Contract sum analysis

A contract sum analysis is generally prepared by a contractor as part of their tender on design and build projects. It breaks down the contractor's price into a form allowing the client to analyse it and to compare it to other tenders, and may then be used as a basis for calculating payments due to the contractor as the works progress.

A contract sum analysis is necessary as there is unlikely to be a bill of quantities on a design and build project when the contract is entered into, and so an alternative means of assessing tenders and valuing payments is necessary.

The more precisely the employer's requirements prescribe the format and break down that the contract sum analysis should take, the easier it will be for the client to directly compare the detail of offers by different tenderers.

The contract sum analysis might be re-visited and expanded before construction commences to ensure that it still properly reflects the nature of the project and to ensure that it is a suitable basis for payment (contractors may be tempted to front-load the contract sum analysis so that they receive more payment at the beginning of the construction process).

[edit] Related articles on Designing Buildings

• Bill of quantities.
• Construction contract.
• Contract sum.
• Cost planning.
• Design and build.
• Final account.
• Fluctuations.
• Net Present Value.
• Pre-tender estimate.
• Provisional sums.
• Retention.
• Tender.
• Tender pricing document.