Which of the following contract types is best used if the scope is well defined but not the quantities of material?

The unit price contract type is ideal in circumstances where the scope of the project is well defined, but the quantities of materials are uncertain. In this arrangement, the contractor is paid a predetermined price for each unit of work or material supplied. This allows for flexibility in quantity without sacrificing clarity in scope.

For example, if a construction project involves installing a certain type of material—like concrete or piping—where the dimensions or total quantity might vary based on site conditions or decisions made during the project, working under a unit price contract means the contractor still has a clear understanding of the work needed, while the owner can adjust the number of units as necessary. This approach not only ensures that the contractor is compensated for what they actually work on, but also facilitates fair pricing to the owner based on the actual quantities used.

Other contract types, such as lump sum, may not provide the necessary flexibility for variable quantities, as they typically require a fixed price regardless of the actual amount of work done. Cost-plus contracts might also lead to inefficiencies since they reimburse for actual costs incurred, which could encourage less efficient use of materials. Cost plus with a guaranteed maximum price (GMP) combines elements of both but is still less suited for a scenario where the quantity is uncertain