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Culture Documents
DISADVANTAGES
1. Changes is difficult and costly.
2. Contractor is free to use the lowest cost of material,
equipment and methods.
3. The contractor carries much of the risks. The tendered price
may include high risk contingency.
4. Competent contractors may decide not to bid to avoid a highrisk lump sum contract.
UNIT PRICE
ADVANTAGES FOR THE CONTRACTOR / DISADVANTAGE FOR THE
OWNER
1. No total final price only an estimated BOQ
2. Quote rates / Prices by units
3. Re-negotiate for rates if the quantity or work considerably
exceeds the initial target.
4. Payment to contractor is based on the measure
5. Unbalanced bids
6. Higher risk to owner
7. Ideal for work where quantities cannot be accurately
established before constructions starts.
COST PLUS
-
The contractor estimates the cost just like in a lump sum bid, but
profit is limited to a specified amount.
In the event that actual costs are lower than the estimates, the
owner keeps the savings.
In the even costs are higher, the contractor pays the difference
and profit is reduced.
ADVANTAGES