Provoc – Glossary of Common Project Control · PDF fileProvoc – Glossary of Common Project Control Terms Page 4 of 31 An estimate generated against a defined scope of work and

Provoc – Glossary of Common Project Control Terms

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KEY:(VQ) Vocational Qualification term(R) Risk Term

A

AccountGrouping of costs for administration and controlpurposes

Account CodeUnique identifier for a cost account, the code canbe alpha, numeric or a combination

Accounts PayableValue of goods and services received and yet to bepaid for

AccountabilityThe point of budget authority and controlresponsibility – usually an individual will haveauthority for control within the defined scope.

Accounts ReceivableValue of goods and services executed and for whichpayment is yet to be received

Accreditation (VQ)The acceptance of qualifications by QCA and SQAas meeting the criteria specified for NVQs andSVQs. Organisations can also be accredited tocarry out assessment.

AccrualCost of work/services received, and not yetinvoiced/paid for, but recorded in the accounts.

Accrual BasisAccounting records for costs incurred and incomeearned

Accrued CostTotal spends to date plus accruals.

Accrued IncomeTotal recorded income plus income associated withaccrued work..

Accuracy FactorFactor expressing the range or the level of accuracyof an estimate

A Cost EAssociation of Cost Engineers.

ActivityAn operation or process with defined a definedduration.. May have an associated cost, a numberof these logic linked will underpin the lowest levelin a Work Breakdown Structure,

Activity-On-Arrow Network DiagramA network presentation where the arrows representnetwork activities, the nodes represent end events.

Activity-On-Node Network Precedence Diagrama network presentation where the nodes symbolisethe network activities.

Activity RelationshipLogical link between two activities(directionrepresented by arrow):Four common relationships are: -

F.S. Finish to Start.S.S. Start to Start.F.F. Finish to Finish.S.F. Start to Finish.

Activity SamplingA method of recording work activity in a satisticalmanner in order to allow an analysis of the totalactivity.

ActualsRecording of actual achievements for cost/revenue/time against planned elements

Actual Cost of Work Performed (ACWP)Recorded cost or value of work or service actuallycompleted.

Advanced FundingFunds made available prior to formalfunding/contract , to cover payment for goods orservices contracted or delivered prior to formalfunding/contract.

AFC1) Approved for construction.2) Anticipated final cost.

AFDApproved for design.


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Ageing RatePre-determined level of depreciation expense orcapital cost for given unit of time.

AllowancesProvision made for work which it is known byexperience will occur, but for which there is noinformation at the time of estimate preparation. Seealso Growth.

AncillariesNeeded auxiliary items/materials, usuallyunspecified, particularly of plant and equipment.

Anticipated Final CostSee Forecast Final Cost.

APL(VQ)Accreditation of prior learning. A process whichenables individuals to gain credit on the basis ofpast achievements, learning and experience.

APMAssociation of Project Management

AppropriationAuthorised allocation of funds for specific futurework.

Appropriation EstimateEarly cost estimate, for budget purposes, usually byClient, based on preliminary but largely fixed designdata to an accuracy of – 15% to +25%, to establishviability of proposed project and secure necessaryadvanced funding approval to generate a class IIestimate, also known as class III, evaluation, outlinedefinition, pre sanction and study or scopeestimate.

Appropriation RequestFormal request for management approval of fundingfor a future project.

Approved BudgetSee Authorised Budget.

Approved Centre (VQ)

An organisation accredited by an Awarding Bodyto carry out the assessment of candidates and torecommend the award of an NVQ or SVQ.

Approved ChangeSee Authorised Change.

As-Sold EstimateFinal purchase or contract sales estimate, inclusiveof all pre-contract changes and adjustments toreflect the actual as sold scope of supply or scopeof work.

As-Sold PriceActual value of purchase order or contract as sold,inclusive of all escalation and other price variationconditions.

Assessment(VQ)The judgement of performance and knowledgeevidence to decide whether competence has beenachieved.

Assessment Plan(VQ)A plan detailing the methods and opportunities bywhich evidence covering each element ofcompetence is to be generated, collected andevaluated.

Assessor(VQ)A person registered and approved as competent toassess candidates in a particular range ofoccupations.

AssetsCurrent value of property, investments, stock andcash.

Asset Reference PlanPlan setting out the main elements of how an assetwill be developed and operated from inceptionthrough to disposal..

Assets RegisterSee Fixed Assets Register.

AuditIndependent verification of a projects current statusagainst the target cost schedule and/or codes ofpractise.

Authorised Budget


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Any budget duly approved by pre-defined level ofauthority.

Authorised ChangeApproved change to a previously authorisedcost/scope/time by the appropriate authority.

Authorised CostAny cost: actual, estimated or budgeted, approvedby the appropriate authority.

Authorised EstimateEstimate approved by the appropriate authority.

Authorised ManhoursEstimate of budgeted manhours approved by theappropriate authority.

Authorised Variation (Cost, time, scope)Client or buyer approved change to previouslyissued contract or purchase order.

Auxiliary FacilitiesNon-productive supporting elements, particularly infactory or plant, such as administrative buildings,utilities, services, etc.

Available CapitalValue of funds available for capital investment,purchase of goods or services, etc.

Average Annual CostConversion of all capital and operating costs to aseries of equivalent annual expenses.

Average CostArithmetical mean cost = total expense divided bytotal quantity

Average Investment ReturnSummation of fixed and variable dividends or profitsnormally expressed as a percentage of the capitalcost employed.

Average Overhead RateRatio of indirect to direct expenses normallyexpressed as a percentage per annum.

Awarding Body (VQ)

A body approved by the Qualifications andCurriculum Authority(QCA) and /or the ScottishQualification Authority (SQA) for the purpose ofawarding an NVQ or SVQ.

B

Back chargeClaim made against supplier, contractor or subcontractor for remedial work, loss or damagesuffered in respect of goods or services notreceived to agreed standard/timing.

Backward Pass (Backward Plan) Critical path calculation process which havingcalculated earliest date for activities on the network.Works backwards to find activities latest start andfinish dates/float

Ballpark EstimateSee Order of Magnitude Estimate.

Bar ChartA chart on which activities and their durations arerepresented by lines to a time scale.

Bar Chart ScheduleGraphical representation of project activities orresources drawn as horizontal lines against acommon time scale.

Base CostCost (estimate or estimate item) established as abasis for calculating escalation, changes,provisions or other related variance.

Base Line A set of dates and costs frozen at the start of theproject and used as a basis for comparison as theproject progresses.

Base DateDate set as a programme/estimate base forcalculating price variations, forward escalation,currency differentials or other time-based cost data.Base Estimate


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An estimate generated against a defined scope ofwork and established as a basis for evaluatingsubsequent adjustments, modifications or changes.

Base Exchange RateA currency exchange rate used in preparation of acost estimate or budget and established as a basisfor calculating subsequent actual currencydifferentials or variances.

Base RateRate used as a basis for evaluation of the effect offuture changes in interest charges..

Basic PriceStandard rate or value adjustable by discount,escalation or variation to suit specificcircumstances applications and/or arrangements.

Basic TimeA term used in Work Study to define the time takento achieve a task by a normally motivated andskilled operative, net of all allowances for relaxation,remedial works and other non-productive time.

Battery LimitsThe boundary/maximum extent of a contractscope, area or system often used to manageinterfaces between contract or commissioningof systems

BenchmarkA comparable standard for a generic group.

Benefit (R)Assessed chance and impact of a potentiallyadvantageous occurrence.

Benefit of FinanceInterest calculation based on the net cash flow andcalculated on an average weekly basis.

Bid Analysis (Tender Analysis)Activity of analysing suppliers’ quotations orcontractors’ tenders.

Bid Bond

Sum provided by bidder as guarantee that the bidwill be submitted, and if accepted, the bidder willproceed into the contract.

Bid CheckReview of suppliers’ quotations or contractors’tenders, for compliance with the bid instructions..Bid ComparisonDocument for comparison of suppliers’ quotationsor contractors’ tenders, as part of the selectionprocess.

Bid EstimateSee Tender Estimate.

Bid EvaluationSee Bid Analysis.

Bid QuantitiesMaterial or construction quantities issued tosuppliers or contractors for bidding purposes.

Bid TabulationProcess of summarising the results of Bid Analysisfor comparison purposes.

Bill of MaterialsList of material quantities estimated or measuredfrom drawings for estimating or procurementpurposes.

