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WV General Contractor practice questions

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Question 1Business and Project Management

A contractor's bid includes direct job costs of $180,000, overhead of 12% of direct costs, and a desired profit of 8% of total cost. What is the bid price?

  1. $221,400
  2. $217,728 Correct answer.
  3. $194,400
  4. $201,600

Explanation

Overhead is applied to direct cost ($180,000 × 0.12 = $21,600), giving total cost of $201,600. Profit is then applied to total cost ($201,600 × 0.08 = $16,128), so the bid is $201,600 + $16,128 = $217,728.

Question 2Business and Project Management

In a standard construction contract, a performance bond primarily protects the owner against which risk?

  1. Injury to a member of the public on the site
  2. Design errors in the owner-furnished drawings
  3. Price escalation of materials during construction
  4. The contractor failing to complete the work as contracted Correct answer.

Explanation

A performance bond guarantees that the contractor will complete the work according to the contract terms, and the surety pays to have the job finished if the contractor defaults. Design errors are generally the designer's or owner's risk, escalation is a pricing risk, and public injuries are covered by liability insurance.

Question 3Business and Project Management

Which project delivery method places a single entity in charge of both design and construction under one contract with the owner?

  1. Design-build Correct answer.
  2. Design-bid-build
  3. Multiple-prime contracting
  4. Construction management at risk

Explanation

In design-build, one entity contracts with the owner to provide both design and construction services, creating a single point of responsibility. Design-bid-build separates design from construction, CM at risk adds a manager who may hold trade contracts, and multiple-prime contracting splits work among several prime contractors.

Question 4Business and Project Management

A contractor's crew of 6 workers installs 480 linear feet of fencing in 4 days. Assuming the same productivity, how many linear feet will a crew of 9 workers install in 6 days?

  1. 720
  2. 1,440
  3. 960
  4. 1,080 Correct answer.

Explanation

Productivity is 480 ÷ (6 × 4) = 20 linear feet per worker-day. A crew of 9 for 6 days provides 54 worker-days, so 54 × 20 = 1,080 linear feet.

Question 5Business and Project Management

On a critical path method schedule, the critical path is best described as which of the following?

  1. The path with the greatest number of activities
  2. The path with the highest total labor cost
  3. The activity chain with the most resources assigned
  4. The sequence of activities with zero total float Correct answer.

Explanation

The critical path is the longest-duration path through the network, which means its activities have zero total float and any delay on it delays project completion. Activity count, cost, and resource loading do not define criticality.

Question 6Business and Project Management

A contractor will receive a $50,000 progress payment 30 days from now. The contractor's annual cost of capital is 12%. Using simple discounting, what is the present value of this payment?

  1. $44,000
  2. $49,500 Correct answer.
  3. $48,500
  4. $49,836

Explanation

For a 30-day period, the discount rate is 12% × (30 ÷ 365) ≈ 0.986%. Present value is $50,000 ÷ 1.00986 ≈ $49,512, closest to $49,500. The other choices apply incorrect time or rate factors.

Question 7Business and Project Management

Under a typical AIA-style contract, when does the owner's obligation to pay a progress payment generally become due?

  1. Whenever the contractor requests it in writing
  2. Within the period stated in the contract after the architect certifies the application Correct answer.
  3. Only after final completion of the entire project
  4. Immediately upon receipt of the application

Explanation

Progress payments become due within a defined period after the architect or owner's representative certifies the payment application, as stated in the contract. Payment is not immediate on receipt and is not deferred to final completion.

Question 8Business and Project Management

A project has a planned value of $200,000, an earned value of $180,000, and an actual cost of $210,000. What is the cost performance index (CPI)?

  1. 1.17
  2. 0.86 Correct answer.
  3. 1.11
  4. 0.90

Explanation

CPI equals earned value divided by actual cost: $180,000 ÷ $210,000 = 0.857, or about 0.86. A CPI below 1.0 indicates the work is costing more than budgeted.

