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UNIT - I

TENDER FOR CONSTRUCTION


What is Tender?
Tender means an offer to carry out work, that is pre-described or to supply or purchase goods of
prefixed specifications at a price to be quoted the tenderer.
Essential qualities of a good tender:
1. Tender should be based upon definite and detailed information. The items of work described in
bill of quantities included in the tender should be very clear and specific.
2. Drawing shall be supplied wherever details are involved. Wherever description is difficult,
drawing should be given to complement description.
3. All factory made products should be specified as far as possible with their trade name (close
specifications). You may attach a list of approved makes or manufacturers to the tender
document.
4. Avoid as far as possible the use of phrase As approved by architect, Instead spell out more in
details your requirements and if needed, supplement the statement by a drawing.
5. Basic price of material shall be mentioned in the tender.
6. The basic concept of tendering is a competition on equal base. Therefore, it is essential that
information given may be in the form of specifications, conditions of work, abstracts, quantities
or drawings shall be same information to all the contractors who shall offer tenders.

Components of a tender: A checklist.


1. Instructions to contractor
1.1.Type of tender (Item rate tender or lumps um tender).
1.2.Location and brief description of work and name of owner. (Name of work, site address and
owners name)

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1.3.Price of Blank tender form.


1.4.Amount of Earnest Money Deposit (E.M.D) to be paid to whom and how.
1.5.Time and place of submitting filled in tender.
1.6.Note: Owner reserves right to reject any or all tenders without giving reasons. (This note is
important and shall not be forgotten.)
2. General conditions and preliminaries: Prepared by the architects office. In this, you should not
forget to refer standard specifications, such as ISI or P.W.D. This should also include a list of
Basic Rates of major building materials and a list of approved manufactures of materials.
3. LETTER OF OFFER: From contractor of Architect. This letter is prescribed by architects office.
(a specimen letter given in Appendix 14.I)
4. Copy of Articles of Agreement and General Conditions of contract. (Printed papers available
with I.I.A)
5. Bill of Quantities (Contract Bill) only in case of an item rate tender.
6. Drawings (Contract Drawings) giving location, overall size, types of building construction etc.
for an item rate tender. OR In case of lump sum tender, a complete set of working drawings
including R.C.C. schedule or structural steel details etc.
Types of Client:
1. Private or an individual owner.
2. Semi-public organizations
3. Public Bodies such as Government Departments.
Different methods of calling tenders:
1. Invited Tender
A list of five or six contractors should be made by the architect in consultation with the owner. Om
behalf of the owner, the architect should write letters to the contractors inviting them to tender
for the work.
A letter of invitation to a contractor shall cover the following points.
(i) Name of the owner.
(ii) Address of the site of proposed work and type of building.
(iii)Estimated cost of work.
(iv) Probable date of commencement of work on site.
(v) Price of blank tender form and
(vi) Date, time and place where from the tender copy would be available.
Each of the points has relevance in business. When you invite a contractor for tendering, he has a
choice to accept or to refuse the invitation. For that he should knowi) Who is the owner, he may have earlier experience, either good or bad with the person.
Contractors decision to accept or to reject the invitation may depend on this
ii) Each contractor has his area of operation in his mind. This depends on the size of his
2 organization and his willingness to go far and the estimate of projects as well.

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iii) The estimate of work is also relevant.


iv) The probable date of commencing work is relevant to know.

2. Public Tender
In case of projects owned by the semi public or the public bodies, in the procedure to be adopted,
there should be no room for favoritism or a partiality. The competition should be open to all.
Hence, a notice shall be published in a newspaper calling the contractors to fill in tender for a
project. In such a notice, the following information shall be given:
1. Name of the client (Owner of the project)
2. Address of the proposed work site and name of the project.
3. Estimated cost of project.
4. Earnest money deposit.
5. Cost of blank tender form.
6. Time and place of issuing blank tender forms.
7. Time and place of submitting filled in tenders.
The biggest disadvantage in a public tender notice is that one does not know the abilities of
contractors offering themselves to work for the project. To get the work, one may quote low rates. But
often such a contractor is unable to carry out the work and to produce work of good standard.
Realizing that he is not making enough profits or he is loosing on the job, the contractor looses an
item even at the cost of quality. The contractor will try to raise claims for variation and extra
items, arguing with an architect now and then on small matters. The owner reserves the right to
accept pr to reject any or All the Tenders without giving any Reasons.
3. Pre-registration of contractors:
In this method, a notice is published in newspaper inviting the contractors to submit the
information of their construction company. In the notice, it is necessary to publish i) Name of the
owner and his address, ii) Name of the project and its estimated cost, iii) Address of construction
site and iv) Probable date of starting construction. Reading this information, the contractor should
decide whether he is interested in the work or not.
Further in the notice, the contractors are
requested to submit the information on the following points:1. Name of the company and its Registered Address, names of partners/ Directors.
2. List of similar projects (similar to the project for which this advertisement is given) or list
projects carried out during last three or five years, with their cost, name of the architect,
name of the owner, etc.
3. List of the construction equipments possessed by the company and technically qualified persons
employed with the company.
4. Income tax clearance certificate.
5. Solvency certificate from bankers.
On receiving the applications on the date given in the advertisement, scrutiny is made and a short
3list of five or seven contractors that is drawn out. A care should be taken while selecting the

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contractors that they are of more or less of equal standing from the point of view experience,
establishment, financial strength etc. and each one of them should be acceptable to the owner.
Papers that are included in a Tender document.
1. Letter of Offer:
This letter is drafted by the architects office. The contractor is supposed to read it carefully and
sign it as a mark of total agreement to it. The contractor shall make no change in the text of the
letter. This letter of offer is an important commitment by the contractor. A specimen letter is given
in Appendix. Please read it carefully and understand its significance, point by point. There are FIVE
clauses in the letter.
(i) In the 1st clause, a reference is made to the tender notice or a letter of invitation as per the
case. This reference has a legal significance.
(ii) In second clause, the contractor commits that he has studied drawings, specifications, articles
of agreement and conditions of contract. All these shall be included in the tender document by
the architects office, so that the contractor can carefully read them, before giving the tender
offer. Drawings and specifications are prepared in the architects office for each work. Article
of Agreement and Conditions is a standard document used on every job. It is prepared by the
Indian Institute of architects. We shall study this document in the following chapter. My remark
for you is that, it is a very important and useful document, which you shall study carefully.
(iii)In this clause, the contractor commits that he knows the situation at the work site and he is
ready to work at the rates given by him, under the present site conditions.
(iv) These are the clauses, regarding E.M.D. It says that the deposit is without interest. It also gives
period of deposit and further states authority to the architect to forfeit E.M.D. under certain
conditions.

2. General Conditions and Special Requirements of the Work:


These general conditions are usually standardized in every office, as they are applicable to almost all
the works. In addition, there could be some special requirement of a job. Such few conditi ons are
added as special requirements of that job. For example, municipal tap water is available on all the
sites in a city. But if a particular site has only well water supply or some other source, you shall write
the conditions pertaining to that and add to the general conditions.

3. Specifications of Work and Materials


This also, you should standardize in your office so that it can be added to the tender document. We
have discussed this in the previous chapter on specifications. In addition on a particular job, you may
have an unusual item of work, such as exposed brick finish, from the finish concrete or the
application of a material in an uncommon way or a new material in building. You should add the
specification of such special items carefully to the text of the tender.

4. Bill of Quantities
This is an important core paper of a tender. Your quantity surveyor should work out correct
quantities of all the items of work. I shall like to draw your attention here, that, to write an
abstract of an item is an important matter. If you forget a word or a clause in the abstract, which in
fact is required to complete that particular item, it becomes an extra claim or variation. The
contractor can demand more money. So be careful! The client has to more for your inefficiency,
which is not creditable to you.

5. Drawings
Drawings shall be added to the tender to give sufficiently a clear idea about the proposed building. The
drawing shall explain the type and the extent of construction, i.e. overall dimensions and number
of floors, height of floors etc. It is not necessary to supply R.C.C. detail drawings at this stage if in the
Bill of Quantities item of reinforcement steel and concrete are separate. In the case of a structural
steel work, the detailed fabrication drawings are not required to be given at this stage, if item of
fabrication work is to be quoted on unit weight of structural steel. But details of items in the form of
drawings should be given at this stage only which cannot be fully visualized only with description, such
as decorative grilles etc.

6. Articles of Agreement & general Conditions of Contract


A reference to this document is made in the Letter of Offer explained to you earlier in this
chapter. A copy of this shall be added in the blank Tender Form, particularly when it is a public
tender. This is a printed document available with the Indian Institute of Architects. We shall study
more in detail about it in the following chapter.
Procedure of calling tender:
Tender document shall be prepared by the architects office. All the copies prepared shall be
serially numbered on the cover page. Copies of tender are sold to the contractors from the
architects office. The contractor goes through the tender papers and taking into consideration the
specification and condition etc. given in the tender, fills in the rates of every item of work against
the abstracts in the bill of quantities. Multiplying by the unit rates to the quantity cost of each
item is arrived at. The sum, total of cost of all items will give the amount of quotation of the
tender.
There could be two or three schedules in a Tender. Such as civil work, plumping work, site
development etc. All these added together will give the final amount of tender offer. Filled in the
tender is then put into an envelope and the envelope is sealed. This sealed envelope along with the
Earnest money deposit Amount in the form of a Cheque or a demand Draft as per the instructions in the
tender document is to be submitted on or before the time and the date given in the tender. These
conditions are usually given on the cover page of the tender.
Earnest Money Deposit:
A contractor along with his tender quotation pays a certain amount as a deposit to show that the
contractor is earnest and sincere about this business with the owner. Further it means, that when
called upon to complete the business, he should not shirk or avoid. we define earnest money
deposit as under.
A note on Earnest Money Deposit:
The amount of deposit asked along with the filled in tender or a rate quotation is called an earnest
money deposit. This amount shall be placed with the office of the architect, without any interest
payable on it. The deposit amount shall not be held for more than a month from the date of a
5receipt of the tender. The deposit shall be refunded in full to the unsuccessful contractors; no
sooner the decision is made on the tenders received.

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In case of successful contractor to whom the work is awarded, this earnest money deposit becomes
a part of security deposit and continues to be with the architects office till the virtual completion
of the work.
On virtual completion of the work, the contractor shall apply to the architects office for the
refund of the amount. This amount is refunded in full by the architects office directly to the
contractor and intimation in writing is given to the owner.
In case of the contractor who is unable to commence the work when called upon to do so, this
amount of E.M.D. is forfeited and is credited to the owner as a part of compensation for the
hardship the owner has suffered.
How Much Time should be given to the Contractors to fill in the tenders?
Time and date for submission of filled in tenders shall be one and the same to all the contractors. A
sufficient time shall be allotted to the contractors to fill in the rates. The contractor has to visit the
site to study the site conditions under which he has to work. If the site is at a distance he has to make
enquires for the availability of material and labour nearby. He has to discuss the rates with his
sub-contractors and other agencies before he could arrive at the item rate.
Instruction on the Cover Page
On the cover page of the tender document, instructions shall be printed regarding - 1) the time, date
and place where the filled in tender shall be submitted. 2)How much shall be the Earnest Money
Deposit Amount to be submitted along with the tender and in what form, that is by a cheque or a
demand draft and payable to whom the architect or the owner.
Receiving of Filled in Tenders
As a good practice, the filled in tenders should be received in the office of the architect. In case of the
institutional clients, as a matter of convenience, the filled in tenders may as well be received in the
office of the client. But in either case, the decision shall be made well in advance, and accordingly,
the instructions regarding the submission of tenders shall be printed in the tender notice and on the
cover page of the tender form.
Opening of Tenders
The time and the place of opening of the tenders shall be informed to the contractors while
receiving the tenders. The contractors or their representatives may as well remain present at the
time of opening of the tenders. The architect SHALL NOT OPEN the tenders in the absence of the
owner.
Scrutiny of Tenders
A detailed scrutiny of all the tenders received is done by the architects office and a scrutiny
report is submitted to the owner recommending a contractor for the work. In case of public tender, we
have experienced as many as twenty-three tenders received for a project. It becomes a time taking
task to scrutinize so many tenders. You should be methodical in your work.
(i) Check whether the E.M.D. amount is submitted as per the conditions of tender. If NOT
submitted, then the tender offer should be rejected forth with. If the deposit amount is asked
by cheque then the cheques shall be deposited in the bank immediately. If the E.M.D. cheque is
dishonored by the bank for any reason, such a contractor shall NOT be considered for the work.
Furthermore, such a contractor shall not be considered for any work in future or should not be
recommended to others. A specimen letter is given in the Appendix. (13J).
(ii) Covering letter
a. Read carefully covering letter and other enclosures, if any. Often contractors in case of Public
Tender are tempted to enclose business profile of their contracting company, particularly when
6 the contracting company, particularly when the contracting company is stranger to owner/

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architect. It is worthwhile contracting owners or architects to crosscheck the information given in


such a profile.
b. The covering letter should have no conditions suggested in it, which will affect the work or the
cost of work. Usually, these conditions or rebates are linked with the supply of building
material or water for construction and supply of electricity for work by the owner on the site.
Often contractors ask for advance against building material brought on the site. As a good
practice, conditions regarding all these points should be mentioned very clearly by the
architect himself in the text of the tender document.

(iii)The next step in scrutiny of tenders is to check the calculations in the schedule of rates. These
days, all the calculations are made by the calculators and therefore, there are hardly any
mistakes in multiplication or totals. Even then, it will be proper for the architects office to go
through carefully through all the pages of the schedule of rates, which is also referred as
contract bill. If arithmetical mistakes are noted, these should be corrected and the corrected
total should be taken for the consideration for the choice of contract.
After when the tenders are opened, in any case contractor shall not be allowed to enter the
missing item-rate. If selected for the work, the contractor shall carry out that particular item
free of cost.
(iv)Rebate:
After arriving at the Total of Schedule of rates, sometimes a contractor offers a rebate at
certain percent of the total amount by writing a note to that effect. If the rebate is offered
without any condition, it should be considered and the total should be reduced accordingly. If
there be any condition attached to the rebate, then such a rebate is unacceptable.

(v) Comparative statement:


Having completed arithmetical check, correcting totals and applying rebate etc., a statement
should be written, name of contractor and the corrected total of tender offer against the name in
an ascending order of the tender offers, starting with the lowest offer in first place and the
highest offer to the last place.

Scrutiny report of tenders


After a careful scrutiny of the tenders received, the next job for an architect is to recommend a
suitable contractor to the owner for the work. This is called a Scrutiny Report. Please bear in mind
her, your role, as an architect is that of an advisor. You should be true to your conscious and
recommend a contractor keeping the interest of the project uppermost in your mind. You should be
impractical and your advice should not be influenced by any one from amongst the contractors or
owners. Having given a sincere advice, the owner, May he be an individual or an institution, may
accept your advice totally or may think otherwise, you should not be disturbed. This is what is said
Disinterested Service to be given by an architect. Your role or duty is to get the best possible work
done from the contractor chosen and selected by the owner.

7But remember, when an architect is knowledgeable and upright, a well-intentioned owner will
always go by the advice of an architect.

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On writing a scrutiny report


The architect shall give a report in writing to the client, on the scrutiny of the tenders received for
the project. In his report, the architect should be logical in his statements. He should give step-bystep reasoning, for NOT considering offers of contractors that are NOT suitable. If the architects
office has worked out an estimate of cost of construction of the project, using the same BILL OF
Quantities, then the tender quotations nearby the Estimate shall be given detailed consideration
for selection.
The architects scrutiny report shall be submitted to the clients office in an enclosed envelope. The
envelope shall be opened by the Secretary or Chairman of the Committee only. The scrutiny report
is a confidential document. It is expected to be discussed only in a committee meeting. Members of
the committee, in good faith, are not supposed to make known the architects remarks about the
contractors to anyone outside the committee.

After receiving the owners instructions regarding the choice of a contractor for the work, the
Architect has to proceed further:1. During the process of selection of a contractor for the work, if certain points have come up,
which need clarification from the contractor who is to be selected or his definite willingness to
accept work etc. is required before he could be finally select for the work; a letter is written to
the contractor by the architect, which is called a LETTER OF INTENT. In this letter, the
architect on behalf of the owner informs the contractor the intention of the owner to give the
work to him provided he is willing to do or accept in writing the verbal assurances that he
might have given during the process of selection. The contractor is asked in the same letter to
inform his acceptance by return post. On receiving an affirmative reply in writing from the
contractor, the architect issues a WORK ORDER on behalf of the owner to the contractor.
2. It is not always necessary to issue a letter of intent. If there are no additional and important
points that have come up during the process of selection of a contractor, it is also suitable to
issue a WORK ORDER and letter of intent may not be issued. Minor conditions also can be
included in the work order itself. A specimen of work order is given in the Appendix.
3. The contractor shall accept the work order and inform in writing his acceptance to the
architect immediately by reply post.
4. Only on receipt of the Letter of Acceptance from the selected contractor, you may say the
tendering process is complete. Only then the architects office shall refund E.M.D. of the rest
of the contractors.
5. A letter to unsuccessful contractors:
a. This kind of a letter helps create fair impression about your office amongst contractors.
b. A person presenting your letter to contractor helps you identify the contractors man and your
office can handover the cheque of refund of E.M.D safely to him.
c. If you have mentioned a time slot in your letter to collect the refund, it is convenient to all and
more particularly to your office staff. Your office clerk should be ready with the cheque at the
appointed time to hand them over, and the contractors need not bother your office all the
time.
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6. The process of selection of contractor. i.e. up to issuing and acceptance of work order shall be
complete within one month from the date of submission of tenders.

Work order
A letter issued to a contractor selected for the work, asking him to take up the work, is called the work
order.
1. On the instructions of the owner (Client), this letter is written by the architect, on behalf of
the owner to the contractor.
2. There has to be a reference in this letter to the tender or quotation submitted by the
contractor for the work.
3. The letter may contain a few additional conditions such as the date of commencement of a
work on the site or such conditions arising out of the discussions with the contractor during the
process of selection of a contractor.
4. The work order shall be included in the contract document and therefore conditions imposed in
this letter (Work Order) become a part of the contract.

