Professional Documents
Culture Documents
Professional Practice Notes
Professional Practice Notes
PROFESSIONAL PRACTICE
1.1 PROFESSION:
What is a profession? A profession includes:
A large body of specialized information and discipline
Mastery of this material and associated skills which is obtained through long standardized
period of education, training and apprenticeship
Regulation (education, quality, conduct etc.) by an association of experienced members
of the profession
Providing service to those who do not have this expertise
Besides these a profession is also required to:
Conduct research which improves the quality of their services and report findings not
only to their colleagues but also to the public
Maintain a caring relationship with the client or person/s served based on altruism, trust
and virtue
Based on the above criteria, determine whether architecture can be called a profession.
How is a profession different from a trade or an occupation, which also form associations
to monitor and regulate their work e.g. hairdressers, waiters, auto mechanics, shopkeepers
etc.? In most instances trades-people are not accountable for the quality of their product
whereas professionals do not sell products but services for which they are fully
accountable. Lately, consumer oriented laws are, however, forcing trades-people in
western countries to be more honest and accountable.
Professionals are different because:
they have obtained substantial and specialized education
they have to exercise discretion wisely. An auto mechanic may have one correct way of
fixing a problem, whereas, there could be very many good design solutions and the
architect has to make a wise decision from a large number of choices.
They have higher fiduciary (trust) responsibilities. This is characterized by good faith and
loyalty and exercise of skills and intelligence on behalf of the beneficiary at all times.
Unlike trades-people, professionals are not guided by profit considerations alone you
dont need to check the scales every time. The duty of the professional is to place the
clients interest above ones own and the public interest above both.
Trade includes manufacture, purchase, sale or resale of commodities whereas a
professional has nothing to sell except his knowledge and skills. He does not advertise his
skills or work unlike the trades-people who are heavily dependent on advertising of their
product to attract buyers,
The relationship of the professional with whom s/he works (colleagues and other
specialists) and people s/he serves (client or public) is consensual and fiduciary. The
professional:
Needs to provide client with good judgment and learning act as the clients expert
advisor. Oliver Norths attorney objected to questioning by US Senators as he felt that his
role was not to sit idly while his client was facing serious legal difficulties.
Needs to provide clients with information and options so the clients have the opportunity
to understand the situation and make the best choice of action. Must have no conflict of
interest with the client.
Needs to have diligent self-policing of incompetence as well as of intentional misconduct
and abuse. This is the true hallmark of professionalism. Earlier professionals were
expected to exercise good judgment and fair dealing. To ensure these were rigorously
maintained professional codes of conduct or ethical standards were established to
improve the standard of practice and policing of the profession. However, the codes have
often been used to determine if actions fit into the approved ethical guidelines rather than
whether the underlying concept of good judgment and fair dealing have been meted out
to the client, public or the profession.
1.2 PROFESSIONAL ETHICS
Ethics is a set of moral values which define what actions we take are right and what are
the principles for the good. The subject of ethics is best left to the philosophers as it is
very difficult to come to specific terms. It has often been argued that teaching ethics is
useless, as it is a trait acquired from childhood to maturation. What is not arguable is that
architecture students need to be made aware of the ethical standards expected of a
professional architect.
It is expected that an architect maintain high moral and ethical obligations to the public to
whom service is rendered. In a public opinion poll in the US in the mid 90s architects
were rated higher in ethical behaviour to lawyers and some medical doctors and almost
all business people. The clergy was ranked the highest. Ironically, in Nepal the priests
would probably be rated one of the lowest and the architect probably in a favourable
position.
Professional ethics are established to codify those standards of ethical behaviour which
members of a professional organization must adhere to. The main problem in ethical
behaviour comes when self-interest, guided or not by practical ethics, differs from our
professional ethics. Pragmatic and self-interest concerns are always present in practice
but our main obligation should always be to our client, users of the buildings as well as
the general public. However, when an architect faces financial ruin and loss of firm,
practical ethics may cause him to deviate from strict adherence to the code. Nonetheless,
he may not disobey the law.
The code of ethics calls for the obligation of its members to obey the law. A violation of
the law is a violation of the code of ethics, however, some violations of the code may not
be unlawful. Actions against some laws have been deemed morally right in certain
circumstances e.g. civil rights movement, antiapartheid actions, democratic movement
during Panchayat and Rana era etc.
breached the code of conduct can be reprimanded, suspended or expelled from the
Institute, in which case he would be unable to practice architecture.
1.2.2 SCAEF Code of Conduct
The Society of Nepalese Architects (SONA) does not as yet have a code of ethics,
however, these are expected to be prepared in the near future.
The Society of Consulting Architectural and Engineering Firms (SCAEF), which has
been in existence since November 1990 has a code of ethics applicable to its members.
As of 2001, out of the 39 members 8 firms are mainly engaged in architectural works.
The SCAEF codes are a revised and improved version of the Code of Ethics for
Engineers first prepared by the Nepal Engineers Association (NEA) in 1969. The NEA
code of ethics laid out ethical conduct under 3 headings: 1) Relations with the Public 2)
Relations with the Employer and Client and 3) Relation with Engineers. This was later
expanded by SCAEF to 5 sections: 1) Responsibility towards the Nation 2)
Responsibility towards the Client 3) Responsibility towards the Profession 4)
Responsibility towards Fellow Professionals and 5) Clients Responsibility towards the
Consulting Engineer.
The fundamental principles of professional engineering ethics are:
The Engineer will uphold and advance the honour and dignity of the engineering
profession in keeping with the high standards of ethical conduct:
Will be honest, fair and will serve with devotion his employer, his client and the public
Will dedicate himself to the advancement of the competence of the engineering
profession
Will use his knowledge and skills in the service of humanity
Responsibility towards the Nation
Moral Responsibility towards community/ gain publics confidence
Involvement in Community Development
Refrain from Work which is against National Interest against national interest,
endanger human race or environment
Responsibility towards the Client
To gain and Maintain Clients Confidence
To be Loyal to Client use best technical knowledge and skills
To Protect Interest of the Client with absolute professional integrity
To Safeguard Clients Confidential Information
To disclose any Conflict of Interest
Responsibility towards the Profession
The Necessity of Formal Qualification
Refrain from Claiming Skill not in his Profession
The Need to Exercise Greater Skill in Specialized Jobs exercise best judgment and
advise client accordingly
the Act one has to be registered with the Council in order to be able to practice
engineering in Nepal. Since Nepal does not have a separate Architects Council,
architects have to register with the Nepal Engineering Council in order to practice in
Nepal. This is the only statute regarding engineering practice. SONA or SCAEF do not
have any statutory backing and serve only as professional associations that have no
authority to stop any member or non-member from practicing in Nepal.
The Council has the authority to prepare policies, plans and programs for engineering
services; award recognition to institutions providing engineering education; determine
minimum qualifications for practicing engineering and to strike out from its register the
names of those who violate the professional code of conduct. Since the Council is still in
its infancy, it has not as yet begun its regulatory functions. These are expected to be taken
up once the Council is more established and begins to function smoothly.
The Council has prepared a brief code of conduct for its members. The main elements of
the code are:
To practice engineering profession with discipline and honesty for the welfare and
honour of the profession
To maintain good relations with the client and to keep confidential all information related
to his work
Not to discriminate against the client because of his religion, race, gender, caste or any
other reason
Not to accept any financial benefits other than professional remuneration and related
facilities
To remain accountable for ones professional services
To disclose the name, designation and registration number in all the drawings and
documents
Not to advertise in a way which would unnecessarily influence clients
If a complaint is received against a member for a breach of code of conduct and the
investigation committee of the Council finds him guilty, he will be suspended from
membership and his name will be removed from the register of the Council. He will then
be prevented from practicing until he is again reinstated by the Council.
1.3 DISCUSSIONS OF CASE STUDIES OF PROFESSIONAL CONDUCT
Example of misconduct undercutting of fees, commission from contractor, collusion
with project manager, inflating the bill of quantities etc.
