Construction glossary

Liquidated damages (LDs) are a fixed amount, usually a daily or weekly rate stated in the contract, that the contractor pays the principal for each day the works are late past the date for practical completion. They replace the need for the principal to prove its actual loss from the delay.

A cost plus contract is a construction contract where the principal pays the contractor's actual costs of doing the work, plus an agreed margin or fee for overheads and profit. It is used when the scope is too uncertain to fix a price, and it shifts most cost risk to the principal.

An extension of time (EOT) is extra time added to the date for practical completion because of a delay the contractor is not responsible for, such as a variation, a latent condition or a principal-caused delay. A granted EOT protects the contractor from liquidated damages for that period.

Latent conditions are physical conditions on or near a construction site that could not reasonably have been anticipated at the time of tender, such as unexpected rock, contaminated soil or uncharted buried services. Most Australian construction contracts set out who carries the cost and time impact when they are found.

A provisional sum is an allowance included in the contract price for work or items that cannot be accurately priced at tender, usually because the design or scope is not yet settled. When the work is done, the allowance is replaced by the actual cost, plus any agreed margin, and the contract sum is adjusted up or down.

Design and construct (D&C) is a delivery method where one contractor is responsible for both designing and building the project under a single contract with the principal. The principal provides a brief or concept design, and the contractor develops the design, engages the consultants and carries the design risk.

A SWMS (Safe Work Method Statement) is a site-specific document that lists the high risk construction work being done, the hazards it creates and the control measures that will be used. Under Australian WHS laws it must be prepared before high risk construction work starts, and the work must follow it.

A JSA (job safety analysis) is a written risk assessment that breaks a task into steps, identifies the hazards in each step and records the controls that will be used. On Australian construction sites it is used for everyday tasks that are not high risk construction work and so do not legally need a SWMS.

A PCBU (person conducting a business or undertaking) is the legal term in Australian WHS laws for the business, organisation or individual that carries the primary duty of care for health and safety at work. On a construction site the builder, every subcontractor and the client can all be PCBUs.

A Take 5 is a quick personal risk assessment a worker completes before starting a task, usually on a pocket card or app, by stopping to look for hazards, assessing the risk and putting controls in place. It takes about five minutes and is widely used on Australian construction and mining sites.

A duress alarm is a device that lets a worker call for urgent help, usually by pressing a button, that instantly alerts nominated people such as first aiders, supervisors or a monitoring service. On construction sites they are used by lone and remote workers and as fixed emergency call points across large sites.

The hierarchy of controls is a ranked list of ways to control a workplace hazard, from most to least effective: elimination, substitution, isolation, engineering controls, administrative controls and personal protective equipment (PPE). Under the model WHS Regulations, Australian businesses must work down it in order when managing risks.

An expression of interest (EOI) is a short, non-binding response showing that a company wants to be considered for an opportunity. In construction, an EOI is usually the first stage of a tender: builders or subcontractors submit capability, experience and capacity so the client can shortlist who receives the full request for tender.

An RFQ (request for quotation) is a request sent to suppliers or subcontractors asking for a price for a clearly defined scope of work or materials. In Australian construction, RFQs are used for smaller or simpler packages where price is the main deciding factor and a full tender process is not justified.

A letter of intent (LOI) is a letter from a client to its preferred tenderer stating that it intends to award the contract, often authorising limited work to start before the formal contract is signed. Depending on its wording, an LOI can be non-binding or can create a binding interim contract.

An RFT (request for tender) is a formal invitation for contractors or subcontractors to submit a priced, conforming offer to carry out defined construction work. It includes the drawings, specifications, scope of works, contract conditions and tender rules, and tenders are evaluated on price and non-price criteria.

A scope of works is the document that defines exactly what work a contractor or subcontractor must carry out, including inclusions, exclusions, standards, interfaces and deliverables. In Australian construction it forms part of the tender and contract documents and sets the baseline for pricing and for assessing variations.

A bill of quantities (BoQ) is a document listing the measured quantities of each item of work, such as cubic metres of concrete, so every tenderer prices the same quantities. In Australia a quantity surveyor prepares it, and it is more common in civil and government work than in private building.

An RCTI (recipient-created tax invoice) is a GST tax invoice prepared by the buyer instead of the supplier. In Australian construction, head contractors commonly issue RCTIs to subcontractors after assessing their progress claims, so the invoice matches the amount actually approved for payment.

Adjudication is a fast, statutory process under Australian security of payment laws in which an independent adjudicator decides how much of a disputed payment claim must be paid. The decision is binding for now and enforceable as a debt, but the parties can still argue the final amount later under the contract.

A subcontractor statement is a NSW form in which a subcontractor declares that, for a set period, it has paid its workers' wages, workers compensation premiums and payroll tax. Holding a valid statement protects the principal contractor from becoming liable for those unpaid amounts.

Preliminaries are the costs of running and supporting a construction site that are not part of any single trade, such as site supervision, site sheds, cranes, scaffolding, temporary services, insurances and fencing. In Australia they are priced as a separate section of the tender, often split into fixed and time-related costs.

