Exam Cheat Sheet · Quick Reference

Oklahoma Mechanical 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%
Quantity take-off method and cost componentsLabor cost calculation and labor burdenOverhead costs: project vs. company overheadMarkup and profit margin determinationBid documents, addenda, and bid submission requirementsEthics in bidding: bid shopping, peddling, and riggingEstimating methods: square-foot, unit price, and conceptualJob cost recording system and cost code structureGeneral EstimatingBid
Project Management and Supervision 7 Q · 14%
Scheduling methods: calendar, bar chart, and critical path method (CPM)Scheduling process: task sequence, activity duration, contingency time, and float timeProject manager roles and responsibilitiesProject supervisory team roles: superintendent, foreman, materials expediter, and owner's representativeProject life cycle phases: pre-construction, construction, and closeoutBudget and cost controls: tracking cost overruns and just-in-time materials managementTracking project progress: daily reports and status reportsQuality assurance and value engineeringGeneral Project OversightOversee BudgetOversee Quality ControlOversee Materials Control +7 more
Contracts 5 Q · 10%
Required elements of a binding contract (offer, acceptance, consideration, competent parties, legal purpose)Types of construction contracts (lump-sum, unit-price, cost-plus, turnkey, fast-track)Contract provisions for payment terms, progress payments, and retainageBreach of contract types, liquidated damages, and statute of limitationsChange orders and contract modificationsAlternative dispute resolution methods (negotiation, mediation, arbitration, collaborative law)Contracting methods (single prime, design/build, construction management, multiple prime, partnering)Subcontracting requirements and oral vs. written agreementsTerminologyRequired Elements/ComponentsContract TypesChange Orders +5 more
Financial 8 Q · 16%
Mechanics' and materialmen's lien rights and filing requirementsPre-lien notice requirements for subcontractors and suppliersLien priority, enforcement, and foreclosure proceduresTrust fund requirements for construction contract proceedsBusiness structure types and financial liability implicationsFinancial statements and accounting methods for contractorsSurety bonds types, qualifying requirements, and claimsCash flow management, progress payments, and retainageBusiness Organization Characteristics, Advantages, and DisadvantagesBusiness Start-upAccounting methodCash Flow Terminology +8 more
Labor and Personnel 5 Q · 10%
Prohibited interview questions and lawful hiring practicesKey employment laws (FLSA, ADA, Immigration and Nationality Act)Hiring minors in construction: working hours and prohibited tasksChild labor law penalties and enforcementEmployee documentation requirements (Form I-9, W-4, personnel files)New hire reporting requirements and purposeWorkers' compensation obligations and fraud preventionEmployee vs. independent contractor classification under IRS guidelinesADALabor StandardsRequirements for Non-citizens and/or NonresidentsWorkers' Compensation +4 more
Risk Management 4 Q · 8%
Types of insurance coverage for construction businesses (property, liability, automobile, burglary and theft)Commercial general liability (CGL) insurance and supplemental liability policiesSurety bond types and their purposes (bid, performance, payment, maintenance, fidelity, lien)Workers' compensation insurance requirements and employer obligations under Oklahoma lawBond qualifying criteria, pricing, and claims processFederal bonding laws (Miller Act and Construction Industry Payment Protection Act of 1999)Insurance coverage requirements for subcontractorsCoverage gaps, overlaps, and business owner's policies (BOPs)InsuranceBonds
Payroll and Payroll Taxes 6 Q · 12%
Federal employment taxes: FICA (Social Security and Medicare)Federal income tax withholding and Form W-4Federal unemployment tax (FUTA) calculation and deposit requirementsPayroll tax deposit schedules and deadlinesGross pay and net pay calculation with deductionsForm W-2 and W-3 filing requirements and deadlinesPenalties for late or incorrect payroll tax depositsEmployer Identification Number (EIN) requirements and applicationTaxesForms and Due Dates
Licensing Requirements 5 Q · 10%
License types and categories for mechanical contractors, journeymen, and apprenticesQualifications and experience requirements for licensureLicense application, examination, and re-examination proceduresLicense duration, renewal, and continuing education requirementsBond and insurance requirements for mechanical contractorsExemptions from licensing requirementsTemporary and reciprocity licensure provisionsProhibited acts and grounds for license suspension or revocationRequired Insurance/BondsRenewal

Key Distinctions

Bid PeddlingvsBid Shopping

Bid peddling is when a subcontractor approaches the general contractor after award to lower their own price, while bid shopping is when the general contractor seeks lower prices from other subcontractors after award.

