500 Important Terminologies Meanings For Quantity Surveyors ~ Every Quantity Surveyor Must Know

1. Bill of Quantities (BOQ)

Definition: The BOQ is a document that lists all the materials, parts, and labor required for a construction project. It breaks down everything into quantities so that contractors can provide accurate quotes. Example: Imagine you’re building a house, and you want to know how much brickwork is needed for the walls. The BOQ will list the exact number of bricks, the mortar required, and even the labor hours needed to complete that part of the job.

2. Cost Plan

Definition: A cost plan is a detailed forecast of all the expenses involved in a project. It helps in managing the budget and avoiding cost overruns. Example: If you’re constructing a shopping mall, the cost plan will include everything from the price of cement to the cost of lighting fixtures. It’s like making a budget for your home, but on a much bigger scale!

3. Tender Document

Definition: The tender document is what’s used to invite contractors to bid on a project. It includes all the details a contractor needs to price their work. Example: When you want multiple contractors to give you quotes for building a bridge, you’ll prepare a tender document that explains the scope of work, timelines, and expectations. The contractors then submit their prices based on that.

4. Procurement

Definition: Procurement is the process of purchasing materials, equipment, and services required for a construction project. Example: Let’s say you’re building an apartment complex. Procurement involves sourcing the steel, concrete, and other materials at the best prices, ensuring they arrive on-site when needed to avoid delays.

5. Pre-Tender Estimate

Definition: A pre-tender estimate is a rough calculation of how much the project is expected to cost before contractors submit their bids. Example: Before you even send out the tender documents, you estimate that building the school might cost around ₹50 crores based on the design and materials required. This helps you know if the contractor’s bids are reasonable.

6. Unit Rate

Definition: A unit rate is the cost of a single unit of a material or labor, used to calculate the total cost of an item or activity in a project. Example: If you’re laying tiles in an office building, the unit rate might be ₹100 per square foot. So, if you need to tile 1,000 square feet, you multiply the unit rate by the total area.

7. Cost Control

Definition: Cost control is the process of monitoring and adjusting a project’s budget to ensure it doesn’t exceed the planned costs. Example: During the construction of a shopping complex, prices of materials like cement might increase. A good quantity surveyor will track these changes and suggest ways to cut costs in other areas, so the project stays within budget.

8. Rate Analysis

Definition: Rate analysis involves calculating the cost of materials, labor, and equipment for a specific task in the construction project. Example: To calculate the cost of plastering a wall, you’d include the price of cement, sand, and the labor required. You might also factor in how long it’ll take to finish the work.

9. Variation Order

Definition: A variation order is a change made to the original scope of work in a construction project. It could be an addition, omission, or alteration. Example: Let’s say a client decides to add another floor to an office building halfway through the project. The variation order will detail the cost and time changes for this additional work.

10. Interim Payment

Definition: Interim payments are partial payments made to a contractor as the work progresses, based on the amount of work completed. Example: If you’re constructing a hospital, you won’t wait until it’s fully completed to pay the contractor. Instead, after they finish the foundation, you might make an interim payment based on the percentage of work done.

11. Final Account

Definition: The final account is a summary of all the costs incurred during the project, including any adjustments or variations made during construction. Example: Once the project is completed, you and the contractor sit down to review all expenses. The final account will show whether the project came in under budget, on budget, or over budget.

12. Provisional Sum

Definition: A provisional sum is an estimated allowance for work that cannot be precisely priced at the tender stage due to uncertainty. Example: If you’re building a school but you’re unsure about the exact design of the auditorium, you might allocate ₹10 lakhs as a provisional sum until the design is finalized.

13. Prime Cost (PC)

Definition: A prime cost refers to the cost of materials or goods that the contractor will purchase, but the exact price isn’t known at the time of tendering. Example: While constructing a high-end office building, you may not know the exact cost of custom lighting fixtures, so you’ll allocate a prime cost for it and adjust later.

14. Life-Cycle Costing

Definition: Life-cycle costing is the total cost of owning a building or structure over its entire life span, including construction, maintenance, and operation costs. Example: When you’re designing a hospital, you don’t just consider the initial construction cost. You’ll also calculate how much it’ll cost to maintain and operate the building over the next 50 years.

15. Escalation

Definition: Escalation refers to the increase in costs over time, particularly due to inflation or rising material prices. Example: If your construction project stretches over two years, the cost of steel might rise due to market demand. Escalation accounts for these increases to ensure the project budget is still valid.

16. Contingency

Definition: A contingency is an amount of money set aside in the budget to cover unexpected costs that arise during construction. Example: While building a residential complex, you may discover the soil conditions aren’t suitable for the planned foundation. The extra cost for soil replacement can be covered by the contingency fund.

17. Daywork

Definition: Daywork refers to work that’s paid for based on the time spent rather than a fixed price for the task. It’s often used when the exact scope of work is unclear. Example: Let’s say a contractor is called in to repair a water pipe, but the extent of the damage isn’t known. They might be paid by the hour for whatever time they spend on the job.

18. Net Present Value (NPV)

Definition: NPV is a method used to assess the profitability of a project by considering the present value of future costs and revenues. Example: If you’re planning a real estate project, NPV helps you determine whether the future cash flows from selling or renting the property will outweigh the costs of building it today.

19. Retention

Definition: Retention refers to a portion of the payment held back by the client until the project is completed and all defects are rectified. Example: If you’re building a commercial complex, the client might withhold 5% of the payment to ensure that any minor repairs are completed after the building is handed over.

20. Snagging

Definition: Snagging is the process of identifying and fixing small defects or unfinished work before the project is signed off as complete. Example: Before handing over a completed building, the contractor might go through the building to fix issues like chipped paint or loose tiles.

21. Subcontractor

Definition: A subcontractor is a specialist hired by the main contractor to complete specific parts of the project, like electrical work or plumbing. Example: If you’re building a school, you might hire a subcontractor to install the HVAC system while the main contractor handles the overall construction.

22. Value Engineering

Definition: Value engineering involves reviewing a project’s design and materials to find cost-saving opportunities without sacrificing quality. Example: While constructing a factory, you might switch from expensive imported materials to local alternatives that are just as good, saving costs in the process.

23. Progress Claim

Definition: A progress claim is a request for payment made by the contractor, showing how much work has been completed and the costs incurred. Example: Halfway through the construction of a hospital, the contractor submits a progress claim to the client, asking for payment for the work done so far.

24. Work Breakdown Structure (WBS)

Definition: WBS is a method of breaking down a project into smaller, manageable tasks or deliverables to ensure everything is completed on time and within budget. Example: If you’re building a stadium, the WBS might break down the project into tasks like excavation, seating installation, and electrical work, with deadlines for each.

25. Preliminary Cost Estimate

Definition: A preliminary cost estimate is an early-stage estimate of the project’s total cost, based on rough assumptions about the scope and materials. Example: Before detailed designs are ready, you estimate that a school construction project will cost ₹25 crores based on the size and type of materials likely to be used.

26. Direct Costs

Definition: Direct costs are expenses that can be directly attributed to the construction project, such as materials, labor, and equipment. Example: The cost of steel beams, cement, and the wages of workers on-site would be considered direct costs in a bridge project.

27. Indirect Costs

Definition: Indirect costs are expenses that aren’t tied to any specific task in the project, such as overheads or administrative expenses. Example: The salary of the project manager overseeing a construction project would be considered an indirect cost, as it isn’t tied to any specific activity like bricklaying or plumbing.

28. Construction Program

Definition: A construction program is a detailed timeline that outlines the sequence and duration of activities in a project, helping to keep everything on schedule. Example: If you’re managing the construction of a housing complex, the construction program will outline when the foundation, framing, and finishing should be completed.

29. Project Manager

Definition: The project manager is responsible for planning, executing, and closing the construction project, ensuring it stays within scope, time, and budget. Example: In a commercial building project, the project manager coordinates between the architect, contractors, and client, ensuring that everyone is on the same page.

30. Pre-Contract Services

Definition: Pre-contract services refer to all the activities and planning that take place before the construction contract is signed, like design development and cost estimation. Example: Before starting the construction of a new mall, pre-contract services would include preparing the designs, calculating costs, and selecting a contractor.

31. Cost Escalation

Definition: Cost escalation refers to the increase in project costs due to factors like inflation, material shortages, or unexpected delays. Example: If you’re constructing a hotel, cost escalation might occur if the price of steel rises midway through the project, pushing up your overall expenses.

32. Disbursement

Definition: Disbursement is the payment made to contractors or suppliers during a construction project, often tied to milestones or progress points. Example: After the foundation work of an office building is completed, the contractor submits an invoice, and the client disburses payment for that portion of work.

33. Construction Contingency

Definition: Construction contingency is a reserved amount in the budget set aside to cover unexpected expenses or changes during the project. Example: In a commercial complex project, the contingency fund might be used to cover the cost of replacing faulty electrical wiring discovered late in the project.

34. Material Take-Off (MTO)

Definition: MTO is a detailed list of all the materials required for a project, based on the design and specifications, to ensure everything is accounted for. Example: Before starting a residential tower project, the MTO would include quantities of concrete, steel, glass, and even nails to be used in the construction.

35. Preliminary Survey

Definition: A preliminary survey is conducted before the start of construction to assess the site’s conditions, identifying any potential issues that could affect the project. Example: If you’re building a bridge, the preliminary survey might reveal the need for soil stabilization, which could influence the design and cost of the foundation.

36. Cost Benchmarking

Definition: Cost benchmarking compares the project’s estimated costs to industry standards or previous projects to ensure the budget is reasonable. Example: If you’re building an office tower, you might benchmark your costs against similar projects in the same area to see if your estimates for materials and labor are realistic.

37. Preliminary Bill

Definition: A preliminary bill is an initial estimate of costs that serves as a basis for further cost analysis and budget preparation. Example: For a new shopping center, the preliminary bill might include early estimates for concrete, steel, labor, and equipment based on conceptual designs.

38. Earned Value Management (EVM)

Definition: EVM is a project management technique that measures project performance by comparing the amount of work completed with the planned budget and schedule. Example: If you’re halfway through a road project and 60% of the work is done, EVM will help you assess whether you’re on track financially and time-wise.

39. Overhead Costs

Definition: Overhead costs are the indirect expenses required to run the project but aren’t directly tied to specific tasks, like rent, utilities, or office salaries. Example: The cost of running the project office and paying the administrative staff during the construction of a hospital would be considered overhead.

40. Profit Margin

Definition: Profit margin is the amount of profit a contractor expects to make on a project after all costs and expenses are covered. Example: If the total cost of building a factory is ₹50 crores, and the contractor’s profit margin is 10%, they expect to make ₹5 crores in profit by the end of the project.

41. Feasibility Study

Definition: A feasibility study assesses whether a construction project is viable, taking into account factors like cost, site conditions, legal regulations, and potential risks. Example: Before constructing a new airport, a feasibility study will be conducted to determine if the location, budget, and timeframe are practical.

42. Project Closeout

Definition: Project closeout is the final phase of a construction project, where all work is completed, documentation is handed over, and the site is cleaned up for handover. Example: After finishing the construction of a commercial complex, the contractor performs a final inspection, fixes any minor defects, and hands over the keys to the client.

43. Liquidated Damages

Definition: Liquidated damages are pre-agreed penalties for delays in project completion, compensating the client for any financial losses due to late delivery. Example: In the construction of a residential tower, if the contractor fails to meet the deadline, they might have to pay ₹50,000 for each day the project is delayed.

44. Change Order

Definition: A change order is a formal request for changes to the original scope of work in a construction project, often involving additional costs or time. Example: During the construction of a hotel, the client decides to add a spa, resulting in a change order that alters the original design and increases the project’s budget.

45. Progress Report

Definition: A progress report is a regular update provided by the contractor to the client, showing the current status of the project, including work completed, costs, and any delays. Example: In a highway construction project, the contractor submits a monthly progress report outlining how much of the road has been paved and any issues that could affect the schedule.

46. Bid Bond

Definition: A bid bond is a guarantee provided by a contractor to assure the client that they will enter into the contract if selected, and it prevents frivolous bidding. Example: When bidding for a government-funded school project, the contractor provides a bid bond to demonstrate their commitment to signing the contract if chosen.

47. Construction Budget

Definition: A construction budget is the financial plan that outlines all expected costs, including materials, labor, equipment, and overheads, ensuring the project stays within financial limits. Example: If you’re building a multi-story office building, the construction budget would account for everything from the foundation work to the final interior finishes, ensuring you don’t exceed your funds.

48. Final Certificate

Definition: The final certificate is issued once all construction work is complete, and all outstanding payments and obligations have been met by the contractor. Example: In a residential housing project, the contractor receives the final certificate from the client, confirming that all work is done, and the last payment is released.

49. Contractual Liability

Definition: Contractual liability refers to the responsibilities and obligations outlined in a contract that each party must fulfill, often including performance, timelines, and penalties for non-compliance. Example: In a hospital project, the contractor’s contractual liability includes completing the work within the agreed schedule and maintaining quality standards as per the contract.

50. Work Inspection Request (WIR)

Definition: A WIR is submitted by the contractor to the client or project manager, requesting a formal inspection of completed work before moving on to the next phase. Example: After finishing the foundation for a new office building, the contractor submits a WIR to the project manager to verify that everything is in order before proceeding with the next stage.

51. Cost-Plus Contract

Definition: A cost-plus contract allows the contractor to be reimbursed for actual costs incurred during construction, plus an additional fee for overhead and profit. Example: If you're constructing a shopping mall, a cost-plus contract will cover the costs of materials, labor, and equipment, with a 10% fee added for the contractor’s profit.

52. Construction Contingency Fund

Definition: A contingency fund is an amount set aside in the project budget to cover unexpected costs that arise during construction. Example: In a large infrastructure project, like building a highway, unforeseen soil conditions may require additional excavation, and the contingency fund can be used to cover those extra expenses.

53. Value Added Tax (VAT)

Definition: VAT is a tax levied on the value added to goods and services during production, which applies to construction materials and services. Example: If you're purchasing steel for a bridge project, you’ll pay VAT on the steel’s value, which is typically included in the overall project costs.

54. Time at Large

Definition: Time at large refers to a situation where there’s no set deadline for completing the construction project because the contractual deadlines have been missed without proper extensions. Example: If a contractor is building a residential tower but there’s a delay in receiving permits, the deadlines may lapse, putting the project in a "time at large" situation, allowing for more flexible completion dates.

55. Earned Value

Definition: Earned value is a project management technique that compares the planned cost of work with the actual cost and progress to assess performance. Example: In a commercial building project, if ₹10 crores worth of work was scheduled to be completed by a certain point, and only ₹7 crores worth of work has been done, you know the project is behind schedule.

56. Interim Valuation

Definition: Interim valuation is a temporary assessment of work done and materials used during a construction project, typically to calculate progress payments. Example: If you're building a school, every few months, the contractor will present an interim valuation to show the work completed so far, so they can receive payment accordingly.

57. Gantt Chart

Definition: A Gantt chart is a visual timeline that shows the start and finish dates of the various tasks required to complete a construction project. Example: In a hospital project, a Gantt chart might display tasks like foundation work, framing, and electrical installation, helping everyone involved to understand the project timeline.

58. Take-Off Sheets

Definition: Take-off sheets are documents that show the quantities of materials needed for a specific task or project, usually derived from the drawings. Example: If you’re constructing a bridge, the take-off sheets will list the exact amounts of steel, concrete, and other materials required for each section of the bridge.

59. Prime Cost Sum

Definition: A prime cost sum is a provision in a construction contract for materials or goods where the exact cost is unknown at the time of tender. Example: In a luxury apartment project, you may not know the final cost of the high-end kitchen fittings, so you’ll include a prime cost sum that can be adjusted once the items are selected.

60. Preliminaries

Definition: Preliminaries are the costs associated with setting up a construction project, including site management, utilities, and health and safety provisions. Example: If you're starting a commercial building, preliminaries might cover the cost of fencing around the site, setting up temporary offices, and providing safety equipment for workers.

61. Two-Stage Tendering

Definition: Two-stage tendering is a process where a contractor is selected based on a preliminary bid, with detailed pricing to be provided later during the second stage. Example: In a railway station construction project, two-stage tendering allows the client to engage with a contractor early in the design phase, ensuring that detailed pricing can be worked out as the project progresses.

62. PC Sum (Provisional Cost Sum)

Definition: A PC sum is an estimate in the contract for specific works or materials that are uncertain at the time of tendering. Example: If you’re building a large residential project, you might allocate a PC sum for landscaping, knowing that the design hasn’t been finalized yet.

63. Overpayment

Definition: Overpayment occurs when the contractor is paid more than what is due based on the work completed to date. Example: If, during the construction of a high-rise building, the client mistakenly pays the contractor for work that hasn’t been done yet, it’s considered an overpayment, which must be adjusted in future payments.

64. Subcontractor Payment Certificate

Definition: A subcontractor payment certificate is a document confirming the amount to be paid to a subcontractor for work completed, typically issued by the main contractor. Example: In a mall construction project, after the electrical subcontractor finishes installing wiring for a floor, the main contractor issues a payment certificate for the work done.

