A building/construction contract is a legal agreement between a building owner and contractor that sets forth the terms for carrying out construction work, including payment terms, schedule, and penalties for non-compliance. Common contract documents that form the basis of the agreement include the contract or agreement itself, conditions of the contract defining legal obligations of parties, drawings, specifications describing project and material requirements, and other necessary documents like pricing schedules. The acceptance of the contractor's tender or proposal by the owner through signing or commencing work results in a valid construction contract.
This document provides an overview of different types of construction contracts:
1. Item rate contracts or schedule contracts involve the contractor agreeing to carry out work based on unit prices for items in the bill of quantities. Payments are made based on measurements of completed work items.
2. Percentage rate contracts involve the contractor agreeing to carry out work for a fixed percentage over the actual cost of construction, which is tracked by the department.
3. Lump sum contracts involve the contractor agreeing to carry out all work shown in drawings and specifications for a fixed price.
4. Labour contracts involve the department supplying all materials, while the contractor supplies labour and completes the work according to specifications.
5. Other
This document discusses different types of construction contracts:
- Lump sum contracts specify a single price for completing a project. They provide incentives for efficiency but carry high risks for contractors.
- Unit price contracts base payment on quantities of work completed. They allow for changes but the final cost is unknown.
- Cost plus contracts reimburse contractors for all costs plus a fee. They provide flexibility but lack incentives for cost control.
Selective tendering is recommended for constructing a new multi-story car park at Taylor's University. This method involves inviting a small number of reputable contractors to bid on the project. It provides higher quality than open tendering due to the contractors' reputations, without significantly increased costs. The process is also simpler than negotiated tendering. Selective tendering balances quality and cost better than the other options for this type of construction project.
The document discusses various topics related to construction contract procedures, including:
1. Traditional and alternative contract systems such as lump sum based on bill of quantities, drawings and specifications, PC with target cost, and turnkey contracts.
2. The main responsibilities of the contractor include performing the work, the contractor receiving progress payments, and the contractor having the right to payments from the main contract.
3. The differences between domestic subcontractors, nominated subcontractors, and nominated suppliers in terms of their responsibilities and payment processes.
The document discusses various types of construction contracts, including lump sum, item rate, labour, material, percentage rate, cost plus, and turnkey contracts. It describes key elements that should be included in a construction contract agreement, such as a description of the work, payment procedures, completion dates, signatures of parties, and references to other contract documents like drawings and specifications. Disputes are typically resolved through arbitration according to the legal requirements in the contract documents.
The document discusses a group assignment submitted by 7 students for their Quantity Surveying course. It addresses 4 questions related to final accounts and contract adjustments. Question 1 defines key elements adjusted in a final account, such as variations, remeasurement of provisional quantities, omission of provisional sums, profit/attendance adjustments. Question 2 discusses the contractual implications of omitting an entrance porch from the tender that was shown on drawings. It states this would need to be treated as a variation, with pricing based on fair market value or a cost-plus basis. Question 3 requires assessing a contractor's final account submission for a project. Question 4 asks to explain how different variations may be finalized and priced in a final account.
The document outlines various procurement strategies and contract forms for construction projects. It discusses traditional procurement, management contracting, and design-build procurement methods. For each method, it describes the process, advantages, and disadvantages. It also examines standard contract forms used in Malaysia, including the PAM 2006, JKR 203A, and FIDIC contracts. Based on the project details of developing a 20-storey condominium, the document recommends using a traditional procurement method with a PAM 2006 contract form due to its common use for private sector building projects in Malaysia.
Construction Managemnt
CONSTRUCTION MANAGERS / LEADERS
CONSTRUCTION MANAGEMENT PROCESS GROUPS
PROJECT MANAGEMENT KNOWLEDGE AREAS
PROJECT MANAGEMENT TRIANGLE
This document provides an overview of different types of construction contracts:
1. Item rate contracts or schedule contracts involve the contractor agreeing to carry out work based on unit prices for items in the bill of quantities. Payments are made based on measurements of completed work items.
2. Percentage rate contracts involve the contractor agreeing to carry out work for a fixed percentage over the actual cost of construction, which is tracked by the department.
3. Lump sum contracts involve the contractor agreeing to carry out all work shown in drawings and specifications for a fixed price.
4. Labour contracts involve the department supplying all materials, while the contractor supplies labour and completes the work according to specifications.
5. Other
This document discusses different types of construction contracts:
- Lump sum contracts specify a single price for completing a project. They provide incentives for efficiency but carry high risks for contractors.
- Unit price contracts base payment on quantities of work completed. They allow for changes but the final cost is unknown.
- Cost plus contracts reimburse contractors for all costs plus a fee. They provide flexibility but lack incentives for cost control.
Selective tendering is recommended for constructing a new multi-story car park at Taylor's University. This method involves inviting a small number of reputable contractors to bid on the project. It provides higher quality than open tendering due to the contractors' reputations, without significantly increased costs. The process is also simpler than negotiated tendering. Selective tendering balances quality and cost better than the other options for this type of construction project.
The document discusses various topics related to construction contract procedures, including:
1. Traditional and alternative contract systems such as lump sum based on bill of quantities, drawings and specifications, PC with target cost, and turnkey contracts.
2. The main responsibilities of the contractor include performing the work, the contractor receiving progress payments, and the contractor having the right to payments from the main contract.
3. The differences between domestic subcontractors, nominated subcontractors, and nominated suppliers in terms of their responsibilities and payment processes.
The document discusses various types of construction contracts, including lump sum, item rate, labour, material, percentage rate, cost plus, and turnkey contracts. It describes key elements that should be included in a construction contract agreement, such as a description of the work, payment procedures, completion dates, signatures of parties, and references to other contract documents like drawings and specifications. Disputes are typically resolved through arbitration according to the legal requirements in the contract documents.
The document discusses a group assignment submitted by 7 students for their Quantity Surveying course. It addresses 4 questions related to final accounts and contract adjustments. Question 1 defines key elements adjusted in a final account, such as variations, remeasurement of provisional quantities, omission of provisional sums, profit/attendance adjustments. Question 2 discusses the contractual implications of omitting an entrance porch from the tender that was shown on drawings. It states this would need to be treated as a variation, with pricing based on fair market value or a cost-plus basis. Question 3 requires assessing a contractor's final account submission for a project. Question 4 asks to explain how different variations may be finalized and priced in a final account.
The document outlines various procurement strategies and contract forms for construction projects. It discusses traditional procurement, management contracting, and design-build procurement methods. For each method, it describes the process, advantages, and disadvantages. It also examines standard contract forms used in Malaysia, including the PAM 2006, JKR 203A, and FIDIC contracts. Based on the project details of developing a 20-storey condominium, the document recommends using a traditional procurement method with a PAM 2006 contract form due to its common use for private sector building projects in Malaysia.
Construction Managemnt
CONSTRUCTION MANAGERS / LEADERS
CONSTRUCTION MANAGEMENT PROCESS GROUPS
PROJECT MANAGEMENT KNOWLEDGE AREAS
PROJECT MANAGEMENT TRIANGLE
Cost estimates & contract documents ce224 pdfSaqib Imran
This document provides information on construction cost estimation and contracts. It begins with an introduction to cost estimation, outlining the key requirements and need for estimation such as determining feasibility, timelines, and controlling costs. It then discusses the procedures and data required for estimating, including drawings, specifications, and rates. The document also covers different types of construction contracts such as lump sum, item rate, percentage rate, and labour contracts. It defines what a contract is and outlines the key obligations of employers and contractors. Finally, it discusses the tendering process, including classification of tenders, tender documents, and a sample tender notice.