NASCLA Contractors Guide, Page 6-2
Company OverheadvsProject Overhead

Company overhead covers general business expenses (office rent, accounting fees, legal fees) not tied to a specific project, while project overhead covers job-specific indirect costs (bonds, temporary storage, dumpsters).

NASCLA Contractors Guide, Page 6-6
Named Peril Builder's Risk InsurancevsAll-Risk Builder's Risk Insurance

Named peril policies cover only the specific perils listed (e.g., fire, lightning), while all-risk policies cover all perils that are not specifically excluded.

Chapter 3 – Named Peril Builder's Risk Insurance section
Bank Letter of CreditvsSurety Bond

A bank letter of credit is a cash guarantee covering only 5–10% of the contract and does not guarantee performance, while a surety bond guarantees performance and typically covers 100% of the contract.

Chapter 3 – Bond Language section
ArbitrationvsMediation

Arbitration uses a third-party arbitrator whose decision is legally binding on all parties, while in mediation the mediator only facilitates discussion and the parties themselves set the terms.

Nascla Contractors Guide 14th, Chapter 7 — Arbitration
Accrual MethodvsCash Method (implied)

The accrual method recognizes income when services occur and records expenses when incurred regardless of payment timing, whereas the cash method (implied contrast) records income and expenses only when cash is actually received or paid.

NASCLA Contractors Guide, Chapter 14 — Accrual Method section
Critical Path Method (CPM)vsBar Chart / Calendar Scheduling

CPM graphically shows interdependent relationships between tasks so delays can be traced through the schedule, while bar chart and calendar methods do not show activity interdependencies.

NASCLA Contractors Guide, Chapter 8 — Critical Path Method section
Free Float TimevsTotal Float Time

Free float is the time an activity can be delayed without affecting the early start of the next activity, while total float is the leeway available without delaying the overall project completion date.

NASCLA Contractors Guide, Chapter 8 — Float Time section
Square-Foot Estimating MethodvsUnit Price Estimating Method

The square-foot method multiplies total square footage by a unit cost for a quick early-stage estimate without detailed plans, while the unit price method bundles all cost factors (labor, materials, equipment, subcontractors) into a single price per unit of a specific task.

NASCLA Contractors Guide, Page 6-7
Quantity Take-Off MethodvsConceptual Estimate

The quantity take-off method is a detailed contractor-prepared estimate using measured quantities of materials and labor, while a conceptual estimate is generally prepared by the architect using cost models from previous projects.

NASCLA Contractors Guide, Page 6-3
Bid RiggingvsBid Peddling

Bid rigging is collusion among multiple contractors to fix the award outcome of a project, while bid peddling is a single subcontractor lowering its own bid after project award to win work from the general contractor.

NASCLA Contractors Guide, Page 6-2
Cost-Plus Contract PaymentsvsLump-Sum / Percentage-Complete Payments

Cost-plus progress payments are based on actual costs incurred plus a proportionate markup (with reconciliation), rather than on a fixed percentage of work completed.

