Construction practices

Construction Project
Practices
-Arun Kurali

TYPES OF CONTRACT
1. Lump Sum Construction Contract
 In this type the contractor bids a single fixed price for
overall activities in the project scope.
 The contractor is responsible for estimating project costs
from drawings then adds overhead and his profit to
determine the price of the project.
 All risks are assigned to the contractor, there isn’t any risk
carried by the owner.
 The contractor has incentive in this contract as he is
rewarded for early finish and there is penalty for late finish.
This contract is ideal when the project scope is well defined at
the design stage because there is limited flexibility for
modifying the design during construction period.

2.PIECE WORK CONTRACT
Contract for which only a rate is agreed upon without
reference to the total quantity of work to be done or
the quantity of work to be done within a given period
Advantages:
 This direct relationship between the results of
labor and remuneration is a real advantage of the
piecework form of payment.
 The employer’s interests are successfully met
because, without additional control, employees are
interested in increasing the company’s production.
Disadvantages:
1)Neglecting external factors.
2) Losing quality for the sake of quantity

3. Unit Price contract
 Contractor under takes the work at the unit rates agreed at the
time of the tender.
 Payment made to contractor after measurement of work done
Ex: Maintenance of building, irrigation projects such as canal.
Merits:
1. Since work is distributed item wise there will no dispute between
contractor and owner
2. Drawing and Specs can be changed at any instant.
3. Bills paid after measurement of actual work. Hence economical.
Demerits:
1. Final cost can not be determined before completion of work.
2. Comparative statement of item rate tenders is more complicted
hence needs expert srutiny

4. Cost plus percentage contract:
 In this contractor gets paid actual cost of the building PLUS a fixed
percentage for his overhead expenses, services and profit.
 Contractor procures the materials and other recourses and does all
the work required and maintains a proper account and he is paid
by the department or owner (cost + 10% Normally)
Merits:
1. The would be no chance of dispute for carrying out extra item of
works.
2. Contractor is free to take decision independently hence quick
completion is possible.
Demerits:
1. Final cost can not be determined before completion of work.
2. Quality of work may be poor.
3. Very difficult to determine the actual cost incurred by the
contractor.

5. Labour contract:
 In this contractor under takes only labour portion of the work.
 All the necessary materials are supplied by the department or
owner.
 Contractor gets paid for the labours only based on the
measurement of the works done.
 Merits:
1. Materials stored by the department are used effectively.
2. Materials are supplied by the department hence quality can be
expected.
Demerits:
1. There may be delay in obtaining the materials by the department.
2. Large storage is required to store different materials.
3. Theft from stores, shortage of materials, accounting all the
materials are constant worries to the department or owner

6. Negotiated contract:
When the work is awarded on the contract by
manual negotiation between the parties without
call of tenders it is said to be negotiated
contract. PWD Negotiated contracts are initiated
only under special circumstance
a) To obtain reasonable rates.
b) To meet the situation arising out of emergency.
Example: Construction of shelter for displaced
people, strengthening runway for national defence

Point of Differentiation Lump Sum Contract
Unit
Price Contract
Cost
Plus Contract
Piece
work Contract
Advantages with respect to
the contractor
Incentives for early finish Low risk No risk
Rewards for any
savings between
actual and target
cost
Disadvantages with respect
to the contractor
High risk
No incentives for
early finish
No incentives for
early finish
Share risk with
the owner
Advantages with respect to
the owner
No risk
Share risk with the
contractor
Can start project
without finishing
designs
Target cost is
defined at early
stagesTotal cost is defined at early
stages
Disadvantages with respect
to the owner
Contractor desire to
decrease costs may be to
detriment of quality
Total cost is
uncertain at early
stages
High risk
Share risk with
the contractor
Total cost is
uncertain at early
stages
Flexibility of design
changing
Limited flexibility
Has flexibility to
change design
More flexible to
design stages
Limited flexibility

