Construction glossary
The terms construction actually runs on — defined plainly, with the nuance a dictionary leaves out. 118 entries.
Contracts & commercial
- AccelerationSpeeding up the works to recover delay — overtime, extra shifts, additional crews, resequencing. Instructed acceleration is paid for. Constructive acceleration, where an EOT was owed and refused, is a claim you have to build.
- Advance Payment Guarantee (APG)A bank guarantee securing an advance payment made to the contractor at the start of a project. It reduces in value as the advance is recovered through deductions from interim payments.
- Back-to-BackA subcontract drafted so that its terms mirror the main contract — the subcontractor takes, in respect of its scope, the same obligations and risks the main contractor owes the employer.
- Concurrent DelayTwo delays running at the same time, one at the employer’s risk and one at the contractor’s, each independently capable of delaying completion. It is the most contested concept in delay analysis, and the answer depends heavily on the contract and the jurisdiction.
- Confirmation of Verbal Instruction (CVI)A written record, sent by the contractor, confirming an instruction that was given verbally — and stating that the work will proceed on that basis unless the recipient objects within a stated period. It converts a conversation into a document.
- Constructive VariationA change to the works that has all the effect of a variation but was never issued as one — a revised drawing, an informal instruction, a change in required sequence. It is a variation in substance, and the entitlement exists whether or not the paperwork does.
- Contemporaneous RecordsRecords created at the time the events occurred, as part of ordinary business — diaries, photographs, correspondence, timesheets, quantity records. They are the foundation of every construction claim, and they cannot be manufactured later.
- Contra ChargeA cost incurred by one party because of another’s default, deducted from money otherwise due to them — cleaning up after a subcontractor, remedying its defective work, or covering attendance it should have provided.
- DayworksA method of valuing work by recording actual labour, plant and materials at agreed rates, used when work cannot be sensibly measured or priced from the bill of quantities — typically small, awkward or unforeseeable variations.
- Decennial LiabilityA statutory liability, in the UAE and other civil-law jurisdictions, under which the contractor and the designer are jointly liable for ten years for total or partial collapse and for defects threatening the building’s stability or safety.
- Defects Liability Period (DLP)The period after taking-over during which the contractor must return and remedy defects that appear — typically twelve months. It is not a warranty period and it does not end the contractor’s liability; it ends one specific obligation.
- DisruptionLoss of productivity — the same work taking more hours than it should have — caused by interference with the planned way of working. Distinct from delay: a project can be disrupted without being late, and expensively so.
- Extension of Time (EOT)A contractual extension to the completion date, granted when a delay is caused by an event the contract places at the employer’s risk. It relieves the contractor of liquidated damages for the extended period — but it does not, by itself, pay for anything.
- Final AccountThe final reconciliation of everything owed under the contract — measured work, variations, claims, contra charges, retention — settled after completion. It is where every unresolved argument on the project arrives at once.
- FloatThe amount of time an activity can slip without delaying the project’s completion date. Total float belongs to the project, not to either party — a principle that is stated in most standard forms and disputed on most projects.
- Global ClaimA claim that attributes a total loss to a group of events without demonstrating causation between each individual event and each part of the loss. Courts and tribunals dislike them, and they frequently fail.
- Liquidated Damages (LDs)A pre-agreed sum payable by the contractor for each day of late completion. Because the figure is fixed in advance, the employer does not have to prove actual loss — which is the whole point of the mechanism.
- Measured MileA disruption analysis that compares a period of unimpacted work against the same work while impacted — using the project as its own control. Widely regarded as the most persuasive disruption method available.
- NoticeA formal communication that a contract requires in order to preserve a right — typically the right to claim time or money. A notice is valid only if served by the contract’s method, to the contract’s addressee, within the contract’s time.
- Pay-When-PaidA clause making a main contractor’s obligation to pay a subcontractor conditional on first being paid by the employer. It pushes payment risk down the chain — and its enforceability varies dramatically by jurisdiction.
- Performance BondA guarantee from a bank or surety, typically 10% of contract value, payable to the employer if the contractor fails to perform. An on-demand bond pays on demand; a conditional bond requires proof of default first — and the difference is enormous.
- Practical CompletionThe point at which the works are complete enough for the employer to take possession and use them for their intended purpose — notwithstanding minor outstanding items. It is a judgement, not an arithmetic test.
- Prime Cost (PC) SumAn allowance for materials or goods whose supplier or specification is not yet fixed — the contractor prices the installation, and the supply cost is adjusted against the allowance when the actual item is selected.
