Types of Contracts

Measured or Unit rate Contract

In this kind of contract, the value is computed by multiplying quantities of labor dead by the unit rate offered by the contractor in his tender. The rates area unit sometimes started out within the Bill of Quantities (BOQ).

Such contracts typically used wherever there are a unit important changes within the quantities or operating conditions. So, once there are a unit sure cheap variations of the quantities accepted by all the parties, then the contract are often bought by multiplying the particular measured quantities by the unit rates.


1. Suitability: This kind of contract is wide utilized in the execution of enormous comes supported by public bodies or governments. It additionally suits the works which might be split into separate things and also the amount of every item can be calculable with cheap accuracy.

2. The leader pays for the particular work dead.

3. The contractor sometimes permits for an explicit margin of variation, with a transparent mechanism for valuation of such variations.


l. The leader cannot be completely positive of the entire price of the project till the full work is completed. Just in case the quantities within the BOQ area unit inaccurate or roughly approximated, the worth of the work might vary significantly. The contractor might try {and} provide an unbalanced tender on the premise of his anticipation of the uncertainty of quantities of sure things.

2. Each the engineer and also the contractor ought to do goodly computations and book-keeping throughout the progress of labor.

3. Additional works or varied things of labor area unit typically a supply of conflict. The contractor might press for higher rates than he would have tendered for within the starting.

Lumpsum contract

In a lumpsum contract, the contractor agrees to hold out the whole work as indicated within the drawings and represented within the specifications, for such fastened lumpsum quantity.

Sometimes, the contract makes provisions to regulate the “lump sum” providing additional work and restricted variations.

  Normally, a bill of quantities isn’t sometimes enclosed, and if enclosed it doesn’t type a part of the “Contract Documents”, however is also used only for steerage.


  l. From the employer’s stand purpose, and if no extras area unit contemplated, the tender total tells him the precise price of the project. Typically the leader are operating at intervals a decent margin of budget.

 2. From the contractor’s stand purpose, as a result of the look can typically be ready by him, the contractor will gain through correct designing and economical management to extend his margin of profit and/or to manage temporal order.

 3. Each parties would like less variety of workers for book-keeping accounting and mensuration.


  1 . In lumpsum contracts, there ought to be an entire set of plans and specifications, or what’s known as “Employer’s Requirements” that ought to be sufficiently elaborated.

2. Variations in lumpsum contract might trigger conflicts concerning whether or not or not a selected item of labor falls at intervals the united scope of labor, and whether or not there has been a variation to such scope.

3. This kind of contract won’t be appropriate for works with scope and nature that can’t be expected accurately beforehand. The end result are unfair for the contractor to assume all risks and uncertainties, or for the leader to pay a better price.

Cost-plus contract

This type of contract differs from each the measured and also the lumpsum accept that the leader agrees to pay the contractor for the particular price of the work and associate united share of this particular price to hide overhead and profit.

The contractor agrees to execute the works supported the drawings and specifications and the other data that may be provided to him from time to time throughout progress of the works.


1.  Early completion of the work – The work are often started even before the look and estimates area unit ready. Choices are often taken chop-chop, and suppleness permits adoption of alternates for construction to suit the Employer’s needs. 

2. The standard of the work are often assured. The contractor is induced to perform the add the simplest interest of the leader. 

3. No conflicts are anticipated on extras or omissions.


1. The ultimate price to the leader cannot be foreseen. 

 2. Each parties ought to do plenty of accounting and book-keeping concerning labor; purchase of materials and plant and use of kit.

 3. The contractor has no incentive to economize or end the work chop-chop.


  In spite of some drawbacks in sure cases, this manner of contract are often used appropriately for:

a- Emergency works that need speedy construction and wherever no time is out there to arrange drawings for it.

b- Construction of special or costly comes, such as palaces, wherever the price of the work is of no consequence however the materials and acquisition to be purchased area unit simply to suit the selection and style of the leader.

Construction Management Contract (C.M.)

In this kind of contract, the leader engages a specialized construction manager (C.M.) to produce body service for him and manage the work on his behalf. The (C.M.) has full management on (Cost and Time), on the budget and programming, and is sometimes paid on a staff-reimbursement basis.

The (C.M.) assists in selecting the look authority and also the numerous contractors for a project divided into packages (structural, finishes, electro-mechanical, etc.).

The technical role is unbroken with the design-professional, however on management, coordination, certification and dispute resolution, the (C.M.) commonly possesses the most important role.


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