CONSTRUCTION CONTRACTS AND CONTRACTING

Assignment No.3 NCP-23

Ar.Shantanu J Joshi Reg.No. 212-05-11-10611-2143

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ASSIGNMENT- CONSTRUCTION CONTRACTS MANAGEMENT Contract administration and monitoring is the most important areaof construction management. Contract administration processshould start right from the day work is assigned to the company.Discuss any project contract currently in progress with yourcompany and how administration and monitoring is being done.Draw the organization chart for this activity and explain all thefunctions carried out. Do you think the system is achieving results?Discuss.

PROJECT FACT FILE Name of project Hematic Motors Pvt.Ltd. Factory Building at Tasawade MIDC, Tal.Karad, Dist Satara. Proposed covered area -11,621 sq.ft.

SCOPE OF WORK Familiarization with site: inspection and examination of the site andits surroundings thoroughly. Study of the nature of the ground, subsoilmeans of access to the site, the facilities available at site etc. Planning and control Civil works as per BOQ and drawings for the proposed work. Providing information and data: providing complete set of information which includes tender documents, tender drawings and contract document complete in all respects, to the contractors 2|Page

Inviting tenders Tendering and award of works: processing of tenders, award of work to the contractor, and signing contract with concerning parties.

Selection of team, giving possession of site and setting up of communication network.

Getting Working drawings from the Architect and issuing them on site Payment of Progress Bills after getting it certified from the Architect/Structural Consultant.

Checking the progress of the work at site through timely inspections. Project tracking in terms of time and cost Settlement of variations and claims. Filing and Records- Maintaining proper files and records of constructionworks ,Progress record, field dairy, daily reports, feedback reports, inspection reports, misc. reports.

Settlement of fees and claims.

IMPORTANT DETAILS OF CONTRACT, COST, TIME, TYPE, ETC, The contract documents' typically contain the notice inviting tender,information and instructions to the renderers, general conditions,of contract, special conditions of contract, schedule of quantities and cost,tender drawings, specifications for work forms of bank guarantee in respectof earnest money, performance guarantee, mobilization advance etc. 3|Page

Important details of the contract for the construction of Factory Building for Hematic Motors, at Tasawade MIDC are:-

A.TYPE OF CONTRACTThe above-said contract is ITEM RATE CONTRACT. In this contract,payment for work done is made on the basis of the quantities of work actually executed and measured, materials supplied and used by the contractor on the project, each such quantity being multiplied by the contractor's corresponding unit rate given his tender for that unit. The mode of measurement shall be as specified in the specifications at the materials. However for items for which no mode of measurement given for any item, same shall be taken as IS-1200. For a contractor to submit an item rate tender, it will be necessary to provide him general specification designs and drawings together with estimates of quantity. B.DEFINING FOLLOWING TERMS: Contract, means the documents forming tender and acceptance thereof and the formal agreement executed between the owner and the contractor. Contractor, means individual or firm or company undertaking the works in this case contractors are Owner, means - HEMATIC MOTORS PVT.LTD. Clerk of Works/Engineer-in-charge means the authorized representative of the owners, who shall supervise and be in charge of the work on behalf of

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the owner. He shall be employed and paid by the owners Architect/Consultant C.TIME LIMIT Time allowed for carrying out the work shall be 18 months from the contractual date of start of work. Time is the essence of the contract and the contractor is required to complete work in all respects within stipulated time of completion strictly as per the applied PERT/BAR chart and hand over the same complete in all respects to the satisfactions of the architects. D.COST OF THE WORK Cost of the work is arrived upon by the bid by the contractor who have been awarded the work is 1,74,31,500/- . Total cost of the project however will take into account. Final bills of each and every item submitted by the contractors Consultancy fees of the architects. Salaries of the Project Manager and his team. Cost of tendering Cost of subsequent site visits of owners, architects, project managers. Site supervisors etc. during various stages of execution. Costs of maintain backup office Civil, Accounts auditing

E.PAYMENT TERMS/ RUNNING ACCOUNT BILLS

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Submission of running bills at regular interval keeping a minimum interval of 15 days between two bills The owner shall make the payment of running bills within 7 days after getting certified from the architects and the architect shall certify the bills within 7 days after submission of each bill by the contractors. F.MOBILISATION ADVANCE Interest free mobilization advance @2% of the contract value against bank guarantee of equivalent amount. G.SECURED ADVANCE Secured advance @75% of the cost of the material brought fromoutside for construction. H.LIQUIDATED DAMAGES A sum equal to 0.5% of the total value of incomplete works for everyweeks delay subject to a maximum of 5% of total contract value. I.DEFECTS LIABILITY PERIOD The defect liability period in respect of works executed under thiscontract shall be nine months or one rainy season, whichever is laterfrom the date of handing over of the works to the owner J.QUALITY NORMS All civil works shall be executed, measured and paid as per standard latest CPWD specification included up-to-date correction slips. In case specifications of any item are not covered under above specifications, relevant IS code shall be followed. All materials are specified to comply with 6|Page

