True or False: A contractor must have sufficient resources to cover business expenses during lag periods.

The statement is true because having sufficient resources to cover business expenses during lag periods is crucial for a contractor's financial stability and operational continuity. Lag periods, which can occur between project completions or during seasonal downturns, can put significant strain on cash flow. Contractors need to ensure they have enough working capital or reserves to maintain operations, pay employees, cover overhead costs, and fulfill any contractual obligations during these times. This preparedness allows them to navigate through challenging periods without jeopardizing their business or reputation. Therefore, being financially equipped to manage lag periods is an essential aspect of sound business practice in the contracting sector.