Chapter 42 — Exercises

These are the last exercises in the book, and most of them are about you rather than about a project. Work them in writing; a career plan you did not write down is a mood.

Difficulty legend: ⭐ basic recall and comprehension · ⭐⭐ applied analysis · ⭐⭐⭐ judgment, ethics, and multi-step work · ⭐⭐⭐⭐ research and extension beyond the book.

Any dollar figure given as an exercise input below is an exercise premise, not market data. For real compensation numbers, use the sources in §42.4.4.

Part A — Conceptual Understanding ⭐

A1. Name the six rungs of the office ladder and the seven rungs of the field ladder in order, without looking. Then state, in one sentence each, what the office ladder manages and what the field ladder manages.

A2. §42.1.1 argues that what really changes as you climb the office ladder is not the amount of work. What is it, and why does that make some people legitimately unsuited to two rungs up?

A3. State the two-part economic argument in §42.1.2 for why a general superintendent is often the most valuable person in a construction company. One part is about scarcity; one part is about arithmetic. Give both.

A4. List, in order, the six things that actually get people promoted (§42.3), and the three things that do not.

A5. What is the difference between a credential, a license, and training as those words are used in §42.5? Give one example of each from the chapter and say what each one permits or signals.

A6. Exactly two items in §42.5.1 are legally required to perform a specific act. Name them and name the act each one permits.

A7. Define experience modification rate (EMR) and explain why it matters to a new contractor twice over — once as a cost and once as a market gate.

A8. In one sentence each, state what the following are for: CCM, PMP, PSP, CSP, LEED AP, OSHA 30. Name the body behind each.

A9. §42.6 argues that the first five years of a career should be chosen on a criterion other than compensation. What is the criterion, and why does it compound?

A10. What are the three kinds of people companies retain in a downturn (§42.7)? For each, say why the company cannot afford to lose them.

Part B — Applied Analysis ⭐⭐

B1. A project engineer with two years of experience tells you she is being held back because she does not have her PMP. She has never owned a cost code, never written a scope sheet, and has never sat in a buyout meeting. Diagnose the actual problem, and write the three-sentence reply you would give her.

B2. A superintendent with fourteen years of experience is passed over for general superintendent in favor of someone with eleven. The eleven-year candidate spent two years as an assistant project manager. Explain the decision using §42.1.3, and then argue the losing side as persuasively as you can.

B3. A project manager reports "on budget" every month from cost-to-date through month eleven, then discloses a 1.4-point margin miss in month twelve. His technical work on the job was excellent and the miss was caused by a subcontractor default that was genuinely not his fault. Explain why he will probably not be promoted anyway, and identify the single behavior that would have changed the outcome.

B4. Two candidates interview for an assistant project manager role. One asks about the bonus plan's payout history, which project she would be assigned to, and who she would report to. The other asks nothing and says he is excited about the opportunity. Beyond the obvious, what has the first candidate signaled to the hiring manager about how she will behave on a job?

B5. A company offers to pay for your CCM. You work at a private general contractor and have no intention of moving owner-side. Should you take it? Argue both ways, then decide, and state what would make you decide differently.

B6. A friend has spent nine years doing nothing but private office tenant interiors. She is excellent at it and the market for it in her city has just gone quiet. Using §42.7, describe her exposure and lay out a two-year plan to reduce it.

B7. Read the §42.4.5 offer-evaluation table. Choose the three questions you think are the most diagnostic and defend the ranking. Then identify one question the table is missing that matters to you personally, and say why it is not on the general list.

B8. A young project manager tells you proudly that he has not taken a full weekend off in five months and that his forecast is always the last one submitted. Connect those two facts, using §42.3.

Part C — Calculations & Deliverables ⭐⭐–⭐⭐⭐

C1 — A project bonus pool, worked. (Exercise premise, not a market figure.) A contractor's plan creates a project bonus pool equal to 15 percent of gross profit above the buyout target, gated on three conditions: no lost-time injuries, substantial completion without liquidated damages, and a closeout package delivered within 60 days of substantial completion. Miss any gate and the pool is cut in half; miss two and it is zero.

