Florida Building Contractor Business/Finance Practice Exam

When bidding on work, which of the following should not be included in the bid price?

1. Materials and labor

2. Overhead, workers comp premium, profit

3. Project management fee

4. Contractor's licensing fee

The correct answer is: Overhead, workers comp premium, profit

When determining the bid price for a construction project, it is important to consider what components should be included and which should not. In this case, while materials and labor, project management fees, and the contractor's licensing fees are essential elements that directly relate to the execution of the project, overhead and profit are considered part of the contractor's overall cost structure, rather than direct costs of the project. Overhead includes various operational costs that the contractor incurs to keep the business running, such as utilities, office supplies, and salaries of administrative staff. Workers' compensation premiums, while necessary for legal compliance and employee protection, also do not directly pertain to the specific project being bid on. Profit is the margin intended for the contractor's financial sustainability and business growth, which, while essential to business practice, relies on the overall financial strategy rather than the variable costs associated with each individual project. Thus, the components listed in the choice related to overhead, workers' compensation premium, and profit would not be explicitly included in the bid price as they belong to the broader financial assessment of the contractor's operations rather than the immediate costs of delivering the project.