Lum sum material works we undertake

Lump Sum Or Fixed Price Contract Type

This type of contract involves a total fixed priced for all construction-relate activities. Lump sum contracts can inculde incentives or benfits for early termination, or can also have penalties, called liquidated damages, for a late termination. Lump Sum contracts are preferred when a clear scope and a defined schedule has been reviewed and agreed upon.

This contaract shall be used when the risk needs to be tranferred to the builder and the owner wants to aviod change orders for unspecified work. however, a contractor must also include some percentage cost associated with carrying yhat risk. These costs will be hidden in the fixed price. On a lump sum contract, it is harder to get credit back for work not comppleted, so consider that when analyzing.