/vertical-construction

name: vertical-construction
description: Domain knowledge for the construction vertical (contractors, field crews) so architect and pm don't spec construction products naively. Covers the vocabulary (bid vs estimate, takeoff, retainage, change order, AIA G702/G703, lien waiver, draw schedule), the non-obvious money rules that incumbents like Procore price out of reach for small contractors, what a naive build gets wrong (no assemblies, ignored retainage, ungated sub payments), and the entities that must be modelled. Applied by architect when writing ARCH-{slug}.md and by pm when writing PLAN-{slug}.md for any of the four construction products (bid-builder, project-mgmt, subcontractor-portal, field-docs).
when_to_use: |
  Apply when:
  - architect writes ARCH-{slug}.md for a construction product (bid-builder,
    project-mgmt, subcontractor-portal, field-docs)
  - pm decomposes a construction feature into PLAN-{slug}.md tasks
  - design-advisor wireframes a construction screen (estimate, billing, sub payment, daily log)
  - any spec touches money flow (billing, payment, retainage) in the construction vertical
  Do NOT apply to non-construction verticals — the money rules (retainage, lien waivers,
  AIA pay apps) are construction-specific and will mislead elsewhere.
effort: low
allowed-tools: Read, Write, Grep, Glob
paths:
  - "docs/architecture/**"
  - "docs/plans/**"
  - "docs/design/**"

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:

| Product | Archetype | Wedge against | |---|---|---| | bid-builder | marketplace-lite | Excel (small contractors estimate in spreadsheets) | | project-mgmt | crud | Buildertrend, Contractor Foreman | | subcontractor-portal | marketplace-lite | Procore, manual COI/payment tracking | | field-docs | crud | Procore field tools, paper daily reports |

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.

Non-obvious domain rules (the ones that trip a naive spec)

1. **Procore is enterprise and expensive.** Don't out-feature it for small contractors — undercut on price and simplicity. The wedge is "good enough, ch