Glossary · U
Unit Rate Contract (Item Rate)
A contract that pays the contractor an agreed rate for each unit of work, so the final cost follows the quantities actually measured.
What is Unit Rate Contract (Item Rate)?
A Unit Rate Contract, also called an Item Rate Contract, is the most common form of construction contract in India. The client does not agree one lump-sum price for the whole building. It agrees a rate for each item, for example ₹5,000 per cu.m of concrete and ₹60 per kg of steel, and the final cost follows the quantities measured on site.
Practical example
A developer signs an item rate contract for earthwork at ₹300 per cu.m. The BOQ estimated 1,000 cu.m, a budget of ₹3,00,000. During excavation the contractor hits hard rock, has to dig wider and ends up excavating 1,200 cu.m. Under the contract the developer pays ₹3,60,000 (1,200 × ₹300).
In SuperWise
In SuperWise each work order line ties a BOQ item to a contracted quantity and a contracted rate, and RA bill lines take their quantities from approved measurement sheets. The cumulative billed quantity of a line cannot pass its contracted quantity. A change in scope or rate after approval is made by amending the work order, which raises its revision number.
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