Scenario: day-rate vs lump-sum
Bid the fit-out by the day or for a fixed price? Weigh risk, cash flow, and expected margin.
A small ELV fit-out can be bid on day-rate or lump-sum — here's how the choice trades risk, cash flow, and expected margin, and when each one wins.
A tenant fit-out needs about AED 240k of ELV works, but the design is only 60% fixed and the client keeps moving partitions. Bid it lump-sum and you own every unknown; bid it day-rate and the client does. The right call depends on who should carry the design risk.
The same job, two ways to bid it
Day-rateLump-sum
Scope certainty neededLowHigh
Design risk carried byClientYou
Cash flowBilled monthly, as-workedMilestone, in arrears
Expected margin~15%, low variance~22%, high variance
Client's price certaintyOpen-endedFixed
Weigh what's actually uncertain
- Design is still moving. Every partition change is a variation on lump-sum — friction, or a claim. On day-rate it's just Tuesday.
- Margin vs variance. Lump-sum prices a richer margin, but an unpriced surprise can wipe it out. Day-rate's thinner margin is near-certain to land.
- Cash flow. Day-rate bills as you work; lump-sum ties up cash until the milestone certifies.
With the design this fluid, day-rate's steady 15% beats lump-sum's hopeful 22% — you're paid for the moving target instead of gambling your margin on it settling down.
Modelling both bid forms off one take-off, so the choice is evidence and not instinct, is what EstiWright is for.
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