1. Contractual Arrangement
Engineering Project
Contractual Arrangement

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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

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