Buyout
The process, right after winning a project, of finalizing and signing subcontracts with the actual subcontractors who'll do the work, locking in firm prices that may differ from the numbers originally carried in the winning bid.
Why it matters
A winning bid is built from estimated subcontractor costs, often based on quotes gathered under time pressure before the bid was due. Buyout is when those estimates become real, signed commitments, and the gap between the two (buyout savings or buyout loss) often determines whether the project actually makes the profit margin it was bid at.
On a real project
A general contractor's winning bid carried $500,000 for electrical work based on a quick preliminary quote. During buyout, they solicit final competitive quotes from three electrical subcontractors and sign a subcontract for $460,000, a $40,000 buyout savings that adds directly to the project's profit.
Who this matters most to
A Project Manager runs buyout once a project is awarded, working to lock in subcontracts at or below what was carried in the bid. An Estimator often stays involved through buyout, since they know exactly which assumptions the original numbers were built on.
Where this goes wrong
A project manager rushes buyout to get subcontracts signed quickly, accepting the first quote for a specialty scope like curtain wall without competitively rebidding it. The number comes in well over what was carried in the original bid, and the difference eats directly into the project's profit before a single piece of steel goes up.