What is the difference between the 'cost of the work' and the 'contract sum' in A201?

• A. The contract sum is the total agreed price for the project
• B. The cost of the work is the actual costs incurred by the contractor for performing the work
• C. The cost of the work refers to overhead and profit
• D. The contract sum is the sum of allowances and contingency

Answer: (A)

The key idea is that cost of the work and contract sum refer to different notions of price in the A201 contract. Cost of the work is the actual resources the contractor must spend to complete the project—labor, materials, equipment, subcontractors, and other direct costs necessary to perform the work. It reflects the driver costs of building the project, and it typically does not include the contractor’s general overhead and profit.

The contract sum, on the other hand, is the total price the owner agrees to pay for the project. It’s the fixed amount that encompasses not only the direct costs of the work but also the contractor’s overhead and profit, along with any allowances or accepted changes included in the agreement. In short, cost of the work measures what it costs to do the project, while the contract sum is the all‑in price the owner will pay for the finished project.

That’s why the best answer states that the contract sum is the total agreed price for the project. The other options are incomplete or miss the distinction: cost of the work is not simply overhead and profit, and the contract sum is not merely the sum of allowances and contingency.