Document Detail

Title: IR260-2 - CII Guide to Reimbursable Contracting
Publication Date: 7/1/2011
Product Type: Implementation Resource
Status: Tool
Pages: 154
Focuses on key differences between reimbursable contracts and other strategies; identifies issues that should be carefully evaluated when a reimbursable contract is being considered and, if chosen, when it is implemented. Also presents best practices and lessons learned for implementing a reimbursable contract. Emphasizes the principles that should be applied to the reimbursable contracting process on projects that use the EPC and EPCM delivery methods. Includes a Microsoft® Excel-based contracting strategy selection tool.

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Abstract

Reimbursable contracts are used in the engineering and construction industry to address situations in which fixed price contracts (including variations of lump sum and unit price contracts) are either inappropriate or unattractive commercially. For example, reimbursable contracts provide a mechanism for projects that are faced with a substantial amount of uncertainty, new technologies, a variable labor market, or volatile materials pricing. However, understanding when to use reimbursable contracting, and how to successfully implement a reimbursable contract, requires analyzing a complex set of factors. This guide aims to help decision makers develop an appropriate contracting strategy and, if a reimbursable strategy is chosen, it will help them understand how implementing a reimbursable contract differs from implementing a lump sum contract