Heating and Air Conditioning Test - J. F. MECHANICAL LLC

LAW AND BUSINESS

Business Practices Office Practices:

Management

Statistics indicate that 90% of all bankruptcies and business closures result from poor management. Contractors usually possess the desire, experience and skills to create their own business, but they may lack management and business manager skills and training necessary to conduct routine daily office business.

Specific reasons for business failures include:

managerial incompetence
people incompetence
technical incompetence

The contractor learned the trade skills on-the-job, and when he/she becomes a business must learn management skills, including office functions, such as:

accounting
bookkeeping
inventory
people management
diplomacy
organization
time management
supervision

Management theory is divided into functional and behavioral areas. Functional areas of management include planning, decision-making and delegation, standardization and controls. Behavioral management includes human relations, cooperation, responsibility, communication and executive ability. Functional areas of management relate primarily to the technical side of business. Behavioral management deals with people relations and relationships.

Sole Proprietorship, Partnerships, And Corporations

The legal form of business refers to sole proprietorship, partnership and corporation. The legal form of the business may change as the business grows and should be reviewed as financing requirements change. The legal form determines the available sources of financing, extent of personal liability, control and tax liabilities.

A general partnership is not an entity separate from the partners. Each partner is personally liable to the extent of his or her personal assets and may be legally responsible for the negligent acts of other partners. A general partnership uses financial and personal resources of two or more individuals who share in the ownership and operation of the business. It requires business name registration and an attorney should be consulted regarding rights, responsibilities, management and profit sharing between or among the partners. Income is taxed as personal income for each individual.

A limited partnership allows investors to join in a partnership without taking full responsibility for the business. The limited partner risks only the original investment. There must be at least one partner who runs the business and who remains fully responsible for the liabilities of the business.

A sole proprietorship is set up easily, subject to minimum regulations; and business income is reported as personal income. Sole ownership is the simplest business organization and relies primarily on financial resources available to the individual. The owner has complete control, must obtain all the financing and is personally liable for any claims against th business.

A corporation is a legal entity set up by filing articles of incorporation with the Secretary of State. As an entity, it can make contracts, raise capital by selling stock, be held legally liable and is taxed as itself through Corporate Income Tax. Death of stockholder or sale of personal stock does not disrupt the business.

An “S” corporation must meet certain restrictions and can report the business income as personal income. This is designed to remove tax considerations from the decision regarding the form of business organization for the small business. An “S” corporation can operate in corporate form to reduce the owner’s liability, but it is taxed like a partnership. The benefit for small business is that it avoids the double taxation of corporate income.

Taxes and Compensation

Business owners must pay taxes and fees at the state, federal and local levels. If the business is a sole ownership or partnership, estimated federal and state income taxes must be prepaid, or paid quarterly.

Bonding is generally mandatory for large jobs. Lenders, such as savings and loans, insurance companies or commercial banks, require large jobs to be bonded. Bonds may be obtained from bonding companies for usually 1%-2% of the contract price. Bonding companies generally do not take risks without verifying the technical and resource capabilities of the bonded contractor.

Performance bonds guarantee the project’s completion according to the building plans and specifications. If the project is abandoned or if the work is unacceptable, the bonding company has the option of hiring another contractor to complete the work. The other option is for the bonding company to settle for damages.

Mandatory contractor bonds are those that the contractor’s law requires a contractor to carry. In accordance with Section 7071 of the Business and Professions Code, a contractor is required by law to carry specific contractor license bonds. The contractor must be aware that bonding requirements may exclude the new business from bidding on desired jobs. In general, the bonding company will not have to pay more than the face amount of the bond.

Insurance is a means of reducing a company’s exposure to unexpected property or casualty damage. Various providers offer insurance programs with varying degrees of coverage.

Finance

Financial statements communicate business information necessary for

planning
coordinating
control

Financial statements provide basic tools for analysis and information that can affect the business’ ability to react to change. This information can impact decisions, which will determine the potential for profit.

State and federal agencies frequently specify that certain records be maintained by contractors and businesses and be made available for government audits. Good financial records are essential to good business and, in some cases, are mandated by law, as for audits and to substantiate tax reporting.

Information summarized on financial statements from accountants includes:

job costs
cash receipts
operational costs

Accurate records provide information about cash receipts and are a basis for control of disbursements. Financial statements include total operational costs, individual job costs and other costs affecting profitability. The contractor can determine cash flow requirements of other jobs and help estimate future job costs by reviewing financial records.

Accounting And Bookkeeping

It is not necessary that contractors understand detailed accounting methods. Contractors must be familiar with, and understand, two fundamental accounting –systems: cash basis and accrual.

Cash basis of accounting may be appropriate when no pre-paid expenses, depreciable assets or inventories exist and when revenue is received during the accounting period.

The accrual basis of accounting allows the matching of revenues and associated expenses for individual periods of time. Accrual basis of accounting is often modified using the percent of completion method or by the completed contract method.

A statement of the financial condition of a business at a particular point in time is the Balance Sheet. The balance sheet is divided into two columns of Assets and Liabilities and Stockholders’ Equity (owner’s investment). Both sides are always in balance. Assets include physical goods and financial claims on others. Liabilities include claims of others on the company. Stockholders’ equity includes original investment of the owners plus undistributed profits earned by the corporations to date.

The Income Statement summarizes company operations over a period of time. The income statement states

income
cost of operations
direct labor
materials used
other direct costs
general and administrative expenses
pretax income
net profit for the year

Usually the largest single item contained on the Income Statement is the “Materials Used”. Materials comprise a significant portion of the total cost of contracting, so the account must be carefully controlled. Efficient purchasing is essential and must be ensured.

A major financial statement, also called the “Statement of Sources and Applications of Funds”, is the Statement of Changes in Financial Position. Statements of Changes in Financial Position indicate how funds were obtained and where funds were used. Generally, small operations do not generate this sheet; however, this document may be required if a contractor is going to be audited by certified public accountants for the purpose of presenting financial statements to creditors or others.

Assets

Land, buildings and equipment are fixed assets, which are expected to be useful to the business over several years. Fixed assets are not purchased for resale purposes and will usually not be sold until their economic usefulness expires. Fixed assets are shown on the balance sheet at “cost less depreciation,” which indicates the current value of the asset.

Depreciation is the decrease in value of a fixed asset due to time, wear or obsolescence. It is recorded in order to value the asset at any current date and to distribute the cost of the asset over its useful life. Depreciation is shown on the balance sheet as a direct deduction from a fixed asset and becomes an expense item on the income and expense statement.

Methods for interpreting financial relationships include:

1 comparing current data with past years
2 comparing current data with other businesses within the industry
3 interpretation using ratio analysis

Companies often compare 3-5 years of key items, such as revenue and net income, to establish trends over time. Industry data provided by agencies, such as Dun and Bradstreet, Inc. and Standard and Poor’s, aid in comparing individual company performance with those within the industry. The ratio is the relationship between any two figures within the current financial data.

For example:
If Current Assets are $100,000 and Current Liabilities are $50,000, the relationship of Current Assets to Current Liabilities would be $100,000/$50,000 or 2 to 1.

The difference between total current assets and total current liabilities is working capital. Working capital represents the amount that is free and clear if all current debts were paid off. A comfortable amount of working capital allows a company to meet its obligations and still take advantage of opportunities

Long-term creditors would be interested in the ratio of total liabilities to net worth. Banks or insurance companies, who are long-term creditors, are interested in these ratio measures which indicate relative proportion of the contractor’s assets supplied by creditors and owner. This ratio is useful in identifying the likelihood of default.

The company’s efficient use of its resources is measured by

net sales to net working capital
net sales to total assets
net income to net worth

A “low net sales to net working capital” ratio may indicate to a creditor that there is an excess of working capital or that there are inadequate sales in a specific company. Ratios are interdependent, and when receivables are reduced, collected cash may be used to reduce long-term liabilities and improve the debt ratio.

Capitalization is the total of financial resources available to the owner. Assessment of financial needs for current daily business is recognized first. Also critical to business is the need for additional financing of office expenses, licenses, payroll expenses, bonding, rentals, etc. and the difference between when the business gets paid and when the business must pay its own expenses. Insufficient cash liquidity and lack of working capital may result in business failure.

Contract retentions usually exceed profits and represent a claim on working capital.

Retention payments to the contractor may be held up for various project completion and contract reasons, which may be through no fault of the contractor. The total project must be complete before retentions are released. The issue is compounded for the subcontractor(s).

Private venture capitalists are good sources of equity funds. Equity funds can become available from private venture capitalists, small business investment corporations funded by the Federal Small Business Administration and minority enterprise small business investment companies. These sources are generally restricted to businesses with a proven profit track record within an expanding industry.

Bid Preparation Bid Analysis:

Bidding

Accurate bidding requires the contractor to plan the construction process on paper. Proper planning greatly improves individual performance and coordination and eliminates confusion. Time spent on detailed planning work assures the accuracy of cost estimates necessary for the contractor to make a profit. Accurate bidding requires the contractor to carefully review the job through an on-site inspection. Reviewing the job includes:

on-site inspection walk-through
review of plans and specifications
identification of equipment required
financing method
subcontractor needs

Required materials are determined from

take-offs
plans
quantities and measurements

Plan quantities and measurements for items are converted to costs on the estimation form. Prices must be obtained from published price lists and quotes from suppliers and subcontractors. Freight and sales tax must be included in the cost estimate.

Common pitfalls to avoid when bidding on a contract include overextending financial resources. When bidding on contracts, it is important to estimate and bid the contract, not be overly concerned about bidding against the competition. It is essential to understand the plans and specifications, plan sufficiently, and to not overextend current financial resources.

After advertising for bids, an accurate log of all sets of contract documents issued, who requested them, and the fee paid must be kept. An accurate log of all sets of plans, contracts and contract documents is kept to know the number of sets picked up by each bidder, the amount and form of payment or deposit, date issued and to whom according to firm name and address, and the firm’s pick‑up representative.

Addenda are issued whenever there are changes in the plans, after the contract has been put out to bid. Addenda are added to the bidding documents. They are mailed to each bid holder, or holder on the bid log, having obtained a set of contract documents. It is essential that all bidders have a full, current, and revised, set of contract documents on which to evaluate and submit a bid estimate price.

All contract documents are updated with the addenda, and all contract bidders who will be mailed the addenda updates will receive them by certified mail with a “return receipt requested.” These should be addressed to each bidder’s legal address, preferably not a PO Box.

When irregularities occur and all bidders do not receive identical bidder’s documents, there is sufficient cause to have all bids set aside and the entire project re-bid. When contracts must be re-bid, it can be costly as well as influence the amounts of each bid after each bidder had had the opportunity for full disclosure of the amount of the other bids.

A Bid Opening Report documents all bids received, including the name of each contractor and the amount of each bid. A Bid Opening Report is prepared by the administrator at the bid opening and is directed to the project manager for review. A copy is also kept for the official project files. Bids must be carefully examined at the time of opening to determine if they are responsive prior to recording.

Upon close of the bid opening session, each bidder must be checked for

financial responsibility
licensing
integrity

Bids must be tabulated and evaluated and each bidder checked according to prior history and solvency. When unit prices are the basis of the bid, each item must be evaluated, analyzed and compared among bidders.

The phase of evaluation of bid data is the bid-holding phase. Following the opening of all bids, but prior to determining contract award, costs and other contractually significant items, as well as recommendations to the owner for award of the contract, are made during the bid‑holding period.

A responsive bid is one that meets all the requirements specified in the Notice Inviting Bids and Instructions to Bidders. To be responsive, all bids must

include all required documents and be submitted on time
have all forms properly completed
have all forms signed and dated by a responsible party
have any required bid bond executed on the prescribed form, which is attached to the bid

On unit-price bids, all items must be filled out and no changes or alterations of any of the documents are permitted.

Non-responsive bids must be rejected without being entered into the record. If the low bidder is non-responsive and the second lowest bidder challenges the bid, contention of award may result in potential

forfeiture of awards
litigation
re-advertising of the contract

The issue of whether a bid is responsive may result in more serious issues than at first conceived. For example: if the apparent low bidder fails to sign one of the minor documents prior to submittal, is challenged by the second lowest bidder suggesting disqualification, it becomes the responsibility of the award committee to determine who receives the award. When award contention threatens to go to litigation or in any way delays beginning the project, the best solution may be to re-advertise the contract, knowing that the second time around bids quite possibly will be higher.

Pre-qualification of bidders on public contracts is considered a cornerstone of the competitive bid process and statute. Some, but not all, states maintain a pre-qualified bidder list, which is generally used for public works projects. When awards are made to pre-qualified contractors on private work, surety bonds might be eliminated if the financial stability and performance record of the contractor is proven to have been satisfactory in the past.

A bid bond may be accepted as bid security, which assures the owner that if the contract is awarded to the successful bidder, that bidder will enter into contract with the owner. Bid bonds are preferably in the amount of 10% of the bid price for the project and are preferable to other securities since it is less burdensome on the contractor.

A balanced bid is one in which each bid item is priced to carry its share of the cost of the work, as well as its share of the contractor’s profit. Contractors sometimes raise prices on particular items and make corresponding reduction of prices on other items without changing the total amount of the project bid.

The purpose of unbalanced bidding is to

receive excessive early payments for first items of work completed
build up the contractor’s working capital
encourage particular types of construction
discourage certain types of construction in exchange for more favorable construction
increase profit in actual payment of the work without increasing the apparent total amount of the bid
eliminate the contractor’s financial squeeze, caused by the usual 10% retention money, by building up capital
(For unreliable contractors) get excessive early payments and then default on the contract, leaving the surety to complete the contract with insufficient funds remaining.

Subcontracting

Bid peddling and bid shopping are the unfair practices of shopping around for other subcontractors by the prime contractor (the prime), after a subcontractor has been notified of selection.
Where no laws exist to shield a selected subcontractor, it is an unfair practice of the prime to shop around for other subs who might underbid the selected subcontractor’s original bid. The act is varied to include primes who withhold submittal of their bids until the last moment allowable before closing of the bid acceptance period and negotiating last minute price concessions with subcontractors in order to get the lowest bid. They then submit their prime contractor bid right before bid closing.

