Fixed price construction contract - Revision history

Editor at 19:25, 6 January 2022

2022-01-06T19:25:37Z

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	It suggests that a firm price contract is, ‘…a contract where the prices is not subject to fluctuations during the construction period’, where fluctuations are, ‘…the increase or decrease in cost of labour, plant, materials and/or overheads costs that may occur during a contract.’		It suggests that a firm price contract is, ‘…a contract where the prices is not subject to fluctuations during the construction period’, where fluctuations are, ‘…the increase or decrease in cost of labour, plant, materials and/or overheads costs that may occur during a contract.’

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

	* Code of Estimating Practice.		* Code of Estimating Practice.
		+	* Evaluation of claims.
	* Fixed charge.		* Fixed charge.
	* Fluctuations.		* Fluctuations.

Designing Buildings at 10:39, 2 September 2020

2020-09-02T10:39:24Z

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	* Variations.		* Variations.

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

Designing Buildings at 13:38, 22 April 2020

2020-04-22T13:38:36Z

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−	Lump sum (or stipulated sum) contracts are sometimes referred to as ‘fixed price’ contracts, although strictly this is not correct.	+	Lump sum (or stipulated sum) contracts are sometimes referred to as ‘fixed price’ or 'firm price' contracts, although strictly this is not correct.

	On a lump sum contract, a single ‘lump sum’ price is agreed before the works begin. If the actual cost of the works exceeds the agreed price, then the contractor must bear the additional expense. If on the other hand the cost of the works is less than the agreed price, the contractor will benefit from the savings.		On a lump sum contract, a single ‘lump sum’ price is agreed before the works begin. If the actual cost of the works exceeds the agreed price, then the contractor must bear the additional expense. If on the other hand the cost of the works is less than the agreed price, the contractor will benefit from the savings.

Designing Buildings: Reverted edits by 84.51.32.194 (talk) to last revision by Editor

2019-08-23T12:54:28Z

Reverted edits by 84.51.32.194 (talk) to last revision by Editor

← Older revision		Revision as of 12:54, 23 August 2019
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	* Traditional contract - pros and cons.		* Traditional contract - pros and cons.
	* Variations.		* Variations.
−
−	~~=== External references ===~~
−
−	* [https://www.projectcubicle.com/construction-contract-types/ Construction Contract Types]

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]

84.51.32.194 at 12:08, 23 August 2019

2019-08-23T12:08:22Z

← Older revision		Revision as of 12:08, 23 August 2019
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	* Traditional contract - pros and cons.		* Traditional contract - pros and cons.
	* Variations.		* Variations.
		+
		+	=== External references ===
		+
		+	* [https://www.projectcubicle.com/construction-contract-types/ Construction Contract Types]

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]

Editor at 13:15, 17 August 2018

2018-08-17T13:15:15Z

← Older revision		Revision as of 13:15, 17 August 2018
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	* Target cost contract.		* Target cost contract.
	* [[Time_and_material_contract_(T%26M)\|Time and material contract (T&M).]]		* [[Time_and_material_contract_(T%26M)\|Time and material contract (T&M).]]
		+	* Traditional contract - pros and cons.
	* Variations.		* Variations.

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]

Designing Buildings at 06:39, 17 August 2018

2018-08-17T06:39:04Z

← Older revision		Revision as of 06:39, 17 August 2018
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	This is unlike a guaranteed maximum price contract, where the contractor bears any additional costs above the guaranteed maximum price, but if the cost is lower than the guaranteed maximum price, then savings may go to the client, to the contractor or are shared. An extension of this is the target cost contract, where there is a ‘pain / gain’ agreement allowing the client and contractor to share both additional costs and savings.		This is unlike a guaranteed maximum price contract, where the contractor bears any additional costs above the guaranteed maximum price, but if the cost is lower than the guaranteed maximum price, then savings may go to the client, to the contractor or are shared. An extension of this is the target cost contract, where there is a ‘pain / gain’ agreement allowing the client and contractor to share both additional costs and savings.

−	However, lump sum contracts tend not to be fixed, but allow the price to change under certain circumstances:	+	However, lump sum contracts tend not to be fixed at all, but allow the price to change under certain circumstances:

	* Variations: These are changes in the nature of the works. Most contracts will contain provision for the architect or contract administrator to issue instructions to vary the design, quantities, quality, sequence or working conditions.		* Variations: These are changes in the nature of the works. Most contracts will contain provision for the architect or contract administrator to issue instructions to vary the design, quantities, quality, sequence or working conditions.
	* Relevant events: A relevant event may be caused by the client (for example failure to supply goods or instructions), or may be a neutral event (such as exceptionally adverse weather) and may result in a claim for loss and expense by the contractor.		* Relevant events: A relevant event may be caused by the client (for example failure to supply goods or instructions), or may be a neutral event (such as exceptionally adverse weather) and may result in a claim for loss and expense by the contractor.
	* Provisional sums: An allowance for a specific element of the works that is not defined in enough detail for tenderers to price.		* Provisional sums: An allowance for a specific element of the works that is not defined in enough detail for tenderers to price.
−	* Fluctuations: A mechanism for dealing with inflation on projects that may last for several years where the contractor tenders based on current prices and then the contract makes provisions for the contractor to be reimbursed for price changes over the duration of the project.	+	* Fluctuations: A mechanism for dealing with inflation on projects that may last for several years, where the contractor tenders based on current prices and then the contract makes provisions for the contractor to be reimbursed for price changes over the duration of the project.
	* Payments to nominated sub-contractors or nominated suppliers.		* Payments to nominated sub-contractors or nominated suppliers.
	* Statutory fees.		* Statutory fees.
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	* Relevant events.		* Relevant events.
	* Target cost contract.		* Target cost contract.
−	* [[Time_and_material_contract_(T&M)\|Time and material contract (T&M).]]	+	* [[Time_and_material_contract_(T%26M)\|Time and material contract (T&M).]]
	* Variations.		* Variations.

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]

Editor at 14:28, 12 July 2018

2018-07-12T14:28:51Z

← Older revision		Revision as of 14:28, 12 July 2018
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	* Relevant events.		* Relevant events.
	* Target cost contract.		* Target cost contract.
		+	* [[Time_and_material_contract_(T&M)\|Time and material contract (T&M).]]
	* Variations.		* Variations.

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]

86.168.201.16 at 10:31, 2 January 2018

2018-01-02T10:31:34Z

← Older revision		Revision as of 10:31, 2 January 2018
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	* Code of Estimating Practice.		* Code of Estimating Practice.
		+	* Fixed charge.
	* Fluctuations.		* Fluctuations.
	* Force account work.		* Force account work.

Editor at 16:42, 7 November 2017

2017-11-07T16:42:45Z

← Older revision		Revision as of 16:42, 7 November 2017
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	* Guaranteed maximum price.		* Guaranteed maximum price.
	* Lump sum contract.		* Lump sum contract.
		+	* Lump sum contract - pros and cons.
	* Negotiated contract.		* Negotiated contract.
	* Open-book accounting.		* Open-book accounting.