Other Construction Industry Terminology

AIA Contract Documents

Standardized contracts and forms published by the American Institute of Architects that define relationships, risk, and responsibilities among owners, designers, and contractors.

We'll use AIA A101 and A201 for the prime agreement; The subcontract will follow AIA A401; Submit the pay app on AIA G702/G703 each month.

Allowance

A budget placeholder in the contract for items not fully defined at bid time, later reconciled to actual cost via change order.

The door hardware allowance is $45,000 pending final selections; We carried an allowance for rock excavation; The tile allowance was under-run and credited back to the owner.

As-Built Drawings

Record drawings that show the final installed conditions, dimensions, and locations of all work after construction.

Update the as-builts weekly as RFIs are resolved; The owner will not release retainage until as-builts are submitted; As-builts reflected the rerouted storm line.

ASTM International

A standards organization that develops and publishes technical standards for materials, products, systems, and services.

Concrete must meet ASTM C94 requirements; Structural bolts shall comply with ASTM A325; Test soils per ASTM D1557.

Authority Having Jurisdiction (AHJ)

The public agency or official responsible for permitting, inspections, and code enforcement on a project.

The fire marshal is our AHJ for life-safety; Submit the site plan to the city AHJ; The AHJ required an extra hydrant.

BIM (Building Information Modeling)

A data-rich 3D/4D/5D model used to coordinate disciplines, detect clashes, simulate schedule, and quantify cost.

Run clash detection in Navisworks on the BIM; The model is at LOD 300 for coordination; We linked the P6 schedule for a 4D BIM sequence.

Bill of Quantities (BOQ)

An itemized list of measured work quantities used to price unit-rate contracts and compare bids.

Price excavation by BOQ cubic yards; The BOQ includes provisional sums; We'll reconcile monthly based on measured BOQ quantities.

Bonding Capacity

The maximum surety credit a contractor can obtain for bid, performance, and payment bonds, based on financial strength and track record.

Our single-job bonding capacity is $25M; We need a 100% performance bond for this job; Increase aggregate capacity before pursuing the airport project.

Building Envelope

The physical separator between interior and exterior (walls, roofs, windows, doors) that controls air, water, vapor, and thermal performance.

Perform an envelope blower door test; The air barrier failed at window interfaces; Commission the envelope per spec 01 91 13.

Buyout

The post-award process of finalizing subcontracts, scopes, and major purchase orders to lock in pricing and risk.

We achieved $150k in buyout savings on MEP; Clarify scope gaps during buyout; Steel was bought out with a 10-week lead time.

Change Order (CO)

A formal modification to the contract that adjusts scope, price, and/or time.

CO-07 adds 12 parking spaces and 10 days; Submit a change order request for concealed conditions; We issued a credit CO for VE lighting.

Commissioning (Cx)

A quality-focused process that verifies building systems are planned, installed, tested, and capable of being operated and maintained per the owner's requirements.

The Cx agent will lead functional performance tests; Submit prefunctional checklists before startup; Track Cx issues in the log.

Contingency

A budget reserve to cover unknowns or risks (owner, design, or contractor contingency).

Use design contingency for incomplete docs; Contractor contingency covered winter protection; We transferred unused contingency to savings.

Critical Path Method (CPM)

A scheduling technique that determines the longest path of activities with zero total float, dictating project finish.

Delaying the switchgear impacts the critical path; Update CPM logic ties monthly; The slab pour gained 2 days of float.

CSI MasterFormat

A standardized numbering system for specifications and cost breakdowns across divisions and sections.

Division 01 covers General Requirements; See 26 05 19 for wire specs; Code the estimate using MasterFormat.

Design-Bid-Build (DBB)

A delivery method where the owner contracts separately with the designer and builder; construction follows completed design.

DBB with lowest responsible bidder; DBB requires complete CDs before bidding; Longer schedule than DB in many markets.