Bid shopping and bid peddling generally result in

poor quality work
substandard materials
deprivation of fair competition
business insolvency
loss of wages to employees
other inequities due to unfair competition imposed among prime contractors and subcontractors

It is the responsibility of the subcontractor submitting a bid to a prime to submit a performance bond and payment bond, if so requested by the prime. In the event any subcontractor submitting a bid fails to submit requested bonds from an issued surety, naming the prime as oblige, the prime may reject the subcontractor’s bid and substitute another subcontractor, subject to the same requirements.

When asking a subcontractor to bid on a portion of work, the prime must not sign the subtractor’s contract until the prime has actually been awarded the contract. The prime may take bids from subcontractors, but delay entering into sub-contracts until he or she is sure of prime contract award.

Estimating bid price:

Principal items to be considered in preparing a bid include:

materials
labor
overhead

Materials are considered by most contractors to be a figure that can be fairly accurately determined. Labor is the most difficult item to estimate. Overhead is frequently not completely covered in estimating, and is applied at at a mark-up percentage. Profit is an amount, which will depend upon the policy established by management, and is also applied at a mark‑up percentage.

Materials

Required materials for the project are determined by plan quantity measurements, which are converted to costs on the estimation form. Materials prices may be obtained from published price lists as well as quotes from suppliers and subcontractors. Sales tax and freight costs should be included in the cost estimation.

Cash discounts should not be included in materials cost estimates unless the contractor is certain that sufficient financial resources will be available so accounts payable will be repaid during the discount period. Accounts payable may be prepaid during the discount period, in which case the contractor, confident there will be sufficient funds available, may include cash discounts in his/her materials cost estimate.

Labor

Labor is calculated according to work classification. Labor costs include:

the hourly wage and payroll taxes
health and welfare benefits
vacation pay
required insurance

Wage settlements may affect these rates as well as job actions, which can affect worker availability. Basic labor and overall wage rates and labor costs for estimates can be affected by wage settlements and personnel contracts and union agreements. Project management after the contract is awarded can impact contract bid prices as well..

Direct and Indirect Costs

Other costs, which must be included, are costs for permits and other fees, borrowed funds and additional insurance, which are all considered direct costs. Direct costs, which must be examined, include:

interest
loan
commitment fees
points
other charges on borrowed funds
equipment (owned or rented)
any additional required insurance

These costs are effectively covered in the bid estimate by treating each item individually.

Equipment fuel and general maintenance are considered indirect costs. Small tools, fuel and lubrication and general equipment maintenance are indirect costs, which should never be overlooked.

The direct labor burden includes all payroll taxes, insurance and employees’ benefits assessed against the labor payroll. Labor payroll is an estimated direct cost, and the amount of labor burden varies in direct proportion to the payroll. Direct labor burden items should be figured and listed under overhead expense.

Supervision should be charged to individual jobs and should not be included in direct labor estimations. Direct labor comprises the actual cost for labor payroll for all jobs during the period covered by the contractor’s income and expense statement. Supervision cannot be accurately charged to direct labor and should therefore be a charge to overhead.

Overhead and Profit

Overhead costs normally include general administration and office expenses, including wages and bad debts. An appropriate portion must be allocated for overhead expenses, which include among other things, office rental, supplies, wages, advertising, bad debts, storage charges and general administrative costs. Overhead is applied at a mark‑up percentage.

A net loss is very likely to result if the contractor is not applying enough to the bid to cover his overhead on each job during the period. Errors multiply by the number of jobs. The statement at the end of the next period will likely result in a net loss if it is managed in retail form, which does not properly segregate direct costs and overhead expenses enabling the contractor to realize his operations for the period covered. Income and expense statements not prepared more than once a year can result in financial problems and possible bankruptcy.

Smaller (and mid-sized) contractors generally have higher percentages of overhead due to the fact that, as sales volume increases, overhead percentages decrease.

The income and expense statement serves as the best resource for estimating the amount of percentage for overhead. For this reason, preparation and use of financial statements monthly, and certainly quarterly, is essential. Accurate expense and income statements at the end of the previous period may establish the true overhead to cover expenses for the next period.

Calculating Overhead Percentage

If sales for the year equal $10,000 and overhead expenses equal $2000, the overhead percentage of sales for the year equals 20%.

One of the most accurate ways of arriving at an overhead percentage is in terms of selling price.

In our example, $2000 / $10,000 would be 20% of sales

Profit is essential to the continuation of business and must be included in the project cost analysis. If the allowance of the bid is low margin and there is a chance of underestimation, omitting the profit may jeopardize a contractor’s business. Insufficient profits threaten capitalization and cash flows. Losses reduce retained earning while cash flow payments to vendors may exceed receipts to the extent that bankruptcy and dissolution may result.

Profit must be added to the total project cost. It represents the return to the contractor for bearing risk. Profit is applied at a mark‑up percentage.

If total direct costs equal $1000, and the total overhead is 20%, to make a 5% net profit, the contractor must bid $1333.33. Here’s how this is figured:

Overhead is 20% of the total price of the job and profit is 5%. So 25% of the job is made up of overhead and profit. The total direct costs are the other 75% of the job. Taking the figure of $1000 for direct costs and dividing it by 75% or .75 we get a selling price bid of $1333.33.

Alternative Overhead and Profit Methods

Overhead and profit are added to the project using a mark-up percent based on the total job price. The simple method of adding overhead and profit markups to the total cost is to use the industry %. Overhead markup is generally 15% of the total job price. Profit markup is 5% of total job price.

When the total estimated project cost is not known, use the mark-up equation to calculate overhead and profit to get the total price. Instead of multiplying the total costs by the markup percentage, divide the total costs by the remaining mark‑up percentage.

Example: Total Cost = $100,000

Profit & Overhead = 20%  100% - 20% = 80%

Total Project Cost = $100,000 / .80 = $125,000

Speculative retention funds may be calculated as a percentage of the current month’s billing, or by holding an amount equal to 10% of the total project cost. Retention funds provide a sum of money available to the owner for the satisfaction of lien claims, which may be calculated in each monthly payment. So the owner never holds onto more than perhaps 10% of any month’s earnings, the amount held at the end of the project is equal to approximately 10% of the entire project cost.

Construction unions provide added stability to the bids of contractors by eliminating the labor rates as a competitive bid item. Unions provide direct access to pools of skilled and experienced labor from which a contractor can tap as his/her needs require. This allows the contractor some flexibility regarding labor needs. Through negotiated labor contracts, fixed wage levels are also established which uphold the living standards of the workforce as well as relieves pressure on the contractor regarding competitive bidding labor concerns.

Contractors are reluctant to breakdown lump sum bids and bid items due to the possibility of extra work, negotiated later, that might be affected as a result. Unit bid price breakdowns of lump sum bid items create the problem of determining the value of portions of work performed. The purpose of lump sum breakdowns is primarily for monthly progress payments to the contractor for portions of work performed of a major work task. Frequently, a contractor may be concerned that revealing unit prices for various individual items may jeopardize costs of any extra work that might be negotiated.

Contracts Contract Analysis:

A Home Improvement Contract or Performance Contract

Is a mutual agreement between two or more people for performance and compensation of an act. All Home Improvement Contracts must contain

details of parties in agreement to proposed work to be performed
compensation
lien rights and provisions
cancellation provisions
both parties’ signatures

Other items included in all Home Improvement Contracts are

name, address and license # of the contractor
1 name & registration # of any salesperson
2 approximate starting and substantial completion dates
3 description of work
4 plans
5 materials
6 equipment
7 contract price
8 schedule of payments
9 statement of Unconditional Release lien rights
10 statement of right to obtain Performance or Payment bonds
11 statement of contractor’s failure to commence work in a prescribed time period results in violation of the contract
12 Disclosure Notice
13 where the contractor may file any complaint with the State board
14 “Notice to Owner”
15 Notice to Rescind
16 both parties’ signatures
17 any other matters that the customer and contractor agree upon

In accordance with the contract, the contractor must commence work within 20 days from the start date set forth in the contract. Failure to do so without a lawful excuse results in violation of the contract.

Violation of any of the contract requirements may result in a fine of $100- $5000 each. Violation of provisions and terms contained in the contract constitutes a misdemeanor with appropriate fines assessed at the discretion of the owner.

To be enforceable, the contract is required to include a time frame, which designates an approximate time for completion, specified in working days. To substantiate the required time frame, approximate start and substantial completion dates are required along with a definition and description of what constitutes “substantial completion” of work.

Contract Types

Contractual agreements between a builder and owner may be

unit price
lump sum
cost-plus
guaranteed-maximum

Contracts are of varying types, depending upon the method of payment in accordance to the type of work performed, time period in which the work will be performed and materials used, and equipment necessary to complete the work.

A unit price contract specifies quantity and number of units of particular materials for use in project construction. Each necessary-to-complete construction item contained in the contract is specified by quantity, type, unit measure and cost per unit measure. Payment will be made according to the successful installation of each item.

A lump sum contract specifies one payment of a specified amount applicable to the project completed in its entirety. The completed project will be paid according to the lump sum amount specified in the contract. Depending upon complexity of the project, the lump sum amount is generally broken down and paid according to percentages of completion of various phases of work completed during the course of construction.

Only having the ability to do what has been granted and authorized, prior to work commencing, is a characteristic of a publicly held contract. Publicly held contracts limit the authority of the contractor with regard to laws of risk and responsibility. The particular jurisdiction has the final say of the extent of the contract, including change orders, or any other additions or corrections to the original contract. Some jurisdictions may require any change order work or changed scope of work be put out to subcontractor bidding and go through the process prior to commencing th work.

Contract Laws

The Notice to Owner contained in the contract informs the customer of his/her lien rights. The Notice to Owner, which explains the Mechanics’ Lien rights on the customer’s property if the contract is not paid, must be given to the customer prior to signing the contract.

The Davis-Bacon Act applies to labor standards and wage rates on contracts where any federal funds are intended to be used. That act is a federal law that determines the minimum wage rates and fringe benefits that must be paid to all workers on all federal and federally assisted projects. It applies to all projects over $2000, and it specifies that workers’ wages must not be less than the wage rates specified in the schedule of prevailing rates of wages as determined by the Secretary of Labor for similar work on similar projects.

The Fair Labor Standards Act, or Equal Pay Act of 1963, provides that an employer may not discriminate on the basis of gender by paying employees of one gender at lower rates than employees of the other gender. The Fair Standards Act, as amended by the Equal Pay Act of 1963, covers employees 16 years old and older. It provides that neither gender is entitled to higher wages than the other gender, and that there shall be equal hourly compensation for doing equal work on jobs requiring comparable skill, effort and responsibility, performed under similar working conditions.

The National Apprenticeship Act promotes cooperation between management and organized labor in the development of apprenticeship programs. Traditionally apprenticeship programs have been a joint effort between union-shop contractors and the AFL-CIO building trades unions. National apprenticeship standards were established in 1971 for employees of “open shop” contractors.

Included in the contract and project design are safety features that are intended to be implemented and administered in accordance with OSHA Safety and Health Standards. Compliance with recognized safety and health work practices should be made mandatory. If no mention is made in contract documents or on the plans, primary safety obligations become legal obligations of the contractor, between himself/herself and the state and federal agencies administering OSHA provisions.

Contract documents should require that evidence of insurance be submitted at the time of submitting the performance and payment bonds. Submittal of evidence of insurance must be in a form that discloses the total policy coverage, not just a statement certifying coverage was obtained. The project manager should maintain a Bond and Insurance Record as well.

Prior to signing a contract, the contractor must thoroughly review

all plans
specifications
payment schedules
how change orders will be handled
work hours
materials deliveries
all other concerns

Everything must be clearly explained and understood and all questions answered before signing the contract. Pre-construction meetings are held specifically for this purpose.

Upon award and acceptance of the contract, a pre-construction meeting is scheduled with the intent of calling the contractor’s attention to critical areas of construction, as well as to establish “ground rules.” The pre-construction meeting introduces and allows personnel on both sides to be part of defining the responsibilities and authorities of each. Procedures, submittals, sampling testing surveys, inspections, payments and procedures for claims and disputes are some of the issues discussed.

The contract must be agreed to by all parties, and signed by all parties to be a legal, enforceable document. Signature indicates agreement and binding of all terms and provisions contained in the contract.

Contained within the contract specifications are contractual allocations of risk that will be assumed by the contractor and owner during construction. Various types of risk and allocation of responsibility are contained in contract clauses. A clause that clears or tends to clear from blame may be inserted as well. This is called an exculpatory clause and is intended to shift the responsibility, for example, from the designer’s errors and omissions to the contractor. Allocations of risk denote who is lawfully responsible and liable for violations under the law in connection to the work. Responsibilities are usually the contractor’s; however some may be shared with the owner, such as acts of God and weather extremes, etc.

The purpose of a down payment is to provide a sum of money available to the owner for the satisfaction of lien claims due to the failure of the prime to pay its subcontractors, etc. In case of default, the retention of funds may be utilized by the surety to complete the work. Otherwise, the funds are a means of holding the profit that the contractor makes on a given project.

When there is a discrepancy between various parts of the contract documents, legal precedence establishes the Agreement as the governing document. General Conditions within the contract cite the specific order, so a dispute may be settled without the need for interpretation or arbitration. The legal precedent dictates that the Contract Agreement has priority followed by Specifications and Plan Drawings.

Change Orders are amendments to the existing contract for work added, deleted or changed. Change Orders must always

be in writing
contain the name and address of the contractor
contain the contractor’s license
contain signatures of both parties
contain approximate starting and ending dates
contain the project address or location
“Notice to Owner.”

A Notice to Rescind or Notice of Cancellation is appropriate and acceptable if the contract is made away from the appropriate trade premises. A formal contract must be made on the trade premises, not, for example, at the contractor’s home. In that case, the customer is entitled to cancel or reject the contract within a reasonable and prescribed time period. If the customer proceeds to sign a contract at the contractor’s office, the right of cancellation within the time period does not exist.

The 3-10-20 rule applies to allowable cancellation time periods for contracts. The customer has a right to cancel a contract not signed on the premises up to midnight of the 3^rd business day. If a customer cancels the contract, the contractor has 10 days to return the money, and the customer has 20 days to make materials available for contractor pick up.

