Exam Cheat Sheet · Quick Reference
South Carolina Business Management and Law - Commercial Contractors
South Carolina · 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
125 min
Administered by
PSI Services Contractor
Format
Reference materials allowed
South Carolina State Portion 50 questions
Business Management
2 Q · 4%
Business entity types and their key characteristics (sole proprietorship, partnership, corporation, LLC)Liability exposure by business structureTaxation methods by business entity typeFinancial statements and the accounting cycle (balance sheet, income statement, cash flow)Contract types, elements, and provisions for commercial contractorsEmployee management, hiring laws, and payroll accountingSouth Carolina contractor licensing financial requirements by groupBusiness planning, marketing, and ethical business practices
Estimating and Bidding
10 Q · 20%
Quantity take-off method for determining estimated costsLabor cost calculation including labor burdenOverhead calculation and markup for profit marginBid documents, addenda, and bid submission requirementsEthics in bidding: bid shopping, bid peddling, and bid riggingEstimating framework: project phases, tasks, and materialsEquipment cost analysis: rent, lease, or buy decisionsJob cost recording system and estimating pitfalls
Contracts and Agreements
12 Q · 24%
Required elements of a binding contract (offer, acceptance, consideration, competent parties, legal purpose)Types of construction contracts (lump-sum, unit-price, cost-plus)Contract provisions for price, payment terms, progress payments, and retainageBreach of contract (material vs. immaterial breach, liquidated damages, statute of limitations)Contracting methods (single prime, design/build, construction management, fast-track, partnering)Change orders and contract modificationsAlternative dispute resolution (negotiation, mediation, collaborative law, arbitration)South Carolina Prompt Pay Law payment timing and interest requirements
Project Management
5 Q · 10%
Scheduling process elements: sequence of tasks, activity duration, float time, and contingency timeScheduling methods: calendar, bar chart, and critical path method (CPM)Project manager roles and responsibilitiesProject supervisory team roles: superintendent, foreman, materials expediter, architect/owner's representativeProject life cycle phases: pre-construction, construction, and closeoutTracking project progress: daily reports, status reports, and schedule trackingBudget and cost controls: cost overruns, materials management, and just-in-time deliveryQuality assurance and value engineering
Insurance and Bonding
2 Q · 4%
Types of surety bonds (bid, performance, payment, maintenance, completion, fidelity, lien)Types of property insurance for contractors (all-risk builders' risk, named peril builders' risk, inland marine, equipment floater)Types of liability insurance (CGL, umbrella, contractual, completed operations, professional liability, wrap-up)SC state public construction bonding requirements under the Consolidated Procurement CodeMiller Act and Construction Industry Payment Protection Act federal bonding requirementsBond qualification criteria, bond language components, and bond claims processEmployment-related insurance requirements (workers' compensation, unemployment, social security)Insurance coverage verification for subcontractors and coverage gaps and overlaps
Safety Recordkeeping and Reporting
1 Q · 2%
OSHA Forms 300, 300A, and 301 requirements and purposesEmployer exemptions and thresholds for OSHA recordkeepingRecordable vs. non-recordable injuries and illnessesFirst aid definitions and medical treatment distinctionsRetention periods for OSHA records, exposure records, and medical recordsFatality and hospitalization reporting requirements and timeframesOSHA injury decision tree for determining recordabilityForm 300A posting requirements and deadlines
Labor Laws and Employment Regulations
3 Q · 6%
Fair Labor Standards Act (FLSA) minimum wage and overtime requirementsEmployee vs. independent contractor classification under IRS guidelinesImmigration and Nationality Act Form I-9 employment eligibility verificationSouth Carolina new hire reporting requirements and penaltiesAmericans with Disabilities Act (ADA) employment provisions and reasonable accommodationsHiring minors in construction: restricted hours and prohibited tasksSouth Carolina payment of wage laws, recordkeeping, and termination pay requirementsOther federal labor laws: FMLA, Title VII, ADEA, WARN Act, and right-to-work status
Financial Management
7 Q · 14%
Accounting cycle steps and journal typesFinancial statement preparation and analysis (balance sheet, income statement, statement of cash flows)Financial ratios (liquidity, quick, activity, debt, profitability, return on assets)Contract accounting methods (completed contract, percentage of completion, cost comparison)Cash management and accounts receivable collectionDepreciation methods (straight-line and MACRS accelerated)Payroll accounting and deductions (gross pay, net pay, FICA, federal withholding)South Carolina contractor licensing financial requirements by group (net worth and bid limits)
