Construction PM
Glossary.

Standardized contract forms published by the American Institute of Architects, widely used across the construction industry. Common ones include A101 (Owner-Contractor Agreement) and G702 (Application for Payment).

A document issued during the bidding period that modifies or adds to the original bid documents. Addenda become part of the contract documents once the contract is signed.

A dollar amount included in a contract for a specific item or scope of work where the exact cost is not known at the time of bidding. The actual cost is reconciled during construction.

Drawings revised during and after construction to show the actual conditions and dimensions of the completed work. Critical for future renovation, maintenance, and regulatory compliance.

The licensed architect who signs and seals the construction drawings and is legally responsible for the design. They are the design authority on the project.

A charge by a general contractor to a subcontractor (or vice versa) for work that was the other party's responsibility but had to be completed or corrected by someone else.

A surety bond submitted with a bid that guarantees the bidder will enter into the contract at the bid price if selected. If the bidder refuses, the bond compensates the owner.

The process of comparing bids from multiple subcontractors or suppliers to ensure they are pricing the same scope of work, making accurate apples-to-apples comparisons possible.

A digital 3D model-based process that gives architecture, engineering, and construction professionals the tools to plan, design, construct, and manage buildings. BIM models contain geometry, spatial relationships, and building component data.

Official approval from a local government agency authorizing construction work. Permits ensure the work complies with zoning, building codes, and safety standards. Work without permits can result in fines and forced removal.

A written agreement between the owner and contractor that modifies the original contract scope, price, or schedule. Change orders must be signed by both parties to be binding.

A document issued by a local government certifying that a building complies with applicable building codes, zoning laws, and regulations and is safe for occupancy.

A percentage or dollar amount added to an estimate or budget to cover unforeseen costs. Industry standard ranges from 5-10% for well-defined projects to 15-20% for projects with significant unknowns.

A project scheduling technique that identifies the longest sequence of dependent tasks. Any delay to a task on the critical path delays the entire project. Used primarily on large commercial projects.

A contract type where the owner pays the contractor for actual costs of labor, materials, and subcontractors plus a fixed fee or percentage for overhead and profit. Also called Time and Materials (T&M) or Cost-Plus-Fee.

The Construction Specifications Institute organizes construction work into 50 divisions (MasterFormat). Division 03 is Concrete, Division 09 is Finishes, Division 26 is Electrical, etc. Used for organizing specifications and cost coding.

A written record of each day's activities on a construction site, including crew, weather, work completed, materials, visitors, and issues. Contemporaneous daily reports are critical legal documents in dispute resolution.

A formal request for additional time or compensation due to events that delayed the project beyond the original schedule. Must be supported by schedule analysis and contemporaneous documentation.

The process of removing equipment, materials, temporary facilities, and personnel from a project site after work is complete.

A project delivery method where a single entity (the design-builder) provides both design and construction services under one contract. Contrasts with Design-Bid-Build where design and construction are separate contracts.

A payment schedule tied to project milestones or completion percentages. As the contractor reaches each milestone, they 'draw' (invoice for) that portion of the contract amount.

A project management metric that compares the budgeted cost of work completed to the actual cost and the planned schedule. Used to assess project performance and forecast final cost.

A contract provision that allows for price adjustments when material or labor costs increase beyond a specified threshold. Protects contractors from volatile material prices on long-duration projects.

A prediction of the cost to complete a scope of work, based on quantities, unit costs, labor rates, and markup. Can range from a rough order of magnitude (+/-30%) to a detailed bid estimate (+/-5%).

A written directive from the architect or owner to the contractor authorizing minor changes in the work. Unlike a change order, a field order typically does not change the contract price or time.

The point at which all work, including punch list items, has been completed in accordance with the contract documents. Triggers release of retainage and start of warranty periods.

The amount of time a task can be delayed without affecting the project's critical path or completion date. Tasks with zero float are on the critical path.

A contract clause that excuses performance due to extraordinary events beyond either party's control -- natural disasters, pandemics, wars, government actions. Must be specifically defined in the contract.

A bar chart that shows project tasks plotted against time. Each task is a horizontal bar whose length represents its duration. The most common visual format for construction schedules.

The overhead costs of running a project that are not directly tied to a specific trade -- project management, temporary facilities, dumpsters, portable toilets, insurance, permits. Typically 10-15% of direct costs.

The party responsible for the overall coordination and completion of a construction project. The GC typically holds the prime contract with the owner and subcontracts portions of the work.

A contract type where the contractor guarantees the project will not exceed a specified maximum price. Cost savings below the GMP may be shared between owner and contractor.

Direct construction costs: labor, materials, equipment, and subcontractors. Contrasts with soft costs (design, permits, financing, legal fees) which are indirect.

See Retainage. A percentage of each payment withheld by the owner until the project is substantially or finally complete.

The final, approved set of drawings and specifications that the contractor is authorized to build from. Changes after IFC require change orders.

Costs not directly attributable to a specific project task -- overhead, insurance, office expenses, equipment depreciation. Contrasts with direct costs (labor, materials for specific tasks).

An examination of work by a building inspector, engineer, or architect to verify compliance with plans, specifications, and building codes. Required at specific stages before work can proceed.

A financial report comparing actual costs to estimated costs for a specific project, broken down by category (labor, materials, subcontractors, equipment). The primary tool for tracking project profitability.

A measurable value that indicates how effectively a contractor is achieving business objectives. Common construction KPIs include gross margin, on-time completion rate, safety incident rate, and labor utilization.

