Construction terms in plain English

Acceleration

Also: Schedule Acceleration, Crashing

Compressing a construction schedule by adding labor, shifts, or overtime to recover delay or finish earlier than planned.

ADA Compliance

Construction requirements under the Americans with Disabilities Act ensuring buildings are accessible to people with disabilities.

Addendum

A written modification to bid documents issued before the bid date to clarify drawings or change scope.

Additional Insured

Also: AI Endorsement

A party added to another's liability insurance policy by endorsement, gaining coverage for claims arising from the named insured's work.

AHJ

Also: Authority Having Jurisdiction

The local agency or official with the legal authority to interpret and enforce building, fire, and life-safety codes.

AIA G702/G703

Also: Pay Application, Application for Payment

Standardized AIA forms for commercial progress billing. G702 is the summary; G703 is the line-item schedule of values.

Allowance

A fixed budget line for an item not yet selected, reconciled against actual cost once the selection is made.

Alternates

Also: Bid Alternates, Alternate Pricing

Optional pricing items in a bid that the owner may choose to add, deduct, or substitute after evaluating the base bid.

Arbitration

A private dispute-resolution process where a neutral arbitrator decides a construction claim outside the court system.

As-Built Drawings

Also: Record Drawings, As-Builts

Drawings documenting what was actually constructed, including field changes from the original design. Required at closeout on most commercial projects.

Backcharge

A deduction from a subcontractor's payment for costs the GC incurred fixing the sub's work, cleanup, or contract violations.

Base Bid

A contractor's firm price for the core scope of work, separate from alternates. The foundation of a competitive bid.

Baseline Schedule

The original approved project schedule used as the benchmark for measuring delay, acceleration, and progress.

Beneficial Occupancy

The point at which the owner takes possession and uses the project for its intended purpose, often before final completion.

Bid

A contractor's formal price proposal to perform a defined scope of work, usually in response to a bid invitation.

Bond (Performance and Payment)

Also: Performance Bond, Payment Bond, Surety Bond

A surety guarantee that a contractor will complete the work (performance bond) or pay subs and suppliers (payment bond).

Builder's Risk Insurance

Insurance covering property under construction against fire, theft, vandalism, weather, and similar perils during the build.

Building Code

The set of regulations governing construction quality, safety, and accessibility, adopted at the state and local level.

Building Permit

Official authorization from the AHJ to begin construction. Required for most new builds, additions, and significant renovations.

Certificate of Insurance

Also: COI

A document proving a contractor carries required insurance coverage, typically required before work begins.

Certificate of Occupancy

Also: CO, C of O

The AHJ-issued document confirming a building is safe and code-compliant for its intended use, allowing legal occupancy.

Change Order

Also: CO

A written modification to a construction contract documenting added, deleted, or altered scope plus price and schedule impact.

Closeout

Also: Project Closeout, Final Closeout

The final phase of a construction project: punch list, document handover, final inspections, and final payment with retainage release.

Commercial General Liability Insurance

Also: CGL, General Liability

Insurance covering third-party bodily injury, property damage, and completed-operations claims arising from the contractor's work.

Concurrent Delay

Two or more delay events affecting the schedule at the same time, with at least one caused by each party. A common claims defense.

Conditional Lien Waiver

A lien waiver that releases lien rights only if the corresponding payment actually clears. Used while payment is in transit.

Consequential Damages

Also: Indirect Damages

Indirect losses (lost profits, lost rent, lost business) caused by a contract breach, distinct from direct damages.

Construction Manager at Risk

Also: CMAR, CM at Risk, CM/GC

A project delivery method where the construction manager joins early as a consultant, then converts to general contractor under a guaranteed maximum price.

Contingency

A reserve fund within a project budget for unforeseen costs and scope clarifications, typically 5 to 15% of contract value.

Contract

The binding written agreement between owner and contractor defining scope, price, schedule, and terms of the project.

Cost-Plus Contract

A contract paying actual costs plus a fixed fee or percentage. Owner carries overrun risk; contractor must document costs.