Letter of Acceptance
On receipt of the work order, the contractor should send a Letter of Acceptance of the work
order, immediately to the architect.
With his, the procedure of calling tenders can be said to be complete. Now the architects office may
refund the E.M.D of remaining contractors forthwith.
A tender offer becomes ineffective
It is also important for an architect to remember that the tender offer becomes NO MORE BINDING over
the contractor under certain conditions.
1. Time period of the Tender Offer
This period is generally written as ONE MONTH from the date of submission of tenders. In some
special case, it could be more. This may depend upon the magnitude of the project or technical
intricacy involved in it, and also the reasonable time that may be required to study carefully the
tender offer received. There has to be a clear mention of this time period in the text of the tender. So
that the contractor is aware of this time period before filling in the tender.
If the client is unable to take the decision within this time period, then thereafter, the contractor is
not bound to accept the work order on the same tender offer. The contractor may come forward by his
free will or may refuse or may ask certain changes in rates or other conditions of the tender, which will
have to be discussed with him. Once the time limit is over, the owner/architect cannot with hold the
E.M.D. and has to be refund in full to the contractors.
Therefore, it is important for architecture to make a clear mention of this time period in the text
of the tender, and thereafter, observe this time period, and complete the process of scrutiny report
earlier giving enough time to the owner to make up his mind and to choose the contractor within
the time period. If your client is an institution, please remember, the decisions are not taken by an
individual, but by a committee. Certain procedure may be required to be followed, which it may
require time. Therefore, the timetable should be worked out properly before hand by the architect
9with the client so that the whole process of selection of contractor is completed within the time
period.

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2. Counter offer by owner


The tender itself is an offer given by the contractor to carry out a work, which is worded by the
owner through his architect. During course of discussion if the owner puts forth another alternative
method of contract for the same work, it is called a counter offer. This counter offer by the owner
sets the contractor free from legal obligations of his earlier tender offer. The owner and the
contractor may or may not agree on the counter offer, but the fact that an alternative is
suggested, the contractor is no more bound by the legal binding of his earlier tender offer.
For example, a contractor filled in an item rate tender for a work. Later if the owner suggests
carrying out the same work on cost plus percentage basis. This is a counter offer. The contractor has
a liberty to refuse the counter officer, if he feels so. At the same time, he gets away from the legal
binding of the earlier tender offer.

3. Death of a party
If the death occurs of either of the party before entering into a contract, than the tender offer is
ineffective and not binding on the contractor.
For example, an individual owner passes away suddenly during the tendering process. The
contractors who have filled in tenders are set free. But if death occurs of a Secretary or a
Chairman or a Director of a company who has invited the tenders, this does not hold good. The
tender process can continue and the contractors are not set free. Here, you have to understand
and appreciate that the death of an individual office bearer, the existence of a Society or a Trust or
a Company is not affected.

4. Withdrawal of Tender
Withdrawal of tender process can be from the owner or from the contractor. The owner can stop
tender process any time before issue of Work order to Contractor. We have disc ussed earlier in
this chapter Clients decision to abandon the work. From the beginning you shall take enough
care so that in case of withdrawal of Tender process, no legal troubles shall start against your
client and yourself as an architect. However, please remember, this is not a desirable situation.
Withdrawal by Contractor: Contractor on reading the tender notice or a letter of invitation to
tender has all his freedom NOT to respond to the call. He can purchase a tender and may not
submit it, if he is unwilling. This means he can withdraw from tendering process without any
obligations or legal hustle. But after submitting filled in tender and the E.M.D., the contractor
cannot withdraw from the process. If he does he loses his E.M.D. and the owner may take him to
the court of law for the compensation if he has not accepted the work order.

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QUESTIONS
Two marks:
1. Differentiate open and closed tender?
2. What is meant by calling for tender?
3. What are the contents of a tender notice?
4. What is Earnest money?
5. What is security deposit and how much is it?
6. What are the types of tender?
7. What is the significance of EMD?
8. What is Mobilization advance?
9. What are the guidelines for calling an open tender?
10. What do you understand by award?
11. Explain any two ways of inviting tenders.
12. What are the contents of a tender document.
13. Explain the advantages of open tenders?
14. What do you understand by the term EMD? Explain its importance.
15. What are the guidelines for calling closed tender?
16. What are the advantages of inviting limited tenders?
17. What is the purpose of insisting a tenderer to pay EMD along with his tender?
11
18. What are the contents of a tender notice?

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19. Differentiate between open and closed tenders.


Sixteen marks:
1. The practice of selecting suppliers through tenders may result in the wrong supplier being
selected - Evaluate the statement.
2. Explain the procedure of issuing and selecting suppliers through tenders.
3. Explain the various types of tenders available for building construction and analyze their merits
and demerits.
4. Explain how tenders are called for and a contract is settled.
5. Compare and contrast the different ways of inviting tenders stating where each type is best
suited. Establish the advantages and disadvantages of cost plus percentage tender. What is
penalty clause?
6. What are the contents of a tender document? What is one part and Two part tendering?
7. Elaborate on the procedure to be followed at the time of opening a public tender. (8)
8. How do you scrutinize a tender document before recommendation. (6)
9. Differentiate between private tender and public tender. (8)
10. Under what situations, as an architect, you would recommend two part tendering. How would
you go about selecting the suitable contract through two part tender.
11. Explain in detail the process of tendering, from the issue of Tender Notice to that of signing a
contract agreement.
12. What are the new trends witnessed in construction industry with regards to the tendering
process. The traditional role of an architect undergoing a change. Do you agree or disagree?

UNIT

II

CONTRACT
Therefore, there is an Act Indian Contract Act of 1872 to regulate the agreements or
undertakings in business.
Every time a contract need not be a written one. It could be an oral or often an implied one. For
instance, you stop an auto rickshaw, tell him the destination, and enter in it and the auto driver
flags down the meter as a mark of agreement. He starts the vehicle to reach you to your
destination. This is an example of an implied contract between the passenger and the auto driver
from our everyday life. The passenger shall pay the fare only when the auto driver reaches him to his
destination and not otherwise.
Let us learn more about the contract in terms of law. In order to be good in Law. A contract must have
the following five elements present in it.

Sr.
No

12

Elements

Pertaining building contract

An offer

Tender offer by contractor

Acceptance

Work order

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Contract to be signed by competent


person by free will and consent.

Rightful owner of land on which


buildings is to be constructed and
authorized person as contractor, as
other party to contract.

For lawful consideration

Amount to be paid to contractor.


Contractors bill for the work done.

For Lawful Object

Construction to be lawful, (approved by


local authority).

For making a good cup of coffee, not a black coffee, you must have water, sugar, coffee powder, milk
and heat to boil. These are the essential elements. If anyone cut of this is not available, then the
mixture made cannot be called a good coffee. Similar is the situation in Law of a contract. It will not
hold good if any one of the elements can be proved to be absent. Therefore, as an architect, you
shall be careful to see that each of the elements is legally sound.
1. An Offer
We have studied the process of calling tender. In the contract document, there shall be a positive
reference to the tender and tendering process. Therefore, the contractors letter of offer, which is
included in the contract document, we have seen that there is clear reference in the first
paragraph to the Tender Notice a letter of invitation for Tender. It is further recommended that a
copy of TENDER notice or a copy of letter of invitation for tendering shall be included in the
binding of the Contract Document.

2. An Acceptance
Work order is an acceptance by the owner, to the tender offer given by the contractor. We have seen
that, on receiving written instructions from the owner, the architect issues a work order on behalf of
the owner to the contractor. To show that this element is observed in the process, a copy of work order
shall be included in the binding of the contract document.

3. Contract to be Signed by a Competent person


It is very important to remember that this contract for the construction of a building is between
the owner of land one part and the building contractor on the other part. The architect is NOT a
party to contract. The architect has to draft the contract properly. Therefore, the architect has not
to sign the contract at all. However, if any printing mistakes in the document are noticed, those
shall be corrected on all the copies by the architect only, before signing of contract by the parties.
The architect shall put his signature at every correction. Parties to the contract shall never alter or
contract the text of the contract.
The two parties to the contract are the owner and the contractor. Let us see who is the competent
person to sign as an owner. Consider a private or an individual client who has to construct a
bungalow for him. The architect shall see from 7/12 extract or property card who is the owner of
the land. At times, the plot is purchased in the name of wife or son or some other close relative,
for some other considerations. Sometimes the wife is a bonafide member of a housing society and
the leaseholder of the plot. In such a case man of the house, head of the family, husband or father
may come forth to sign the contract, saying that he is going to spend money for construction or he
13
is the KARTA of the family. It would be wrong to sign a contract by any other person other than a
person in whose name the land is held, or who is a bonafide member of a housing society.

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In case of a Trust, co-operative societies and such institutions, a Secretary or a Chairman shall sign the
contract. In case of Companies, an Executive Director or a person expressly authorized to execute
the contract shall sign. In all cases, there shall be a resolution passed in the Executive committee or
Board of Directors authorizing the person to execute the contract.
The other party to a contract is a contractor. Here again, the contractor could be a Proprietary
Concern, a Partnership company, or Private Ltd. Company. Since the Proprietary concern is owned
and controlled by one person, he shall sign the contract. In case of partnership, all the partners
shall sign the contract. In the absence of all other partners, one partner can sign provided there is
a letter of authority in his name, signed by all other partners. This letter shall be included i n the
contract document. Similarly, in case of a Private Ltd. Co., an authorized signatory or an Executive
Director can sign the contract.
Except in case of an individual or a private owner, both the parties to the contract, the owner as well
as the contractor needs to have a rubber stamp of the Post of Designation and name of the
organization under their signature.
By free will and Consent
Another important point you shall note is the parties to contract shall sign the contract with free
will and consent. Suppose, an agreement to sell a property is executed under the threat. It could
be ineffective, provided it could be proved in the court of law that the signature was made under
threat.
4. Lawful Consideration
Consideration offered in the contract shall be lawful. Consideration means payment in cash or kind
for the work done. A mother says to a child if you do this for me I shall give you a chocolate.
Here, chocolate is the consideration for the work a child is supposed to do. In a building contract,
the contractor agrees to construct a building for which the owner agrees to pay him the contract
amount. This is a usual form of agreement. But suppose the owner proposes to hand over a piece of
land or wealth in some other form as a payment or a consideration to the contractor and that
wealth itself is not legally owned by the owner or has some legal hitch, then it is a unlawful
consideration. In such a case, the contract itself is BAD AT LAW and does not hold good.
5. Lawful Object
The object of a contract shall be lawful. Suppose, there is a contract to supply goods. But if those
goods are contraband goods. Then the object of a contract is not lawful. Therefore, the contract
becomes null and avoid. In case of the building contract, to construct a building is the object of
the contract, and it shall be lawful. The plans of the building shall be approved by the Authorities
concerned. The land on which it is proposed to be constructed shall be owned by the person who is
a party to the contract. If knowing or by mistake, the owner directs a contract to construction on a
land not belonging to him, this becomes unlawful object, and the contractor gets away from the
legal binding of the contract. The contractor can as well file a civil suit for the compensation from
the owner.
Witness to Contract
While signing contract document, the signature of a witness is also necessary. Responsibility of a
witness is restricted to identify a person. That means a person signing a contract is genuinely the
same person and NOT an impostor. For that, it is expected that, the witness shall know the person who
is signing the contract. The witnesses also have to say whether the signatures were made by free will
or under threat, in case asked in the court of law. The witness is NOT responsible for the text or
contents of the document.
Indian Stamp Act of 1899
Under the Act, a contract shall be executed on a stamp paper of appropriate value, as prescribed
by the rules under the Act, from time to time. Sale of stamp paper is a source of revenue to the
Government. The stamp duty is likely to be revised by the Government. Therefore, one has to refer
14
prevailing Rule before purchasing stamp papers. Value of stamp papers is related to the contract
amount.

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In case of dispute, unstamped contract papers cannot be admitted before an Arbitrator or a Court
of Law. Therefore, it is advisable to sign the contract on the stamp paper. Most of the building
contracts in private practice are carried out and completed smoothly without serious disputes. In
very few cases, disputes are referred to the Arbitrator and Civil Court. Taking the advantage of the
probabilities, usually a contract is executed on a stamp paper of lesser value. In case, if one has to
a course of law, one will be required to affix additional stamps of proper value along with the
penalty.
Contract Document
A contract document is the most important document in connection with carrying out of the
building construction. It is necessary to have a contract in some form or the other. It could be only a
verbal one or it may consist simply of a Tender and a letter of acceptance. But better the form; the
fewer are the difficulties in carrying out the work.
The forms of contract in the Government Departments are different. If you are working in any
Government Department, you will have to adopt that form of contract, which is used in the
Department.
The form of contract agreement we shall study is the one issued under the sanction of The Indian
Institute of Architects. It consists of- i) Articles of Agreement and ii) general conditions of contract
A contract document shall consist of the following papers:1. Copy of Public Notice or Copy of Letter of Invitation.
2. Copy of work order
3.1.Letter of offer by contractor
3.2.Articles of Agreement
3.3.General conditions of contract
3.4.Appendix
4.

Specifications of work and material, reference to standard specifications, special or


additional conditions drawn up by the Architect for that particular job.

5. Bill of Quantities [contract Bill]


The same is referred as schedule of Rate as the item rates are written on it, which are
approved and accepted by the owner.
6. Contract Drawings
Drawings sufficient to indicate the work to be carried out. (This needs not be a Working
Drawing in case of item rate tender).
Before Signing of Contract
Contract document shall be properly understood by both the parties to contract before signing it. It
is for the architect to explain the contents of it, in short, to the owner. Both, the owner and the
contractor agree to give authority to the architect to properly administer the Building contract.
Both of them agree and accept the architects supervision on the work. Hereafter, the architect is
owners representative on the work site, and the contractor agrees to carry out the construction
under the architects guidance and supervision, as per the terms and conditions of the contract.
Hereafter, the owner shall express his views about construction, not directly to the contractor but
through the architect. The contractor shall not try to by-pass the architect and to take the
instructions regarding building construction or ask for the payment directly from the owner. The
owner shall not entertain any request for payment from the owner. The owner shall not entertain
15
any request for payment from the contractor if it is not certified by the architect. Both of them by

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virtue of this contract appoint the architect as an authority to administer the building contract. If
this discipline is observed by all, I am sure the building construction shall be a happy experience.
The architect is now charged with a heavy responsibility. He should always remember that the
owner is building by spending his own money. Therefore, he should respect his aspirations and
expectation about the building. Ii is his duty to give the owner is sincere advice to the best of his
abilities and to safeguard the interest of the owner. Finally remember it is owners wish; it is
owners property.
Appendix in general conditions of contract
Before signing the contract, the appendix shall be filled in by the architect, with consent of both the
parties and in their presence. The architect should explain to both the parties, the relevant clause
and the decision should be taken mutually.
Owners consulting engineers
I have experienced many a times, particularly in the case of an Educational Trust, interference
from the owners side in administering a contract. Often there is an honorary consulting engineer
appointed on the building committee. Usually, such a person is a retired Government Engineer
either from Railways or P.W.D. Having spent entire career in the Government department, most of
them have no information about the private architectural practice. They do not care to read and
understand the contract document, which is different in the text from the one used in the
Government works. Such consulting engineers feel that they are supreme and hence, the conflict
arises. It would be in the interest of the work, if such a consulting Engineer remembers that an
architect is the owners representative on the work site and not a contractors man. He should
speak with the architect about the building work to suggest him or to draw his attention to and not
contradict the architect or try to overpower him. The architect should also keep an open mind to
the suggestions from consulting engineer. Sometimes, the engineer may have practical experience
of work site. Most of the time, the engineer would be senior to you in age. You should always be
polite in conversation, but need not be submissive on every point. It is always good to learn from a
knowledgeable person. That should be your attitude all the time in your life. At the same time,
remember you are the architect, responsible to the building committee and shall not be carried
away by an individuals opinion.
Now about the works of individual clients. I feel it is the sign of a good culture of an individual or a
good setup of mind that, having appointed an architect one should go by his advice. If you trust
someone more than your medical consultant, it may not be suitable for your health. Unfortunately,
very few individual clients have such well-cultivated mind. I always preach an individual owner, a
private client that,there is no one else except both of us who are really concerned about your
project. There may be several suggestions from many people around you. Please feel free to
discuss with me the suggestions. We shall adopt if found suitable. But please do not be carried
away or be disturbed by the comments of passers- by. Because he is not responsible for his
comments or suggestions.
I remember, a father-in-law of my client, for whom I had designed a bungalow, was a retired
lecturer from an engineering college. He used to suggest and even insist the contractor in my
absence to do something else on the site. It was a big problem for me to protect my design from
such a quack. On the other hand, a surgeon told his wife and other family members, for whom I
was doing his Bungalow; we have had enough discussions with our architect he said now do not
listen to the comments of others that may create confusion. When you visit the construction and if
you have anything to say, say it to the architect and not directly to the contractor. It was a
pleasant experience to all, including the contractor, to construct that Bungalow.
DIFFERENT TYPES OF CONTRACT
Now we shall study the different types of Tenders. The terminology is applicable to the types of
contract as well.
16
1. Item Rate Tender / Contract

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This is a type most commonly used for big as well as small building projects. After finalizing the
working drawings, quantities is prepared mentioning quantities of each item against an abstract of
an item. This schedule of quantities is then issued to the contractors for filling in item rates. Thus
on the basis of the same and on the equal information, the Item Rate Tenders are invited from the
contractor.
A) This is a standard and suitable method for a big as well as for a small building project.
B) Rate of an item is the commitment in this form of Tender/Contract.
C) This gives a freedom to the owner and his architect to change the details of work during the
construction, as he has a liberty to increase or decrease the quantities of any item of work.
without vitiating the contract
The only disadvantages in this form of contract are the uncertainty of the final amount of the cost of
construction. Usually, it is observed that there is a difference in the contract amount, i.e.
estimate and the final bill of the contractor. If the final bill is much more than the contract
amount, i.e. estimate, then it may sometimes, pose difficulty for the owner to arrange for the
additional funds. This creates displeasures between the owner and the architect. To keep this
possibility to the minimum, you as an architect should take at most precaution. i) You should work out
quantities and estimate preferably from working drawings, as accurate as possible. ii) During the
course of construction if there is a change in the work, which would increase the cost of work, it should
be notified in writing to the owner from time to time.
2. Lump Sum Tender and Contract
This method is more suitable where the owner requires a fixed commitment of investment for
construction of a project. To overcome the problem of cost overrun, which we find in an item rate
contract, this method of contract shall be useful. This is suitable for the construction of buildings of
a simple nature and with no possibilities of additions or alterations during the course of
construction. One may find it suitable for a repetitive work.
Essential Points to be Observed White Calling a Lump Sum Tender
1. Work to be carried out should be very clearly shown by means of drawings
Plans, elevations, sections and all relevant details, including a schedule of reinforcement in case of
R.C.C. structure and fabrication drawings in case of a structural steel work, in short, a complete set
of working drawings should be supplied to a contractor to work out the cost of construction. Minor
details of railing, grilles, etc. should also be included in the set of drawings, if they are required to
be included in the construction cost.
2. Specifications
Materials and work specifications shall be included in the tender. A list of finishes such as floor
finish, plaster finish, dado, colors, paints etc. everything shall be clearly indicated on drawing and
supplemented in words. So that the contractor will be able to work out correct quantities. It is
convenient to give a list of approved materials.