65. Cost to Complete

Definition: The cost to complete is an estimate of how much money is needed to finish the remaining work on a project. Example: If you’re 60% done building a bridge, the cost to complete might include the remaining materials, labor, and equipment needed to finish the other 40%.

66. Direct Procurement

Definition: Direct procurement refers to purchasing construction materials or services directly from suppliers, without using intermediaries like contractors. Example: In a government building project, the client may decide to procure high-quality steel directly from the manufacturer to control costs and ensure quality.

67. Project Handover

Definition: Project handover is the final stage of a construction project, where the completed project is officially transferred to the client. Example: After completing a school building, the contractor hands over the keys and all documentation, including warranties and maintenance guides, to the client.

68. Risk Management

Definition: Risk management involves identifying, assessing, and mitigating potential risks that could impact the construction project. Example: In a coastal construction project, risk management might involve assessing the risk of flooding and planning for additional drainage systems to mitigate that risk.

69. Site Instruction

Definition: A site instruction is a written order issued by the project manager or architect to modify or clarify work on the construction site. Example: If the design for a shopping center changes slightly, the architect might issue a site instruction to the contractor to adjust the layout of certain walls.

70. Cost Reimbursement

Definition: Cost reimbursement is the process of repaying the contractor for actual costs incurred during construction, often seen in cost-plus contracts. Example: In a custom home construction project, the contractor may submit invoices for materials and labor as the work progresses, and the client reimburses these costs with an agreed profit margin.

71. Cash Flow Forecast

Definition: A cash flow forecast estimates how much money will be spent and received over the course of the construction project to ensure financial stability. Example: In a large office building project, the cash flow forecast helps the contractor plan when payments from the client will be received, ensuring they have enough money to pay for labor and materials at the right times.

72. Contractual Obligation

Definition: Contractual obligations are the duties that both the client and the contractor are required to fulfill as outlined in the contract. Example: In a commercial building project, the contractor's contractual obligation might include completing the work by a certain date, while the client's obligation is to make payments on time.

73. Construction Claim

Definition: A construction claim is a formal request made by the contractor or client for additional time or money due to unforeseen circumstances. Example: If, during a high-rise construction project, unexpected ground conditions cause delays, the contractor might submit a claim for additional time and compensation.

74. Scope Creep

Definition: Scope creep occurs when the project's scope expands beyond the original plan, often leading to increased costs and delays. Example: In a residential construction project, scope creep might happen if the client decides to add extra rooms or make design changes after construction has already begun.

75. Final Payment

Definition: The final payment is the last payment made to the contractor once the project is complete, including any retention money held back during the project. Example: After completing a factory project, the contractor receives the final payment, which includes the 5% retention that was held back until all work was done.

76. Contract Sum

Definition: The contract sum is the total agreed price for completing a construction project, as specified in the contract. Example: If the contract sum for a new residential tower is ₹50 crores, that’s the maximum amount the client is expected to pay, unless there are agreed changes to the scope.

77. Scope of Work

Definition: The scope of work is the detailed description of the tasks and responsibilities required to complete a construction project. Example: If you're constructing a bridge, the scope of work might include everything from excavation to installing railings and final inspections.

78. Design and Build Contract

Definition: A design and build contract is an arrangement where a single entity is responsible for both designing and constructing the project. Example: In a shopping mall project, the client might choose a design and build contract, meaning one contractor handles both the architectural design and the actual construction.

79. Performance Bond

Definition: A performance bond is a financial guarantee provided by a contractor to assure the client that the project will be completed according to the contract terms. Example: In a commercial tower project, the contractor provides a performance bond to guarantee that the work will be finished, even if unexpected issues arise.

80. Net Cost

Definition: Net cost is the total cost of completing a construction task or project, excluding any profit margins or taxes. Example: If the net cost of laying the foundation for an apartment complex is ₹10 lakhs, this amount covers only the actual expenses for labor, materials, and equipment.

81. Work in Progress (WIP)

Definition: WIP refers to the work that has been started but not yet completed on a construction project. Example: In an ongoing office building project, the WIP might include completed foundations, half-finished walls, and partially installed electrical systems.

82. Lead Time

Definition: Lead time is the amount of time required between ordering materials and having them delivered to the construction site. Example: In a hospital construction project, if the lead time for custom windows is 12 weeks, the contractor will plan accordingly to ensure they arrive on time for installation.

83. Main Contractor

Definition: The main contractor is the entity responsible for overseeing and managing the entire construction project, often hiring subcontractors for specialized work. Example: If you're building a school, the main contractor will manage everything from laying the foundation to installing the electrical systems, even if some work is subcontracted.

84. Breakdown of Costs

Definition: A breakdown of costs provides a detailed listing of the expenses involved in each part of a construction project, helping with budgeting and cost control. Example: In a highway construction project, the breakdown of costs might include labor, materials, and equipment expenses for each section of the road.

85. Submittals

Definition: Submittals are documents, drawings, or samples provided by the contractor to the client for approval before certain aspects of the project begin. Example: In a luxury hotel project, the contractor might submit samples of tile and flooring materials for the client to approve before placing orders.

86. Non-Compliance Report (NCR)

Definition: An NCR is issued when work on-site doesn’t comply with the contract specifications, requiring corrective actions to be taken. Example: If the concrete mix used in a commercial project doesn’t meet the required strength, an NCR will be issued, and the contractor will need to fix the issue before continuing.

87. Critical Path

Definition: The critical path is the sequence of tasks in a project that determines the minimum time needed to complete it, with no room for delays. Example: In a bridge project, pouring the foundation, installing support beams, and laying the deck might be part of the critical path because delays in any of these tasks would push back the entire project.

88. Construction Program

Definition: A construction program is a schedule that outlines the sequence and timing of activities needed to complete the project. Example: If you're building a residential apartment complex, the construction program will show when tasks like foundation work, electrical installation, and finishing should occur.

89. Rework

Definition: Rework refers to correcting or redoing work that was done incorrectly or did not meet project specifications. Example: If the plumbing in a hotel project is installed incorrectly, the contractor will have to perform rework, which can add to the project cost and timeline.

90. Defects Liability Period

Definition: The defects liability period is the time after project completion during which the contractor is responsible for repairing any defects that arise. Example: If a contractor finishes building an office tower, and within six months cracks appear in the walls, they must return to fix these defects during the defects liability period.

91. Interim Payment Application

Definition: An interim payment application is a request from the contractor to the client for partial payment based on the work completed up to a certain point. Example: If 50% of the work on a hospital project is complete, the contractor will submit an interim payment application for the corresponding amount of money.

92. Quantity Surveying

Definition: Quantity surveying involves managing the financial aspects of a construction project, including estimating costs, controlling budgets, and preparing bills of quantities. Example: A quantity surveyor working on a shopping mall project will estimate how much the entire project will cost, keep track of expenses, and ensure the budget isn’t exceeded.

93. Work Authorization

Definition: Work authorization is a formal document that gives the contractor permission to begin work on a specific task or project phase. Example: If you're building a bridge, the project manager might issue a work authorization for the contractor to start laying the foundation after all permits are secured.

94. Construction Delay

Definition: A construction delay occurs when the project timeline is extended due to unforeseen circumstances, such as weather, material shortages, or design changes. Example: If a contractor building a residential complex faces heavy monsoon rains, the project might experience a delay in completing the foundation work.

95. Progress Monitoring

Definition: Progress monitoring involves regularly checking the construction site to ensure the work is on track with the schedule and within the budget. Example: In a commercial office project, the quantity surveyor may visit the site weekly to track progress and make sure the work is being completed on time and within the estimated costs.

96. Dispute Resolution

Definition: Dispute resolution refers to the methods used to resolve disagreements between the contractor and client, such as negotiation, mediation, or arbitration. Example: In a shopping center project, a dispute might arise over the quality of materials used, and both parties could resolve it through arbitration without going to court.

97. Cost Plus Fixed Fee

Definition: In a cost-plus fixed fee contract, the contractor is reimbursed for all project costs and also receives a fixed fee for their services. Example: If you're constructing an industrial facility, the contractor might be paid for all materials and labor costs, plus a fixed fee of ₹50 lakhs for their management services.

98. Inspection Request

Definition: An inspection request is submitted by the contractor to ask for a formal inspection of work that has been completed, ensuring it meets project standards before continuing. Example: After completing the foundation of a school, the contractor submits an inspection request to the project manager to confirm that it meets safety and quality standards.

99. Material Escalation Clause

Definition: A material escalation clause allows for adjustments to the contract price if the cost of materials increases significantly during the project. Example: In a road construction project, if the price of asphalt rises dramatically due to supply issues, the material escalation clause allows the contractor to adjust the budget accordingly.

100. Tender Addendum

Definition: A tender addendum is a document issued during the bidding process to clarify, modify, or add to the original tender documents. Example: If a contractor is bidding on a bridge project and new environmental regulations are introduced, the client might issue a tender addendum outlining these changes.

101. Retention Money

Definition: Retention money is a portion of the contract payment withheld by the client until the project is completed and any defects are rectified. Example: If you're constructing a commercial tower, the client may hold back 5% of the payment until all minor repairs, like painting touch-ups or replacing broken tiles, are done after completion.

102. Cost Breakdown Structure (CBS)

Definition: A CBS is a hierarchical breakdown of all project costs, categorized by various activities, resources, or work packages. Example: For a highway project, the CBS might divide the costs into categories like labor, materials, equipment, and overheads, providing a detailed view of where money is being spent.

103. Construction Loan

Definition: A construction loan is a short-term loan used to finance the construction of a project, typically converted to a long-term loan once the project is completed. Example: If you're developing a shopping mall, a construction loan might cover the initial costs like purchasing materials and paying labor, and then it's paid back once the mall is up and running.

104. Certificate of Payment

Definition: A certificate of payment is issued by the project manager or architect, authorizing a payment to the contractor for work completed to date. Example: If a contractor has finished 50% of the work on a hospital project, the architect issues a certificate of payment to release funds for the work completed.

105. Direct Materials

Definition: Direct materials are the raw materials used directly in the construction process, forming a part of the finished project. Example: In a residential project, the direct materials might include cement, bricks, and steel used to construct the walls and foundation.

106. Allowable Cost

Definition: Allowable costs are expenses that are considered reasonable and necessary for the completion of a construction project, as defined in the contract. Example: For a school construction project, the allowable costs might include labor, materials, equipment rental, and safety gear for workers.

107. Preliminary Tender Estimate

Definition: A preliminary tender estimate is an early-stage estimate of the project’s cost, prepared before the detailed design and construction phases begin. Example: Before bidding starts on a new highway project, the contractor prepares a preliminary tender estimate to gauge the project’s overall cost and compare it to similar projects.

108. Contractor’s All Risks Insurance (CAR)

Definition: CAR insurance is a comprehensive insurance policy that covers the construction site, materials, and equipment, protecting against risks like theft, fire, or accidents. Example: In a high-rise office building project, the contractor takes out CAR insurance to cover damages to the site in case of unexpected events like a fire during construction.

109. Mobilization Costs

Definition: Mobilization costs refer to the expenses incurred in setting up the construction site and getting it ready for work, such as moving equipment, setting up site offices, and initial labor costs. Example: If you're starting a large infrastructure project like a bridge, mobilization costs might include renting cranes, setting up worker facilities, and bringing in materials.

110. Decommissioning

Definition: Decommissioning is the process of safely closing down and dismantling a construction site, often after completing temporary structures or after demolishing existing ones. Example: After completing a major highway project, the contractor decommissions the temporary access roads and site offices, removing all equipment and cleaning up the site.

111. Method Statement

Definition: A method statement is a detailed description of how a specific task will be performed safely and effectively during the construction process. Example: If you’re laying the foundation for a large office building, the method statement will outline the step-by-step process for excavating, pouring concrete, and reinforcing the foundation.

112. Work Order

Definition: A work order is a document issued by the client or project manager to authorize the contractor or subcontractor to start work on a specific part of the project. Example: In a residential building project, the contractor may issue a work order to the plumbing subcontractor to begin installing pipes and fixtures.

113. Advance Payment

Definition: An advance payment is money paid to the contractor before the work begins, often used to purchase materials or mobilize resources. Example: If you're constructing a mall, the client might make an advance payment to help the contractor buy materials like steel and cement before construction starts.

114. Cost Loading

Definition: Cost loading involves distributing the project’s total cost across different activities in the project schedule, allowing for better cost control and tracking. Example: In a bridge construction project, cost loading helps assign costs to specific tasks like excavation, foundation work, and paving, ensuring that costs are monitored throughout the project.

115. Construction Punch List

Definition: A punch list is a document listing minor tasks or repairs that need to be completed before the project is fully handed over to the client. Example: In a residential tower, the punch list might include fixing leaky taps, repainting walls, or replacing broken tiles before the client takes possession.

116. Variance Analysis

Definition: Variance analysis compares the planned budget and schedule to the actual costs and progress, identifying any differences and the reasons behind them. Example: If you're building a factory and the actual costs for the foundation are higher than planned, variance analysis will help determine whether the price increase was due to labor or material cost fluctuations.

117. Overhead Recovery

Definition: Overhead recovery is the process of allocating indirect costs, like administrative salaries or office rent, to specific construction projects to ensure full cost recovery. Example: In a large-scale commercial project, overhead recovery might include allocating the costs of running the project office and administrative staff to the overall project budget.

118. Contract Closeout

Definition: Contract closeout is the process of completing all contractual obligations, including final inspections, punch list items, and handing over the completed project to the client. Example: After finishing a school construction project, the contractor works on contract closeout by ensuring all defects are addressed, final payments are made, and warranties are issued.

119. Back Charges

Definition: Back charges are costs that are billed to a subcontractor or supplier when the main contractor has to correct or complete their work. Example: If a plumbing subcontractor fails to install piping correctly in a high-rise project, and the main contractor has to redo the work, the cost of redoing it would be a back charge to the plumbing subcontractor.

120. Precedence Diagramming Method (PDM)

Definition: PDM is a project scheduling technique that shows the logical sequence of tasks, including their dependencies, and helps in identifying the critical path. Example: In a bridge project, PDM helps the project manager visualize that excavation must be completed before foundation work can start, and these tasks are interdependent.

121. Subcontract Agreement

Definition: A subcontract agreement is a formal contract between the main contractor and a subcontractor, outlining the scope of work, payment terms, and responsibilities. Example: In a residential tower project, the main contractor signs a subcontract agreement with a specialist to handle electrical installations and wiring.

122. Final Account Agreement

Definition: A final account agreement is a detailed statement showing the total cost of a construction project after all adjustments for variations, claims, and other factors have been made. Example: After completing an office complex, the final account agreement shows the total cost of the project, including any additional expenses incurred due to design changes.

123. Defective Work

Definition: Defective work refers to any construction work that does not meet the required standards or specifications outlined in the contract. Example: If the flooring in a commercial building doesn’t meet the client’s quality expectations, the contractor must replace it, as it's considered defective work.

124. Delay Damages

Definition: Delay damages are penalties imposed on the contractor if they fail to complete the project within the agreed-upon timeframe, as outlined in the contract. Example: If a contractor is building a shopping mall and fails to meet the completion date by two months, they may face delay damages of ₹1 lakh per day, as stated in the contract.

125. Earnest Money Deposit (EMD)

Definition: EMD is a deposit submitted by contractors during the bidding process, showing their commitment to the project and that their bid is serious. Example: If a contractor bids on a government highway project, they submit an EMD to demonstrate their intention to follow through if awarded the contract.

126. Addendum

Definition: An addendum is an additional document issued after the original tender documents, providing clarifications, changes, or additional information. Example: During the tendering phase of a bridge project, if new environmental guidelines are introduced, the client issues an addendum to inform all bidding contractors of the changes.

127. Float (Slack Time)

Definition: Float, or slack time, is the amount of time a task can be delayed without affecting the overall project schedule. Example: In a commercial building project, if the installation of windows can be delayed by two weeks without impacting the final completion date, those two weeks represent the float time.

128. As-Built Drawings

Definition: As-built drawings are the final set of construction drawings that show the project as it was actually built, including any changes made during construction. Example: In a residential project, the as-built drawings may show that the location of electrical outlets was altered from the original design due to on-site conditions.

129. Site Clearance

Definition: Site clearance is the process of removing debris, vegetation, or existing structures to prepare the construction site for work. Example: If you're starting a new residential development, site clearance might involve removing old buildings, clearing trees, and leveling the ground before laying the foundation.

130. Prequalification

Definition: Prequalification is the process where contractors submit their qualifications, experience, and financial capability before being invited to bid on a project. Example: Before bidding on a high-rise building project, contractors must go through prequalification to ensure they have the necessary experience and financial stability to handle such a large project.

131. Value for Money (VFM)

Definition: VFM assesses whether the client is getting the best possible value from the project, balancing cost, quality, and time. Example: In a government infrastructure project, the quantity surveyor evaluates whether the contractor’s bid offers the best VFM, considering both the initial cost and the long-term benefits.

