Difference between lump sum and measurement contracts - Revision history

Editor at 09:23, 24 January 2023

2023-01-24T09:23:27Z

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−	[[File:Contract-~~ga27c0c345 1280~~.jpg]]	+	[[File:Contract-ga27c0c345_1280.jpg\|link=File:Contract-ga27c0c345_1280.jpg]]

	Lump sum and measurement are both types construction contracts.		Lump sum and measurement are both types construction contracts.
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	* Construction contract.		* Construction contract.
	* Contract sum.		* Contract sum.
		+	* The difference between admeasurement and construction management contracts.
	* Fixed price contract.		* Fixed price contract.
	* Lump sum contract.		* Lump sum contract.

Designing Buildings at 07:55, 17 January 2023

2023-01-17T07:55:05Z

← Older revision		Revision as of 07:55, 17 January 2023
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		+	[[File:Contract-ga27c0c345 1280.jpg]]
		+
	Lump sum and measurement are both types construction contracts.		Lump sum and measurement are both types construction contracts.

−	Under a lump sum contract, a single ‘lump sum’ price ~~for all the works~~ is agreed before the works begin. It is ~~defined as~~ a fixed price contract, where the contractors agree to execute the ~~work~~ for a ~~stated~~ total sum of money. Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out.	+	Under a lump sum contract, a single ‘lump sum’ price is agreed before the works begin. This is a type of 'fixed price' contract, where the contractors agree to execute the works described in the contract for a total sum of money (the contract sum). Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out.

	For more information see: Lump sum contract.		For more information see: Lump sum contract.

−	Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of ~~works~~) can be described in reasonable detail, but the amount cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out.	+	NB it should be noted that whilst lump sum contracts are often referred to as 'fixed price', there are generally mechanisms within the contract to allow the contract sum to be changed, for example if variations are made, or if there are provisions to account for inflation. For more information see: Fixed price contracts.
		+
		+	Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of work required) can be described in reasonable detail, but the amount required cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out.
		+
		+	Measurement contracts can allow an early start on site, before design is complete, and they can allow changes to be made to the works relatively easily. However, there is inevitably some risk for the client as the cost of the works is not known. In effect, the client is taking the risk for any ‘unknowns’, and whilst this can result in competitive prices from contractors, the level of uncertainty for the client means that measurement contracts are rare other than on civil engineering projects.

	For more information see: Measurement contract.		For more information see: Measurement contract.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Construction contract.		* Construction contract.

Designing Buildings at 08:09, 9 September 2020

2020-09-09T08:09:18Z

← Older revision		Revision as of 08:09, 9 September 2020
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	* Schedule of rates term contract.		* Schedule of rates term contract.

−	[[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Designing Buildings at 07:13, 11 December 2019

2019-12-11T07:13:11Z

← Older revision		Revision as of 07:13, 11 December 2019
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	For more information see: Measurement contract.		For more information see: Measurement contract.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Construction contract.		* Construction contract.

Designing Buildings: Reverted edits by 151.253.50.122 (talk) to last revision by Editor

