Version 1
: Received: 8 January 2024 / Approved: 9 January 2024 / Online: 9 January 2024 (05:15:07 CET)
How to cite:
Rashid, M.R. Lump Sum Contracts in Construction: Benefits, Challenges, and Risk Allocation Strategies. Preprints2024, 2024010691. https://doi.org/10.20944/preprints202401.0691.v1
Rashid, M.R. Lump Sum Contracts in Construction: Benefits, Challenges, and Risk Allocation Strategies. Preprints 2024, 2024010691. https://doi.org/10.20944/preprints202401.0691.v1
Rashid, M.R. Lump Sum Contracts in Construction: Benefits, Challenges, and Risk Allocation Strategies. Preprints2024, 2024010691. https://doi.org/10.20944/preprints202401.0691.v1
APA Style
Rashid, M.R. (2024). Lump Sum Contracts in Construction: Benefits, Challenges, and Risk Allocation Strategies. Preprints. https://doi.org/10.20944/preprints202401.0691.v1
Chicago/Turabian Style
Rashid, M.R. 2024 "Lump Sum Contracts in Construction: Benefits, Challenges, and Risk Allocation Strategies" Preprints. https://doi.org/10.20944/preprints202401.0691.v1
Abstract
Lump sum contracts are specific contracts used in the construction industry to give owners financial certainty and decrease risk while incentivizing contractors to finish projects on schedule and within budget. This article discusses the usage of lump sum contracts in construction projects, covering the types of projects appropriate for lump sum contracts, critical considerations for entering a lump sum contract, and the tender and preliminary expenses involved. The article also covers lump sum contracts' benefits and drawbacks and how owners and contractors allocate risk. Finally, the difficulties of implementing lump sum contracts, such as potential disagreements over scope changes and quality issues, are investigated. In general, lump sum contracts can be a valuable tool for managing construction projects, but their execution necessitates careful planning and collaboration to ensure successful completion.
Keywords
risk allocation; financial certainty; tender and preliminary expenses; construction procurement; cost estimation
Subject
Business, Economics and Management, Business and Management
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
