United States
Hong KongProcurement and Contracting Requirements
The largest category at 31 of 115 scored questions, covering bidding, contract types and precedence, bonds and insurance, changes and claims, payment and liens, business structure, employment law and estimating.
Thirty-one questions, more than a quarter of the scored paper, and the category most candidates prepare least for.
The eight subtopics
- Bidding, bid documents and the award of a contract
- Contract types, terms and the order of precedence
- Bonds, insurance and indemnification
- Changes, claims, delays and contract time
- Payment, retainage, lien rights and closeout
- Business organization, licensing and tax obligations
- Employment law, payroll and independent contractors
- Estimating, cost control and financial management
Why contractors find this hard
Because it is the part of the business most contractors learned by doing rather than by reading, and by doing it one particular way.
You may have run projects for fifteen years under contracts somebody else drafted. That teaches you your contracts rather than the general principles the exam asks about.
The concepts most often tested
| Concept | The point |
|---|---|
| Order of precedence | Which document governs when they conflict |
| Bid, performance and payment bonds | Three bonds, three different guarantees |
| Retainage | Held against completion, often reduced at substantial completion |
| Liquidated damages | A genuine estimate of loss, not a penalty |
| Markup against margin | Calculated on cost against on price, and not the same number |
A 20 percent markup on cost is not a 20 percent margin on price. Confusing them is the most common estimating error in the trade, and it is asked directly.
Where the answers live
Mostly in the NASCLA Contractors Guide to Business, Law and Project Management. That single reference carries more of this exam than any other book on the list.
Tab it more finely than anything else you own.
Common questions
How many questions is Procurement and Contracting Requirements?
31 of the 115 scored questions, the largest single category.
What does it cover?
Bidding, contract types and precedence, bonds and insurance, changes and claims, payment and liens, business structure, employment law and estimating.
Why do experienced contractors struggle with it?
Because they learned their own contracts by doing rather than the general principles the exam asks about.
What is the difference between markup and margin?
Markup is calculated on cost and margin on price. They are different numbers and confusing them is the classic estimating error.
Which book answers this category?
Mostly the NASCLA Contractors Guide to Business, Law and Project Management.