Design-Build (DB)

A delivery method where one entity is responsible for both design and construction, often enabling speed-to-market and single-point accountability.

Pursue DB under a GMP; The design-builder holds the A/E; Early trade input during DB lowered risk.

Division 01 Specifications

The General Requirements division that sets administrative and procedural rules (submittals, temp facilities, quality, safety, closeout).

Follow Division 01 for submittal timelines; Temp power is in 01 50 00; Closeout per 01 77 00.

Earned Value Management (EVM)

A method that integrates scope, schedule, and cost to measure performance (PV, EV, AC, CPI, SPI).

CPI < 1.0 shows cost overrun; EV lags PV due to late steel; SPI improved after resequencing.

Engineer, Procure, Construct (EPC)

A turnkey contract model common in industrial/infrastructure where one party designs, buys, and builds the facility.

The EPC wraps design and schedule risk; EPC contractor will guarantee output; Arrange long-lead procurement early in EPC.

Escalation Clause

A contract provision that adjusts price for material or labor cost changes based on an agreed index or trigger.

Steel escalates per PPI index; Include a fuel surcharge escalation; We hit the copper escalation threshold.

Float (Total/Free)

Schedule slack; total float is time an activity can slip without delaying project finish; free float without delaying successors.

Site utilities have 5 days of total float; Pouring the slab uses up free float; Negative float indicates required acceleration.

Gantt Chart

A bar-chart schedule showing activities, durations, and sequences over time.

Publish a 6-week look-ahead Gantt; The owner requested a baseline Gantt by Friday; Link procurement to installation bars.

Guaranteed Maximum Price (GMP)

A contract price cap where the contractor guarantees not to exceed an agreed maximum, often with shared savings provisions.

Execute GMP Amendment No. 2 for site work; Buyout savings reduce the GMP; Allowance overages can push towards GMP.

HAZMAT

Hazardous materials (e.g., asbestos, lead, PCBs, contaminated soils) requiring special handling, abatement, and disposal.

Submit SDS for all HAZMAT; Schedule asbestos abatement before demo; Soil is classified as HAZMAT per lab results.

IBC (International Building Code)

A model code adopted by jurisdictions to regulate building safety, structural design, fire protection, and means of egress.

Design meets IBC 2021 for Risk Category II; Verify IBC occupancy separations; Stairs must comply with IBC handrail rules.

IFC (Issued for Construction)

The approved set of drawings/specs released for building, superseding prior design iterations.

Build off the IFC set dated 06/15; Cloud all IFC changes on the cover sheet; The city stamped the IFC drawings.

IPD (Integrated Project Delivery)

A collaborative delivery model with multi-party agreements, shared risk/reward, target cost, and lean methods.

The IPD team works from a Big Room; Savings are shared per the IPD agreement; TVD drives decisions in IPD.

JSA (Job Safety Analysis)

A task-level safety review that breaks work into steps, identifies hazards, and defines controls before execution.

Conduct a JSA before confined-space entry; Update the JSA when conditions change; Supervisors sign off each JSA daily.

KPI (Key Performance Indicator)

A measurable value that tracks performance against objectives (e.g., safety, schedule, quality, financials).

Our LTIR KPI is 0.5 YTD; Monitor schedule variance as a KPI; First-pass yield is a QA KPI.

Lean Construction

Application of lean principles (flow, pull, waste reduction) to improve reliability and value in project delivery.

Run pull planning with trades; Implement the Last Planner System; Use takt planning for interiors.

Lien Waiver

A document releasing a party’s right to file a mechanic’s lien for payment received to date.

Submit conditional lien waivers with the pay app; Collect unconditional waivers upon funding; Subs must provide lower-tier waivers.

Liquidated Damages (LDs)

Pre-agreed daily damages for late completion, representing a reasonable estimate of owner’s losses.

LDs are $2,500/day past the substantial completion date; We negotiated LD caps; Acceleration avoided LD exposure.

