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Cost Glossary

Cost Glossary

Learn the language of Cost.




Architect/Engineer; the design professional hired by the owner to provide design and design-related services.

Accounting Period

The period of time during which actuals will be collected for transfer into the Earned Value Management System for reporting purposes. Also referred to as Reporting Period.


Accruals are defined as the difference between the estimated cost of the work performed and the actual cost of the work reported by the accounting system. Especially in the case of procurements and contracts, procured items are delivered, or contracted work performed, prior to an invoice being sent for the work completed. Many times the invoiced costs do not enter the accounting system for one, two, or even up to three months after the work is performed. Accruals allow you to estimate the cost of the work in order for Earned Value calculations to be as accurate as possible.

Actual Cost (AC)

The costs actually incurred and applied or distributed in accomplishing the work performed within a given time period. The actual costs include direct and indirect costs as well as accruals. Also referred to as the Actual Cost of Work Performed (ACWP).


A document setting forth the relationships and obligations between two parties, as the CM and owner or contractor and owner. It may incorporate other documents by reference.

Apparent Low Bidder

The bidder who has submitted the lowest bid for a division of work described in bid documents, a proposal form, or proposed contract.

Apportioned Effort (AE)

Effort that by itself is not readily measured or divisible into discrete work packages but is related in direct proportion to the planning and performance of other discrete effort.

Approved Bidders List

The list of contractors that have been prequalified for the purpose of submitting responsible, competitive bids.

Approved Budget

The baseline budget plus approved changes. This is the standard against which performance is measured.

Approved Budget Changes

Changes in scope to the budget resulting in an increase or decrease to its value.

Approved Changes

Changes in the contract documents that have been subjected to an agreed upon change approval process and have been approved by the party empowered to approve such changes.

Approved Schedule

A project schedule or plan that can be compared to the current schedule to measure progress. The approved schedule is the original baseline schedule plus any approved schedule changes.


A licensed professional who designs plans for buildings, either new projects or renovations.

At-Risk Construction Manager

Also known as Construction Manager At-Risk. A delivery method in which the construction manager makes a commitment to a client to deliver a project within a guaranteed maximum price. The construction manager acts as consultant to the client in the development and design phases, but as the equivalent of a general contractor during the construction phase.

Authorization to Proceed (ATP)

Official authority for the contractor to begin work. It is usually issued by the procuring contracting officer.

Authorized Unpriced Work

A contract scope change, which has been directed by the contracting officer but has not yet been fully negotiated/definitized. It includes a value, excluding fee or profit, typically associated with the authorized, unpriced change order.

Authorized Work

That effort that has been definitized and is on contract plus that effort for which definitized contract costs have not been agreed to but for which written authorization has been received.



The budgeted cost, hours, and quantities for each control account. This is the standard against which performance is measured.

Baseline Budget

A project's beginning budget of hours, cost, and quantities.

Baseline Estimate

The estimate that forms the basis of the baseline budget in the Cost Management module.

Baseline Schedule

The accepted, initial schedule is often referred to as the baseline schedule. The use of this term refers to the fact that the projected activity dates will be used as a baseline for comparing the actual, achieved dates and measuring progress.

  • Another name for “tender”. A bid or tender in Aconex is the process of submitting a proposal for new work.
  • An offer to perform the work described in contract documents at a specified cost.
Bid Bond

A pledge from a surety to pay the bond amount to the owner in the event the Bidder defaults on its commitment to enter into a contract to perform the Work described in the Bid Documents for the bid price

Bid Documents

The documents issued to the contractor(s) by the owner, which describe the proposed Work and contract terms. Bid documents typically include: drawings, specifications, contract forms, general and supplementary general conditions, proposal or bid forms, and other information.

Bill of Materials (BOM)

A listing of material items required to complete the production of a single unit. When actual or expected prices are applied, it becomes the Priced Bill of Materials (PBOM).

Block Planning

The periodic process of converting summary level planning packages into control accounts and control account planning packages into work packages. The time period chosen reflects blocks of time from a specific contractual milestone to a subsequent specific contractual milestone.


