This document provides an introduction and overview of preliminary or approximate estimates and related estimation methods. It discusses several methods for preparing preliminary estimates, including the plinth area method, cubic content method, service unit method, bay method, and approximate quantity method. It also covers detailed estimates, revised estimates, supplementary estimates, and annual maintenance estimates. Key factors for estimation like drawings, specifications, rates, measurements, and circulars are also outlined. Common items of work, units of measurement, and rules for deductions are defined. The document concludes with definitions of valuation, factors affecting property value, types of value, valuation methods, and depreciation methods.

1. Introduction to estimate and
related terms
 Preliminary or approximate estimate
1. Its rough estimate prepared to know the approximate cost of work in short
time on basis of cost of similar work carried out.
2. While preparing estimate various factors of comparison may be used like
cubic content, plinth area, per capita, per km, service unit etc.
3. These estimate are sectioned by concerned authority with respect to
financial aspect of work.
4. These estimate are useful to know the cost at initial stages to decide
feasibility of work.
5. Estimate is based on practical experience of carrying out simillar work in
past and their rates.

2. a) Plinth Area Method
 This estimate prepared on the basis of plinth area of building.
 It can be calculated by (approximate cost = plinth area x
plinth area rate).
 The rate are obtained from area building having similar
specification and constructed in same locality.
 Open area should not be include in plinth area.
 For storey building the plinth area estimate is prepared for each
storey separately.

3. b) Cubic Content method
 In this method ( approximate cost = volume of building x rate per
volume)
 The volume of building can be calculate by multiplying plinth area
with height of building.
 The foundation, plinth and carpet above roof are not considered while
finding cubic content.
 cubic content method is more accurate as compared to plinth area
method.

4. c) Service unit Method
• In this method all cost of unit quantity such as per km highway, per
litre for water tank, per meter for span of bridge etc. are considered
first.
• (Approximate estimate = no. of service of unit x cost per service
unit)
• This estimate can quickly prepared.
Eg. For road = service unit per KM
for School = service unit is per classroom

5. d) Bay Method
• Bay is centre to centre distance between the support.
• This method is applicable to structure like godown, a railway platform,
factory shades etc.
• Such structure are constructed with intermediate column or with roof
trusses on walls placed equal distance forming bays.
Approximate cost = no. of bays x cost of one bay

6. e) Approximate quantity method
• In this case
(Approximate cost = total length of wall x rate per running meter)
• The structure is divided into two parts
a) Foundation including plinth
b) Superstructure
• Plan and line plan should be required to prepare for the estimate.

7. B) Detailed Estimate
• This is most accurate method
• Below are steps for calculating detailed estimate
i) its prepared by finding out the actual quantities of item of work and then
multiplied by corresponding rates.
ii) Whole structure is subdivided into individual item of work and
quantities of all item of work can be calculated form their respective
dimension form drawing and noted it in measurement sheet.
iii) Multiplying these quantities by their respective rates in abstract sheet.
iv) The cost of all items are worked out individually and then abstracted.
Detailed estimate is accompanied by
i) Comprehensive report of work
ii) General specification
iii) detailed specification
iv) Detailed drawing showing plan
v) Design data and calculation
vi) basic rates adopted in estimate

8. i) Revised Estimate
• Revised estimate is detailed estimate for revised quantities and rates
for items of work originally provided in the estimate.
• Its required to prepared under any one of following reasons.
 When originally sanctioned estimate is likely to exceed by more than
5%.
 When expenditure on work exceed or likely to exceed the amount of
administrative sanction by more than 10%.
 If there is change in rate or quantity of materials.
 Major alternation is introduced in original work.
• No additional or revised drawing is necessary.
eg. Cost of materials like cement, steel increased after construction
work started.

9. ii) Supplementary Estimate
a) Its type of detailed estimate, which is prepared when additional works
are required to supplement to original proposed work during execution
of work.
b) The fresh detailed estimate of additional work is prepared in addition
to original estimate.
c) The abstract shows the amount of original estimate and total amount
including supplementary amount for which sanction is required.
d) No comparative abstract form is required.
Eg. In large room, required to construct partition walls.

