Income statement and Balance sheet
The indirect costs of materials, equipment, buildings, or personnel needed to support the construction
What are overhead costs?
A law that requires contractors to post a separate payment bond and make payments for material and labor provided on federal construction projects
What is the Miller Act?
Something that alters the contract price
What is a change order?
A process by which contract funds are received from the obligee by a 3rd party and subsequently disbursed to suppliers, subcontractors, and the principal when earned
what is funds control?
Contract price minus estimated total cost equals this
What is gross profit?
Rolling culmination of equity held with in the company.
what is retained earnings?
A bond principal’s and indemnitor’s promise to pay the surety for any loss sustained from writing bonds for the principal
What is a GIA
An agreement that provides payment to the contractor for the cost of the work plus an amount of overhead and profit
What is a cost plus contract?
This form of collateral provides loss paying power (protection?) to the surety through its equity value
What is real estate?
A financial statement/form filled out by the obligee that describes the status of the job
what is a progress report/contract status report?
The practice of billing more than the costs incurred and earned profits to date
What is overbilling?
Any bid spread over this amount must be communicated to the underwriter
what is 10%?
A percentage withheld from the contractor by the owner/GC on each pay app.. typically 5 or 10%.
What is retainage?
This form of collateral provides loss paying power (or maybe protection?) to the surety via the Principal’s bank
What is an ILOC?
Estimated GP minus GP recognized to date=
Something that reduces the book value of equipment overtime
what is depreciation
Another name for general and administrative expenses.
What is overheard?
The amount that the owner is entitled to recover from the contractor if the contractor does not complete the contract within the specific time
What are LDS?
The United States Small Business Administration provides reinsurance to the surety for contractors who qualify under its Surety Bond Guarantee Program at this percentage, which can increase to 90% for certain principals
what is 80%?
The letter that is sent out when declining an account due in part to personal credit?
What is the FCRA letter? (fair credit reporting act)
At later stages in the job, if the principal is this, it could suggest a loss or unapproved change orders
What is underbilled?
This rate class reflects the most difficult obligation and have the highest loss costs
What is class B?
Name of the form that is used to add the lender to a bond form.
What is a dual obligee rider?
Assets specifically pledged by the principal to the surety in support of their bond program (cash, ILOC, IDOT)
what is collateral?
When a project has already started, we will request this from the oligee to make sure there are no known performance or payment issues
What is an all rights letter?