A pledge from a surety guaranteeing the performance of the obligation defined in the bond, including the completion of work or payment of the bond amount to the obligee (owner or contractor) in the event of a default, or non-payment by a principal (contractor or subcontractor), as with bid, performance and labor and material bonds.

Bonding Capacity

The maximum amount of credit coverage the lender will extend to the company.

Bridge Financing

Temporary debt financing to provide a “bridge” to a company that will eventually be replaced with permanent capital.


The dollar amount allocated by the owner for a project/program.

Budget at Completion (BAC)

The baseline budget plus all approved changes. This value is equivalent to the approved budget. Also referred to as Approved Budget or Current Budget.

Budget Estimate

An estimate of the cost of work based on preliminary information, with a qualified degree of accuracy.

Budgeted Cost for Work Performed (BCWP)

Value of completed work in terms of the work’s assigned budget. Also referred to as Earned Value.

Budgeted Cost for Work Scheduled (BCWS)

Time-phased Budget Plan for work currently scheduled. Also referred to as Planned Value, Approved Budget to Date, and Current Budget to Date.



A project is assigned a calendar when it is created. Calendars define the project’s workdays and the work hours per day. With this you can calculate full-time equivalent hours (FTEs) for each reporting period. Then you can calculate time-phased data in the cost management module. Calendars are also used to generate project reports.

Change Order

Process for modifying a construction contract when unforeseen changes occur during the planning and construction of a project, which may drive the cost of a project upward.

A written agreement or directive between contracted parties, which represents an addition, deletion, or revision to the contract documents, identifies the change in price and time and describes the nature (scope) of the work involved. Also referred to as Contract Modifications.

Changed Conditions

Conditions or circumstances, physical or otherwise, which alter the conditions or circumstances on which the contract documents were based.

Claim (US/Europe)

A formal demand for compensation, filed by a contractor or the owner with the other party, in accordance with provisions of the contract documents.

CM Fee

A form of contractual payment for services, where the CM is paid a fee for services performed.

Code of Accounts

The owner's written description of the cost elements of the project, used for the owner's accounting purposes.

Commercial Manager

Normally the custodian of the Cost Worksheet, responsible for the finances on a project.


Start up, calibration, and certification of a facility.


Purchase orders or contracts that have been issued to vendors or contractors that obligate the project for payment of the goods or services provided.

Construction Budget

The sum established, normally during the planning or design phase, as available for construction of the project.

Construction Contract Documents

The documents, which provide the basis for, the contract entered into between parties. They typically include the bid documents updated to reflect the agreement between the owner and the contractor(s).

Construction Cost

All costs attributed to the construction of the project, including the cost of contracts with the contractor(s), construction support items, general condition items, all purchased labor, material and fixed equipment.

Construction Management

A type of contract where the General Contractor acts on behalf of the Client for a fee.

Construction Management Plan (CMP)

The written document prepared by the CM, which clearly identifies the roles, responsibilities and authority of the project team and the procedures to be followed during construction.

Construction Manager (CM)

A professional Construction Manager (CM) acts as an extension of staff to the Owner and manages the entire project with pre-planning, design, construction, engineering and management expertise that can assure the best possible project outcome no matter what type of project delivery method used. A CM is NOT a general contractor. Few owners maintain the staff resources necessary to pay close, continuing attention to every detail--yet these details can "make or break" a project. CM is often used interchangeably with Project Manager.

Construction Schedule

A graphic, tabular or narrative representation or depiction of the time of construction of the project, showing activities and duration of activities in sequential order.


An amount of money reserved by the owner or contractor to pay for unforeseen changes in the work or increases in cost.

Contract Budget Base

The sum of the negotiated contract cost plus the estimated cost of authorized unpriced work. This represents the total amount of performance measurement budget that may be allocated to contract work.

