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Which of the following is true regarding unit-price contracts?
They have no direct competition
They limit the number of bidders
They provide flexibility for quantity variations
They ensure a fixed total cost
The correct answer is: They provide flexibility for quantity variations
Unit-price contracts are characterized by their payment structure, which is based on the quantity of work performed at predetermined unit prices. This type of contract is particularly beneficial in construction projects where the exact quantities of work can be uncertain at the outset, allowing for adjustments as the project progresses. The correct statement reflects that unit-price contracts provide flexibility for quantity variations. As the project moves forward, if the actual quantity of work differs from the estimated amounts, the total cost will adjust accordingly based on the actual units completed. This flexibility is advantageous in construction because it accommodates unforeseen conditions or changes in project scope without needing to renegotiate the entire contract. In contrast, the other options do not accurately describe unit-price contracts. They do allow for competition among bidders, can accept a broad range of bidders, and do not guarantee a fixed total cost since the final contract amount may vary based on the actual quantities executed during the project. This adaptability to quantity changes is what makes unit-price contracts a preferred option in many construction situations, especially when dealing with unpredictable site conditions.