Construction Project Management Consultants Key Terms
Construction terms every business owner and consultant must knowThe real estate and construction business can be quite complex. Before entering into any type of construction agreement one must fully understand what is being discussed. The following key terms will help business owners work with construction project management consultants to ensure that the construction process goes smoothly and that all vital areas are addressed. These areas should be included in discussions with consultants and contractors so that all parties are kept well informed.
Project management professional (PMP)
Change orderBusiness owners and consultants alike must be aware of change orders. A change order is a written document agreed to by the contractor and business owner detailing a change from the original agreement as to the work, the time schedule or the money amount.
Indirect costs/soft costsIndirect costs, also known as soft costs, are the expenses that consultants or contractors incur that are not for a specific task or project, but which still must be covered. You will want to know what these costs are expected to be prior to entering into any sort of agreement.
Request for proposal (RFP)It is imperative that both consultants and business owners understand requests for proposals. This document formally lays out the details of the job and asks for companies to provide a bid to perform the service. Business often hire consultants to handle this process.
Schedule of valuesConsultants and business owners alike need to be aware of the schedule of values and need to track it closely. This schedule is completed by the contractor and details how much money is allocated to each part of the project. It's used as a way to monitor payments to the contractor.
AddendumAn addendum is a written document clarifying, modifying or adding to any type of original agreement. Consultants may need to write an addendum to modify the agreement with a construction contractor, or the business owner may have to create an addendum to change the original agreement with the consultant.
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