Contract Data Requirements List (CDRL)

The standard format for identifying potential data requirements in a solicitation, and deliverable data requirements in a contract. The purpose of the CDRL is to provide a standardized method of clearly and unambiguously delineating the Government's minimum essential data needs.

Contract Performance Report (CPR)

A contractually required report, prepared by the contractor, containing performance information derived from the internal Earned Value Management System that provides status of progress on the contract.

Contract Variation

Changes in scope to the contract resulting in changes in the value of the contract or the duration.

Contract Work Breakdown Structure (CWBS)

The complete WBS for a contract. It includes the approved WBS for reporting purposes and its discretionary extension to lower levels by the contractor, in accordance with the contract work statement. It provides for the product-oriented decomposition of contract work into major elements that include all the services that are the responsibility of the contractor.


The organization or individual who undertakes responsibility for the performance of the work, in accordance with plans, specifications and contract documents, providing and controlling the labor, material and equipment to accomplish the work.


Contracts are packages of work placed between two parties, normally a General Contractor and a Subcontractor, for work to be carried out on a project.

Control Account

A control account is a Work Breakdown Structure (WBS) element element assigned to a single focal point to plan and control scope/schedule/budget.

Control Account Manager (CAM)

A single manager within the contractor’s organizational structure that has been given the authority and responsibility to manage one or more control accounts.

Control Account Plan (CAP)

The documented representation of the time-phased integration of scope, schedule and resources for all control account authorized work.

Control Element

A subset of the total cost, hours, or quantity of an estimate item or a Control Account. Examples include Labor, Materials, Equipment, and Subcontracts.

Control Element

A subset of the total cost, hours, or quantity of an estimate item or a Control Account. Examples include Labor, Materials, Equipment, and Subcontracts.

Cost Control

The function of limiting the cost of the construction project to the established budget based upon owner-approved procedures and authority.

Cost Element

A subset of the total cost of a control account or work package. Examples include Labor, Materials, Equipment, and Subcontracts.

Cost Engineer

Normally the custodian of the Cost Worksheet, responsible for the finances on a project.

Cost Management

The act of managing all or partial costs of a planning, design, and construction process to remain within the budget.

Cost of Construction

All costs attributed to the construction of the project, including the cost of contracts with the Contractor(s), construction support items, general condition items, all purchased labor, material and fixed equipment.

Cost Performance Index (CPI)

The ratio of the approved budget for work performed to what you actually spent for the work. The CPI reflects the relative value of work done compared to the amount paid for it, sometimes referred to as the project’s cost efficiency. You can use the CPI to date to project the cost performance for the remainder of the task.

Cost Variance (CV)

A metric for showing cost performance derived from earned value data. It is the mathematical difference between the amount budgeted and the amount actually spent for the work performed. The CV shows whether and by how much you’re under or over your approved budget. A positive value indicates a favorable condition and a negative value indicates an unfavorable condition. It may be expressed as a value for a specific period of time or cumulative to date.

Critical Activity

A discrete work package or planning package (or lower level tasks/activities) that resides on the critical path.

Critical Date Schedule

A schedule representing important events along the path to project completion. All milestones may not be equally significant. The most significant are termed "major milestones" and usually represent the completion of a group of activities.

Critical Path

A sequence of discrete work packages and planning packages (or lower level tasks/activities) in the network that has the longest total duration with the least amount of total float/slack through an end point that is calculated by a schedule software application.

Critical Path Method (CPM)

A scheduling technique used to plan and control a project. CPM combines all relevant information into a single plan defining the sequence and duration of operations, and depicting the interrelationship of the work elements required to complete the project. The critical path is defined as the longest sequence of activities in a network, which establishes the minimum length of time for accomplishment of the end event of the project.

Current Budget

The Original Budget plus any agreed changes.

Current Period

Accounting period in which the program is currently executing, i.e., time now.


Construction Project

The total effort required in all phases from conception through design and construction completion to accomplish the owner's objectives.

Payment Applications (US/EU)

The process used by a sub-contractor requesting payment for the works they have completed.

Payment Claims (ANZ)

The process a sub-contractor uses to request payment for the works they have completed.


