Exam Cheat Sheet · Quick Reference

Oklahoma Electrical Business and Law

Oklahoma  ·  PSI Services Contractor

Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
50
Passing score
70%
Exam time
120 min
Administered by
PSI Services Contractor
Format
Reference materials allowed

Oklahoma State Portion 50 questions

Bidding and Estimating 10 Q · 20%
General EstimatingBid
Project Management and Supervision 7 Q · 14%
General Project OversightOversee BudgetOversee Quality ControlOversee Materials ControlManage Jobsite SafetySchedulePotentially Hazardous MaterialsEnvironmental ProtectionSubmittals and ReportsEthicsLiens
Contracts 5 Q · 10%
TerminologyRequired Elements/ComponentsContract TypesChange OrdersStandardized DocumentsInterpretationWarrantiesDocuments/InclusionsOther Obligations
Financial 8 Q · 16%
Business Organization Characteristics, Advantages, and DisadvantagesBusiness Start-upAccounting MethodCash Flow TerminologyAccounts ReceivableAccounts PayableBalance SheetIncome StatementTaxes on Company IncomeObtaining FinancingChecking AccountFinancial Ratios
Labor and Personnel 5 Q · 10%
ADALabor StandardsRequirements for Non-citizens and/or NonresidentsWorkers' CompensationFederal or State OSHANew HiresPersonnel Record KeepingOther Requirements
Risk Management 4 Q · 8%
InsuranceBonds
Payroll and Payroll Taxes 5 Q · 10%
TaxesForms and Due Dates
Licensing Requirements 6 Q · 12%
License classifications and scope of work limitations (unlimited, residential, limited, refinery, poultry house)Experience and age requirements for contractor and journeyman license categoriesApprentice registration requirements and supervision ratiosBond and insurance requirements for active electrical contractorsLicense display, vehicle signage, and pocket license requirementsLicense fees, renewal procedures, and late renewal penaltiesReciprocity and exam equivalency procedures for out-of-state licenseesContinuing education requirements for license renewalRequired Insurance/BondsRenewal

Key Distinctions

Bid peddlingvsBid shopping

Bid peddling is when a subcontractor approaches the general contractor after award intending to lower its original bid-day price, while bid shopping is when the general contractor seeks lower bids from other subcontractors.

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Peddling section (Page 6-2)
ArbitrationvsMediation

Arbitration uses a third-party arbitrator acting as a judge whose arbitral award legally binds all parties, while a mediator only facilitates dialogue and does not impose a binding decision (the parties set the terms).

NASCLA Contractors Guide (14th ed.), Chapter 7 — Arbitration
Named peril builder's risk insurancevsAll-risk builder's risk insurance

Named peril policies are narrower and cover only the perils specifically listed (typically fire and lightning, sometimes wind, explosion, water damage, terrorism, earthquake), while all-risk covers all perils not specifically excluded.

NASCLA Contractors Guide (14th ed.), Chapter 3 – Named Peril Builder's Risk Insurance section
Bank letter of creditvsSurety bond

A bank letter of credit is not a bond but a cash guarantee to the owner (convertible to a payment) that is not a guarantee of performance and customarily covers only 5 to 10 percent of the contract, not 100 percent.

NASCLA Contractors Guide (14th ed.), Chapter 3 – Bond Language section
Maintenance bond amountvsPerformance bond amount

Maintenance bonds often use 10 percent of construction cost as the required bond amount, while performance bonds are usually set at 100 percent of the contracted price.

NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Bond Language section
Company overheadvsProject overhead

Company overhead is the cost of doing business that cannot be linked to a specific project (office rent, accounting and legal fees, taxes, telephone, administrative labor), while project overhead is project-specific (bonds, temporary storage/office, security, utilities, dumpsters, portable toilets).

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Add Company Overhead section (Page 6-6)
Direct costsvsOperating (indirect) expenses

On the income statement, direct costs are those directly linked with a particular project (materials, subcontractor fees, permit fees, labor), while operating expenses are indirect items such as office salaries, advertising, and warehouse rental.

NASCLA Contractors Guide (14th ed.), Chapter 2 — Income Statement section
Project equipment (direct cost)vsSmall tools and pickup trucks

Small tools and pickup trucks are considered an indirect cost figured into project overhead rather than listed as direct project equipment in the estimate.

NASCLA Contractors Guide, Bidding and Estimating chapter — Determining Estimated Costs section
Accrual methodvsRecognizing income/expenses at payment

The accrual method recognizes income when the services occur and records expenses when incurred, not when money is collected or bills are paid; most construction businesses use the accrual method.

NASCLA Contractors Guide (14th ed.), Chapter 14 — Accrual Method section
Critical path method (CPM)vsCalendar and bar chart (Gantt) scheduling

CPM graphically illustrates the interdependent relationships between tasks, while calendar and bar chart methods do not show interdependencies or the impact a delayed task has on other tasks (calendar scheduling's advantage is linking tasks to specific dates).

