These contracts call for tenderers to quote only their rates per unit of work of different kinds. They are used for work whose quantity cannot be defined in advance, such as for site investigations, grouting work or the sinking of boreholes.
Any quantities entered in such contracts will be for indicating the amount of work expected and do not form a basis of the contract.
The tenderer has to ensure that his rates for each item of work carry enough oncost to pay for his overheads and profit. However, the items listed can include lump sum prices for one off costs, such as For bringing and setting up grouting plant on site and so on.
In some overseas countries the government, local government authority, or public utility may publish its own standard rates for a range of civil engineering operations. Many of these will be for the provision of labour only, since pipes, steelwork and steel reinforcement are often supplied by the authority.
Tenderers bid a percentage of the employers standard rates to be applied to the quantities of work set out. Due to inflation and failure to update the standard rates, the percentages tenderers quote are often well over 100 per cent addition.