Bygg- og anleggsøkonomisk ordliste
Velkommen til Bygg- og anleggsøkonomisk ordliste, din essensielle ressurs for å forstå de økonomiske begrepene og konseptene som er unike for bygg- og anleggsbransjen. Denne ordlisten er laget for både bransjefolk og nykommere, og dekker alt fra grunnleggende budsjettering til avansert kostnadsstyring.
Enten du har ansvar for prosjektøkonomi, styrer kontantstrømmen eller forbereder kostnadsprognoser, finner du definisjonene du trenger her. Hold deg informert og ta trygge beslutninger i hvert prosjekt.
A
Actual Cost of Work Performed (ACWP)
Actual Cost of Work Performed (ACWP) is a key metric in Earned Value Management (EVM) that represents the total cost incurred for completed work during a specific period.
Adjudication
Adjudication is a fast, binding dispute process for construction contracts in the UK.
Advance Billing
Advance billing is invoicing the client for part of the contract sum before the work or materials are delivered.
Allowance
An allowance is a budgeted amount set aside in a construction contract for items that have not been fully specified at the time of bidding.
Architect
An architect designs the building, prepares the drawings and specification, and checks that the design meets the client’s brief and the building regulations.
B
Back Charges
Back charges are deductions made by a main contractor from a subcontractor’s payment due to costs incurred from the subcontractor’s failure to meet contract requirements.
Bid Bond
A bid bond is a guarantee, usually issued by a surety or insurance company, that protects the project owner if a contractor wins a tender but then refuses to sign the contract or arrange the performance and payment bonds it promised.
Bill of Quantities (BoQ)
A bill of quantities (BoQ) is a document that lists the items of work in a project with the measured quantity of each, so every tenderer prices the same thing.
Billable Rates
A billable rate is the hourly or unit price a contractor, subcontractor or consultant charges for labour, plant or services, set to cover the cost of the resource plus overhead and profit.
Bonding Capacity
Bonding capacity is the maximum amount of bonded work a surety company will support for a contractor at one time.
C
Capital Expenditure (CapEx)
Capital expenditure, or CapEx, is money a construction business spends to acquire or improve an asset it expects to use for more than one accounting period, such as a crane, a fleet vehicle or a new depot.
Cashflow Forecast
A cashflow forecast is a projection of the money coming into and going out of a project or business over time, week by week or month by month.
CDM Regulations
The CDM Regulations are the Construction (Design and Management) Regulations 2015, the main health and safety law for construction projects in Great Britain.
Change Directive
A change directive is a written instruction from the owner or their representative to carry out a change to the work immediately, with the price and time impact agreed afterwards.
Client
The client is the individual or organisation that commissions the construction project.
Collateral Warranty
A collateral warranty is a contract that gives a party with no direct contract with the contractor, subcontractor or consultant a right to claim against them if their work is defective.
Commitments/Liabilities
Commitments or liabilities refer to the obligations or debts that a contractor is required to pay.
Compensation Event
A compensation event is an NEC contract event that entitles the contractor to a change in the prices, the completion date, or both.
Consolidated Invoices
A consolidated invoice combines several deliveries, jobs or earlier invoices into one bill, normally for a set period such as a month.
Construction Accounting Software
Construction accounting software tracks costs, income and cash by job instead of only for the whole business.
Construction Act
The Construction Act is the common name for Part II of the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009.
Construction Management at Risk (CMAR)
Construction Management at Risk (CMAR) is a US delivery method where the construction manager joins the project during design, then agrees a guaranteed maximum price (GMP) and takes the risk of delivering the work for that sum.
Construction Manager
A construction manager runs the build on site: they plan the programme, coordinate subcontractors and suppliers, keep to quality and safety standards, and watch the cost against budget.
Contingency Budget
A contingency budget is a set amount reserved in the overall project budget to cover unexpected costs or unforeseen changes during construction.
Contra Charge
A contra charge is a deduction a main contractor makes from money owed to a subcontractor, to recover costs the subcontractor caused.
Contract Sum Analysis
A contract sum analysis (CSA) is a breakdown of the contract sum into priced elements, supplied by the contractor on a design and build contract.
Cost Accruals
Cost accruals are costs for work done or goods received on a construction project that have not been invoiced yet.
