Performance-Based Contract

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.

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.

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

A signal that a client or project poses serious financial or operational risk to a subcontractor. Common triggers include late payments, scope disputes, or sudden crew access restrictions. Recognising these early helps subcontractors protect revenue and avoid costly disputes.

A contract clause that adjusts your billing rate when diesel or fuel prices shift beyond a set threshold. It protects subcontractors from absorbing sudden fuel cost spikes on long-term or remote field assignments. Negotiate the trigger percentage and index reference before signing.

A pricing model where work is billed per unit completed (per meter drilled, per cubic meter hauled, per joint welded, etc.).

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