Risky Business

by Hank Harris, Vice. Pres. and Dir. of Engrg. and Arch. Series Group; FMI Corp., Raleigh, NC,


Serial Information: Civil Engineering—ASCE, 1999, Vol. 69, Issue 1, Pg. 63-64


Document Type: Feature article

Abstract: Labor, clients, project conditions and information flow are all potential risks that small design firms face when deciding to agree to a fixed price. If you're in charge of a small firm or considering starting one, then you'll need to know about lump-sum agreements, or fixed-price contracts, and why they can be risky. Reasons include the variable labor, project conditions and clients, unpredictable complex systems, and imprecise labor reporting. The author further discusses methods, mind-sets and systems necessary to succeed with lump-sum agreements.

Subject Headings: Contracts | Fees | Pricing | Risk management

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