Waldo Büchner

Unit Price Agreement

Unit prices benefit the owner because it is relatively easy to verify whether the price charged for goods or services is reasonable. It is advantageous for the contractor because the contractor has been largely removed from the risk of an imprecise estimate of uncertain quantities for certain key tasks. In the United States, a unit price contract is a commonly used type of construction contract. This type of contract is suitable for large public works, such as infrastructure projects, which involve repetitive tasks and easily quantifiable resources. However, when a project involves several complex trades and activities, it is not particularly appropriate, as it can be difficult to accurately predict the quantities required for each unit. If you need more materials, that`s fine! It`s right there in the cost of the unit. Conversely, the percentage of profits remains the same for the contractor when less work is required, but the total cost is lower than the original estimate. In summary, unit price contracts are well designed for projects with familiar materials and repetitive work units. This type of contract results in high performance, competitive and compliant pricing in the tendering phase and a common risk for all parties involved. Some of the falls can occur while working on more complex projects and the work is not perfectly defined for unit prices (z.B. Project with all doors and door sizes… The installation scopes and equipment used in each opening would be different from the next.) Individual contracts are often used in engineering, landscape architecture, flat construction and housing. Home builders…

Oh, really? Yes, unit work may not be repeated, but for manufacturers that offer a finite number of model options, it is useful in the grand scheme of things. For public works, you will often see a large number of lump sums for the estimated volume of work and additional unit prices for temporary positions. These are more difficult to estimate until work begins. (for example.B. geotechnical studies are not accurate in measuring excavation/earthwork requirements) In a unit price contract, the total price of the contract is based on the price of all “parts” – or units – of work. As part of a unit price contract, the contractor makes available to the owner a specific price for one or more transactions or a partial “segment” or a “block” of the total work required for the project. The owner then agrees to pay the contractor for the units that the contractor spends on the completion of the project. Sometimes a unit price contract for certain parts of the project is combined with a lump sum contract or mixed with other types of contracts. A bidder may only be asked to indicate flat prices for certain clearly defined items, such as the mobilization and demobilization of dredging facilities.

A flat-rate contract or a “fixed fee contract” is a traditional means of purchase that provides a single “flat price” for all work before work begins.