Professional Documents
Culture Documents
Sulehri
October 2012
1
SALIENT ASPECTS
of
CONTRACT ADMINSTRATION
for
PMs and REs
Schematic Design
Budgetary Estimate
Detailed Design
Quantity Take-Off
Preparation of BOQ
Work Specifications
Engineers Estimate
Bid Preparation
Contractor Pre-/ Qualification
Contractor Selection/ Bidding and Award
Project Commencement
Performance Security
4
Insurances
Project Control
Scheduling
Applying Conditions of Contract on the Project
Contract Interpretations
Execution of Work in accordance with Drawings and Specs
Quality Issues in Construction and their Resolution
Quality Manuals/ Testing Procedures
Work Inspection Procedures
Payment against IPCs (Clause 60)
Determination of Increase / Decrease in
Contract Price (Clause 70: Price Adjustment)
5
RESOLVING CLAIMS:
Variation Orders
Cost Claims (Clause 53)
EoT Claims (Clause 44)
DISPUTE RESOLUTION:
Engineers Decision (Sub-Clause 67.1)
Amicable Settlement (Sub-Clause 67.2)
Arbitration (DRB, DAB, etc.) (Sub-Clause 67.3)
Completion Certificate (Sub-Clause _____ )
Defects Liability Certificate (Sub-Clause ____)
Final Payment certificate (Sub-Clause ________)
Project Closure
6
1.
2.
3.
4.
5.
6.
7.
8.
9.
Engineering Contracts
Role of the Engineer & Engineers
Representative
Price Adjustment
Introduction to Cost & EoT Claims
Dispute Resolution
Liquidated Damages
Variation Orders
Guidelines for Interpretation
Introduction to PPRA Rules
7
1. Engineering Contracts
S
DIVISION
PART
1. Engineering Contracts
S
DIVISION
PART
10
1. Engineering Contracts
DIVISION
PART
Unique/ Non-Routine
Temporary/ One Time Effort
Complex
Limited by:
Time
Budget
Resources, and
Performance Specifications
11
1. Engineering Contracts
DIVISION
PART
1. Engineering Contracts
DIVISION
PART
13
1. Engineering Contracts
DIVISION
PART
is to seek proposal
Bidding/Tendering
conforms to Contract Act 1872 as
Principles
amended
Contracts when the subject matters
Engineering
are the following and defined under Section-2(k) of
PEC Act 1976:
Goods
Works
Engineering Services
14
1. Engineering Contracts
Bidding Procedure
DIVISION
PART
15
1. Engineering Contracts
Bidding Procedure
DIVISION
PART
Bid Evaluation
Letter of Acceptance (Award)
Performance Guarantee
Conformed Contract Documents
16
1. Engineering Contracts
DIVISION
PART
End of Part 1
17
18
Definitions
CONTRACTS
DIVISION
PART
19
Definitions
20
Importance
CONTRACTS
DIVISION
PART
21
DIVISION
PART
22
DIVISION
PART
DIVISION
PART
24
DIVISION
PART
25
DIVISION
PART
End of Part 2
26
27
DIVISION
PART
3. Price Adjustment
DIVISION
PART
3. Price Adjustment
3. Price Adjustment
Escalation
DIVISION
PART
Payable Escalation =
(Quantity of specified materials consumed
during the billing period) x
(Current rate Base rate)
30
of Construction Contracts
DIVISION
PART
3. Price Adjustment
3. Price Adjustment
DIVISION
PART
Cement
(covers OPC, SRC and all types of Cement)
Reinforcing Steel
(covers all kinds of steel used for the Works)
32
3. Price Adjustment
DIVISION
PART
Fixed Elements
(covers overhead and profit, etc.)
33
DIVISION
PART
3. Price Adjustment
where:
Pn is the adjustment multiplier
a is a fixed coefficient specified in Appendix - C to Bid,
representing non-adjustable portion in contractual payments
b, c, d, are weightages or coefficients representing the
estimated proportion of each cost element
Ln, En, Mn,.. are the current cost indices of the cost
elements for month n
Lo, Eo, Mo,.. are the base cost indices prevailing on
the base date as defined in the bidding documents
34
3. Price Adjustment
DIVISION
PART
3. Price Adjustment
Table
Cost element
*
Description of
cost index or
reference
price *
Weightage
0.35
Fixed Part
Non-adjustable
Local Labour
(L)
Fuel (F)
PSO
Cement of all
types (C)
Miscellaneous
Materials
Total
1.00
36
Fixed Portion
DIVISION
PART
3. Price Adjustment
Fixed portion in a
Price Adjustment Formula
Part of Contract Value not subject to price adjustment
Includes but is not be limited to:
Inflation for the cost pertaining Cost elements not included
in the table of adjustment data/ formula
Cost of Providing various Guarantees
Taxes and duties included in the Contract Price
Contractors profit margin
Fixed portion shall not be less than 35% as per PEC Standard
Bidding Documents
37
3. Price Adjustment
DIVISION
PART
38
3. Price Adjustment
DIVISION
PART
End of Part 3
39
40
4. Introduction to Claims
DIVISION
PART
Introduction to Claims
Under FIDIC 1987,
4th Edition, Reprinted 1992
Clause-44 EOT Claims
Clause-53 Cost Claims
41
4. Introduction to Claims
DIVISION
PART
42
4. Introduction to Claims
DIVISION
PART
records
Sub-Clause 53.3 [Substantiation of Claims]
Within 28 days of giving notice, the Contractor shall
4. Introduction to Claims
44
4. Introduction to Claims
DIVISION
PART