Example of high professional conduct
Citicorp Centre in Midtown Manhattan. Building raised on 4 nine-storey high columns
placed at the centre of each elevation. Architect Hugh Stubbins Jr.; William J.
LeMessurier (pronounced Lemeasure), leading structural engineer, designed the 25,000
ton steel skeleton under the 59 storey towers sleek aluminium skin.
In 1978 a student calls to tell his professor thinks column placement wrong. Column
design result of compromise to rebuild the existing St. Peters Church. Buildings corners
cantilevered out 72 out over church and plaza, dramatic effect. LeMessurier explains
structure best solution to cover quartering winds. New York Citys building codes
required adequate strength in perpendicular winds which had been determined safe. In the
spirit of intellectual play, he decided to check for winds at 45 and was surprised to
discover strain on bracing increased by 40%. When cross-checking he found that welding
at joints had been changed to bolted joints to reduce cost as well over designed strength.
He had doubts about bolted joints ability to withstand quartering winds. Consulted
leading Canadian engineer Alan Davenport who ran tests in wind tunnel, which
confirmed his fears. Calculations showed joint at 30th floor would fail in a 16 year storm
and with dampers in a 55 year storm but high chances of electricity to control dampers
failing during storm. Additional welding at joints required. To prevent disaster
LeMessurier decided to blow the whistle despite knowledge this could lead to possible
protracted legal action, bankruptcy and professional disgrace. Would definitely be a
shock to Citicorp management and shareholders. Contemplated keeping silent, even
suicide. Grilled by company lawyers. Leslie Robertson, structural consultant for the
World Trade Centre brought in review design. LeMessurier and Stubbins went to meet
the chairman of Citicorp who was very supportive. Department of Buildings informed.
But, efforts taken not to leak information to avoid panic. Evacuation plans prepared,
constant watch of weather and damper. Robertson, constantly monitoring the building
and progress. Citicorp released bland press release. Qualified welders hired to conduct
welding after office hours throughout the night. Strengthening carried out successfully.
Building can now withstand 500 year storm. LeMessurier sued by Citicorp for $4.3
million but settled for $2 million which was the limit of insurance coverage. Example of
no villians and all heroes.
Reference:
Legal and Contractual Procedures for Architects; Bob Greenstreet and David Chappell;
1996.
Nepal Engineering Council Regulations; Nepal Engineering Council, 2057.
Report on Consulting Architectural and Engineering Industry in Nepal; The Task Force
on Consulting A & E Industry in Nepal; 1990
Professional Practice: A Compendium of Business and Management Strategies in
Architecture; Andy Pressman; 1997
2. PROFESSIONAL RELATIONSHIP
2.1 ARCHITECT-CLIENT RELATIONSHIP
For the practicing architect, attracting and retaining fee-paying clients is a matter of
survival. In the US, out of over 13,000 architecture firms owned by AIA members, only
5% employed more than 10 architects while 62% were one-person firms and growing. In
India out of over 23406 registered architects in 1998, 10% were in the public sector, 30%
in the private sector while 60% were self-employed. In Nepal as employment
opportunities in the public and semi-public sectors become saturated, the trend towards
individual private practice will have to be expanded. Currently less than 5% of the
buildings in Nepal are designed by architects and the majority of the architects are
concentrated in Kathmandu Valley. If the percentage of buildings designed by architects
can be increased and architects begin practice in the rapidly urbanizing centers of the
country, the scope for private practice is quite significant.
The success of private practice hinges on successful client-architect relationship.
Professional organizations recognize this and include it in their code of ethics.
Breakdown in relationship is less from failure in design and more often due to breakdown
in the contractual relationship due to misunderstanding, miscommunication or general
lack of comprehension of the relative responsibilities of both parties. It is important,
therefore, for both parties to have a clear understanding not only of their own rights,
responsibilities and duties but also of the other party. This understanding can be brought
about through discussions, letters, recorded minutes of meetings etc., however, use of
contracts is one of the most convenient ways of establishing the ground rules. Although
one can produce ones own contract, uses of standardized contracts ensure that important
issues are not left out. They have been continuously reviewed and revised and tend to be
fair to both parties.
For the meeting of minds to be successful, two conditions must be fulfilled:
The relationship needs to be detailed out as much as possible so that both parties
understand them fully
The understanding needs to be achieved BEFORE the contractual relationship has been
formalized
The AIA, RIBA have various types of standardized agreements. The Indian Institute of
Architect also recommends the use of a standard contract agreement. SONA has yet to
produce its own set of contract documents, whereas, SCAEF has a standard agreement
based on FIDIC and ADB documents. Many projects being implemented in Nepal
through donor funding have to use the contract agreements of the concerned agencies e.g.
the World Bank, ADB, UN, USAID etc.
The contract document also allows the architect to educate the would-be client on the
roles and responsibilities of each side and conversely what is NOT part of the basic
services. The standard agreements always specify the basic services to be provided. This
helps to protect the architect against unrealistic expectations of the client and also alerts
the client to his role during the period of the contract. Although this appears to be a
tedious task, not as interesting as discussing design and also has the possibility of
frightening off a few clients, it is better to lose an uncertain client before the work begins
rather than during the process. Architects are most vulnerable to working for a client on a
verbal or informal basis in the beginning of their careers because of the need to grab any
client at any cost. As a result they are overworked and underpaid. Example client in
Baneshwore demanding daily site visits delayed payment, conflict.
When dealing with a client, a few things which need to be kept in mind:
Time to Sign Contract
It is quite common for architects to produce a few sketch designs at preliminary meetings
with the client before signing a contract. This is not necessarily a bad practice as it is akin
to fishing and helps secure the client. But such work should be limited and agreement
should be entered into within a reasonable period of time. In Nepal certain clients are
notorious for trying to milk architects for designs, simultaneously engaging two or more,
and finally getting the agreeable design developed cheaply through an overseer or
draftsman. It is often very difficult to deny clients when they request to take the sketches
to discuss with family and friends. They should be judged carefully before parting with
such sketches. When the client tends to prolong the signing of an agreement, the future of
the relationship needs to be carefully evaluated. Better to lose a potentially troublesome
client than to risk problems later on. Architects in heavy demand or with substantial
workload can charge for preliminary works, but this may not be possible for beginners.
Clarifying Clients Requirements
Sometimes a client has difficulty clarifying his requirements and despite a lot of work the
architect cannot satisfy him. To safeguard against this, at the outset it must be made very
clear to the client that the architect is paid to review and clarify the clients program. If
the client is vague about his requirements and needs substantial assistance from the
architect to gather and analyze necessary information (market studies, field studies, soil
investigations etc.), he should be informed that additional fees will be required.
When to Stop Designing
The architect is supposed to provide a design which fulfills the clients expectations.
Sometimes some clients are very difficult to please and the architect has to produce a
continuous stream of drawings causing him to overrun his budget. It is possible to limit
the number of sketch design at the contract stage, especially if such a situation can be
foreseen. However, this requires the clients agreement and he may be reluctant to setting
limits. Fees can also be set according to the amount of work done, but again the client
may not agree to this. Nonetheless, it pays to plan for such contingencies to prevent
problems later on.
Accuracy of Estimate
During the early phase of design, the client needs to be given only preliminary cost of the
project. However, care must be taken to keep the cost fairly accurate. Many consultants
in Nepal tend to deliberately provide underestimates to the clients in order not to scare
them off. This is not a good practice as it unnecessarily puts the client in a financial
difficulty later on which could be harmful to the future relationship. Detailed estimates
need to be prepared before bids are invited. Certain consultants have been known to
deliberately inflate and underestimate certain items and later delete them or include them
as additional items. This is done with bad intentions and made known to certain
contractors so they can outbid others by quoting unrealistically low or high prices for
these items.
