Virginia Contractor General Portion

2 questions | 4% of exam

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Business Structure Types & Characteristics

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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). Submitting incomplete or incorrect documents makes your bid non-responsive. Pre-bid meetings are held on larger projects to discuss specs and changes. Any changes before bid due date are issued as an addendum, which becomes part of the contract upon award.

Ethics in Bidding - Bid Shopping — GC reveals subcontractor bids to other subs to get a lower price after bids are submitted - Bid Peddling — Sub approaches GC after award to offer a lower price than original bid - Bid Rigging — Contractors collude to fix the outcome of a bid (federal crime; forbidden on public projects by state statute) -…

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5 Required Elements of a Legally Binding Contract

1. Offer and Acceptance – Offer outlines work and compensation; acceptance requires both parties to agree (signing). A counteroffer is NOT acceptance.
2. Consideration – Both parties must exchange something of value (typically services for money).
3. Competent Parties – Both parties must be of sound mind; minors cannot contract without parental consent.
4. Legal Purpose – Contract cannot require illegal activity (e.g., work that violates building codes is invalid).
5. (Offer must include: date, party info, project description, contract time, payment terms, contract sum type, and expiration date.)

Virginia Written Contract Requirements (Residential Projects)

Virginia licensing law requires written contracts for residential projects. Required elements include: - Start date and estimated completion date - Total contract cost + progress payment schedule + specific down payment amount…

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Scheduling Methods (Chapter 9)

• Calendar Scheduling: Simplest method; uses a standard desk calendar; ties tasks to specific dates (deliveries, holidays, payment schedules). Best for small, less complex projects only.
• Bar Chart / Gantt Chart: Visual, easy-to-read graphical depiction of activity duration and sequence. Weakness: does not show interdependencies between tasks — a delay in one task doesn't visually impact others.
• Critical Path Method (CPM): Most sophisticated method; illustrates interdependent relationships between tasks. Identifies the critical path — the sequence of tasks that determines total project duration. A one-week delay on any critical path task = one-week delay to the entire project. Supports simultaneous task identification to shorten schedule.

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Risk Assessment

• Evaluate every risk on two dimensions: probability of loss AND severity of consequences
• High probability/low loss → manage operationally; Low probability/high loss → insure against it
• Good risk management benefits: lower premiums, reduced lawsuit exposure, better legal outcomes

Property Insurance Types

• All-Risk Builder's Risk: Covers buildings under construction, including machinery, equipment, materials, and fixtures becoming part of the structure. Coverage requires construction to be in progress. Does NOT cover major construction defects, poor workmanship, or faulty design. Tools typically not covered — require separate policy.
• Inland Marine Insurance: Covers materials and equipment in transit or temporarily stored off-site
• Equipment Floater: Covers contractor's mobile equipment and tools wherever located

29 CFR 1926 | 5 questions, 10% of exam

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Fall Protection Trigger Heights (Subpart M – §1926.502)

• 6 feet is the universal trigger height for fall protection in construction — guardrails, safety nets, or personal fall arrest systems (PFAS) are required when workers are exposed to falls of 6 feet or more to a lower level.
• Exception: Excavations require fall protection at any depth if a worker could fall in; covers/barriers required at 6 feet.

Guardrail System Specifications (§1926.502(b))

• Top rail height: 42 inches (±3 inches) — acceptable range is 39–45 inches
• Midrail: placed at approximately the midpoint, minimum 21 inches above walking surface
• Top rail must withstand 200 lbs of force applied in any downward or outward direction
• Midrail must withstand 150 lbs
• No openings greater…

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Fair Labor Standards Act (FLSA)

• Federal minimum wage applies; Virginia may set a higher state minimum — always apply whichever is greater.
• Overtime: Non-exempt employees must receive 1.5× their regular rate for all hours worked over 40 in a single workweek.
• Exempt employees (not entitled to overtime): executive, administrative, professional, outside sales, and certain computer employees — must meet both a duties test and earn at least $684/week salary threshold.
• Non-exempt employees = most hourly construction workers. When in doubt, classify as non-exempt.

Form I-9 – Employment Eligibility Verification

• Required for every employee hired in the U.S. — citizens and non-citizens alike.
• Employee must complete Section 1 on or before their first day of work.
• Employer must complete Section 2 within 3 business days of the employee's first…

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Bookkeeping & Accounting Cycle (6 Steps): 1. Classify and record transactions (journals: cash receipts, purchases, cash disbursements, payroll, general) 2. Post transactions to the general ledger 3. Prepare trial balance (debits must equal credits) 4. Prepare adjusted trial balance (6 types of adjusting entries: prepaid expense, accrued expense, accrued revenue, unearned revenue, estimated items, inventory adjustment) 5. Prepare financial statements 6. Analyze financial statements

Chart of Accounts numbering: Assets (1000s), Liabilities (2000s), Equity (3000s), Revenue (4000s), COGS (5000s), Expenses (6000s).

Debit/Credit Rules: - Assets & Expenses: Debit increases, Credit decreases - Liabilities, Equity, Income: Credit increases, Debit decreases

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

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Employer Identification Number (EIN)

• 9-digit number (format: 00-0000000) issued by the IRS to identify tax accounts
• Who does NOT need an EIN: Sole proprietors with no employees and no excise/pension returns; single-member LLCs where the owner files employment tax returns (use SSN instead)
• Everyone else — including all partnerships — must obtain an EIN
• How to obtain: online at irs.gov, phone (800) 829-4933, fax Form SS-4, or mail Form SS-4

Federal Business Tax Types by Entity

• Sole Proprietor: Income tax (Form 1040 + Schedule C), self-employment tax (Schedule SE), estimated tax (1040-ES), employment taxes (Form 941, 940)
• Partnership: Files information return only (Form 1065); individual partners pay income tax on Schedule E + self-employment tax on Schedule SE
• Corporation: Form 1120 or 1120-A; estimated tax on Form…

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Statutory Authority: Virginia Code, Title 43, Chapter 1 governs all mechanics' and materialman's lien rights and procedures.

Who Has Lien Rights: - General contractors (including laborers, mechanics, materialmen) who contract directly with the owner - Subcontractors (including laborers, mechanics, materialmen) who contract with the general contractor - Sub-subcontractors — those supplying labor or materials to a subcontractor - Minimum threshold: $50 or more in labor or materials for construction, removal, repair, or improvement

Memorandum of Lien — Required Contents (must be verified under oath): - Name of the property owner - Name of the lien claimant - Amount and consideration of the claim - Schedule of amounts due and payable - Statement of intent to claim the lien - Brief description of the property - General contractors must also file a certificate of mailing a copy to…