Essential Contract Documents and Equipment Economics

Vocabulary flashcards covering contract documents, earthworks definitions, mass haul diagrams, and equipment economics concepts.

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, which is basically the contract itself.

General Conditions

The framework of the construction contract documents.

Special Conditions

An addition or amendment to the general conditions section.

Scope of Work

Also known as a statement of work, it is 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 for a project.

Construction Schedule

A project management tool where updates should be readily accessible.

Schedule of Values

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

Earthwork

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

Borrow

Excavated material that is not obtained from roadway excavation.

Waste

Excavated material obtained 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

A correct and thorough understanding of equipment ownership and operation costs, or the process of evaluating these costs to determine the most cost-effective selection, utilization, and timing for a project.

Ownership Costs

Costs incurred for the equipment itself, regardless of whether it is being used, representing cumulative cash flows an owner experiences.

Operating Costs

Expenses an owner experiences by using a machine on a project, arising from its actual use.

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 equipment.

Taxes and Insurance

Property taxes and premiums paid to insure equipment as part of ownership costs.

Storage Costs

Ownership costs associated with storing equipment.

Fuel and Lubricants

Operating costs covering fuel, oil, and other lubricants.

Maintenance and Repairs

Operating costs for regular upkeep and the cost of fixing breakdowns.

Tires and Undercarriage Costs

Operating costs for replacing wear-and-tear components on equipment.

Operator Wages

Operating costs representing the cost of the equipment operator's labor.

Mobilization and Demobilization

Operating costs required to move equipment to and from the job site.

Equipment Selection

A key application of equipment economics to choose the most appropriate equipment for a specific task based on cost-effectiveness.

Cost Calculation

An application of equipment economics to accurately estimate the cost per unit of production for bidding and project planning.

Buying vs. Renting vs. Leasing

An evaluation in equipment economics to decide whether to own, rent, or lease equipment based on financial and operational needs.

Replacement Analysis

An analysis used 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

The four fundamental principles comprising: 1. Supply, 2. Demands, 3. Markets, and 4. Types of Business.