Delays Beyond Architects Control
Delays can occur in getting necessary approvals/ agreements, financing etc. where
architect has no obligation to expedite the process. The client should be made fully aware
of any such delays. There should be no misleading of the client. If long delays are
foreseen in some projects (legal/financial etc.) it may be wise to include limits to project
extension periods.
Extent of Services
There is a tendency to think that the role of the architect as advisor and consultant more
or less covers everything about building design and construction. Both clients and
architects often fall into this trap. Architects could be providing too many services for too
little fees. It is advisable to prepare clear terms of reference (TOR) for the architects
services, clarify the TOR to the client and include it in the contract. This will avoid overexpectation of services from the client.
Site Visits
Site visits should be made at appropriate intervals depending on the stage and nature of
the project (setting out, before cover-up, reinforcement, concreting etc.). The contract
agreement should be, however, be thoroughly studied while advising on site work or
conditions and process should be followed accordingly. Misunderstanding of instructions
can lead to conflict between client, contractor and architect.
Architects Fees
The amount and timing of the architects fees is very important for the smooth
functioning and proper financial management of the firm. In many instances architects
face difficulty in receiving timely payments, putting him into financial crises and
completely disrupting his plans. Often a certain percentage of the fees is never paid at all
and payment of fees is an issue that often brings about conflict in the client-architect
relationship. Thus mode of payment, payment amount or percentage etc. must be clearly
stated in the contract agreement and must be made clear to the client. Despite all the care,
certain clients are always reluctant to make timely payments. Therefore, it is good
practice to promptly submit bills, maintain excellent records of all transactions and keep
sending polite reminders. Although legal action is possible, it should be done only after
careful consideration because of the cost, time and potential public relations damage.
2.2 ARCHITECT- CONTRACTOR RELATIONSHIP
Although there is a contract agreement between the owner and architect and the owner
and the contractor, there is no contract between the architect and contractor to guide and
formalize their relationship. However, the contract agreement between the owner and
contractor (the standard HMG document is based on the World Banks small contracts
format while the documents used by SCAEF and ADB are based on the FIDIC format)
gives certain rights to the architect (designated as Engineer in many of the standard
documents) associated with his contractual duties to the owner. The documents also
specify responsibilities of the architect to both the owner and the contractor. It is while
trying to balance his duties to the two parties that he faces potential problems, especially
with regard to accuracy of drawings, specifications and contract documents; certification
of progress payments; review and approval of work, substantial completion certificate
and claims. To carry out the balancing act properly, the architect should strive to gain the
respect rather friendship of both the parties.
not unusual if the owner is the government and is represented by corrupt bureaucrats. In
case of legal action, the architect is liable to be made the scapegoat. Because of such
malfeasance the World Bank and ADB have now made it mandatory to include a clause
on corrupt and fraudulent practices which can terminate a contract and blacklist a
contractor. This clause becomes completely redundant when the owner himself colludes
with the contractor. In such severe situations the architect has to be vary careful and may
even have to consider terminating his agreement. Example of an architect who wanted to
cancel the tenders because of suspicion of collusion among contractors during bidding
and the owner insisting on continuing giving the excuse of excessive time loss in rebidding. Unfortunately, there are also innumerable examples of architects colluding with
contractors as well as with clients.
4. Disputes
The architect is given the power to resolve all claims and disputes between the client and
the contractor, including any claims arising out of the architects errors or omissions.
Unfortunately, many contractors tend to discount the architects ability to be fair in
determining disputes between the owner and the contractor and prefer to refer them to
arbitration. As arbitration involves extra time and cost, it is important that the architect
resolve claims and disputes fairly so that the contractor builds more faith on his
neutrality.
Payments
The architect has to process the contractors interim and final payment requests. Care has
to be taken against front-end loading or excessively high or low rates for certain items
in the contract. He should consider asking for additional guarantees if he feels such
imbalance could affect the smooth performance of the contract. Payment is a sensitive
issue as the owner does not want to pay for work not performed while the contractor does
not want to continue work unnecessarily at his own expense. The architect needs to
certify payments within the stipulated time period. Unless there are valid reasons e.g.
defective works, persistent delays, failure to pay subcontractors etc., the architect should
not unreasonably withhold payment certification as it can be very financially damaging
for the contractor. While processing of payment requests need to be as thorough as
possible, minor errors or omissions can easily be adjusted in the subsequent bills.
Project Completion
It is the architects responsibility to certify substantial completion and final completion of
the project. After substantial completion, a significant proportion of the retention money
is released, building use is permitted, liquidated damages period is terminated, defects
liability period is commenced and preparation of final bills initiated. Before certification,
a joint inspection is made and a list of minor items to be completed is prepared. Conflicts
can arise during the preparation of the list or determining whether the substantial
completion certificate can be issued as it involves large financial outcome.
2.3 ARCHITECTS RELATIONSHIP WITH OTHER CONSULTANTS AND STAFF
Consultants
When a construction project requires certain services outside the normal services offered
by the architect, on the advice of the architect, the owner may employ specialists. This is
common for a one person practice. Separate contracts should be made with the specialists
so that the architect is not made liable for the specialists work. Some of these specialist
services are town planning, quantity surveying, structural engineering, mechanical
engineering, electrical engineering, interior design, landscape design etc. Often it is more
practical and profitable, especially for an architectural firm, to include these services
within its normal services in which case it must increase the fees to account for payments
to be made to the consultants. When the architect takes on the full responsibility of
providing the specialist services, he is liable for their performance so he must ensure their
work is undertaken with skill and care. He also needs to make the owner clear about such
an arrangement as he has to bear their costs. Where the specialists inputs form a part of
the architects services, it is advisable for the architect to sign an agreement with the
specialists prior to the commencement of the work, clearly outlining the scope of
services, responsibilities, terms of payment, duration of services etc. in order to avoid
misunderstanding and conflict later on.
When dealing with fellow architects, the architect should not try to compete with them
unfairly i.e. by reducing fees, offering discounts or other inducements in order to
undercut their fees. He also should not discredit or try to undermine the professional
credibility of other architects. Until and unless it has been determined that the contract of
an architect has been terminated in a fair and proper manner, no attempt should be made
to supplant that architect. Such actions not only create problems among architects, they
are in breach of the code of ethics of architects.
Staff
The architect should take every care to ensure the health, safety and general welfare of
his employees as far as he reasonably can. This includes providing a proper working
environment, training and social benefits. Although a contract is not generally necessary
for employees, a statement of the terms of employment should be provided. The terms of
employment should generally include:
Names of parties
Date of commencement of employment
Wage or salary rates
Payment intervals
Working hours
Benefits such as paid leave, sick leave, insurance, provident fund, pensions, gratuity etc.
Job title and job description
If the employment is for a fixed period, the date of expiry of employment
Restrictions on private work, if any
Position as to copyright
Certain obligations are implied on both the architect and his staff after employment. It is
the duty of the architect to provide work, wages, take reasonable care of the employees
safety and indemnify them against liability in the proper performance of their duties. He
should also recognize and respect the professional contribution of his employees,
associates and consultants. Similarly, it is the duty of the staff to work honestly and
faithfully and not to permit personal interests to conflict with their duties. They should
use reasonable skill and care in performing their jobs and to indemnify the architect
against liability incurred as a result of a breach of duty.
Reference:
Professional Practice; Dr. Roshan H. Namavati; 1997.
Professional Practice: A Compendium of Business and Management Strategies in
Architecture; Andy Pressman; 1997.
Legal and Contractual Procedures for Architects; Bob Greenstreet and David Chappell;
1996.
competitions. The disadvantage is that the process is quite time consuming and extra
costs are incurred for conducting the competition, for prizes, honoraria etc. In case of
start-up firms winning the competition, there is the danger that they may not be
financially and technically capable of executing the project. In such a case, the firms are
often asked to enter into joint venture with a more established and experienced firm.
