CA General Contractor cheat sheet

A California contractor license is required when a project's combined labor and materials cost exceeds $500.

The standard contractor license bond is $25,000; an LLC contractor must also file a $100,000 LLC contractor surety bond.

A license qualifier must pass the law and trade exams; an RME must be a bona fide employee, and an RMO must be an officer or owner.

Changing entity form, such as sole proprietor to corporation or a new LLC, generally requires a new contractor license; license numbers are not transferable.

Gross profit = revenue - direct job costs; net profit = gross profit - overhead.

Markup on cost = profit / cost; margin = profit / selling price; a 25% markup equals a 20% margin.

Break-even sales = fixed costs / (1 - variable cost ratio).

Working capital = current assets - current liabilities.

A cash-flow projection subtracts monthly cash outflows from inflows to identify the peak borrowing need.

License classifications: A = general engineering; B = general building; C = specialty trades.

A B licensee may perform general building work but must subcontract specialty work unless the B licensee also holds that specialty classification.

Contractor license numbers must appear on contracts, bids, advertisements, and business documents.

A contractor must be licensed at the time of bidding and throughout performance on public works.

Business and Professions Code section 7031 bars an unlicensed contractor from collecting compensation for work requiring a license.

CSLB may issue citations, suspend, or revoke a license for violations such as unlicensed contracting, false advertising, or failure to maintain required bonds.

A home improvement salesperson must be registered with CSLB and work under a licensed contractor.

An LLC contractor must be registered with the Secretary of State and maintain the required LLC surety bond in addition to the standard license bond.

Advertising must not be false or misleading, and use of an expired license number is prohibited.

Drawing scale 1/4 inch = 1 foot means one-quarter inch on the plan equals 12 inches actual; multiply the plan measurement by 48.

CSI MasterFormat organizes specifications by divisions; Division 01 is General Requirements.

An addendum modifies bid documents before bid opening; an ASI modifies or clarifies work after contract award.

Written dimensions generally control over scaled measurements.

An RFI asks the design team to clarify plans or specifications; the response may support a change order.

Shop drawings show the contractor's proposed fabrication or installation details and require design professional approval.

Contract documents typically include the agreement, conditions, drawings, specifications, addenda, and change orders.

Plan symbols and abbreviations are defined in the drawing legend; the north arrow indicates orientation.

A revision cloud marks changed drawing areas, and the revision number or date identifies the change.

Bid price = direct costs + overhead + profit + contingency + applicable taxes.

Unit cost = material + labor + equipment cost per unit of work.

Order quantity = net quantity x (1 + waste factor).

A public works bid bond is typically 10% of the bid; performance and payment bonds are each 100% of the contract price.

Addenda must be acknowledged in the bid; failure to acknowledge may make the bid nonresponsive.

An unbalanced bid prices early or likely-increased items high and later items low; agencies may reject materially unbalanced bids.

Contingency covers unknown conditions and is not profit.

California's subcontractor listing law requires prime bidders on public works to list subcontractors in the bid.

A bidder may request withdrawal before award if a clerical error is proven under applicable law.

A valid contract requires offer, acceptance, consideration, mutual assent, capacity, and legality.

Contracts that cannot be performed within one year must be in writing under the statute of frauds.

Change orders should be written and signed by authorized representatives; they modify price, time, or scope.

Substantial completion is when the work is usable for its intended purpose; it triggers warranty and retention consequences.

Liquidated damages are enforceable only if they are a reasonable estimate of probable loss, not a penalty.

Excusable delay extends time; compensable delay also supports cost recovery.

Termination for cause requires material breach or a contract-specified default; termination for convenience follows contract notice requirements.

California prompt payment law sets deadlines for owner-to-prime and prime-to-subcontractor payments.

A constructive change arises from owner-directed work or differing site conditions without a formal change order.

A 20-day preliminary notice preserves full mechanics lien rights; late notice limits the lien to work performed in the 20 days before notice.

A direct contractor generally must record a mechanics lien within 90 days after completion; a recorded Notice of Completion shortens that period to 60 days.

A subcontractor or supplier generally must record a lien within 90 days after completion; a recorded Notice of Completion shortens that period to 30 days.

A lien foreclosure suit must be filed within 90 days after the lien is recorded.

A stop payment notice asks an owner or construction lender to withhold funds for the claimant.

Public works payment bond claimants generally cannot record mechanics liens against public property.

A conditional lien release is effective only when payment is received; an unconditional release is effective on signing.

The owner records a Notice of Completion to shorten lien periods.

A payment bond claim requires statutory notice and timely suit; exact deadlines depend on the claimant category.

Overtime is 1.5 times the regular rate for hours over 8 per day or 40 per week; double time applies over 12 hours per day or over 8 hours on the seventh consecutive day.

A 30-minute meal period is required before the end of the fifth hour; a second 30-minute meal period is required before the end of the tenth hour.

Rest breaks are 10 minutes per 4 hours worked or major fraction thereof.

Public works projects over $1,000 require prevailing wages and DIR-registered contractors and subcontractors.

Certified payroll records using form PWC-100 must be submitted weekly on California public works.

Wages must be paid at least twice per month on designated paydays.

Final wages are due immediately on termination and within 72 hours if an employee quits without notice.

Workers' compensation insurance is required for employees; sole proprietors may exempt themselves.

Apprenticeship ratios limit apprentices to a set ratio of journeymen, and apprentices must be registered.

The Cal/OSHA construction fall protection threshold is 7.5 feet.

Excavations 5 feet or deeper require a protective system when cave-in potential exists.

A competent person must inspect excavations daily and before worker entry.

Every California employer must have a written Injury and Illness Prevention Program (IIPP).

Heat illness prevention requires water, shade, rest breaks, and high-heat procedures at 95 degrees Fahrenheit.

Hazard Communication requires accessible safety data sheets and labeling for hazardous chemicals.

Scaffolds must be designed and erected by qualified persons and inspected before use.

Workers' compensation, general liability, and builder's risk are common construction insurance coverages.

Additional insured status and certificates of insurance verify and allocate risk among project parties.

Public works include construction, alteration, demolition, or maintenance paid with public funds.

Prevailing wages apply to California public works projects over $1,000.

Contractors and subcontractors must register with the DIR and submit certified payroll weekly.

A bid bond is typically 10% of the bid; performance and payment bonds are each 100% of the contract price.

Retention on California public works is generally capped at 5%.

Award generally goes to the lowest responsible bidder submitting a responsive bid.

California's subcontractor listing law requires prime bidders to list subcontractors in the bid.

A public works stop notice is served on the public entity to reach withheld funds.

Public agency bid openings are public, and bids are sealed until the opening.

A recorded Notice of Completion shortens lien periods and starts final payment deadlines.

Substantial completion makes the project usable for its intended purpose; final completion follows correction of punch list items.

Closeout documents include as-built drawings, O&M manuals, warranties, spare parts, and training records.

Final payment typically requires conditional or unconditional final lien releases.

Retention release follows contract terms and statutory periods; public works retainage is generally capped at 5%.

Final inspection and certificate of occupancy confirm code compliance before occupancy.

Contracts, change orders, payroll records, and lien releases must be retained for statutory periods.

The warranty period often starts at substantial completion.

Punch list items must be completed before final payment and retention release unless the contract states otherwise.