Virginia Contractor Advanced Portion (Class A)

Key Concepts

Bid Documents & Bid Package Components A complete bid package includes: (1) invitation to bid, (2) bid instructions, (3) bid forms (bid sheet, bid schedule, bidder's questionnaire, copy of contract), and (4) supplements (property survey, soil analysis). A bid is deemed non-responsive if documents are incorrectly submitted or omitted. If changes occur before bid due date, an addendum is issued — it becomes part of the bid documents and ultimately the contract. Subcontractors must provide a copy of their license to the prime for correct listing on the bid envelope (Rule 0680-1-24).

Ethics in Bidding Three prohibited practices — know them cold: - Bid Shopping: The general contractor reveals existing sub bids and solicits lower prices from other subs after bids are submitted. - Bid Peddling: The subcontractor approaches the GC after award to voluntarily offer a lower price than originally submitted. - Bid Rigging: Collusion among contractors to coordinate bids and…

Key Concepts

Five Required Elements of a Legally Binding Contract

All five must be present or the contract is invalid: 1. Offer and Acceptance — Offer outlines all obligations (work + compensation). Acceptance = signing. A counteroffer is not acceptance. Offers expire after a "reasonable time" if no deadline is stated. 2. Consideration — Both parties exchange something of value (typically services for money). 3. Competent Parties — Both parties must be of sound mind and legal age. Minors require parental consent. Intoxicated or mentally disabled individuals may be ruled incompetent. 4. Legal Purpose — Contract cannot require illegal activity or violate building codes (e.g., a contract to build a non-code-compliant structure is invalid). 5. Offer must be specific — Include project description, contract sum, contract type, payment terms, and expiration date.

Key Concepts

Scheduling Process Elements (Chapter 9)

Sequence of Tasks: Tasks must be ordered logically. Some tasks run concurrently (interior and exterior paint); others are strictly sequential (drywall must be complete before paint). Sequencing errors most often affect subcontractor coordination.

Activity Duration: Determined by labor hours estimated ÷ hours per day available. Example: 4-hour task with only 2 hours/day available = 2-day duration. Input from subs and experienced crew members is essential.

Contingency Time: A buffer built between tasks to absorb unforeseen delays. More contingency is needed when: - Tasks are weather-dependent - Work is custom (not standard) - Site access is limited

Key Concepts

Risk Assessment

• Two dimensions: probability of loss and consequence (severity) of loss
• High-probability/low-consequence risks are handled differently than low-probability/high-consequence risks
• Risk can be managed through contracts, safety programs, insurance, and bonding

Property Insurance Types

• All-Risk Builder's Risk: Covers buildings under construction, including materials, supplies, equipment, and fixtures that will become part of the structure. Coverage requires construction to be in progress. Does not cover major construction defects, poor workmanship, or faulty design. Tools typically excluded — require separate coverage.
• Inland Marine Insurance: Covers materials, equipment, and tools in transit or stored off-site
• Equipment Floater: Covers mobile equipment and tools at multiple job sites; often added as a rider to inland marine

(29 CFR 1926 | 2 Questions | 8% of Exam)

Key Concepts

Fall Protection (29 CFR 1926 Subpart M)

• 6-foot rule: Fall protection required at 6 feet or more above a lower level for most construction work
• Three accepted systems: Guardrail systems, safety net systems, or personal fall arrest systems (PFAS)
• Guardrail specs: Top rail at 42 inches (±3 in.), midrail at 21 inches; top rail must withstand 200 lbs outward/downward force
• Safety nets: Must be installed as close as practicable, no more than 30 feet below the work surface; must be drop-tested
• PFAS components: Body harness, lanyard, deceleration device, anchor; anchor must support 5,000 lbs per employee or be designed by a qualified person with safety factor of 2; limits free fall to 6 feet, arrests fall before worker travels 3.5 feet after activation
• Leading edges: If infeasible to use conventional systems, a fall…

Key Concepts

Fair Labor Standards Act (FLSA)

• Sets federal minimum wage, mandates overtime at 1.5× regular rate for hours over 40/week for non-exempt employees.
• Employers must maintain payroll records for at least 3 years; records of wage computations for 2 years.

Hiring & Interview Practices

• Prohibited questions: age, disability, pregnancy, marital status, children, religion, sexual orientation, ethnic background.
• Lawful topics: work history, skill level, training/education, safety record, ability to work on a team, salary expectations, conflict resolution.

Virginia New Hire Reporting Program

• Report all new, rehired, recalled, and temporary employees within 20 days of hire/rehire.
• Electronic/magnetic filers must submit two monthly transmissions no more than 16 days apart.
• Required data: employer name, address, federal ID number; employee name, address, SSN, first day of work, and hire/rehire status.
• Penalties: $25 per incident for failure to report; up to $500 per employee for non-compliance. -…

Key Concepts

Bookkeeping & Accounting Cycle (6 Steps): 1. Classify and record transactions (source documents → journals) 2. Post transactions (journals → general ledger) 3. Prepare trial balance (debits must equal credits) 4. Prepare adjusted trial balance (6 types of adjusting entries) 5. Prepare financial statements 6. Analyze financial statements

Chart of Accounts numbering: Assets (1000–1999), Liabilities (2000–2999), Equity (3000–3999), Revenue (4000–4999), Cost of Goods Sold (5000–5999), Expenses (6000–6999).

Debit/Credit Rules:

Financial Statements: - Balance Sheet: Assets = Liabilities + Owners' Equity (snapshot in time) - Income Statement: Revenue − Expenses = Net Income (period performance) - Statement of Cash Flows: Operating, investing, and financing activities

Key Concepts

Employer Identification Number (EIN) - A 9-digit number (format: 00-0000000) issued by the IRS to identify tax accounts - Required for: All partnerships, corporations, S corps, and any entity with employees - Exceptions (use SSN instead): Sole proprietors with no employees who file no excise or pension returns; single-member LLCs where the owner files employment tax returns - Obtain via: online at irs.gov, phone (800) 829-4933, fax or mail Form SS-4

Federal Business Taxes by Entity - Sole proprietor: Income tax (Form 1040 + Sch. C), self-employment tax (1040 + Sch. SE), estimated tax (1040-ES), employment taxes (Form 941 for FICA/withholding, Form 940 for FUTA) - Partnership: Files information return Form 1065 (not an income tax return); individual partners pay income tax on Schedule E and SE tax on Schedule SE - Corporation: Income tax on Form 1120; estimated tax on Form 1120-W; S corp uses Form 1120S - All businesses except…

Key Concepts

Who Is Entitled to a Lien (Code of Virginia, Title 43, Chapter 1) Any contractor, subcontractor, laborer, or materialman who furnishes $50 or more in labor or materials for construction, removal, repair, or improvement of any building or structure has lien rights. - General contractors: contract directly with the owner - Subcontractors: contract with the general contractor - Sub-subcontractors: contract with a subcontractor — also have lien rights

Memorandum of Lien – Required Content Must be verified under oath and include: - Name of property owner - Name of lien claimant - Amount and consideration of the claim - Schedule of amounts due - Statement of intent to claim the lien - Brief property description

Filed in the clerk's office of the county/city where the property is located. General contractors must also file a certificate of mailing a copy to the owner's last known address.