The Lien Release is used to pay the contractor when contract work has been accepted.
The Lien Release’s purpose is to state that the customer accepts the work and it states that the contractor is paid, thereby releasing property from Mechanics’ Lien rights.

The Notice of Award does not authorize the contractor to begin work. The Notice of Award is similar to the issuance of a letter of intent and obligates the owner to sign the construction contract if the contractor can execute what the contract requires. It does not constitute the start of work, since the beginning of work should not start until after the owner and contractor have both signed the agreement.

Most agencies allow a 10-day period after the issuance of a formal Notice to Proceed for the contractor to begin work. The contract cannot provide a specific commencement date because of the uncertainty of when work can feasibly begin. Before the contract can begin, the contractor must gain access to the job-site. Some owners attempt to base the start-date on the date of execution of the agreement. Since it takes days to weeks for the contractor to get a copy of the Executed Agreement, the Notice to Proceed cannot logically be issued until after the effective date of the Agreement.

The contractor is given 7 days after the date of commencement, as stated in the Notice to Proceed, to submit for acceptance the preliminary construction schedule. A detailed schedule submitted by the contractor describes the work activities and procurement to be accomplished in the project and their dependency relationships, timeline and critical path elements and functions.

Liquidated damages may be assessed for the contractor failing to substantially complete the project within the final specified completion date time frame. Liquidated damages are assessed using a formula based on allotted time of the contract and bid price of the contract. Liquidated Damages assessments are calculated costs per day for failure of the contractor to complete the job, or negotiate a time extension. Recently, there have been successful actions to collect liquidated damages for failure of a contractor or subcontractor to meet various specified key dates for completion of specified portions of work affecting the prime to deliver his/her portion of the work on time.

The original contract amount is multiplied by .15, and then divided by original time for physical completion. This would give you the liquidated damages per working day.

Acceptance of final contract payment by the contractor may, in some jurisdictions, terminate the liability of the owner. The final payment should not be approved for release until after formal acceptance of the “work” by the owner is evidenced by the execution of a formal Notice of Substantial Completion, and/or, Notice of Completion. At that time, when public access to the work site can safely resume, liability may be terminated.

Contract Operations Planning:

Profits

Can quickly be reduced due to lack of

planning
scheduling
lack of coordination

If the estimation is properly done, the job is broken down into a job schedule in order to arrive at labor hours needed to complete the project. Scheduling is also used to ensure that material, equipment and labor all arrive at the jobsite at the appropriate times.

In order to produce a coordinated project plan, the principal subcontractor’s schedule should be entered into the planning stage and is just as important as the prime’s schedule. The contractor, or prime, sets the general timing or scheduling of the project. The individual subcontractors review their portions of work and the necessary alterations to the schedule are made.

Maintaining a small payroll and expanding the workforce as necessary using union halls can control costs. The contractor must be knowledgeable about the union’s master labor contract in order to plan for, and schedule, subcontractors. Subcontractors should be chosen on the basis of their ability to perform, as well as cost, since delays can quickly deplete potential savings of the lowest bid.

Scheduling

A simple scheduling method commonly used for many years is a bar chart. Gantt charts are the basis for bar charts, which were originally used for production scheduling, but increasingly are used for planning construction and recording its progress. Its primary advantage is its simplicity and its ability to be understood by all levels of management.

The Program Evaluation Research Technique system, known as PERT, primarily deals with estimating the probability of completing a project within a specified time. It is primarily a tool used by the military and aerospace projects concerned with completing a project within a specified time frame. The critical path method (CPM) is intended to achieve improved time management over construction projects or projects that have been previously done where the approximate time to completion is known.

Critical Path Method

A scheduling method used for large complex projects, which is also the most effective planning tool is the critical path. It helps identify the order and interdependence of events. The basic concept of the critical path method (CPM) is to show the start of each given activity and its dependence upon the completion of proceeding activities and how its completion also restricts other activities to follow.

The first step in the CPM procedure is project planning. The planning phase of the CPM includes:

identification of the basic work items necessary to complete the specified work
determination of what tasks must be completed prior to each work item beginning
establishing a logical work order of the work items necessary to complete the project
preparing a network diagram of the process from beginning through to completion.

Any single identifiable step in the total project, as indicated in the CPM, is an activity.
The number of activity subdivisions within any project depends on the number of practical considerations, such as:

areas of responsibility
categories of work according to craft or crew
categories of work by equipment requirements
categories of work by materials
locations of work
breakdown for bidding and payment
estimating or cost accounting
Outage schedules or limiting times for utilities, connections, relocations, etc.

Scheduling leeway is also called float. When an activity has float time available, the extra time may be used to extend the duration of an activity, delay beginning an activity or a combination. It is mathematically the difference between the early and late dates for an activity.

Free float is the amount of time any activity can be delayed without adversely affecting the early start of the following activity. Free float is the least difference between the early finish of an activity and the early start of the next and following activities. Free float provides an accurate measure of how much an activity can be delayed or extended without adversely affecting any other activity except to the extent that it is a part of the total float of preceding activities.

Total float is the amount of time that an activity can be delayed without adversely affecting the overall time for the project completion. An activity having a total float can create tighter scheduling restraints on all other activities since the total float is shared with all activities.

Project management:

Before beginning any work, EVERYTHING must be re-checked for changes or revisions. Law and business emphasizes checking and rechecking everything before signing contracts and particularly before beginning any work. Plans and specifications must be reviewed for potential errors. Additional codes that may apply must be discussed.

Communication is one of the most valuable and important tools a project manager has.
Whenever possible, communicate with the contractor and encourage reciprocal communication. Respond to questions as soon as possible. During critical phases, complaints should be noted and addressed by the end of the critical phase.

To help ensure the project goes smoothly, the project manager should

communicate work specifications as clearly as possible
respond to complaints as soon as possible
maintain continuous two‑way communication
review plans and specifications
answer all questions prior to work commencing
pay attention to unpaid bills and regular invoicing
put all change orders and extras in writing
conduct periodic punch list walk-throughs as well as a final walk‑through.

For contractors performing public works projects, an additional requirement necessary to eliminate poor work and provide safer conditions, is the listing of all subs involved in excess of one-half of 1% of the job. In an effort to eliminate poor quality work and provide safer work conditions, the government may assume and complete the job if performance is inadequate. Prime contractors must list all subcontractors in excess of one-half of 1% of the job and cannot substitute any subcontractor listed in the bid. Bid shopping and bid peddling are strictly prohibited and performance or payment bonds are required.

To provide safer working conditions, public works projects exceeding $25,000, must have any excavation or trenches 5 ft. or more in depth shored to brace the trench walls to protect workers from potential ground cave‑ins.

The foreman/supervisor is responsible for conducting safety meetings every 10 working days. Although a journeyman is a worker qualified to perform without supervision, the foreman/supervisor is responsible for training and evaluating workers at or below journeyman level and are required to conduct safety meetings every 10 working days in accordance with OSHA requirements.

The contractor is responsible for scheduling inspections, on-site safety and all on-site and off-site duties. The contractor is generally responsible for scheduling inspections, providing or making sure drinking water, first aid kits, safety equipment and supplies are on-site. It is also the contractor’s responsibility to provide one bathroom for every 20 employees.

The contractor is responsible for ensuring his or her subcontractors are licensed, insured, that all payments are made to employees, codes are followed, etc.

Dig-alert notification must be made 2-14 working days prior to digging or excavating. The local Dig-Alert Center must be contacted and the inquiry number is required for the permit to be issued to the excavator. Location of the trench or excavation work should be marked in white paint.

Plans must be updated if substantial improvement is made to an existing structure.
Substantial improvement to a structure or improvement project area requires plans be updated as “as-built drawings” and archived so future engineers, planners and contractors can see what and how improvements occurred.

Progress payments cannot exceed the value of the work performed. At any given time, no progress payment may exceed the value of the work performed, or be in excess of completed and approved work. Progress payments are generally on a regularly scheduled basis (per month), which also negates the necessity for partial payments for work performed.

Frequent, as well as final walk-through, punch lists and inspections are to be done to ensure all work is completed and performed within code requirements and specifications. Frequent and documented or videotaped walk-through, inspections and punch lists are necessary to ensure work is up to contract quality and specification and that the owner approves of the work. Frequent reviews allow corrections to be made in a timelier manner during project construction, which mitigates delays of final project completion and acceptance. Final punch lists and walk-through should not be delayed. Once the work is approved, a signed completion agreement should be made.

Upon successful completion and full payment of a project phase or of the project in its entirety, the owner may request a waiver and release from further maintenance and responsibility for the project. Types of waivers include: Unconditional Waiver & Release on Final Payment: which is used only if work is complete and the contractor has been paid in full, and no more conditions need to be met; Unconditional Waiver & Release on Progress Payment: which is used only if a phase is complete and payment for the particular phase has been paid in full; Conditional Waiver & Release on Final Payment: which is used only if work is complete, but full payment has not yet been made and some condition remains to be met and Conditional Waiver & Release on Progress Payment: when a phase is complete but payment for that phase has not yet been paid in full.

Contract laws are laws and regulations which affect the making of both public and private contracts. The performance of construction contracts is regulated by laws. Licensing laws govern business practices as well as the personal qualifications standards of people involved in the construction process. There are laws governing the execution of the work being performed under the contract. These laws concern issuance and conformance to the conditions of the various permits, regulation, ordinances and other requirements of the jurisdictional agencies involved. There are laws related to dispute settlements which potentially develop out of performance of the contract.

If a contractor fails to provide compensation insurance on an employee and an injury occurs, the contractor must pay the disability compensation plus a 10% penalty. In the event of an injury, failure of a contractor to provide insurance compensation for an employee results in a legal presumption that the injury was caused by the employer’s negligence. The contractor pays attorney fees in addition to disability compensation plus 10%. The contractor must also supply all necessary medical treatment and is liable for damage in a civil action. “Contributory negligence of the employee is no defense” (Sections 3706, 3708, 4554 and 4555 of the Labor Code).

If any occupational safety or health standard results in death, or the prolonged impairment of the body of any employee, the employer shall be

punished
fined
imprisoned

Every employer, and every employee having direction, management control or custody of any other employee, shall, upon conviction, be punished by fine of not more than $10,000 and/or imprisonment of not more than six months.

The Department of Industrial Relations, Division of Labor Standards Enforcement may issue a stop order prohibiting the use of employee labor until insurance is provided to contractors who fail to secure the payment of compensation. Failure of the contractor to secure payment of compensation may also result in the Department of Industrial Relations, Division of Labor Standards Enforcement obtaining a restraining order in superior court against the contractor, issue a penalty assessment order requiring the uninsured contractor to pay a $2000 penalty for each employee employed on the date of injury in non-compensation cases and $20,000 for each employee in compensable cases or record a lien against the of the contractor’s real and personal property as a security interest.

Liability and Insurance

Many construction contracts include a clause that assumes the liability of someone else toward third parties and third party damages. This is recognized as assumed and contractual liability. Contractual or assumed liability is recommended insurance policies of contractor and subcontractors requiring blanket contractual liability. Assumed liabilities can then be covered automatically. Such clauses covering contractual liability generally read as ”hold harmless” and “indemnity.”

The Broad Form Comprehensive Liability Policy is the one usually recommended liability insurance policy for construction projects. The Broad Form Comprehensive Liability Policy is a comprehensive general public liability insurance that protects against legal liability to the public.

Basic liability insurance covers problems with the client or his/her property or poor workmanship. Liability insurances cover poor workmanship, but not the actual work. It does not pay for the poor workmanship; however, but rather only for the damage it causes.

Claims made is a primary type of liability insurance which covers claims made only while the policy is in force.

Business insurance covers project stoppages. Business interruption insurance, also known as business insurance, covers interruptions, such as lawsuits, owner absenteeism, severe weather, etc.

Property insurance covers the contractor’s property, tools and office against fire, storm theft, etc. but it does not cover the employees’ tools and equipment.

For larger companies, the umbrella policy is the coverage that goes beyond standard policies. New businesses would not consider this insurance as an option since it is more expensive because it goes beyond standard insurances. It is more suited for larger, more established companies that can afford the extra coverage.

While health insurance covers health care and related health issues, key-person insurance covers the loss of a contractor’s key-person. Loss of a key-person who performs a critical role in the business is compensated through the key-person insurance policy. Compensation is paid to the business owner for loss of the key‑person.

During project construction, builder’s risk insurance will protect the property and site against vandalism. Builder’s risk insurance protects employees and property at the site against fire, storm, theft, vandalism, etc.

Vendors and subcontractors:

The prime may submit requested subcontractor information as late as 24 hours after the deadline for receipt of bids to the commission by the prime. When the officer, department, board or commission requests information, beyond name and location of business, about any subcontractor the prime has listed, the prime has 24 hours after the “receipt of bids” deadline to comply.

Subcontractor Substitution

Substitution of a subcontractor listed in the original bid may be approved when the listed subcontractor fails or refuses to execute a written contract. A subcontractor listed in the original bid may be replaced when the written contract, based on general conditions, plans and specifications for project involvement, is not honored. If work has failed to be sufficiently performed by the listed subcontractor, he/she may also be replaced. A reasonable opportunity must be afforded the subcontractor to execute and complete the contract work before substitution action can begin.

In the event the subcontractor fails or refused to meet the bond requirements of the prime contractor, the subcontractor may be substituted or replaced. When the subcontractor fails to meet bond requirements, becomes bankrupt or insolvent, or is found to be unlicensed pursuant to the Contractor’s License Law; the subcontractor may be replaced and/or substituted.

When the subcontractor is found to have performed unsatisfactory or substandard work, the authorized officer may require the subcontractor be removed and substituted.

When the awarding authority determines the listed subcontractor has not satisfactorily performed the work, or not in substantial accordance with the plans and specifications, or if it is determined that the subcontractor is not a responsible contractor, the subcontractor may be substituted.

