NATIONAL INSTITUTE FOR CONSTRUCTION MANAGEMENT & RESEARCH

NAME OF INSTITITE: NICMAR-SODE., PUNE.

SUBJECT

: CONSTRUCTION CONTRACTS & CONTRACTING.

COURSE NAME

: GRADUATE PROGRAMME IN CONSTRUCTION PROJECT MANAGEMENT, (MODULE-18)

ASSIGNMENT NO

: 02

SUBMITTED BY

: MUZAMMIL FARMAN HAWA.

REGISTERED NO

: 214-01-14-11980-2142.

NATIONAL INSTITUTE FOR CONSTRUCTION MANAGEMENT & RESEARCH

INDEX

1.

INTRODUCTION

2. SCOPE OF WORK

3. IMPORTANT DETAILS OF CONTRACT, COST, TIME, TYPES etc.,

4. IMPORTANT POINTS FROM CONTRACTORS POINT OF VIEW TO BE MONITORED/RESOLVED

5. ORGANISATIONAL CHART WITH FUNCTIONS

6. METHOD FOLLOWED FOR ADMINISTER AND MONITOR

7. RECOMMENDATION/CONCLUSION

8. BIBLIOGRAPHY / READINGS

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Assignment
Contracts administration and monitoring is the most important area of construction management.
Contracts administration process should start right from the day work is assigned to the company.
Discuss any project contract currently in progress with your company and how administration and
monitoring is being done. Draw the organisation chart for this activity & explain all the functions carried
out. Do you think the system is achieving result? Discuss.

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1. INTRODUCTION TO WORKThe proposed project consisting of development and renovation of the existing factory in first
phase & then in second phase one more part to be constructed as part of the proposed factory
for Naturex-Valentine Agro Pvt. Ltd. Roha, Raigad. MS.

Existing block is G+1 building consisting structural framed structure & concrete casing over it,
where as floor to floor height is 4.5 meter. This block is containing traditional type of production
process & old type of production equipments. Old block is having plinth area of around 935 sq.
m area. This block having material lift, fire-fighting system, but these need to be upgraded &
there are some renovation in this block.

New block is G+2 Reinforced cement concrete structure consisting of 4.5 meter floor to floor
height. And additionally, having two small structural platforms for working.
The present work pertaining to this tender consists of Civil, structural, masonry, finishing &
external development works around the building.

2. SCOPE OF WORK: Scope of work covers following points

Civil works as per BOQ and drawings for proposed work.

Familiarization with site, inspection, examination of site & its surroundings thoroughly.
Study the nature of the ground subsoil, access & egress from site, facilities available
nearby site.

Planning & Quality control.

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Providing information & all data: providing complete information which includes tender
document, BOQ, tender drawing, contract documents, agreement & special condition
document. If any. To the contractor.

Inviting tenders.

Tendering & award of works: processing of tenders, getting quotation from various
contractors, finalising contractor, awarding of work to contractor & signing contract
with concerned parties.

Selection of project manager & his team to work on project, giving them possession &
setting up of communication system.

Provision of working drawings.

Payments of progress bills.

Checking of progress of work & thorough inspection of site.

Settlement of variations & claims.

Filling of records formats & checklist: maintaining proper site records of construction
works, progress records, field diary, daily reports, feedback reports, correspondence,
inspection resports, etc.,

Settlement of fees & claims.

3. IMPORTANT DETAILS OF CONTRACT, COST, TIME, TYPE. ETC.,:

The contract document generally contains notice inviting tender, information & instructions to
tenderers, general condition of contract, special condition of contract, schedule of quantities &
cost, tender drawings, specification of works, forms of bank guarantee in respect of earnest
money, performance guarantee, mobilization advance etc.,

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Important details of the contracts for the construction of factory for NATUREX-Valentine Agro
Pvt. Ltd. ROHA area

A. TYPE OF CONTRACT
The above said contract is ITEM RATE CONTRACT in this contract, payment for work done is
made on the basis of quantity of work actually completed & as per their actual executed
measurements at site. Supply, provision of material & use of material for execution all are in
contractor scope. Each such quantity multiplied by contractors corresponding unit rate
given in his tender for that unit. The mode of measurements shall be as specified in the
specifications at the materials. And the items for which no mode of measurements given in
specification, same shall be taken as per IS-1200. For a contractor to submit an item rate
tender, it will be necessary to provide him all the specifications & general drawings with
RCC standard drawings & design specifications with estimates of quantity or BOQ.

