A
Adjudication

A rapid, binding, but interim, method of dispute resolution. Mandated by law in some countries.

ADR

Alternative dispute resolution. A method to resolve disputes without using courts or Arbitration, such as Mediation and Adjudication.

Arbitration

A method of formal dispute resolution.

Assignment

The transfer of legal rights from one party to another party.

B
Bank guarantee

A guarantee by a bank to pay money to a party. Used interchangeably with Performance bond and SBLC.

BAR

Builder's All-Risk. An insurance policy that protects against loss of or damage to the Works. Also called EAR - Erection All-Risks policy, and CAR - Contractor's All-Risks policy.

BIM

Building information modelling. A detailed digital 3D version of a project used for building design and maintenance.

BOQ

Bill of quantities. A document setting out the quantity of materials required to build something. Usually prepared by an engineer, QS or architect.

C
CAR

Contractor's All-Risk insurance. See BAR.

Change order

A change to the scope of Works, Programme or other aspects of the Works. Also known as a Variation.

COD

Commercial operation date. The date on which the Works are to be completed. See Practical Completion and Substantial Completion.

Collateral warranty

A contractual agreement given by contractors, designers and key subcontractors to third parties such as the Employer, developer, funder, or contractor. Also known as a Direct agreement.

Conditional bond

A security instrument that pays out only if certain conditions are met.

Contractor's proposals

The contractor's detailed commercial and technical offer to the Employer for the Works. Usually provided in response to a RFP.

Contract price

The price payable to the contractor for the completion of the Works.

Cost-plus contract

A method of contracting by which the contractor is paid its verified actual costs plus a fixed % for overhead and profit. Requires open book accounting and trust.

Critical path

Project activities that are time-critical or time-sensitive. Any delay to these will delay the completion of the Works.

D
Defect

A defect in the Works or in its design.

Demurrage

Charges payable to a ship-owner for not loading or discharging cargo on time.

Design and build contract

A contract under which the contractor takes full responsibility for the design and construction of the Works.

Direct agreement

See Collateral warranty.

DLP

Defects liability period. The period after completion of the Works during which the contractor is responsible for fixing defects.

E
EAR

Erection All-Risks insurance. See BAR.

Employer

The project owner that contracts with the main contractor. Sometimes referred to as the owner or developer.

Employer's requirements

The Employer's technical and commercial requirements for a project.

Entire contract

A contract under which the contractor is paid only when the entire Works are complete.

EOT

Extension of time. An extension to the Guaranteed completion date.

F
FIDIC contract

A standard form of contract published by the International Federation of Consulting Engineers.

Final account

Final closing-out of the contractor's account. Usually occurs with the expiry of the DLP.

G
GMP

Guaranteed maximum price. An absolute ceiling on the Contract price.

Guranteed completion date

The date by which the Works must be completed.

H
Heat rate

A measure of a power plant's efficiency in converting fuel to heat and power.

HGCRA

The Housing Grants, Construction and Regeneration Act 1999 of England & Wales. Otherwise known as the Construction Act.

I
Indemnity

A method for transferring risk for from one party to another.

ITT

Invitation to tender. See RFP.

J
Joinder

Forcing a third party to become a co-defendant in court proceedings or Arbitration.

JCT contract

A standard form of contract published by the Joint Contracts Tribunal.

K
Key personnel

Project personnel that cannot be replaced without the consent of a counterparty.

L
LAD

See LD.

Latent defect

A Defect in the Works that is not apparent or cannot be discovered.

LD

Liquidated damages. A fixed amount of money payable if completion of the Works is delayed or the plant under-performs. Also known as LAD (liquidated ascertained damages).

LOI

Letter of intent. A letter from the Employer that allows the contractor to commence the Works pending execution of the contract itself.

LNTP

Limited Notice to Proceed. Similar to LOI, except that the contract itself is usually executed but the Employer is not ready to fully release the contractor to commence the Works.

