What Is The Meaning Of Lump Sum Agreement

As part of a flat-rate contract, a single lump sum for all the work is agreed before the start of the work. Knowing what a lump sum contract, also known as a fixed-price contract, is important to a contractor. Read 3 min In the case of lump sum contracts or fixed-price contracts, the contractor evaluates the value of the work based on the available documents. Mainly these documents can be specifications and drawings. In the pre-tender phase, the contractor evaluates the cost of carrying out the project (based on the above documents such as drawings, specifications, schedules, tender instructions and clarifications received for the issues raised). And the contrast with these documents The contractor evaluates and agrees with the owner (or employer) to complete the work without exceeding the agreed lump sum.