BLDG 213 Lecture Notes - Lecture 6: Moe Williams, Casualty Loss
8 May 2020
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Lump sum / stipulated sum : contract to perform work for fixed price. Owner must pay the fixed amount no matter what it actually costs. Most common where the project is competitively bid. Contractor bears risk of cost overruns & reaps benefits of labor efficiencies or cost savings. Common issue: whether a particular change or modification of the design requires an increase of the contract sum and an extension to the project schedule. Cost plus: entitles gc to payment of actual costs of labor, materials, & equipment related to construction, plus set sum or % of cost as fee (% fee makes incentive for. Gc to make the project more expensive, so less common than lump sum) Parties should carefully define the costs including gc overhead. Owner must review the contractor"s costs during performance of the work. Issues: definition and scope of costs that the parties must address under this arrangement.