3.2 FINANCIAL ADMINISTRATION REGULATIONS
The selection of consultants for all Government works is governed by the Financial
Administration Regulations (FAR). According to FAR:
Consultants can be selected through direct negotiations if the fees are less than one lakh
rupees;
For works which have consultancy fees ranging from rupees one to five lakhs, sealed
tenders will be invited from consultants comprising of separate technical and financial
proposals;
For works with consultancy fees exceeding rupees five lakhs, sealed technical and
financial proposals will be invited from consultants;
HMG can request for technical and financial proposals from any institution in which it
has more than 50% share and conduct direct negotiations with it based on the proposals.
(This provision appears to have been included to enable HMG to award work directly to
NEPECON and avoid the sometimes lengthy and tedious process of selecting consultants
through the two envelope system. Of late there has been some criticism that NEPECON
does not have the technical capability of undertaking some of the works and sublets them
to local consulting firms, thereby acting more as a commission agent rather than a
consulting agency);
For consultancy services of smaller and general nature, the fees should not exceed 3% of
the total cost of the project.
Invitation notice to consultants along with the TOR of the project works will have to be
published in a national newspaper and the firms will have to submit details of their office,
CVs of their professional employees and income tax certificates. For projects with fees
ranging from one to five lakh rupees, 15 days will be allowed for submitting the technical
and financial proposals while 15-35 days will be allowed for the projects with fees in
excess of five lakh rupees.
Where loan or grant agreements make specific provisions for joint venture between
foreign and local consultants, the consultancy services will be awarded only if local firms
are included as JV partners. In situations where local consulting firms compete with
foreign firms, the local firms will be awarded the contract even when their proposed fees
are higher by up to 10% than that of the foreign firm.
Before opening the technical and financial proposals appropriate criteria will be prepared
based on:
Experience, qualification and competence of the firm
Qualification and work experience of the proposed personnel
Work methodology, time schedule and manpower requirements
certain funds and consequently is primarily responsible for the bidding procedures.
The invitation notice to the consultants includes a brief description of the project,
information to be submitted by the firms (CV, company profile, list and cost of works
ongoing or completed, staffing, management system etc.), selection procedure and
weightage, personnel required, method of making proposal and final date of submission
etc.
Preparation of Short List of Consultants
The consultants included in the long list are allotted scores according to the criteria
prepared earlier. A reasonable number of firms scoring the highest marks (5-10) are then
short-listed for the second stage of the selection process. The criteria against which firms
should be evaluated could include eligibility, availability, experience in similar projects,
experience in similar geographic and climatic regions, work volume (in monetary value)
and man-power etc. While evaluating the firms, they must be checked whether they are
linked to any contractors or manufacturers.
The evaluation committee evaluates the firms included in the long list in an unbiased
manner and prepares the list of the short-listed firms which is then sent to the client and
the funding agency for approval.
Invitation of Proposal from Short Listed Firms
The most widely used system of inviting proposals from the short listed firms is the two
envelope system where separate technical and financial proposals are invited from the
firms. Each of the selected firms is provided a copy of the invitation documents prepared
by the client and previously approved by the funding agency. The invitation document
comprises the letter of invitation, background information, terms of reference and draft
contract agreement.
The letter of invitation should normally include:
Brief description of the project;
List of attachments e.g. background, TOR, forms to be completed etc.;
Contact office and person to be contacted for further information, whether country visit is
a must or not;
Anticipated man-months of consultancy services so the consultants can get a clear
understanding of the scale of the proposed assignment;
Provisions for association with other firms;
Source of funding and any requirements that need to be considered;
Time allowed for submission;
Reference to local laws which may apply especially with regard to taxes, duties,
exemption if any etc.;
Details regarding submission of proposals, viz., language, number of copies, address and
date for submitting proposals;
Tentative date for negotiation of contract and commencement of works
Period of validity of the consultants proposal
The background information provides information which will help the consultant prepare
his proposal in an informed and responsive manner. It should explain the history and
need for the project, the purpose and the intended benefits and beneficiaries. It refers to
other ongoing or completed projects which may have a bearing on the project as well as
reports and documents that need to be referred. In addition it may include information
which do not strictly form a part of the TOR such as temperature, rainfall, travel
conditions, availability of accommodation etc.
The terms of reference gives the consultants sufficient idea about the scope of works and
how the client perceives the likely deployment of the consultants resources. The TOR
forms a part of the final contract and provides the basis for assessing the performance of
the consultant. Therefore, it should be clear and detailed about the various activities of
the proposed assignment and how certain information should be provided e.g. bar chart of
activities, manning schedule of various staff, works completed by the firm, methodology
of completing the project, CV of proposed personnel etc.
The draft contract agreement provides the consultant with a clear idea of the type of
contract he will be expected to enter into.
As instructed by the invitation document, the short listed consulting firms submit
technical proposals and financial proposals sealed in separate envelopes. In case of
bilateral/multilateral funding, consultants are often requested to submit three copies of the
technical proposal as one copy remains with the client, one is sent to the funding agency
and the third copy is used by the evaluation committee for its evaluation purposes. A
single copy of the financial proposal is submitted in a sealed envelope which is not
opened until the evaluation of the technical proposals has been completed.
Evaluation of Technical Proposal
The evaluation criteria for the technical proposals are more detailed and systematic than
the criteria used for short-listing. This is also prepared and finalized before the technical
proposals are invited. This is to ensure that complete information required for the
evaluation of firms is provided by the prospective short-listed firms in the required
format.
The evaluation criteria are normally divided into:
Qualification and experience of the firm
Approach and methodology for carrying out the work
Proposed personnel
Qualification and experience of the firm: This is normally allotted 100 to 300 marks out
of a total of 1000 marks. The more important, complex or specialized the work, the
higher the marks allotted. However, most of the firms in Nepal are yet to establish
themselves properly and tend to hire short-term consultants for specific jobs. The
consultants are relieved as soon as the work is complete and without them, the firms are
incapable of undertaking similar works in the future. Thus, most of them appear strong in
experience only on paper. That is why every time there is an advertisement for a large
project, there is a mad rush to hire consultants and good consultants are deluged with
offers by many consulting firms. Unfortunately, the firms do not try and retain these
consultants after the works are completed and any experience the firms may have
gathered vanishes with the termination of the consultants services.
Approach and Methodology: This is generally allotted 200 to 400 marks and illustrates
how well the consultant has understood the TOR. It shows the consultants evaluation of
the task and how he allocates his resources. The consultant is evaluated on his
understanding of the project objective, work methodology, including any innovative ideas
proposed, work program, man-month requirements and counterpart facilities required.
Proposed Personnel: This is normally allotted the highest marks, ranging from 300 to
700. Since it is actually the personnel who will be responsible for the proper execution of
the work, they are given more weightage. This is also to safeguard against firms that are
strong in experience only on paper. The team leader is given the highest rating and other
key members are rated in decreasing order. The personnel are evaluated for their
experience in similar projects, qualification and other relevant training. Firms are
instructed to submit CVs of all the proposed personnel.
Negotiating and Signing of the Contract
After the ranking has been completed, the evaluation report has to be approved by the
client and by the funding agency, if any. The firm whose technical proposal has been
adjudged the best is then invited for negotiations within 2 weeks of approval of the
evaluation report.
The sealed financial proposal of the first ranked firm, which was submitted along with
the technical proposal, is then opened in the presence of the consultant. Detailed
negotiations on the proposal, beginning with the scope of works, are then carried out until
a satisfactory agreement is reached with the firm. When agreement has been reached, the
financial proposals of the other firms are returned unopened. However, if a satisfactory
agreement cannot be reached due to some serious disagreement, the negotiations are
terminated and negotiations are commenced with the second ranked firm, and so on. If
the project is funded by a multilateral agency, the agency must be informed about the
failure of negotiations with the first ranked firm and the reasons for disagreement and
approval must be sought to begin negotiations with the firm next in ranking.