Question 9Business and Project Management

Which document typically establishes the priority order of contract documents when they conflict?

  1. The general conditions of the contract Correct answer.
  2. The contractor's safety plan
  3. The project schedule
  4. The submittal log

Explanation

The general conditions usually contain an order-of-precedence clause that resolves conflicts among drawings, specifications, and other contract documents. Schedules, safety plans, and submittal logs do not establish document priority.

Question 10Business and Project Management

A contractor is required to provide a bid bond with a proposal. What does a bid bond guarantee?

  1. That subcontractors will honor their quoted prices
  2. That the owner will pay the contractor's final invoice
  3. That the contractor will enter the contract and furnish required bonds if awarded Correct answer.
  4. That the contractor will complete the project on time

Explanation

A bid bond assures the owner that if the bidder is awarded the contract, it will execute the agreement and provide the required performance and payment bonds. If it fails to do so, the surety may be liable up to the bond penalty.

Question 11Business and Project Management

A contractor's estimate of $100,000 for a project contains a 15% contingency. If the actual base cost comes in at $95,000 excluding contingency, what is the remaining contingency amount, assuming the full contingency was included in the original estimate?

  1. $2,174
  2. $15,000
  3. $5,000
  4. $13,043 Correct answer.

Explanation

If $100,000 includes a 15% contingency on the base cost, the base is $100,000 ÷ 1.15 ≈ $86,957 and the contingency is about $13,043. Since actual base cost is $95,000, the remaining contingency is $100,000 − $95,000 = $5,000, but the contingency portion originally set aside is $13,043; the question asks the contingency amount embedded in the estimate, which is about $13,043.

Question 12Business and Project Management

Which of the following best describes the purpose of a lien waiver in construction payment?

  1. It authorizes the owner to withhold retainage
  2. It guarantees the contractor's workmanship for one year
  3. It documents a party's release of lien rights in exchange for payment Correct answer.
  4. It transfers ownership of materials to the owner

Explanation

A lien waiver is a written document in which a party relinquishes its right to file a mechanic's lien, typically in exchange for payment received. It does not transfer title, warrant workmanship, or create retainage rights.

Question 13Business and Project Management

A contractor is comparing two schedules. Schedule A has a total float of 5 days on a key activity; Schedule B has zero float on that activity. Which statement is most accurate?

  1. Schedule A is always less expensive to build
  2. Schedule B requires more workers on that activity
  3. Schedule A cannot meet the completion date
  4. Schedule B has no cushion for delay on that activity Correct answer.

Explanation

Zero total float means the activity is on the critical path and any delay will delay project completion. Float does not directly determine cost, feasibility of the completion date, or crew size.

Question 14Business and Project Management

Under West Virginia contractor licensing rules, a general contractor performing work on a project valued over a threshold must generally do which of the following?

  1. Post a performance bond with the building department
  2. Register only with the county where the work occurs
  3. Hold a valid contractor license issued by the state Correct answer.
  4. Obtain a federal contractor permit

Explanation

West Virginia requires contractors to hold a state-issued contractor license for covered work above statutory thresholds. County registration, federal permits, and local performance bonds do not substitute for the state license.

Question 15Business and Project Management

A contractor discovers an arithmetic error in its submitted bid that understates the price by $20,000. Under typical bid-error rules, what is the contractor generally permitted to do?

  1. Unilaterally raise the contract price after award
  2. Withdraw the bid without penalty in all cases
  3. Request correction of the error if it is a clerical mistake and the intended price is evident Correct answer.
  4. Ignore the error and absorb the loss silently

Explanation

Many bid rules allow correction of clerical errors where the intended price is clearly evident from the bid documents, while material errors may permit withdrawal with forfeiture of the bid bond. Unilateral post-award price changes are not permitted.

Question 16Business and Project Management

Which cost is classified as a direct job cost on a construction project?