General Condition of contract:
1. The rates agreed by the contractor should be inclusive of
transport,materials,labours,tools,plants and all other
necessary arrangements.
2. The contractor should deposit 10% of the cost of the work
as a security deposit the contractor may deposit the entire
amount at the beginning of the project or can be deducted
from the running bills contractor
3. The contractor should complete the work within specified
time otherwise he is liable for the penalty
4. The time may be extended by the department for the valid
reasons requested by the contractor
5. The cost of the material issued to the contractor
equipment given to the contractor shall be deducted from his
running bills

General Condition of contract:
6. The work has to be play according to the drawings, plan
specifications and order issued by the authority.
7. The contractor terminated for his bad work or
unsatisfactory progress and the part or full security deposit
may be forfeited.
8. the work shall be open for inspection.
9. extra items which are not included in the contract shall
be paid as per the current schedule of rates.
10. compensation to the workman shall be paid by the
contractor for any accident or damage.
11. All the taxes, royalties etc. Shall have to be paid by the
contractor whiche are included in the rates

Contract Agreement:
Contract agreement is written document binding legally the
contractor and the department to follow the rules and
regulations.
All the pages of the agreement must be signed by both
parties.
Contract agreement must be containing following details.
1) Title page with name of the work and contract number.
2)Index page giving the content of the agreement the page
preferences
3) tender notice with description of work, location time,
period of completion etc

Contract Agreement (continued…):
4) bill of quantities and total cost of the work etc
5) schedule of issue of materials giving list of materials to be issued
with rate and place of issue
6) general specification during the classes and type of work.
7) detailed specification for the each item of work and materials.
8) complete Drawings with plan, elevation, site plan and other relevant
details.
9) condition of contract giving rate of labour, materials, tools and
plants, progress rate etc.
10) special conditions regarding nature of work, taxes, royalties, labour
and amenities etc
Contract Agreement:

Tender:
Tender is an offer in writing to execute some
specified work or to supply the materials at certain
prices within a fixed time under the certain
conditions of agreement between the contractor
and the owner
Necessity of tenders:
1. Lower bids may be obtained due to competition.
2. Contractors experience can be utilised.
3. Partiality, Personal interest,Prejudices,can be
avoided

Tender Form:
Tender form is a printed standard form of contract
giving standard conditions of contract, general rules
and directions for the contractors
1. General work description.
2. Estimated cost.
3. EMD(Earnest Money Deposit)
4. SD(Security Deposit)
5. Time allowed for the work from date of written
order to commence
6. Column for sign of contractor before submission
of tender and sign of officer by whom accepted

Tender Document:
Content of tender document
1) detailed specification of the work material should be
used.
2) A complete set of Drawings with detail of various parts.
3) general conditions of contract
4) special conditions of contract.
5) schedule of quantities the various terms of work.
Approximate qnty of work under each item of work.
6) the location of the work
7) the name of the division in which work is situated.
8) the rates of the Steel and cement if they are supplied
by the department.

Tender Document:
9) Hire charges for the lorries, plants to be levied when
issued from the department
10) condition regarding employment of the technical
personnel.
11) location of water location point and supply point of
power.
12) the period of completion of work and the time
required for each item of work.
13) the amount of earnest money deposit (EMD).
14) the name of authority that is accepting or rejecting
the tender.
15) conditions of penalty for slow progress and non
fulfilment of the condition of the contract.
16) resolution for the dispute.

Tender Notice:
After approval of tender
document by the concern
authority inviting tender has
to be published on the
notice board and all units
of the department and
advertisement in the press
and by the notice in English/
Hindi newspapers.

Following particulars should be written in the
tender notice:
1) name of the authority inviting the tender.
2) name of the work and it's location.
3) estimated cost of the work.
4) period and type of contract.
5) when and where the tender document should be
purchased.
6) tender schedule.
7) the amount of EMD and SD
8) open timing of the tender opening.
9) designation of the officer who accepts the
tender.

