Architecture / June 7, 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 availability, location and capacity of existing utilities must be considered in the design. Connecting to these may involve significant costs particularly where they are inconveniently located or are distant from the site. For example septic tanks or pumping plant may be required to drain a site, easements may be required to cross neighbouring land, and diversions of live services may be required to accommodate the development.