South Carolina Contractor License Exam — All Questions

48 questions

Project Management & Scheduling

In a Critical Path Method (CPM) schedule, the 'critical path' is:

  • a.The path containing the most costly activities
  • b.The longest sequence of dependent activities✓
  • c.The sequence with the largest number of activities
  • d.The path with the most float available

The critical path is the longest chain of dependent activities through the network. Because it is the longest path, it sets the minimum time in which the whole project can finish. Activities on the critical path have zero float — delaying any one of them delays the entire project. It is about time and dependency, not cost or equipment.

Project Management & Scheduling

'Float' (also called slack) for a scheduled activity means:

  • a.How long an activity can slip without delaying the project✓
  • b.The amount of money left in the activity's budget
  • c.The number of extra workers assigned to the activity
  • d.The percentage of the activity that is already complete

Float (slack) is the scheduling flexibility of an activity — how long it can slip before it pushes out the project finish date. Activities on the critical path have zero float. Understanding float lets a manager shift non-critical work and reallocate crews without harming the overall completion date. It is a measure of time flexibility, not money or manpower.

Project Management & Scheduling

During construction the contractor finds the plans and specifications conflict and needs clarification from the architect. The standard document used to formally ask this question is a:

  • a.Certificate of occupancy
  • b.Conditional lien waiver
  • c.Request for Information✓
  • d.Notice to proceed

A Request for Information (RFI) is the formal, written channel a contractor uses to ask the design team to clarify or resolve gaps, conflicts, or ambiguities in the drawings and specifications. Documenting questions and answers through RFIs creates a paper trail, avoids guesswork, and supports later claims if the answer changes the cost or schedule.

Project Management & Scheduling

What is the primary purpose of a Gantt (bar) chart on a construction project?

  • a.To calculate payroll taxes for each employee
  • b.To show activities as bars along a timeline✓
  • c.To record the quantities of material installed each week
  • d.To assign each worker to a specific crew and shift

A Gantt chart displays each task as a horizontal bar positioned and sized along a time axis, making it easy to communicate when activities start and finish, how long they take, and where they overlap. It is a scheduling and communication tool. It does not perform payroll, material testing, or permitting functions.

Project Management & Scheduling

In scheduling, what does it mean to 'crash' an activity?

  • a.To remove the activity from the schedule
  • b.To let the activity slip until it becomes critical
  • c.To add resources to shorten its duration✓
  • d.To overlap it with the activity that precedes it

Crashing means compressing an activity's duration by adding resources — extra crews, equipment, or overtime — accepting higher cost to finish faster. To shorten a project, a manager crashes activities on the critical path, since only those control the finish date. Crashing is one of two common acceleration methods; the other, fast-tracking, overlaps activities that would normally run in sequence.

Project Management & Scheduling

What are 'submittals' on a construction project?

  • a.The contractor's monthly payment applications
  • b.Shop drawings, product data, and samples✓
  • c.The permits filed with the building department
  • d.The as-built drawings turned over at closeout

Submittals — shop drawings, product data sheets, and physical samples — are provided by the contractor and subcontractors so the architect or engineer can verify that the materials and equipment to be installed conform to the design intent and specifications before they are ordered or fabricated. Reviewing submittals early catches mismatches on paper rather than after costly materials arrive or are installed.

Project Management & Scheduling

A 'notice to proceed' issued by the owner tells the contractor:

  • a.The official date to begin work✓
  • b.That the final inspection has passed
  • c.That the building may now be occupied
  • d.That the contract price has been finalized

A notice to proceed (NTP) is the owner's formal authorization directing the contractor to start the work, and it frequently establishes the date from which the contract time (and any completion deadline or liquidated-damages period) is measured. It marks the transition from award to active construction. It is distinct from a certificate of occupancy, which comes at the end and authorizes use of the finished building.

Project Management & Scheduling

The 'punch list' near the end of a project is:

  • a.A list of workers still owed wages
  • b.The schedule of upcoming inspections
  • c.A record of every change order on the job
  • d.Minor items still to be corrected✓

A punch list is the itemized list of minor deficiencies and unfinished details — touch-up paint, a missing cover plate, an adjustment to a door — that must be corrected before the work is finally accepted and final payment (including retainage) is released. It is generated at substantial completion, when the project is usable but not yet 100% finished, and it defines the last work owed.