Prior to approval of the prime’s request for substitution, notice shall be given to the subcontractor

in writing
by certified or registered mail
allowing for the subcontractor to submit written objections

If the subcontractor submits written objections within 5 working days, the awarding authority will notify the subcontractor in writing within 5 (more) working days of a hearing by the awarding authority on the prime contractor’s request for substitution.

The prime may not deviate from the original bid and listed contractors unless approved by the awarding authority, or in instances of

change orders
deleted work
additional work

In the event of a clerical error in listing a subcontractor, or claim, the prime has 2 working days after the bid opening to give written notice to the awarding authority. Copies of such written notice given to the awarding authority regarding the clerical error or claim must be also given to the subcontractor the prime claims to have listed in error and the intended subcontractor who had bid to the prime prior to bid opening. In turn, the subcontractor has six working days from the time of the prime bid opening in which to submit to the awarding authority and prime, written objection to the prime’s claim. Failure to submit written objection is taken that the subcontractor is in agreement with the prime’s claim.

A stop notice upon public entry may be served by the subcontractor in charge of hazardous materials activities if the prime fails to pay the subcontractor. A contractor’s failure to pay the subcontractor for investigation, removal or remedial action or disposal relative to the release or presence of hazardous material or hazardous waste within 10 days after the investigation, removal or remedial action, etc. is completed, may result in the subcontractor issuing a service stop notice.

Upon request by the prime, the subcontractor is responsible for submitting faithful performance and payment bonds. The prime may rightfully reject any subcontractor’s bid if the subcontractor fails to furnish, at the expense of the prime at the established charge or premium, a bond or bonds issued by an admitted surety where the prime is named the oblige, guaranteeing prompt and faithful performance of the subcontract and payment of all claims for labor and materials furnished or used in the work.

Only in cases of public emergency shall the prime’s total bid be permitted in excess of one-half of one percent without specifying a subcontractor. Subletting or subcontracting of any portion of work exceeding one-half of one percent of the prime’s total bid to which no subcontractor has been listed is only permitted in cases of public emergency or necessity and then, only if a public record of the awarding authority sets forth the facts constituting such work in writing.

A prime who violates any provisions of Section VII, Subletting and Subcontracting, Chapter 14, Subletting ad Subcontracting Fair Practices Act may be notified by the awarding authority of cancellation of his/her contract. Violation by the prime of any of the Subletting and Subcontracting provisions may result in cancellation of contract as well as assessment of penalty, not to exceed 10% of the amount of the subcontract involved. The penalty assessment is to be deposited in a fund out of which the prime contract is awarded. The prime is entitled to, and will be notified 5 days in advance, of the time and place of a public hearing,.

Safety

Employee Safety and Record Keeping:

OSHA’s primary responsibility is to

provide safety in the workplace
enforce standards
investigate injuries

OSHA is approved and monitored by Federal OSHA. Its function is to ensure safe and healthy workplace environments. OSHA conducts routine workplace inspections, investigates job-related accidents, illnesses and complaints and implements state, as well as federal, safety practices and policies.

Record keeping requirements include creating and maintaining records of near-misses, which ultimately must be investigated. Records of accidents, work-related injuries and property losses, occupational illnesses and near misses must all be reported for investigation.

The materials safety data sheet is a list of hazardous chemicals in the workplace that is part of the written hazard communication program, which must be maintained in the workplace. The MSDS, materials safety data sheet, must be prepared and maintained as part of the OSHA Hazcom Program in accordance with the HCS. OSHA’s published HCS, Hazard Communication Standards, applies to all employers whose employees are exposed to hazardous chemicals in the workplace. The HCS’ primary concept is that every employee has a right to know the hazards and identified of the chemicals they are exposed to while working. Manufacturers or sellers of hazardous substances and materials must prepare MSDS’s and voluntarily provide them to anyone who purchases the materials.

Job Site Safety:

“Safety and Health Protection on the Job,” posters must be located in a conspicuous area in the workplace. OSHA requires employers to install “Safety and Health Protection on the Job” posters, informing employees as well as employers of their rights and responsibilities on the job, in conspicuous locations where employees report to work or where they carry out activities or meetings. A minimum of one poster in a conspicuous location is required.

Permits must be obtained from the DIVISION OF OCCUPATIONAL SAFETY AND HEALTH Enforcement Unit before an employer undertakes trench and excavation work. Construction or demolition of any building, structure, falsework, or scaffolding exceeding 3 stories (12 feet in height), erecting a tower crane or constructing trenches or excavations exceeding 5 ft. in depth, requires a permit.

When fallproofing floor and wall openings, guardrails should be installed around open floors where the fall distance to the next level is 6 feet or more. Top rails of the fallproofing guardrail must be able to withstand a 200 lb. load. Top rails must be at a height of 42” and midrails at a height of 21”. Toeboard installation is required when employees are working below the work area. Open floor areas 2 inches square or larger must be covered with material that can safely support a working load.

When working on a roof pitch greater than 4:12, and up to 6:12, slide guards should be installed for safety. Roof construction, particularly during inclement weather, may require additional safety protection in order to prevent employees from falling off a roof. Slide guards are installed along the roof eave after the first three rows of roofing material are installed. Manufactured slide-guard brackets support 2 x 6 boards at a 900 angle. The intent is to prevent a roofer from falling down the roof surface. For roofs over 25 ft. high with a pitch greater than 18:12, fall protection gear is required.

A hardhat is required on the jobsite at all times in order to minimize the rate and level at which impact forces are transmitted to the head, neck and spine, particularly from falling objects. OSHA requirements require protective headgear be worn in construction and industrial areas at all times. There are four Classes of helmet. Class A is for general service and protection against impact hazards and low-voltage electrical current. Class B is for general service and protection against impact hazards and high-voltage electrical current. Class C is usually made of aluminum and provides some impact protection and no voltage protection. Class D is for impact protection, fire resistant and will not conduct electricity (made primarily for firefighters).

Reflective orange or lime yellow-green safety vests must be worn when operating and working around heavy equipment or when exposed to traffic hazards. High visibility safety vests must have a min. 200 sq. in. of blaze orange or lime yellow-green material, preferably with reflective tape stripes, must be visible from a reasonable distance and stand out from surrounding landscapes and environments.

Safe practices for working around electricity include de-energizing a system if possible. Prior to working on an electrical system, it should be de-energized if possible. If that is not possible, only qualified electricians with appropriate protective gear and knowledge of safety rules and procedures should be working. Remove ALL metal, such as jewelry.

A hardhat is essential head protection in case the head comes in contact with an overhead power source. Under no circumstances should it be metal. Metal items can cause serious burns, or sparks. Safety glasses are also necessary to protect the eyes from the potential of flying sparks and small particles.

The best fire extinguisher to have at the worksite is Class ABC. Class ABC fire extinguishers are multipurpose dry chemical extinguishers that cover the possibility of the three basic types of fires.

Fall protection is a serious issue around any worksite. The most likely areas around the construction site where falls may occur are roofs. Typical fall hazards occur:

in unprotected leading edges of floors
on roofs and building components under construction
in trench and excavation edges
on roofs of all pitches
near finished and unfinished skylights
in wall openings and stairways
near ladders, scaffolds and other work platforms

If working on scaffolds at a level exceeding 7’6”, handrails are required.

Labor

Weekly benefit payments, indemnity and medical and hospital treatment are required of the employer-contractor for all employees who incur work-related injuries. The liability of the employer extends to employed relatives on the same basis as any other employee.

Every licensed contractor must report the insurer carrying workers’ compensation on his/her employees within 10 days after any policy of insurance is issued. After any policy of insurance is issued to the contractor, he/she must send a copy of the report to the insurer and report the insurer’s name and address to the Registrar of Contractors.

If a licensed or unlicensed prime contractor subs with a contractor who does not hold a valid license in the appropriate classification, the subcontractor and all of their employees are considered to be statutory employees. The prime contractor may be held liable for FICA, FUTA, UI, and Workers Compensation costs. It is mandatory that any subcontractors the prime hires be licensed and employees are legal.
The prime contractor will

agree to pay the contributions without deduction
collectively and voluntarily contribute to the program as a unit
are exempt due to other voluntary Disability Insurance wage‑deduction

Employee contributions support the State Disability Insurance Program, and the employer is liable for the worker contribution whether it is deducted from the employee’s wages or not, unless there is an adequate voluntary plan in place.

The employer must report wages paid every calendar quarter in which they were paid.
Wages paid must be reported in the calendar quarter in which they were paid in order to determine the basis for possible benefit claim awards.

In accordance with OSHA, in an effort to provide a safe and healthful workplace environment, the employer is responsible for

complying with occupational safety and health standards
allowing employees access to toxic substance exposure records
allowing employees access to the employer’s log of occupational injuries and illnesses

It is the employer’s responsibility to comply with and administer OSHA laws and regulations to provide a safe and healthy work environment for its employees, as well as to keep employees informed on current new and revised safety and health laws and provisions.

An employer’s rights regarding OSHA regulations for providing a safe and healthful workplace include:

requesting free education and training services on occupational safety
applying for variances from certain requirements and standards
contesting citations and penalties

While the employer is required to provide workplace safety and comply with OSHA standards, the employer can participate in the inspection of his/her facilities or establishment, apply for variances from requirements and standards, assist in developing, modifying or revoking standards and rules by participating in advisory committees and public hearings. The employer also has a right to protection of law against the revelation of trade secrets as a result of inspection and subsequent proceedings.

In every case involving a serious injury or illness, an employer-contractor is required to telephone the Division of Occupational Safety and Health immediately. In accordance with OSHA, a complete report of a serious employee injury or illness that requires medical treatment beyond first aid must be immediately reported to the Division of Occupational Safety and Health. It must also be reported to the Department of Industrial Relations, through its Division of Labor Statistics and Research, or, if insured, through the insurer.

In accordance with Labor Code Section 139.5, an employee may be entitled to services, such as job counseling, job modification, training, placement assistance or vocational rehabilitation if it is found that the injured employee cannot resume normal work duties as before the injury occurred.

Employees must be a minimum of 16 years old to work in heavy construction. When employees are hired, a social security card and ID or driver’s license must be presented for verification of age and identity for tax purposes prior to employment.

Unless a special employment contract exists, employees must be paid a minimum of every 2 weeks, twice a month or once every 14 days. Unless there is a special employment contract, such as a collective bargaining agreement, a commission program or salary-basis, employees must be paid every 2 weeks, or the equivalent.

It is the foreman’s and/or supervisor’s responsibility for training and evaluating employees at or below journeyman level. Prior to evaluating any employee, the job task must be clearly and concisely defined and monitored.

If an employee is terminated for any reason, the employer must pay all current unpaid wages immediately. The first line of defense when an employee is to be terminated for mistakes, tardiness, absenteeism, etc., is to document all incidents. Date, time and infraction, and follow-up action taken, if any, should be documented if needed to show just cause for termination.

If an employee does not have a written contract for a definite period and quits, his wages become due and payable no later than 72 hours thereafter. Unless the employee has given 72 hours previous notice of intent to leave, the employee is entitled to wages payable within 72 hours after quitting. If the employee has given 72 hours previous notice, wages will be paid at the time of separation.

Thirty-two to 40 hours per week constitutes fulltime employment. Employees are generally not permitted to work more than 6 days in 7 days. Part-time employment is 0 - 31 hours worked in an established work week. Fulltime employment is 32-40 hours worked in any given work week. Hours worked in excess of 40 hours in any given work week is considered Overtime, accumulated at time-and -1/2 and paid as such.

Employee responsibilities for occupational safety and health include:

not interfering with the safeguards of others
complying with all occupational safety and health standards and rules

Employees are responsible for cooperating with safety and health provisions the employer puts in place in an effort to achieve a safe and healthful workplace. Employees should not remove, damage, displace or tamper with safety devices and safeguards, notices or warnings put up by the employer to protect the employees.

When an employee receives a check from the employer that is refused due to insufficient funds, wages and fringe benefits will continue to accumulate at the same rate for 30 days or until the check or voucher is paid. As a penalty to the employer for submitting a bad check, from the due date on, until 30 days has elapsed, wages and benefits shall continue to accumulate until an action is commenced. The action may be check replacement or some other means of compensation to the employee. Such wages and fringe benefits will not continue beyond 30 days in any case, however.

Bills incurred and tools used on the job by the employee may be paid for by the employer. Many employers voluntarily pay for reasonable bills incurred during the routines of work. Tools, necessities and implements of the trade or profession may be purchased and paid for by the employer. Many employers stipulate, however, that if the employee separates from the company those items paid for by the employer stay at the company for use by others.

The employer must have written authorization from the employee to legally withhold or divert any portion of an employee’s wages. Unless an employee authorizes, in writing, a deduction or diversion of a portion of wages into another specified account or area, the employer cannot legally voluntarily take any such action.

Legal Lien laws:

Stop Notice

A Stop Notice is a lien on funds. A Mechanics’ Lien is a change or claim against property to pay for work done on that property. A Stop Notice is a lien on funds if there is a construction lender or bank handling the funds. A mechanics’ lien applies to private work only. A stop notice may apply to public as well as private work.

A Claim of Lien or Mechanics’ Lien is a written statement signed and verified by the claimant or by the claimant’s agent. Claim of Lien, or Mechanics’ Lien, must state:

the amount of claimant’s demand (minus credits and offsets)
the owner’s name, or reputed owner’s name, if known
the type of labor, services, equipment or materials furnished by the claimants
the person by whom the claimant was employed, or the claimant who furnished labor services, equipment and/or materials (For a subcontractor: the name of the contractor; For a prime: the name of the owner) and a description of the site sufficient for identification.

Within 20 days from first furnishing materials and labor, subcontractors and material suppliers must serve a 20-Day CA Preliminary Notice to the prime, owner and construction lender if they intend to reserve their Mechanics’ lien rights. This should not be mistaken for an actual lien.

A Lis Pendens is a notice filed with the Mechanics’ Lien stating there is a pending lawsuit. A Lis Pendens affects the property. It notifies all who might acquire the property that they may be bound by an adverse judgment.

Those entitled to a lien include:

prime contractor
subcontractor
land surveyor
contractor
equipment lessor
architect
engineer
materials suppliers
labors and teamsters
mechanic
machinist and artists

In general, anyone who contributes to a work of improvement is entitled to a lien with the inclusion of materials suppliers.

