Subcontractor & Vendor Management Flashcards

A subcontractor requests a 2-week schedule extension due to a material delivery delay. The estimator should evaluate:

Answer: Whether the delay is on the critical path and if it was caused by the sub's actions or excusable events

A valid schedule extension requires that the delay affect a critical path activity and be caused by an excusable event outside the subcontractor's control, not by their own actions.

Which type of subcontract pricing arrangement provides the GC with the greatest cost certainty?

Answer: Lump sum (fixed price) subcontract

A lump sum subcontract fixes the total price for a defined scope, transferring cost risk to the subcontractor and giving the GC the highest level of budget certainty.

When a subcontractor performs work outside their contracted scope without prior authorization, the GC should:

Answer: Notify the sub that unauthorized work will not be compensated and address scope additions through the change order process

Contractual change order processes exist specifically to authorize and price scope changes in advance; compensating unauthorized work without process undermines cost control and contract integrity.

A material vendor offers a 2% discount if an invoice is paid within 10 days rather than the standard 30 days (net 30). This is expressed as:

Answer: 2/10 net 30

Standard trade credit notation '2/10 net 30' means a 2% discount is available if payment is made within 10 days; otherwise the full amount is due in 30 days.

The purpose of a 'back-charge' to a subcontractor is to:

Answer: Recover costs incurred by the GC to correct the sub's deficient or incomplete work

A back-charge allows the GC to deduct costs from the subcontractor's payments when the GC has had to perform or pay for work that was the sub's contractual responsibility.

Which document should a subcontractor provide to prove their employees are legally authorized to work in the United States?

Answer: Completed I-9 Employment Eligibility Verification forms

Federal law requires employers to complete Form I-9 to verify each employee's identity and work authorization, a compliance obligation that flows down to subcontractors on many projects.

When an estimator 'levels' subcontractor bids, they are:

Answer: Adjusting bids to a common scope basis by adding or subtracting items for fair comparison

Bid leveling normalizes bids that include different scope inclusions or exclusions by adding the cost of missing items or subtracting overlapping items to compare true like-for-like values.