A Class C contractor in Virginia wants to bid on a $125,000 commercial renovation project. What is the issue with this scenario?
Correct Answer
A) The project exceeds the Class C monetary limit
Class C contractors in Virginia are limited to projects under $120,000, so a $125,000 project exceeds their licensing authority and would require a Class B license.
Why This Is the Correct Answer
Virginia's Class C contractor license is limited to single contracts under $120,000 and total annual volume under $150,000. A $125,000 project exceeds the $120,000 per-contract ceiling for Class C. The contractor would need to hold a Class B license (which covers contracts from $120,000 up to $7,500,000) to legally bid on this project.
Why the Other Options Are Wrong
Option B: Class C contractors need additional insurance for this amount
There is no special additional insurance requirement triggered solely by a contract amount that exceeds the Class C threshold. The issue is the license class limit, not an insurance threshold. Insurance requirements are tied to license class, not individual project size beyond that class.
Option C: No issue - this is within Class C limits
This is incorrect. The $125,000 project does exceed the Class C per-contract limit of $120,000, making this scenario a clear licensing violation. Choosing 'no issue' would mean the contractor illegally proceeds on a project for which they lack authority.
Option D: Class C contractors cannot work on commercial projects
Class C contractors are not barred from commercial projects by project type. The restriction is monetary, not sector-based. A Class C contractor can legally work on commercial projects as long as each contract is under $120,000 and annual volume stays under $150,000.
Memory Technique
Virginia Class limits: C = $120K per contract / $150K annual. B = $120K–$7.5M per contract. A = unlimited. Think of C as the 'Compact' class — small projects only, capped at $120K per job. The $125K project is $5K over the compact limit.
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