NC General Contractor Exam Flashcards

Q: What does the North Carolina general contractor exam cover?

The NC GC exam program covers five domains: Business & Law (license classifications, limitations, licensing thresholds, lien law, bonds and insurance), Contract Law, Safety & Codes, Project Management, and Financial Management.

Q: How many exams does North Carolina require and what is the passing score?

North Carolina requires two open-book exams: a 40-question Business & Law exam (90 minutes) and a 90-question Trade exam matching your classification (200 minutes). Both exams require a 70% passing score.

Q: What happens if I fail the NC general contractor exam?

There is no mandatory wait between your first three attempts within a 12-month period from your initial test date, but failing all three attempts in that year triggers a 1-year wait before you can retest. Each attempt costs $100, paid directly to PSI.

Q: What are North Carolina's license limitation tiers?

Limited licenses cap individual projects at $750,000, Intermediate at $1,500,000, and Unlimited has no project cap. Each tier requires increasing working capital ($17K / $75K / $150K) or an equivalent surety bond as an alternative.

Question 1

Building Contractor Classification

Accepted Answer

The broadest NC classification — covers commercial, industrial, institutional, and residential building construction, demolition, site work, and specialty work like concrete, roofing, masonry, and pools.

Question 2

Residential Contractor Classification

Accepted Answer

Covers construction and demolition of residential units built to the NC Residential Code, plus ancillary site work. Narrower scope than Building — no commercial work.

Question 3

Highway Contractor Classification

Accepted Answer

Covers highway construction: grading, paving, bridges, culverts, airport runways, guardrails, fencing, and signage, plus specialty work in boring, concrete, and marine construction.

Question 4

Public Utilities Contractor Classification

Accepted Answer

Covers water and wastewater system construction, with 5 subclassifications (communications, fuel distribution, electrical, water/sewer lines, water purification).

Question 5

Specialty Contractor Classification

Accepted Answer

Covers a single specialized trade only, as defined by NCLBGC regulations — the narrowest classification scope.

Question 6

Limited License

Accepted Answer

Caps individual projects at $750,000. Requires $17,000 working capital (current asset surplus) or $80,000 net worth, or a $175,000 surety bond as an alternative.

Question 7

Intermediate License

Accepted Answer

Caps individual projects at $1,500,000. Requires $75,000 working capital (current asset surplus), or a $500,000 surety bond as an alternative.

Question 8

Unlimited License

Accepted Answer

No dollar cap on individual project value. Requires $150,000 working capital (current asset surplus), or a $1,000,000 surety bond as an alternative.

Question 9

NC Licensing Threshold

Accepted Answer

Any single project valued at $40,000 or more requires a licensed general contractor in North Carolina.

Question 10

Unlicensed Contracting Penalty

Accepted Answer

Contracting above the $40,000 threshold without an NC GC license is a Class 1 misdemeanor under GS Chapter 87.

Question 11

NASCLA Exam Credit in NC

Accepted Answer

NCLBGC accepts the NASCLA Accredited Examination as credit toward the trade exam for the Building classification ONLY. The NC Business & Law exam is still required.

Question 12

Mechanics Lien Filing Deadline

Accepted Answer

A claim of lien on real property must be filed no later than 120 days after the last furnishing of labor or materials (GS Chapter 44A).

Question 13

Lien Enforcement Deadline

Accepted Answer

A lawsuit to enforce a filed mechanics lien must be commenced within 180 days of the last furnishing of labor or materials.

Question 14

Lien Agent Notice

Accepted Answer

Subcontractors and suppliers must give notice to the project's designated lien agent within 15 days of first furnishing labor or materials to preserve full lien rights.

Question 15

Performance Bond vs. Payment Bond

Accepted Answer

A performance bond protects the OWNER by guaranteeing job completion. A payment bond protects SUBS AND SUPPLIERS by guaranteeing they get paid.

Question 16

Public Project Bond Thresholds

Accepted Answer

In NC, a payment/performance bond is required on local (municipal/county) public contracts over $300,000, and on state public contracts over $500,000.

Question 17

Lump Sum Contract

Accepted Answer

A fixed total price for the entire scope of work, regardless of the contractor's actual cost. The owner bears less price risk; the contractor bears more cost risk.

Question 18

Cost-Plus Contract

Accepted Answer

The owner reimburses the contractor's actual costs plus an agreed fee (fixed amount or percentage). This shifts cost risk to the owner.

Question 19

Unit Price Contract

Accepted Answer

Sets a price per measured unit of work (e.g., per linear foot or cubic yard). Common when exact quantities aren't known until work begins.

Question 20

Time and Materials (T&M) Contract

Accepted Answer

Bills the owner for actual labor hours worked plus materials used, typically with a markup. Common for smaller or undefined-scope jobs.

Question 21

GMP (Guaranteed Maximum Price) Contract

Accepted Answer

A cost-plus contract with a price ceiling — the contractor is paid actual cost plus fee, but total cost cannot exceed the guaranteed maximum.

Question 22

Subcontractor Payment Deadline

Accepted Answer

A prime contractor must pay a subcontractor within 7 days of receiving payment from the owner for that sub's work (GS Chapter 22C).