Bill of QuantitiesList of construction quantities estimated ormeasured from drawings for tender pricing andcontract payment purposes.

Bill of Quantities ContractContract awarded against a Bill of Quantities forwhich payment is made in accordance with the unitprices contained in the bill of quantities.

BondSum of money, securities or a guarantee of a thirdparty to guarantee completion of the work and/orrecovery of sums payable if owed by the contractorunder the terms of the contract.

Bonus


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Incentive payment over and above agreed wage orcontractual reimbursement, usually relating toachievement targets.

Bonus Incentive/Bonus SchemePayment framework agreement, to increase outputfrom work force, by payingt for achievementagainst a range of targets.

Bonus/Penalty ClauseContractual incentive placed on supplier orcontractor to achieve certain completion targets forwhich a bonus payment is earned or a financialpenalty incurred.

Book ValueAsset as recorded in the books of a business.

BrainstormingStructural collection of ideas/solutions against aparticular issue/topic. Often done in a workshopenvironmentBudget(1) Authorised target for project achievement, or

part thereof usually expressed in terms ofquantities, manhours or costs.

(2) An approved financial or quantitative planagainst financial periods, and used as abenchmark against which achievements can becompared / referenced

Budget CentreA Financial Centre that owns and controls its ownbudget.

Budget CostThe target cost for completion of the work package.

Budget Cost of Work Performed (BCWP)Budget value for work completed or servicesrendered, at cut off date.

Budget Cost of Work Scheduled (BCWS)Budget value for work or service planned(scheduled) to be completed or rendered at the cutoff date.

Budget EstimateSee Class II Estimate.

Budget Transfer

Authorised adjustment to budget targets which donot increase or decrease the total budget.

Budget Unit CostUnit cost applied to budget item quantities tocalculate the item budget cost.

Budget VarianceVariance between budget and actual/forecast:quantities, manhours or costs.

Budgetary ControlThe continuous comparison of actual with thebudget values in order to maintain costs in line withthe budget or to provide a basis for its revision.

Building ServicesMechanical, electrical or other specialised utilitieswithin a building or plant.

Bulk Factors (1)Multipliers applied to manufactured equipmentcosts to calculate erected plant or total installationcosts, including associated bulk materials andancillaries.

Bulk Factors (2)Index for granular and earthworks materials, to allowfor the increase in volume of an excavated materialremoved from its original state – needing moreprovision for transporting, storing and disposalthan its net volume.

Bulk MaterialsAny material purchased in bulk.

BurdenOverhead expenses distributed as an add-on cost todirect cost.

Buying Gain/LossThe difference between the budget provision for amaterial or service and the contracted cost paid bythe contractor.

C

Cancellation ChargesContract charges submitted by a supplier orcontractor in the event of cancellation of purchaseorder or termination of contract by client or othersCancellation Costs


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Costs incurred on a project due to cancellation ortermination of an issued purchase order or contract.

Capacity FactorTerm used in Estimating in respect of the capacityratio between two similar plants.

CapitalMoney invested or available for investment againstwhich earnings and dividends are assessed.

Capital BudgetingDefined allocation of capital resources for approvedfuture investment.

Capital Cost EstimateA proposed fixed asset cost estimate, coveringdesign, supply and installation costs, but excludingany financing or operating costs.

Capital ExpenditureExpenditure arising from the implementation of afixed asset or improvement of an existing asset.

Capital RecoveryRecovery of capital invested in a project over itsoperating, including allowed depreciation.

Cascade ChartA bar chart where the vertical presentation showseach activity as dependent on activities higher inthe list.

Cash /Monies in hand or available for immediate use.

Cash BasisMethod of recording cost and income data basedon actual cash payments and receipts.

Cash CallProjection and request for future cash requirementsat specific points in time.

Cash FlowForecast cash balance against time based on the netflow of actual or anticipated cash payments iereceipts less actual costs against the sametimescale. (Sometimes used to expressforecast/actual cumulative cash recipts)

Cash ForecastsSee Cash Call.

Cash GenerationNet increase in cash flow from an investment.

CBS Cost Break Down Structure.- Generice codinghierarchy for companies cost code, cost unit andcost items enabling compilation of norms andproject estimating ratios, and Benchmarking

CEPCapital Expenditure Proposal ( generally a clientdocument), and usually underpinned by a class IIestimate.

Change AlertAdvanced notice of potential change.

Change ControlThe process of tracking and monitoring, for earlydetection, evaluation and approval of projectchange.

Change EstimateEstimate evaluating a potential change to theproject.

Change ImpactEffect of change on project cost and schedule.

Change ManagementThe monitoring, recording and assessment ofchanges to the scope and/or timing of a project andthe management of the implementation of approvedchanges.

Change OrderAuthorised Change Order Request.

Change Order RequestRequest. for authorisation to implement a change tothe current project/contract scope

Change of ScopeChange to the previously contracted scope ofsupply or work.Charge Out-rate


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Price charged for manhours, etc.

CIFCarriage, Insurance and Freight.

ClaimDemand made for compensation or additionalremuneration for which one of the contractedparties considers he has a contractual right.

Class I EstimateDetailed estimate prepared for control purposesfrom well-defined design data to an accuracy of+1/-5%. (Also known as Definitive Estimate,Detailed Estimate, Control Estimate or FinalEstimate).

Class II EstimateSemi-detailed estimate prepared for initial budgetpurposes from preliminary but largely fixed designdata to an accuracy of +1/- 10%. (Also known asBudget Estimate, Sanction Estimate, Scope Estimateor Semi-Detailed Estimate).

Class III EstimatePre-budget estimate prepared from very preliminarydesign data to an accuracy of +1/- 20%. (Alsoknown as Evaluation Estimate, Pre-Design Estimate,Preliminary Estimate).

ClientsThose to whom a person or business hasresponsibility. That responsibility may be directand defined contractually or it may be indirect andimplied through the person’s accountability forachievements and resources. In some industrysectors other terms, such as ‘customer’, may bemore commonly used.

Clocked TimeTotal hours recorded by employees betweenclocking on and off.

Close-out Report (aka Project de-brief)Final end of project or end of assignment report tocapture lessons learnt and out-turns for projectmemory.

Code of Accounts

A complete set of Account Codes for collation,analysis and allocation as part of cost control or forfuture estimating purposes. (i.e. Project Memory).

Collateral WarrantyA binding legal contract alongside of, but separatefrom, the head contract between the parties of theprovider and the beneficiary. The beneficiary is ableto instigate legal proceedings against the providerin the event of certain specified defaults. Theliability of the provider under the a collateralwarranty is in addition to the head contract andpotentially an onerous burden on the provider.Typically the beneficiary will be a funder, purchaseror tenant, sub-contractor or consultant who hascarried out work in connection with it.

CommercialRelating to trading activities and considerations.

Commissioning PhaseThe period following completion of constructionand installation work of an area/system whencommissioning of some/all of the works takes place.

CommitmentBroken down into the following:(1)Gross CommitmentTotal value of all orders placed to date, includingletters and telexes of intent, and includingallowances for all additional cost anticipated inrespect of those orders.

(2)Outstanding CommitmentThe current Gross Commitment less payments plusaccruals for work/services completed against thecontracted scope.

(3)Still to be CommittedThe difference between current Gross Commitmentand the total planned commitment to complete theProjet/Contract

CommunityThe public in general and those that represent thepublic interest in particular.

Competence (VQ)The ability to perform work activities to the nationalstandards required in employment.

Comply


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Meet all the specified conditions.

Conditions of ContractTerms agreed by the parties to the contract fordelivery and/or cessation of the contract.

Condition MoneyAdditional money paid to site labour/staff tocompensate for working in difficult or unusualconditions i.e. height, confined spaces, etc.

Confidence Limit(R)A project cost or schedule, percentage probabilityof achievement ,or the value for a predefinedmaximum or acceptable limits. (Usually a product ofthe risk process).

Configuration ManagementThe technical and administrative activitiesconcerned with the creation, maintenance andcontrolled change of configuration data throughoutthe life of a product.

Construction AreaAn Area within a construction site allocated forconstruction purposes.

Construction IndirectsTerm commonly used to describe all indirect fieldexpenses, such as non-productive labour, fieldstaff, field office staff, construction tools, etc.