3. Plumping and Sanitary fittings


If the services are also to be included in the lump sum tender, than a plan together with the
specifications shall describe the plumping and the sanitary work. One should specifically mention the
size, colour and make of the sanitary fittings, the diameter of a material and the make etc. of waste
lines and sewage line, underground lines. It is proper to give a plan of drainage line including inspection
champers and up to the disconnecting chamber (Intercepting chamber) and to include this work in
the lump sum tender.
17

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Where municipal sewage lines are not available to a site, a septic tank shall be constructed, and it
shall be included in the lump sum tender. However the architect should not forget to give a
working drawing of septic tank, if it is not ready-made to be used.
4. Electrical Installation
If the lump sum cost is to include an electrical installation, you should indicate, the outlet
position, the control switch board positions, the positions of D.B.M.C.B., the electrical meter
position, etc. clearly on the drawing. The specifications should give details of wire, switches and
accessories, control panel etc. You should also specify whether it shall be a concealed wiring or a
surface wiring. It is convenient to include in the lump sum tender, an electrical installation up to
and including the main switch electrical meter and cupboard. Bringing an electrical supply up to
the electrical meter shall be separate job, which may not be included in the lump sum tender.

5. Water supply
Water supply system within a building can also be included in the lump sum tender as it can be
clearly indicated on the drawing and can be described in the specifications. This shall include an
overhead water storage tank, a ground tank or an underground tank. In case of a ready-made tank, it is
necessary to specify its make, capacity etc. while it is necessary to supply a working drawing, in case
of the tank is to be constructed on site. The drawings and the specifications shall include a diameter
and a class of G.I. pipe line to be used in the work. The water supply may require a water pump, which
has to be specified properly.
Source of water supply to a property could be a municipal water supply or owners own
arrangement such as well water or water lifted from nearby lake etc.
Uncertain items of work
The uncertain items mean the items, which cannot be worked out in details in terms of quantities
and cost at the time of floating a lump sum tender. It will not be fair to include such items in the
tender. It could be a reason for dispute and displeasure. To cover an uncertainty, a contractor may
consider a higher cost for a work. Then it is a loss to the owner. On the other hand, if it goes
beyond the expectation of a contractor in expenditure, it may have a bad effect on his
performance.
Work below ground level
To be strictly theoretical, the list of uncertain items of work will include the foundations of a
building or work below the ground level. The depth of excavation cannot be predicted. A trial pit
cannot be always representative of all the area of a building. The depth of excavation totally
depends upon meeting desired strata. Therefore, the depth of excavation varies from column pit to
pit. If the variation in depth is not much and yet well within the specified depth, then such a case
may be suitable for the lump sum tender. Sites with slope or with changing strata are really not
suitable for including foundation work in the lump sum quotation. There may be a big difference
between assumptions and actual. It may prove unfair to either of the parties to contract.

CONTRACT DOCUMENT
Supervision of work
Supervision of work is an important duty of an architect from the practical point of view. You shall
be good at designing of a building. It is equally important for you to give an effective supervision
18
on the construction. It is not expected of you to be on site all the while. Even then you shall have
full control on the project. For that you must be well versed in your responsibilities and authorities

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as well. In government department, executive powers are not with the government architect.
There are engineers of the department for that purpose. But in private practice, it is not so; and it
shall NOT be so. Owner engages an architect for a project; and the architect shall not lose hold on
the project.
As per code of council
The council of architecture has kept this role of Construction Manager as optional. On big
projects, owner is supposed to appoint a separate agency to supervise the construction work. But
there is more number of medium and small construction works where perhaps it is not suitable to
the owner to engage one more agency to supervise the construction. If a clerk of works/ site
supervisor is appointed to assist the architect, reasonably effective supervision on construction is
achieved. Articles of agreement and general conditions of contract as prescribed by the I.I.A. shall
be used for signing contract, which gives an architect an additional authority that is required to
work as a Construction Manager.
Architect as construction manager
A practicing architect is in a way a Construction Manager of a project for which he has been
commissioned by the owner to design. He being the owners representative has to see that building
project is executed under his supervision and guidance per the conditions of contract signed
between the owner and the contractor. He has to oversee quality of materials and the workmanship
with the help of the clerk of works (in some cases mare than one person) appointed for the
project. He shall see that the project is carried out as per the design drawings, working drawings
and specifications given to the contractor. The architect may be required to give further details
and decisions during the course of construction. He has an authority to remove any worker or sub contractor for his unsatisfactory performance, so that the quality of work shall not suffer.
The architect has to control the cost of the project by checking the quantities of works executed
and the item rates shown in the contractors bill for payment. The architect has to probe into the
extra item rates and rates for variation of items and judicially certify them for the payment. He
has to play a role of an Auditor for that matter. Over and above, an architect must keep a proper
liaison with the client. Keeping him informed regularly the progress of work on site and directions
and decisions given to the contractor by him (Architect). To discharge all this duties, an architect
has to visit the site frequently at a regular interval. He has to make a round and see for himself all
the areas of the project. He shall hold site meetings with representatives of general contractor,
sub-contractors, nominated sub-contractors, site engineers and clerk of works etc. In such a
meeting, he shall criticize under performance and delay in progress, unsatisfactory quality etc. But
shall not remain behind to praise a person for his good work. This motivates the team to do
better than before. He shall always talk of co0operation and co-ordination between different
agencies and sub-contractors and suppliers. He shall motivate the whole team for doing their
best.
When the contractor is doing his work sincerely and satisfactorily, the architect shall also go little out
of the way it insists upon the owner for making the payments to the contractor on time. Because
that keeps the contractors money rolling.
Study of contract document
Out of the three types of contractors an item rate contract is more commonly used. We have made
a list of components, generally included on a contract document in Chapter - XI. If it is a lump sum
contract, there shall be a slight change in the list of components. That also we have discussed in
Chapter XI. Common to both the types is the letter of offer given by a contractor to the architect.
(Please read a specimen given in Appendix 14.I). There are five paragraphs in the letter. Each of them
is an important commitment.
Letter of offer
In the 1st paragraph, there is a reference to the procedure adopted for this tender, i.e. invited or
Tender notice in newspaper dated etc. There is also a reference to the work, i.e. name
of the work for which this procedure of tender is made. The next item is about the type of tender
19
Schedule of Rates if it is an item rate Tender or Lump sum amount of Rs if it is a
lump sum tender.

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In the following paragraphs, the commitments made by the contractor are of immense importance
for the execution of project. Here, he accepts your authorities as an architect for the project. He
shall not raise claims on account of conditions on site. He shall accept your authority to forfeit
E.M.D. under certain conditions. The contractor also commits the time limit to complete the said
work.
This offer letter shall be signed by the proprietor, if the contracting company is proprietary, and by all
the partners if it is Partnership Company, names of all the partners shall be written by the
contractor. A rubber stamp of the office shall be used. All these precautions shall be taken to
restrict the possibilities of anyone backing out from the offer given. The other partners shall not
deny their legal responsibility.
In addition to the general Conditions of contract as prescribed by I.I.A. and which are available in
printed form, every architect may have a few additional clauses for a particular work, which are
called PRELIMINARY CONDITIONS. These shall be included in tender and in contract as well. While
writing out these Preliminary Conditions, one should avoid repetition of clauses that are included in
General Conditions, which are exhaustive in it.
To write out and to include the specifications of building materials and works shall be a volume of
work. There are standard specifications of building materials and works by I.S.I. specifications by
public works department of the Central Government and the State Governments. You shall be
familiar with at least one of them. Preferably you shall have a copy in your office library. In
preliminary conditions if you include a clause saying Where not stated otherwise, standard
building material and works specifications as laid down by P.W.D. Handbook shall be considered for
this work. This will reduce your clerical work and stationery. For the benefit of young architects,
starting their own practice, I have added in Appendix Preliminary conditions used in my office.
You should read them carefully and understand well. You shall copy them and suitably include in
tender and contract in your work. I shall draw your attention to some of the clauses.
Basic Rates of Material and Escalation of Prices (refe3r Appendix 14 II)
At the time of floating tenders, the architect shall learn from the market, the prevailing rates of
building Materials and include them in the list of Basic Rates. The advantages of this clause are;A. This provides a freedom of choice to the Owner and the Architect regarding the finishing
materials such as marble, ceramic tiles, mosaic tiles etc. without being unfair to either of the
parties to contract.
B. The owner can arrange to purchases the standard building materials such as Cement, Steel, and
Bricks etc. provided he could procure it at a cheaper rate than the basic rates and supply it to
the contractor. / The deduction for the material supplied shall be made from the contractors
bill at the Basic Rates only. The difference in price shall be saving to the owner. Educational
Trusts, Hospitals or even an Individual Owner may get a big discount or donation in the form of
Building Material. This clause is useful in such situations [Refer clause - owners right to supply
building material].
C. Price Escalation; during the period of construction, prices of material are likely to fluctuate. If
the price rise is marginal usually a contractor can absorb it. But if it is more, say mo re than 5
%, and then it would be unfair to compel the contractor to work at the same item rate. If the
price rise is very high, it may erode the profit margin of the contractor and may have an ill
effect on the quality of work. Cost of building material is a major component in an item rate
of work.
Therefore, if the escalation in building material is taken care of, the contractor faces no hardship
due to price of material. This arrangement I have found in my practice, works well. If not all,
20

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AR 2501

prices of major building materials such as cement, reinforcement steel, structural steel, bricks, floor
tiles etc. shall be covered under this clause.
The contractor has to produce bills of the material purchases to architects office. The architect
shall check whether there is a clear mention on the bill, of the site to which the material is
delivered. The date of the bill shall also match to the requirement of material on the site. The clerk
of works shall certify the arrival of material on the site.
This is only to ensure that the Purchase Bill of other sites is not put in to the account of your site.
Purchase Price- {Basic price + 5 % of Basic price} = Amount payable to contractor by owner.
[Basic price + 5 %of basic price] - Purchase Price = Amount payable to Owner by contractor.
In Government works, there is a certain formula to work out increase in an item rate and labour
rate due to inflation, which is rather clumsy. I do not recommend it to be used in private practice.
The printed booklet consists of:
1. Articles of Agreement
2. General conditions of contract and
3. Appendix
Articles of Agreement
The first page of the booklet of the printed matter or ledger paper is the Articles of Agreement.
This is printed in the form of Fill in the gaps. It is necessary to affix adhesive court fees stamps
of appropriate value before signing on it. Legally it is very important. One shall not sign first and
then affix stamps. Person signing the contract must realize and understand that he is signing on a
stamp paper. Alternatively, the text of Articles of Agreement shall be typed on a stamp paper of
the appropriate value. This stamp paper shall replace the printed first page of the booklet.
Purchase of stamp paper of affixing stamps is to be done by one of the parties to the contract,
usually the contractor. The contractor shall purchase a stamp paper and give it to the architects
office for further work.
Filling in the gaps in the text of the Articles of Agreement is very simple. Still you must remember the
following;1. The first line is the date - This is the date of signing the contract and not the date of tender or
any other date. In practice, the contractor can start the preparation on site or commence the
work on site on the strength of the work order received by him. Preferably the contract shall be
signed before commencing the work on site. With mutual good faith, it could be signed a few
days later as well.
2. Then comes the Name of the owner and his address (herein after called the owner). Thus, we
define the owner, the party to the contract. In case of institution, name of the person, his
designation and address of the office of institution shall be written.
3. The other party to the contract - The contractor is defined in the following lines. In case of a
proprietary concern, you shall write e.g. U.R. Nandi, proprietor of Nandi constructions. If it is
a partnership company, it is good to make all partners party to the contract, e.g. U.R. Nandi,
partner and all partners of M/S. Nandi construction co. Thus in case of a company, name of
the person his position, like partner, director etc. and address of the company shall appear.
4. Then follows the work WHEREAS the owner is desirous of .. Here you describe
the work. e.g. the owner is desirous of constructing a Building for a Hospital
on
.. Then the address of site.
21
5. Next to be filled in is the name of the architect and his office address.

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6. Please note in case of a lump sum contract, you should omit the word Bill of Quantities and
keep only working drawings and specifications in the text.
7. The contract drawings (refer definition on page No.232) shall be numbered, and shall be signed
by both the parties to contract. The schedule of rates included in contract - called contract
Bill, shall be signed by both the parties on the last page of the Bills.
8. Security Deposit: E.M.D. given along with the tender, along with additional installment if asked
for, is now termed as Security Deposit. This security Deposit shall remain with the Architects
office and shall bear no interest. It shall be refunded to the contractor on virtual completion of
the work. This amount of deposit is to be mentioned here in the Articles of Agreement.
The Para says it is agreed as follows. This sets out the obligation of each of the parties. The
contractor has to complete the work as per the terms of contract and the owner has to pay the
contractor the contract sum or the sum as becomes payable as per terms of contract from time to
time. The Articles further define the Architect for this contract and appointing his successor in
case, it is need to do so. The intention is not to allow the contract to become void on account of
change of Architect. There is a point to be noted in this paragraph. Appointment of an Architect for
this work is entirely the owners choice. The contractor has given tender and entered into contract
knowing full well who the Architect, for the project is. If he had any grievances regarding the
Architect, the contractor in the first place should keep himself away from tendering for the work.
But now having entered into contractor if for some reason, the Architect is required to be changed;
it cannot be the owners choice alone. The contractor has a reasonable say in it.
Architects office shall make the contract document on stamp paper and shall prepare two copies of
it, at the same time.
A. Before signing the contract the architect shall allow both the parties to contract particularly
the contractors to satisfy themselves that the item rates in the contract Bill, in all the three
copies are the same as agreed upon in tender offer.
B. Then the architect shall explain the Appendix to both the parties and fill in the particulars.
C. Both the parties shall sign below the Appendix on all the three copies.

On Filling Appendix
At the end of the general conditions of contract is the Appendix. This shall be filled in on all the three
copies by the architect, after mutual consent of both the parties to contract.
Defects Liability Period
This is like a warranty period given by a manufacture. Any defect observed during this period in the
building shall be made good by the contractor free of cost to the owner. Defect liability period shall
be minimum one year, after virtual completion of the building, so that the building has
experienced all the seasons of the year. However, if the owner desires to extend this period it shall be
notified in the blank tender document.
Period of Final Measurement and Valuation
This is printed as three months after virtual completion and that is reasonable. After the contractor has
submitted his final bill and measurements, the architects office shall scrutinize and finalize all the
accounts of the project within three months.
Date of Commencement
In the work order, the contractor is given a certain period to mobilize the site and he is asked to
22
commence the work on site on or before a certain date. The date on which the work is started on site
shall be entered here.

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Date of Completion
The contractor has committed himself to complete the work in certain period of time in the letter of
offer. The date of completion shall be worked out accordingly and shall be entered here.
Agreed Liquidated Damages
There is a penalty for the delay in completion of the work. The owner having invested in building,
if he is not able to utilize the building on account of non-completion of work on time, he is losing
his returns on his total investments. To work out the per day loss to the owner, work out interest
at 70% p.a. on the contract amount for one year and divide the annual interest by 365 to work out
daily loss.
Loss per day - Annual interest on the contract amount at 70 % 365 days
This amount shall be rounded off to a suitable higher figure and shall be written in Appendix. The per
day amount shall not be too small; lest it will NOT serve the purpose. Often the owner is nor=t happy
with a small per day penalty, particularly in case of industrial or commercial projects. Then these
calculations shall be made with higher rate of interest mutually agreed, say 18 % or more. But
remember, to make it a balanced contract, you shall insist to apply the same rate of interest for the
delayed payment by the owner to the contractor. In that case, the architect shall correct the rate of
interest printed on all the copies of the contract, with a mutual consent of both the parties. The
architect shall put small signature there.
Value of Work for Interim Certificate
It is not practical to expect a contractor to complete the project and then ask for payment at the
end. The contractor shall be paid in between also. The contractor shall raise the Interim Bill or the
Running Account Bill (R.A. Bill) of the work done on site from time to time. Instead of raising a
monthly bill, it is more correct to set up a mutually agreed amount for the interim bill/certificate.
This amount mutually agreed shall be written here. As and when the contractor realizes that he has
carried out work worth that amount, he shall submit a bill along with measurements sheets and all
relevant papers to the architects office for the scrutiny and for issuing the certificate for the
payment.
This amount of bill can contain value of building materials brought on site such as cement,
reinforcement steel, bricks etc. if purchase by the contractor.
Usually 80% of the cost of unfixed material on site is included in the amount payable to the
contractor in the running account bill. This value of work for interim certificate shall not be too
small. Though the contractor will like to have it small. So that the contractor can keep his
investment lie in the project, there will be more number of interim bills in a given project,
occupying more of your time in scrutinizing them.
The owner shall not pay the contractor under any pretext, without a certificate for payment from the
architect. The owner shall not pay to the contractor any amount more than that is certified by the
architect, for the payment to the contractor.
In Case of Lump Sum Contract
Write here in Appendix as per statement attached. A statement shall be made stating stage of
work done on site and amount to be paid to the contractor at that stage.
Retention Percentage
Before commencing work on the site, a contractor is supposed to deposit 10% of the contract
amount as a security deposit with the Owner/Architect. When the project is of a big amount, the
amount of security deposit also is sizeable. The contractors working capital is locked up by giving this
security deposit.
Schedule of Quantities
23
In an item rate contract, the rate of an item is the essence to any extent, which will not vitiate
(destroy) the contract. This is not provided here to give you (Architect) a liberty to be careless

