CONTRACT AGREEMENT

1 Scope of Contract
Total construction management of the Commercial Building and other works
mentioned in the contract document with following conditions.
 NNCS Shall coordinate with consultant regarding design details, construction-
ability, project planning and monitoring and shall report the same to the Owner
on monthly basis.
 NNCS shall assist the owner for the total management of works including
procurement and management of all the materials including storage, equipment
rentals, labours and sub-contractors for construction of commercial building at
Lalitpur.
 Construction Manager shall perform the work as per the bill of quantities attached
with the contract document.
 The total project cost shall be ….. ……………….. .

2 Contract Period
 NNCS shall commence the project within one week from date of signing the
contract. NNCS however shall make its best effort to finish the project
within six month from the date of signing the contract.

Project Cost
 Provisional total project cost shall be Rs. …….., excluding 10% for
contingencies.

3 Liquidated Damage
 On the failure without genuine reason to start the work in time or/and to
complete the works and leave the site on or before the date of
completion, NNCS shall without any prejudice pay delay compensation
of an amount equal to Rs. 2000 (two thousand) per day as liquidated
damage. This amount is limited to 5% of management contract amount.

5 Payment to the Contractor

To facilitate the overall construction management CM shall receive advance
payment as follows.

5.1 The Owner shall pay the mobilization advance of 20% of the estimated project cost
of ………. (Rs. …………. only).

5.2 The rest of the payment shall be made as per the running bill to be verified by the
consultant.

5.3 The owner shall retain 5% (Five prevent) as retention money from the final bill to
be paid after the completion of the work and handover of the project.

6 Work Progress & Progress report

6.1 Work Schedule

After the Contract has been entered into but prior to commencement of the
work, the CM shall submit to the Owner a time chart in duplicate of the various
parts or section of the job in direct relation to the time and shall indicate the

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
 forecast of the dates for commencement and completion of the various parts or
section of the works in sufficient detail to the full satisfaction of the Owner.
The Owner's decision with regard to this clause shall be final, binding and
conclusive. This chart shall be the basis of gauging the progress or otherwise of
the works. During the progress of the works, it may be necessary to amend this
chart. The CM in that case shall work out such amendments and get it
approved by the Owner. The chart may further be necessary to be amended to
allow for any specific requirement of the Owner or to suit other concerned
agencies.

6.2 Progress report and interim project cost and billing

CM Shall submit the monthly progress report including bills of work executed
in the first week of the following months. The progress report will include the
works done in the month & the program of the following months. This
report shall be the basis for the payment to the management contractor.

7 Assignment and Subletting

7.1 Assignment
The CM shall not assign to anyone the Contract or any part thereof or any
benefit or interest therein under without the prior written consent of the Owner.

7.2 Subletting
The CM except where otherwise provided by the Contract shall execute the
whole of the works included in the Contract. The CM shall not sublet any part
of the works except with the prior consent of the Owner to be confirmed in
writing.

8 Admission To Site
8.1 The Principal, the Architect & Engineer and their representatives shall at all
times have access to the works at the site, storage and all such places where
work is being prepared or supplied.

9 Supply of Samples and Testing

9.1 The CM shall supply samples of the construction materials, which may require
site Engineer's approval prior to the use. These samples shall be supplied at the
Owner's expenses and without delay.

9.2 Whenever required by the CM in consultation to the Owner, the Owner, at his
own expense shall provide all facilities to have the stores or materials tested at
any time during the construction or reconstruction or prior to the expiry of
maintenance period, that the stores or materials recommended by the CM are
sound or of a satisfactory quality or meeting the specified standard, or in
accordance to the Contract. In the event that the test results are otherwise, the
CM shall instruct to remove such unsatisfactory stores and materials within 24
hours upon the written instructions of Owner.

10 Construction Plant And Equipment

10.1 Renting and procurement of all tools, plant, transport, instruments and
equipments required for the satisfactory execution of the works in accordance
with the drawing and Specifications shall be managed by the CM for which
owner shall pay as certified by CM. CM should get prior approval from the
Owner on above issue.

11. Orders Under Contract

11.1 Orders in Writing

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
 All notices, orders, etc. to be given under the Contract, shall be in writing, type
script or printed (or instructed in field book while at site), and if sent by
registered post to the last known place or abode or business of the CM or to his
temporary site office, shall be deemed to have legally served on the CM on the
date which in the ordinary course of post it would have been delivered to him.

