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Fixed Price
Reimbursable
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Contractor free to use any means and methods to
complete work
Contractor responsible for proper work performance
Work must be very well defined at bid time
Fully developed plans and specs required
Owner·s financial risk low and fixed at the outset
Contractor has greater ability to profit
!
& u u
Requirements
² Good project definition
² Stable project conditions
² Effective competition essential when bidding
² Much longer time to bid and award this type of project
² Minimal scope changes
!
& $
Requirements
² Adequate breakdown and definition of work units
² Good quantity surveying and reporting system
² Adequate drawings
² Experience in developing bills of quantities
² Payment terms properly tied to measured work completion
² Owner-furnished drawings and materials must arrive on time
² Quantity sensitive analysis of unit prices to evaluate total bid price for
potential quantity variations
!
&
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Requirements
² Competent and trustworthy contractor
² Close quality supervision by owner
² Careful cost control by owner
² Detailed definition of work items to be performed
² Detailed payment terms covered by both lump sum
and ´all inclusiveµ rates
"
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Factors Conditions
Scope Definition Extensive Low
Uniqueness of work Routine Unusual
Cost Importance High Low
Market Conditions Buyers· sellers·
Economic Conditions Stable Unstable
Project Duration Normal Long
Schedule Importance High Low
Buyer·s Resources Low High
Pricing style Indicated Fixed Price Reimbursable
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Torts
Contract Law
Trade Practices
Equity
Dispute Resolution (including civil
procedure, arbitration and ADR)
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Property Law
Planning Law
Environmental Law and
Project Finance.
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Contract Documents
The Contract Documents do not include unless
specifically enumerated in the Agreement,
² Bidding requirements (advertisement or invitation to bid
² Instructions to Bidders
² Sample forms
² The Contractor·s bid
² Portions of Addenda relating to bidding requirements
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Scope of Work
An os escrpon of he Work occrs when he owner
nerpres he Scope of Work ore ro ly h n oes he
conr cor.
The Sppleen ry Conons, Dr wns n Specfc ons
shol ll e horohly revewe o
² e sre h ll Work h s een properly enfe n
² o ep o eln e conflcs whn he Conr c Docens.
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Alternatives Criteria
Fixed Price Highest Suitable for Fixed in Rational Very imp High High
consistency contractor advance delay time
Incentive Well defined Suitable for Not fixed Rational Imp Intermediat intermediat
contractor delay time e e
EPCP Not well Not suitable Not fixed Inadmissible Imp Low Low
defined for time
contractor