  1. Lumber incorporated into the structure Correct answer.
  2. Home office rent
  3. Surety bond premiums for the company's annual program
  4. Owner's marketing expenses

Explanation

Direct job costs are those traceable to a specific project, such as materials, labor, and equipment used on that job. Home office rent and company-wide bond programs are overhead, and owner marketing is not a contractor cost.

Question 17Business and Project Management

A project is 40% complete by earned value but 50% of the budget has been spent. Which conclusion is best supported?

  1. The project has no cost variance
  2. The project is ahead of schedule
  3. The project's scope has decreased
  4. The project is over budget relative to work performed Correct answer.

Explanation

Spending 50% of budget for 40% of the work means actual cost exceeds earned value, producing a negative cost variance and a CPI below 1.0. This indicates cost overrun, not schedule gain or scope reduction.

Question 18Business and Project Management

What is the primary purpose of a punch list near project completion?

  1. To schedule the contractor's equipment demobilization
  2. To identify incomplete or deficient work that must be corrected before final acceptance Correct answer.
  3. To list unpaid subcontractor invoices
  4. To record change orders issued during construction

Explanation

A punch list documents remaining incomplete or defective items that the contractor must correct before the owner accepts the work and final payment is released. It is not a financial ledger, demobilization plan, or change-order log.

Question 19Business and Project Management

A contractor's contract contains a liquidated damages clause of $1,000 per day. The project finishes 12 days late due to a 5-day owner-caused delay and a 7-day contractor-caused delay. How much in liquidated damages can the owner generally assess?

  1. $5,000
  2. $12,000
  3. $0
  4. $7,000 Correct answer.

Explanation

The contractor is generally responsible only for delay it caused, so liquidated damages apply to the 7 contractor-caused days: 7 × $1,000 = $7,000. Owner-caused delay is typically excused or entitles the contractor to time extension.

Question 20Business and Project Management

Which of the following is the best example of a leading indicator used to manage construction safety performance?

  1. Experience modification rate
  2. Number of near-miss reports and safety observations this month Correct answer.
  3. Total workers' compensation claims paid
  4. Recordable incident rate for the prior year

Explanation

Leading indicators measure proactive activities and conditions that predict future outcomes, such as near-miss reporting and safety observations. Incident rates, experience modification rates, and paid claims are lagging indicators of past results.

Question 21Business and Project Management

In a time-and-materials contract, the contractor is typically compensated based on which basis?

  1. A fixed lump sum for the completed scope
  2. A guaranteed maximum price with shared savings
  3. Actual labor hours at agreed rates plus materials at cost with a markup Correct answer.
  4. A percentage of the owner's project budget

Explanation

Time-and-materials contracts pay for actual labor hours at established rates plus materials at cost plus an agreed markup. Lump sum, percentage-of-budget, and guaranteed maximum price arrangements are different pricing structures.

Question 22Business and Project Management

A contractor wants to reduce the risk of a subcontractor's default mid-project. Which measure most directly addresses this risk?

  1. Increasing the subcontractor's retainage to 10%
  2. Shortening the subcontractor's payment cycle
  3. Requiring the subcontractor to provide a performance bond and payment bond Correct answer.
  4. Requiring weekly progress photos

Explanation

Performance and payment bonds provide a surety-backed remedy if the subcontractor fails to perform or pay, directly mitigating default risk. Retainage, payment timing, and photos are administrative controls but do not provide the same financial backstop.

Question 23Business and Project Management

A change order is issued that adds work but the contractor and owner cannot agree on price. Under many standard contracts, what is the typical interim approach?

  1. The contractor stops all work until price is agreed
  2. The contractor sets the price unilaterally
  3. The owner may direct the contractor to proceed and the cost is later determined by the contract's method Correct answer.
  4. The change is automatically void

Explanation

Standard contracts often allow the owner to order the contractor to proceed with disputed change work, with the cost determined later using the contract's pricing method or a negotiated resolution. Work stoppage, automatic voiding, and unilateral pricing are generally not permitted.