A Notice of Cessation is a notice written and filed by the owner stating labor has ceased. When labor has ceased for a period of 30 consecutive days, a written notice is filed by the owner stating such.

Subcontractors have 30 days to record a lien after a Notice of Completion or Cessation is filed.
1. Primes have 60 days to record a lien after a Notice of Completion or Cessation is filed.
2. Both have 90 days to record a lien if no other Notices of Completion or Cessation have been filed.

A lien must be recorded in the state where the property is located. Required information needed for recording includes the owner’s name, names of any other individuals who might have an interest in the property and the address of the property. Including the cost unrelated to the claim will result in forfeiture. All deadlines are the last day you can record a lien.

A Lien Release must be filed immediately upon receipt of payment, thereby canceling the previously recorded lien. A Lien Release must be recorded if a lien payment was received after a lien was filed.

When a tenant or renter requests work to be performed without prior permission from the owner, the owner may submit a Notice of Non-Responsibility stating that the owner is not the one requesting the work. The owner must file the Notice of Non-Responsibility within 10 days of learning the un-requested work is preceding. The notice must be written and signed by the owner to be valid.

Alternate dispute resolution techniques:

To avoid excessive out-of-pocket costs as well as physical and emotional disruptions, every effort should be made to settle differences. Out-of-pocket costs for legal representation and services and physical and emotional stress are never fully recovered.

Options for avoiding a dispute include:

documenting all agreements in writing
meeting problems head-on and resolve issues in a timely manner
negotiating changes as they occur and putting all change orders in writing regardless of magnitude
using punch lists and communicating regularly and effectively with the customer
invoicing regularly
paying large bills promptly and resolving problems and issues quickly

The most important issue to be considered in presenting any claim is documentation.
Data required to support construction claims generally is difficult to reconstruct unless careful documentation has been kept during the process. Most companies and organizations prepare checklists in order to create a documentation file and progress chart. Generally, many claims can be resolved without going to court if sufficient documentation is maintained.

Negotiations

One way to approach negotiations is to

consider the overall method as a whole
elect to resolve each of the issues separately
strive to resolve issues sequentially

Basic methods in approaching negotiations are to consider the total issue or to focus on each element of the problem separately, in a sequential manner, resolving each issue first before going onto the next. The idealized result is to eventually resolve the entire matter by resolving the smaller issues. This, however, can result in more time spent in negotiations, depending on complexity of the matter.

A basic principle of negotiation is to reach an overall determination. Basic principles of negotiation do not require an agreement be reached on individual items, but rather that compromise be made by each party to reach an overall determination. Negotiations should not be conducted on the basis of reaching a firm agreement on each issue.

Successful negotiation guidelines to help ensure progress in an overall compromised determination include:

keeping the objective in mind
adjusting the end to suit the means
exploiting the line of least resistance
approaching the issues offering alternative objectives; remaining flexible and adaptable to changing circumstances
not forcing the issues while the opposition is on guard
not insisting on “attacking” along the same lines or in the same manner after it has failed once

Arbitration

Arbitration is considered an informal and equitable approach to dispute resolution. Both parties must agree to arbitration. The contract may address terms of arbitration if the customer is “compelled to arbitration.” In such cases, the customer may have attorneys, but decisions cannot be appealed.

The arbitrator has broad powers to determine matters of

fact
law
procedure

The arbitrator’s decision-making authority is his/hers alone and cannot be delegated to others; otherwise, the award could be subject to attack in court. Arbitrators are the final judges of all matters of both fact and law before them.

Arbitration awards must be in writing. To be effective, the award must be stated concisely, without inclusion of varying opinions. It must express a judgment of at least the majority of the board unless the contract of the parties states otherwise, and requires a unanimous decision. The award will not deal with any matter not submitted to arbitration. Courts are concerned only with matters of the face of the award itself, not any additional explanatory matter.

Alternatives

Prior to serving Mechanics’ Liens and Stop Notices, it is important to

determine the name of the owner and extent of the owner’s interest in the property
obtain the legal description of the property
consider the effect of a bond or joint control

In addition to a Mechanics’ Lien and Stop Notice, a civil lawsuit may be filed for breach of contract. If the party concerned is a sole-proprietorship or partnership entity, self representation in court is acceptable. A corporation may not represent itself but must retain an attorney.

Prior to serving notices, primes, subcontractors and material suppliers should consider the effect of a payment bond, performance bond or joint control. Under a performance bond, the surety has an obligation to the owner for any additional costs to complete the contract due to the contractor’s failure to comply with contract requirements. Under a payment bond, the surety guarantees the payment of all legitimate labor and materials bills resulting from the performance of the contract.

Exercising terms of the bond(s) and suing the negligent party may be preferable to the complexities of filing various liens.

If a dispute cannot be avoided, and if it amounts to $5000 or less, small claims court followed by a judgment may effectively settle the dispute. Lawsuits take time and money and should be avoided. Small claims judgments are binding; no attorneys are allowed and Mechanics’ liens cannot be closed in small claims court. The defendant also has the right to appeal the decision.

Civil Action

During litigation, properly documented records may be used to ascertain the true impact and determine damages and settlement. The value of project records includes defining contractual parameters, relevance and probative value of facts under dispute. They also are used to establish credibility or for impeachment.

A subcontractor has 90 days in which to file a lawsuit to foreclose on a lien. Both the prime and the subcontractor have 90 days to file a lawsuit to foreclose on their liens.

After the Lien Foreclosure Action is filed, but before 90 days have elapsed, the owner may be given credit. Credit should be recorded; at that time an extension may be granted. Work ceases and the Lien Foreclosure Action is filed within 90 days of recording the Claim of Lien, record of Lien Pendent and Stop Notice. Extensions may be granted after credit is given and recorded. After 90 days, the offer expires. Another extension may be granted; however, foreclosure must be completed within a year after the work is completed. The action should be brought to trial within 2 years after commencement.

As a sole proprietor, you are not required, but are advised, to have an attorney represent you in court. Due to technical requirements of court proceedings, it is recommended a sole proprietor have attorney representation. It is not required however, and the sole proprietor may represent himself/herself.

If a contractor or subcontractor fails to comply with statutory requirements, he/she may still file suit in court in order to resolve a dispute. If the customer does not pay money owed when it is due, the contractor is entitled to file suit. There is no restriction or stipulation for filing on those who have not availed themselves of the mechanics’ lien rights, due to failure to comply with statutory requirements.

SMACNA Symbols

Manual For HVAC General Terms

HVAC

- Heating, ventilating and air conditioning refers to the indoor comfort industry.

ARI

- Air-Conditioning and Refrigeration Institute is a non-profit, voluntary organization comprised of heating, air conditioning and refrigeration manufacturers. ARI publishes standards for testing and rating heat pumps and air conditioners to provide you with a standardized measure of comparison. So, ARI ensures a level of quality within the industry.

DOE

- The Department of Energy is a federal agency in charge of setting industry efficiency standards and monitoring the consumption of energy sources.

Watt (W)

- A Watt is a unit of electricity.

Kilowatt (kW)

- A kilowatt equals 1,000 Watts. A kilowatt hour (kWh) is the amount of kilowatts of electricity used in one hour of operation of any equipment.

BTU

- British thermal unit is the amount of heat that will raise or lower one pound of water by one degree Fahrenheit. A Btuh is how many Btus are used per hour.

Ton

- Heat pumps and air conditioners are generally sized in tons. Typical sizes for single family residences are between two and five tons. Each ton equals 12,000 Btuh.

It is important to note that actual capacity is not constant and will change based on outdoor or indoor temperatures. The published capacity rating of air conditioners and heat pumps is based on performance at the ARI standard temperature levels of 95 F outside, 80 F inside.

Efficiency

A rating on comfort equipment is similar to the miles per gallon rating on your car. The higher the rating number, the more efficient the system and the lower your fuel consumption will be.

You can save a lot of money with a high efficiency unit, as shown in the chart below. Depending on your local climate, lifestyle and electricity rates, savings will vary.

SEER

- Seasonal energy efficiency ratio is the amount of cooling your equipment delivers per every dollar spent on electricity. SEER applies to air conditioners and heat pumps.

In the past, a unit with a SEER of 8.00 was considered standard efficiency, and a unit with a 10.00 SEER was considered high efficiency. After January 1, 1992, the minimum SEER required by the DOE is 10.00 and 15.00+ SEER is considered high efficiency.

HSPF

- Heating seasonal performance factor is similar to SEER, but it measures the efficiency of the heating portion of your heat pump. Like SEER, industry minimums have been raised recently, and the minimum is now 6.80 HSPF.

COP

- Coefficient of performance compares the heating capacity of a heat pump to the amount of electricity required to operate the heat pump in the heating mode. COPs vary with the outside temperature: as the temperature falls, the COP falls also, since the heat pump is less efficient at lower temperatures. ARI standards compare equipment at two temperatures, 47 F and 17 F, to give you an idea of the COP in both mild and colder temperatures.

Sound Ratings

Although sound does not affect the efficiency of a unit, it will certainly affect your comfort. If your unit has a low sound level, you will hardly notice it is operating. But if it has a higher sound level, it may mean your good night's sleep is disturbed every time it runs!

Decibel (db)

- A decibel describes the relative loudness of a sound. Some common sounds are fairly close to a typical air conditioner or heat pump's sound level: human voice, 7.0 decibels; blender, 8.8 decibels.

Sound Rating Number (SRN)

- Sound is measured in bels (a bel equals 10 decibels). The SRN of a unit is based on ARI test, performed at ARI standard rating conditions. Average sound rating range from 7.0 to 8.0 decibels. The lower the SRN rating, the quieter the unit.

Indoor Coils

A homes comfort system consist of two components: the outdoor unit (air conditioner or heat pump) and the indoor unit (coil or blower coil). Combinations of various units will result in vastly different efficiency ratings.

Unreasonably high efficiency ratings can be created by using unrealistic indoor and out door equipment combinations. The term "most popular coil" indicates the actual tested combinations; other ratings may be simulated and unrealistic. Be sure that the efficiency ratings you are comparing are for "most popular coil." You'll know the ratings are attainable and close to reality.

HVAC

From Wikipedia, the free encyclopedia.

HVAC may also stand for High-voltage alternating current.

Software being used to design HVAC systems

HVAC (pronounced either "H-V-A-C" or, occasionally, "H-VAK") is an initialism/acronym that stands for "heating, ventilation and air-conditioning". This is sometimes referred to as climate control.

These three functions are closely interrelated, as they control the temperature and humidity of the air within a building in addition to providing for smoke control, maintaining pressure relationships between spaces, and providing fresh air for occupants. In modern building designs, the design, installation and control systems of these functions are integrated into a single "HVAC" system.

The term air handler can mean a whole unit including the blower, heating and cooling elements, filter racks or chamber and dampers, but not including the ductwork through the building.

Basic Measurement Skills

All load area and length calculations are made in decimal feet. For windows, glass doors and skylights, the load area is the area of the rough opening. For walls and ceilings, use the net wall and net ceiling area. For floors other than slab floors, use the gross floor area. For slab floors, use running feet of exposed edge. Small closets can be combined with the adjoining room. Halls and large closets (equipped with a supply air outlet) are evaluated as separate rooms.

Duct Load for Heating

For heating, the duct load is evaluated as a fraction of the total envelope heating load. This reference load includes the heat loss for fenestration, exposed opaque panels, partitions, below grade walls, floor (exposed, basement or slab) and the infiltration load (do not include a ventilation load). The duct load is estimated by multiplying the envelope heating load by a duct loss factor.

Window, Glass Door, Wood and Metal Door Area

The load area for windows and glass doors equals the area of the rough opening in the wall. All calculations shall be in decimal feet. Load adjustment factors are used to compensate for the geometry of projected windows (i.e. bay and garden windows).

Wall Areas

The load area for walls is the net wall area. This area equals the gross wall area minus the area of the associated window and door openings. Gross wall areas are calculated by multiplying the wall length by the average wall height. The average height of a rectangular wall is obvious. The average height of a triangular wall is half the height of the triangle. The average height of a wall that is shaped like a triangle sitting on top of a rectangle equals the height of the rectangle plus half the height of the triangle. The average height of a wall that has an odd geometric shape equals the gross wall area divided by the wall length. All calculations shall be in decimal feet.

Heating

Heating systems may be classified as central or local.

Central Heating

Central heating is often used in cold climates to heat private houses and public buildings. Such a system contains a central boiler, furnace or heat pump to heat water, steam, or air; piping or ductwork to distribute the heated fluid, and radiators to conduct this heat to the air. The term radiator in this context is misleading, since most heat transfer from the heat exchanger is by convection. not radiation. The radiators may be mounted on walls, or buried in the floor to give under-floor heating. When so mounted it is often referred to as "radiant heating".

All but the simplest systems have a pump to circulate the water and ensure an equal supply of heat to all the radiators. The heated water is often fed through another heat exchanger inside a storage cylinder to provide hot running water.

Forced air systems send air through ductwork. The ductwork can be reused for air conditioning and the air can be filtered or put through air cleaners.

The heating elements (radiators or vents) should be located in the coldest part of the room, typically next to the windows. Popular retail devices that direct vents away from windows to prevent "wasted" heat defeat this design parameter. Drafts contribute more to the subjective feeling of coldness than actual room temperature. Thus rather than improving the heating of a room/building, it is often more important to control the air leaks.

The invention of central heating is often credited to the ancient Romans, who installed a system of air ducts in walls and floors of public baths and private villas. The ducts were fed with hot air from a central fire.

Ventilation

Ventilation includes both the exchange of air to the outside as well as circulation of air within the building. Methods for ventilating a building may be divided into natural and forced types.

Natural Ventilation

Natural ventilation is the ventilation of a building with outside air without the use of a fan or other mechanical system. It can be achieved with operable windows when the spaces to ventilate are small and the architecture permits. In more complex systems, warm air in the building can be allowed to rise and flow out upper openings to the outside (chimney effect) thus forcing fresh cool air to be drawn into the building naturally though openings in the lower areas. These systems use very little energy but care must be taken to ensure the occupants' comfort.