132. Cost Overrun

Definition: A cost overrun occurs when the actual cost of the project exceeds the estimated budget due to unforeseen circumstances, changes, or delays. Example: If the cost of building a factory is projected at ₹10 crores but ends up costing ₹12 crores due to higher material prices and labor costs, this is a cost overrun.

133. Scope Clarification

Definition: Scope clarification is the process of clearly defining and resolving any ambiguities in the project’s scope to ensure that all parties are aligned. Example: In a residential project, if there’s confusion over whether the contractor is responsible for installing certain fixtures, scope clarification is necessary to avoid disputes later on.

134. Bid Evaluation

Definition: Bid evaluation is the process of reviewing and analyzing the bids submitted by contractors, considering factors like price, experience, and proposed timelines. Example: If five contractors submit bids to build a school, bid evaluation involves comparing their pricing, timelines, and qualifications to select the best candidate for the job.

135. Cost Savings

Definition: Cost savings refer to the reductions in project costs achieved through better planning, purchasing, or construction methods. Example: If a contractor finds a local supplier for steel, reducing transportation costs, this can result in significant cost savings for the project.

136. Fixed Price Contract

Definition: A fixed-price contract is a construction contract where the contractor agrees to complete the work for a set price, regardless of changes in material or labor costs. Example: If you're building a residential building, a fixed-price contract ensures that the total cost remains ₹20 crores, even if material prices rise during construction.

137. Performance Measurement Baseline (PMB)

Definition: The PMB is a set of approved project plans and schedules used to measure and compare actual project performance. Example: In an office tower project, the PMB helps the project manager track progress and ensure that work is completed on time and within budget.

138. Joint Venture (JV)

Definition: A JV is a partnership between two or more companies that agree to collaborate on a specific construction project, sharing resources, risks, and rewards. Example: Two construction firms might form a JV to build a major airport, combining their expertise in civil engineering and project management.

139. Variation Clause

Definition: A variation clause allows for changes to the project’s scope or design, usually requiring agreement from both the client and the contractor. Example: In a commercial building project, the variation clause might be used if the client decides to add an extra floor, altering the original scope of the contract.

140. Workforce Management

Definition: Workforce management involves planning, scheduling, and allocating workers to ensure the project progresses smoothly and efficiently. Example: In a residential construction project, workforce management helps ensure that electricians, plumbers, and painters are all scheduled appropriately to avoid any delays.

141. Site Supervision

Definition: Site supervision is the on-site management of the construction process to ensure that work is carried out according to the plans, specifications, and safety standards. Example: In a school construction project, the site supervisor oversees workers, monitors progress, and ensures that all safety protocols are followed.

142. Request for Quotation (RFQ)

Definition: An RFQ is a document issued to suppliers, asking them to provide a price quote for materials, equipment, or services needed for the project. Example: If you're constructing a bridge, you might send out an RFQ to steel suppliers to get quotes on the material costs for the structure.

143. Work Methodology

Definition: Work methodology outlines the techniques and processes used to complete tasks on a construction project, ensuring consistency and quality. Example: In a high-rise building project, the work methodology for concrete pouring might specify the type of concrete, the curing time, and the techniques used to ensure strength and durability.

144. Risk Mitigation

Definition: Risk mitigation involves taking steps to reduce the impact of potential risks on the project, such as cost overruns or delays. Example: If you’re building a coastal hotel, risk mitigation might include designing stronger foundations to protect against flooding or storm damage.

145. Claim for Extension of Time

Definition: A claim for an extension of time is a formal request made by the contractor to extend the project’s completion date due to delays beyond their control. Example: If heavy rains prevent the contractor from completing the foundation work for a commercial building on time, they might submit a claim for an extension of time to adjust the deadline.

146. Unit Rate Pricing

Definition: Unit rate pricing involves setting a price for each unit of work, such as square meters of flooring or cubic meters of concrete, to calculate the total project cost. Example: In a road construction project, the contractor might charge ₹500 per square meter of asphalt laid, with the total cost calculated based on the number of meters completed.

147. Material Takeoff (MTO)

Definition: MTO is a detailed list of all the materials needed for a construction project, based on the drawings and specifications. Example: Before starting a residential tower project, the contractor prepares an MTO listing quantities of steel, concrete, and glass required for the building.

148. Latent Defect

Definition: A latent defect is a hidden flaw in construction work that is not immediately visible and may only become apparent after a period of time. Example: In a residential project, a latent defect might involve a hidden plumbing issue that doesn’t cause problems until several months after the building is occupied.

149. Fast-Track Construction

Definition: Fast-track construction is a method of speeding up a project by starting construction work before the final design is complete, allowing for simultaneous design and build. Example: In an airport terminal project, fast-track construction might involve starting excavation and foundation work while the final interior designs are still being finalized.

150. Guaranteed Maximum Price (GMP)

Definition: A GMP contract sets a ceiling price for the project, with the contractor bearing any costs that exceed that limit, unless there are approved changes. Example: In a hotel construction project, the contractor agrees to complete the work for a GMP of ₹40 crores, meaning the client won’t pay more than that amount unless changes are made.

151. Cost Plan Review

Definition: A cost plan review is the process of revisiting and analyzing the project's cost plan to ensure that the estimated costs are accurate and realistic. Example: In a hospital construction project, the cost plan review may identify potential savings by switching to more cost-effective materials for flooring without compromising quality.

152. Trade Package

Definition: A trade package is a set of tasks related to a specific trade, such as electrical work or plumbing, that is subcontracted to a specialist contractor. Example: In a residential apartment project, the trade package for electrical work would include all wiring, lighting installation, and power systems, and would be subcontracted to an electrical contractor.

153. Construction Time Schedule

Definition: A construction time schedule is a timeline that outlines the start and completion dates for each phase of a project. Example: In a commercial complex, the construction time schedule might show that foundation work should be completed by March, followed by framing in April and May.

154. Work Progress Report

Definition: A work progress report is a document that provides updates on the construction project, detailing the work completed, any delays, and upcoming tasks. Example: In a mall construction project, the contractor submits a work progress report each month, showing how much of the structure has been completed and highlighting any issues that may affect the timeline.

155. Cost Engineering

Definition: Cost engineering involves analyzing and controlling costs throughout the construction process to ensure that the project stays within budget. Example: In a high-rise building project, cost engineers help manage expenses by tracking material costs, labor rates, and equipment use to avoid budget overruns.

156. Work Package

Definition: A work package is a detailed breakdown of a specific task or set of tasks within a project, outlining the resources, time, and costs required to complete it. Example: In a road construction project, a work package might include paving a section of the road, with details on the labor, machinery, and asphalt needed.

157. Benchmarking

Definition: Benchmarking is the process of comparing the project’s costs, timelines, and performance against industry standards or similar projects to ensure efficiency. Example: In a residential tower project, the contractor may benchmark costs against similar projects in the area to ensure that the pricing for materials like steel and cement is competitive.

158. Design Change Request

Definition: A design change request is a formal submission made to modify the original design of the project, which may affect the scope, cost, or timeline. Example: In a luxury hotel project, the client might submit a design change request to alter the layout of the lobby, requiring additional work and adjustments to the project timeline.

159. Retention Bond

Definition: A retention bond is a financial guarantee provided by the contractor instead of withholding retention money, assuring the client that any defects will be corrected after project completion. Example: In a bridge construction project, instead of withholding 5% of the contract value, the client accepts a retention bond from the contractor, ensuring that they will fix any issues discovered post-completion.

160. Provisional Certificate of Completion

Definition: A provisional certificate of completion is issued when most of the construction work is finished, allowing the client to use the building while minor tasks are still being completed. Example: In a commercial office project, the contractor may receive a provisional certificate of completion when the majority of the building is finished, but final landscaping and touch-ups are still underway.

161. Specification

Definition: Specifications are detailed written descriptions of the materials, workmanship, and standards to be used in a construction project. Example: In a school building project, the specifications might detail the type of concrete to be used, the thickness of the walls, and the standard for windows to ensure quality and safety.

162. Cost Code

Definition: A cost code is a unique identifier used to track and categorize expenses in a construction project, helping with budget management and reporting. Example: In a highway construction project, different cost codes are assigned to materials, labor, and equipment to ensure that each expense is tracked accurately and within the budget.

163. Quantity Surveyor (QS)

Definition: A QS is a professional responsible for managing the financial and contractual aspects of a construction project, including cost estimation, budgeting, and contract management. Example: In a residential tower project, the QS estimates the total cost of the project, monitors the budget, and ensures that the contractor is paid fairly for the work completed.

164. Contract Amendment

Definition: A contract amendment is a formal modification made to an existing contract to reflect changes in the project’s scope, cost, or timeline. Example: In a factory construction project, the client may request a contract amendment to increase the building’s size, leading to adjustments in both the budget and completion date.

165. Preliminary Cost Estimate

Definition: A preliminary cost estimate is an initial estimate of the total cost of the project, based on early design information and assumptions. Example: When planning a new airport terminal, the client receives a preliminary cost estimate that provides a rough idea of the total expenses for the construction, including materials, labor, and equipment.

166. Owner’s Representative

Definition: The owner's representative is the person or entity appointed by the client to oversee the construction project on their behalf, ensuring that the contractor meets the terms of the contract. Example: In a hotel project, the owner’s representative works with the contractor and architect to ensure the project is delivered on time and within budget, while also addressing any concerns from the client.

167. Pre-Construction Services

Definition: Pre-construction services include activities that take place before the actual construction begins, such as design development, cost estimation, and project scheduling. Example: Before starting a shopping mall project, the contractor provides pre-construction services like refining the design, estimating costs, and planning the construction timeline.

168. Escalation Clause

Definition: An escalation clause allows for price adjustments in the contract if the cost of certain materials or labor increases unexpectedly during the project. Example: In a road project, if the price of asphalt rises significantly, the escalation clause allows the contractor to adjust the final project cost to reflect the increased expense.

169. Critical Task

Definition: A critical task is a task that must be completed on time to ensure that the overall project schedule is not delayed. Example: In a bridge construction project, pouring the foundation is a critical task because any delay in this phase will push back the entire project timeline.

170. Cost Control Report

Definition: A cost control report tracks and analyzes project expenses to ensure that costs are kept within the budget and any potential overruns are identified early. Example: In a high-rise building project, the quantity surveyor submits a cost control report monthly, showing whether the project is staying on budget or if adjustments need to be made.

171. Work-to-Date (WTD)

Definition: WTD refers to the amount of work that has been completed so far on a construction project, often used in progress reports and payment applications. Example: In a residential project, if 40% of the building has been constructed, the contractor’s payment application will reflect the WTD, justifying partial payment from the client.

172. Owner's Contingency

Definition: The owner’s contingency is a fund set aside by the client to cover unexpected expenses or changes that arise during construction. Example: If unforeseen issues arise, such as discovering poor soil conditions during excavation, the client can use the owner’s contingency to pay for the necessary soil stabilization work.

173. Letter of Award (LOA)

Definition: An LOA is a formal letter issued by the client to the contractor, officially awarding them the contract and authorizing them to begin work. Example: In a university construction project, the client issues an LOA to the winning contractor, signaling that they can mobilize and start work on the site.

174. Precast Concrete

Definition: Precast concrete refers to concrete elements that are manufactured off-site and transported to the construction site for assembly. Example: In a stadium construction project, precast concrete beams are manufactured in a factory, transported to the site, and assembled quickly, saving time in the construction process.

175. Cost Estimation

Definition: Cost estimation is the process of calculating the expected expenses for a construction project, including materials, labor, equipment, and overheads. Example: For a shopping complex, the quantity surveyor provides a cost estimate that includes everything from the cost of cement and steel to the wages of the workers on-site.

176. Milestone Payment

Definition: Milestone payments are partial payments made to the contractor at pre-agreed stages of the construction project, based on the completion of specific milestones. Example: In a high-rise building project, the contractor receives milestone payments when they complete key tasks like laying the foundation, finishing the structure, and installing the roof.

177. Risk Allocation

Definition: Risk allocation is the process of assigning responsibility for potential risks in a construction project to the appropriate parties, typically outlined in the contract. Example: In a road construction project, the contract might assign the risk of material price increases to the client, while the contractor takes on the risk of labor shortages.

178. Re-measurement

Definition: Re-measurement is the process of recalculating the quantities of work completed on a construction project to ensure accurate payment for tasks that vary from the original scope. Example: In a tunneling project, if more rock needs to be excavated than initially estimated, re-measurement ensures that the contractor is compensated for the additional work.

179. Design-Bid-Build (DBB)

Definition: DBB is a project delivery method where the design and construction are contracted separately, with the design completed first and then contractors bidding for the construction. Example: For a new public library, the architect completes the design first, and then construction firms submit bids to build the project according to the completed plans.

180. Letter of Intent (LOI)

Definition: An LOI is a letter from the client to the contractor, indicating their intention to enter into a formal contract, allowing the contractor to begin preparations before the contract is signed. Example: In a hotel construction project, the client issues an LOI to the contractor, allowing them to begin preliminary work like mobilizing equipment and securing materials while the final contract is being negotiated.

181. Billable Hours

Definition: Billable hours are the hours worked by the contractor or consultant that can be charged to the client as part of the project costs. Example: In a commercial office project, the project manager tracks billable hours spent overseeing construction and coordinating subcontractors, which are included in the monthly invoices to the client.

182. Design Review

Definition: A design review is a formal evaluation of the project’s design to ensure that it meets the client’s requirements and complies with local regulations. Example: In a hospital project, the design review checks that the layout of operating rooms and patient wards complies with medical standards and local building codes.

183. Turnkey Contract

Definition: A turnkey contract is a type of contract where the contractor agrees to deliver a fully operational project to the client, ready for immediate use, with minimal involvement from the client during construction. Example: In a power plant construction project, the contractor delivers the plant fully built, tested, and ready for operation, allowing the client to "turn the key" and begin using it immediately.

184. Cash Flow Management

Definition: Cash flow management is the process of monitoring and controlling the movement of cash in and out of a construction project to ensure that there is enough money available to pay for expenses as they arise. Example: In a residential project, cash flow management ensures that payments from the client align with expenses like labor wages and material purchases, avoiding delays due to a lack of funds.

185. Sectional Completion

Definition: Sectional completion refers to the completion of specific parts of a project, allowing the client to take possession and use those sections while other parts are still under construction. Example: In a school construction project, the contractor completes the classrooms first, allowing students to start using them while work continues on the auditorium and gymnasium.

186. Subcontractor Default

Definition: Subcontractor default occurs when a subcontractor fails to complete their portion of the work, leading to delays or the need for the main contractor to hire a replacement. Example: If the plumbing subcontractor in a residential project fails to install the piping correctly and abandons the job, the main contractor has to find another subcontractor to complete the work.

187. Bank Guarantee

Definition: A bank guarantee is a financial instrument provided by the contractor’s bank, assuring the client that the contractor will fulfill their contractual obligations or the bank will compensate the client. Example: In a large infrastructure project, the contractor provides a bank guarantee to the client, ensuring that if the contractor fails to complete the work, the client will be financially protected.

188. Quantity Takeoff (QTO)

Definition: QTO is the process of measuring and listing all the materials and labor required for a construction project, based on the project’s drawings and specifications. Example: For a bridge construction project, the QTO includes calculating the quantities of steel, concrete, and asphalt needed for the structure, which helps in preparing the cost estimate.

189. Project Management Plan

Definition: A project management plan is a comprehensive document outlining the project’s objectives, scope, schedule, budget, and procedures for managing risks, quality, and communication. Example: In a stadium construction project, the project management plan details everything from the construction timeline to how risks like bad weather will be managed to keep the project on track.

190. Cost-to-Complete Report

Definition: A cost-to-complete report estimates the remaining expenses needed to finish the project, helping the client and contractor track whether the project is staying within budget. Example: In a hospital construction project, the contractor provides a cost-to-complete report halfway through, showing how much more money is needed to finish the remaining work.

191. Final Inspection

Definition: The final inspection is the last review of the project by the client or a building inspector to ensure that all work meets the project’s specifications and building codes. Example: After finishing a shopping mall, the contractor arranges a final inspection with the building inspector to verify that all electrical, plumbing, and safety systems are up to code before handing the project over to the client.

192. Bid Bond Guarantee

Definition: A bid bond guarantee is provided by the contractor during the bidding process to assure the client that they will enter into the contract if selected, and it protects the client if the contractor backs out. Example: In a government-funded road construction project, contractors are required to provide a bid bond guarantee when submitting their bids to ensure they follow through if awarded the contract.

193. Maintenance Period

Definition: The maintenance period is the time after project completion during which the contractor is responsible for fixing any defects that arise, often referred to as the defects liability period. Example: In a residential apartment project, the contractor is responsible for addressing any issues, such as plumbing leaks or electrical faults, that occur within the first year of completion.

194. Earned Value Analysis (EVA)

Definition: EVA is a project management technique that compares the planned work and budget to the actual work completed and costs incurred, helping assess project performance. Example: In a bridge project, EVA shows whether the work completed is on track with the budget and timeline, highlighting areas where the project is behind or over budget.

