AFSB 152- Study Cards (ANSWERED CORRECTLY)
Chapter 1 starts here! - Correct Answer Chapter 1 starts here!
Surety bond - Correct Answer A written contract that expresses one party's promise to answer for
another party's failure to do something as promised.
Surety - Correct Answer 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 - Correct Answer The party to a surety bond that receives the surety's guarantee that the
principal will fulfill an obligation or perform as promised.
Principal - Correct Answer The party to a surety bond whose obligation or performance the surety
guarantees.
Suretyship - Correct Answer The obligation of one entity to answer for the debt, default or miscarriage
of performance of duties by another entity.
Bid bond - Correct Answer 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 - Correct Answer 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? - Correct Answer
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 - Correct Answer Guarantee that the contractor will fulfill all terms, specifications,
and conditions of the construction contract.
Payment bond - Correct Answer Guarantees that the contractor will pay labor and material bills
associated with the contract.
Bond penalty - Correct Answer The surety's full capital and surplus back guarantees up to a bond's
financial limit.
Contractors benefit - Correct Answer 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. - Correct Answer Payment
The Heard Act - Correct Answer 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 - Correct Answer 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. - Correct Answer Miller, Heard
The Construction Industry Payment Protection Act of 1999 (CIPP) - Correct Answer 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 legislation (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 - Correct Answer
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 - Correct Answer The surety's rigorous analysis of the
contractor's qualifications lends credibility to the contractor.
Payment bonds benefit - Correct Answer 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 - Correct Answer Miller Act.
Design/build - Correct Answer A construction method that offers "one-stop shopping" to property
owners for design and construction services.
Subcontractor (specialty contractor) - Correct Answer 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 - Correct Answer 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) - Correct Answer 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 - Correct Answer A list of small finishing tasks that must be accomplished for completion.
Architects often act as _____ _____ during the design phase. - Correct Answer Central coordinators
Financial constraints - Correct Answer Affect every design decision.
, Civil engineers - Correct Answer Structural components
Electrical engineers - Correct Answer Electrical components
Mechanical engineers - Correct Answer Heating, ventilating, air conditioning, and plumbing
Civil engineers determine - Correct Answer 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 - Correct Answer 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.
Mechanical engineers deal with - Correct Answer Heating ventilating, and air conditioning,
contemplating such factors as the building's use and the type of equipment to be installed.
Here's an example of how a typical design process works: - Correct Answer 1. The design professional
interviews the client and measures current and future needs.
2. The design professional reviews existing facilities for potential renovation and for their ability to
handle future growth needs.
3. Professional engineers, architects, and attorneys obtain required zoning approvals and ensure that
plans and specifications comply with all government regulations.
4. For new construction, the future owner either acquires or obtains an option to acquire the land or the
building to be renovated.
5. The owner obtains a building permit, which may be subject to restrictions for zoning approval,
parking, sewer access, utilities, labor and industry approval, environmental impact studies, and other
restrictions.
6. The owner arranges financing before construction.
