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Cash Flow Glossary Term

Quantity Drift

The gradual increase or decrease in actual field quantities compared to original contract estimates. For subcontractors, untracked drift leads to unbilled work or disputed invoices at project close-out. Monitor quantities continuously to support change order claims.

Related Terms

PPI (Producer Price Index)

Cash Flow

A government measure tracking price changes for goods and services at the producer level. Subcontractors use it to justify rate increases on long-term contracts when input costs rise. It also supports escalation clause negotiations with operators and prime contractors.

Dayrate Model

Cash Flow

A pricing structure where subcontractors charge a fixed daily rate for equipment, personnel, or services regardless of output. Rates are negotiated upfront and apply for each calendar or operational day on site. This model gives field crews predictable revenue but ties income directly to days worked, not project milestones.

Alteration

Cash Flow

A formal change to an existing contract's scope, timeline, or pricing. Subcontractors must document alterations in writing to protect payment entitlements. Verbal agreements alone rarely hold up during disputes or audits.

Tax-Exempt Revenue Bonds

Cash Flow

Government-issued bonds that fund large infrastructure projects without federal tax on investor returns. For subcontractors, these bonds often finance the public projects you bid on, such as pipelines or facilities. Lower borrowing costs for project owners can mean steadier long-term contracts and more predictable payment cycles.

Headline Inflation

Cash Flow

The overall rate of price increases across the economy, including fuel and materials. For subcontractors, it signals rising operating costs that may not be covered by fixed-rate contracts. Monitor it when renegotiating agreements or submitting bids.

Natural Gas Futures

Cash Flow

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.

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