Preparing comparative statement of tender
Once after the tender opens comparative
statements should be prepared it serves the
rates of different builders normally lowest will
be a successful bidder hands become the
contractor

Scrutiny of tender:
Tender inviting authority should verify the terms
and conditions of the tender has been
obeyed are not or any special conditions are
special addendums added or not and
hence calculate the consequent deviations.
After the detailed scrutiny the tender document
along with comparative statement will be sent to
next higher authorities stating his observation
and recommendations.

Acceptance of Tender:
Based on the comparative statement usually the
lowest tender is accepted except In the case
where the lowest tender black mark in his work.
Tenderer whose rates are accepted is intimated
to sign the contract documents.
If he fail to sign the contract document within
specified time then his tender will be cancelled
and his EMD will be forfeited. Tender may be
allotted to the next lowest bidder.

Execution of contract agreement:
After acceptance of tender and contract
documents. contractor required to pay security
deposit before contract agreement is signed.
Earnest money deposit(EMD):
when the contractor submits the tender to any
work, he have to deposit some amount usually
2% of the estimated cost to the department as
the guarantee of tender.
When contractor refuses to take work after the
acceptance of tender then the EMD will be
forfeited. But EMD of all other Unsuccessful
bidders will be returned.

Security deposit (SD):
 when tender is accepted the contractor has to deposit
10% of the project cost as a security deposit. This
amount includes EMD, contractor can pay the entire
amount or the it can be deducted from the running
bills.
 Contractor should fulfil all the terms and conditions of
the tender specifications, quality of the work, within
specified time. if he fails to fulfil then security deposit
would be forfeited partially or fully
 if he completes the work satisfactorily amount will be
refunded to the contractor after six months. during this
period there should not be any defects.

work order: for petty and small works
Site order book:
Within 10 days of acceptance of the work
order contractor should submit a site order
book subdivision assistant engineer in
triplicates. which should be machine
Numbered.

Advantages of e tendering
1. Reduced tender cycle-time.
2. Fast and accurate pre-qualification and
evaluation, which enables the automatic
rejection of suppliers that fail to meet the
tender specification.
3. Faster response to questions and points of
clarification during the tender period.
4. Reduction in the labour intensive tasks of
receipt, recording and distribution of tender
submissions.

Advantages of e tendering
4.Reduction in the labour intensive tasks of receipt,
recording and distribution of tender submissions.
5. Reduction of the paper trail on tendering
exercises, reducing costs to both councils and
Suppliers.
6.Improved audit trail increasing integrity and
transparency of the tendering process.
7. Improved quality of tender specification and
supplier response.
8. Provision of quality management information

Penalty on contractor:
slow progress: For slow progress contractor may be penalised
with 1% of the cost of the construction per week and should
not exceed 10% cost of contract.
damages: if contractor uses department equipment. repair or
replacement of equipment or plants should be done.
Termination of contract:
The executive Engineer or the competent authority is
empowered to terminate the contract in case of the
bankruptcy or default of contractor an amount up to 10%
estimated cost is forfeited if the contract is to be terminated a
notice to that effect has to be serves to the contractor.

Termination of contract:
The contract agreement may be terminated in the
following conditions:
Bankruptcy : If both or one of the parties become
bankrupt the contract may be terminated
since the work cannot be completed due to lack
of funds.
Breach of conditions : If one party fails to follow
the conditions mentioned in the contract
then the other party has every right to terminate
the contract and can also claim for damages done
to him through court of law or through arbitration

Agreement: Due to extraordinary circumstances
it may become necessary to terminate the
contract by mutual agreement. For example the
owner or contractor may expire and no other
person may be there to fulfil the agreement.
Completion of the work: If the work is
completed satisfactorily as per the conditions in
the agreement then also the contract is
terminated after making the final payment to
the contractor and releasing his security deposit.

