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ntroduction

Initsmostsimpleform,ascheduleofratescanbealistinacontractsettingoutthestaff,labourandplanthirerates
thecontractorwilluseforpricingcostreimbursableinstructeddaywork.

However,onamuchlargerscale,a'scheduleofratestermcontract','termcontract'or'measuredtermcontract'maybeused
whenthenatureofworkrequiredisknownbutitcannotbequantified,orifcontinuityofprogrammecannotbedetermined.In
theabsenceofanestimate,tenderersquoteunitratesagainstadocumentthatisintendedtocoveralllikelyactivitiesthat
mightformpartoftheworks.Astheextentoftheworkisunknowntheunitratesincludeoverheadsandprofit.
Generalpreliminariessuchasscaffolding,temporarypower,supervisionandtemporaryaccommodationwillalsohaverates.
Onprojectslongerthansay18monthstheremightbeescalationprovisionsbasedonannualpercentageincreases.

Prosandcons

Theadvantagesofscheduleofratestermcontractsinclude:
Variationsareeasiertoestimateandnormallycheaperthanonfixedpricetraditionalcontracts.
Theclientcanstopandstartworkatapacethatmightbedeterminedbycashfloworfunding.
Alargerpoolofcontractorscanbeaskedtotenderastheprocessisinexpensiveandquick.
Itisflexibleinrelationtoscopeandcontractualcommitment.
Asafullydetaileddesignisnotrequiredtheclientcanobtaintendersattheearlystagesofaprojectandbegin
constructionbeforecompletionofthedesign.Sotothisextentitis'fasttrack'.

Thedisadvantagesinclude:
Additionalresourcesarerequiredtomeasureworkandcertifypayments.
Theclientdoesnothaveafinalpricewhencommittingtostartingwork.
Itisdifficultforcontractorstoplanlongtermresourcesandsomightmeanchangestopersonnelwithlossofcontinuity.
Contractorsmaybetemptedtoloadfrontendcostsincaselaterworkdoesnotmaterialise.
Thereisnorealincentiveforcontractorstotreatsuchworkwithanysenseofurgencyanditsbeststaffwillbeplacedon
theprojectswherethecontractoriscarryingmorerisk.

Thetenderdocumentswillbeasubstantialpackagelookinglikelikeabillofquantitieswithnumerousoptionsanddiscount
opportunitiesbasedonquantity.