Crew Day

A unit of estimating productivity: one day of work by a defined crew producing a measured output.

Critical Path

The sequence of dependent tasks determining a project's minimum duration. Critical-path delays push the entire schedule.

CSI MasterFormat

The standard numbering system organizing construction specifications into 50 divisions and thousands of sections.

Cure Period

Also: Notice and Cure

The time given to a defaulting party to fix a contract breach before the other party can terminate or pursue remedies.

Daily Log

A contractor's daily record of weather, labor, work performed, deliveries, visitors, and incidents on the project.

Davis-Bacon Act

Federal law requiring contractors on federal construction projects to pay prevailing wages and benefits to laborers and mechanics.

Demobilization

Also: Demob

Removing labor, equipment, and temporary facilities from a construction site at project end or between phases.

Design-Bid-Build

Also: DBB, Traditional Delivery

The traditional project delivery method where the owner contracts the architect first, then bids the completed drawings to GCs.

Design-Build

Also: D-B, DB Delivery

A project delivery method where the owner contracts a single entity to deliver both design and construction under one contract.

Easement

A legal right to use another's land for a specific purpose, often utilities, access, or drainage.

Egress

Also: Means of Egress, Exit

The path occupants use to exit a building safely in an emergency. Regulated by IBC for distance, capacity, separation, and signage.

Estimate

A contractor's informational projection of project cost. Non-binding and revisable; differs from a firm bid.

Estimator

A construction professional who prepares quantity takeoffs, prices labor and materials, and produces bids and budgets from drawings.

Excusable Delay

A project delay caused by events outside the contractor's control, entitling the contractor to a time extension.

FFE

Also: Fixtures, Furniture, and Equipment, FF&E

Fixtures, Furniture, and Equipment — non-permanent items in a commercial buildout, often owner-supplied or contractor-coordinated.

Fire Marshal

The AHJ for fire and life-safety code compliance, separate from the building department, with authority over plan review and inspection.

Fire Rating

Also: Fire Resistance Rating, F-Rating

The time (in hours) a building assembly resists fire spread, tested per ASTM E119. Required for walls, floors, doors, and penetrations.

Fixed-Price Contract

Also: Lump Sum Contract

A contract obligating the contractor to complete defined scope for a stated price. Contractor carries overrun risk.

Float

Also: Slack, Schedule Float

The amount of time a task can be delayed without delaying the overall project. Critical-path tasks have zero float.

Flow-Down Clause

Also: Pass-Through Clause

A clause incorporating the prime contract's obligations into the subcontract, binding subs to upstream owner requirements.

Force Majeure

Also: Acts of God, Superior Force

A contract clause excusing performance when extraordinary events outside either party's control prevent normal performance.

Front-End Loading

Overstating early-phase costs in a schedule of values to maximize early progress payments. Owners scrutinize it carefully.

Gantt Chart

A horizontal bar chart showing project activities over time. The most common visual format for construction schedules.

General Conditions

Indirect project costs: site office, supervision, dumpsters, temp utilities, safety, and similar project-level overhead.

General Contractor

Also: GC

The prime contractor responsible for delivering the complete project, coordinating subs, materials, and inspections.

Green Building

Also: Sustainable Construction

Design and construction practices targeting energy efficiency, water conservation, low embodied carbon, and healthy indoor environments.

Hard Costs

Also: Brick and Mortar Costs, Construction Costs

The direct construction costs of a project: labor, materials, equipment, and subcontractor pricing. Distinct from soft costs.

Health and Safety Plan

Also: HASP, Site Safety Plan, SSP

A written document outlining hazards, controls, training, and emergency procedures for a specific construction site.

Hold Harmless

A contract clause in which one party agrees to absorb liability for specified claims that would otherwise fall on the other.

IBC

Also: International Building Code

The model building code for commercial and high-rise residential construction in the United States, adopted in some form by all 50 states.

IECC

Also: International Energy Conservation Code

The model energy code governing building envelope, HVAC, lighting, and water heating efficiency in commercial and residential buildings.

