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Contract management
A contract is an agreement between two or more parties which is enforceable by law. This
agreement may be for selling or buying any commodity, burrowing or spending money,
using or hiring any property, or construction of the facility or rendering any service. All
contract are governed by Indian contract act 1872.
Elements of contract-
1- Mutual agreement- there should be mutual agreement between both the parties.
2- Lawful consideration- It includes set of promises which both the parties have agreed
upon, which may contain few exception to the law.
3- Lawful object- The proposal and the object of the agreement must be lawful. The
object must not be illegal, immoral or opposed to public policy.
4- Competent contracting parties- The parties entering into the agreement must be
competent, i.e. not disqualified either by infancy of insanity or by other special
qualification by personal law.
Contractual approach-
1- Traditional build-only contracts-
Traditionally, the construction management process follows a sequential approach.
It starts with procuring of facility and then design finalisation.
2- Design and build contracts-
These contract include design, construction and commissioning of the proposed
facility.
3- Build-own transfer(BOT) contracts-
In this contract, design and drawing are provided by the client to the contractor and
is viewed by the client as time consuming, capital intensive and risky, especially for
high cost infrastructure projects.
4- Organisational approach- The construction work can also be executed using contract
and departmental mix.
Contract documents-
The implementation of a construction contract between the owner and the contractor
requires certain written legal formalities. These are the form of written documents. The
specification together with the contract drawing and the bid documents, constitute the
contract documents.
The contract document is prepared by the purchaser/engineer in as detail and clear manner.
The content of typical contract document include the following-
1- Letter inviting tender.
2- Form of agreement.
3- General condition of contract.
4- Special conditions of contract.
5- Technical specification.
6- Contract drawing.
7- Bill of qualities and client’s standard schedule of rates.
Tenders preparation- The first step in tender preparation is to conduct the site
investigation for collecting all relevant data relating to site, the availability of materials
at the sites, rates of labour and material, sources of water and power, labour situation,
political environment of the area. Following aspects should be rechecked prior to issue
of tenders-
Scrutiny of contract drawings
Verification to ensure bill of quantities (BOQ) is prepared in accordance with the
standards methods of measurements
Correctness of bureau of Indian standards (BIS) specification referred in the contract,
and
Correctness of figures in numerals and words.
Tendering procedure-
The tendering procedure includes series of activities. Following is the sequence wise
details of those activities in tendering procedure.
1) Pre- Qualification of contractors
Eligibility criteria of contractors: parameters for selection of contractors for all high
value and specialist works shall be as given below:
A) Financial status: classification, liquidity status etc
B) Technical competence: organisation set up, past experience and reputation of
the consultant/firm, architectural/structural design facilities.
C) Resources: Equipment and T & P required for the specific task.
D) Records of service: works completed performance on on-going work, response to
defects rectification of completed works.
E) Attitude: Finalisation of bills/star rates and contractual disputes.
Tenders are issued to pre-qualified contractors. For pre-qualification of contractors,
notifications are issued giving details of name of purchase/engineer, project outline,
enquiry issue and tender submission dates, instruction for applying for pre-
qualification and submission date for the contractor’s pre-qualification data.
Period of submission of tenders-
It is essential that time allowed to tenderers should be adequate to enable them to correctly
calculate and check their tenders before submission. Hurried calculations on their part may
involve an element of approximation or an error on the safe side, which may not be in the
interest of the state. Allowing a short period to tenderers for submitting their quotations
may not save time in the long run because the work may have to be put to retendering due
to an unreasonable quotations received at the first instance.
Sufficient time should be allowed to the tenderer to study the amendments and allow for
these in their quotation in addition to the time required in dispatch/receipt of the
amendment and the tender. It is, therefore essential that when an amendment to the
tender effects the quotations, date of submission of tender is suitable extended.
Issue of tender-
Tender documents are issued to selected/pre-qualified contractors. These are dispatched
under the registered AD. Before issuing tender documents, the issuing officer must ensure
that he has obtained the sanction of the competent authority to issue tender and the tender
document have been scrutinised by the technical authorities.