Unit Price Agreement

Sometimes a unit price contract for certain parts of the project is combined with a lump sum contract or mixed with other types of contracts. A bidder may only be asked to indicate flat prices for certain clearly defined items, such as the mobilization and demobilization of dredging facilities. Differences from estimated quantities are expected to result in a proportional increase or decrease in the contract price. In the United States, a unit price contract is a commonly used type of construction contract. Depending on who you ask, there are 4 types of contracts that are commonly used in the building; with different preplays and replays and best use scenarios. Fixed-price or fixed-price contracts are the most appreciated and are ideal for general contractors and their subcontractors for projects for which planning is completed and the scope of the work is clearly defined. A cost-plus contract or cost reimbursement contract takes the direct cost of equipment and work PLUS a percentage of costs, fixed fees, incentives or bonuses based on performance metrics. Time and equipment contracts (t-m) are very similar, but the rates for equipment and work will each have a transparent mark-up. The unit price or individual contracts are also called (re) measurement contracts. It`s a great choice for projects that involve repetitive tasks and easily quantifiable resources. The various positions cover all costs of work, equipment, overhead, overhead, taxes, authorization and inspection. Unit price contracts are the most widely used for public works.

However, it could be very useful for some trades to also use individual price contracts for private jobs. A flat-rate contract or a “fixed fee contract” is a traditional means of purchase that provides a single “flat price” for all work before work begins. If a project is well defined, that is, the scope and timing of the project is clear at the time of the tender and changes are unlikely, a lump sum or a fixed fee may be acceptable. This means that the contractor is able to accurately tout the risk he or she must take. But in many cases, risk assessment is difficult. A unit contract is based on estimated quantities of materials for the project and their unit prices. The final price of the project depends on the quantities required to carry out the work. This means that before work and contract, the different materials are known, but the quantities cannot be identified. In a single-rate contract, the contractor offers a price for each material during the tender. The list of unit games per item can make it easier to calculate any changes or changes and avoid risks.

In reality, however, this can be likened to a flat price. This is particularly the case when the proponent asks the contractor to accept the risk of a proper assessment of quantities, rather than allowing a reassessment of quantities in light of what happens on site during the work. It can be entered on the basis of a unit price, for example. B hourly rate, certain items, work volume, etc. This can be used to agree a contract on the basis of approximate quantities, and then the actual payment, determined by the number of units actually needed. For example, a price per kilometre of highway can be indicated on the basis of an approximate estimate of the distance required, and then the actual payment calculated on the basis of the measurement of the final length of the highway built. Pricing per unit can benefit the customer because it is very easy to compare and compare prices, and it can allow an early start before determining the exact extent.

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