Construction Management Contract(CM)A contract where the contractor will be reimburseda defined fee and preliminaries for undertaking theworks, (or just the fee, with a prelims packageplaced elsewhere). The package sub-contractors arein direct contract with the employer and theirturnover does not pass through the contractors’accounts.

Construction PhilosophyOverall strategy for construction work, definingproposed methods of execution, sequence andtimings of key activities, utilisation of direct or sub-contract labour resources, etc.

Construction QuantitiesMeasured and quantified construction work.

ConsumablesMaterial consumed or construction aidspermanently incorporated into a constructionproject, including non-recoverable formwork, shimsand packings, welding electrodes, industrial gases,fuel, etc.

ContingencyEstimate provision to fund unforeseeableoccurrences within the defined scope.

Contingency Draw downThe transfer from contingency to authorisedestimate, inorder to fund in scope deviations/risksthat have arisen, during project/contract..

Contingency ManagementThe monitoring and maintenance of remainingcontingency in terms of fund transfers andremaining risk.

Contingent ReserveThe current budgetary provision, to cover potentialrisk occurrences, associated with the remainingproject scope.

ContractLegal and binding agreement usually in writingbetween two or more parties, defining scope of workor services to be delivered, and the terms andconditions for implementation,cessation andpayments.

Contractors AreaArea on a construction site set aside for contractorssite establishments.

Contract Price Adjustment (CPA)A provision in the contract to adjust the contractsum, in respect of escalation.

Contract ProgrammeThe agreed logic schedule for the contract showingthe major deliverables and their relationships/keydates against which the contract report is preparedand any justification for extensions of time oracceleration are evaluated.


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Control BudgetA budget used for high level control of theproject/contract, and against which actualperformance is measured

Control Code See Cost Code.

Control EstimateAn estimate used as the reference estimate for costcontrol of the project/contract.

Control ProgrammeThe agreed logic schedule for the project showingthe major deliverables and their relationships/keydates against which the project report is preparedand any justification for extensions of time oracceleration are evaluated.

Control ToolAny cost/schedule control aid e.g. An estimate,programme budget, cost code, norms computersystem, control procedure, cost report, etc.

Cost AnalysisSystematic segregation and manipulation of costdata into elements or categories for detailexamination.

Cost BlackoutProlonged absence of verified actual and forecastcost status, this is often caused by failing tounderstand the impact of migration of internalscope arising during front-end design developmenton the construction and commisioning costs.

Cost Breakdown Structure (CBS)Systematic breakdown of costs into pre-definedelements in order to summate cost of likeitems/develop ratios for comparison betweenprojects and project memory estimating for futureprojects.

Cost BudgetCost target for completion.

Cost CentreA business area with authority to manage its costwithin its authorised annual budget, cost are

collected against the centres budget items as part ofthe management/feedback process.

Cost Classification – Application of IndicesFramework different types of costs into definedgroups and sub-groups to develop norms forcomparison between projects and input to projectmemory for estimating of future projects.

Cost CodeA unique code within a hierarchy, assigned to aspecific cost item with an attribute(catagory), whichneeds collating for management of the project ordevelopment of norms/ project memory.

Cost ControlSystematic monitor of expenditure to track/managecompletion within pre-determined budgets andtargets.

Cost DeviationVariance from the current control base or basis.

Cost ElementClassified component of larger cost item.

Cost EngineerAn engineer who as a consequence of his trainingand experience is competent, in the use anddevlopment of the principles of cost engineering.

Cost EngineeringThe engineering practise devoted to the projectcost management, involving such activities asestimating, cost control, cost forecasting,investment appraisal and risk analysis.

Cost Estimate/ForecastAny considered prediction of future or final projectcosts.

Cost HistoryRecord of previously incurred costs or costmovements against estimate items or areas ofexpenditure.

Cost Impact (R)The effect of some event, often a risk occurence orchange, on an existing cost budget or forecast..


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Cost IndexTabulation factors measured from a base daterecording the cost movements for a particularcategory or item or unit of work over a series of timeperiods, ie annually,quarterly or monthly.

Cost IndicesSeries of factored tabulations as defined above forCost index.

Cost JournalAccounts bookeeping record of individual dailytransactions in the Cost Ledger, may be within anIT system.

Cost LedgerAccounting book for recording both cost andrevenue, may be within an IT system.

Cost Model (Cost Schedule)Plan of proposed or anticipated expenditure phasedover scheduled time periods, in the case of a costschedule costs will be attached to the activities onthe network.

Cost MonitoringContinuous tracking of the costs of work inprogress with against control estimate cost targets.

Cost MovementAny change in the previously recorded cost for anestimate item.

Cost NormEstablished average or expected cost of defineditem or unit of work.

Cost of CapitalExpected return that is foregone by investing in aproject rather than in comparable financialsecurities.

Cost Over-runAny cost in excess of that budgeted.

CPICost Performance Index: the ratio of actual costover budgeted cost for completed work.

Cost PhasingTerm used to describe the distribution over time ofplanned or actual costs incurred.

Cost PlanSee Cost Model.

Cost Plus Contract (Cost Reimbursible)Form of contract where reimbursement is based onactual costs incurred plus a mark-up or fee to coveroverhead and profit.

Cost StatusCurrent cost position expressed in terms ofbudgets, commitments, expenditures and forecasts.

Cost StudyReview/analysis of costs associated with apotential revision to strategy/options, or a newproject.

Cost to DateCosts committed, incurred, expended, accrued, etc,to the current cut-off date.

Cost TrendTracking/extrapolation of Actual cost performancedata.

Cost VarianceActual or forecast cost deviation from thepreviously forecast or budgeted values for theestimate item.

CPA(1) Contract price adjustment(2) Critical path analysis

Critical ActivityAn activity on the critical path.

Critical EventAn event on the critical path.

Critical Evidence (VQ)Evidence of work performance, which candidatesmust provide for National Vocational Qualificationassessment purposes.


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Critical PathThe path through a network with the least float(canalso be zero or negative float).

CTRCost, Time and Resource – particular concept ofproject control based on assigning costs, durationsand resources to individual network activities.

Currency DifferentialCost variance arising from currency exchange ratefluctuations.

Current BudgetOriginal budget plus all approved budget changesand transfers.

Current CostsBased on current date cost position and derivedfrom evaluation of current data.

Current Cost VarianceCurrent variance between Actual Cost of WorkPerformed and Budget Cost of Work Performed.

D

DamagesSums of money awarded as financial compensationfor a tort or breach of contract.

Data BankCollection of project information, norms, rates,indices, generic projects data etc.

Day WorkWork paid for on an hourly, daily or weekly timebasis, covering labour, material and plant chargesincluding overheads and profit.

Day Work RatesHourly, daily or weekly rates for Day Work.

Day Work ContractContract reimbursed against Day Work rates.

DebitCharge to an account.

Deed of WarrantyA specific main contract obligation for the sub-contractor to provide the warranty under deed.

De-EscalationProcess of evaluating and removing actualescalation, from spends todate, in accordance witha defined formula or set of indices to give anequivalent value against a prior base date.

Defective Work ChargeSee Backcharge.Contract may require defective work to be replaced

Definition PhaseInitial period of a project when confirmation ofscope and project strategy is developed.

Definitive EstimateDetailed estimate prepared for control purposesfrom well-defined engineering/design data.

DeliverablesProject measurable documents, materials and otherphysical commodities or outputs capable of beingdelivered/tracked against a specific programme orschedule.

Delivered Material CostAll up cost of material delivered to site, inclusive offreight, handling charges, insurance, duties, etc.

DemobilisationTerm used to describe final project or contracttermination close-out activity.

DemurrageCharges payable for detention of a vessel, vehicleor trailer.

DepartmentalisationThe division of an organisation into departments,cost centres or service units for budgetary costcontrol purposes.

DepreciationDrop in value of a capital asset due to use orageing.


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Depreciation ReserveAn account set up to receive credits to offsetdepreciation charges.

Design and Construct ContractContract based on a brief provided by the owneragainst which a contractor designs and constructsa project.

Design BasisFormal front-end document defining project scopeof work, anticipated execution philosophy requiredfor engineering design activity, any site/regulationconstraints, and forms the basis for estimated costsand timescale for the project.

Design CostCost of preparing a defined design, inclusive of allfees, drawings, specifications, models, surveys, andall other documentation or services necessary toengineer the complete package

Design DevelopmentNominal allowance in an estimate or forecast foranticipated additional costs arising from naturalevolution of preliminary design data.

