ABSTRACT
In most contract industries, tenders are submitted on the basis of a fixed price. In other words, the contractor offers to undertake services or provide goods for a fixed sum. Examples include the many maintenance contracts within the public sector (grounds maintenance, street cleansing, and so on). The contractor will bid a fixed sum for which he will carry out the contract in the first year. The annual inflation allowance, or variation orders, will be the only reason to increase or alter the originally agreed fixed sum.
