vertical-construction

Vertical: construction — don't spec it naive

Construction has its own money physics. A spec that treats a contractor's billing like a SaaS invoice will ship something no contractor can use, because the cash flow it ignores (retainage held back, draws against a schedule of values, subs gated on lien waivers) is the thing the contractor is trying to manage. This skill gives architect and pm the vocabulary and the non-obvious rules so the four construction products are specced from domain reality, not intuition.

The four products and their incumbents:

Incumbents: Procore (enterprise, ~$375+/mo minimum — too expensive and heavy for small contractors; do not fight it head-on), Buildertrend (residential-focused), Contractor Foreman, Autodesk Construction Cloud (enterprise). The opening is small contractors priced and complexity'd out of these.

Domain vocabulary (use these terms exactly in specs)

• Estimate — internal cost calculation (what the job will cost the contractor). Bid — the priced number submitted to win the job (estimate + markup). Proposal — the customer-facing document wrapping the bid with scope, terms, exclusions. Estimate → bid → proposal are three artifacts, not synonyms.
• Takeoff (quantity takeoff) — counting/measuring quantities from plans (sq ft of drywall, linear ft of pipe) that feed the estimate. Garbage takeoff = garbage bid.
• Unit cost + assembly — an estimate is built from line items priced per unit (e.g. $/sq ft). An assembly bundles several unit-cost items into one (a "door assembly" = door + frame + hardware + labor). Real estimating is assemblies, not freehand numbers.
• Markup vs margin — markup is added on top of cost (cost × 1.20). Margin is the cut of the bid price (price − cost) / price. 20% markup ≠ 20% margin. Mixing them mis-prices the job. Spec which one a field means.
• Change order (CO) — a contracted change to scope/price after the bid is signed. Untracked COs are where margin leaks and disputes start.
• RFI (request for information) — formal question to the architect/owner about ambiguous plans; the answer can change scope (→ change order).
• Submittal — contractor's proposed material/product samples sent for approval before install.
• Draw schedule + progress billing — payment isn't lump-sum. The contractor bills in draws as work completes, against a schedule of values (the job broken into line items each with a contract value); each billing claims a % complete per line.
• Retainage / retention — the owner withholds a slice (typically 5–10%) of each payment until the job is complete/accepted. It is owed money the contractor can't touch yet — a first-class concept, not a discount.
• Lien / lien waiver — a mechanic's lien is a legal claim against the property for unpaid work; a lien waiver is the sub/supplier signing away that right in exchange for payment. Conditional (on payment clearing) vs unconditional (already paid).
• AIA G702/G703 — the industry-standard pay-application forms. G702 is the summary (application + certificate for payment); G703 is the continuation sheet (the schedule of values with this-period / to-date / retainage columns). Many owners require these exact forms.
• 1099 subcontractor — subs are typically 1099 contractors, not employees; the GC must collect a W-9 and issue a 1099 for tax reporting.
• COI (certificate of insurance) — proof a sub carries required insurance; must be current (not expired) before the sub works or gets paid.
• Daily log — the dated field record (crew on site, work done, weather, deliveries, delays). It is legal/dispute evidence, not a status update.
• Punch list — the end-of-job list of defects/incomplete items to fix before final payment / retainage release.
• Schedule of values (SOV) — the contract sum allocated across work items; the backbone of progress billing and G703.