In a Schedule of Rates (item rate) contract, the contractor's payment is determined by:
Choose the correct answer
A fixed lump sum agreed before construction begins
Actual quantities of work executed multiplied by the agreed unit rates
Cost of materials and labour plus a fixed management fee
A percentage premium above the departmental estimate
Correct Answer
B. Actual quantities of work executed multiplied by the agreed unit rates
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Item rate/SOR contract: quantities in BOQ are approximate; actual payment = measured quantities × tendered rates. Risk is shared: contractor owns rate risk (covers their costs), client owns quantity risk. Most common contract type for Indian government construction projects.
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