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Unit Price Billing is a method used in the construction industry where costs are determined based on agreed-upon rates for specific types of work. This method means you pay for materials and labor based on the quantity used or amount of time expended. For instance, if you're building a skyscraper, payment might be determined by a set price for every square foot of construction rather than a lump sum for the entire project. Unit Price Billing allows for more flexibility as changes occur during construction, with pricing adjustments made according to altered quantities. It provides transparency and can potentially lead to cost savings if actual quantities are less than projected.

Subcontractor Default, often seen in the construction industry, refers to the circumstance when a subcontractor fails to fulfill their contractual obligations. This could be due to many reasons - ranging from financial instability and resource unavailability to poor performance or bankruptcy. When a Subcontractor Default occurs, the prime contractor becomes liable, which could lead to significant project delays, increased costs, and potential legal issues. It represents a major risk in the construction industry, which is why many firms secure themselves with Subcontractor Default Insurance (SDI) as a financial risk management tool. Managing relationships with subcontractors carefully, monitoring their performance, and conducting background checks are some ways to avoid Subcontractor Default.

A Schedule of Values (SOV) is an essential financial tool used in the construction industry. It's essentially a detailed plan that lists out the entire scope of construction work and assign costs to each element. The SOV is organized into a series of line items categorized by phase, task, or materials required for the job. This document is a critical component of successful project management as it breaks down the work into measurable parts to calculate and track costs throughout the project. This ensures that the project stays on budget and timeline. The SOV can be updated as the project progresses to reflect any changes. It provides a useful framework for monitoring progress, managing payments, and resolving disputes, making it integral to the financial health of a construction project.