Construction and contracting terms, defined

An approved change to the scope, specification or duration of a contract after signing, with an agreed value and time effect. Work that starts before its value is approved is not a variation — it is a claim negotiated after the fact.

A formal extension of the contractual completion date for a delay the contractor is not responsible for. It is built on proving the cause and its effect on the critical path, and it stands or falls on contemporaneous daily records rather than later recollection.

A sum fixed in advance by the contract and deducted per day of delay past completion. Being pre-agreed, it requires no proof of actual loss — which is what makes an extension-of-time claim the only practical defence against it.

A percentage withheld from each payment (typically 5%–10%) as security against defects, half released at practical completion and the rest after the defects liability period. It is withheld in both directions: from the contractor, and by the contractor from subcontractors.

An allowance included in the contract for work whose scope was not fully defined at signing, settled later against actual cost. It differs from contingency in being earmarked for a known but unpriced item rather than for unknown risk.

The point at which the works are fit for their intended use despite minor items remaining. It stops liquidated damages, releases half of the retention, and starts the defects liability period.

A period following practical completion (commonly 6–24 months) during which the contractor must remedy emerging defects at their own cost. It ends with release of the remaining retention and a final completion certificate.

A contract between the main contractor and a specialist trade for part of the scope. It carries its own value, retention rate and schedule of values, entirely independent of the main contract, and does not inherit its terms automatically.

A document breaking the works into lines, each with a unit, quantity, rate and amount. It gets priced once at tender, but its real value is being used after award as the reference for measuring progress and cost week by week.

A breakdown of a contract value into billable lines whose sum must equal the contract value exactly. Without one there is no way to measure percent complete against a lump-sum contract, so every instalment becomes an estimate.

A periodic claim for the value of work completed in a period: gross by progress, less retention, less previously certified, equals net due. It is approved or rejected with a reviewer note.

The value of work actually completed, measured at budget rates. It is what makes spend comparable to progress — instead of comparing spend to budget alone, which says nothing about performance.

Earned value divided by actual cost. Below 1 means every unit of currency spent bought less than a unit of work. Its trend across three months matters more than its value in any single month.

Earned value divided by planned value. Below 1 means behind plan in value terms. It is read together with CPI: a stalled project shows an excellent cost index and a terrible schedule one.

A share of the budget set aside for unknown risk, not for known items left out of the estimate. Burning it early is a warning sign: it means what was meant as reserve is covering a shortfall in the original pricing.

Site running costs that belong to no single construction line: supervision, temporary offices, scaffolding, security, utilities. They scale with duration, which is why every delay increases them.

Final cost exceeding the approved budget. It does not arrive in one piece but accumulates from small gaps, and the useful question is not its size but how long each gap existed before anyone saw it.

The movement of money in and out across the life of a project. A contractor profitable on paper can still fail because payment applications settle after 60 days while wages and suppliers fall due monthly.

The longest chain of logically linked activities from project start to finish — the activities whose total float is zero. One day lost on any of them is one day lost on handover.

The number of days an activity can slip without moving the project finish date. It is the number priorities are actually run on — more useful than a binary flag that only says critical or not.

A frozen snapshot of the schedule as approved, held still while the live schedule keeps moving. Without one you cannot prove what slipped, because a live schedule rewrites itself with every update.

A constraint linking two activities in one of four types: finish-to-start, start-to-start, finish-to-finish, start-to-finish. These links are what turn a list of dates into a schedule that moves.

Days added to a dependency: a lag is a mandatory wait where nobody works (concrete curing, for instance), and a lead is a negative value letting an activity start before its predecessor finishes.

A zero-duration event marking a checkpoint in the schedule: site handover, drawing approval, practical completion. It is used for reporting and payment triggers, not for describing work.

A hierarchical split of a project into phases, then work packages, then tasks. Its value is that every cost and every activity can be attributed to one defined level instead of floating at project level.

The share of an activity or line that is done. Its worth depends entirely on how it is measured: a percentage derived from executed quantities is a different thing from one estimated by eye.