A punitive measure, usually associated with failure to fulfil a contractual obligation.

Percent Complete

Percent complete denotes in percentage terms the work that has been completed on an activity, WBS component, phase or project.


A measure of the accomplishment of work relative to the Approved Budget. Performance is measured by comparing Earned Value to the Actual Costs and to the Approved Budget.

Performance Bond

A pledge from a surety to pay the bond amount to the Obligee (owner or contractor) in the event of a default in performance of contractual obligations.

Performance Measurement Baseline (PMB)

An approved plan for the project against which project execution is compared and deviations are measured for management control. The PMB integrates technical scope, schedule, and cost parameters.


A pre-defined increment of time for planning and progress measurement. Typical period durations are 1 week, 2 weeks, 4 weeks, 1 month, etc. Also referred to as Reporting Period or Financial Period.

Phased Construction

An incremental approach to construction or design and construction. Each overlapping or sequential phase or element to have a defined work scope and to be considered as a separate project.

Planned Value (PV)

The approved budget for the work scheduled to be completed by a specified date; also referred to as the Budgeted Cost of Work Scheduled (BCWS). The total PV of a task is equal to the task’s Budget at Completion (BAC) — the total amount budgeted for the task.

Planning Package

Far-term control account activities not yet scheduled or defined into Work Packages.


Construction drawings show where to build the project, sizes, shapes and which products to use where. Also referred to as Drawings.

Post-Construction Phase

The period following substantial completion.

Pre-Bid Conference

A meeting held by the client and attended by potential bidders to describe project details and answer questions.

Pre-Design Phase

The period before schematic design commences, during which the project is initiated and the program is developed; the planning and conceptual phase.


A list of items to cover non-construction costs like Salaries, Utilities, or accommodation.

Price at Completion

Estimate at Completion plus adjusted profit or fee(s).

Prime Contract

A direct contract with an owner. It can be a single contract and/or include the work specified for several contracts depending upon division of work.

Prime Contractor

A contractor who has a contract with an owner.

Program Management

The practice of professional construction management applied to a capital improvement program of one or more projects from inception to completion. Program Management provides additional benefits such as standardization, leveraged purchasing and economies of scale.


The amount of work that has been accomplished. Progress may be reported in terms of physical completion by measuring installed quantities relative to total quantity, in terms of hours of work expended relative to total hours of work, in terms of actual cost relative to total cost, or using other specialized methods such as Rules of Credit.

Progress Meeting

A meeting dedicated to the subject of progress during any phase of project delivery.

Progress Payment

Partial payment of the contract amount periodically paid by the owner, upon approval by the CM, verifying that portions of the Work have been accomplished.

Project Budget

The sum or target figure established to cover all the owner's costs of the project. It includes the cost of construction and all other costs such as land, legal and professional fees, interest, and other project‑related costs.

Project Cost

The actual cost of the entire project.

Project Management

The use of integrated systems and procedures by a team of professionals during project design and construction. As applied to a construction project, Project Management can be used synonymously with Construction Management.

Project Management Plan

A document prepared by the CM, and approved by the owner, which defines the owner's goals and expectations including scope, budget, schedule, and quality and the strategies to be used to fulfill the requirements of the project.

Project Procedures Manual

A detailed definition of the project team responsibilities and authority, project systems, and procedures.

Project Team

Initially consists of the owner, design professional, and CM. Thereafter, as prime construction contractors are engaged they are added to the Team.

Project Team Meeting

A meeting dedicated to all aspects of the project, involving the project team members (owner, design professional, CM, contractor or contractors).

Punch List

A list made near the completion of the construction work indicating items of work that remain unfinished, do not meet quality or quantity requirements as specified or are yet to be performed by the contractor prior to completing the terms of the contract.


Data Date

The date at which, or up to which, the project's reporting system has provided actual status and accomplishments.

Deferred Maintenance

Major repairs or replacement of buildings and equipment; preventative maintenance expenses delayed due to lack of funding.

