COMMERCIAL ASPECTS OF A CONTRACT

• INTRODUCTION
• GENERAL RULES & REGULATIONS
 Who can Sign Tender Form
 Opening, Acceptance & Rejection of Tenders
• NOTICE INVITING TENDERS
 Work to be Carried Out
 Submission, Opening Details, Time Allowed
 EMD/SD, Bid Availability and other Details
• CONTENTS OF A TENDER DOCUMENT
 NIT as Published, Brief Tender Notification.
 Bid Proposal Form, Instructions to Bidders
 Genera, Special & Erection Conditions
 Technical Spec, Drawings & Price Schedule
CONTRACTS, TYPES & COMMERCIAL ASPECTS

• What is a contract
– Bilateral agreement between two parties
– Undergoes several changes
• Agreement
– Parties must be competent
– Made by the free consent of partirs
– Made for some consideration
– Must be lawful
– Should be in writing & registered
• General principles of a contract
– Making a proposal
– Valid proposals
– Communication of proposals
– Must be certain & definite
– Make offers & invitation to offers
– Standing offers
– Acceptance of offers
– Standard forms of contract
• Various types of contract
– Supply
– Supply & construction
– Engineering, procurement & construction
– Engineering, procurement,construction, O & M
– Construction only
– Operation only
– Operation & Maintenance only
• Technical Aspects of a contract
– Extent & value
– Steps involved in taking up a project
– Mode of enquiry / NIT
– Prequalification requirements
– Technical requirements
– Engineering required for each equipment /
work viz sizing / rating / quantity
– Technical particulars to be met
– Performance guarantees
– Penalty / liquidated damages
– Efficiencies
– Capitalisation of losses
– Schedule of supply / erection
– Period of completion
– Examples of sizing / capacity fixing
• Batteries
• Auxiliary supply switchgear
• Turbo generating unit
• Thermal power plant
• Transformers
• BREIF TENDER NOTIFICATION
 Date of Submission, Opening of Bids
 Date & Time of Pre Bid Conference
 Cost of Bid/ Validity of offer/EMD
 Mode of Submission of Bids
• INSTRCUTIONS TO BIDDERS
 Scope, PQR, EMD, SD, Validity.
 Receipt & Opening of Bids, Documents to be Enclosed
 Award of Contract, Quality Assurance.
 Prices, Taxes & Duties, Quantities, Local Conditions
 Insurance, Maintenance Tools & Tackles.
 Proforma of EMD, Check List, PQR.

• GENERAL AND SPECIAL CONDITONS

 Definitions, Scope of Contract, SD, Sub vendors, Patent Rights
 Contract Price, Taxes & Duties, Completion Period.
  Delivery, Terms & Mode of Payments, Delays,Guarantee,
 Default, Termination, Proforma for Contract Agreement, SD, EMD etc.,

• ERECTION CONDITIONS
 Scope, Details of work, Testing & Inspection, Insurance
 Access to Site & Site Establishment
 Employment of Labour, Facilities
 Security, Material Handling & Storage.
 Planning & Measurement of Works, Completion & Handing Over.

• TECHNICAL CONDITIONS & DRAWINGS

 Scope of works in detail, Standards, GTPS
 Technical Details of Equipment & Work
 Survey, Work Plan.
 List of Materials & Drawings.
• PRICE SCHEDULE
• BID PROPOSAL FORM
• Post award works
– Detailed engineering
– Progress monitoring & co-ordination
– Inspection & testing
– Commissioning
– Performance tests / Taking over
– Documentation
• Some important conditions of tender
– Cost of bid document
– Earnest money deposit
– Security deposit
– Contract agreement
– Insurance
– Delivery period / completion period
– Penalty
– Terms of payment
– Guarantee
– Force majeure
– Termination of contract
– Power to vary or omit the works