MUSTER ROLL
muster roll is a record, in which names, particulars
and attendance of daily labourers, payable to-them
and the work done by them are recorded.
The advance for payment to the labour is issued on
the basis of muster roll and after disbursement of
wages and recording necessary certificates of
disbursement is kept as a voucher. In muster roll
form the record of the attendance of labourers,
payments and work done by them are recorded

Rules for preparing muster roll:
1 . One or more muster rolls can be used for the same work.
2. Muster rolls should never be prepared in duplicate for the
same work.
3. The presence of labour should be marked with a cross mark
(X) and the absence, with letter A
4. Labourers may be paid more than once a month depending
upon local conditions, but after
each payment, separate or new muster roll has to be opened.
5. The daily record of attendance and fines should be
recorded.
6. After the muster roll has been passed, payment should be
made as early as possible by the
sub-divisional officer in the presence of subordinate
concerned, who should certify to the
payment as "paid in my presence to the right person".

common irregularities in the master rolls:
1. The labourers employed on muster roll not grouped.
2. Muster rolls contain erasures and over writings.
3. Muster rolls not signed daily. Muster rolls should be
signed daily by the person who mark the
daily attendance.
4. Attendance is not marked daily. The attendance of the
muster roll labourer should be marked
daily.

common irregularities in the master rolls:
5. Discrepancy between the daily report and muster
roll. The details of labour given in daily labour
report and muster roll should tally. Any difference
between the two is highly objectionable.
6. Corrections not attested. Any correction made in
the muster roll should be attested with the
dated initials of the person who makes it.
7. Delay in passing the muster roll and its payment.

LABOUR REPORT
This report gives the following information's.
1) Category or class of labourers such as mason,
carpenter, etc.
2)Number of labourers employed in each
category.
3) Rates at which labourer employed.
4)Approximate amount of work done, etc.

MEASUREMENT BOOK(MB)
It is a book which records the measurement of all the works
and supply of materials for the purpose of payment.
all measurement books are serially numbered and pages of
each book are machine numbered. The register of
measurement book is maintained in Divisional Office showing
the serial number of each book, name of the Sub-Division to
which it is issued. The date of its issue and date of its return to
the divisional Office also will be recorded in the register. The
loss of measurement book is the serious matter which should
be reported to the higher officer and the person responsible
will be punished

Importance of MB
1)MB is initial record for all kinds of works.
2)MB are the basis for all kinds of account of
quantities.
3)MB must be accurate and kept carefully

Kinds of Measurement Books:
1) Ordinary measurement book.
2)Standard Measurement book
3)Check measurement Book

1) Ordinary measurement book:
It is an initial record of all kinds of works which are susceptible to
measurements. In this book entries regarding the work done, supplies
made are recorded for the purpose of making payments
to the contractors.
2) Standard measurement book
In the department there are some buildings which are repaired
periodically and the quantities of various items of work remain same
from year to year. In such cases of repair works to save the trouble of
measuring them every time, it is convenient to maintain standard
measurement
books of such buildings. Thus the measurement book in which standard
measurements are recorded is known as standard measurement book.
preparation of estimate for periodical repairs, white washing, color
washing, etc. The standard measurement book is checked every year.

Advantages of standard measurement book are:
1. It facilitate the preparation of estimates for repair work from
time to time.
2. It simplifies the preparation of the contractor's bill as it is not
necessary to take detailed measurement.
3. Check measurement book

3)Check measurement Book
To check the measurements made by the Sectional Officer or
Junior Engineer a check measurement book is kept by the Sub
Divisional officer. Some portions of the measurement which are
recorded by section officer will be checked by AE and EE in
presence of Section officer. AEE checks 25%and EE can check 8-
50% of each subdivision in case of civil works
difference should not exceed 17%
Earth work 10%
repair 5%
if exceeded then it has to be escalated to the higher officer.