Project Management & Scheduling

'Substantial completion' on a construction project generally means:

  • a.The contract has been signed and work is about to begin
  • b.The owner can use the project for its intended purpose✓
  • c.Every punch-list item has been corrected
  • d.The contractor has been fully paid including retainage

Substantial completion is the milestone at which the project is complete enough for the owner to occupy or use it for its intended purpose, even though minor punch-list items remain. It is significant because it often starts warranty periods, shifts responsibility for insurance and utilities, and may trigger release of most retainage. Final completion, which comes later, means every remaining item is finished.

Project Management & Scheduling

Why should a site superintendent keep a written daily report on a construction project?

  • a.Because the daily report replaces the need for a project schedule
  • b.Because it serves as the crew's official payroll timesheet
  • c.To create a daily factual record of conditions and work✓
  • d.Because the building official requires one at each inspection

A daily report is a contemporaneous factual record of what happened on site each day — weather, manpower and equipment present, work accomplished, deliveries, visitors, and any problems or delays. This documentation is invaluable later for resolving disputes, supporting or defending delay and change-order claims, and reconstructing events, because memories fade but a consistent daily log is strong evidence.

Project Management & Scheduling

Site grading cannot begin until clearing has been under way for two days, and the two crews then work along together. Which network relationship describes this?

  • a.Finish-to-start, because grading may begin only after clearing is entirely finished
  • b.Start-to-finish, because the finish of grading is what controls the start of clearing
  • c.Start-to-start with a two-day lag, because grading starts after clearing has started✓
  • d.Finish-to-finish, because the two activities are required to be completed on the same day

In an activity-on-node network, a start-to-start link ties the start of the successor to the start of the predecessor, and the two-day wait is expressed as a lag on that link. Finish-to-start would force clearing to be 100 percent complete first, which is not what the sequence describes. Finish-to-finish ties the two completions together, and start-to-finish is a rarely used relationship that does not fit here.

Project Management & Scheduling

Touch-up painting and final cleaning run alongside each other, but cleaning cannot be finished until painting is finished. Which network relationship is this?

  • a.Finish-to-finish, because the finish of the painting controls the finish of the cleaning✓
  • b.Start-to-start, because the two activities are required to begin work on the same day
  • c.Finish-to-start, because cleaning may not begin until the painting is entirely complete
  • d.Start-to-finish, because the start of the cleaning is what controls the finish of painting

A finish-to-finish link constrains the completion of the successor to the completion of the predecessor while allowing the two activities to overlap. Finish-to-start would prohibit any overlap, which contradicts the description. Start-to-start would tie the beginnings rather than the endings, and start-to-finish reverses the logic entirely.

Project Management & Scheduling

In a CPM network, a lag placed on the finish-to-start link between concrete placement and form stripping represents:

  • a.An overlap that lets form stripping begin before the concrete placement is finished
  • b.A reserve of money set aside in case the concrete work overruns its budgeted cost
  • c.A note telling the field crew that stripping the forms is optional on this project
  • d.Required waiting time, such as concrete curing, between the two activities✓

A lag is imposed delay between two linked activities and it consumes schedule time exactly as an activity duration does, so cure time is normally modeled as a lag rather than as work. An overlap that pulls the successor earlier is a lead, sometimes written as a negative lag, which is the opposite of what is described. Lag is a time value, not a contingency fund, and it never makes an activity optional.

Project Management & Scheduling

In CPM calculations, what does the backward pass through the network produce?

  • a.The early start and early finish of every activity, working forward from the project start date
  • b.The late start and late finish of every activity, working back from the project finish date✓
  • c.The cost of each activity, which is then loaded onto the schedule to forecast cash flow
  • d.The actual dates each activity was performed, taken from the daily field reports

The forward pass runs left to right and computes each activity's early start and early finish; the backward pass runs right to left from the project completion and computes each activity's late start and late finish. Comparing the two sets of dates is what yields float. Cost loading and as-built date collection are separate exercises that do not come out of the network passes.

Project Management & Scheduling

A project has three paths: A-B-C at 4, 6, and 5 days; A-D-C at 4, 9, and 5 days; and A-E-F-C at 4, 2, 3, and 5 days. How long is the critical path?

  • a.15 days
  • b.29 days
  • c.18 days✓
  • d.14 days

Total each path and take the longest: A-B-C is 4 + 6 + 5 = 15 days, A-D-C is 4 + 9 + 5 = 18 days, and A-E-F-C is 4 + 2 + 3 + 5 = 14 days. The critical path is the longest of the three at 18 days, so 18 days is the shortest time in which the project can finish. Choosing 14 picks the shortest path, and 29 comes from adding every activity's duration once instead of totaling paths.