Design Management & Construct Contract (DMC)A type of Design & Build which generally, thoughnot exclusively, the contractor procures and takesfull responsibility for all design on the project, (i.e.including what would normally be termedconsultants design).

Designed QuantitiesQuantities derived from take off from drawings withallowances for MUI (Miscellaneous andUnspecified Items), etc.

Detailed EstimateSee Class I Estimate.

DevelopRefine an initial idea or proposal to the point atwhich it holds together as a coherent andpotentially viable proposition.

Direct CostAny cost directly allocatable to a productiveaccount or cost centre.

Direct Labour((1) Labour which can be directly related/allocated

to output of a productive account or costcentre, compared with indirect labour which isnot directly related to output.

(2) Labour employed directly by owner or maincontractor, as opposed to sub-contract labour.

Direct ManhoursManhours which are directly related to the outputof a productive account or cost centre, as opposedto indirect manhours.

Direct MaterialPurchased material which is directly used as part ofthe output of a productive account or cost centre

Discounted Cash FlowOverall cash flow on a project discounted to netpresent value or a specific year value.

DiscountingApplication of compound interest to, adjust costsplaced earlier in time, to an equivalent later, basedate value.

Disposal CostThe cost incurred at the end of an assets workinglife which would include the cost of demolition,scrap or resale value and labour cost.

DistributablesA category of costs which are spread orapportioned over other cost items.

Double Shift WorkTwo separate labour teams operating inconsecutive shifts.

Down TimePeriod when equipment or plant is non-operational,planned or unplanned.


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Drawing Measure/QuantitiesConstruction or material quantities as measuredfrom drawings.

DurationElapsed time for work to be done, underpinned byquantities or standard time.

DummiesThe logic linking activities

E

E&OEErrors and Omissions Excepted – a qualificationclause commonly used to cover mistakes inquotations.

Earliest Event Time (EET)Early CompleteThe earliest time an event can be completed withinthe logic and imposed targets in the network.

Early StartThe earliest time an event can start within the logicand imposed targets in the network.

Early Warning System (EWS)System/process to give advance notice of apotential cost/time over-run of a deliverable/project

Earned IncomeActual income value to date for services rendered,work performed or materials supplied..Earned ManhoursBudget man-hours for work completed.

Earned ValueBudget value for work completed; the value of theuseful work done at any given point in a project.

ECGDExport Credit Guarantee Department – an official UKGovernment office for insurance of payment onoverseas sales or contracts.

Effective DateCut-off date for the data incorporated into acost/progress report.

EfficiencySee Productivity.

Efficiency FactorSee Productivity Factor.

Element Of Competence (VQ)The smallest sub-division of a unit of competence.

Engineers Order (EO) (aka Work Order -)Order raised by an Engineer or his delegate,releasing a work package to be delivered to therequired scope, time, quality and cost.

EPCEngineering, Procurement and Construction –Anintegrated contract covering all these functions tomange/deliver the project.

Equipment Cost1) Delivered capital cost of permanent plant and

equipment.2) Purchase or rental cost of construction

equipment.

Equipment List/Plant ListDesign and progress document listing all items ofmajor equipment/plant on a project.

Erected CostTotal cost of erected equipment, facilities,structures or buildings inclusive of engineering,material, fabrication, erection, etc.

ErectionInstallation of equipment, materials, structures, etcon site.

Escalated CostCosts which have been escalated from actual orestimated values, to equivalent values at a new date

EscalationCost increases arising from inflation or marketforces resulting in a change in value against time,referenced to a base date.

EstimateEvaluation of expected quantities, time andmanhours, with allowances/provisions for expectedunknowns.

Estimate AuthorisationEstimate approval at the appropriate level ofauthority.

Estimate BasisDocument defining all conditions and assumptionsused in the preparation of an estimate.


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Estimate ClassificationCategorisation of an estimate based on levels ofdetail and accuracy (e.g. Class I, Class II and ClassIII Estimates).

Estimate ReliabilityLevel of confidence in an estimated value and thequality of underpinning information

Estimate to CompleteEstimate of remaining costs, man-hours orquantities to completion, of defined scope.

Estimatora specialist who maintains the generic projectmodels and norms for the business and appliesthem or industry standards in the preparation of thevarious classes of estimate.

Evaluation EstimateSee Class III Estimate.

EventThe end or start of an activity.

Event TimeThe time by which an event can be (or is to be)achieved.

Extensions of TimeContractual extension of time to reflect agreedclaims/scope changes. Sometimes used to minimisethe risk of invoking penalty clauses.

Ex Quay (Duty to Buyer’s A/C)All goods for which all import duties and taxes arerouted through the buyer’s account.

Ex Quay (Duty Paid)All goods for which unloading from ship, importduties, taxes and customs clearance are included invendors price/contract.

Ex ShipAll goods for which unloading, documentation,handling charges, import duties and taxes arerouted through the buyer’s account.

Ex Works

Goods from the factory, mill, warehouse, etc, forwhich the vendor is responsible for all packing andloading.ExpenditureTotal value of all invoices and charges either paidor approved for payment.

F

Factored Estimate1) Front-end estimate created by

factoring/modelling known costs from previoussimilar projects, or part projects

2) Budget estimate created by factoring the costsof major items in order to provide the cost ofminor components or bulk items.

Factors (VQ)Things that may affect the setting of objectives ortheir achievement.

FacilitiesServices to support the delivery and operation of aproject.

FASFree alongside ship — cost of goods and allcharges up to placement alongside a vessel at acontracted port.

Feasibility StudyAssessment of the technical and/or commercialviability of a project (research/investment).

Feed-backOut-turn data used to create norms and modellingdata structured to underpin future estimates. Itincludes data on how a process or a product meetsexpectations.

Feed-outTerm used for the analysed presentation of tenderinformation, normally prepared by an estimator foruse by the project execution team as a basis for costcontrol activities.

Field Administration and SupervisionSite administrative and supervisory staff.


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Field BudgetAuthorised target for field activities based ondesigned quantities and associated budgetmanhours and infrastructure/construction plantcosts.

Field ChangeField-authorised change to overcome problems withthe as-designed construction or erection drawing orspecification.

Field Controllable CostsCost which can only be controlled on site.

Field ProratesField indirect costs distributed over directconstruction cost accounts.

Field Purchased MaterialPermanent material purchased by site against aField Purchase Order.

Field Purchase OrderPurchase Order raised and authorised at site.

Final AccountAgreed final settlement of payment under acontract.

Final MeasureAgreed final measurement from as-built drawings orsite construction.

Financial ModelPlan of proposed or anticipated income andexpenditure against time for a project.

Firm PricePrice fixed in all respects apart from an escalationclause in some contracts where additional paymentmay be made using an agreed formula against abase date.

Fixed Assets RegisterList of the current asset value of allcompleted/operational projects. This may be sub-divided into main areas/facilities created by theproject.

Asset under construction register.

List of the projects currently in progress, wherepurchase has taken place.

Fixed CapitalCapital values of fixed assets, land structures andequipment, which are difficult to liquidate to cash.

Fixed FeeContract for service for which there is noadjustment for escalation or other reasons, withinthe contract period providing scope is unaltered.

Fixed Lump Sum PriceSingle price for specified scope of work not subjectto adjustment for escalation or other reasons.

Fixed PricePrice held for fixed duration for specified goods orservices.

Fixed Unit PriceUnit price held for fixed duration for specifiedgoods or services.

FloatThe duration an activity can move in time withouteffecting the critical path.

Free FloatThe duration an activity can move without movingthe adjacent activities planned dates.

Total FloatThe overall time available within a schedule orprogramme from the activities earliest start to itslatest finish finish date, withut affecting the overallproject end date.

Float ErosionThe using up of available float.

Float (Business/Stock)A buffer level of cash, goods or stock maintainedfor immediate use.maintained at a predeterminedlevel.

Fluctuation ClauseContractual clause covering the procedure forhandling price adjustments due to cost of livingincreases during the contract period.


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FOBFree On Board – cost of goods and all charges upto being placed on board a vessel at the namedport.

FORFree On Rail — cost of goods and all charges up tobeing placed on railway trucks at the contractedstation.

Force-Majeure ClauseContractual disaster clause specifying as aconsequence of an Act of God. i.e. Earthquake,flood war, riots, etc release mechanisms from thecontract or parts of contract.

