A contract sum analysis (CSA) is a breakdown of the contract sum into priced elements, supplied by the contractor on a design and build contract. It shows the employer how the price is made up, and it is used later to value changes and to help assess interim payments.
The term is most closely tied to the JCT Design and Build contract, where it is a contract document that sits alongside the employer's requirements and the contractor's proposals.
Worked example
A contractor tenders £2,400,000 for a design and build office fit-out. The analysis it submits is part of the contract documents.
| Element | £ |
|---|---|
| Preliminaries | 288,000 |
| Partitions and ceilings | 612,000 |
| Mechanical and electrical | 780,000 |
| Finishes and joinery | 492,000 |
| Design fees | 96,000 |
| Overheads and profit | 132,000 |
| Contract sum | 2,400,000 |
If the employer later asks to omit part of the ceilings, the analysis is the first place to look for the rate, so the deduction is not a guess.
The analysis in the CVR
A CVR needs a value baseline for each cost area. The contract sum analysis is often that baseline on a design and build job. Map each line of the analysis to a budget code, so the value earned for each package can be compared with the cost behind it.
Two traps are common. The analysis is too thin, with large lump items that hide where margin sits. Or the lines do not match the way the cost is coded in the accounts. If the mapping is done at the start, changes and payment applications flow through without reworking the breakdown each month.
Writing a useful analysis
- Break the price down to the level you will later value work at.
- Price preliminaries, design and profit on their own lines, so they are not buried in work items.
- Use rates you would be content to be held to for changes.
Other design and build forms use similar breakdowns under different names, so check the contract's wording.
Related terms
Bill of Quantities (BoQ), Lump Sum Contract, Design-Build Contract, Variation, Cost Value Reconciliation (CVR).
Planyard's cost value reconciliation compares the value you have earned with the cost behind it, line by line, so a contract sum analysis becomes the baseline for a working CVR.
