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Lump sum and scheduled contract The owner provides required information and contractor charges certain amount. This contract is suitable when the number of items are limited or when it is possible to work out exact quantities of work to be executed.
Under a lump sum contract, a single 'lump sum' price for all the works is agreed before the works begin. It is defined in the CIO Code of Estimating Practice as, 'a fixed price contract where contractors undertake to be responsible for executing the complete contract work for a stated total sum of money.
Lump sum (or stipulated sum) contracts are sometimes referred to as 'fixed price' contracts, although strictly this is not correct. On a lump sum contract, a single 'lump sum' price is agreed before the works begin.
When to Use This Type of Contract A lump-sum contract is a great contract agreement to be used if the requested work is well-defined and construction drawings are completed. The lump-sum agreement will reduce owner risk, and the contractor has greater control over profit expectations.
Lump Sum or Fixed Price Contract Type This type of contract involves a total fixed priced for all construction-related activities. Lump sum contracts can include incentives or benefits for early termination, or can also have penalties, called liquidated damages, for a late termination.
A lump-sum payment is an often large sum that is paid in one single payment instead of broken up into installments. They are sometimes associated with pension plans and other retirement vehicles, such as 401k accounts, where retirees accept a smaller upfront lump-sum payment rather than a larger sum paid out over time.
AIR contracts and forms are consensus documents that reflect advice from practicing architects, contractors, engineers as well as owners, surety bond producers, insurers, and attorneys. AIR documents balance the interests of all the parties, so no one interest, including that of the architect, is unfairly represented.
AIR contracts and forms are consensus documents that reflect advice from practicing architects, contractors, engineers as well as owners, surety bond producers, insurers, and attorneys. AIR documents balance the interests of all the parties, so no one interest, including that of the architect, is unfairly represented.
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