Project Management & Scheduling

An activity has an early start of day 12, an early finish of day 17, a late start of day 19, and a late finish of day 24. What is its total float?

  • a.12 days
  • b.7 days✓
  • c.24 days
  • d.5 days

Total float is late start minus early start, or equivalently late finish minus early finish: 19 - 12 = 7 days, and 24 - 17 = 7 days, which confirms the answer. The 5-day figure is the activity's duration (17 - 12), not its float. The 12 and 24 figures are simply the early start and late finish dates read straight off the calculation.

Project Management & Scheduling

Activity A takes 6 days and begins on day 0. B (3 days) and C (8 days) both follow A finish-to-start. D (4 days) begins only after both B and C finish. What is the project duration?

  • a.21 days
  • b.13 days
  • c.18 days✓
  • d.14 days

The forward pass gives A finishing on day 6, B finishing on day 9, and C finishing on day 14. D is a merge point, so it starts at the later of its two predecessors, day 14, and finishes on day 18. Taking the B branch instead of the later C branch yields 13, stopping at C's finish yields 14, and adding all four durations yields 21.

Project Management & Scheduling

Free float for a scheduled activity is best defined as:

  • a.The number of days an activity may be delayed before the contract completion date moves
  • b.The money remaining in an activity's budget after its own labor and material costs are paid
  • c.The number of days an activity may be delayed before its assigned crew leaves for another job
  • d.The number of days an activity may be delayed before a successor's early start is pushed out✓

Free float is the slack an activity owns outright: it can absorb that much delay without disturbing the early start of any following activity. Total float, by contrast, is the delay available before the project completion date moves, and it is usually shared along a chain of activities, so one activity consuming it takes it away from the others. Float is a measure of time, not of budget or crew availability.

Project Management & Scheduling

Why does every activity on the critical path have zero total float?

  • a.Because the critical path is the longest path, so any delay on it pushes out the finish date✓
  • b.Because the scheduler assigns zero float to those activities by hand when the baseline is set
  • c.Because those activities are the most expensive line items in the project's cost-loaded budget
  • d.Because critical activities are always performed first, before any other work can be started

Zero float is a calculated result, not a setting. Because the critical path is the longest route through the network, its early dates and late dates come out identical on the forward and backward passes, leaving no slack anywhere along it. That is why a one-day delay to a critical activity becomes a one-day delay to the project. Cost and sequence position have nothing to do with it.

Project Management & Scheduling

A non-critical activity that carries six days of total float finishes four days late. What is the most likely effect on the project?

  • a.The project finish date slips by four days, because every late finish moves the completion date
  • b.The project finish date is pulled in two days, because unused float transfers to other work
  • c.The schedule must be rebaselined, because a late finish invalidates the approved baseline
  • d.The project finish date holds, and the activity's remaining total float drops to two days✓

Delay inside an activity's available float is absorbed by the network and does not move the completion date, but it does consume the cushion: six days of float minus four days of delay leaves two days. That matters, because a path with little float left can become critical after a further slip. Float is never converted into an earlier finish, and a routine slip within float does not require rebaselining.

Project Management & Scheduling

A critical-path activity finishes five days late and the contract completion date cannot move. What is the project manager's most appropriate response?

  • a.Wait to see whether the activities that follow happen to beat their planned durations
  • b.Crash or overlap remaining critical activities, and price the cost of that acceleration✓
  • c.Move the delay onto non-critical activities in the software so the finish date is restored
  • d.Shorten non-critical activities instead, since those are the ones that carry available float

A slip on the critical path becomes a project slip immediately, so recovery has to come from the remaining critical work, either by crashing it with added resources or by fast-tracking it through overlap. Both cost money, so the impact should be quantified and communicated rather than absorbed silently. Shortening non-critical activities buys nothing, because they were not controlling the finish date, and editing the logic to hide the delay misrepresents the schedule.

Project Management & Scheduling

What distinguishes a baseline schedule from an as-built schedule?