B. DEFINING TERMS USEDAn agreement enforceable by law is a contract. Here, contract means an agreement forming
tender & acceptance thereof by both parties. Parties means, promissor or Contractor means
individual or firm or a company undertaking the job execution. Here it means. M/s. Trimurti
Engineering Contractors. ROHA.
And the other party means, promise or owner means company by whom this project given
for execution to contractor. Here company is M/s. Naturex-VAPL.
Engineer in-charge means representative from consultant. Here consultant is SNC-LAVALIN.
He is in-charge of project execution & work on behalf of owner. He shall be employed by &
paid by the owner.
Architect or designer means, architect or designer working on this project in SNC-LAVALIN
Mumbai office.

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C. TIME LIMIT
Time allowed for carrying out the work shall be 12 months from the contractual date of
start of work.
The time is the main point of contract & contractor is required to complete all the work
with all respect within stipulated line of completion strictly as per the applied PERT/BAR
chart & hand over the same to owner with satisfaction of the Engineer In-charge or
architect.

D. COST OF THE WORK

The cost if the work arrived after the bid submitted by the contractor, who has been
awarded the work is Rs. 5.00 Cr. For Civil works as mentioned above.
In addition to this other expenditures also should be consider in project cost like.
a. Final bill submitted by contractor for each & every extra item.
b. Consultancy fees to consultants, associates & architect.
c. Salaries of project manager & his team.
d. Cost of tendering
e. Cost of visits by consultant project manager, architect & designer.
f.

Site supervision etc., during various stages of work.

g. Costs of maintain backup office & site office.

E. PAYMENT TERMS/RUNNING ACCOUNT BILLS

Submission of running bills at regular interval - keeping a minimum interval of 30 days
minimum between two bills. After submission of Running account bill by contractor, within
7 days owner should pay 70% of the running account bill to the contractor, which is to be
done as per payment certificate provided by Engineer In-charge, against Running account

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bill. And the rest amount of 30% to be released after full checking of running account bill &
amount finalized.

F. MOBILIZATION ADVANCE
Interest free mobilization amount of 10% of the contract value to be given by the owner to
Contractor as no free issue material from owner side. All raw construction material are to
be provided by Contractor side.

G. LIQUIDATED DAMAGES
A sum equal to the 0.5% of the total value of incomplete work for every week delay
subjected to a maximum of 5% total contract value.

H. DEFECT LIABILITY PERIODE

Defect liability period would be 60 months from the date of hand over to owner custody.

I.

QUALITY NORMS
All civil works shall be executed, measured & paid strictly as per relevant quality / technical
specification including checklist filled by site Engineer at the time of execution signed by
consultant Engineer or with correction slip attached with checklist. In case specifications of
any item are not covered under above specification, relevant IS code shall be followed.
All materials are to be used for construction are specified to comply with IS code, whenever
required testing of material should be done.

4. IMPORTANT POINTS FROM CONTRACTORS POINT OF VIEW TO BE MONITORED/RESOLVED

1. FAMILIARIZATION WITH SITE

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Contractor must be visit the site before bidding process starts. It is advisable that contractor
should visit, inspect & examine the site & surroundings of site thoroughly & satisfy himself
as the site surrounding conditions like sub-soil, strata & means of access to the site, the
facility available nearby the site etc., they shall also study local conditions. From Raw
material availability point of view & anything that can influence the fluctuations in
execution rates. Contractor shall gather all the local information as risks, contingency and all
other circumstances which, according to them may influence or affect rates.

2. COMPLETE THE WORK

The first & foremost obligation of a contractor is to carry out & complete the works in
accordance with contract. The obligation has two faces- first is to carry out the work &
complete it in time, and second is maintaining & rectifying defects during defect liability
period which starts immediately after completion of the work & before handover to owner.

3. SELECTION OF RESOURCEFUL SUB-CONTRACTORS

In many cases prime contractor award many of their different type of works to the various
sub-contractors. The selection of resourceful subcontractor is the most significant role for a
prime contractor. The project success is mainly depends on the sub-contractors
performance. Sub-contractors with a good resource should be selected & awarded with
desired works with most workable & economic rates for prime contractor. For timely
completion of work, it is Prime contractors responsibility to arrange equipments in time,
demanded by sub-contractors.