- Prolongation CostThe time-related cost of remaining on site longer than planned — site establishment, supervision, plant on hire, preliminaries. It is claimed separately from an extension of time, and it is the money half of a delay claim.
- Provisional SumAn allowance included in the contract for work that cannot be fully defined at tender — carried as a lump sum, then expended, omitted or adjusted when the work is properly instructed and valued.
- RetentionA percentage of each payment withheld by the employer as security for performance and defects — commonly 5–10% of contract value, released in halves at completion and at the end of the defects liability period.
- Taking-Over CertificateThe certificate confirming that the works have reached substantial completion and are accepted by the employer. It stops liquidated damages, starts the defects liability period, and usually triggers release of the first half of retention.
- Time BarA contractual deadline for giving notice of a claim, after which the entitlement is lost — regardless of merit. Under FIDIC 2017 the window is 28 days from the event or from awareness of it, and it is enforced as a genuine condition precedent.
- Variation OrderA formal instruction changing the scope, quality or sequence of the works, issued under the contract’s variations clause. It is the mechanism by which the contract accommodates change without either party breaching it.
- Vesting CertificateA document transferring ownership of materials to the employer before they are installed — usually so the contractor can be paid for goods stored off site, while the employer gets title to what it has funded.
Documents & process
- Approval WorkflowThe configured sequence a record must pass through before it takes effect — who approves, in what order, under what thresholds and conditions. It is how a delegation of authority becomes enforced behaviour rather than a document.
- As-Built DrawingA drawing updated to show what was actually constructed, rather than what was designed. It is the handover document operations will rely on for decades — and it is almost always produced badly, at the end, under pressure.
- Audit TrailThe record of who did what, when, and under what authority — requester, approval chain, timestamps, and the evidence behind the decision. The test is whether someone who was not there can reproduce the decision years later.
- Ball-in-CourtThe discipline that at any moment, every open item has exactly one owner — the person in whose court the ball currently sits. Not two people, and never a department.
- Common Data Environment (CDE)The single agreed source of project information — where every drawing, model and document lives, at a known revision, with a known status. The point is not storage. The point is that there is exactly one place to look.
- Correspondence RegisterA sequential log of every formal letter in and out of a project — number, date, from, to, subject, references, and an action-by date. It is what makes a position findable, attributable and dated years later.
- Deemed AcceptanceA contractual mechanism by which a submission is treated as approved if the reviewer does not respond within a stated period. Silence becomes consent — which is powerful, and dangerous to whichever party is not watching the clock.
- Delegation of Authority (DoA)The matrix stating who may approve what, up to what value, under what conditions. Almost every organisation has one — and in most of them it is enforced by nothing, which is why the system and the policy drift apart.
- DeterminationA decision by the engineer or contract administrator on a claim or a valuation, made under the contract after consulting the parties. It binds unless and until it is challenged through the contract’s dispute procedure.
- Distribution MatrixThe table stating who receives which documents, at which status, and for what purpose. It is what turns document control from a series of individual decisions into a rule.
- Document RegisterThe controlled index of every project document — its number, title, current revision, status, and issue history. It is what makes a document set navigable, and what makes a superseded drawing findable before somebody builds from it.
- Electronic SignatureA signature applied digitally, with an identity and a timestamp attached. In most jurisdictions it is as binding as ink — but the legal weight comes from the evidence of WHO signed, not from the image of the signature.
- IFC (Issued For Construction)The status of a drawing that has been checked, approved and released for building. It is the only status a contractor should build from — and the only one that carries the issuer’s responsibility for its content.
- Minutes of Meeting (MOM)The formal record of what was decided at a meeting, who owns each action, and by when. Circulated for comment and, absent objection, treated as agreed — which is what makes them quietly powerful.
- Purpose-of-Issue CodeThe code stating what a document may be used FOR — for information, for review, for approval, for construction. It is not metadata. It is an instruction, and using a document beyond its stated purpose is doing so at your own risk.
- RevisionA formally issued update to a document, carrying a new identifier (Rev A, Rev B) and a recorded reason for the change. Every revision supersedes the one before it — and the one before it must be visibly withdrawn, not merely replaced.
- RFI (Request for Information)A formal question from the contractor to the designer or engineer, asking for clarification of the design or the specification. It is the mechanism by which ambiguity gets resolved — and the mechanism by which delay gets evidenced.
