Boldem has earned its status as an efficient contractor in the construction industry in the past 5 years due to its competent methods and fast turn around times. Most of the times, Boldem takes up projects from its clients (owner/developer of the construction) individually or along with smaller contractors under its head and negotiates the entire contract and scheme that is used throughout the project and at all milestones. Most of the times, the Boldem management has preferred a Fixed price contract, wherein, Boldem is the prime contractor for the client and offers its services till the completion of the project at a finalized set price.However, with new trends in the construction industry and innovative contractual agreements coming up, the company management is forced to take a look into the aspects of various other contract types and methods of working. The following section discusses the three main types of contracts used in the construction industry.In this type of contract, the owner/developer of the project, i.e., the client of Boldem will assign all the risk of the project in Boldem’s account, as a result of which Boldem management can bid for the project at a higher price which will cover all the unforeseen damages and losses (at an estimate). In this type of contract agreement, Boldem management has to submit a work activity schedule to the client. In case, Boldem submits a price which is less than the actual cost of the project, then the loss will be incurred into its account. However, if the management bids at a higher price, it makes a suitable profit into its account. However, If Boldem management bids at a higher price, then it decreases the chance of being amongst the low bidders for any project. In both cases, the cost incurred to the client is the same.Also, in the case of cost overruns, the client is safe and it gets passed to the contractor company, (Bartholome, 1999).
Introduction to Boldem Constructions Limited