4. PLANNING AND CONTROL

Planning and control is very important for successful project. Time, cost and quality are
always the critical targets for the contractor in implementation of construction project. The

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contractor shall adhere to the construction programs as instructed by the architects from
time to time by deploying extra labours, equipments etc., the contractor shall submit to the
architects, the weekly bar chart showing the progress of works achieved as per the
programmer & projected progress to be achieved in the next week. The contractor shall also
give weekly report of labour and equipments deployment at the site as per the Performa
prescribed by architect.

5. QUALITY ASSURANCE
It is seen from the experience that whatever adequate attention is not paid by the
contractor to quality assurance requirement, this has not only led to delays & extra cost to
the contractor but had created friction in relations between employer & contractor. hence
quality assurance is very important to the contractor. If it shall appear to the architect that
any work has been executed with unsound, imperfect, or unskilful workmanship or with
material with any inferior description, it is contractor responsibility to rectify or remove and
reconstruct the work material or articles at his own cost.

6. PROCUREMENT OF MATERIAL
The contractor shall provide at his own cost all materials, except specified. Innumerable
project gets delayed due to delay in procurement of material. Effective planning & control
of material procurement system is essential to avoid delay in implementation of project and
to avoid wastage of material and extra expenditure due to loss of labour.

Control on waste of material within the prescribed limit is of ultimate importance for
achieving planned profitability level. Excessive wastage of material caused due to
imperfection in the workmanship, imperfect storage system, improper handling, absence of
bar bending schedule or shop drawings, improper checking of quantities while delivery

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supplier can be reduced by having a regular system of wastage accounting & to advise
measures for reducing it by eliminating the causes. Occupational surprise checks should be
carried out for ensuring the proper use of material and for checking the wastage limit.

7. LABOUR WELFARE
The contractor shall obtain a valid labour licence under the contract labour
(Regulation & abolition) Act, 1970 and the contract labour (Regulation & abolition) Central
rules, 1971 before the commencement of the work. No labour age of eighteen years shall
be employed on the work.
The contractor shall pay to labour employment wages as defined in the contractors labour
regulation as per provisions of the above mentioned acts. The contractor shall comply with
the provisions of the payment of wages Act, 1936, Minimum Wages act,1948, Employees
liability Act, 1938, and Workmens Compensation Act, 1961.
The contractor shall provide for his own coat with a sufficient number of huts inside the
site, adequate water supply for the use of labours, sufficient arrangement of draining away
silage water so as to keep the labour camp neat & tidy, sufficient lighting arrangement,
proper arrangement for conservancy and sanitation in the labour camps according to the
rules of the Local public Health and Medical authorities.

8. MINTENANCE OF CONSTRUCTION EQUIPMENTS

Effective maintenance & operation of construction equipments is very important for the
contractor. It is duty of contractor to check the maintenance costs of the various
equipments, finding ways to check these costs, providing adequate work sheds to store
these equipments, tools & accessories, proper oiling of all the machinery etc., so that the
maintenance cost & hence operation could be reduced.

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9. FILES & RECORDS

Following is the list of some records to be maintained at Construction site.
o

Daily progress report

Telephone calls recording

Records of Tests material

Daily dairy

Log sheet

Files to be maintained at construction site.

o

Copies of all correspondence

Job or Construction drawing

Shop drawing submittals

Copies of all requisitions for payments

Copies of reports of all types

Records of all approved samples

Files of all operating tests

Deviation requests

Construction progress records

o

Daily progress records

Field daily diary

Special feedback report

Reports of field corrections

Concrete batch plant daily report (if batching plant available)

Plant inspection report

Field inspection report

Documentation for safety hazard identification & warnings given

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Recording of proceeding of job conferences

Construction progress photographs

Miscellaneous records

Extra works instruction records & their photograph after work completion.

5. ORGANIZATIONAL CHART WITH FUNTIONS

The organizational chart is a document supplied to all the concerns, which supply all person name &
their relative function to all personal involved in construction. Following is organizational chart for
Consultants.

CONSULTANT OFFICE
PROJECT MANAGER
(Functional lead from his organization)
(Functions Dealing with owner, contractor & vendors, overall control & monitoring)

ARCHITECT STAFF

ENGG. STAFF/CONSULTANTS

CONSTRUCTION

ADMIN STAFF

Architect, Asst Arch.

Civil Engineer, Estimator, Evaluation

Construction Mgr

Accountant

Arch. Draughtsman

Civil designer, Design draughtsman

Civil Site Engr.

Electrical Consultant

Safety Engr.

Mechanical/Plumbing

MEP Engr.

