2-Pre-Qualification of Contractor & Types of Contract - PPT

Pre-Qualification of
Contractor & Types of

Contract
Department of Civil Engineering Notes Compiled By: Engr. Abdul Rahim Khan 1
(Narowal Campus), UET Lahore
Pre- Qualification of Contractor
• Pre qualification is financial and technical evaluation of contractor by
employer or engineer.
• The owner ensures financial and technical soundness of contractor to
handle the project.
• Criteria for Pre-Qualification of Tenderer/Bidder/Contractor:
• Company Assets: Company should asset the contractor. The contractor
should be well recognized.
• Financial Status: Financially the contractor should have to satisfy the
company. He should have financial or bank statement for previous year.
• Organo-Gram Unit:
• In Organo-Gram unit
• The contractor should have list of skilled staff.
• The contractor should have to manage all these things before the time of
execution of work.
• The contractor should also have skilled labor. The masons should be
perfectly skilled.
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Department of Civil Engineering Notes Compiled By: Engr. Abdul Rahim Khan
Criteria for Pre-Qualification of Tenderer/Bidder/Contractor
• Tool & Plant (T&P): The contractor should have all types of machinery
related to the project to satisfy the client.
• Experience of Previous Project: Contractor should have lists of previous
projects being executed by him in order to satisfy his client.
• Experience About Current Project: Contractor should have executed the
same type of project which he is going to execute, so, he can handle it
carefully.
• Registration with PEC: Contractor should be registered from Pakistan
Engineering Congress. His degree should be valid.
3
Financial ability for Pre qualification
• Bank reference certificate for successful maintenance of accounts.

• Latest bank statement.
• Income tax registration certificate.
• Sales tax registration certificate.
• National tax number (NTN)
• Litigation or arbitration certificate.
• List of costs of Past and Present major projects.
• Details of joint ventures if any alongwith share of each organization.
• Annual turnover supported by the auditor report.
4
Technical ability for Pre qualification
• Registration of company with PEC.

• Registration of company with government and private client.
• List of Past projects.
• List of present projects in hand.
• List of technical staff.
• List of registered office with telephone, fax and e-mail addresses.
• List of equipment and machinery (for contractor only)
5
6
Contract
• Contract: A construction contract is defined as, “An agreement between

two parties such that it is enforceable by the law and must be agreed”
• Contractor
• This term is normally applied to a person (Other than Govt. Servant),
syndicate or firm giving an undertaking for the execution of any work or
supply of materials or performance of any service in that connection.
• Different Types of Contractor
• There are following types of contractor
• For Building and Roads
• For Sanitary installations and Water supply
• For Electrical and Air conditioning
• For Furniture
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Essential of Contract
• Minimum Two Parties
• Minimum of two parties are necessary to form a contract. Because a single
person can not enter in to a contract
• To form a contract, one party has to make an offer and the other must
accept it
• The person who makes an offer is called “Promisor” and the person who
accepts the offer is called “Promisee”
• Offer and Acceptance
• There must be an offer and acceptance in a contract.
• Both should be lawful
• Competent Parties
• The parties involved in a contract must be competent i.e. not disqualified
from contracting by and law to which they are subjected
• Free Consent
• To form a valid contract, all parties should give their free consent
• Consent means that the parties must agreed upon the same thing in the
same sense 8
Types of Contract
• Item Rate Contract
• In this type of contract, the contractor have to quote rate of each item of the
work without reference to any schedule of rates.
• This method is adopted when a reasonably a complete schedule of rate is
not available for the place where the work is to be carried out, or when the
number of non schedule items in the work is more
• Percentage Rate Contract
• In this type of contract, the rate of various item is fixed by the department
and contractor has to be agreed to work according to that rates above or
below some fixed percentage of rates
• This type of contract is adopted where schedule of rates is available
• Schedule Rate Contract
• In this type of contract schedule of rates for different item is available and
work has to be carried out accordingly
• Lump Sum Contract
• In this type of contract, contractor has to quote a lump sum figure for the
completion of the work. This type of contract is given in exceptional cases
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Types of Contract
• Serial Contract
• If a contractor is already working on certain contracts at a construction site
and later on more works are planned on the same site, theses works may be
awarded to the same contractor, generally at the same rates, depending
upon his previous performance. This becomes a serial contract.
• If the client is satisfied with the quality of work completed by a particular
contractor, it is preferable to award subsequent contracts for other works to
the same contractor rather than appointing another party with whom the
client had no prior dealing.
• Package Deal Contract
• If a contracting firm is well reputed and provides both design and
construction facilities, the project as a whole may be awarded to this firm;
the agreement become a “Package Deal Contract”.
• Special type of buildings such as hotels, picture houses, shopping plazas,
etc., may be built on the basis of package deal contract.
• However, the success of such a contract mostly depends upon the
reputation and understanding of the firm with the client.
10
Types of Contract
• Labor Contract
• This is a contract where labor and workmanship is provided by the
contractor but all the materials are supplied by the client.
• It is suitable for those cases where an employer is in a position to buy large
quantities of materials at favorable prices.
• The advantages is that the speed of work will be increased but, at the same
time, there will be more wastage of materials.
• Labor rates for the scheduled items are also given in the schedule of rates
published by the competent authority.
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Advantages and Disadvantages
• Item Rate Contract

