Construction Contracts and Procurement
Expert-defined terms from the Certificate in Cost Management in Construction course at London School of Planning and Management. Free to read, free to share, paired with a globally recognised certification pathway.
**Admeasurement** #
**Admeasurement**
: The process of accurately measuring and quantifying the extent and/or quality… #
: The process of accurately measuring and quantifying the extent and/or quality of construction works, often carried out by a quantity surveyor to determine the value of work completed for interim payment purposes.
**Association of Cost Engineers (ACostE)** #
**Association of Cost Engineers (ACostE)**
: A professional body dedicated to promoting best practices in cost engineering,… #
: A professional body dedicated to promoting best practices in cost engineering, project management, and related fields.
**Bills of Quantities (BOQ)** #
**Bills of Quantities (BOQ)**
: A comprehensive, detailed, and itemized list of materials, labor, and equipmen… #
: A comprehensive, detailed, and itemized list of materials, labor, and equipment required to execute a construction project, typically prepared by a quantity surveyor.
**Building Information Modeling (BIM)** #
**Building Information Modeling (BIM)**
: A digital tool that enables the creation and management of a 3D model of a con… #
: A digital tool that enables the creation and management of a 3D model of a construction project, facilitating collaboration, visualization, and simulation of the construction process.
**Change Order** #
**Change Order**
: A formal request to modify the scope, price, or schedule of a construction con… #
: A formal request to modify the scope, price, or schedule of a construction contract, typically involving additional costs or time extensions.
**Contract Administration** #
**Contract Administration**
: The process of managing and overseeing the execution of a construction contrac… #
: The process of managing and overseeing the execution of a construction contract, ensuring compliance with the terms and conditions, and resolving any disputes that may arise.
**Cost Estimating** #
**Cost Estimating**
: The process of predicting the total cost of a construction project, taking int… #
: The process of predicting the total cost of a construction project, taking into account all relevant factors, such as materials, labor, equipment, and overheads.
**Cost Management** #
**Cost Management**
: The systematic process of planning, controlling, and monitoring the costs asso… #
: The systematic process of planning, controlling, and monitoring the costs associated with a construction project, with the aim of maximizing value while minimizing waste and inefficiency.
**Design #
Bid-Build (DBB)**
: A traditional procurement method in which the employer engages a designer to p… #
: A traditional procurement method in which the employer engages a designer to prepare detailed designs, and then invites contractors to bid on the construction works based on those designs.
**Design #
Build (DB)**
: A procurement method in which the employer engages a single entity to both des… #
: A procurement method in which the employer engages a single entity to both design and construct the project, with the aim of facilitating collaboration, reducing costs, and accelerating the construction process.
**Earned Value Analysis (EVA)** #
**Earned Value Analysis (EVA)**
: A project management technique used to assess project performance, comparing t… #
: A project management technique used to assess project performance, comparing the value of work completed against the planned value and actual costs incurred.
**Employer's Requirements** #
**Employer's Requirements**
: A comprehensive and detailed document outlining the employer's objectives, sco… #
: A comprehensive and detailed document outlining the employer's objectives, scope, and technical requirements for a construction project, used as the basis for engaging a designer or contractor.
**Engineering, Procurement, and Construction (EPC)** #
**Engineering, Procurement, and Construction (EPC)**
: A procurement method in which the employer engages a single entity to undertak… #
: A procurement method in which the employer engages a single entity to undertake the engineering, procurement, and construction of a project, typically used in large-scale, complex construction projects.
**Evaluation of Tenders** #
**Evaluation of Tenders**
: The process of assessing and comparing the bids received from contractors, tak… #
: The process of assessing and comparing the bids received from contractors, taking into account factors such as price, quality, experience, and reputation, to determine the most suitable contractor for the project.
**FIDIC (Fédération Internationale des Ingénieurs #
Conseils)**
: An international organization that develops standard forms of contracts for us… #
: An international organization that develops standard forms of contracts for use in construction and engineering projects, with a focus on promoting fair and balanced contracts that facilitate collaboration and minimize disputes.
