Construction Contracting, Bonds, Insurance, and CSI Specifications

A set of vocabulary flashcards covering construction contract types, surety bonds, insurance concepts, and CSI specification formats based on lecture materials.

AE

Architects and Engineers who comprise the project design team hired by the owner.

Prime Contractor

The general contractor holding a direct contract with the owner, responsible for managing the project, subcontractors, and suppliers.

Requisition

A monthly payment request or invoice submitted by the contractor that must be reviewed and approved by the architect or engineer.

AIA Contracts

Standardized construction contract documents developed by the American Institute of Architects used to establish baseline terms and shift risks between parties.

Lump Sum Contract

A construction agreement where the contractor builds a project for a fixed total price, absorbing any cost overruns or keeping savings.

Cost Plus Fee Contract

A contract where the owner pays the actual expenses of the job plus a specified percentage fee to the contractor.

Unit Price Contract

A contract based on set rates per unit of measure, commonly used for unquantifiable work such as excavation or structural repairs.

Guaranteed Maximum Price (GMP)

A contract structure establishing a fixed upper cost ceiling, above which the contractor absorbs all financial losses.

Contingency

A set amount of funds allocated within a contract to absorb unexpected project costs or scope omissions, often split between owner and contractor if unused.

Surety

An entity licensed as an insurance company that provides a financial guarantee backing a contractor's obligations to an obligee.

Bid Bond

A bond usually valued at $5\%$ to $10\%$ of a bid, guaranteeing that a winning bidder will execute the contract and provide required final bonds.

Performance Bond

A bond guaranteeing to the owner that the contractor will perform and complete the work as agreed in the contract.

Payment Bond

Also known as a labor and material bond, this guarantees that the contractor will pay all subcontractors, suppliers, and laborers on the project.

Commercial Surety

A broad category of non-construction surety bonds encompassing license and permit bonds, public official bonds, court bonds, and utility deposit bonds.

Workers' Compensation

Insurance specifically covering medical costs and lost wages for employees injured on the job while employed directly by the contractor.

Experience Modification Rate (EMR)

A rating metric reflecting a company's past workers' compensation claims history, where a rating below $1.0$ indicates a favorable safety record.

General Liability Insurance

Insurance coverage protecting against third-party claims for personal injury or property damage caused on a construction site.

Umbrella Policy

An auxiliary insurance policy that provides additional monetary coverage beyond the limits of an underlying general liability policy.

Construction Specifications Institute (CSI)

The organization that established standard numeric divisions and formatting for construction technical specifications and project manuals.

MasterFormat

CSI's standard organizational framework containing $50$ divisions used to organize technical specifications and procurement requirements.

General Conditions

Contract specifications detailing the basic legal rights, administrative requirements, and overall operational responsibilities of the owner and contractor.

Supplemental Conditions

Project-specific additions or modifications to standard general conditions, covering items like soil testing, traffic control, or site safety plans.

Addendum

A formal modification or clarification to project plans and specifications issued by the design team prior to contract execution.

Alternate

A proposed addition (add) or deduction (deduct) to a project's base bid price based on alternative materials, equipment, or scopes of work.