Lump Sum in Public Procurement Law 2026
Lump sum in procurement law: form of remuneration with a fixed total amount and no itemised billing – distinction from unit prices and significance under procurement law.
Definition: A lump sum in the procurement context is a pre-agreed fixed remuneration for a defined service, paid regardless of the actual effort or the quantities actually delivered. Performance is fully covered by the agreed lump sum.
Last updated: January 2026 · Legal basis: BVergG 2018, ÖNORM B 2110, VOB/B, BGB
Concept and distinction
In procurement and contract law, the lump sum is a pricing form that differs fundamentally from the unit price: whereas the total remuneration under the unit price model is calculated as unit price multiplied by actual quantity, with a lump sum the total price is fixed from the outset. The quantity and calculation risk thus rests with the contractor.
Lump sums come in various forms:
- Lump-sum price (global lump sum): A lump sum for the entire service.
- Partial lump sum: Lump sum for certain partial services, while other items are billed at unit prices.
- Hourly-rate lump sum: Lump sum for services rendered on a time-and-materials basis (less common).
Significance under procurement law
When tendering lump-sum services, the contracting authority must exercise particular care in the specification, since the bidder can only calculate on the basis of a complete specification. An incomplete or contradictory specification regularly works to the detriment of the contracting authority in lump-sum contracts when the contractor considers the missing services not to be covered by the lump sum and submits supplemental claims.
Risks for contracting authorities and contractors
Lump-sum contracts allocate the economic risk in a specific way: the contractor bears the quantity risk – if the actually required quantities are higher than calculated, the remuneration does not increase. The contracting authority bears the risk of an incomplete specification – if a service becomes necessary that was not included in the specification, the contractor is entitled to additional remuneration.
Related terms
FAQ
Is a lump-sum contract always advantageous for the contracting authority? Not necessarily. The contracting authority enjoys cost certainty but bears the risk of an incomplete specification, which can lead to expensive supplemental orders.
Can the contractor assert supplemental claims under a lump-sum contract? Yes, if the specification was incomplete or if additional services are ordered that are not covered by the lump sum.
Last updated: January 2026 All information without guarantee. For legally binding advice, please consult a law firm specialising in public procurement law.
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