Beacon News

By John Yeung, Vice President, Beacon Consulting Group, Inc.

Whether you’re new to the construction industry, a professional from a related field (surety claims, insurance, law, or finance), or an owner looking to better understand your project, this glossary breaks down 55 more of the most commonly used — and sometimes misunderstood — construction terms. From contracts to job‑site lingo, this is your go‑to cheat sheet. To see Beacon's previous list of common construction terms, please click here.

Contracts & Project Delivery

1. Construction Manager at Risk (CMAR) — A delivery method where the CM provides pre-construction services, then holds the trade contracts and delivers the project for a Guaranteed Maximum Price (GMP), carrying cost and schedule risk.

2. Progressive Design-Build — A two‑phase design‑build model: team selection and preliminary services first, then scope/price progress to a final agreement as design advances, emphasizing collaboration and early cost transparency.

3. Guaranteed Maximum Price (GMP) — A cap on the owner’s cost (subject to defined allowances, contingencies, and changes), with savings and overruns handled per contract.

4. Lump Sum (Stipulated Sum) Contract — Contractor delivers the defined work for a fixed price; risk of quantities and means/methods largely sits with the contractor.

5. Unit Price Contract — Work is paid at agreed unit rates multiplied by actual installed quantities; commonly used when exact quantities aren’t known at bid time.

6. Cost‑Plus (Cost‑Reimbursable) Contract — Owner pays actual, allowable costs plus a fee (fixed or variable); often used when scope is evolving.

7. Allowance — A budget placeholder in the contract for items not fully defined at award (e.g., finishes), later reconciled to actual cost via change mechanisms.

8. Alternate (Additive/Deductive) — A defined option to add or subtract scope and price from the base bid for owner selection.

9. Escalation Clause — A contractual provision that adjusts price for market‑driven cost changes (e.g., materials, fuel) according to agreed indices or triggers.

10. Waiver of Consequential Damages — Mutual waiver (often per AIA A201) eliminating recovery of indirect losses like lost profits or use, to reduce claim volatility.

11. No‑Damages‑for‑Delay (NDD) Clause — Limits a contractor’s remedy for certain delays to time extensions only (no money), subject to jurisdictional exceptions.

12. Pay‑If‑Paid Clause — Makes subcontractor payment contingent on owner payment to the GC, shifting nonpayment risk downstream (often restricted by statute).

13. Pay‑When‑Paid Clause — A timing mechanism: GC must pay subs within a stated period after owner payment, without eliminating the ultimate duty to pay.

14. Constructive Acceleration — When a contractor accelerates to meet original dates after a justifiable time extension is denied or delayed, preserving rights to added cost.

15. Constructive Change — An owner action/inaction that effectively alters contract requirements without a formal change order, entitling the contractor to an equitable adjustment.

Planning, Scheduling & Controls

16. Work Breakdown Structure (WBS) — A hierarchical decomposition of project scope into manageable work packages for estimating, scheduling, and control.

17. Baseline Schedule — The owner‑approved schedule against which progress, slippage, and changes are measured.

18. Resource Leveling — Adjusting activity start/finish to resolve resource over‑allocations while respecting logic and constraints.

19. Crashing — A schedule compression technique that adds resources (and cost) to shorten durations on the critical path.

20. Earned Value Management (EVM) — An integrated method comparing planned value, earned value, and actual cost to quantify cost/schedule performance.

BIM & Digital Delivery

21. Building Information Modeling (BIM) — A digital process for creating and using coordinated, computable building information across the facility lifecycle.

22. Level of Development (LOD) — A standardized way to define how much detail, reliability, and authorized use a model element has at each stage.

23. Clash Detection — Model‑based checks to find conflicts (e.g., duct vs. beam) before field installation.

24. BIM Execution Plan (BEP/BIMxP) — The team’s playbook for BIM scope, roles, standards, model handoffs, and exchange requirements.

25. COBie — A structured data format for handing off equipment/asset info to operations and maintenance.

26. OmniClass — An industry classification framework used to organize built‑environment information (often paired with BIM standards).

27. UniFormat II — A systems‑based classification for programming, estimating, and early specifications by building elements.

Surety, Risk, and Insurance

28. Builder’s Risk Insurance — First‑party property coverage that protects a project during construction (e.g., materials, equipment, and the work in place), typically excluding contractor tools and liability claims.

