What characterizes a Unit Price contract?

What characterizes a Unit Price contract?

• A. Fixed pricing with no repeatable items
• B. Set pricing for known quantities of repeatable work
• C. Cost transparency with no maximum limit
• D. Payment based solely on time wages

Answer: (B)

A Unit Price contract is characterized by its structure allowing for set pricing based on known quantities of work that are repeatable. This type of contract is commonly used in construction projects where certain tasks can be quantified in units, such as cubic yards of excavation, linear feet of piping, or tonnage of materials. In the context of this contract, the contractor provides a unit price for specific items of work. As the project progresses, the quantities of each item are measured, and the contractor is paid based on the actual quantities completed times the agreed-upon unit price. This approach provides flexibility to account for variations in the project scope while ensuring that the contractor is compensated fairly for the work completed. Therefore, the essence of a Unit Price contract lies in its allowance for price adjustments based on fluctuating quantities of work, making it particularly useful for projects involving specific and repetitive tasks. This ensures cost control and accountability, reflecting the actual work performed.

A Unit Price contract is characterized by its structure allowing for set pricing based on known quantities of work that are repeatable. This type of contract is commonly used in construction projects where certain tasks can be quantified in units, such as cubic yards of excavation, linear feet of piping, or tonnage of materials.

In the context of this contract, the contractor provides a unit price for specific items of work. As the project progresses, the quantities of each item are measured, and the contractor is paid based on the actual quantities completed times the agreed-upon unit price. This approach provides flexibility to account for variations in the project scope while ensuring that the contractor is compensated fairly for the work completed.

Therefore, the essence of a Unit Price contract lies in its allowance for price adjustments based on fluctuating quantities of work, making it particularly useful for projects involving specific and repetitive tasks. This ensures cost control and accountability, reflecting the actual work performed.