Form of ContractAgreement document, legally binding andenforceable in law. Can be a standard form ofcontract i.e. JCT building, civil, mechanical, or leadcompany’s own form. The standard form isprepared by a sector body. For any type ofcontract there will often be a choice of standardforms from which the contract specific document ofagreement can be prepared.

Forward Cost EstimateForecast of outstanding costs usually tocompletion of a phase or the project.

Forward EscalationAnticipated increases in costs arising fromescalation.

Forward Labour Load(Resource Requirements)Anticipated future manpower requirement.

Free Issue MaterialFabrication or construction materials supplied, at nocost, made available by owner or design contractorto the fabricator or construction contractor.

Fringe BenefitsThe non-productive employment cost to coveremployee terms and conditions such as holidays,sick leave, etc.

Front EndTerm commonly used to describe the initial designor definition phase of a project.

Funding EstimateGenerally a class II estimate to underpin the fundingcase approval.

G

Gant ChartTime based activity chart showing logical links andkeydates

General ReservesProvision within a cost estimate for undefined risks.

Grass-Roots PlantDevelopment of a Greenfield site from sitepreparation to a completed facility.

Green Field SiteVirgin site where no prior structural developmenthas occurred

Brown Field SiteSites on which buildings/structures exist or havepreviously existed.

Gross Margin/ProfitOperating profit, revenue, costs or loss beforeoverhead recovery charges.

GrowthIncrease costs arising from evolution of work scopefrom R&D, design development, procurement,fabrication and construction costs for the sameoriginal scope.

Guaranteed Maximum Price (GMP)Contractual conditions which limits reimbursementto a maximum payment and for which completion isguaranteed.

Gulf Coast ManhoursConstruction manhours calculated using Gulf Coastnorms.


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Gulf Coast NormsStandard construction manhour norms developedfrom various US Gulf Coast projects data.

H

HammockAn activity, joining the start of the leading activityto the end of a series of network activities andwhere duration reflects the overall time and relatedlogic for the series, at plan and subsequentmonitoring stages.

Handling CostCosts of handling, storing, and re-distribution ofgoods and materials.

HandoverCompletion of a project or area of a project andtransfer to the client or next owner.

Hard TargetThe activity must not start before a set date and/ormust complete by a set date.

Height MoneyWage adjustment for working at heights or adjacentto holes, generally in accordance with trades unionworking agreements.

Hierarchy of ProgrammesThe suite of programmes necessary to control theproject/contract, generally at three levels thoughcan go deeper, each level rolling up to its higherparent:

Level 1 summary logic showing keyactivities, dates and overall durationsLevel 2 strategic control programmesshowing all stratecic activities, logic anddurations for the project and main areasand phases ie. design, construction etc.Level 3 Detail programmes or schedulesunder pinning level 2 programme activiesand durationsNB: With integrated computor planningpackages this is now treated as project,sub-project, network and sub-network ,etc.

HistogramBar chart indicating estimated or actual manpowerresources over each period of the contract.

Historical Data/AnalysisDetailed and systematic analysis of recorded costand performance data on a collection of completedprojects/project phases.

IIncentive CostThe cost of bonus incentive payments on contract.

Incentive PaymentsAdditional payments to labour and or subs/contractors for incentive purposes.

Incurred CostActual cost to date of services rendered, work doneor materials supplied, including accruals.

Indefinite ScheduleUn-resourced schedule.

IndicesSee Cost Indices.

Indirect CostsCost for support/infrastructure. e.g. Preliminaries,labour, etc.

Indirect WagesIndirect labour wages.

IndirectsAll labour, material, plant, tools, supplies, services,etc not directly related to a projectprogress/productivity.

Inflated CostArtificially uplifted cost as a provision forunknowns, etc.

InflationSee Escalation.


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In-HouseCompany’s internal resource or information.

In-House EstimateEstimate underpinned by company’s owninformation, without use of vendor or contractor,quotations/input, etc.

Initial Approved CostInitial approved base cost against whichsubsequent cost movements are measured andreported.

Initial Objectives (VQ)Goals that are regarded as potentially achievablebefore a detailed analysis has been carried out.

In-Place Sub-ContractsMajor contractors with sub-contracts currently inplace (eg. design, supply and erection sub-contracts).

Installed CostCloseout cost of installed equipment, materials andfacilities, inclusive of design, procurement andconstruction.

Installed QuantitiesQuantities installed as measured from designdrawings.

IntangiblesCost items for non-deliverables (ie. not acommodity). e.g. Labour, services, etc.

Integrated Work MeasurementProgress payment structured around integrated,cost schedule, which underpins estimate, budget,tender and actuals from an integrated base.

Interest Rate of ReturnDiscounted cash flow where the averageoutstanding investment and interest charges arerepaid by revenue from the project over a definedwrite off period.

InterfaceAn event used to define the common point betweenone network and another, to allow the relationships

to be established. This can be within or acrossprojects.

Interim ValuationInterim payment on an account, using an agreedpayment framework for work done to date.

Internal Change (Internal Risk)Internal evolution of scope, the costs of which areabsorbed by the contractor or project.

Internal TransferTransfer of quantities, manhours or costs from onearea of estimate to another, without affectingcurrent overall estimate value.

ICECInternational Cost Engineering Council

IPMAInternational Project Management Association

Impact (R)The efffect of an occurrence on cost or time,generaly linked to rankings for magnitude at riskworkshops for conversion to modelling values, forattachment to items on the model

ITSInvitation to Bid.

ITPInstruction To Proceed.

ITTInvitation to Tender.

J

Job CardTravelling document authorising a package of sitework to be carried out in accordance with attacheddrawings/ specifications, etc.


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K

Key EventMilestone event used to flag importanttargets/requirements on the project.

Knock-on Cost/EffectCosts/time impact of a prior or anticipatedoccurrence.

Knowledge Evidence (VQ)Evidence which demonstrates an individual’sunderpinning knowledge and understandingrequired to support performance to the nationalstandard. It is normally specified in the forms of :-• Principles and Methods – demonstrated

understanding of relevant theory, principlesand methodology.

• Facts And Data – Demonstrated knowledge ofrelevant information and facts.

L

Labour MixThe distribution of trades in a labour force.

Labour Only ContractContract for supply of labour only.

LadderWhere a number of activities require partialcompletion before their subsequent activity canstart, and completion before the subsequentactivity can be freed-up to complete its remainingwork. This gives the overall appearance of a ladder.

LagThe schedule lapse time on a logic link between thestart or finish of one activity and the start or finishof an succeeding activity.

Lang FactorsEstimating factors used to convert themanufactured cost of plant into the erected orinstalled cost and ultimately, the completed projectcost.

Latest Event Time (LET)Latest time an event can occur without affecting thetarget finish date for the project.

Late StartLatest start date for an activity without affecting thetarget finish date for the project.

Late CompleteLatest complete date for an activity withoutaffecting the target finish date for the project.

LeadIs a logic link with a duration specifying theadvance between the preceeding activity and itssuccessor.

Letter of IntentA document issued by a party intending to enterinto a contract that purports to confer upon theopposite party a limited set of rights and conditionswith the intention of them commencing their ownobligations under the same contract.

Level 1/Level 2/Level 3 ProgrammesSee Hierarchy of Programmes

Level of ConfidenceProbability of achievability of the cost and scheduleforecasts/base often linked to the risk model.

Level of effort ProgrammesWhere resource limits have been set for thedifferent skills required, and the planning package isallowed to set the elapsed duration for the projectactivities to stay within the limits, and hencedetermin the overall end date.

Life Cycle CostThe whole life cost of the asset including capitalexpenditure, ongoing maintenance, future repairand/or renewal and eventual disposal.

Liquidated Damages (LD’s)


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Contractual clause for reimbursing the client in theevent of delay in completion by the contractor,usually £x/day/week.

Load FactorAverage output or demand on a plant comparedwith the design capacity.

LoadingDistribution of labour, cost or other resources overbar charts, schedules or networks.

Local ManhoursHome country construction manhours Factored tosuit a specific geographic area, or ones specific tothat geographic area.

Location FactorFactor to adjust costs, manhours or otherconversion data from one geographical area toanother.

LogisticsSystems for organising the deployment ofresources.

Long Lead ItemsPlant or materials with long delivery duration togive time for design, manufacture and workstesting. Often critical to project.