NASCLA Contractors Guide (14th ed.), Chapter 8 — Critical Path Method section
Free float timevsTotal float time

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 allowed without delaying the overall project completion date (contingency time is a buffer between tasks for unforeseen delays).

NASCLA Contractors Guide (14th ed.), Chapter 8 — Float Time section
SuperintendentvsForeman

The superintendent is the onsite supervisor over all daily operations (coordinating activities, tracking schedule/cost deviations, punch lists, records), while the foreman supervises specific areas by trade such as rough carpentry or concrete installation; certifying progress payments belongs to the architect/engineer, not either one.

NASCLA Contractors Guide (14th ed.), Chapter 8 — Foreman section
Project specificationsvsApplicable codes

When specifications and codes conflict, the contractor must follow the stricter of the two because codes are the minimum requirements by law.

NASCLA Contractors Guide (14th ed.), Chapter 6, Specifications paragraph, Bidding and Estimating chapter — Project Documents section (Page 48)
S corporation entity tax obligationsvsS corporation shareholder tax obligations

The S corporation entity is liable for employment taxes (Social Security, Medicare, income tax withholding, and FUTA), while income tax flows through to shareholders on Form 1040/Schedule E and self-employment and estimated tax (Form 1040-ES) are individual responsibilities.

NASCLA Contractors Guide, Tax Basics chapter — Summary of Federal Tax Forms section

Key Terms

Addendum NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Documents section (Page 6-1)
A document issued when changes are made to a bid package before the bid due date; it becomes part of the bid documents and ultimately part of the contract when awarded.
Bid rigging NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Rigging section (Page 6-2)
A form of collusion in which contractors coordinate their bids to fix the award outcome of a project, forbidden by some state statutes on public projects.
Labor burden NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Labor Burden section (Page 6-4)
Roughly 30 percent added to labor cost covering Medicare and Social Security, federal and state unemployment insurance, workers' compensation, liability insurance, and company benefits — but not raw material costs.
Distribution code (job cost recording) NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Job Cost Recording System section (Page 6-8)
A one-letter code placed behind the activity classification code identifying the type of cost — Material (M), Labor (L), Equipment (E), Project Overhead (P) — e.g., 06200L for finish carpentry labor.
Unit price method of estimating NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Other Methods of Estimating section (Page 6-7)
An estimating method that bundles all cost factors (labor, materials, equipment, subcontractors) into a single unit price for the entire task, e.g., $2.00/sq ft × 2,000 sq ft = $4,000.
Unit-price contract NASCLA Contractors Guide, Contract Management chapter — Unit-Price Contract section
A contract used when the extent of work cannot be fully determined in advance, in which a price per unit is calculated for each item and the contractor is paid according to actual quantities used.
Conceptual estimate NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Other Methods of Estimating section (Page 6-7)
An estimate generally prepared by the architect using cost models from previous projects; the contractor may arrive at a much different cost due to the project's unique characteristics.
Standard industry markup NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Add Markup section (Page 6-7)
Typically 15 percent applied to the project's direct costs (labor, material, project equipment, project overhead, subcontractors), though market and competition should be considered; too low a markup leads to breaking even, losing money, and eventually going out of business.
Non-standard abbreviations (estimating error) NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Inaccurate Estimates section (Page 6-7)
Unclear or vague shorthand that may be interpreted as a different measurement or material; the guide recommends spelling out the actual word instead.
Material breach NASCLA Contractors Guide (14th ed.), Chapter 7 — Breach of Contract section
A serious violation of the contract — such as a contractor refusing to perform or complete a job or an owner refusing to pay — that may void the contract and will most likely end up in litigation.
Indemnification clause NASCLA Contractors Guide (14th ed.), Chapter 7 — Provisions to Limit Risk section
A contract provision that absolves the indemnified party from any payment for losses and damages incurred by a third party, shifting liability to the other contracting party.
Indemnity NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Insurance Defined section
In insurance terminology, a way to transfer risk and provide exemption from loss incurred by any course of action; an insurance payout is sometimes called an indemnity.
Inland marine insurance NASCLA Contractors Guide (14th ed.), Chapter 3 — Inland Marine/Equipment Theft Insurance section
Property insurance that can be purchased for tools and equipment and provides coverage for goods in transit and projects under construction (an equipment floater is a type of inland marine insurance).
Contractor's protective public and property damage liability insurance NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Other Types of Liability Insurance section
Supplemental coverage protecting a contractor who supervises subcontractors and is subsequently held liable for the subcontractors' actions causing personal injury or property damage, addressing exclusions in a standard CGL policy.
SUTA dumping NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Unemployment Insurance section
Transferring employees between businesses for the purpose of obtaining a lower unemployment compensation tax rate; prohibited and subject to criminal and/or civil penalties under state law.
Prime contractor liability for subcontractor workers' compensation (Okla. Title 85A § 36) Oklahoma Workers' Compensation Act Statutory Excerpts, Title 85A, Section 36
If a subcontractor fails to secure the workers' compensation coverage required by the act, the prime contractor is liable for compensation to the subcontractor's employees unless an intermediate subcontractor has coverage.
Workweek (Fair Labor Standards Act) NASCLA Contractors Guide (14th ed.), Chapter 10 — Fair Labor Standards Act section
A period of 168 hours during seven consecutive 24-hour periods, which may begin on any day and hour established by the employer.
Employer Identification Number (EIN) NASCLA Contractors Guide (14th ed.), Chapter 14 — Employer Identification Number section
A 9-digit number issued by the IRS in the format 00-0000000, used to identify the tax accounts of employers.
Federal Unemployment Tax (FUTA) NASCLA Contractors Guide (14th ed.), Chapter 14 — Federal Unemployment Tax (FUTA) section
A tax paid solely by the employer and reported on Form 940, where timely payment of state unemployment tax earns an offset credit and deposits under $500 may be carried forward to the next quarter.
Value engineering NASCLA Contractors Guide (14th ed.), Chapter 8 — Value Engineering section
A project management approach whose objective is to understand the owner's cost, quality, and time priorities to deliver a product of the highest value, often with owner incentives such as bonuses for cutting costs without sacrificing quality.
Just-in-time (JIT) delivery NASCLA Contractors Guide (14th ed.), Chapter 8 — Just-In-Time section
Timing material deliveries to arrive as materials are needed, keeping inventory costs low and reducing the risk of theft or vandalism onsite.
Project manual NASCLA Contractors Guide (14th ed.), Chapter 7 — Contract Documents and Project Manual section
A central location for bid documents, contract provisions, technical specifications, and addenda.
Income statement (profit-and-loss statement) NASCLA Contractors Guide (14th ed.), Chapter 13 — Income Statement section
A summary of a company's revenues, cost of goods sold, and expenses over a given period of time, showing gross profit and net income; it also supplies the overhead and revenue figures used to compute overhead percentages.
Posting / general ledger NASCLA Contractors Guide (14th ed.), Chapter 13 — Post Transactions section
Posting is transferring transactions recorded in the journals to the appropriate accounts, which are located in the general ledger.