The Willow Street Community Center is a $6,800,000 contract. The buyout target margin is 5.00 percent. The job finishes at 6.10 percent.

(a) Compute the target gross profit, the actual gross profit, the excess, and the pool. (b) The job had one lost-time injury in month nine. Recompute the pool. (c) The closeout package is delivered on day 74. Recompute again. (d) In one sentence, state what this plan is actually paying people to do — and name a way a manager could game it that the gates do not prevent.

C2 — The cash trough, your numbers. You are a new specialty contractor. Contract $320,000, five months of roughly even production, cost $281,600 (a 12 percent margin), labor 65 percent of cost paid weekly, material 35 percent on 30-day terms, retention 10 percent, and money arrives 75 days after the end of the month you worked.

(a) Build the monthly cash table through the month the cumulative position turns positive. (b) State the deepest trough and the month it occurs. (c) Express the trough as a percentage of contract value and as a multiple of the profit. (d) You are offered a second identical contract starting in month two. State what happens, in one sentence, and name the failure mode from §42.6.8.

C3 — Comparing two offers on deltas. (Exercise premise.) Offer A: base salary $9,500 higher than Offer B; formal corporate bonus with a stated target of 8 percent of base that has paid an average of 6 percent to people at your level for three years; no vehicle; mileage reimbursed. Offer B: lower base; a company truck with fuel (assume a fair value of $9,600/year all-in for a vehicle you would otherwise buy and fuel); a project bonus that paid the equivalent of roughly 11 percent of base for the last two years but zero the year before that; a 40-minute longer commute each way.

(a) Compare the two on cash, treating the truck at its stated value and the bonuses at their actual payout histories rather than their targets, on a base of $100,000 for Offer B. (b) State which components you would treat as reliable and which as volatile, and why. (c) The commute is 40 minutes longer each way. At 240 working days, how many hours a year is that, and how would you weigh it? (d) What single additional fact would most change your answer?

C4 — Your five-year map. Complete the 📋 Try it drill in §42.10 in full: the ten-skill self-assessment with evidence for every score, the named target role with size and sector, exactly two capability gaps, the specific projects or experiences that close them, the credential decision with a reason, three named relationships, and twelve dated actions. One page. Then give it to somebody one rung above you and record, in writing, the two places they said you were wrong.

C5 — The capability inventory. From Case Study 2: list every step of a full project cycle in your current role and mark each D (done alone, end to end), H (done with help), or S (somebody else did it). Count the S items. Then write one sentence per S item naming the specific assignment that would convert it to H.

C6 — Sizing the first job. A superintendent going out on his own has $85,000 of usable working capital and access to a $40,000 line of credit. Using the trough ratio from §42.6.8 — roughly a quarter of contract value at a 60-day pay cycle with 5 percent retention — compute the largest single contract he can prudently carry. Then recompute at the C2 terms (75-day cycle, 10 percent retention) using that exercise's trough ratio. State the difference in one sentence, and say what contract terms you would negotiate first.

C7 — The résumé rewrite. Take five lines from your own résumé (or, if you have none yet, five deliverables from your Willow Street notebook) and rewrite each in the scope-and-outcome form of §42.9.2: size, scope, and result. Then, for each rewritten line, write the follow-up question an experienced interviewer would ask, and your answer.

Part D — Judgment & Ethics ⭐⭐⭐

D1. You are a project manager. Your forecast shows a 0.9-point margin miss, and your project executive tells you — not in writing — to "hold it at the current number until after the surety meeting next month." Lay out what you actually do, in order, and what you write down. Then say what you do if you are overruled.

D2. You are leaving your employer for a competitor across town. You have spent six years building relationships with subcontractors and two owner's representatives. What may you take with you, what may you not, and what should you check before you give notice? Where does the line sit between a relationship and a company asset, and who decides?

D3. You are two months from a promotion decision and four weeks behind on a critical-path activity. Your superintendent proposes a resequence that will work but will stack three trades in the same corridor for eleven days. Read finding #3 of the Northgate scaffold near-miss (Chapter 24) and then decide. What makes this decision harder than it looks on paper, and what would you have to be honest with yourself about?