The document discusses the traditional procurement method for construction projects. It begins by outlining the key aspects of the traditional method, including that the client hires consultants to handle design, cost control, and administration, while a contractor is hired to carry out the construction works. It then discusses the advantages and disadvantages of the traditional method based on a client's request to build a RM1.2 billion hotel and shopping complex within 5 years while maintaining full design control and minimal variations. The document recommends using the traditional method to meet the client's needs and control over the project. It provides a timeline and overview of risks associated with the traditional procurement approach.
Assignment - Tender Documentation (Presentation Slide)Kai Yun Pang
This document is a tender submission for the construction of a 3-storey semi-detached house. It includes an introduction with the project details, plans showing the layout and elevations of the building, instructions for tendering, forms of contract, bills of quantities, appendices with schedules and rates. The group members and lecturer are listed and the site is described as generally flat with earthworks and infrastructure already completed. The tender submission contains standard forms and documents required for the tendering process.
This document provides an overview of construction contracting methods and contract types. It discusses the traditional Design-Bid-Build approach, as well as Design-Build, Turnkey, and Construction Management delivery methods. The major contract types covered are Lump Sum, Unit Price, Cost Plus, and variations like Cost Plus Fixed Fee and Cost Plus with a Guaranteed Maximum Price. For each, the document outlines the key characteristics, advantages, and disadvantages. The course appears to cover construction documents, contracting, bidding processes, and contract conditions over multiple lectures.
Tender & bidding in construction projectsTEJAS2011
The document summarizes a study comparing e-tendering and traditional tendering processes in construction projects. Some key findings include:
- E-tendering allows for a more efficient process as bidding can be done electronically versus traditional paper-based bidding. It also enhances bidders' estimation skills.
- E-tendering saves time and costs for both parties involved as paperwork is reduced, bidding can be done from anywhere at any time, and the process is more automated and accurate versus traditional tendering which is time-consuming and prone to errors.
- A comparison of e-tendering versus traditional tendering for private projects found that e-tendering completed the process faster, provided better security for
This document contains a group assignment for a course on professional practice. It provides background on the group members and instructor. It then lists 4 questions for the assignment. Question 1 asks students to prepare a report explaining adjustments needed for the final account of a construction project. Question 2 asks about contractual implications of omitting an item from the tender document. Question 3 requires students to assess a contractor's final account application and prepare the final account based on provided valuations and adjustments. Question 4 asks students to explain how various variations would be finalized and priced in a final account.
Earnest money is a monetary deposit paid by bidders to show their sincerity and good faith in a project. It aims to prevent bidders from withdrawing their bids before the validity period ends. Standard earnest money amounts are 2% of the estimated project cost for works costing up to Rs. 10 crores, and 1% of estimated cost plus Rs. 20 lakhs for higher value projects. Earnest money is refunded once the contract is awarded, or forfeited if the bidder withdraws during the validity period. The document discusses earnest money definitions, forms, amounts, refund processes, and treatments under different scenarios.
This document discusses different types of construction contracts. It outlines various classification schemes, including separated, management, integrated, and discretionary contracts. Specific contract types are then defined, such as lump sum, item rate, percentage rate, cost plus percentage, management, construction management, design-build, and turnkey contracts. The key responsibilities and features of each contract type are provided.
•What is Contract?
•What is Construction Contract?
•Purpose of Construction Contract
•Contract for Bid and Procurement
•Contract for Pricing Arrangement
•Construction Contract Component
•Contract Document List
•Standard Form of Contract in Malaysia
10 Essentials For An Effective Construction ContractSarah Fox
An overview of the 10 aspects every contract for a construction works package (however large or small) needs to include to make it an effective tool.
These 10 essentials are the foundation to the 500-Word Contract (TM), developed as a basis for construction contracts in England/Wales. They are also a checklist for your own terms and conditions.
For more information go to www.500words.co.uk or send Sarah an email sarah@500words.co.uk
The document outlines the tendering process for construction contracts. It discusses:
1) The information that must be included in tender notices such as project details, completion time, deposit amounts, and submission deadlines.
2) The procedure for submitting and opening tenders which involves separating documents into envelopes for money deposit, qualifications, and bid rates.
3) The criteria for evaluating bids such as experience, resources, rates, and ensuring bids are complete before selecting the lowest bidder.
FIDIC is an international federation of consulting engineers that publishes standard forms of contract. It was founded in 1913 and is headquartered in Geneva. Some of FIDIC's most well-known standard forms include the Red, Yellow, and Silver Books. The Red Book covers construction projects, the Yellow Book covers electrical and mechanical works, and the Silver Book covers EPC/turnkey projects. FIDIC contracts establish important procedures like priority of contract documents, the engineer's role, extensions of time, insurance requirements, and dispute resolution processes involving negotiation, mediation, and arbitration.
The document discusses the bidding process for construction projects in Canada. It explains that the bidding process must comply with Canadian tender law. The tender authority, which can be the project owner or a third party, is responsible for administering the tender process, including issuing the call for tenders, tender documentation, and evaluating bids. Contractors must submit a complete bid by the deadline to be considered compliant. The document outlines the roles and responsibilities of the general contractor if selected. It also provides guidance for cost estimators on preparing a bid, including reviewing project scope and developing an estimating plan.
1) A tender notice is being drafted for the construction of a girls hostel costing 150 lakhs at XYZ Institute.
2) Sealed item rate tenders are invited from registered contractors of class IV and above for the construction work.
3) The last date for tender submission is February 7, 2017 and tenders will be opened on the same day at 4pm in the presence of contractors.
The document describes the typical process for construction projects, which involves several key stages:
1) A need is identified, initial plans are developed, and a designer is selected.
2) Conceptual and final designs are created along with cost estimates. Bids are solicited from contractors.
3) A contractor is selected and construction begins according to the project plans.
4) Once completed, the facility is used and maintained over its lifespan.
This document provides an overview of the professional examination process and requirements for architectural licensure in Malaysia. It discusses the practical experience log book that must be completed over a minimum of 104 weeks under a supervisor. The log book must document experience across all phases of architectural projects and be certified by the supervisor. Candidates must also submit minimum 2,000-word evaluation reports on two projects covering various stages and addressing professional duties and responsibilities. The document outlines the examination syllabus which includes professional legislation, the architect's role in society, practice management, building codes and regulations, and contract administration. It notes some key requirements and deadlines regarding registration, fees, and sitting for the oral examination.
Based on the information provided:
- The Contractor had priced RM 130,000 for Contractor All Risk Insurance (CARI) in the preliminaries bill.
- However, the Contractor failed to purchase the CARI when works commenced.
- The Employer then purchased the CARI for RM 180,000 on behalf of the Contractor.
As the Contractor failed to purchase the mandatory CARI as required by the contract, the Employer is entitled to recover the actual cost paid for the insurance from the Contractor.
