Oregon Construction Contractors (CCB) Practice Test

When should a bid or proposal be submitted by a contractor?

1. Before the contractor posts a $30,000 bond

2. After all work is completed

3. Before adding a markup percentage to the project costs

4. After a markup percentage is added to the project costs

The correct answer is: After a markup percentage is added to the project costs

A bid or proposal should be submitted by a contractor after a markup percentage is added to the project costs because this reflects the contractor's total pricing strategy. Including a markup is essential for covering overhead costs, profit margins, and any unforeseen expenses that might arise during the project. This ensures that the contractor not only breaks even on the project but also earns a profit for the work being performed. Submitting the bid after calculating the markup allows the contractor to present a more comprehensive and competitive proposal. This practice is standard in the construction industry, as it allows the contractor to accurately reflect the true cost of the job based on direct project costs supplemented by the necessary markup for sustainability and profit. Other options, such as submitting a bid before posting a bond or after all work is completed, do not align with standard bidding practices. A bond is typically a requirement before work begins, and submitting a bid after all work is completed is impractical; bids are meant to estimate costs prior to the start of a project. Likewise, submitting a bid before factoring in markup would risk underestimating the costs involved. Hence, the most effective time to present a bid is after the markup has been calculated and included.