Fuel Cost Escalation Clause

A pricing model where the contractor agrees to complete a defined scope of work for a fixed total price, regardless of actual costs incurred.

A formal written amendment to an existing contract that modifies scope, cost, or schedule. Subcontractors should never perform out-of-scope work without a signed change order. Undocumented changes are a leading cause of unpaid invoices and disputes.

The queue of pending bids and quotes a subcontractor has not yet completed or submitted to clients. A large estimating backlog can delay securing new work and strain small estimating teams. Tracking it helps prioritise high-value opportunities and allocate quoting resources effectively.

A reduced invoice amount offered to prime contractors or clients who pay before the standard due date. Common terms like 2/10 Net 30 mean a 2% discount if paid within 10 days. Subcontractors must weigh the cash-flow benefit against the revenue they give up.

Revenue that is earned but never collected due to operational inefficiencies. Common causes include lost field tickets, unbilled equipment hours, forgotten third-party charges, and documentation errors. Industry estimates suggest 1-5% of revenue is lost to leakage in paper-based operations.

The process a prime contractor or operator uses to review, approve, and finalise invoices before releasing payment to subcontractors. Understanding the settling system helps subs forecast cash flow and avoid payment delays. Timelines vary widely between clients, so confirm the cycle before mobilising.

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