195. Green Building Certification

Definition: A green building certification is awarded to buildings that meet certain environmental and sustainability standards, such as energy efficiency, water conservation, and the use of eco-friendly materials. Example: In an office building project, the contractor designs and constructs the building to meet LEED standards, earning green building certification for energy efficiency and sustainability.

196. Time-and-Materials Contract

Definition: A time-and-materials contract reimburses the contractor for the actual cost of labor and materials, plus a markup for profit, often used when the scope of work is uncertain. Example: In a complex renovation project where the full scope of work isn’t clear upfront, the client and contractor agree to a time-and-materials contract to ensure the contractor is paid for the actual time spent and materials used.

197. Project Turnover

Definition: Project turnover is the process of transferring ownership of the completed project from the contractor to the client, along with all documentation, warranties, and training required to operate the building. Example: In a manufacturing plant project, the contractor hands over the keys, user manuals for equipment, and maintenance schedules to the client during the project turnover phase.

198. Retention Release

Definition: Retention release is the process of paying out the final portion of the contract amount that was held back as retention, once the project is fully completed and any defects have been resolved. Example: After a commercial building project is finished and all minor defects have been addressed, the client releases the final 5% retention payment to the contractor.

199. Contract Termination

Definition: Contract termination is the process of ending a construction contract before the project is completed, typically due to breaches, non-performance, or mutual agreement. Example: If a contractor consistently fails to meet deadlines and quality standards in a school construction project, the client may issue a notice of contract termination and hire another contractor to complete the work.

200. Work Sequence

Definition: Work sequence refers to the order in which tasks are performed on a construction project, ensuring that work is done efficiently and logically. Example: In a residential project, the work sequence would ensure that the foundation is poured before framing begins and that electrical systems are installed before the drywall is placed.

201. Cost Value Reconciliation (CVR)

Definition: CVR is a financial management tool that compares the value of work completed with the actual costs incurred, helping to assess the financial performance of the project. Example: In a large shopping complex project, the contractor compares the CVR monthly to ensure that the costs of materials and labor align with the planned budget.

202. Guaranteed Maximum Price (GMP) Contract

Definition: A GMP contract sets a cap on the maximum price the client will pay for the project. If costs exceed the GMP, the contractor absorbs the additional expenses, unless there are approved changes. Example: In a hotel construction project, the contractor agrees to a GMP of ₹50 crores, meaning the client won’t pay more even if the project exceeds that amount.

203. Planned Value (PV)

Definition: PV is the estimated value of work planned to be completed by a certain date, used to measure progress in construction projects. Example: If you're building a bridge, the PV might show that by month three, ₹10 crores worth of work should be completed, allowing you to track whether you're on schedule.

204. Progress Billing

Definition: Progress billing is the process of invoicing the client for work completed to date, often done in stages as the project progresses. Example: In a school construction project, the contractor may submit monthly progress billings, requesting payment for the percentage of work finished, such as completing the foundation.

205. Risk Register

Definition: A risk register is a document that lists all potential risks to the project, along with their likelihood, potential impact, and strategies for mitigation. Example: In a coastal hotel project, the risk register may include potential flooding and rising material costs, along with measures to minimize their impact.

206. Detailed Cost Estimate

Definition: A detailed cost estimate provides a breakdown of all project costs, including materials, labor, overhead, and contingency, based on detailed drawings and specifications. Example: For a large shopping mall project, the detailed cost estimate would itemize every element, from the cost of concrete to the expense of labor for installing escalators.

207. Direct Labor

Definition: Direct labor refers to the work done by employees or subcontractors that is directly involved in the construction process, such as masons, carpenters, or electricians. Example: In a high-rise apartment project, the wages paid to the electricians wiring the building are considered direct labor costs.

208. Project Cost Report

Definition: A project cost report is a financial document that summarizes all costs incurred to date, comparing them against the budget to identify variances. Example: In a residential building project, the project cost report helps track whether the spending on materials, labor, and overhead is aligned with the initial budget.

209. Change Control

Definition: Change control is the process of managing changes to the project's scope, schedule, or budget, ensuring that all changes are properly documented and approved. Example: In a government infrastructure project, the client requests additional landscaping. Change control ensures that the cost and time impacts are documented and approved before work begins.

210. Cost Performance Index (CPI)

Definition: CPI is a measure of cost efficiency in a project, calculated by dividing the earned value by the actual costs. A CPI greater than 1 indicates good performance. Example: In a commercial building project, if the CPI is 1.2, it means the project is being completed more efficiently than planned, costing less for the amount of work done.

211. Baseline Schedule

Definition: The baseline schedule is the original project timeline, approved by the client and contractor, against which progress is measured. Example: In a hospital construction project, the baseline schedule might show that the foundation should be completed by month two and the roofing by month five, providing a reference point for tracking progress.

212. BOQ Measurement

Definition: BOQ measurement refers to the precise calculation of quantities for materials, labor, and services required for the construction project, as outlined in the Bill of Quantities. Example: In a bridge project, BOQ measurement ensures that the quantities of steel, concrete, and asphalt are correctly calculated, preventing shortages or over-ordering.

213. Lead Consultant

Definition: The lead consultant is the primary advisor responsible for coordinating all aspects of the project’s design and ensuring that the client’s requirements are met. Example: In a large infrastructure project, the lead consultant manages architects, engineers, and other specialists, ensuring that the design aligns with the client’s vision and the budget.

214. Cash Flow Forecast

Definition: A cash flow forecast estimates the amount of money needed at different stages of a construction project to ensure there’s enough cash available to cover expenses. Example: In a shopping mall project, the contractor creates a cash flow forecast showing when funds will be needed for materials, labor, and subcontractor payments over the next six months.

215. Forward Pricing

Definition: Forward pricing is an estimate of future costs for materials, labor, and equipment, based on anticipated price changes and inflation. Example: If you're planning to start a large commercial project in six months, forward pricing helps estimate what materials like steel or cement might cost at that time.

216. Preliminaries and General Conditions

Definition: Preliminaries and general conditions refer to the project setup costs, such as site establishment, security, utilities, and supervision. Example: In a hotel project, preliminaries might include setting up temporary offices for site staff, fencing off the construction site, and arranging temporary power supply.

217. Additive Change Order

Definition: An additive change order is a formal instruction to increase the scope of work in a project, usually resulting in additional costs and time. Example: During the construction of a hospital, the client decides to add another floor for specialized treatment rooms, resulting in an additive change order that modifies the contract.

218. Substantial Completion

Definition: Substantial completion is the point at which a construction project is sufficiently complete for the client to use the building, although minor work may still remain. Example: In an office building project, substantial completion is reached when the building is usable, but final touches like landscaping or painting may still be pending.

219. Disbursement Schedule

Definition: A disbursement schedule outlines when payments will be made to the contractor based on milestones or progress completed in the project. Example: In a residential project, the disbursement schedule might state that the contractor receives 20% of the contract value after completing the foundation, and another 30% after finishing the structure.

220. Value Added

Definition: Value added refers to the additional benefits or enhancements a contractor brings to the project, beyond the basic requirements, which can include innovative solutions or efficiency improvements. Example: In a hotel project, a contractor might suggest using a more energy-efficient HVAC system, adding value by reducing future energy costs for the client.

221. Cost Escalation

Definition: Cost escalation refers to the increase in costs during a construction project due to factors like inflation, changes in material prices, or labor shortages. Example: In a bridge project, cost escalation might occur if steel prices rise unexpectedly, causing the project’s total cost to exceed the original estimate.

222. Design-Build (DB) Contract

Definition: A DB contract is a project delivery method where the contractor is responsible for both the design and construction of the project, simplifying communication and reducing risks. Example: In a residential tower project, the client hires a design-build contractor who handles the architectural design, engineering, and actual construction work, streamlining the process.

223. Performance Specifications

Definition: Performance specifications outline the required performance outcomes for materials and systems without specifying the exact materials or methods to achieve them. Example: In a stadium project, the performance specifications might state that the roofing system must withstand 100 km/h winds, leaving it up to the contractor to choose the best materials to meet this requirement.

224. Cost-Benefit Analysis (CBA)

Definition: CBA is a process of comparing the costs and benefits of different project options or solutions to determine the most cost-effective choice. Example: In a highway construction project, the CBA might evaluate whether using a more expensive but longer-lasting asphalt would provide better value over the life of the road.

225. Letter of Acceptance (LOA)

Definition: An LOA is a formal document issued by the client, accepting the contractor’s tender or bid and confirming that the contract will be awarded to them. Example: After receiving competitive bids for a school project, the client issues an LOA to the winning contractor, giving them the green light to begin work.

226. Provisional Item

Definition: A provisional item is a part of the BOQ that is included with estimated quantities or costs because the exact details are not yet known at the time of tendering. Example: In a residential project, the cost for the external landscaping might be listed as a provisional item, as the final design hasn’t been completed yet.

227. Cost Breakdown Analysis

Definition: A cost breakdown analysis divides the project’s total cost into individual components, such as materials, labor, and overhead, to provide a clearer picture of where money is being spent. Example: For a shopping mall, the cost breakdown analysis might show that 30% of the budget is allocated to structural work, 25% to finishes, and the rest to services like HVAC and electrical.

228. Earned Schedule (ES)

Definition: ES is a project management technique that measures the actual time spent on tasks compared to the planned schedule, helping to assess if the project is on time. Example: In a commercial building project, the earned schedule analysis might show that even though the work is progressing, it's behind the original timeline by two weeks.

229. Ex-Gratia Payment

Definition: An ex-gratia payment is a goodwill payment made by the client to the contractor for work done, even though the contractor is not legally entitled to it. Example: In a construction project, the client might make an ex-gratia payment to the contractor for completing additional tasks outside the original contract, even though it wasn’t part of the agreed terms.

230. Feasibility Budget

Definition: A feasibility budget is an initial budget estimate created to determine whether a project is financially viable, based on preliminary designs and cost data. Example: When planning a new airport terminal, the client prepares a feasibility budget to determine if the projected costs align with the available funds.

231. Warranties and Guarantees

Definition: Warranties and guarantees are assurances provided by the contractor or suppliers that the work and materials will meet the required standards for a specified period. Example: In a high-rise residential project, the contractor provides a two-year warranty on all structural work, meaning any issues arising within this period must be fixed at no extra cost.

232. Breakdown Structure (BDS)

Definition: A BDS organizes the project’s tasks or costs into a hierarchical structure to ensure that all aspects are accounted for, making it easier to manage and track. Example: In a hospital project, the BDS divides the work into major categories like foundation, framing, and finishes, with subcategories for specific tasks and materials.

233. Retention Percentage

Definition: Retention percentage is the amount of money withheld from each payment to the contractor, typically around 5% to 10%, until the project is fully completed and defects are rectified. Example: In a commercial tower project, the client withholds 10% of each payment as retention, which is released after the final inspection confirms that all work is completed to satisfaction.

234. S-Curve

Definition: An S-curve is a graphical representation of project progress over time, showing cumulative work completed compared to the schedule. Example: In a large infrastructure project, the S-curve might show that the project is slightly behind schedule, prompting the project manager to take corrective action to avoid further delays.

235. Forecasting

Definition: Forecasting is the process of predicting future costs, work progress, or resource needs based on current project performance and trends. Example: In a shopping mall construction project, the project manager uses forecasting to predict how much more money will be needed to complete the work based on current spending rates.

236. Daily Site Report

Definition: A daily site report is a record of the activities, progress, and any issues encountered on the construction site each day, helping to keep all stakeholders informed. Example: In a high-rise project, the site supervisor submits a daily site report to the project manager, detailing the work completed, any safety incidents, and materials used.

237. Liquidated and Ascertained Damages (LAD)

Definition: LAD are pre-agreed damages that the contractor must pay to the client if the project is delayed beyond the agreed completion date, compensating for any financial losses. Example: In a residential tower project, the contract might state that the contractor will pay ₹1 lakh per day in LAD if the project is delayed beyond the deadline.

238. Turnkey Solution

Definition: A turnkey solution is a project where the contractor delivers a fully completed and operational building, ready for immediate use by the client. Example: In an industrial facility project, the contractor handles everything from design to construction to commissioning, so the client can begin using the facility as soon as it's handed over.

239. Material Price Escalation

Definition: Material price escalation refers to the increase in material costs during the project, which may require adjustments to the project budget or contract price. Example: In a highway project, if the cost of cement rises sharply due to market conditions, the contractor may request an adjustment under the material price escalation clause in the contract.

240. Construction Phasing

Definition: Construction phasing is the process of dividing a project into stages or phases to optimize scheduling, resources, and coordination of activities. Example: In a mixed-use development, construction phasing ensures that the residential units are completed and occupied before the commercial spaces are finished, maximizing project efficiency.

241. Soft Costs

Definition: Soft costs refer to expenses that are not directly related to the physical construction, such as architectural fees, permits, and insurance. Example: In a hospital construction project, soft costs might include the fees for the project’s architect and legal advisor, as well as the cost of obtaining necessary building permits.

242. Hard Costs

Definition: Hard costs are the direct expenses associated with the actual construction of a building, such as materials, labor, and equipment. Example: In a residential tower project, hard costs include the price of bricks, concrete, steel beams, and the wages paid to the construction workers.

243. Rework Costs

Definition: Rework costs refer to the additional expenses incurred from correcting work that was incorrectly performed or failed to meet the project’s standards. Example: If the plastering in a commercial building is found to be of poor quality, the contractor incurs rework costs to redo the plastering according to the original specifications.

244. Procurement Strategy

Definition: A procurement strategy outlines the approach for sourcing materials, services, and contractors needed to complete a construction project. Example: In a shopping mall project, the procurement strategy may involve selecting multiple local suppliers for materials like steel and cement to minimize transportation costs and ensure timely delivery.

245. Design-Build-Finance-Operate (DBFO)

Definition: DBFO is a project delivery method where a single entity is responsible for designing, building, financing, and operating the project, often used in public infrastructure projects. Example: In a toll road project, the contractor handles the entire process, including financing, and then operates the toll system for a certain period to recoup their investment.

246. Force Account Work

Definition: Force account work refers to construction work performed by the client’s own employees, as opposed to hiring a contractor. Example: In a government road project, the road maintenance work is carried out by the public works department’s in-house team, instead of subcontracting the task to an external contractor.

247. Construction Logistics

Definition: Construction logistics involves planning and managing the transportation, delivery, and storage of materials, equipment, and workers to the construction site. Example: In a high-rise project in a congested city center, construction logistics are crucial to ensure that materials like steel beams and concrete are delivered on time without causing delays or traffic disruptions.

248. Lump-Sum Contract

Definition: A lump-sum contract is a type of contract where the contractor agrees to complete the project for a fixed total price, regardless of the actual costs incurred. Example: In a school construction project, the contractor agrees to a lump-sum contract of ₹30 crores, meaning the client will pay this amount even if the contractor’s actual costs are higher or lower.

249. Value Engineering (VE)

Definition: VE is a method of improving project value by identifying cost-saving opportunities without compromising quality or performance. Example: In a commercial complex project, VE might suggest using a different type of flooring material that offers the same durability but at a lower cost, saving money without reducing quality.

250. Owner-Builder

Definition: An owner-builder is a person or entity that takes on the responsibilities of both the client and the contractor, managing and executing the construction project themselves. Example: In a small residential development, the owner decides to act as the builder, overseeing the construction process, purchasing materials, and hiring subcontractors directly.

251. Commissioning

Definition: Commissioning is the process of testing and verifying that all systems and components of a building are installed and functioning as intended before the final handover to the client. Example: In an office tower project, commissioning involves testing the HVAC systems, elevators, electrical wiring, and fire safety equipment to ensure they work as specified.

252. Design Intent

Definition: Design intent refers to the overall vision and functional goals that the architect or designer aims to achieve through the project’s design. Example: In a museum construction project, the design intent might focus on creating open, airy spaces with lots of natural light to enhance the visitor experience.

253. Takeoff List

Definition: A takeoff list is a document that details all the quantities of materials and equipment needed for a project, derived from the design drawings. Example: Before starting a bridge project, the contractor creates a takeoff list that specifies how much steel, concrete, and asphalt will be required for the construction.

254. Contractor's All Risk (CAR) Insurance

Definition: CAR insurance provides coverage for physical loss or damage to the construction works, as well as third-party liability for injuries or damages occurring on-site. Example: In a high-rise building project, the contractor purchases CAR insurance to cover potential damages caused by fire, theft, or accidental injury during construction.

255. Capital Expenditure (CapEx)

Definition: CapEx refers to the funds used by a company to acquire, upgrade, or maintain physical assets like buildings, equipment, or infrastructure. Example: In a manufacturing plant construction project, the cost of purchasing and installing new machinery and equipment is considered a capital expenditure.

256. Design Freeze

Definition: A design freeze is the point in a project where all design decisions are finalized, and no further changes are allowed without significant justification. Example: In a commercial building project, the design freeze occurs when the client and architect agree on the final layout, materials, and specifications, preventing costly design changes during construction.

257. Budget Tracking

Definition: Budget tracking is the ongoing process of monitoring actual project costs against the approved budget to ensure that spending remains within limits. Example: In a residential housing project, the project manager regularly updates the budget tracking report to compare planned expenses with actual spending on materials and labor.