Design - Bid - Build

A project delivery method where an architect is hired to create design documents from which general contractors will bid.

Design - Build

Design-Build is a project delivery method, which combines architectural, and engineering design services with construction performance under one contract agreement.

Design - Final

The stage of the design process when drawings and specifications are completed for construction bid purposes. It is preceded by the preliminary design stage, and followed by the procurement phase. The designation used by designers for the last part of the design process prior to procurement.

Design - Preliminary

The transition from the schematic phase to the completion of the design development. During this stage ancillary space is developed and dimensions are finalized. Outline specifications are developed into technical specifications; sections are delineated and elevations are defined. Also referred to as Design Development.

Design - Schematic

Traditionally the first stage of the designer’s basic services. In the schematic stage, the designer ascertains the requirements of the project and prepares schematic design studies consisting of drawings and other documents illustrating the scale and relationships of the project.


The individual or organization that performs the design and prepares plans and specifications for the work to be performed. The designer can be an architect, an engineer, or an organization, which combines professional services.

Detail Planning

The act of defining the scope, schedule and budget of a planning package into more detailed work packages with earned value techniques. Or the act of further defining the scope, schedule and budget of a Summary Level Planning Package into more detailed control accounts.

Direct Costs

Any costs that may be specifically identified with a singular cost objective. The field costs directly attributed to the construction of a project, including labor, material, equipment, subcontracts and their associated costs.

Discrete Effort

Tasks related to the completion of specific end products or services and can be directly planned and measured.

Distribution Curves

A method for spreading total cost, hours, or quantities across a range of reporting periods. Distributions are based on a system-defined or user-defined algorithm.


Graphic representations showing the relationships, geometry and dimensions of the elements of the work.

Driving Path

The longest sequence of discrete tasks/activities from time-now to a selected interim contract milestone. Discrete tasks/activities on the driving path have the least amount of total float/slack to the interim contract milestone. Driving path may not be part of the contract critical path.


Early Budget

The time-phased budget based on the early schedule dates.

Earned Value (EV)

The approved budget for the work actually completed by the specified date; also referred to as the Budgeted Cost of Work Performed (BCWP).

Earned Value Management (EVM)

A program management technique for measuring program performance and progress in an objective manner.

Earned Value Management System (EVMS)

An integrated management system that integrates the work scope, schedule, and cost parameters of a program in a manner that provides objective performance measurement data. It measures progress objectively with earned value metrics; accumulates direct costs; allows for analysis of deviations from plans; facilitates forecasting the achievement of milestones and contract events; provides supporting data for forecasting of estimated costs; and fosters discipline in incorporating changes to the baseline in a timely manner.

Earned Value Technique (EVT)

A specific technique (e.g., Milestone Method, Percent Complete, 50/50, 0/100, Units Complete, Apportioned Effort, LOE, etc.) selected to represent the measurement of work scope progress and accomplishment in a work package.

Elements of Costs (EOC)

Product costs are decomposed into the elements of cost. These elements are comprised of labor, materials, other direct costs and overhead. EOCs represent the cost of products that are typical across industry.

Environmental Impact Report (EIR)

A report of the environmental impact of a proposed construction project.

Estimate at Completion

The projected final cost of the project.

Estimate to Completion

The amount of money expected to be spent between a point in time and a project’s completion.

Estimated Actuals (EA)

A value entered into the Earned Value Management System to represent direct costs for material and/or subcontracted items for which earned value has been taken but invoices or billings have not entered the accounting system.

Estimated Cost

An anticipated cost for specified work scope.


Fast Track

The process of dividing the design of a project into phases in such a manner as to permit construction to start before the entire design phase is complete. The overlapping of the construction phase with the design phase.

Field Order

An order issued at the site by the owner or CM to clarify and/or require the contractor(s) to perform work not included in the contract documents. A field order normally represents a minor change not involving a change in contract price or time and may or may not be the basis of a change order.

Final Completion

The date on which the terms of all construction contracts have been satisfied.

