SEMINAR REPORT

On

CONTRACT DOCUMENTS
SUBMITTED TO VISVESWARAIAH TECHNOLOGICAL UNIVERSITY BELGAUM FOR THE PARTIAL FULFILLMENT OF VIII SEM DEGREE OF BACHELOR OF ENGINEERING IN CIVIL ENGINEERING

BY KATTAMREDDY ROHITH REDDY USN -1BI09CV031 VIII Semester Civil Engineering Under The Guidance of: Dr K.C. JAYARAMU Asst Professor, Department of Civil Engineering BANGALORE INSTITUTE OF TECHNOLOGY
(Affiliated To Visveswaraiah Technological University) Bangalore-560004
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BANGALORE INSTITUTE OF TECHNOLOGY BANGALORE -560004

CERTIFICATE

This is to certify that KATTAMREDDY ROHITH REDDY bearing university USN-1BI09CV031 has submitted the report on CONTRACT DOCUMENTS in partial fulfillment of the VIII SEM CIVIL ENGINEERING course in as prescribed by the Visveswaraiah Technological University during the academic year 2013-2014, under the guidance of Dr KC JAYARAMU Asst Professor, Dept of civil engineering.

Dr . A.G NATARAJ H.O.D Professor Dept. of Civil Engg

Dr K.C. JAYARAMU Professor Dept. of Civil Engg

INTRODUCTION

CONTRACT is an undertaking by a person or firm to do a work under certain terms and conditions. The work may be for the construction or maintenance and repairs, for the construction, supply of materials, for supply of labors, for transport , etc. In contract system the work is got done through contractors who arrange all materials, workers and services required for completion of work in time. A contract agreement is a bond , the contractor and department are bound by terms and conditions. The contract agreement consists of various documents that work to be done, time limit, woks and rates, detailed specifications, etc. The contract documents are one of the most important pieces that will guarantee of a successful project. This list contains the most common documents that must form part of every construction contract. Before the work is given out on contract an agreement or bond is prepared. The following documents shall be attached to the contract agreement or bond which should be duly endorsed and sealed. Each page shall bear the signature of the contractor and the accepting authority and all corrections shall be similarly initialed.

1. Title page
- having the name of work, contract bond numbered.

FIG 1. An example for title of a contract document

2. Index page
- having the contents of the agreement with page references.

FIG 2: An example showing index page

3.Tender noticegiving brief description of the work, estimated cost of work, date and time of the tender, amount of earnest money and security money ,time of completion,etc.earnest money, usually 2% of the estimated cost is deposited along with tender. 1. Sealed tenders will be received upto------A.M / P.M on the -----of 19 ----by the executive engineer ---------division of the following work:Name of the work---------------------estimated cost RS---------------.

2. The work must be completely finished to the satisfaction of the executive engineer within--------------------months from the date of the order to commence the work.

3. The tender form with complete sets of blank forms of contract can be obtained from the office of executive engineer ---------------division at -----------------every day from --------------------A.M to -----------------P.M at a charge of RS. --------per set.

4. Each tender must be accompanied by a deposit of RS. ------------as earnest money. such earnest money may be of following forms:-

a) Cash or treasury challan. b) Post office savings bank pass book having the requisite amount in the account, pledged to the executive engineer. c) Deposit receipt of state bank or other approved bank pledged to the executive engineer. e) National plan or national saving certificate pledged to the executive engineer.

5. The tenders will be opened at -----------------A.M / P.M on the -----of 19 ----by the executive engineer at the office at-----.

6. Power is reserved to reject any tender or all tenders without assigning any reason or given any explanation.
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7. Unless the person, whose tender has been accepted, signs the contract and deposits the security specified withindays, the earnest money deposited by him will be forfeited and the acceptance of his tender will be withdrawn. 8. The tendered rates shall be for the complete work and shall include all quarrying charges, royalty, testing, screening, tools and plants, carriage of materials to site, removal and changes of rejected materials, all taxes, income-tax, salestax, octroi charges, materials, labour, etc. 9. The tender rates will remain valid for a period of three months from date of opening tenders. 10. The quantities in the bill of quantities are approximately and liable to variation or cancellation for which contractor will not be entitled to any compensation. The quantities of any item or items and the total cost may vary by 20% for which rates shall not be altered.