One of the problems of the two envelope system is that consulting firms sometimes tend
to submit much higher than normal rates in their financial proposals, knowing very well
that once they obtain the highest ranking in the technical proposal, the client is under
great pressure to conclude an agreement with them. Funding agencies are also often
reluctant to terminate negotiations with the first ranked firm based primarily on financial
disagreements. Knowing this, the consulting firms try, as far as possible, to stick to their
unreasonably high proposals during negotiations and the client is often forced to conclude
negotiations at rates much higher than the normal fees.
Case study of negotiations between Pokhara Sub-metropolis and the consultant for the
Environment Improvement Education Program. Case study of disagreement between the
Project Management Unit and Department of Civil Aviation regarding concluded
To ensure that the client receives a design of high standard and the competition is fair to
all the competitors, it is essential that the designs are judged by architects who are
qualified and competent to interpret the competitors' drawings and judge whether they
best meet the clients requirements. Thus one of the crucial elements in holding a
successful design competition is the appointment of prominent and respected architects as
assessors.
Design competitions can be open or limited and held in one or two stages. In an open
competition, invitation to participate is issued to all those interested through a public
notice and anyone desirous of competing can register and submit designs, however, these
are normally restricted to members of the professional organization or even students of
architecture (a third year student won the competition for the design of the Vietnam War
Veterans Memorial). In a limited competition only a select group of architects deemed to
have adequate experience in similar projects are invited to compete. New architects rarely
get invited to limited competitions. In open competitions it is common to award prize
monies and honoraria to a limited number of winners, whereas, in limited competitions,
apart from the prize monies, all the participating architects normally receive some sort of
compensation for their efforts.
In a single stage competition, the designs are judged and awarded in a single stage,
whereas, in a two stage competition, the designs submitted during the first stage are
reviewed and only a limited number of architects with the best designs are invited to
further develop their designs for the second stage. The winner is selected from among the
designs submitted for the second stage of competition.
Some of the important elements of a design competition are:
Appointment of prominent and competent architects/specialists as assessors. The
assessors or senior assessor usually assist in the preparation of the project brief, study and
understand the clients requirements and site conditions, finalize the conditions and
prepare the final report of award.
Preparation of a project brief to be distributed to prospective competitors. The project
brief should clearly state the objective of the competition, the site conditions, the
conditions of local authorities that need to be met, the nature of the problem, the
requirements of the client as well as the competition conditions which need to be fulfilled
in order to be eligible to compete.
Finalization of competition conditions prior to announcement of competition. The
condition should clarify registration procedures if any, mandatory eligibility
requirements; number, nature, scale and dimensions of documents, plans, models etc.;
estimates if required, nature of prizes, names of assessors, timetable etc.
Non-disclosure of the names of competitors. Throughout the competition, the names of
the competitors should remain anonymous to the assessors so that judgment will be fair.
Drawings should be coded and the names should not be disclosed until the awards have
been finalized.
Award of the project to the winning design. In case no design is found worthy of the first
prize, the other prizes should be awarded and the client is under no compulsion to execute
any of the designs. If the award winning architect is found to be lacking in experience, he
can be asked to associate with an experienced architect or firm e.g. the winner of the
design competition for KMC building was asked to associate with an established firm and
she did.
Reference:
Professional Practice; Dr. Roshan H. Namavati; 1997.
Report on Consulting Architectural & Engineering Industry in Nepal; Task Force on
Consulting A & E Industry in Nepal; 1990.
Financial Administration Regulations 2056; His Majestys Government of Nepal.
Council of Architecture: Directory of Architects; Council of Architecture India; 1998.
Architects Handbook, Ready Reckoner; Charanjit S. Shah; 1996.
Handbook for Users of Consulting Services; Asian Development Bank; 1991.
4. CONTRACT AGREEMENT
4.1 General
Work can be started after a simple oral agreement or a brief letter from the client.
However, to avoid misunderstanding and conflict with the client later on, it is always
advisable to have a written contract agreement where all aspects of the architects as well
as the clients responsibilities and obligations are clearly spelled out; the staff, work
schedule as well as the fees are agreed upon and termination and method of dispute
resolution is specified. Some architects and clients also tend to prepare their own contract
documents with very specific conditions. Although this is useful in very unique and
special projects, for general as well as specific works, it is much safer to make use of
standard contract documents. Besides using documents which have been proven and
accepted through extensive use, adopting them ensures no important issues are omitted.
In most cases the standard agreement can form the basic document and alterations or
additional clauses can be added as required. The standard contract documents are usually
prepared by the respective professional bodies for use by their members e.g. AIA, RIBA,
IIA etc. Many multilateral organizations have also developed their own standard
contracts to be used in projects funded by them e.g. the World Bank, The Asian
Development Bank etc. SONA has yet to develop its standard format. On the other hand
SCAEF has prepared a model form of agreement for use among its members based on
formats prescribed by FIDIC and ADB. It is quite a comprehensive document and
suitable for use for all types of architectural works.
Normally a contract document should cover three principal areas, either in the contract
proper or in the appendices attached to it. These are service definition, staffing and
payment procedures. The service definition sets out the obligations of each party and
defines the steps to be followed in initiating, modifying and terminating the services.
More general obligations are included in the text while the specific responsibilities are
detailed out in the appendices. Since the consultants are normally selected according to
their proposed staffing, the actual list of professional staff is attached in the appendix.
The payment procedures outline the method of payment including definition of payment
Settlement of Disputes
Disputes to be settled under arbitration rules and procedures of Nepal. Decision of
arbitrator to be final
Personnel
Services to be carried out by personnel during period indicated in Appendix B
Reasonable time extension of 20% or 1 week whichever longer
Designate team leader responsible for liaison between client and consultant
If necessary replace staff with person of comparable experience with client approval
Clients staff to be remunerated and removed by client
Remuneration to the Consulting Engineer
Client to pay consultant as set forth in Appendix D
Additional remuneration to be paid if supplementary services required. Cost computed on
a time basis as well as for all reimbursable costs incurred
If additional work required due to damage to work or equipment as a consequence of war,
political disturbance or causes beyond consultants control, appropriate remuneration to
be paid
Payment to the Consulting Engineer
Payment to the consultant to be made as set forth in Appendix D
Payment within 30 days of invoice otherwise interest to be paid
If dispute in certain item of invoice, payment for rest of item not to be held up. Payment
Study Reports
Design Reports
Construction Documents
Implementation Reports
Monitoring and Evaluation Reports
Operation and Maintenance Reports
Request for Proposal
Qualification and Experience Required
Man-power Inputs
Time Schedule
Evaluation Criteria and Marking System
Other Information Required
Undertaking by the Consulting Engineer
Scope of Service
Personnel Nomination
Assignment Period
Equipment to be Provided by the Consulting Engineer
Completion Targets
Undertaking by the Client
Clients personnel
Services of Other Firms
Coordination among Different Parties
Equipment and Facilities to be Provided by the Client
Remuneration to be Paid
Remuneration and Payment
Remuneration
Salary
Social Benefits
Overhead
Fixed Fee/ Profit
Site Allowance
Out-of-pocket Expenses
Per diem
Site Accommodation
Travel
Transport
Office Accommodation
Consumables
Utilities
Report Reproduction
Documentation
Mode of Payment
- Upon Signing
- On Submission of Inception Report
25%
15%
EIA, architectural work and site development, structural engineering work, sanitary,
plumbing, drainage, water supply and sewerage work, electrical work; heating,
ventilation and air-conditioning work, acoustical work, landscape work, interior
designing and graphic signage. The Schedule of Services describes the different stages of
design development from site evaluation and analysis and EIA report to concept design,
preliminary design, working drawings, specifications, bill of quantities, periodic site
visits. Certification of contractors bills and preparation of completion report does not
appear to be included.