Tax Laws
3 Q · 6%
Federal employer identification number (EIN) requirements and methods of obtainingFederal business tax types by business entity (income, self-employment, employment taxes)Federal employment taxes: FICA, federal income tax withholding, and FUTAPayroll tax deposit schedules, thresholds, and penalty ratesEstimated tax payment requirements and thresholds by entity typeSouth Carolina state business income tax by entity type (sole proprietor, partnership, C corp, S corp, LLC)South Carolina sales and use tax, withholding tax, unemployment tax, and corporation license taxInformation returns and tax calendar deadlines (Form 1099-MISC, W-2, Form 940, Form 941)
Liens
3 Q · 6%
Who is entitled to file a mechanics' lien (eligible parties and licensing requirements)Notice of Project Commencement (filing deadlines, required information, posting requirements, and cost)Notice to owner by subcontractors and suppliers without direct contract (prerequisite to lien rights)Dissolution of lien for failure to serve statement (90-day notice requirement and required contents)Time limits for filing lien foreclosure petition and lis pendens (six-month deadline)Collecting on a lien (lawsuit requirements, county filing, and multiple lien claimants)Monetary awards and proration of liens among multiple lienorsNotice of Non-Responsibility, Offer of Settlement, and sale of land to satisfy lien
Environmental Laws and Regulations
2 Q · 4%
EPA and SC DHEC roles and regulatory authorityKey federal environmental laws applicable to construction (Clean Water Act, Clean Air Act, ESA, NEPA, NHPA)NPDES stormwater permitting requirements for construction sitesAsbestos identification, notification, and abatement regulationsLead hazard regulations and Lead Pre-Renovation Education Rule (Lead PRE)Hazardous and non-hazardous solid waste identification and disposalSedimentation and erosion control measuresEnvironmental compliance phases during construction projects
Key Distinctions
Bid peddlingvsBid shopping
Bid peddling is when a subcontractor approaches the general contractor after the project was awarded intending to undercut the original bid-day price, while bid shopping is when the general contractor seeks lower prices from other subcontractors.
NASCLA Contractors Guide, South Carolina (9th ed.), Bidding and Estimating chapter — Bid Peddling section (Page 7-2)AddendavsModifications / change orders
Addenda are changes to the contract documents issued before the contract award (and become part of the bid documents and contract), while modifications are changes made after the contract is signed and executed and change orders are written owner-contractor agreements changing the contract after execution.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 8 — Making Changes to the ContractLump-sum contractvsUnit-price contract
In a lump-sum contract the contractor agrees to a predetermined specified price and assumes essentially all risk for unforeseen cost overruns, whereas a unit-price contract is used when the extent of work cannot be fully determined in advance and pays the contractor per unit based on actual quantities used.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 8 — Types of Construction ContractsArbitrationvsMediation
The arbitrator's decision, called an arbitral award, is legally binding, unlike in mediation.
NASCLA Contractors Guide, Contract Management chapter — Arbitration sectionBar chart and calendar schedulingvsCritical path method (CPM)
Bar chart and calendar scheduling do not show the interdependencies of activities (so a delay's impact on other tasks is not visible), while CPM graphically illustrates the interdependent relationships of tasks.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 9 — Critical Path Method sectionC Corporation taxationvsS Corporation, LLC, and partnership taxation
A C Corporation pays tax on its profits and shareholders are taxed again on dividends (double taxation), while S Corporations, LLCs, and partnerships generally use pass-through taxation.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 2Corporate estimated tax thresholdvsSole proprietor / partner / S corporation shareholder threshold
Corporations generally must make estimated tax payments if expected owed tax is $500 or more when the return is filed, while the threshold for sole proprietors, partners, and S corporation shareholders is $1,000.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 15 — Estimated Tax sectionDirect project equipment costvsIndirect cost (project overhead)
Equipment dedicated to the project is a direct project equipment cost, while small tools and pickup trucks are indirect costs figured into project overhead rather than listed as project equipment.
