Essential Contract Documents and Equipment Economics

Vocabulary flashcards defined verbatim from the notes on contract documents, mass haul diagram concepts, equipment economics, ownership and operating costs, and construction economics principles.

Contract Document

A group of documents that define the price, conditions, clauses, schedule, and scope of the executed work.

Construction Contract

A legal agreement between contractors and clients.

The Construction Agreement

The most fundamental document in a construction contract; basically the contract itself.

General Conditions

The framework of the construction contract documents.

Special Conditions

An addition or amendment to the general conditions section of a contract.

Scope of Work

Also known as a statement of work, a crucial element of a construction contract.

Drawings

Contract documents that include a set of drawings or blueprints.

Specifications

Contract documents containing all technical data and performance requirements.

Bill of Quantities

An itemized list of the various materials, parts, and labor required.

Construction Schedule

A construction document whose updates should be readily accessible.

Schedule of Values

A document provided by a contractor that lists all the work items from start to finish.

Earthwork

The excavation of material from cutting and/or construction of embankments.

Borrow

Material not obtained from roadway excavation.

Waste

Excavated material from roadway cuts.

Overhaul

Excavated material transported to a distance beyond the free haul distance.

Economic Limit of Haul

The distance through which it is more economical to haul excavated material than to waste and borrow.

Mass Haul Diagram

A curve in which the abscissas represent the stations of the survey, and the ordinates represent the algebraic sum of excavation and embankment quantities.

Equipment Economics

The process of evaluating owning and operating costs to determine the most cost-effective equipment selection, utilization, and timing for a project.

Ownership Cost

Costs incurred for the equipment itself, regardless of whether it's being used; cumulative result of cash flows an owner experiences.

Initial Cost

The purchase price of the equipment.

Salvage Value

The estimated value of the equipment at the end of its useful life.

Depreciation

The decrease in the equipment's value over time.

Interest (Equipment Cost)

The cost of capital invested in the equipment.

Operating Cost

Costs arising from the actual use of equipment; the sum of expenses an owner experiences by using a machine on a project.

Mobilization and Demobilization

Costs to move the equipment to and from the job site.

Equipment Selection

Choosing the most appropriate equipment for a specific task based on cost-effectiveness.

Cost Calculation

Accurately estimating the cost per unit of production for bidding and project planning.

Replacement Analysis

Determining the optimal time to replace old equipment with new equipment to maximize profit and efficiency.

Principles of Construction Economics

The four key principles comprising Supply, Demands, Markets, and Types of Business.

Contract Document

Group of documents that define the price, conditions, clauses, schedule and scope of the executed work.

Construction Contract

Legal agreement between contractors and clients.

The Construction Agreement

Most fundamental document in a construction comtract; basically the contract.

General Conditions

Framework of the construction contract documents.

Special Conditions

An addition or amendment to the general conditions section.

Scope of Work

Known as a statement of work, is a crucial element of a construction contract.

Drawings

Include a set of drawings or blueprints.

Specifications

Contains all the technical data and performance requirements.

Bill of Quantities

Itemized list of the various materials, parts, and labor required.

Construction Schedule

A document whose updates should be readily accessible.

Schedule of Values

Provided by a contractor and lists all the work items from start to finish.

Earthwork

Excavation of material from cutting and/or construction of embankments.

Borrow

Not obtained from roadway excavation.

Waste

Excavated from roadway cuts.

Overhaul

Excavated material transported to a distance beyond the free haul distance.

Economic Limit of Haul

Distance through which it is more economical to haul excavated material than to waste and borrow.

Mass Haul Diagram

A curve in which the abscissas represent the stations of the survey, and the ordinates represent the algebraic sum of excavation and embankment quantities.

Equipment Economics

Correct and thorough understanding of equipment ownership and operation costs; process of evaluating owning and operating costs to determine the most cost-effective equipment selection, utilization, and timing for a project.

Ownership Costs

Cumulative result of those cash flows an owner experience; costs incurred for the equipment itself, regardless of whether it's being used.

Operating Costs

Sum of those expenses an owner experiences by using a machine on a project; costs that arise from the actual use of the equipment.

Initial Cost

The purchase price of the equipment.

Salvage Value

The estimated value of the equipment at the end of its useful life.

Depreciation

The decrease in the equipment's value over time.

Interest

The cost of capital invested in the equipment.

Taxes and Insurance

Property taxes and premiums paid to insure the equipment.

Storage

Costs associated with storing the equipment.

Fuel and Lubricants

The cost of fuel, oil, and other lubricants.

Maintenance and Repairs

Regular upkeep and the cost of fixing breakdowns.

Tires and Undercarriage

Costs for replacing wear-and-tear components.

Operator Wages

The cost of the equipment operator's labor.

Mobilization and Demobilization

Costs to move the equipment to and from the job site.

Equipment Selection

To choose the most appropriate equipment for a specific task based on cost-effectiveness.

Cost Calculation

To accurately estimate the cost per unit of production for bidding and project planning.

Buying vs. Renting vs. Leasing

To decide whether to own, rent, or lease equipment based on financial and operational needs.

Replacement Analysis

To determine the optimal time to replace old equipment with new equipment to maximize profit and efficiency.

Goal of Equipment Economics

To achieve a high level of operational efficiency and cost-effectiveness by carefully analyzing all related costs.

Principles of Construction Economics

1. Supply, 2. Demands, 3. Markets, 4. Types of Business.