2019-12-11T07:11:37Z

Reverted edits by 151.253.50.122 (talk) to last revision by Editor

← Older revision		Revision as of 07:11, 11 December 2019
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−	Lump sum and measurement are both types construction contracts. Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin. It is defined as a fixed price contract, where the contractors agree to execute the work for a stated total sum of money. Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out. For more information see: Lump sum contract. Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of works) can be described in reasonable detail, but the amount cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out. For more information see: Measurement contract. {\| \|\| Advantages of re measurable contract (unit price contracts) \|\| Advantages of lump sum contracts, \|- \| \| 1. Client's risk is minimal \|- \| 1. works can start after finalising the initial design and BOQ \| 2. Fewer variations \|- \| 2. Can reduce the design cost. \| 3. The client can arrange capital according to the payment plan. \|- \| 3. High possibility to do value engineering \| 4. Contractors cash flow is predictable. \|- \| 4. Prices (unit rates) will be competitive \| 5. The tendering process is more transparent and impartial. \|- \| 5. Contractor's risk is comparatively low \| \|- \| \| \|- \| Disadvantages of re measurable contract (unit price contracts) \| Disadvantages of lump sum contracts, \|- \| \| \|- \| 1. Cant predict the final value of the project \| 1. Contractors risk is high (ill productivity and mismanagement can lead the project into a loss) \|- \| 2. Delays in contractor's payments (assessment of the measurements takes time) \| 2. Improper details and specs in the design can lead project disputes \|- \| 3. Client's risk is comparatively high \| 3. Delays in the client's financing can delay the project as well \|- \| \| 4. The design should be complete and available before the pre-contract process. \|- \| \| 5. Procurement time can be high \|- \| \| \|}<br />	+	Lump sum and measurement are both types construction contracts.
−	Find out more === Related articles on Designing Buildings Wiki === * Construction contract. * Contract sum. * Fixed price contract. * Lump sum contract. * Lump sum contract - pros and cons. * Measured term contract. * Measurement contract. * Procurement route. * Remeasurement. * Right to payment. * Schedule of rates. * Schedule of rates term contract. References * Quantity Surveyor. (2019). Why cost reimbursement contracts or Re measurable contracts Pros & Con. [online] Available at: [https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/ https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/] [Accessed 11 Dec. 2019]. * Quantity Surveyor. (2019). Lump sum Contracts/Fixed price Contracts- 5 pros & cons (with video). [online] Available at: [https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/ https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/] [Accessed 11 Dec. 2019].	+

−	~~[[Category~~:~~Articles_needing_more_work]]~~ [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin. It is defined as a fixed price contract, where the contractors agree to execute the work for a stated total sum of money. Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out.
		+
		+	For more information see: Lump sum contract.
		+
		+	Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of works) can be described in reasonable detail, but the amount cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out.
		+
		+	For more information see: Measurement contract.
		+
		+	= Find out more =
		+
		+	=== Related articles on Designing Buildings Wiki ===
		+
		+	* Construction contract.
		+	* Contract sum.
		+	* Fixed price contract.
		+	* Lump sum contract.
		+	* Lump sum contract - pros and cons.
		+	* Measured term contract.
		+	* Measurement contract.
		+	* Procurement route.
		+	* Remeasurement.
		+	* Right to payment.
		+	* Schedule of rates.
		+	* Schedule of rates term contract.
		+
		+	[[Category:Contracts_/_payment]] [[Category:Procurement]]

