LECTURE NOTES -2

K GANESAN
TYPES OF CONTRACTS &
REQUIREMENTS
CONTRACT MANAGEMENT CYCLE

PROJECT
FORMULATION
PRE-
TENDERING
ACTIVTIES
AWARD OF
WORKS
EXECUTION OF
WORKS

COMPLETION AND
HANDING OVER
DEFECTS
LIABILITY
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Prime Contracts
Contracts entered in to by Owner

Sub Contracts
Contracts entered in to by the Prime
Contractors
in order to fulfill the obligations arising from the
Prime Contract with the Owner
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 Various types of Prime contracts /

Sub Contracts
 A/E contracts
 PM/CM contracts
 Contractor / Suppliers / Specialists
contracts
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CONTRACTS FOR ARCHITECTURAL /

ENGINEERING (A/E) / MANAGEMENT SERVICES

COMMISSIONED BY OWNER TO CARRY OUT

SPECIALIST DESIGN & SUPERVISION SERVICES
 INITIAL PROJECT PHASE
 PREPARE FEASIBILITY REPORTS
 TO ADVISE ON RELATED APPROVAL REQUIREMENTS &
PROCEDURES
 CONCEPT / PRELIMINARY DESIGN
 INITIAL COST ESTIMATES
 TO OBTAIN NECESSARY PRELIMINARY PERMITS
APPROVALS FROM AUTHORITIES
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CONTRACTS FOR ARCHITECTURAL / ENGINEERING (A/E)

/ MANAGEMENT SERVICES
 PRE – TENDERING PHASE
 DETAILED TENDER DRAWINGS / SPECIFICATIONS/ TENDER
CONDITIONS / TENDER ESTIMATES
 ASSIST IN OBTAINING BUILDING / CONSTRUCTION PERMITS
 ASSISTANCE IN PRE-QUALIFICATION PROCESS /SHORTLISTING
OF BIDDERS
 ISSUE OF DOCUMENTS
 PROVIDE NECESSARY CLARIFICATIONS TO BIDDERS
 ISSUE OF NECESSARY CORRECTIONS / ADDENDUMS
 RECEIPT OF TENDERS / EVALUATIONS
 ASSIST IN TENDER NEGOTIATIONS / FINALIZATION OF
CONTRACT
 ASSIST IN FORMATION OF CONTRACT
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CONTRACTS FOR ARCHITECTURAL /

ENGINEERING (A/E) / MANAGEMENT SERVICES
 DURING CONSTRUCTION PHASE
 MONITOR PROGRESS
 MONITOR QUALITY OF MATERIALS / WORKS EXECUTED
 ISSUE OF FURTHER DRAWINGS / DESIGN INFORMATION /
CLARIFICATION
 ISSUE OF CHANGE INSTRUCTIONS/ VALUATION OF CHANGES
 EVALUATE & RECOMMEND CONTRACTOR’S MONTHLY
PAYMENT APPLICATIONS
 EVALUATE CONTRACTORS CLAIMS TOWARDS ADDITIONAL
COSTS/ TIME
 ENSURE PROPER REPORTING TO OWNER
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CONTRACTS FOR ARCHITECTURAL /

ENGINEERING (A/E) / MANAGEMENT SERVICES
 DURING PRACTICAL COMPLETION / HANDING OVER
PHASE
 CHECK & ISSUE SNAG /PUNCH LIST AND MONITOR THEIR
COMPLIANCE
 ATTEND ALL TESTING / COMMISSIONING ACTIVITIES AND
COMMUNICATE ACCEPTANCE OR OTHERWISE
 ENABLE TROUBLE FREE HANDING OVER TO OWNER/ USERS
 CHECK ALL AS-BUILT DRAWINGS & O/M MANUALS
 CERTIFICATION OF CONTRACTORS’ BILLS AT PRACTICAL
COMPLETION
 ENSURE ISSUE OF ALL REQUIRED GUARANTEES & WARRANTYS
FROM THE CONTRACTORS
 ANY OTHER CLOSE OUT REQUIREMENTS
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CONTRACTS FOR ARCHITECTURAL /

ENGINEERING (A/E) / MANAGEMENT SERVICES
 DURING DEFECTS LIABILIT Y PERIOD
 ASSIST EMPLOYER IN THE SELECTION OF MAINTENANCE
AGENCIES
 MONITOR CONTRACTORS’ COMPLIANCE TO DEFECTS /
SNAGS NOTIFIED
 CHECK & CERTIFY CONTRACTORS’ FINAL BILLS INCLUDING
CLAIMS
 CHECK & ISSUE THE DEFECTS LIABILITY COMPLETION /
PERFORMANCE CERTIFICATE AT THE END OF DEFECTS
LIABILITY PERIOD
 PROVIDE CLOSURE REPORT TO THE OWNER/ EMPLOYER
CE 6010 – CONSTRUCTION CONTRACT S & S PECIFICATIONS
CE 6010 – CONSTRUCTION CONTRACT S & S PECIFICATIONS