10. iii) Revised and Supplementary Estimate
• During execution of project, if there is increase in volume of original
work, estimate is necessary to revise and if at same time sanction of
supplementary work is required.
• In that case revised estimate prepared for increased volume of original
work and detailed estimate prepared separately for supplementary
work.
• This estimate is prepared when particular work is abandoned

11. iii) Annual maintenance or repair estimate
• This estimate is necessary after completion of work like replacement,
renewal and repair etc.
• The amount of such estimate should be between 1.5% to 2% of
original cost of construction.
• for building, items of work may be white washing, colour washing,
painting, minor repair etc.

12. Data required for estimation
a) Drawing
b) Specification
c) Rates
d) Updated mode of measurement
e) Standing circulars
a) Drawing
• Basically drawing should be prepared with showing plans, different
sections and other relevant details for work.
• Complete set of drawing is required which include plan, elevation,
section and foundation drawing.
b) Specification
• General specification
The nature and class of work and name of material to be used are
explained
• Detailed Specification
It gives description of every item to be executed with qualities,
quantities, materials proportion, workmanship

13. c) Rates
• Rates for various materials required in construction and wages of
different categories of labour should be needed for preparing estimate.
• Rates are provided by PWD, rate book schedule
Eg: Rate of bhisti per day = Rs. 512
d) Updated mode of measurement
• Unit of measurement for different items of work are different.
• IS 1200 gives guidelines for this measurement along with standard
addition or deduction rule.
Eg: excavation in cu.m
e) Standing circulars
for taxes, insurance and GST etc. are required to fix up rates of those
items which are not in schedules of rates.

14. Items of Work
a) Different type of work of load bearing structure
• site clearance
• excavation for foundation
• PCC in foundation
• CR masonry in plinth
• UCR in foundation
• damp proof course at plinth level
• plinth filling with hard murum
• brickwork in superstructure
• providing and fixing door and window frame
• Lintels over opening
• Sloping roof
• internal and external plastering, pointing
• providing and laying flooring
• door and window shutter
• water supply and sanitary arrangement
• electrification

15. b) Different item of work of CC road
• site clearance
• excavation of road way
• Excavation for catch/side water gutter
• conveying materials obtained form road cutting
• providing, laying, spreading and compacting stone aggregate
• providing and laying in situ cement concrete
• groove cutting and joint filling
• supplying hard murum at road side

16. Units of measurement
• Limits of measurement and degree of accuracy in estimating
a) Dimension shall be measured to the nearest 0.01m expect the
following cases:
 thickness of slab measured to nearest 0.005 m
 wood work to nearest 0.002m
 reinforcement to nearest 0.005m
 Thickness of road work less than 20cm, measured to nearest 0.005m
• Area shall be measured to nearest 0.01 sq.m
• Cubic content shall be worked out to nearest 0.01cu.m
• Weights shall be worked out to nearest 1kg.

17. Rules for Deduction
a) Rules for deduction in brick masonry
b) Rules for deduction in plastering and pointing
Rules for deduction in brick masonry
No deduction is made for following
i) Opening upto 0.1 sq.m
ii) Ends of beam, posts, afters, purlins, etc. upto 0.05sq. M in scetion
iii) Bed plate, wall plates, bearing of chajjas where thickness does not
exceed 10cm.
iv) Bearing of floor and roof slab are not deducted form masonary in
superstructure.

18. For other opening, deduction are made in following manner
a) Rectangular Opening
Deduction = l x h x t
b) Opening with segmental arch
Deduction = ((l x h)+(2/3*l*r))*t
c) Opening with semi-circular arch
deduction = ((l x h)+(3/4*l*r))*t
Rules for deduction in plastering and pointing
a) No deduction is made for ends of beam, posts, rafter etc.
b) No deduction is made for opening up to 0.5 sq.m
c) For opening more than 0.5 sq.m and upto 3 sq.m.
d) for opening above 3 sq.m deduction is made for both faces of opening
and jambs.