151.253.50.122 at 07:08, 11 December 2019

2019-12-11T07:08:06Z

← Older revision		Revision as of 07:08, 11 December 2019
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−	Lump sum and measurement are both types construction contracts.	+	Lump sum and measurement are both types construction contracts. Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin. It is defined as a fixed price contract, where the contractors agree to execute the work for a stated total sum of money. Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out. For more information see: Lump sum contract. Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of works) can be described in reasonable detail, but the amount cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out. For more information see: Measurement contract. {\| \|\| Advantages of re measurable contract (unit price contracts) \|\| Advantages of lump sum contracts, \|- \| \| 1. Client's risk is minimal \|- \| 1. works can start after finalising the initial design and BOQ \| 2. Fewer variations \|- \| 2. Can reduce the design cost. \| 3. The client can arrange capital according to the payment plan. \|- \| 3. High possibility to do value engineering \| 4. Contractors cash flow is predictable. \|- \| 4. Prices (unit rates) will be competitive \| 5. The tendering process is more transparent and impartial. \|- \| 5. Contractor's risk is comparatively low \| \|- \| \| \|- \| Disadvantages of re measurable contract (unit price contracts) \| Disadvantages of lump sum contracts, \|- \| \| \|- \| 1. Cant predict the final value of the project \| 1. Contractors risk is high (ill productivity and mismanagement can lead the project into a loss) \|- \| 2. Delays in contractor's payments (assessment of the measurements takes time) \| 2. Improper details and specs in the design can lead project disputes \|- \| 3. Client's risk is comparatively high \| 3. Delays in the client's financing can delay the project as well \|- \| \| 4. The design should be complete and available before the pre-contract process. \|- \| \| 5. Procurement time can be high \|- \| \| \|}<br />
−		+	Find out more === Related articles on Designing Buildings Wiki === * Construction contract. * Contract sum. * Fixed price contract. * Lump sum contract. * Lump sum contract - pros and cons. * Measured term contract. * Measurement contract. * Procurement route. * Remeasurement. * Right to payment. * Schedule of rates. * Schedule of rates term contract. References * Quantity Surveyor. (2019). Why cost reimbursement contracts or Re measurable contracts Pros & Con. [online] Available at: [https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/ https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/] [Accessed 11 Dec. 2019]. * Quantity Surveyor. (2019). Lump sum Contracts/Fixed price Contracts- 5 pros & cons (with video). [online] Available at: [https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/ https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/] [Accessed 11 Dec. 2019].
−	Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin. It is defined as a fixed price contract, where the contractors agree to execute the work for a stated total sum of money. Lump sum contracts are generally appropriate where the project is well defined when tenders are sought and significant changes to requirements are unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out.	+
−		+
−	For more information see: Lump sum contract.	+
−		+
−	Measurement contracts (sometimes called ‘re-measurement’ or ‘measure and value’ contracts) are generally used in situations where the design (or type of works) can be described in reasonable detail, but the amount cannot. For example, excavation works where the quantity of excavation required is difficult to assess until after the works have begun. The contract sum for measurement contracts is not finalised until the project is complete. At this point it is assessed on based on re-measurement of the actual amount of work carried out.	+
−		+
−	For more information see: Measurement contract.	+
−		+
−	{\|	+
−	\|~~width="50%"~~\| Advantages of re measurable contract (unit price contracts)	+
−	\|~~width="50%"~~\| Advantages of lump sum contracts,	+
−	\|-	+
−	\|	+
−		+
−	\| 1. Client's risk is minimal	+
−	\|-	+
−	\| 1. works can start after finalising the initial design and BOQ	+
−	\| 2. Fewer variations	+
−	\|-	+
−	\| 2. Can reduce the design cost.	+
−	\| 3. The client can arrange capital according to the payment plan.	+
−	\|-	+
−	\| 3. High possibility to do value engineering	+
−	\| 4. Contractors cash flow is predictable.	+
−	\|-	+
−	\| 4. Prices (unit rates) will be competitive	+
−	\| 5. The tendering process is more transparent and impartial.	+
−	\|-	+
−	\| 5. Contractor's risk is comparatively low	+
−	\|	+
−		+
−	\|-	+
−	\|	+
−		+
−	\|	+
−		+
−	\|-	+
−	\| Disadvantages of re measurable contract (unit price contracts)	+
−	\| Disadvantages of lump sum contracts,	+
−	\|-	+
−	\|	+
−		+
−	\|	+
−		+
−	\|-	+
−	\| 1. Cant predict the final value of the project	+
−	\| 1. Contractors risk is high (ill productivity and mismanagement can lead the project into a loss)	+
−	\|-	+
−	\| 2. Delays in contractor's payments (assessment of the measurements takes time)	+
−	\| 2. Improper details and specs in the design can lead project disputes	+
−	\|-	+
−	\| 3. Client's risk is comparatively high	+
−	\| 3. Delays in the client's financing can delay the project as well	+
−	\|-	+
−	\|	+
−		+
−	\| 4. The design should be complete and available before the pre-contract process.	+
−	\|-	+
−	\|	+
−		+
−	\| 5. Procurement time can be high	+
−	\|-	+
−	\|	+
−		+
−	\|	+
−		+
−	\|}	+
−		+
−	<br />	+
−	Find out more	+
−		+
−	=== Related articles on Designing Buildings Wiki ===	+
−		+
−	* Construction contract.	+
−	* Contract sum.	+
−	* Fixed price contract.	+
−	* Lump sum contract.	+
−	* Lump sum contract - pros and cons.	+
−	* Measured term contract.	+
−	* Measurement contract.	+
−	* Procurement route.	+
−	* Remeasurement.	+
−	* Right to payment.	+
−	* Schedule of rates.	+
−	* Schedule of rates term contract.	+
−		+
−	References	+
−		+
−	* Quantity Surveyor. (2019). Why cost reimbursement contracts or Re measurable contracts Pros & Con. [online] Available at: [https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/ https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/] [Accessed 11 Dec. 2019].	+
−	* Quantity Surveyor. (2019). Lump sum Contracts/Fixed price Contracts- 5 pros & cons (with video). [online] Available at: [https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/ https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/] [Accessed 11 Dec. 2019].	+