NASCLA Contractors Guide, Bidding and Estimating chapter — Determining Estimated Costs sectionNegotiation communicationvsOffer
Parties are not bound to terms during negotiation, so a contractor must clearly label negotiation communications to avoid them being misconstrued as an offer — a binding contract requires both an offer and an acceptance.
NASCLA Contractors Guide, Contract Management chapter — Negotiation sectionOwner's payment deadline (SC Prompt Pay)vsContractor's payment deadline to subcontractors
The owner must mail or deliver the undisputed amount of a pay request within 21 days of receipt, while the contractor must pay subcontractors within 7 days of receiving each periodic or final payment.
NASCLA Contractors Guide, South Carolina (9th ed.), Appendix J — SC Code Section 29-6-30Sediment control measuresvsErosion control measures / dust control
Sediment control uses a silt fence or hay bales at the down gradient side of the site, while placing mulch and vegetation is erosion control and a water misting system controls dust generation.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 12 — Sedimentation and Erosion Control Measures sectionADA employee thresholdvsADEA employee threshold
The ADA's employment provisions apply to employers with 15 or more employees, while the ADEA (protecting individuals age 40 or older) applies to employers with 20 or more employees.
NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 11 — Americans with Disabilities Act sectionBid documentsvsContract provisions in the project manual
Invitation to bid and bid forms are bid documents (and required bonds are supplemental forms), while contract provisions include the form of agreement, general conditions/obligation of parties, supplemental conditions, change orders, and the index of drawings.
NASCLA Contractors Guide, Contract Management chapter — Contract Documents and Project Manual sectionKey Terms
Progress payments NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 8 — Progress Payments calculation method
Payments generally calculated by taking the difference between the completed work and materials delivered and a predetermined schedule of unit costs.
Retainage NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 8 — Retainage
A percentage (generally 10 percent) withheld from each progress payment that the owner uses to ensure project completion and provide protection against liens, claims, and defaults; it may drop to 5 percent after 75 percent completion.
Labor burden NASCLA Contractors Guide, South Carolina (9th ed.), Bidding and Estimating chapter — Labor Burden section (Page 7-4)
Employer obligations such as employment taxes, insurance, and company benefits (Medicare, social security, federal and state unemployment insurance, workers' compensation, liability insurance) that add approximately 30 percent to labor cost.
Addendum NASCLA Contractors Guide, South Carolina (9th ed.), Bidding and Estimating chapter — Bid Documents section (Page 7-2)
A document issued when changes are made to a bid package before the bid is due; it becomes part of the bid documents and ultimately part of the contract when awarded.
Project manual NASCLA Contractors Guide, Contract Management chapter — Contract Documents and Project Manual section
A central location for bid documents, contract provisions, technical specifications, and addenda.
Indemnification clause NASCLA Contractors Guide, Contract Management chapter — Provisions to Limit Risk section
A risk-limiting provision that shifts payment or liability for losses or damages incurred by a third party from the indemnified party to another party, and must be carefully examined to ensure proper liability distribution between contractor and owner.
Material breach NASCLA Contractors Guide, Contract Management chapter — 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.
Statute of limitations NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 8 — Breach of Contract — Statute of Limitations
A law setting the maximum period of time within which a lawsuit or claim may be filed; missing the statutory deadline may forfeit the right to file.
Value engineering NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 9 — Value Engineering section
A project management approach aimed at understanding the owner's cost, quality, and time priorities to deliver the highest-value product, often supported by owner incentives/bonuses that should be included in the construction contract.
Cost-plus contract NASCLA Contractors Guide, Contract Management chapter — Cost-Plus Contract section
A contract in which the contractor is reimbursed for the actual cost of labor and materials plus a markup fee for overhead and profit.
Foreman NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 9 — Foreman section
The supervisory team member who assists the superintendent with daily project operations and usually supervises specific areas by trade, such as rough and finish carpentry.
Status report NASCLA Contractors Guide, Scheduling and Project Management chapter — Status Reports section
A periodic report that summarizes project highlights by addressing items completed, items in progress, and outstanding items, used to communicate with customers, managers, subcontractors, and suppliers.
SC Prompt Pay Law exclusions (SC Code §29-6-60) NASCLA Contractors Guide, South Carolina (9th ed.), Appendix J — SC Code Section 29-6-60
The law does not apply to residential homebuilders, improvements to real property intended for residential purposes consisting of sixteen or fewer residential units, or private persons/entities owning improvements when the specific improvements are not financed by a nonowner.
