Unit-Price Bid and Unbalanced Bids

Bid = \sum q_{i} p_{i}, payment = \sum q_{i}^{actual} p_{i}

Unit-price contracts pay actual quantities at bid unit prices. Unbalancing (high p on early/overrun items) can be legal but unethical if it misleads. Lump-sum is one price for the defined scope.

$q_{i}$: Estimated quantity
$p_{i}$: Unit price

Step-by-step solved example

Excavation 8000 CY @ $12, concrete 200 CY @ $400. Bid? If excavation is 9000 CY, payment extra?

Unit prices × quantities = bid; actual q pays the contract.

1. Bid
8000×12+200×400=96000+80000=$176,000.
2. Overrun
1000×12=$12,000 extra (if the spec pays overruns at unit price).

Answer: Bid $176,000; +$12,000 if 1000 CY extra excavation

10 practice questions

0/10 correct

1.A lump-sum overrun of scope is handled by

2.Unbalancing front-loads cash by

3.If you expect a quantity overrun you might

4.3 items: 10×5 + 4×20 + 8×10 =

5.Engineer’s estimate is

6.A responsive bid meets

7.Payment quantity from average-end-area is

8.Retainage withholds

9.If actual q=0 for an item, payment is

10.Ethics: an unbalanced bid intended to exploit a known owner error is