Indemnification

A contract obligation where one party agrees to compensate another for specified losses, often including defense costs.

Inspection

A regulatory review by the AHJ verifying completed work complies with code, required at multiple project milestones.

Integrated Project Delivery

Also: IPD

A delivery method where owner, designer, and contractor share a single multi-party contract with shared risk and reward.

Invoice Aging

Also: AR Aging, Aged Receivables

The categorization of unpaid invoices by how long they have been outstanding (current, 30, 60, 90+ days).

Job Cost

Also: Job Costing

Tracking actual costs (labor, material, sub, equipment) against budget per job. The core construction profitability metric.

Joint Check

A payment made jointly to two or more parties requiring all named payees to endorse before deposit. Common in lien-risk situations.

Journeyman

A tradesperson who has completed an apprenticeship and is qualified to perform skilled trade work without supervision.

Kickoff Meeting

Also: Project Kickoff, Pre-Construction Kickoff

The formal start-of-project meeting between owner, designer, and contractor to align on scope, schedule, communication, and procedures.

Labor Burden

Also: Burdened Labor Rate, Fully Burdened Rate

The cost of an employee beyond base wages: payroll taxes, workers' comp, benefits, paid time off. Typically 25 to 45% of base wage.

Labor Rate

Also: Hourly Rate, Wage Rate

The hourly cost of a worker used in estimating. Base rate is the wage; burdened rate adds taxes, insurance, and benefits.

Lead Time

Also: Procurement Lead Time

The elapsed time from purchase order to material delivery. Critical for scheduling long-lead items like generators, switchgear, custom millwork.

LEED

Also: Leadership in Energy and Environmental Design

The most widely used green building certification system in the US, run by the US Green Building Council, with four certification levels.

Lien Waiver

A signed document by which a contractor or sub releases the right to file a mechanic's lien in exchange for payment.

Liquidated Damages

Also: LDs, LD

Pre-agreed daily damages payable by the contractor for failing to complete the project by the contract substantial completion date.

Long-Lead Item

Material or equipment with procurement time long enough to drive the schedule. Examples: switchgear, generators, custom millwork.

Look-Ahead Schedule

Also: Two-Week Look-Ahead, Three-Week Look-Ahead

A short-term detailed schedule (typically 2-3 weeks) showing exactly what will happen on the project in the immediate future.

Markup vs Margin

Markup adds a percentage to cost to set price. Margin is profit as a percentage of price. Different numbers, common confusion.

Mechanic's Lien

A legal claim filed against a property by a contractor, sub, or supplier when payment is not received as agreed.

Mediation

A non-binding dispute resolution process where a neutral mediator helps the parties reach a voluntary settlement.

MEP

Also: Mechanical, Electrical, Plumbing

Mechanical, Electrical, and Plumbing — the three building systems trades that make up the bulk of TI scope on commercial work.

Milestone

A significant event or completion point in a project schedule, often used to trigger billing or schedule reviews.

Mobilization

Also: Mob

Moving equipment, labor, and temporary facilities onto a construction site at project start. Often a separate billed line item.

Mockup

A full-scale physical sample of a building component built on or near the project site to verify design intent before full installation.

NEC

Also: National Electrical Code, NFPA 70

The model electrical code (also NFPA 70) governing electrical installation in buildings, adopted in some form by all 50 states.

NFPA

Also: National Fire Protection Association

The organization publishing fire and life-safety codes including NFPA 13 (sprinklers), NFPA 70 (NEC), and NFPA 101 (Life Safety Code).

Notice of Completion

Also: NOC

A recorded document declaring the project complete, which starts the lien-claim deadline countdown in many states.

Notice of Delay

A contractor's formal written notice to the owner that an event has caused or will cause project delay. Required to preserve time-extension claims.

Notice to Proceed

Also: NTP

A written authorization from the owner allowing the contractor to begin work; typically starts the contract clock.

Occupancy Load

Also: Occupant Load

The maximum number of people allowed in a space, calculated per IBC. Drives egress capacity, exit count, and posted occupancy signs.

