Contractual Arrangement Engineering Project Contractual Arrangement

Types of Contractual Arrangement Lump sum contracts Measurement contracts Cost reimbursement contracts Management contracts Design & build and Turnkey contracts Build-operate-transfer (BOT) contracts

Lump Sum Contracts Contract sum is agreed in advance except the future variation works Contract sum agreed may be fixed or adjustments may be allowed Lump sum on plan and specification Lump sum on Bills of quantities

Measurement contracts Contract sum is ascertained by measurement and valuation Measurement contract based on bills of approximate quantities Final measurement of completed works is required Measurement contract based on schedule of prices

Cost reimbursement contracts The price to be paid is determined on the basis of actual cost incurred Cost plus percentage Cost plus fixed fee Cost plus fluctuating fee Target price

Design & build, and turnkey contracts Contractor offers a package deal service (Design & Build) Turnkey, the contractor not only to design and build but also to furnish and fit out as well

Build-operate-transfer (BOT) contracts Applied to both public and private sector Contractor usually carries out the construction under a Turnkey contract, with independent checking engineers hired by the contractor and client Contractor allow to operate the facility, in return to charge the public for the use of the facility

Management Contracts Contractor is paid a fee to manage the building of a project on behalf of the client A contract to manage, procure and supervise rather than a contract to build

Time-Cost-Quality triangle Affect tendering procedures and contractual arrangements Time, cost, quality are inter-related Altering one element will have an effect on the others

Common Practice in H.K. Lump Sum Contract Management Contract Design & Build Contract Turkey Contract