A project management approach adapted from lean manufacturing that focuses on minimizing waste (time, materials, motion) and maximizing value delivery. Methods include Last Planner System and pull planning.

A legal claim against a property by a contractor, subcontractor, or supplier who has not been paid for work or materials provided. Also called a mechanic's lien or construction lien.

A document signed by a contractor, sub, or supplier waiving their right to file a lien for payment received. Can be conditional (waiver effective only when check clears) or unconditional.

A pre-determined amount specified in the contract that the contractor must pay the owner for each day the project extends beyond the completion date. Intended to compensate the owner for delay costs.

Materials or equipment with extended procurement timelines (weeks or months). Examples: custom windows, structural steel, switchgear, specialty fixtures. Must be ordered early to avoid schedule delays.

A rolling 2-3 week schedule updated weekly that shows upcoming work in detail. The most practical day-to-day scheduling tool for active construction sites.

The percentage added to direct costs to cover overhead and profit. Varies by trade and market -- residential contractors typically mark up 35-65% on labor and 10-30% on materials.

A significant event or achievement in a project's timeline -- foundation complete, building dried in, substantial completion. Used for progress tracking and often tied to payment schedules.

The process of assembling personnel, equipment, materials, and temporary facilities at the project site to begin construction work.

A document recorded by the property owner stating that construction work has been completed. Filing a NOC starts the clock on lien deadlines in most states.

A written notice from the owner to the contractor authorizing the start of work and establishing the contract start date. The project schedule begins from the NTP date.

Owner-Architect-Contractor meeting, held regularly (typically weekly or biweekly) during construction to discuss progress, issues, submittals, and RFIs.

Business expenses not directly attributable to a specific project -- office rent, insurance, vehicles, administrative staff, accounting, marketing. Typically expressed as a percentage of revenue (15-30% for small contractors).

A person or firm hired by the property owner to act on their behalf during design and construction, managing the owner's interests and decision-making.

A surety bond that guarantees the contractor will complete the work according to the contract terms. If the contractor defaults, the surety either completes the work or compensates the owner.

The planning phase before physical construction begins -- estimating, value engineering, scheduling, permitting, procurement planning, and constructability review.

A periodic payment made to the contractor based on work completed to date, typically monthly. Calculated from a schedule of values or percentage of completion.

A list of items that need to be completed or corrected before the project can reach final completion. Created during the substantial completion walkthrough by the architect, owner, or both.

A written document from a buyer to a supplier authorizing the purchase of specific materials, equipment, or services at agreed-upon prices.

QA is the proactive process of preventing defects (standards, training, inspections). QC is the reactive process of identifying and correcting defects after they occur (testing, inspection, rework).

A percentage (typically 5-10%) of each progress payment withheld by the owner until the project reaches substantial or final completion. Intended to ensure the contractor finishes all work and punch list items.

Work that must be done again because it was performed incorrectly the first time. Industry research from the Construction Industry Institute estimates rework accounts for 5-15% of total project cost.

A formal written question from the contractor to the architect or engineer seeking clarification on the drawings or specifications. RFIs are numbered, tracked, and become part of the project record.

A document issued by an owner or GC inviting contractors to submit detailed proposals for a project, including qualifications, approach, timeline, and pricing.

The installation of mechanical, electrical, and plumbing (MEP) systems within wall and floor cavities before they are closed up with drywall, flooring, or other finishes.

A detailed description of all work to be performed under a contract -- tasks, deliverables, materials, standards, and exclusions. The most important document for preventing disputes.

Detailed drawings prepared by the contractor, subcontractor, or manufacturer showing how specific components will be fabricated and installed. Reviewed and approved by the architect before fabrication.

Indirect project costs not related to physical construction -- architectural fees, engineering, permits, legal, financing, insurance, and project management.

A contractor hired by the general contractor to perform a specific portion of the work -- electrical, plumbing, HVAC, roofing, concrete, etc. The GC remains responsible to the owner for the sub's work.

A document (shop drawing, product data, sample, or mockup) submitted by the contractor to the architect for review and approval before the item is fabricated or installed.

The point at which the work is sufficiently complete that the owner can use it for its intended purpose. Triggers the start of warranty periods and the punch list process.

The contractor's on-site representative responsible for day-to-day field operations -- coordinating crews, managing the schedule, ensuring quality, and maintaining safety.

A contract type where the owner pays for actual labor hours (at agreed rates) and actual material costs (at cost plus markup). Used when scope is uncertain or for small/emergency work.

The process of measuring quantities of materials and labor from construction drawings to produce an estimate. Can be done manually from printed plans or digitally using takeoff software.

The maximum time a task can be delayed without delaying the project completion date. Tasks with zero total float are on the critical path.

A systematic process of reviewing project designs and specifications to reduce costs without sacrificing quality or function. Typically performed during preconstruction.

The time during which the contractor is obligated to repair or replace defective work at no additional cost to the owner. Standard warranty is 1 year from substantial completion, though some components carry longer manufacturer warranties.

A day on which weather conditions prevent work from being performed. Contract-defined weather days typically exclude the contractor from liquidated damages for delay.

A hierarchical decomposition of a project into smaller, manageable components. Used for estimating, scheduling, and cost tracking. Each WBS element can be independently scoped, estimated, and tracked.

A document authorizing specific work to be performed, typically for maintenance, repair, or small scope additions. Less formal than a change order.