GOVERNMENT POLYTECHNIC,ARVI

Department of civil engineering

Prepare a report on mode of Payment to the contractor and its necessity

Presented by Under the guidance of

38 – Deep mandokar
39 – Mahesh B.Wairagade Prof M.B.Thakare
INTRODUCTION

A payment is the trade of value from one party (such as a person or a company) to another
for goods, or services, or to fulfill a legal obligation.

Payment to contractors for supply of material and works completed by them are done on the
basis of measurements recorded in the measurement books.
1.INTERIM PAYMENT
A partial payment given to the contractor monthly for work in progress under the terms
of contract is called as interim payment.

The department arranges for interim payment against the work completed by contractor.

 Interim payments are necessary in the following situations:

1. Work is completed by contractor but not measured.
2. Work is measured but bills are not prepared.

3. The quantity of an item executed is very large and payment is required by contractor in
stages other than R.A. bill.
2.ADVANCE PAYMENT

 Such payments are made in case where work is done but not measured.

 Advance payment is made in special cases where work is sufficiently progressed, but
measurements cannot be taken for certain valid reasons. Assistant engineer has to
give a certificate mentioning about the value of work done.

 On strength of this certificate, 75% payment is made to the contractor.

 3. Bill Forms
 
 
Various standard forms of bills and vouchers used for payment according to
the nature of the works.

Usually, white forms are used for running bills and yellow forms are used for
final bills.
4.First and Final payment

In case of small works of short duration, where the preparation of interim bills is not
necessary, the contractor is paid the whole of the tender sum in only on installment i.e.
on completion of work. P.W. Acct. Form No. 24 – First and Final, is used for making the
payment.
5. Retention Money:
The department withholds about 10 to 15% of the monthly payments to the contractor
to have an additional hold on the contractor so that he will not be encouraged to
abandon the work when nearing completion.

The purpose of retention money is to:

1.To rectify the defects,

2.Any work left out can be executed by this amount.

3.To meet the damages, if any.

6. Final Bill and Payment:
This means the last payment on running account made to a contractor on completion of
work and in full settlement of the account. The bill on which final payment is made is
known as “final bill”.

The contractor shall submit the final bill within one month from the date of completion of
work along with the final certificate issued by the engineer.
7. Reduced Rate Payment:

Sometimes, the contractor may fail to carry out the work strictly as per the
specifications, plans and drawings.

But the engineer is of the view that the work is structurally sound, but finishing
item is not as per the specification or as per actual drawing.

For example, item of painting to doors and windows consists of three coats of
painting of a particular brand but the contractor has used the paint of another brand
of lower quality, then this item will be paid at suitable reduced rate.
 8. E-Payment
 
 
It’s an electronic transfer of money from a bank account, usually checking
account without the use of the paper check. E-cash is a form of an electronic
payment system where a certain amount of money is stored on a client’s
device and made accessible for online transactions.
Conclusion
In this report I have studied about the different modes of payment to the
contractors such as interim payment, advance payment, reduce rate payment
and e-payment.