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about quantity surveying whiles preparing the tender and the contract bill. This is to give Liberty to
the Owner/ Architect to do alterations in design during the construction to some extent, which wills
obviously increase or decrease quantities of items.
The owner has a right (a) to increase or to decrease any of the quantities of item, (b) to totally omit
any item of work. The contractor shall not claim extras or damage on these grounds.
Contract Drawing
The drawing that is including in a contract document is a Contract Drawing. It is to be taken as
indicative. It shows dimensions, positions and type of constructions.
1. Contractors work shall not deviate from the drawing and specifications. Architects
interpretation of these documents shall be final and without an appeal. This is a very important
clause. Architect must know precisely what he wants as far as design is concerned and he shall
be confident about the technology. So that others may not over power him.
2. A) Errors or consistencies in drawing and specification shall be promptly brought to
the
attention of the architect, for the interpretation or correction.
B) Local conditions, which may affect the work, shall be also brought to the notice of the
architect.
C) If it is discovered at any time that the work is not as per the drawings and specifications, the
contractor shall correct at his own cost without claiming extra time or cost.
1.3 Large scale drawings shall take precedence over small scale drawings figured dimensions shall
govern. Any work done before the receipt of such details, shall be removed or corrected by the
contractor or adjusted as directed without extra cost to the owner.
[As a good practice, the architect shall give all the large-scale details well in advance. You shall not
take this clause as a license to delay your work.]
4. All drawings, bill of quantities and specifications and copies thereof, shall not be used on any
other work but shall be returned to the architect on the completion of work or the termination
of contract.
5. Bar bending schedule if asked for, shall be supplied by the contractor to the architect at least
fifteen days in advance before the fabrication of the reinforcement. [This is to give you a
sufficient time in your busy schedule, to examine the schedule carefully. Once you or the
structural engineer has approved the schedule, it is your responsibility about its correctness.
Contract Sum
The contract sum shall not be adjusted or altered. The contract sum can be altered only in
accordance with the express provisions of these conditions of contract. The architects
interpretation of these documents (Which includes drawings and specifications as well) shall be
final.
Contract Bills
The bill of quantities included in a contract known as contract Bills.
1. If there is no other mention in case of a particular item of work, then the quantities shall be
worked out (measured) as per the standard method of measurement of building works latest
issued by the Indian Standard Institute (I.S.I).
2. If the architect indicates as a particular mode of measurement for any item of work in this bill
of quantities, the same shall be followed by the contractor. (irrespective of standard mode of
measurement)
3. Any error in the description or in the quantities or the omission of item from the contract bills
shall not vitiate this contract. The errors shall be corrected and items omitted shall be added
and these items shall be considered as variations required by the architect.
Scope and Intent of contract
1. The general character and the scope of work is illustrated and defined by i) Specifications, ii)
Bill of quantities and iii) Contract Drawings. All these are included in the contract document.
2. If any discrepancy in or a divergence between the three above is observed by the contractor, he
24
shall give a written notice to the architect pointing out a discrepancy or a divergence. The
architect shall issue the instructions in regards to that Extent 8(2) under this clause, the

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architect is authorized to issue to the contractor further drawings, details and written
instructions regarding the said construction work.
3. The intent of a contract document is to include all the required labour, material, equipment
and transport etc. necessary for the proper execution of work.
Architects Instruction
1. Under the contract, the architect is expressly empowered to issue instructions to the
contractor pertaining the said work.
i) The contractor shall comply with the instructions of the architect.
ii) If such instructions involve variation, it shall be confirmed writing.
iii) If the instructions issued by the architect are not complied with the contractor within seven
days, then the owner may employ and pay other person to execute any such work, which may
be necessary to give an effect to such instructions. All the cost
incurred for such work
shall be deducted by the owner from any payment that shall be due to the contractor.
2. The contractor may ask the architect in writing, the clause of a contract under which a
particular instruction has been issued by the architect. The architect shall reply forthwith such
a letter. Obviously, you must be conversant with the General Conditions of Contract. (Purports
to be.. = appears to be ..)
3. All instructions issued by the architect shall be in writing. any instruction issued orally sh all be
of immediate effect. But the contractor shall confirm in writing to the architect within seven
days.
Facilities and Co-operations
The construction of modern buildings is a multidispensary work. The general contractor who is a civil
contractor has to co-operate with other contractors such as contractor for elevators,
airconditioning, electrical installation, plumping etc. This clause is necessary to make it obligatory for
the general contractor to co-operate with other agencies contractors.
Setting Out
This clause puts responsibility of accuracy of setting out of line out of building on to the contractor, as
per the drawing provided by the architect. The architect has to furnish the contractor an
accurately dimensioned drawings and information such as line of reference and correct levels etc.
Therefore, you shall be capable to produce an accurate centre line plan.
Contractors Visit to Site
1. The contractor is supposed to study the conditions at the site including access to the site,
distance, availability of men and material to the site etc. before filling in the item rates in the
tender. This clause is to prevent the contractor from making a claim for an extra payment later
on account of situation at the site.
2. Possession: The site is as if given in possession of the contractor to do the construction work as
per the contract from the date of commencement and up to the date of completion subject
to extension of time given as per the relevant clause.
3. Treasures: Any treasures coins or object of Antiquity found on the site shall be handed over to
the owner. Often such things are found in excavation.
Samples and Shop Drawings
Under this clause the contractor is required to submit the samples of all materials within sixty days
of signing the contract and not less than 120 days before its use in that particular item of work
taking place on site. The architect shall remember this clause and insist up on it. That will set the
contractor to make the arrangements well in advance and there will be enough time to place the
orders for supply of chosen and specified material. The clause further says that the dates of
submitting samples shall be indicated on Bar chart. This is very important. That reminds every one,
the architect as well as the contractor, the activity that should take place on a particular date to
be on time.
Progress Chart
Project management is much talked about these days. In fact it is nothing but methodic working of
25
a project. If it becomes a habit with you to work systematically in your everyday work, you are not

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far from Project Management. Only ting remains to learn about and adopt in your work, a couple of
tools like BAR CHART (progress chart), flow chart and Network Diagram etc.
This clause authorizes you to insist upon the contractor to produce a progress chart (bar chart). You
shall make copies of the same and keep one in your office and the other on the site. You shall refer the
chart every time when on site visit to check the progress of work on site.
Access for Architect to the Work
The opening sentence of this clause says Architect shall be the owners representative during the
construction period. This is one of the roles; the architect has to play in practice. The other roles
being, owners advisor, auditor and umpire. This clause gives an authority to the architect to visit
not only the work site but also places of work of sub-contractors for the inspection of work being
carried out there.
Architects Status and Decisions
There are about twelve points in this clause.
1. The Architect shall be the owners representative during the construction period.
2. The Architect shall periodically visit the site to see for himself the progress and the quality of
work and to determine in general if the work is proceeding as per the contract conditions.
3. The architect shall not be required to make exhaustive or continuous on site inspection to
check the quality or quantity of the work and he shall not be responsible for the contracts
failure to carry out the construction work as per the contract.
Often the owners have wrong expectations of architectural duties. This clause is important
from that point. It is for us to explain to the owner beforehand. As far as construction is
concerned, the responsibility of an architect is to give proper drawings and instructions to a
contractor. In spite of that if the contractor is unable to deliver the goods, it is logical to say that
the architect shall not be responsible for the contractors failure.
4. The architect shall inform the owner from time to time about the progress of work on the basis
of his visit to the site [while explaining clause 9.3 above I have suggested writing on Triplicate
Book. In that develop habit of writing an opening line about the progress of work on site such
as Concreting of footing is complete or Brick Masonry on ground floor is almost complete.
This is recording the progress of work. A copy of these instruction to contractor shall be sent to
the owner. There by the obligation of keeping the owner informed about- i) progress of work
and. ii) your instruction to contractor is fulfilled.
5. The Architect shall guard the owner against defects and deficiencies in the work of the
contractor, and for that he shall condemn the work, which is not as per the architects
instructions, in the form of drawings and specifications. [In such a case, the architect shall give
a written instruction to remove and redo the portion of work, which is not meeting the
requirements of the contract conditions].
6. The Architect shall have an authority to act on behalf of the owner only to the extent expressly
provided in the contract document. [The contract gives an authority to the architect to act on
behalf of the owner only for the proper execution of the project and not beyond. It will be
beyond. It will be beyond the architects authority to promise someone to sale a portion of
property or surplus land of the owner etc.]
7. The architect shall have an authority to stop the construction work whenever such stoppage is
necessary to ensure the proper execution of the contract.
8. The architect shall be in the first instance, the interpreter of the conditions of this contract
and the judge of its performance. He shall side neither with the owner nor the contractor. He
shall use his powers under the contract to enforce its faithful performance by both the parties.
9. In case of termination of the architect, this contract shall not be vitiated. The owner shall
appoint another architect against whom the contractor shall have no unreasonable objection.
Any dispute in connection with such appointment shall be subject to Arbitration. [please refer
the explanation on ARTICLES OF AGREEMENT].
10. DECISIONS: The architect shall within a reasonable time make the decisions on all the claims of
the owner or the contractor and all other matters relating to the execution and progress of the
work or interpretation of the contract Document. The Architect is an umpire. Therefore, do not
be hasty in expressing your opinion. A layperson can make any statements. But when a
26 professional expresses his views, it is taken as considered opinion. Therefore, you shall express
your opinion within a reasonable time and not on the spur of the moment. You shall express

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your views only after referring the matter, text of the contract, drawings, standard
specifications etc. as needed by the case. But at the same time, you shall not take too long give
your decisions.
11. This clause also authorizes the architect to issue from time to time further drawings, details
and written instructions all the matters related to the construction of the project. A full list
from A to L is given in the clause.
12. DISMISSAL: If in the opinion of the architect, any person employed on the work by the
contractor or sub-contractor, is not competent or has misbehaved, the architect shall ask the
contract to dismiss him from the work. The contractor shall do so with an immediat e effect. A
person so dismissed shall not be employed again without a written permission of the Architect.
[The Architect shall use this authority if he notices bad workmanship-either due to lack of skill
required for the job or the attitude of a worker to ignore the instructions given by the architect
or the clerk of works. It is necessary to exercise this authority in the interest of the work,
which results into safeguarding interest of the owner, which is the prime duty of the Architect.]
Performance Bonds
The concept of security deposit is explained earlier in this chapter in the paragraph Retention
percentage. Earnest money becomes a part of Security Deposit. Amounts shall be agreed upon
mutually. The period of holding the deposit is also subject to mutual agreement before signing the
contract.
Clerk of works
The word CLERK may be misleading for some of you. The clerk of work is in fact a Technical
Person and is Supervisor of work on site. Architect shall insist on the appointment of Clerk of Works
particularly on the institutional works.
Contractors Field Organization and Equipment
This clause requires the contractor to appoint a Site Engineer in charge of the work, who shall be
present all the time on the site when the work is in progress. This Site Engineer shall carry out the
work as per the drawings and specifications issued to the contractor. Any instruction given to the site
Engineer by the Architect is as good as given to the contractor.
Taxes
The item rates shall include all taxes, duties and octroi etc. legally payable. That means no
additional payment towards any tax shall be paid by the owner. (Works contract tax also).
Statutory Obligations, Notices, and Fees etc.
If a contractor uses the area of road for dumping a building material during the construction
period, the local authorities (Municipal corporation etc) charges rent or fees for that, which the
contractor is required to pay under this clause. The contractor shall hand over the receipt of
payment or the N.O.C. to the architect, which may be required for the process of Building
Completion. Similarly, the plumbing contractor shall obtain a N.O.C. from the Drainage Department
and the water department as a part of his duties under this contract. Similarly, the Electrical
contract has to submit test-report to the concerned authority and obtain the Electrical supply to
the property as a part of his duty under the contract. Architect need not spend his time for these
works.

Water for Construction


It shall be made clear by the architect as to what is the source of the water supply to the site during
the construction. The contractor also before working out his item rates shall visit the site and take
into account the cost of water that may be required for the construction and shall provide for that in
the item rates.
Sub-Contractors
27

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It is a usual practice that a General Contractor in turn engages the sub-contractors or the labour
contractors for the different of work involved in a construction project. You may not see same
workers doing concreting who had excavated for foundations.
1. Under this clause, the contractor is required to submit a list of sub-contractors he intends to
engage for the major parts of the work. Any of the Sub-contractors disapproved by the Owner/
Architect shall not be engaged on the work.
2. The Architect shall have powers to obtain the estimate and select other agencies to carry out
any of the works. Such agencies like specialists, suppliers, tradesman selected by the Architect
or the Owner are called nominated sub-contractors. These shall be deemed to be subcontractors engaged by the contractor. If the contractor has a reasonable objection against a
Nominated sub-contractor, he shall not be employed by the contractor with consent of the
Architect.
3. It is the contractors responsibility to get the work done as per the requirements of the
contract from the sub-contractors and the nominated sub-contractors.
4. For all the practical purposes the General Contractor shall treat a nominated sub-contractor
same as sub-contractor. Nominated sub-contractor shall carry out the work as required by the
contract and to the satisfaction of the contractor and of the Architect.
5. Except the provision of Fire Insurance, which is to be done by the General Contractor, all
other provision of the contract on part of the contractor is to be observed by the nominated
sub-contractors.
6. The nominated sub-contractor as well as the sub-contractor shall indemnify the contractor
against the same liabilities in respect of their works as those for which the contractor is liable
to indemnify the owner under this contract, such as act of negligence, omission, default of subcontractor or his servants etc.
7. The contractor shall pay the sub-contractor within 14 days after the receipt of a certificate for
the payment for the Bill in which sub-contractors work is included.
8. The architect shall have right of Access to workshops and other places of works of subcontractors and nominated sub-contractors. [This gives an authority to the Architect if he
wishes to inspect fabrication windows, grilles, M.S. Gate, M.M. Tiles or any other materials etc.
at the workshop or factory.]
9. The contractor can retain the proportionate amount from the payment due to the Nominated
Sub-Contractor, proportionate to the retention kept by the Architect in R.A. Bill of the
contractor.
10. The Architect has an authority to ask the contractor whether payments are made to the subcontractors and the Nominated sub-contractors as per the previous certificate of the payment,
before issuing the next certificate.
11. The contractor shall not grant an extension of time to a Nominated sub-contractor without the
permission of the Architect.
12. The contractor shall allow for general attendance upon sub-contractors and also free use of
plant scaffolding, use of sanitary conveniences, storage facilities for material and reasonable
facilities for carrying out their works.
Prime Cost
Even in an item rate tender and contract, it is sometimes convenient to include in Contract Bill and in
contract sum Provisional Sum in respect of materials or goods to be fixed in the construction work
about which details are not final or the owner wants his freedom to finalize it later.
Separate Contract
The items of work that are with the main contractor are carried out by other agencies which are
called sub-contractors. This includes nominated sub-contractors as well. The owner has no separate
contract or an agreement signed with these agencies. The sub-contractors work under the control of
the main contractor. In order to complete the project in all the respects, there could be certain
agencies required to be engaged. Their work could be out of the scope of the main contractor. By
including this clause, the owner reserves his right to engage such other contractor, while the main
contractor is still working on the site.
28
Variation, Provisional and Prime Cost Sum: Explanation

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During the construction, the architect may find it necessary to alter or modify the design or item of
construction and may ask the contractor accordingly. This change in item is called Variation in
work. As per this clause, the contract is not vitiated because of variation. The architect may
instruct the contractor to make the changes in the abstract of an item.
PROVISIONAL SUM: At the estimate level, without going into the details, a certain amount based on
earlier experience, is provided in the tender against an item by the architect, usually for
purchases of goods. This amount is further included in Contract Sum.
Certificate and Payments
It is one of the responsibilities under taken by the Architect, as per this contract to work like an
auditor. Any payment to be made by the owner to the contractor shall be made only with the
recommendation of the Architect.
Claim for Extra
If instructions of the Architect given on the site involves an extra work where by the contractor may
plan to claim an extra rate, the contractor shall inform the Architect before proceeding with the said
work on the site.
Deduction for Uncorrected Work
Any work damaged or not done in accordance with the contract, and in the opinion of the
Architect, it is not likely or helpful to try to correct it or improve upon it, the Architect in such a case
reduce or make an equitable deduction from the contract price of that work.
Fluctuation
This clause is not suitable in present day situation. In the developing economy of the country, the
market is expected to be unsteady. Instead of this clause, the clause of Basic Rates of Materials as
explained is recommended.
Unfixed Goods and Materials
As per this clause, the building material brought on the site shall not be removed from the site
without a written instruction of the Architect, more as when the value of such material on the site is
certified by the Architect for the payment in R.A. Bill. The reason being since now, the owner has paid
for that material, it belongs to the owner; therefore it shall not be removed from the site without
permission except for its use in the construction. However, safety and security of the material on
the site shall be the contractors responsibility.
Materials and Workmanship
1. All building materials and workmanship shall be as per the relevant code of I.S.I. specifications.
The contractor shall remove from the works site any material and/or work, which in the
opinion of the Architect are defective or unsuitable and shall substitute a proper material and/
or a workmanship at his own cost.
2. Whenever a special make or the brands are called for, they are mentioned as a standard. Others
of equal quality may be used with a written approval from the Architect. Such an approval must
be taken within 30 days after signing of the contract. Thereafter a request for substitution may
be denied.
Defects
The contractor shall make good, at his own cost and to the satisfaction of the architect, all the
defects, shrinkages, small faults arising in the work that may appear within Defects Liability
Period.
The contractor shall make good the defects as directed by the architect, at his own cost, within a
reasonable time as given by the architect.
Water proofing of Terrace
The main contractor, preferably along with the sub-contractor for the water proofing work shall
give in writing on stamp paper, a guarantee for Ten Years to the owner, about the water proofing
29
work.

