CSI’s treatment of methods of payment / contract pricing (as used in standard owner–contractor agreements and CDT content) includes several common bases of payment:
Stipulated Sum (Lump Sum)
The contractor agrees to provide the work for a single fixed price.
The price does not change except through formal changes to the work (change orders).
This is the classic “fixed-price” contract form.
Unit Price
The contractor is paid based on measured quantities of work completed multiplied by agreed unit rates.
Final cost depends on actual quantities installed, not a single fixed total.
Cost-Plus-Fee
The owner reimburses actual cost of the work (labor, materials, equipment, etc.) plus a fee (fixed or percentage) as contractor’s compensation.
The final cost is not fixed; it varies with actual costs incurred.
Cost-Plus-Fee with Guaranteed Maximum Price (GMP)
A variation of cost-plus where the total reimbursable cost plus fee is capped at a guaranteed maximum.
Still not the same as a straightforward fixed lump sum; the basis is cost reimbursement up to a cap.
The question specifically asks: “for a fixed price.” In CSI and standard contract terminology, “fixed price” = “stipulated sum” (or lump sum). That is:
The owner and contractor negotiate a single dollar amount for the entire scope of work;
The contractor’s compensation is that stipulated sum, adjusted only by approved changes.
Why the other options are not correct:
B. Unit price – The total cost is not fixed at the time of contracting; it depends on actual installed quantities.
C. Cost-plus-fee – Costs are reimbursed; final price is open-ended and therefore not fixed.
D. Cost-plus-fee with guaranteed maximum price – This sets a cap, but the actual final cost is not a single fixed price; it is “actual cost plus fee” up to the GMP.
Therefore, the correct basis of payment for a fixed-price contract is Stipulated sum (Option A), consistent with CSI’s classification of contract types and standard owner–contractor agreements.
Key CSI References (titles only, no links):
CSI Project Delivery Practice Guide – sections on “Basis of Payment” and contract pricing methods (stipulated sum, unit price, cost-plus, GMP).
CSI CDT Body of Knowledge – Contract Types and Methods of Payment.
Standard owner–contractor agreements discussed in CSI materials (e.g., stipulated sum as the fixed-price form).