258. Owner's Risk

Definition: Owner's risk refers to potential liabilities or financial losses that the client is responsible for during the construction project, such as delays caused by design changes. Example: In a hotel construction project, if the client decides to change the design of the lobby mid-construction, any resulting delays or cost overruns are considered the owner’s risk.

259. Scope Gaps

Definition: Scope gaps are areas of work that are not clearly defined in the project’s scope, often leading to confusion or disputes between the client and contractor. Example: In a mall project, if the contract does not clearly specify who is responsible for installing interior finishes like tiling, this creates a scope gap that needs clarification to avoid delays.

260. Work Breakdown Structure (WBS)

Definition: A WBS is a hierarchical breakdown of the project’s tasks into manageable sections, making it easier to assign responsibilities and track progress. Example: In a large infrastructure project, the WBS divides the work into categories like site preparation, foundation, framing, electrical systems, and finishing, allowing for more efficient management.

261. Provisional Sum

Definition: A provisional sum is an estimated allowance included in the contract for work that is not yet fully defined, to be adjusted once the details are finalized. Example: In a commercial building project, the landscaping costs might be listed as a provisional sum, as the exact design and scope of the work are still being developed.

262. Performance Milestone

Definition: A performance milestone is a key project stage or task that must be completed by a certain date to keep the project on schedule. Example: In a highway project, one performance milestone might be completing the bridge foundations by a specific date to ensure that the rest of the work stays on track.

263. Contractor’s Liability

Definition: Contractor’s liability refers to the contractor’s legal and financial responsibility for any damages, defects, or accidents that occur during the construction process. Example: In a residential project, if a wall collapses due to poor construction, the contractor is liable for fixing the damage and covering any associated costs or injuries.

264. Lean Construction

Definition: Lean construction is a methodology aimed at maximizing value while minimizing waste in construction processes, focusing on improving efficiency and reducing unnecessary costs. Example: In a hospital project, lean construction principles might involve streamlining the supply chain to ensure that materials are delivered just in time for use, reducing storage costs and waste.

265. Sustainability Assessment

Definition: A sustainability assessment evaluates the environmental, social, and economic impacts of a construction project, ensuring that it meets green building standards. Example: In an office building project, the sustainability assessment might focus on using eco-friendly materials, reducing energy consumption, and minimizing the building’s carbon footprint.

266. Prime Contractor

Definition: The prime contractor is the main contractor responsible for managing the entire construction project and coordinating all subcontractors and suppliers. Example: In a shopping mall project, the prime contractor oversees the entire construction process, ensuring that subcontractors for plumbing, electrical, and carpentry work are all on schedule.

267. Environmental Impact Assessment (EIA)

Definition: An EIA is a study conducted to assess the potential environmental effects of a construction project, required before approval in many cases. Example: Before building a new airport, an EIA is conducted to evaluate the project’s impact on local wildlife, water sources, and air quality, ensuring compliance with environmental regulations.

268. Geotechnical Report

Definition: A geotechnical report provides an analysis of the soil, rock, and groundwater conditions at a construction site, helping to design foundations and structural supports. Example: For a skyscraper project, the geotechnical report informs the engineers about the soil’s bearing capacity, ensuring that the building’s foundation is designed to handle the load safely.

269. Earnest Money Deposit (EMD)

Definition: EMD is a deposit made by a contractor during the bidding process to demonstrate their commitment to the project and seriousness of the bid. Example: When bidding on a government infrastructure project, contractors are required to submit an EMD, which will be forfeited if they fail to sign the contract after winning the bid.

270. Project Contingency

Definition: A project contingency is a reserve fund included in the project budget to cover unexpected expenses or risks that arise during construction. Example: In a large infrastructure project, a 5% contingency is added to the total budget to cover unforeseen issues like material shortages or design changes.

271. Interim Certificate

Definition: An interim certificate is issued by the project manager or architect, authorizing payment to the contractor for work completed during a specific period. Example: In a hospital construction project, an interim certificate might be issued every month to release payments for the work completed up to that date, based on site inspections.

272. Standard Form of Contract

Definition: A standard form of contract is a pre-established template used in construction projects that outlines common terms, conditions, and obligations between the client and contractor. Example: In a public works project, the government uses a standard form of contract to ensure that all contractors work under the same legal and operational terms, making it easier to manage multiple projects.

273. Subcontractor Agreement

Definition: A subcontractor agreement is a formal contract between the prime contractor and a subcontractor, outlining the scope of work, payment terms, and responsibilities. Example: In a high-rise office building project, the prime contractor signs subcontractor agreements with specialists like HVAC installers, electricians, and plumbing contractors.

274. Punch List

Definition: A punch list is a document that lists all the minor tasks or repairs that need to be completed before the final handover of the project to the client. Example: In a residential project, the punch list might include items like fixing paint touch-ups, installing missing door handles, or replacing cracked tiles before the client takes possession of the property.

275. Liquidated Damages

Definition: Liquidated damages are pre-agreed financial penalties imposed on the contractor if the project is not completed within the agreed timeframe. Example: In a mall construction project, the contract might include a liquidated damages clause that fines the contractor ₹50,000 for each day of delay past the agreed completion date.

276. Occupancy Permit

Definition: An occupancy permit is a legal document issued by the local authorities that certifies that a building is safe and suitable for occupancy, marking the end of the construction phase. Example: In a commercial office project, the contractor must obtain an occupancy permit from the city’s building department before the tenants can move in and use the space.

277. Depreciation

Definition: Depreciation refers to the decrease in value of an asset, such as machinery or equipment, over time due to wear and tear or obsolescence. Example: In a construction company’s financial statements, the value of a bulldozer decreases each year due to depreciation, reflecting its reduced utility and resale value.

278. Retained Earnings

Definition: Retained earnings are the profits that a construction company keeps after paying dividends to shareholders, which can be reinvested in the business or saved for future use. Example: A construction firm might use its retained earnings to invest in new equipment, such as cranes or excavators, improving its ability to take on larger projects.

279. Construction Drawings

Definition: Construction drawings are detailed plans and diagrams that show the technical specifications for the construction of a building, including dimensions, materials, and layouts. Example: In a residential apartment project, construction drawings are used by contractors to understand how to lay out walls, install electrical systems, and place windows and doors.

280. Project Financing

Definition: Project financing refers to the methods used to fund a construction project, which may include loans, equity investments, and other financial instruments. Example: In a large infrastructure project like a toll road, the government might use project financing by issuing bonds or taking out loans to cover the upfront costs, which are repaid through toll revenues.

281. Letter of Intent (LOI)

Definition: An LOI is a formal letter from the client to the contractor indicating the intention to enter into a contract for a project, allowing preliminary work to begin. Example: Before the final contract is signed for a bridge project, the client issues an LOI, allowing the contractor to begin site preparations and ordering materials.

282. Backlog

Definition: Backlog refers to the total value of contracted work that has not yet been completed by a contractor, representing future revenue. Example: A construction company with multiple ongoing projects might have a backlog worth ₹100 crores, representing the value of work yet to be completed.

283. Escrow Agreement

Definition: An escrow agreement is a legal arrangement where funds are held by a third party on behalf of the client and contractor, to be released upon meeting certain conditions. Example: In a commercial building project, the client deposits funds in escrow, and payments are released to the contractor when specific project milestones are achieved.

284. Alternative Dispute Resolution (ADR)

Definition: ADR refers to methods used to resolve disputes outside of court, including mediation, arbitration, and negotiation. Example: If a contractor and client disagree on the quality of work in a residential tower project, they may use ADR to settle the issue through mediation, avoiding lengthy court battles.

285. Provisional Completion

Definition: Provisional completion refers to the stage when a project is mostly complete but still requires some minor works or rectifications before the final handover. Example: In a shopping mall project, provisional completion is achieved when the structure is ready for tenants, but minor works like landscaping or final paint jobs are still pending.

286. Fast-Track Construction

Definition: Fast-track construction is a method where construction starts before the full design is complete, allowing certain parts of the project to progress simultaneously, saving time. Example: In an airport terminal project, excavation and foundation work might begin while final designs for the interior are still being completed, speeding up the overall construction timeline.

287. Fixed Overhead

Definition: Fixed overhead refers to the ongoing business expenses that do not fluctuate with the volume of work, such as office rent, salaries, and insurance. Example: A construction company’s fixed overhead includes costs like office lease payments and administrative staff salaries, which must be paid regardless of how many projects are ongoing.

288. Bill of Quantities (BOQ)

Definition: A BOQ is a detailed document that lists the quantities of all materials, labor, and other resources needed to complete a construction project. Example: In a residential building project, the BOQ might include quantities for steel, concrete, bricks, and finishes, helping the contractor estimate costs accurately.

289. Scope Creep

Definition: Scope creep occurs when the project’s scope expands beyond the original plan without proper authorization, often leading to cost overruns and delays. Example: In a hotel project, scope creep might happen if the client keeps requesting additional rooms or features, causing delays and additional expenses that weren’t part of the original contract.

290. Construction Programme

Definition: The construction programme is the detailed timeline that outlines the sequence and duration of all tasks in the project. Example: In a hospital project, the construction programme shows when excavation, foundation work, and each phase of building will be completed, ensuring the project stays on schedule.

291. Constructability Review

Definition: A constructability review is an assessment of the construction project’s design to ensure it can be built efficiently and effectively, identifying any potential issues before work begins. Example: In a complex high-rise project, a constructability review might highlight challenges with accessing the site or suggest ways to streamline the construction process, reducing costs and delays.

292. Critical Path Method (CPM)

Definition: CPM is a project scheduling technique that identifies the longest sequence of dependent tasks, known as the critical path, which determines the shortest time needed to complete the project. Example: In a residential project, CPM analysis shows that foundation work, framing, and roofing are critical tasks, meaning any delays in these tasks will directly impact the project’s completion date.

293. Liquidated and Ascertained Damages (LAD)

Definition: LAD refers to pre-agreed financial penalties imposed on the contractor if the project is delayed beyond the agreed completion date, compensating the client for the delay. Example: In a commercial office project, the contract includes a LAD clause stating that the contractor must pay ₹1 lakh per day for each day of delay beyond the completion deadline.

294. Project Milestones

Definition: Project milestones are significant stages or achievements in the construction project, often used as points for progress payment or performance evaluation. Example: In a stadium project, major milestones might include completing the foundation, finishing the structure, and installing the roof, each triggering a progress payment to the contractor.

295. Practical Completion

Definition: Practical completion is the stage at which the construction work is complete enough for the building to be used, although minor defects or incomplete items may still need attention. Example: In an apartment building project, practical completion is reached when all units are habitable, but small touch-ups like repainting or fixing minor defects are still pending.

296. Earned Value Management (EVM)

Definition: EVM is a project management technique that combines scope, schedule, and cost data to assess project performance and progress. Example: In a residential project, EVM is used to compare the amount of work completed (earned value) with the planned and actual costs, helping the project manager stay on budget and schedule.

297. Progress Claim

Definition: A progress claim is a request submitted by the contractor to the client for payment based on the work completed to date. Example: In a school project, the contractor submits a progress claim at the end of each month, showing the percentage of work completed and requesting payment accordingly.

298. Pre-Qualification Questionnaire (PQQ)

Definition: A PQQ is a document used by clients to assess the capabilities of contractors before inviting them to tender for a project, ensuring they meet minimum standards. Example: In a government infrastructure project, contractors must complete a PQQ, demonstrating their financial stability, experience, and technical capabilities before being allowed to bid.

299. Quality Control (QC)

Definition: QC refers to the processes and procedures used to ensure that the construction work meets the required quality standards, often involving regular inspections and testing. Example: In a residential tower project, QC ensures that materials like concrete and steel meet the specified strength requirements through regular testing during construction.

300. Subcontractor Default Insurance

Definition: Subcontractor default insurance provides coverage to the contractor if a subcontractor fails to complete their work or goes bankrupt, protecting the project from delays or additional costs. Example: In a shopping center project, the contractor takes out subcontractor default insurance in case the electrical subcontractor is unable to finish their work, allowing the contractor to hire a replacement without financial loss.

301. Schematic Design

Definition: Schematic design is the initial stage of the design process where basic concepts, layouts, and relationships between spaces are developed. Example: In an office complex project, the schematic design shows the rough layout of office spaces, common areas, and meeting rooms, providing a basic visual guide for the client.

302. Design Coordination

Definition: Design coordination involves managing and aligning the various design disciplines—such as architectural, structural, and MEP (Mechanical, Electrical, Plumbing)—to ensure a cohesive project. Example: In a hospital project, design coordination ensures that the structural design can accommodate the mechanical systems for HVAC and medical gases without conflicts.

303. Construction Phase Plan

Definition: A construction phase plan outlines the health, safety, and welfare arrangements during the construction phase, detailing how risks will be managed on-site. Example: In a high-rise construction project, the construction phase plan includes safety protocols for working at heights, handling hazardous materials, and ensuring worker safety.

304. Snagging

Definition: Snagging refers to the process of identifying and fixing minor defects or incomplete work before the final handover of the building to the client. Example: In a residential project, snagging might include identifying issues like incomplete paint jobs, faulty door handles, or minor cracks in walls that need to be fixed before the tenants move in.

305. Retention Release

Definition: Retention release is the process of paying out the final portion of the contract sum that was withheld as retention money after the project is completed and all defects have been rectified. Example: After completing a commercial tower project and fixing all minor issues during the defects liability period, the client releases the 5% retention payment to the contractor.

306. Project Charter

Definition: A project charter is a formal document that authorizes the project, outlines the project’s objectives, and defines the roles and responsibilities of the stakeholders. Example: In a public infrastructure project, the project charter specifies that the contractor is responsible for the construction, while the government agency handles approvals and permits.

307. Work Sequence

Definition: Work sequence refers to the logical order in which construction tasks are carried out to ensure efficiency and avoid conflicts between different trades. Example: In a high-rise apartment project, the work sequence ensures that plumbing and electrical work are completed before the walls are plastered and painted, preventing rework.

308. Feasibility Study

Definition: A feasibility study assesses the practicality and financial viability of a construction project, taking into account factors like cost, timeline, and potential risks. Example: Before committing to build a shopping mall, the client conducts a feasibility study to determine if the project can be completed within budget and if there’s enough demand for retail space in the area.

309. Value Management (VM)

Definition: VM is a systematic approach to improving the value of a project by identifying and optimizing essential functions while reducing unnecessary costs. Example: In a hospital construction project, VM might suggest using modular construction techniques to reduce build time and costs without sacrificing quality or functionality.

310. Building Information Modeling (BIM)

Definition: BIM is a digital representation of the physical and functional characteristics of a building, allowing for detailed design, analysis, and coordination between project teams. Example: In a large residential complex project, BIM is used to create 3D models of the structure, helping architects, engineers, and contractors identify potential conflicts and optimize design elements before construction begins.

311. Final Account

Definition: The final account is the comprehensive financial statement showing the total project costs after all adjustments for variations, claims, and agreed-upon changes. Example: In a commercial tower project, the final account reconciles the initial budget with the actual expenses, including additional costs for approved changes and variations.

312. Pre-Tender Estimate

Definition: A pre-tender estimate is a cost estimate prepared by the client’s quantity surveyor before the tendering process begins, providing a baseline for comparing contractor bids. Example: In a highway project, the pre-tender estimate helps the client assess whether the bids submitted by contractors are reasonable based on the estimated costs for materials, labor, and equipment.

313. Building Control

Definition: Building control refers to the process of ensuring that a construction project complies with local building codes and regulations, often involving inspections by authorities. Example: In a school construction project, building control inspectors check that fire safety systems, structural elements, and electrical installations meet regulatory standards before granting approval for occupancy.

314. Tender Evaluation

Definition: Tender evaluation is the process of assessing the bids submitted by contractors to determine which offers the best value based on price, quality, experience, and proposed timeline. Example: In a residential development project, the client evaluates several tender submissions to ensure they choose the contractor who can deliver high-quality work at a competitive price.

315. Defective Work

Definition: Defective work refers to construction work that fails to meet the specified quality standards or contract requirements, often requiring rework or repair. Example: In a commercial building project, if the concrete used for the foundation is found to be below the required strength, the contractor must remove and replace the defective work at their own expense.

316. Cost Plan

Definition: A cost plan is a detailed financial document that outlines the estimated costs for each phase of a construction project, helping to control the budget throughout the project. Example: In a hospital project, the cost plan includes estimates for excavation, foundation work, mechanical systems, and interior finishes, providing a comprehensive budget for the entire build.

317. Due Diligence

Definition: Due diligence is the process of thoroughly investigating all aspects of a construction project, including legal, financial, and technical considerations, before proceeding. Example: Before purchasing land for a high-rise project, the developer conducts due diligence to ensure that the site is free from legal disputes and suitable for the planned construction.

318. Architect’s Instruction (AI)

Definition: An AI is a formal instruction issued by the architect to the contractor, requesting a change in the construction work, often leading to variations in the contract. Example: In a hotel construction project, the architect might issue an AI to change the design of the lobby ceiling, requiring the contractor to adjust the scope of work and cost accordingly.

