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1 The Owner and the Contractor shall purchase and maintain insurance as set forth in Document A1012017, Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum, Exhibit A, Insurance and Bonds, and elsewhere in the Contract Documents.
Disadvantages of a Lump Sum Construction Contract A lump sum agreement presents a higher risk to a contractor. Measuring the number of changes is difficult. Such contracts require paperwork and records of change orders from each phase, and this means further documentation is needed.
A stipulated sum contract also called a lump sum or fixed fee contract, is a contractual agreement in which the contractor agrees to complete the project for a predetermined set price. A stipulated sum contract binds the contractor to agree to be accountable for project execution at a predefined cost.
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A stipulated sum contract is exactly what the name suggestsa construction agreement in which the owner and contractor agree to a predetermined, set project price to complete a project. The Document A1012017 is a familiar fixed price standard form of agreement between owner and contractor.
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Unlike stipulated sum contracts, which hold contractors responsible for completing projects at fixed prices regardless of actual costs incurred, GMP contracts transfer this risk to the contractor by setting a limit on how much the customer will be charged.
The documents produced by The American Institute of Architects () are the most widely used standard form contracts in the construction industry. They facilitate communications among all the parties involved in construction, which makes it easier to produce a high quality project in a timely and economical fashion.
A stipulated sum contract is a fixed-price agreement in which the contractor agrees to complete the construction project for a specified sum of money.

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