19. Valuation
Valuation : Valuation is the technique of to estimating and determining the
fair price or value of property such as building, factory, other engineering
structure of various types, land etc. By valuation the present value of
property is determined.
Basically present value of property may be decided by its selling price,
income or rent it may fetch.
The value of property depend on its structure, life, maintenance, location,
bank interest, legal control etc. and value also depend on supply on
demand and purpose for which valuation is required.

20. Purpose of Valuation
1. Buying and selling the property
2. Taxation : Based on municipal taxation
3. Rent fixation
4. Security of loans and mortgage
5. Compulsory acquisition : acquired by govt.
6. Valuation of property required for insurance, betterment charges,
speculations etc.
7. Sale
8. Balance sheet
9. Court Fees : depend on real estate and required stamps.
10. Gift Tax
11. Partition
12. wealth Tax : govt fixed value

21. 1. Price
2. Cost
3. Value
1. Price :
a) This is amount worked out by adding the cost of production or
construction, interest on investment, own profit, reward to producer
for his labour and risk. Thus selling price is fixed for commodity.
b) For less price demand, selling price may have to lower and vice
versa.
2. Cost :
a) cost means original cost of construction or production and can be
known after accounting all day to day expenditure form very planning
stage till construction is completed.
b) cost of old building is less due to its age and changes in fashion.
c) for valuation, cost of an old building is worked out form present
cost of construction of such new building less the calculated amount of
loss in building due to its wear and tear.

22. Value :
a) value means worth or utility
b) value varies time to time and depend largely on supply of that
particular type of property ad extent of demand for it.
c) the cost of construction of building may have no relation to value
of the same which sold in open market.
d) value id depend on i) its utility ii) shortage in supply or demand
iii) Events.

23. Factors affecting value of property
a) change in building technology
b) Migration Tendencies
c) forces of demand and supply
d) cost of construction
e) change in age distribution of population
f) sudden change in price of building materials
g) Rent restriction act
h) Improvement in amenities
i) interest on bank and government securities
j) unstable time
k) abnormal Condition

24. Types of Value
1. Market Value : sold in open market at particular time
2. Book value : amount shows in account book of particular year
3. Salvage value : without being broken into pieces or dismantled
4. Scrap value : 10 %
5. Distressed value : if property sold at lower price than market value.
6. Sentimental value : if property is sold or purchased at higher value
7. than market value
8. Accommodation value
9. Annual Value: local authority decided.
10. Good will value
11. Highest and best use value
12. Liquidation value : sold or purchase under force circumstances
13. Monopoly value : depend on shape, frontage and location
14. Potential Value : when property is capable to getting more return due.
15. Rateable value : same as annual value
16. Replacement Value
17. Assessed value: the value of property recorded in register
18. Speculative value
19. Capitalized Value : net income * year of purchase

25. Different Types of Lease
1. Building lease :
a) if owner of free hold plot of land not able to construct building on
his land then he gives the plot of land on lease to somebody who
ready to construct a suitable building on particular piece of land.
b) in such case lease holder pays yearly ground rent to free holder.
2. Occupation lease
a) the owner construct structure on land and together with land, he
grants lease for certain occupation such as residential, factory, shop, office
etc.
b) lease holder maintain property according to term and condition of
lease.
3. Sub lease: a lease holder may tender sublease of his lease hold property
to other person.
4. Life lease : lease is granted for the duration of life or lives of one or
more persons.
5. Perpetual lease: when lease of property is given for number of years
providing condition that the lease is renewable time to time.

26. Method of Depreciation
Depreciation: the loss in the value of property due to its use, life, wear,
tear decay and obsolescence is called as depreciation.
 Straight line method : its assumed to property loses its value by
same amount of year.
Annual depreciation (D) = (C-S)/n
 Constant % method or declining balance method : the property
will lose its value by constant % of its value at beginning of every
year
P = 1-(S/C)^1/n
 Sinking fund method : the property assumed to be equal to annual
sinking fund plus the interest on fund for that year.