Labor and material payment bond (SC Code §29-6-250(1)) NASCLA Contractors Guide, South Carolina (9th ed.), Appendix J — SC Code Section 29-6-250(1)
When a governmental body is a party to a contract to improve real property exceeding $50,000, the owner shall require the contractor to provide a labor and material payment bond in the full amount of the contract.
Undue hardship (ADA) NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 11 — Americans with Disabilities Act section
The standard under which an employer is excused from accommodating a known disability of a qualified applicant or employee — accommodation is required unless it imposes an undue hardship on the operation of the employer's business.
USERRA NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 12 — Other Labor Laws section
The Uniformed Services Employment and Reemployment Rights Act, which protects service members' reemployment rights when returning from uniformed service (including reserve or National Guard call-ups) and prohibits employer discrimination based on military service or obligation.
WARN Act NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 11 — Other Labor Laws section
The Worker Adjustment and Retraining Notification Act, requiring employers to give 60 days' advance notice of covered plant closings and covered mass layoffs.
South Carolina New Hire Reporting System NASCLA Contractors Guide, South Carolina (9th ed.), Chapter 11 — New Hire Reporting section
A reporting system whose information is used to establish and enforce child support orders and detect fraud in unemployment benefits, workers' compensation, and other government programs such as welfare and food stamps; the penalty for failure to report is $25 for the second offense and each offense thereafter ($500 per offense if from an employer-employee conspiracy).
Square-foot method of estimating NASCLA Contractors Guide, Bidding and Estimating chapter — Other Methods of Estimating section
A quick way to arrive at an estimated cost that does not account for project-specific factors affecting cost, making it less accurate than other methods.
Formulas to Know
Bid price after adding overhead (overhead percentage method)
Total overhead % = project overhead % + company overhead %; Bid price = direct costs ÷ (1 − total overhead %). Example: 9% + 11% = 20%, so $100,000 ÷ 0.80 = $125,000.Standard markup added to an estimate
Markup = 15 percent (standard industry markup) applied to direct costs (labor, material, project equipment, project overhead, subcontractors); adjust for market and competition.Labor burden added to labor cost
Labor cost × approximately 30% = added employer obligations (employment taxes, insurance, benefits); planning and scheduling hours must also be figured into the labor cost equation.Owned-equipment unit cost and project equipment cost
Unit cost per hour = total yearly equipment cost (depreciation, maintenance, insurance, taxes, operating) ÷ estimated hours of use per year; Project cost = unit cost × project hours. Examples: $12,000 ÷ 600 = $20/hr; $30,000 ÷ 1,000 = $30/hr × 40 hr = $1,200.Cost-plus contract total with percentage markup
Total = actual cost of labor and materials + (actual cost × markup %). Example: $250,000 × 0.15 = $37,500; $250,000 + $37,500 = $287,500.Net pay from gross pay
Gross Pay − Taxes & Deductions = Net Pay. Example: $2,400 − $312 − $148.80 − $34.80 − $50 = $1,854.40.Straight-line depreciation (yearly amount)
(Initial Asset Cost − Salvage Cost) ÷ Useful Life Years. Example: ($80,000 − $5,000) ÷ 5 = $15,000 per year.Bonding amounts and premiums
SC state public construction over $50,000: bid bond = 5% of the bid amount. Miller Act payment bond: under $1 million = 50% of contract; $1–$5 million = 40%; over $5 million = $2.5 million. Bond premium = 0.5% to 2% of the contract amount.Late payment interest under SC Prompt Pay Law (§29-6-50)
Interest = 1% per month, or a pro rata fraction thereof, on the unpaid balance due when payment is delayed beyond the required time periods (owner: 21 days; contractor to sub: 7 days).Late payroll tax deposit penalty rates
1–5 days late = 2%; 6–15 days late = 5%; more than 16 days late = 10%; still unpaid more than 10 days after the first IRS notice = 15%; failure to pay trust fund taxes = 100% penalty.Job cost code structure (activity code + distribution code)
Activity classification code + one-letter distribution code placed behind it: Material = M, Labor = L, Equipment = E, Project Overhead = P (e.g., finish carpentry 06200 → 06200M for material, 06200E for equipment). Project numbers may combine project type + year + sequence (e.g., remodel started 2021, first of year = R-21-01).