Unit price agreement

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A unit price agreement (EPA for short) or fixed price agreement is a contract between a client and a contractor on flat-rate costs for the provision of services. As a rule, unit price agreements in the real estate industry are concluded between large housing companies as clients and craftsmen as contractors. See also unit price .

Unit price agreements are mostly used in the so-called ongoing maintenance of housing companies (average invoice amount of around 250 euros) in a trade-oriented manner and offer the client a more reliable calculation basis.

Uniform price agreements have been in place since the early 1990s, but in recent years they have been increasingly promoted through the use of new media, such as the award of contracts via the Internet (tradespeople coupling). This means that uniform price agreements are becoming more and more important to this day.

The standard price agreement should not be confused with the standard standard price agreements in building contracts according to VOB .

Components

  • Exact description of standard services (service items)
  • Validity periods
  • legal regulations
  • Prices

advantages

The prices within the framework of uniform price agreements are on average 10–20% below the usual market offers, that is, the housing company benefits from lower prices, on the other hand, craftsmen receive preferential contracts.

Strategic importance

Especially in the ongoing maintenance of housing companies, where the administrative costs exceed the often minimal actual repair costs, unit price agreements represent an opportunity to reduce costs. Depending on the degree of generalization, the cost risk, but also a possible higher profit margin, is transferred to the contractor. The higher the level of generalization, the lower the administrative costs for the client and the higher the risk for the contractor. Due to the increasing cost pressure on companies, the trend is increasingly towards simple, highly flat-rate unit price agreements.

As an alternative to standard price agreements, the complete outsourcing of ongoing maintenance (Bremen model) is widespread, in which the entire maintenance process chain, from damage reporting through order processing to invoicing, is handled by other providers for a fixed annual fee.