Page 198 - Civil Engineering Project Management, Fourth Edition

15
Measurement and

bills of quantities

15.1 Principles of pricing and payment

In the simplest contracts for construction, the amount to be paid to the con-
tractor may have been pre-agreed as a lump sum, or a series of lump sums
relating to different items to be provided, and payment will depend on these
being completed. In principle many turnkey types of contract and some design
and construct contracts follow similar arrangements although, in practice,
things seldom turn out so simple.
For many construction contracts, however, the works cannot be precisely
defined at the time when the contract for construction is entered into, such as
the depth to which foundations should be taken or pipelines and sewers laid.
Also there may be additions or alterations found necessary when conditions
on site are not those expected. In such circumstances a re-measurement type of
contract may be the most suitable. Such a contract must set out exactly what is
to be measured for payment purposes and when the payments are to be made.
Hence it also needs to show, either specifically or by implication, what work is
included in the prices to be paid.
Under most standard forms of contract the contractor undertakes to carry
out the works described in the specification and shown on a set of drawings
included in the contract. This obligation of the contractor is one which he takes
on independently of the terms set out in the contract as to how and what he
will be paid for various items of work. When a bill of quantities is used for the
basis of payment, the specification and drawings describe what is required in
detail, and the tenderer has to consult these when he prices a bill item and take
them into account. He has also to see from the rest of the contract what are the
obligations he must cover when he enters a price against a bill item.
The bill of quantities is, of course, of importance in the tendering process
because it allows a reasonably fair financial comparison of tenders, but it does
not limit what is to be built, nor limit the contractor’s obligations. Under the
ICE and similar conditions the bill of quantities is merely used for the ultimate