29. Owner‑Controlled Insurance Program (OCIP) — A wrap‑up in which the owner purchases consolidated insurance (often workers’ comp, GL/excess, and sometimes pollution and builder’s risk) that covers enrolled contractors on designated projects.

30. Contractor‑Controlled Insurance Program (CCIP) — Similar to an OCIP, but procured and administered by the general contractor to cover enrolled parties on a project or program of projects.

31. Additional Insured (AI) — Status granted by endorsement so an owner or other upstream party is insured under a contractor’s liability policy for covered claims arising out of the contractor’s work. Proof via certificate alone is not enough—an AI endorsement is required.

32. Primary & Noncontributory — A policy condition often required of contractors stating their liability insurance will respond first to a claim (primary) and will not seek contribution from the owner’s insurance (noncontributory).

33. Waiver of Subrogation — An agreement (often by endorsement) in which one party’s insurer waives its right to pursue reimbursement from another party for paid claims, helping prevent post‑loss disputes among project participants.

34. Certificate of Insurance (COI) — Evidence of insurance issued by an insurer or broker summarizing coverages and limits; it does not grant rights or change policy terms. Endorsements (e.g., AI, waiver of subrogation) must accompany the COI to be effective.

35. Subcontractor Default Insurance (SDI) — First‑party insurance purchased by a GC to cover certain costs when a subcontractor defaults (an alternative or complement to surety bonds); coverage terms and triggers differ materially from bonds.

Lean & Collaboration

36. Target Value Design (TVD) — Designing to a cost: the team sets a target and steers design decisions to meet value and budget simultaneously.

37. Last Planner® System (LPS) — A collaborative production planning system that improves reliability through commitments made by those doing the work.

Preconstruction, Site Conditions & Technical Docs

38. Owner’s Project Requirements (OPR) — The owner’s performance goals and priorities that guide design, construction, and commissioning.

39. Basis of Design (BOD) — The designer’s documented approach and criteria showing how the OPR will be met.

40. Constructability Review — A structured, early review of design documents to improve buildability, clarity, cost, schedule, and risk.

41. Geotechnical Data Report (GDR) — The factual subsurface data (borings, lab results) compiled for proposers and designers.

42. Geotechnical Baseline Report (GBR) — The contract’s stated baseline of anticipated ground conditions used to price subsurface risk.

43. Differing Site Conditions (DSC) Clause — Allocates risk and remedies when actual site conditions materially vary from the contract’s indications or normal expectations.

Environmental & Safety

44. Stormwater Pollution Prevention Plan (SWPPP) — A site‑specific plan detailing best management practices to control erosion and stormwater pollutants during construction.

45. NPDES Permit (Construction) — Authorization under the Clean Water Act to discharge stormwater from qualifying construction sites, with SWPPP requirements.

46. Job Hazard Analysis (JHA) — A stepwise review of a task to identify hazards and define controls, often used to create safe‑work procedures.

Building Enclosure (Envelope)

47. Air Barrier — The continuous system that controls unintended air leakage through the enclosure to improve durability, indoor air quality, and energy performance.

48. Vapor Retarder — A material/system that limits water‑vapor diffusion through assemblies; class and placement depend on climate and design.

49. Thermal Bridge — A location where heat bypasses insulation through more conductive materials, increasing energy loss and condensation risk.

Commissioning & Closeout

50. Commissioning Authority (CxA) — The independent party leading and verifying the commissioning process, from design reviews through functional testing and training.

51. Systems Manual — The owner‑facing, plain‑language guide compiling design intent, sequences, setpoints, O&M data, and training materials for operations.

Structural & Materials

52. Post‑Tensioning (PT) — A prestressing method where steel tendons are tensioned after concrete cures, enhancing span and crack control.

53. Self‑Consolidating Concrete (SCC) — Highly flowable, non‑segregating concrete that fills forms and encapsulates rebar without vibration.

54. Insulating Concrete Forms (ICFs) — Stay‑in‑place insulated forms filled with reinforced concrete, delivering robust structure and thermal performance.

55. Structural Insulated Panels (SIPs) — Factory‑made structural sandwich panels (insulation core + structural facings) used for walls/roofs to speed enclosure and improve airtightness.

Please click here for our Vol. 1 list of construction industry terms.