Question 23

Pay-If-Paid Clauses in NC

Accepted Answer

Pay-if-paid clauses, which make owner payment a condition of paying the subcontractor, are UNENFORCEABLE in North Carolina — owner nonpayment is not a valid defense.

Question 24

Late Subcontractor Payment Interest

Accepted Answer

Under GS Chapter 22C, unpaid amounts owed to a subcontractor accrue interest at 1% per month until paid.

Question 25

Retainage Cap Rule

Accepted Answer

A contractor may not withhold retainage from a subcontractor at a higher percentage than the owner withholds from the prime contractor.

Question 26

Mediation vs. Arbitration

Accepted Answer

Mediation uses a neutral facilitator and is non-binding — parties keep control of the outcome. Arbitration is binding — the arbitrator decides, with limited appeal rights.

Question 27

Change Order

Accepted Answer

A written document that modifies the original contract's scope, price, or schedule. Extra work should always be documented with a change order before it begins.

Question 28

OSHA Fall Protection Trigger Height

Accepted Answer

Fall protection (guardrails, safety nets, or personal fall arrest systems) is required at 6 feet or more above a lower level on construction sites (29 CFR 1926.501).

Question 29

Excavation Edge Protection

Accepted Answer

Excavations 6 feet deep or greater generally require barricades or other fall protection at the edge to protect workers and the public.

Question 30

Trench Cave-In Protection

Accepted Answer

OSHA requires a protective system (sloping, shoring, or shielding) for trenches 5 feet deep or greater, unless the excavation is entirely in stable rock.

Question 31

Trench Egress Requirement

Accepted Answer

Trenches 4 feet deep or greater require a ladder, ramp, or other safe means of exit within 25 feet of workers.

Question 32

Open Excavation Hazard Control

Accepted Answer

Open excavations and wells must be covered, or protected with guardrails or barricades, to prevent falls by workers and the public.

Question 33

Workers' Compensation Threshold in NC

Accepted Answer

NC requires employers with 3 or more employees (including construction firms) to carry workers' comp insurance. A GC is also statutorily liable for an uninsured subcontractor's injured employees (GS 97-19).

Question 34

Current NC Building Code Edition

Accepted Answer

The 2018 NC Building Code is the current edition in effect.

Question 35

2024 NC Building Code Effective Date

Accepted Answer

The 2024 NC Building Code edition takes effect July 31, 2026.

Question 36

Building Permit Requirement

Accepted Answer

A building permit must be obtained from the local jurisdiction before construction work begins.

Question 37

Code Inspection Requirement

Accepted Answer

Construction work must pass inspections at defined code milestones (e.g., footing, framing, final) before work can proceed or the structure can be occupied.

Question 38

Sedimentation Pollution Control Act

Accepted Answer

NC's Sedimentation Pollution Control Act requires an erosion and sedimentation control plan for qualifying land-disturbing construction activity.

Question 39

Takeoff

Accepted Answer

The process of measuring quantities of materials and labor needed for a project directly from the plans and specifications.

Question 40

CPM (Critical Path Method) Schedule

Accepted Answer

A scheduling method that identifies the longest sequence of dependent tasks (the critical path), which determines the shortest possible project duration.

Question 41

Float (Schedule Slack)

Accepted Answer

The amount of time a task can be delayed without delaying the overall project finish date. Critical-path tasks have zero float.

Question 42

Gantt Chart

Accepted Answer

A bar-chart timeline showing project tasks against a calendar, used to visualize schedule, duration, and overlap of activities.

Question 43

Design-Bid-Build vs. Design-Build

Accepted Answer

Design-Bid-Build uses two separate, sequential contracts (designer, then contractor) with the owner holding both. Design-Build uses one firm for both roles under a single contract, usually faster.

Question 44

CM at Risk (Construction Manager at Risk)

Accepted Answer

A delivery method where the construction manager guarantees the project price (a GMP) and holds the trade contracts, taking on cost-overrun risk.

Question 45

Superintendent Role

Accepted Answer

The individual responsible for day-to-day, on-site supervision of the work, coordinating trades, schedule, and site safety.

Question 46

Accrual vs. Cash Accounting

Accepted Answer

Accrual accounting records income and expenses when earned or incurred, matching them to the period of work. Cash accounting records them only when cash actually moves.

Question 47

Working Capital Formula

Accepted Answer

Working capital = Total Current Assets − Total Current Liabilities. NCLBGC uses this figure to qualify contractors for the Limited, Intermediate, and Unlimited license limits.

Question 48

CPA-Prepared Financial Statement Requirement

Accepted Answer

NCLBGC requires a CPA-prepared financial statement to document working capital or net worth for higher license limitation tiers (Intermediate and Unlimited).

Question 49

Retainage

Accepted Answer

A percentage of each payment withheld by the owner (or by the prime contractor from a sub) until the work is substantially complete, protecting against defects or non-completion.

Question 50

1099 vs. W-2 Worker Classification

Accepted Answer

A 1099 independent contractor pays self-employment tax and controls their own work methods. A W-2 employee has taxes withheld and works under the employer's direction — misclassification carries legal risk.

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