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NASCLA Commercial General Building Contractor — Practice Exam

Procurement and contracting: contracts: practice questions

Our NASCLA Commercial GC bank has 18 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

What is a mechanic's lien?

  1. A claim against private property for unpaid labor or materials
  2. A type of insurance covering unpaid suppliers
  3. A tax on contractors
  4. A loan for equipment, secured by the equipment itself
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A. A claim against private property for unpaid labor or materials — Deadlines and notices are set by state law.

Question 2

In a cost-plus-fee contract, how is the contractor paid?

  1. Actual costs of the work plus a fee
  2. A fixed total price agreed before work starts, with no adjustment
  3. Only the fee
  4. A unit price per item installed
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A. Actual costs of the work plus a fee — A guaranteed maximum price can cap the owner's cost.

Question 3

What is an addendum in bidding?

  1. The contractor's bid form
  2. A warranty document
  3. A change to the bidding documents issued before bids are due
  4. A change made to the work after the contract has been signed by both parties
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C. A change to the bidding documents issued before bids are due — Bidders usually must acknowledge each addendum.

Question 4

What are liquidated damages in a construction contract?

  1. Interest on late payments
  2. A preset amount per day the contractor owes for late completion
  3. The cost of cleanup
  4. Damages paid for defective work only, as found during the warranty period
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B. A preset amount per day the contractor owes for late completion — They must be a reasonable estimate of the owner's loss, not a penalty.

Question 5

In a lump-sum (stipulated sum) contract, who carries the risk of cost overruns?

  1. The construction lender
  2. The owner
  3. The architect
  4. The contractor
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D. The contractor — Changes in scope are handled by change orders.

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