Financing Plan

Plan to determine how the construction or modernization costs and operating costs will be met.

Fixed Price

A type of contract where the General Contractor bids for the project in competition with others. Normally the lowest project-cost bid wins the work based on it being a fixed price.


Contingency time that exists on a schedule of activities. It is measured by comparing the early and late dates on a start and finish basis.

Force Account

Directed work accomplished by the contractor outside of the contract agreement.


An estimate of the remaining effort required to complete a project scope of work as defined by the Control Account. The forecast includes estimates for remaining duration, remaining work hours required as well as remaining cost to complete.

Forecast Cost to Complete

The amount of money expected to be spent between a point in time and a project’s completion.

Forecast Final Cost

The projected final cost of the project.

Full Time Equivalent (FTE)

A way to measure a worker's involvement in a project. An FTE of 1.0 means that the person is equivalent to a full-time worker; while an FTE of 0.5 signals that the worker is only half-time.

Note: In the U.S. Federal government, FTE is defined by the Government Accountability Office (GAO) as the number of total hours worked divided by the maximum number of compensable hours in a work year as defined by law. For example, if the work year is defined as 2,080 hours, then one worker occupying a paid full time job all year would consume one FTE. Two employees working for 1,040 hours each would consume one FTE between the two of them.


The amount of money available from a particular source for a particular time period to fund or pay for work to be performed. Typically funding is set by fiscal or calendar year for a multi-year project and should not be confused with the project’s budget.


General & Administrative (G&A)

Per FAR Subpart 2.1: G&A expense means any management, financial, and other expense which is incurred by or allocated to a business unit and which is for the general management and administration of the business unit as a whole. G&A expense does not include those management expenses whose beneficial or causal relationship to cost objectives can be more directly measured by a base other than a cost input base representing the total activity of a business unit during a cost accounting period.

General Conditions

A section of general clauses in the Contract Specifications that establish how the project is to be administered. Included are obligations such as providing temporary work, insurance, field offices, etc.

General Ledger

A complete record of financial transactions over the life of a company. The ledger holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses.


A legally enforceable assurance by a third party of satisfactory performance, quality or quantity of products or work during a specific period of time stated and included in the contract in the event the product or work fails to perform properly

Guaranteed Maximum Price

A contractual form of agreement wherein a maximum price for the work is established based on an agreed-to scope.


Indirect Costs

Costs that cannot be identified specifically against a particular program or activity and must be controlled and budgeted at a functional or organizational level.

Integrated Master Plan (IMP)

An event-driven plan that documents the significant accomplishments necessary to complete the work and ties each accomplishment to a key program event.

Integrated Master Schedule (IMS)

Integrated Master Schedule (IMS)

An integrated, networked schedule containing all of the detailed activities necessary to accomplish the objectives of a program. When coupled with the Integrated Master Plan, it provides the time spans needed to complete the accomplishments and criteria of the Integrated Master Plan events. The IMS normally contains all levels of schedules for the program (master, intermediate, and detailed).

Integrated Program Management Report (IPMR)

A contractually required report, prepared by the contractor, containing performance information derived from the internal Earned Value Management System. Provides status of contract cost and schedule performance (DI-MGMT- 81861). The IPMR is being phased in to replace the Contract Performance Reports (DI-MGMT-81466) and the Integrated Master Schedule (DI-MGMT-81650).


Late Budget

The time-phased budget based on the late dates.

Late Schedule

The latest dates an activity can start and finish based on the critical-path-method (CPM) schedule calculation.

Level of Effort (LOE)

Work defined as having no practicable measurable output or product that can be discretely planned and objectively measured at the work package level.


A claim, encumbrance, or charge against or an interest in property to secure payment of a debt or performance of an obligation.

Life Cycle Cost

Life cycle costs include all costs incident to the planning, design, construction, operation, maintenance and demolition of a facility, or system, for a given life expectancy, all in terms of present value.

Liquidated & Ascertained Damages (LAD)

The penalty (normally financial) for a project finishing late through the fault of the General Contractor.