Definition
Additional time granted to the Contractor to provide
an extended contractual time period by which
works are to be completed
Purposes
To relieve the Contractor of liability for Liquidated
Damages (LDs) for delay
To establish a new contract completion date to
prevent Time for Completion of works becoming
at large
45
4. Introduction to Claims
DIVISION
PART
Original Duration
Start of Project
Original
completion date
46
4. Introduction to Claims
DIVISION
PART
Original Duration
Start of
Project
EoT
Original
completion date
Extended
completion date
47
4. Introduction to Claims
DIVISION
PART
Original Duration
Start
of Project
LDs
EoT
Original
completion
date
Extended
completion
date
Actual
Completion
date
48
4. Introduction to Claims
4. Introduction to Claims
Letters
Method Statements
Instructions
Progress Reports
Photographs
50
4. Introduction to Claims
DIVISION
PART
4. Introduction to Claims
DIVISION
PART
Sub-Clause 44.2
4. Introduction to Claims
DIVISION
PART
Type of Delay
Reasons/Conditions
Excusable Delays
Non-Excusable
Delays
Concurrent Delays
Neutral Delays
Compensable
Delays
53
4. Introduction to Claims
DIVISION
PART
4. Introduction to Claims
DIVISION
PART
As-Planned
Collapsed
As-Built
55
4. Introduction to Claims
DIVISION
PART
4. Introduction to Claims
DIVISION
PART
By Negotiation
88%
05%
Through Arbitration
05%
Through Litigation
02%
57
End of Part 4
58
59
Introduction
DIVISION
PART
5. Dispute Resolution
Dispute
Introduction to ED
DIVISION
PART
5. Dispute Resolution
Amicable settlement
Documents/ Record
DIVISION
PART
5. Dispute Resolution
63
Format of ED
DIVISION
PART
5. Dispute Resolution
64
End of Part 5
65
66
6. Liquidated Damages
DIVISION
PART
LIQUIDATED
DAMAGES
Under Clause 47
[PEC STANDARD BIDDING DOCUMENTS
(CIVIL WORKS) BASED ON FIDIC CONDITIONS]
67
6. Liquidated Damages
DIVISION
PART
68
6. Liquidated Damages
DIVISION
PART
6. Liquidated Damages
DIVISION
PART
70
6. Liquidated Damages
DIVISION
PART
71
6. Liquidated Damages
DIVISION
PART
Equitable
treatment
calls
Bonus (@ 50% of Total LDs)
for
including
72
6. Liquidated Damages
DIVISION
PART
73
End of Part 6
74
75
DIVISION
PART
Adding (A)
Removing (R) or
Modifying (M)
76
DIVISION
PART
DIVISION
PART
(A/D)
DIVISION
PART
DIVISION
PART
80
DIVISION
PART
Evaluate variation using the rates or prices set out in the Contract, to
the extent of their applicability
When there are no applicable rates or prices, use the existing
(reasonable) rates as a basis for valuation
Determination of provisional rates to enable on-account payments in
any certificate issued under Clause 60
Agreement of suitable rates or prices with the Employer and the
Contractor by the Engineer
If no agreement is reached, the Engineer shall fix such rates or prices
what he considers appropriate
For supplied items, the rates/prices shall be developed on the basis of
quotations of at least three suppliers
81
DIVISION
PART
Sub-Clause 2.1
Sub-Clause 17.1
Setting-out
Sub-Clause 18.1
Sub-Clause 27.1
Fossil
Sub-Clause 31.2
Sub-Clause 36.5
Sub-Clause 40.2
Sub-Clause 42.2
Sub-Clause 44.1
Sub-Clause 58.2
End of Part 7
83
84
Plain Meaning
Contextual vs. Textual meaning
DIVISION
PART
Standard Terms
Specific provisions have precedence
DIVISION
PART
Standard Terms
Defined Terms will have the specific meaning throughout the
document
Standard Terms consistently used throughout the document
Ordinary meaning will be given to words other than Defined Terms
and Standard Terms
DIVISION
PART
Gap-filling
DIVISION
PART
Negotiated Terms
Negotiated Terms are to be given greater weight than
Standard Terms
Gap-filling
If there is a gap (that is if the contract does not address the
contingency that caused the dispute), the person
interpreting/ arbitrator may apply a default/ standard rule
88
Role of Knowledge-Base
DIVISION
PART
89
Spirit of Contract
DIVISION
PART
90
Standards of Preference
DIVISION
PART
DIVISION
PART
End of Part 8
93
94
Contents
95
DIVISION
PART
DIVISION
PART
DIVISION
PART
Curb/Minimise Corruption
Fair and Transparent (Rule 4)
Ensure Best Value for Money (VFM) (Rule 4)
Open Competitive Bidding (Rule 21)
Award to the Lowest Evaluated Bidder (Rule 38)
Negotiation(s) Not Permitted (Rule 40)
Redressal
98
DIVISION
PART
DIVISION
PART
Rule 13: Response Time (min. 15 days for LCB & 30 days for ICB)
Rule 14: Exceptions (Risks: National security & Disclosure of Information)
100
DIVISION
PART
DIVISION
PART
102
DIVISION
PART
DIVISION
PART
Contd.
Part 6: Opening, Evaluation and Rejection of Bids
DIVISION
PART
105
DIVISION
PART
Contd.
Part 7: Acceptance of Bids and Award of Contracts
DIVISION
PART
107
DIVISION
PART
109
110
111
End of Part 9
112
Extremely Important
Contractual Procedures
11
Feedback
DIVISION
PART
Discussion
Q&A Session
115
Thank You
116