. Construction Management Under this method the project owner contracts with professionals construction manager to coordinate and manage the project. Turnkey in this type the you manage the construction and design team but the contractor also has to obtain financing and land. Fast Track Under this method the construction process begins before the completion of the contract. It involves a phased approach to the project. Change Order A _____________ is a written agreement between the owner and contractor to change the contract Addenda Changes prior to the contract award are called what Modifications Changes made after the contract is signed and executed are called the party who wrote it

If a contract cannot be clarified based on this method the interpretation will go against Flow down This is known as a contract clause that says the same obligation and responsibilities owner- contractor- subcontractor. Free Float time This is the remaining time after a task is complete and before the next task begins. Float time The amount of time an activity can be delayed without impacting the early start of the next activity. Bar Chart "Gantt Chart" One of the main weaknesses of this chart is the they do not show the interdependencies of activities. Critical Path Method (CPM) This scheduling illustrates the interdependent relationship of task. It Identifies activities that must be completed before other activities can occur. superintendent This person is responsible for the daily operations. The architect Who must certify each progress payment Personal comments it should only contain factual information No quality if workmanship The daily log/report must not list what? Just in time Deliveries This will keep your inventory cost low. It allows you to time deliveries to arrive as soon as you need the materials according to the work to be completed.

it is the cost estimate and job cost system What is the easiest way to track your budget? Cost overruns occurs when you exceed budgeted amounts in your estimate. What is cost overruns? Quality Assurance Neglecting quality can cost you in the long run. ensuring the customer recieves a quality built product is one of the most important aspects of project management. Fair Labor Standards Act This applies to employers who have 1 or more employees $7. federal minimum wage is pay overtime compensation of one and one half times the regular rate after 40 hours of work in a work week. Employers must Exempt Employees Administrative personnel Executives Professional Employees Outside Sales Employees are all considered A work week is a period of 168 hours during 7 consecutive 24 hour periods How is a work week defined under FLSA vacation holiday serverance or sick pay FLSA does not require They are subject to a civil penalty of up to $1000 for each violation

How much are employers who willfully violate the minimum wage or overtime pay requirements fined? at least 3 years after the date of hire or 1 year after the employment ends I9 must be kept on file for how long it must be completed within 3 days of hire When must an I9 be completed U.S. Passport Which document establishes both Identity and employment eligibility? Discrimination against persons with disabilities and applies to employee with 15 or more employees. EX: Alcoholism Drug Addiction The American with Disabilities Act (ADA) prohibits what? Epilepsy Paralysis HIV Infection Aids What are some examples of the ADA that applies to persons who have impairments that substantially limit major life activities The Davis-bacon Act requires payment of prevailing wage rates and fringe benefits on federally financed or assisted construction. What is the Davis-Bacon Act? The family and medical act entitles eligible employees of covered employers to take up to 12 weeks of unpaid job protected leave each year. What is the family and Medical Act?

The right to work law secures the right of employers to decide for themselves whether or not to join or financially support a union. What is the right to work? Understand and take responsibility with OSHA standards and quickly correct any violations. The employer must OSHA requires you have an emergency action plan if you have more than 10 employees. When must you have an Emergency Action Plan in writing? A form 300 A which includes a summary of the previous years injury and illnesses. The data from the form 300 is use to complete this form. Form 300 A must be posted by February 1 and kept in place until at least April 30 of the following year covered by form. Each year the employer must conspicuously post in the workplace Osha Records must be kept for 5 years How long must osha records be kept by the employer? 8 hours Fatalities and Hospitalizations must be reported orally to OSHA within how long? Medical Treatment means the management and care of a patient to combat disease or disorder How is medical treatment defined? be kept on hand by employer for all chemicals used in the workplace. It provides emergency information in case of contact with chemical. Material Safety data sheets (MSDS) must Officials conduct inspections and they can issue citations for violations. What happens if you are not following osha standards?

violation that employer knowingly commits with plain indifference to the law. The employer knows what he or she did. The penalty can be up to $70000 with a penalty minimum of $5000 for each violation. What is a willful violation and what is the penalty? During the pre-bid phase you must learn the regulations that pertains to the project and factor in the cost of compliance into the estimate. What is the pre-bid phase? it makes it unlawful for any persons to discharge any pollutant from a point source into navigable waters unless a national pollutant discharge elimination system (NPDES) permit was obtained. What is the clean water Act? Cleaning supplies What is considered Hazardous Material? If during construction you uncover hazardous substances you must stop the construction activities immediately and notify the owner and contact the national response center. What must you do if you uncover hazardous substances? Federal law requires that contractors provide lead information to residents before renovating pre 1978 housing. The EPA publishes a pamphlet that must be distributed to the owner and occupants before starting work. What must be provided under lead PRE federal law? Work designed to permanently eliminate lead based paint hazards is considered lead abatement and is not subject to the guidelines under lead PRE. What is lead abatement? 37500 per day for each violation What is the penalty associated with lead violations? A source document is the proof that a transaction took place.

What is a source document? the financial situation of the company It is comprise of Assets = liabilities + owners' equity A balance sheet shows the companies Liabilities are all debt and obligations owed What are liabilities? Liabilities that will mature and must be paid within one year What are current Liabilities? Working capital can also be determine by looking at the balance sheet. Use this Equation; Current Assets- Current Liabilities = working capital What is working capital Show the financial Operation of the firm Income Statement Income - Cost of goods Sold = gross Profit Gross Profit- Expenses= Net Income Revenues - Cost of construction = Gross Profit what is the profit equation The liquidity ration is calculated by dividing the current liabilities/ current assets

It determines if the company can pay its current debts. If the ratio is greater than one the company is in a positive liquidity position. How is the Liquidity Ratio calculated and what is it? (Current Assets - Inventory) / current liabilities = Quick ratio What is quick ratio and how is it calculated? The debt ratio measures the percent of total funds provided by creditors. The formula; total debt/ total assets=debt ratio What is the debt ratio? it is used to calculate profit margin of the company the formula; Net Income/Revenues=profit margin What is the profitability ratio Net Profit (after taxes)/ total asssets= return on total assets; What is the return on total asset ratio( return on investment)? The cash method of accounting you report income in the year you receive it and deduct expenses in the year you paid them. The cash method does not match revenues with expenses incurred related to that revenue. What is the cash method? The accrual method you recognize income when the services occur not when you collect the money.` What is the accrual Method?