What is one characteristic of a unit price contract?

A unit price contract is characterized by pricing that is based on measurable quantities of work performed. In this type of contract, the contractor provides a unit rate for specific tasks or materials, and the total cost of the project is determined by the actual quantity of work completed or materials used. This allows for flexibility, as the final amount can fluctuate based on how much of the contracted work is required, making it suitable for projects where the scope may change.

Setting the total price before work begins is a feature of fixed-price contracts, not unit price contracts, which are more dynamic. Costs that vary based on labor hours suggest a different pricing structure, often found in time-and-materials contracts. Finally, billing all work at a flat rate aligns with fixed-price contracts as well, whereas unit price contracts specifically deal with the rates tied to observable quantities of work. This unique approach of linking cost to measurable outputs is what defines the unit price contract.