A Tier 2 contractor in SC is bidding on a $275,000 commercial renovation project. The contractor's current contract volume is $850,000. What is the maximum additional contract value they can legally accept?
Correct Answer
A) $150,000
Tier 2 contractors have a $1,000,000 contract volume limit. With $850,000 current volume, they can accept $150,000 more ($1,000,000 - $850,000 = $150,000). The $275,000 project exceeds this limit.
Why This Is the Correct Answer
$150,000 is correct. Tier 2 contractors in South Carolina have a maximum contract volume cap of $1,000,000. With $850,000 already committed, the remaining capacity is $1,000,000 − $850,000 = $150,000. Even though the bid is for $275,000, they cannot legally accept more than $150,000 in additional volume.
Why the Other Options Are Wrong
Option B: $125,000
$125,000 is incorrect. This would imply a cap of $975,000 for Tier 2, which is not the SC standard. The cap is $1,000,000, leaving exactly $150,000 available.
Option C: $200,000
$200,000 is incorrect. Accepting $200,000 more would bring the total to $1,050,000, which exceeds the $1,000,000 Tier 2 cap and would be a violation of SC contractor licensing law.
Option D: $175,000
$175,000 is incorrect. This would bring the total to $1,025,000, also exceeding the $1,000,000 Tier 2 limit. Only $150,000 can be legally accepted.
Memory Technique
SC Tier 2 = $1 Million cap. Think of it as a bucket: the bucket holds $1M. If $850K is already in it, only $150K more fits — regardless of the size of the new project you're pouring.
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