IS code, when required proper testing of materials should be done. Mode of measurement shall be in accordance with IS: 1200

IMPORTANT POINTS FROM CONTRACTOR'S POINT OFVIEW TO BE MONITORED/ RESOLVED 1. FAMILIARISATION WITH SITE The contractor is advised to inspect and examine the site and surroundings thoroughly and satisfy himself before submitting the tender as to the nature of ground and subsoil, means of access to the site, the facilities available at the site etc. In general, they shall themselves obtain all required information as to risks, contingency and all other circumstances which, according them may influence or affect the rates. The Contractor shall be deemed to have full knowledge of the site. 2. COMPLETE THE WORK The first and foremost obligation of a contractor is to carry out and complete the works in accordance with the contract. The obligation has two facets,-the first is to carry out the work and complete it in time, and the second facet is the maintenance and rectifying defects during defect liability period winch starts immediately after completion of the work. 3. SELECTION OF RESOURCEFUL SUB-CONTRACTORS In most cases, the prime contractor entrusts different work packages to various sub-contractors. The selection of sub-contractors is very significant to the success of the project. It is desirable that sub-contracts should be 7|Page

awarded to a resourceful sub-contractor on workable rates. The prime contractor must satisfy himself whether the resources committee would be available for deployment and whether the equipment committed to other projects by the sub-contractor would be made available in time 4.PLANNING AND CONTROL Planning and control is very important for a successful project. Time, Cost and Quality are always the critical targets for the contractor in implementation of construction project The contractor shall adhere to the construction programmes as instructed by the architects from time to time by deploying extra labor, equipments etc. The contractor shall submit to the architects, the weekly bar charts showing the progress of works achieved as per the programme and projected progress to be achieved in the next week. The contractor shall also give daily/weekly report of labor and equipments deployed at the site as per the Performa prescribed by the architects, 5.QUALITY ASSURANCE It is seen from the experience that wherever adequate attention is not paid by the contractor to quality assurance requirements, this has not only led to delays and extra cost to the contractor but had created friction in relations between employer and contractor. Hence quality assurance is very important to the contractor. If it shall appear to the architect that any work has been executed with unsound, imperfect, or unskillful workmanship or with materials of any inferior description, it is contractors responsibility to rectify or remove and reconstruct the work materials or articles at his own 8|Page

cost.6.PROCUREMENT OF LATERIAL The contractor shall provide at his own cost all materials, except specified. Innumerable projects get delayed due to delay in procurement of material. Effective planning and control of material procurement system is essential to avoid delay in implementation of the project and to avoid wastage of material and extra expenditure due to loss of labor. Control on waste of material within the prescribed limits is of ultimate importance for achieving the planned profitability Level. Excessive wastage of material caused due to imperfection in the workmanship Imperfect storage system, improper handling, absence of bar bending schedule/ shop drawings, improper checking of quantities while delivery from the supplier can be reduced by having a regular system of wastage accounting and to advise measures for reducing it by eliminating the causes. Occasional surprise checks should be carried out for ensuring the proper use of material and for checking the wastage limit. 7.LABOUR WELFARE The contractor shall obtain a valid license under the Contract Labor (Regulation and Abolition) Act, l970 and the Contract Labor(Regulation and Abolition) Central Rules, 1971, before the commencement of the work. No labor below the age of eighteen years shall be employed on the work. The contractor shall pay to labour employed wages as defined in the Contractors Labour Regulation or as per provisions of the abovementioned acts. The contractor shall comply with the provisions of the Payment of Wages Act,

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1936, Minimum Wages Act, 1948, Employees Liability Act, 1938, and Workmen's Compensation Act, 1961 . The contractor shall provide with his own cost with a sufficient number of huts inside the site, adequate water supply for the use of laborers, sufficient arrangements for draining away silage water so as to keep the camp neat and tidy, sufficient lighting arrangement, proper arrangements for conservancy and sanitation in the labor camps according to the rules of the Local Public Health and Medical Authorities. Contractor should make a labour insurance policy covering all the team on his payroll and pay the premium at his own cost. 8. MAINTENANCE OF CONSTRUCTION EQUIPMENT Effective operation and maintenance of construction equipment is very important for the contractor. It is duty of the contractor to check the maintenance costs of the various equipments, finding ways to Check these costs, providing adequate work sheds to store these equipments, tools and Accessories, proper oiling of all the machineries. So that the maintenance cost and hence the operating costscould be reduced 9.FILES AND RECORDS 1) Construction records 2) Daily progress report 3) Telephone calls recording 4) Records of Tests of Materials 5) Daily Diary or LogConstruction site Office Files 10 | P a g e

