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Extra info for Civil engineering project management
With the works clearly defined, and a fair system of measurement, the contractor's risks are reduced and pricing m a y be keen. Payment arrangements, risks and project cost estimating 31 (c) Lump sum contracts A lump sum price may be called for, or a series of lump sums. This is best suited to easily defined, relatively simple constructions, involving little below-ground work. However, some quite large above-ground constructions are paid for by lump sum. Sometimes a separate section of the bill for pricing allows for the foundation work of a building to be paid for 'on measure'.
The problem with bonuses is that, if unforeseen conditions occur causing the contractor a delay not of his own making, there may be a dispute about how much extra time should be allowed to him. Bonuses should therefore be a reasonable amount; not so large that they put the contractor on a win or lose situation in respect of his whole profit. (d) "Ex-contractual"payments These are payments made by an employer to a contractor which are not authorized by the contract. They are occasionally paid when a contractor has performed very much to the satisfaction of the employer but has shouldered some extra cost clearly not attributable to his own actions, such as exceptionally bad weather or some other misfortune outside his control.
Overall unit prices can also be developed for checking purposes, such as the cost of a building per m 3 volume; or of a tank per 1000 m 3 storage capacity. Before the cost parameters are derived from previous priced contracts the following procedures are necessary. 9 Preferably at least three priced contracts should be analysed. If possible not all should be for the lowest tenders received. 10) should be expressed as a percentage addition to the total of measured work. 9 If a tender is being analysed, general contingencies and dayworks should also be expressed as percentage additions, or shown separately.