Lump sum
In short
A contract stating one price with no breakdown by activity. Without back-end records, the mixed-contract analysis is unavailable.
In full
A lump-sum contract states a single price for the whole of the work, without separating the charge for each activity.
A lump sum is not itself a problem. ADOR accepts back-end records behind a lump-sum bid in place of itemization on the contract, provided each activity is accurately described. The itemization has to exist somewhere; it does not have to be in the document the customer signed.
Where no breakdown exists in any form, the worksheet does not resort to judgment. It applies a default, and the default is severe: on a contract relating to existing property that contains only one lump sum amount, **all of it is allocated as alteration activity** if any alteration activity is included in the contract.
The effect is worth working through. A contract containing mostly repair, with one alteration item in it, priced as a single figure, is treated as though the entire price were alteration. The whole amount is then compared to the alteration threshold — 25% of full cash value on residential property, or $750,000 elsewhere. A contract that would have passed comfortably on its actual alteration content can breach the threshold on its total, and once it does, the over-threshold alteration joins the modification bucket and the contract is taxable under prime contracting in full.
So the cost of not itemizing is not a loss of precision. It is a specific adverse allocation, applied to the largest number in the contract.
One case is unaffected. Where the contract contains neither alteration nor modification, the worksheet treats the project as MRRA and states that no further analysis is necessary.
ADOR Evaluating Mixed Construction Contracts worksheet, sections 1 and 2b; A.R.S. § 42-5075(S)(1)(a), (S)(1)(b)