What Is a Unit Price in Construction?

By Wyatt Cooper · Published October 22, 2026 · 3 min read

Key takeaways

A unit price fixes the price per unit, not the total: the owner pays the unit price times the quantity actually installed.
Unit prices suit work whose quantity can't be known before it starts, like rock excavation, unsuitable soil or patching.
On federal fixed-price construction with estimated quantities, either party can demand an equitable adjustment when the actual quantity runs more than 15% over or under the estimate.

A unit price is a fixed price per unit of measured work, such as $95 per cubic yard of unsuitable soil removed or $14 per linear foot of curb. On a unit-price contract or line item, the owner pays the unit price times the quantity actually installed, so the rate is fixed but the total moves with the measured quantity.

How a unit price is paid

The bid lists an estimated quantity for each unit-priced item so bids can be compared; payment follows the measured quantity. When the real quantity swings far from the estimate, the unit price may no longer fit, so the federal clause allows a reset: if the actual quantity "varies more than 15 percent above or below the estimated quantity, an equitable adjustment in the contract price shall be made upon demand of either party," based only on the variation above 115 percent or below 85 percent (FAR 52.211-18).

Unsuitable soil removal and replacement

Unit price: $95 per cubic yard
Estimated quantity: 1,200 CY (bid total $114,000)
Measured quantity: 1,500 CY, 25% over
Paid at the unit price, up to 115%: 1,380 CY × $95 = $131,100
Above 115%, open to adjustment: 120 CY, repriced on demand of either party
If not repriced: 1,500 CY × $95 = $142,500

A unit-priced item that overran (fictional figures)

Unit price vs. lump sum, and unbalanced bids

A lump sum fixes the total and leaves the quantity risk with the contractor; a unit price leaves it with the owner. Many jobs mix them: a lump sum for the building, unit prices for rock or extra receptacles. The risk is a bid that loads the items likely to overrun. Federal rules let the contracting officer reject a bid whose line-item prices "are materially unbalanced" (FAR 14.404-2); an offer is unbalanced "if its prices are significantly less than cost for some work, and overstated for other work" (FAR 36.205).

Quantities for unit-priced bids come from a takeoff. Unit prices also show up in estimates built from sub bids and on the schedule of values of a billing.

The bottom line

A unit price is a fixed rate per unit, paid on the measured quantity, so the owner carries the quantity risk.

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Sources

FAR 52.211-18, Variation in Estimated Quantity — Acquisition.gov, U.S. General Services Administration. Read October 22, 2026.
FAR 14.404-2, Rejection of individual bids — Acquisition.gov, U.S. General Services Administration. Read October 22, 2026.
FAR 36.205, Statutory cost limitations — Acquisition.gov, U.S. General Services Administration. Read October 22, 2026.

Questions

Does the 15% rule apply to private contracts?

Only if the contract says so. FAR 52.211-18 is a federal clause; private contracts set their own variation rule, or none, so read the unit-price section.

Who measures the quantity on a unit-price item?

The contract says. Usually the contractor measures and the owner's representative or inspector agrees the quantities each pay period.