Industry Guides
Commercial Construction Glossary: 40 Terms Owners Should Know
June 19, 2025 · 7 min read
Construction contracts assume you already speak the language. Here are the terms that matter most on commercial interior projects.
Contract and money terms
These appear in nearly every agreement.
- Schedule of values — the itemized breakdown payments are drawn against
- GMP — guaranteed maximum price, a cost ceiling in a cost-plus contract
- Retainage — a percentage withheld from payments until completion
- Change order — a written modification to scope, price or schedule
- Allowance — a placeholder dollar amount for undecided scope
- General conditions — project overhead such as supervision and protection
Schedule and field terms
Used daily on site.
- Critical path — the sequence that determines the finish date
- Long lead — items with extended delivery times
- Rough-in — in-wall and overhead systems before close-in
- Close-in — covering framing and MEP with drywall or ceiling
- Punch list — remaining corrections before final acceptance
- Substantial completion — the point the space can be used for its intended purpose
Code and approval terms
These control when you can occupy.
- Certificate of occupancy — permission to occupy the space
- Letter of completion — sign-off for qualifying alterations
- Controlled or special inspection — third-party verification of specific work
- Occupancy classification — the code category governing the space
- Egress — the required path out of the building
Frequently Asked Questions
What is the difference between substantial and final completion?
Substantial completion means the space is usable for its purpose; final completion means all punch list items and closeout documents are done.
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