  • a.The baseline is the approved plan of record; the as-built records when work actually happened✓
  • b.The baseline is drawn by hand; the as-built is that same plan redrawn in scheduling software
  • c.The baseline covers only the first month of work; the as-built covers the rest of the project
  • d.The baseline is issued by the owner's architect; the as-built is issued by that same architect

The baseline is the schedule accepted at the start of the job and frozen as the yardstick for measuring progress; the as-built is the record of the dates on which work was actually started and completed. Comparing the two is how delay is measured and how time-extension claims are proved, which is also why milestones and the baseline should not be quietly revised. Neither document is defined by who drew it or by the software used.

Project Management & Scheduling

What is the purpose of a three-week look-ahead, or short-interval, schedule?

  • a.To replace the CPM schedule with a simpler bar chart that the owner reviews once a month
  • b.To record what each crew accomplished over the previous three weeks for payment purposes
  • c.To list the change orders the owner is expected to approve over the next three weeks
  • d.To detail near-term work so crews, materials, and access are ready in time✓

A look-ahead takes the next few weeks of the master schedule and expands them into crew-level detail so that constraints such as missing submittals, undelivered material, or blocked access get cleared before the work is due to start. It supplements the CPM schedule rather than replacing it, and it is the backbone of lean planning methods such as the Last Planner weekly work plan. It looks forward, not backward at completed quantities.

Project Management & Scheduling

Resource leveling a construction schedule means:

  • a.Setting every activity's duration to the same number of days so progress is easier to track
  • b.Paying every trade working on the project the same hourly rate to simplify payroll accounting
  • c.Shifting the timing of work so that crew and equipment demand stays within available limits✓
  • d.Grading the site so that material can be stockpiled at a uniform elevation near the building

A logically correct schedule can still demand twenty carpenters in one week and four in the next. Resource leveling moves activities, usually into their available float first, so that the demand curve for labor and equipment fits what the company can actually supply. Leveling that has to move critical work will extend the project, which is the trade-off the planner has to weigh.

Project Management & Scheduling

Which statement best compares fast-tracking with crashing as a way to accelerate a project?

  • a.Fast-tracking overlaps sequential work and adds rework risk; crashing adds resources and cost✓
  • b.Fast-tracking adds labor and overtime cost; crashing simply reorders work at no added cost
  • c.Fast-tracking shortens the critical path; crashing lengthens it to absorb the extra crews added
  • d.Fast-tracking applies only to design work; crashing applies only to sitework and foundations

Fast-tracking starts an activity before its predecessor is complete, which costs little directly but risks rework when the earlier work changes after the follow-on has begun. Crashing shortens durations by adding crews, shifts, or equipment, which is a direct cost increase and can also reduce productivity through crowding. Both are applied to critical activities, since only those control the finish date.

Project Management & Scheduling

A superintendent puts the framing crew on sixty-hour weeks for a month to recover schedule. What should the project manager expect?

  • a.Output per hour rises steadily as the crew settles into the longer working week
  • b.Payroll cost stays flat, because overtime hours are paid at the same regular hourly rate
  • c.Output per hour is unchanged, so the only real consequence is the overtime premium paid
  • d.Output per hour falls and error and injury rates rise, while payroll cost climbs✓

Sustained overtime produces well-documented productivity loss: fatigue reduces output per hour, rework and errors increase, and accident rates climb, so the schedule gain is smaller than the added hours suggest. The premium rate also raises unit labor cost. Short bursts of overtime can be effective, but weeks of it is one of the more expensive ways to buy schedule.

Project Management & Scheduling

What is the schedule of values on a construction project?

  • a.A list of the equipment the company owns, valued for the surety that issued the bond
  • b.A breakdown of the contract sum into line items used to bill progress each month✓
  • c.A ranked list of the subcontractors on the job, ordered by the value of their contracts
  • d.A record of the material prices quoted by suppliers before the bid was submitted

The schedule of values allocates the total contract amount across the work's components, and the monthly application for payment reports a percent complete against each of those line items to justify the amount requested. A realistic allocation matters, because an owner reviews it for front-loading and because the percent complete claimed on each line is what the architect verifies before certifying payment.

Project Management & Scheduling

The budgeted cost of the work actually performed on a job is $410,000, and the actual cost of that same work is $455,000. This means:

  • a.The job is ahead of schedule, because more work was performed than had been planned
  • b.The job has a favorable cost variance of $45,000, since earned value exceeds the budget
  • c.The job has an unfavorable cost variance of $45,000, since the work cost more than budgeted✓
  • d.The contractor has overbilled the owner by $45,000 on the current application for payment

Cost variance is earned value minus actual cost: $410,000 - $455,000 = -$45,000, and a negative result is unfavorable, meaning the completed work cost $45,000 more than it was budgeted to cost. The comparison says nothing about schedule, which is measured by comparing earned value against planned value instead. Overbilling is a billing question, not a cost-performance measurement.