The mode of payment and amount to be paid as well as the basis for determining
payments (on a percentage basis) is given in articles 3 and 4. Article 5 deals with
reimbursable expenses (comparable to out-of-pocket expenses). These are generally
appended to the general conditions in the other model agreements. Article 6 states the
clients responsibilities with regard to providing the architect with detailed requirement
of the project, all necessary information and paying the architect on time. Article 7 deals
with the formation of a coordination committee which is optional. Article 8 denies the
architect any further work if he violates the agreement, ethics or fee structure
recommended by IIA. Article 9 covers the execution of the assignment and includes
responsibilities of the architect, termination clauses, general clauses about alterations in
designs, time extensions, site visits, clients right not to execute the project etc. Unlike in
the other models the article states that the architect has proprietary rights over the
documents, not the client. Article 10 states all disputes to be referred to the Council of
Architecture.
References:
Report on Consulting Architectural and Engineering Industry in Nepal; The Task Force
on Consulting A & E Industry in Nepal; 1990.
Handbook for Users of Consulting Services; Asian Development Bank; 1991.
Council of Architecture, Directory of Architects; Council of Architecture; 1998.
consultant on actual expenditure basis after submission of actual vouchers e.g. payment
for air travel after submission of air tickets.
Man-month Contracts
This is also commonly referred to as time-based or cost plus fee contracts. This is the
most preferred contract by the multilateral agencies. Fees are paid as per agreed rates per
man-hour, man-week or man-month and are paid for the time the consultants actually
spend on the job. In addition there are other expenditures such as per diem, travel costs
and out-of-pocket or direct expenses for equipment, printing etc. The advantage of this
type of contract is that it most closely reflects the actual costs incurred by the consultants
during the performance of the services. This contract generally has a ceiling and is
accompanied by an explicit obligation of the consultant to complete the given task within
the stipulated amount and time. The disadvantage is that payment is done according to
consultants inputs rather than outputs so that there are chances the desired output is not
obtained within the given period and greater client monitoring is required.
Lump-sum Contract
In lump-sum contract a fixed amount is negotiated for a specified output. Its biggest
advantage is that it is simple to administer and payments are made at specific intervals
according to the work progress. The client also has the advantage of transferring the risk
of price rise and need for doing more than the anticipated amount of work to the
consultant. In this case the consultant has to take these into consideration while
estimating the contingencies in his quoted price. The fixed amount to be charged is
normally derived from man-month type of calculations or alternatively from percentage
type calculations.
Percentage Contract
This has been the traditional type of fee structure where the consultant is paid an agreed
percentage of the actual construction cost. The percentage to be charged for each type of
work is based on a scale drawn up by a national association of engineers or architects and
normally ranges from 2.5% to 10%. The percentage scales are supposed to be the
minimum fees and the consultant is free to charge higher fees if necessary. More accurate
concept of the actual fees to be charged can be developed as the consultant gains more
experience and knowledge over the years. It is simple to administer and the advantage to
the consultant is that fees automatically increase as the cost increases. The disadvantage
is that the consultant is not motivated to achieve the best design or reduce cost. However,
this type of fees is one of the least favoured by the multilateral funding agencies.
Cost Plus Fixed Fee Contract
In this type of contract the consultant is paid a fee based on time-based rates for the
design and management plus a fixed amount of fee, usually for his expertise and knowhow. It is quite similar to the man-month contract except that in a month contract the
consultants fees are built into the man-month rates whereas in this type of contract it is
calculated as a separate fixed amount of fee. This type of contract is generally used for
the design and construction of industrial plants or research and development works where
the degree of input cannot be estimated or the output specified with any confidence.
The fee represents the consultants gross profit before taxes and is usually expressed as a
percentage of the sum of the base salary, social costs and the overhead. This can vary
between 5% and 20% depending upon the policies and practices of the consulting firm.
The overseas or inducement allowance is paid to staff on overseas assignment and varies
according to the nationality of the firm and the country of assignment. This is not
applicable for in-country assignments.
The sum of the base salary, social costs, overhead, fees and, if applicable, overseas
allowance forms the man-month rate to be charged. This calculation is done for each
staff. If there are international staffs, it becomes necessary to calculate the man-month
rate in foreign currency.
Other Expenses
Apart from these, out-of-pocket expenses and contingencies also need to be worked out.
The out-of-pocket expenses are estimates of the per diem allowance, travel costs, project
office rentals, vehicle and equipment rentals, report printing and reproduction etc.
Contingencies are normally allocated to cover any unforeseen expenses or shortages, if
any, in any of the other categories and ranges from 5-10% of the sum of remuneration
and out-of-pocket expenses.
The total sum of all the remuneration, out-of-pocket expenses and contingencies is
normally the ceiling figure for the cost of consulting services.
5.3 SCHEDULE OF PAYMENT
The payment schedule depends upon the type of remuneration structure adopted. In the
man-month type of fee structure monthly bills are submitted indicating personnel time
inputs and reimbursable costs. The same method applies for the cost plus fixed fee
contracts.
In the case of percentage fee structure, payment is made according to the different phases
of the services rendered. Different percentages are agreed upon to be paid after each
phase is completed and paid after the work phase is completed. Different phases are
agreed upon for both the design and the construction phases. Since the percentage fee is
based on the final project cost, final adjustment has to be made once the construction is
complete since the interim fees are based on the estimated cost and later on the bid
amounts which are bound to change after the construction is complete.
For the lump sum fees, payment is made as per agreed percentage of total sum according
to completion of different stages of completion of the project e.g. at contract signing,
completion of 25% assignment, 50%, 75%, draft report and final report.
5.4 SCAEFS RECOMMENDED BREAKDOWN OF SOCIAL COST, OVERHEAD
AND FEES
In its guidelines SCAEF has recommended social costs to be 42% of base salary,
overhead to range between 75-100% of base salary and the fees to vary from 15-20% of
the sum of base salary, social cost and overhead. The proposed breakdown of each cost is
as follows:
Social Cost Breakdown
Paid Leave 15-21 days/year
Sick Leave 7 days/year
Provident Fund
Dasain Salary 1 month/year
Medical Allowance
Life Insurance
Pension / Gratuity
Total
41.73% or 42%
Overhead Breakdown
Head Office Rent
Head Office Utilities
Adm. Salaries
Non-revenue Earning Professional Salaries
Printing and Reproduction
Computer Costs
Transport
Business Promotion
Depreciation
Postage
Insurance
Library Materials
Financial (bank commissions/interest)
Advertisement
Fees for Lawyers, Auditors
Research and Development
Staff Training and Education
Professional Indemnity Insurance
Social Activities
Total
75-100%
Fees
Reserves and Profits, Business Risk
5.40 6.00%
2.50%
10.00%
8.33%
5.00%
2.50%
8.00%
16%
7%
14%
15%
3%
8%
6%
16%
6%
1%
6%
1%
0.5%
0.5%
15-20%
services. An analysis of a few consulting firms fees based on cost plus fee was found to
range from 6-10% of the total project cost, whereas, the minimum fees recommended by
IIA for comprehensive services including site supervision and certification of contractors
bills is 6%. Thus there does not appear to be a major deviation in the total fees charged
according to the different systems.
The IIA recommends architects to be engaged, as far as possible, in comprehensive
architectural services and has designed a scale of fees for comprehensive services
including pre-design study, architectural, structural, electrical and plumbing design, air
conditioning, heating, acoustics and interiors and if required, detailed designs of external
services including roads, drainage, sewerage, water supply, street lighting, landscaping
and signage.