319. Design Intent Drawings

Definition: Design intent drawings are detailed sketches or plans that show the architect’s overall vision for the project, but may not include full construction details. Example: In an office building project, design intent drawings might illustrate the layout of workspaces and common areas, providing a visual guide for the client before detailed construction drawings are developed.

320. Cash Retention

Definition: Cash retention refers to a portion of the contractor’s payment that is held back by the client to ensure that all work is completed satisfactorily and any defects are fixed. Example: In a shopping mall project, the client withholds 5% of each payment as cash retention, which is only released after all minor issues are resolved at the end of the defects liability period.

321. Design-Build-Operate (DBO)

Definition: DBO is a project delivery method where a single contractor is responsible for designing, constructing, and operating the facility for a specified period. Example: In a wastewater treatment plant project, the contractor designs, builds, and operates the plant for five years before handing it over to the client for long-term operation.

322. Prime Cost Sum (PC Sum)

Definition: A PC Sum is an allowance included in the contract for specific items, such as fixtures or fittings, where the exact cost is not known at the time of tendering. Example: In a residential building project, the PC Sum may be used for bathroom fixtures, allowing flexibility in choosing the final products based on the client’s preferences.

323. Latent Condition

Definition: A latent condition refers to a site condition that was not visible or anticipated during the initial site investigations, often leading to additional costs and time. Example: In a commercial building project, a latent condition might involve discovering unstable soil or underground utilities during excavation, which requires additional work to stabilize or relocate.

324. Prorated Payment

Definition: Prorated payment refers to a partial payment made for a portion of work completed or for a partial time period of service. Example: In a road construction project, if the contractor finishes 75% of the paving work, they may receive a prorated payment for the completed work, while the remaining payment is held until the job is fully finished.

325. Dispute Adjudication Board (DAB)

Definition: A DAB is an independent panel of experts appointed to resolve disputes that arise during a construction project, aiming to avoid costly and time-consuming litigation. Example: In an infrastructure project, if there’s a disagreement between the client and contractor over delays, the DAB reviews the case and provides a binding resolution.

326. Stipulated Sum Contract

Definition: A stipulated sum contract is a fixed-price contract where the contractor agrees to complete the project for a specified amount, regardless of actual costs. Example: In a school construction project, the contractor agrees to complete the work for ₹25 crores under a stipulated sum contract, meaning the price remains unchanged unless there are approved variations.

327. Performance Bond

Definition: A performance bond is a financial guarantee provided by the contractor’s bank or insurance company, ensuring that the contractor will complete the project as per the contract terms. Example: In a commercial tower project, the client requires a performance bond to protect against the risk of the contractor failing to complete the work, ensuring that another contractor can be hired if necessary.

328. Rate Analysis

Definition: Rate analysis is the process of calculating the cost of materials, labor, equipment, and overhead for a specific construction activity, helping to set unit prices for work items. Example: In a road project, rate analysis is used to determine the cost per square meter of asphalt paving, considering factors like material costs, labor wages, and equipment usage.

329. Turnkey Project

Definition: A turnkey project is one where the contractor handles all aspects of design, construction, and commissioning, delivering the project in a ready-to-use condition to the client. Example: In a factory construction project, the contractor completes all design, construction, and installation of machinery, allowing the client to start operations immediately after handover.

330. Lien

Definition: A lien is a legal claim made by a contractor or subcontractor to secure payment for work performed, giving them the right to take legal action if payment is not made. Example: In a residential project, if the contractor is not paid for their work, they can file a lien against the property, preventing its sale until the payment issue is resolved.

331. Depreciation Expense

Definition: Depreciation expense refers to the reduction in the value of an asset over time due to wear and tear, usage, or obsolescence. Example: In a construction company’s financial records, the value of heavy machinery like bulldozers is depreciated annually, reflecting the declining value as the equipment ages.

332. Greenfield Project

Definition: A greenfield project is a construction project built on undeveloped land, where there are no existing structures or infrastructure. Example: In a new industrial park project, the site is a greenfield, meaning that the contractor starts with an empty plot of land, without needing to demolish or work around existing buildings.

333. Time-Related Charges

Definition: Time-related charges are costs that are incurred due to delays in the construction project, including additional labor, equipment rental, and overhead costs. Example: In a high-rise building project, if unexpected delays extend the construction schedule by two months, time-related charges like additional site office rent and labor costs are incurred.

334. Cost Plus Contract

Definition: A cost-plus contract is a type of contract where the client reimburses the contractor for all actual costs incurred, plus an agreed-upon profit margin or fee. Example: In a custom residential project, the client agrees to a cost-plus contract, covering all material, labor, and equipment costs, with the contractor earning a 10% profit on top of these expenses.

335. Risk Register

Definition: A risk register is a document that identifies potential risks to the project, assesses their likelihood and impact, and outlines mitigation strategies. Example: In a coastal hotel construction project, the risk register includes potential risks like flooding, material shortages, and labor strikes, with strategies to minimize their impact on the timeline and budget.

336. Site Acquisition

Definition: Site acquisition is the process of purchasing or leasing land on which the construction project will be built. Example: Before starting construction on a shopping mall, the developer completes the site acquisition process by negotiating with landowners and obtaining the necessary permits for development.

337. Letter of Award (LOA)

Definition: An LOA is a formal letter issued by the client to the contractor, officially awarding the contract and authorizing the contractor to begin work. Example: After receiving bids for a highway project, the client issues an LOA to the selected contractor, allowing them to mobilize their resources and start construction.

338. Request for Information (RFI)

Definition: An RFI is a formal request made by the contractor to the client or designer for clarification on drawings, specifications, or contract terms during construction. Example: In a school project, the contractor submits an RFI to the architect to clarify the specifications for the roof materials, ensuring that the correct products are ordered and installed.

339. Variance Report

Definition: A variance report compares the planned budget and schedule against the actual performance, highlighting any discrepancies and their causes. Example: In a commercial building project, the variance report might show that the actual costs for excavation were higher than estimated due to unexpected site conditions, explaining the cost overrun.

340. Reimbursable Costs

Definition: Reimbursable costs are expenses incurred by the contractor during the construction project that are directly reimbursed by the client, usually outlined in cost-plus contracts. Example: In a cost-plus office building project, the contractor’s reimbursable costs include materials, labor, equipment rentals, and site utilities, all of which are repaid by the client.

341. Defects Liability Period (DLP)

Definition: The DLP is the period after practical completion during which the contractor is responsible for fixing any defects or issues that arise in the work. Example: In a residential tower project, the DLP is typically 12 months, during which the contractor must repair any defects like cracked walls or leaking pipes that are identified by the client.

342. Mobilization

Definition: Mobilization refers to the activities and processes involved in preparing the construction site for work, including moving equipment, setting up site offices, and installing temporary utilities. Example: In a highway project, mobilization includes transporting heavy machinery to the site, setting up storage areas for materials, and installing temporary power for the workers.

343. Rate Contract

Definition: A rate contract is an agreement where the contractor provides goods or services at a fixed unit price for a specified period, often used for supply contracts. Example: In a road construction project, the client enters into a rate contract with a supplier for the continuous delivery of asphalt at a fixed price per ton, ensuring cost stability throughout the project.

344. Trade Contractor

Definition: A trade contractor specializes in a specific aspect of construction, such as electrical, plumbing, or carpentry, and is hired by the general contractor to complete that portion of the project. Example: In a high-rise apartment project, the general contractor hires a trade contractor to handle all plumbing installations, ensuring that the work meets the building’s specifications.

345. Notice to Proceed (NTP)

Definition: An NTP is a formal document issued by the client to the contractor, authorizing the commencement of construction work as per the contract terms. Example: In a public infrastructure project, the client issues an NTP to the contractor, allowing them to start excavation and site preparation work according to the agreed schedule.

346. Material Escalation Clause

Definition: A material escalation clause allows for adjustments to the contract price if the cost of materials increases unexpectedly during the project, protecting both the client and contractor. Example: In a bridge project, if the price of steel rises significantly, the material escalation clause allows the contractor to adjust the contract price to cover the additional cost.

347. Preliminary Estimate

Definition: A preliminary estimate is an initial cost estimate for a construction project based on early-stage designs, providing a rough idea of the budget required. Example: Before finalizing the design for a shopping mall, the client requests a preliminary estimate to determine whether the project is financially viable.

348. Life Cycle Costing (LCC)

Definition: LCC is an analysis of the total cost of owning and operating a building over its entire lifespan, including construction, maintenance, and eventual disposal costs. Example: In a commercial office project, LCC might show that using energy-efficient HVAC systems reduces operating costs over time, even though the initial installation is more expensive.

349. Substantial Completion Certificate

Definition: A substantial completion certificate is issued when the project is sufficiently complete for occupancy or use, even though some minor works or defects may still need attention. Example: In a hotel project, the client issues a substantial completion certificate once all major construction is finished, allowing the hotel to open while minor repairs are completed.

350. Schedule of Rates (SOR)

Definition: An SOR is a list of pre-determined rates for various construction activities, materials, and labor, often used as a reference in public works contracts. Example: In a government road project, the contractor is paid according to the SOR, which specifies rates for tasks like excavation, paving, and line marking, ensuring transparency in cost estimation.

351. Baseline Budget

Definition: The baseline budget is the initial approved budget for a project, serving as a reference point to track actual costs and manage financial performance. Example: In a highway project, the baseline budget is set at ₹500 crores, and all future expenses are compared to this figure to ensure the project remains within its financial limits.

352. Functional Obsolescence

Definition: Functional obsolescence occurs when a building or system no longer meets current needs or standards due to outdated design or technology. Example: In an old office building, functional obsolescence might occur if the electrical system cannot support modern equipment, making it necessary to upgrade or replace the system.

353. Certificate of Final Payment

Definition: A certificate of final payment is issued by the client to confirm that the contractor has completed all work as per the contract and is entitled to the final payment. Example: In a commercial tower project, the contractor receives the certificate of final payment once all minor defects are resolved, signaling the end of the contract.

354. Piling

Definition: Piling refers to the process of driving long, strong columns, called piles, deep into the ground to support the weight of a building or structure. Example: In a high-rise building project, piling is necessary to ensure the foundation is stable and can bear the load of the structure on soft soil.

355. Practical Completion Certificate

Definition: A practical completion certificate is issued when a construction project is substantially complete and ready for occupation, with only minor defects or outstanding work remaining. Example: In a residential apartment project, the contractor receives the practical completion certificate once the majority of the units are finished and habitable, even though some painting and landscaping work remains.

356. Quantitative Risk Analysis

Definition: Quantitative risk analysis is the process of numerically assessing the potential impact of risks on a project’s timeline and budget. Example: In a stadium construction project, the project manager uses quantitative risk analysis to evaluate how a delay in material delivery could affect the overall schedule and cost.

357. Certificate of Occupancy (CO)

Definition: A CO is an official document issued by local authorities that certifies a building is safe and suitable for occupancy after meeting all regulatory requirements. Example: In a shopping mall project, the contractor must obtain a CO from the city’s building department before tenants can open their stores and the public is allowed to enter.

358. Unit Cost

Definition: Unit cost refers to the cost of producing or constructing one unit of a specific item or element in a project, such as per square meter of flooring or per cubic meter of concrete. Example: In a road project, the unit cost for laying asphalt is ₹500 per square meter, and this rate is used to calculate the total cost based on the road’s size.

359. Design Risk

Definition: Design risk refers to the potential problems or challenges that arise from errors, omissions, or changes in the project’s design, which can lead to cost overruns or delays. Example: In a hotel project, a design risk might occur if the architect overlooks structural support for an open lobby, requiring costly changes to the plans during construction.

360. Contractor’s Schedule of Values

Definition: A contractor’s schedule of values is a detailed list of the value of each work item, used for invoicing and progress payments throughout the construction project. Example: In a commercial building project, the schedule of values includes line items for excavation, framing, electrical work, and finishing, each with an assigned value based on the contract.

361. Quality Plan

Definition: A quality plan outlines the procedures, standards, and responsibilities required to ensure that the construction work meets the specified quality requirements. Example: In a hospital project, the quality plan details the inspections, tests, and documentation needed to ensure that the building’s electrical and plumbing systems are installed correctly.

362. Sundry Costs

Definition: Sundry costs refer to miscellaneous expenses that don’t fall under specific categories but are still necessary for the completion of the project. Example: In a residential project, sundry costs might include minor office supplies, incidental transportation, or small repairs needed during the construction process.

363. Bid Bond

Definition: A bid bond is a financial guarantee provided by a contractor during the bidding process, ensuring the client that the contractor will enter into the contract if selected. Example: In a government infrastructure project, the contractor submits a bid bond along with their proposal, guaranteeing that they will sign the contract if their bid is accepted.

364. Long-Lead Items

Definition: Long-lead items are materials or equipment that require a longer-than-normal delivery time and must be ordered well in advance to avoid delays. Example: In a high-rise office project, custom-designed glass panels for the façade are considered long-lead items, so the contractor places the order early to ensure timely delivery.

365. Project Execution Plan (PEP)

Definition: A PEP is a comprehensive document outlining how the construction project will be managed, including timelines, resources, quality control, and risk management strategies. Example: In a school construction project, the PEP details the project’s milestones, the key team members responsible for each phase, and how potential delays will be addressed.

366. Critical Path Activity

Definition: A critical path activity is a task that must be completed on time to ensure the overall project schedule is not delayed, as it directly impacts the project’s completion date. Example: In a bridge project, pouring the foundation is a critical path activity because any delay in completing the foundation will push back the entire construction timeline.

367. Turnover Package

Definition: A turnover package is a collection of documents, manuals, and warranties provided to the client at the end of the project, detailing how to operate and maintain the building. Example: In a shopping mall project, the turnover package includes user manuals for HVAC systems, warranties for electrical equipment, and a maintenance schedule for the elevators.

368. Liquidated Damages Clause

Definition: A liquidated damages clause is a provision in the contract that specifies the penalties the contractor must pay if the project is not completed by the agreed-upon deadline. Example: In a commercial office project, the contract includes a liquidated damages clause requiring the contractor to pay ₹50,000 per day for every day of delay beyond the scheduled completion date.

369. General Conditions

Definition: General conditions refer to the administrative, legal, and procedural requirements necessary for managing the construction project, such as site management, permits, and insurance. Example: In a high-rise apartment project, general conditions include the costs of setting up temporary site offices, obtaining building permits, and hiring site security.

370. Temporary Works

Definition: Temporary works refer to structures or systems installed during construction that are not part of the final building, such as scaffolding, hoarding, or temporary roads. Example: In a tunnel project, temporary works include shoring systems used to support the excavation until the permanent tunnel lining is installed.

371. Progress Payment

Definition: A progress payment is an installment payment made by the client to the contractor based on the percentage of work completed during a specific period. Example: In a residential project, the contractor submits a progress payment request every month, showing the work completed and requesting payment for that portion of the project.

372. Latent Defects

Definition: Latent defects are flaws in the construction work that are not immediately visible and may only become apparent after the project is completed and in use. Example: In a residential building, a latent defect might involve plumbing issues that cause leaks several months after the building is occupied, requiring repair under the contractor’s warranty.

373. Value Engineering Proposal (VEP)

Definition: A VEP is a formal suggestion submitted by the contractor to the client, proposing changes to the design or materials that reduce costs without compromising quality. Example: In an office building project, the contractor submits a VEP suggesting the use of prefabricated wall panels, reducing construction time and material costs while maintaining structural integrity.

374. Feasibility Cost Estimate

Definition: A feasibility cost estimate is an early-stage estimate used to assess the financial viability of a construction project, based on preliminary designs and assumptions. Example: Before committing to building a new hospital, the client requests a feasibility cost estimate to determine whether the project can be completed within the available budget.

375. Corporate Social Responsibility (CSR)

Definition: CSR in construction refers to a company’s efforts to contribute positively to society and the environment, often through sustainable practices or community engagement. Example: In a residential development project, the contractor implements CSR initiatives by sourcing eco-friendly materials and offering apprenticeships to local workers.

376. Clerk of Works

Definition: A clerk of works is a professional responsible for ensuring that construction work is carried out according to the project’s specifications and quality standards. Example: In a public infrastructure project, the clerk of works regularly inspects the site to ensure that the materials used and the workmanship meet the contract’s requirements.

377. Builder’s Risk Insurance

Definition: Builder’s risk insurance is a policy that covers damage or loss to a building under construction, protecting against risks like fire, theft, or vandalism. Example: In a high-rise office project, the contractor takes out builder’s risk insurance to protect the site from potential damages, such as a fire or equipment theft during construction.

378. Commissioning Agent

Definition: A commissioning agent is a specialist responsible for ensuring that all systems and equipment in a building are installed and functioning as designed before handover. Example: In a hospital project, the commissioning agent tests the HVAC, electrical, and medical gas systems to verify that they meet the project’s specifications and are ready for use.

379. Site Utilization Plan

Definition: A site utilization plan is a detailed layout that shows how the construction site will be organized, including locations for storage, access roads, and worker facilities. Example: In a large urban project, the site utilization plan shows where materials will be stored, where cranes will operate, and how workers will safely access the site without interfering with ongoing traffic.

