Allowances, Unit Prices, and Alternates

ACT 380

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ObjectivesO Recognize specifying techniques

which meet the needs of dealing with the lack of adequate information, unknowns, and contingencies on a construction project

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Related ConsiderationsO Once a project has been analyzed to

determine where changes may occur, then an allowance, alternate , or unit price can be used to minimize the impact of such variables

O These special procedures SHOULD NOT become a substitute for accurate and complete documents (drawings & specifications)

O Using these items tend to add complexity to the bidding and contract award process

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Major TopicsO Allowances

O Cash allowanceO Quantity allowance

O Unit PricesO Alternates

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Allowance DefinedA monetary amount or a quantity that is not otherwise defined by specifications and drawings, but which the contractor is required to include in the project

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Cash Allowance Defined

A monetary amount that the contractor includes as part of the contract sum to cover the cost of certain items to be determined at a later time

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When to Use Cash Allowances

O Inclusion of items that cannot be designed or selected until the project is partially complete

O Cover cost of items for which the owner or architect wants to arrange separate procurement

O Cover items where the magnitude of the item can only be determined during construction

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When to Use Cash Allowances

O Accelerate construction schedule when short design period outweighs potential higher cost for cash allowances items

O Substitute for complicated specification that is difficult to produce

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A/E Must Clearly Indicate Which of the Following are Included in

allowance:O Actual material costO TaxesO DeliveryO UnloadingO UncratingO Storage and HandlingO Installation

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Typical Cash AllowanceGenerally covers only cost of material delivered to the site including any taxes

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When Cash Allowances Used:

O Items that cannot be designed or selected until the project is partially complete (e.g., murals, sculptures, furnishings & accessories, & landscaping)

O Items such as testing, the magnitude of which can only be determined during construction

O Acceleration of the design schedule when the benefit of a short design period outweighs the potentially higher cost involved with cash allowance items

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Quantity Allowance Defined

Requires the contractor to include a specific quantity of a product in the scope of the work even though location of the product is not defined on drawings or in the specifications

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Quantity Allowance Example

A multi-story office building is being constructed

O The exact layout of the interior partitions often can’t be determined until the space is leased and each tenant’s requirements are determined

O In such as case…bidder will be asked to provide a quantity allowance for linear feet of finished interior partitions, doors & frames, sq. ft. of acoustical ceilings, and recessed lighting

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Specifying AllowancesO Written provisions must be included

in several of the bidding documents:O Bidding requirementsO Conditions of the Contract (both AIA &

EJCDC forms provide articles for this)O Div 1 – General requirementsO Individual specifications sections for

products

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Unit PriceO A cost quoted by a contractor for a

single, specified unit of workO Useful where the nature of the work

is defined but the extent of work is not known or is likely to change

O When the quantity of the work is known, the total cost of the item is determined by multiplying the quantity by the unit price

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AlternatesO A defined portion of the work that is

priced separately and thus provides an option for the owner in selecting the final scope of the project

O An alternate can simply be a choice between two products or can be the deletion or addition of a portion of the work (this reduces the total contract amount – stay within budget)

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Sample UsesO Allowances

O See page 4.34; Fig 4.6-AO Unit Prices

O See page 5.54; Section 5.6.7; also see Fig 5.6-H

O AlternatesO See page 4.35; Section 4.64

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