The fee structure is based on the tendered cost of the total project including repetition of
designs. The fees recommended are the minimum scale and architects are free to increase
the fees according to the type and complexity of the assignment. For works costing up to
Rs. 5 lakhs and community development works such as community housing, slum
upgradation etc. fees are negotiable between the architect and the client. For all other
works the minimum rates as given below are to be followed:
Urban Design
Site development, housing (excluding high rises)
All Other Building Projects (comprehensive)
Additions/alterations
Interiors
Site Supervision and verification of Contractors Bills
Site Visits, models, presentation Drawings
1%
2.5%
5%
7.5%
10%
additional 1%
actual cost
6. CONTRACT AGREEMENT
A contract document is a legally binding agreement between two or more parties for the
performance of certain services. Various types of contract documents are used for
construction works, namely, admeasurements (Bill of Quantities), turnkey or semiturnkey and lump-sum contracts. The most common type of contract for civil works is the
admeasurement type of contract where price for a given work is determined by
measurement and valuation in relation to agreed price formulas and rates. In the turnkey
contract, the entire works including survey, design, construction, installation and testing
of equipment are to be executed by the contractor. This type of contract is common for
industrial and other specialized works. In semi-turnkey contracts, certain portions of the
work are undertaken on a turn-key basis, whereas, in a lump-sum contract, a fixed agreed
amount is paid for a given work.
Just as in the case of a contract agreement between a client and a consultant, any type of
contract can be formed i.e. verbal, written etc., however, it is safer and more convenient
to use standard contract documents. SCAEF recommends the use of contract documents
prepared by FIDIC while HMG has prepared a standard contract document based on the
World Banks Standard Bidding Documents for Small Contracts (for contracts less then
$5 million but applicable to most construction works in Nepal). Since its introduction in
1999, it is compulsory for government agencies to use these documents for their larger
civil construction works. For smaller works, HMG does not requiring tendering. Direct
award can be made for works costing less than 1 lakh rupees and works worth less than
rupees 10 lakhs can be awarded based on evaluation of sealed quotations invited from at
least three contractors. A very concise and simple contract often in Nepali is generally
used for such small works.
(owned or leased, make and condition), qualification of key personnel, financial reports,
access to finance, ongoing litigation, if any. The qualification information is used to
determine whether a contractor qualifies for the work before his bid is opened. Often the
client visits the contractors sites to verify the accuracy of the information provided. The
advantage of requesting qualification information along with the bids over the prequalification method is that it discourages collusion among contractors. During prequalification, the pre-qualified contractors are identified and their number is limited,
making it easier for them to collude in their bids. In the post-qualification method
collusion is difficult as it is not known at the time of submitting bids whether a contractor
will qualify for the bids or not. From past experience it has been noted that competitive
bids are often submitted during post-qualification, whereas, after pre-qualification, it is
normal to receive only three bids. The lowest bid is approximately 9 percent above the
estimated cost, since HMG regulations stipulate bids can be accepted up to 10% above
the estimated cost without much difficulty, whereas, higher bids require approval from
higher authorities and questions can also be raised during the annual audit. Although, of
course, in countries like Nepal the audit often is another source of corruption and
collusion.
Form of Agreement This is a standard form of agreement between the client and the
contractor with their signatures and the commitment of the contractor to complete the
works as per the contract.
Conditions of Contract This outlines the various conditions which apply to the contract.
It also defines the role the consultant has to play during the administration of the contract,
generally through his representative at the site, the Project Manager/ Engineer.
Otherwise, the consultant does not form any direct agreement with the contractor. All his
powers to act during the construction phase are derived from these conditions where his
role is to serve as the clients representative and look after his interests. However, as per
the contract, he is expected to act as an impartial judge between the client and the
contractor. This can lead to difficult situations as the client being the consultants
paymaster expects favorable consideration from him whereas the contractor tends to
suspect that the consultants decisions will always favor the client. Almost all the clauses
are standard and apply to most contracts. The conditions are normally not altered. All
variable conditions are included in the Contract Data. However, in case it is felt necessary
to alter or delete any of the standard clauses or add new ones, this is done through an
insertion in the Contract Data specifying the alteration or deletion of the clause.
Some of the duties assigned to the consultant as per the contract are:
Will decide contractual matters between client and contractor fairly and impartially.
There is a provision that either party can refer the matter to an adjudicator if he feels the
decision of the consultant was taken wrongly;
May delegate duties and responsibilities to others after notifying client and the contractor;
Give permission to the contractor to sub-contract part of the works;
Give approval to contractor to replace key personnel or remove any member of the
contractors staff if the members presence is felt undesirable;
Approve insurance of the works, equipment, staff etc. as per the contract;
Approve work schedule and any subsequent revisions including any time extensions. This
becomes quite contentious if there are provisions for liquidated damages or bonus
payments;
Approve temporary works;
Instruct contractor what to do if any material of historical importance is discovered at the
site;
Check quality of contractors work and notify him of any defective work which needs to
be corrected. Can also ask contractor to carry out tests to determine if the works are as
per specifications. If contractor does not correct the defective work within a specified
time, he can have it corrected and deduct the cost from payments due to the contractor;
Approve changes in the rate if the quantity of a certain item exceeds the quantity in the
BOQ by more than 25% and the additional cost constitutes more than 1% of the Initial
Contract Price;
Approve any variations in the contract and cost of variation and adjust Contract Price and
time extension accordingly;
Certify contractors monthly bills and final bill;
Determine Compensation Event and adjust Contract Price accordingly e.g. hard rock
instead of normal soil;
Approve and certify Dayworks;
Issue Completion Certificate of the works (Substantial Completion);
Issue Defects Liability Certificate after determining all defects have been corrected and
certify final payments;
Determine if a fundamental breach of contract has occurred after either of the parties has
given written notice about such a breach of contract. If contract is terminated, determine
payments to be made to the contractor;
Certify if the contract has been frustrated due to events beyond the control of the
employer or contractor.
In certain cases the architect does not sign a comprehensive contract agreement with the
client in which case he is neither responsible nor authorized to carry out many of the
tasks identified above. His site visits could be very intermittent and he would report to the
client any inconsistencies in the design and execution or any deficiencies in the quality of
construction. The client would then be responsible for ensuring that the inconsistencies
are rectified.
Contract Data All the variable conditions specific to each contract are included in this
section so as to avoid altering the standard conditions. The name of the contract, names
and addresses of the client, his representative, the Project Manager, the intended starting
date, the location of the site, the defects liability period, the percentage of liquidated
damages, bonuses, insurance, language, applicable law, currency of payment, adjudicator,
retention amount, performance security and any additional conditions are included in this
section.
Technical Documents these include drawings, specifications, bill of quantities and form
part of the contract documents
This becomes mandatory for the architect in case of a comprehensive contract agreement
with the client. Some of the responsibilities which are important and the architect needs
to be aware of in contract administration are:
The client/project director needs to inform the contractor about the authority given to the
architect and his project engineer to administer the contract. Similarly, the contractor
needs to inform the client and the project engineer about the authority delegated to his
representative, especially with regard to acknowledgement of directives.
The architect/project engineer should thoroughly study the plans, specifications,
estimates, contract documents etc. before commencement of the works. Any errors or
omissions discovered or reported by the contractor should be notified to the client and
rectified. The working drawings and specifications complement each other and must be
read in conjunction. All items may not be shown in both the plans and specifications but
they need to be present in at least one of them, otherwise they will be considered
additional items. In case of conflict, as stated in the general conditions of contract,
normally precedence is given to the specifications. Specifications are of two types,
method specification and performance specification. Method specification details out the
exact equipment and procedure to be used in performing a construction operation
whereas the performance specification indicates the result to be achieved and the
contractor has the freedom of choice of equipment and method e.g. in structural,
electrical, plumbing works etc.
The architect/project engineer should be fully acquainted with the contractors plan of
operations, safety provisions and schedule of progress. He should also keep track of all
revisions in the plan and its impact in the progress of the works. The time of completion
is normally mentioned in the contract. When a project is not completed on time, the
contractor has to pay for the damages suffered by the client due to such delay, not as a
punitive measure. This is covered in the clause on liquidated damages and specifies the
amount to be paid by the contractor for each day of delay. On the other hand, there are
provisions in the contract to allow time extensions to the contractor if certain events
occur which are beyond his control owner directed changes, acts of God, strikes, war
etc. In case of delays due to acts of God, time extension needs to be provided but
compensation can be claimed from the insurers. In owner caused delays both time
extension and additional payments may be required. But in case of delays due to the
contractor no time extensions or payments are required.
