VA Contractor Business Exams key terms

A business owned by one person with no separate legal identity. The owner reports business income on personal tax returns and is personally responsible for every business debt, judgment, or claim.

A business structure registered with the state that legally separates the owners from the company. Members generally are not personally liable for business debts, and profits pass through to their personal tax returns.

A financial statement listing what a company owns (assets), what it owes (liabilities), and owner equity as of a single date. It shows financial strength at a moment in time rather than results over a period.

A report of revenue, direct job costs, and expenses over a period that ends with net profit or loss. Contractors typically prepare one for each project and one for the company as a whole.

A report of money actually moving into and out of the business during a period, grouped as operating, investing, and financing activities. It reveals whether the company can pay bills as they come due.

Current assets minus current liabilities. It measures the money available to fund payroll, materials, and equipment before customer payments arrive, and it signals whether a job can be carried financially.

Indirect business costs that cannot be charged to one specific project, such as office rent, insurance, vehicles, and management salaries. Overhead must be recovered through markup on every job.

The amount added to estimated direct job costs to cover overhead and profit, usually stated as a percentage of cost. Markup is figured on cost, while margin is figured on the selling price.

The maximum dollar volume of work a surety company will bond for a contractor, based on financial strength, credit, experience, and current backlog. It limits how much work the contractor can realistically pursue.

A system that records labor, materials, equipment, and subcontract costs separately for each project, then compares actual costs against the estimate to measure profit or loss job by job.

The regulatory board within DPOR that licenses Virginia contractors, sets entry and education requirements, investigates complaints, disciplines licensees, and administers the transaction recovery fund.

The Virginia state agency that houses the Board for Contractors and processes licensing applications, examinations, renewals, and enforcement actions for contractors and many other regulated occupations.

Virginia's highest contractor classification, required when a single contract is $120,000 or more, or $750,000 or more for commercial building construction. There is no upper dollar limit on Class A work.

A Virginia license covering single contracts from $10,000 up to $120,000, or from $10,000 up to $750,000 for commercial building work. It falls between Class C and Class A in project size.

Virginia's smallest contractor classification, generally limited to single contracts under $10,000, or under $150,000 for commercial building construction. It cannot legally be used on projects above those limits.

The individual named on a Virginia contractor license who is accountable for the day-to-day operations of the business and who satisfies the experience and examination requirements for that license class.

A fund administered by the Board for Contractors and financed by assessments on licensed contractors that can reimburse consumers who hold a judgment against a licensee for improper or dishonest work.

The statewide construction code adopted by Virginia's Board of Housing and Community Development and enforced by local building officials, setting minimum standards for building, fire, plumbing, mechanical, and electrical work.

A statutory claim recorded against real property by a contractor or supplier who was not paid for labor or materials that improved it. In Virginia it must be filed by the statutory deadline and enforced through a lawsuit.

The state law in Title 2.2, Chapter 43 of the Code of Virginia that governs how public bodies buy goods, services, and construction, including methods such as competitive sealed bidding and competitive negotiation.

Virginia's certification for Small, Women-owned, and Minority-owned businesses, issued through the Department of Small Business and Supplier Diversity. It can create bidding advantages and subcontracting opportunities on state contracts.

A bond submitted with a bid guaranteeing the bidder will sign the contract if awarded and will provide required performance and payment bonds. It is usually set at a small percentage of the bid price.

A surety guarantee that the contractor will complete the contract according to its terms. If the contractor defaults, the surety must arrange to finish the work, typically up to the bond amount.

A surety guarantee that the contractor will pay subcontractors, laborers, and suppliers. It shields the owner from liens and gives unpaid parties a collection route on bonded projects.

A written modification issued to all bidders before bids are due that changes the plans, specifications, or bid documents. Bidders must acknowledge each addendum in their submitted proposal.

A written agreement signed by the owner and contractor that alters the contract scope, price, or schedule after award. Work should not proceed on changes without proper written authorization.

A contract paying a fixed price for each measured unit of work, such as per cubic yard of concrete or per linear foot of pipe. The final contract amount depends on quantities actually installed.

A predetermined dollar amount stated in the contract that the contractor pays for each day of delay past the completion date. It must be a reasonable forecast of the owner's actual loss.

A breakdown of the contract price into work items, used to support monthly pay applications. Each item's assigned value should reflect its share of the total contract amount.

Physical conditions at the site that differ materially from those shown in the contract documents or from what a reasonable site inspection would reveal. Most contracts give the contractor notice and adjustment rights.

A written statement in which a contractor or supplier gives up the right to file a mechanics' lien for work or materials, commonly exchanged for payment. Waivers may be conditional or unconditional.

The point at which the work is complete enough for the owner to use it for its intended purpose, with only minor items remaining. It starts warranty periods and affects retainage and delay responsibility.

An individual who can identify existing and predictable hazards at the site and who has authority to take prompt corrective action. OSHA requires one for tasks such as excavation, scaffolding, and fall protection.

Systems and procedures that keep workers from falling from heights or arrest a fall once it occurs. OSHA generally requires protection at six feet in construction using guardrails, nets, or personal fall arrest systems.

The Virginia Occupational Safety and Health program, which enforces workplace safety rules in the state, largely mirroring federal OSHA standards, and conducts inspections and investigates complaints and serious incidents.

A method such as sloping, benching, shoring, or a trench box used to prevent cave-ins in trenches and excavations. OSHA requires protection at five feet deep or more, with daily inspections by a competent person.

A step-by-step review of a work task that identifies the hazards in each step and the controls needed before work starts. It is used in pre-task planning and crew safety briefings.

A property policy covering a project under construction against damage from fire, wind, theft, vandalism, and similar perils. It typically covers materials, installed work, and sometimes soft costs and temporary structures.

Insurance that pays medical costs and lost wages to employees injured on the job regardless of fault. Virginia generally requires coverage for employers with three or more regularly employed workers.

A scheduling technique that identifies the longest chain of dependent activities, which sets the shortest possible project duration. Delay on any critical-path activity pushes the completion date.