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Extension
The extension of time to complete the project can be given by the architect only under certain
conditions given below. The contractor has to give a written notice to the architect immediately if he
has lost the time of work for the reasons beyond his control such as given below. If the reason is true
and reasonable, the architect shall inform in writing to the contractor and the owner as well, the
number of days of extension granted beyond the date of completion.
Damages for Non-completion on Time
If the contractor fails to complete the work by the date specified in Appendix or within extended
time given by the architect, then the contractor shall pay the owner or allow to the owner to
deduct the penalty from any amount due to the contractor. This amount of penalty shall be worked out
at the rate of interest agreed upon and written in Appendix, on the contract amount for the period of
Extra Time taken by the contractor to complete the project.
Virtual Completion and Defects Liability Period
When in the opinion of the architect, the project (work) is practically completed; the Architect shall
issue immediately a certificate (a letter to the owner with a copy to the contractor) to that effect.
The date of completion of the project stated in this letter shall be referred for all the purposes of
the conditions on this contract.
Loss and Expense Caused by Disturbance of Regular progress of Work
This is one evidence that this is a balanced contract. If there be any hindrance in the normal
progress of work on the site because of the following reasons, this contract provides a monetary
compensation to the contractor. The contractor shall make a written application to the architect
stating the cause of hindrance and the direct loss or expense incurred by him. If the contractor is
not reimbursed by the payment under any other provision in this contract, then the architect shall
ascertain the amount of such loss or expense and add that amount to the certificate for payment
to the contractor.
Injury to Persons
In case of a road accident, the owner of the vehicle is held responsible. He may not be driving
himself or even he may not be present in the car at that time of the accident. But the law holds
the owner also responsible. Similarly, if there be any accident on the work site and if someone is
injured or killed, it becomes a Police Case. As per the law, not only the contractor but also the
owner of the property and the architect are arrested for an inquiry. It is not only injury to a person
or loss of life, but damage or loss to the property of others become a matter of liability and have
to be compensated. In order to protect the owner from a legal hustle; this clause is included in the
contract. As per this clause, the contractor indemnifies the owner against any liability, loss, claim
or legal proceedings whatsoever arising under any law in respect of a personal injury to or a death
of any person on the work site; unless due to the act of neglect of the owner or of any person for
whom the owner is responsible.
Insurance against Injury to Persons or Property
This clause requires the contractor to take necessary insurance policy to protect everyone on the site
against an injury and damage to any property. The contractor shall in turn make it necessary to the
sub-contractors to take a similar insurance to cover their workers.
Insurance of the Works against Fire etc
Your attention is drawn to the footnote on the page of the General conditions of contract. This
Clause is divided into three parts. 1) Clause A and B is applicable to the new building under the
construction where the contractor is required to take the policy. Clause 2) A and B is applicable to the
erection of a new building if the owner is to take a policy. And 3) A, B up to B (iii) is applicable to the
alterations of or an extension to the existing building.
Determination by the Owner
A good form of an Agreement or a Contract (includes partnership in business etc) shall have
30
provision and procedure laid down to break the contract. This contract document also lays down a
definite procedure for both the parties to contract, to break the contract under certain situation.

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Determination by the Contractor


This clause is one more evidence to prove that this is a balanced document. It gives the owner right
to break the contract under certain conditions. Similarly, it provides an authority to the contractor
to get away from the bonds of this contract under a particular situation.
Co-ordination of Work
This clause requires the contractor to hold the meetings on a site from time to time with his sub contractors, persons, agencies on the separate contracts and with the Architect. A good contractor
to manage his work properly shall hold such meetings on his own without you asking for it. But in a
way, this clause authorizes an Architect to ask the contractor to call all the sub-contractors and the
agencies to be present on a site on the date and time of the site visit of the Architect for a meeting
with the Architect. The time of periodical site visits of the Architect (or his representative or a
project architect etc) shall be prefixed and always known to the contractor; so that it shall be the
responsibility of the contractor to present everyone of them on the site including contractors SiteEngineer. The clerk of works is supposed to be on the site and more particularly at the time of the
visit of the Architect. In this reference, the word Architect means the Architect himself or his
representative who is looking after the project called a project Architect or a Structural Engineer Consultant, working for the Architect.
Labour
These contract conditions prevent an employment of a child labour below 14 years of age. When a
female labour is engaged, the contractor shall make a necessary provision for safeguarding the
small children.
Protection of Trees and Shrubs
An Architect as a tree lover shall implement this clause to protect existing or newly planted trees and
shrubs on the site.
Excepted Matters
It would be an endless arguments and discussions if all the aspects of the work are kept open for an
argument. Hence, this clause.
As per this clause, in certain matters, decision, opinion, direction of the Architect shall be final
conclusive and binding on both the parties to this contract.
Arbitrator
Any dispute in our civilized society can be or shall be referred to a Court of Law. But to seek a
justice from the court of law is a lengthy process and can be delayed by either of the parties.
Justice delayed is justice denied. Therefore, for the speedy settlement of matters, the process of
Arbitration is built in the contract conditions.

Protection and Cleaning


This clause requires the contractor to protect and prevent the work from the damage by providing a
temporary covering, a boxing or other construction as required, during the progress of work till
handing over building to the owner.
Tolerance
The dimensions called for on the drawings shall be observed properly in the work carried out on the
site as well as in the fabrication of elements. The contractor shall exercise every care to ensure
that all the structural members are sufficiently in plumb and true to the dimensions called for on
the drawings. In case of a separate contract, the contractor whose work does not confirm to the
dimensions called for shall be liable for all the expenses, which may incur for a rectification or a
replacement as required by the Architect. Architects decision in this respect shall be final and
binding on the parties concerned.
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ARBITRATION
Arbitrator
Explanation: Any dispute in our civilized society can be or shall be referred to a Court of Law. But to
seek a justice from the court of law is a lengthy process and can be delayed by either of the parties.
Justice delayed is justice denied. Therefore, for the speedy settlement of matters, the process of
Arbitration is built in the contract conditions. as per this clause 1. Any or all disputes and difference arising out of or in connection with the contract, during the
progress of work or after the completion, before or after the determination, the abandonment
or the breach of contract shall be refereed to and settled by the ARCHITECT of the contract.
2. In case of the expected matters, the decision of the Architect is final and binding on both the
parties and there shall be no ARBITRATION of these matters.
3. In case, if either of the parties to the contract be dissatisfied with the decision of the Architect
in matters other than the expected matters, shall give within 28 days after receiving such a
decision, a Notice to the other party through the Architect, regarding his desire to go in for
Arbitration.
Procedure to be followed:A) Single Arbitrator or Sole Arbitrator
If both the parties agree or concur to the selection of an Architect who is a follow member of
the Indian Institute of Architects; should approach him and appoint him as the arbitrator, to
study and settle the disputed matter. Both the parties shall present their case before the Single
Arbitrator, personally or through an Attorney, on hearing both the parties and studying the
papers etc. The Arbitrator shall within a reasonable time, give his Award, i.e. the decision,
which shall be final and binding on both the parties. The Arbitrator shall give the directions in
this Award regarding the cost and the incidental charges of an Arbitration to be borne by whom
etc. This submission to an Arbitrator shall be deemed to be a submission to an Arbitration
within the meaning of the Indian Arbitration Act, 1899 or any modification thereof, for the time
begin in force.
B) Joint Arbitration
In case if there is no agreement between the two parties upon the appointment of a single
Arbitrator, then each of the parties shall appoint his own Arbitrator who shall be a fellow member of
the Indian Institute of Architects, called joint Arbitrators.
Umpire
The Joint Arbitrators before proceeding with their work shall mutually agree upon a third person
who shall be an Architect and a fellow member of the Indian Institute of Architects. The Joint
Arbitrators shall approach such a third Architect and request him jointly to be their umpire, in case
if it is needed. Upon his acceptance to work as an umpire, the Joint Arbitrators shall proceed with
their work.
The Joint Arbitrators shall hear the case jointly, study the papers etc. and try to come to an
agreement about their AWARD. If the Joint Arbitrators agree upon their decision on all the points of
dispute, then they can give their AWARD. If the Joint Arbitrators defer in their decisions of the points
of dispute, then the Joint Arbitrators shall refer the matter of the Umpire. The Umpires decision
shall be final and binding on both the parties. One should note here and appreciate the importance
of appointing an umpire before commencing the hearing of the case by the joint Arbitrators. The
selection and appointment of the umpire shall be done with unbiased and impartial mind.
Therefore, it shall b done before the start of a hearing.

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QUESTIONS
Two Marks:
1. Define a contract?
2. Name two conditions of void contract?
3. What is meant by arbitration?
4. What is a lump sum contract? Mention any two advantages.
5. What are the elements of contract?
6. What is Indian Stamp Act?
7. What are the contents of contract document?
8. What are the types of tender applicable to contract?
9. Explain interim award?
10. Explain the three types of Arbitration?
11. Write short notes on arbitrator.
12. What is retention amount?
13. Why is necessary for a contractor to visit the construction site prior to tendering?
14. What is the role of a clerk of works in a construction site?

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15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

Explain the importance of Articles of Agreement in a contract document.


Differentiate between arbitrator and umpire.
What do you understand by the term award?
A tenderer is required to visit the construction site before offering his tender. why?
What is your understanding of the term Retention Amount?
Explain the importance of certificate in a construction process.
What are liquidated damages?
What is the meaning of the term determination of contract?
Why is the necessary for a tenderer to inspect the construction site before tendering?
Who is clerk of works? What are his duties?
What is the meaning of the term Award in an arbitration process?
What is the purpose of certificates in a construction agreement?
Who is resident engineer?

Sixteen Marks:
1. Explain briefly the procedure you would follow in the selection of a contractor for a building
project
2. What are the qualifications of an arbitrator? What are the advantages of settling dispute
through arbitration?
3. Explain the contents of Articles of Agreement.
4. Enumerate the conditions of a valid contract.
5. Explain in detail a contract document?
6. Describe in detail the factor to be considered while calling a Lump sum contract?
7. Describe in detail the elements of contract?
8. Establish the procedure for opening and acceptance of tenders. Compare and contrast Item
Rate tender with Lump Sum tender establishing where each is recommended?
9. Explain contract and when does it become void? Establish the procedure and precautions to be
adopted to avoid variation and extras in contractors bill.
10. Explain articles of agreement and its importance in the actualization of a contract Explain
Breach of contract and termination of contract by the employer.
11. Elucidate the purpose and advantages of Arbitration. Compare and contrast Arbitrat ion
Agreement Order of Reference?
12. Elucidate on the appointment and powers of an Arbitrator. Compare and contrast Arbitration
and Valuation. What is Award?
13. Discuss in detail the conditions for termination of a contractor as per the contract.
14. Explain the importance of Articles of Agreement in a contract agreement.
15. Elaborate on the conditions and duties pertaining to an architect in a contract.
16. What is the significance of an arbitrator? How is an arbitrator selected?
17. What are the types of arbitration? Discuss in detail the situation under which the varying types
can be implemented.
18. Difference between Item rate tender and Lump sum tender. (8)
19. Retention amount is Security advance paid in installments. you agree? Give reasons for you
reply. (8)
20. What is the role of an architect in the certification process? (8)
21. Explain the procedure involved in giving an interim certificate. (8)
22. What are the precautions an architect should take while issuing a final certificate? (8)
23. What is defects liability period in a contract? (8)
24. Explain the circumstances under which a contract can be terminated by a contractor and an
employer. (8)
25. Differentiate between assigning and subletting as mentioned in the general conditions of
contract. (8)
26. Between whom can disputes arise in a building contract? How will the arbitration process help
in settling the disputes? (8)
27. Explain the provisions incorporated in a contract document with regard to arbitration.
28. Which are the matters that are not open for arbitration? Why are they beyond the purview of
arbitration? (8)
29. Under that situations an umpire will be appointed in arbitration process. What is his role?
34
30. What are the advantages and disadvantages of Item rate and labor tender? (10)
31. Explain briefly articles of agreement in a contract document.

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32. Elaborate on the conditions pertaining to architects on contract. And how he will execute the
contractors bill certification.
33. Define the role and importance of arbitration. (8)
34. Explain the different types of the arbitration. (8)
35. Explain the difference between the Interim Bill and Final Bill raised by the contractor with
particular reference to architects responsibility. (8)
36. Explain the importance of certificates issued by an architect. (8)
37. As per the construction agreement, a contractor has certain obligations in facilitating
supervision of construction by an architect. Elaborate on the same. (8)
38. Explain the role of Engineer in-charge in a construction site.
39. Bill of quantities plays an important role in a Item Rate Tender. Give reasons. (8)
40. Explain in detail the contents of Appendix in construction agreement and briefly touch on the
importance of at least 4 item of the appendix.
41. Differentiate between mobilization advance and security deposit.
42. What are the obligation of contractors with regard to administration and execution of work as
per the construction agreement?
43. Why should there be a termination clause in any agreement. what circumstances can a contract
be terminated by an employ.
44. What are the various methods by which a dispute between contractor and an employer be
resolved?
45. What are the advantages of arbitration when compared to a process.
46. Differentiate between sole arbitrator and joint arbitrators. what circumstances will an umpire
be appointed.
47. What is an award and how is it binding on the parties involved arbitration.
48. Bring out the differences between item-rate, lump sum an demolition tender.(8)
49. Elaborate on the importance of Bills of Quantities in an Item-rate tender. (8)
50. As per the contract agreement contractors are obliged towards facilitating architects
supervision. Elaborate. (8)
51. What are the provisions in the contract agreement, for a contract to terminate the agreement?
(8)
52. What is the duty of an architect when a contractor raises a Bill? (8)
53. What are certificate? In issuing a final certificate, an architect has to exercise certain
precautions. What are they? (8)
54. What are the advantages of settling a dispute through arbitration process? (8)
55. They are certain Excepted matters beyond arbitration. What are they? (8)
56. When joint arbitrators have disagreement over solving a dispute. what happens? (8)
57. What is an arbitration agreement? (8)
58. Explain the role of umpire in an arbitration process.

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UNIT -III
NEW TRENDS IN PROJECT FORMULATION AND EXECUTION
Turn key offer (Expression of interest, Request for Proposal Document)
A turnkey or a turnkey project (also spelled turn-key) is a type of project that is constructed so that
it could be sold to any buyer as a completed product. This is contrasted with build to order, where
the constructor builds an item to the buyer's exact specifications, or when an incomplete product is
sold with the assumption that the buyer would complete it.
Turnkey refers to something that is ready for immediate use, generally used in the sale or supply of
goods or services. Turnkey is often used to describe a home built on the developer's land with the
developer's financing ready for the customer to move in. If a contractor builds a "turnkey home" they
frame the structure and finish the interior. Everything is completed down to the cabinets and carpet.
"Turnkey" is commonly used in the construction industry, for instance, in which it refers to the
bundling of materials and labor by sub-contractors. 'Turnkey' is also commonly used in
motorsports to describe a car being sold with drive train (engine, transmission, etc.) to contrast with
a vehicle sold without one so that other components may be re-used.
Similarly, this term may be used to advertise the sale of an established business, including all the
equipment necessary to run it, or by a business-to-business supplier providing complete packages for
business start-up. An example would be the creation of a "turnkey hospital" which would be building
a complete medical center with installed medical equipment.
(Expression of interest, Request for Proposal Document, Conditions for inviting
36
turnkey offer, finalization of the bidder). Same processes as followed in tender.

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Current practices in Project execution:


1. BOT (build-operate-transfer)
2. BOOT (build-own-operate-transfer)
3. BOO (build-own-operate)
4. BLT (build-lease-transfer)
5. DBFO (design-build-finance-operate)
6. DBOT (design-build-operate-transfer)
7. DCMF (design-construct-manage-finance)
1. Build operate and Transfer (BOT)
Build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) is a form of project
financing, wherein a private entity receives a concession from the private or public sector to
finance, design, construct, and operate a facility stated in the concession contract. This enables
the project proponent to recover its investment, operating and maintenance expenses in the
project.
Due to the long-term nature of the arrangement, the fees are usually raised during the
concession period. The rate of increase is often tied to a combination of internal and external
variables, allowing the proponent to reach a satisfactory internal rate of return for its
investment.
Introduction
In recent years, a growing trend emerged among governments in many countries to solicit
investments for public projects from the private sector. The main reasons for this trend are a
shortage of public funds and hands off approach of government agencies. The Build Operate
Transfer approach (BOT) is an option for the government to outsource public projects to the private
sector. With BOT, the private sector designs, finances, constructs and operates the facility and
eventually, after a specified concession period, the ownership is transferred to the government.
Therefore, BOT can be seen as a developing technique for infrastructure projects by using private
initiative and funding. Such infrastructure projects include a wide array of public facilities with the
primary function to serve public needs, to provide social services and promote economic activity in the
private sector. The most common examples are roads, bridges, water and sewer systems, airports,
ports and public buildings (Vaughan and Pollard, 1984).
In addition to government, the private sector may initiate BOT projects when there are limited
funds available and there are no enough resources to execute successfully a required building
project. Examples can be seen in non-profit hospitals and educational institutions as well as
manufacturing facilities. However, none of those cases are included in this book, which focuses on
government related projects. Several project delivery schemes have developed in recent years
(Diaz, 1994). The traditional design-bid-award was enhanced by the introduction of the project
manager as a consultant to the owner, where project manager advises the owner in formulating a
building strategy and supervises the construction on the owners behalf. As a consulting service,
the project manager works in parallel with the architect for a flat rate fee, with no fiduciary or
construction risk. Design- build is a one-stop shop for design and construction. Architects and
contractors work under one contract, where total responsibility for all stages of the project is
placed with both parties. Design-build projects are often of limited sophistication, but hold
considerable promise for the future as a partnership process of project delivery. Bridging allows the
separation of schematic design from design development, with the latter grouped together with
the general contractor. Such a project delivery scheme allows THE BUILD OPERATE TRANSFER
37
APPROACH 5 for more sophistication and for transfer of design across geographical and economic

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boundaries.
With turnkey contracts, the owner buys a package of site, design and finished building, while the
developer secures financing, manages the project flow and coordinates the architect and the
contractor. Such contracts are usually limited in complexity1. BOT is closer to total product
delivery where in addition to financing and development, the supplier is also responsible for the
operation of the facility.
BOT in construction
Build Operate Transfer is a major startup business venture where private organizations undertake
development and operation of a facility normally done by the government. The termination of the
private sector involvement occurs at the return of the ownership of the facility to the government
after a fixed concession period, usually 25 to 40 years (Tiong, 1990). Among the various definitions
of BOT, the following definition is adopted in this book that constitutes the premise for conducting
this research. In the BOT approach, a private party or concessionaire retains a concession for a
fixed period from a public party, called principal (client), for the development and operation of a
public facility. The development consists of the financing, design and construction of the facility,
managing and maintaining the facility adequately, and making it sufficiently profitable. The
concessionaire secures return of investment by operating the facility and, during the concession
period, the concessionaire acts as owner. At the end of the concession period, the concessionaire
transfers the ownership of the facility free of liens to the principal at no cost3. A key characteristic
of BOT is private financing. In BOT, the government subcontracts the entire development process,
including the associated risks, to the private entity. One of these risks is financing, which must be
obtained by the concessionaire, who is ultimately responsible for all aspects of the project.
A prerequisite for private financing is a need for the facility to be developed; for example, a
highway extension due to increasing traffic jams, more bed space in detention and correctional
facilities due to an increase in crime and the number of incarcerated individuals, a tunnel or bridge to
solve traffic problems and facilitate accessibility, or a sewage system or power generation to support
the growth in population and industry. If there is no obvious requirement for the facility, private
parties will refuse to participate and provide financial support. Only after market analysis justifies a
need will private parties be willing to financially participate as well as become involved in developing
the facility. BOT is just one of the many different project delivery schemes within the context of
privatization or public-private-partnerships. The two other schemes that appear most similar to BOT
are Build Own Operate (BOO) and Build Transfer Operate (BTO). In all three cases, the private party
retains revenues from operating the facility.
In BTO, the private party transfers the ownership of the facility directly after the delivery and
operates the facility on behalf of the principal. In BOO, the private party retains ownership of the
facility, makes returns on investment by operating it for its useful life, and may sell it at any point at
market value. Besides the three most common approaches, BOT, BOO and BTO, other variations can
also occur (Fig. 0.3). All differ from each other in the way the level of risk is divided between the
private and public parties. Each form is a kind of a public-private-partnership but all are unique in
allocating risks to the individual parties.
MAJOR PARTICIPANTS IN BOT PROJECTS
Five major participants are identified in every BOT project and Fig.
0.4 shows the typical
structure. Very simply, the principal grants the concession to the concessionaire. The
concessionaire, usually a consortium of companies, undertakes the financing and development of
the project. Financing is obtained from sponsors and lenders. The contractor builds the facility and the
operator runs the facility.