11. The rate should be quoted in the bill of quantities, legibly both in figures and words.

4. Tender formgiving the bill of quantities, contractors rates. a) Total cost of works b) Time for completion c) Progress of works: Construction Work-in-Progress is a long-term asset account in which the costs of constructing long-term assets are recorded. The account Construction Work-inProgress will have a debit balance and will be reported on the balance sheet as part of a company's Property, Plant and Equipment. The costs of a constructed asset are accumulated in the account Construction Work-inProgress until the asset is placed into service. When the asset is completed and placed into service, the account Construction Work-in-Progress will be credited for the accumulated costs of the asset and will be debited to the appropriate Property, Plant and Equipment account. Depreciation begins after the asset has been placed into service. d) Security money- on acceptance of the tender, the contractor has to deposit 10% of the tendered amount as security money with the department which is inclusive of the earnest money already deposited. This amount is kept as a check so that the contractor fulfils the terms and conditions of contract and carries out the work satisfactorily according to the specifications and maintains progress and completes the work in time. If the contractor fails to fulfill the terms of contract his whole or part of security money is forfeited by the department. The security money is refunded to the contractor after the satisfactory completion of the whole work after a specified time, usually after one rainy season or six months of the completion of the work. Instead of collecting the whole of security money in one installment before starting the work this can be collected gradually by deducting from the running account bill of the contractor. Usually the earnest money is taken as part of the security money and the balance amount of the security money is collected by deduction from the running account bill of the contractor at 10% of the every running bill, up to the extent of 10 percent of the total cost of whole work.
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Earnest money- Earnest money should be in cash or encashable at any time. Earnest money may be in the form of deposit in treasury or state bank or other approved bank or government security, or savings certificate or post office, savings pass book or cash certificate, pledged to the executive engineer. While submitting a tender the contractor is to deposit a certain amount, about 2% of the estimated cost, with the department, as earnest money as guarantee of the tender. This amount is for a check so that the contractor may not refuse to accept the work or run away when his tender is accepted. In case the contractor refuses to take up the work his earnest money is forfeited. Earnest money of the tender whose tender has not been accepted is refundable. The amount of earnest money depends on the estimated cost of works and is as follows:Rs. 50.00 for works up to Rs. 2,000.00, Rs. 100.00 for works above Rs. 2,000.00 to Rs. 5,000.00, Rs. 200.00 for works above Rs. 5,000.00 to Rs. 10,000.00 and Rs. 100.00 for every Rs. 5,000.00 or part thereof above Rs.10, 000.00.

e) Penalty clause1. Delay in completion of work. 2. Defects in workmanship. 3. Replacement of materials in the event of job standard materials used which will not match with specification. 4. Escalation in prices if considerable, the contractor has to b suitably compensated. 5. in case of delayed payment by clients, the percentage payable to contractor

5. Estimate:
Before undertaking the construction of a project it is necessary to know its probable cost which is worked out by estimating. An estimate is a computation or calculation of the quantities required and expenditure likely to be incurred in the construction of a work. The primary object of the estimate is to enable one to know beforehand, the cost of a work .the estimate cost is the probable cost of a work and is determined theoretically by mathematical calculations based on the plans and drawing and current rates. Approximately estimate may be prepared by various methods but accurate estimate is prepared by detailed estimate method. Actual cost-the actual cost of a work is known at the completion of the work. Account of all expenditure is maintained day to-day during the execution of work in account section and at the end of the completion of the work when the account is completed, the actual cost is known .the actual cost should not differ much from estimated cost worked out at the beginning. Detailed estimate- preparation of detailed estimate consists of working out the quantities of different items of work and then working out the cost i.e, the estimate is prepared in two stages:i) Details of measurements and calculation of quantitiesthe whole work is divided into different items of work s earthwork, concrete, bridge work, etc .and the items are classified and grouped under different sub-heads and details of measurement of each item of work are taken out and quantities under each item are compounded in prescribed form details of measurement form

