Contract cost refers to the total cost incurred in fulfilling a long-term contract, typically calculated using contract costing techniques.
An agreement on a construction project where the contractor earns a specified percentage profit over the actual costs incurred. This contract type is considered suboptimal due to reduced incentives for cost control. An alternative approach is the cost-plus-fixed-fee contract.
In real estate, a holdback refers to a portion of money that is not paid out until certain specified events or conditions have been met. These events could include the completion of a floor loan, the fulfillment of a loan commitment, or retainage on a construction contract.
A subcontractor is an individual or business that is hired by a general contractor to perform a specific task as part of a larger project. The general contractor remains responsible for the overall completion and quality of the project.
A guarantee provided by a company ensuring that it will not withdraw from a contract after submitting a bid.