OSHA

Also: Occupational Safety and Health Administration

The federal agency enforcing workplace safety regulations on construction sites. Standards in 29 CFR 1926 cover construction-specific risks.

Overhead and Profit

Also: O&P, OH&P

The markup added to direct costs to cover the contractor's indirect business expenses and target profit margin.

Owner Direct Purchase

Also: ODP, Owner-Furnished Equipment

When the owner buys materials or equipment directly to capture sales-tax exemption or pricing leverage, with the contractor installing.

Owner-Controlled Insurance Program

Also: OCIP, Wrap-Up Insurance, Owner Wrap

A single insurance program purchased by the owner covering all enrolled contractors and subcontractors on a project, replacing their individual policies.

Pay-If-Paid

Also: PIP, Conditional Payment Clause

A clause making the GC's payment to the sub conditional on the GC actually receiving payment from the owner. Stricter than pay-when-paid.

Pay-When-Paid (vs Pay-If-Paid)

Pay-when-paid delays sub payment until GC is paid. Pay-if-paid conditions sub payment on GC payment. Different legal effects.

Payment Bond

A surety bond guaranteeing the contractor will pay subcontractors and suppliers. Required on most public works (Miller Act).

Performance Bond

A surety bond guaranteeing the contractor will complete the project per contract. Required on most public works.

Permit

AHJ-issued authorization to perform specific work on a building. Required before construction begins.

Phase

A chunk of project work grouped by trade, location, or sequence (demo, framing, MEP rough, finish, etc.).

Plan Review

The AHJ's examination of construction drawings for code compliance before issuing a permit.

Plat

A recorded map of a parcel of land showing boundaries, lots, easements, streets, and other features. Required for subdivision and development.

Pre-Bid Meeting

Also: Pre-Bid Conference, Bidder Walkthrough

A walkthrough and Q&A session held during bidding so prospective bidders can inspect the site and ask questions about the bid documents.

Preconstruction

Also: Precon

The phase before construction starts where the contractor consults on design, estimating, scheduling, constructability, and procurement.

Preliminary Notice

Also: Pre-Lien Notice, 20-Day Notice

A pre-lien notification required in most states for contractors and suppliers to preserve mechanics lien and bond claim rights.

Prevailing Wage

Minimum wage and benefit rate required on certain government-funded construction projects under Davis-Bacon and state laws.

Prime Contractor

A contractor holding a direct contract with the project owner. Distinct from subcontractors who contract with the prime, not the owner.

Progress Billing

Splitting contract value across multiple invoices tied to milestones or percent-complete intervals.

Proposal

A contractor's document offering to perform specified work for a stated price, with scope details and terms.

Punch List

A written list of remaining items (typically minor) to complete or correct before a project is considered final.

Quality Assurance

Also: QA

The systematic process by which a contractor ensures construction work will meet specifications. Distinct from Quality Control (QC).

Quality Control

Also: QC

The inspection and testing of construction work to verify it meets specifications. The downstream complement to Quality Assurance.

Quantity Takeoff

Also: QTO

Measuring quantities (length, area, volume, count) from drawings to feed the estimate. The first step in pricing a job.

Record Drawings

The architect's clean final set incorporating all field changes from the contractor's as-built redlines. A closeout deliverable.

Red Tag

A notice posted by an inspector ordering work to stop or be corrected because it violates code, lacks permits, or is unsafe.

Resource Leveling

A schedule technique that adjusts activity timing to smooth out crew, equipment, or material demand peaks and valleys.

Retainage

A percentage (typically 5 to 10%) withheld from each progress payment, released at substantial or final completion.

RFI

Also: Request for Information

A formal written question from a contractor to the design team requesting clarification on drawings or specs.

Risk Register

A tracked list of project risks with likelihood, impact, ownership, and mitigation plans.

Schedule of Values

Also: SOV

A line-item breakdown of contract value used for progress billing, typically aligned with phases or trades.

Scope of Work

Also: SOW

The written description of all tasks, materials, and deliverables the contractor agrees to perform on the project.

