What is the definition of the total contract price?

What is the definition of the total contract price?

• A. Sum of all labor costs
• B. The summation of lump sum bids and products of quantities multiplied by unit prices
• C. Estimated costs without any bidding
• D. Final amount after all changes and modifications

Answer: (B)

The total contract price is defined as the summation of lump sum bids and products of quantities multiplied by unit prices. This means it encompasses all aspects of a contract's financial structure, including fixed amounts for specific tasks (lump sum bids) as well as variable amounts based on the quantity of work performed (unit prices). In highway construction, contracts often have components where the contractor is paid a predetermined sum for certain completed tasks, while other parts may pay based on the actual amount of work, such as per cubic yard of material or per foot of roadway constructed. Thus, the total contract price accurately reflects the total projected expenditure for completing the entire scope of the work described in the contract. Understanding this concept is crucial because it allows stakeholders, such as project managers and estimators, to gauge the overall cost and manage budgets effectively throughout the project's lifecycle.

The total contract price is defined as the summation of lump sum bids and products of quantities multiplied by unit prices. This means it encompasses all aspects of a contract's financial structure, including fixed amounts for specific tasks (lump sum bids) as well as variable amounts based on the quantity of work performed (unit prices).

In highway construction, contracts often have components where the contractor is paid a predetermined sum for certain completed tasks, while other parts may pay based on the actual amount of work, such as per cubic yard of material or per foot of roadway constructed. Thus, the total contract price accurately reflects the total projected expenditure for completing the entire scope of the work described in the contract.

Understanding this concept is crucial because it allows stakeholders, such as project managers and estimators, to gauge the overall cost and manage budgets effectively throughout the project's lifecycle.