NASCLA Contractors Guide, Chapter 13 — Payment for Cost-Plus Contracts section

Key Terms

Company Overhead Percentage Calculation NASCLA Contractors Guide, Page 6-6
Per NASCLA Contractors Guide Page 6-6, company overhead percentage is calculated by dividing total overhead costs from the prior year's income statement by total revenues from the same statement.
Overhead Division Method (Bid Price) NASCLA Contractors Guide, Page 6-6
Per NASCLA Contractors Guide Page 6-6, when overhead percentages total a known share of the bid, the bid price is found by dividing direct costs by the remaining decimal (e.g., direct costs ÷ 0.80 when overhead is 20%).
Labor Burden NASCLA Contractors Guide, Page 6-4
Per NASCLA Contractors Guide Page 6-4, labor burden adds approximately 30% to base labor cost and includes Medicare/Social Security, FUTA, workers' compensation, liability insurance, state unemployment insurance, and company benefits — but not raw material costs.
Project Overhead Cost Range NASCLA Contractors Guide, Page 6-6
Per NASCLA Contractors Guide Page 6-6, project overhead typically represents 5% to 10% of the total bid and should be itemized as much as possible for accuracy.
Standard Industry Markup NASCLA Contractors Guide, Page 6-7
Per NASCLA Contractors Guide Page 6-7, the standard industry markup applied to direct costs (labor, material, equipment, project overhead, subcontractors) is 15%, though market conditions and competition should be considered.
CSI MasterFormat NASCLA Contractors Guide, Pages 6-3 and 6-8
Per NASCLA Contractors Guide Pages 6-3 and 6-8, the Construction Specifications Institute's MasterFormat is the recommended classification system for both estimating and job cost recording so estimated costs can be directly compared to actual costs.
Distribution Code NASCLA Contractors Guide, Page 6-8
Per NASCLA Contractors Guide Page 6-8, a one-letter code appended to an activity classification code to identify cost type: M = Material, L = Labor, E = Equipment, P = Project Overhead (e.g., 06200E = finish carpentry equipment).
Addendum NASCLA Contractors Guide, Page 6-1
Per NASCLA Contractors Guide Page 6-1, an addendum is the document issued to communicate changes to a bid package before the bid due date; it becomes part of the bid documents and ultimately part of the awarded contract.
Federal Unemployment Tax (FUTA) NASCLA Contractors Guide, Chapter 14 — Federal Unemployment Tax (FUTA) section
Per NASCLA Contractors Guide Chapter 14, FUTA is paid solely by the employer (not withheld from employees), reported on Form 940, and employers who pay state unemployment tax on time receive an offset credit against their FUTA liability; deposits under $500 may be carried to the next quarter.
Accrual Method of Accounting NASCLA Contractors Guide, Chapter 14 — Accrual Method section
Per NASCLA Contractors Guide Chapter 14, the accrual method recognizes income when services occur (not when payment is collected) and records expenses when incurred (not when paid); it is the method most construction businesses use.
Just-In-Time (JIT) Delivery NASCLA Contractors Guide, Chapter 8 — Just-In-Time section
Per NASCLA Contractors Guide Chapter 8, JIT delivery times material arrivals to coincide with when they are needed in the construction process, keeping inventory costs low and reducing the risk of onsite theft or vandalism.
Zero Float / Critical Activity NASCLA Contractors Guide, Chapter 8 — Float Time section
Per NASCLA Contractors Guide Chapter 8, an activity with zero float is a critical activity — any delay to it will directly delay the overall project completion date.
Punch List NASCLA Contractors Guide, Chapter 8 — Job Completion and Closeout section
Per NASCLA Contractors Guide Chapter 8, a punch list is a list of follow-up items developed during the post-completion walkthrough that must be resolved during project closeout.
Preliminary Estimate NASCLA Contractors Guide, Page 6-7
Per NASCLA Contractors Guide Page 6-7, a preliminary estimate is a price quoted before accurate calculations are made; it is considered a risky practice because quoting too high may lose the bid and quoting too low may disappoint the customer.
Good Estimate Accuracy Threshold NASCLA Contractors Guide, Page 6-2
Per NASCLA Contractors Guide Page 6-2, a good construction estimate falls within 1% to 2% of actual construction costs.

Formulas to Know

Labor Cost per TaskRequired Labor Hours per Task × Labor Rate = Labor Cost per Task
Total Material Unit CostPrice per Unit × Number of Units Needed = Total Material Unit Cost
Project Equipment Unit CostTotal Annual Equipment Cost ÷ Annual Hours = Cost per Hour; Cost per Hour × Project Hours = Project Equipment Cost
Bid Price Using Overhead Division MethodBid Price = Direct Costs ÷ (1 − Project Overhead % − Company Overhead %)
Company Overhead PercentageCompany Overhead % = Total Annual Overhead Costs (from income statement) ÷ Total Annual Revenue (from income statement)
Bid Price with MarkupBid Price = Direct Costs × (1 + Markup %)
Square-Foot EstimateEstimated Project Cost = Total Square Footage × Unit Cost per Square Foot
Unit Price EstimateTotal Task Cost = Unit Price (bundling labor + materials + equipment + subcontractors) × Number of Units
Start free practice Full study guide