Pay-When-Paid

A charge issued by an operator or general contractor to a subcontractor for costs incurred due to defective work, delays, or failure to meet contractual obligations.

An arrangement where costs for equipment, mobilisation, or resources are split between the contractor and client. Subcontractors should confirm cost-sharing terms in writing before mobilising. Unclear agreements often lead to disputed invoices and delayed payments.

A contract where your payment depends on meeting specific targets, such as uptime, output, or safety metrics. Underperforming against those benchmarks can trigger penalties or reduced fees. Subcontractors must track KPIs closely to protect their margins.

A disconnect between what a subcontractor quoted and what the client expects to pay for. This often surfaces during invoicing when scope, rates, or billing terms were not clearly agreed upon upfront. It can delay payments and strain relationships with prime contractors.

NPT (Non-Productive Time) is any period when crews or equipment are on-site but not performing billable work. This includes weather delays, equipment breakdowns, or waiting on materials. Subcontractors often absorb NPT costs unless contracts clearly define standby rates.

The total value of contracted work that has not yet been completed. Used by bonding companies to assess contractor capacity and risk.

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