Idaho Public Works Contractor Exam

Section 1: Business Plan (1 question, 1% of exam)

Key Concepts

What is a Business Plan? A business plan is a written document that describes your business, its objectives, strategies, market, and financial forecasts. It serves as a roadmap for running your business and is essential for securing financing.

Seven Components of a Business Plan (per Section 1):

1. Executive Summary — Written last but placed first. Provides a concise overview of the entire plan including the business concept, financial needs, and key highlights. Must stand alone as a snapshot of the business.

Key Concepts

Business Organization Types

Six recognized methods of organization a contractor can choose from: - Sole Proprietorship – Simplest form; owner personally liable - General Partnership – Shared liability among partners - Limited Liability Partnership (LLP) – Partners have limited liability - Limited Partnership (LP) – Mix of general and limited partners - Limited Liability Company (LLC) – Hybrid liability protection - Corporation – Separate legal entity; strongest liability protection

Secretary of State Registration Requirements

• File Organizational Documents (e.g., Articles of Incorporation for corporations)
• File a Certificate of Assumed Business Name if operating under a trade name

Idaho Public Works Contractor Exam — 2 questions, ~2% of exam weight

Key Concepts

Types of Business Entities in Idaho

Idaho recognizes six business structures: Sole Proprietorship, General Partnership, Limited Liability Partnership (LLP), Limited Partnership (LP), Limited Liability Company (LLC), and Corporation.

Sole Proprietorship - Simplest form; no formal registration required with the Secretary of State - Owner has unlimited personal liability for all business debts and obligations - Business income reported on owner's personal tax return

General Partnership - Two or more persons carrying on business for profit - All partners share unlimited personal liability - No filing required to form, but a partnership agreement is strongly recommended

Exam Weight: 2 questions, ~2% of exam

Key Concepts

DOPL Mission & Regulatory Boards

• DOPL (Division of Occupational and Professional Licenses) mission: safeguard Idaho citizens through responsible administration of building/construction safety and licensure standards while promoting a positive business climate
• DOPL hosts seven regulatory boards under the Executive Office of the Governor:
• Idaho Building Code Board
• Idaho Electrical Board
• Idaho HVAC Board
• Idaho Plumbing Board
• Manufactured Housing Board
• Modular Building Advisory Board
• Public Works Contractors License Board
• DOPL's Industrial Safety Program conducts annual safety inspections of public schools and state-owned buildings and monitors elevator/escalator safety certification statewide
• DOPL also operates Idaho's Logging Safety Program

Key Concepts

Financial Statements

• Balance Sheet: Snapshot of financial position — Assets = Liabilities + Owner's Equity. Assets include cash, receivables, and equipment; liabilities include accounts payable and loans.
• Income Statement: Shows revenues minus expenses over a period = Net Profit or Loss.
• Cash Flow Statement: Tracks actual cash in/out across operating, investing, and financing activities. Profitable companies can still fail due to poor cash flow.

Accounting Methods

• Cash Method: Revenue recorded when cash is received; expenses recorded when paid. Simpler, but can distort true financial position on long projects.
• Accrual Method: Revenue recorded when earned; expenses recorded when incurred — regardless of cash movement. Required for GAAP compliance. Most contractors…

Key Concepts

Federal Anti-Discrimination Laws & Protected Classes

Key Concepts

Types of Contractor Insurance

• General Liability Insurance: Covers bodily injury and property damage caused to third parties during operations. Required for Idaho public works contractors.
• Builder's Risk Insurance: Covers structures under construction against fire, vandalism, weather, and other perils. Covers the project itself — not liability to others.
• Automobile Insurance: Covers vehicles used in contractor operations; separate from general liability.
• Completed Operations Coverage: Extends liability protection after a project is finished — covers claims arising from work already completed. Often paired with general liability as "Products/Completed Operations."

Workers' Compensation (Idaho)

Key Concepts

Types of Bids

• Open/Hard Bid (Competitive Bid): All qualified contractors submit sealed bids; lowest responsible bidder wins. Required for most public works projects in Idaho.
• Closed/Negotiated Bid: Owner selects a contractor and negotiates price directly; not open to all bidders.
• Public works projects typically mandate the open competitive bidding process to ensure transparency and fair use of public funds.

Deciding Whether to Bid a Job

Key factors to evaluate before committing to bid: - Project type, size, and location relative to your capabilities - Availability of labor, equipment, and bonding capacity - Current backlog and workforce capacity - Competition level and realistic chance of winning - Project risks (soil conditions, schedule, owner…

Idaho Public Works Contractor Exam | 8 questions, 8% of exam

Key Concepts

Elements Required for a Valid Contract

A valid contract requires six elements: offer, acceptance, consideration, competent parties, lawful subject matter, and mutual assent (meeting of the minds). All six must be present — missing any one element makes the contract unenforceable.

Types of Construction Contracts

• Lump Sum (Fixed Price): Contractor agrees to complete the entire scope for a single fixed price. Contractor bears cost overrun risk.
• Cost Plus: Owner pays actual costs plus a fee (flat or percentage). Reduces contractor risk; increases owner exposure.
• Time and Materials (T&M): Owner pays for actual labor hours and materials used, often with a…

Idaho Public Works Contractor Exam

Key Concepts

Five Phases of Project Management

1. Initiation — Define project scope, feasibility, and objectives
2. Planning — Develop schedules, budgets, resource plans, and risk assessments
3. Executing — Deploy resources, coordinate subcontractors, perform the work
4. Monitoring/Controlling — Track progress against plan, detect variances, implement corrections
5. Closing — Final inspections, punch lists, contract closure, warranty documentation

Critical Path Method (CPM)

• The critical path is the longest sequence of dependent activities — it determines the minimum project duration
• Activities on the critical path have zero float — any delay extends the project finish date
• Early Start (ES) = earliest an activity can begin (forward pass)…

Idaho Public Works Contractor Exam — Section 11 (5 questions, 5%)

Key Concepts

OSHA Recordkeeping Forms

• Form 300 – Log of Work-Related Injuries and Illnesses. Maintained by employer throughout the year.
• Form 300A – Summary of Work-Related Injuries and Illnesses. Must be posted February 1 – April 30 each year, even if no recordable incidents occurred.
• Form 301 – Injury and Illness Incident Report. Completed for each recordable incident within 7 calendar days.
• Records must be retained for 5 years.
• Employers with 10 or fewer employees and employers in certain low-hazard industries are exempt from routine recordkeeping (but NOT from reporting fatalities/hospitalizations).

Idaho Public Works Contractor Exam

Key Concepts

Idaho Sales & Use Tax - Contractors are generally treated as consumers of materials, not retailers — they pay sales tax on materials they purchase and incorporate into real property. - Use tax applies when materials are purchased out-of-state without paying Idaho sales tax and then used in Idaho. - Contractors do not collect sales tax from property owners on lump-sum construction contracts for real property improvement. - Exempt situations: materials sold to government entities under certain contract structures, resale items, and some specific industrial/agricultural exemptions may apply.

Section 13: Mechanic's and Materialmen's Liens

Key Concepts

Who Can File a Lien Any contractor, subcontractor, laborer, or materialman who furnishes labor, materials, or equipment used in the improvement of real property in Idaho has the right to file a mechanic's or materialmen's lien against that property.

90-Day Filing Rule A lien claimant must file their claim with the county recorder in the county where the property is located within 90 days of the last date labor was performed or materials were furnished. Missing this deadline extinguishes the lien right entirely.