Construction glossary: bid, scope and subcontractor terms
Short, plain definitions of the terms that come up when you bid, scope and manage trade work, each linked to the longer guide where there is one.
Plain-language definitions of terms used when bidding, scoping and managing trade work in Canada. They are general, not legal advice: contracts, provinces and insurers differ, so check your own documents for what applies to you.
Acceptance criteria
The conditions a deliverable must meet before it is accepted as done, written so two people would reach the same conclusion. See how to write a scope of work.
Addendum
A written change or clarification to the bid documents, issued by the owner or consultant while bidding is open. Bidders are normally expected to price from the latest set and acknowledge each one. See how to handle RFP addenda.
Bid leveling
Comparing subcontractor bids like for like by checking what each one includes and excludes, then adjusting for the gaps so the prices can be compared fairly. See how to level bids.
Bid or no-bid
The decision to price and submit a bid on a job, or to pass on it, made before spending time on the estimate. See how to decide.
Bid security
A guarantee, such as a bid bond or a deposit, that the bidder will sign the contract at the bid price if it is awarded. Whether it is required, and in what form, is set in the bid instructions.
Change order
A written record of a change to the agreed scope: what was added, removed or altered, the effect on cost and schedule, and who approved it. See change orders and scope creep.
Clarification
An answer that explains what the documents already mean, without adding or removing work. It is usually obtained through an RFI and kept on file.
Clearance certificate (WSIB)
In Ontario, a number issued by WSIB showing that a business is registered and up to date with WSIB. See WSIB clearance certificates for what WSIB says about when one is needed and how long it lasts.
Exclusion
Work, materials or conditions that a scope or a bid states are not included, written so that no one assumes they are covered.
General contractor
The company that holds the main contract with the owner and manages the project, often hiring subcontractors for individual trades.
Holdback
An amount withheld from payments for a period and released later, as set by the contract and the law. The rules vary by province and contract, so check yours.
Liquidated damages
A pre-agreed amount, often per day, that the contract says a party owes for a delay such as finishing late. The amount and the conditions are set in the contract.
Milestone
A checkpoint in the work with a clear definition of done. In ScopeMark a milestone is a progress checkpoint, backed by photos and confirmed by the company; confirming one raises that milestone's invoice (a checkpoint with no amount raises none), and ScopeMark moves no money.
Principal
In WSIB's clearance rules, the business that hires a contractor. WSIB says a contractor who hires a subcontractor becomes the principal to that subcontractor. See the WSIB guide.
RFI (request for information)
A written question sent during bidding or construction about something unclear or conflicting in the documents. See how to track RFIs.
RFP (request for proposal) or tender
An invitation to submit a proposal or price for a defined piece of work. Some use "tender" for a price against fully defined documents and "RFP" where approach is also assessed; your documents say which applies. See how to review a tender.
Scope creep
Extra work that slips in without being agreed, priced or recorded. A change order is how a real change is recorded properly instead.
Scope of work
The written description of the work: what is delivered, what is excluded, the milestones and how completion is judged. See how to write one.
Site visit
A walk-through of the work location arranged during bidding. Some bids make it mandatory, and missing a mandatory visit can disqualify a bid.
Specifications
The written technical requirements for materials, products and workmanship, read together with the drawings.
Subcontractor
A company hired by a general contractor, or by another contractor, to do part of the work, usually one trade. In ScopeMark, subcontractors join by invitation from a company they work with.
Trade package
The part of a project written up for one trade to price, with its own scope, inclusions and questions, so the bids that come back can be compared.
Questions people ask
What is the difference between an RFI and an addendum?
An RFI is a question you send. An addendum is a written change or clarification the owner or consultant issues to all bidders. An answer to an RFI is sometimes shared as an addendum.
What is the difference between a clarification and a change order?
A clarification explains what the documents already mean and adds no work. A change order records a real change to the scope, with its cost and schedule effect.
What is scope creep?
Scope creep is extra work that slips in without being agreed, priced or recorded. Writing a change order for each real change is how to stop it.
Does ScopeMark hold or move our money?
No. ScopeMark does not process payments between companies and subcontractors. The buyer pays directly, outside ScopeMark, and records the payment. ScopeMark's only revenue is its subscription.