definitions of billing requirements : bill of quantities , specifications etc

1. MODULE 5
BILLING
REQUIRMENTS

2. Bill of Quantities
 The bill of quantities (sometimes referred to as 'BoQ' or 'BQ') is
a document prepared by the cost consultant (often a quantity surveyor) that
provides project specific measured quantities of the items of work identified
by the drawings and specifications in the tender documentation.
 The quantities may be measured in number, length, area, volume, weight or
time. Preparing a bill of quantities requires that the design is complete and
a specification has been prepared.
 The bill of quantities is issued to tenderers for them to prepare a price for
carrying out the works. The bill of quantities assists tenderers in the
calculation of construction costs for their tender, and, as it means
all tendering contractors will be pricing the same quantities (rather
than taking off quantities from the drawings and specifications themselves),
it also provides a fair and accurate system for tendering.

3. Role of the architect in monitoring the
specifications follow-up for quality control
 An architect engaged to monitor construction of the project (which
should not be confused with contract administration) will be
responsible for checking that the construction conforms to the
planning permission and Building Regulations and all stages are
properly completed to a satisfactory standard of workmanship.
 This will involve periodic site visits to monitor progress (visually), but
will not normally involve the architect in detailed checking of
dimensions or testing materials. The contractor, on site, will
supervise the work on a day-today basis and be responsible for the
proper carrying out and completion of construction works and for
health and safety provisions on the site.


4. Monitoring the specifications:
 Architect visits the construction site to make sure that contractors
follow the design drawings, adhere to the schedule, use the specified
materials, and meet work quality standards.
 Continual revision of drawings and specification on the basis of client
needs, budget and other constraints not imagined during design stage is
often necessary to be carried out by an architect.
 In general, the architect is expected to protect the owner of a project
against defects and deficiencies in the work of the contractor and is
said to act as the owner's representative during the construction phase.
In a sense, the architect is acting as an advocate for the owner's
interests.
 When owner-contractor disagreements arise, both sides look to the
architect as adjudicator of their differences. Architect’s duty to render
unprejudiced and unbiased judgment

5. What is measurement Book?
 The Measurement Book is a most important record. It is
the basis of all accounts of quantities of work done, purchase
made and it must contain such a complete record of facts as
to be conclusive evidence in court of law.
 The measurement of all works and supplies are recorded in
the measurement book and payment of work and supplies are
made on the basis of measurement recorded. It should be
maintained by the site engineer / supervisor etc. It is
undertaken accurately and recorded neatly for the different
items of work for the respective units.

6. Running Account Bill .
Running Account Bill means a bill for the payment of
"On Account" money to the Contractor during the
progress of work on the basis of work done and the
supply of non-fresh materials to be incorporated in the
work.
As most of construction contract are for a long period,
so in contract there is a clause that payment shall be
made in stages completion of work, to avoid liquidity
problem to contractor. Contractor raise bill for work
done up to particular stage, to get the payment. These

8. Interim
Interim certificate is the most frequently used
certificate in construction contracts, often use
interchangeably with a progress certificate. It has to
fulfill two functions, such
as controlling the work progress and
normalizing installment payments or interim
payments, agreed with the contractor

10. Final Checking certificate
 In standard form building contracts, a Final Certificate is
issued by the contract administrator to certify that the
contract has been completed fully. In our experience, the
conclusive nature of these Certificates are often
misunderstood by clients, which can potentially lead to
problems at a later date.
 A Final Certificate is issued after the making good of any
defects and the agreement of the final contract sum. It
closes the door on any further disputes as to performance
between the parties, other than in respect of latent defects
which subsequently appear.

12. Contract
 Contract is an undertaking by a person or firm to do any work under
certain terms and conditions. The work may be for the construction or
maintenance and repairs, for the supply of materials, for the supply of
labour, for the transport of matetrials, etc.
Objective of using a contract
i) Describe the scope of work
ii) Establish time frame
iii) Establish cost and payment provision
iv) Minimize disputes
v) Improve economic returns of investment

13. Administration sanction
 Administration sanction - for any work or project to be undertaken an
approval or sanction of the competent authority of the department,
with respect to the cost and work necessary at the first instance. It
denotes the formal acceptance by the concerned authority of the
department (owner/firm/stakeholder etc). After the administrative
approval is given, the engineering department takes up the work and
prepares detailed designs, drawings, approximate estimates based on
the preliminary plans and submits to the local government authority for
building approval / sanction (eg: BBMP building sanction)

14. Technical sanction
Technical sanction - the sanction of the detailed
estimate, design calculations, quantities of
works, rates and cost of the work by the
competent authority of the engineering
department. Only after the technical sanction is
given shall the work be taken up for execution.