27. Types of Value
Method of Valuation
1. Rental method
2. Direct comparison method
3. Profit based method
4. Development or residual method
5. Based on cost or contractors method
6. Book value method
7. Present land value method
Method of valuation of land only
1. Belting method
2. Comparative method
3. Abstractive method

28. Tenders
It is an invitation from the owner to the contractor to execute some
work at specified cost in specified time. It is published in the form of
tender notice in news papers, notice boards etc. according to the cost of
works.
Methods of inviting tenders
Open tender–It is invitation of tenders by open advertisement
through the Indian Trade Journal or through the principal
newspapers in India or Abroad up to 10000/- or over.
Limited tender—This is direct invitation only to a selected no. of
contractors to quote rates for supply of articles. This is ordinarily
adopted in the case of all orders the estimated value of which is
less than Rs.10,000.
Single tender—Invitation is given to only one firm to render a
service by quoting their rates. If the quoted rates are high, it will
be negotiated to the agreement of the contract.

29. Tender Notice
Tender for work or supply are invited by issuing tender notice in
prescribed form. Following particulars are given in the tender
notice
1. Name of the authorities(dept.) inviting tender Exa: Govt. of
Tamil Nadu
Water Resources Organisation Public Works Department (PWD),
1. Name of work and its location
2. Estimated cost
3. Last date and time of receipt of tender
4. Period of availability of tender document or validity of tender
5. Cost of tender document
6. Time of completion and type of contract
7. Earnest Money Deposit to be paid & security deposit
9. Date, time and place of opening the tender
10. Designation of the officer opening the tender

32. Tendering Procedure
• Approval of work form govt. authority
• Prepare tender draft containing detailed specification, BOQ, contract
document by concerned govt. department
• Invitation of tender by concerned govt. department
• Submission of tender by contractor
• Opening of tender by concerned govt. authority
• Scrutiny of tender by concerned govt. authority
• Comparative statement and award of contract by concerned govt.
authority
• Work order to selected contractor

33. Pre-Qualification of contractors
1. In this process, the capability/competencency of contractors
determined before the tenders for the work are invited.
2. The tenders are then supplied/offered only to those contractors,
who qualified for the work.
3. The contractor should be filled with form
i. Information regarding contractors past experience
ii. Present work in hand
iii. Financial stability
iv. Technical qualification
v. Plants and equipment's
4. After properly studying and analysing these fact the officer in
charge decides category of contractor and accordingly put his name
in schedule of category.
5. Officer then invite only selected contractors to quote tender.

34. Post-Qualification of contractors
1. In this process, capability/compentency of contractor is determined
after tender is opened.
2. The lowest tender is generally accepted and qualification of
awarded/Selected contractor are studied before actually singing the
contract
Tender Document
1. Title Page : Agreement No.
2. Index
3. Tender notice
4. General Instruction
5. Special conditions
6. Form of contract : A1,A2,B1,B2 form
7. Various contract clauses, terms and condition
8. Schedule A : showing materials details to be supply dept.
9. Schedule B : BOQ
10. Schedule C : detailed item wise specification and drawing
11. Specification: general and detailed
12. Complete set of drawing.

35. Types of BID system
1. 2 bid system : system include technical and financial Proposals are
submitted separately.
2. 3 bid system : documents related criteria, technical bid and
financial bid
In this system 1st two bids will be opened of only those bidders who
meet qualification criteria.

36. Bid Conference
The bid organised by authority or owner before last date of submission
of tenders to clear doubts of contractor with respect to execution of
work.
1. The main purpose of conference is to clarify the doubts about
proposed project work and answer the questions of any matter
2. The pre bid conference is usually organised at place near to
proposed work site.
3. The time, date and place of conference is mentioned in tender
notice
4. The interested contractor attend the conference on their own cost.