Liquidated Damages

An amount of money usually set on a per-day basis, which the contractor agrees to pay the owner for delay in completing the Work in accordance with the contract documents

Long-Lead Items

The identification given to material and equipment having an extended delivery time and which may be considered for early procurement and purchase. Items which would be delivered too late for timely installation if their procurement or purchase were included as part of the procurement for the entire contract or project.

Long-Lead Time

The time interval between purchase and delivery of long‑lead items.

Loss and Expense Claim

A claim for additional money or time by the General Contractor or Sub-contractor caused by circumstances no fault of their own i.e. Bad weather or changes to working conditions outside of their control.

Low Bidder

The bidder who has submitted the lowest bid, which is determined to be responsive and responsible for a division of work described in a bid document, proposal form or contract.

Lowest Responsible Bidder

A bidder that is trustworthy as well as demonstrates quality and fitness. The bidder
is responsible for the division of work described in the bid document or contract. The lowest responsible bidder does not have to be the lowest bidder.

Lump Sum Fee

A fixed amount that includes the cost of overhead and profit paid, in addition to all other direct and indirect costs of performing work.


Management Reserve

Budget withheld for unknowns / risk management.

Master Schedule

An executive level summary schedule identifying the major components of a project, their sequence and durations. The schedule can be in the form of a network, Milestone Schedule, or bar chart.

Milestone Schedule

A schedule representing important events along the path to project completion. All milestones may not be equally significant. The most significant are termed "major milestones" and usually represent the completion of a group of activities.

Multiple Currency

A term used when a project has cost data tracked using more than one currency. For example, a project may require the cost of some records to be entered in US Dollars and others in Canadian Dollars.

Multiple Prime Contracts

Separate contractors contracting directly with the owner for specific and designated elements of the work.


Negotiated Contract Cost

Contract price minus profit or fee(s)

Non-Conforming Work

Work that does not meet the requirements of the contract documents.

Notice of Award

A formal document informing an individual or organization of successfully securing a contract.

Notice to Proceed

A formal document and/or point in the project's life cycle authorizing an individual or organization to commence work under its contract. The issuance of the notice to proceed typically marks the end of a procurement phase.


Organizational Breakdown Structure (OBS)

A division of a projects technical scope according to responsible individuals, departments, and companies. The purpose of dividing the project in this manner is to assign responsibility to the work scope and to prepare reports and graphics that relate project progress and cost directly to the responsible organization.

Original Budget

The initial budget planned for the project.

Over Target Baseline

Sum of Contract Budget Base + additional budget approved for remaining work.

Owner Construction Management

A form of Construction Management that does not use an independent construction management organization as a team member. The owner performs all required Construction Management services with in-house staff.

Owner's Representative

The individual representing the owner on the project team.



The degree to which the project and its components meet the owner's expectations, objectives, standards, and intended purpose; determined by measuring conformity of the project to the plans, specifications, and applicable standards.

Quality Assurance (QA)

The application of planned and systematic methods to verify that quality control procedures are being effectively implemented.

Quality Control (QC)

The continuous review, certification, inspection, and testing of project components, including persons, systems, materials, documents, techniques, and workmanship to determine whether or not such components conform to the plans, specifications, and applicable standards.

Quality Management

The process of planning, organization, implementation, monitoring and documenting of a system of policies and procedures that coordinate and direct relevant project resources and activities in a mannerthat will achieve quality.

Quantity Surveyor

Normally the custodian of the Cost Worksheet, responsible for the finances on a project.


Record Drawings

Drawings (plans), prepared after construction is complete that represent the work, accomplished under the contract.

Recovery Schedule

The schedule that depicts action(s) and special effort(s) required to recover lost time in the original Master Schedule. It can depict activities of any member of the project Team.

Reporting Periods

User-defined increments of time for reporting project status.

Request for Change Proposal

A delineation and/or narrative issued by the CM to the contractor that describes a proposed change to the contract documents for purposes of establishing cost and time impacts. Also referred to as Bulletin, Request for Information (RFI), and Request for Quote (RFQ).

