Assignment 1

- D.L.Priyamvada

1. What is tender and its types?

Ans: - Tender: - It is nothing but an offer made by one party to another for execution of
specified work at a specified cost keeping with all the terms and conditions set there in
the tender document including the extent of the work shown in the plans.

TYPES OF TENDERS

ITEM RATE TENDER: - An item rate contract  is the type of contract in which the
contractor agrees to carry out the work as per drawings and specifications considering the
payment made entirely on the basis of measurements taken as the work proceeds and at the
unit price tendered by the contractor in the bill of quantities. This type of contract is also
called Unit Price Contracts.

 The quantities given are always approximate and are not binding on the owner.
 The contractor is required to fill in the rates of the items and thus it becomes a
simplified job so as the calculations and estimating are concerned.
 The contractor is paid on the measurement of the work executed at the rates quoted by
him in the tender.
 In fact, the rates of the items are the part of the contractor and the approximate
quantities are not.
 This is a balanced method of execution and the chances for extra works are minimised.
 It is suitable for all types of works like buildings, bridges, culverts, sewer lines, roads,
etc.

LUMP-SUM TENDER: - In this tender, the contractor undertakes to carry out the work as
shown on the plans and described in the specifications till completion, supplying all the
materials and labours for a fixed lump-sum or at a fixed rate per cubic or sq.mts of work.

 The contractor will be paid from time-to-time if specified in the contract and if not
specified, then he has to recover the full amount on completion of the work.
 He cannot make part payments as a ground for leaving the work if the contracts does not
specify the same.
 Time for completion of the work should be specified in advance.
 If the contractor is not to be given any part payments for the works, the same should be
specified in advance as otherwise, it is understood that part payments will be affected as
mutually agreed.
 Site shall be accessible to the contractor so that he can ascertain the nature of soil,
approx. cost of foundation and other relevant working conditions.
 This type of tender is suitable for all building works, laying of main sewer, general
drainage and plumbing and road works also.

COST PLUS PERCENTAGE TENDER: - The expenditure incurred by the contractor is

paid by the owner as agreed and over and above he is paid certain percentage as profit for
his professional services. At times such tenders are invited from a few contractors asking
them to name the price at which they will execute the work and fees that they expect for the
same. The fees usually fixed at a certain percentage of the cost of work

 The work can be commenced immediately without waiting for all the formalities.
 Suitable for public and private works.
 All details need not be worked out prior to the commencement of the work.
 Necessary variations as are required can be made.
 No guarantee of the cost of project in advance and ultimate cost is not known.
 No time limit for completion of work.
 Owner will be entitled to discounts, rebates and refunds.
 There are chances of fictious bills creeping in and calls for more care.

LABOUR TENDER: - In this case, the contractor agrees to carry out the complete labour
work of all the items of the work at the rates quoted by him.

 The contractor has to supply all the tools, scaffolding, nails, etc., and the owner supplies
only the materials required for the construction work.
 The contractor is responsible for line, level and setting out of the work.
 It generally includes the labour work for the construction of water tank for storage of
water required for construction purpose as well as labour work for putting up temporary
sheds for office and cement go down of reasonable size.
 The owner has to keep a close watch over the materials used by the contractor as he is
least concerned with their wastage.
 This method is very popular as the materials used and the workmanship will be of
standard quality.
 The contractor agrees to execute the complete work of the building right from the
foundation stage till completion at the specified rate per sq.mts or cubic m, excluding
drainage and electric works.
 It is suitable for all types of works like buildings, bridges, culverts and especially the
works of additions, alterations and repairs to the existing buildings.

DEMOLITION TENDER: - These tenders are usually called for the demolition of the
existing building up to ground level or up to road level and removal of all the materials of
the same including carting away the debris. The tenderer usually takes away all the
materials that are there in the old building and in turn he pays a specified amount to the
owner:

 The highest and not the lowest tender should be approved.

 The tender should be accompanied with a specified deposit so that the work can be
carried out as per the terms of the contract.
 The whole of the tender amount should be taken in advance before the possession of the
building is given for demolition.
 The contractor should be asked to take out insurance for accident, workmen’s
compensation, third party risks and for other claims. Etc.
 The contractor has to make the necessary arrangement s for cutting off the existing
water supply, drainage, connections, electric supply, etc.
2. How is tender document prepared?

Ans: - Tender document: -

- Instruction to contractor
 Type of tender
 Name of work, address & owners name
 Price of blank tender form
 Amount of EMD
 Time & place of tender submission
- General conditions & preliminaries
 It includes basic rate of building materials and list of approved manufacturer s of
materials.
- Letter of offer
 From contractor to architect’s office
 Letter is prescribed by architect’s office
- Copy of articles of agreement & general conditions of contract
 Printed papers available with IIA
- Drawings

3. What is the process of tendering?

Ans: - Stages involved in finalizing tender

 Announcement of tender (Tender Notice)

