NM General Contractor key terms

A percentage of each progress payment withheld by the owner until substantial or final completion, protecting the owner against defective or incomplete work. New Mexico public and private contracts commonly cap it by statute or contract.

Current assets minus current liabilities. It measures whether a contractor can pay short-term obligations such as payroll, suppliers, and subcontractors between progress payments, and is a common licensing and bonding review metric.

Indirect costs of running a construction business that cannot be charged to one project, such as office rent, insurance, and owner salaries. Overhead must be recovered through markup, not through job cost alone.

The amount added to direct and indirect job costs to cover overhead and profit, usually expressed as a percentage of cost. Confusing markup with gross margin understates price and erodes profit.

The percentage of contract revenue remaining after job costs are paid, calculated as (revenue minus cost) divided by revenue. It differs from markup because the denominator is price, not cost.

A cost traceable to a single project, such as labor, materials, equipment, and subcontracts. Direct costs form the basis of an estimate and are tracked in the job cost ledger.

The project-level accounting record that accumulates committed and actual costs by cost code, allowing comparison of budget to actual and supporting billing, change orders, and closeout.

A forecast of cash receipts and disbursements over time, used to time draws, payables, and payroll so the contractor does not run short between progress payments.

A standardized label dividing a project into work categories, such as CSI divisions or a contractor's own numbering, so estimates, commitments, and actual costs can be compared consistently.

The category assigned by the Construction Industries Division that defines the types and dollar limits of work a licensee may perform, such as general construction, mechanical, electrical, or specialty trades.

The division of the New Mexico Regulation and Licensing Department that administers contractor licensing, permits, inspections, and enforcement under the Construction Industries Licensing Act.

The individual who passes the required trade and business examinations and is designated to exercise supervision and control for a licensed contracting business, meeting the statute's experience and examination requirements.

New Mexico's statute, Chapter 60, Article 13, that requires licensing of contractors, establishes the Construction Industries Commission and Division, and sets grounds for discipline and revocation.

The most severe disciplinary action, permanently cancelling a contractor's authority to operate unless the licensee later qualifies for reinstatement under the statute and commission rules.

A surety guarantee submitted with a bid stating the bidder will enter the contract and furnish required bonds if awarded; failure can expose the surety to the difference up to the bond penalty.

A surety bond guaranteeing the contractor will complete the contract according to its terms. If the contractor defaults, the surety may complete the work or pay the owner up to the penal sum.

A surety bond protecting subcontractors and suppliers by guaranteeing they will be paid for labor and materials furnished on the bonded project, even if the general contractor defaults.

A written change to bidding documents issued before bid opening that clarifies, corrects, or modifies the drawings or specifications. Bidders must acknowledge each addendum in their proposal.

A fixed price per measured unit of work, such as per cubic yard or square foot, used when quantities are uncertain. Final payment equals the actual measured quantity times the unit price.

A contract where the contractor agrees to perform a defined scope for one fixed total price, bearing the risk of quantity variation unless changes alter the scope.

A line-item breakdown of the contract sum by work category, submitted by the contractor and used as the basis for progress payment applications and retainage calculations.

A periodic partial payment to the contractor based on work completed and approved, typically supported by a pay application and reduced by retainage and prior payments.

A written document signed by owner and contractor that modifies the contract scope, price, or schedule. Work outside the original scope should not proceed without one.

A compensable change arising without a formal change order, often from ambiguous plans, owner-directed acceleration, or defective specifications, which may support a claim for added cost.

A written question from the contractor seeking clarification of drawings or specifications. Timely, documented RFIs protect the contractor if later work is disputed.

The stage when the work is sufficiently complete for its intended use, allowing the owner to occupy it. It triggers warranty start, retainage release, and often liquidated damages cutoff.

A documented list of minor incomplete or defective items identified at substantial completion that the contractor must correct before final acceptance and final payment.

A scheduling technique that models activities, durations, and dependencies to identify the longest path through the network, which determines the shortest possible project duration.

The amount of time an activity can be delayed without delaying the project completion date. Activities with zero total float lie on the critical path.

The approved version of the project schedule against which actual progress and delay are measured. Changes to it require formal approval and documentation.

A short-interval, rolling schedule covering the next few weeks that breaks down near-term work, verifies readiness of materials and crews, and supports weekly coordination.

A person capable of identifying existing and predictable hazards and authorized to take prompt corrective action, required to inspect trench and excavation conditions before workers enter.

A method such as sloping, benching, shoring, or shielding used to protect workers in excavations from cave-in, selected based on soil type and depth under OSHA rules.

The OSHA program requiring chemical inventory, safety data sheets, and labeled containers so workers understand hazards of materials on site, including training and written program elements.

A site plan identifying erosion and sediment controls, best management practices, inspections, and responsible parties to keep construction runoff from polluting waters of the state.

A control measure such as silt fence, stabilized entrance, or inlet protection used to prevent or reduce pollutants in stormwater leaving a construction site.

A field test measuring the consistency and workability of fresh concrete by the vertical settlement of a molded cone, performed per ASTM C143 during placement.

A compressive strength test on cast and cured cylindrical specimens, typically at 7 and 28 days, used to verify that concrete meets the specified design strength.

The ratio of water mass to cementitious material mass in a concrete mix. Lower ratios increase strength and durability; excess water reduces both and increases shrinkage.