Lark’s has a wealth of experience in stipulated sum contract models. It is a perfect approach designed to reduce design and contract administration costs.
A stipulated sum contract is a great contract agreement to be used if the requested work is well-defined and construction drawings are completed. The stipulated agreement will reduce owner risk. It is also a preferred choice when stable soil conditions, complete pre-construction studies and assessments are completed and the contractor has analyzed those documents. The stipulated sum contract might contain, when agreed-upon parties, certain unit prices for items with indefinite quantities and allowance to cover any unexpected condition. The time to award this type of contract is also longer; however, it will minimize change orders during construction.
A lump sum contract offers the following advantages:
• Low risk to owner.
• ‘Fixed’ construction cost.
• Minimize change orders.
• Owner supervision is reduced when compared to Time and Material Contract.
• Contractor will try to complete the project faster.
• Accepted widely as a contracting method.
• Bidding analysis and selection process is relatively easily.
• Contractor will maximize its production and performance.