TN General Contractor key terms

The difference between a company's current assets - cash, receivables, and inventory - and its current liabilities. Contractors need enough of it to pay labor, materials, and overhead before progress payments arrive.

Indirect business costs that cannot be charged to a single project, such as office rent, insurance, owner salaries, and accounting. Contractors recover overhead by marking it up into each bid.

A month-by-month forecast of when cash will come in from billings and go out for payroll, suppliers, and debt. It warns a contractor before a cash shortage develops.

A written, signed modification to the contract that adjusts scope, price, or time. Without the owner's signature it usually cannot be billed, so signed authorization should come before the extra work starts.

The point at which a project is usable for its intended purpose, even though minor items remain. It typically starts warranty periods, releases retainage, and shifts risk of loss to the owner.

A pre-agreed sum deducted from payment for each day a contractor finishes late. Courts enforce it when it reasonably estimates the owner's actual losses rather than acting as a penalty.

A contract clause where one party promises to pay for losses and defend the other party against claims arising from specified events. Broad forms may be limited by state anti-indemnity statutes.

The state board that issues contractor licenses, sets classifications and monetary limits, investigates complaints, and can suspend or revoke a license or assess civil penalties for violations.

The maximum dollar value of work a Tennessee contractor may perform under its license, set by the board based on the contractor's finances and experience. Bidding beyond it is a licensing violation.

A Tennessee license for contractors doing residential remodeling, repair, or improvement work in a lower dollar range than full contractor licensing. It carries its own application, exam, and consumer-protection requirements.

A statutory claim recorded against real property by a party who furnished labor, materials, or equipment that improved it and was not paid. Strict notice and filing deadlines apply or the right is lost.

A written document in which a contractor or supplier gives up lien rights, either for progress payments received to date or, in a final waiver, for all work on the project.

A surety bond that guarantees a contractor will pay subcontractors and suppliers on a project. Claimants who are unpaid may pursue the surety after meeting the bond's notice requirements.

A state law modeled on the federal Miller Act that requires payment and performance bonds on public projects above a threshold, giving unpaid subcontractors a remedy when liens are unavailable on public property.

A percentage of each progress payment withheld by the owner until the work is complete. It protects the owner against defective or unfinished work but ties up contractor cash.

Statutes setting deadlines for owners and upper-tier contractors to pay invoices, and for the withholding of payment to be justified in writing. They may also set interest on late amounts.

Under OSHA, someone capable of identifying existing and predictable hazards and authorized to take prompt corrective action. Excavation, scaffolding, and fall-protection rules require one on site.

The OSHA program requiring chemical hazards to be classified and communicated through labels, safety data sheets, and worker training. Employers keep SDSs accessible for every hazardous chemical on the job.

A work-related death, illness, or injury requiring medical treatment beyond first aid, loss of consciousness, restricted work, or days away. Recordable cases go on the OSHA 300 log.

Insurance that pays medical costs and lost wages for employees injured on the job, in exchange for giving up most tort claims against the employer. Most states require it once employees are hired.

A bond submitted with a bid guaranteeing the bidder will sign the contract and provide required bonds if awarded. If the bidder walks away, the surety pays the owner up to the bond amount.

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

The longest chain of dependent activities in a schedule; it sets the project duration. Any delay on it delays completion unless the schedule is adjusted or time is recovered.

The amount of time an activity can slip without delaying the project finish (total float) or the next activity (free float). It is a scheduling buffer, and contract terms may govern who owns it.

A systematic measurement of every material and labor item shown on the drawings and specified, forming the basis of an estimate. Errors here carry straight through to the bid price.

A written change to the bidding documents issued before bids are opened, such as revised drawings, specifications, or clarifications. Bidders must acknowledge each addendum in their proposal.

The maximum pressure a foundation soil can safely support without excessive settlement or shear failure, usually expressed in pounds per square foot and confirmed by geotechnical testing.

Mechanical densification of fill or subgrade soil, measured as a percentage of maximum dry density. It reduces settlement and increases strength under footings, slabs, and pavement.

Shoring, shielding, or sloping used to prevent cave-ins in excavations. OSHA requires one for trenches five feet deep or more, or where a competent person finds unstable soil.

A field test measuring how far a cone of fresh concrete settles, indicating workability and consistency. It is a quick check that the mix matches the approved design.

Maintaining adequate moisture and temperature in concrete after placement so cement hydration continues and the concrete reaches its intended strength and durability.

The depth of concrete between the outer surface and the nearest reinforcing steel. It protects rebar from corrosion and fire, and codes set minimums by exposure condition.

Fabricator or contractor-prepared drawings showing how specified components will actually be made and installed. They are submitted for designer review and are not a substitute for the contract documents.

Waterproof material installed at joints, penetrations, and edges of a roof or wall to direct water away from the building. Improper lapping is a common source of leakage.

A material that slows the movement of water vapor through an assembly, protecting insulation and framing from condensation. Placement depends on climate and whether the assembly dries inward or outward.

Product data, samples, or drawings a contractor sends to the design professional for review before installation. The review confirms the product meets the specifications, not that the design is correct.

A formal written question from the contractor asking the designer to clarify or resolve an ambiguity in the contract documents. The answer becomes part of the project record and may support a change order.

A list of incomplete or defective items identified near the end of a project that the contractor must correct before final acceptance and final payment.

Marked-up drawings recording the actual dimensions, locations, and changes of what was built. They are turned over to the owner at closeout for future maintenance and renovation.

A breakdown of the contract sum into line items of work, used to price progress payments. Each line must be realistically allocated so billings track work actually put in place.