Glossary
The words behind the numbers.
30 terms you will meet on a construction contract in Oman, each defined in a sentence or two. Reviewed September 2026.
- Advance payment guarantee
- An advance payment guarantee is a bank guarantee the contractor provides in exchange for an advance, often 10 to 15 percent of the contract sum, paid before work starts to fund mobilisation. The advance is recovered by deductions from later interim certificates, and the guarantee reduces as it is repaid.
- Bill of Quantities (BOQ)
- A bill of quantities is an itemised list of every element of work in a building, with measured quantities and units, that contractors price line by line. It is prepared from the drawings to a standard method of measurement so all tenderers price the same job and payments can be measured against it.
- Cash-flow forecast
- A cash-flow forecast predicts how much the client will pay each month over the life of a project, following the typical S-curve of slow start, peak in the middle and tail at the end. Banks require it for construction finance, and it is the baseline that cost monitoring reports actual spend against.
- Contingency
- Contingency is money held in the budget, outside the contract sum, for risks that cannot be priced precisely: ground conditions, design development, client changes. It is drawn down against specific risks as they occur and reported monthly, so the client always knows how much cover remains.
- Cost plan
- A cost plan is the client's budget for a building broken down by element: substructure, frame, envelope, finishes, services, external works and preliminaries, each with a target cost. It is prepared before the design is fixed and updated as the design develops, so design decisions are made against a known budget.
- Defects liability period
- The defects liability period is the time after practical completion, commonly 12 months in Oman, during which the contractor must return to fix defects at their own cost. The second half of the retention is released when it ends and the defects have been made good.
- Extension of time (EOT)
- An extension of time is a formal adjustment of the completion date because of a delay the contract says the contractor is not responsible for, such as late instructions or client variations. Granting it relieves the contractor of liquidated damages for that period; it does not automatically entitle them to money.
- FIDIC
- FIDIC is the international federation of consulting engineers whose standard forms of contract are widely used on larger private and public projects in Oman. The Red Book is for works designed by the client, the Yellow Book for design and build. Government projects commonly use the Oman Standard Documents, which share much of the same logic.
- Final account
- The final account is the agreed statement of the total amount payable under a construction contract once the work is complete: the contract sum adjusted for re-measurement, variations, provisional and prime cost sums, claims, retention and any damages. Both parties sign it, and it closes the contract commercially.
- In-Country Value (ICV)
- In-Country Value is Oman's measure of how much of a contract's spend stays in the national economy through Omani staff, local suppliers, subcontractors and services. Public tenders score ICV alongside price and technical merit, so a bidder's supply chain is part of the bid.
- Interim payment certificate
- An interim payment certificate is the monthly statement of what a contractor has earned to date: measured work in place, materials on site and agreed variations, less retention, advance recovery and previous payments. It is issued by the client's consultant after checking the contractor's application, and the client pays against it.
- Krooki (site plan)
- A krooki is the official site plan for a plot in Oman, issued by the Ministry of Housing and Urban Planning, showing the boundaries, area, coordinates and permitted use. It is required for any building permit application and is the document that setbacks and plot coverage are checked against.
- Liquidated damages (LDs)
- Liquidated damages are a pre-agreed sum per day or week that the contractor pays the client for finishing late, deducted from payments due. They are capped, usually at 5 to 10 percent of the contract sum, and cannot be levied for periods covered by a granted extension of time.
- Loss and expense
- Loss and expense is the contractor's claim for money lost because of a client-caused event that disrupted or prolonged the works, over and above what the variation rates cover. Entitlement depends on the contract wording, and quantum depends on contemporaneous records that show what was actually spent.
- Lump sum contract
- A lump sum contract fixes a single price for a defined scope, with the contractor carrying the risk of quantities. It suits projects with complete drawings at tender. Changes are still valued as variations, so a lump sum is only as fixed as the design it was priced on.
- NRM (New Rules of Measurement)
- NRM is the RICS suite of measurement rules used to prepare cost plans (NRM 1) and detailed bills of quantities (NRM 2). In Oman it is the most common standard named in consultant appointments for measured bills, alongside the older Standard Method of Measurement (SMM).
- Order-of-cost estimate
- An order-of-cost estimate is the first budget for a project, prepared from the brief and floor areas before drawings exist, using current rates per square metre for the building type. It tells a client whether a scheme is affordable before design fees are spent, and it is the starting point of the cost plan.