Hence, there will be a variation of RM 180,000 - RM 130,000 = RM 50,000 that will be deducted from the Contractor's final
The document discusses different types of tenders and tender processes used in construction projects. It describes open, sealed, limited, single, and rate contract tenders. For each tender type, it provides details on who is invited to bid, level of publicity, and documents used. It also outlines the typical information provided in tender notices, the tender procedure, types of contracts like lump-sum and item rate, and documents involved like the contract bond. Security deposits required from contractors to protect the owner in case of default are also summarized.
Persons involved in tenders and contractshiva prakash
This document discusses the key representatives involved in tenders and contracts for construction projects. It defines a tender as inviting bids from contractors to carry out work, and a contract as a legally enforceable agreement. The main roles discussed include the client/owner, project manager, lead consultant, cost consultant, consultant, main contractor, senior estimator, commercial manager, building manager, cost planner, subcontractor, and suppliers. The client is responsible for the project, while the project manager oversees its planning and execution. Consultants help with documentation and the main contractor manages subcontractors and evaluates risks.
LEC - 1.ppt most important lecture note and best2cd
The document defines key terms related to contracts, including:
1. A contract is a legally binding agreement between two parties that creates rights and obligations. It typically involves one party undertaking work in exchange for payment.
2. The elements that distinguish a contract from a simple agreement are offer, acceptance, and enforceability under law.
3. Key parties to a construction contract typically include the client/owner, contractor, and consultant. Their main rights and responsibilities are also outlined.
4. For a contract to be valid, it must generally contain offer/acceptance, consideration, competent parties, and a lawful purpose. The document provides further details on these elements.
Contracts and Tenders
When two or more persons have common intention communicated to each other to create same obligation between them there is said to be an agreement. An agreement which is enforceable by law is a Contract.
A Tenders is called upon for executing certain specified work, or supplying specified materials; subjected to certain terms and conditions like rates, time limit, etc. It is an offer in written form: Legally speaking, it is an offer to receive an offer for the work, within the specified financial limits.
Check for more presentations at - www.archistudent.net
Cost estimates & contract documents ce224 pdfSaqib Imran
This document provides information on construction cost estimation and contracts. It begins with an introduction to cost estimation, outlining the key requirements and need for estimation such as determining feasibility, timelines, and controlling costs. It then discusses the procedures and data required for estimating, including drawings, specifications, and rates. The document also covers different types of construction contracts such as lump sum, item rate, percentage rate, and labour contracts. It defines what a contract is and outlines the key obligations of employers and contractors. Finally, it discusses the tendering process, including classification of tenders, tender documents, and a sample tender notice.
The document discusses the traditional procurement method for construction projects. It begins by outlining the key aspects of the traditional method, including that the client hires consultants to handle design, cost control, and administration, while a contractor is hired to carry out the construction works. It then discusses the advantages and disadvantages of the traditional method based on a client's request to build a RM1.2 billion hotel and shopping complex within 5 years while maintaining full design control and minimal variations. The document recommends using the traditional method to meet the client's needs and control over the project. It provides a timeline and overview of risks associated with the traditional procurement approach.
Assignment - Tender Documentation (Presentation Slide)Kai Yun Pang
This document is a tender submission for the construction of a 3-storey semi-detached house. It includes an introduction with the project details, plans showing the layout and elevations of the building, instructions for tendering, forms of contract, bills of quantities, appendices with schedules and rates. The group members and lecturer are listed and the site is described as generally flat with earthworks and infrastructure already completed. The tender submission contains standard forms and documents required for the tendering process.
This document provides an overview of construction contracting methods and contract types. It discusses the traditional Design-Bid-Build approach, as well as Design-Build, Turnkey, and Construction Management delivery methods. The major contract types covered are Lump Sum, Unit Price, Cost Plus, and variations like Cost Plus Fixed Fee and Cost Plus with a Guaranteed Maximum Price. For each, the document outlines the key characteristics, advantages, and disadvantages. The course appears to cover construction documents, contracting, bidding processes, and contract conditions over multiple lectures.
Tender & bidding in construction projectsTEJAS2011
The document summarizes a study comparing e-tendering and traditional tendering processes in construction projects. Some key findings include:
- E-tendering allows for a more efficient process as bidding can be done electronically versus traditional paper-based bidding. It also enhances bidders' estimation skills.
- E-tendering saves time and costs for both parties involved as paperwork is reduced, bidding can be done from anywhere at any time, and the process is more automated and accurate versus traditional tendering which is time-consuming and prone to errors.
- A comparison of e-tendering versus traditional tendering for private projects found that e-tendering completed the process faster, provided better security for
This document contains a group assignment for a course on professional practice. It provides background on the group members and instructor. It then lists 4 questions for the assignment. Question 1 asks students to prepare a report explaining adjustments needed for the final account of a construction project. Question 2 asks about contractual implications of omitting an item from the tender document. Question 3 requires students to assess a contractor's final account application and prepare the final account based on provided valuations and adjustments. Question 4 asks students to explain how various variations would be finalized and priced in a final account.
Earnest money is a monetary deposit paid by bidders to show their sincerity and good faith in a project. It aims to prevent bidders from withdrawing their bids before the validity period ends. Standard earnest money amounts are 2% of the estimated project cost for works costing up to Rs. 10 crores, and 1% of estimated cost plus Rs. 20 lakhs for higher value projects. Earnest money is refunded once the contract is awarded, or forfeited if the bidder withdraws during the validity period. The document discusses earnest money definitions, forms, amounts, refund processes, and treatments under different scenarios.
This document discusses different types of construction contracts. It outlines various classification schemes, including separated, management, integrated, and discretionary contracts. Specific contract types are then defined, such as lump sum, item rate, percentage rate, cost plus percentage, management, construction management, design-build, and turnkey contracts. The key responsibilities and features of each contract type are provided.
•What is Contract?
•What is Construction Contract?
•Purpose of Construction Contract
•Contract for Bid and Procurement
•Contract for Pricing Arrangement
•Construction Contract Component
•Contract Document List
•Standard Form of Contract in Malaysia
10 Essentials For An Effective Construction ContractSarah Fox
An overview of the 10 aspects every contract for a construction works package (however large or small) needs to include to make it an effective tool.
These 10 essentials are the foundation to the 500-Word Contract (TM), developed as a basis for construction contracts in England/Wales. They are also a checklist for your own terms and conditions.
For more information go to www.500words.co.uk or send Sarah an email sarah@500words.co.uk
The document outlines the tendering process for construction contracts. It discusses:
1) The information that must be included in tender notices such as project details, completion time, deposit amounts, and submission deadlines.
2) The procedure for submitting and opening tenders which involves separating documents into envelopes for money deposit, qualifications, and bid rates.
3) The criteria for evaluating bids such as experience, resources, rates, and ensuring bids are complete before selecting the lowest bidder.
FIDIC is an international federation of consulting engineers that publishes standard forms of contract. It was founded in 1913 and is headquartered in Geneva. Some of FIDIC's most well-known standard forms include the Red, Yellow, and Silver Books. The Red Book covers construction projects, the Yellow Book covers electrical and mechanical works, and the Silver Book covers EPC/turnkey projects. FIDIC contracts establish important procedures like priority of contract documents, the engineer's role, extensions of time, insurance requirements, and dispute resolution processes involving negotiation, mediation, and arbitration.
