What is a measurable contract?
A remeasurement contract is where the work is measured and valued against agreed rates. There is therefore no agreement as to a lump sum, but there is agreement as to the basis upon which the work will be valued.
What’s cost-reimbursement contract?
A cost-reimbursement contract is a contract where a contractor is paid for all of its allowed expenses to a set limit, plus additional payment to allow for a profit. Cost- reimbursement contracts contrast with a fixed-price contract, in which the contractor is paid a negotiated amount regardless of incurred expenses.
How does a cost-reimbursement contract work?
A Cost-Reimbursement contract requires the contracting officer to negotiate a “total estimated cost” and payment of a fixed dollar fee to the contractor. The total estimated cost is a contract cost limitation that the contractor cannot exceed, except at the risk of non-reimbursement.
What is a measurement contract?
Measurement contracts (sometimes called “re-measurement” or ‘measure and value’ contracts) contains a Bill of Quantities ( BOQ ) provided by the employer or its consultants, can be used in situations where the design (or type of works) can be described in reasonable detail, but the amount cannot.
What is the difference between lump sum contract and unit price contract?
A lump sum bid represents the total price for which a contractor offers to complete a facility according to the detailed plans and specifications. Unit price bidding is used in projects for which the quantity of materials or the amount of labor involved in some key tasks is particularly uncertain.
What is lump sum contract disadvantage?
Disadvantages of a Lump Sum Construction Contract A lump sum agreement presents a higher risk to a contractor. Measuring the number of changes is difficult. Such contracts require paperwork and records of change orders from each phase, and this means further documentation is needed.
What are two forms of a cost-plus-fixed-fee contract?
Cost-Plus-Fixed-Fee (CPFF) Contracts A CPFF may take one of two basic forms: completion or term. CPFF Completion Contract. The completion form describes the scope of work by stating a definite goal or target and specifying an end product.
What happens in a re-measurement type contract?
In a re-measurement type contract, completed Works would be re-measured for payment purposes. BOQ items, quantities, descriptions are at the employer’s risk. Final value of the works could either be more or less than the contract price.
What are the advantages of a remeasurement contract?
Advantages of remeasurement contract (unit price contracts) 1 works can start after finalizing the initial design and BOQ 2 Can reduce the design cost. 3 High possibility to do value engineering 4 Prices (unit rates) will be competitive 5 Contractor’s risk is comparatively low More
What do you need to know about a reimbursable contract?
The reimbursable contractor is not required to assess lump-sum risk, obtain third-party pricing, or develop contingency pricing. The owner may require the reimbursable contractor to provide detailed information about cost elements and mark-ups.
What’s the difference between re MEA and admeasurement?
Remeasurement is the whole procedure of re-measuring the completed amount of work. On the other hand, the admeasurement is the difference between the estimated amount and the real amount. What is Remeasurement contract / Unit price contract or Re-measurable contract