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Construction Contracts & Contracting: Assignment 2 ON
Construction Contracts & Contracting: Assignment 2 ON
ASSIGNMENT 2
ON
NCP 23
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SUBMITTED BY:
Arunashish Mazumdar
GPPM,
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DEPARTMENT OF GPPM
NATIONAL INSTITUTE OF CONSTRUCTION MANAGEMENT AND RESEARCH
SCHOOL OF DISTANCE EDUCATION
25/1, BALEWADI, N.I.A. POST OFFICE, PUNE – 41104
v CASE
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management. Contract administration process should start right from the day work
is assigned to the company. Discuss any project contract currently in progress with
your company and how administration and monitoring is being done. Draw the
organization chart for this activity and explain all the functions carried out. Do you
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v PROJECT FACTS
The proposed project is to develop a New Building for ITM University at Gurgaon.
The New Building is (G+3) storeys with Two level basement and organized open spaces, with
summative built-up area of about 85,000 Sqft. Amenities and facilities like elevators, power
back-up, water supply and sanitation, fire-fighting, electronic security, intercommunication etc.
The present work pertaining to this tender consists of Civil, Structure, Finishing and
v SCOPE OF WORK
• Civil works as per BOQ and drawings for the proposed work.
• Familiarization with site: inspection and examination of the site and its surroundings
thoroughly. Study of the nature of the ground, subsoil means of access to the site, the
• Providing information and data: providing complete set of information which includes tender
documents, tender drawings and contract document complete in all respects, to the
contractors
• Inviting tenders
• Tendering and award of works: processing of tenders, award of work to the contractor, and
• Selection of project manager and his team, giving possession of site and setting up of
communication network.
• Filing and Records- Maintaining proper files and records of construction works Progress
record, field dairy, daily reports, feedback reports, inspection reports, misc. reports.
The contract documents' typically contain the notice inviting tender, information and instructions to
the renderers, general conditions of contract, special conditions of contract, schedule of quantities
and cost, tender drawings, specifications for work forms of bank guarantee in respect of earnest
Important details of the contract for the construction of ITM university building are-
A. TYPE OF CONTRACT-
The above-said contract is ITEM RATE CONTRACT In this contract, payment for work
done is made on the basis of the quantities of work actually executed and measured, materials
supplied and used by the contractor on the project, each such quantity being multiplied by the
contractor's corresponding unit rate given his tender for that unit. The mode of measurement
shall be as specified in the specifications at the materials. However for items for which no
mode of measurement given for any item, same shall be taken as IS-1200. For a contractor to
submit an item rate tender, it will be necessary to provide him general specification designs
Contract, means the documents forming tender and acceptance thereof and the formal
agreement executed between the owner and the contractor. Contractor, means individual or
shall sup-'i-vise and be in charge of the work on behalf of the owner. He shall be employed
NEW DELHI.
C. TIME LIMIT
Time allowed for carrying out the work shall be 16 months from the contractual date of start
of work
Time is the essence of the contract and the contractor is required to complete work in all
respects within stipulated lime of completion strictly as per the applied PERT/BAR chart and
hand over the same complete in all respects to the satisfactions of the architects.
Cost of the work is arrived upon by the bid by the contractor who have been awarded the
• Cost of tendering
The owner shall make the payment of running bills within 7 days after getting certified from
the architects and the architect shall certify the bills within 7 days after submission of each
F. MOBILISATION ADVANCE
Interest free mobilization advance @2% of the contract value against bank guarantee of
equivalent amount.
G. SECURED ADVANCE
Secured advance @75% of the cost of the material brought from outside for construction.
H. LIQUIDATED DAMAGES
A sum equal to 0.5% of the total value of incomplete works for every week’s delay subject to
The defect liability period in respect of works executed under this contract shall be nine
months or one rainy season, whichever is later from the date of handing over of the works to
the owner
J. QUALITY NORMS
All civil works shall be executed, measured and paid as per standard latest CPWD
specification included up-to-date correction slips. In case specifications of any item are not
All materials are specified to comply with IS code, when required proper testing of materials
should be done.
MONITORED/ RESOLVED
The contractor is advised to inspect and examine the site and surroundings thoroughly and
satisfy himself before submitting the tender as to the nature of ground and subsoil, means of
access to the site, the facilities available at the site etc. In general, they shall themselves
obtain all required information as to risks, contingency and all other circumstances which,
according them may influence or affect the rates. The Contractor shall be deemed to have full
The first and foremost obligation of a contractor is to carry out and complete the works in
accordance with the contract. The obligation has two facets,-the first is to carry out the work
and complete it in time, and the second facet is the maintenance and rectifying defects during
defect liability period winch starts immediately after completion of the work.
