Lump sum
A single, fixed payment. In construction, it can also refer to a delivery method whereby a contractor enters into an agreement to complete work stipulated in a contract with another party for a predetermined, set price.
A lump sum contract sets a fixed price for the entire scope of work, providing certainty in budgeting and financial planning. While it limits cost overruns, it requires detailed project specifications and agreements to avoid disputes over scope changes or unforeseen conditions.
Used in a sentence
The contract was established as a lump sum agreement, fixing the total project cost.
Synonyms/variation
Fixed Price
Stay updated on what’s happening in construction.
Subscribe to Blueprint, Procore’s free construction newsletter, to get content from industry experts delivered straight to your inbox.
Learn MoreLearn more about Lump sum
Construction Invoice Factoring: A Quick Guide
Construction companies need to maintain consistent cash flow. Projects can take years to complete, and delays and unforeseen events may keep expenses mounting. Adding to this load are typically high upfront costs, like materials, equipment and labor. One way to stay solvent while waiting for clients to make their final payments is construction invoice factoring. This […]
Sales Tax on Construction Materials: Who Pays It and When
Sales tax plays a major role in construction, influencing everything from material costs to contract pricing and compliance requirements. But deciding when and how sales tax on construction work applies isn’t always straightforward. With rules varying by state, contract type and client, even experienced contractors can run into unexpected tax liabilities. Whether submitting a local […]
Empowering Tribal Nations Through Strategic Capital Program Management
Tribal nations are leading significant investments in infrastructure that honor their heritage while simultaneously propelling them into a modern, sustainable future. From healthcare facilities that reduce travel for elders to broadband networks that connect youth to global resources, these projects are more than just construction: They’re investments in self-sufficiency and long-term community well-being. Funding opportunities […]
Construction Tax Deductions: A Quick Guide
Tax deductions offer a lot of opportunity for construction businesses to lower their tax liability, helping to free up cash flow and increase profitability. Because construction projects are so complex, tax deductions in the construction industry are nuanced, but there are many opportunities to use tax deductions for more effective financial management. This article discusses […]
How can we improve this glossary entry?
By clicking this button, you agree to our Privacy Notice and Terms of Service.