NEW MEXICO GS-1 GENERAL SPECIALTY CONTRACTOR
EXAM COMPLETE EXAM QUESTIONS AND VERIFIED
ANSWERS | 2026–2027 LATEST UPDATE | GUARANTEED
PASS | DETAILED RATIONALES | FULL STUDY GUIDE | EXAM
PREP | PRACTICE TEST | CERTIFICATION PREPARATION
1. Under the New Mexico Construction Industries Licensing Act (CILA), which activity requires a
contractor's license?
A) Performing a one-day interior painting job for a homeowner
B) Installing a residential HVAC system for a client
C) Advising a client on material selection without performing work
D) Supplying only tools to a subcontractor
Correct Answer: B) Installing a residential HVAC system for a client
Rationale: CILA requires a license for any construction activity involving the installation or alteration
of building systems, which includes HVAC, electrical, and plumbing, regardless of the client type.
Routine painting and material advice typically do not meet this threshold, nor does the passive supply
of tools.
2. In New Mexico, a GS-1 license requires the Qualifying Party (QP) to verify a minimum of how
many hours of relevant experience?
A) 2,000 hours (1 year)
B) 4,000 hours (2 years)
C) 6,000 hours (3 years)
D) 8,000 hours (4 years)
Correct Answer: B) 4,000 hours (2 years)
Rationale: The GS-1 through GS-34 specialty classifications require the Qualifying Party to have two
years (4,000 hours) of verifiable, journeyman-level experience within the past ten years. This
experience must be documented via a notarized work experience verification form as part of the QP
packet.
3. What is the minimum surety bond amount required for a GS-1 license in New Mexico?
A) $5,000
B) $7,500
C) $10,000
D) $15,000
Correct Answer: C) $10,000
*Rationale: New Mexico requires a $10,000 contractor license bond, often referred to as a Consumer
Protection Code Bond, to demonstrate financial responsibility. This bond is a mandatory part of the
license application and must be submitted to the Construction Industries Division (CID).*
4. Which New Mexico agency is responsible for issuing contractor licenses?
A) Department of Transportation
B) Construction Industries Division (CID)
,C) Environment Department
D) Attorney General's Office
Correct Answer: B) Construction Industries Division (CID)
Rationale: The Construction Industries Division of the Regulation and Licensing Department is the
state authority that issues all contractor licenses. While CID issues the license, the actual
examinations are administered by a third-party testing service, PSI.
5. A contractor performs work without a license in New Mexico. What is a potential penalty?
A) Mandatory community service of 10 hours per violation
B) A fine up to $5,000 per day of violation
C) Immediate revocation of any existing licenses
D) Imprisonment for up to 30 days
Correct Answer: B) A fine up to $5,000 per day of violation
*Rationale: The CID can assess significant fines, up to $5,000 per day, for unlicensed contracting
activity. Beyond fines, unlicensed contractors face criminal charges and forfeit their rights to file
mechanics liens or sue for payment on the project.*
6. Under New Mexico law, a materialmen's lien must be filed within how many days after the last
furnishing of labor or materials?
A) 30 days
B) 60 days
C) 90 days
D) 120 days
Correct Answer: B) 60 days
Rationale: New Mexico lien law requires that a mechanics' or materialmen's lien be filed within 60
days of the last day work was performed or materials were supplied. Failure to meet this strict
deadline results in the loss of lien rights.
7. What does the "G" in "GS-1" represent within the New Mexico contractor classification system?
A) Government
B) General Construction
C) Grade
D) Green Building
Correct Answer: B) General Construction
Rationale: In the New Mexico classification system, the first letter indicates the broader field. "G"
stands for General Construction, while the second letter indicates the specific type, with "S"
designating "Specialty."
8. What is the time limit for the Business and Law exam administered by PSI?
A) 90 minutes
B) 130 minutes
C) 180 minutes
D) 225 minutes
Correct Answer: B) 130 minutes
Rationale: The New Mexico Business and Law exam consists of 50 questions and candidates are given
a 130-minute time limit. This exam, along with the trade-specific exam, must be passed to obtain a
GS-1 license.