In most cases, the prime contractor entrusts different work packages to various sub-
contractors. The selection of sub-contractors is very significant to the success of the project.
workable rates. The prime contractor must satisfy himself whether the resources committee
would be available for deployment and whether the equipment committed to other projects
Planning and control is very important for a successful project. Time, Cost and Quality are
always the critical targets for the contractor in implementation of construction project the
contractor shall adhere to the construction programs as instructed by the architects from time
to time by deploying extra labor, equipment’s etc. The contractor shall submit to the
architects, the weekly bar charts showing the progress of works achieved as per the
programmer and projected progress to be achieved in the next week. The contractor shall also
give daily/weekly report of labor and equipment’s deployed at the site as per the Performa
5. QUALITY ASSURANCE
It is seen from the experience that wherever adequate attention is not paid by the contractor
to quality assurance requirements, this has not only led to delays and extra cost to the
contractor but had created friction in relations between employer and contractor. Hence
quality assurance is very important to the contractor. If it shall appear to the architect that any
work has been executed with unsound, imperfect, or unskillful workmanship or with
6. PROCUREMENT OF LATERIAL
The contractor shall provide at his own cost all materials, except specified. Innumerable
projects get delayed due to delay in procurement of material. Effective planning and control
and to avoid wastage of material and extra expenditure due to loss of labor.
Control on waste of material within the prescribed limits is of ultimate importance for
achieving the planned profitability Level. Excessive wastage of material caused due to
bar bending schedule/ shop drawings, improper checking of quantities while delivery from
the supplier can be reduced by having a regular system of wastage accounting and to advise
measures for reducing it by eliminating the causes. Occasional surprise checks should be
carried out for ensuring the proper use of material and for checking the wastage limit.
7. LABOUR WELFARE
The contractor shall obtain a valid license under the Contract Labor
(Regulation and Abolition) Act, l970 and the Contract Labor (Regulation and Abolition)
Central Rules, 1971 before the commencement of the work. No labor below the age of
The contractor shall pay to labour employed wages as defined in the Contractor's Labour
Regulation or as per provisions of the above mentioned acts. The contractor shall comply
with the provisions of the Payment of Wages Act, 1936, Minimum Wages Act, 1948,
The contractor shall provide for his own cost with a sufficient number of huts inside the site,
adequate water supply for the use of laborers, sufficient arrangements for draining away
silage water so as to keep the camp neat and tidy, sufficient lighting arrangement, proper
arrangements for conservancy and sanitation in the labor camps according to the rules of the
Effective operation and maintenance of construction equipment is very important for the
contractor. It is duty of the contractor to check the maintenance costs of the various
equipment’s, finding ways to check these costs, providing adequate work sheds to store these
equipment’s, tools and accessories, proper oiling of all the machinery etc. so that the
Construction records
• Job Drawings
• Deviation Requests
• Misc. Records
• Construction photographs
follows:
ARCHITECT
(Functions Dealing with owners, contractors, consultants Overall control and monitoring)
Electrical Consultants
Landscape consultants
Functions of each and every member of the above chart are well defined and those are as follows:
• Astt. Architects
Preparation of tender drawings, deciding materials and its specifications to be used for the
project, providing information and drawings to civil engineer. for the preparation of tender
documents & BOQ, assigning work to the draughtsman, attending all me meetings related to
the project, release of the working drawing, communication with various consultants, owners,
representatives, project managers & contractor, visiting the site as required, proper feedback to
• Engg. Staff
Consultants to provide drawings and information of their respective field of work, visit site as
directed by the architect to check the progress/quality of the work along with the Astt
Civil engineer's functions are preparation of tender documents preparation of BOQ, filling up
of quantities, checking all the final submitted tenders, checking of actual measurements of
architect/asst. architect.
• Administrative Staff
Clerk's job is to maintain all records of letters/communication with the either party, maintain
record of progress reports from the site, to draft letters of communication to various party, to
make sure that the letters, samples, drawings etc. has been delivered to the right party, to
maintain, as far as possible, record of all the telephonic communication with the either party
Accountant's job is to maintain all the accounts bills of consultancy, bills of site visits, and
and equipment’s.
3) Project Manager-In this case employed by the owner for the project only- completes
Points of disputes, ambiguity arising out of various levels of the organization are resolved by
face to face meeting between the concerning persons. The disputes are however tried to be
minimized by keeping open a proper communication channel which includes the clean
instructions given by the superiors to the juniors and proper feedback given by the juniors to
the seniors
However, the disputes arising between the various parties involved in the project have been
tried to be minimized by clearly mentioning all the important and sensitive points in the
tender/contract document and keeping the communication network open as planned in the
tender document.
Methods followed for the proper administration and monitoring of the project are as follows:
a) Maintaining proper communication with the concerning parties through telephones and
letters.
b) Making it very clear the duties of the contractor in the tender document itself.
h) Asking for manufacturer's report, testing reports of various materials used for
i) Arranging timely meetings to discuss and reschedule the progress of the work.
v CONCLUSION
Thus, we can see that how important is a contract and contract management to carry out a project
to the satisfaction of all the parties. Contract defines me duties of contractor, it provides
guidelines to proceed for the work, and also provide a system of control and management so that
the project is completed in time. Instruction from the concern parties, feedback reports from the
contractor help in establishing a proper communication network that ultimately helps in timely
completion of the project. And this system is achieving result in the farm house project as a proper
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