Committed Utilization Agreement

Materials, labour, and equipment costs tied to commercial and industrial construction projects. Subcontractors track these input costs to price bids accurately and protect margins. Rising input costs can erode fixed-price contract profitability quickly.

A guaranteed minimum volume of work contracted over a set period. For subcontractors, baseload provides predictable revenue and justifies keeping crews and equipment on standby. It is the foundation around which additional spot or call-out work is scheduled.

Expenses already built into a contract rate that cannot be billed separately, such as mobilisation, PPE, or overhead. Subcontractors must identify these upfront to avoid absorbing unrecovered costs. Missing embedded costs during bid review is a common source of margin loss.

The gradual increase or decrease in actual field quantities compared to original contract estimates. For subcontractors, untracked drift leads to unbilled work or disputed invoices at project close-out. Monitor quantities continuously to support change order claims.

Payment terms indicating when payment is due after invoice date. Net 30 means payment within 30 days. Many operators use Net 45 or Net 60, extending subcontractor cash cycles.

Materials or equipment stored at your job site but owned by the supplier until you use them. You only pay when items are consumed, reducing upfront capital tied up on remote projects. Common for frequently used consumables like fittings, gaskets, and PPE on long-duration field contracts.

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