The document discusses the bidding process for construction projects in Canada. It explains that the bidding process must comply with Canadian tender law. The tender authority, which can be the project owner or a third party, is responsible for administering the tender process, including issuing the call for tenders, tender documentation, and evaluating bids. Contractors must submit a complete bid by the deadline to be considered compliant. The document outlines the roles and responsibilities of the general contractor if selected. It also provides guidance for cost estimators on preparing a bid, including reviewing project scope and developing an estimating plan.
1) A tender notice is being drafted for the construction of a girls hostel costing 150 lakhs at XYZ Institute.
2) Sealed item rate tenders are invited from registered contractors of class IV and above for the construction work.
3) The last date for tender submission is February 7, 2017 and tenders will be opened on the same day at 4pm in the presence of contractors.
The document describes the typical process for construction projects, which involves several key stages:
1) A need is identified, initial plans are developed, and a designer is selected.
2) Conceptual and final designs are created along with cost estimates. Bids are solicited from contractors.
3) A contractor is selected and construction begins according to the project plans.
4) Once completed, the facility is used and maintained over its lifespan.
This document provides an overview of the professional examination process and requirements for architectural licensure in Malaysia. It discusses the practical experience log book that must be completed over a minimum of 104 weeks under a supervisor. The log book must document experience across all phases of architectural projects and be certified by the supervisor. Candidates must also submit minimum 2,000-word evaluation reports on two projects covering various stages and addressing professional duties and responsibilities. The document outlines the examination syllabus which includes professional legislation, the architect's role in society, practice management, building codes and regulations, and contract administration. It notes some key requirements and deadlines regarding registration, fees, and sitting for the oral examination.
Based on the information provided:
- The Contractor had priced RM 130,000 for Contractor All Risk Insurance (CARI) in the preliminaries bill.
- However, the Contractor failed to purchase the CARI when works commenced.
- The Employer then purchased the CARI for RM 180,000 on behalf of the Contractor.
As the Contractor failed to purchase the mandatory CARI as required by the contract, the Employer is entitled to recover the actual cost paid for the insurance from the Contractor.
Hence, there will be a variation of RM 180,000 - RM 130,000 = RM 50,000 that will be deducted from the Contractor's final
The document discusses different types of tenders and tender processes used in construction projects. It describes open, sealed, limited, single, and rate contract tenders. For each tender type, it provides details on who is invited to bid, level of publicity, and documents used. It also outlines the typical information provided in tender notices, the tender procedure, types of contracts like lump-sum and item rate, and documents involved like the contract bond. Security deposits required from contractors to protect the owner in case of default are also summarized.
Persons involved in tenders and contractshiva prakash
This document discusses the key representatives involved in tenders and contracts for construction projects. It defines a tender as inviting bids from contractors to carry out work, and a contract as a legally enforceable agreement. The main roles discussed include the client/owner, project manager, lead consultant, cost consultant, consultant, main contractor, senior estimator, commercial manager, building manager, cost planner, subcontractor, and suppliers. The client is responsible for the project, while the project manager oversees its planning and execution. Consultants help with documentation and the main contractor manages subcontractors and evaluates risks.
LEC - 1.ppt most important lecture note and best2cd
The document defines key terms related to contracts, including:
1. A contract is a legally binding agreement between two parties that creates rights and obligations. It typically involves one party undertaking work in exchange for payment.
2. The elements that distinguish a contract from a simple agreement are offer, acceptance, and enforceability under law.
3. Key parties to a construction contract typically include the client/owner, contractor, and consultant. Their main rights and responsibilities are also outlined.
4. For a contract to be valid, it must generally contain offer/acceptance, consideration, competent parties, and a lawful purpose. The document provides further details on these elements.
Contracts and Tenders
When two or more persons have common intention communicated to each other to create same obligation between them there is said to be an agreement. An agreement which is enforceable by law is a Contract.
A Tenders is called upon for executing certain specified work, or supplying specified materials; subjected to certain terms and conditions like rates, time limit, etc. It is an offer in written form: Legally speaking, it is an offer to receive an offer for the work, within the specified financial limits.
Check for more presentations at - www.archistudent.net
The International Construction Contract governs the relations between a company (Contractor) and its client (Employer), located in different countries, for the undertaking of a works project. Construction Contract.
This document provides an overview of contract principles and types of construction contracts. It discusses key elements of a contract including mutual agreement, legal objectives, valid consideration, and legal capacity of parties. It also describes various types of construction contracts such as lump sum, unit rate, cost plus fixed fee, and cost plus percentage contracts. Contract documents such as invitation to tender, instructions to tender, form of tender, agreement, conditions of contract, specifications, bills of quantities, drawings and addenda are explained. Contract administration, claims, dispute management and resolution procedures are also summarized.
Final types of contracts- different types of contractsMohammedAlfayad2
The document discusses different types of construction contracts:
- Item rate contracts pay contractors based on actual quantities measured at agreed unit rates. This allows for variation in quantities but the total cost may change.
- Percentage rate contracts use estimated quantities but contractors bid a percentage above or below rates rather than individual rates, removing potential for unbalanced bids.
- Lump sum contracts require contractors to complete the entire scope for a fixed price, with provisions sometimes to adjust for changes.
Chapter-2 Construction Contract. Subject code:3160614ptxsulevrunda
This document describes 12 types of construction contracts: item rate, percentage rate, lump sum, all in, labor, materials supply, piece work, cost plus percentage rate, cost plus fixed fee, cost plus sliding fee, target, and BOT. Each type is defined, with item rate, percentage rate, and lump sum contracts explained in further detail regarding their advantages, disadvantages, and key aspects.
This document provides an overview of contract law basics in India. It discusses key definitions and concepts in contract law under the Indian Contract Act of 1872, including:
- The definition of a contract as an agreement enforceable by law, requiring an offer, acceptance, and consideration.
- Essential elements of a valid contract such as capacity of parties, lawful object, free consent, and intention to create legal relations.
- Types of contracts such as express contracts, implied contracts, unilateral contracts, and bilateral contracts.
- Formation of contracts including offer, acceptance, revocation and lapse of offers, and rules of acceptance.
- Other important concepts of privity of contract, consideration, and capacity
The document discusses contracts management and the Indian Contract Act of 1872. It provides definitions of key terms related to contracts such as offer, acceptance, consideration, void agreements, remedies for breach of contract, and classifications of contracts. It also summarizes general conditions of contracts including scope, time for completion, guarantees and liabilities, and procedures for contract execution and changes.
This document discusses various types of engineering contracts and their key terms and conditions. It begins by outlining the four main functions of engineering contracts: scope of work, period of performance, payment, and termination. It then describes different types of civil engineering contracts such as item rate, percentage rate, and lump sum contracts. Finally, it lists important contract terms and conditions like security deposits, compensation for delays, extensions, completion certificates, and measurements and payments.
The document discusses the types of contracts used in construction projects. It states that the material in the presentation is intended for educational purposes during the COVID-19 lockdown situation. Fair use of copyrighted material is permitted under accepted law. The contents are only intended for attendees of the class being conducted. It then defines contracts and describes various types of construction contracts like fixed-price contracts (lump sum, unit price), cost plus contracts, design and build contracts, construction management contracts, and other types like time and materials, supply, and build-operate-transfer contracts.
