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Contract management

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Estimate

Last Updated: December 19, 2024

Estimate is a challenging word in construction, since it can refer to so many different things. An estimate can mean a quote for a project. It can also be an internal cost budget prepared by the estimator. It can even be a ‘best guess at final cost’ in a Time and Materials contract. If you’re...

Deposit

Last Updated: December 19, 2024

A deposit is an amount of money given to the contractor in order to begin the project. Contractors usually use deposited funds to start purchasing materials and to pay for their labor costs as work ramps up. How deposits are applied against future invoices can vary from contractor to contractor. Some deposits are applied ratably...

Fixed price contract

Last Updated: December 19, 2024

A fixed price contract specifies that the scope of work quoted by a contractor will be performed for a fixed sum of money. Even if the contractor ends up spending much more than she/he expected to in order to complete the work, she/he will still be contractually obligated to only charge the client the fixed...

Markup

Last Updated: December 19, 2024

Markup refers to the increase applied to the estimated cost of something in order to arrive at the final bid value to be presented to the customer. Markup is not the same thing as margin; margin is the target profitability %, while markup is the % (or integer) the cost value is increased by to...

Time & Materials contract

Last Updated: December 19, 2024

Among the many types of construction contracts, Time & Materials (T&M) stands as one of the most commonly used in the construction industry. Under a Time & Materials contract, a subcontractor will be paid for the hours worked and materials used to complete a project. The main differentiator of this type of contract is that...

Change order

Last Updated: December 19, 2024

A change order, when signed, is a formal amendment to a contract specifying a change to the scope of work. A change order can either increase or decrease the scope of work, and so can either add or subtract from the total cost of the project. Typically, change orders are fixed-price; when a contractor wants...

E-signature

Last Updated: December 19, 2024

E-Signature is an electronic signature, which, under statutes in the United States, Canada, and many other countries throughout the world, are as legally-enforceable as wet-ink signatures. When you e-sign a document, you are committing to it to the same extent as if it were a paper copy you were signing with a pen. Also known...