Details of measurement form:Item no Description of particulars No. Height Breadth Length

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ii)

Abstract of estimated cost: the cost under item of work is calculated from the quantities already computed at workable rate and total cost is worked out in a prescribed form, abstract of estimate form. A percentage of 3 to 5 percent is added for contingencies, to allow for pretty contingent expenditures, unforeseen expenditures changes in design, changes in rates which may occur during the execution of the work. A percentage of 11/2 and 2 per cent is also added to meet the expenditure of work charged establishment.the grand total thus obtaind is the estimated cost of the work.

Abstract of estimate form:Item no DESCRIPTION Quantity OF PARTICULARS Unit Rate Amount

In the above form the description of each item should be such as to express exactly what work ,material, proportions of mortar, etc. have been provided for.

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6. Bill of quantities
giving quantities and rates of each item of work and cost of each item of work and the total cost of the whole work. The bill of quantities (sometimes referred to as 'BoQ') is a document prepared by the cost consultant (often a quantity surveyor) that provides project specific measured quantities of the items of work identified by the drawings and specifications in the tender documentation. The quantities may be measured in number, length, area, volume, weight or time. Preparing a bill of quantities requires that the design is complete and a specification has been prepared. The bill of quantities is issued to tenderers for them to prepare a price for carrying out the works. The bill of quantities assists tenderers in the calculation of construction costs for their tender, and, as it means all tendering contractors will be pricing the same quantities (rather than taking-off quantities from the drawings and specifications themselves), it also provides a fair and accurate system for tendering. The contractor tenders against the bill of quantities, stating their price for each item. This priced bill of quantities constitutes the tenderer's offer. As the offer is built up of prescribed items, it is possible to compare both the overall price and individual items directly with other tenderers offers, allowing a detailed assessment of which aspects of a tender may offer good or poor value. This information can assist with tender.

The priced bill of quantities will also:

Assist with the agreement of the contract sum with the successful tenderer. Provide a schedule of rates assisting with the valuation of variations. Provide a basis for the valuation of interim payments. Provide a basis for the preparation of the final account.

PREPARING BILLS OF QUANTITIES It is very important that bills of quantities are prepared according to a standard, widely recognized methodology. This helps avoid any ambiguities or misunderstandings and so helps avoid disputes arising through different interpretations of what has been priced. In the UK, bills of quantities for general construction works were until most commonly
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prepared in accordance with the Standard Method of Measurement, currently in its 7th Edition (SMM7). However, a new standard, the New Rules of Measurement became operative on 1 January 2013 and replaced SMM7 on 1st July 2013. NB Other methods of measurement are used for civil engineering works (Civil Engineering Method of Measurement) currently in its 3rd Edition (CESMM). SMM7 adopted the Common Arrangement of Work Sections (CAWS), a standard method for categorizing the works (see the Construction Project Information Committee (CPIC)). This is also the categorization of work that is used for the National Building Specification (nbs):

A - Preliminaries and general conditions. B - Complete buildings, structures and units. C - Existing site, buildings and services. D - Groundwork. E - In situ concrete and large precast concrete. F - Masonry. G - Structural carcassing, metal and timber. H - Cladding and covering. J - Waterproofing. K - Linings, sheathing and dry partitioning. L - Windows, doors and stairs. M - Surface finishes. N - Furniture and equipment. P - Building fabric sundries. Q - Paving, planting, fencing and site furniture. R - Disposal systems. S - Piped supply systems. T - Mechanical heating, cooling and refrigeration systems. U - Ventilation and air conditioning systems. V - Electrical systems. W - Communications, security, safety and protection systems. X - Transport systems. Y - General engineering services.
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Z - Building fabric reference specification. However, this system is currently undergoing considerable change, with CAWS being incorporated intoUniclass, and Uniclass being replaced with Uniclass2 In addition, NRM has moved away from the Common Arrangement of Work Sections (CAWS) to adopt its own system of indexing . Bills of quantities can be prepared elementally or in works packages, and are most useful to the contractor when they are prepared in work sections that reflect likely subcontract packages. This makes it easier for the contractor to obtain prices from subcontractors and is more likely to result in an accurate and competitive price. The bill of quantities should identify the different kinds of work required, but should not specify them as this can lead to confusion between information in the bill of quantities and information in the specification itself. Disputes can occur where there is discrepancy between the bill of quantities and the rest of the tender documents (for example where an item is included in