Forced Ventilation

Forced ventilation may be used to control humidity or odours. Kitchens and bathrooms typically have mechanical ventilation to control both. Factors in the design of such systems include the flow rate (which is a function of the fan speed and exhaust vent size) and noise level. If the ducting for the fans traverse unheated space (e.g. an attic), the ducting should be insulated as well to prevent condensation on the ducting.

Heat recovery ventilation systems employ heat exchangers to bring the fresh air temperature to room temperature.

Ceiling fans and table/floor fans are very effective in circulating the air in the room. Paradoxically, because heat rises ceiling fans may be used to keep a room warmer.

Air-conditioning

An air-conditioning system provides heating, cooling, ventilation and humidity control for a building. It is often installed in modern offices and public buildings, but is difficult to retrofit (install in a building that was not designed to receive it) because of the bulky air ducts required. A duct system must be carefully maintained to prevent the growth of pathogenic bacteria in the ducts. The alternative to large ducts to carry the needed air to heat or cool an area is the use of remote coils or split systems. These systems are gaining popularity in commercial buildings although are most often seen in residential application. The remote coil is connected to a remote condenser unit using piping instead of ducts. The units usually have a fan to move air across the coil, although recent innovation have seen static units installed in some large office spaces.

A dehumidifier is an air-conditioning-like device that controls the humidity of a room or building. They are deployed in basements, which because of their lower temperature have a higher relative humidity. (Conversely a humidifier increases the humidity of a building.)

Air-conditioned buildings often have sealed windows, because open windows would disrupt the attempts of the control system to maintain constant air quality.

Thermostats

Thermostats control the operation of HVAC systems, turning on the heating or cooling systems to bring the building to the set temperature. Typically the heating and cooling systems have separate control systems (even though they may share a thermostat) so that the temperature is only controlled "one-way". That is, in winter, a building that is too hot will not be cooled by the thermostat. Thermostats may also be incorporated into facility energy management systems in which the power utility customer may control the overall energy expenditure. In addition, a growing number of power utilities have made available a device which, when professionally installed, will control or limit the power to an HVAC system during peak use times in order to avoid necessitating the use of rolling blackouts. The customer is given a credit of some sort in exchange.

Wiring: 1 Fan Serving 2 Baths with 1 Switch per Bath (With Lights).

This How To focuses on applications where a single bath fan is ventilating 2 (or more) bathrooms and there is only a single (fan+light) switch available or desired in each bathroom.

Operation:

By turning ON the combined light+fan switch, the bathroom light will be turned on, and through the relay, the common fan will also be started. Similarly, the other bathroom switch will control its own light and through the relay also turn ON the common fan. The fan will be ON if either of the switches are in the ON position, and the fan will be off only if both light switches are in the OFF position.

Explanation:

The relays are used to isolate each light circuit from the other. You would not want to turn on a light/fan switch in one bathroom, and then have the other bathroom lights turn on.

Diagrams:

Two different diagrams are shown. Diagram A is the more general case in which lights L-1,L-2 and the fan are all powered by separate power sourcres. Diagram B is for the case where electrical power is common for all the lights and the fan (from the same source).

Diagram A:

Diagram B:

Parts List:

Other than the typical switches and wiring items, you will need 2 relays with 120 VAC coils and normally open (NO) contacts rated for at least 5 amps at 120VAC, inductive duty. If the fan draws more than 5 amps, then the relay should be sized accordingly.

How to Focus

This How To focuses on residential kitchen ventilation. The first reaction is "what's so complicated about putting a hood over my stove and routing the duct to outside". Well... nothing, but you may end up with a noisy, ineffective system.

The goals of this How To are to help you:

- calculate the amount of airflow that is required,
- pick aesthetic components (hoods, grilles, etc.),
- pick the mechanical components,
- be aware of the duct choices,
- compare and select fans,
- verify a checklist.

Hoods:

The first element in the airstream and the most visible component of the kitchen ventilation system is a hood that covers the cooking area. The hood can be an exposed stainless steel hood (see below), or it can be a built-in hood liner (SHL - see below) with a decorative surround. Either type of hood should extend beyond the cooking area by about 3".

How much air?

After we have settled on a grille or hood we must calculate how much air flow is required. We usually rely on a number of "rules of thumb". These rules of thumb can sometimes be confusing, and even contradictory, so feel free to call us if you are confused or not sure which one to use.

Rule of Thumb 1:

Take the hood area (in square feet) and multiply it by 75 to get the CFM (cubic feet per minute) for a wall hood, or multiply it by 100 for an island hood.

Rule of Thumb 2:

Allow 15 air changes per hour (ACH) for the kitchen.
Take the kitchen volume (length x width x height) and divide by 4 to get the required CFM.

Rule of Thumb 3:

Allow 1 CFM per 100 BTU's per hour (BTUH) heat output.
Take the output of the oven and cooktop (if together or close) and divide by 100 to get the required CFM.

Rule of Thumb 4: (this applies to commercial type ranges)

Allow 100 CFM per linear foot of hood.
Take the perimeter of the hood and multiply it by 100 to get the required CFM.

Which rule of thumb is the best one to use?

The most popular rules of thumb are #1 and #3. We typically use rule of thumb #1 when we size fans.

What is next?

A backdraft damper, if not supplied with the hood, is highly recommended. This damper (see picture below), keeps outside air from flowing backwards into your house. It should be placed right next to the hood or grille.

Some duct and installation tips:

- Use high quality aluminum duct tape to seal connections and seams in the duct.
- Use Fantech FC clamps to connect in-line fans to duct and/or silencer.
- Aluminum, flexible (corrugated) duct that is UL listed for residential kitchen exhaust may be used for short distances (check with your local code official before proceeding).
- Use as few elbows and transitions as possible to minimize restrictions to flow.
- Shorter is better when it comes to ducting. The longer the duct, the more restriction to flow.
- Use ducting that is the same size as your fan (or bigger). For example, if you install an 8" in-line fan, use 8" ducting.

Checklist:

➤select hood or grille type
➤plan your duct run
➤determine the desired airflow
➤use our system configurator to select a fan
➤add a backdraft damper
➤add a silencer
➤select duct type
➤add a roof or wall cap (if required)

FAQs

Q. Do you have charts or graphs to properly size a closed loop for Geothermal application?

A. No. Properly designed geothermal closed loops must be designed by an IGSHPA (or equivalent) certified H/VAC contractor. Due to differences in soil conditions, median ground temperatures, load requirements of the space and other variables, it is necessary to run the data through a computer program that IGSHPA (International Ground Source Heat Pump Association) certified contractors will have access to. For more information on IGSHPA, please see our "Links to other Industry Sites."

Q. I have a 100% outside air unit. Why won't a wall mounted T-stat control the functions properly?

A. 100% outside air units are not designed to be run by a wall thermostat. Since they supply 100% outside air, they are dealing with high latent and sensible loads. These loads require the unit run full time. Basic controls, including humidity (leaving air temperature) and capacity control are factory provided within the unit. The only controls that should be field wired are time clocks or a manual switch that will make and break the R to G circuit. No further external wiring is required to run the unit.

Q. I have a commercial unit that is supplying low air-flow. What do I need to do to correct this?

A. The best method to adjust your airflow is by changing the motor or fan pulleys. You can also change the airflow in small increments by adjusting the motor pulley. Be sure not to open or close this pulley too far. This can lead to belt damage or the belt jumping off the pulley. Horsepower requirements will change as the fan RPM is changed, and the motor may quickly overload, so be sure to verify motor amperage against motor nameplate ratings. If your amperage and airflow is off by more than the motor pulley can correct, then you will likely need to make a fan pulley change. Before this is done, it is recommended that you consult the factory with your requirements, and be sure to have the unit Model and Serial numbers ready. Most units are designed to provide airflow within a specified range. However, there are occasions when duct design or other building variables may adversely affect unit airflow, and sheave or motor changes are necessary to comply with space requirements.

Q. I am observing erratic operation from a unit, with chattering contactors and other similar problems. What causes this?

A. Many times the primary reason is that the voltage to the unit is inadequate. Be sure that if the unit is being applied to 208V as opposed to 230V, that the control transformer is tapped accordingly. If you are still experiencing problems, there may be supply voltage problems. Be sure that there are no field mounted accessories that are drawing power from the transformer circuit, for this may cause too much VA draw for the transformer to handle.

Q. After about a minute of operation, I am experiencing a lock out condition on a commercial water source unit. What causes this?

A. Especially during heating cycle when the water temperature is low, the suction pressure can fall to levels below the cut out point. There is a time delay that will allow the unit to continue running for 90 seconds to allow the suction side to recover. In some situations, this is not enough, and the unit will then lock out to prevent damage to the system. There are variable timers that can be installed to allow a longer period before lock out. These timers, in conjunction with other factors can reduce or eliminate low pressure lock out. If it is possible to start the water flow before the compressor is activated, this can also reduce lockout conditions.

Q. My unit does not seem to run as often as it should. Why is the space not maintained at temperature, even though the thermostat is calling?

A. Verify if the unit is connected to some form of Energy Management device. These devices will shut down a unit during high electrical demand, and can cause the unit to be off when the space requires cooling or heating. If there are no Energy Management controls, be sure that the unit has an adequate charge, and that the limit controls are not holding the unit out.

Q. What is the Hot Gas By-Pass valve and what does it do?

A. The HGBP is a control that comes into play during low evaporator load conditions. This valve will perform two functions, the primary being capacity control. As the load on the evaporator coil drops, the suction pressure will fall. When the set-point of the valve is reached, it will begin to feed hot gas directly from the compressor into the evaporator coil. This creates a false load on the coil keeping suction pressures up. The valve begins to open at 62 psig, and is fully open by 57 psig. (This is 32° saturation temperature of R-22) The secondary function is that with this hot gas entering the coil that would normally be at freezing, any condensate water on the coil will be prevented from freezing. On semi-hermetic compressors, the HGBP valve will NOT engage until after the compressor has been unloaded. (This is provided the unloader control is properly adjusted and wiring has not been changed).

Q. What is the Re-Heat circuit used for?

A. Simply enough, it is to Re-Heat the air leaving the unit. On 100% outside air units, this is accomplished by taking hot gas from the compressor and running it through an independent circuit in the evaporator section. This is done for tempering of the leaving air and to control humidity. With 100% OS air units, the temperature drop can sometimes be twice that of a recirculating unit. The resulting lower leaving air temps also produce saturated air. (100% relative humidity) For every 10° of temperature rise across the reheat coil, there is approximately a 20% drop in the leaving air relative humidity.

Q. What is a Low Ambient control and what is its function?

A. The Fan Cycling control (Sometimes referred to as Condenser Head Pressure control, or Low Ambient Control) is a switch that makes contact on pressure rise. The sensing line is piped into the discharge line and is set to maintain the condenser head pressure during lower outdoor ambient temperatures. If the fan were to run all the time, the head pressure would remain very low and system efficiency would fall. Fan Cycling will compensate for this to a certain extent by allowing the head pressure to rise to moderate levels. The Low Ambient control is optional on package and split systems, and is standard on 100% outside air units.

Q. What is the Vari-speed option and what is its function?

A. It is a controller and a variable speed fan. The vari-speed option (sometimes referred to as Low ambient to 0°) will control the head pressure similar to the low ambient control switch, but does so with much less fluctuation in refrigerant pressures. Its primary application is on systems with hot gas reheat option. The controller senses discharge pressure as the low ambient control does, but drives a variable speed motor that ramps up and down to maintain a minimum head pressure of 205psig. This pressure will be maintained as close as possible by slowing down the fan (to minimum speed if necessary) and allowing stable control of the head pressure. This allows for better efficiency, especially on 100% outside air units. As with the low ambient control, Vari-speed is an option on package and split systems, and is standard on 100% outside air units.

Q. I started up a 100% outside air system, and after a while the sight glass was alternately flashing then clear. Is there a problem in the system?

A. No. What you are seeing is a reduction in capacity due to unloading or reheat functions. The unloader on semi-hermetic compressors bypasses one or more cylinders internally. (depending upon compressor size) re-Heat will take hot gas from the discharge line and re-route some of it to another part of the system. Both functions reduce the velocity and amount of refrigerant flowing through the condenser coils and liquid line. If the sight glass were to remain clear all the time, the SubCooling temperatures would be extremely high during maximum cooling capacity. Resulting high SubCooling temperatures and discharge pressures can be detrimental to the units efficiency and longevity. A clear sight glass will be observed only when the unit is at full cooling capacity with no call for Re-Heat or Hot Gas By Pass.

Q. I had to repair a leak on a 100% outside air unit, and some time after I recharged it, the sight glass began to flash. Do I still have a leak in the system?

A. Probably not. If you can not find a leak, it is more likely that when you recharged the system, the reheat did not engage until some time after you were done. Because of the check valve in the system, the reheat coil was still in a vacuum. When the call for humidity control (or reheat for leaving air control) was made, the solenoid at the front of the circuit opened and allowed refrigerant to flow into that circuit. Depending upon the size and capacity of the unit, this coil can hold up to several pounds of refrigerant. This charging of the Re-Heat coil re-routes refrigerant from the rest of the system. It is best to charge the system to approximately 20° to 22° of SubCooling, engage the reheat for a moment, then disengage it and verify your SubCooling readings. This should leave the system at the proper final charge.

Q. How much liquid SubCooling is recommended for your units?

A. We prefer to charge our units by liquid SubCooling versus the suction SuperHeat method since the majority use a Thermal eXpansion Valve (TXV) to meter refrigerant. If you are dealing with a residential unit with a "fixed orifice" cap-tube or piston metering device, then it must be charged by SuperHeat. SubCooling will vary depending upon system capacity controls and ambient conditions. (and to a lesser extent, space conditions) Most of our equipment is designed with 95° ambient air across the condenser coils. With a straight cool system (including 100% OS air units) at full capacity in 95° ambient, there should be approximately 15° to 18° of liquid SubCooling. If you are dealing with a split system with extensive vertical lift, these numbers will change drastically. At the same conditions, Heat pump systems should be charged to approximately 11° to 13° SubCooling, due to the elevated head pressures in heating mode.

