Construction Contracts for Georgia Electrical Contractors
Pricing Types, the Prompt Pay Act, Retainage, Lien Rights, Indemnity Limits, Defect Notices, the UCC and Standard General-Conditions Clauses
O.C.G.A. 13-11, 13-10-80, 44-14-360 to 44-14-369, 13-8-2, 13-6-7, 8-2-38, 9-3-24 to 9-3-51, 11-2-201 to 11-2-725, 10-1-6 as published on Justia (read 2026-09-20); FAR clauses as read on acquisition.gov 2026-09-19 · Reviewed 2026-09-21
"Contracts and purchase orders" sits in the 6-item "Comply with Administrative Requirements" block on both Georgia exams. Two layers are tested: (1) the general-conditions vocabulary every construction contract uses — pricing types, change orders, specifications versus drawings, differing site conditions, liquidated damages, retainage, warranty, default — and (2) the Georgia statutes that override whatever the paper says: the Prompt Pay Act (O.C.G.A. 13-11), public-work retainage (13-10-80), the mechanics' and materialmen's lien law (44-14-360 et seq.), the anti-indemnity statute (13-8-2), the Right to Repair defect-notice procedure (8-2-35 et seq.), the UCC for material purchases (Title 11) and the limitation periods (Title 9, Chapter 3). The public-domain Federal Acquisition Regulation clauses are used here as the model text for the general-conditions concepts; private-form general conditions (AIA, ConsensusDocs, EJCDC) follow the same logic.
1. Pricing types — who carries the cost risk
| Type | How the price works | Risk | Source model |
|---|---|---|---|
| Lump sum / firm-fixed-price | One price, not adjusted for the contractor's actual cost experience | Maximum risk on the contractor — full responsibility for costs and profit or loss; maximum incentive to control cost | FAR 16.202-1 |
| Cost-plus (cost-reimbursement) | Owner pays allowable incurred costs plus a fee; an estimated total cost acts as a ceiling | Cost risk mostly on the owner; contractor needs an accounting system that captures costs | FAR 16.301-1 |
| Time and materials | Labor hours at fixed hourly rates that already include wages, overhead, G&A and profit, plus materials at actual cost | Only when the extent or duration cannot be estimated; gives the contractor no profit incentive to control cost, so the owner watches the work and sets a ceiling price | FAR 16.601 |
| Unit price | Price per unit (per foot, per fixture) × measured quantity; contract sum = Σ (unit price × quantity) | Best when the quantity is uncertain but the unit of work is well defined |
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