1. Allowances, Unit Prices, and Alternates ACT 380 1

2. Objectives O Recognize specifying techniques which meet the needs of dealing with the lack of adequate information, unknowns, and contingencies on a construction project 2

3. Related Considerations O Once a project has been analyzed to determine where changes may occur, then an allowance, alternate, or unit price can be used to minimize the impact of such variables O These special procedures SHOULD NOT become a substitute for accurate and complete documents (drawings & specifications) O Using these items tend to add complexity to the bidding and contract award process 3

4. Major Topics O Allowances O Cash allowance O Quantity allowance O Unit Prices O Alternates 4

5. Allowance Defined A monetary amount or a quantity that is not otherwise defined by specifications and drawings, but which the contractor is required to include in the project 5

6. Cash Allowance Defined A monetary amount that the contractor includes as part of the contract sum to cover the cost of certain items to be determined at a later time 6

7. When to Use Cash Allowances O Inclusion of items that cannot be designed or selected until the project is partially complete O Cover cost of items for which the owner or architect wants to arrange separate procurement O Cover items where the magnitude of the item can only be determined during construction 7

8. When to Use Cash Allowances O Accelerate construction schedule when short design period outweighs potential higher cost for cash allowances items O Substitute for complicated specification that is difficult to produce 8

9. A/E Must Clearly Indicate Which of the Following are Included in allowance: O Actual material cost O Taxes O Delivery O Unloading O Uncrating O Storage and Handling O Installation 9

10. Typical Cash Allowance Generally covers only cost of material delivered to the site including any taxes 10

11. When Cash Allowances Used: O Items that cannot be designed or selected until the project is partially complete (e.g., murals, sculptures, furnishings & accessories, & landscaping) O Items such as testing, the magnitude of which can only be determined during construction O Acceleration of the design schedule when the benefit of a short design period outweighs the potentially higher cost involved with cash allowance items 11

12. Quantity Allowance Defined Requires the contractor to include a specific quantity of a product in the scope of the work even though location of the product is not defined on drawings or in the specifications 12

13. Quantity Allowance Example A multi-story office building is being constructed O The exact layout of the interior partitions often can’t be determined until the space is leased and each tenant’s requirements are determined O In such as case…bidder will be asked to provide a quantity allowance for linear feet of finished interior partitions, doors & frames, sq. ft. of acoustical ceilings, and recessed lighting 13

14. Specifying Allowances O Written provisions must be included in several of the bidding documents: O Bidding requirements O Conditions of the Contract (both AIA & EJCDC forms provide articles for this) O Div 1 – General requirements O Individual specifications sections for products 14

15. Unit Price O A cost quoted by a contractor for a single, specified unit of work O Useful where the nature of the work is defined but the extent of work is not known or is likely to change O When the quantity of the work is known, the total cost of the item is determined by multiplying the quantity by the unit price 15

16. Alternates O A defined portion of the work that is priced separately and thus provides an option for the owner in selecting the final scope of the project O An alternate can simply be a choice between two products or can be the deletion or addition of a portion of the work (this reduces the total contract amount – stay within budget) 16

17. Sample Uses O Allowances O See page 4.34; Fig 4.6-A O Unit Prices O See page 5.54; Section 5.6.7; also see Fig 5.6-H O Alternates O See page 4.35; Section 4.64 17