11.2 CM to Comply
The CM shall comply with all orders and directions given to him in writing
by Owner without any delay

11.3 CM to Arrange for Safety

The CM shall implement necessary control measures for prevention of loss or
damage of the works until the works have been handed over completely to the
Owner

11.4 Intimation
The CM shall give due notice to the Owner whenever any such work of
concrete pouring is ready or about to be ready for execution. CM shall prepare
necessary site inspection sheets duly approved by CM's site engineers for the
works and report the same to the Owner whenever Owner requires the same.

11.5 CM to open up for Inspection

The Owner shall for the purpose of inspection and test uncover any parts of the
works or make opening in or through the same as the Owner may from time to
time direct and shall reinstate and make good part of parts to the satisfaction of
the Owner. The CM will make sure that the representative from the Owner
is present during such inspections.

12 Inspection of Works
12.1 Facilities for Inspection
At any time if so desired by the principal, they shall have the power to inspect
and examine any parts of the works and the CM shall give all facilities as
required for such inspection and examination.

12.2 Rectification through Other Agencies

In case of default on the part of the CM in carrying out the project the Owner
shall be entitled to employ and pay other agencies to carry out the same and
all expenses consequent there on or incidental there to shall be deducted from
the CM's balance payable amount.

13 Completion of Works

13.1 On completion of the work, CM shall inform the Owner for take over of the
building.

14 Maintenance Period
14.1 Guarantee till Completion and Transfer of Risk
The CM assist the Owner in repair, fair wear and tear expected, the whole of
the works until the six months from the date of handover of the building.

15 Contract Variation
15.1 Contract Variation by CM
In no circumstance shall the CM make any alternation in, addition to or
omission from the work as shown on the drawings except in pursuance of the

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
 written instruction of the Owner for any substantial alternation in, addition to
or omission from the work shall evidence the approval of the Owner.

15.2 Contract Variation by Principal

The Owner shall make any variation of nature, quality and quantity of the work
at his discretion but the value (if any) of such variation shall be taken into
account in ascertaining the amount of Contract Amount and CM should
manage the project incorporating all changes.

15.3 Compensation for Contract Variation

The CM shall provide the service for contract variation for work orders issued
within the contract period not exceeding 10% of the project cost without
additional financial burden to the Owner.

15.4 Dispute shall not stop work

If any dispute arises of work executed under the Contract, the matter shall be
referred to arbitration but under no circumstances should the work be
suspended on account of this said dispute and disagreement.

16 Removal of Persons Employed At Site

16.1 Removal on Misconduct
If in the opinion of the Owner any person employed by CM on the site is
incompetent, negligent or guilty of improper conduct, such person shall on the
Owner’s written instruction be removed forthwith and not again be employed
on the site without the consent of the Owner. The Owner’s decision with regard
to these clauses shall be final, binding and conclusive.

17 Termination of the Contract

17.1 Defaults
The Owner may, without any prejudice to any right or remedy which shall have
occurred or shall occur thereafter to the Owner, terminate the Contract as a
whole or in part by giving seven days clear notice to the CM of the following
defaults in the Contractor’s part:

17.2 Disregard to Instructions

The CM refuses or persistently disregards to comply with a notice in writing
from the Owner requiring him to manage the project according to standard
practice.

17.3 Failure to Observe Contract

a. Fails to comply with any of the terms and conditions of the Contract
after seven days notice in writing or failure to clear site, or
b. Fail to manage the project and complete the project by the date of
completion other than due to reasons beyond CM's control.

17.4 Subletting
Assigns, transfers, sublets or attempts to assign, transfer or sublet, any portion
of the works without the prior written approval of the Owner.

17.5 Completion of Works through Other Agencies

Whenever, the Owner finds it necessary to exercise his authority to terminate
the Contract under this condition, the Owner may manage the project by any
means at the CM’s risk and expense. The CM shall be entitled to receive
payment for the work performed by him, to the extent of the Contract value
thereof less the cost of the completion of the work in his default, as agreed

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
 between CM & Owner which will then be final, binding and conclusive. If the
cost so certified works exceed the sum of money held by the Owner or
otherwise due to the CM, the Owner may recover the deficit from the CM by
other means.

17.6 Liability after Termination

In case of the Owner has to go for termination in part as aforesaid the CM shall
not be released from any of his obligations or liabilities under the Contract as
regards the work remaining to be done by him.

17.7 Amicable Termination

If incase the Owner has to terminate the contract and discontinue the project
midway of the construction works for no fault of the CM, a mutually
acceptable plan to do so will be worked out between the Owner and the CM
and to be approved by the Owner. The plan will cover the reasonable
compensation for loss of opportunity for the CM due to such decision. The
amount of compensation shall be at the sole discretion of the Owner.

