The contractors may submit high tender in lumpsum contract

[shivajikobardan]

Homework Statement

what does it mean really?

Relevant Equations

none.

I don't understand what does this mean?

What does this mean? Please guide. I don't understand. In lump sum contract, once the contractor gives money it is all done isn't it. What does contractors submit high tender.

 

[DrClaude]

It means the contractors may ask for more than it will actually cost.

Think about a lumpsum contract from the side of the contractor. You try and estimate as best as you can what to will cost, but you have to prepare for uncertainties and don't want to end up losing money because the job actually costed more than planned. The contractors will thus tend to include a buffer for uncertainties in their tender.

 

[Lnewqban]

“Unforeseen conditions” is one reason.
“Errors and omissions” in the construction documents and specifications is another reason.

 

[shivajikobardan]

It means the contractors may ask for more than it will actually cost.

Think about a lumpsum contract from the side of the contractor. You try and estimate as best as you can what to will cost, but you have to prepare for uncertainties and don't want to end up losing money because the job actually costed more than planned. The contractors will thus tend to include a buffer for uncertainties in their tender.

makes sense. thank you.

 

[pbuk]

“Unforeseen conditions” is one reason.
“Errors and omissions” in the construction documents and specifications is another reason.

Those are nothing to do with "the contractors may submit [a] high tender"; exposure to additional cost due to claims or variations are not addressed by that slide.