The architect/project engineer needs to ensure construction is carried out as per the plans
and specifications according to the terms of the contract
The architect/project engineer needs to take measurements of quantities and determine
payments to the contractor. The progress payments need to be made on a monthly basis
or after reaching predetermined milestones. Payment is generally made for work
completed, material delivered to the work site and work prefabricated but not yet
incorporated in the project. It is customary to withhold a certain amount referred to as a
retention money from the progress payment as a guarantee against any defective work as
well as make proportional deductions for any advances paid in accordance to the terms
specified in the contract. The typical retention amount is 10% of the progress payment
sometimes 5% for smaller contracts of which half is released on the issuance of the
Substantial Completion Certificate and the remainder is paid after the expiry of the
Defects Liability Period (normally 6 months to 1 year but covering at least one full
monsoon season).
Maintain records of all project activities: correspondence, daily diaries of events (source
of information, outcomes etc. which can serve as evidence in case of later controversies),
personnel, supplies and equipment, project progress reports, final report, photographs etc.
If necessary, the architect/project engineer needs to issue contract modifications and
directives within the scope of the contract. The change orders are often necessitated due
to design modifications initiated by the owner or designer. Changes may also be required
due to differing site conditions, unforeseen work essential to complete the work,
variations in the estimated quantity of an item of work (if initiated by the contractor),
unforeseeable delays which increase the cost or time of construction, substitution by
alternate equipment, material or process. Modifications often require adjustments in the
contract price and construction time which needs to be carefully determined by the
project engineer and mutually agreed upon by the client and the contractor. Often prior
agreement cannot be made when the work has to be continued and agreement is made
later. If there is disagreement later on, this becomes a dispute.
The architect/project engineer should keep control of materials at the site. He needs to
approve different materials, samples and tests of materials carried out by the contractor.
He must also ensure that the materials are being stored and handled in a way so as not to
destroy their quality or strength. He must conduct regular inspections and keep records of
materials and equipment brought to the site or used in construction. This becomes
important in case of termination due to default of contractor.
After the contractor submits a letter stating that the works have been completed, the
project engineer, together with the contractor or his representative, should inspect the
works and make note of any defects or unfinished works. If these are considered to be
minor which can easily be completed during the defects liability period, the substantial
completion certificate is to be issued after which the building can be taken over by the
client and the defects liability period commences. Once the contractor corrects all
previously noted defects as well as any new defects by the time the defects liability
period is completed, the project engineer issues a defects liability certificate after which
final payment is made to the contractor and all retention is returned. Except for any
outstanding disputes, the contract between the client and the contractor is deemed to have
ended.
The architect/project engineer should properly evaluate and decide on any claims and
disputes, if any. A claim is a request by the contractor for additional payments or time
extension because of an occurrence of an event beyond his control. A dispute is a
disagreement between the client and the contractor on some contractual matters. The
project engineer needs to give his unbiased judgment on any dispute; however, if any of
the party is dissatisfied with his decision, he is entitled by the contract to refer the matter
to arbitration.
References:
Standard Bidding Document; His Majestys Government of Nepal; 1998.
Sample Bidding Documents, Procurement of Civil Works; Asian Development Bank;
1988.
Manual for the Administration and Supervision of Construction; Harihar Man Amatya;
1993.
Construction Methods and Management; S. W. Nunnally; 1998.
7. REGULATORY CONTROLS
Comprehensive development plans are prepared for the future growth of the cities based
on the goals and aspirations of the local communities. The success of the implementation
of plans, however, depends greatly upon the preparation and strict execution of
complementary regulatory controls, the most important of which are subdivision and
zoning regulations and the national building codes. While subdivision deals with the
breakup of land and design of streets and other infrastructure, zoning deals with the use
of the land, the building bulk and set-backs. The national building code is related to the
minimum standards to be followed in building design and construction in order to make
the building safe.
7.1 LAND SUBDIVISION
Land subdivision is the act of breaking up a piece of land into separate parcels. It is
normally done to permit the transfer of the subdivided parcels to someone other than the
owner of the original land. The primary purpose of the breakup is to allow development
to take place on the land e.g. for housing, industrial or commercial use etc. Although
subdivision is also done for dividing property among heirs or for continuing the use of
the land (farm sold to another farmer for agriculture purposes), the major intention of
subdivision is to develop the property. Subdivision is primarily a tool to regulate urban
development, unfortunately in Nepal, subdivision is conducted by the Land Registration
and Land Survey Departments which have no concern for the city plans.
Subdivision regulations govern the process by which individual lots are created out of
larger tracts of land and form an integral part of the larger master plan of the city. In
general, subdivision regulations govern the rules and standards for converting farm land
or vacant land into plots for urban development. These relate to the size and shape of the
lots and the width and length of the streets. They also include construction standards for
streets, curbs and gutters, water mains, sewers and sidewalks. On the other hand zoning
regulations divide the city into zones for different classes of land uses such as residential,
industrial, commercial etc. and specifies the spatial relationship between land and
building and the open spaces surrounding the building.
The subdivision has to consider certain provisions of the master plan e.g. proposal of
future roads, parks etc. The regulations also require that the existing utilities (local
streets, sewers, water mains etc.) tie in properly with the proposed utilities in the land to
be subdivided. Intentions to regulate the width of the street, length of the block, size of
lots, frontage etc. are also reflected in the subdivision regulations. Sometimes the cost of
public facilities is divided between the developers and the taxpayers, but often the
developers are required to dedicate land for streets and to install at their own expense the
necessary public facilities to serve the development. More recently, the developers have
been required to dedicate certain amount of land for parks, schools and even to contribute
towards the cost of constructing a sewage disposal plant. Unfortunately, Nepal does not
have any subdivision controls as a result of which subdivisions are occurring in an
unplanned and haphazard manner by individual land speculators. Individual plots of
irregular shapes and sizes without proper access and infrastructure are being created
without regard to any city development plans or planning rules and standards. The
following need to be considered when reviewing a subdivision proposal submitted for
approval:
Major streets are aligned with existing or proposed streets adjacent to the property
Utility lines are properly sized to fit the wider system
Drainage or natural hazard problems are not created for future residents or adjoining
properties
Improvements are adequate to serve proposed uses and quality of construction minimizes
future public maintenance costs
Natural amenities are preserved
Size and shape of plots serve their proposed use and met zoning and land use regulations
Subdivision can be served with necessary public services and facilities
Timing is right with regard to the communitys ability to provide services, for example,
the land cannot be an isolated lot far away from the built-up area where it will be too
expensive to extend services
Design is suitable and creates maximum safety for future occupants
Even in the developed countries the reviewing agencies are not always competent or
knowledgeable about the process and community goals are often not clear enough
resulting in poorly executed subdivision. Since subdivision is an integral part of the
planning process, it needs to be closely coordinated with other plans of the city and
cannot be implemented in isolation. Some of the plans which need to be considered are:
Water and sewer plans which establish the service area and the size, standard, location
and phasing of treatment facilities and lines to serve the area based on desired land use
pattern for future growth
Park and open space plan which identifies the location and standards for park and
recreation spaces to serve future growth and open space which needs to be preserved
Environmental plan identifying critical areas which need to be protected from
development such as flood plains, steep slopes, geologically sensitive areas, historical
areas, forest lands, agricultural land etc.
Street and transportation plan indicating location, capacity and nature of the system
Fiscal plan which determines the proportion of the cost of public facilities which needs to
be contributed by new subdivisions
Capital improvement plan which shows where and when physical improvements will be
made, their scale and how they will be financed
Ideally, subdivision proposals should be reviewed before final approval by the local
government as well as other concerned agencies such as water and sewer department,
roads and highway department, power and telephone companies, school authorities,
health department, fire department, parks and recreation department etc.