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Principal
In a BOT project, the principal is usually a government agency, a local or federal government body
that recognizes the need for a public facility but is unable to financially support the project. The
government agency is thus forced to look for alternative options.
Concessionaire
After the identification of the need for the facility, the government, following a due process,
grant a concession to the concessionaire. The concessionaire is usually a consortium and takes
responsibility of developing (designing, financing and constructing), maintaining and operating
facility, on behalf of the principal. The concessionaire is the owner of the facility during
concession period and realizes profits on the initial investment through the usage of the facility

will
the
the
the

Investors
Financing is supplied by the private sector and the investors include both shareholders and lenders. The
shareholders invest money in exchange for equity, and lenders support the concessionaire during
negotiations with the principal with promises for loans to be available during the development
of the project. Lenders may include banks, insurance companies
and bond holders.
Contractor
The concessionaire commissions a contractor with the construction of the facility. In most cases,
the contractor is part of the concessionaires consortium and involvement is favored by all
concerned parties. During the early stages of the process the contractors involvement assures the
consortium of the most effective and efficient design and execution of the project. Ultimately, the
39
contractor is responsible for the construction of the project and for hiring subcontractors, suppliers

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and consultants.
Operator
The operator is also in the concessionaires service and manages the operational stage of the
facility. Similar to the contractor, the operator is usually part of the concessionaires consortium,
because of the critical role in the revenue stream. In addition, the importance of ope rating
knowledge for programming, financing, design and construction is required. Often the operator is
supported by a government agency or in some cases, is the agency. In the Wijker tunnel case, the
facility is entirely operated by the government maintenance department for bridges, dikes and
roads, and in
STAGES OF BOT PROJECTS
Preliminary study
The preliminary study usually takes place prior to the involvement of the concessionaire. This stage is
executed by, or on behalf of, the principal. Feasibility studies are necessary to prove the
forecasted success of the project, in order to attract private funding. Alternatively, a private party
may identify a need and initiate the BOT project and in such a case, the preliminary study is
conducted by the private entity with limited government involvement.
Selection process
The selection process depends on who initiates the project. In a public selection process where the
initiative is coming from the public sector (government), a request for qualification is distributed.
After receiving applications, the government selects a few consortia to submit proposals (request
for proposals) and from these a concessionaire is chosen. During this process, the consortia will
group interested parties as required for the efficient and adequate execution of the project.
Alternatively, in a speculative selection process, the private sector initiates the project and
contacts the appropriate government agency for approval. The project is granted after proper
negotiations.
Project implementation
After the selection stage and the foundation of the concessionaire, the proposal is finalized.
Together with all the involved parties, the concessionaire develops a detailed program and
preliminary design, and applies for permits. This process can be shortened if a government agency
is actively participating. Once permits are issued, the final concession agreement is signed. During
the project implementation stage, in addition to the interests of the involved parties, the interests
of the external parties also require attention. The influential power of politics, the opposition, and
environmental agencies are significant factors and, if not taken into account, may hinder or even
dissolve the project.
Construction
Once the necessary permits are obtained, construction begins. Often BOT projects are fast track
projects where the design is not complete when construction starts. This is feasible because of
congruent financial interests within the members of the consortium and the pressing need to
complete construction and start collecting revenues. Less controversial designs allow a quicker
construction period with fewer uncertainties.
Operation
During the operation stage, the facility is operated and maintained by the operator who is paid by
the concessionaire. The concessionaire, as the owner of the facility during the operation period, is
obligated to operate the facility in a manner that adequately services the public user. The
concessionaire is also responsible for maintaining the facility in working condition. Both the
concession and operation agreements specify the condition of the facility at the time of transfer to
the principal.
Transfer
The facility is transferred to the principal, usually at no cost
(Fig. 0.10). Transfer time is
40
determined in the concession agreement. Should the principal choose to take over the facility
earlier than the agreed concession period; the concessionaire will be financially compensated for

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the investment. After transfer, the principal is the sole owner of the facility and can choose to
operate and maintain the facility directly or hire an independent operator. Although a transfer has
not taken place in any of the cases in this book, it can be expected that the principal will continue
with the same operator, as in the concession period, due to history of involvement and experience
with the facility. If the principal is the government, it may choose after transfer not to charge the
final users anymore.
In essence, the facility at that time will have become public, and its maintenance and operation
can be funded by indirect taxation. Another issue to be considered is to what extend the principal
wants to receive the facility. After a typical concession period of 30 years, the facility may have
become obsolete and could need major rehabilitation or require more resources to operate than a
new facility. In prisons for example, the facility may be inadequate, or in a power plant the
method of generating energy may be inefficient. Active participation of the principal during the
concession period may keep a facility up to standards or, at transfer, a BOT project could in fact
lead to a new BOT project.
Due to the external and internal particularities of every BOT project, the actual organization and
process may be different to the presentation in the previous paragraphs. The starting and
completion period of each stage in a BOT project can change due to a variety of factors, both
external and internal to the project. Among them are the complexity of the development process,
government regulations, political influences, concerns of environmental groups, and neighborhood
pressures. Such effects have an m a j o r influence on the progress of a project, likely to stall or
change theoretical models. Thus, the development of a precise and detailed framework
applicable for every BOT project is not possible and this must be taken into consideration for each
case study in this book that presents the framework of a particular project and its external and
internal conditions.
2. Build Lease operate and Transfer (BLOT)
BLOT (build, lease, operate, transfer) is a public-private partnership (PPP) project model in which
a private organization designs, finances and builds a facility on leased public land. The private
organization operates the facility for the duration of the lease and then transfers ownership to the
public organization.
The BLOT model is one of several related PPP project types including BOOT (build, own, operate and
transfer) and BOO projects (build, own, operate).
BUILD, designed and tailor-made as per building faade.
OPERATE, install, commission and operate.
LEASE, on monthly rentals for minimum five years contract.
TRANSFER, thereafter transferred to you at an agreed value.
3. BOO
BOO (build, own, operate) is a public-private partnership (PPP) project model in which a private
organization builds, owns and operates some facility or structure with some degree of
encouragement from the government. Although the government doesn't provide direct funding in
this model, it may offer other financial incentives such as tax-exempt status. The developer owns and
operates the facility independently.
The BOO model is one of several related PPP project types including BOOT (build, own, operate and
transfer), BLT (build, lease, transfer) and BLOT (build, lease, operate, transfer).
4.BOOT (build-own-operate-transfer)
A BOOT structure differs from BOT in that the private entity owns the works. During the concession
41
period the private company owns and operates the facility with the prime goal to recover the
costs of investment and maintenance while trying to achieve higher margin on project. The

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specific characteristics of BOOT make it suitable for infrastructure projects like highways, roads
mass transit, railway transport and power generation and as such they have political importance for
the social welfare but are not attractive for other types of private investments. BOOT & BOT are
methods which find very extensive application in countries which desire ownership transfer and
operations including. Some advantages of BOOT projects are:

Encourage private investment

Inject new foreign capital to the country

Transfer of technology and know-how


Completing project within time frame and planned budget
Providing additional financial source for other priority projects
Releasing the burden on public budget for infrastructure development
5.BLT (build-lease-transfer)
Under BLT a private entity builds a complete project and leases it to the government. On this way
the control over the project is transferred from the project owner to a lessee. In other words the
ownership remains by the shareholders but operation purposes are leased. After the expiry of the
leasing the ownership of the asset and the operational responsibility are transferred to the
government at a previously agreed price. For foreign investors taking into account the country risk
BLT provides good conditions because the project company maintains the property rights while
avoiding operational risk.
6.DBFO (design-build-finance-operate)
Design-build-finance-operate are a project delivery method very similar to BOOT except that there
is no actual ownership transfer. Moreover, the contractor assumes the risk of financing till the end
of the contract period. The owner then assumes the responsibility for maintenance and operation.
Some disadvantages of DCMF are the difficulty with long term relationships and the threat of
possible future political changes which may not agree with prior commitments. This model is
extensively used in specific infrastructure projects such as toll roads. The private construction
company is responsible for the design and construction of a piece of infrastructure for the
government, which is the true owner. Moreover the private entity has the responsibility to raise
finance during the construction and the exploitation period. The cash flows serve to repay the
investment and reward its shareholders. They end up in form of periodical payment to the
government for the use of the infrastructure. The government has the advantage that it remains
the owner of the facility and at the same time avoids direct payment from the users. Additionally,
the government succeeds to avoid getting into debt and to spread out the cost for the road over
the years of exploitation.
7.DCMF (design-construct-manage-finance)
Some examples for the DCMF model are the prisons or the public hospitals. A private entity is
built to design, construct, manage, and finance a facility, based on the specifications of the
government. Project cash flows result from the governments payment for the rent of the facility.
In the case of the hospitals, the government has the ownership over the facility and has the price
and quality control. The same financial model could be applied on other projects such as prisons.
Therefore this model could be interpreted as a mean to avoid new indebtedness of public
finance.

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QUESTIONS
Two Marks:
1. What are the advantages of a turnkey contract?
2. What are the various current practices in Project execution?
Sixteen Marks:
1. Explain BOLT form of project financing with a suitable case study.
2. Explain the conditions for inviting turnkey offer and the process involved in the finalization of
the bidder.

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UNIT - IV
IMPLICATIONS OF GLOBALISATION IN ARCHITECTURAL PRACTICE
Globalization
Globalization (or globalization) is the process of international integration arising from the
interchange of world views, products, ideas, and other aspects of culture. Advances in
transportation and telecommunications infrastructure, including the rise of the telegraph and its
posterity the Internet, are major factors in globalization, generating further interdependence of
economic and cultural activities.
The term globalization has been in increasing use since the mid-1980s and especially since the
mid-1990s. [6] in 2000; the International Monetary Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capital and investment movements, migration and movement
of people and the dissemination of knowledge. Further, environmental challenges such as climate
change, cross-boundary water, air pollution, and over-fishing of the ocean are linked with
globalization.
44
Globalizing processes affect and are affected by business and work organization, economics,

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socio- cultural resources, and the natural environment.


In economical aspect
This is the integration of economies, industries, markets, cultures and policy-making around the
world.
Globalization describes a process by which national and regional economies, societies, and
cultures have become integrated through the global network of trade, communication,
immigration and transportation.
In the more recent past, globalization was often primarily focused on the economic side of the
world, such as trade, foreign direct investment and international capital flows, more recently the
term has been expanded to include a broader range of areas and activities such as culture, media,
technology, socio-cultural, political, and even biological factors, e.g. climate change.
Example
Global trade has grown enormously since WWII; international trade in manufactured goods alone has
grown an estimated 100 times from $95 billion to $12 trillion in the 50 years since 1955. However,
globalization is much more than just trade.
In the last twenty years the breadth and depth of links between nations and between regions has
grown enormously. Communications costs have declined dramatically allowing easy daily contact via
the web and telephone, enabling the outsourcing of IT and other Services, to India for
example, and the rise in global work teams.
Other critical links are immigration and transportation, particularly airlines. The International
Organization for Migration estimates that there are two hundred million migrants around the world
today, they have largely immigrated from the emerging to the developed countries, particularly to the
U.S., Canada, Australia, the U.K. and Continental Europe. Though there are tensions at times in
Europe and elsewhere this immigration has changed the face of these regions and increased the
personal links across borders very considerably.
Finally the transportation of people and goods has increased very substantially in the last few
decades with great growth on the number of flights across borders. During the 80s and 90s growth
rates in the number of airlines seats offered of 5% a year were not uncommon, in 2010 there are
over 2.3 million flights per month. With this great growth in flights, this has allowed stronger
business and personal links. Today we see a world much more interlinked than in the past.
Advantages of Globalization
Globalization has several advantages on the economic, cultural, technological, social, and
other fronts. Globalization means increasing the interdependence, connectivity, and integration on
a global level, with respect to the social, cultural, political, technological, economic, and
ecological levels. It is the collaboration of countries to provide a boost to trade practices, and
also to reduce cultural differences. Its various advantages can be felt all across the globe by one
and all, and also to a very large extent in our daily lives.
Obviously, now we understand that globalization is here to stay. Here are the most common and
important advantages that globalization, over time, has brought about for mankind. These have
been listed in no particular order, and are all vital in their own way.
Peaceful Relations
Most of the countries have resorted to trade relations with each other in order to boost their
economy, leaving behind any bitter past experiences if any. Nations now try to raise capital and
45
fortify their stand in international trade, rather than hosting a war. Thus, globalization has
induced international peace and security in a big way.

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Free Trade
Free trade is a policy in which a country does not levy taxes, duties, subsidies or quota on the
import/export of goods or services from other countries. There are countries which have resolved
to free trade in specific regions. This allows consumers to buy goods and services, comparatively
at a lower cost.
Global Connectivity
Globalization has promoted international connectivity. With the use of the Internet, the world has
definitely become a smaller place. There has been exchange of thoughts and ideas which has
morally boosted and interlinked the mindset of people all round the world.
New Markets
The opportunities for new markets have increased dramatically. Numerous companies have started
investing in different countries and luring customers for their brands. These ever-expanding
markets have helped countries to raise capital in terms of foreign domestic investments, thus
improving the economy of the country.
Employment Opportunities
One of the most advantageous factors of globalization is that it fosters the generation of
employment. This happens due to the emergence of new companies and new markets, where lots of
skilled and unskilled labor is required. Immigration between countries also increases, providing
better opportunities for people all round the world. By providing employment, globalization helps in
increasing the standard of living of the people, and also reduces poverty.
Quality Products
The competition among different companies finds place at an international level. It becomes
important for the companies to focus on quality goods and services, in order to have a strong
foothold in the market. The consumer is benefited in the process, and gets quality products at
cheaper rates. He/she also gets the opportunity to select his goods from a large variety available
in the market.
Environmental Protection
Mutual trade carried out by countries has brought about an understanding for the prote ction of
the environment from which they benefit so much. It has been accepted by most countries that
action needs to be taken in saving natural resources and wildlife, without thinking about the
boundaries that separate them. Global environmental problems like cross-boundary pollution,
over-fishing in the oceans, climate change, etc., are solved by discussions and conventions.
Good for Developing Nations
It is claimed that globalization increases the economic prosperity of developing nations. Developed
countries invest in such countries with an aim of capturing new markets, which helps them improve
their infrastructure and technologies to international levels. A lot of capital is invested in such
projects, which in turn proves fruitful to the economy of the developing nation as well.
Equality for All
Globalization has helped in creating international criminal courts, and international justice
movements are also launched to provide justice to people at a global level. Disputes are solved
through global standards such as patents, copyright laws, and world trade agreements. Thus, it has
ensured that people do not get discriminated with regard to country, caste, creed or sex.
Ease of Transportation
With the advent of globalization, there has been an immense increase in the transportation of
goods and services worldwide. Things which took weeks for conveyance can now easily be availed
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within a couple of days. Due to the development of containerization for ocean shipping,

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transportation costs are reduced to a great extent, lowering the cost of products in world markets.
Travel and Tourism
Globalization has promoted tourism to great heights. There are many places that have tourism as
their main source of capital generation. International trade among different countries also helps in
increasing the number of tourists that visit different places around the world.
Unity in Diversity
Globalization has helped in bringing about integrity and social understanding everywhere. The
dream for a global village becomes realistic after looking at the impact of globalization. It has
helped in removing some barriers that had kept the world divided on various grounds. There has
been propagation of democratic ideas among countries. Cross-cultural contacts grow and cultural
diffusion takes place, which helps in minimizing differences, and promotes companionship.
External Borrowing
It has often been seen that a poor country is unable to provide adequate financing to its
companies, which proves to an obstacle in the development of the country on the whole. With the
help of globalization, there is opportunity for corporate, national, and sub-national borrowers to
have better access to external finance, with facilities such as external commercial borrowing and
syndicated loans.
It is a common belief that globalization plays a role just at international levels of trade and
commerce, but the fact is that it has played an important role in making our lives much more
comfortable too. The phones, apparels, gadgets or accessories that we use in our day-to-day life
are being available to us through globalization. Knowingly or unknowingly, we are all under the
impact of globalization, and more importantly it has helped in bringing international peace and
justice to mankind.
Disadvantages of Globalization:
1. Developed countries can stifle development of undeveloped and under-developed
countries.
2. Economic depression in one country can trigger adverse reaction across the globe.
3. It can increase spread of communicable diseases.
4. Companies face much greater competition. This can put smaller companies, at a
disadvantage as they do not have resources to compete at global scale.
5. Globalization can ruin the environment. Moving things from one area to another wastes
oil, etc.
6. Globalization can ruin local economies. There is a movement that wants to buy local
especially organic foods.
7. Globalization can lead to hyper-specialization, which can be good, but also negative.
There is something great about being a generalist. Also what if something goes wrong. To
know things generally give an incredible perspective that specialists do not have.
8. Globalization can be driven by people with "know how" and power and they can
systematically fleece the world.
What is the WTO?
The World Trade Organization (WTO) is the only global international organization dealing with the
rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk
of the worlds trading nations and ratified in their parliaments. The goal is to help producers of goods
and services, exporters, and importers conduct their business.
Goal
There are a number of ways of looking at the World Trade Organization. It is an organization for
trade opening. It is a forum for governments to negotiate trade agreements. It is a place for them to
47
settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a place where
member governments try to sort out the trade problems they face with each other.

