The two formulas and their distribution
| Aspect | Unit rates | Fixed price |
|---|---|---|
| What is paid | What is actually executed at the agreed prices | The global amount for the defined works |
| Quantity risk | Developer | Contractor |
| Operating condition | Quality quantities and certification that measures | A genuinely closed and complete design |
| Implicit premium | No quantity risk premium | The contractor prices the risk assumed |
| Life of changes | Fluid: contract prices absorb variations | Everything undefined returns as an exception to the scope |
The fixed price's uncomfortable truth
The fixed price does not eliminate quantity risk: it transfers it in exchange for a premium and a condition. The premium is visible in healthy markets (the fixed offer prices above the unit-rate equivalent). The condition is the one that gets forgotten: the closure only covers what is defined, and every design indefinition (a generic lump sum, an unresolved detail, an "or equivalent" specification) is a reopening door the contractor, squeezed by its own risk, will use. A fixed price on an incomplete design combines the worst of both worlds: premium paid and conflict retained.
The selection criteria
The design's degree of definition. Complete execution design, resolved details, specified quality: the fixed price is viable. An evolving design or renovation with uncertainty about the existing building: unit rates, because the fixed price would reopen with every discovery.
The developer's monitoring capacity. Unit rates require rigorous measuring and certifying; without that capacity (in-house or contracted), the fixed price buys management simplicity in exchange for the premium.
The nature of the dominant risk. When uncertainty is about quantities of known units (earthworks, renovation), unit rates handle it naturally. When the design is stable and the developer values budget certainty above expected cost, the fixed price answers that preference.
Mixed formulas resolve the intermediate cases: fixed price for the defined chapters, unit rates where the uncertainty lives (what is buried, what is concealed in renovation), with the boundary between both regimes described without ambiguity.
The essentials
Unit rates: the developer keeps the quantity risk and pays for what is executed, on condition of really measuring. Fixed price: the contractor assumes that risk with a premium, on condition of a genuinely closed design. The serious choice audits the conditions before the preferences, and mixed formulas draw the boundary where the project comes with one built in. What no formula suppresses: the need to compare offers on structure rather than totals.
Note: usual practices in Spain in 2026; the applicable regime is what each contract agrees.