D4. A recruiter offers you a role at a company you know has a reputation for aggressive claims behavior and thin subcontractor payment practices. The compensation is materially better. What do you need to find out, and where is your line? Explain what a reputation for that behavior costs you, personally, over a fifteen-year career in a fragmented industry.

D5. You are a hiring manager. A candidate's résumé claims she "reduced project costs by $1.2 million." In the interview it emerges that the savings came from an owner-driven scope reduction she administered. Is the résumé line dishonest? How do you handle it in the room, and what does your handling of it tell the candidate about your company?

Part M — Mixed / Interleaved Practice ⭐⭐–⭐⭐⭐

M1 — with Chapter 28 and Chapter 34. §42.3 claims that forecasting honestly and early is the highest-leverage career behavior in construction. Prove it with the machinery from those two chapters: trace exactly what happens inside a company when a job fades quarter after quarter, from the cost report to the WIP schedule to the surety's aggregate program to the pursuits that evaporate. Then state, in one sentence, why the lateness of a disclosure costs more than its size.

M2 — with Chapter 16 and Case Study 2. Aaron Delacroix's $46,000 scope gap fell between the drywall and acoustical ceiling packages. Using the scope-sheet method from Chapter 16, write the three scope-sheet lines that would have closed it, and identify which package should carry the work and why. Then explain what it means that a nine-year project manager could miss it.

M3 — with Chapter 34. You are interviewing at a contractor and they show you their published financial summary and backlog. List the six things you would look at, in order, and what each one would tell you about your job security and your bonus prospects. Then write the two questions you would ask out loud, phrased so that they are not insulting.

M4 — with Chapter 24 and Chapter 41. §42.8 argues that ambition is a mechanism by which schedule pressure becomes a physical hazard. Write the toolbox talk — 400 words, delivered to a crew of eighteen — that addresses schedule pressure honestly without either denying the schedule or telling people to be careful. Then write the four sentences you would say to the assistant superintendent who is transmitting the pressure.

M5 — with Chapter 33. §42.2 says AACE International credentials are close to table stakes in forensic and expert work. Look back at the delay analysis you built for Willow Street and identify the three places where a credentialed analyst's method would have been more rigorous than yours. Then decide whether that track interests you, and say why or why not in three sentences.

M6 — with Chapter 2 and §42.6.8. Chapter 2 lists the barriers to entry and calls bonding capacity "the real ceiling." §42.6.8 argues that working capital kills more new contractors than bonding does. Reconcile the two claims. Under what circumstances is each one the binding constraint, and which one binds first for a contractor doing $400,000 jobs?

Part E — Research & Extension ⭐⭐⭐⭐

E1 — Your state's licensing board. Find the contractor licensing authority for the state where you intend to work, and answer, from the primary source: Is a license required to hold a construction contract, and at what dollar threshold? Are licenses issued by trade, by classification, or generally? Is a qualifying individual with documented experience required? Are financial statements or a license bond required, and at what level? Does the state have reciprocity with neighbors? Then check whether the city or county adds its own requirement. Write it up in one page. Requirements vary enormously by jurisdiction and change; cite the board, and note the date you checked.

E2 — Real compensation data. Using the sources in §42.4.4 — published industry and association compensation research, and the federal wage statistics — assemble the current picture for two roles you might hold in five years, in the specific metropolitan area you intend to work in. Note the source, the date, and the sample basis for each figure. Then compare your metro to one large-market metro and one small one, adjust for housing cost, and write two sentences on what you learn. Do not use any figure from this book.

E3 — Go to a meeting. Attend one local association meeting — AGC, ABC, CMAA, DBIA, NAWIC, a trade association, or a student chapter — and go with a specific question to ask three different people. Suggested question: "What do you look for in somebody you would promote to run their own job?" Write down all three answers verbatim, note where they agree and disagree, and compare them against §42.3. Then send a two-line thank-you to each person, which is the actual exercise.