Construction Contracts
Chapter 4 – Construction Contracts
1. Name and briefly describe each of the two basic types of competitively bid construction contracts. Which type would be most likely used for building the piers to support a large suspension bridge. Why?
Two basic types of competitively bid construction contracts are lump-sum and the unit-price contract. The lump-sum contract is when the contractor agrees to complete all work for a pre-determined price including profit and the contract. The unit-price contract is when the contractor quotes work on units separately instead of entire project. Price is based on units of work performed, and cost varies depending on the quantities of units. Building the piers to support a large suspension bridge will most likely use the lump-sum because this type of contract is known to have a fixed price which is guaranteed for the work specified in the contract. Knowing the exact budget for the project helps the owner pick easier if he knows the fixed price rather than going with the unit-price contract that might create more completions for certain budgeting for different aspects of the project. 2. If you were asked to perform an excavation contract competitively with limited boring data, what type of contract would you want and why?
The unit price of a contract because it would be difficult to estimate a lump-sum contract based on limited boring data. If I had picked lump-sum, and over bid it could get costly at the owner’s expense. The unit price contract would allow me renegotiate of the project costs get overwhelming high. 3. Name three ways the construction contract can be terminated.
A construction contract can be terminated on the means of the need of the project. Will this project be useful to society, if not the contract can be terminated. Also the location of the project can also terminate the contract, if you are building an unsafe nuclear power plant in a populated area, the contract can be declined. Finally the cost
1. Name and briefly describe each of the two basic types of competitively bid construction contracts. Which type would be most likely used for building the piers to support a large suspension bridge. Why?
Two basic types of competitively bid construction contracts are lump-sum and the unit-price contract. The lump-sum contract is when the contractor agrees to complete all work for a pre-determined price including profit and the contract. The unit-price contract is when the contractor quotes work on units separately instead of entire project. Price is based on units of work performed, and cost varies depending on the quantities of units. Building the piers to support a large suspension bridge will most likely use the lump-sum because this type of contract is known to have a fixed price which is guaranteed for the work specified in the contract. Knowing the exact budget for the project helps the owner pick easier if he knows the fixed price rather than going with the unit-price contract that might create more completions for certain budgeting for different aspects of the project. 2. If you were asked to perform an excavation contract competitively with limited boring data, what type of contract would you want and why?
The unit price of a contract because it would be difficult to estimate a lump-sum contract based on limited boring data. If I had picked lump-sum, and over bid it could get costly at the owner’s expense. The unit price contract would allow me renegotiate of the project costs get overwhelming high. 3. Name three ways the construction contract can be terminated.
A construction contract can be terminated on the means of the need of the project. Will this project be useful to society, if not the contract can be terminated. Also the location of the project can also terminate the contract, if you are building an unsafe nuclear power plant in a populated area, the contract can be declined. Finally the cost