Formulas to Know

Labor cost for a task (quantity take-off)Required Labor Hours per Task × Labor Rate = Labor Cost per Task (consider skill level, crew size, weather when setting hours)
Total material cost per unit on a take-off sheetPrice per Unit × Number of Units Needed = Total Material Unit Cost (add a small waste contingency that varies by material type and job specs)
Overhead percentage (company or project)Overhead costs from prior year ÷ Revenues = Overhead % (e.g., $220,000 ÷ $2,000,000 = 11% company; $160,000 ÷ $2,000,000 = 8% project); company overhead averages 5%–20%, project overhead typically 5%–10% of the total bid
Bid price using cost-based pricing (adding overhead)Bid Price = Direct Costs ÷ (1 − combined overhead %); e.g., 9% + 11% = 20% → $100,000 ÷ 0.80 = $125,000; 10% + 15% = 25% → $90,000 ÷ 0.75 = $120,000
Percentage of completion cumulative earningsProject Costs Incurred ÷ Total Estimated Costs = % Complete; % Complete × Contract Amount = Cumulative Earnings (e.g., $300,000 ÷ $1,000,000 = 30%; 30% × $1,500,000 = $450,000)
Straight-line depreciation (yearly amount)(Initial Asset Cost − Salvage Cost) ÷ Useful Life Years = Yearly Depreciation (e.g., ($80,000 − $5,000) ÷ 5 = $15,000)
Owned equipment unit cost per hour (project equipment estimating)Total yearly equipment cost (depreciation, maintenance, insurance, taxes, operating) ÷ Estimated hours of use per year = Unit cost per hour (e.g., $12,000 ÷ 600 = $20/hr)
Average collection period (activity ratio)Revenues ÷ 365 = Sales per Day; Accounts Receivable ÷ Sales per Day = Average Collection Period (e.g., $730,000 ÷ 365 = $2,000; $60,000 ÷ $2,000 = 30 days)
Profit margin (profitability ratio)Net Income ÷ Revenues = Profit Margin (e.g., $40,000 ÷ $500,000 = 8.0%)
Activity duration in working daysTotal Labor Hours ÷ Hours per Day Available for the Task = Activity Duration (e.g., 16 hrs ÷ 4 hrs/day = 4 working days)
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