For General Information Only Owners of Single Family Residences in California Only. Typically, before a general contractor starts “on the road” to completion of a major reconstruction project based on design documents an architect has prepared, several contracts that should lay out the “rules of the road” to project success have already been signed. A number of events that usually arise during a repair process can have significant impact on an owner can occur without an agreement prepared by counsel.
Contracts provide a legally-enforceable framework for guiding any and every type of business relationship, from employment agreements to orders for parts and supplies. While these agreements are key to guiding business relationships and ventures across all sectors, getting contracts right is especially important within construction, where the ability to complete a build on time, on budget and to code hinges upon all vendor arrangements going as expected. From the builder’s perspective, contracts are also important for preventing scope creep and to reducing the risk of cost overruns they may unexpectedly have to absorb.
Construction management contracts encompass the work and/or materials required for a building project. Typically, they will address:
1)Project/deliverable specifications
2)Labor and material requirements
3)Timelines for completion/delivery
4)Compensation formula and amounts
While construction management agreements will typically include the above, they can be structured differently, with numerous types of contracts that are designed to best meet the needs of all parties under all sorts of different scenarios. Familiarizing yourself with the types of contracts that are typically in play within building projects is an important first step to optimizing all contract-related processes within construction management.
This document discusses various aspects of contract management for construction projects. It covers legal aspects of contracts, different types of contracts including their advantages and disadvantages, the tendering process, and dispute resolution. The types of contracts discussed are lump-sum, unit price, bill of quantities, cost plus, and negotiated contracts. The tendering process includes preparing contract documents, advertising tenders, submitting bids, evaluating bids, and awarding contracts. Dispute resolution involves negotiation, arbitration, and in some cases going to court. The overall goal is reaching an agreed settlement through cooperative negotiation or arbitration to avoid protracted legal battles.
The document discusses different types of construction contracts. It defines a contract and explains key components like offer, acceptance, consideration. It then describes various types of construction contracts including unit price contracts, lump sum contracts, labour contracts, and project management contracts. For each type, it provides details on how payment is determined and highlights their advantages and disadvantages. Project management contracts allow clients to focus on their core work while the project manager oversees construction management. While clients pay extra fees, project management can help complete projects on time and within budget.
The document discusses various types of construction contracts. It describes lump sum contracts, item rate contracts, labour contracts, and cost reimbursement contracts. It provides details on how each contract type works, including payment structures, risk allocation, and suitable applications for different contract types. Key factors like flexibility, incentives, and risk allocation are considered when choosing the appropriate construction contract.
This document discusses different types of construction contracts. It defines a contract and describes lump sum and unit price contracts. Lump sum contracts involve a fixed total price for all work, while unit price contracts involve bidding based on units of work, with the total cost depending on actual quantities. The document also categorizes different types of contracts from a legal perspective, such as valid, voidable, void, unenforceable, illegal, and contingent contracts.
A detailed draft provided for a Sub-Contract Agreement that can be used as a base and guideline for all sub-contract or works contracts in any country.
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The document discusses key concepts related to the formation of construction contracts, including tenders, offers, acceptance, letters of intent, and letters of award. It provides examples of each concept and explains essential contract terms that must be agreed upon. Letters of intent and letters of award are described as important documents that provide assurance to contractors but do not legally bind parties until a formal contract is signed. Case law examples are also presented to illustrate how these concepts have been applied.
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This document provides an overview of a course on contract specifications and quantity surveying. The course covers procurement and contracts, specifications, quantity surveying, and project cost estimation. It defines key terms like contract, discusses contract requirements and types, and outlines the objectives of the course for students to understand contracts and their role in construction projects.
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2. Disclose the nature of fixtures, fittings, amenities and construction details. Specify possession dates and prepare a list of flats sold.
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1. A
Contract
is
a
legal
agreement
between
two
or
more
people
for
an
exchange
of
goods
or
services.
Contracts
are
enforceable
by
Contract
law.
There
are
many
different
types
of
Contracts
and
they
vary
between
industry
and
according
to
the
type
of
services
performed.
WHAT
IS
A
CONSTRUCTION
/
BUILDING
CONTRACT?
A
Contract
between
an
Owner
of
a
site
and
a
Building
Contractor,
se@ng
forth
the
terms
under
which
construcAon
is
to
be
carried
out,
the
basis
of
remuneraAon,
the
Ame
scale,
and
the
penalAes,
if
any,
(for
failure
to
comply
with
terms
of
the
Contract)
is
termed
as
a
Building/ConstrucAon
Contract.
Architects
in
India
generally
adopt
IIA
form
of
1979
WHAT
ARE
THE
COMMON
CONTRACT
DOCUMENTS?
The
Contract
Documents
are
all
documents
which,
when
combined,
forms
the
basis
of
the
Contract.
It
is
recommended
that
both
parAes
to
the
Contract
execute
or
endorse
complete
sets
of
all
Contract
documents
and
these
should
be
preserved
intact.
A
possible
list
of
documents
that
makeup
the
Contract
Documents
include:
The
Contract
or
Agreement
to
be
used
by
the
parAes.
CondiAons
of
the
Contract
–
these
define
the
legal
rights
and
obligaAons
of
the
parAes;
another
way
of
describing
the
general
condiAons
is
as
the
rules
by
which
each
party
will
operate
in
performing
their
obligaAons
as
set
down
under
the
Contract.
Special
condiCons
of
Contract
–
these
are
an
extension
to
the
general
condiAons
and
apply
specifically
and
individually
to
each
project/Contract.
Bill
of
quanCCes
–
it
lists
quanAAes
of
the
various
items
and
the
material
to
be
included
in
the
Contract.
It
can
also
be
used
as
the
basis
for
valuaAon
of
variaAons
and
assists
the
preparaAon
of
progress
claims.
The
extent
to
which
the
Owner
warrants
the
completeness
of
a
bill
of
quanAAes
or
a
schedule
of
rates
depends
upon
the
terms
of
the
Contract.
All
drawings
required
in
building
the
structure
(contract
plans
including
Architectural
and
Structural).
These
include
drawings
from
relevant
Consultants.
All
SpecificaCons
–
sets
out
the
technical
requirements
of
the
work
It
describes
the
project
and
adds
clarity
to
its
drawings;
describes
the
requirements
for
materials
and
workmanship.
All
other
documents
considered
necessary,
for
example,
Schedule
or
Annexure
to
the
Contract
completed,
all
technical
schedules,
all
pricing
schedules.
CONTRACT
2. APPLICATION
TO
BUILDING
CONTRACT
The
contractor
as
a
promisor
makes
a
proposal
to
carry
out
a
construcAon
job
for
a
specified
consideraAon.
This
offer
is
called
the
tender.
The
owner
to
whom
this
offer
is
made
gives
his
assent,
which
means
that
he
has
accepted
the
proposal
and
is
ready
to
pay
for
the
cost
of
the
work.
This
results
in
a
valid
contract.
The
assent
is
given
by
the
employer
or
his
architect
in
the
form
of
work
order.
MODE
OF
ACCEPTANCE
The
acceptance
of
tender
can
be
in
wriAng
or
it
can
be
oral
acceptance
when
the
employer
hands
over
the
possession
of
the
site
and
permits
the
contractor
to
commence
the
works
(unless
the
tender
provides
foe
a
wriRen
acceptance
only).
