Lump-sum contracts are applicable to which Basic Delivery Method(s)?

Lump-sum contracts are applicable to which Basic Delivery Method(s)?

• A. Traditional Bid only
• B. Applicable to all Basic Delivery Method (Traditional, Multiple Prime, CMAt-Risk, Design-Build)
• C. Traditional, Multiple Prime, CM-At-Risk
• D. Traditional, Multiple Prime

Answer: (B)

Lump-sum contracts are fixed-price agreements where the contractor agrees to complete the project for a single, predetermined amount based on a complete set of drawings and specifications. This pricing approach is most straightforward when the scope is well defined, and it shifts most cost risk to the contractor (unless changes occur). That fixed-price method can be used under any Basic Delivery Method: traditional design-bid-build, multiple prime contracts, CM at risk with a guaranteed maximum price, and design-build. In traditional, bidders submit lump-sum bids for the entire project. In multiple prime, each prime contract is typically priced on a lump-sum basis. In CM at risk, the owner and CM agree to a GMP, which functions as a fixed ceiling price for the project. In design-build, the design-builder provides a single lump-sum price covering both design and construction based on the agreed scope. So lump-sum contracts are applicable to all basic delivery methods.

Lump-sum contracts are fixed-price agreements where the contractor agrees to complete the project for a single, predetermined amount based on a complete set of drawings and specifications. This pricing approach is most straightforward when the scope is well defined, and it shifts most cost risk to the contractor (unless changes occur). That fixed-price method can be used under any Basic Delivery Method: traditional design-bid-build, multiple prime contracts, CM at risk with a guaranteed maximum price, and design-build. In traditional, bidders submit lump-sum bids for the entire project. In multiple prime, each prime contract is typically priced on a lump-sum basis. In CM at risk, the owner and CM agree to a GMP, which functions as a fixed ceiling price for the project. In design-build, the design-builder provides a single lump-sum price covering both design and construction based on the agreed scope. So lump-sum contracts are applicable to all basic delivery methods.