GOVERNMENT OF KARNATAKA

MOCK TENDERING PROCESS FOR CONSTRUCTION WORK

Types of contract :-
The types of contract are.

Piece work contract

Item rate or unit price contract

Lumpsum contract

Cost plus percentage contract

Combination of lumpsum and schedule of rates contract

Labour contract

Piece work contract:-

It is an agreement by which the worker agrees to execute the different items of works on
mutuaaly agreed rates . The agreement contains different items of works to be carried out with
proper description and rates for unit quantity of work.

MERITS:-
It is the best suited for small works and the work which will not require the
engineering skill.
Work may not be completed very quickly.

DEMERITS:-
The time is not considered so the workers can be take their own time to complete the
job so that rate of progress of work will reduce.
The department has to arrange detailed and closed supervision and checking the piece
worker who does not have professional skill.
 GOVERNMENT OF KARNATAKA

Lumpsum contract:-
In this contract the contractor agrees to execute a complete work in all respects for a specified
amount within a specified time. The plans, drawings and specifications of all items of the
work are provided to the contractor but the details of quantities and schedule of items will
not be given and contractor will have to complete the work as per plan and specification
within the contract period.

MERITS:-
Reduction in cost of construction due to competition of contractors.

The amount to be spent on the work is known accurately well in advance

The contractor try to complete the work early as it is advantages for him.

DEMERITS:-
It is very difficult to make the changes in drawings and plans during construction.

If the specifications and drawings are not clear, may lead to difficulties and defective
construction.

ITEM RATE OR UNIT PRICE CONTRACT:-

In this contract the contractor under takes the execution of the work at the unit rate arranged at the
time of tender. The payment is made to contractor by detail measurement of the work actually
executed by the contractor.

MERITS:-
Since the work is distributed as on item wise there will be no disputes between the owner and
contractor.

Drawing and specification can be changed at any instant at any time.

GOVERNMENT OF KARNATAKA
DEMERITS:-
The final cost cannot be determined before the completion of the work.

Comparative statement if item rate tenders is more elaborate and comprehensive and
intelligent scruting is required.

CONTRACT AGREEMENT:-
Contract agreement is a written document binding legally the contractor and the department to
follow the rules and regulations and the conditions given, till the work entrusted to the
contractor is completed. All pages of the agreement must be signed by both the parties.

Title page with name of work and contract number.

Index page giving the contents of the agreement with page references.

Tender notice with despcription of work, location time, period of completion.

Bill ogf equantities and total cost work etc.

General specifications giving the clauses and type of work.

Detailed specifications for each item of work and materials.

TENDER:-
The tender is an offer in writing to execute some specified work or to supply the materials at
certain rates with in a fixed time under the certain conditions of agreement between the
contractor and the department or owner or any party.

NECESSITY FOR TENDERS:-

Entrussing works by calling tenders is advantageous because of

Lower bids that may be obtained due to competition among the contractors.

Selection of contractors can be made based upon their experience in their line.

GOVERNMENT OF KARNATAKA
TENDER DOCUMENTS:-
Detailed specifications of the work and material should be used

General conditions of contract

Special conditions.

TENDER NOTICE:-
After the tender documents have been prepared and approved by the authority . A inviting
tenders has to be published on the notice board of all unit offices of the department.

The following particulars are written in the tender notice.

Name of the work and its location.

Name of the authority inviting the tender.

Estimated cost of the work.

SCRUTINY OF TENDERS:-
After preparing comparative statement, the tender opening authority shall verify wheather the
contractor has agreed to all the tender conditions or he has included any special condition and
the consequent variation in the total amount has to be calculated.

EARNEST MONEY DEPOSIT(EMD):-

When the contractor or submits the tender for a work,he has to deposit some amount usually
at about 2% of the estimated cost of the department as a guarantee of the tender

SECURITY DEPOSIT:-
Once the tender is accepted , the selected contractors should deposit 10% of the total cost of
work as security deposit with the department . This amount includes the earnest money of
already deposited .The contractor may deposit the entire amount at the beginning of the work
or it may be deducted from the running bill of the contractor.