However
the
acceptance
has
to
be
:
1. In
absolute
that
is
without
counter
offer
and
2. Must
be
within
reasonable
Ame
if
the
tender
does
not
provide
period
during
which
tender
is
to
remain
in
force.
EXECUTION
OF
CONTRACT
The
contract
is
executed
on
stamp
paper
of
the
value
as
prescribed
under
Indian
Stamp
Act
1899
and
must
be
signed,
sealed
(in
case
of
public
bodies)
and
delivered.
Unstamped
documents
cannot
be
admiRed
in
evidence
before
an
arbitrator
or
court.
In
such
cases
parAes
will
be
asked
to
get
the
document
duly
stamped
by
paying
Stamp
duty
as
well
as
penalty.
Proper
stamping
before
the
execuAon
of
contract
results
in
the
saving
of
Ame
labour
and
money.
CONTRACT
BY
PRIVATE
PARTY
AND
PUBLIC
BODY
The
contract
by
a
private
party
is
executed
by
signing
the
necessary
contract
document
whereas
in
case
of
Public
bodies,
Government
and
Local
AuthoriAes,
the
same
should
be
made
under
their
respecAve
seals.
RETROSPECTIVE
APPLICATION
OF
CONTRACT
It
is
common
pracAce
to
sign
building
contracts
a[er
the
work
has
already
started.
In
spite
of
this
it
is
understood
that
contract
will
apply
retrospecAvely
to
works
already
executed.
DISCHARGE
OF
CONTRACT
A
contract
can
be
discharged
in
four
ways:
1. By
agreement
2. By
performance
3. By
being
excused
by
law
from
performing
it
4. By
breach
The
contract
becomes
void
due
to
1. MisrepresentaAon
2. Fraud
3. Mistake
3. WHAT
HAPPENS
IF
THERE
ARE
INCONSISTENCIES
BETWEEN
PRINTED
MATTERS
IN
THE
CONTRACT
AND
WRITTEN
CLAUSES
When
there
are
printed
and
typewriRen
clauses
in
a
contract,
they
have
to
be
given
equal
effect
unless
there
is
an
inconsistency
between
the
two
in
which
case
greater
force
is
given
to
the
laRer.
This
is
due
to
the
fact
that
wriRen
words
are
the
immediate
language
and
express
their
meaning.
However
printed
porAon
cannot
be
discarded
in
toto.
UNAUTHORIZED
WORKS
Now-‐a
days
in
Mumbai
and
out
of
Mumbai
there
has
been
a
sprawl
of
unauthorized
works.
The
contractor
in
such
cases
would
be
at
loss
1. When
he
has
entered
into
a
contract
to
commit
an
illegal
act
whereby
the
contract
becomes
void
and
2. When
he
has
entered
into
a
contract
unaware
of
it
being
illegal.
This
happens
when
the
owner
produces
necessary
plans
and
structural
drawings
duly
signed
by
the
professionals,
but
not
approved
by
the
authority.
Here
he
stands
at
the
losing
end
because
the
act
is
illegal
and
the
contract
becomes
unenforceable.
4. Contracts
are
usually
categorized
according
to
the
type
of
payment
but
can
be
tailored
to
incorporate
common
elements
from
several
different
Contract
types.
Some
of
the
common
forms
of
Contract
are
examined
below.
• UNIT
PRICE
(ITEM
WISE)
CONTRACT
• LUMP
SUM
(
FIRM
FIXED
PRICE)
CONTRACT
• LABOUR
CONTRACT
• COST
+
CONTRACT
• PROJECT
MANAGAMENT
CONTRACT
WHAT
IS
UNIT
PRICE
(ITEM
WISE)
CONTRACT?
This
kind
of
Contract
is
based
on
esAmated
quanAAes
of
items
included
in
the
project
and
unit
prices
which
have
been
agreed
to.
The
final
price
of
the
project
is
dependent
on
the
quanAAes
of
the
items
needed
to
carry
out
the
work.
The
terms
of
this
type
of
Contract
o[en
accommodates
flexibility
for
price
adjustment.
The
agreed
to
value
may
be
subject
to
amendment
if
the
volume
is
reduced
or
exceeds
the
original
negoAated
terms
and
price.
WHAT
ARE
THE
ADVANTAGES
OF
UNIT
PRICE
CONTRACT?
• The
Architect
is
involved
in
this
type
of
Contract
because
it
is
he
who
provides
the
quanAAes
of
each
item
(in
the
Bill
of
quanAAes),
and
negoAates
the
unit
prices
with
the
Contractor.
Moreover,
in
this
type
of
Contract,
the
Owner
makes
payments
to
the
Contractor
only
a[er
the
Architect
has
verified
the
measurements
at
Site
and
cerAfied
the
Contractor’s
bills
for
payment.
This
way
the
Owner
is
safe
as
he
is
paying
only
for
the
volume
of
work
done
at
site
and
not
paying
anything
extra.
Also,
he
is
assured
(because
the
Architect
is
involved),
that
the
quality
of
the
work
will
be
up
to
the
mark.
• In
this
type
of
Contract,
the
Contractor
has
to
iniAally
invest
his
own
money
for
starAng
the
work,
and
so
the
Owner
need
not
worry
about
giving
the
Contractor
a
big
advance.
• In
general
this
Contract
is
considered
the
most
scienAfic
and
most
suitable
for
construcAon
projects
where
the
different
types
of
items,
but
not
their
numbers,
can
be
accurately
idenAfied
in
the
Contract
documents.
• The
Contractor
is
also
safeguarded
against
any
conAngencies,
or
variaAons
in
labour
or
material
rates.
WHAT
ARE
THE
DISADVANTAGES
OF
THE
UNIT
PRICE
CONTRACT?
The
Contractor
has
to
invest
his
own
money
iniAally.Though
this
is
one
of
the
most
preferred
Contracts
in
ConstucAon/Buildings,
it
is
not
unusual
to
combine
a
Unit
Price
Contract
for
parts
of
the
project
with
a
Lump
Sum
Contract
or
other
types
of
Contracts.
TYPES
OF
CONTRACT
5. PROBLEM
CondiAon
No.
4
of
I.I.A.
form
of
contract
lays
down
that
the
owner
reserves
the
right
to:
1. Increase
any
of
the
quanAAes
2. Decrease
any
of
the
quanAAes
3. Totally
omit
any
item
of
work
And
the
contractor
shall
not
claim
any
extras
or
damages
on
these
grounds.
CondiAon
4
further
provides
that
any
error
in
descripAon
or
in
quanAty
or
omission
of
item
from
the
contract
bill
shall
not
viAate
this
contract
but
shall
be
treated
as
a
variaAon.
However
in
pracAce
to
avoid
unpleasant
situaAon
of
depriving
the
contractor
of
reasonable
profit,
the
construcAon
industry
and
the
government
departments
agree
that
increase
or
decrease
in
quanAAes
cannot
be
beyond
a
specified
percentage
and/
or
amount.
For
example,
The
Mumbai
Housing
and
Area
Development
Board
provides
for
such
a
conAngency
subject
to
certain
terms
and
condiAons
as
below:
1. QuanAAes
of
item
below
plinth
may
vary
to
any
extent
due
to
local
condiAons
for
which
the
contractor
will
not
be
enAtled
to
the
revised
rates.