6) Copies of all Correspondence 7) Job Drawings 8) Shop drawing Submittals 9) Copies of all approved Requisitions for payment 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24) Copies of Reports of all Types Record of all approved Samples Files of all Operating Tests Deviation RequestsConstruction Progress Record Daily Progress Record Field Diary or Log Special Feedback Reports Report of Field Correction Concrete Batch Plant Daily Reports Plant Inspection Reports Field Inspection Report Documentation of Safety Hazard Warnings Misc. Records Recording the proceedings of Job Conferences Construction photographs

ORGANIZATIONAL CHART WITH FUNCTIONS

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ARCHITECT
(Head of the organization) (Functions Dealing with owners, ractors, consultants Overall controland monitoring)

STUDIO STAFF Astt. Architect (2no.) Draughtsman ( 1 no.)

ENGG. STAFF/ CONSULTANTS Structural consultant Plumbing/sanitation Electrical Consultants Landscape consultants Civil Engg. (1 Nos.)

ADMINSTAFF Accountant (1no.) CLERK (1 no)

Functions of each and every member of the above chart are well defined and those are as follows: Astt. Architects (Draughtsman to work -under them- actual preparation of the drawings).Preparation of tender drawings, deciding materials and its specifications to be used for the project, providing information and drawings to civil engineer. for the preparation of tender documents &BOQ, assigning work to the draughtsman, attending all me meetings related to the project, release of the working drawing, communication with various consultants, owners, representatives, project managers &contractor, visiting the site as required, proper feedback to the architect, making site visit reports etc.

Engg. Staff

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Consultants to provide drawings and information of their respective field of work, visit site as directed by the architect to check the progress/quality of the work along with the Astt Architects/ Project Manager. Civil engineer's functions are preparation of tender documents, preparation of BOQ, filling up of quantities, checking all the final submitted tenders, checking of actual measurements of various works on site, checking of quality of construction at site, proper feedback to architect/asst. architect. Administrative Staff Clerk's job is to maintain all records of letters/communication with the either party, maintain record of progress reports from the site, to draft letters of communication to various party, to make sure that the letters, samples, drawings etc. has been delivered to the right party, to maintain, as far as possible, record of all the telephonic communication with the either party Accountant's job is to maintain all the accounts bills of consultancy, bills of site visits, and other misc. spending related with the project. Organizational Structure of the contractor, in brief, is as follows: 1)Contractor- The Head-Overall Control and Monitoring. 2)Sub-contractors- Handling construction works of their respective fields, arranging materials and equipments. 3)Site engineers/site supervisors- Qualitative and Quantitative check at site. 4)Administrative staff- Filing and Recording, Accounting and Billing. Organizational Structure of Owner, in brief, is as follows: 1)Owner-The Client-The money Spender. 13 | P a g e

2)Representatives of owner-Overall planning, meetings with architects and contractors, time scheduling, feedback to owner, handling misc. matters. 3)Project Manager-In this case employed by the owner for the project onlycompletes control and monitoring. Points of disputes, ambiguity arising out of various levels of the organization are resolved by face to face meeting between the concerning persons. The disputes are however tried to be minimized by keeping open a proper communication channel which includes the clean instructions given by the superiors to the juniors and proper feedback given by the juniors to the seniors However, the disputes arising between the various parties involved in the project have been tried to be minimized by clearly mentioning all the important and sensitive points in the tender/contract document and keeping the communication network open as planned in the tender document METHODS FOLLOWED FOR ADMINISTRATION/MONITORING Methods followed for the proper administration and monitoring of the project are as follows: a) Maintaining proper communication with the concerning parties through telephones and letters. b) Making it very clear the duties of the contractor in the tender document itself. c) Clearly specifying all the materials specifications in the tender document. d) Timely site visits by architect/asstt. Architect to monitor the construction work. 14 | P a g e

e) Proper preparation of tender and working drawings. f) Demanding site progress reports weekly from the contractor g) Sending site visits report to the clients/owners for their feedback. h) Asking for manufacturer's report, testing reports of various materials used for construction from the contractors. i) Arranging timely meetings to discuss and reschedule the progress of the work.

CONCLUSION Contract defines the duties of contractor, it provides guidelines to proceed for the work, and also provide a system of control and management so that the project is completed in time. It acts as a boundary in which the work needs to be done. Instruction from the concerned parties, feedback reports from the contractor help in establishing a proper communication network that ultimately helps in timely completion of the project,as a proper overall control and management is possible because of the Contract Management.

BIBLIOGRAPHY/ READINGS 15 | P a g e

1. Contract Management in Civil Works ProjectV. A. Prakash NICMAR Publication. 2. NICMAR Text Book NCP-23-Construction Contracts and Contracting.

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