Question 24Business and Project Management

A contractor's annual revenue is $2,000,000 and its gross profit margin is 20%. If overhead is $300,000, what is the net profit?

  1. $100,000 Correct answer.
  2. $300,000
  3. $400,000
  4. $700,000

Explanation

Gross profit is $2,000,000 × 0.20 = $400,000. Net profit equals gross profit minus overhead: $400,000 − $300,000 = $100,000.

Question 25Business and Project Management

Which scheduling technique is specifically designed to show overlapping activities and relationships when detailed network logic is not yet available?

  1. Program evaluation and review technique
  2. Critical path method
  3. Bar (Gantt) chart with dependencies Correct answer.
  4. Line-of-balance method

Explanation

A bar chart can display activities over time and, when dependencies are added, show overlaps and sequencing without full network logic. Line-of-balance suits repetitive work, while CPM and PERT require defined network logic.

Question 26Business and Project Management

Which project delivery method assigns a single entity responsibility for both design and construction?

  1. Construction management at risk
  2. Design-build Correct answer.
  3. Design-bid-build
  4. Multiple-prime contracting

Explanation

In design-build, one entity contracts with the owner to furnish both design and construction, creating a single point of responsibility. The other methods separate design from construction or split construction among multiple parties.

Question 27Business and Project Management

What is the primary purpose of a project schedule baseline?

  1. To record actual progress for historical archives
  2. To replace the contract completion date
  3. To document subcontractor bid prices
  4. To serve as the approved reference against which schedule performance is measured Correct answer.

Explanation

A baseline is the approved, frozen version of the schedule used to compare planned versus actual performance. It enables variance analysis and progress tracking.

Question 28Business and Project Management

A contractor's crew installs 400 square feet of wall per day. A project requires 6,000 square feet. How many working days of installation are required?

  1. 15 days Correct answer.
  2. 24 days
  3. 12 days
  4. 18 days

Explanation

Dividing total quantity by daily production gives 6,000 / 400 = 15 working days. This is a basic production-rate calculation used in schedule development.

Question 29Business and Project Management

Which of the following is a fixed indirect cost for a construction company?

  1. Fuel consumed by project equipment
  2. Office rent for the company headquarters Correct answer.
  3. Lumber purchased for a specific project
  4. Overtime wages for project carpenters

Explanation

Indirect costs are not chargeable to a single project; home office rent is a fixed overhead expense. The other items are job-specific direct costs or variable costs.

Question 30Business and Project Management

What does a performance bond protect the owner against?

  1. Defective design by the owner's architect
  2. Nonpayment of subcontractors
  3. The contractor's failure to complete the work according to the contract Correct answer.
  4. Price escalation in material markets

Explanation

A performance bond guarantees the contractor will perform the contract; if it defaults, the surety ensures completion or compensates the owner. It does not cover design errors or price escalation.

Question 31Business and Project Management

Which document formally authorizes a contractor to proceed with work and establishes the contract time?

  1. Request for information
  2. Letter of intent
  3. Notice to proceed Correct answer.
  4. Submittal register

Explanation

The notice to proceed is the owner's formal instruction to begin work and typically sets the contract time start. Other documents serve different administrative purposes.

Question 32Business and Project Management

A contractor bills a project monthly. The retainage rate is 5% and the work completed to date is $400,000. What amount is retained?

  1. $20,000 Correct answer.
  2. $8,000
  3. $2,000
  4. $40,000

Explanation

Retainage is calculated as 5% of $400,000, which equals $20,000. Retainage is withheld to protect the owner until completion.

Question 33Business and Project Management

Which of the following best describes a subcontractor's scope of work?

  1. The full set of obligations the subcontractor agrees to perform under its subcontract Correct answer.
  2. The general contractor's safety program
  3. The architect's design intent narrative
  4. The owner's list of desired project features

Explanation

Scope of work defines the specific tasks, quantities, and responsibilities the subcontractor is obligated to perform. It is the basis for pricing and dispute resolution.

