Revenue Leakage

The base price a subcontractor pays to source materials, equipment, or supplies before adding markup. Understanding wholesale cost helps field service companies price jobs accurately and protect margins. It is the starting point for calculating billable rates to clients.

A U.S. federal law requiring prime contractors on government projects to post payment bonds protecting subcontractors and suppliers. If unpaid, subs can file a claim directly against the bond. This provides a critical payment remedy when the prime contractor defaults.

The point when a project is complete enough for the owner to use it for its intended purpose. For subcontractors, it typically triggers final invoicing and starts the defect liability period. Holdbacks or retainage are often released shortly after this milestone.

The gap between a benchmark price (like WTI crude) and the actual local price your client pays. When that gap widens unexpectedly, clients may cut field budgets mid-contract. This can delay your invoices or reduce your awarded scope.

A fee billed to clients to reserve your crew, equipment, or services during a set period — whether fully utilised or not. It protects subcontractors from revenue loss during standby or low-demand phases. Common in long-term service agreements for drilling, frac, or maintenance contracts.

Debt instruments issued by large operators or prime contractors, backed by company assets. When a client carries heavy debt loads like these, subcontractors face higher payment risk if the borrower defaults. Always review a client's debt structure before committing to large scopes of work.

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