Explain the following contract:bill of quantity contact,lumpsum contract, target contract, package deal contract, term contract, cost reimbursement contract?

1. Bill of Quantity Contract: This type of contract specifies the quantities of materials and labor required for a project, along with their unit prices. The total cost of the project is then calculated based on these quantities and prices.

2. Lumpsum Contract: In a lumpsum contract, the contractor agrees to complete the project for a fixed price. This type of contract is commonly used for projects with well-defined scopes of work and minimal changes expected during construction.

3. Target Contract: A target contract sets a target cost for the project, with the contractor and client sharing any savings or overruns based on a pre-determined formula. This type of contract incentivizes the contractor to control costs and complete the project within budget.

4. Package Deal Contract: A package deal contract combines multiple projects or services into a single contract, often offering cost savings or other benefits for bundling services together. This type of contract is commonly used in industries such as construction and event planning.

5. Term Contract: A term contract is a long-term agreement between a client and contractor for ongoing services or projects. This type of contract typically sets out the terms and conditions for the duration of the agreement, including pricing, scope of work, and performance expectations.

6. Cost Reimbursement Contract: In a cost reimbursement contract, the client agrees to reimburse the contractor for all allowable costs incurred during the project, plus a fee or profit margin. This type of contract is commonly used for projects with uncertain scopes of work or high levels of risk.

Bill of Quantity Contract

- Also known as a "measured contract."
- The contractor is paid based on the actual quantities of materials and labor used in the project.
- The quantities are determined by the architect or engineer during construction.
- Advantages: Fairness, eliminates overpayment, provides incentive for efficient use of resources.

Lumpsum Contract

- The contractor is paid a fixed price for the entire project.
- No payment is made for changes in quantities or conditions.
- Advantages: Simple to administer, provides budget certainty.
- Disadvantages: Inflexible, may result in disputes if changes occur.

Target Contract

- A variation of the lumpsum contract.
- The contractor is paid a target price, plus or minus a percentage based on performance.
- Performance is measured against agreed-upon targets.
- Advantages: Provides incentives for efficiency and innovation.

Package Deal Contract

- A single contractor is responsible for the design and construction of a project.
- The contractor assumes the risk for both phases.
- Advantages: Coordination and efficiency, single point of responsibility.
- Disadvantages: Potential for increased costs due to sole-source procurement.

Term Contract

- A contract for a specified period of time.
- The contractor is paid based on the actual work performed during the term.
- Payment rates are negotiated in advance.
- Advantages: Predictability, reduces administrative costs.

Cost Reimbursement Contract

- The contractor is reimbursed for all allowable costs incurred plus a fee.
- Allowable costs include labor, materials, equipment, and overhead.
- The fee is negotiated in advance.
- Advantages: Provides flexibility for changes in scope or conditions.
- Disadvantages: Potential for cost overruns, less incentive for efficiency.