Glossary
Construction bid glossary
The vocabulary of comparing subcontractor bids, defined plainly. Written for estimators, general contractors, and anyone reading a proposal for the first time.
- AddendumAlso: addenda, bid addendum
- An addendum is a formal change to the bid documents issued by the design team during the bidding period. Read more
- AllowanceAlso: allowances, cash allowance
- An allowance is a fixed sum carried in a bid for work that is not yet defined well enough to price, to be reconciled against the actual cost later. Read more
- AlternateAlso: bid alternate, add alternate, deduct alternate
- An alternate is separately priced scope, added to or deducted from the base bid, that lets the owner decide at award whether to include it. Read more
- Apparent low bidderAlso: apparent low bid, apparent low
- The apparent low bidder is the bidder whose submitted price is lowest as read, before any review of scope, responsiveness, or qualifications has been done. Read more
- Apples-to-apples comparisonAlso: like-for-like comparison, apples to apples
- An apples-to-apples comparison is one where every bid covers the same scope, so the prices differ only by what the bidders charge rather than by what they included. Read more
- Base bidAlso: base price, base scope
- The base bid is the price for the work as specified in the contract documents, before any alternates, unit price adjustments, or allowances are applied. Read more
- Bid bondAlso: bid security, bid guarantee
- A bid bond is a surety guarantee that a bidder will honor its bid and enter into the contract at that price if the work is awarded to it. Read more
- Bid formAlso: proposal form, form of proposal
- The bid form is the document a bidder must complete and sign to submit its price, prescribed by the owner so that every bid arrives in the same structure. Read more
- Bid levelingAlso: bid levelling, leveling bids
- Bid leveling is the process of adjusting subcontractor bids onto a common scope so their prices can be compared like for like. Read more
- Bid packageAlso: bid packages, trade package, work package
- A bid package is the bundle of scope issued to subcontractors as a single unit for pricing, usually corresponding to one trade. Read more
- Bid shoppingAlso: bid peddling, shopping bids
- Bid shopping is disclosing one subcontractor's price to its competitors after bids are in, to pressure them into undercutting it. Read more
- Bid tabulationAlso: bid tab, bid tab sheet, bid tabulation sheet
- A bid tabulation, or bid tab, is the table that sets every bid for a package side by side so their prices and scope can be read against each other. Read more
- BuyoutAlso: subcontractor buyout, bought out
- Buyout is the process, after a project is won, of converting each estimated scope into a signed subcontract at an agreed price. Read more
- By othersAlso: work by others, BO
- "By others" is a note a bidder places against work it is not pricing, indicating the work is expected to be performed by some other party. Read more
- Change orderAlso: CO, contract change order
- A change order is a written amendment to a contract that adds, removes, or modifies work, adjusting the contract price and schedule accordingly. Read more
- ContingencyAlso: construction contingency, contingency allowance
- A contingency is money carried in a budget for costs that are expected to arise but cannot yet be identified, as distinct from a specific scope whose price is not yet known. Read more
- Cost per square footAlso: $/SF, cost per SF, dollars per square foot
- Cost per square foot, written $/SF, is a price divided by the building area it covers, used to compare projects and bids of different sizes. Read more
- CSI MasterFormatAlso: MasterFormat, CSI divisions, CSI
- CSI MasterFormat is the standard numbering system that organizes construction specifications into numbered divisions and sections. Read more
- Escalation clauseAlso: price escalation, material escalation clause
- An escalation clause is a contract provision allowing a price to be adjusted if the cost of specified materials rises beyond an agreed threshold before they are purchased. Read more
- ExclusionsAlso: exclusion, excluded scope
- Exclusions are the items a bidder states are not included in its price. Read more
- Front-loadingAlso: unbalanced bid, front loaded schedule of values
- Front-loading is assigning more value to early line items on a schedule of values than they actually cost, so that a contractor is paid more than it has earned in the opening months. Read more
- General conditionsAlso: GCs, general conditions costs
- General conditions are the project-specific costs of running a job that belong to no trade — supervision, the site office, temporary utilities, cleanup, and similar. Read more
- General requirementsAlso: Division 01, Div 1
- General requirements are the Division 01 specification sections that set the administrative and procedural rules of a contract — submittals, meetings, closeout, quality control, and site conduct. Read more
- Hoisting and riggingAlso: hoisting, rigging, crane time
- Hoisting and rigging is the lifting and placement of materials and equipment on site — cranes, hoists, forklifts — and the question of who provides and pays for it. Read more
- Invitation to bidAlso: ITB, invitation for bid, IFB
- An invitation to bid is the notice sent to selected contractors asking them to price a defined scope, stating what is being bid, on what terms, and by when. Read more
- Liquidated damagesAlso: LDs, liquidated damages clause