IRREGULARITES IN WRITING MEASUREMENT BOOK
1. Agreement number is not written on the top of the
measurements.
2. over writing and erasing original entry
3. Entries in the measurement book interpolated and corrected
and the amount of the bill is also changed after the original
preparation of the bill.
4. Blank spaces shouldn't be left in pagea
5. Entries in the measurement book are not recorded at the site of
work, but copied from some other record
6. Entries originally are made in pencil and inked over afterwards.
7. Full particulars of work are not given and the name of the work
does not tally with the sanctioned estimate.
8. Payments are made without the sub-divisional, officer's pay
order or the clerk's certificate of check.

9. Percentage of checks by senior officers is inadequate.
10. Corrections are not attested.
11. Voucher number and date not indicated after making the
payment.
12. Index of the measurement book is not up to-date.

9. Percentage of checks by senior officers is inadequate.
10. Corrections are not attested.
11. Voucher number and date not indicated after making the
payment.
12. Index of the measurement book is not up to-date.
PAYMENT OF BILLS
Bill: It is the account of work done or materials
supplied. It contains full particulars lika!
amount, amount due and agreement number is
also mentioned.
Voucher: It is a return document as a proof of
payment.

TYPES OF BILLS
Four types of bill forms are used depending upon the mode of
contract.
1. First and Final Bill
This form of bill is used for making payment to contractors both
for works done or supplies
received, when a single payment is made for a job or a contract
on its completion.
2. Running Account Bill
This form is used for contracts both for works executed on
piece-work system and for
received This bill is prepared for
1) Value of measured items of work
2) Value of authorized extra work on account of additional
works

TYPES OF BILLS
3. Lumpsum Contract Bill
In the Lumpsum contract method, a number of
intermediate payments.ie advance pay
are made in Lumpsum contract running-account bill
form before final payment.
ount bill-form before final payment is made.
4) Hand Receipt.
this is an simple voucher which is used for the small
and petty works

Mode of payments
1) Mobilization Advance- mobilise Resources
2) First and Final Payment- applicable for small
works
3)Final payment - Running account bill after
completion of work
4) intermediate Payment- after part work
completion
5) Advance - work has sufficient progress.
6) secured Advance - Divisional officer may sanction
advance at the rate of 70% of value of materials
which are brought to site

checking of Bills
before signing the bill the sub divisional officers or
AEE should check the following deduction have made
and compare bills .
1) Recovery of Advance payments.
2) Recovery in respect of department material used .
3) Hiring charges for department tools and plants.
4) The amount to be with held towards SD
5) Penalty and slow progress
6) Recovery towards empty bags not return.

PASSING AND PAYMENT OF BILLS
-after checking bills arithmetic check, accuracy
and compare with contractors ledger
-memorandum of payment is made
-officer shall pass Bill on the basis of MB and
cross out it.
- the contractor is paid for the net ammount
and by cheque and acknowledgement taken for
Gross ammt

ESCALATION:
In case of Big projects, later stage of project may face price
increase in construction materials hence such statements
are included in tender document to escalate if the prices of
materials like cement, aggregate and steel etc goes up.
HINDRANCE REGISTER:
hindrance caused by contractor or owner or by third
parties and major forces are to be recorded in a register
called hindrance register.
This is the reliable document to decide on extension of
time .

Drawing Register:
This register maintained list out drawing relating to the
project.
COMPLETION REPORT
When a work is completed and the accounts have been
settled, a note below the final entries is made in red ink.
Work completed on ______ date and this note is signed by
divisional officer. with notes and orders
And Project competition certificate is issued in a standard
format .

