Construction Dictionary
Estimating & Procurement Terms
Learn estimating, bidding, procurement, buyout, allowance, and pricing terms used before and during construction.
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90 terms in estimating & procurement.
| Term | Short name | Plain-English definition |
|---|---|---|
| A | ||
| A151 Agreement Between Owner and Vendor | Agreement Between Owner and Vendor | A151 is an AIA agreement form for owner-vendor relationships involving goods, equipment, or materials. |
| Additive Alternate | - | An additive alternate is optional work that can be added to the base bid if accepted by the owner. |
| Allowance | - | An allowance is a budgeted amount included in the contract for work or materials not fully defined at the time of pricing. |
| Alternate | - | An alternate is a separately priced option that may be accepted or rejected by the owner. |
| B | ||
| Backcharge | - | A backcharge is a cost charged to another party for work, damage, cleanup, delay, or correction they were responsible for. |
| Bid Bond | - | A bid bond is a surety bond that helps protect the owner if the selected bidder does not honor its bid. |
| Bid Documents | - | Bid documents are the drawings, specifications, forms, instructions, and contract requirements issued for pricing. |
| Bid Package | - | A bid package is a grouped set of scope, drawings, specifications, and instructions issued for pricing. |
| Biddability Review | - | A biddability review checks whether bid documents are clear, complete, and organized enough for reliable pricing. |
| BPM Building Product Manufacturer | Building Product Manufacturer | A BPM is a company that makes products, materials, equipment, or systems used in buildings. |
| Budget Code | - | A budget code is a cost tracking code used to connect budgets, commitments, invoices, changes, and forecasts. |
| Budget Estimate | - | A budget estimate is a cost estimate used to set or test the project budget. |
| Buyout | - | Buyout is the process of awarding subcontracts and purchase orders after pricing has been received and reviewed. |
| C | ||
| Cash Allowance | - | A cash allowance is a set amount of money included in the contract for work or materials not fully defined at award. |
| Commitment | - | A commitment is a subcontract or purchase order that commits project funds to a vendor, supplier, or subcontractor. |
| Committed Cost | - | Committed cost is money already committed through contracts, purchase orders, or approved obligations. |
| Constraint Log | - | A constraint log tracks issues that must be resolved before planned work can proceed. |
| Contingency | - | Contingency is money or time reserved for unknowns, risks, or incomplete information. |
| Cost Code | - | A cost code is a tracking code used to organize project costs by scope, activity, or work category. |
| Cost Type | - | Cost type classifies project costs by kind, such as labor, material, equipment, subcontract, or general conditions. |
| CPM Schedule Critical Path Method Schedule | Critical Path Method Schedule | A CPM schedule is a schedule built with activity logic to identify the critical path and forecast project timing. |
| Critical Path | - | The critical path is the sequence of activities that controls the earliest possible project completion date. |
| D | ||
| Deductive Alternate | - | A deductive alternate is optional work that can be removed from the base bid if accepted by the owner. |
| E | ||
| Escalation | - | Escalation is an increase in labor, material, equipment, or subcontract cost over time. |
| Estimate | - | An estimate is a forecast of construction cost based on available information, assumptions, quantities, and pricing. |
| Estimated Cost to Complete | - | Estimated cost to complete is the forecasted remaining cost needed to finish the work. |
| Estimated Final Cost | - | Estimated final cost is the projected total cost at project completion. |
| Excusable Event | - | An excusable event is a delay or condition that may justify schedule relief under the contract. |
| Extension of Time | - | An extension of time adds contract time or schedule duration because of an approved delay or change. |
| F | ||
| Fast Track | - | Fast track is a project approach where construction starts before all design or procurement packages are complete. |
| Float | - | Float is the amount of time an activity can move without delaying a defined schedule milestone or project completion. |
| Force Account | - | Force account is a method of tracking changed work based on actual labor, equipment, and material records. |
| G | ||
| G702 Application and Certificate for Payment | Application and Certificate for Payment | G702 is an AIA payment application form used to request and certify progress payment. |
| G703 Continuation Sheet | Continuation Sheet | G703 is an AIA continuation sheet used with a payment application to show detailed line-item billing. |
| G705 List of Subcontractors | List of Subcontractors | G705 is an AIA form used to identify subcontractors and portions of work. |
| G707A Consent of Surety to Reduction in or Partial Release of Retainage | Consent of Surety to Reduction in or Partial Release of Retainage | G707A is an AIA form used when a surety consents to reducing or partially releasing retainage. |
| G732 Application and Certificate for Payment, Construction Manager-Adviser Edition | Application and Certificate for Payment, Construction Manager-Adviser Edition | G732 is an AIA payment application form used with construction manager as adviser project structures. |
| General Conditions Costs | - | General conditions costs are project costs needed to manage and support the work but not tied to one specific trade item. |
| I | ||
| Installed Production Quantities | - | Installed production quantities are measured amounts of work actually installed in the field. |
| Invitation to Bid | - | An invitation to bid is a procurement notice inviting contractors or subcontractors to submit bids. |
| ITB Invitation to Bid | Invitation to Bid | An ITB is a formal invitation for contractors or suppliers to submit competitive bids. |
| J | ||
| Job Costing | - | Job costing is the process of tracking actual and projected costs against a specific construction project. |
| L | ||
| Labor Burden | - | Labor burden is the additional cost of labor beyond base wages. |
