Architecture / June 16, 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.
All construction work is ultimately undertaken for the benefit of a client. Clients fund the construction process, whether they are individuals extending their homes, or a multi-national corporation developing a cutting-edge production facility, or a government department providing much needed social infrastructure. The importance of clients cannot be over-emphasized. Very often clients do not get the building they want, because they do not know how to ask for it and the architect or other consultants think the building should look a different way. Clients expect that the project will be a success and that the providers will deliver a competent service. They will be dissatisfied, if these expectations are not met.