Re measurement contract

In this category of contract the employer accepts the risk of variation in the quantities originally estimated and in some of the rates & prices tendered. This is particularly relevant in civil engineering works with a high content of wok below the ground surface where the quantities are inherently unpredictable.

Cost Reimbursable contracts

In this category of contract, the employer essentially accepts the whole risk of carrying out the works. The contractor is reimbursed for the actual cost of carrying out the work plus an additional amount of money in respect of profit. This may be done on the basis of the following: a) b) c) d) Cost plus percentage fee contracts, Cost plus fixed fee contracts, Cost plus fluctuating fee contracts, and Target price contracts

In all these contracts, very detailed and extensive day to day professional administrative services are required to check the quality and quantity of work done.

Lump sum contracts

In this type of contracts the employer whishes to accept the least amount of risk with respect to quantities. It is sometimes referred to as a fixed price contract, since duty is imposed on the contractor to carry out all the work included in the contract documents for a fixed specified tendered sum. A typical example of this type of contract is the orange book where clause 13.1 provides that b) The contract price shall not be adjusted for changes in the cost of labor, materials or other matters; c) Any quantities which may be set out in a schedule are only estimated quantities and are not to be taken as the actual and correct quantities of the works to be executed by the contractor in fulfillment of his obligations under the contract .

Fixed price contracts are useful where the quantities are expected to remain unchanged. Bills of quantities however are sometimes included in this type of construction contract. Thus the contractor is made responsible for all the costs necessary for the completion of the work. Accordingly, despite the fixed price nature of this contract, there are a number of grounds on which a contractor can claim extra payment. If the drawings and contract documents do not accurately describe the work, of if they make provision for specific alterations, the contractor would be entitled to be paid additional sums. Payment is usually made at pre-determined stages related to the extent of progress achieved on site.

EPC (contract)
EPC stands for Engineering, Procurement and Construction. It is a common form of contracting arrangement within the construction industry. Under an EPC contract, the contractor will design the installation, procure the necessary materials and construct it, either through own labor or by subcontracting part of the work. The contractor carries the project risk for schedule as well as budget in return for a fixed price, called Lump sum or LSTK depending on the agreed scope of work.[1] When scope is restricted to engineering and procurement only, this is referred to as an EP or E+P contract. This is often done in situations where the construction risk is too great for the contractor or when the Owner has a preference for doing the construction himself.

LSTK stands for Lump Sum Turn Key. In the construction industry, LSTK combines two concepts. The LS (lump sum) part refers to the payment of a fixed sum for the delivery under e.g. an EPC contract. The financial risk lies with the contractor. TK (turn key) specifies that the scope of work includes start-up of the facility to a level of operational status. Ultimately the scope of work will define just exactly what is needed.[1]

EPCM
EPCM refers to Engineering, Procurement, and Construction Management. It is a common form of contracting arrangement within the construction industry. In an EPCM arrangement, the contractor is not in fact the constructor. Rather the EPCM designs, procures and manages the construction process as an agent of the project Owner. While the C stands for construction, this is in the context of CM, Construction Management. Unlike an EPC contract, an EPCM contract is essentially a contract for professional services, based on a schedule of rates, with or without a multiplier.[1]