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Clerk

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Functions of each and every member of the above chart are well defined and these are as follows:

Project Manager:
Preparation of proposal, submission of proposal to client, approval of cost are the roles
played by a project manager in initial stage. The person responsible for all work initiations,
assigning of works according to department, selection of his team to perform each role are
the decision made by a project manager. In addition to this, He has to control all the
vendors scope & follow-up for their quotation, work order delivery of material & execution.
On the other side project manager has to select or appoint a construction manager with his
team to work on site for project execution. And giving possession to his site team at site
with site office & all required facilities.

Architect :
(Arch. Draughtsman to work under them- for actual preparation of drawings)
Preparation of tender drawing, deciding materials and its specifications to be used for the
project, providing information & drawing to civil Engineer for the preparation of tender
document & BOQ, assigning work to draughtsman, attending all the meetings related to the
project release of the working drawing, communication with various vendors, owners, party
representative, project managers & contractors, visiting the site if required, proper feed
back to project manager, making site visit reports.

Engineering Staff:
Consultants to provide drawing and information of their respective field of work. Visit site
as directed by Project manager to check the progress, quality of the work along with the
Asst. project manager.

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Civil Engineer:
Civil Engineers functions are preparation of tender document, preparation of BOQ, filling
up of quantities, checking all final submitted tenders, checking of actual measurements of
various works, giving proper feedback to project manager.

Administrative staff:
Clerks job is to maintain all records of letter, communication with the either party, maintain
records of progress reports from site, to draft letters of communication to various party, to
make sure that the letters, samples, drawings etc., has been delivered to right party, to
maintain as far as possible, records of all telephonic communications with the either party.
Accountants job is to maintain all the accounts bills, bills of site visits, and other
miscellaneous spending related to the project.

Construction:
Construction Manager is the lead person from site personnel. He is responsible for overall
management of site, coordination with owner, contractors & consultant office. Arranging &
managing all concerns meeting for resolution of any issue.
Civil Site Engineer responsible for execution as per drawing, as per specifications, filling
execution checklists, quality checks, verification of actual quantities executed at site and
approved these quantities for billing.
Safety Engineer is responsible for implementing safety at site and mainly hazard
identifications during execution.
MEP Engineer is responsible for all mechanical, electrical works execution & their quality
checks.

ORGANIZATIONAL CHART FOR CONTRACTOR:

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Following is the organizational chart for contractor in brief.

1) Contractor- the head overall control & monitoring.
2) Project in-charge overall planning & site management.
3) Site Engineer, Supervisor Qualitative & quantitative checks at site.
4) Administrative staff filling and recording, accounting, store & billing.
ORGANIZATIONAL CHART FOR OWNER OR CLIENT:
1) Owner/client- the money spender.
2) Representative of owner- overall planning, meeting with contractor, consultants &
vendors, time scheduling, feedback to owner, handling local & miscellaneous matters.
Points of disputes, ambiguity arising from various levels of organization are solved by face to
face meeting between concerning person. The disputes are however tried to be minimized by
keeping open a proper communication channel which includes the clean instructions given by
superiors to the juniors and proper feedback given by junior to senior.
However, the disputes arising between the various vendors involved in project have been tried
to be minimized by clearly mentioning all the important and sensitive points in the tender,
contract document and keeping communication network open as planned in the tender
document.
6. METHODS FOLLOWED FOR ADMINISTRATION/MONITORING
Methods followed for proper administration & monitoring of the project as follows:
a) Maintaining proper communication with concerning vendors through emails & telephone.
b) Making it very clear the works in each contractors/ vendors scope.
c) Clearly mentioning all the specification of material in tender document.
d) Timely architect & designers visit for monitoring construction works & quality.
e) Proper preparation of tender & working drawing.

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f)

Demanding site progress reports weekly from project controls Engineer.

g) Sending site visit reports to client for their feedback.

h) Asking for various manufacturers reports, testing reports for material to be used at site.
i)

Arranging timely meetings to discuss & reschedule the progress of work.

7. CONCLUSION:
thus, we can see how important is a contract & contract management to carry out a project to
the satisfaction of all the vendors & client. A good typed Contract shows Contractors
responsibilities & provides guidelines for work progress. It also provides a system of control and
management. So that project can be completed in time. Instruction from the concern parties,
feedback reports, from the contractor help in establishing a proper communication network
that ultimately helps in timely completion of the project. And this system is achieving good
results.

8. BIBLIOGRAPHY/ READINGS:
1. Contracts Management NICMAR publication
2. Tender document of NATUREX-VAPL, ROHA, Raigad, MS.

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