Project Management & Scheduling

In earned value terms, a negative schedule variance tells the project manager that:

  • a.The work performed has cost more money than had been budgeted for that same work
  • b.The owner has fallen behind in paying the last two applications for payment submitted
  • c.The remaining work will finish under budget, because unspent contingency is still available
  • d.Less work has been earned to date than the schedule planned to have earned by now✓

Schedule variance compares the budgeted value of work performed with the budgeted value of work planned for the same date, so a negative figure means the job is behind the planned production curve. Cost overruns show up in cost variance, which compares earned value with actual cost instead. Neither measure reports on the owner's payment behavior or on contingency that has not been spent.

Project Management & Scheduling

Why does a contractor assign cost codes to labor hours and supplier invoices on a job?

  • a.So actual costs land in the same categories the estimate used to price them✓
  • b.So payroll taxes are withheld at the correct rate for each trade working on the site
  • c.So the building official can trace which subcontractor performed each inspected item
  • d.So the surety can confirm that the payment bond covers every material supplier used

Cost codes are the common language between the estimate and the accounting system: hours and invoices are coded to the same work categories the estimator priced, so the project manager can see which categories are running over and by how much while there is still time to react. Without consistent coding, a job report shows only a total, which tells you that money was lost but not where.

Project Management & Scheduling

A long-lead item such as electrical switchgear appears on the submittal log. Why does the project manager push that submittal early?

  • a.Because the specifications require the first submittal on any project to be an electrical item
  • b.Because the owner cannot be billed for stored equipment until its submittal is approved
  • c.Because review, fabrication, and delivery can run months, and a late release delays the job✓
  • d.Because the building official will not issue the permit until that submittal is reviewed

The submittal log tracks required submittals against the dates the material is needed on site, working backward through delivery, fabrication, and design-team review time. For major equipment that chain can run many months, so a submittal released late becomes a critical-path delay no amount of field effort can recover. Submittal review is a contract process between the contractor and the design team, not a permitting requirement.

Project Management & Scheduling

Which submittal type is prepared by the fabricator or subcontractor to show how an assembly will actually be made and installed for this project?

  • a.Product data, consisting of the manufacturer's printed catalog sheets for a stock item
  • b.A shop drawing, showing dimensions, connections, and fabrication details for this job✓
  • c.A sample, consisting of a physical piece of the material submitted for color and texture
  • d.A mill certificate, reporting the tested properties of the steel sent to the fabricator

Shop drawings are project-specific documents drawn by the fabricator or installer that translate the design documents into what will actually be built, including field dimensions and connection details. Product data are the manufacturer's standard literature for a catalog item, and samples are physical pieces submitted so appearance can be judged. All three are submittals, but only the shop drawing is created for the particular job.

Project Management & Scheduling

The architect returns a shop drawing stamped 'reviewed, no exceptions taken.' What does that stamp mean for the contractor?

  • a.The contractor is relieved of responsibility for dimensions and field conditions on that work
  • b.The item is approved as a change order, and the contract sum is adjusted for its added cost
  • c.The architect now guarantees the fabricator's work and pays for errors found in the field
  • d.The submittal conforms to design intent, but the contractor remains responsible for accuracy✓

Standard contract language limits the design team's submittal review to checking conformance with the design concept and the information in the contract documents. It does not transfer responsibility for quantities, dimensions, field measurements, fabrication methods, or coordination with other trades, all of which stay with the contractor. A reviewed submittal also does not change the contract sum; only a change order does that.

Project Management & Scheduling

Which package does the contractor typically turn over to the owner at project closeout?

  • a.The bid-day estimate, the subcontractor quotes, and the internal job-cost reports
  • b.The certified payroll records, the daily reports, and the safety training rosters
  • c.As-built drawings, operation and maintenance manuals, and system warranties✓
  • d.The original permit application, the approved plan set, and the paid supplier invoices

Closeout transfers to the owner what is needed to operate and maintain the building: as-built drawings marked to show what was actually installed and where, operation and maintenance manuals for the equipment, and the manufacturer and installer warranties. Estimates, job-cost reports, and payroll records are the contractor's internal or statutory records and are not part of the owner's turnover package.