the drawings and specification but not in the bill of quantities), or where there has been an arithmetical error. Generally the priced bill of quantities will take precedent, and the client will be responsible for their own errors or omissions, which may be classified asrelevant events (or compensation events) giving rise to claims for an extension of time and loss and expense. However if an ambiguity or error is noticed by the contractor during the tender process, it is best practice for them to tell the client, even if there may be some commercial advantage to them not doing so. Increasingly, software packages are available to assist in the preparation of preparation of bills of quantities, and building information modeling systems can be used to produce bills of quantities from information already contained within the model. Bills of quantities are normally only prepared on larger projects. On smaller projects, or for alteration work the contractor can be expected to measure their own quantities from drawings and schedules of work. Schedules of work are 'without quantities' instructional lists that allow the contractor to identify significant work and materials that will be needed to complete the works and to calculate the quantities that will be required. APPROXIMATE BILL OF QUANTITIES An approximate bill of quantities (or notional bill of quantities) can be used on projects where it is not possible to prepare a firm bill of quantities at the time of tendering, for
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example if the design is relatively complete, but exact quantities are not yet known. However this will tend to result in more variations during construction and so less price certainty when the investment decision is made. Some contracts allows for re-measurement of approximate quantities (for example, this is common on cut and fill on road works). Here, quantities are simply revised and payments made accordingly without the need to instruct a variation. If an approximate quantity turns out not to have been a realistic estimate of the quantity actually required, this may constitute a relevant event giving rise to claims for an extension of time and loss and expense. Approximate bills of quantities can also be used during the design process as a tool for controlling design. They are then sometimes included in the tender documents as a guide with a caveat stating that responsibility for measuring quantities lies with the contractor, and drawings and specifications take priority over any description in the approximate bills .

7. Schedules
a) Schedule of issue of materials-giving list of materials to be issued to the contractor with rate and place of issue. b) Schedule of work-: schedule of work are 'without quantities' instructional lists often produced on smaller projects or for alteration work. They are an alternative to bills of quantities, allowing pricing of items such as builders work and fixing schedules (such as sanitary fittings, doors, windows, ironmongery, light fittings, louvers, roller shutters, diffusers, grilles and manholes). Schedules of work are prepared by designers rather than by the cost consultant. They may be prepared as part of the production information alongside drawings, specifications, bills of quantities and preliminaries and are likely to form part of the tender documentation and then contract documents. Schedules simply list the work required. Any information about quality should be provided by reference to specifications, and information about location and size should be provided

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on drawings. Where a schedule includes a description of the work required, this is a 'specified' schedule of work. Schedules should allow the contractor to identify significant work and materials that will be needed to complete the works and to calculate the quantities that will be required. As a consequence, it is important that schedules of work properly describe every significant item of work to which they relate. Failure to do so may result in a claim by the contractor. Schedules of work can be arranged on an elemental basis (for example groundwork, concrete, masonry etc.) or on a room by room basis.

8. specificationsSpecification specifies or describes the nature and the class of the work, materials to be used in the work, workmanship, etc., and is very important for the execution of the work. The cost of a work depends much on the specifications. Specifications should be clear, and there should not be any ambiguity anywhere. From the study of the specifications one can easily understand the nature of the work and what the work shall be. The drawings of a building or structure show the arrangement of the rooms and various parts. Drawings do not furnish the details of different items of work, the quantities of materials, proportion of mortar and workmanship which are described in specifications. Thus the combinations of drawings and specifications define completely the structure. Drawings and specifications form important parts of contract document. During writing specification attempts should be made to express all the requirements of the work clearly and in a concise form avoiding repetition. As far as possible, the clauses of the specification should be arranged in the same order in which the work will be carried out. The specifications are written in a language so that they indicate what the work should be and words "shall be" or "should be" are used. Specifications depend on the nature of the work, the purpose for which the work is required, strength of the materials, availability of the materials, quality of materials, etc.