Q. What kind of SuperHeat readings do you recommend for your units?

A. Most TXV systems should not require a SuperHeat adjustment. SuperHeat readings are affected slightly by some variables. (such as space load conditions and SubCooling levels) However, if there is a load in the space and the SuperHeat is not in a range of 16° to 18° at the sensing bulb, then you should check for airflow or refrigerant problems. Be sure that the unit at full load when taking these readings. If the SuperHeat readings are too high, check for proper refrigerant levels by using a sight-glass and the liquid SubCooling method. If the SuperHeat readings are too low, check for clogged filters or coils, refrigerant line restrictions, overcharging, blower rotation, entering air temperatures and proper sensing bulb/suction line coupling as well as proper location of the bulb on the line. The use of thermal paste is highly recommended for any unit having problems with low SuperHeat. Running with little or no SuperHeat for extended periods of time can cause damage to the compressor.

Q. Do you have charts or graphs to properly size a closed loop for Geothermal application?

Q. I have a 100% outside air unit. Why won't a wall mounted T-stat control the functions properly?

Q. I have a commercial unit that is supplying low air-flow. What do I need to do to correct this?

Q. I am observing erratic operation from a unit, with chattering contactors and other similar problems. What causes this?

Q. After about a minute of operation, I am experiencing a lock out condition on a commercial water source unit. What causes this?

Q. My unit does not seem to run as often as it should. Why is the space not maintained at temperature, even though the thermostat is calling?

Q. What is the Hot Gas By-Pass valve and what does it do?

Q. What is the Re-Heat circuit used for?

Q. What is a Low Ambient control and what is its function?

Q. What is the Vari-speed option and what is its function?

Q. I started up a 100% outside air system, and after a while the sight glass was alternately flashing then clear. Is there a problem in the system?

Q. I had to repair a leak on a 100% outside air unit, and some time after I recharged it, the sight glass began to flash. Do I still have a leak in the system?

Q. How much liquid SubCooling is recommended for your units?

Q. What kind of SuperHeat readings do you recommend for your units?

Types Of HVAC to Thermostat Connections

The first thing I have to say here is that the HVAC industry is the least "standardized" of any I have seen. The best word I can think of to describe the HVAC industry is "casual." Every rule has many exceptions...and nobody seems to worry about the lack of standardization much. But it is still useful to detail the few de-facto standards so you will have a starting point to understanding specific setups.

For the purposes of this tutorial, I'll ignore self-contained heaters and air-conditioners. These units, such as window-mount air conditioners, usually have an integral thermostat.

I'll mostly talk about controlling forced air heating and/or air conditioning systems, but the same control techniques are directly related to other types of heating such as hydronic. Every such system I've seen, no matter how complicated internally, has standard thermostat style connections to the outside world. The only difference is that hydronic and other specialty heating systems often require a fan call* along with the call for heat. Our programmable and remotely controlled thermostats can be set up to do this.

* "Call" is industry jargon for "the thermostat requesting..." which in fact simply means that the thermostat shorts the appropriate two wires together!

220V Baseboard

Let's dispense with this one right away. This is where 220 volt baseboard electric heating elements are wired directly to a special thermostat. The thermostat switches the 220 volts AC on and off directly. I have not seen a reasonable way to retrofit automated control of 220V baseboard heat.

Millivolt Heat Only

Some simple heating systems use what is called a "2-wire millivolt" system. These are usually gas-fired wall or floor heaters that do not have forced-air blowers. In other words, they are convection heaters. My house has such a wall-heater. (I converted the 2-wire millivolt system to a standard 24vac system via a small box I built. E-mail if you're interested.) There are two dead giveaways for a millivolt system: They do not have any connection to AC power. They connect to the thermostat with two...and only two...wires. The thermostat is typically a simple heat-only contact closure type.

Millivolt systems have the advantage of being incredibly simple. A very small electrical voltage is created by a bi-metallic device that sits in the pilot light's flame. This is wired in series with a simple thermostat and an electrically operated gas valve. When the thermostat closes and completes the circuit, a small current flows through the very efficient valve which opens and lets the gas through. Completely self-contained and, I think, quite ingenious. Unfortunately, as with most things ingenious, the system doesn't adapt well to other configurations. Most modern thermostats and HVAC control systems operate on a 24VAC standard. Thus, the selection of thermostats for a millivolt system is rather limited.

To control a millivolt heater, you can use a thermostat rated for use will a millivolt system. But you can also use most simple (non-electronic) standard heat-only thermostats. These thermostats are designed to switch 24VAC on and off, but since they do not use the 24VAC for any electronics internally, they work fine for millivolt systems. Just don't turn the "heat anticipator" up -- it won't work and the added resistance could interfere with the proper operation of the electric valve in the heater.

If you are installing a millivolt system, you could install two conductor thermostat wire, but we would recommend installing five conductor thermostat wire to allow future upgrades. Use the white and red wires.

For the thermostat we would recommend for a millivolt system.

24VAC Heat/Cool Non‑Heat Pump

A standard gas or gas/electric HVAC system has four connections, although it is often connected to the thermostat via a five-conductor cable. The connections are as follows:

Description	Color	Terminal Code
24VAC Return	Red	R
Call For Heat	White	W or W1
Force Fan On	Green	G
Compressor/Call For Cool	Yellow	Y or Y1

Note that the remaining wire (blue) is often not connected. It could be used for carrying the 24VAC common to the thermostat so that the thermostat can always have 24VAC power. Or it could be used for setback control of a dual-setting thermostat (see below.)

The HVAC system may have a "RH" (24VAC Return -- Heat) and "RC" (24VAC Return -- Cool) terminals rather than a single "R" terminal. Or, if the heating and cooling systems are independent, there may be a separate "R" terminal on each system. If this is the case, there are two independent 24VAC return lines (one for each system). You may need to keep these separate back to the thermostat and use a thermostat or control system that is "dual return" compatible. (All of our thermostats and control systems are.) Check with your HVAC system installer to see if you have to wire for dual returns (this is very rare).

The connections to a standard HVAC system work as follows: The thermostat "requests" heating, cooling, or just the fan from the HVAC system by shorting the appropriate control lines (heat/cool/fan) to the return line.

Shorting the heat (white) wire to the return (red) wire will cause the HVAC system to begin heating. Most HVAC systems will turn on the forced-air fan automatically, the thermostat does not need to do anything with the fan (green) wire when heating. (If the system does not automatically control the fan in heating mode, you'll need a thermostat that can call for fan when it calls for heat. Our programmable and remotely controllable thermostats can be set up this way.)
Shorting the cool (yellow) wire to the return (red) wire will cause the HVAC system to begin cooling. Again, the fan will be turned on automatically.
Shorting the fan (green) wire to the return (red) wire will cause the HVAC system to run the circulation fan. The fan may be left on as long as is desired. Normal heating and cooling cycles can occur, the fan will just never turn off.

Calling for both heat and cool at the same time is undefined and may damage the HVAC system. Most thermostats (including all of ours) have interlocks to keep this from happening.

Note the sequence of colors. The return (red) and heat (white) come first. If you have a heat only system, these might be the only two wires you need. But some heat only systems allow fan control, so the "force fan on" wire comes next (green). Lastly, if the system has air conditioning too, the call for cool (yellow) wire comes next.

This setup is sometimes described as "one stage heat/one stage cool." The vast majority of domestic HVAC control systems fit into this category. Such systems are usually wired with five conductor thermostat wire.

24VAC Heat/Cool Single-Stage Heat Pump

A common heat pump system has the following wiring & connections:

Description	Color	Terminal Code
24VAC Return	Red	R
Call For Auxiliary Heat	White	W1
Force Fan On	Green	G
Compressor	Yellow	Y or Y1
Changeover	Orange	C/O or O

Note: On some systems, the Changeover may be a Brown wire connected to a "B" terminal.

A single-stage heat pump system brings two new facets to the control equation: The changeover connection and auxiliary heating.

Heat pump systems cool the normal way, the compressor (call for cool) wire (yellow) is shorted to the return wire (red), the compressor and fan runs, and the HVAC unit cools the house. But they heat by running the compressor backwards! There is a new connection, called the changeover connection, that reverses the flow of freon in the system. (Also sometimes called the "reversing valve control".) Manufacturers couldn't get together on which way the changeover control worked (shorted=heat or shorted=cool) so all universal heat pump thermostats have switches or different contacts for each type. Consult the documentation on your HVAC system to determine which type you have. Thermostats either have a single output (marked C/O or O) that is switch selectable for either operating mode, or two outputs (marked O and B), where O is shorted=cool and B is shorted=heat.

The other new facet is auxiliary heating. The heat resulting from running the compressor backwards is efficient, but does not put out as many BTU's as may be required during the coldest parts of the year. So there is a supplemental form of heating added to the system, usually electric, and often either baseboard strips or heating elements in the HVAC stack itself. This auxiliary heating comes on when it is obvious that regular heating (running the compressor backwards) is not adequate (temperature is still falling.) Note that first regular heating is requested with the compressor and changeover wires, this leaves the old "call for heat" (white) wire available to use as an auxiliary heat request wire. Heat pump thermostats are designed to call for auxiliary heat when the temperature drops a few degrees below the heating set point.

The connections to a heat pump HVAC system work as follows: The thermostat "requests" regular heating, auxiliary heating, cooling, or just the fan from the HVAC system by shorting the appropriate control lines (auxiliary heat/compressor/fan/changeover) to the return line.

Shorting the auxiliary heat (white) wire to the return (red) wire will activate the supplemental (usually electric) heating system. The HVAC system will turn on the forced-air fan automatically, if needed for this form of heat.
Shorting the compressor (yellow) wire to the return (red) wire will cause the HVAC system to run the compressor. Whether the system is heating or cooling is determined by the state of the changeover wire (see below.) In one position, the system will cool, in the other, the system will heat. Again, the fan will be turned on automatically.
Shorting the fan (green) wire to the return (red) wire will cause the HVAC system to run the circulation fan. The fan may be left on as long as is desired. Normal heating and cooling cycles can occur, the fan will just never turn off.
Shorting the changeover wire (orange) to the return (red) wire will cause the HVAC system to reverse the compressor. Most systems are "changeover shorted = cool" which means that if both changeover (orange) and compressor (yellow) are shorted to return (red), the system will cool. If only compressor (yellow) is shorted to return (red), the system will heat. A few systems use changeover in the opposite manner.

It is unusual to call for auxiliary heat without calling for regular heat. (I.E.: only white and red shorted.) But some thermostats allow this function in case the compressor is damaged during a cold spell. The occupant can call for "emergency heat" and the electric heating will kick in without trying to run the compressor.

This setup is sometimes described as "two heat/one cool." The compressor only has one speed so it is also known as a "single stage heat pump." The vast majority of domestic heat pump HVAC control systems fit into this category. Note that the additional wire used is orange (or sometimes brown). The orange and brown wires only appear in seven conductor thermostat wire which is used to wire heat pump systems.

24VAC Heat/Cool Multi-Stage Heat Pump

A common multi-stage heat pump system has the following wiring & connections:

Description	Color	Terminal Code
24VAC Return	Red	RF
Call For Auxiliary Heat	White	W1
Force Fan On	Green	GT
Compressor Stage 1	Yellow	Y1
Compressor Stage 2	Not standardized, use Blue	Y2
Changeover	Orange	C/O or O

Note: On some systems, the Changeover may be a Brown wire connected to a "B" terminal.

A multi-stage heat pump system brings one more facet to the control equation: The second stage compressor control.

Multi-stage heat pump systems either have a dual-speed compressor or they have two compressors. The thermostat can cause the compressor to run at either a low or high setting. So the HVAC system can cool at two rates, and heat at three rates (remember the auxiliary heat).

Other than an extra "compressor call" wire, the multi-stage heat pump is controlled just like a single-stage heat pump. Thermostats designed for multi-stage heat-pumps are usually pretty sophisticated in how they turn on each successive stage.

This setup is sometimes described as "three heat/two cool." Multi-stage heat pump systems require more than five wires so you must use seven conductor thermostat wire.

Residential HVAC (Heating Ventilation & Air Conditioning) is a topic you don't see written about very much. It seems to me to be a pretty brutal business. After all, HVAC systems are rated in "tons" and are pretty massive. They include large ducts that are built-in-place by slicing and bending sheet metal (often by hand). And they draw lots of power and fuel to operate.

While HVAC manufacturers are gradually becoming more sophisticated, our experience with HVAC installers has shown that they are still more comfortable bending tin than pushing electrons. A homeowner that desires anything more elaborate than a single thermostat must design and procure the control portion of the system themselves.

Although this may seem like a daunting task, let me assure you that it really isn't that difficult. As with many "trade" oriented subjects, it just hasn't been written about publicly very much...until now. Let the professionals design and install your HVAC system and ducting, we'll show you how to design and install the control system.

Types Of HVAC to Thermostat Connections

- 220V Baseboard
- Millivolt Heat Only
- 24VAC Heat/Cool Non‑Heat Pump
- 24VAC Heat/Cool Single-Stage Heat Pump
- 24VAC Heat/Cool Multi-Stage Heat Pump
Choosing A Location For A Thermostat
Thermostat Wire
Wiring For A Thermostat In New Construction
Thermostats

- 220V Baseboard
- Mechanical Thermostats
- Digital/Electronic Thermostats
- Programmable Thermostats
- Remotely Controllable Thermostats
- - One-Way X-10 Compatible Thermostat
  - Two-Way X-10 Compatible Thermostat
  - RS232 Controllable Thermostat
  - RS485 Controllable Thermostat
- Other Common Thermostat Features
  - Heating Anticipator
  - Cooling Anticipator
  - Remote Temperature Sensor

Types Of HVAC to Thermostat Connections

For the purposes of this tutorial, I'll ignore self-contained heaters and air-conditioners. These units, such as window-mount air conditioners, usually have an integral thermostat.

Thermostat Wiring

Learn what the different thermostat wiring colors mean and how to service and repair control wiring. On your gas furnace, oil burner, heat-pump or air‑conditioner.

I get many inquiries about what the different wire colors mean and what they do and how troubleshoot problems where nothing happens or some parts will work and others will not.

