So here are a few terms I think our industry needs to change, and a couple that need to disappear entirely.

Mobilization versus CAT Fee

"Mobilization" is a restoration term. On a commercial project, especially during storm or event response, mobilization means moving equipment to the area or site and setting up. The problem is most contractors fail to properly define what the mobilization fee is for and that it also shares the same category as transportation. This causes a lot of confusion. 

When a restoration contractor responds to a catastrophe, we are not just moving equipment. We are pulling crews off other work, paying travel and per diem, staging trucks and trailers, securing lodging in a market where hotels are gone, and putting people into an environment with no power, no fuel, and no supply chain. That has a real cost, and it happens before a single billable hour hits the loss. 

When we call that "mobilization," an adjuster hears a transportation and/or large construction line item and starts comparing it to what a General Contractor (GC) charges to move a crane. Then the negotiation starts from the wrong place.

Call it what it is: a CAT fee, or a catastrophe response fee. It's the cost of deploying trained people and specialized equipment into a disaster zone on short notice. If a CAT fee for you includes back-office preparation, loading trucks and trailers, equipment maintenance you should list as many items out in your agreement as possible. Name it correctly and define it, and it stops being a line-item people argue about and starts being a term of the agreement.  

The typical CAT fee I have seen in pricing review this year was 6% of the total invoice. 

"Laydown Yard" should be changed to “Support Center”.

As an industry we must continue to evolve and stay ahead of the curve in processes and procedures. Using the term laydown yard worked for a few years but now has caused problems because if it did not occur at the yard site is it even billable? Attorneys can have a field day when it comes to arguing what a client perceives and what your contract may say. 

Using the term support center has become the latest term used to describe all the supporting logistics and services that go into a CAT situation or even a single large commercial project. The support center, if it’s properly defined in your terms and conditions, can cover transportation, project coordinator, admin staff, rent for the staging area, and even back-office work from your corporate office for items such as booking hotels, processing per-diems and additional subcontractor invoices, and much more.

“Daily PPE’ should be daily “Safety Equipment”.

Having invoiced almost a billion dollars in commercial and CAT work I have found that daily PPE is the most confusing item to adjusters and consultants. I have struggled to explain why we have a daily charge and also line items for PPE. I even made sure to spell out what that was for in our terms and conditions but it still continued. When I took the approach of a contractor and changed the name to daily safety equipment those questions stopped.

"Pass-Through" Undersells the Work. It's Cost Plus. 

Somewhere along the way, we allowed subcontracted work and purchased materials to become "pass-throughs," as if the contractor is just a financier and mail service for the client. Think about what actually happens with that "pass-through." The contractor found the sub, vetted them, contracted with them, scheduled them, supervised them, verified their work, carried the liability for their performance, and floated the cost on their own credit for 60, 90, sometimes 120 days before anyone got paid. That is not passing something through. That is procurement, management, risk, and financing.

The word "pass-through" tells the carrier one thing: no markup belongs here. And once the word is on the table, you're negotiating uphill. The correct term is cost plus, not Overhead and Profit (O&P), or 10 and 10. Cost plus is a recognized contract structure with a hundred years of history behind it. The cost is the sub or the material. The plus is the management, the risk, and the money you carried. It's not a favor. It's how the work gets done.

“Overhead and Profit” also needs to become “Cost Plus".

"Overhead and Profit" might be the most fought-over phrase in property claims. We've let it turn into a ritual: the 10 and 10 convention, the three-trades rule, the endless debate over whether O&P "applies" to this loss or that one. 

Here's the problem. When overhead and profit is treated as something separate that gets added on at the end, it becomes something that can be taken away at the end. We handed the other side of the table a lever, and they pulled it on every claim. No other professional service works this way. Your attorney does not bill you a rate and then negotiate whether their office rent "applies." The rate is the rate, and it covers the business that delivers the service. 

Moving to cost plus language fixes this. Under a cost plus structure, the plus isn't a bonus you have to justify trade by trade. It's a defined percentage in the agreement, tied to the cost of the work, agreed to up front. It stops being a debate and becomes math.

Some Terms that just need to go away: "Tools of the trade", “Industry standard”, “Reasonable and customary”, and "Cost of doing business"

Some terms should be replaced and some just need to be stripped from our industry language. This is especially true for several of these when it comes to time and material billing. "Tools of the trade" is just ludicrous when billing in T&M. All items billed for should either be on the price list section of your agreement or was billed under a subcontractor or as reimbursable. I do like to include a lot of small things in my small tools charge and make sure to spell that out in the terms section of the agreement. Fact is that there is no such thing as a tool of the trade when billing T&M unless otherwise agreed upon with the client.

Another term that needs to be removed from the invoicing section is industry standard. The only standard that is valid is our standards that govern what we practice. This term is abused so much that we need to remove it and come up with a more specific term such as ANSI/IICRC standards. Industry standard too often is used as a pricing mechanism, and every catastrophe and job is different and there is no standardization on how to approach all jobs. Just rules that govern our practices. So, when this term is used, ask for a written definition of the term. Do not accept industry standards as an opportunity to have you reduce your billing cost for any item.  

Reasonable and customary always gets me heated when dealing with consultants. As stated above every job and conditions are unique, and there is no generic pricing that is applied, just what is in your contract. What I have always done to play the game is ask for copies of those invoices and what was paid to prove that you only pay $105 per day for a dehumidifier. In all my years I have never had a consultant provide any proof, and when I have stuck to my guns and the contract, I typically win this one easily. 

I think I hate the term "cost of doing business" the most. The cost of doing business in my opinion is what you have done to get your company in position to provide services. In other words: setting up your company, insurance, and other ancillary costs that are part of running the day-to-day business. Anything done or used in service for the client is billable if it's in the agreement.  

These are all denial terms. You will not find these terms defined in the ANSI/IICRC S500 or any other standard we use in this industry, in any pricing platform, or in any contract you've signed. They exist for one purpose: to strip legitimate line items off an invoice without having to explain why. Every one of those is a real, documented, necessary cost of performing the work on that specific loss, and every one of them can vanish behind one of these phrases. 

Here's my rule: if a term has no written definition, it has no place in a payment discussion. The next time one of these phrases shows up in a review of your invoice, ask one question. "Can you show me where that term is defined in our agreement or in the ANSI/IICRC Standards?" There will be no good answer, because there is no real definition. 

We can't stop other people from using these phrases. But we can stop using them ourselves, we can stop accepting them as a reason for non-payment, and we can write contracts that leave no room for them.

Language Is the First Line of Defense

None of this is about word games. It's about defensibility. Every term I've talked about here eventually lands in one of three places: a contract, an invoice, or a dispute. Vague language loses in all three, and defined language wins. So, define your CAT fee. Write cost plus into your agreements. Kill the undefined phrases before they kill your line items. The industry's language should describe the work we actually do and the risk we actually carry.