NASCLA EXAM ACTUAL TEST PAPER WITH
FULL SOLVED QUESTIONS AND CORRECT
ANSWERS GRADED A PLUS
◉ Performance Bond. Answer: Guarantees that the contractor will
complete a contract with in its time frame and conditions
◉ Payment Bonds. Answer: Guarantees subcontractors and suppliers
that they will be paid for work if they perform properly under a
contract
◉ Maintenance bond. Answer: Guarantees that for stated Typically
one year no defective workmanship or material will appear in the
completed project
◉ Completion bond. Answer: Provide assurance to the financial
backers have a construction project but it will be completed on time
◉ Fidelity bond. Answer: Covers business owners for losses due to
dishonest act by there employees
◉ Lien bond. Answer: Guarantees that liens cannot be placed against
the owners property by contractors for payment of service
,◉ Sub contractors bond. Answer: Protects the general contractor in
the event that subcontractors do not fully perform the contract and or
pay for labor and materials
◉ Bank letter of credit. Answer: Is not a Bond but is it cash
guaranteed to the owner it is not a guarantee of performance but can
be converted to a payment to the owner by a bank or lending
institution
◉ Bid bond. Answer: Guarantees that the contractor if awarded the
job will do the work at the submitted bid price enter into a contract
with the owner and furnish the required performance and payment
bonds
◉ What is a bond. Answer: Bonds provide protection in the event that
the contractual obligation's are not met
◉ Bond language. Answer: At a minimum Bond should contain the
total dollar amount length of the bond requirements for notice of the
fact or lack of maintenance and bond enforcement
◉ Filing procedures. Answer: Construction law contractual
relationships govern the bond claims process the filing process as
outlined in the bond
◉ Project changes. Answer: Unless specifically outlined in the bonds
agreement the Surety company will not cover changes to the original
, contract in most cases request for additional coverage must be made
and the bonding company must be notified of the contract changes
◉ Payment in the event of default. Answer: In the event of default
Surety may provide additional finances arrange for a new contractor
or hire subcontractors to complete the work or pay out the amount of
the bond
◉ Miller act of 1935. Answer: Current law requiring performance and
payment bond on a federal construction project value greater than
$100,000
◉ Miller act amounts. Answer: 50% on contracts less than 1 million
40% of contracts between one and 5 million 2.5 million payment
bond for contracts in excess of 5 million
◉ Little Miller act. Answer: Similar to the Miller act for public works
projects
◉ Construction Industry payment protection act of 1999. Answer:
Addendum to the miller act it's purpose is to improve payment bond
protections for persons who furnish labor or material for use on
federal construction projects to help subcontractors with adequate
protection
◉ All risk builders risk insurance. Answer: A form of property
insurance that covers property owners and builders for buildings
under construction
FULL SOLVED QUESTIONS AND CORRECT
ANSWERS GRADED A PLUS
◉ Performance Bond. Answer: Guarantees that the contractor will
complete a contract with in its time frame and conditions
◉ Payment Bonds. Answer: Guarantees subcontractors and suppliers
that they will be paid for work if they perform properly under a
contract
◉ Maintenance bond. Answer: Guarantees that for stated Typically
one year no defective workmanship or material will appear in the
completed project
◉ Completion bond. Answer: Provide assurance to the financial
backers have a construction project but it will be completed on time
◉ Fidelity bond. Answer: Covers business owners for losses due to
dishonest act by there employees
◉ Lien bond. Answer: Guarantees that liens cannot be placed against
the owners property by contractors for payment of service
,◉ Sub contractors bond. Answer: Protects the general contractor in
the event that subcontractors do not fully perform the contract and or
pay for labor and materials
◉ Bank letter of credit. Answer: Is not a Bond but is it cash
guaranteed to the owner it is not a guarantee of performance but can
be converted to a payment to the owner by a bank or lending
institution
◉ Bid bond. Answer: Guarantees that the contractor if awarded the
job will do the work at the submitted bid price enter into a contract
with the owner and furnish the required performance and payment
bonds
◉ What is a bond. Answer: Bonds provide protection in the event that
the contractual obligation's are not met
◉ Bond language. Answer: At a minimum Bond should contain the
total dollar amount length of the bond requirements for notice of the
fact or lack of maintenance and bond enforcement
◉ Filing procedures. Answer: Construction law contractual
relationships govern the bond claims process the filing process as
outlined in the bond
◉ Project changes. Answer: Unless specifically outlined in the bonds
agreement the Surety company will not cover changes to the original
, contract in most cases request for additional coverage must be made
and the bonding company must be notified of the contract changes
◉ Payment in the event of default. Answer: In the event of default
Surety may provide additional finances arrange for a new contractor
or hire subcontractors to complete the work or pay out the amount of
the bond
◉ Miller act of 1935. Answer: Current law requiring performance and
payment bond on a federal construction project value greater than
$100,000
◉ Miller act amounts. Answer: 50% on contracts less than 1 million
40% of contracts between one and 5 million 2.5 million payment
bond for contracts in excess of 5 million
◉ Little Miller act. Answer: Similar to the Miller act for public works
projects
◉ Construction Industry payment protection act of 1999. Answer:
Addendum to the miller act it's purpose is to improve payment bond
protections for persons who furnish labor or material for use on
federal construction projects to help subcontractors with adequate
protection
◉ All risk builders risk insurance. Answer: A form of property
insurance that covers property owners and builders for buildings
under construction