• Advantages
• This form of contract ensure a more detailed analysis of cost by the
contractor. And is more scientific.
• This form of contract helps in smooth progress and timely completion of a
work
• Intermediate payments to the contractor for the completed item is more
easier.
• Disadvantages
• In this type of contract there is always a loophole for the contractor to
change the rates of item
• If the certain item is to be increased then the contractor has right to quote
the rate during construction according to his own desire.
• Preparation of such type of contract required more time.
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• Lump Sum Contract

• Advantages
• The cost of the work is known before the start of the work
• Detailed measurements of the work is not required
• Proper planning and efficient management for execution of the work the
work is more convenient
• Disadvantages
• Making and intermediate payment to the contractor is not easy
• Detailed drawing with full information and specification is essential to
avoid any dispute
13
• Schedule Contract
• Advantages
• The materials store is utilized
• Disadvantages
• A large storage area is required for the storage of materials
• Theft of materials from store
• Reconciliation of materials is essential in this type of contract
• Delay due to non availability of materials in market is avoided
• Better progress with quality of materials can be maintained
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Purpose of Contract
• A quality construction.
• Construction on time.
• Construction within budget.
• Safe construction.
15
Leading Client in Government Sector
• In Government sector leading clients are:

• WAPDA (Water and Power Development Authority)
• NHA (National Highway Authority)
• Pakistan Railways
• Irrigation and power department
• Communication and works department (C & W)
Leading Client in Private Sector

• In private sector leading clients are:
• Bahria Developer
• Eden Developers
• Tricon developers (Real estate developers, Tricon village)
• Atlas Honda
• Coca Cola
• Suzuki
• Pepsi
• Nishat Mills
• KFC
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Leading Consultant
• Leading consultants are:

• NESPAK
• ACE (Allied Consultant Engineering)
• AAA consultants
• REC (Republic Engineering Consultant)
• NDC (National Development Consultants)
• Noor Durrani Associates
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Leading Contractor
• Leading contractors are:
• Descon
• Izhar Group
• Banu Mukhtar
• Habib Rafique
• SKB Engineering
• FWO
• Habib Construction (N-League)
• Hasnain Group (FC College Underpass)
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Thank You!
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Pre-Qualification of

Contractor & Types of

• Bank reference certificate for successful maintenance of accounts.

• Registration of company with PEC.

• Contract: A construction contract is defined as, “An agreement between

• Item Rate Contract

• Lump Sum Contract

• In Government sector leading clients are:

Leading Client in Private Sector

• Leading consultants are:

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