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Functions
Among the various functions of the WTO, these are regarded by analysts as the most important:
(i) It oversees the implementation, administration and operation of the
agreements.
(ii) It provides a forum for negotiations and for settling disputes.

covered

Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure
the coherence and transparency of trade policies through surveillance in global economic policy making. Another priority of the WTO is the assistance of developing, least- developed and lowincome countries in transition to adjust to WTO rules and disciplines through technical cooperation
and training.
The WTO is also a center of economic research and analysis: regular assessments of the global trade
picture in its annual publications and research reports on specific topics are produced by the
organization. Finally, the WTO cooperates closely with the two other components of the Bretton
Woods system, the IMF and the World Bank.
Principles of the trading system
The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is,
it is concerned with setting the rules of the trade policy games. Five principles are of particular
importance in understanding both the pre-1994 GATT and the
WTO:
Non-discrimination. It has two major components: the most favored nation (MFN) rule, and the
national treatment policy. Both are embedded in the main WTO rules on goods, services, and
intellectual property, but their precise scope and nature differ across these areas. The MFN rule
requires that a WTO member must apply the same conditions on all trade with other WTO
members, i.e. a WTO member has to grant the most favorable conditions under which it allows
trade in a certain product type to all other WTO members. "Grant someone a special favor and you
have to do the same for all other WTO members." National treatment means that imported goods
should be treated no less favorably than domestically produced goods (at least after the foreign
goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g.
technical standards, security standards et al. discriminating against imported goods).
Reciprocity. It reflects both a desire to limit the scope of free-riding that may arise because of
the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a
nation to negotiate, it is necessary that the gain from doing so be greater than the gain available
from unilateral liberalization; reciprocal concessions intend to ensure that such gains will
materialize.
Binding and enforceable commitments. The tariff commitments made by WTO members in a
multilateral trade negotiation and on accession are enumerated in a schedule (list) of
concessions. These schedules establish "ceiling bindings": a country can change its bindings, but
only after negotiating with its trading partners, which could mean compensating them for loss of
trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute
settlement procedures.
Transparency. The WTO members are required to publish their trade regulations, to maintain
institutions allowing for the review of administrative decisions affecting trade, to respond to
requests for information by other members, and to notify changes in trade policies to the WTO. These
internal transparency requirements are supplemented and facilitated by periodic country specific
reports (trade policy reviews) through the Trade Policy Review Mechanism (TPRM). The WTO system
48
tries also to improve predictability and stability, discouraging the use of quotas and other measures
used to set limits on quantities of imports.

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Safety valves. In specific circumstances, governments are able to restrict trade. The WTO's
agreements permit members to take measures to protect not only the environment but also public
health, animal health and plant health.
There are three types of provision in this direction:
articles allowing for the use of trade measures to attain non-economic objectives;
protection measures as a means of disguising protectionist policies.
Articles aimed at ensuring "fair competition"; members must not use environmental
Provisions permitting intervention in trade for economic reasons.
Exceptions to the MFN principle also allow for preferential treatment of developing countries,
regional free trade areas and customs unions.
GAT
The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization
(WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations. The
treaty was created to extend the multilateral trading system to service sector, in the same way the
General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
Services are covered by GATS?
GATS consider education as a tradable service. GATS covers 12 service sectors (Business;
Communication; Construction and Engineering; Distribution; Education; Environment; Financial;
Health; Tourism and Travel; Recreation, Cultural, and Sporting; Transport; "Other".). Two exceptions
are services in the exercise of governmental authority and air traffic rights
Laws are covered by GATS?
GATS apply to all measures affecting trade in services. GATS defines measures as all laws,
regulations and practices from national, regional or local government or non-governmental bodies
exercising powers delegated to them by government that may affect trade.
How can services be traded?
GATS define 4 ways that all services can be traded based on modes of supply:
1. Consumption abroad of service by consumers travelling to supplier country (e.g. Students
studying abroad);
2. Cross border supply of a service to consumer country without the supplier (e.g. open and
distance education);
3. Commercial presence of a supplier in consumer country (e.g. offshore foreign
universities); and
4. Presence of Natural Persons from supplying country in consuming country (e.g.
professors, researcher working outside their home country).
Rules does GATS have?
GATS have two broad categories of rules. The first category is general rules which apply, for the
most part, to trade in all services. The second category is rules applicable to national
commitments in specific service sectors.
Pre-requisites for Indian architects to work in other countries
The professional requirements for architects vary from place to place, but usually consist of
three elements: a university degree or advanced education, a period of internship or training in an
office, and examination for registration with a jurisdiction.
Professionals engaged in the design and supervision of construction projects prior to the late 19th
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century were not necessarily trained in a separate architecture program in an academic setting.

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Instead, they usually carried the title of Master Builder, or surveyor, after serving a number of
years as an apprentice (such as Sir Christopher Wren). The formal study of architecture in
academic Institutions played a pivotal role in the development of the profession as a whole,
serving as a focal point for advances in architectural technology and theory.
Professional requirements by country
Australia
In Australia, the title of architect is legally protected but architects are registered through
state boards. These boards are affiliated through the Architects Accreditation Council of
Australia (AACA). The AACA's Architect Registration service also provides accreditation for
schools and assessments for architects with overseas qualifications for the purposes of
migration.
There are three key requirements for registration: a professional degree from a school of
architecture accredited by the AACA; at least two years of practical experience, and; the
completion of the architectural practice examination.
Architects may also belong to the Australian Institute of Architects (formerly the Royal
Australian Institute of Architects) which is the professional organization and members use the
suffix AIA after their name.
Most States have legislation which covers the use of the title "architect" and makes it an
offence for abusers of the title. As this can vary, it is essential to check the relevant
legislation applicable in each State.
Canada
In Canada, architects are required to meet three common requirements for registration:
education, experience, and examination. Educational requirements generally consist of an M.Arch.
Degree and are certified by the Canadian Architectural Certification Board (CACB). For degreed
candidates, the experience requirement is typically the Intern Architect Program (IAP). The
provincial associations of architects, by the authority granted under their respective provincial
Architects Act, require that Interns gain a minimum of 5,600 hours of work experience. The
fundamental purpose of the pre-registration/licensing employment period is to ensure that the
Intern is provided with sufficient experience to meet the standards of practical skill and level of
competence required to engage in the practice of architecture. This experience is diversified into
four main categories and 16 sub-categories, and must be completed working under the direct
supervision of a registered architect. At present, all jurisdictions use the Architect Registration
Examination (ARE), a series of seven computerized exams administered by the National Council of
Architectural Registration Boards (NCARB). As well, all jurisdictions recognize the Examination for
Architects in Canada (Ex AC), administered by the Pan Canadian Ex AC Committee. Upon
completion of the educational requirements, IAP, and examinations, one can apply for
registration/license with their respective provincial architectural institute. An annual fee must be
paid, and continuing education requirements met, in order to maintain a license to practice.
The Royal Architectural Institute of Canada (RAIC) was established in 1907 and is a voluntary
national association representing more than 3,600 architects and Faculty and graduates of
accredited Canadian Schools of Architecture.[2] The RAIC aims to be "the voice of Architecture and
its practice in Canada". Members are permitted to use the suffix MRAIC after their names. The
suffix FRAIC (Fellow of the RAIC) is used by members of the RAIC College of Fellows. Not all
members of the RAIC hold accredited degrees in architecture, and not all Canadian architects are
members of the RAIC.
India
For carrying professional practice in India, architects are required to register with Council of
Architecture which is constituted by the Government of India under the provisions of the
50
Architects Act, 1972. The profession of an architect is governed by the Architects Regulations,

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1989 (as amended in 2003).


The COA registration service also provides accreditation for institutions providing the degree of
architecture, which is minimum five years duration including professional practice for 16 working
weeks (one semester). There are about 280 institutions including constituent colleges/
departments of universities, deemed universities, affiliated colleges/schools, IITs, NITs and
autonomous institutions which impart architectural education in India leading to recognized
qualifications.
Ireland
The main body for Architecture in Ireland is the Royal Institute of Architects in Ireland, RIAI.
Members may use the affix MRIAI and are registered to use the title "Architect" in company
stationery. The title has only recently been protected.
To become a registered Architect, it usually takes five years' full-time study in the recognized
schools of Architecture, followed by a minimum of two years approved experience, and one of the
recognized Professional Practice qualifications to gain admission to the RIAI . In all, it takes a
minimum of seven years to gain registration. More details can be found on the RIAI website.
An alternate route to the Register is available through the ARAE (Architects Register Admission
Examination) this provides an opportunity for those without the required educational and
professional qualifications to enter the Register in Ireland. This examination has operated
successfully since 2009.
Architects' Alliance of Ireland is a group of long-established self-trained architects created in
response to Part 3 of the Building Control Act 2007. The Act seeks for the first time to control the
use of the term 'architect' in the Republic of Ireland. The group is lobbying for an amendment of
the legislation in order to restore the prior status of self-trained architects in the profession.
Italy
To enter the profession in Italy, individuals are required to first obtain a degree in Architecture, or
a degree in Building Engineering/ Architecture, then to receive professional qualification,
obtained by passing a state exam which consists of four tests (three written and one oral). To
practice, the architect must register with the Ordine degli architect (Order of Architects), which
following a recent reform also includes planners, landscape architects and conservationists
(architectural heritage). The Orders are organized by province, and registration is based on place
of residence of the architect. Within the order there are currently several classes and categories,
depending on specific qualifications.
Italian law recognizes equal rights to Building engineers registered with the appropriate order.
Other professionals in the construction industry are the geometry (survey or ) and the perito
industrial(technical expert) specializing in construction; these professionals have several
limitations compared to architects and engineers, as they follow a different and shorter course
of study aimed at learning basic and complementary aspects of work in construction.
Mexico
In Mexico, every profession is regulated by the Secretariat of Public Education, including
architecture. The Secretariat expends a Professional License (in Spanish cdula professional),
only after a recognized undergraduate degree is successfully achieved. Therefore, it is legally
sufficient for an architect to hold an undergraduate diploma and a Professional License in order
to practice. Registration to an official college or association of architects is completely optional.
Nevertheless, there are other norms that regulate the building industry. In Mexico, as it is
51
common for constructions to be developed by individuals other than architects, these regulations

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are quite unrelated to the architecture profession. For a major construction, it is necessary for a
professional to act as a Director Responsible of Construction (in Spanish, Director Responsible de
Obra or DRO). This position does require a minimum of two years of professional experience in
construction, as well as further evaluation and/or training. However, it is uncommon for
architects to assume this role; this is generally a position preferred by and reserved to civil
engineers.
Singapore
In Singapore, university study is required (such as the five-year course of study at the National
University of Singapore or certain approved foreign universities). Upon completion of university,
additional training by working for a minimum of two years under a registered architect is required in
order to become registered. Singaporean law governs the use of the term "architect" and prescribes the
requirements to be listed in the Register of Architects. Membership in the Singapore Institute of
Architects is a voluntary professional credential.
South Africa
See also: List of architecture schools in South Africa
In South Africa, Architecture can be practiced in one of four categories, depending on qualification:
professional architect (Pr.Arch.), professional senior architectural technologist (Pr.S.Arch.T.),
professional technologist (Pr.Arch.T.), or professional draughts person (Pr.Arch.Draught.). After
graduating, one enters a two-year period of in service training as a "candidate", and sits a
Professional Practice entrance examination; one must also register with the South African Council
for the Architectural Profession. When studied through a University, the programme is structured in
two parts: the first is a three-year course leading to a Bachelor of Architectural Studies or BSc
(Architecture); the second is an additional two-year postgraduate, professional degree- either the
Bachelor of Architecture or Master of Architecture, depending on University - which qualifies one to
become an architect. A student is able to exit university after obtaining the first degree, and will be
able to become a senior architectural technologist. When studied through a University of Technology
(or a comprehensive university), the courses in architecture are a three-year National Diploma, and,
after an additional year of study, the B.Tech degree. These enable a student to become an
architectural technologist or senior technologist, respectively. To become a draughts person, one
requires a (two year) National Certificate. The possibility of progression from one category to the
next has been provided for in the Regulations, and is under review.
Sri Lanka
Term "Architect" and "Chartered Architect" are protected titles in Sri Lanka under the
Architects Registration act of 1979 and the Sri Lanka Institute of Architects (Amendment) Act, No.
14 of 1996.
In Sri Lanka, architects are required to meet three common requirements for registration:
education, experience, and examination. The Education can be from one of the two available
institutions; the degree course held by University of Moratuwa or by the part-time course held by the
City School of Architecture (owned by the Sri Lanka institute of Architects) or by any foreign
university recognized by the SLIA.
The University of Moratuwa has been offering a "3+2" program recognized by both
the SLIA and RIBA; a three-year B.Sc. (Built Environment) degree and a two-year masters, M. Sc.
(Architecture). This with the 2 years of appropriate work experience and successful completion of
SLIA Part III examination would lead to the charter and the Architectural Registration Board (ARB)
registration.
Recently, the University of Moratuwa has changed the "3+2" program to a continuous five- year
B.Arch. program.
City School of Architecture offers a part-time course of seven years during which the students
52
should be working continuously under the supervision of a Chartered Architect while attending the
school on a part-time basis. Completion of the first four years of this program qualifies for SLIA

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part I and completion of the balance after 3 years qualifies for SLIA part II. Successful completion
of this program with the 1 year of appropriate work experience and successful completion of SLIA
Part III examination would lead to the charter and the Architectural Registration Board (ARB)
registration.
United Kingdom
In the United Kingdom, practicing under the name, style or title "architect" is restricted by law to
those registered at the Architects Registration Board. It usually takes a minimum of seven years to
obtain the necessary qualifications and experience for registration.
Those wishing to become registered must first study at a recognized university-level school of
architecture. Though there are some variations from university to university, the basic principle is
that in order to qualify as an architect a candidate must pass through three stages which are
administered by the Royal Institute of British Architects:
On completing an initial degree in architecture (usually three or four years, usually either a BA,
BSc, or B. Arch) the candidate receives exemption from RIBA Part I. There then follows a period
of a minimum of one year which the candidate spends in an architect's office gaining work
experience.
The candidate must then complete a post-graduate university course, usually two years, to
receive either a graduate diploma (Dip Arch), Masters (M. Arch) or B(Arch). On completing that
course, the candidate receives exemption from Part II of the RIBA process.
The candidate must then spend a further period of at least one year gaining experience before
being allowed to take the RIBA Part III examination in Professional Practice and Management.
United States
In the United States, people wishing to become licensed architects are required to meet the
requirements of their respective state. Each state has a registration board to oversee that state's
licensure laws. National Council of Architectural Registration Boards is a non-profit professional
association created in 1919 to help ensure parity between the states' often conflicting rules. The
registration boards of each of the 50 states (and 5 territories), member boards. NCARB issues a
national certificate to qualified licensed architects. The NCARB certificate is recognized in most
licensing jurisdictions for the purpose of granting licensure by endorsement or reciprocity.
Requirements vary among jurisdictions, and there are three common requirements for registration:
education, experience and examination. About half of the States require a professional degree
from a school accredited by the National Architectural Accrediting Board (NAAB) to satisfy their
education requirement; this would be either a B. Arch or M. Arch degree. The experience
requirement for degreed candidates is typically the Intern Development Program (IDP), a joint
program of and the American Institute of Architects (AIA). IDP creates a framework to identify for
the intern architect base skills and core-competencies. The intern architect needs to earn 700
training units (TUs) diversified into 16 categories; each TU is equivalent to 8 hours of experience
working under the direct supervision of a licensed Architect. The states that waive the degree
requirement typically require a full 10 years' experience in combination with the I.D.P
diversification requirements before the candidate is eligible to sit for the examination. California
requires C-IDP (Comprehensive Intern Development Program) which builds upon the seat time
requirement of IDP with the need to document learning having occurred. All jurisdictions use the
Architect Registration Examination (ARE), a series of seven (formerly nine) computerized exams
administered by NCARB. The NCARB also has a certification for those architects meeting NCARB's
model standard: NAAB degree, IDP and ARE passage. This certificate facilitates reciprocity between
the member boards should an architect desire registration in a different jurisdiction. All architects
licensed by their respective states have professional status as Registered Architects (RA).
Depending on the policies of the registration board for the state in question, it is sometimes
possible to become licensed as an Architect in other ways: reciprocal licensure for over-seas
architects and working under an architect as an intern for an extended period of time. Length of
the typical licensure process depends on the particular combination of education, experience and
53
pace of examination of a candidate. It is typical that the entire licensure process takes at least 7
to 11 years to complete; including five years of study (5 years for B. Arch, 3 years for M. Arch, 6

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years for a "four-plus-two" program), three-plus years of experience


(meeting exact IDP
requirements in each category), and often a year or more to take and pass the seven ARE 4.0
exams.
Entry of foreign architects in India
Indian Architects keep foreign players out
After the tussle between local and foreign auditors and lawyers, it's now the turn of architects. The
Council of Architecture (CoA), the regulatory body for the profession, has stepped up its fight
against foreign architects practicing in India attracting severe criticism from several countries,
including the US.
Although foreign architects are not allowed to practice in India, several entities were rendering
services in the country, either directly or through tie-ups with local players. A 1972 law explicitly
prohibits any foreign firm architect and the government, despite its keenness, has refused to open up
the sector despite negotiations at the World Trade Organization (WTO).
Last year, as reported first by TOI, the Delhi high court had ruled that the approval granted by the
Foreign Investment Promotion Board ( FIPB) to RSP Architects, Planners and Engineers, a
Singapore-based firm, was not in line with the law.
This provided fresh ammunition to the CoA, which recently issued a public notice saying "... no
foreign architect/consultant (not registered with CoA) be appointed for architectural works,
without following the procedure under the (Architects) Act". It said that it had issued the
advertisement after it received complaints about appointment of foreign architects, without prior
approval of the government.
This largely went unnoticed in India but has evoked strong reaction from foreign lobby groups and
architects, which have raised a banner of protest and have gone to the extent of drawing parallels
with the retrospective amendments to tax laws. They have told Indian ministers that the issue
once again highlights India's unwillingness to open up its markets to foreign competition. Overseas
architects are keen to tap into the booming real estate and infrastructure sectors in India.
CoA president Uday C Gadkari could not be reached for comment but council member Inderjit
Bakshi told TOI that the regulatory entity had taken up the issue with the government as
those registered with the council can practice in India". Apart from those with degrees
recognized Indian architecture schools, the Architect's Act also recognizes qualifications
certain countries on a "reciprocal basis".

