Trade Contractors Industry Terminology

Addendum

A formal change or clarification to the bidding documents issued before contract award; modifies drawings, specs, or terms and becomes part of the contract if acknowledged.

Addendum 3 revises the door hardware schedule; Bid per Addendum 4, detail A5.2; Make sure you acknowledge all addenda on the bid form.

As-Built Drawings

Record drawings that show the actual installed conditions of the project, reflecting field changes, differing conditions, and approved modifications for operations and future work.

Update the as-builts daily to capture rerouted conduit; The owner wants native CAD/PDF as-builts at closeout; Verify valve locations against the as-built set before coring.

Backlog

The total value of contracted work not yet completed; a key indicator of future revenue and capacity planning for a trade contractor.

Our 12-month backlog is $48M; This award boosts the electrical division’s backlog through Q3; We need to replenish backlog by bidding two more schools.

Baseline Schedule

The original, owner-approved project schedule used as the benchmark for progress measurement, delay analysis, and change management.

The baseline was approved with a 12-month duration; We’ll status against the baseline each month; Any re-sequencing requires a baseline change request.

BIM (Building Information Modeling)

A data-rich 3D digital representation of the project used for coordination, visualization, quantity takeoff, prefabrication, and 4D/5D planning.

Export quantities from the BIM for rough-in; Run clash detection in BIM before fabrication; The GC wants a federated BIM for coordination.

Bid Bond

A surety bond that guarantees the bidder will enter into a contract and provide required performance/payment bonds if awarded, typically a percentage of the bid.

Provide a 10% bid bond with your proposal; Without the bid bond, the bid is non-responsive; The surety issued the bid bond under our program.

Bonding Capacity

The maximum amount of work a surety will bond for a contractor, usually expressed as single job and aggregate limits, based on financial strength and performance.

Our single limit is $10M and aggregate is $30M; This project exceeds our bonding capacity; Strengthen financials to increase bonding capacity.

Change Order (CO)

A formal modification to the contract scope, price, and/or time due to added work, unforeseen conditions, or design changes.

Submit a CO for the added VAV boxes; CO #12 extends the contract 10 days; The owner issued a unilateral change order.

Closeout

The process of completing all contractual requirements at project end, including punch-list completion, O&M manuals, as-builts, training, and warranties.

We’re targeting closeout in four weeks; Upload O&M manuals and warranties to the closeout tracker; Final lien waivers are required for closeout.

Commissioning (Cx)

A quality process that verifies building systems are installed, calibrated, and perform per the owner’s requirements through inspections and functional tests.

Cx functional testing starts Monday; Provide pre-functional checklists to the Cx agent; Correct NCRs before Cx retesting.

CPM (Critical Path Method)

A scheduling technique that identifies activity sequences with zero total float (critical path) to determine project duration and analyze delays.

Duct install is now on the critical path; Use CPM logic to see float impacts; The time impact analysis is based on CPM.

Daily Report

A site log capturing manpower, work performed, equipment, deliveries, safety observations, and issues for each day; used for documentation and claims.

Enter manpower and weather in today’s daily; Note the delivery delay in the daily report; Attach photos of the slab pour to the daily.

Design-Build (DB)

A project delivery method where design and construction are under a single contract, encouraging early collaboration and faster execution.

As the DB HVAC trade, we own design and install; Our DB proposal includes stamped drawings; Early DB coordination reduces change orders.

Escalation Clause

A contract provision allowing price adjustments due to market-driven increases in materials or labor costs beyond the contractor’s control.

Our proposal includes a steel escalation clause; Trigger escalation if copper exceeds the index by 5%; The contract removed escalation—price accordingly.

Estimate (Bid Estimate)

A quantified and priced assessment of project cost, assembled from quantity takeoffs, labor/equipment rates, subcontractor quotes, and markups.

The detailed estimate includes labor productivity factors; We carried allowances for uncertain scope; Update the estimate after addendum 2.

Float

The amount of time an activity can slip without delaying a successor (free float) or the project completion (total float).

The riser rough-in has 3 days of total float; Consuming free float may impact the next trade; A CO that uses float may not warrant time.