380. Earned Value (EV)

Definition: EV is a project management metric that measures the value of work completed against the planned budget and schedule, helping to track project performance. Example: In a commercial tower project, the project manager calculates the EV to determine whether the construction work completed so far matches the planned budget and timeline.

381. Risk Mitigation Plan

Definition: A risk mitigation plan outlines the strategies and actions that will be taken to reduce the likelihood or impact of potential risks in a construction project. Example: In a coastal resort project, the risk mitigation plan includes strategies for managing the risks of flooding and storm damage, such as elevating structures and using waterproof materials.

382. Contractor’s All Risks (CAR) Insurance

Definition: CAR insurance is a comprehensive policy that covers physical loss or damage to the construction works, as well as third-party liability for injuries or property damage. Example: In a commercial office project, the contractor purchases CAR insurance to protect against damages caused by accidents, such as equipment falling from a crane or a fire breaking out on-site.

383. Pre-Construction Meeting

Definition: A pre-construction meeting is a gathering of the client, contractor, and key stakeholders to discuss the project’s objectives, timeline, roles, and responsibilities before work begins. Example: In a residential development project, the pre-construction meeting includes a review of the construction schedule, safety protocols, and communication procedures between the contractor and client.

384. Progress Curve

Definition: A progress curve is a graphical representation of the cumulative work completed over time, often used to track the project’s actual progress against the planned schedule. Example: In a highway project, the progress curve shows that work is ahead of schedule for the first three months, but begins to fall behind as unforeseen delays occur in the later stages.

385. Cost Breakdown Structure (CBS)

Definition: A CBS is a hierarchical structure that organizes the project’s costs into categories, making it easier to track expenses and manage the budget. Example: In a hospital project, the CBS divides costs into categories such as site preparation, structural work, interior finishes, and medical equipment installation.

386. Provisional Work

Definition: Provisional work refers to tasks that may or may not be required during the project, with costs included as allowances in the contract until they are confirmed. Example: In a residential tower project, the contract includes provisional work for additional landscaping, allowing the client to decide later whether or not to proceed with the work.

387. Cash Flow Projection

Definition: A cash flow projection estimates the amount of money that will be spent and received at different stages of the construction project, helping to ensure liquidity. Example: In a commercial development project, the contractor creates a cash flow projection to ensure that funds are available to cover costs such as labor, materials, and equipment rentals throughout the project.

388. Final Account Settlement

Definition: Final account settlement is the process of reconciling all outstanding payments, adjustments, and variations at the end of the project to close out the contract. Example: In a hotel project, the contractor and client agree on the final account settlement after resolving all outstanding change orders, payments, and defects.

389. Health and Safety Plan (HASP)

Definition: A HASP outlines the safety protocols and procedures that must be followed on-site to ensure the health and safety of all workers and stakeholders. Example: In a high-rise building project, the HASP includes guidelines for working at heights, handling hazardous materials, and responding to emergencies like fires or accidents.

390. Construction Loan

Definition: A construction loan is a short-term loan used to finance the building of a project, with funds typically released in stages as work progresses. Example: In a residential housing development, the developer secures a construction loan to cover the costs of materials and labor, repaying the loan once the homes are sold or leased.

391. Independent Testing

Definition: Independent testing involves using a third-party agency to conduct tests on materials or systems to verify that they meet the required quality and performance standards. Example: In a bridge construction project, an independent testing lab is hired to test the strength of the concrete used in the foundations to ensure it meets the specified load-bearing capacity.

392. Method of Measurement

Definition: The method of measurement is the set of rules and standards used to quantify the work involved in a construction project, ensuring consistency in cost estimation and payment. Example: In a highway project, the method of measurement specifies how quantities of asphalt, concrete, and excavation work should be calculated for billing and payment purposes.

393. Variation Order (VO)

Definition: A VO is a formal request to change the scope of work in a construction project, which can result in additional costs or time extensions. Example: In an office building project, the client issues a VO to change the flooring material in the lobby, leading to adjustments in both cost and schedule.

394. Notice of Delay

Definition: A notice of delay is a formal notification from the contractor to the client, informing them of delays in the project’s schedule and the reasons for the delay. Example: In a school construction project, the contractor submits a notice of delay after encountering unforeseen site conditions that require additional excavation work, affecting the project timeline.

395. Provisional Sum Adjustment

Definition: Provisional sum adjustment refers to the process of updating or finalizing the provisional costs in the contract, once the exact scope of work is confirmed. Example: In a residential building project, the landscaping costs are initially included as a provisional sum, but the exact amount is finalized and adjusted once the design is approved by the client.

396. Pay When Paid Clause

Definition: A pay-when-paid clause in a subcontractor agreement stipulates that the subcontractor will be paid only after the main contractor has been paid by the client. Example: In a commercial office project, the subcontractor for electrical work agrees to a pay-when-paid clause, meaning they receive payment after the contractor is paid for that portion of the work by the client.

397. Lead Time

Definition: Lead time refers to the time between ordering a material or product and its delivery on-site, which must be carefully managed to avoid delays. Example: In a hospital construction project, the lead time for custom-made medical equipment is six months, so the contractor places the order well in advance to ensure timely installation.

398. Contractual Risk

Definition: Contractual risk refers to the potential financial or legal risks arising from the terms and conditions of the construction contract, including penalties, disputes, and liability. Example: In a public infrastructure project, the contractor faces contractual risk if the liquidated damages clause imposes significant penalties for delays, requiring careful schedule management to avoid financial loss.

399. Time Extension Claim

Definition: A time extension claim is a formal request submitted by the contractor to the client for additional time to complete the project due to delays beyond their control. Example: In a hotel construction project, the contractor submits a time extension claim after severe weather delays excavation, requesting an additional 30 days to complete the work.

400. Earned Schedule

Definition: Earned schedule is a project management tool that compares the actual work completed to the planned schedule, helping to track whether the project is ahead or behind the timeline. Example: In a residential development project, the earned schedule analysis shows that the project is one week behind the original timeline, prompting the contractor to adjust the work plan to catch up.

401. Specification

Definition: A specification is a detailed document that outlines the materials, workmanship, and standards required for each aspect of a construction project. Example: In a residential tower project, the specification for flooring might detail the type of tiles, the size, and the method of installation required to meet the project’s quality standards.

402. Work Method Statement

Definition: A work method statement is a document that describes the safe and efficient process for completing a specific task on-site, often focusing on safety and compliance. Example: In a tunnel project, a work method statement for excavation includes the procedures for safely operating machinery and shoring the walls to prevent collapse.

403. Cost Reimbursement Contract

Definition: A cost reimbursement contract allows the contractor to be reimbursed for actual costs incurred during the project, along with an additional fee for profit. Example: In a road construction project, the client agrees to reimburse the contractor for all labor, material, and equipment costs, plus a 15% fee for management and profit.

404. Project Contingency

Definition: Project contingency refers to the additional funds set aside in the budget to cover unforeseen circumstances or changes in the project scope. Example: In a commercial building project, the budget includes a 10% contingency fund to cover unexpected issues, such as delays caused by bad weather or material shortages.

405. No-Damage-for-Delay Clause

Definition: A no-damage-for-delay clause is a contract provision that limits the contractor’s ability to claim compensation for delays, protecting the client from liability. Example: In a public works project, the contract includes a no-damage-for-delay clause, meaning the contractor cannot seek additional payment for delays caused by unforeseen site conditions.

406. Lean Scheduling

Definition: Lean scheduling is a planning approach focused on optimizing workflow and eliminating waste in construction processes, ensuring efficient use of time and resources. Example: In a high-rise office project, lean scheduling minimizes downtime by coordinating deliveries and labor to ensure that each task begins as soon as the previous one is completed.

407. Acceleration

Definition: Acceleration refers to measures taken to speed up the construction process, such as working overtime or hiring additional labor, often to meet a tight deadline. Example: In a commercial tower project, the contractor accelerates work by increasing the number of workers and extending work hours to meet the completion date despite earlier delays.

408. Commissioning Plan

Definition: A commissioning plan outlines the procedures for testing and verifying that all building systems are functioning as designed before the project is handed over to the client. Example: In a hospital project, the commissioning plan includes testing the HVAC, electrical, and plumbing systems to ensure they meet the specified performance criteria.

409. Preconstruction Services

Definition: Preconstruction services involve planning, budgeting, and scheduling tasks that take place before actual construction begins, helping to ensure a smooth start to the project. Example: In a residential development project, preconstruction services include preparing the site, securing permits, and finalizing the project’s budget and timeline.

410. Latent Defects Insurance (LDI)

Definition: LDI provides coverage for latent defects that become apparent after the construction project is completed, typically within a specified period. Example: In a commercial building project, LDI covers issues like foundation cracks or structural problems that may arise within the first five years after the project is completed.

411. Insolvency Risk

Definition: Insolvency risk refers to the possibility that a contractor or subcontractor may go bankrupt during a construction project, potentially causing delays or incomplete work. Example: In a public infrastructure project, the client mitigates insolvency risk by requiring performance bonds and financial assessments before hiring contractors.

412. Section 106 Agreement

Definition: A Section 106 agreement is a legal agreement between a developer and local authorities, often requiring the developer to provide additional public benefits or infrastructure as part of the project. Example: In a residential development, the Section 106 agreement may require the developer to contribute funds toward building a new school or improving local roads.

413. Provisional Sums

Definition: Provisional sums are estimated amounts included in the contract for work or materials that are not fully defined at the time of tendering but may be required later. Example: In a hotel project, the contract includes provisional sums for landscaping, allowing flexibility in the final design and scope of work.

414. Financial Close

Definition: Financial close refers to the point in a project when all financial agreements are finalized, and the necessary funds are secured, allowing the project to proceed. Example: In a toll road project, financial close occurs when the developer secures loans from banks, allowing construction to begin.

415. Retention Money

Definition: Retention money is a percentage of the contractor’s payment withheld by the client until the project is completed and all defects are rectified. Example: In a shopping mall project, the client withholds 5% of each payment as retention money, which is released after the defects liability period ends.

416. Liquidated Damages (LD)

Definition: LD are pre-agreed financial penalties imposed on the contractor if the project is delayed beyond the contractually agreed completion date. Example: In an office building project, the contractor must pay ₹2 lakh per day in liquidated damages if the project is not completed by the agreed deadline.

417. Payment Schedule

Definition: A payment schedule outlines the timeline for making payments to the contractor, typically tied to specific project milestones or the percentage of work completed. Example: In a residential tower project, the payment schedule specifies that the contractor will receive 20% of the total contract value upon completing the foundation.

418. Contract Administration

Definition: Contract administration refers to the process of managing the construction contract, ensuring that all parties fulfill their obligations and resolving any issues that arise. Example: In a commercial tower project, the contract administrator handles tasks like approving progress payments, issuing variation orders, and addressing disputes between the client and contractor.

419. Fast-Track Construction

Definition: Fast-track construction involves starting construction before the design is fully completed, allowing work to begin earlier and reducing the overall project timeline. Example: In a hospital project, excavation and foundation work might begin while the interior designs are still being finalized, speeding up the project’s completion.

420. Cost Control

Definition: Cost control is the process of monitoring and managing a project’s budget to ensure that spending stays within the approved limits, and identifying potential cost-saving opportunities. Example: In a residential project, the project manager uses cost control to track actual expenses against the budget, identifying areas where costs are higher than expected and making adjustments to avoid overruns.

421. Mitigation of Damages

Definition: Mitigation of damages is the principle that both the client and contractor should take reasonable steps to reduce the impact of any issues that arise during construction. Example: In a commercial tower project, if a delay in material delivery is anticipated, the contractor mitigates damages by rescheduling labor and focusing on other tasks to minimize the overall impact on the timeline.

422. Quantity Surveyor’s Report

Definition: A quantity surveyor’s report provides an analysis of the project’s costs, progress, and any potential financial risks, helping the client make informed decisions. Example: In a high-rise residential project, the quantity surveyor’s report highlights cost overruns in the structural work and suggests potential savings in the finishing stages to balance the budget.

423. Scope of Work (SOW)

Definition: The SOW is a detailed document outlining the tasks, deliverables, and expectations for the contractor, ensuring that both parties have a clear understanding of the work involved. Example: In a commercial building project, the SOW specifies that the contractor is responsible for the foundation, structural framing, and installation of windows, while the client will handle interior finishes.

424. Joint Venture (JV) Agreement

Definition: A JV agreement is a contract between two or more companies that agree to collaborate on a construction project, sharing resources, risks, and profits. Example: In a major infrastructure project, two large construction companies form a JV to pool their expertise and resources, allowing them to bid on the project together.

425. Cost Overrun

Definition: A cost overrun occurs when the actual costs of a project exceed the estimated or budgeted amount, often due to unforeseen circumstances or changes in scope. Example: In a shopping mall project, a cost overrun occurs when the price of steel increases unexpectedly, pushing the total project cost beyond the original estimate.

426. Guaranteed Maximum Price (GMP) Contract

Definition: A GMP contract sets a maximum limit on the total project cost, with the contractor responsible for any costs that exceed this amount unless there are approved changes. Example: In a hospital project, the client agrees to a GMP of ₹100 crores, ensuring that they won’t pay more than this amount unless they request additional work.

427. Extension of Time (EOT)

Definition: An EOT is a formal request made by the contractor to extend the project’s deadline due to delays beyond their control, such as bad weather or material shortages. Example: In a highway construction project, the contractor requests an EOT after severe floods cause delays in excavation work, asking for an additional two months to complete the project.

428. Milestone Payment

Definition: Milestone payments are partial payments made to the contractor when specific stages of the project are completed, as defined in the contract. Example: In a residential tower project, the contractor receives milestone payments after completing the foundation, structural framing, and roofing, with the final payment due upon completion of all work.

429. Preliminary Works

Definition: Preliminary works are the initial tasks carried out before the main construction begins, such as site clearing, setting up temporary utilities, and installing access roads. Example: In a large infrastructure project, preliminary works include clearing vegetation from the site, installing temporary fencing, and building access roads for construction vehicles.

430. Occupancy Certificate

Definition: An occupancy certificate is an official document issued by the local authorities, certifying that a building is safe and ready for occupancy, having met all building codes and regulations. Example: In a commercial office project, the contractor must obtain an occupancy certificate from the city before tenants can move into the building and begin using the space.

431. Substantial Completion

Definition: Substantial completion refers to the point at which a construction project is finished enough for the client to use the building, even though minor work or repairs may still be needed. Example: In a residential tower project, substantial completion is reached when all the major systems, like plumbing and electrical, are operational, allowing tenants to move in, while touch-up work like painting is still being completed.

432. Health and Safety Executive (HSE)

Definition: The HSE is the body responsible for ensuring that construction work complies with health and safety regulations, preventing accidents and injuries on-site. Example: In a high-rise construction project, the HSE regularly inspects the site to ensure that workers are following safety protocols, such as wearing helmets and harnesses while working at heights.

433. Bill of Quantities (BOQ)

Definition: A BOQ is a detailed list of materials, labor, and services required for a construction project, often used as the basis for tendering and cost estimation. Example: In a bridge project, the BOQ specifies the quantities of concrete, steel reinforcement, and labor needed to complete the structure, providing the contractor with a clear understanding of the project’s scope and costs.

434. Cash Allowance

Definition: A cash allowance is a specified sum of money included in the contract for certain items, such as fixtures or equipment, that will be selected by the client later in the project. Example: In a hotel project, the contract includes a cash allowance for the selection of lighting fixtures, allowing the client to choose the style and brand closer to the installation date.

435. Schedule of Values

Definition: A schedule of values is a breakdown of the contract sum into individual work items, helping to track progress payments and ensure that the contractor is paid for completed work. Example: In a school construction project, the schedule of values includes line items for site preparation, foundation work, framing, and roofing, each with an assigned value based on the contract.

436. Wet Trade

Definition: Wet trade refers to construction work that involves materials mixed with water, such as concrete, plaster, and mortar, requiring proper drying and curing times. Example: In a residential building project, wet trades include tasks like plastering walls and pouring concrete for floors, both of which need time to cure before additional work can proceed.

437. Labor Burden

Definition: Labor burden refers to the additional costs associated with employing workers, including taxes, insurance, benefits, and overhead, on top of their base wages. Example: In a commercial building project, the contractor calculates the labor burden to ensure that the cost of hiring workers includes all associated expenses, such as health insurance and payroll taxes.

438. Performance Specification

Definition: A performance specification outlines the required performance outcomes for a system or material, without specifying the exact method or materials to be used to achieve them. Example: In a stadium project, the performance specification for the roof might state that it must withstand 100 km/h winds, leaving it up to the contractor to choose the materials and construction method.

439. Post-Contract Services

Definition: Post-contract services refer to tasks carried out by the contractor or consultant after the main construction work is completed, such as defect inspections, handover, and maintenance support. Example: In a hospital project, post-contract services include final inspections to identify any defects, preparing the building for handover, and providing maintenance manuals to the client.

