What type of contract involves vendors submitting a single price for a set amount of work?

A lump-sum contract is a contractual agreement where the vendor agrees to complete a specified amount of work for a single fixed price. This type of contract is typically used in projects with clearly defined scopes and requirements, allowing both parties to have a clear understanding of costs upfront.

The clarity of a lump-sum contract benefits both the client and the vendor, as it helps manage budget expectations and reduces the risk of unexpected costs arising from project changes or overruns. As such, the vendor must ensure that their pricing reflects all foreseeable expenses associated with the project while also allowing for some margin to cover unforeseen issues.

In contrast, other types of contracts, such as cost-plus contracts, involve the vendor being reimbursed for their actual costs plus an additional fee or percentage. Unit price contracts are based on pricing per unit of work rather than a single price, and time and material contracts charge based on the time spent and materials used rather than a fixed price for the overall project. Each of these alternatives carries different implications for risk management, budgeting, and project scope.