An S curve is a graph of cumulative cost, value or progress plotted over a project's duration. It gets its name from its shape: slow at the start during establishment, steep through the main construction phase and flattening towards completion. Builders use it to compare planned against actual progress and cash flow.

A progress claim is a contractor's periodic request for payment for work completed during a period, usually monthly, under a construction contract. In Australia a progress claim can also be a payment claim under the state security of payment Act, which triggers strict deadlines for the respondent to reply and pay.

An RDO (rostered day off) is a scheduled paid day off that construction workers accrue by working slightly longer days than their 38 ordinary weekly hours. On most Australian commercial sites, RDOs follow an industry calendar set under enterprise agreements, and the whole site usually shuts on those days.

A work breakdown structure (WBS) is a hierarchical breakdown of a construction project into smaller, manageable packages of work, from the whole project down to individual deliverables. It gives the programme, budget, cost codes and subcontract packages one shared structure, so time and cost can be tracked against the same items.

The critical path is the longest sequence of dependent activities in a construction programme, and it sets the shortest possible time to finish the project. Any delay to an activity on the critical path delays completion unless time is recovered elsewhere. Activities off the critical path have float.

A construction programme is the time plan for a construction project, showing every activity, its duration, how activities depend on each other and the dates they are planned to happen. In Australia it is usually a linked Gantt chart, and most contracts require the contractor to submit and keep it updated.

A notice of delay is a written notice from the contractor telling the superintendent or principal that something has caused, or is likely to cause, a delay to the works. Most Australian construction contracts require it promptly, and it is usually the first step towards a claim for an extension of time.

A dilapidation report is a dated record, with photos and written notes, of the condition of neighbouring buildings, roads and public assets before construction starts. It is used to prove whether any cracking or damage found later existed before the works or was caused by them.

An NCR, or non-conformance report, is a formal record that work, materials or a process on a construction project does not meet the specified requirements. It describes the problem, how it will be dealt with, who approves the fix, and what will stop it happening again.

An occupation certificate is the NSW approval that allows a new building, or a changed part of one, to be occupied and used. It is issued by the principal certifier under the Environmental Planning and Assessment Act 1979 once the building is suitable for occupation and fire safety requirements are met.

An ITP, or inspection and test plan, is a quality document that lists every inspection and test required for a work activity, when it happens, who does it, the acceptance criteria and the records needed. It also marks the hold points and witness points where the client or engineer must be involved.

Shop drawings are detailed drawings prepared by a subcontractor, fabricator or supplier showing exactly how a component will be made and installed, such as structural steel, precast panels, joinery or ductwork. They translate the design drawings into buildable detail and are submitted for review before fabrication.

As-built drawings are the final set of drawings that show a project as it was actually constructed, including every change from the design drawings. In Australia they are often called work as executed (WAE) drawings, and they are handed to the owner for operation, maintenance and future works.

An RFI (request for information) is a formal written question a contractor sends to the design team or superintendent to clarify drawings, specifications or contract documents. It records the query, the answer and the date of each, so gaps or conflicts in the design are resolved before work proceeds.

A delivery docket is the document that comes with materials or plant delivered to a construction site, listing what was supplied, how much, from whom and when. Site staff check and sign it on arrival, and it later supports invoice matching, quality records and quantity tracking.

IFC drawings (issued for construction) are the design drawings formally released by the design team as approved for building. They replace earlier tender or preliminary issues, and they are the set the contractor and subcontractors build from on site.

A transmittal is a cover record that lists the documents sent from one party to another on a construction project, with their revision numbers, purpose and date of issue. It proves what was sent, to whom and when, and is a core part of document control.

A construction management plan (CMP) is a document setting out how a building project will be run to manage its impact on neighbours, traffic and the environment, covering hours, access, deliveries, noise, dust and safety. Councils often require one as a condition of development consent or planning permit.

Document control is the process of managing a construction project's drawings, specifications and records so that everyone works from the current approved version. It covers numbering, revision tracking, issuing with transmittals, approvals, storage and removing superseded documents.

An EWP (elevating work platform) is mobile plant with a platform that lifts people, tools and materials to work at height, such as a scissor lift, boom lift or vertical lift. In Australia, operating a boom-type EWP with a boom length of 11 metres or more requires a WP high risk work licence.

A high risk work licence (HRWL) is a licence issued by a state or territory work health and safety regulator that lets a person carry out specified high risk work, such as operating cranes, forklifts or boom-type EWPs, scaffolding, dogging or rigging. The classes are set out in the model WHS Regulations.

Dry hire vs wet hire describes the two ways construction plant is hired. Dry hire means hiring the machine only, with the hirer supplying the operator and running it. Wet hire means hiring the machine with a qualified operator supplied by the hire company, who usually also handles fuel and routine maintenance.

Mobile plant is any plant that moves under its own power on a construction site, such as excavators, forklifts, telehandlers, EWPs, mobile cranes, rollers and dump trucks. Under the model WHS Regulations, powered mobile plant has specific control requirements for overturning, falling objects and collisions with people.

A plant risk assessment is a documented process of identifying the hazards of a specific item of plant, assessing the risks and setting controls so it can be used safely. In Australia it is the main way businesses meet their plant duties under the model WHS Regulations, and most sites require one before plant starts work.