MS Contractors Business, Law and
Project Management Test and Verified
Answers
Questions the estimator should ask when assessing whether to bid a project - <CORRECT
ANSWER >>- company resources and type of work: do we do this kind of work and do we have
the resources
- site considerations: do the site conditions create any additional costs to our company, and
special site considerations that we need to consider
- location and cost effectiveness: what is the most cost effective and efficient way to do the job;
travel time or limited access?
- risk: what are the risks and how will we manage them?
- profitability of project: what is the profit margin on this work?
What makes up a bid package - <CORRECT ANSWER >>- invitation to bid
- bid instructions
- bid forms
- supplements
What is included in invitation to bid - <CORRECT ANSWER >>- brief overview of the project,
deadlines, and general requirements
What is included in bid instructions - <CORRECT ANSWER >>- specifics of how the bid should be
completed and submitted
What is included in bid forms - <CORRECT ANSWER >>- bid sheet, bid schedule, bidders
questionnaire on experience, financial responsibility and capability and copy of contract
,What is included in supplements of bid documents - <CORRECT ANSWER >>- items important to
the overall bid process such as property survey and soil analysis
What happens in a pre bid meeting - <CORRECT ANSWER >>the project specifications and any
changes to the bid package are discussed
When is an addendum issued - <CORRECT ANSWER >>when any changes are made to a bid
package before its due
- then the addendum becomes part of the bid documents and part of the contract when
awarded
Bid shopping - bad ethics - <CORRECT ANSWER >>when the GC approaches subcontractors
other than those who have submitted bids to seek lower offer than what was quoted in original
bid
- AKA revealing the original bids submitted and tries to reduce the price
Bid peddling - bad ethics - <CORRECT ANSWER >>when the subcontractor approaches the GC
after the project was awarded with the intent of lowering the original price submitted on bid
day
Bid rigging - bad ethics - <CORRECT ANSWER >>form of collusion where contractors coordinate
their bids to fix the award outcome of a project
True or False: it is unlawful to submit a bid, enter into a contract, or otherwise engage in the
business of a contractor without having first obtained the required certificate of responsibility -
<CORRECT ANSWER >>true
Estimate - <CORRECT ANSWER >>the sum of the costs to complete the project, plus your added
overhead and profit margin
- good estimates fall between 1-2 % of actual construction costs
,Project documents required to prepare an accurate cost estimate - <CORRECT ANSWER >>-
construction or architectural drawings: many different views and elevations of the job
- specifications: materials and methods used, must meet applicable codes
- the contract: agreement between you and your customer, shows obligations of each party
- bonds: bid and performance bonds if required
Estimating framework - <CORRECT ANSWER >>lists the process for completing the job
- define the phases of the project
- listing each task and materials needed for each phase
- once framework is done you can enter the time and cost for each job
Estimating checklist - <CORRECT ANSWER >>the construction specifications institute publishes a
classification system called masterformat
- includes numbers and job tasks grouped by major construction activities
- helps you account for all aspects of materials and labor
Quantity take off estimating method - <CORRECT ANSWER >>individually estimate units of
materials and labor for each task you listed in your estimating framework, after material and
labor you add
- subcontractor fees
- labor burden
- project overhead costs
- project equipment
- contingencies
- allowances
- company overhead
- profit
, Labor cost per task - <CORRECT ANSWER >>required labor hours per task X labor rate = labor
cost per task
- info from previous jobs can help you determine accurate job costs
- hours for planning and scheduling must be figured into the labor cost equation too
- look at historical cost data from previous jobs
Labor burdens for employers - <CORRECT ANSWER >>these add about 30% to your labor costs
(this is what your labor burden is)
- Medicare and social security
- federal unemployment insurance
- workers compensation
- liability insurance
- state unemployment insurance
- company benefits (health insurance, vacations
** this must be factored into your total labor costs
Determining material costs - <CORRECT ANSWER >>for each material item on your framework
you need to have a cost
- suppliers can provide you with the materials price per unit or lump sum
- Bureau of Labor statistics tracks the price of major groups of construction materials
Price per unit X number of units needed = total material unit cost
- obtain at least 3 bids from suppliers to make sure you are receiving the best cost
-add contingency for waste
Determining project equipment cost - <CORRECT ANSWER >>figured as a direct cost of the
project and added to estimate
- small tools and pickup trucks are considered a indirect cost and not part of project equipment
which are figured into project overhead
Project Management Test and Verified
Answers
Questions the estimator should ask when assessing whether to bid a project - <CORRECT
ANSWER >>- company resources and type of work: do we do this kind of work and do we have
the resources
- site considerations: do the site conditions create any additional costs to our company, and
special site considerations that we need to consider
- location and cost effectiveness: what is the most cost effective and efficient way to do the job;
travel time or limited access?