Request for Quotation (RFQ)

A request for a quote to perform work.


Schedule Activity

A single task that makes up one part of a project.

Schedule of Values

A list of basic contract segments in both labor and material, where each line item consists of a description of a portion of work and a related cost and the sum of the lines of the contract equals the total contract price. Generally used to determine progress payments to contractor(s).

Schedule Performance Index (SPI)

The ratio of the approved budget for the work performed to the approved budget for the work planned. The SPI reflects the relative amount the project is ahead of or behind schedule, sometimes referred to as the project’s schedule efficiency. You can use the SPI to date to project the schedule performance for the remainder of the task.

Schedule Variance (SV)

The difference between the amounts budgeted for the work you actually did and for the work you planned to do. The SV shows whether and by how much your work is ahead of or behind your approved schedule.


Identification of all requirements of a project or contract.

Scope Changes

Changes that expand or reduce the requirements of the project during design or construction.

Shop Drawings

Drawings typically prepared by the contractor, based upon the contract documents and provided in sufficient detail that indicate to the designer that the contractor intends to construct the referenced work in a manner that is consistent with the design intent and the contract documents.

Short Term Construction Activity Plan

The planning and scheduling of prime contractor(s) activities on site, for the short duration or "foreseeable future" usually developed on a week-by-week basis using milestones for planning intervals and coordinated by Construction Management personnel. Also referred to as Rolling Schedule, Look Ahead Schedule, and Short Interval Schedule.

Special Conditions

Also referred to as Supplementary General Conditions.

Special Consultants

The designation for various professionals, including engineers, architects, designers and other experts, who provide expertise in specialized fields.


The detailed written descriptions of materials, equipment, systems, and required workmanship and other qualitative information pertaining to the work.


The period prior to occupancy when systems are activated and checked out, and the owner's operating and maintenance staff assumes the control and operation of the systems.


A contractor who has a contract with a prime contractor to perform work.


Transmittals of information as required by the contract documents.

Substantial Completion

The date, certified by the design professional or Construction Manager or both, that a contractor has reached that stage of completion when the owner accepts use of the facility for its intended purposes, even though all work is not completed.

Summary Level Planning Package

Far-term contract activities not yet defined into control accounts.


The process of updating a document in the Document Register with a new version.

Supplementary General Conditions

Additions and/or modifications to the General Conditions, which are part of the Bid Documents and/or contract documents.


To Complete Performance Index (TCPI)

Efficiency needed from ‘time now’ to achieve a Cost Target = Budget at Completion, Latest Revised Estimate, or Estimate at Completion.

Total Allocated Budget

Sum of all budgets for work on contract = Negotiated Contract Cost, Contract Budget Base, or Over Target Baseline.

Trade Contractors

Construction contractors who specialize in providing and/or installing specific elements of the overallconstruction requirements of a complete project.

Trade-Off Study

The study to define the comparative values and risks of a substitution or exchange of a design component. The trade-off can identify both monetary and functional values. Also referred to as Alternatives Analysis.


The process of sending updated documents to the Document Registers of other organizations on the project.


Undistributed Budget

Broadly defined activities not yet distributed to Control Accounts or Summary Level Planning Packages.



An accurate assessment of the work completed to date.

Value Analysis

Also referred to as Value Engineering.

Value Engineering

A specialized cost control technique, which utilizes a systematic and creative analysis of the functions of a project or operation to determine how best to achieve the necessary function, performance, and reliability at the minimum life cycle cost.


The difference between the Adjusted Budget and the overall Project Cost.



Assurance by a party that it will assume stipulated responsibility for its own work.


All construction-incorporating labor, material and equipment required by the contract documents.

Work Breakdown Structure (WBS)

A hierarchical product-oriented division of program tasks depicting the breakdown of work scope for work authorization, tracking, and reporting purposes.

Work Package

Near-term, detail-planned activities within a Control Account.