- Segregation of Duties (SoD)The control that requester, approver and recorder must be three different people. Collapse any two of those roles into one pair of hands and you have built the fraud scheme yourself, in your own policy.
- Shop DrawingA detailed fabrication or installation drawing produced by the contractor or a specialist supplier, developing the designer’s intent into something that can actually be built. It is submitted for review before manufacture.
- SubmittalA document the contractor submits for the consultant’s review before proceeding — shop drawings, material samples, method statements, calculations. Approval is a precondition of the work, which makes the review clock a schedule risk.
- Superseded DrawingA document that has been replaced by a later revision and must no longer be used. It is one of the most expensive objects on a construction site, because it looks exactly like a current drawing.
- TransmittalThe formal record of a document being issued from one party to another — what was sent, to whom, when, at what revision, and for what purpose. It is the proof of issue, and its absence is the proof of nothing.
Quality & safety
- CAPA (Corrective and Preventive Action)The discipline of turning a finding into a fix that sticks. A correction repairs the instance; a corrective action eliminates the root cause; a preventive action stops it happening elsewhere. Closing a CAPA with a correction is the classic counterfeit.
- DefectWork that fails to comply with the contract or specification. Distinct from a snag (a minor completion-stage item) and from an NCR (a formal quality record raised during execution) — the three behave completely differently in contract.
- Earned HoursWhat the work you actually installed should have taken — installed quantities multiplied by your productivity norms. Compared against “burned” hours from the timesheets, it is the industry’s standard productivity measure.
- First-Time Pass RateThe share of inspections passed on the first attempt. It measures whether work is being done right before it is offered — rather than offered, rejected, corrected and offered again.
- Hold PointA point in the work beyond which the contractor may NOT proceed until the specified inspection has been carried out and released. It is a mandatory stop, and proceeding through one is a non-conformance in itself.
- ITP (Inspection and Test Plan)The document setting out what will be inspected, when, by whom, against what criteria, and with what hold and witness points. It is agreed before the work starts — which is the only time it can be agreed honestly.
- JHA / JSA (Job Hazard Analysis)A task broken into steps, with the hazards of each step identified and a control assigned to each hazard. It is the document a permit-to-work and a method statement are both built on.
- LTI (Lost Time Injury)An injury resulting in the worker being unable to attend their next scheduled shift. It is the most widely used safety metric in construction — and the most widely manipulated, because the definition depends on whether somebody came to work.
- LTIFR (Lost Time Injury Frequency Rate)Lost-time injuries per million hours worked — the metric preferred outside the US, and the one most GCC clients ask for. Same lagging weakness as TRIR, with a different denominator.
- MIR (Material Inspection Request)The formal request for materials delivered to site to be inspected and approved against the specification before use. Approval is a condition, not a certificate — material accepted on arrival can still fail on the day it is installed.
- Muster RollThe list used at an evacuation assembly point to account for everyone on site. It must be read from the LIVE gate log, not from a printed roster — and the gap that kills is always visitors and new inductions.
- NCR (Non-Conformance Report)A formal record that work does not conform to the specification, drawings or approved procedure. It carries containment, root cause, a disposition, and verified closure — which is what separates it from a complaint.
- Near MissAn incident that could have caused injury or damage but did not. It is the cheapest safety information a site will ever get — a full-cost lesson delivered at no cost, and most sites throw it away.
- Permit to WorkA formal authorisation to carry out a specific high-risk task, at a specific place and time, with named controls in place and a named person accepting responsibility. Hot work, confined space, work at height, live systems.
- ReworkWork redone because it was not right the first time. It is the largest avoidable cost in construction, and most of it is never measured — because rework absorbed by a subcontractor never reaches anybody’s cost report.
- Root Cause AnalysisThe investigation that establishes why something went wrong, rather than what went wrong. Five Whys suffices for most findings; deeper methods are warranted where the consequences are severe — the depth should match what is at stake.
- SIF PrecursorA condition with the potential to cause a serious injury or fatality, whether or not anything actually happened. The insight behind the concept is that serious injuries have different causes from minor ones — so counting cuts and bruises tells you nothing about the fatality risk.
- Snag List (Punch List)The list of minor defects and incomplete items identified at or near completion, to be remedied before or shortly after taking-over. A snag is not a defect and not an NCR — the terms behave completely differently in contract.
- Toolbox TalkA short, task-specific safety briefing delivered to a crew before work — ideally daily, on the hazards of the job actually about to be done, rather than a generic topic read from a laminated card.