Cost Breakdown Structure (CBS)
A cost breakdown structure (CBS) is a hierarchy that sorts every cost on a project into levels, from broad headings such as substructure or mechanical down to individual items of labour, materials and subcontract.
Cost Code
A cost code is a short reference that tags a cost to a type of work on a job.
Cost Escalation
Cost escalation refers to the increase in construction project costs over time due to factors such as inflation, material price fluctuations, labour shortages, or changes in regulatory requirements.
Cost Forecasting
Cost forecasting is predicting the final cost of a job, or the cost still to come, using the actual spend so far, the orders already placed and the estimate of what is left to buy.
Cost Value Reconciliation (CVR)
CVR means cost value reconciliation.
Cost-Loaded Schedule
A cost-loaded schedule integrates project costs into the construction schedule, linking expenditures to specific project activities.
Cost-Plus Contract
A cost-plus contract reimburses the contractor for the actual cost of the work and adds a fee, either a fixed sum or a percentage of that cost.
Cost-to-Complete
Cost-to-complete refers to an estimate of the remaining expenses required to finish a construction project.
Credit Notes
A credit note is a document issued by a supplier or contractor to cancel or reduce an earlier invoice.
D
Dayworks
Dayworks is a method of valuing work by the actual labour, plant and materials used, rather than by measured quantities or an agreed price.
Defect Liability Period
The defect liability period (DLP), more often written defects liability period in the UK, is a set timeframe after a construction project is completed during which the contractor is responsible for repairing any defects that arise.
Deferred Payment Schedule
A deferred payment schedule is a financing arrangement in which payments for construction work are delayed and spread over a set period rather than being due immediately upon completion.
Depreciation Schedule
A depreciation schedule is a table that spreads the cost of a long-life asset, such as a crane, an excavator, or a fleet vehicle, across the years it is expected to be in use.
Design-Build Contract
A design-build contract (called design and build in UK practice) gives one contractor responsibility for both design and construction.
Developer
A developer is the party responsible for financing and overseeing the construction project.
Direct Costs
Direct costs are expenses that can be traced to one specific project, or even one specific cost code within it, such as labour, materials, equipment hire and subcontractor work carried out on that job.
Draw Request
A draw request is a formal document submitted by a contractor to request payment for work completed during a specific phase of a construction project.
E
Earned Value Management (EVM)
Earned value management (EVM) is a method for measuring project performance that compares three figures at a given point in time.
Engineer
An engineer provides the technical design and checking for part of a building: structure, groundworks and drainage, or mechanical and electrical services.
Escalation Clause
An escalation clause is a contract provision that adjusts the price when the cost of materials, labour or other inputs changes after the contract is signed.
Expense Allocation
Expense allocation is spreading shared business costs across the jobs that use them, so each job’s reported profit includes a fair share of overhead.
Extension of Time (EOT)
An extension of time (EOT) is a formal change to the contract completion date, granted when a delay is caused by something the contract treats as the client’s risk or a neutral event.
F
Final Account
The final account is the comprehensive financial statement issued at the end of a construction project, summarising all costs, payments, variations, and adjustments.
Framework Agreement
A framework agreement sets out the terms, rates and sometimes the list of approved suppliers for work that may be ordered in the future over a set period.
Front-Loaded Billing
Front-loaded billing is a practice where contractors allocate a higher portion of costs to early project phases, ensuring positive cash flow before later, more expensive work begins.
G
General Conditions
General conditions are the costs of running and supervising a construction site that aren’t tied to any single trade, such as a site manager’s salary, temporary power and water, site offices, and project insurance.
Guaranteed Maximum Price (GMP) Adjustment
A guaranteed maximum price (GMP) adjustment is a formal change to the spending cap in a GMP contract, agreed between client and contractor through a variation.
Guaranteed Maximum Price (GMP) Contract
A guaranteed maximum price (GMP) contract sets a ceiling on what the client will pay.
I
Indirect Costs
Indirect costs are the shared costs of running a contracting business that cannot be charged to a single job: office rent, insurance, accountancy, management and estimating salaries, vehicles and software.
Integrated Project Delivery (IPD)
Integrated project delivery (IPD) is a US delivery method in which the client, designer and main contractor sign a single agreement, share the risks and rewards, and have part of their profit linked to how the project performs overall.
Interim Payment
An interim payment is a payment made during a construction project for the work done so far, instead of one lump sum at the end.
