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Construction Terms Glossary

Conwize Construction Industry Terms Glossary Contents

Bonding Capacity: A contractor’s financial and performance limits for securing bonds

Term Definition - Bonding capacity is a financial metric that represents the maximum value of surety bonds a contractor can

Budget Estimate: An early-stage approximation of project costs

Term Definition - A budget estimate, also known as a preliminary estimate or a Class 5 estimate, is an approximate

Cash Flow Projection: A forecast of money coming in and out of a project

Term Definition - A cash flow projection is a financial forecast that estimates the timing and amount of money a

Change Order: A formal modification to a construction contract’s scope, cost, or schedule.

Term Definition - A change order is a formal, written agreement that amends the original construction contract by modifying the

Claim Management: The systematic process of handling formal contract disputes

Term Definition - Claim management is the structured and proactive process of identifying, documenting, preparing, and resolving formal claims on

Competitive Bidding: A Formal Process for Selecting a Contractor Based on the Lowest Responsible Bid

Term Definition: Competitive bidding is a procurement method used in construction projects where multiple contractors submit bids to undertake a

Concept Estimate: An early-stage cost projection used to evaluate the feasibility of a construction project

Term Definition: A concept estimate is a preliminary cost forecast prepared during the earliest phase of a construction project —

Contingency: A financial allowance set aside to cover unforeseen costs and risks in a construction project

Term Definition: In construction, a contingency is a specific amount of money or percentage of the total project cost reserved

Contract Award: The Owner’s Formal and Binding Acceptance of a Contractor’s Proposal

Term Definition: A contract award is the official act by which a client or project owner selects and grants a