, 9. What is the passing score required for the GS-1 exam?
A) 65%
B) 70%
C) 75%
D) 80%
Correct Answer: C) 75%
Rationale: A minimum score of 75% is required to pass the GS-1 trade exam. Candidates must achieve
this score on both the GS-1 trade exam and the Business & Law exam to qualify for a license.
10. By what date do New Mexico contractor licenses expire each year?
A) The first day of the license's anniversary month
B) 30 days before the expiration date
C) The last day of the calendar year (December 31)
D) No later than 60 days after expiration
Correct Answer: C) The last day of the calendar year (December 31)
Rationale: All New Mexico contractor licenses expire on December 31 of each year and must be
renewed by that date. The renewal process and fees are managed by the Construction Industries
Division.
11. A subcontractor agreement contains a "pay-if-paid" clause. What does this mean for the
subcontractor?
A) The subcontractor must be paid within 30 days of invoice
B) Payment is received only after the general contractor is paid by the owner
C) The subcontractor can withhold work until paid
D) Payment is guaranteed regardless of the owner's payment status
Correct Answer: B) Payment is received only after the general contractor is paid by the owner
Rationale: A "pay-if-paid" clause shifts the risk of the owner's non-payment to the subcontractor. It
makes the general contractor's payment to the subcontractor contingent upon the general contractor
receiving payment from the owner first.
12. Which business structure provides limited liability to its owners while allowing pass-through
taxation?
A) Sole proprietorship
B) General partnership
C) C-Corporation
D) Limited Liability Company (LLC)
Correct Answer: D) Limited Liability Company (LLC)
Rationale: An LLC offers its owners (members) limited personal liability for business debts and
lawsuits, similar to a corporation. Simultaneously, it allows for pass-through taxation, where profits
and losses are reported on the owners' personal tax returns, avoiding corporate double taxation.
13. When preparing a quantity takeoff, what is the standard unit of measure for wallboard
(drywall)?
A) Linear feet
B) Square yards
C) Cubic meters
D) Pounds
EXAM COMPLETE EXAM QUESTIONS AND VERIFIED
ANSWERS | 2026–2027 LATEST UPDATE | GUARANTEED
PASS | DETAILED RATIONALES | FULL STUDY GUIDE | EXAM
PREP | PRACTICE TEST | CERTIFICATION PREPARATION
1. Under the New Mexico Construction Industries Licensing Act (CILA), which activity requires a
contractor's license?
A) Performing a one-day interior painting job for a homeowner
B) Installing a residential HVAC system for a client
C) Advising a client on material selection without performing work
D) Supplying only tools to a subcontractor
Correct Answer: B) Installing a residential HVAC system for a client
Rationale: CILA requires a license for any construction activity involving the installation or alteration
of building systems, which includes HVAC, electrical, and plumbing, regardless of the client type.
Routine painting and material advice typically do not meet this threshold, nor does the passive supply
of tools.
2. In New Mexico, a GS-1 license requires the Qualifying Party (QP) to verify a minimum of how
many hours of relevant experience?
A) 2,000 hours (1 year)
B) 4,000 hours (2 years)
C) 6,000 hours (3 years)
D) 8,000 hours (4 years)
Correct Answer: B) 4,000 hours (2 years)
Rationale: The GS-1 through GS-34 specialty classifications require the Qualifying Party to have two
years (4,000 hours) of verifiable, journeyman-level experience within the past ten years. This
experience must be documented via a notarized work experience verification form as part of the QP
packet.
3. What is the minimum surety bond amount required for a GS-1 license in New Mexico?
A) $5,000
B) $7,500
C) $10,000
D) $15,000
Correct Answer: C) $10,000
*Rationale: New Mexico requires a $10,000 contractor license bond, often referred to as a Consumer
Protection Code Bond, to demonstrate financial responsibility. This bond is a mandatory part of the
license application and must be submitted to the Construction Industries Division (CID).*
4. Which New Mexico agency is responsible for issuing contractor licenses?
A) Department of Transportation
B) Construction Industries Division (CID)
,C) Environment Department
D) Attorney General's Office
Correct Answer: B) Construction Industries Division (CID)
Rationale: The Construction Industries Division of the Regulation and Licensing Department is the
state authority that issues all contractor licenses. While CID issues the license, the actual
examinations are administered by a third-party testing service, PSI.
