Question 5

What usually is the primary advantage and the primary disadvantage to an owner in a
unit-price contract?

the primary advantage to the owner in a unit-price contract is that he can proceed with the work
with less risk even though he cannot tell the bidders exactly how much work is required
because of its nature, or because of the nature of the site.

The owner’s primary disadvantage in a unit-price contract lies in the possibility of serious
inaccuracies in the approximate quantities of work and a greater expenditure than originally
expected.

Question 6

In a unit-price contract, how should additional work arising from a change be priced?
Explain why.

additional work ordered in a unit-price contract should not be done on the basis of either unit
prices agreed to post-contract, or by the stipulation and acceptance of a lump sum as in a lump-
sum contract, as described, or by any other methods in any other kind of contract. Even in a
lump-sum contract it is usual for the owner to be able to order additional work and make
changes in the work of the contract, and so it is in any other kind of contract. The additional
work may be done on any basis that is agreed to by the parties: by unit prices, cost plus fee, or
stipulated and accepted lump sum (pre- or post-contract).

Question 7

Which other kind of construction contract is most similar to a unit-price contract?

Explain how and why.

a unit-price contract is very much like a typical lump-sum contract, but with each item of work
the subject of a separate lump sum dependent on the unit price for the item and the quantity of
the item of work done.