Lecture 16 contract types
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Lecture 16 – Contract Types. CEE 474 – Engineering Project Management. Basic Types. Fixed Price Lump Sum Unit Price Cost Reimbursable Cost plus fixed-fee Cost plus award-fee Cost plus incentive-fee Cost plus percentage of cost (illegal on Federal projects). Fixed Price.

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Lecture 16 – Contract Types

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Lecture 16 contract types

Lecture 16 – Contract Types

CEE 474 – Engineering Project Management


Basic types

Basic Types

  • Fixed Price

    • Lump Sum

    • Unit Price

  • Cost Reimbursable

    • Cost plus fixed-fee

    • Cost plus award-fee

    • Cost plus incentive-fee

    • Cost plus percentage of cost (illegal on Federal projects)


Fixed price

Fixed Price

  • Use a lump-sum contract when the project can be clearly defined and there is question on quantities.

  • Use unit priced when the project can be definitized, it is easily apparent what the end results will be, but quantities cannot be determined at bid or prior to construction. Usually with earthwork, or unforeseen items (asbestos abatement)


Cost reimbursable

Cost Reimbursable

  • Used when the costs cannot, or final scope, can be determined prior to contract award at bid (or proposal) or during execution.

    • TERC (Total Environmental Restoration Contract) at Ellsworth AFB, SD.

      • http://www.state.sd.us/DENR/DES/Ground/Superfund/Sites_on_Superfund_List.htm

    • DSS (Designated Seismic Sites – Black Hills, Tulsa, & Newport, WA)

      • http://www.state.gov/t/ac/trt/5204.htm


Contract sequences

Contract Sequences

  • Design-Bid-Build – The project is completely designed, then sent out for bid (or proposal), contractor selected and the project is constructed.

  • Design-Build – An RFP describes project requirements and a designer/builder is selected.


Alternate contract types

Alternate Contract Types

  • IDIQ – Indefinite Delivery, Indefinite Quantity – A contract where various scopes of works are awarded as task orders (or delivery orders). These maybe sole source, negotiated, under an umbrella contract or competitively bid previously selected contractors (MATOC – Multiple Award Task Order Contracts).


Delivery order contracts

Delivery Order Contracts

  • Delivery order contracts are awarded for specific type of work, such as design, housing construction, generator rewinds, debris removal, etc. Delivery or task orders are made under the “umbrella” contract as the need arises.


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