An invitation to several suppliers to price a defined scope by a due date. Its value is in comparing line by line rather than total against total — the cheapest total may be a bid that dropped an item.

A contractual commitment to a supplier at defined quantities and prices. It stays open until fully received, which is what makes a partial delivery surface a gap between ordered and received instead of passing unnoticed.

The record of what actually came off the truck, by quantity and condition. It is the only independent number in the purchase cycle — and one filled in later from the invoice loses its function, having become a copy of what it was meant to check.

Crossing the purchase order, the goods receipt and the supplier invoice before payment. It stops one specific kind of overpayment — paying for quantities never received — and will not reveal a rate that was too high to begin with.

An approved internal request for a material by quantity and date. It separates whoever sees the shortage from whoever commits the money, which is what stops purchasing becoming one person's phone call.

A minimum stock balance for a material at a site, below which it must be ordered. Set from consumption rate and usual lead time, it turns purchasing from a reaction to stopped work into something planned.

The time between placing an order and the material reaching site. Long-lead items (lifts, generators, façades) have to be ordered against the schedule rather than against this week's need.

A defined scope issued to several subcontractors or suppliers with a common due date. How clearly its scope is written is what makes the returned bids comparable at all.

A formal question from contractor to consultant clarifying an ambiguity or conflict in the documents. The date raised and the date answered are together what turn a wait on site into a documented cause of delay.

A material, drawing or sample presented to the consultant for approval before supply or execution. A rejection restarts the cycle, which is why submittal turnaround belongs directly in the schedule.

A detailed drawing produced by the contractor or supplier translating the design into what will actually be fabricated and installed. It is approved before execution and always built on the current design revision.

A drawing reflecting what was actually built, including field changes. It is a core part of the handover file and what operations and maintenance rely on afterwards.

A number or letter distinguishing one version of a drawing from the last. Building from a superseded revision is among the most expensive causes of rework, which is why withdrawing the old one is part of issuing the new.

A document setting out how a specific activity will be carried out step by step, with its plant, hazards and safety controls. Approved before work starts and usually paired with a risk assessment.

A daily record of weather, crews, equipment, work done and obstructions. Its value shows up months later: it is the only source that evidences a condition on its own date when a claim or dispute arrives.

The list of defects and incomplete items to be resolved before final handover. Each item needs a precise location, an owner and a status, or the list becomes a recurring argument.

A formal record of work executed contrary to the specification or approved drawing. It closes with a documented rectification or a formal concession, not with a verbal agreement to let it pass.

A plan defining what gets inspected at each stage, by whom, and against what acceptance criteria — including hold points that work cannot pass until cleared. The basis of the checklists a site is actually inspected against.

A specific action addressing the cause of a problem rather than its symptom, with one owner, a due date and a status. With no owner and no date it is an intention, and it will not be chased because it cannot be late.

An event that could have caused injury or damage and did not. Its chain of causes is identical to a real accident, so it deserves the same seriousness — and it is the only lesson that arrives free.

A time-bounded written authorisation for high-risk work (hot works, excavation, work at height or in confined spaces) issued once controls are verified. Work does not start before it is issued or continue after it expires.

Delivery of the completed works to the owner with the handover file: as-built drawings, warranties, operation and maintenance manuals, test certificates. Its quality is decided by what was collected during execution, not after it.

The party contracted directly with the owner to deliver the project, responsible for the entire scope including the parts it subcontracts out.

A specialist contractor engaged by the main contractor for part of the works. Their contractual relationship is with the main contractor rather than the owner, and their retention and payment terms are independent of the main contract.

The party representing the owner in design, supervision and approval of the works. They answer RFIs, approve submittals and certify payment applications.

The party who owns and funds the project and contracts the main contractor. What they need during execution is visibility of progress and pending decisions, not access to the contractor's internal data.

The unit of labour effort: workers × hours. The basis of labour cost and productivity measurement — and an hour not attributed to a project disappears from its cost and reappears in overhead.

Recording a worker's attendance with their coordinates and time rather than on a timesheet filled in at week's end. It ties the paid hour to the site that consumed it, which is what makes labour cost attributable.