Allowances, Unit Prices, and Alternates

Allowances, Unit
Prices, and Alternates
ACT 380
O Recognize specifying techniques which meet
the needs of dealing with the lack of
adequate information, unknowns, and
contingencies on a construction project
Related Considerations
O Once a project has been analyzed to
determine where changes may occur, then
an allowance, alternate , or unit price can be
used to minimize the impact of such
O These special procedures SHOULD NOT
become a substitute for accurate and
complete documents (drawings &
O Using these items tend to add complexity to
the bidding and contract award process
Major Topics
O Allowances
O Cash allowance
O Quantity allowance
O Unit Prices
O Alternates
Allowance Defined
A monetary amount or a quantity that is not
otherwise defined by specifications and
drawings, but which the contractor is
required to include in the project
Cash Allowance Defined
A monetary amount that the contractor
includes as part of the contract sum to cover
the cost of certain items to be determined at
a later time
When to Use Cash Allowances
O Inclusion of items that cannot be designed
or selected until the project is partially
O Cover cost of items for which the owner or
architect wants to arrange separate
O Cover items where the magnitude of the
item can only be determined during
When to Use Cash Allowances
O Accelerate construction schedule when
short design period outweighs potential
higher cost for cash allowances items
O Substitute for complicated specification that
is difficult to produce
A/E Must Clearly Indicate Which of the
Following are Included in allowance:
O Actual material cost
O Taxes
O Delivery
O Unloading
O Uncrating
O Storage and Handling
O Installation
Typical Cash Allowance
Generally covers only cost of material
delivered to the site including any taxes
When Cash Allowances Used:
O Items that cannot be designed or selected
until the project is partially complete (e.g.,
murals, sculptures, furnishings &
accessories, & landscaping)
O Items such as testing, the magnitude of
which can only be determined during
O Acceleration of the design schedule when
the benefit of a short design period
outweighs the potentially higher cost
involved with cash allowance items
Quantity Allowance Defined
Requires the contractor to include a specific
quantity of a product in the scope of the
work even though location of the product is
not defined on drawings or in the
Quantity Allowance Example
A multi-story office building is being
O The exact layout of the interior partitions
often can’t be determined until the space is
leased and each tenant’s requirements are
O In such as case…bidder will be asked to
provide a quantity allowance for linear feet
of finished interior partitions, doors &
frames, sq. ft. of acoustical ceilings, and
recessed lighting
Specifying Allowances
O Written provisions must be included in
several of the bidding documents:
O Bidding requirements
O Conditions of the Contract (both AIA & EJCDC
forms provide articles for this)
O Div 1 – General requirements
O Individual specifications sections for products
Unit Price
O A cost quoted by a contractor for a single,
specified unit of work
O Useful where the nature of the work is
defined but the extent of work is not known
or is likely to change
O When the quantity of the work is known, the
total cost of the item is determined by
multiplying the quantity by the unit price
O A defined portion of the work that is priced
separately and thus provides an option for
the owner in selecting the final scope of the
O An alternate can simply be a choice between
two products or can be the deletion or
addition of a portion of the work (this
reduces the total contract amount – stay
within budget)
Sample Uses
O Allowances
O See page 4.34; Fig 4.6-A
O Unit Prices
O See page 5.54; Section 5.6.7; also see Fig
O Alternates
O See page 4.35; Section 4.64