Re-measurable/remeasurement contract is the most popular type of contracts used in the earlier construction industry. But still, large construction organizations are using this procurement method to appoint subcontractors for works such as painting, plastering etc. In this method, payments will be made based on the actual work done (by the client). Compare to other procurement methods, Client’s risk is high in this method (and the contractor’s risk is minimal).
Remeasurement(Re measurable) contracts / Unit price contracts
In re-measurable contracts, works will be carried out based on the pre-agreed unit rates. All the Payments will be paid based on the actual work done after measuring the work done. So the final value of the project will be derived based on the unit prices and exact quantities. The contractor will provide their rates based on the BOQ supplied by the client.
Mostly re measurable contracts are used to appoint small subcontracting works such as painting, plastering etc. Also, this contract type widely uses for tasks, which quantities are not able to determine in the initial stage (such as demolition). As we mentioned in the lump sum contracts, procurement method to execute work is mainly decided based on the client’s requirements such as budget, quality and time frame. Re measurable agreements is highly recommended where,
- The client does not have a tight budget.
- The client wants to improve and change the design and the finishes at a later stage.
- And the client wants to start works immediately based on competitive unit rates.
So based on the above requirement project management team (consultants) prepare the initial design and approximate BOQ to start works immediately. Mostly traditional closed envelope tendering method is used in this procurement method to choose a suitable contractor. The suitable contractor will select after comparing each contractor’s unit rates.
Advantages of remeasurement contract (unit price contracts)
- works can start after finalising the initial design and BOQ
- Can reduce the design cost.
- High possibility to do value engineering
- Prices (unit rates) will be competitive
- Contractor’s risk is comparatively low
Disadvantages of re measurable/remeasurement contract (unit price contracts)
- Cant predict the final value of the project
- Delays in contractor’s payments (assessment of the measurements takes time)
- Client’s risk is comparatively high