Last edited 04 Dec 2020

Fixed charge

The New Rules of Measurement (NRM) are published by the Royal Institute of Chartered Surveyors (RICS). They provide a standard set of measurement rules for estimating, cost planning, procurement and whole-life costing for construction projects.

According to NRM2: Detailed measurement for building works, a fixed charge is:

…for work, the cost of which is to be considered independent of duration.

Charges may be fixed, time-related, or a combination of both.

NB The Code of Estimating Practice, seventh edition, published by the Chartered Institute of Building (CIOB) in 2009 defines a 'fixed price contract' as, ‘…a contract where the price is agreed and fixed before construction starts’.

However, in reality, contracts tend not to have a fixed price, but allow the price to change under certain circumstances, such as:

A truly 'fixed' price contract would not necessarily be in the interests of the client as it would require that the contractor price risks over which they may have no control, and which might not arise.

For more information see: Fixed price.

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