Question 34Business and Project Management

A project has a budget at completion of $500,000, earned value of $200,000, and actual cost of $250,000. What is the cost performance index?

  1. 1.25
  2. 0.50
  3. 0.40
  4. 0.80 Correct answer.

Explanation

CPI equals earned value divided by actual cost, or $200,000 / $250,000 = 0.80. A CPI below 1.0 indicates cost overrun.

Question 35Business and Project Management

A contractor wants to shorten the project duration by compressing the schedule. Which activity should be crashed first?

  1. The critical activity with the lowest cost per day of acceleration Correct answer.
  2. The activity with the longest duration regardless of float
  3. Any activity with the largest total float
  4. The activity with the highest cost per day of acceleration

Explanation

Crashing targets critical-path activities because only those affect completion date, and the lowest cost-per-day activity is chosen to minimize added cost. Noncritical activities do not shorten the project.

Question 36Business and Project Management

Which of the following best describes the purpose of a quality assurance program on a construction project?

  1. To assign blame for defects among subcontractors
  2. To inspect and reject defective finished work
  3. To plan and systematize processes so quality is built in rather than inspected in Correct answer.
  4. To document warranty claims after turnover

Explanation

Quality assurance focuses on planning and process control to prevent defects, while quality control involves inspection and testing. The other options describe after-the-fact or administrative activities.

Question 37Business and Project Management

A contractor is preparing a bid and must account for a risk that is unlikely but could be very costly. Which approach is most appropriate?

  1. Reduce the bid by the expected value of the risk
  2. Transfer the risk through insurance or a subcontract provision Correct answer.
  3. Ignore the risk because it is unlikely
  4. Assume the owner will pay for the risk if it occurs

Explanation

Low-probability, high-impact risks are best transferred through insurance, bonds, or contractual provisions. Ignoring them or assuming owner payment leaves the contractor exposed.

Question 38Business and Project Management

Which contract type places the greatest cost risk on the contractor?

  1. Cost-plus-fee
  2. Cost-plus-incentive-fee
  3. Time and materials
  4. Lump-sum fixed-price Correct answer.

Explanation

Under a lump-sum fixed-price contract, the contractor bears the risk of cost overruns because the price is fixed. Cost-reimbursable types shift more risk to the owner.

Question 39Business and Project Management

A contractor receives a request for information that changes the interpretation of a drawing. What should the contractor do before proceeding with the affected work?

  1. Obtain written clarification and evaluate whether a change order is required Correct answer.
  2. Proceed based on the verbal instruction from the superintendent
  3. Submit a claim for delay immediately
  4. Ignore the RFI response until the next progress meeting

Explanation

Clarifications affecting cost or time should be documented in writing and evaluated for a change order before work proceeds. Verbal instructions create disputes.

Question 40Business and Project Management

Which of the following best describes a critical path in a construction schedule?

  1. The longest path through the network, which determines project duration Correct answer.
  2. The path with the greatest number of resources assigned
  3. The path with the most activities
  4. The sequence of activities with the highest total cost

Explanation

The critical path is the longest-duration path through the network and sets the minimum project completion time. Activities on it have zero total float.

Question 41Business and Project Management

A contractor's safety program requires weekly toolbox talks. Which metric best measures whether the program is actually being implemented?

  1. Experience modification rate
  2. Number of recordable injuries year to date
  3. Percentage of scheduled toolbox talks documented as completed Correct answer.
  4. Number of lost workdays

Explanation

Documented completion of scheduled talks is a leading indicator measuring program implementation. Injury counts, EMR, and lost days are lagging outcomes.

Question 42Business and Project Management

A contractor must decide whether to self-perform or subcontract a specialty trade. Which factor most directly supports subcontracting?

  1. The contractor has an idle crew trained in the trade
  2. The trade requires specialized equipment and expertise the contractor lacks Correct answer.
  3. The contractor wants to maximize control over schedule
  4. The work is on the critical path

Explanation

Subcontracting is appropriate when specialized expertise or equipment is needed and the contractor lacks in-house capability. Self-performance is favored when idle trained crews exist.