Loss and expense

Costs incurred by a contractor as a result of a delay to the progress of the Works.

Lump sum contract

A fixed price contract.

M
Management contracting

A method of procurement by which there is no main contractor. Instead, the Employer appoints a management contractor to manage the Employer's trade contractors.

Mareva injunction

Asset freezing order issued by a court.

MCI

Marine cargo insurance. Insurance that protects cargo on a vessel against specified perils.

Mediation

A method for resolving disputes, involving shuttle diplomacy by a neutral third party.

N
NEC contract

A standard form of contract published by the National Engineering Council.

Nominated subcontractor

A subcontractor selected by the Employer for the execution of certain Works.

Novation

The transfer of rights and obligations under a contract from one party to another.

NTP

Notice to Proceed. The contractor is fully released by the Employer to commence all of the Works.

O
Off-shore contract

A product of Split contracts. This is a contract that is typically executed by an off-shore company for off-shore supply of goods and services such as overseas equipment procurement and overseas engineering services.

OMM

Operation and maintenance manuals. Alo referred to as O&M manuals.

On-shore contract

A product of Split contracts. This is a contract that is typically executed by an on-shore company for on-shore supply of goods and services, such as construction work and on-shore procurement.

P
Performance bond

Similar to Bank guarantee, except that it may not necessarily be an on-demand instrument.

Performance guarantee

Guaranteed performance to be achieved when the Works are complete e.g. output, heat rate.

Practical completion

The Works are complete save for minor defects that do not affect the use or operation of the project.

Programme

The scheduled sequence for the execution of the Works.

Provisional sum

An estimated amount for certain aspects of the Works, which would be finalized at a later date.

Punch list

List of minor defects at Practical Completion, also called Snags, that the contractor must fix during the DLP. Also known as a snagging list.

Q
QS

Quantity surveyor. A professional that specialises in construction costing and contracting.

R
Recovery plan

Contractor's plan to get delayed Works back up to speed.

Retention

Also known as retainage. An amount held back from payments of the Contract Price, and held as security for the Employer. Half of the Retention is usually retrned to the contractor on Practical completion and the other half on expiry of the DLP.

RFP

Employer's request for proposals from contractors. See ITT.

S
SBLC

Standby letter of credit. An unconditional promise by a bank to pay money to someone. See Bank gaurantee.

Sectional completion

The Works are split into sections, or phases, each with its own Contract price, commencement date, date for Practical Completion, LD and DLP, but under a single contract.

Site

The place at which the Works will be constructed.

Snag

Defective or incomplete items of Works that form the basis of a Punch list.

SMM

Standard method of measurement. A standardised tool used to develop a BOQ.

SOPA

Security of Payment Act or, by its long name, the Building and Construction Industry Security of Payment Act of Singapore.

Split contracts

A contract that is bifurcated between an Off-shore contract and On-shore contract.

Subcontractor

A direct supplier to a contractor.

Subrogation

An insurer's right to take over the rights of an insured with respect to an insured risk.

Substantial completion

See Practical completion.

Subsurface conditions

Physical conditions that exist beneath the surface of a Site.

Surety bond

A promise by an insurance company that a party will honour the terms of its contract.

T
Taking over

The Employer taking over care, custody and control of the Works.

Tender

Contractor's proposal to the Employer for a project.

Tests

Tests performed on the completed Works to assess whether Performance guarantees are met.

Traditional contract

A contract under which the contractor only constructs the Works, but does not design them. See Design and build contract.

Turnkey contract

See Design and build contract.

U
Umbrella

A contract that effectively unifies an Off-shore contract and an On-shore contract.

V
Value engineering

A proposal by a contractor to optimise the design of the Works to achieve a better Contract price for the Employer.

Variation

See Change order.

W
Warranty period

See DLP.

Works

The entirety of the Works, materials and plant that the contractor is to execute and supply for the Works.

Wrap

See Umbrella.