Georgia Business & Law Exam (Residential and General Contractors)

Bid peddling is when a subcontractor approaches the general contractor after the project was awarded intending to undercut the price submitted on bid day, while bid shopping is when the general contractor initiates contact with subcontractors other than those who bid to seek a lower offer.

Bid rigging is collusion among contractors coordinating their bids to fix the award outcome (forbidden by state statutes on public projects), whereas peddling and shopping involve post-bid price undercutting by a subcontractor or solicitation by the general contractor.

Addenda are changes made before the contract award (they become part of the bid documents and ultimately the contract), while modifications are changes made after the contract is signed and executed.

In arbitration a third-party arbitrator acts as a judge and renders an award legally binding on all parties, while in mediation an independent mediator only facilitates dialogue and the parties themselves set the terms of any agreement.

Mediation and arbitration use a neutral third party, whereas collaborative law has no neutral mediator or arbitrator — the parties negotiate a mutually beneficial result through their own advocates, usually lawyers.

All-risk covers direct loss by any peril not specifically excluded by the policy (nearly all risks), while named peril has narrower coverage that lists the perils covered, such as fire and lightning.

The unit price method bundles labor, materials, equipment, and subcontractor costs into a single price for the entire task/unit, while the quantity take-off method estimates each cost component individually.

Project overhead includes job-specific costs such as bonds, temporary storage, temporary office, security guard, utilities, dumpsters, and portable toilets, while company overhead includes business costs such as office rent, accounting fees, and legal fees.

Under a lump-sum contract the contractor completes the project for a predetermined price and assumes all risk, including costs from unforeseen circumstances; under a cost-plus contract the owner reimburses actual labor and material costs plus a markup (percentage or fixed fee) for overhead and profit.

Design/build has the owner contract with one company that assembles designers, architects, engineers, and contractors to take the project from design through completed construction; fast-track begins construction before the contract documents are complete using a phased approach, with cost generally not fixed until documents are done.

Free float is the time an activity can be delayed without impacting the early start of the next activity, while total float is the leeway in starting or completing an activity without delaying the project completion date.

Liquidated damages are a per-day amount written into the contract and assessed for unexcused contractor delay; an owner who sues for liquidated damages cannot also sue for actual damages (mutually exclusive remedies).

A counteroffer (for example, agreeing to the scope but proposing a different price) is not acceptance; acceptance occurs only when both parties agree to the same contract terms.