- Performance bond
- A performance bond is a bank guarantee, typically 5 to 10 percent of the contract sum in Oman, that the client can call if the contractor fails to perform the contract. It is a standard condition of award on public projects and most private projects of size.
- Practical completion
- Practical completion is the point at which the works are finished enough for the client to take over and use the building, with only minor snags outstanding. It starts the defects liability period, releases the first half of retention and stops liquidated damages from running.
- Pre-qualification
- Pre-qualification is the check made before a contractor is invited to tender: registration and Tender Board grade, financial standing, insurance, comparable completed projects, key staff and current workload. It ensures every bid received comes from a firm that could actually deliver the project.
- Preliminaries
- Preliminaries are the contractor's costs of running the site rather than building the work: site management, offices, welfare, cranes and scaffolding, temporary power and water, insurances and bonds. They are priced as a separate section of the bill and typically form a significant share of the contract sum.
- Prime cost sum (PC sum)
- A prime cost sum is an allowance for the supply price of a specified item, such as sanitary ware or tiles, whose exact product the client will choose later. The contractor prices fixing and profit separately, and the sum is adjusted up or down once the real supply price is known.
- Prolongation cost
- Prolongation cost is the extra time-related expense a contractor incurs when the project runs longer for reasons the client is responsible for: site staff, offices, plant and insurances for the additional weeks. It is claimed with an extension of time and must be proven from actual records, not the tender preliminaries.
- Provisional sum
- A provisional sum is an allowance included in the contract for work that cannot yet be fully described or priced, such as a kitchen or landscaping not yet designed. It is spent only on the engineer's instruction and adjusted to the actual cost in the final account, which is why large provisional sums make a tender price unreliable.
- Quantity surveyor (QS)
- A quantity surveyor is the construction cost professional who measures work, sets budgets, prepares bills of quantities, evaluates tenders, certifies payments, values variations and agrees final accounts. A client-side QS works for the owner; a contractor's QS protects the contractor's margin.
- Re-measurement contract
- A re-measurement contract pays the contractor for the quantities actually built, at the rates tendered in the bill of quantities. The bill quantities are estimates. It suits infrastructure and earthworks, where quantities are uncertain, and requires a quantity surveyor to measure the work as it goes in.
- Retention
- Retention is a percentage, commonly 5 to 10 percent, withheld from each interim payment as security for the contractor finishing the work and correcting defects. Half is usually released at practical completion and the balance at the end of the defects liability period.
- Tender
- A tender is a contractor's formal priced offer to carry out the works described in the tender documents. A competitive tender issues the same drawings, specification and bill of quantities to several pre-qualified contractors at the same time, with a fixed return date, so the prices can be compared like for like.
- Tender Board grade (contractor classification)
- In Oman, contractors, suppliers and consultancy offices are classified by the Projects, Tenders and Local Content Authority into grades, from excellent grade down to fourth grade, based on capital, staff and track record. The grade determines which government tenders a company may bid for and is a useful proxy for capacity on private work.
- Variation
- A variation is an instructed change to the scope, quality or sequence of the contract works. It is valued at the contract rates where the work is similar, at rates derived from them where it is not, and at fair rates otherwise. Unagreed variations are the main reason final accounts drift from the contract sum.
Also: APG · mobilisation advance
Also: BOQ · BQ · bills
Also: drawdown schedule · S-curve
Also: risk allowance
Also: elemental cost plan
Also: DLP · maintenance period · defects notification period
Also: EOT · time extension
Also: FIDIC Red Book · FIDIC Yellow Book
Also: ICV · local content
Also: IPC · interim valuation · interim bill · running bill
How we help: Interim Bill Evaluation & Payment Certification
Also: kroki · site plan · plot plan
Also: LDs · delay damages · penalty
Also: disruption claim · L&E
Also: fixed price contract
Also: NRM1 · NRM2 · RICS NRM
Also: OCE · feasibility estimate · budget estimate
Also: performance guarantee · performance security
Also: substantial completion · taking over · handover
Also: PQ · PQQ · contractor shortlisting
Also: prelims · general items
Also: PC sum · PC rate
Also: QS · cost consultant · cost engineer
Also: measure and value · admeasurement contract · unit rate contract
How we help: Interim Bill Evaluation & Payment Certification
Also: retention money
How we help: Interim Bill Evaluation & Payment Certification
Also: bid · tender submission
Also: excellent grade · first grade contractor · PTLC classification
Also: variation order · VO · change order
Met one of these on your project?
Send us the contract clause or the contractor's letter. We will tell you what it means for your money.