Lump Sum

An unplanned increase in project costs due to rising material prices, labour rates, or scope changes. Subcontractors without escalation clauses in their contracts absorb these overruns directly. Always negotiate cost escalation provisions before signing fixed-price agreements.

Contracts that lock in a future price for natural gas, traded on commodity markets. When futures prices drop, upstream clients often cut budgets and delay field work. Subcontractors should monitor futures as an early signal of upcoming project slowdowns or cancellations.

Fees paid to reserve a subcontractor's workforce or equipment availability, regardless of actual utilisation. Clients use these to secure priority access during peak demand periods. For subcontractors, they provide predictable revenue even during standby phases.

A surety bond guaranteeing that a general contractor will pay its subcontractors, labourers, and material suppliers. If the GC defaults, subcontractors can file a claim against the bond to recover unpaid amounts. It is common on publicly funded construction and pipeline projects.

The point when project financing is fully secured and contractual obligations become binding. For subcontractors, it typically signals that mobilisation, procurement, and invoicing can officially begin. Work started before financial close carries significant payment risk.

A contract clause requiring the client to pay for a minimum volume of services or materials, whether used or not. For subcontractors, it provides revenue protection when a project slows down or scopes are cut. Negotiate these clauses carefully to ensure your standby rates and mobilisation costs are covered.

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