- Hard costs — the physical construction: labor, materials, equipment, site work. ~70–80% of project cost.
- Soft costs — design fees, permits, legal, financing/interest, insurance, surveys, testing, developer fees. Often 15–30% on top of hard costs.
- FF&E — Furniture, Fixtures & Equipment (e.g., dental chairs, kitchen equipment, office furniture). Usually budgeted separately from construction.
- Contingency — a reserve (commonly 5–15%) for the unexpected. Larger on renovations/rescues where hidden conditions lurk.
- Escalation — expected cost increase over time due to inflation/market. (Commercial construction rose ~12–18% from 2023–2026; growth slowed to ~3–4% in 2026 — directional, verify currently.)
- Value engineering (VE) — systematically finding lower-cost ways to achieve the same function without gutting quality.
- Retainage — a percentage (often 5–10%) the owner withholds from each payment until the job is satisfactorily complete; protects the owner.
- Change order (CO) — a documented change to scope/price/schedule after the contract is signed. Controlling change orders is a top owner concern.
- Submittal — sub/vendor documentation (product data, shop drawings) submitted for approval before installation.
- RFI (Request for Information) — a formal question from the builder to the design team to clarify the drawings.
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