DOCUMENTING CONTRACTOR'S COST ESTIMATES
In this issue's compliance article, we discussed how, in case of an audit, you must be able to show that you're paying a reasonable price for contractor services. HUD has some specific guidelines for when you must get cost estimates. Take the quiz below to test your knowledge of HUD's requirements.
INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, (1) b, (2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!
HUD requires you to get written estimates from contractors when you expect the services or supplies to cost how much per year?
$50,000 or more
$20,000 or more
$10,000 or more
For services or supplies that require written estimates, at least how many estimates must you get?
When you're allowed to get oral—instead of written—estimates, you must get at least three estimates. True or false?
How long must you keep proof of all estimates, including written estimates, bid packages, and oral estimates?
ANSWERS & EXPLANATIONS
Correct answer: c
When you expect services or supplies to cost $10,000 or more, HUD generally requires that you get written estimates.
Correct answer: c
You might decide to get more written estimates, but HUD requires a minimum of three.
Correct answer: b
False. For work costing less than $10,000, HUD doesn't set a minimum number of estimates you must get. But you're required to secure estimates to assure that the site is getting the lowest possible cost.
Correct answer: a
HUD requires you to keep this proof for at least three years after the work or service is completed or the supplies are bought.
See The Lesson For This Quiz
|How to Document Contractors' Cost Estimates|