LoopLogic error, where a succeeding activity attempts tostart a preceding activity.

Lost TimeProductive time lost because of inclement weather,labour problems, equipment failure or other cause.

Lump SumAgreed single payment/price for work, goods orservices on completion to the agreedspecification/drawings

M

Maintenance Period

Under certain types of contract, (eg. ICE), theperiod starting from the date of issue of thepractical completion certificate and running for aspecific period of time stated in the contract,(usually 12 months), during which the contractor isliable to make good any defects.

Managing ContractorMain contractor responsible to owner for theoverall delivery of the project, by self and others.

ManhourBasic work unit for labour/resourcing.

Manhour BudgetManhour target for project to completion.

Manhour ChangeChange to current control manhour budget.

Manhour CostActual or estimated cost from manhour estimatetimes manhour rate.

Manhour EstimateEstimate breakdown of manhours required to deliverproject.

Manhour ForecastForecast of manhours yet to be expended

Manhour NormStandard time for task /deliverable. Can becompanies own or national norm. i.e. SPONS, etc(monitor/deliverable).

Manhour Rate1) Cost per manhour.2) Manhours per work unit.

ManpowerManning requirements for task/tasks.

Mapi MethodAmerican variant of discounted cash flow.

MarginPlanned/tracked differential, such as between costand revenue.Mark-up


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Surcharge on actual costs or contract rates toprovide reimbursement for overheads and profit,etc.

Master BudgetAny high level summary budget.

Master NetworkOverall control network for the complete project,which dictates the framework for more detailedunderpinning networks developed as the projectdetail evolves.

Master ScheduleHigh level contractual summary schedule.

Material Control1. Controlling the procurement activities of

material from requisition through final deliveryto the point of installation.

2. Process of monitoring the utilisation ofmaterials on site specifically in regard to qualityand quantity.

Material Handling CostCost/charges for loading, unloading, transporting,storing, etc, of purchased material.

Material Take-off (MTO)1. Measurment of material quantities from

drawings.2. Document output following measurement of

material quantities from drawings.

Measured TermTerm contract where payments are made onvaluations for installed/constructed work at thequoted contract rates.

Measured WorkConstruction or fabrication work which is identifiedand measured, physically or from drawings, fortender, progress and/or payment.

Mechanical CompletionMajor milestone for the completion of process orservice installation ready for the start ofcommissioning.

Method Statement

Contractual strategy document submitted attender/agreed at contract for delivery of thecontract.

MilestoneKey or critical event within the project programme:often tracked to indicate the health of project, asperformance measurement benchmarks or astriggers for payments.

MobilisationPeriod between contract placed and effective startof work to cover recruiting resources,setting up thesite establishment, design offices etc.

MoietyOne half of the total retention percentage stated inthe main contract. Moiety is released upon thecertificate of practical completion and the finalcertificate.

Monte Carlo SimulationParticular computerised probabilistic method usedin modelling risk etc.

MUIMiscellaneous Unspecified Items. Provision foritems not specified, but considered to be needed .

N

Net Present Value (NPV)The present value of all net cash inflows less thepresent value of all cash outflows.

Net ProfitRevenue less costs, less project overheadcharges,for the financial year /project.

Network (Project Network)Timescale model for the project or part project usinga combination of activity duration’s, logic andresource constraints and key dates at strategicpoints/times.

Network AnalysisRunning of the time model using critical pathtechniques to evaluate float/critical path, etcNode


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1) The start or finish event for an arrow network.2) The activity itself for a precedence network.

Non-Productive TimePaid time with no productive output. e.g. Meal time,walk time, lost time, overtime uplift, etc.

Non-Splittable ActivityAn activity that, once started, must be completedwithout interruption.

NormStandard cost, manhour or duration for a specificdeliverable.

Norm CostCost derived from established cost norms.

Norm HoursManhours derived from manhour out-turn.

Normal HoursThe working hours in standard day/week.

Normal TimeTime worked before overtime payment.

NVQ (VQ)National Vocational Qualification. A qualificationbased on occupational competence, to the relevantapproved national occupational standard, whichhas been accredited by QCA and incorporated intothe NVQ framework.

O

Objectives (VQ)The goals that are regarded as potentiallyachievable by a project. Initial objectives are thoseestablished as a precursor to detailed analysisbeing carried out. Primary objectives must be metfor project success to be achieved.

OCPCAOil and Chemical Plant Contractors Association.

OCPCA Norms

Standard manhour norms for mechanical andelectrical work developed and published byOCPCA.

Occupational Standard (VQ)A specification of expected performance inemployment. It defines performance andknowledge requirements and outcomes and therange of circumstances for which performance isspecified.

OffsitesAreas of plant outside the main process plantcovering receipt, storage, administration, externalutilities and infrastructure.

On CostApportionment of indirects, burdens, overheads,profit, etc to direct costs.

Open Ended CostContract with no fixed value, to allow for variablequantities, manhours, unit rates, etc.

Open Ended OrderPurchase or construction contract with unit price orunit rate but unknown final quantities

Optimum Plant SizeProcess equipment capacity sizing representing thebest balance between the economics of size and thecost of carrying excess capacity during the earlyyears of selling the product.

Order-of-Magnitude EstimateTerm commonly used for very preliminary costestimate.

Out-of-Pocket CostMinor expenses account.

Overhead CostsCompany expenses not directly assignable to aparticular project, but each project must contributeto these and the profit in most cases.OwnerA general term covering employer/purchaser,manufacturer, client or operator.


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P

Packaged PlantSystem – Manufactured/assembled and workstested off site, brought to site assembled or in part-assembled units and placed/final assembled on siteon pupose foundations ready to operate

Packaged UnitEntire working piece of equipment, complete withassociated piping, instrumentation, etc., Usuallyarriving on site on skids.

Parent Company GuaranteeA guarantee given by a parent company to anemployer under a contract, undertaking that in theevent of it’s subsidiary company failing to performit’s obligations, the parent company itself will beliable in place of the subsidiary. A parent companyguarantee should not place obligations on theparent company over and above the terms andconditions placed on the subsidiary under thecontract.

PathUnbroken sequence of activities with the samefloat.

Payback Period/ Payout TimeCalculated time taken for the original investment tobe paid-off from the projected profit after allowingfor depreciation and taxes.

Payroll BurdenIndirect payroll costs. e.g. National Insurance, ,training, holiday’s, etc.

PC SumSee Prime Cost Sum.

Performance BondSee Surety Bond.

Performance Criteria (VQ)The criteria which indicate the standard ofperformance required for the successful completionof an element of competence.

Performance Evidence (VQ)

Evidence, gathered under real work conditions, orconditions as close to the normal workingenvironment as possible, which eitherdemonstrates how a candidate performs a job/task,or is the result of such performance.

Performance FactorFactor expressing productivity as a function of thebudget = actual time taken, divided by, budgetedwork time for the same scope.

Permanent AssetsFixed capital value of plant, buildings, land, etc. noteasily liquidated.

Permanent MaterialPurchased equipment and material permanentlyincorporated into the finished project.

PERTProgramme Evaluation and Review Technique. =The original name for network analysis/ CPA

Physical CompletionProgress assessed by physical measurement

PID/P&IDPiping and Instrument Diagram.

PlanningDeveloping and running the Network model for aproject.

Planning EngineerA specialist engineer who develops the projecttimescale schedules, and running them in computorplanning packages, increasingly this involvesdeveloping integrated cost schedules in the samepackage.

PlantMain items of machinery and equipmentpermanently installed in a process/manufacturingplant.

Plot PlanGeneral layout drawing showing the major items,plant layout and external facilities.

Possession


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1. Partial: A main contract condition allowingthe employer to take possession ofportion(s) of the completed works atspecified dates.

2. Date of: The fixed date in the main contractfor the contractor to take possession ofthe works

3. Temporary: A fixed period of time madeavailable to a contractor to carry out worksin a specified area that would normally beoccupied and operated by the client or athird party. Often utilised in worksadjacent to railways.

Precedence MatrixAnalytical tabulation of activities showing theinterrelationship of activities in a precedencenetwork.

Predecessor(s)An activity that must start or finish before anothertask can start or partially finish.

Pre-Design EstimatePre-budget estimate prepared from very preliminarydesign data to an accuracy of +/20%.

PreliminariesPreliminaries are the overhead charges associatedwith a contract for which the client is chargedregardless of progress, ie: site establishment costs.

