Contracts

Unit price contracts in construction

By Scavi Company · · 3 min read
Unit price contracts in construction

Unit price contracts pay by measured quantities. Here is how to bid and manage them.

How unit price works

The contractor bids a price per unit, such as per cubic yard or linear foot. Payment is based on actual measured quantities. It shares the quantity risk between owner and contractor.

When it's used

Earthwork, utilities, paving, demolition and repairs where quantities are uncertain.

Keep reading — free

The rest of this article is worth the 20 seconds

Tell us where to send it and the full piece unlocks right here, along with everything else on this blog.

Rather just talk? Message us on WhatsApp.

Bid quantities vs actual

Bid quantities are estimates. Final payment depends on what's measured.

Measurement rules

Read how each item is measured and paid. Details matter.

Daily quantity records

Track quantities daily with the owner's inspector when possible.

Fixed costs in unit prices

Mobilization and fixed costs must be recovered somewhere. Consider separate items.

Unbalanced bids

Shifting cost between items can be risky and may be rejected. Bid honestly.

Large quantity changes

Contracts often allow price adjustment when quantities change significantly. Know the clause.

Pay applications

Back each pay app with measurement records.

An example

A utility contractor tracked trench footage daily with the inspector and photos. When final quantities exceeded the estimate by 30%, the records made payment and the adjustment discussion simple.

Where to start

Before bidding, list how each unit is measured and confirm any unclear items with the owner.

Common mistakes

Poor field measurement, ignoring fixed costs and not reading quantity variation clauses.

Run tighter jobs and win the right ones.

We help construction companies build the systems, online presence and client relationships that bring better projects.

Frequently asked questions

When are unit price contracts used?

They are common when quantities are uncertain at bid time, such as earthwork, utilities, paving and repair work, especially in public projects.