- TRIR (Total Recordable Incident Rate)Recordable injuries per 200,000 hours worked — roughly, per 100 full-time workers per year. It is the standard US benchmark, and it is a LAGGING indicator: it tells you what has already happened.
- WIR (Work Inspection Request)The contractor’s formal request for the consultant to inspect completed work. Its first-time pass rate is one of the most honest quality metrics a project produces, because nobody can argue with it.
- Witness PointA point at which the client or consultant has the right to attend and observe an inspection or test — but where the work may proceed if they choose not to, having been given proper notice.
Procurement & finance
- Abnormally Low TenderA bid so far below the others, and below any plausible cost, that it suggests the bidder has misunderstood the scope, made an error, or intends to recover the shortfall through claims and variations.
- AddendumA formal change or clarification issued to all tenderers during the tender period, becoming part of the tender documents. Everyone gets it, at the same time, in writing — which is the whole point.
- Bid LevellingAdjusting tenders onto a like-for-like basis before comparing them — normalising for exclusions, qualifications, different assumptions and scope gaps, so that the comparison is of price rather than of what was left out.
- Bill of Quantities (BOQ)An itemised list of the measured work in a project, with quantities against each item, which tenderers price. It makes bids comparable — everyone is pricing the same thing, in the same units.
- Buy-OutThe process of converting the tender allowances in a winning bid into actual awarded subcontracts and orders. The gap between what you allowed and what you actually buy is the buy-out gain — or the buy-out hole.
- CertificationThe formal confirmation by a named authority — the engineer, the project manager — that work has been done or a milestone achieved. On a service contract it replaces the goods received note as the receipt leg of the match.
- Committed CostMoney legally promised but not yet invoiced — the value of approved purchase orders and subcontracts. It is the leg that budget-versus-actual leaves out, and it is the leg that warns you.
- ContingencyMoney held against identified risks that may or may not occur. It is a control account, not a slush fund — drawn down against a materialised, documented risk, and never against scope creep.
- Delivery NoteThe supplier’s document accompanying a delivery, stating what it claims to have sent. It is the supplier’s account, not yours — which is exactly why the GRN exists.
- Duplicate Vendor RecordThe same supplier existing more than once in the vendor master — under a slightly different name, a typo, a changed trading style. It is the single most common cause of duplicate payment, and it is entirely mundane.
- E-TenderingRunning the tender process through an online portal — issue, clarification, submission and evaluation. The benefit is auditability: an unalterable record of who received what, and when each bid arrived.
- Escalation ClauseA contract provision allowing prices to be adjusted for movements in the cost of specified materials or labour, usually against a published index. It shares a risk neither party can control, instead of assigning it to whoever was less careful.
- ExpeditingActively chasing an order through the supplier’s production and shipping process — confirming that it has actually started, that it is on the line, that it shipped. It is the difference between having an order and having a delivery date you believe.
- Front-LoadingA payment schedule in which the money runs ahead of the work — a large mobilisation payment, a thin completion payment. It is a transfer of risk to the buyer, agreed at signature and noticed far too late.
- GRN (Goods Received Note)The record of what was actually accepted at the gate — counted, checked, and possibly different from what the supplier’s delivery note says. It is the only delivery document you control, and it is the receipt leg of the three-way match.
- IncotermsThe standard three-letter codes defining where risk and cost transfer from seller to buyer in an international sale — EXW, FOB, CIF, DDP and the rest. They decide who pays for what, and who is holding the risk when something goes wrong at sea.
- Landed CostThe true total cost of a material delivered to site — the unit price plus freight, insurance, duty, port handling, inland transport, and any financing cost. Comparing suppliers on unit price alone compares the wrong number.
- Maverick SpendPurchasing that bypasses the agreed process — no purchase order, no approved supplier, no negotiated rate. It is almost never dishonest. It is people solving a problem faster than the process allows.
- Milestone BillingPaying against defined, verifiable units of completion rather than against elapsed time or a percentage. The whole discipline lives in the definition: if two reasonable people could disagree about whether a milestone is met, it is not a milestone.
- Pay-Less NoticeA formal notice, served within a contractual window, stating that the employer intends to pay less than the sum applied for and why. Serve it late, and the full amount can become payable regardless of its merits.
- Payment Application (Interim Payment Certificate)The contractor’s periodic claim for payment — measured work, materials on site, variations, less retention and previous payments. The employer’s certificate in response is what actually creates the payment obligation.
