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 materials specified and the proposed construction details will have an important bearing on the cost of the project. The relationship of quality to cost has been commented on above, and buildings which incorporate high quality and innovative features are invariably more expensive than those which are purely functional. The choice depends on what the client is willing to pay. The materials, nevertheless, should be appropriate for their use; over-specification is wasteful.