15. Contingencies
 Contingencies- It indicates incidental expenses of miscellaneous
character which cannot be classified under any distinct sub-head, yet
pertain to the work as a whole.
 In an estimate a certain amount in the form of Contingencies of 3 to 5%
of the estimated cost, provided to allow for the expenses for
miscellaneous petty items which do not fall under any subhead of the
items of work.
 If there is any savings against the amount provided under
Contingencies, this amount may be utilized to meet the expenses of
extra items of work, or minor changes in the design or any other
unforeseen expenses.
 example : compensation for estimating accuracy based on quantities
assumed or measured, unanticipated market conditions, scheduling
delays, lack of bidding competition etc

16. Work charged establishment
Work charged establishment - During the
construction of building or a project, certain
number of work-site site architects, project
managers, supervisors, administrative staff,
security and housekeeping are required to
employed and their salaries are paid from the
amount of work-charged establishment provided
in the estimate. 1.5 to 2% of the estimated cost
of the project is reserved for this purpose and is
included in the detailed cost estimate.

17. Earnest money
Earnest money - While submitting a tender, all
the contractor participating are required to
deposit a certain amount about 2% of the
estimated cost individually, with the
department, as earnest money for guarantee of
the tender. In case the contactor terminates the
agreement at any stage of the project, his
earnest money is forfeited. Earnest money of the
tenderer whose tender has not been
selected/accepted is refunded.

18. Sundry items
 Sundry items (also known as sundries) are miscellaneous
small items or items or expenditures that are rare, amount
to very little, or are relatively unimportant and therefore
do not readily fit into standard categories and so are
classified as being under sundries
 A toll expense on making a unscheduled delivery
 A non regular parking fee for the company vehicle
 Traffic violation fine
 A birthday gift for an employee
 Basic supplies for the company party

19. The below cannot be considered as sundries
Rent or utility payments
Depreciation or amortization expenses
Accounting or professional fees
Marketing or advertising costs.
Employee benefits

20. Lead and lift
Lead and lift - Lead is the average
horizontal distance b/w site of earthwork
and the area of disposal. The lead is
generally measured in terms mts distances.
Lift is the average vertical distance b/w
level of excavation and the to the place of
spreading or heaping.

21. Types of contracts
Lump sump contract
Lump sump and schedule contract
 Schedule contract or item rate contract
 Labour contract
 Repair and maintenance contract

22. Lump sump contract
 In lump sump contract the contractor undertakes the execution or
construction of a specific work with all its contingencies, to complete
it in all respects within a specified time for a fixed amount.
 The detailed specification of all items of works pertaining to the whole
work, plans and detailed drawings and deposit of 10% security money,
penalty, progress and other conditions of contract are included in the
contract agreement.
 The quantities or schedule of different items of work are not provided.
 On completion of the work no detailed measurement of the different
items of work is required but the whole work is compared and checked
with the drawings.

23. Lump sump and schedule contract :
 This similar to lump sump contract but the schedule of rates is also provided in the
contract agreement. In this system the contractor undertakes the execution or
construction of a specific work at a fixed sum within a specified time as per the
drawings and the detailed specifications and conditions.
 The schedule of rates for various items of work are also provided which regulates
the extra amount to be paid or deducted for any additions and alterations.
 In this case no measurement of various items of work involved in the original work
is required, but measurement of extra items only shall have to be taken. The
original work shall however be checked and compared,
 The other conditions example deposit of 10% security money, penalty, progress are
included in the contract agreement.

24. Schedule contract or item rate contract :
 In schedule rate contract, the contractor undertakes the execution or
construction of a work on the item rate basis.
 The amount the contractor is to receive depends upon the quantities of
various items of work actually done.
 The contractor agreement includes quantities, rates and amounts for
various items of work and the total amount of contract (Bill of
quantities with rate, amount and total amount) plans and detailed
drawings, detailed specifications and deposit of 10% security money,
penalty, progress, date of completion and other conditions of contract.
 The payment to the contractor is made by the detailed measurement of
different items of works actually done by the contractor. the system is
used for all works. Item rate contract may also be percentage above or
below the printed schedule of rates of the department