Premium TimeOvertime paid at enhanced rates.

Price Variation FormulaContract price formula to compensate for variationsin economic conditions

Primary Objectives (VQ)Those targets which must be met for a project orundertaking to be deemed a success.

Prime CostBasic cost for installed plant, materials, labour andservices, excludes indirect charges, operating costs,maintenance costs and interest on loans.

Prime Cost Sum (PC Sum)

Contract sum for an item of work to besupplied/carried out by a supplier or sub-contractor- excludes general contractor attendance and profitmargin.

Private Finance Initiative (PFI)A method of procuring services that are deliveredthrough assets. It consists of a long-termcontractual public private partnership under whichthe private sector takes on the risks associated withthe delivery of public sector services in exchangefor payments linked to agreed standards ofperformance.

ProbabilityThe chance that something (risk/benefit) may occur(usually % or index)..

Probability Analysis/ModellingStatistical modelling, where the model is run anumber of times, using risk (probabilty and impact)values against the model elements, and thebudgeted estimate/programme are compared withthe model outcome to determin their achievability,expressed as a percentage chance of occurrencefrom the run.

ProcurementThe process of obtaining a resource. It includesestablishing the appropriate sources of supply,defining criteria for quantity, quality and cost, andselecting the appropriate contractual methods forits acquisition and the means for its delivery to thepoint of use.

Procurement PhasePeriod during the life of a project when procurementis the main activity.

Productive AccountDirect account or cost centre where its activitiesimpact directly on project/business throughput.

Productive LabourSee Direct Labour.

ProductivityEfficiency statement for work output compared tostandard or norm.Productivity Factor


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The productivity factor expresses productivity as afunction of a norm = actual time taken, divided by,the norm time for the same quantity of work.

Productivity ProfileGraphical showing actual or forecast productivityfactors against time.

Programme ManagerThe individual or body with responsibility formanaging a group of projects.

Progress PaymentInterim payment in respect of work/servicecompleted.

Progress WeightingConversion of different activities types to acommon base to enable an overall progressevaluation to be made.

ProjectIs defined by British Standard 6079 as “A uniqueset of co-ordinated activities, with definite start andfinishing points, undertaken by an individual ororganisation to meet specific objectives withindefined schedule, cost and performanceparameters.”

There are several attributes of projects, asdescribed in BS 6079:-• Non-repetitive and tending to have unique

features that are novel to the management.• Carry risk and uncertainty.• Approved in return for undertakings to deliver

quantified results within quality andsafety/health parameters.

• Usually in the hands of a temporary team andmay be subject to change as the workprogresses.

• May be affected by events inside and outsidethe enterprise.

Project ControlThe setting and monitoring of cost/scheduledeliverables, identification and anticipation ofvariances and implementation of preventive andrecovery actions

Project Life Cycle

The sequential phases through which a projectpasses from inception to demolition/reinstatement =Inception, Optioneering, Front end definition, Frontend engineering, Detail Design, Procurement,Construction, Installation, Commissioning,Operation, Decommission, Demolition,Reinstatement

Project ManagerThe individual or body with responsibility andaccountability to manage the resources (includingthe technical, time and cost aspects) in order todeliver the project

Project ManagementThe planning, monitoring and control of all aspectsof a project and the motivation of those involved init to achieve the project objectives on time and tothe specified cost, quality and performance.

Project Management TeamA multi-disciplinary group of people headed by aproject manager set up to deliver the project.

Project MonitoringThe recording of current project status against thecontrol Estimate and Programme and identificationof the variances.

Project PhaseOne of a series of distinct steps in carrying out aproject that, together, constitute the project lifecycle.

Project ProgrammeA time and resource related schedule or diagram ofproject tasks that describes the project process.

ProvisionAllowance in an estimate for a specific item orpotential event, which cannot be fullydefined/underpinned.

Provisional SumSpecified sum in contract for item of work or supplywhich cannot be fully defined at contract..


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Purchase RequisitionFormal request to order equipment/service orfacility.

Q

QCA (VQ)Qualifications and Curriculum Authority. Thenational accrediting body for NVQs.

Quality Assurance (QA)Formal documentation, implementation andmonitoring of business processes.

Quality Control (QC) A control process to ensuring product or servicequality meets defined and desired attributes.

Quantity ControlMonitoring design or construction deliverablescompleted, or status to completion against thecontrol estimate quantities/activity (ie number of:drawings,EFD’s welds, etc.).

Quantity TrendTracking/analysing the actual deliverable quantitycurve variances against the control estimatedeliverable curve.

Quantity VarianceDifference between as-designed, as-purchased oras-built quantities and authorised budgetquantities.

R

Radius AllowancePayment to site construction workers to cover thecost of travelling to site. Normally aligned to anational agreement.

Range Item/Range Statement (VQ)The definition of the boundaries of circumstances,contexts and contents governing the scope ofperformance criteria.

Rate of Return on InvestmentEfficiency factor relating operating/profit to capitalemployed.

Rectification CostCost of restoring faulty design, materials orworkmanship to meet contract requirements

RegulationsStatutory and mandatory non-statutoryrequirements. Will include national andinternational regulations and codes of practice.

Reimbursable ContractContract in where payment is made on a costreimbursable basis, against either rates at cost plusa mark-up, or a straight cost and mark-up.

Reimbursable RateThe cost rate against which contract reimbursementis made.

Re-Measurere validation of quaantities for unit rateconstruction or fabrication work from drawings

Rental EquipmentMechanical equipment rented during theconstruction period of project.

Reporting CycleThe routine sequence of tasks/cut off, necessary tocollate and prepare a cost and schedule report foreach reporting period against the project (generallymothly/quaterly)..

Resource AccumulationThe total roll-up against time of all resource typesacross all phases of the project to predictdemand/phasing for each resource type and overalldemand.

Resource LevellingAdjusting the schedule to optimise fluctuation inresource requirements for the different resource orkey resource types.

Resource Limited SchedulingThe scheduling of activities to ensure availableresource levels are not exceeded. ( See Level OfEffort)


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Resource SmoothingResource levelling, within the limits of the activitiesfloat/maintaining project end date.

RetentionSum of money retained ( Post completion) for acontracted period to cover possible defects in workor service, and paid to the contractor at the end ofthat period, if no defects have occurred.

Re-Use PriceAssessed re-use valuefor Material/equipement

RFPRequest for Proposal

RiskBS 6079 defines as: “ a combination of theprobability, or frequency, of the occurrence of adefined threat or opportunity and the magnitude ofthe consequences of the occurrence.”

Risk AnalysisThe process of evaluation of potential risk to theproject, identification / ranking and modelling tofind the main risks.

Risk ManagementThe process whereby decisions are made to accepta known or assessed risk and /or theimplementation of actions to reduce or eliminate theconsequences or probability of occurrence.

Risk RankingThe process of identification of impact andprobabilities of an individual risk and attaching ofthose to the appropriate activity on the model inorder to evaluate the overall potential risk to theproject, and overall ranking to find the main risksand managing/mitigating them.

Risk RegisterA database, or document to capture the risk titles ,impacts and probabilities on a project, and link themback to the model elements. Along with this thedatabase captures the mitigating actions and thierowners. This is a live register, continually capuringthe current risk status. More sophisticated registersread directly into the modelling tool as per RiskDecisions “Risk Manager” to “Risk Analyser”

Rolling ProgrammeThis is the practise of having a strategic controlprogramme, firming up the next 6 months windowand detailing a working programme for the next 3months window, on an ongoing basis.

Roll-upAccumulation cost of schedule data at a detailedlevel and summarisation to a structural higher level.

RoyaltyPayment for use of copyrights and patents, such asfor propriety chemical processes.

S

Sales EstimateEstimate prepared in support of bid.

Salvage CreditsRecovery value for unused/recovered equipment,material or property.

SamplingAnalysis of key criteria/data for a particularcost/programme category by taking particularexamples across the range (samples), to developtrends and interpolate/extrapolate for possiblefuture new variants.

Sanction EstimateSee Class II Estimate.

Sanctioned CostAuthorised maximum cost for project/work package.

Sanctioned ManhoursAuthorised manhours for work package.

Scaling FactorsUsed for estimating cost/time for new processequipment by interpolating/extrapolating, for thesame generic type of equipment, from therelationships between known equipment costs andsizes.