- Liquidated damages are a fixed sum, agreed in advance and usually stated per day, that a contractor owes the owner if the work finishes later than the contract requires. Read more
- Long-lead itemAlso: long lead time item, long-lead equipment
- A long-lead item is material or equipment whose manufacturing and delivery time is long enough that it must be ordered well before it is needed, or it will delay the job. Read more
- MarkupAlso: mark-up, contractor markup
- Markup is the amount added to a direct cost to arrive at a selling price, expressed as a percentage of that cost. Read more
- MobilizationAlso: mobilisation, mob
- Mobilization is the work of getting set up on site before production begins — moving in equipment, establishing the site office and utilities, and staging materials. Read more
- NIC (not in contract)Also: NIC, not in contract
- NIC — "not in contract" — is the notation a bidder uses to mark work it has deliberately excluded from its price. Read more
- Overhead and profitAlso: O&P, overhead & profit
- Overhead and profit is the markup a contractor adds to its direct costs to cover the expense of running the business and to earn a return on the work. Read more
- Performance and payment bondAlso: P&P bond, payment and performance bond, performance bond
- A performance and payment bond is a pair of surety guarantees: one that the contractor will complete the work as contracted, the other that it will pay its subcontractors and suppliers. Read more
- Plug numberAlso: plug, plugged number, carried number
- A plug number is a placeholder figure an estimator carries for a scope with no bid yet, so the overall estimate stays complete. Read more
- Prevailing wageAlso: Davis-Bacon, prevailing wage rate
- A prevailing wage is the minimum hourly rate and fringe benefits that must be paid to workers on certain public construction projects, set by government determination for each trade and locality. Read more
- QualificationsAlso: qualification, clarifications, assumptions
- Qualifications are the conditions and assumptions a bidder attaches to its price — the circumstances under which that number holds. Read more
- Quantity takeoffAlso: takeoff, take-off, quantity survey
- A quantity takeoff is the measurement of materials and work quantities from the drawings — square feet, linear feet, cubic yards, counts — that an estimate is built on. Read more
- Request for informationAlso: RFI, RFIs
- A request for information is a formal written question from a contractor to the design team seeking clarification of something the contract documents do not resolve. Read more
- RetainageAlso: retention, retainage withheld
- Retainage is a percentage of each progress payment that is withheld until the work is complete, as security that the contractor will finish and correct its work. Read more
- Sales tax on materialsAlso: material sales tax, sales and use tax
- Sales tax on materials is the tax owed on construction materials, whose treatment varies by state and by project and is a common source of inconsistent bids. Read more
- Schedule of valuesAlso: SOV, schedule of value
- A schedule of values is the breakdown of a contract price into line items, used to measure progress and to determine how much is payable in each application for payment. Read more
- Scope gapAlso: scope gaps, gap in scope
- A scope gap is work required by the project that no bidder included in its price, because every bidder assumed someone else was carrying it. Read more
- Scope letterAlso: scope sheet, scope of work letter
- A scope letter is the written statement accompanying a subcontractor bid that sets out exactly what the price includes, excludes, and assumes. Read more
- Scope of workAlso: SOW, scope
- A scope of work is the written definition of what a package or contract covers — the work a bidder is being asked to price. Read more
- Self-performAlso: self-performed work, self perform
- To self-perform is for a general contractor to carry out work with its own employees rather than subcontracting it to a specialty trade. Read more
- Shop drawingsAlso: shop drawing, fabrication drawings
- Shop drawings are detailed drawings prepared by a contractor, fabricator, or supplier showing how a specific element will actually be fabricated and installed. Read more
- Subcontractor prequalificationAlso: prequalification, prequal, subcontractor prequal
- Subcontractor prequalification is the process of vetting a subcontractor's capacity, financial standing, and safety record before inviting it to bid. Read more
- SubmittalAlso: submittals, product submittal
- A submittal is documentation a contractor provides for review before fabrication or installation — product data, samples, or shop drawings — showing that what will be supplied meets the specification. Read more
- Temporary facilitiesAlso: temp facilities, temporary utilities, temp power
- Temporary facilities are the services and structures a site needs while it is being built — power, lighting, water, heat, sanitation, fencing, and the site office. Read more
- Unit priceAlso: unit prices, unit rate
- A unit price is a rate per unit of measure — per cubic yard, per linear foot — used for work whose quantity cannot be known when the bid is submitted. Read more
- Value engineeringAlso: VE, value engineering proposal
- Value engineering, or VE, is the process of finding lower-cost ways to deliver the same function, usually triggered when a project comes in over budget. Read more
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