Difference between lump sum and measurement contracts
Lump sum and measurement are both types construction contracts.
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.
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.
[edit] Related articles on Designing Buildings
- Construction contract.
- Contract sum.
- The difference between admeasurement and construction management contracts.
- 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.
Featured articles and news
A change to adoptive architecture
Effects of global weather warming on architectural detailing, material choice and human interaction.
How big is the problem and what can we do to mitigate the effects?
Overheating guidance and tools for building designers
A number of cool guides to help with the heat.
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).
Ebenezer Howard: inventor of the garden city. Book review.
Airtightness Topic Guide BSRIA TG 27/2025
Explaining the basics of airtightness, what it is, why it's important, when it's required and how it's carried out.
Comments
[edit] To make a comment about this article, or to suggest changes, click 'Add a comment' above. Separate your comments from any existing comments by inserting a horizontal line.