**Lump Sum Contract** #
**Lump Sum Contract**
: A type of construction contract in which the contractor agrees to complete the… #
: A type of construction contract in which the contractor agrees to complete the project for a fixed price, regardless of the actual costs incurred.
**Measurement Rules** #
**Measurement Rules**
: Standardized methods and procedures for measuring and quantifying the extent a… #
: Standardized methods and procedures for measuring and quantifying the extent and quality of construction works, used to ensure consistency and accuracy in the preparation of bills of quantities.
**Negotiation** #
**Negotiation**
: The process of engaging in discussions and bargaining with contractors to reac… #
: The process of engaging in discussions and bargaining with contractors to reach an agreement on the terms and conditions of a construction contract, typically used in design-build and EPC procurement methods.
**NRM (New Rules of Measurement)** #
**NRM (New Rules of Measurement)**
: A set of standardized measurement rules developed by the Royal Institution of… #
: A set of standardized measurement rules developed by the Royal Institution of Chartered Surveyors (RICS) for use in the preparation of bills of quantities and the measurement of construction works.
**Pricing of Bills of Quantities** #
**Pricing of Bills of Quantities**
: The process of determining the cost of each item in the bills of quantities, t… #
: The process of determining the cost of each item in the bills of quantities, typically carried out by contractors in the tendering process, to arrive at a total price for the project.
**Procurement** #
**Procurement**
: The process of acquiring goods, services, or works from an external source, ty… #
: The process of acquiring goods, services, or works from an external source, typically involving the preparation and issuance of tenders, evaluation of bids, and negotiation of contracts.
**Quantity Surveying** #
**Quantity Surveying**
: A professional discipline concerned with the measurement, valuation, and manag… #
: A professional discipline concerned with the measurement, valuation, and management of construction costs, typically carried out by quantity surveyors.
**Re #
measurement Contract**
: A type of construction contract in which the quantity of work is not fixed at… #
: A type of construction contract in which the quantity of work is not fixed at the time of contract signing, and the final price is determined based on the actual quantities of work carried out during construction.
**Risk Management** #
**Risk Management**
: The process of identifying, assessing, and mitigating risks associated with a… #
: The process of identifying, assessing, and mitigating risks associated with a construction project, with the aim of minimizing their impact on cost, schedule, and quality.
**Schedule of Rates** #
**Schedule of Rates**
: A list of standardized prices for common construction items, used as the basis… #
: A list of standardized prices for common construction items, used as the basis for pricing bills of quantities or re-measurement contracts.
**Single Stage Tendering** #
**Single Stage Tendering**
: A procurement method in which contractors are invited to submit a single, fixe… #
: A procurement method in which contractors are invited to submit a single, fixed price bid for a construction project, based on a detailed set of employer's requirements and bills of quantities.
**Two Stage Tendering** #
**Two Stage Tendering**
: A procurement method in which contractors are invited to submit a price for th… #
: A procurement method in which contractors are invited to submit a price for the design phase of a project, followed by a separate price for the construction phase, with the aim of facilitating collaboration and reducing risks.
**Variation Order** #
**Variation Order**
: A formal request to modify the scope, price, or schedule of a construction con… #
: A formal request to modify the scope, price, or schedule of a construction contract, typically involving additional costs or time extensions.
**Value Engineering** #
**Value Engineering**
: A systematic and creative approach to problem-solving and cost reduction, focu… #
: A systematic and creative approach to problem-solving and cost reduction, focused on optimizing the value of a construction project by identifying and eliminating unnecessary costs, while maintaining or enhancing functionality and quality.
**Works Contract** #
**Works Contract**
: A type of construction contract in which the contractor agrees to complete a d… #
: A type of construction contract in which the contractor agrees to complete a defined scope of work, with the price and quantity of work determined based on the actual work carried out during construction.