AFSB 152- Study Guide Questions and Answers 100% Solved

AFSB 152 - Study Guide Questio ns and Answers 100% Solve d Chapter 1 starts here! Chapter 1 starts here! Surety bond ✔️✔️A written contract that expresses one party's promise to answer for another party's failure to do something as promised. Surety ✔️✔️The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law. Obligee ✔️✔️The party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised. Principal ✔️✔️The party to a surety bond whose obligation or performance the surety guarantees. Suretyship ✔️✔️The obligation of one entity to answer for the debt, default or miscarriage of performance of duties by another entity. Bid bond ✔️✔️A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted. Contract bond ✔️✔️A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts. How do surety bonds affect lenders' confidence in financing a construction project? ✔️✔️Lenders are more confident in extending project financing in the form of construction loans when they know that the construction risk has a surety's guarantee. Performance bonds ✔️✔️Guarantee that the contractor will fulfill all terms, specifications, and conditions of the construction contract. Payment bond ✔️✔️Guarantees that the contractor will pay labor and material bills associated with the contract. Bond penalty ✔️✔️The surety's full capital and surplus back guarantees up to a bond's financial limit. Contractors benefit ✔️✔️By using contract surety bonds from a prequalified corporate surety. Laborers, subcontractors, and suppliers receive financial assurance, via the _____ bond, that they will receive payment for their services on the bonded project. ✔️✔️Payment The Heard Act ✔️✔️Passed in 1894, requiring contractors on public works to "execute the usual penal bond, wiht good and sufficient sureties, with the additional obligations that such contractor or contractors shall promptly make payments to all persons supplying him or them labor and materials..." The Miller Act ✔️✔️Passed in 1935, requiring a separate payment bond to protect certain subcontractors' and suppliers' payment rights for material and labor provided for federal construction projects. The _____ Act replaced the _____ Act in 1935. ✔️✔️Miller, Heard The Construction Industry Payment Protection Act of 1999 (CIPP) ✔️✔️Revised the Miller Act. Before the 1999 revision, the payment bond required was not to exceed 50 percent of the contract price, subject to a maximum of $2.5 million. CIPP revised the Miller Act to set the payment bond amount generally equal to the contract price. With that amendment, in most cases, the Miller Act requires a 100 percent performance bond and a 100 percent payment bond on federal public works of $100,000 or more. Nearly all state, county, and municipal governments have adopted similar legislat ion (some of which are known as "little Miller Acts") to protect the contractual rights of those who provide labor and material for public works projects. Contract surety bonds provide numerous benefits to project owners, including ✔️✔️Financial assurance that a contractor will undertake and complete the owner's building contract and the confidence that all parties involved in the contract will fulfill their duties and be paid appropriately by the contractor. Contractors benefit from contract bonds because ✔️✔️The surety's rigorous analysis of the contractor's qualifications lends credibility to the contractor. Payment bonds benefit ✔️✔️Laborers, subcontractors, and suppliers by assuring them that they will receive payment for the products and services they provide on the bonded project. The federal government extends this assurance through enforcement of the ✔️✔️Miller Act. Design/build ✔️✔️A construction method that offers "one -stop shopping" to property owners for design and construction services. Subcontractor (specialty contractor) ✔️✔️An independent contractor who specializes in a particular kind of work and who is engaged by a general contractor to perform a particular portion of the general contractor's contract. Mobilization ✔️✔️The process before construction begins that involves initial activities to facilitate a construction process, such as moving equipment and a field office onto the job site and installing temporary utilities. Critical path method (CPM) ✔️✔️A process that identifies every major element of the construction project, as well as a time estimate for each element, and assembles these elements into one master schedule. Punch list ✔️✔️A list of small finishing tasks that must be accomplished for completion. Architects often act as _____ _____ during the design phase. ✔️✔️Central coordinators Financial constraints ✔️✔️Affect every design decision. Civil engineers ✔️✔️Structural components Electrical engineers ✔️✔️Electrical components Mechanical engineers ✔️✔️Heating, ventilating, air conditioning, and plumbing Civil engineers determine ✔️✔️The size and consistency of foundations, the need for sheet piling, the design of reinforcing bars inside concrete foundations, and similar matters. They also determine the size and characteristics of the steel or masonry walls that carry the weight of the structure. Electrical engineers determine ✔️✔️The voltage and amperage loads required by heating, ventilating, and air conditioning units, as well as lighting requirements. They also consider specialized electrical machinery or equipment, such as elevators, computers, or manufacturing apparatus.