Deciding the pricing type of a contract silent on its price form (colloquially the "fully open contract") and the corresponding scope of quantity and price review

Topic Positioning

Where a construction contract leaves its price form unstated (colloquially a "fully open contract"), how to decide whether it is a unit-rate contract, a lump-sum contract or a cost-plus (percentage) contract, and the corresponding scope of quantity and price review once classified.

Core Conclusions

1. "Fully open contract" is not a statutory pricing form At normative level only three classes of contract price exist. Measures for the Administration of Pricing of Construction Contracting (Order No. 107 of the Ministry of Construction), Article 12: "the contract price may adopt: (1) fixed price - the contract total or unit price unadjustable within the agreed risk band; (2) adjustable price - the contract total or unit price adjusted per the agreed method during performance; (3) cost plus fee." GB/T 50500-2024 (pricing standard for works on a BOQ basis) classifies construction contracts into unit-rate contracts (clause 2.0.6), lump-sum contracts (clause 2.0.7) and cost-plus-fee contracts (clause 2.0.8); T/ZBD 100.5-2023 Guidance for Settlement Review Practice, clause 1.4.10, lists "percentage contracts" alongside lump-sum and unit-rate contracts. The right question is therefore: where the contract is silent, how to classify by pricing mechanism - "fully open" is merely the colloquial tag for the outcome (neither quantity nor price capped).

2. Classification when silent (four steps)

Step 1 - clause identification: not just whether the words "unit-rate / lump-sum contract" appear; read through the price clauses, the quantity confirmation and interim measurement clauses, the variation-adjustment and risk-band clauses, and the settlement clauses. T/ZBD 100.5-2023 clause 2.1.4 requires attention to "the contract price form - stated or not, focus on what the contract price covers and its adjustable and non-adjustable scopes", and to quantity / measurement clauses, price and adjustment clauses, and measurement and pricing rules.

Step 2 - classify by pricing mechanism (the core comparison):

Test	Unit-rate contract	Lump-sum contract
Basis of price formation	the BOQ, item descriptions and their all-in unit rates; "within the agreed scope the unit rates do not adjust"	contract drawings and contract specifications; "within the agreed scope the total price does not adjust"
Liability for quantities	BOQ items and quantities fixed by the works the contractor actually completes and that are measurable	the works priced from contract drawings and specifications; with drawings and conditions unchanged, no price adjustment for quantity differences
Drawings versus BOQ in conflict	the BOQ prevails	contract drawings and specifications prevail
Settlement method	rates fixed, quantities as executed, then variations / claims	only adjustable content and out-of-band risk factors adjust on the lump sum

Basis: GB/T 50500-2024 clauses 2.0.6, 2.0.7, 2.0.8 and 3.4.6 ("where, in performance, the contract drawings of a unit-rate contract conflict with the tendered divisional-work BOQ, the BOQ prevails; where, in a lump-sum contract, the contract drawings and specifications conflict with the priced BOQ, the contract drawings and specifications prevail"); GB/T 51095-2015 Code for Construction Cost Consultation, clause 8.2.5; GB/T 50875-2013 Standard for Construction Cost Terminology, clauses 3.3.6 to 3.3.8.

Step 3 - leaning from the tendering background: GB/T 50875-2013 clause 3.3.7 "works priced on a BOQ basis are generally suited to unit-rate contracting"; DB37/T 5130-2018 Code for Construction Cost Consultancy Services, clause 6.3.2, the same, adding that smaller scale, lower technical difficulty and shorter duration suit lump-sum terms, and emergency rescue, disaster relief and technically very complex works suit cost-plus.

Step 4 - fallback where still undecided: T/ZBD 100.5-2023 clause 1.4.2 "where the construction contract agrees the determination of the contract price and the measurement rules, its agreement prevails; absent or unclear agreement, the price may be determined and adjusted per the price-determination principles in the contract and by reference to State, sector or local provisions"; Contract Law of the PRC Article 61 (unclear agreement may be supplemented; failing supplement, per the contract's terms or trade usage) and Article 62 (price unclear - perform at the market price of the place of performance at contracting; government pricing or guidance pricing where prescribed). In expert-assessment scenarios: T/ZBD 100.4-2023 clause 3.1.6 - where the parties have not expressly agreed the contract price and its determination principles and methods, the assessor, consulting the client, refers to the fair market prices from its own investigation, the sector / local pricing quotas issued by the construction administration, or the contractor's direct-cost records reviewed against market on-cost levels; GB/T 51262-2017 Code for Construction Cost Expert Assessment, clause 5.6.1 - the assessment basis for disputes over adjusting all-in unit rates for quantity changes from variations, or pricing new items (contract agreement prevails; unclear or absent agreement follows the current national pricing standard).