 Submission of Tender
 Opening of Received Tender
 Tender Scrutiny
- Detailed scrutiny of all the tenders received is done by the architect’s office and a
scrutiny report is submitted to the owner recommending a contractor for the work.
- Tender scrutiny is a time taking task to scrutinize so many tenders, it should be
done methodical.
 Rate Analysis
- First 2-3 contractors from the ascending list will be analysed.
- Rate analysis will be asked to be submit by selected contractors.
- Rate analysis means detailed calculation made to arise at item rate.
- Rate analysis will be used to make competing contractors to reduce rate.
- Rate quoted by the contractor should not be revealed to the other competing
contractor during rate analysis.
- Low rate will be tempting but as an architect we should check whether good
quality of work will be produced.
- Architect should always recommend reasonable economic rate to produce good
quality of work.
- Contractor financial strength should be checked to handle the project in the
estimated cost.
- Previous work experiences and conduct certificate reference should be analysed.
 Scrutiny Report
 - After a careful scrutiny of the tenders received, the next job of architect is to
recommend suitable contractor to the owner for the work. This is called Scrutiny
Report.
- After tender scrutiny architect will recommend either 1-2 contractors to owner.
- Architect office always make an estimate cost of construction and they will
compare with the shortlisted contractors.
- Quality of previous work done by the contractor will be an added advantage.
- Architect scrutiny report will be submitted to client in an enclosed envelope.
- This confidential document is opened in the meeting and discussed with the
presence of the client.
- Letter of intent will be issued form architect office to contractor.
- Contractor will also accept the offer and convey his interest to do the work in the
form of written statement.
- Finally, the most waited work order will be given to the selected contractor.
 Work Order
- A letter issued from architect to contractor on behalf of the owner to take up the
work is called the Work Order.
- This letter should have the proper reference of the tender submitted by the
contractor.
- This letter includes the commencement of the work and its also a part of the
contract document.

4. What is a contract and its types?

Ans: - Is a voluntary arrangement between two or more parties that is enforceable by law
as a binding legal agreement.

 Contract is a branch of the law of obligations in jurisdictions of the civil law

tradition.
 Contract shall be executed and signed on a stamp paper of appropriate value.
 In case of dispute unstamped contract papers cannot be admitted before an arbitrator
or a court of law.

Contracts can be done by private party or a public body.

 The contract by a private party is executed by signing the necessary documents.

Whereas in case of Public Bodies, Govt and Local Authorities, the same should be made
under their respective seals:  The seal of the authority must be affixed by those persons
who are authorised to do so.  The instrument operates at once, as soon as the seal is
affixed.  The seal should not be affixed carelessly and indifferently.  The seal shows
that every member is bound by whatever has been done by the person authorised to do so.

5. What are the different types of building contracts?

Ans: - The different types of building contracts are:

 Lump-sum contact- Under a lump sum contract, also known as a stipulated sum
contract, the project owner provides explicit specifications for the work, and the
contractor provides a fixed price for the project. These contracts require the owner to
 complete the project’s plans, designs, specifications and schedule before the contractor
can establish a price. The contractor then estimates the costs of materials, tools, labour
and indirect costs such as overhead and profit margin and provides a quote.

If the project’s final costs are lower than the contactor’s estimate, then their profit increases.
If the estimate is too low, the contractor’s bottom line suffers. However, the project owner’s
finances are unaffected in either scenario.

 Item rate contract- An item rate contract is the type of contract in which the
contractor agrees to carry out the work as per drawings and specifications considering
the payment made entirely on the basis of measurements taken as the work proceeds and
at the unit price tendered by the contractor in the bill of quantities. This type of contract
is also called Unit Price Contracts or Remeasured Contracts. A bill of quantities
(BOQ) will be prepared by the client during the tendering stage where the quantities of
items to be carried out is precisely worked out by the client and the contractor has to
quote a unit price against each item of work. 

 Cost plus percentage contracts- Cost-plus percentage of cost is a method contractors

often use to price services. This type of contract specifies that the buyer must pay all the
project costs incurred by the seller, plus an additional amount for profit. Products such
as purses and services such as car detailing have fixed prices. Other services and
projects, such as home remodels, have variable costs that are hard to predict. These
depend on the cost of materials. Any changes or additions made while the work is being
done might increase that expense. The cost plus percentage contract ensures contractors
are reimbursed for the actual expenses they incur, rather than allowing for a fixed price
that covers everything. The cost-plus contract is also referred to as the cost-
reimbursement contract. It includes a percentage cost on top of the seller's costs for their
overhead. That way, the seller can make a profit from the transaction.

 Labour contract- A labour contract is a legal agreement that sets forth the terms and
conditions of an employee's employment. Labour contract typically include provisions
such as salary, benefits, vacation time and other working hours. The contract can be
written or oral, but it is always best to get them in written format. labour contracts can
be used between employees, independent contractors, seasonal workers, and more.
Many US states have different laws related to employment, so it is important to work
with a lawyer licensed in the state where the employee will be working to make sure
you're covered on local laws.

 Demolition contract- A demolition contract is a legally binding agreement between a

contractor and their company, with a client. A demolition contract is a legally binding
document specifically for situations where a building or structure is demolished. In a
demolition contract, you should include:

1. a description of which property or structures are to be demolished and specify any

that are excluded;
2. dates for the demolition project to begin and dates for it to be completed;
3. which party is responsible, the client or the contractor, for obtaining permits and
licenses for the demolition, including who is responsible when it comes time to pay
for those fees; and
4. what the contractor will be paid in exchange for the demolition project.