General Conditions

Contractual provisions and indirect project costs (e.g., supervision, site services, safety, temporary works) necessary to support construction but not tied to a specific trade item.

Superintendent and temp utilities are in general conditions; Division 01 specs define general conditions; Track GC’s general conditions in pay apps.

GMP (Guaranteed Maximum Price)

A contract type that caps the owner’s cost at an agreed maximum; often includes open-book accounting, allowances, and shared savings provisions.

The MEP package is part of the GMP; Savings below the GMP are shared 70/30; Buyout gains move to GMP contingency.

JHA (Job Hazard Analysis)

A task-level safety assessment that identifies hazards and specifies controls and PPE for each step of an activity.

Complete a JHA before the roof tie-off work; Add heat stress controls to today’s JHA; Review the JHA at the toolbox talk.

Lead Time

The elapsed time between placing an order and receiving the item; critical for scheduling procurement and installation.

RTU lead time is 22 weeks; Account for lead time in the look-ahead; Long lead time triggers early procurement.

Lean Construction

A production-based approach to construction that maximizes value and minimizes waste through methods like Last Planner, takt, pull planning, and continuous improvement.

Use pull planning with the trades; We’re piloting takt planning on Level 4; 5S the prefab shop to reduce motion waste.

Lien Waiver

A document relinquishing a contractor’s or supplier’s right to file a mechanics lien for amounts paid; can be conditional/unconditional and progress/final.

Submit a conditional lien waiver with the pay app; Final unconditional waiver is due at retainage release; The GC rejected the waiver form.

LOTO (Lockout/Tagout)

A safety procedure to de-energize, lock, and tag equipment to prevent the release of hazardous energy during maintenance or installation.

Perform LOTO before opening the panel; The LOTO log is posted at the switchgear; Only authorized personnel can remove LOTO devices.

Look-Ahead Schedule

A short-term, detail plan (e.g., 2–6 weeks) derived from the master schedule to manage handoffs, constraints, and crew commitments.

The 3-week look-ahead shows ceiling rough-in; Clear constraints before committing to next week’s tasks; Update look-ahead tasks at the weekly pull session.

MEP (Mechanical, Electrical, Plumbing)

The core building systems trades that require significant coordination and often drive schedule, space planning, and commissioning activities.

Coordinate MEP overhead clashes in BIM; The MEP rough-in precedes drywall; We’re bidding the MEP scope as a combined package.

NCR (Nonconformance Report)

A quality record documenting work that does not meet requirements, with disposition (repair, replace, accept-as-is) and corrective actions.

Issue an NCR for out-of-tolerance anchors; Submit a corrective action plan to close the NCR; The NCR log is part of QC reporting.

NTP (Notice to Proceed)

The owner’s formal authorization to begin work, which typically establishes the start date for contract time.

Contract time starts upon NTP; We’ll mobilize within 10 days of NTP; No onsite work before written NTP.

OSHA

The U.S. Occupational Safety and Health Administration; sets and enforces safety standards and reporting requirements for construction.

Comply with OSHA 1926 fall protection; OSHA inspected the site after the incident; Provide OSHA 10 cards for all workers.

Pay Application

A periodic invoice requesting payment for work completed to date, typically based on the Schedule of Values and supported by documentation.

Submit the pay app by the 25th using AIA forms; Bill stored materials with backup; The architect certified this month’s pay app.

Payment Bond

A surety bond guaranteeing that the prime contractor will pay subcontractors and suppliers, protecting the owner from liens and claims.

The owner requires a 100% payment bond; The payment bond protects against unpaid subs; File a claim under the payment bond if necessary.

Performance Bond

A surety bond guaranteeing the contractor will perform the work in accordance with the contract; provides owner protection against default.

The surety issued the performance bond at NTP; The bond secures completion if the contractor defaults; Keep performance bond current through warranty.

PPE (Personal Protective Equipment)

Safety gear worn by workers—such as helmets, eye protection, gloves, respirators—used to mitigate exposure to hazards on site.

Hard hats, safety glasses, and gloves are mandatory PPE; Specify FR PPE for hot work; Inspect PPE before each shift.

Prefabrication (Prefab)

Fabricating building components in a controlled environment offsite for just-in-time delivery and installation onsite.

