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From budget to works contract

📐 Topic8 min read

The budget becomes a contract through two decisions that fix the risk distribution of the entire project: the price formula and the offer selection method. This page fixes both and points to the branch's two analyses.

First decision: the price formula

Formula Mechanics Who takes the quantity risk
Unit rates What is actually executed is paid at the agreed prices The developer
Fixed price A global amount on a defined design The contractor
Mixed formulas Fixed for defined chapters, unit rates where uncertainty remains Distributed by blocks

The serious choice is not ideological but documentary: the fixed price works exactly to the extent that the design is closed, because everything undefined comes back as an exception to the scope. Unit rates, in exchange, require quality quantities and real certification discipline. Selection criteria and sensitive clauses in fixed price or unit rates.

Second decision: selecting the offer

Serious tender comparison is done on the common bill of quantities, item by item, with three operations: homogenising (exclusions, variants, alternative specifications brought back to a comparable base), analysing the price structure (detecting abnormally low prices that anticipate claims and loaded prices on the items the contractor expects to grow) and reading the total only at the end. A low total with unbalanced prices can be the tender's most expensive offer once executed. The complete method, comparison table included, is in comparing contractors' offers.

What the contract inherits from the budget

Three pieces of the prior work become de facto clauses. The agreed measurement rules will be the certification rules. The prices' breakdown structure will be the construction rule for new rates. And the exclusions detected during homogenisation must be resolved in writing before signature, because every surviving exclusion is an announced new rate. The well-prepared contract adds no new rules: it consolidates the budget's.

The two analyses in this branch

Fixed price or unit rates. Each formula's risk distribution, the fixed price's operating conditions and the sensitive clauses.

Comparing contractors' offers. The comparison table, homogenisation and detection of anomalous prices.

The essentials

Between budget and contract stand two decisions: a price formula chosen according to the design's real degree of definition, and an offer selection made on price structure rather than totals. The rest is consolidation: measurement rules, breakdown rules and resolved exclusions pass from the budget into the contract and then govern the entire economic monitoring.

Note: usual conventions and practices in Spain in 2026; each contract's regime and, in public works, the procurement rules prevail.

Frequently asked questions

Lump sum and remeasurable unit prices, with opposite risk allocations. Under a lump sum the contractor carries the quantity risk; under unit prices the client does.

Only against quantity overruns, and at the cost of a risk premium. Scope changes still generate variations, and a poorly defined design produces them regardless.

The quantities, the measurement rules, the unit prices and the regime governing lump sums. Anything left undeclared will be argued during the works.

By first homogenising the offers on the same measured base and isolating the lump sums. Comparing totals without that step compares different documents.

Quantities and budgets in Spanish construction: complete guide