5. A contractor performs work without a license in New Mexico. What is a potential penalty?
A) Mandatory community service of 10 hours per violation
B) A fine up to $5,000 per day of violation
C) Immediate revocation of any existing licenses
D) Imprisonment for up to 30 days
Correct Answer: B) A fine up to $5,000 per day of violation
*Rationale: The CID can assess significant fines, up to $5,000 per day, for unlicensed contracting
activity. Beyond fines, unlicensed contractors face criminal charges and forfeit their rights to file
mechanics liens or sue for payment on the project.*
6. Under New Mexico law, a materialmen's lien must be filed within how many days after the last
furnishing of labor or materials?
A) 30 days
B) 60 days
C) 90 days
D) 120 days
Correct Answer: B) 60 days
Rationale: New Mexico lien law requires that a mechanics' or materialmen's lien be filed within 60
days of the last day work was performed or materials were supplied. Failure to meet this strict
deadline results in the loss of lien rights.
7. What does the "G" in "GS-1" represent within the New Mexico contractor classification system?
A) Government
B) General Construction
C) Grade
D) Green Building
Correct Answer: B) General Construction
Rationale: In the New Mexico classification system, the first letter indicates the broader field. "G"
stands for General Construction, while the second letter indicates the specific type, with "S"
designating "Specialty."
8. What is the time limit for the Business and Law exam administered by PSI?
A) 90 minutes
B) 130 minutes
C) 180 minutes
D) 225 minutes
Correct Answer: B) 130 minutes
Rationale: The New Mexico Business and Law exam consists of 50 questions and candidates are given
a 130-minute time limit. This exam, along with the trade-specific exam, must be passed to obtain a
GS-1 license.
, 9. What is the passing score required for the GS-1 exam?
A) 65%
B) 70%
C) 75%
D) 80%
Correct Answer: C) 75%
Rationale: A minimum score of 75% is required to pass the GS-1 trade exam. Candidates must achieve
this score on both the GS-1 trade exam and the Business & Law exam to qualify for a license.
10. By what date do New Mexico contractor licenses expire each year?
A) The first day of the license's anniversary month
B) 30 days before the expiration date
C) The last day of the calendar year (December 31)
D) No later than 60 days after expiration
Correct Answer: C) The last day of the calendar year (December 31)
Rationale: All New Mexico contractor licenses expire on December 31 of each year and must be
renewed by that date. The renewal process and fees are managed by the Construction Industries
Division.
11. A subcontractor agreement contains a "pay-if-paid" clause. What does this mean for the
subcontractor?
A) The subcontractor must be paid within 30 days of invoice
B) Payment is received only after the general contractor is paid by the owner
C) The subcontractor can withhold work until paid
D) Payment is guaranteed regardless of the owner's payment status
Correct Answer: B) Payment is received only after the general contractor is paid by the owner
Rationale: A "pay-if-paid" clause shifts the risk of the owner's non-payment to the subcontractor. It
makes the general contractor's payment to the subcontractor contingent upon the general contractor
receiving payment from the owner first.
12. Which business structure provides limited liability to its owners while allowing pass-through
taxation?
A) Sole proprietorship
B) General partnership
C) C-Corporation
D) Limited Liability Company (LLC)
Correct Answer: D) Limited Liability Company (LLC)
Rationale: An LLC offers its owners (members) limited personal liability for business debts and
lawsuits, similar to a corporation. Simultaneously, it allows for pass-through taxation, where profits
and losses are reported on the owners' personal tax returns, avoiding corporate double taxation.
13. When preparing a quantity takeoff, what is the standard unit of measure for wallboard
(drywall)?
A) Linear feet
B) Square yards
C) Cubic meters
D) Pounds