First I am not into disclaimers because I assume you are smart enough to know not to mess with stuff that you are not familiar with or competent at doing. However I must make an exception here.

Control wiring on hvac equipment while harmless looking and 24 volts ac wont shock you (it will bite) can cause very bad things to happen if connected incorrectly. You could destroy your equipment at best or burn down your home or business at worst. Among the control wiring can be high voltages from 120/240 volts in a residential furnace to 480 or 600 volts in commercial equipment that can kill you instantly or burn you in a flash.

So if you are unsure of what you are doing or your abilities please leave it to someone who understands control wiring and electricity. If you need to ask for a wiring diagram then it is a good bet that you should seek extra help because the knowledge required to do the job safely far exceeds the knowledge required to read a diagram. So if you are having trouble with wiring to the point where you think that you need a diagram then its doubtful that one would help you.

Keep in mind that more than one disconnect may be required to remove all power from a piece of equipment. If your unit has service switches find them first. Or turn off the circuit breakers or pull the fuses, then check with a meter or test lamp to be sure the circuit is dead.

With all that said lets get to the terminal designations and colors. These designations are for 24 volt control wiring used in most residential and light commercial equipment, line voltage stuff can be different. Never assume that a wire color is correct for the function it should perform; check it out first The same goes for high voltage control wiring and motor terminals.

• {Terminal name}, {color}, {function}
• (R), Red, hot side of transformer.
• (C) Common side of transformer (See B)
• (Y), Yellow, Compressor activity (cooling or cooling and heating on a heat pump).
• (W), White, Heat (gas burner, oil burner , electric heat, (auxiliary heat on a heat pump including defrost output from the outdoor unit to activate electric heat and turn on the AUX. heat lamp).
• (G), Green, furnace blower fan. (needed for air conditioning, heat pumps and some electric furnaces). NOTE: on most thermostats the "G" and "Y" are connected together at all times when the fan switch is in the "Auto" mode, If you sully R to G then you will most likely energize the outdoor unit contactor!
• (O), Orange , Energize to cool (used for reversing valve on heat pumps)
• (B), Blue or Orange, Energize to heat (used on some systems, Rheem/Ruud is notorious for this).
• (B) or (X), Blue, brown or Black, common side of transformer. Needed on some electronic thermostats or if you have indicator lamps. Do not confuse with (B) Reversing valve (energize to heat) above. York and Trane like to use (B) as common.
• (E), blue, pink, gray or tan, emergency heat relay on a heat pump. Active all the time when selected, usually not used.
• (T), Tan or Gray, outdoor anticipator reset.
Used on GE/Trane/American Standard and some Carrier Products.
• (W2), Pink or other color, second stage of heat (may be same as (W) on heat pump or fossil fuel system). Note: some thermostats require a jumper from W1 to Y for heat pump operation.
• (Y2), Blue or Pink, second compressor stage.
• (L), Blue, brown, tan or gray service indicator lamp.
• Numbers, see manufacture's diagrams but can be stages of electric heat especially on York/Borg Warner/Coleman-Evcon, Frasier Johnson/ Air‑pro.
• (X2), Second stage of Electric Heat on GE/Trane/American Standard. See link above. Also used as indicator lamp or misc. contacts on other systems.

If you need to see the 24 volt control signal this lamp is an easy way do it. This 1819 lamp and sockets are available from Radio Shack. This clamp on ac ammeter is valuable for measuring ac current. The built in "Non Contact Volts" feature is worth the price. About $80 at Lowes or The Home Depot.

I cannot say it enough times: You should never go after your thermostat as a cause of the problem until you verify with test lamps or a meter. To do so you are not solving the problem but creating more and risk blowing a fuse or the control transformer. On most systems you can get to the control wiring at the air handler or furnace and take your reading there. You should only replace or change a thermostat after you verify that it does have a problem.

If your system does not have a fuse protecting the secondary side of the transformer add one before proceeding! An automotive ATC fuse holder and a 3 amp fuse should do the job. If you have a GE, Trane or American Standard unit and you blow the control fuse that is proprietary, replace it with and automotive 3 amp ATC fuse.

I would highly suggest identifying each wire by connecting the hot lead to each function wire with clip leads and a 3 amp fuse and recording the function before installing your new thermostat. While this is more trouble it may save you from ruining your day.

Sizing Residential Heating and Air Conditioning Systems

When a heating or air conditioning system becomes old and unreliable, or rising utility bills are emptying your wallet, replacing your system with a more efficient one becomes an option. Although newer models are more efficient, you must install the correct size in order to realize all of the savings from improved energy efficiency. Correctly sizing a heating system is also important because too small a system will not adequately heat the home during the coldest days of winter, or supply enough air conditioning in mid-August. Over-sizing the heating system is wasteful, not only because a larger system normally costs more to install, but also because it does not operate efficiently and, consequently, costs more to operate. Over-sized air conditioners (and heat pumps), in addition to costing more to buy and operate, do not run long enough to dehumidify the air. This results in the "clammy" feeling of some air conditioned houses.

The starting point for determining a properly sized unit is to check the "nameplate rating" of the existing system. The "nameplate" is a metal tag attached to the unit, usually near the control valves or wiring box on a furnace. On air conditioners or air-to-air heat pumps there will be nameplates on both the outdoor (compressor) units and the indoor (air handler) units. The nameplate will tell you the maximum Btu per hour output as well as other useful information about the unit. One ton of air conditioning equals 12,000 Btu/hour of cooling capacity. DO NOT ASSUME the existing unit is the right size. In the past, few if any new homes had adequate levels of insulation or air infiltration sealing. It was not uncommon to install furnaces and air conditioners with twice the needed capacity to make up for the large losses found in most production-built houses. As fuel costs rose, most people did at least some caulking, weatherstripping, and insulating. A full load (heat loss and heat gain) calculation should always be done on your home, especially if you believe that the insulation or windows of your home have been upgraded since the original heating or cooling systems were installed.

Sizing Heaters and Air Conditioners: Quick but Inaccurate Methods

Some contractors regularly use quick and incorrect methods when sizing a heater or air conditioner. Surveys by the Florida Solar Energy Center showed that one third of the contractors in that state used incorrect methods. The survey included only those contractors who were members of a professional contractors' association and who responded to the survey. The percentage of all contractors who use incorrect methods is probably much higher. Some of these methods, together with a brief description of their weaknesses, are listed below:

The contractor walks in the house, looks at the existing unit, and recommends that the replacement unit be the same size. This obviously does not take into account any improvements made to the house or mistakes made in sizing the original unit.
The contractor asks you how many square feet of living space there are in your house. He (or she) then tells you what size unit you need. This is called "sizing by square footage" and is the most commonly used inaccurate method of sizing. A typical value used for air conditioners is one ton (12,000 Btu/hour) per 500 square feet (46 m2). This does not take into account differences among houses in design, construction, or energy efficiency.
You may get different answers from different contractors who use the previous technique. In that case, they may have a different "rule of thumb," or one of them may be using the "lowest cost" method. This involves adjusting the square footage rule so that an in-stock unit is the right size for your house. Since the in-stock system costs the contractor (but not necessarily the homeowner) the least, this becomes the "lowest cost" method.
A more complex (but still inaccurate) method involves a prepared chart such as the one below, which is for heating systems. You use the chart in the following way. First, determine the floor area of all the heated rooms, and the levels of insulation in the floors, walls, and ceilings. Next, find the category (under description) that best describes the home. Then, multiply both the upper and lower values for heat loss in Btu per hour per square foot (from the table) by the floor area of the home to roughly estimate the required heating range.

Home Type or Characteristics	Heat Loss (Btu/hr/ft²)
1.) No insulation in walls, ceilings, or floors; no storm windows; windows and doors fit loosely	90 to 110
2.) R-11 insulation in walls and ceilings; no insulation in floors over crawl spaces; no storm windows; doors and windows fit fairly tight	50 to 70
3.) R-19 insulation in walls, R-30 in ceilings, and R-11 in floors; tight-fitting storm windows or double pane windows	29 to 35
4.) Superinsulated house with R-24 wall insulation, R-40 in ceilings, and R-19 in floor; tight-fitting storm windows or double pane windows; vapor barrier sealed carefully during construction	21 to 25
5.) Earth-sheltered house with litle exposure; well insulated	10 to 13

For example, if a home's energy-saving features are best described by category 2, and the home has a heated space of 1,500 square feet (139.35 m²), then the design heating load is roughly 75,000 to 105,000 Btu/hour (18,900 to 26,460 kilocalories/hour) (1,500 x 50 and 1,500 x 70). Although a chart like this looks official, not all houses fit the profile given. There is also no accounting for the thermostat temperature setting, the location of the house, the shape of the house, or many other factors.

The above methods can be used for a first "guess" or rough estimate over the phone. You cannot expect contractors to go to the home of everyone that calls them for an estimate. DO NOT USE THESE ESTIMATES for the final sizing.

Correctly Sizing Heating and Air Conditioning Units

Before making a final decision on any heating or cooling system, the design heating load and/or the design cooling should be calculated accurately. Homeowners should insist upon a correct system sizing before signing a contract. This service is often offered at little or no cost to homeowners by gas and electric utilities, major heating equipment manufacturers, and conscientious heating and air conditioning contractors. Manual J, published by the Air Conditioning Contractors of America (ACCA), is the most common method in use. Many user-friendly computer software packages or worksheets can simplify the calculation procedure. You should make sure that the procedure used by the contractor follows Manual J or one of the approved standards in the Bibliography below.

Many factors effect a home's design heating or cooling load. A good heating technician will measure walls, ceilings, floor space, and windows for the accurate determination of room volumes. Also, a good estimate takes into account the R-value of the home's insulation, windows, and building materials. An estimate of the building's air leakage is necessary. A blower door test is the best measurement. The duct sizes and insulation, as well as the location of the registers and returns, should be appropriate for the system type and size. ACCA, American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE), or other approved standards (see Source List below) should be followed. If you have an air-to-air heat exchanger (heat recovery ventilator), you need to account for heating and cooling the ventilation air. The orientation of the house also effects heat gain and heat loss through windows. This should be noted and entered into the calculation. Overhangs can reduce solar gain through windows. Make sure the contractor uses the correct design outdoor temperature and humidity for your area. Using a higher summer design temperature results in over-sizing air conditioners. Underestimating the latent (humidity) load (energy used by the air conditioner to remove moisture from the air) results in undersized air conditioners.

Any bid should include an agreement to provide written calculations (with procedures and standards that will be followed), equipment and installation warranties, a payment schedule, and a firm completion date. When the contractor is finished, get a copy of their calculations, assumptions, and the computer output or finished worksheet.

How to Study for the State Exam:

All correct answers have equal value and there are no score reductions for wrong answers. Therefore, all examination questions should be answered.
Ample time is provided to answer all examination questions, so be sure to read each question and its choices completely and carefully before selecting the BEST possible answer to the question.

Note: If there are any words that you don’t understand use your dictionary or even an internet search to get it understood before moving on.

How Our Program Works

These practice exams do not contain the exact questions and answers that will appear on the contractor examination but has the subject matter that the board wants you to know in order to pass the state exam. Once you UNDERSTAND the subject matter, you can then answer any question correctly. The goal of the program is to familiarize you with the different subject matter that will be included on the real test. Memorization has no part in it.

NOTE:

Once you achieve a 95% passing rate then print out your results as proof that you have achieved a 95% passing rate for the record.

You must study my practice exam as described here in this policy letter.

These practice exams do not contain the exact questions… Memorization has no part in it.

How to Take the State Exam

Don't answer the questions with answers that you think to be true through your own eyes only, and may not necessarily be what the real exam is asking for. So answer all questions in a way that answers "the questions that the real exam is asking". Don't add more to it or over complicate it.
The Questions ask of you are simple and blunt, if you over complicate them by adding your opinion and your “know it alls” then you may lose.
Just take their simple questioned exam and only answer those as they are, without adding your vast data base of knowledge and so over complicating it.

When you complete the real exam save the print out that the testing center has given you as proof that you failed or passed.

Best

Mario Robles

Tech Support

Prepare for the HVAC Licensing Exam

EMPLOYMENT / JOB APPLICATION

PERSONAL INFORMATION

EDUCATION

EDUCATION

Test 1

Test 3

Test 2

Labor Laws

Labor Laws

The Davis-Bacon Act

The Walsh-Healey Public Contracts Act

The Service Contract Act

The Contract Work Hours and Safety Standards Act

The Wage Garnishment Law

The Employee Polygraph Protection Act

The Family and Medical Leave Act

Title VI of the Civil Rights Act

The Equal Pay Act

The Age Discrimination in Employment Act (ADEA)

The Worker Adjustment and Retraining Notification Act (WARN)

Title III of the Consumer Credit Protection Act (CCP A)

The Uniformed Services Employment and Reemployment Rights Act (USERRA)

Purpose of New Hire Reporting:

Hiring Minor for Construction Work:

Employee Documentation

Employee Documentation

Form 1-9:

IRS Form W-4:

IRS Form W-5:

State Tax Form:

Employment Application:

Policy Signoffs:

Americans with Disabilities Act (ADA)

LAW AND BUSINESS

Business Practices Office Practices:

Management

Sole Proprietorship, Partnerships, And Corporations

Taxes and Compensation

Finance

Accounting And Bookkeeping

Assets

Bid Preparation Bid Analysis:

Bidding

Subcontracting

Materials

Labor

Direct and Indirect Costs

Overhead and Profit

Calculating Overhead Percentage

Alternative Overhead and Profit Methods

Contracts Contract Analysis:

A Home Improvement Contract or Performance Contract

Contract Types

Contract Laws

Contract Operations Planning:

Profits

Scheduling

Critical Path Method

Liability and Insurance

Subcontractor Substitution

Safety

Employee Safety and Record Keeping:

Job Site Safety:

Labor

Legal Lien laws:

Stop Notice

Negotiations

Arbitration

Alternatives

Civil Action

SMACNA Symbols

Manual For HVAC General Terms

Efficiency

Sound Ratings

Indoor Coils

HVAC

Basic Measurement Skills

Duct Load for Heating

Window, Glass Door, Wood and Metal Door Area