Lump Sum
A Lump Sum is a payment method in construction and contracting where the contractor agrees to complete a project for a single, fixed price. Unlike hourly or cost-plus contracts, this approach sets one total price upfront that covers all labor, materials, and overhead. It's similar to getting a fixed quote for home repairs rather than paying by the hour. Companies often prefer lump sum contracts because they know exactly what they'll pay from the start, though contractors typically build in some cushion to protect against unexpected costs.
Examples in Resumes
Managed $2.5M Lump Sum contract for office building renovation
Negotiated Lump Sum agreements with subcontractors, resulting in 15% cost savings
Successfully completed 12 Fixed Price commercial construction projects
Led team of estimators preparing Lump Sum bids for government contracts
Typical job title: "Contract Managers"
Also try searching for:
Where to Find Contract Managers
Professional Associations
Online Resources
Job Boards
Example Interview Questions
Senior Level Questions
Q: How do you handle risk management in a lump sum contract?
Expected Answer: Should discuss methods of identifying potential risks, building contingencies into pricing, and strategies for managing unexpected challenges while maintaining profitability.
Q: Describe a situation where you had to negotiate changes to a lump sum contract.
Expected Answer: Should explain process of change orders, importance of documentation, and maintaining client relationships while protecting company interests.
Mid Level Questions
Q: What factors do you consider when preparing a lump sum bid?
Expected Answer: Should mention material costs, labor rates, overhead, profit margins, project timeline, and risk factors that influence pricing decisions.
Q: How do you ensure proper scope definition in a lump sum contract?
Expected Answer: Should discuss importance of detailed scope documents, clarifying assumptions, and identifying potential exclusions before contract signing.
Junior Level Questions
Q: What's the difference between lump sum and time-and-materials contracts?
Expected Answer: Should explain that lump sum means one fixed price regardless of actual costs, while time-and-materials bills actual costs plus markup.
Q: What documents are typically included in a lump sum contract package?
Expected Answer: Should mention scope of work, payment schedule, timeline, specifications, and terms and conditions as basic components.
Experience Level Indicators
Junior (0-2 years)
- Basic contract document preparation
- Understanding of pricing structures
- Project cost tracking
- Basic scope writing
Mid (2-5 years)
- Contract negotiation
- Risk assessment
- Change order management
- Detailed cost estimation
Senior (5+ years)
- Strategic contract planning
- Complex project management
- Risk mitigation strategies
- Team leadership
Red Flags to Watch For
- No experience with contract documentation
- Poor understanding of pricing structures
- Lack of risk management knowledge
- No experience with change orders or scope management