Invoice Reconciliation
Invoice reconciliation is checking each invoice against the purchase order, the delivery note or the valuation before it is approved for payment.
J
L
Lien Waiver
A lien waiver is a document a contractor, subcontractor or supplier signs to give up their right to file a mechanic’s lien against a property for a specific amount of work or payment.
Liquidated Damages
Liquidated damages are a sum of money, agreed in the contract before work starts, that a contractor owes the client for each day or week a project runs past its agreed completion date.
Loss and Expense
Loss and expense is the money a contractor can claim when the client, or someone for whom the client is responsible, disrupts the progress of the works and the contractor spends more than it would otherwise have done.
Lump Sum Contract
A lump sum contract is a fixed-price agreement: the contractor agrees to carry out a defined scope of work for a set sum, whatever the work actually costs.
M
Main Contractor
The main contractor is the business that holds the primary contract with the client and carries overall responsibility for delivering the project, coordinating the trades and subcontractors needed to complete it.
Markup
Markup refers to the percentage added to the cost of a service or product in construction, allowing contractors to cover overhead and generate profit.
Material Price Escalation Clause
A material price escalation clause is a contract term that adjusts the price when the cost of named materials moves beyond an agreed threshold, so the risk of market swings is shared instead of sitting entirely with the contractor.
Mobilization Cost
Mobilization cost refers to the expenses incurred at the start of a construction project to prepare the site, transport equipment, and deploy the workforce.
N
O
Overbilling
Overbilling is invoicing a client for more than the value of the work completed to date on a contract.
Overhead Allocation
Overhead allocation is the process of dividing indirect business costs, such as office rent, head office salaries and insurance, across the jobs the company is running.
Overhead Costs
Overhead costs are the running costs of a construction business that cannot be charged to a single job: office rent, head office salaries, insurance, IT and professional fees.
Owner Contingency
Owner contingency is a budgeted reserve set aside by project owners to cover unexpected costs, design modifications, or unforeseen issues that arise during construction.
Owner Financing
Owner financing is an arrangement where the project owner funds construction directly from their own capital or a private facility, rather than drawing on a construction loan from a bank.
P
Parent Company Guarantee
A parent company guarantee (PCG) is a promise by a contractor’s parent company to the client that it will step in and meet the contractor’s obligations if the contractor fails to perform.
Pass-Through Costs
Pass-through costs are expenses incurred by a contractor that are directly charged to the project owner without markup.
Pay Less Notice
A pay less notice is a written notice, required under the Construction Act, in which a payer tells the payee that it intends to pay less than the sum stated in the payment notice.
Pay-When-Paid Clause
A pay-when-paid clause is a subcontract term that ties the subcontractor’s payment to the main contractor being paid by the client.
Payment Application
A payment application is a formal request from a contractor or subcontractor for payment of the value of work done to date, usually monthly.
Payment Notice
A payment notice is the written notice a payer gives, under the Construction Act, to say what it considers due on an interim payment and how that sum is calculated.
Performance Bond
A performance bond is a guarantee, usually issued by an insurer or bank acting as surety, that protects the client if a contractor fails to carry out the contract, most often because of insolvency or abandonment of the site.
Practical Completion
Practical completion is the stage at which building works are finished apart from minor outstanding items, and the client can use the building for its purpose.
Preliminary Costs
Preliminary costs, usually called preliminaries or prelims, are a contractor’s site running costs: the cost of setting up, running and clearing the site that is not part of any single element of the permanent work.
Prepayment
A prepayment is an advance payment made before goods are delivered or work is done, usually to secure the order or to fund the supplier’s costs of getting started.
Prime Cost (PC) Sum
A prime cost (PC) sum is an allowance in the contract for goods, materials or specialist work that will be supplied by a supplier or subcontractor selected by the client or its design team.
Principal Contractor
The principal contractor is the contractor appointed by the client, under the CDM Regulations 2015, to plan, manage and coordinate the construction phase of a project that has more than one contractor.
Profit Fade
Profit fade is the gradual drop in a project’s margin between the tender and the final account, as the forecast profit shrinks month by month.
Profitability Forecasting
Profitability forecasting is predicting a project’s final profit margin from the cost incurred so far, the costs already committed and the work still to be bought.
Progress Billing
Progress billing is a payment method where a contractor invoices the client for the portion of work completed during a billing period, rather than waiting until the whole project is finished.