	[[Category:Articles_needing_more_work]] [[Category:Contracts_/_payment]] [[Category:Procurement]]		[[Category:Articles_needing_more_work]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

151.253.50.122 at 07:07, 11 December 2019

2019-12-11T07:07:18Z

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	{\|		{\|
−	\|width="50%"\|	+	\|width="50%"\| Advantages of re measurable contract (unit price contracts)
−	~~===~~ Advantages of re measurable contract (unit price contracts) ~~===~~	+	\|width="50%"\| Advantages of lump sum contracts,
−	\|width="50%"\|	+
−	~~===~~ Advantages of lump sum contracts, ~~===~~	+
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	\|-		\|-
−	\|	+	\| Disadvantages of re measurable contract (unit price contracts)
−	~~===~~ Disadvantages of re measurable contract (unit price contracts) ~~===~~	+	\| Disadvantages of lump sum contracts,
−	\|	+
−	~~===~~ Disadvantages of lump sum contracts, ~~===~~	+
	\|-		\|-
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151.253.50.122 at 07:06, 11 December 2019

2019-12-11T07:06:30Z

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	{\|		{\|
	\|width="50%"\|		\|width="50%"\|
−	= Advantages of re measurable contract (unit price contracts) =	+	=== Advantages of re measurable contract (unit price contracts) ===
	\|width="50%"\|		\|width="50%"\|
−	= Advantages of lump sum contracts, =	+	=== Advantages of lump sum contracts, ===
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	\|		\|
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	\|		\|
−	= Disadvantages of re measurable contract (unit price contracts) =	+	=== Disadvantages of re measurable contract (unit price contracts) ===
	\|		\|
−	= Disadvantages of lump sum contracts, =	+	=== Disadvantages of lump sum contracts, ===
	\|-		\|-
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151.253.50.122 at 07:05, 11 December 2019

2019-12-11T07:05:29Z

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	{\|		{\|
−	\| Advantages of re measurable contract (unit price contracts)	+	\|width="50%"\|
−	\| Advantages of lump sum contracts,	+	= Advantages of re measurable contract (unit price contracts) =
		+	\|width="50%"\|
		+	= Advantages of lump sum contracts, =
	\|-		\|-
	\|		\|
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	\|-		\|-
−	\| Disadvantages of re measurable contract (unit price contracts)	+	\|
−	\| Disadvantages of lump sum contracts,	+	= Disadvantages of re measurable contract (unit price contracts) =
		+	\|
		+	= Disadvantages of lump sum contracts, =
	\|-		\|-
	\|		\|

151.253.50.122 at 07:04, 11 December 2019

2019-12-11T07:04:30Z

← Older revision		Revision as of 07:04, 11 December 2019
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	References		References

−	* Quantity Surveyor. (2019). Why cost reimbursement contracts or Re measurable contracts Pros & Con. [online] Available at: https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/ [Accessed 11 Dec. 2019].	+	* Quantity Surveyor. (2019). Why cost reimbursement contracts or Re measurable contracts Pros & Con. [online] Available at: [https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/ https://quantitysurveyor.blog/2019/09/04/cost-reimbursement-remeasured-unit-price-contract-cost-plus/] [Accessed 11 Dec. 2019].
−	* Quantity Surveyor. (2019). Lump sum Contracts/Fixed price Contracts- 5 pros & cons (with video). [online] Available at: https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/ [Accessed 11 Dec. 2019].	+	* Quantity Surveyor. (2019). Lump sum Contracts/Fixed price Contracts- 5 pros & cons (with video). [online] Available at: [https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/ https://quantitysurveyor.blog/2019/08/02/what-is-a-lump-sum-or-fixed-price-contracts/] [Accessed 11 Dec. 2019].

	[[Category:Articles_needing_more_work]] [[Category:Contracts_/_payment]] [[Category:Procurement]]		[[Category:Articles_needing_more_work]] [[Category:Contracts_/_payment]] [[Category:Procurement]]