Singh
"only
from
from

Government officials agreed with the CoA stance and said the law clearly bars foreign architects
from practicing in India. "It is not part of our commitment to WTO and can only be done if there
is qualification equivalence or mutual recognition," an official said. This means that architects
from a foreign country can be allowed to practice in India on a reciprocal basis if the
professional qualifications are accepted or architects from either country clear the stipulated
professional tests. For this to happen, CoA and its foreign counterpart have to come to an
agreement.
While foreign lawyers are explicitly banned from practicing in India, the Institute
of Chartered Accountants of India has entered into mutual recognition agreements with its
counterparts in the UK, Canada and Australia for reciprocal membership arrangements.
Although the government has repeatedly tried to open up the professional services market to
foreign players, industry bodies have prevented it from going ahead, citing threat to livelihood.
Despite the "ban" foreign players have thrived with audit firms such as EY, KPMG and Deloitte taking
over domestic firms. They have used their brands to get business but use the local firms for signing off
on accounts. In case of law firms, several Indian players have tie-ups with overseas solicitors, who
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advise them but cannot appear in court.

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Example - current scenario


Foreign Architects in India
The profession and practice of architecture in India has undergone a complete transformation in this
decade. The last eight years have been a boom time, not seen since the heady days of Post
Independence India.
The booming economy and the burgeoning middle class has prompted developers to bring in foreign
architects with foreign fees to design everything from airports to residential and office towers and
bungalows and resorts.
Foreign architects bring in the tried and tested processes and function precision to bring about a
complete turnaround in the way projects are designed and built. They pair up with Indian firms who
have the expertise on the ground to get things done and built.
Foreign architects for the most part are bringing in foreign solutions and design principles which may
not all work in India, but the public does not think a second before lapping it all up. We are literally
bringing New York, Chicago, Tokyo or Shanghai to Bombay, Delhi, Calcutta, Madras and countless
other towns and cities.
Only time will tell if this is successful in the long term. India is not the only place in the world
where this is happening. China is way ahead of us in transplanting urban fabric from the West into
their cities.
The TOI has an interesting article about the whole phenomenon of foreign architects coming to
India. " Time was when there was only the occasional eruption of concrete. Today, Indias skyline is a
work in progress. But while the towering new skyscrapers, sprawling IT parks, glitzy airports and
swanky townships reflect desi aspirations, the blueprint, more often than not, is foreign.
Be it a slum redevelopment project in congested Mumbai or Kolkatas new museum of modern art,
the global imprint on the countrys fast-changing urban landscape is evident. Made in India but
designed by a clutch of foreign architects looking to cash in on the countrys real estate boom. For
Edinburgh-based RMJM, the company behind the distinctive Scottish Parliament, a foray into India
four years ago has translated into business of 1 billion. That, the company says, is unprecedented
for a UK architecture firm doing business in India. Theres a cue here for UK busine ss we need
to be in India in a very big way, says RMJM CEO Peter Morrison. RMJM, which currently has 38
projects under way in India, is now looking to establish a permanent base in Mumbai.
Many others have taken the cue. Celebrated British architect Lord Norman Foster, who shaped
Londons skyline with buildings such as the Gherkin and designed the Reichstag in Berlin, has
entered India in a tie-up with a Mumbai real estate firm, the Neptune group. Other big UK names in
India are Laing ORourke, Davis Langdon and Mott MacDonald. Not just UK, firms from Canada
(Arcop) to Australia (Omiros One) have designs on India.
But does India really need foreign architects or is it just about getting a brand on the brochure?
Most builders agree its as much about star power as it is about international quality. After all,
well-heeled buyers respond to designers with international reputations as much as they respond to
a luxury label like Gucci or Prada. When people purchase an expensive apartment, a famous
architect is extra validation theyre making a good choice, says Kunal Banerji of Ansal API which
signed up US firm Chelsea West to design Manhattan- style condos at its Aqua polis project in
Ghaziabad.
The Mahindra groups real estate arm Mahindra Life spaces, which has roped in US-based architect
and design firm HOK (of Dubai marina fame), says their reasons go much beyond the brand. The
selection of an international architect or planner is driven by the unique needs of the project. For
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instance, the 325-acre Mahindra World City project is one of the largest such developments under
implementation and to that extent the width and depth of on-ground implementation experience

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is currently available only with international firms who have conceived and implemented such
projects in different parts of the world, says Anita Arjundas, COO of Mahindra Life spaces.
Size does matter and with Indian developers going beyond stand-alone commercial blocks and
residences to converting huge swathes of land into townships and IT parks, a foreign hand does
come in handy. Foreign firms can visualize and handle massive scale. Also, their designs are very
innovative. They create landmarks and not just buildings, says Shantanu Malik, DGM-Architect,
Unitech Ltd.
Its a win-win for Indian architects as well. Working with foreign firms gives us exposure to
international standards. There is a lot to learn from their use of detailing and modern materials,
adds Malik.
Unitech often hires multiple design firms for a single project. For instance, it has 10 global
architecture and design consultants for the $3 billion Unitech Grande, a super-luxury residential
complex spread over 347 acres along the Noida expressway. This project draws on the expertise of
US-based mall designer Callison, landscape artists SWA and EDAW, Britains RMJM for architecture
and interiors and HOK for floor plans, besides a course designed by Australian golfer Greg Norman.
With so much demand, it isnt surprising that Mark Igou, director in the US architectural firm
Skidmore, Owings and Merrill Llp (SOM), has been shuttling between New York and India over the
last three years. I spend more than three months a year in India, familiarizing myself with the
ground situation. And ground reality is what SOM the firm which has designed the Burj Dubai,
which will be the worlds tallest skyscraper when it is finished in 2009 is faced with in Mumbai
where it is designing homes for slum dwellers in Mumbais Santa Cruz as part of a masterplan for
Unitech. Its a unique design challenge recreating the same sense of community that exists in
their current housing so that people dont want to return to the slums they left, says Igou. SOM is
also using the services of sociologists and cultural anthropologists to get a sense of the social and
cultural aspects of the lives of those being rehabilitated.
Whether its slum housing or a swanky township, India is essential to the design inputs. Education and
social interaction are both important to Indians so our designs will reflect these needs. So
residential units would have schools nearby and public spaces for people to interact, he says.
Besides projects like the Jet Airways headquarters in Mumbai, SOM is also working in Tier-II cities like
Ahmadabad and Nagpur.
Be it the Indian ethos or the vagaries of its climate, Uruguayan architect Carlos Ott keeps it in mind
when he is on the drawing board. Ott, who has designed a techno park for Tata Consultancy
Services at Siruseri, Chennai, in association with countryman Carlos Ponce de Leon, says, I am
constantly studying the history and traditions of India, hoping to integrate some of its
characteristics in my buildings. And though my work is definitely contemporary, the clues from the
past are integrated in a modern vocabulary.
Ott is building on the work that earlier foreign architects have done in India. Apart from Lutyens
and Le Corbusier, several other international architects have showcased their designs in India.
Ahmadabads Indian Institute of Management reflects Louis Kahns trademark style of veering
towards monolithic masses resembling ancient ruins. Christopher Charles Benningerdesigned the
Mahindra United World College of India, near Pune. British- born Laurie Baker planned the
Fishermens Village in Poonthura in Kerala, while American Joseph Stein gave shape to Delhis India
International Centre.
Now, a new generation of foreign architects has designs on India. And their glittering
computergenerated images look set to redefine the countrys skyline. "
Construction sounds boom loudly nowadays as the Indian skyline towers with competing skyscrapers
and IT office parks sprawling in outer suburban townships. More high-tech, high-glitz international
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airports replete with all the commercial building associated with major transportation hubs have

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fulfilled many Indian intended building goals but the design is often American inspired.
Design Demand Outpaces Local Delivery
The boom in India real estate development and redevelopment is outpacing the countrys ability to
produce enough native talent to keep up with the demand. Thus, when a country with a population of
1.2 billion produces only 3,000-4,500 architects annually from its 180 schools - according to the India
Council of Architecture, with an estimate of 40,000 registered professionals, the demand means an
international search for available talent.
Besides the enormous need for commercial building architecture, building expansion, and interior
design created by Indias real estate boom, the sustainable-designed buildings are also in public
consideration due to rising energy prices and changing government policies and tariff structure. Many
new buildings in India are LEED certified.
Still Made in India, But Designed Globally
From the redevelopment of Mumbai slums to the high-tech designs for a modern art museum in
Kolkata, architectural design in the Indian sub-continent has taken on a decided global appearance
making a huge impact upon the ever-changing urban landscape. Although this does translate into
opportunities for construction to remain Made in India, the design has been firmly grabbed by a
bevy of foreign architectsincluding U.S.-based firmsseeking to capitalize on the countrys
continuing real estate boom.
Is This Need Created?
This question can be rightly posed if India is, indeed, in need of so much foreign architect design
activity. Or, is it simply a matter about acquiring star power and the bragging rights associated
with international quality? We at Amritt believe that Indian real estate developers are seeking a
modernized, updated function and look to their properties, just as any clothing consumer would
seek either Prada or Gucci as design choices.
Therefore, world class implementation demands worldwide searches. Savvy, profit-seeking Western
architects are focusing effort on India.
Codes of conduct for Indian architects
A code of conduct is a set of rules that outlines the duties and responsibilities of a particular
person, groups or organization. All professions are bound by these codes, including architecture
which is a process of designing, planning and construction of buildings and other structures.
In India, just like other countries, architects do have codes of conduct. Indian architects are
required to register with a government body called the council of architecture so that one can be
able to carry out the professional practice. It is illegal to conduct any architectural activities
without getting registered by this body. When they register with this body each architect gets a
unique registration number. They also have to follow the Indians architects act 1972, which states
the following.
All architects are to be bound by this act and are to follow it.
The council of architecture shall be the body responsible for all architects. Through this
body contracts can be made. One can sue or be sued.
The head office shall be in Delhi unless stated otherwise by the central government, which will
be put in the gazette.
Specifies the number of members who are to be on the council and there mode of
election.
It talks about the registration of architects. That with them they should have their birth
certificate, national identification card, relevant school documents and a degree from a
57 known institution.
Punishments to those who give false representation are also stated.

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The Indian government also did establish a code of conduct in the Indian constitution. It is under the
professional code of conduct 1989. It states that:
Every architect who's either employed or practicing is subject to the provisions of the
central civil services.
An architect should make sure that his professional activities do not conflict with his
responsibilities and what he is entitled to do, his responsibility to the society and environment.
He or she should apply and use his skills responsibly for the economic development of India. The
architect shall provide professional services of high quality and to the best of his
ability.
Should always inform the client on the conditions of engagement and the terms of
agreement especially if one is on private practice. These are to form the basis of an
appointment.
One should not sub commission work to another or other architects without an agreement
with his client.
He should not give or take discounts, gifts, commissions or any form of inducement for
introduction of a client or work.
He should act with impartiality and fairness when administering a contract.
The architect should maintain very high standards of integrity.
Should promote the advancement of architecture, research, training, architectural
education and also training.
He should respect and recognize professional responsibilities of consultants.

QUESTIONS
Two Marks:
1. What do you understand by globalization in architectural practice?
2. Writes short notes on GATS?
Sixteen Marks:
1. What are the pre- requisites for Indian architects to work in other countries.
2. Explain the impact of information technology on architectural practice.
3. Explain the implications of foreign Architects entry in India.

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UNIT - V
EMERGING SPECIALISATIONS FOR AN ARCHITECT
Contents:
Definition
Introduction to Project Management
Evolution of Project Management
Todays Scenario - Fields in Project Management
Function of Project Management
Role of an Architect in Construction
Benefits in project management for architects
Lifecycle of Project Management
Process of Project Management
Others
Course Objective
Project:
What is a Project?
Projects are unique, transient endeavors undertaken to achieve a desired outcome.
The definition of a project identifies two of the key features:
Uniqueness
Projects are separate to business-as-usual activities, requiring people to come together temporarily
to focus on specific project objectives. As a result, effective teamwork is central to successful
projects.
Transience:
A project has a specific start and end point and is set up to meet specific objectives, to
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create a specified result, product or service.

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What is project Management?


At its most fundamental, project management is about people getting things done.
Project management is the process by which projects are defined, planned, monitored, controlled and
delivered such that the agreed benefits are realized. Projects bring about change and project
management is recognized as the most efficient way of managing such change. (APM, 2011)
Project management focuses on controlling the introduction of the desired change. This
involves:
Understanding the needs of stakeholders.
Planning what needs to be done, when, by whom, and to what standards.
Building and motivating the team.
Coordinating the work of different people.
Monitoring work being done.
Managing any changes to the plan.
Delivering successful results
Evaluation of Project Management
It can be conjectured that the history of project management goes back to the time of the
pharaohs and the construction of pyramids of Giza or to the Qin dynasty and the Great of China
Contemporary project management has its roots in the 1950s and 1960s although Henry
Gantt, widely recognised as the father of planning and control techniques and his eponymous bar
chart in the early 1900s and Gantt Charts were used during World War 1 to reduce the buildtime of cargo ship.
The concept of project management was after its introduction, mainly used by the
construction industry due to the temporary nature of its projects.
Two forefathers of project management are Henry Gantt, called the father of planning and
control techniques, who is famous for his use of the Gantt chart as a project management tool.
Todays Scenario - Fields in Project Management:
With the advent of the new millennium, project management is increasingly seen as part of the
general management too and its techniques are deployed across all sectors of business and all types
of project.
IT
Construction Industry
Retail
Healthcare
Mining
Function of Project Management:
A list of functions carried out by project managers:

Establishment of the clients objectives and priorities.


Design of the project organization structure.
Identification of the way in which the client is integrated into the project.
Advice on the selection and appointment of the contribution to the project and the
establishment of their teams of reference.
Translation of the clients objectives into a brief for the project team and its transmission.
Preparation of the programme for the project.
Activation of the framework of relationships established for the contributors.
Establishment of an appropriate information and communication structure.
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Convening and chairing meetings of appropriate contributors at all stages.

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Monitoring and controlling feasibility studies, design and production to ensure that the brief is
being satisfied, including adherence to the budget, investment and programme plans.
Contribution to primary and key decisions and to making operational decisions.
Recommendation and control of the implementation of a strategy for disposal or management
of the completed project, including commissioning the building and advising on arrangements
for running and maintaining it when completed.
Evaluation of the outcome of the project against its objectives and against interim reports
including advice on future strategies.

Role of an Architect in construction:


list of functions it is clear that the design manager (architect) and project manager are clearly
different roles, demanding quite different skills and abilities.
There are, however, overlaps between the project manager and architect, best accommodated
by integrating both disciplines within the same professional service firm There are, however,
overlaps between the project manager and architect, best accommodated by integrating both
disciplines within the same professional service firm
Collation of client/business requirements
Design co-ordination
Implementation.
Benefits in Project management for architects
Why should an architect understand project management?

Client/ stakeholders have an informed view of what the project will entail, at the onset. There
are clearly defined policies, objectives and instructions for every element of the project from
start to finish.
Clients benefit from assigning the ultimate responsibility to the project manager.
An effective project manager is more likely to deliver the project successfully- i.e with good
leadership, the project is kept on track with respect to time, cost and quality.
Effective project management ensures effective risk management.
Effective project management ensures value for money.
Coordination is one key aspect of project management which is beneficial to the
team as a whole
A project manager with a sound knowledge of the relevant tools and techniques of PM is likely
to introduce change with maximum efficiency and effectiveness
In planning, monitoring and controlling a project, Project management focuses attention on
cost, time, quality/performance and their trade-offs in such a way as to effect optimum
efficiency and effectiveness.

Need for project management in construction Industry


All the work that has to be done to achieve the time, cost and quality objectives defines the
project scope. The scope can change over time, and it is the project managers responsibility
to ensure the project will still deliver its defined benefits.
A project manager must maintain focus on the relative priorities of time, cost and quality.
Cost
Quality
Time

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Process of Project Management:

A clinical Approach to Project Management:

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RISK

1. Identify project objectives and constraints.


2. Maintain and update Risk register to
capture project risks along with mitigation
strategies.

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SCHED
ULE

QUALITY &
SAFETY

COST

1. An initiation schedule created to set the


momentum.
2. A combination of progress schedules tracked
closely to understand the current and planned
1. Quality plan & safety plan document with
target parameters.
2. Periodic quality & safety reviews to review
compliance and minimum requirements
respectively.

1. Keep overall costs within approved project


budget by strictly monitoring expenditure.
2. Conduct value engineering (VE0 workshops
to devise alternate methodologies to reduce
costs.

Initiate:
Find out the requirements of the Client (objective of the client)
Understand the environment of the projects and the variables
Define the Scope of the Project, agree with the client etc
Plan:
Prepare a project Charter
Develop a Project Management Plan
Create a Work Breakdown Structure
Resource Allocation
Things to Consider while Planning Projects
Resource Availability
Health and Safety of Personnel the Workplace
Environmental Safety

Reduction of Time

Minimization of Cost
1.Execute:

Implementation of project plan with the agreed cost, time and quality.
Change management, cost management etc.

2.Monitor and Control


Schedule
Risk management
3. Closing Process
Handover of the project with achieved objectives & deliverables e.g commercial &
technical handover.
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Who is a good Project management?

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Leadership skills
Motivation skills
Decision maker
Teambuilding
Forecast and plan
Manage risk
Effective control of resources.

Indian project management companies in the market

DTZ
CBRE

JLL
Turner & Townsend
Design & Build firms.
Cushman & Wakefield
Project management school in India:
NICMAR

Tools and techniques


Project management Softwares ( Primavera, Microsoft project plan, pert
master etc )
Templates for individual deliverables ( 5 phases of the project)
Regular Meetings
Why this Subject? (objective)
To understand Traditional Management System - Grant chart, Bar Chart, PERT, CPM, WBS etc
Skills - soft & hard skills
Programming, Network Techniques
To Establish a relationship between Project Cost and Project Planning
Application of Softwares in Planning of Simple Projects.

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QUESTIONS

Two Marks:
1. What do you understand by a dummy activity?
2. Mention any four rules to be followed for drawing a network diagram.
Sixteen Marks:
1. Explain and analyze the role, function and responsibilities of a construction manager and a
project manager.
2. Explain the planning, scheduling and controlling phases of a project management.

..

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