NASCLA question n answers graded A+ 2023

NASCLAPerformance Bond - correct answer Guarantees that the contractor will complete a contract with in its time frame and conditions Payment Bonds - correct answer Guarantees subcontractors and suppliers that they will be paid for work if they perform properly under a contract Maintenance bond - correct answer Guarantees that for stated Typically one year no defective workmanship or material will appear in the completed project Completion bond - correct answer Provide assurance to the financial backers have a construction project but it will be completed on time Fidelity bond - correct answer Covers business owners for losses due to dishonest act by there employees Lien bond - correct answer Guarantees that liens cannot be placed against the owners property by contractors for payment of service Sub contractors bond - correct 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 - correct 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 - correct 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 - correct answer Bonds provide protection in the event that the contractual obligation's are not met Bond language - correct 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 - correct answer Construction law contractual relationships govern the bond claims process the filing process as outlined in the bond Project changes - correct 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 - correct 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 - correct answer Current law requiring performance and payment bond on a federal construction project value greater than $100,000 Miller act amounts - correct 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 - correct answer Similar to the Miller act for public works projects Construction Industry payment protection act of 1999 - correct 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 - correct answer A form of property insurance that covers property owners and builders for buildings under construction