Glossary of contractor bidding terms

Scope of work also: SOW, statement of work, work scope: A scope of work is the written, itemised description of exactly what a contractor will do on a job — the tasks, the materials, the quantities and the conditions. It is what a price is a price for.
Bid leveling also: bid levelling, levelling bids, bid analysis: Bid leveling is the process of adjusting competing contractor bids onto a common basis so their prices can be compared directly — adding in what one bidder excluded, stripping out what another included, until every number covers the same work.
Exclusion also: exclusions, excluded work, not included: An exclusion is work a contractor has explicitly stated their price does not cover. Exclusions are a legitimate and normal part of a bid — the danger is not that they exist, but that they are easy to miss.
Change order also: change orders, variation order, extra work order: A change order is a written amendment to a signed contract that adds, removes or alters work, and adjusts the price and schedule accordingly. It is the mechanism by which a job's final cost stops matching the bid you accepted.
Allowance also: allowances, cash allowance, provisional sum: An allowance is a placeholder amount included in a bid for work or materials that have not been specified yet — a budget line to be reconciled against the actual cost once the choice is made.
Apples-to-apples comparison also: like-for-like comparison, comparable quotes, comparable bids: An apples-to-apples comparison is one where every bid covers identical work under identical conditions, so the only variable left between them is price. Achieving it requires a single shared scope; without one, the phrase is aspirational.
Three-bid rule also: rule of three bids, three quotes, competitive bidding: The three-bid rule is the common practice — and, for many property managers and HOA boards, a written policy — of collecting at least three competing bids before awarding work above a certain value.
Unit price also: unit pricing, unit rate: A unit price is a per-unit rate — per square foot, per linear foot, per sheet, per fixture — agreed in advance so that work of unknown quantity can be priced without renegotiation.
Lump-sum bid also: fixed price, stipulated sum, fixed-price contract: A lump-sum bid is a single fixed price for the entire defined scope, regardless of what the work actually costs the contractor to perform. The contractor carries the risk of their own estimate being wrong.
General conditions also: general requirements, project overhead: General conditions are the costs of running a job that are not part of any single task — supervision, dumpsters, portable toilets, temporary protection, permits, site cleanup, insurance and mobilisation.
Mobilization also: mobilisation, mobilization fee, setup cost: Mobilization is the cost and effort of getting a crew, equipment and materials to a site and set up to work — and, at the end, of demobilising and restoring the site.
Punch list also: snag list, punchlist, completion list: A punch list is the itemised list of incomplete or defective work identified near the end of a job, which the contractor must finish before the work is accepted and final payment released.
Retainage also: retention, holdback: Retainage is a percentage of each payment — commonly 5–10% — withheld until the job is complete and accepted, held as security that the contractor will return to finish the last items.

The words on a contractor bid, defined