 CONTRACTS – MINIMUM REQUIREMENTS

 DEFINED SCOPE OF WORK

 CLEAR OFFER
 UNQUALIFIED ACCEPTANCE
 MEETING OF MINDS
 TIME FOR PERFORMANCE
 AMOUNT PAYABLE & PAYMENT TERMS
 CLEARLY DEFINED OBLIGATIONS OF CONTRACTING
PARTIES
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 CONTRACTS BETWEEN PRIVATE PARTIES

 NO DEFINED PROCEDURES NECESSARY
 SUO MOTO PROPOSAL / SINGLE BIDDER POSSIBLE
 NEGOTIATED TERMS WITH PREFERRED BIDDER

 HOWEVER FORMAL TENDERING PROCEDURES ARE

ADOPTED TO ACHIEVE
 COMPETITIVE PROPOSALS
 PARTICIPATION OF CONTRACTORS WITH BETTER SKILLS
 TO HAVE AN OPTIMUM PRICE AND A CLEAR BASIS FOR
SELECTION
 TO ESTABLISH A POOL OF COMPETENT CONTRACTORS
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 GOVERNMENT CONTRACTS

 CONTRACTING AUTHORITY AS DETERMINED BY LAW

 OPEN AND TRANSPARENT PROCESS
 FINANCED BY PUBLIC FUNDS

 ADVERTISED AND LET IN ACCORDANCE WITH BIDDING

STATUTES & OTHER LEGISLATIVELY MANDATED RULES

 JOB AWARDED TO LOWEST “RESPONSIVE &

RESPONSIBLE” BIDDER
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 GOVERNMENT CONTRACTS
 TO ENSURE PROPER USE OF PUBLIC FUNDS.

 BIDDING STATUTES DESIGNED SO THAT PUBLIC PAYS MINIMUM

PRICE FOR CONSTRUCTION DETERMINED BY OPEN
COMPETITIVE BIDDING

 TO PROTECT AND ENSURE A CONTINUATION OF FREE

ENTERPRISE SYSTEM

 STRINGENTLY WRITTEN AND ENFORCED TO ENSURE HONESTY

 VIOLATING RULES LEADS TO BOTH CIVIL AND CRIMINAL

LIABILITY
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 GOVERNMENT CONTRACTS

 SUFFICIENT BID PREPARATION TIME - BETWEEN FIRST

ADVERTISEMENT OF BID AND BID OPENING SO THAT
PROSPECTIVE BIDDERS KNOW ABOUT PROJECT AND HAVE
SUFFICIENT OPPORTUNITY TO PREPARE COMPETITIVE BIDS
 BIDDING DOCUMENTS -SUFFICIENTLY CLEAR & DETAILED TO
ASSURE FREE AND OPEN COMPETITION- ASSURES THAT EACH
BID RECEIVED REPRESENTS A PRICE RENDERED BY EACH
INDIVIDUAL BIDDER TO CONSTRUCT THE IDENTICAL PROJECT
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 GOVERNMENT CONTRACTS

3. PUBLIC BID OPENING & A PUBLIC READING OF ALL BIDS AT THE

DATE, TIME AND A PLACE STATED IN BID ADVERTISEMENT-EVERY
PERSON PRESENT HEARS BID PRICES TENDERED BY VARIOUS
BIDDERS-CONTENTS OF ALL BIDS BECOME PUBLIC KNOWLEDGE &
MAY BE EXAMINED BY ANY PERSON WITH LEGITIMATE INTEREST
4. CONTRACT AWARDED TO LOWEST RESPONSIVE AND RESPONSIBLE
BIDDER WHOSE BID IS IN THE BEST INTEREST OF THE
GOVERNMENT
5. ALL BIDS MAY BE REJECTED WHEN REJECTION IS IN THE BEST
INTEREST OF THE GOVERNMENT/PUBLIC
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GOVERNMENT CONTRACTS

 SHALL COMPLY WITH STATUTORY REQUIREMENTS

 NO IMPLIED CONTRACT IF ARTICLE 299 (1) VIOLATED
 LITIGATION BETWEEN GOVT. DEPARTMENTS & PSUs
NOT MAINTAINABLE
 ONLY DULY AUTHORIZED OFFICIAL CAN ENTER INTO
CONTRACT
 NO PERSONAL LIABILITY OF PRESIDENT OR
GOVERNOR
GOVERNMENT CONTRACTS

 NO WRIT LIES AGAINST NON-STATUTORY CONTRACT

 ORAL CONTRACTS NOT BINDING
 PARTIES MAY AGREE TO FORM CONTRACT
 STATE MUST ACT FAIRLY
 REASONABLE AND FAIRNESS OF CLAUSES OF
CONTRACT
 RATES ONCE ACCEPTED CANNOT BE CHANGED