This document outlines key aspects of contracts and tenders for civil engineering projects. It discusses the elements of a valid contract, different types of contracts like lumpsum, item rate, and percentage rate contracts. It also describes earnest money deposits, security deposits, departmental execution of works, tender types and forms, submission process, and dispute resolution through arbitration. Contracts must have lawful subject, competent parties, valid consideration, free consent, and comply with law. Tenders can be open, global, limited, or negotiated. Disputes are typically settled through arbitration involving appointment of arbitrators, case preparation, hearings, issuing an award, and filing the award.

1. CONTRACTS &
TENDERS

2. CONTENTS
 ELEMENTS OF CONTRACT
 CONTRACT PROCUREMENT
 TYPES OF CONTRACTS
 EARNEST MONEY DEPOSIT
 SECURITY DEPOSIT
 DEPARTMENTAL EXECUTION OF WORKS
 TENDER- TYPES & TENDER FORM
 MODE OF SUBMISSION OF TENDER
 DISPUTES SETTLEMENT

3. ELEMENTS / REQUIREMENTS OF CONTRACT
 LAWFUL SUBJECT
 LEGALL COMPETANT PARTIES
 VALID CONSIDERATIONS
 FREE CONSENT
 PROVISIONS OF LAW
CONTRACT
Agreement b/w two parties which is enforced by law.
 Contracts in India are governed by
 Indian Contract Act
 Indian Arbitration & Council Act

4. CONTRACT PROCUREMENT
Notice inviting Tender
Pre-qualification of
contractors
Issue of tenders to pre-
qualified contractors
Preparation of
contract docs.
Evaluation of bids

5. TYPES
OF
CONTRACTS
Contracts
Separated
Lumpsum Item rate
% rate Cost + % rate
Cost + fixed fee
Cost +
fluctuating fee
Integrated
Design-Build Turnkey or EPC
Build-Operate-
Transfer
Management
Construction
management
Design &
construction
management
Discretionary
Public-private
partnership
Joint venture
Others
Labor Material
Annual rate
Demolition of
buildings

6. LUMPSUM CONTRACT
 Schedule of rates not provided.
 CLIENT : consults design Engineer
 CONTRACTOR : Has to complete work as per drawings & Specs for the agreed
lumpsum amount.
 Contractors having prior construction experience will submit a realistic bid.
 Contractor can earn more profit by effective management
o Disputes since many unforeseen details not specified in contract agreement.
Contractor demands higher rates for extra items.
o Not suits : for difficult foundations, excavations of uncertain character & projects
suspected to unpredictable variations.

7. LUMPSUM & SCHEDULED CONTRACT
 Lumpsum with schedule of rates also included in contract agreement.
 CONTRACTOR : has to complete as per drawings & detailed specs in fixed time,
at fixed amount.
 SOR decides the extra amount to be paid incase of any additions during work
progress.
 Measurement of extra items is required for payment.
 OWNER : Knows the cost of the project from the tenders & decides whether to
do or postpone he work.
o Disputes: reg. non-scheduled extra items , contractor demands higher rates.

8. ITEM RATE CONTRACT (Scheduled contract)
 OWNER : includes detailed Bill Of Quantities(BOQ) with estimated quantities
of works.
 Owner wont prepare detailed drawings.
(contracted will do it after he is allotted the tender)
 PAYMENT TO CONTRACTOR: made based on detailed measurements of diff
items of work actually done by him (at agreed rates).
 Commonly used for All types of Engg works (Public / private)
 SUITABILITY : works which can be split into various items & estimation of each
quantity accurately.
o Owner cant know the total cost until completion , he may face financial
difficulties.
o Additional staff required to finalize he payment based on detailed
measurements.
o Contractor may use inferior materials for profit.

9. SUB-CONTRACTS
 % rate Contract
 Cost + %
 Cost + Fixed fee
 Cost + Fluctuating Fee
 Piece work / Work order

10. EARNEST MONEY DEPOSIT
The amount which is to be paid along with the tender form
To obtain bid security from bidders.
 Works up to :10cr : EMD = 2% of estimated cost
 Works >10cr : EMD = Rs.20Lakhs + 1% of estimated cost
 Restricts competition among contractors
 Punishment- if he bids unreasonable lowest prices.
SECURIY DEPOSIT
After tender is selected, contractor has to deposit about 2.5%
to 10%
 This deposit is given (by the owner) to the contractor in the
form of loan for materials,labour,...
 Punishment- if he don’t respect the given provisions of plans
& specs and will be terminated.

11. DEPARTMENTAL EXECUTION OF WORKS
 MUSTER ROLL
 PART-1 nominal roll
 PART-2 details of quantities
 PIECE WORK AGREEMENT
 Rates – based on quantity of work / time
 For small works upto Rs.2000 or even Rs.7500
 Contractor's payment is in stages
 No penalty & No Security deposit
 Quantities of items not mentioned
 WORK ORDER
 Rates – based on measurements of work done
 For small works up to Rs.2000 Contractor’s
 Contractor's payment is direct.
 penalty & Security deposit of 10%.
 Quantities of items mentioned
 This is a contract – contractors are selected based
on bids.

12. TENDER
An offer in writing, to execute a specified work or supply of materials,
at certain rate - with in specified time - under certain conditions
TENDER FORM
1.Price- Lumpsum price or unit price
2.Earnest money deposit
3.Security money deposit
4.Time limit- the time period
5.Tender validity period(30 days to 150 days)
6.Miscellaneous- site, plans, specifications, signatures.

13. TYPES OF TENDERS
 OPEN TENDERS
 GLOBAL TENDER
 LIMITED TENDER
 NEGOTIATED TENDER

14.  Envelope 1:
It contains the EMD in the form indicated in the notice of invitation to tender
 Envelope 3: It contains the priced tender form with the
signature of the tenderer
 Envelope 4: (i) A large envelope consisting of all the above
mentioned envelopes
(ii) This should be properly sealed.
(iii) Complete details of the works in hand at the time of
submission of tender Note: Envelope 4 consists of the first
three envelopes.
 Envelope 2:
(a) Covering letter to the tender
(b) any comments which the tenderer makes
(c) the solvency certificate from bank authorities
(d) the latest income tax clearance certificate
(e) List of works of similar nature carried by contractor
(f) Details of plant and machinery available with the tenderer
(g) Details of technical staff employed by the tenderer
(i) Details of registration with government or semi
government authorities
(j) Details about the firm such as year of incorporation,
registration date, names of partners etc.
Mode of submission of tender
The tender shall be submitted in 4 envelope.

15. Procedure of settlement of dispute in a civil engineering contract by arbitration :
clause 251
1.Appointment of arbitrator
2. Preparation and submission of a case for
Arbitration(claimant and respondent)
3. Hearing of the case
4. Issue of award
5. Filing of the award
6. Power of court to modify award
7. Power of court to remit award
8. Removal of arbitrators or umpires
9. Power of court to appoint an arbitrator or umpire