| Lien Waiver | - | A lien waiver is a document that waives or releases lien rights for payment received or expected. |
| Life Cycle Cost | - | Life cycle cost is the total cost of owning, operating, maintaining, and eventually replacing a building or system. |
| Long-Lead Item | - | A long-lead item is a material or piece of equipment that requires a long time to purchase, fabricate, or deliver. |
| Lookahead Schedule | - | A lookahead schedule is a short-term schedule showing upcoming work over the next few weeks. |
| Low Bidder | - | The low bidder is the bidder that submits the lowest responsive price for the defined scope. |
| M | ||
| Master Schedule | - | A master schedule is the high-level schedule showing major phases, milestones, and overall project timing. |
| Milestone | - | A milestone is a key date or event used to track important points in the project schedule. |
| Milestone Schedule | - | A milestone schedule tracks major project dates and key completion points. |
| N | ||
| Notice of Award | - | A notice of award tells the selected bidder that the owner intends to award the contract. |
| O | ||
| Open Book | - | Open book means the contractor shares cost information, backup, and pricing details with the owner or project team. |
| Overbilling | - | Overbilling happens when billed amounts exceed the value of work actually completed or earned. |
| P | ||
| Pay Application | - | A pay application is a contractor's request for payment for completed work and stored materials. |
| Phased Construction | - | Phased construction breaks a project into separate stages or work packages. |
| Pre-Bid Meeting | - | A pre-bid meeting is a meeting held before bids are due to explain project requirements and answer bidder questions. |
| Procurement Log | - | A procurement log tracks required materials, equipment, subcontracts, buyout status, lead times, and delivery dates. |
| Procurement Schedule | - | A procurement schedule tracks purchasing, submittal, fabrication, and delivery timing for required materials and equipment. |
| Production Quantities | - | Production quantities are measured amounts of completed work used to track productivity and progress. |
| Production Rate | - | Production rate is the amount of work completed per unit of time or labor. |
| Progress Billing | - | Progress billing is billing for work completed during a defined period rather than waiting until the end of the project. |
| Progress Payment | - | A progress payment is a payment made for work completed or materials stored during the project. |
| Pull Planning | - | Pull planning is a collaborative scheduling method where teams plan backward from a milestone to define commitments and handoffs. |
| Purchase Order | - | A purchase order is a contract document used to buy materials, equipment, or services. |
| Q | ||
| Quantity Takeoff | - | A quantity takeoff is the process of measuring quantities of work or materials from drawings, models, or field information. |
| R | ||
| Request for Proposal | - | A request for proposal is a procurement document asking firms to submit qualifications, approach, and pricing for a defined need. |
| Request for Quote | - | A request for quote asks a vendor, supplier, or subcontractor to price a defined item or scope. |
| Retainage | - | Retainage is a portion of payment withheld until work reaches agreed completion milestones. |
| RFP Request for Proposal | Request for Proposal | An RFP is a procurement document requesting proposals for a defined project, service, or scope of work. |
| RFQ Request for Qualifications | Request for Qualifications | An RFQ is a procurement document used to evaluate firms based on qualifications, experience, and capability. |
| Rolling Schedule | - | A rolling schedule is updated continuously as time moves forward and more project information becomes available. |
| Rough Order of Magnitude | - | A rough order of magnitude is an early, high-level cost estimate made with limited information. |
| S | ||
| Schedule of Values | - | A schedule of values is a detailed allocation of the contract sum across work categories or line items. |
| Schedule Update | - | A schedule update records current progress, revised dates, logic changes, and forecasted completion information. |
| Short Interval Schedule | - | A short interval schedule is a detailed near-term plan for upcoming work over a short period. |
| SOV Schedule of Values | Schedule of Values | An SOV is a breakdown of the contract amount into line items used for billing and progress tracking. |
| Stored Materials | - | Stored materials are materials purchased for the project but not yet installed. |
| Subcontractor Invoice | - | A subcontractor invoice is a payment request submitted by a subcontractor for work performed or materials supplied. |
| Subcontractor Schedule of Values | - | A subcontractor schedule of values breaks a subcontract amount into billing line items. |
| T | ||
| T&M Time and Materials | Time and Materials | T&M is a pricing method based on labor time, material costs, equipment, and agreed markups. |
| T&M Ticket Time and Materials Ticket | Time and Materials Ticket | A T&M ticket records labor, material, equipment, and sometimes subcontractor costs for time-and-materials work. |
| Timecard | - | A timecard records labor time worked by a person or crew. |
| Two-Week Lookahead | - | A two-week lookahead is a short-term schedule focused on work planned over the next two weeks. |
| U | ||
| Underbilling | - | Underbilling happens when completed or earned work is not yet billed. |
| Unit Price | - | A unit price is a cost per measured unit of work, such as dollars per square foot, cubic yard, or linear foot. |
| V | ||
| VE Value Engineering | Value Engineering | VE is a process for evaluating alternatives that may reduce cost, improve constructability, or preserve value. |
| W | ||
| WBS Work Breakdown Structure | Work Breakdown Structure | A WBS breaks a project into smaller work packages, deliverables, or cost and schedule components. |
| WIP Work in Progress | Work in Progress | WIP refers to construction work that is underway but not yet complete. |
| Work Breakdown Structure | - | A work breakdown structure organizes project scope into smaller components for planning, tracking, and control. |