What is unit price construction?

Unit price construction is a service model where payment is made per completed designated unit of work, making option B the correct choice. This method is widely used in construction projects, particularly for tasks that can easily be quantified, such as road work, site preparation, or utility installations. It helps to streamline the bidding process by allowing contractors to estimate their costs based on the unit prices they set for specific activities, which are then multiplied by the quantity of work performed.

This approach offers several advantages, such as clear cost breakdowns and flexibility for both the contractor and the client. As the project progresses, actual quantities can be measured, ensuring that the payment accurately reflects the work completed, which is beneficial in projects where the scope may change. Unit price contracts also mitigate risks associated with estimating total project costs up front, allowing for adjustments based on actual work completed.

The other options describe different aspects of construction pricing and contracting but do not accurately capture the essence of unit price construction. For instance, estimating labor costs as a flat rate addresses cost estimation but does not consider the payment structure tied to actual work units. A pricing strategy based on market competition focuses on how prices are determined without specific reference to unit pricing. Lastly, a construction approach that does not require a formal contract