Construction billing and contract terms: a glossary

Short, sourced definitions of the billing and contract terms that come up on every project, from India to the Middle East and the UK. Where we've written a full guide on a term, the definition links to it.

BOQ (Bill of Quantities)

The contract list of every item of work, each with a description, unit, quantity and, once priced, a rate and amount. Contractors price it at tender, and after award it's the basis for valuing running bills and variations. On CPWD works it's called the Schedule of Quantities. Full guide: What is BOQ in construction?

Contemporary records

Records made at the time of an event, not reconstructed later. FIDIC 2017 defines them as records "prepared or generated at the same time, or immediately after, the event or circumstance giving rise to the Claim" (Sub-Clause 20.2.3, FIDIC). They're the backbone of any claim for time or money.

DLR (Daily Labour Report)

A daily record of the labour on site, usually by trade and by subcontractor, often split into supervisors, skilled and unskilled workers. Contracts often require the underlying records: FIDIC 2017 asks for records of each class of personnel and their working hours for each activity, location and day (Sub-Clause 6.10).

DPR (Daily Progress Report)

The daily record of what happened on site: manpower, equipment, materials received, work done by item and location with quantities, hindrances, inspections and the plan for tomorrow. Weekly reports, bills and delay claims are built from it. Full guide: DPR format for construction

EOT (Extension of Time)

An extension of the contract completion date for delays the contractor isn't responsible for, such as employer delays, variations or exceptional weather. It protects the contractor from liquidated damages for the extended period. Most contracts set a strict notice deadline: 28 days under FIDIC, and 14 days under CPWD GCC 2023 Clause 5.4. Full guide: How to claim an extension of time

Extra item

Work that isn't in the contract's schedule of quantities at all, as distinct from a change in the quantity of an existing item. On CPWD contracts, the contractor may claim a market rate for an extra item within fifteen days of the order or occurrence, with a rate analysis (GCC 2023, Clause 12.2, IIT Kanpur copy).

Hindrance register

A running log of everything that stops or slows the work: what happened, where, when it started and ended, which activities it affected and who was told. On EPC contracts, joint hindrance register entries are often a principal basis for deciding time extensions; on CPWD works, hindrances are now recorded in the site order book. More in our EOT guide.

Interim payment application (IPA) and IPC

The contractor's periodic claim for payment for work done. Under FIDIC 2017 it's called a Statement, submitted after the end of each payment period, usually monthly (Sub-Clause 14.3). The Engineer then issues an Interim Payment Certificate (IPC) within 28 days of receiving it (14.6), and the employer pays within 56 days unless the contract states otherwise (14.7). The Indian equivalent is the RA bill.

Liquidated damages (LD)

A pre-agreed amount the contractor pays for each day or week of delay past the completion date, usually capped. FIDIC calls them Delay Damages, set in the Contract Data (Sub-Clause 8.8). CPWD calls them compensation for delay: up to 1% per month, capped at 10% of the accepted tendered value (GCC 2023, Clause 2). An approved extension of time moves the date they run from.

Measurement book (MB)

The record of quantities actually executed and measured on site, usually measured jointly by the client's engineer and the contractor. Running bills are paid on these measured quantities at BOQ rates. On CPWD works, measurements are now recorded in an electronic measurement book (e-MB) (CPWD Works Manual 2022, para 5.12, NDMC copy).

Notice of claim

The formal notice a contractor must give to preserve a claim for time or money. Under FIDIC 2017, it's due as soon as practicable and no later than 28 days after the contractor became aware, or should have become aware, of the event. If it's late, the entitlement is lost (Sub-Clause 20.2.1).

Provisional sum

An amount included in the BOQ for work that can't yet be fully described or measured, to be adjusted once the work is defined. RICS's measurement rules distinguish defined and undefined provisional sums (RICS NRM2).

RA bill (Running Account bill)

India's interim bill for work done to date, usually raised monthly. On CPWD works over ₹20 lakh, running account bills are submitted "on the basis of such recorded measurements" on the department's format, and interim payments are treated as advances against the final bill (GCC 2023, Clause 7). No RA bill is paid until the applicable labour licences and EPFO, ESIC and BOCW registrations are submitted (Clause 7A).

Schedule of values (SOV)

The US equivalent of a priced breakdown for billing: the contract sum split into lines by section of work or by subcontractor, with each pay application showing the work completed on each line and the percentage complete (AIA G703 instructions).

Site order book

The register kept on site in which instructions from the client's engineer are written down and signed by the contractor's representative to acknowledge them (CPWD GCC 2023). On CPWD works it's also where hindrances are now recorded. It's often the first written record of a change or a delay.

Variation

A change to the contracted work instructed by the employer's side, such as added, omitted or changed work. FIDIC 2017 defines it as "any change to the Works, which is instructed as a variation under Clause 13" (Sub-Clause 1.1.86). CPWD contracts use deviations and extra items. Variations are usually valued at BOQ rates where they apply. Full guide: Claiming a variation from a verbal site instruction

Frequently asked questions

What is an RA bill in construction?

An RA (Running Account) bill is an interim bill for work done to date, usually raised monthly. On CPWD works it is prepared from measurements recorded in the measurement book, and interim payments are treated as advances against the final bill.

What is a measurement book?

The measurement book records the quantities of work actually executed and measured on site, usually jointly by the client's engineer and the contractor. Running bills are paid on these quantities at BOQ rates. CPWD now uses an electronic measurement book (e-MB).

What is EOT in construction?

EOT means extension of time: an extension of the completion date for delays the contractor is not responsible for. It protects the contractor from liquidated damages for that period. Notice deadlines are strict, for example 28 days under FIDIC and 14 days under CPWD.

What are liquidated damages in construction?

Liquidated damages are a pre-agreed amount the contractor pays for each day or week of delay past the completion date, usually capped. CPWD sets compensation for delay at up to 1% per month, capped at 10% of the accepted tendered value.

What is the difference between a variation and an extra item?

A variation is any change to the contracted work instructed by the employer's side. On CPWD contracts, an extra item is work not in the schedule of quantities at all, claimed at a market rate within fifteen days, while a change in quantity of an existing item is a deviation.

What is an interim payment application?

It is the contractor's periodic claim for payment for work done. Under FIDIC 2017 the contractor submits a Statement, usually monthly; the Engineer issues an Interim Payment Certificate within 28 days, and payment follows within 56 days unless the contract says otherwise.