VA Contractor Business Exams cheat sheet

Sole proprietorships and general partnerships are unincorporated and taxed on the owners' personal returns; corporations and LLCs are separate legal entities created by filing with the Virginia State Corporation Commission.

Gross profit = revenue − cost of goods sold (direct job costs). Net profit = gross profit − overhead and other indirect expenses.

Markup % = (price − cost) ÷ cost. Margin % = (price − cost) ÷ price. Price = cost ÷ (1 − margin %), so a 25% markup produces only a 20% margin.

Break-even revenue = fixed overhead ÷ contribution margin ratio, where contribution margin ratio = (revenue − variable costs) ÷ revenue.

Current ratio = current assets ÷ current liabilities. A ratio below 1.0 means short-term assets cannot cover obligations due within the year.

Working capital = current assets − current liabilities; it is the cash cushion that funds payroll and materials between progress payments.

Retainage withheld by an owner is recorded as a receivable (a current asset), not as revenue, and is tracked on the receivables aging report until released.

Overhead is recovered by applying a markup to direct costs; if overhead is charged to jobs unevenly, bid prices will under-recover indirect costs on small or short-duration work.

A Virginia contractor license is required when the total value of a project, including labor and materials, is $1,000 or more.

Class A authorizes contracts of any dollar amount; Class B is limited to $120,000 per single contract; Class C is limited to $10,000 per single contract.

The DPOR Board for Contractors issues all contractor licenses, and every license expires two years from its date of issue.

Each licensed firm must designate a qualified individual who has passed the Virginia contractor exam for the applicable license class.

Contracting without a valid license is a Class 1 misdemeanor and also grounds for denial of a future license application.

The Virginia Contractor Transaction Recovery Fund can satisfy an unpaid judgment obtained against a licensed contractor, up to the fund's statutory limits.

On Virginia state public works contracts, retainage is limited to 5 percent of the contract amount until the work is substantially complete.

Virginia prompt payment rules require state agencies to pay properly submitted invoices within 30 days; the prime contractor then has 7 days after receipt to pay subcontractors.

A memorandum of mechanic's lien is generally recorded within 90 days after the last day of the month in which the claimant last furnished labor or materials.

A bid bond is typically 5 percent of the bid amount; performance and payment bonds are typically 100 percent of the contract amount.

A bid received after the stated opening time is rejected regardless of the reason; bids are opened publicly at the time and place set in the invitation.

Under a lump-sum contract the contractor carries quantity risk; under a unit-price contract the owner pays for measured quantities actually installed, so the owner carries quantity risk.

Contingency (roughly 5–10 percent of estimated cost) covers undefined scope and is separate from markup for overhead and profit.

Addenda issued before bid opening become part of the contract documents, and the bidder must acknowledge each one in the bid.

A change order is a written modification signed by the owner or authorized representative that adjusts scope, price, or time; field direction alone is not a change order.

Under pay-if-paid, the owner's payment is a condition precedent to the prime paying the subcontractor; under pay-when-paid, the prime must pay within a stated period regardless of owner payment.

Liquidated damages are a pre-agreed per-day amount for delay; they are enforceable only if they are a reasonable forecast of actual loss rather than a penalty.

Burdened labor cost = labor hours × (base wage + payroll taxes + workers' compensation + insurance + fringe), not hours × bare wage.

OSHA construction fall protection is required at 6 feet above a lower level for most walking-working surfaces; scaffold platforms trigger it at 10 feet.

Any excavation 5 feet or deeper requires a protective system selected or designed by a competent person, unless the excavation is entirely in stable rock.

Spoil piles and heavy equipment must be kept at least 2 feet back from the edge of an excavation.

Employers must report a work-related fatality to OSHA within 8 hours and an in-patient hospitalization, amputation, or loss of an eye within 24 hours.

The OSHA Focus Four fatality causes are falls, struck-by, caught-in/between, and electrocutions.

The critical path is the longest-duration path through the schedule network; it has zero total float and sets the project completion date.

Total float = late start − early start = late finish − early finish; an activity with zero float cannot slip without delaying the project.

Temporary 120-volt receptacles on a construction site must be GFCI-protected unless the employer maintains an assured equipment grounding conductor program.

A Job Hazard Analysis breaks a task into steps and assigns hazard controls before work begins; toolbox talks are short crew briefings on the hazards of that day's tasks.