In my opinion the term "Flat Rate" could be used in many ways.

For T&M if you charge $80 per hour you could say you have a "flat rate" of $80 per hour. The hourly rate doesn't change but the price does depending on how long it takes.

For unit pricing you could say you charge a "flat rate" of $80 per fixture for installation. The price doesn't change but the hourly rate does depending on how long it takes.

The difference in the two examples is that in one you give a "flat rate" per labor unit and the other you give a "flat rate" for each fixture.

The hourly flat rate price will result in a variable final price.

The per fixture price will result in a fixed final price.

In my opinion both could be considered a flat rate price.

Example: We have a flat rate price of $80 per hour or we have a flat rate price of $80 per fixture.

I believe a better term do distinquish between the two would be "Upfront Price" or "Fixed Price" not flat rate price.

Flat rate pricing is just a slang term used in the industry to give an upfront or fixed or final price to the customer before work is started.

Flat rate pricing systems are systems designed to make it easier to determine a final or fixed price, in the field, to give the customer before starting the work. (In the field Estimating System)

Maybe they should have called it an "Upfront Pricing System" instead of a "Flat Rate Pricing System".


[This message has been edited by A-Line (edited 09-25-2006).]

[This message has been edited by A-Line (edited 09-25-2006).]