Architecture / June 25, 2018 /
The payment arrangements adopted on a contract directly affects the level of risk borne by the contractor. Where the contract is let on the basis of a drawings and specification lump sum the contractor assumes the risk for both the quantity and pricing. In lump sum contacts based on bills of quantities and remeasurement contracts the contractor assumes the risk for the pricing only. With reimbursement contracts the client assumes the risk for the quantity and pricing. The payment arrangement, therefore, directly motivates the contractors efforts to carry out the work in an efficient and economic manner. This in turn has a major impact on the final price paid by the client.
The choice of the material, and hence the cost, may be influenced by factors other than aesthetic qualities. For example fast-track construction projects may use a steel frame in preference to an in-situ or precast concrete frame in order to reduce overall programme durations. Although the concrete option may be cheaper, the shorter programme achieved by using steel may offset this initial cost advantage. Technical decisions such as these are made for each building element and these have a direct bearing on the eventual cost. Where considerable repetition can be achieved it may prove economical to prefabricate certain structural elements or to standardise various components and fittings.