AEC definitions
A unit-price contract pays the contractor a stated price for each unit of work actually performed, such as a cubic yard of rock or a foot of pipe. The bid quantity is an estimate. The final contract sum is the unit price times the measured quantity.
Definition
Civil and site work use unit prices because quantities are uncertain until the ground is opened. The bid form lists items, estimated quantities, and unit prices. The extended prices are for comparison. Payment follows field measurement under the method the specifications describe. A large overrun may entitle either party to renegotiate a unit price if the contract says so, because the unit price assumed a volume. Unit price is not a lump sum with approximate quantities. In a lump sum, quantity risk on a defined scope stays with the contractor.
In depth
Each line is a unit price times an estimated quantity. The total of the extensions ranks the bidders. A very low unit price on a likely overrun, and a high price on a likely underrun, is an unbalanced bid. Owners may reject unbalanced bids if the instructions say so.
The estimated quantity is not a warranty. Say that on the form.
The spec should say who measures, how often, and with what evidence: survey, truck tickets, in-place volume. Both parties should be able to check the number.
A unit without a measurement method will be argued at the first pay application.
A price per foot of pipe should say whether excavation, bedding, and backfill are included. Otherwise the cheap unit is missing the expensive work.
Mobilization and bonds are sometimes separate lump-sum lines inside a unit-price contract. That is normal. Call them lump sum so they are not remeasured.
A unit price spreads fixed costs over the estimated quantity. If the quantity doubles or collapses, the unit price is no longer fair. Many contracts allow an adjustment when a quantity changes by more than a stated percent.
The clause should say who may ask, and whether the adjustment is up only, down only, or both.
Work that does not fit an existing unit is a change, priced by the change clause, not forced into the nearest unit.
Forcing it produces a bad measurement and a bad price.
Examples
The bid form estimates 1,000 cubic yards of rock at a unit price. The survey measures 1,250. Payment uses 1,250 times the unit price.
Pipe is paid per foot, including trench and bedding, as the item description states. A separate rock item pays the extra excavation.
A quantity falls by half. The contract's variance clause lets the contractor adjust the unit price for unrecovered fixed cost.
FAQ
Unlock the value of your institutional knowledge—organized, connected, and grounded in your team's critical workflows with Nomic.
