Lump-sum Tendering

In this common contractual format (typically formalized in a CCDC-2 standard contract as provided by the Canadian Construction Association – see our links page), the owner first engages the services of an architectural consultant who acts as the owner’s agent. The architect produces drawings and specifications, and upon completion the project is offered for lump sum tender to general contractors on a competitive basis, after which a firm lump sum contract is entered into between the owner and the contractor.

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The Pros

  • Firm upfront pricing structure
  • Easy hierarchical format

The Cons

  • Possible lack of unity between designer and builder
  • Guesswork in estimating early can lead to higher prices once changes arise