19/11/2025
Types of Construction Contracts
1. Lump Sum Contract
In this contract, the contractor agrees to complete the project for a fixed total price.
Suitable for projects with clearly defined scope.
2. Item Rate Contract
Payment is made based on the actual quantity of work done at pre-agreed unitrates. Useful for projects with variable quantities.
3. Cost Plus Contract
The contractor is paid for actual cost incurred plus a fixed percentage or fee. Usedwhen the scope is uncertain.
4. Time and Material Contract
Payment is based on the time spent and materials used. Common for repair or
maintenance work.
5. Percentage Rate Contract
The contractor quotes a percentage above or below the estimated cost. Widelyused in government projects.
6. Turnkey Contract
The contractor handles design, construction, and commissioning. The clientreceives a fully ready project.
7. EPC Contract (Engineering, Procurement, Construction)
Contractor manages engineering design, procurement of materials, andconstruction under a single package.
8. Design-Build Contract
A single entity performs both design and construction work, ensuring faster project
delivery.
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