CA General Contractor key terms

The person through whom a contracting business holds its license, having passed the law and trade exams and met experience requirements; a Responsible Managing Officer is an owner-officer, while a Responsible Managing Employee is a hired employee.

A license classification that lets a contractor build or remodel any structure, provided the contractor either subcontracts at least two unrelated trades or performs the framing or carpentry itself.

A $25,000 surety bond that every licensed contractor must keep on file with the CSLB; it can pay a consumer who wins a judgment for the licensee's violation of license law.

The indirect costs of running a contracting business, such as office, vehicles, insurance, and management, plus the margin the contractor expects to earn, usually applied as a percentage markup on direct job costs.

Money set aside in an estimate or project budget to cover unforeseen conditions, price increases, or work not yet fully defined; it is not intended for known scope items.

The California state agency that licenses contractors, administers licensing exams, investigates consumer complaints, and may suspend, revoke, or fine a license for violating the Contractors License Law.

California's licensing statute that bars an unlicensed contractor from suing to collect compensation for work performed; only a narrow, good-faith substantial compliance exception may allow recovery.

A limited exception allowing an unlicensed contractor to recover payment when the license lapse was brief, generally under 90 days, unintentional, and caused no harm to the other party.

A written agreement to repair, remodel, or improve a residential structure, which must meet CSLB content rules, limits on down payments, and the homeowner's cancellation rights before work starts.

A written modification to the bidding documents issued before bids are opened, clarifying or changing the drawings, specifications, or contract terms; it becomes part of the contract and must be acknowledged in the bid.

A formal written question from the contractor to the design professional asking to resolve an ambiguity, conflict, or missing information in the plans and specifications, with the answer documented for later reference.

A drawing, product data sheet, or sample the contractor prepares to show how a specific component will be fabricated or installed, submitted to the designer for review before that work proceeds.

A written modification signed by the owner that adds, deletes, or revises contract work and adjusts the price or time; work done without one is often difficult to collect for.

An owner direction, or an owner-caused condition, that effectively changes the work even though no formal change order was issued, possibly entitling the contractor to an adjustment in price or time.

Physical conditions at the site, often subsurface, that differ materially from what the contract documents indicated, allowing the contractor an equitable adjustment in price or time if proper notice is given.

A fixed dollar amount per day that the owner may deduct for late completion, enforceable only if it is a reasonable forecast of actual losses rather than a penalty.

The stage when the project is usable for its intended purpose although minor items remain; it typically starts warranties, owner occupancy, and the deadlines for liens and retainage release.

The owner's written direction telling the contractor when to begin work and starting the contract time period used to measure completion and any liquidated damages.

The measuring and counting of materials and work items shown on the plans to produce a detailed quantity list that is priced to build an estimate or bid.

A surety guarantee submitted with a bid, commonly 10 percent of the bid on public work, paying the owner the gap if the low bidder fails to sign the contract.

Revealing one subcontractor's price to competing subcontractors to obtain a lower number, or swapping a listed subcontractor after award to reduce cost; restricted on public work.

California requirement that a prime bidder on public work list every subcontractor performing more than one-half of one percent of the work, with few grounds for later substitution.

A written notice generally served within 20 days after first furnishing labor, services, or materials, preserving a subcontractor's or supplier's right to record a lien or serve a stop notice.

A recorded claim against real property by a contractor, subcontractor, or supplier who furnished labor or materials, creating a security interest; it generally must be recorded within 90 days after completion.

A demand served on an owner or public entity that money still owed the prime contractor be withheld and paid to a subcontractor or supplier; on public work it substitutes for a lien.

A surety bond on public work guaranteeing payment to subcontractors and suppliers; California requires one on public projects over $25,000, and claimants must give statutory notice.

A document the owner records after completing a work of improvement; recording it shortens the time to record mechanics liens to 60 days and starts other payment deadlines.

The portion of each progress payment the owner holds back until the work is complete, capped at 5 percent on most California public work, to protect against unfinished or defective work.

A line-by-line breakdown of the contract price by work item, used to measure progress and support each monthly payment application; the line items must total the contract amount.

The final list of minor incomplete or defective items found during the walkthrough near completion, which the contractor must correct before final payment and retainage release.

Project drawings the contractor marks up in the field and delivers at closeout to show actual installed locations, dimensions, and deviations from the original design.

The minimum hourly wage plus fringe benefits that must be paid to workers on California public works, set by the DIR for each trade and county and updated periodically.

A weekly payroll report on public work, signed under penalty of perjury, listing each worker's name, classification, hours, and wages, submitted to show prevailing wage compliance.

Registration with the Department of Industrial Relations required before bidding or working on public work; an unregistered contractor or listed subcontractor makes the bid invalid.

The public works rule that at least one apprentice must be employed for every five journeymen in each trade, unless the approved apprenticeship program cannot supply them.

A written safety program every California employer must maintain, covering responsibilities, hazard identification, training, and correction of unsafe conditions, as required by Cal/OSHA regulations.

Someone able to recognize existing and predictable hazards and authorized to take prompt corrective action; required for excavations, scaffolding, and similar high-hazard work under Cal/OSHA rules.

A party such as the owner or general contractor added to another company's liability policy, giving it coverage for claims arising out of the named insured's work on the project.

The bidder on public work who submits the lowest responsive bid and also shows the skill, experience, and resources needed to perform; the awarding agency must award to that bidder.

A California requirement on certain public works that a set percentage of project hours be performed by apprentices and by workers who graduated from approved apprenticeship programs.