- Purchase Order (PO)The instrument that commits cost. An approved PO is a legally binding offer to buy, and the moment it is issued the money is committed — before any delivery, and long before any invoice arrives.
- Recovery AuditA retrospective review of payments made, looking for money paid in error — duplicates, overpayments, missed credits, unclaimed discounts. It recovers real cash, and its existence is an indictment of the controls upstream.
- Retention LedgerThe record of retention held against every contract, with the amounts and the dates on which each half becomes releasable. Its absence is why retention so often ages quietly into a bad debt.
- TenderA formal offer to carry out work at a stated price, submitted in response to an invitation. In construction it is also the whole process — floating the package, answering queries, receiving bids, and evaluating them.
- Three-Way MatchReconciling the purchase order, the goods received note and the invoice before payment. Ordered, received, billed — and all three must agree. It is the single most effective control against paying for what never arrived.
- Tolerance BandThe permitted variance between the ordered, received and invoiced amounts before a match is rejected — so that a two-dirham rounding difference does not stop a payment run.
- Unbalanced BidA tender whose total is competitive but whose individual rates are distorted — loaded onto early or likely-to-increase items, cut on items expected to reduce. The total looks fine. The outcome does not.
- Virement (Budget Transfer)Moving approved budget between lines without changing the total — zero-sum by definition. It is the safety valve that keeps a budget realistic, and, ungoverned, the mechanism that launders an overrun.
Hotels & assets
- ADR (Average Daily Rate)Room revenue divided by rooms SOLD — the average price actually achieved per occupied room. Unlike RevPAR, it says nothing about how many rooms were empty.
- Competitive Set (Compset)The group of rival hotels a property benchmarks itself against. Every benchmark index is your number divided by theirs — which means the peer group is doing all the work, and a peer group you chose is a peer group you can game.
- CPOR (Cost Per Occupied Room)The direct cost of servicing one occupied room — housekeeping labour, amenities, laundry, utilities. It is the cleanest measure of operational efficiency a hotel has, because it is largely within management’s control.
- FCI (Facility Condition Index)Deferred repair cost divided by current replacement value. It is how a portfolio ranks buildings for capital — and the band scheme you quote it against varies by sector, so always say which one you are using.
- FF&E (Furniture, Fixtures & Equipment)The movable contents of a property — furniture, soft goods, case goods, loose equipment. Depreciable, typically reserve-funded, and replaced on a cycle. It belongs on the fixed-asset register.
- FF&E ReserveA percentage of revenue set aside under a hotel management agreement to fund future capital replacement — conventionally in the low single digits. It is a funding mechanism, and it is not a capital plan.
- Flow-ThroughThe share of incremental revenue that reaches profit — actual profit minus budget profit, over actual revenue minus budget revenue. The hospitality rule of thumb is that at least half of extra revenue should survive to GOP.
- Ghost AssetsItems still on the fixed-asset register that no longer physically exist — scrapped, traded in, or removed during a refurbishment and never written off. They inflate insurance, property tax and net book value.
- GOPPAR (Gross Operating Profit Per Available Room)Gross operating profit divided by rooms available — what the operation actually earned per room, after operating costs. It is the closest single proxy for what the asset is worth, and it is the number an owner should celebrate.
- OS&E (Operating Supplies & Equipment)The consumable operating items of a hotel — linen, glassware, crockery, uniforms. Expensed rather than capitalised, tracked at par level, and NOT a fixed-asset register item.
- PIP (Property Improvement Plan)A brand-mandated scope of works a hotel must complete to meet or retain its franchise standards. Triggered by renewal, sale, refinancing or conversion — and considerably more negotiable than owners assume.
- Preventive Maintenance (PM)Maintenance carried out on a schedule — by calendar or by runtime — to prevent failure rather than respond to it. The alternative, running assets to failure, is the most expensive maintenance strategy there is.
- RevPAR (Revenue Per Available Room)Room revenue divided by rooms available. The industry’s headline metric — and blind to every cost and to all non-room revenue, which is why a hotel can grow RevPAR while its profit per room falls.
- TRevPAR (Total Revenue Per Available Room)Total revenue — rooms, food and beverage, spa, everything — divided by rooms available. It corrects RevPAR’s blindness to non-room revenue, though it remains blind to cost.
- USALIThe Uniform System of Accounts for the Lodging Industry — the standard chart of accounts that makes one hotel’s numbers comparable to another’s. Its 12th edition became mandatory on 1 January 2026.