Prefab the bathroom pods offsite; Spool piping for prefab to cut onsite hours; Prefab improves safety and reduces rework.

Procurement

The process of sourcing, soliciting, and purchasing materials, equipment, and subcontracts, including bids, POs, and expediting.

Issue RFQs for long-lead gear; Update the procurement log weekly; Procurement is on the critical path for switchgear.

Punch List

A list of incomplete, deficient, or damaged items to be corrected before final acceptance and closeout.

Zero out the punch list before substantial completion; Log punch items in the app with photos; The owner added paint touch-ups to the punch.

QA/QC (Quality Assurance / Quality Control)

QA is the planned system of procedures to ensure quality; QC is the inspection/testing to verify installed work meets specified requirements.

Follow the QA plan and ITPs; QC hold points require engineer sign-off; Track QA/QC metrics with test reports.

QTO (Quantity Takeoff)

The measurement and tabulation of material and labor quantities from drawings/specs/models used for estimating, planning, and purchasing.

Use QTO to price drywall and studs; Validate QTO counts with the BIM model; Update the QTO after addendum changes.

RFI (Request for Information)

A formal request to clarify design intent, resolve conflicts, or obtain missing information in the contract documents.

Submit an RFI for the conflicting dimensions; RFI 27 clarifies the sleeve size; Track RFI aging to avoid delays.

RFP (Request for Proposal)

A solicitation asking contractors to propose scope, price, and approach—often used for negotiated work or design-build projects.

The GC issued an RFP for value engineering; Our RFP response includes alternates; The owner’s RFP requires a GMP.

Retainage

A percentage of each progress payment withheld by the owner to incentivize completion and protect against liens and defects.

The contract holds 10% retainage; Retainage drops to 5% at substantial completion; Release retainage upon final acceptance.

Rough-In

The phase where basic MEP infrastructure is installed (cables, conduits, piping, duct) before walls/ceilings are closed and finishes applied.

Electrical rough-in must finish before insulation; Inspect plumbing rough-in heights; The inspector signed off on rough-in today.

Schedule of Values (SOV)

A detailed breakdown of the contract price into cost items used to evaluate and certify progress billings.

Add a SOV line for fire alarm devices; The pay app must match the SOV; Update SOV after scope changes.

Shop Drawings

Detailed drawings and diagrams prepared by fabricators or subs showing how components will be manufactured and installed to meet design intent.

Submit duct shop drawings for review; Use approved shops for fabrication; The shops reflect the latest field measurements.

Subcontract

A legally binding agreement between a contractor and a lower-tier trade or supplier defining scope, price, schedule, and terms.

Flow down liquidated damages in the subcontract; The subcontract scope excludes excavation; Execute the subcontract before mobilizing.

Submittal

Product data, samples, and shop drawings submitted for design team review to verify compliance prior to fabrication or installation.

Log submittals within 10 days of NTP; Provide cut sheets and certifications; Late submittals will delay fabrication.

T&M (Time and Materials)

A pricing method where the client pays for actual labor hours and materials plus a markup; often used when scope is unclear.

Extra work will be billed T&M with tickets; Provide T&M rates per the subcontract; The owner approved T&M not-to-exceed $50k.

Value Engineering (VE)

A structured review to reduce cost or improve schedule while maintaining required function and performance, often via approved alternates.

VE the specified fixtures to reduce cost; Submit VE alternates with equal performance; VE saved six weeks on lead time.

VDC (Virtual Design and Construction)

The integrated use of digital models and processes (BIM, 4D/5D, simulations) to plan, coordinate, and manage construction.

Link the model to the 4D VDC schedule; VDC coordination resolved 120 clashes; VDC drives our prefab strategy.

Warranty

A promise to repair or replace defective work for a set period after completion; may include manufacturer and contractor warranties.

Provide a 2-year roof warranty; Start warranty upon substantial completion; Warranty calls go through the service desk.

WIP (Work-in-Progress)

A financial report tracking each project’s billed vs. earned revenue, costs, and forecast to identify under/over-billings and profitability.

The WIP shows we’re under-billed on Lot 7; Update cost-to-complete for the WIP; WIP drives bonding and cash flow decisions.