ScheduleControl programme for project/remaining scope


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SchedulingThe process of running forward and backwardpasses across the schedule.

Schedule ImpactEffect or influence of some occurrence, commonly achange, on an existing schedule or completion date.

Schedule of RatesList of unit prices for categories of work that may beundertaken and/or services/materials suppliedunder the contract.

Schedule of Rates ContractOpen-ended contract with reimbursement against aSchedule of Rates.

ScopeSee Scope of Supply or Scope of Work.

Scope EstimateSemi-detailed estimate prepared for initial budgetpurposes based on preliminary but mainly designdata to an accuracy of +/10%.

Scope of SupplyDefine item of services, commodities or facilities tobe delivered under contract.

Scope of WorkExtent of work to be delivered under contract.

S-CurveCumulative graph against time for tracking overallprogress cf with plan: for cost, manhours,materials.etc. CP1/SP1 can be calculated from thevariance on this form of graph.

Semi-Detailed EstimateInitial budgetary estimate underpinned by mainlypreliminary but fixed design data to an accuracy of+/-10%.

Sequence of ActivitiesLogic sequence path for a number of activities.

Sinking FundFund set up to pay off a known liability, wastingasset or depreciation by a defined date.

Site EstablishmentAll on site support facilities required on aconstruction site, including site administration andsupervision, temporary facilities, contractor’s areas,construction tools, utilities, stores, workshops,labour camp etc.

Site InstructionWritten client instruction issued at site to theconstruction contractor.

Size MixRange of sizes embodied in a category of materialsor tasks, such as pipework, steelwork etc.

Skeleton NetworkA summary network with a reduced number ofactivities but maintaining the logic and timing of theunderpinned activities. See Level 1 Programme

Slack (Free Float)See Free Float.

Slush FundProvisional fund for draw down in the case ofcontingent irregularities.

Special Purpose Vehicle (SPV)In PFI, an entity, (usually a limited company), set upto act as the supplier specifically for a PFI contractwhich does not usually have any other activities.

Specification of RequirementsThe detailed statement of how the project shall beachieved and how it shall be expected to perform.

Specific ReservesEstimate/forecast provision for specific possibleoccurrences.

Splittable ActivityAn activity that can be interrupted for resourcesmoothing purposes.

SQA (VQ)


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Scottish Qualifications Authority. Equivalent toQCA and the accrediting body for ScottishVocational Qualifications (SVQ).

Stage PaymentsProgress payments made during a contract workpackage or a conract, for the achievment of thedeliverables/milestones agreed in the contract.

StakeholderA person, or group of people who have a vestedinterest in the success of an organisation and theenvironment in which the organisation operates.

Standard TimeA term used in Work Study to define the time takento achieve a task by a normally motivated andskilled operative, including calculated allowancesfor relaxation and other necessary non-productivetime, but excluding remedial works.

Star RateAgreed additional unit rate for work not coveredunder the original contract schedule of rates.

Statement of RequirementsA clear but often broadly based definition of theprinciple aims and objectives for a project. It issometimes called the Project Brief.

Study EstimatePre-budget estimate based on a very preliminarydesign data to an accuracy of +/-20%.

Summary NetworkA very condensed presentation network reflectingthe more detail programmes.

Surety BondThe third party guarantee document executed bythe owner to ensure the contractor performs hiscontracted liability.

Suspense AccountCost account held for the purpose of collectingunmatched expenditure, an ongoing audit/checkfacility .

Suspense ClausePurchase order or contract clause defining thecircumstances under which suspension orcancellation may be invoked, and the terms underwhich suspension or cancellation shall be effected.

T

TangiblesPhysical ‘tangible’ commodities, cf ‘intangible’labour, services etc.

Target DateFixed milestone date for either the start or finish ofan activity.

Take Over CertificateFormal certification that work has been completed inaccordance with the contract and ownership istransferred.

Temporary WorksOn site works to provide temporary support forstructures during construction process, e.g.formwork for concrete, propping of floors,excavations, etc.

TenderFormal pre-contract submission in response to anenquiry stating price, completion time and anyqualifications which will form the basis for contractif chosen.

Term ContractA contract with pre-agreed unit rates for aprescribed period which enables a client to call offwork as required.

Terminal Cash FlowRate of revenue or income at end of economic life

TerminationCancellation of a placed purchase order or contractbefore completion of works.Tied ActivitiesActivities that must be performed sequentially orwithin a defined time of each other.

Time-Based Network Linked Bar Chart


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See Gantt Chart.

Time Limited SchedulingThe scheduling of activities and resources toensure the project duration/imposed dates, are notexceeded.

Time NowThe monitor/report cut-off date for information.

Time PhasingTerm used to describe the distribution of planned oractual manhours across time.

Total FloatThe overall time by which an activity may bedelayed or extended without affecting the totalproject duration, but may delay adjacent activities.

Transfers CertificateFormal transfer of custody of area/zone of buildingfrom one trade to another or contractor to client.

Trend ForecastForecasts derived from analysis of data trends.

TrendingThe process of analysing data to determine trendsthrough continuous monitoring across project life.

Turn-Key ContractContract for design, supply, construction andcommissioning of a plant or facility.

TurnoverAggregate in the period of the value recognised on:long term contracts, short term contracts, feeincome and sales.

U

Unallocatable Cost/ManhoursCosts which cannot be allocated to a direct accountor productive cost code.Underpinning Knowledge and Understanding (VQ)The knowledge of facts, procedures and principlesrequired to attain the standards for competentperformance.

Under-RecoveryWhere expenditure exceeds recoverable revenue,for part or all of the work.

Unit CostCost per stated item or unit of measurement.

Unit Of Competence (VQ)A group of elements within an OccupationalStandard that have a coherent functionalrelationship.

Unit RateAny rate expressed against a unit of measurement

Unlimited scheduleA schedule produced without resource constraint.

V

ValuationCertified assessment or calculation of completedwork for payment purposes (interim or final).

ValueEstimate/Actual-manhours or costs.

Value EngineeringTechnique for optimising the design forconstruction and operation at the most economiccost, without loss of quality or safety.

Value Management1. The process concerned with defining what

“value” means to a client within aparticular context.

2. A structured problem solving and decisionmaking process encompassing valueengineering and other value relatedactivities.

VarianceAny deviation from plan/budgetVariance AnalysisAnalysis of the causes of reported variances.

VariationChange in scope of work or supply, subject toconfirmation and approval.(Often used for internal


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growth changes, rather than Contract scopechanges).

Variation OrderDocument authorising the defined project changebe implemented. (Often used for internal growthchanges, rather than Contract scope changes).

Verification (VQ)The process of checking that what has been done isas specified and to the required standard.

Verifier (VQ)A person competent, registered and approved toverify the performance of the NVQ assessmentprocess.

VersionThis is the unique identification number attached tomaster versions of an estimate or programme,copies of which are used as the baseline formonitoring/reporting actuals against, on acontinuous basis.

Version ControlThis procedure is to control the versions of aprogrammes and estimates, to prevent what-if ormonitored copies being used as firm information.

W

Walking TimeTime allowed for movement of construction labourbetween different places of work or siteaccommodation.

Wastage FactorsFactors applied to bulk material quantities to allowfor unavoidable wastage during fabrication,erection or installation.

Weighted Percent CompleteOverall progress completion measurement, usingweighting to normalise disparate activities.Wet TimeTime lost due to wet weather and treated asadditional to current contract value.

WharfageCharge for temporary storage at dockside

The Work Breakdown Structure (WBS)The hierarchical structure for the project againstwhich the estimate and programme elements will bereferenced for packaging and reporting commondata/management information.

Work ComponentLevel within Work Breakdown Structure

Work ElementLevel within Work Breakdown Structure.

Work MeasurementThe measurement of drawings or by physicalsurvey of fabrication or construction work, requiredfor estimating, budgeting, tendering, progressing orpayment purposes.

Work PackageA group of activities/tasks necessary to deliver adefined area of plant/facility or element in a workbreakdown structure..

Working Rule AgreementSets out the minimum terms and conditions forconstruction activities.

Writings OffReduction/elimination of the net book value for afixed asset due to sale, demolition, redundancy orreplacement.

Y

YardstickHistorical data established for benchmarkingand control of current work.

Documents

Provoc – Glossary of Common Project Control · PDF fileProvoc – Glossary of Common Project Control Terms Page 4 of 31 An estimate generated against a defined scope of work and