Principles to be followed in PWD system
 All transaction is, whether income or expenditure
have to be passed through certain specified heads
 everything should be done with certain
procedures and rules and regulations responsibility
is laid on divisional officer. and should be under
certain heads of account.
1) Expenditure heads.
2) Revenue Heads
3) Remittance head
4) Debit or depository heads

IMPREST & TEMPORARY ADVANCE
Imprest is a standing advance of fixed sum of
money given to Sub- divisional to enable them
carry out day to day petty payments for proper
discharge of their duties either in cash or in the
form of voucher.( Without bills)
Temporary advances
These are granted to Sub-Divisional Officer for
making specific payments on bills or Muster rolls,
etc

CASH BOOK
The cash book is one of the most important
account records of the division.
 It is maintained in form-1 for all cash
transactions for day-to-day, strictly in order of
occurrence.
The detailed instructions are available in the fly
leaf of the cash book.
The pages of the cash book are machine
numbered

CONTRACTOR'S LEDGER
For every contractor a separate Register is
maintained at sub divisional office in this ledger
all the details of the contractor and payments,
recoveries adjustments are noted in a prescribed
format.

Stores Management:
STORE : it is a place that keeps the materials in a
way by which the materials are well accounted
for, are maintained safe, and are available at the
time of requirement.

Stores Management:
STORE : it is a place that keeps the materials in a
way by which the materials are well accounted
for, are maintained safe, and are available at the
time of requirement.
Classification of stores
1)Stock or general stores
2)Tools and plants
3) Materials charged direct to work
4)Road metals

1)stock or General Stores
Department keeps all the necessary construction
materials to avoid delay

Sub heads are
1) small stores : nails , screws nuts bolts etc
2) Building materials : cement brick steel etc
3) timber: teak wood etc
4) Metals : iron rolled, sections etc
5) fuel and lubricants coal petrol
6) Painter store: paints brush etc
7) House fittings
8) Miscellaneous store : pipes empty drums etc
9) Manufacture

2) Tools and plants
1) General or ordinary tools and plants
2) Special tools and plants
Sub heads of Tools and plants:
1) Plants and machinery- fixed, movable,
locomotive, vehicles,road making
2) Tools -Fixed(lathe), saw drills etc
3) Scientific apparatus and instruments-pippet ,
thermometer, breakers, surveying instruments-
chain tape theodolite,total station etc

2) Tools and plants
1) General or ordinary tools and plants
2) Special tools and plants
Sub heads of Tools and plants:
 Furniture- office chair , office tables,waste
paper basket etc
 Hospital equipment-furntures dentist chairs ,
xray plants etc
 Live stock - bullock, horses etc

Maintenance of stores
Points to be considered for storages of materials
1) Combustible materials should be kept
separately to avoid fire accidents.
2) oil should be stored in seperate store over the
sand
3) petroleum should be stored in under ground
tanks.

Maintenance of stores
4) Textile material should be protected from
attack of insects
5)coal charcoal should be stored in bins
6)all iron and steel should be grouped as per size
7)Road metals are stores on level ground.

8)canvas material should be exposed to sunlight
and dried often .
9)all wood items should be periodically examined
and preventive measures should be taken.
ISSUES:
The materials are issued from stocks for following
1)Either for direct use or for contractors use
2)For sale to contractor or to the other person
3) transfer to other stores within division
4)For dispatch to other departments

Indent:
issue of materials from stock should be made only
on the receipt of an indent in a quadruplicate
signed by divisional or sub divisional officer.entry
of materials should be made in all four copies of
indent.
One copy with store keeper himself
One copy returned to the indenting officers
Third and fourth copy sent to divisional officer

Invoice:
The invoice is available in tge standard format
which should be filled up when the materials are
to be supplied.It should be sent along with the
materials to the indenting officers for his
acknowledgements. Indenting officers should sign
and return it to the store keeper. Invoice should
be in triplicates
One original will be in invoice book
2 will be sent to divisional officer.

Bin card:
In stores, a number of materials are to be
handled. Details of information about the
stock position,drawel rate per month, when
the order of perticular material is placed are
all entered on bin card .
Specimen of Bin card:

Inspection of stores:
# Verification of materials should be made in the
presence of the authority responsible.
# Ending 31st March and 30th September in the
same manner as stated.
# Tools and plants, stocks should be done every six
months.

Inspection of Stores
Storage and surplus
Shortage of stores
Materials at site account (MAS)

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