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GATE 2017 CE (CE2) – Question 13

Construction Management · Construction equipment and types of contracts · 1 mark · Multiple choice

The scope of construction work is well defined with all drawings, specifications, quantities and estimates. Which contract would be most preferred?

  1. EPC contract
  2. Percentage rate contract
  3. Item rate contract
  4. Lump sum contract

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Show answer and explanation

Correct answer: (D) Lump sum contract

Explanation

With drawings, specifications, quantities and estimates fixed, bidders can price the complete work as a single agreed amount. A **lump sum contract, D**, is therefore appropriate. Item-rate payment is especially useful where final executed quantities remain uncertain; EPC also assigns design/procurement responsibilities beyond the stated comparison.