What is a re-measurable or unit price contract ?
A re-measurable or unit price contract is a type of construction contract in which payment is based on the actual amount of work completed. This is opposed to a fixed price contract, in which the price is agreed upon before the work begins. Re-measurable contracts are often used when the exact scope of work cannot be accurately estimated at the time of bidding, such as in excavation work. In this type of contract, the contractor provides rates for their work in a tender, and is paid based on the quantities of work actually completed, using these rates.
The client assumes more risk in a re-measurable contract, as the final cost of the project is dependent on the unit prices and quantities. However, this type of contract can be beneficial for projects with flexible budgets or design changes, or for those that need to start work immediately based on competitive unit rates. It is also helpful for tasks where quantities cannot be accurately determined in the initial stage. Re-measurable contracts are typically used in civil engineering projects and are not as common as other procurement methods.
A re-measurable or remeasurement contract is a type of construction contract in which payment is based on the actual amount of work completed. This method is commonly used in the construction industry, particularly when the nature of the work cannot be accurately estimated in advance. In a remeasurement contract, the contractor provides rates in their tender, either based on the price estimate or in a price schedule. The actual amount of work is then measured and the tender rates are applied to those quantities, resulting in payment for the contractor based on the completed work.
There are advantages and disadvantages to using a remeasurement contract. One advantage is that it allows for an initial start on site before the design is complete and enables the smooth modification of works. However, there is also a higher level of risk for the client, as the final cost of the project is dependent on the unit prices and actual quantities. This type of contract is suitable for situations where the client does not have a strict budget, wants to make changes to the design at a later stage, or wants to start work immediately based on competitive unit rates.
In contrast to a remeasurement contract, a lump sum contract involves a fixed price for the entirety of the work. In a lump sum contract, the contractor assumes most of the risk, as they are required to complete the work for the agreed upon price regardless of any unexpected changes or challenges that may arise.
Ultimately, the choice between a remeasurement contract and a lump sum contract will depend on the specific needs and circumstances of the project. It is important for the client and contractor to carefully consider the risks and benefits of each option before deciding on the most appropriate procurement method.