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Cash FlowGlossary Term

Lump-Sum Turnkey

A fixed-price contract where the subcontractor delivers a completed scope of work for one agreed total. All cost overruns come out of your margin, not the client's pocket. Scope creep and unforeseen site conditions are your financial risk to manage.

Related Terms

Cost-Escalation Clause

Cash Flow

A contract provision allowing subcontractors to adjust their rates when material, labour, or fuel costs rise beyond a set threshold. It protects field service companies from absorbing unexpected cost increases on long-term projects. Without one, subcontractors are locked into original pricing regardless of market changes.

Spring Breakup

Cash Flow

The seasonal period when thawing ground and flooding restrict heavy equipment access to remote job sites. For subcontractors, it typically means project delays, suspended haul routes, and reduced billable work. Plan cash flow carefully to cover the slow period.

Nonresidential Inputs

Cash Flow

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.

Embedded Cost

Cash Flow

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.

Construction Input Costs

Cash Flow

The direct costs subcontractors pay to deliver field work, including labour, materials, fuel, and equipment. These costs fluctuate with market conditions, directly squeezing margins if contracts aren't priced accordingly. Tracking them closely helps subcontractors identify when to renegotiate rates or escalation clauses.

Rule 144a

Cash Flow

A U.S. securities regulation allowing large private companies to raise capital without a public stock listing. For subcontractors, it signals a major client may have access to significant private funding. This can affect contract stability and payment capacity on large projects.

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