Project Management & Scheduling

What is accomplished at the preconstruction meeting held before work begins?

  • a.Communication lines, submittal and payment procedures, site rules, and access are established✓
  • b.The final punch list is walked and the remaining corrective items are assigned to the trades
  • c.The contract sum is renegotiated once the contractor has seen the actual site conditions
  • d.The building official reviews the drawings and issues the permit for the proposed work

The preconstruction meeting brings owner, design team, contractor, and key subcontractors together to agree on how the project will be run: who talks to whom, how RFIs and submittals will be processed, when pay applications are due, and how deliveries, laydown areas, parking, and site access will work. Weekly coordination meetings then carry those procedures through construction. Pricing is settled before award, and punch-list work belongs at the end of the job.

Project Management & Scheduling

How do the roles of the project manager and the site superintendent typically divide on a general contractor's job?

  • a.The project manager directs the crews in the field; the superintendent handles owner billings
  • b.The project manager runs contracts, submittals, and cost; the superintendent runs field work✓
  • c.The project manager works for the owner; the superintendent works for the general contractor
  • d.The project manager approves inspections; the superintendent issues change orders to the subs

The project manager is the commercial and contractual lead, handling subcontracts, submittals, RFIs, change orders, billings, and cost reporting. The superintendent is the field lead, sequencing crews day to day, running site logistics and safety, and calling for inspections. Both work for the general contractor, and the split of duties is why the two must communicate constantly.

Project Management & Scheduling

What distinguishes quality control from quality assurance on a construction project?

  • a.Quality control applies to subcontracted work; quality assurance applies to self-performed work
  • b.Quality control is performed by the building department; quality assurance by the architect
  • c.Quality control happens at closeout; quality assurance happens during the bidding phase
  • d.Quality control inspects and tests the finished work; quality assurance is the system that prevents defects✓

Quality control is the inspection and testing of work that has been performed, catching defects after the fact. Quality assurance is the planned program of procedures, qualified personnel, approved submittals, and mockups intended to keep the defects from occurring in the first place. Both are the contractor's responsibility and both run throughout the job, independently of the building department's code inspections.

Project Management & Scheduling

Why does a specification require a mockup panel of the exterior wall before production work starts?

  • a.To let the owner decide whether the exterior wall assembly should be deleted from the scope
  • b.To satisfy a requirement that a sample of the assembly be tested in an approved laboratory
  • c.To set an approved standard of workmanship and appearance the finished work must match✓
  • d.To give the estimator a way to measure labor hours for pricing a future change order

A mockup, sometimes called a benchmark sample, is built and reviewed so that the owner and design team can accept the intended color, texture, joint treatment, and workmanship before the trade goes into production. Once accepted, it becomes the physical standard against which the remaining work is judged, which settles arguments that drawings and words cannot. It is a workmanship standard, not a laboratory test or a pricing exercise.

Project Management & Scheduling

Eight months after the owner moved in, a rooftop unit fails. Is that a punch list item or a warranty claim?

  • a.A warranty claim, because the failure appeared after acceptance during the warranty period✓
  • b.A punch list item, because any defect discovered after occupancy belongs on the punch list
  • c.A punch list item, because the unit was installed before substantial completion was reached
  • d.A change order, because the owner has already paid out the retainage held on the contract

A punch list captures incomplete or defective work identified at substantial completion, and it must be cleared before final payment. A warranty claim covers a failure that shows up later, during the warranty period that typically begins at substantial completion, and it is handled under the warranty terms and the manufacturer's coverage rather than by withholding contract funds. A latent failure months after occupancy falls in the second category, not the first.

Project Management & Scheduling

How does a construction manager at risk differ from a construction manager acting as the owner's agent?

  • a.The at-risk manager advises for a fee; the agent signs the trade contracts and carries the risk
  • b.The at-risk manager holds trade contracts and guarantees a price; the agent advises the owner✓
  • c.The at-risk manager is licensed by the state; the agent works with no license requirement
  • d.The at-risk manager works only on public projects; the agent works only on private projects

A construction manager at risk holds the trade contracts and usually commits to a guaranteed maximum price, so it carries construction risk much as a general contractor does. A construction manager as agent is the owner's professional adviser: it manages the process for a fee, and the owner holds the trade contracts and the risk. The distinction determines who is exposed when the work costs more than expected.

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