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