2. For
super
structure
items
the
contractor
is
bound
to
execute
works
in
excess
up
to
25%
of
the
tendered
quanAAes
without
claiming
revised
rates
for
such
excess.
3. Even
if
the
executed
quanAAes
are
more
than
25%
of
the
tendered
quanAAes
the
contractor
will
not
be
enAtled
to
the
revised
rates
for
such
excess
quanAAes
if
the
value
of
such
excess
excess
quanAes
at
the
tendered
rate
does
not
exceed
Rs5000/-‐.
ILLUSTRATION
Tender
QuanAty
Rate
Amount
50mm
G.I.
pipes
QuanAty
executed
It
exceeds
permissible
limit
of
25%
value
of
excess
quanAty
at
tender
rate
100
R.M.
150
R.M.
50
R.M.
Rs.
95/-‐per
R.M.
Rs.9500/-‐
50xRs.95/-‐
=
Rs.
4750/-‐
This
amount
is
less
than
Rs.5000/-‐and
hence
the
contractor
is
not
enAtled
to
the
revised
rates.
6. WHAT
IS
A
LUMP
SUM
(FIRM
FIXED
PRICE)
CONTRACT?
With
this
kind
of
Contract
the
Contractor
agrees
to
do
the
construcAon
and
compleAon
of
the
building
at
a
designated
Ame
for
a
fixed
price
or
Lump
Sum.
Also
named
“Fixed
Fee
Contract”,
this
type
of
Contract
is
o[en
used
in
Building
Contracts.
Fixed
Fee
or
Lump
Sum
Contract
is
suitable
if
the
scope
and
schedule
of
the
project
are
sufficiently
defined
to
allow
the
esAmaAon
of
the
project
costs.
The
scope
of
the
Contract
defines
the
expectaAons
of
both
parAes.
This
type
of
Contract
provides
a
degree
of
certainty
for
both
parAes
because
the
Contract
clearly
spells
out
what
is
involved.
WHAT
ARE
THE
ADVANTAGES
OF
LUMP
SUM
CONTRACT?
• A
lump
sum
Contract
provides
for
a
price
that
is
not
subject
to
any
adjustment
on
the
basis
of
the
Contractor’s
cost
experience
in
performing
the
Contract.
This
Contract
type
places
upon
the
Contractor
maximum
risk
and
full
responsibility
for
all
costs
and
resulAng
profit
or
loss.
• Since
the
price
is
fixed,
any
unforeseen
conAngencies
or
variaAons
in
material
or
labour
prices
do
not
affect
the
Owner.
• It
provides
maximum
incenAve
for
the
Contractor
to
control
costs
and
perform
effecAvely
and
imposes
a
minimum
administraAve
burden
upon
the
ContracAng
parAes.
Lump-‐sum
Contract
can
be
1. A
fixed
sum
contract
or
lump-‐sum
contract
2. Area
based
Contract
Turn
key
Contracts:
It
is
a
broad
classificaAon
of
Lump-‐sum
contract.
In
this
case
the
builder/developer
contractor
purchases
the
land,
employs
his
own
architect/engineer
and
agrees
to
hand
over
completed
tenements
to
the
employer
(usually
a
society)
against
specified
rate
per
S.M.
of
area;
subject
to
payments
by
installaAons
as
the
work
progresses.
7. • A
lump
sum
Contract
can
be
used
in
conjuncAon
with
an
award-‐fee
incenAve
and
performance
incenAves,
when
the
award
fee
or
incenAve
is
based
solely
on
factors
other
than
cost.
The
Contract
type
remains
Lump
Sum
when
used
with
these
incenAves.
A
lump
sum
Contract,
shall
be
used
when
the
risk
involved
is
minimal
or
can
be
predicted
with
an
acceptable
degree
of
certainty.
However,
when
a
reasonable
basis
for
firm
pricing
does
not
exist,
other
Contract
types
should
be
considered,
and
negoAaAons
should
be
directed
toward
selecAng
a
Contract
type
(or
combinaAon
of
types)
that
will
appropriately
Ae
profit
to
Contractor
performance.
WHAT
IS
A
LUMP
SUM
CONTRACT
WITH
PRICE
ADJUSTMENT?
It
provides
for
upward
and
downward
revision
of
the
stated
Contract
price
upon
the
occurrence
of
specified
conAngencies.
A
lump
sum
Contract
with
economic
price
adjustment
may
be
used
when
there
is
serious
doubt
concerning
the
stability
of
market
or
labor
condiAons
that
will
exist
during
an
extended
period
of
Contract
performance,
and
conAngencies
that
would
otherwise
be
included
in
the
Contract
price
can
be
idenAfied
and
covered
separately
in
the
Contract.
Economic
price
adjustments
are
adjustments:
• based
on
established
prices
of
specific
items
or
the
Contract
end
items,
• based
on
actual
costs
of
labor
or
material
that
the
Contractor
actually
experiences
during
Contract
performance
and
• based
on
cost
indexes
of
labor
or
material
that
are
specifically
idenAfied
in
the
Contract.
In
establishing
the
base
level
from
which
adjustment
will
be
made,
one
shall
ensure
that
conAngency
allowances
are
not
duplicated
by
inclusion
in
both
the
base
price
and
the
adjustment
requested
by
the
Contractor
under
economic
price
adjustment
clause.
WHAT
ARE
THE
DISADVANTAGES
OF
THE
LUMP
SUM
CONTRACT?
• An
Architect
is
not
involved
as
this
Contract
is
an
agreement
between
the
Owner
and
the
Contractor
for
a
final
fixed
price.
So
the
Architect
does
not
have
a
role
to
play
,
and
so
quality
of
work
cannot
be
checked
and
controlled
by
an
expert.
• Since
specificaAons
are
not
clear,
the
Contractor
can
use
alternaAve/inferior
brands
of
materials.
• Also
there
is
a
lot
of
ambiguity
in
the
specificaAons,
measurements,
mode
of
payment,
etc.
• Though
the
Contract
is
made
on
a
fixed
price,
the
Contractor
may
claim
extras
by
giving
different
reasons,
since
the
specificaAons,
measurements
are
not
clear.
• The
Contractor
takes
money
in
advance
from
the
Owner,
and
then
he
proceeds
with
the
work
at
his
own
pace.
Also
someAmes,
the
Contractors
deliberately
hold
up
work
towards
the
end,
so
as
to
extract
maximum
money
from
the
Owner.
So
the
Owner
feels
helpless
as
his
money
is
with
the
Contractor.
8. WHAT
IS
A
LABOUR
CONTRACT?
In
this
type
of
Contract,
the
Owner
buys
and
supplies
all
the
material
required
for
the
construcAon
to
the
Labour
Contractor
and
only
uses
his
labour.
The
system
of
employing
Contract
labour
is
prevalent
in
most
industries
including
ConstrucAon,
involving
skilled
and
semi
skilled
jobs.
A
workman
is
deemed
to
be
employed
as
Contract
Labour
when
he
is
hired
in
connecAon
with
the
work
by
or
through
a
Contractor.
