Homework

Check to see if you understand all vocabularies below. If not, make sure to find out what it means. 1. Special condition Also: Supplementary Conditions Amendments to the General Conditions that change standard requirements to unique requirements, appropriate for a specific project. 2. Substantial completion Substantial completion is the point during construction at which the contractor is ready to turn the property over to the client for acceptance and final punch list. Usually occurs upon the issuance of a certificate of occupancy. Any items remaining to be completed should, at this point, be duly noted or stipulated in writing. 3. Surety Also: Surety bond Surety is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation. A third party, referred to as the surety, provides protection such that, if a default between two parties occurs that results in damage (e.g. loss of money or other value), the surety protect the damage party. 4. Progress chart A chart that shows various operations in a construction project, such as excavating and foundations, along with planned starting and finish dates in the form of horizontal bars. Progress is indicated by filling in the bars. 5. Pre-qualification Screening of potential contractors, suppliers, or vendors (on the basis of factors such as experience, financial ability, managerial ability, reputation, work history, etc.) to develop a list of qualified bidders who will receive the invitation-to-bid (ITB) documents. 6. Progress Payment A partial payment made under a construction contract as the project goes forward. 7. Retention An amount retained from construction contract payments (5-15% of the contract price) to ensure the contractor completes the construction before the retention is returned 8. Notice of award A letter from an owner to a contractor stating that a contract has been awarded to the contractor and a contract will be forthcoming

9. Change order Also: Contract Modification The document that alters the contract amount, contract time, or contract requirements of the original contract entered into by the owner and a contractor. 10. Punch list A punch list is a list of tasks that need to be completed to satisfy the terms of a construction contract. Such lists may be included in the contract itself, but more commonly, they are generated in the final phases of construction, as people walk around the site and note down any issues and deficiencies that need to be resolved. They are very useful for project management, whether people are dealing with a contractor or doing the work themselves, because it's easy to miss small details which can be problematic later. The term punch list is a reference to the fact that people used to punch a hole in the paper next to tasks which had been completed. Today, these lists may be managed as simple written checklists, or even in electronic form. Electronic ones are very convenient because they can be distributed to many people and may be updated instantly, allowing everyone to see progress. This can be especially important when multiple contractors need to address the same issue. 11. Liquidated damages An amount, specified in a contract for construction, to cover damages incurred by the owner as a result of the contractor's failure to complete the work within the timeframe set forth in the contract. 12. Invitation to bid A written notice of an owner's intention to receive competitive bids for a construction project wherein a select group of candidate constructors are invited to submit proposals. 13. Instructions to bidders A document included as part of the bidding requirements that sets forth specific instructions to candidate constructors on procedures, expectations and disclaimers of the owner, and other necessary information for the preparation of proposals for consideration by the owner for a competitive bid. 14. Lump sum contract A type of construction contract requiring the general contractor to complete a building or project for a fixed cost normally established by competitive bidding. The contractor absorbs any loss or retains any profit. 15. Unit price contract A construction contract in which payment is based on the work done and an agreed on unit price. The unit price contract is usually used only where quantities can be accurately measured. 16. Claim A contractor's request for additional compensation or an extension of time pursuant to the contract terms.

A formal notice sent by a contractor to an owner asserting the fact that the terms of the contract have been breached and compensation is being sought by the contractor from the owner. 17. Performance Bond A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. For example, a contractor may cause a performance bond to be issued in favor of a client for whom the contractor is constructing a building. If the contractor fails to construct the building according to the specifications laid out by the contract (most often due to the bankruptcy of the contractor), the client is guaranteed compensation for any monetary loss up to the amount of the performance bond. 18. Addenda Supplementary documentation issued prior to the contract award that changes or clarifies information stated in the bidding documents.