Question 43Business and Project Management

A contractor's bid includes a 10% markup on a direct cost of $80,000. What is the bid price?

  1. $72,000
  2. $88,000 Correct answer.
  3. $90,000
  4. $8,000

Explanation

A 10% markup on $80,000 adds $8,000, producing a bid price of $88,000. Markup is applied to the base cost.

Question 44Business and Project Management

Which of the following is the best example of a contract document that governs the resolution of disputes between the parties?

  1. The general conditions of the contract Correct answer.
  2. The submittal log
  3. The daily field report
  4. The project schedule

Explanation

The general conditions set forth the rights, obligations, and dispute resolution procedures of the parties. The other documents are administrative or scheduling tools.

Question 45Business and Project Management

A project is behind schedule because of unusually severe weather that was not foreseeable. Which contract provision most likely governs the contractor's relief?

  1. The retainage provision
  2. The warranty provision
  3. The force majeure or weather delay provision Correct answer.
  4. The liquidated damages clause

Explanation

Force majeure or weather delay provisions typically allow time extensions for unforeseeable events beyond the contractor's control. Liquidated damages apply to unexcused delay.

Question 46Business and Project Management

A contractor's earned value analysis shows SPI = 1.15 and CPI = 0.92. Which conclusion is best supported?

  1. The project is ahead of schedule and under budget
  2. The project is behind schedule and under budget
  3. The project is ahead of schedule and over budget Correct answer.
  4. The project is behind schedule and over budget

Explanation

An SPI above 1.0 indicates the project is ahead of schedule, while a CPI below 1.0 indicates costs are exceeding the budget. The combination means faster progress at higher cost.

Question 47Business and Project Management

A contractor is evaluating a claim for extended field office costs caused by an owner-caused delay. Which cost category do these expenses represent?

  1. Direct labor cost
  2. Time-related indirect job cost Correct answer.
  3. Material escalation cost
  4. Home office overhead

Explanation

Extended field office expenses are time-related indirect job costs that continue as long as the project is delayed. Home office overhead is a separate category.

Question 48Business and Project Management

A contractor has a contract with a 5% retainage on all work and a subcontractor performing 30% of the work. If the owner reduces retainage to 2% after substantial completion of the contractor's work, what is the most appropriate action regarding the subcontractor?

  1. Release retainage to the subcontractor consistent with the reduced owner retainage and subcontract terms Correct answer.
  2. Apply the subcontractor's retainage to the contractor's overhead
  3. Continue holding 5% from the subcontractor indefinitely
  4. Increase the subcontractor's retainage to offset the owner's reduction

Explanation

The contractor should align subcontractor retainage with the owner's reduction and the subcontract terms, releasing funds appropriately. Retaining more than the owner holds creates unjust enrichment and potential claims.

Question 49Business and Project Management

A contractor's total float on a critical-path activity is zero, and a two-day delay occurs on that activity due to a subcontractor. What is the effect on the project completion date?

  1. No effect if the subcontractor accelerates later
  2. No effect because the activity can use float
  3. A one-day delay because float is shared
  4. A two-day delay to project completion Correct answer.

Explanation

An activity with zero total float is on the critical path, so any delay on it directly extends the project completion date unless recovery occurs. The delay passes through to the project finish.

Question 50Business and Project Management

A contractor is negotiating a contract that includes a no-damage-for-delay clause. What is the primary effect of this clause?

  1. It transfers all delay risk to the subcontractors
  2. It eliminates the need for a schedule
  3. It guarantees the contractor an extension of time for all delays
  4. It prevents the contractor from recovering delay damages from the owner Correct answer.

Explanation

A no-damage-for-delay clause bars the contractor from recovering monetary delay damages from the owner, typically limiting recovery to time extensions. It does not guarantee time extensions or shift risk to subcontractors.