Lump Sum Estimating: Discovery and Simulation

The lump sum bidding process is designed to reduce cost overruns so as to minimize cost growth of projects and to share the risk of additional material quantities with contractors. This research used a test contractor to bid a unit priced contract as a lump sum contract. The contractor was engaged as a "lump sum test contractor" on SP5007-25. The test contractor submitted a lump sum bid prior to the actual bid letting deadline. For the lump sum bid, all quantities were verified, according to the plans. The results were compared to the unit priced bids that were submitted by contractors during the actual bid process. Phase two of this project was a time study of work categories performed by field inspectors and a time study of work categories performed by inspectors on the same jobs during the winter shutdown season. The time study was followed by a survey, which was sent to MnDOT inspectors and Project Engineers in an effort to discern attitudes toward the lump sum bidding process. Finally, feedback about the survey results was solicited from project engineers.