Contract
workmen
are
indirect
employees;
persons
who
are
hired,
supervised
and
remunerated
by
a
Contractor
who,
in
turn,
is
compensated
by
the
Owner
of
the
site.
Contract
labour
has
to
be
employed
for
work
which
is
specific
and
for
definite
duraAon.
WHAT
ARE
THE
ADVANTAGES
OF
A
LABOUR
CONTRACT?
• This
kind
of
Contract
is
someAmes
preferred
by
the
Owner,
because
he
buys
all
the
material
by
himself
and
thus
saves
a
lot
on
the
Contractor’s
profit.
• Moreover,
the
Owner
can
buy
the
materials
of
his
choice
and
can
be
sure
of
the
brand
that
will
be
used
in
the
construcAon.
WHAT
ARE
THE
DISADVANTAGES
OF
A
LABOUR
CONTRACT?
However,
I
personally
would
discourage
a
Client
from
entering
into
this
type
of
Contract
for
the
following
reasons:
• In
this
Contract
also,
the
Architect
does
not
have
a
role
to
play,
and
so
quality
of
work
cannot
be
checked
and
controlled
by
an
expert.
• There
is
a
lot
of
headache
and
tension
involved
in
running
around
and
arranging
for
the
supply
of
materials
at
site,
on
Ame
as
the
work
progresses.
• It
is
easy
to
get
fooled
on
the
quality
of
sand,
bricks
etc.
because
the
Owner
is
not
very
experienced
in
assessing
the
quality.
• It
is
difficult
to
strike
a
good
bargain
when
negoAaAng
with
suppliers
and
vendors,
because
the
Owner
is
a
one
Ame
Client,
whereas
the
Contractor
normally
has
an
advantage
as
he
is
a
regular
Client
and
a
relaAonship
is
built
between
him
and
the
suppliers.
• There
is
every
possibility
of
pilferage
of
the
material
stored
at
site.
• Very
o[en
labourers,
masons
etc
do
not
turn
up
to
site
as
they
may
be
lured
for
a
day
to
some
other
site
and
hence
the
work
gets
delayed.
• Since
the
workers
are
generally
paid
for
the
work
on
a
daily
basis,
the
labour
Contractor
may
purposely
go
slow
so
that
he
he
takes
longer
to
complete
the
job
and
so
get
paid
more.
• Inferior
labour
status,
casual
nature
of
employment,
lack
of
job
security
and
poor
economic
condiAons
are
the
major
characterisAcs
of
Contract
labour.
While
economic
factors
like
cost
effecAveness
may
jusAfy
system
of
Contract
labour,
consideraAons
of
social
jusAce
call
for
its
aboliAon
or
regulaAon.
• In
fact,
in
my
experience,
I
have
seen
that
in
most
cases,
the
Owner
ends
up
spending
almost
as
much,
at
the
end
of
the
project
as
he
would
have
if
he
had
chosen
any
other
type
of
Contract.
9. WHAT
IS
A
COST
+
CONTRACT?
This
type
of
Contract
is
not
popular
in
India.
This
is
a
Contract
agreement
wherein
the
Owner
agrees
to
pay
the
cost
of
all
labor
and
materials
plus
an
amount
for
Contractor
overhead
and
profit
(usually
as
a
percentage
of
the
labor
and
material
cost).
It
is
like
a
Labour
Contract,
but
here
the
Contractor
buys
the
materials
and
provides
the
labour
and
is
reimbursed
accordingly.
This
type
of
Contract
is
favored
where
the
scope
of
the
work
is
indeterminate
or
highly
uncertain
and
the
kinds
of
labor,
material
and
equipment
needed
are
also
uncertain.
Under
this
arrangement
complete
records
of
all
Ame
and
materials
spent
by
the
Contractor
on
the
work
must
be
maintained.
This
type
of
Contract
can
be
altered
according
to
the
basis
on
which
the
addiAonal
amount
paid
to
the
Contractor
is
fixed.
COST
+
FIXED
%
CONTRACT–
It
is
based
on
a
percentage
of
the
cost
COST
+
FIXED
FEE
CONTRACT
–
It
is
based
on
a
fixed
sum
independent
of
the
final
project
cost.
COST
+
FIXED
FEE
BONUS
CONTRACT
–It
is
based
on
a
fixed
sum
of
money
and
a
bonus
is
given
if
the
project
finishes
below
budget,
ahead
of
schedule
etc.
COST
+
FIXED
FEE
WITH
SHARING
ANY
COST
SAVINGS
CONTRACT–
It
is
based
on
a
fixed
sum
of
money
and
any
cost
savings
are
shared
with
the
Owner
and
the
Contractor.
INCENTIVE
CONTRACTS
–
It
is
based
on
the
Contractor’s
performance
on
the
agreed
target
–
budget,
schedule
and/or
quality.
WHAT
ARE
THE
ADVANTAGES
OF
THE
COST
+
CONTRACT?
It
has
the
advantages
of
the
Labour
Contracts.
• In
addiAon,
since
the
Contractor
gets
an
addiAonal
amount
at
the
end
of
the
project,
it
provides
maximum
incenAve
for
the
Contractor
to
control
costs
and
perform
effecAvely
and
on
schedule.
WHAT
ARE
THE
DISADVANTAGES
OF
COST
+
CONTRACT?
• In
this
Contract
also,
the
Architect
does
not
have
a
role
to
play,
and
so
quality
of
work
cannot
be
checked
and
controlled
by
an
expert.
• Since
the
Contractor
is
reimbursed
based
on
the
records
of
the
workers
he
has
employed
and
the
materials
he
has
bought,
one
can
never
be
sure
if
these
records
are
genuine,
as
there
is
no
way
of
verifying
them.
So,
this
type
of
Contract
is
rarely
adopted
in
India.
10. WHAT
IS
A
PROJECT
MANAGEMENT
CONTRACT?
Project
Management
Contracts
are
a
type
of
Contract
where
the
Architect
agrees
to
manage
the
Contract,
as
defined
by
the
scope
of
the
agreement,
for
a
specified
duraAon
of
Ame
for
monetary
consideraAon.
This
type
of
Contract
can
be
short
term
or
long
term.
WHAT
ARE
THE
ADVANTAGES
OF
PROJECT
MANAGEMENT?
• The
Clients
can
focus
on
their
core
operaAons
while
the
Architect
(Project
Manager)
looks
a[er
the
management
of
Projects,
people
and
issues,
ensuring
that
deadlines
are
met,
quality
is
maintained
and
costs
are
controlled.
• The
Project
Manager
coordinates
with
all
the
agencies,
including
the
Consultants,
the
Contractor
and
the
Suppliers
to
ensure
that
the
construcAon
of
the
project
goes
on
smoothly.
WHAT
ARE
THE
DISADVANTAGES
OF
PROJECT
MANAGEMENT?
Some
Clients
hesitate
to
go
in
for
Project
Management
Contract
as
they
have
to
pay
extra
for
project
management,
in
addiAon
to
the
fees
paid
to
the
Architect.
However,
there
are
lots
of
Clients
nowadays,
who
opt
for
Project
management
as
it
saves
them
from
a
lot
of
headache
and
they
can
concentrate
on
their
work
as
the
building
comes
up.
Moreover,
in
the
long
run,
since
the
project
is
completed
on
Ame,
and
costs
are
controlled,
the
Client
actually
saves.