Which of the following are common types of construction contracts?

Lump sum, cost-plus, and design-build contracts are common types of construction contracts because they each offer distinct structures that cater to different project needs and risk management strategies.

Lump sum contracts involve a fixed price for the entire project, providing certainty for both the client and contractor regarding the overall budget. This is particularly advantageous for projects with well-defined scopes, as it incentivizes the contractor to complete the work efficiently to maximize profit.

Cost-plus contracts, on the other hand, reimburse the contractor for actual costs incurred plus an additional fee or markup. This type of contract is beneficial in situations where project specifications are not fully defined, allowing for flexibility and adjustments throughout the construction process.

Design-build contracts integrate both the design and construction phases under a single contract, fostering collaboration between architects and builders. This approach can streamline communication, reduce project timelines, and enhance overall project delivery, making it increasingly popular in modern construction practices.

The other options include types of contracts that are either less common in construction (such as grant and award contracts) or do not specifically align with construction project methodologies (like hourly wage and commission contracts). Negotiated contracts can occur in construction, but they are generally a broader category and do not specifically represent a standard type of construction contract.