440. Self-Performing Contractor

Definition: A self-performing contractor is one who carries out much of the construction work with their own employees, rather than subcontracting the tasks to other companies. Example: In a residential development project, the self-performing contractor handles tasks like excavation, concrete pouring, and framing, reducing the need to hire subcontractors for these key activities.

441. Shop Drawings

Definition: Shop drawings are detailed diagrams or plans created by subcontractors or suppliers, showing how specific components of the project will be fabricated and installed. Example: In a commercial office project, the subcontractor provides shop drawings for the custom steel beams, detailing the exact dimensions and connections required for installation.

442. Retention Release

Definition: Retention release is the process of releasing the portion of the contractor’s payment that was withheld as retention money, typically after the defects liability period is completed. Example: In a shopping mall project, the client releases the retention money after the contractor addresses all minor defects identified during the final inspection.

443. Construction Staging

Definition: Construction staging refers to the process of organizing and sequencing construction activities to ensure efficient use of time and resources while minimizing disruptions. Example: In a high-rise office project, construction staging involves coordinating the delivery of materials, setting up cranes, and scheduling labor to ensure that tasks like steel erection and concrete pouring happen in the correct order.

444. Restoration

Definition: Restoration refers to the process of repairing or renewing a building or structure to its original condition, often preserving historical or architectural elements. Example: In a historic building restoration project, the contractor carefully repairs and restores the original stone façade and wooden windows, ensuring that the building retains its original character.

445. Temporary Occupancy

Definition: Temporary occupancy refers to the permission granted to the client to use part of the building while construction work is still ongoing in other areas. Example: In a commercial office project, the client is granted temporary occupancy of the lower floors while finishing work continues on the upper floors, allowing tenants to move in and start operations.

446. Prime Cost (PC)

Definition: Prime cost refers to the direct costs of labor, materials, and equipment that are necessary for the construction of the project, excluding overhead and profit. Example: In a residential building project, the prime cost includes the cost of purchasing steel, paying workers, and renting construction equipment, forming the base cost of the project.

447. Defects List

Definition: A defects list is a document prepared during the final inspection, outlining any work that needs to be repaired or completed before the project can be considered finished. Example: In a hotel project, the defects list includes minor issues like chipped paint, cracked tiles, and a leaking faucet, all of which must be fixed before the final payment is released to the contractor.

448. Project Handover

Definition: Project handover is the process of formally transferring responsibility for the completed construction project from the contractor to the client, marking the end of the construction phase. Example: In a residential tower project, the project handover includes delivering the keys, completing all final inspections, and providing the client with documentation like warranties and maintenance manuals.

449. Final Inspection

Definition: The final inspection is the last on-site review of the construction work by the client, contractor, and any relevant authorities, ensuring that the project meets all specifications and quality standards. Example: In a shopping mall project, the final inspection includes checking that all lighting, HVAC, and fire safety systems are installed and functioning correctly, confirming that the building is ready for occupancy.

450. Scope Creep

Definition: Scope creep refers to the gradual expansion of a project’s scope beyond the original plan, often leading to increased costs and delays if not properly managed. Example: In a commercial tower project, scope creep occurs when the client requests additional floors and amenities that were not part of the original design, requiring changes to the contract and budget.

451. Project Closeout

Definition: Project closeout is the final phase of a construction project, where all work is completed, documentation is finalized, and the project is officially handed over to the client. Example: In a school construction project, project closeout includes completing all punch list items, final inspections, and handing over maintenance manuals and warranties to the client.

452. Cost Estimate

Definition: A cost estimate is a detailed prediction of the costs involved in completing a construction project, typically broken down into labor, materials, equipment, and overhead. Example: In a high-rise apartment project, the contractor prepares a cost estimate that includes costs for steel, concrete, labor, and equipment rental, ensuring the client has a clear budget expectation.

453. As-Built Drawings

Definition: As-built drawings are the final set of construction drawings that reflect any changes made during the project, showing the exact dimensions and layout of the completed building. Example: In a hospital project, the as-built drawings are updated to show the location of HVAC ducts and electrical wiring, which were adjusted during construction.

454. Zero Cost Change Order

Definition: A zero-cost change order is a modification to the construction contract that changes the scope of work without affecting the project’s cost or timeline. Example: In a shopping mall project, a zero-cost change order is issued to swap out one type of flooring material for another without changing the project’s overall cost or completion date.

455. Retention Bond

Definition: A retention bond is a financial guarantee provided by the contractor in place of holding retention money, ensuring that the contractor will fix any defects identified during the defects liability period. Example: In a commercial office project, the contractor provides a retention bond instead of withholding 5% of each payment, giving the client assurance that any defects will be addressed.

456. Interim Valuation

Definition: Interim valuation is the process of assessing the value of work completed on-site for the purpose of issuing progress payments to the contractor. Example: In a residential project, an interim valuation is conducted at the end of each month, allowing the contractor to receive payment for the percentage of work completed.

457. Performance Specification

Definition: A performance specification focuses on the required outcomes or performance standards of materials and systems, rather than dictating the specific methods or materials used. Example: In a stadium project, the performance specification might require the roof to withstand certain wind loads, leaving the choice of materials and design to the contractor.

458. Subcontractor Warranty

Definition: A subcontractor warranty is a legal assurance from a subcontractor that their work will meet the specified quality standards and remain free of defects for a certain period. Example: In a high-rise construction project, the plumbing subcontractor provides a warranty guaranteeing that the installed pipes and fixtures will function properly for at least one year after completion.

459. Provisional Certificate

Definition: A provisional certificate is issued when a construction project is nearly complete but requires minor work or corrections before final handover to the client. Example: In a commercial tower project, the client issues a provisional certificate after the main structure and interiors are finished, allowing tenants to move in while some minor landscaping work remains.

460. Site Plan

Definition: A site plan is a detailed map showing the layout of a construction site, including the building’s position, access roads, utilities, and surrounding infrastructure. Example: In a shopping center project, the site plan shows the location of the building, parking lots, loading docks, and access points for construction vehicles.

461. General Contractor

Definition: A general contractor is responsible for managing all aspects of a construction project, including hiring subcontractors, coordinating work, and ensuring the project is completed on time and within budget. Example: In a residential apartment project, the general contractor hires specialists for electrical, plumbing, and carpentry work while managing the overall construction schedule.

462. Contractor’s Final Account

Definition: The contractor’s final account is a summary of all costs incurred during the construction project, submitted at the end of the project to reconcile payments between the client and contractor. Example: In a hotel construction project, the contractor submits the final account after completing all work and addressing any change orders or variations.

463. Site Clearance

Definition: Site clearance involves preparing the construction site by removing any obstacles, such as trees, debris, or existing structures, to create a clean workspace for building. Example: In a residential housing project, site clearance includes removing old buildings, leveling the land, and clearing any vegetation before starting excavation.

464. Design-Build-Finance-Maintain (DBFM)

Definition: DBFM is a project delivery method where a single contractor is responsible for designing, building, financing, and maintaining the facility over a specified period. Example: In a toll road project, the contractor designs and builds the road, finances the project, and maintains the road for 20 years, recouping costs through toll collection.

465. Pre-Bid Meeting

Definition: A pre-bid meeting is held between the client and potential contractors before the tendering process to clarify the project’s scope, requirements, and any questions about the bid. Example: In a government infrastructure project, the pre-bid meeting allows contractors to ask questions about the specifications and contract terms before submitting their bids.

466. Final Settlement

Definition: Final settlement is the process of resolving any remaining financial or contractual issues at the end of a construction project, including the release of retention money and payment for any outstanding work. Example: In a high-rise office project, the contractor and client agree on the final settlement after addressing all defects and change orders, closing out the contract.

467. Design-Assist

Definition: Design-assist is a collaborative approach where the contractor or key subcontractors are brought in during the design phase to provide input on constructability and cost efficiency. Example: In a hospital project, the HVAC subcontractor is involved in the design phase to help optimize the system layout and ensure efficient installation during construction.

468. Project Kickoff Meeting

Definition: A project kickoff meeting is the initial gathering of all stakeholders at the start of a construction project, where goals, schedules, roles, and responsibilities are discussed. Example: In a commercial tower project, the kickoff meeting includes the client, contractor, architects, and engineers, setting expectations for the project timeline and key deliverables.

469. Direct Costs

Definition: Direct costs are expenses directly related to the physical construction of a project, including labor, materials, and equipment. Example: In a road construction project, direct costs include the cost of asphalt, machinery rentals, and wages for construction workers.

470. Schedule Compression

Definition: Schedule compression involves shortening the project timeline without reducing the project scope, often through techniques like fast-tracking or crashing. Example: In a commercial building project, the contractor uses schedule compression by working multiple shifts and increasing the number of workers to meet a tight deadline.

471. Bill of Entry

Definition: A bill of entry is a legal document used in importing goods, detailing the contents, quantity, and value of goods brought into a country for a construction project. Example: In an airport construction project, the contractor submits a bill of entry for imported steel beams, ensuring that customs duties are properly calculated and paid.

472. Work-to-Date

Definition: Work-to-date refers to the total amount of construction work completed at a specific point in time, often used for progress reporting and billing purposes. Example: In a high-rise office project, the work-to-date report shows that 60% of the structural work is completed, allowing the contractor to invoice the client for that portion of the project.

473. Preliminary Schedule

Definition: A preliminary schedule is an initial project timeline that outlines key milestones and activities, subject to further refinement as more details become available. Example: In a residential project, the preliminary schedule shows when excavation, foundation work, and framing will be completed, helping to establish a rough timeline for the project.

474. Builder’s Risk Insurance

Definition: Builder’s risk insurance is a policy that covers damage to a construction site or building during construction, protecting against risks like fire, theft, or natural disasters. Example: In a high-rise apartment project, the contractor takes out builder’s risk insurance to cover potential losses if a fire breaks out during construction.

475. Demobilization

Definition: Demobilization is the process of removing equipment, materials, and temporary structures from a construction site after the project is completed. Example: In a highway project, demobilization includes dismantling the site office, removing construction equipment, and cleaning up the site once all work is finished.

476. Work Breakdown Structure (WBS)

Definition: A WBS is a hierarchical breakdown of the tasks and deliverables in a construction project, helping to organize and manage the work more effectively. Example: In a shopping mall project, the WBS divides the work into major tasks like site preparation, foundation work, structural framing, and interior finishes, each with its own set of subtasks.

477. Activity Float

Definition: Activity float, or slack, refers to the amount of time a task can be delayed without affecting the overall project schedule. Example: In a commercial office project, the contractor has five days of float for interior painting, meaning the painting can be delayed by up to five days without affecting the final project completion date.

478. Construction Budget

Definition: A construction budget is the total financial plan for a project, covering all anticipated costs, including labor, materials, equipment, overhead, and contingencies. Example: In a hospital construction project, the budget includes ₹50 crores for materials, ₹20 crores for labor, and ₹10 crores for equipment and contingencies.

479. Request for Quotation (RFQ)

Definition: An RFQ is a formal request issued by the client or contractor to potential suppliers, asking them to provide pricing for materials or services needed for the project. Example: In a road construction project, the contractor issues an RFQ to multiple suppliers for asphalt, selecting the one that offers the best combination of price and quality.

480. Liquidation

Definition: Liquidation refers to the process of winding down a contractor’s business, selling assets to repay debts, often as a result of insolvency or financial difficulties. Example: In a large infrastructure project, if the main contractor faces liquidation due to financial troubles, the client may need to hire a new contractor to complete the remaining work.

481. Open Tendering

Definition: Open tendering is a competitive bidding process where any qualified contractor can submit a bid for the project, often used for public sector projects. Example: In a government-funded highway project, open tendering is used to allow all eligible contractors to submit their bids, ensuring a fair and transparent selection process.

482. Change Directive

Definition: A change directive is an instruction from the client to the contractor to carry out a change in the work, often issued when there is no agreement on the cost or schedule impact of the change. Example: In a shopping mall project, the client issues a change directive to alter the layout of the food court, instructing the contractor to proceed with the work while negotiating the cost impact.

483. Material Takeoff (MTO)

Definition: MTO is a detailed list of all materials required for a construction project, based on the construction drawings and specifications. Example: In a bridge construction project, the MTO includes the quantities of steel, concrete, and reinforcement bars needed to complete the structure, helping the contractor order the correct amounts of each material.

484. Liquidation Damages Cap

Definition: A liquidation damages cap is a contract provision that limits the maximum amount of liquidated damages the contractor must pay for delays, protecting the contractor from excessive penalties. Example: In a hotel construction project, the contract includes a liquidated damages cap of ₹2 crores, ensuring that the contractor’s financial liability is limited even if the project is delayed.

485. Procurement Route

Definition: A procurement route is the strategy used to organize and manage the purchasing of goods, services, and contractors for a construction project. Example: In a hospital project, the client uses a design-and-build procurement route, where a single contractor is responsible for both the design and construction phases of the project.

486. Final Completion

Definition: Final completion refers to the point when all construction work, including minor defects and punch list items, is completed to the client’s satisfaction, marking the official end of the project. Example: In a residential tower project, final completion is achieved after all remaining issues are resolved, and the client signs off on the work, releasing the final payment to the contractor.

487. Master Schedule

Definition: A master schedule is a high-level project timeline that outlines all major tasks, milestones, and deadlines, serving as the primary reference for tracking progress. Example: In a commercial office project, the master schedule includes key milestones such as completing the foundation, structural framing, and interior fit-out, helping the project manager ensure the work stays on track.

488. Punch List

Definition: A punch list is a document that lists all the minor tasks or corrections that need to be completed before the project can be considered fully finished and handed over to the client. Example: In a shopping mall project, the punch list includes items like fixing chipped paint, repairing door handles, and addressing minor leaks in the roof, all of which must be resolved before the client accepts the building.

489. Project Feasibility Study

Definition: A feasibility study assesses the practicality, financial viability, and potential risks of a construction project, helping the client decide whether to proceed with the project. Example: Before starting a commercial complex, the developer conducts a feasibility study to determine whether there is enough demand for office space in the area and whether the project can be completed within budget.

490. Lien Waiver

Definition: A lien waiver is a document signed by the contractor or subcontractor waiving their right to file a lien on the property after receiving payment for their work. Example: In a residential construction project, the contractor signs a lien waiver after receiving the final payment, ensuring that they cannot place a lien on the property for any outstanding debts.

491. Cost Baseline

Definition: A cost baseline is the approved budget for a construction project, serving as the reference point for tracking actual costs and managing budget performance. Example: In a bridge construction project, the cost baseline is set at ₹500 crores, and the project manager regularly compares actual expenses to this baseline to ensure the project stays on budget.

492. Surety Bond

Definition: A surety bond is a financial guarantee provided by a third-party surety company, ensuring that the contractor will fulfill their obligations under the construction contract. Example: In a government infrastructure project, the client requires the contractor to provide a surety bond, protecting the client in case the contractor fails to complete the project.

493. Prime Contractor

Definition: A prime contractor is the main contractor responsible for managing the entire construction project, hiring subcontractors, and coordinating all work on-site. Example: In a large infrastructure project, the prime contractor oversees all aspects of the construction, from excavation and foundation work to installing utilities and completing the finishing touches.

494. Precast Concrete

Definition: Precast concrete is concrete that is cast and cured off-site in a controlled environment, then transported to the construction site for installation. Example: In a commercial building project, precast concrete panels are used for the façade, allowing for faster installation on-site and reducing construction time.

495. Cost-Plus Contract

Definition: A cost-plus contract is a construction contract where the client agrees to pay the contractor for all actual costs incurred, plus an additional fee for profit. Example: In a custom home project, the client signs a cost-plus contract with the contractor, agreeing to cover all material, labor, and equipment costs, plus a 10% profit margin for the contractor.

496. Provisional Sum

Definition: A provisional sum is an estimated amount included in the contract for specific work that may or may not be required during the project. Example: In a hotel project, the contract includes a provisional sum for additional landscaping, which will be finalized once the client approves the final design.

497. Mobilization Payment

Definition: A mobilization payment is an upfront payment made to the contractor to cover the costs of setting up the construction site, purchasing materials, and preparing for the start of work. Example: In a highway construction project, the contractor receives a mobilization payment to cover the cost of moving equipment to the site and setting up temporary offices and storage areas.

498. Risk Register

Definition: A risk register is a document used to track and manage potential risks throughout a construction project, including their likelihood, impact, and mitigation strategies. Example: In a commercial tower project, the risk register includes potential risks such as material shortages, weather delays, and labor strikes, along with plans to minimize their impact on the project timeline.

499. Contractual Obligation

Definition: A contractual obligation is a legal requirement or duty that a party agrees to fulfill under the terms of a construction contract. Example: In a residential building project, the contractor’s contractual obligations include completing the work according to the specifications, meeting safety standards, and finishing the project by the agreed-upon deadline.

500. Value Engineering

Definition: Value engineering is the process of analyzing a project’s design and construction methods to identify cost-saving opportunities without compromising quality or functionality. Example: In a bridge project, the contractor proposes value engineering changes to the foundation design, using a more cost-effective concrete mix that still meets the required strength standards.