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They are written documents that describe the materials and workmanship required for a development. They do not include cost, quantity or drawn information, and so need to be read alongside other contract documentation such as quantities, schedules and drawings. Likewise, written information about materials and workmanship should not appear on drawings or in bills of quantities, instead they should refer to the appropriate clauses in the specification. Specifications vary considerably depending on the stage to which the design has been developed when the project is tendered, ranging from performance

specifications (open specifications) that require further design work to be carried out by the contractor, to prescriptive specifications (closed specification) where the design is already complete and no choices are left to the contractor. Prescriptive specifications give the client more certainty about the end product when they make their final investment decision (i.e. when they appoint the contractor), whereas a performance specification gives the contractor more scope to innovate, and adopt cost effective methods of work, potentially offering better value for money. Typically, performance specifications are written on projects that are straight-forward and are well-known building types, whereas prescriptive specifications are written for more complex buildings, or buildings where the client has requirements that might not be familiar to contractors and where certainty regarding the exact nature of the completed development is more important to the client. An exception to this might be a repeat client such as a large retailer, where a specific, branded end result is required and so whilst the building type is well known, the specification is likely to be prescriptive. Most projects will involve a combination of performance and prescriptive specifications. Items crucial to the design will be specified prescriptively (such as external cladding) whilst less critical items are specified only by performance (such as service lifts). Key to deciding whether to specify a building component prescriptively or not, is considering who is most likely to achieve best value, the client, the designers or the contractor:

Large clients may be able to procure certain products at competitive rates themselves (for example the government),

Some designers may have particular experience of using a specific product (although some clients may not allow designers to specify particular products as they believe it

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restricts competition and innovation and may relieve the contractor of their liability for 'fitness for purpose').

The contractor may be best placed to specify products that affect build ability. Specifications should be developed iteratively alongside the design, and not left until the preparation of production information. By tender they should describe every aspect of the building in such a way that there is no uncertainty about what the contractor is pricing. Aspects of the works are generally specified by:

Products (by standard, a description of attributes, naming (perhaps allowing equivalent alternatives) or by nominating suppliers). Workmanship (by compliance with manufacturers requirements, reference to a code of practice or standards or by approval of samples or by testing). It should be possible to verify standards of products and workmanship by testing, inspection, mock-ups and samples, and documentation such as manufacturers certificates. Specifications should be structured according to work packages mirroring the separation of the works intosub-contracts. This makes it easier for the contractor to price and so may result in a more accurate tender. The Common Arrangement of Work Sections (CAWS) includes 300 different work sections, reflecting the range of specialists and sub-contractors in common use. Proprietary specifications (such as the National Building Specification (NBS)) follow the Common Arrangement of Work Sections (CAWS) and are continually updated. Subscribing to such a service ensures that all clauses and standards referred to in a specification are up to date. NB This system is currently undergoing considerable change, with CAWS being incorporated into Uniclass, Uniclass being replaced with Uniclass2 and SMM7 being

superceded by the New Rules of Measurement(NRM). NRM uses its own system of indexing. See CAWS or New Rules of Measurement for more information. The development of Building Information Modeling (BIM) can allow the creation of a building model populated with specification information meaning that there is no need to prepare a separate specification