18 Measurement Of Works
18.1 Methods of Measurement
Measurement of all works in detail shall be in accordance with the Indian
standard method of measurement, IS 1200, unless otherwise stated in the Bill
of Quantities, Specifications. In any case discrepancy arising in method of
measurement between the IS 1200 latest and the method indicated in the bills
of quantities and Specifications forming part of Contract, the method adopted
in the Bill of Quantities and the Specifications shall prevail.

19 Unfixed Materials At Site

19.1 Property of the Owner when paid
Any unfixed materials intended for and / or placed on or adjacent to the works,
such materials shall become the property of the Owner and they shall not be
removed except for use upon the work, without the written authority of the
Owner. The CM shall be liable for any loss or damage to such materials.

19.2 Cooperation to Other contractors

The CM shall, in accordance with the requirements of the Owner, afford all
reasonable facilities for any Contractors, sub-Contractors, tradesmen, etc.
employed by the Owner and any other properly authorized or statutory bodies
who may be employed in the execution on or near the site of any work not
included in the Contract or of any Contract which the Owner may enter into in
connection with or ancillary to the works.

20 Working Hours
20.1 Working hours will be limited to the daylight starting not before 9.00 & until
18.00. Work can commence or can be held beyond specified time with
notifying the Owner/consultants site representative.

21 Cleanliness
21.1 The CM shall at all times keep the premises free from accumulated waste
materials or rubbish. The cost so incurred shall be reasonable.

22 Order Book
22.1 The CM shall maintain an order book at the site of work in which instruction
shall be given to the CM by the Owner as and when necessary. These orders
shall have to be signed by the Owner and nothing else will be written on it. If

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
 the CM wants to represent anything thereof he can do so similarly in the site
order book..

23 Force Majeure
23.1 The concept of Force Majeure shall mean events such as war or warlike
hostilities, mobilization of general military call up or draft, acts of government
(including acts of statutory authorities), civil war, revolution, rebellion,
insurrection, sabotage, strikes, Natural calamities such as floods, earthquakes
etc, and other circumstances or events that are beyond control of either party,
their sub-contractors, supplier, or financing bodies. It is expressly understood
that no circumstance shall be considered a case of Force Majeure, which the
party invoking the case of Force Majeure ought reasonably to have into
account at the date of signing the present Contract.

23.2 Should any event of Force Majeure occur after signing of the Contract which
prevents the performance of any obligations of either party on the date or dates
or periods of time provided for in this Contract or any specific construction
contract, the performance of such obligations may be postponed for such time
as the performance necessarily has to be delayed for its fulfillment, it being
understood that such a postponement shall not be deemed a deviation from the
schedule of execution.

24 Law Governing the Contract

24.1 Laws of H. M. G. Nepal
This Contract shall be deemed for all purpose to have been executed in Nepal
and in all respects shall be constructed in accordance with the laws of Nepal
and the rules and regulation of His Majesty’s Government.

25 Arbitration
25.1 Settlements of Disputes
Any dispute, controversy or claim arising out of or relating to this agreement,
or the breach, termination or invalidity thereof, shall be decided by arbitration
in accordance with rules for Domestic Commercial Arbitration Proceedings of
Nepal Council of Arbitration. The parties hereto agree to be bound by any
arbitration award rendered under this clause as the final adjudication of the
dispute.

26 Miscellaneous
26.1 The Owner shall cooperate with and assist the CM wherever possible in the
smooth execution of the works.

26.2 The CM shall make all shop drawing and as built drawing required for the
project.

26.3 The CM should have enough technical manpower in the site under the Project
Engineer to carryout the job efficiently.

26.4 The CM shall provide the owner details of manpower and procurement
schedule in the material and labor management schedule including cash flow
for the execution of the work. This shall be the basis for the monthly payment
schedule for the management of works by CM.

26.5 The CM shall effectively manage manpower.

26.6 The CM shall minimize to possible extent wastage of resources.

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)
26.7 The CM shall provide Cash Flow status to Owner on monthly basis.

All other issues not covered above shall be agreed jointly.

Agreed as above

For and on behalf of For and on behalf of

………….. ……..

……………………… ……………………
……. ……
………. ……..
........ ..........

Date: Date:

Seal: Seal:

Witness: Witness:

Contract Agreement Between Nayan Bahadur Subedi and Ram Kaji Sibakoti (NNCS)