3. Scope of quantity and price review after classification

• GB/T 51095-2015 clause 8.2.5: the final account follows the contract type - lump-sum contracts adjust, on the total price, the content agreed adjustable and the risk factors beyond the agreed scope; unit-rate contracts hold all-in unit rates fixed within the agreed risk band, measure per the contract and on the quantities actually completed; cost-plus contracts compute the works cost, the fee and the taxes per the agreed method.
• T/ZBD 100.5-2023 clause 3.1.3: adopt the corresponding review method per the pricing mode - lump-sum (lump-sum contract), unit-rate (unit-rate contract), cost-plus or percentage.
• Clause 3.1.4: whatever the form, attend to scope changes, work interfaces, whether quantities need re-determination, omissions, provisional sums for specialist works, provisional sums for materials and plant, employer-supplied materials etc. (e.g. "under a unit-rate contract where no re-measurement or interim settlement was done during construction, the quantities of the original contract price are recomputed and checked against the settlement drawings"; "under either form, works found unexecuted at completion are deducted from the priced BOQ").
• Clause 3.1.6 (fixed-unit-rate review points): re-verify the quantities completed and measurable and make good BOQ omissions; check every all-in unit rate against the priced BOQ, adjusting only where variations changed the BOQ item per the current national standard, not otherwise absent agreement; check actual materials and plant against the contract; adjust preliminaries and other charges; deduct employer-supplied materials and metered water and electricity; rewards and penalties; adjust statutory levies and VAT as the law provides.
• Clause 3.1.7 (cost fluctuation): lump-sum contracts generally do not adjust for fluctuation absent agreement - contractor claims grounded on change of circumstances or extended duration proceed as claims; unit-rate contracts generally agree adjustment beyond the risk band - follow the agreement, and where absent or unclear adjust per national or local / sector rules of the project location (including the price basis under delayed completion and confirmation of the base period).
• T/ZBD 100.4-2023 clause 4.3.3: where a party seeks re-assessment of quantities within a lump-sum contract as contrary to fact, with the contract valid and absent special agreement on measurement, the assessor should not recompute quantities inside the lump sum; clause 4.3.2 sets the order of precedence for disputed measurement-rule versions (expressly agreed version first; absent agreement, the one prevailing under the contract's interpretation order; failing that, unit-rate contracts take the tender BOQ and the tender price ceiling rules in turn, lump-sum contracts the rules used in the tender).

Applicability Boundaries

• This card covers the classification method for contracts silent on price form and the review scope after classification; "fully open contract" is practice slang, not a statutory form, and must not serve as a contract-clause category.
• Classification follows the pricing mechanism (who carries quantity risk, the basis of price formation, drawings versus BOQ in conflict), not the wording of the contract's name.
• The percentage mode appears alongside the three contract classes in the sector settlement-review guidance; check the contract agreement and local rules when applying.
• Clause content follows the current valid editions; in litigation and expert assessment, combine the assessment codes and the client's instructions.

Further Reading

• Measures for the Administration of Pricing of Construction Contracting (Order No. 107 of the Ministry of Construction), Article 12
• GB/T 50500-2024 Standard for Pricing of Works on a Bill of Quantities Basis, clauses 2.0.6, 2.0.7, 2.0.8, 3.4.6
• GB/T 51095-2015 Code for Construction Cost Consultation, clause 8.2.5
• GB/T 50875-2013 Standard for Construction Cost Terminology, clauses 3.3.4, 3.3.6 to 3.3.8
• T/ZBD 100.5-2023 Guidance for Settlement Review Practice, clauses 1.4.2, 1.4.10, 2.1.4, 3.1.3, 3.1.4, 3.1.6, 3.1.7, 3.1.8
• T/ZBD 100.4-2023 Guidance for Construction Cost Expert Assessment Practice, clauses 3.1.6, 4.3.2, 4.3.3
• GB/T 51262-2017 Code for Construction Cost Expert Assessment, clause 5.6.1
• DB37/T 5130-2018 Code for Construction Cost Consultancy Services, clause 6.3.2
• Contract Law of the PRC, Articles 61 and 62
• Government source pages (for verification): http://jsj.jinhua.gov.cn/col/col1229168694/art/2026/art_d364056d2f7442d98542a39cd28cb429.html http://www.ziyang.gov.cn/zysrmzf/c00002/pc/content/content_1820524526866087936.html http://sjj.xiangyang.gov.cn/zwgk/gkml/qtzdgknr/sjbg/jggg/202509/t20250911_3875909.shtml https://js.zibo.gov.cn/art/2022/6/22/art_3078_2299535.html https://zjw.ningbo.gov.cn/art/2021/2/20/art_1229325543_1631176.html http://sxcj.sx.gov.cn/art/2022/10/18/art_1229732604_58897266.html http://sxcj.sx.gov.cn/art/2022/12/5/art_1229732604_58897263.html http://zjj.baise.gov.cn/zwgk/tzwj/t27988478.shtml