Specifications are of two types:(1) General specification

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(2) Detailed specification. General specification or Brief specification- General specification gives the nature and class of the work materials in general terms, to be used in various parts of the work, from the foundation to the super structure. It is a short description of different parts of the work specifying materials, proportions, qualities, etc. General specifications give general idea of the whole work or structure useful for preparing the estimate. Detailed Specifications-The detailed specification is a detailed description and expresses the requirements in detail. The detailed specification of an item of work specifies the qualities and quantities of materials, the proportion of mortar, workmanship, the method of preparation and execution and the methods of measurement. The detailed specifications of different items of work are prepared separately, and describe what the works should be and how they shall be executed and constructed. Detailed specifications are written to express the requirements clearly in a concise form avoiding repetition and ambiguity. The detailed specifications are arranged as far as possible in the same sequence of order as the work is carried out. The detailed specifications form an important part of contract document. Every engineering department prepares the detailed specifications of various items of works and get them printed in book form under the name 'Detailed specifications'. When the work, or a structure or project is taken up, instead of writing detailed specification every time, the printed Detailed Specifications are referred. The detailed specifications of different items of work are prepared separately, and describe what the works should be and how they shall be executed and constructed. Detailed specifications are written to express the requirements clearly in a concise form avoiding repetition and ambiguity. The detailed specifications are arranged as far as possible in the same sequence of order as the work is carried out. The detailed specifications form an important part of contract document.

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9. Drawings -complete act of drawings including:

Planes Elevations Sections Detailed drawings The plan and all fully dimensioned.

FIG 3; A drawing of sectional elevation of a three room building

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FIG 4; A drawing showing plan of a three room building

10. Condition of contract

-containing the terms and conditions of contract in detail. The conditions specify the following:a) Rates inclusive of materials, transport, labour, Tand P, all other agreements are necessary for completion of work b) Amount of security money c) Time for completion of the work d) Progress to be maintained e) Penalty for unsatisfactory and bad work, for failure in maintaining progress, for delay in completion
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f) Mode of payment, running account payment, final payment, security money refund g) Extension of time limit of contract h) Rules of for employment of debitable agency, termination of contract i) Minimum wages to labour, compensation to labour Contract conditions set out the principal legal relationship between the parties to a construction project, determining the allocation of risk and consequently, price. English law, unlike the codified legal systems in Europe, which recognize a duty of good faith, is not concerned with fairness but with certainty (unless it is a

consumer contract protected by statute such as the Consumer Protection Act 1987 or the Unfair Contract Terms Act 1977 ) The construction sector has a wide range of standard forms of contract which are intended to balance the risk of the parties but more importantly, through extensive and repeated use, give rise to a certainty of meaning. Well known standard form contracts include the Joint Contracts Tribunal (JCT), the New Engineering Contract (NEC) and for international projects Federation International des Ingenieurs-Conseil (FIDIC).

NB Standard form contracts also provide for different procurement routes, such as:

Construction management. Design and build. Design build finance and operate (PPP / PFI / DBO / BOOT). Emerging cost contracts. Engineering Procurement and Construction Contract (EPC) / Turnkey contract Engineering Procurement and Construction Management contract (EPCM) FF&E (Furniture, Fixtures and Equipment) contract. Framework agreements. Management contract. Measured term contracts Measurement contract ('re-measurement' or measure and value contract)
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Partnering. Prime cost contract / cost plus contract / cost reimbursable contract Prime contracting / prime-type contracting Traditional contract.

Typical conditions found in construction contracts can include (in alphabetical order):

Access. Assignment, rights of third parties and collateral warranties. Contractor's design. Contract sum and adjustment, Date for possession, deferment of possession, progress, delays, completion date, suspension &termination.

Dispute resolution procedures and alternative dispute resolution. Employer's instructions. Force majeure. Information release schedule. Insolvency. Injury, damage and insurance. Joint Fire Code. Liquidated damages. Net contribution clause. Partial possession. Payment, valuation (including off-site materials), certificates, fluctuations and retention. Practical completion. Project management and contract administration. Quality of works. Relevant events (compensation events), extensions of time and loss and expense. Sectional completion. Statutory obligations. Sub-contractors. Testing and defects (defects liability period) Variations, prime cost sums and provisional sums.
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Conditions of contract must be read in conjunction as contract must be read in conjunction with specification documents, drawings bills of quantities, activity schedules and special conditions. Standard form contracts often comprise suites of contracts with back to back subcontracts, consultant appointments and collateral warranties. The use of core conditions with option schedules or supplemental provisions is also now common.

11. Special condition

- depending on the nature of works, regarding Taxes royalties which are included in rates labour camp labour amenities Compensation to labour in case of accident, etc.

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