Project Cost Breakdown
A project cost breakdown is an itemised list of everything a construction project is expected to cost, split into categories such as labour, materials, equipment, subcontractors and preliminaries.
Project Manager
A project manager (PM) in construction is the person responsible for delivering a job to programme, budget and quality: planning the work, coordinating trades and suppliers, managing the client relationship and reporting progress and cost.
Provisional Sum
A provisional sum is an amount included in the contract sum for work or costs that cannot be fully described or priced when the contract is signed.
Punch List Holdback
A punch list holdback is the portion of a contractor’s final payment that an owner or general contractor withholds until every item on the punch list has been fixed.
Purchase Order (PO)
A purchase order, or PO, is a formal document a buyer issues to a supplier or subcontractor, setting out what is being bought, at what price, in what quantity and on what terms, before the work or delivery happens.
Q
Quantity Surveyor (QS)
A quantity surveyor (QS) is the construction professional who manages the cost and commercial side of a project: measuring and pricing work, valuing progress for payment, assessing variations and agreeing the final account.
Quantum Meruit
Quantum meruit is a Latin term meaning “as much as he has deserved”.
R
Request for Quotation (RFQ)
A Request for Quotation (RFQ) is a document a contractor or buyer sends to suppliers or subcontractors asking for a firm price against a clearly defined scope, such as a quantity of material or a single trade package.
Retention
Retention is a percentage of each payment that the client holds back until the work is complete and defects are put right.
Retention Bond
A retention bond is a guarantee, issued by a bank or insurer, that stands in for cash retention.
S
Schedule of Rates
A schedule of rates is a list of work items with a unit and a price for each, such as £ per square metre, per metre run or per hour.
Schedule of Values
A schedule of values (SoV) is a breakdown of a contract sum into work items, each with an agreed value, used to work out the amount payable as the work progresses.
Snagging
Snagging is the process of inspecting a finished or nearly finished building to find small defects and incomplete items, and listing them for the contractor to put right.
Stored Materials
Stored materials refer to construction supplies purchased but not yet installed.
Subcontract
A subcontract is an agreement under which a main contractor hires a subcontractor to carry out part of the works.
Subcontractor
A subcontractor is a specialist firm hired by a main contractor to carry out part of a construction project under its own contract.
Substantial Completion
Substantial completion is the point at which a building or section of work is complete enough for the client to use for its intended purpose, even if minor items remain.
Supplier
A supplier provides the materials and equipment needed for construction projects.
T
Target Cost Contract
A Target Cost Contract sets an estimated target cost for the project, with incentives for the contractor to stay within this target.
Time and Materials (T&M) Contract
A time and materials (T&M) contract pays the contractor for the actual hours worked, at an agreed labour rate, plus the cost of materials used, rather than a fixed price agreed in advance.
U
Underbilling
Underbilling is invoicing a client for less than the value of the work completed to date on a contract.
Unit Cost Estimate
A unit cost estimate prices construction work by multiplying a cost per unit of measurement, such as £ per square metre, per metre or per hour, by the quantity of work.
Unit Price Contract
A unit price contract pays the contractor a fixed price for each unit of work, such as per metre of drain or per square metre of surfacing, and the final price depends on the quantities measured on site.
V
Valuation
Valuation is the assessment of completed work used to determine interim payments throughout a construction project.
Value Engineering
Value engineering is a structured review of a project’s design, materials, and construction methods, carried out to find a way to deliver the same function at a lower cost, or more function at the same cost.
Variance Analysis
Variance analysis compares the budgeted cost of a project with the actual and forecast cost, line by line, to find where it is over or under budget and why.
Variation
A variation is a change to the work required under a construction contract: an addition, omission or alteration to the scope, quality, sequence or timing, which is valued and added to or deducted from the contract sum.
W
Work Package Costing
Work package costing is the practice of dividing a project into work packages, such as groundworks, frame or first-fix M&E, and holding a budget, commitments and forecast for each one.
Work-in-Progress (WIP) Report
A work-in-progress (WIP) report, or WIP schedule, is a summary of every live contract showing its contract value, forecast cost, cost to date, percentage complete, value earned, amount billed and the over or underbilling.
Workforce Burden Rate
The workforce burden rate is the cost of employing a worker on top of their base wage, expressed as a percentage of that wage or folded into a fully burdened hourly rate.
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