- risk: what are the risks and how will we manage them?
- profitability of project: what is the profit margin on this work?
What makes up a bid package - <CORRECT ANSWER >>- invitation to bid
- bid instructions
- bid forms
- supplements
What is included in invitation to bid - <CORRECT ANSWER >>- brief overview of the project,
deadlines, and general requirements
What is included in bid instructions - <CORRECT ANSWER >>- specifics of how the bid should be
completed and submitted
What is included in bid forms - <CORRECT ANSWER >>- bid sheet, bid schedule, bidders
questionnaire on experience, financial responsibility and capability and copy of contract
,What is included in supplements of bid documents - <CORRECT ANSWER >>- items important to
the overall bid process such as property survey and soil analysis
What happens in a pre bid meeting - <CORRECT ANSWER >>the project specifications and any
changes to the bid package are discussed
When is an addendum issued - <CORRECT ANSWER >>when any changes are made to a bid
package before its due
- then the addendum becomes part of the bid documents and part of the contract when
awarded
Bid shopping - bad ethics - <CORRECT ANSWER >>when the GC approaches subcontractors
other than those who have submitted bids to seek lower offer than what was quoted in original
bid
- AKA revealing the original bids submitted and tries to reduce the price
Bid peddling - bad ethics - <CORRECT ANSWER >>when the subcontractor approaches the GC
after the project was awarded with the intent of lowering the original price submitted on bid
day
Bid rigging - bad ethics - <CORRECT ANSWER >>form of collusion where contractors coordinate
their bids to fix the award outcome of a project
True or False: it is unlawful to submit a bid, enter into a contract, or otherwise engage in the
business of a contractor without having first obtained the required certificate of responsibility -
<CORRECT ANSWER >>true
Estimate - <CORRECT ANSWER >>the sum of the costs to complete the project, plus your added
overhead and profit margin
- good estimates fall between 1-2 % of actual construction costs
,Project documents required to prepare an accurate cost estimate - <CORRECT ANSWER >>-
construction or architectural drawings: many different views and elevations of the job
- specifications: materials and methods used, must meet applicable codes
- the contract: agreement between you and your customer, shows obligations of each party
- bonds: bid and performance bonds if required
Estimating framework - <CORRECT ANSWER >>lists the process for completing the job
- define the phases of the project
- listing each task and materials needed for each phase
- once framework is done you can enter the time and cost for each job
Estimating checklist - <CORRECT ANSWER >>the construction specifications institute publishes a
classification system called masterformat
- includes numbers and job tasks grouped by major construction activities
- helps you account for all aspects of materials and labor
Quantity take off estimating method - <CORRECT ANSWER >>individually estimate units of
materials and labor for each task you listed in your estimating framework, after material and
labor you add
- subcontractor fees
- labor burden
- project overhead costs
- project equipment
- contingencies
- allowances
- company overhead
- profit
, Labor cost per task - <CORRECT ANSWER >>required labor hours per task X labor rate = labor
cost per task
- info from previous jobs can help you determine accurate job costs
- hours for planning and scheduling must be figured into the labor cost equation too
- look at historical cost data from previous jobs
Labor burdens for employers - <CORRECT ANSWER >>these add about 30% to your labor costs
(this is what your labor burden is)
- Medicare and social security
- federal unemployment insurance
- workers compensation
- liability insurance
- state unemployment insurance
- company benefits (health insurance, vacations
** this must be factored into your total labor costs
Determining material costs - <CORRECT ANSWER >>for each material item on your framework
you need to have a cost
- suppliers can provide you with the materials price per unit or lump sum
- Bureau of Labor statistics tracks the price of major groups of construction materials
Price per unit X number of units needed = total material unit cost
- obtain at least 3 bids from suppliers to make sure you are receiving the best cost
-add contingency for waste
Determining project equipment cost - <CORRECT ANSWER >>figured as a direct cost of the
project and added to estimate
- small tools and pickup trucks are considered a indirect cost and not part of project equipment
which are figured into project overhead