MEP (Mechanical, Electrical, and Plumbing)

Primary building systems responsible for heating/cooling, power/lighting, and water/drainage.

Coordinate MEP in the ceiling plenum; MEP rough-in precedes drywall; The MEP engineer approved the submittal.

Method Statement

A written plan describing how specific work will be executed safely and to spec, including equipment, sequence, and QA/QC.

Provide a method statement for the crane picks; Review the shoring method statement with the PE; Include hold points in the method statement.

Mobilization

The initial phase of bringing labor, equipment, trailers, utilities, permits, and controls to site to start work.

Bill mobilization as a separate SOV line; Mobilize after NTP and insurance binders; Mobilization includes fencing and temp power.

Non-Conformance Report (NCR)

A formal record of work that does not meet requirements, with corrective and preventive actions.

Issue an NCR for out-of-tolerance anchor bolts; Close the NCR after rework and reinspection; Trend NCRs to spot systemic issues.

Notice to Proceed (NTP)

The owner’s written authorization to start work, which triggers contract time and mobilization.

Contract time starts five days after NTP; We can't book costs before NTP; Issue NTP upon permit issuance.

OAC Meeting

Regular Owner–Architect–Contractor coordination meeting to review schedule, RFIs, submittals, costs, risks, and decisions.

Add the AHJ visit to this week’s OAC agenda; Publish OAC minutes within 48 hours; Decide the façade mockup at the OAC.

Operations and Maintenance (O&M) Manuals

Documentation and instructions for operating and maintaining installed systems and equipment, delivered at closeout.

Include warranties in the O&M manuals; O&M binders must match as-builts; Train facilities staff using the O&Ms.

Pay Application

A periodic invoice requesting payment for completed work, often tied to the Schedule of Values and certified by the design professional.

Submit the pay app by the 25th; Retainage will be withheld on this pay app; Architect certified the pay app for 85% complete.

Performance Bond

A surety instrument guaranteeing the contractor will perform per the contract; protects the owner if the contractor defaults.

Provide a 100% performance bond; The surety approved our bond line; Bond claims are subject to the bond form.

Primavera P6

An enterprise scheduling tool widely used for CPM planning, resource loading, and progress tracking.

Update the baseline in P6; Export the P6 schedule to PDF for the OAC; Resource-load the P6 plan for critical crews.

Punch List

A list of incomplete or deficient items identified near substantial completion that must be corrected before final acceptance.

Walk units and issue punch lists by Friday; Close 95% of punch items before turnover; Log punch list progress weekly.

QA/QC (Quality Assurance/Quality Control)

QA is the planned system of procedures; QC is the actual inspections/tests to verify compliance with requirements.

Develop an ITP as part of QA; QC hold points require engineer sign-off; Track rework as a QC metric.

Quantity Takeoff (QTO)

Measuring and quantifying materials and work from drawings/models to build estimates or control costs.

Perform a digital takeoff for drywall; Use the model for QTO of pipe lengths; Reconcile QTO to the BOQ.

RFI (Request for Information)

A formal inquiry used to clarify drawings/specs or resolve conflicts in the documents.

Submit an RFI for the beam elevation conflict; Reference detail 5/S3.2 in the RFI; Track RFI impacts on schedule.

Retainage

A portion of each payment withheld to ensure satisfactory progress and closeout, released upon milestones.

Retainage is 10% until substantial completion; Request a retainage reduction; Release final retainage after punch completion.

Schedule of Values (SOV)

A detailed breakdown of the contract sum by work items used to support progress billing.

Add a line for temporary utilities to the SOV; Bill 50% complete on the SOV this month; Architect rejected the SOV for lack of detail.

Value Engineering (VE)

A structured process to improve value by balancing function, performance, cost, and schedule, often proposing alternatives.

VE the façade to a unitized system; Submit VE alternates for lighting; VE saved 3% without hurting performance.