Self-Perform

Construction work executed by the GC's own crews, rather than subcontracted out to specialty trades.

Setback

The minimum distance from a property line within which buildings may not be constructed, set by zoning code.

Shop Drawings

Detailed fabrication and installation drawings produced by subcontractors or fabricators showing exactly how work will be built.

Site Logistics Plan

Also: Site Plan, Logistics Plan

A drawing showing the temporary use of the site during construction: trailer, fencing, gates, parking, deliveries, crane, and material laydown.

Site Superintendent

Also: Superintendent, Super, Field Super

The GC's on-site leader running daily field operations: crew coordination, safety, quality, schedule, and inspections.

Soft Costs

Indirect project costs not tied to physical construction: design fees, permits, financing, legal, FF&E, marketing, and contingency.

Square Foot Cost

Also: $/SF, Cost per Square Foot

A high-level estimating metric expressing total construction cost per square foot of building area. Useful for budgeting and benchmarking.

Stop Work Order

Also: SWO

A formal directive halting all work until a deficiency or safety issue is resolved. Issued by the AHJ, owner, or safety authority.

Subcontractor

Also: Sub

A contractor performing specific scope under contract with the prime contractor (typically the GC), not directly with the owner.

Submittal

A contractor-prepared document (shop drawing, product data, sample) submitted for design-team review before fabrication.

Substantial Completion

The point at which the project is sufficiently complete for the owner to occupy or use the space as intended.

Surety

The insurance company issuing bonds (performance, payment, bid) that guarantee a contractor's obligations to an owner.

Survey

Also: Boundary Survey, Land Survey

A measured map of a property showing boundaries, easements, structures, and other features. Required before site planning.

SWPPP

Also: Stormwater Pollution Prevention Plan

The federally required plan for managing stormwater runoff and erosion control on construction sites disturbing one acre or more.

Takeoff

Also: Quantity Takeoff, QTO

The process of extracting quantities (sqft, linear ft, fixture counts) from drawings to feed an estimate.

Tenant Improvement

Also: TI, Build-Out

Construction work that customizes commercial leased space for a specific tenant, often funded by a landlord allowance.

Termination for Cause

Also: Default Termination

The right to end a contract because the other party has materially breached. Requires notice, cure period, and documented breach.

Termination for Convenience

Also: T for C, No-Fault Termination

The owner's right to end a contract without cause, paying the contractor for work completed plus a defined termination fee.

Time and Materials

Also: T&M

A contract paying hourly rates for labor plus material cost with markup. Common for repairs and undefined-scope work.

Type of Construction

Also: Construction Type, IBC Type

IBC classification of buildings by structural materials and fire resistance (Type I through V). Drives allowable height, area, and occupancy.

Umbrella Policy

Also: Excess Liability

Excess liability coverage layered above the contractor's primary CGL, auto, and employers' liability limits.

Unconditional Lien Waiver

A lien waiver that releases lien rights immediately, regardless of whether payment is received. Use only after funds clear.

Unit Cost

Price per unit of measure (per sqft, per linear ft, per fixture) used to convert takeoff quantities into a priced estimate.

Value Engineering

Also: VE

The process of identifying alternate scope, materials, or methods to reduce cost while preserving function and quality.

Variance

Also: Zoning Variance, Code Variance

A formal exception granted by the AHJ allowing a project to deviate from a specific code or zoning requirement when strict compliance is impractical.

Waiver of Subrogation

A clause preventing an insurance carrier from pursuing recovery from a third party after paying a claim. Common in construction insurance.

Weather Day

A workday lost to inclement weather conditions exceeding the contract's threshold. Often grants a non-compensable time extension.

Work Breakdown Structure

Also: WBS

A hierarchical decomposition of a project into deliverables and work packages used for estimating and scheduling.

Workers' Compensation Insurance

Also: Workers' Comp, WC

Insurance covering medical and lost-wage benefits for employees injured on the job. Required by state law in most states.

Zoning

Local regulation of how land can be used, what can be built, and at what density. Drives setbacks, height, parking, and allowed uses.