37. Comparative statement
1. After scrutinizing the tender received by govt. officer prepared
comparative statement of all tenders.
2. This comparative statement contain information regarding name of
contractor, date or receipt of tender, percentage above or below rate entered
by contractor and amount of tender quoted by contractor.
3. Format of comparative statement:
eg. Cost of work Rs. 10 Lakh
4. A special note shall be written by officer weather rate quoted by lowest
tender are workable or not.
5. In addition, reputation of contractor should be mentioned after
considering all parameters of lowest tender and decision for awarding
contract is taken.
Sr.
no.
Name of
firm
Amount of
tender (RATE
QUOTE)
1 A 8 Lakh
2 B 8.4 Lakh
3 C 8.9 lakh
4 D 9.5 lakh
5 E 10.4 lakh

38. Qualitative and Quantitative evaluation of tenders
1. After invitation tender, interested bidder should be submit their
tenders and documents to fulfil requirement of owner or
department.
2. After all tenders responses are received, evaluation process starts to
identify best effective contractor for contract award.
3. Evaluation team is the team of expert that involve technical expert,
financial expert, purchasing expert and if required legal and
commercial expert.
4. criteria for formal evaluation process.
i. financial evaluation : Evaluate financial soundness of contractor.
ii. Technical Evaluation : scrutinise capability of contractor
iii. Capability evaluation : evaluate client experience, system
management, contractor strength and weakness,
iv. Service evaluation : assessment of contractor service ranging from
his experience
v. Contract award

39. Tender Acceptance
1. it has been act as per Indian contract act 1872 : when person to
whom proposal is made signifies his assent thereto.
2. After completion of scrutiny of tender process, at last officer in
charged prepared comparative statement.
3. Normally tender with lowest amount is accepted and in some cases
the rate of lowest tender are so low that it may causes poor quality of
work.
4. In that case officer decide or negotiates with second lowest
contractor.
5. The contractor whose tender is accepted or awarded, should have to
submit tender acceptance letter of standard format within specified time
limit (normally within 14 days of tender opening date )
6. Within that 4 days EMD of unsuccessful contractor should returned.
7. The various method of acceptance of tender from view point of law
are as follows.
I conduct as proof of acceptance
II acceptance by telegram
III written acceptance
IV absolute acceptance

40. Rejection of tender
1. Rejection of all tenders
2. Rejection of lowest tender
1. Rejection of all tenders
i) There is no competition for work and minimum no. tenders are not
received.
ii) After publication of tender notice in news paper, its found that changes
in design are very essential
iii) When any fraud is detected.
iv) The lowest tender has quoted very high rates than estimated rate.
v) There is collisions among contractors.
2. Rejection of lowest tender
i) when tender is not submitted in particular from sold by department.
ii) Earnest money is not enclosed along with tender
iii) the lowest tender may lack in experience for work
iv) unsatisfactory reputation of lowest tenderer.
v) tender is not signed by contractor
vi) If any page removed by contractor form documents.
vii) If contractor black listed by any department.

41. Unbalanced tender
1.In case of item rate tender the contractor has to quote his rates against
each item indicated in tender form.
2. If the rates quoted by contractor are not varying much form those
mentioned in the schedule of rates prepared by PWD then tender is said
to be balanced tender.
3. If rates quoted by contractor for initial items are higher and for
subsequent item are lower but sum total amount practically unaffected,
the tender is said to unbalanced tender.
4. Contractor submit unbalanced tender for following reasons.
i. get an excess payment in initial stage of work, which can reutilised
as working capital.
ii. Contractor having plant, machinery, for item of work for which he
has quoted lower rates.

42. Built operate transfer
BOT defined as the type of arrangement in which private sector builds
an infrastructure with their funds and then operate and transfer
ownership of project to the government.
1. Its also called as PPP (public private partnership)
2. In this work govt. grants permission to private firm to construct.
3. Type of Bot contract can be enlisted as follows.
i. BO – build, operate
ii. BOT- build operate and transfer
iii. BOO – build own and operate
iv. BOOT – build, own, operate and transfer
v. BT – build, transfer
vi. BTO – build, transfer and operate
vii. BLT – build, lease and trasnfer

43. Global Tender
1. Some work required special equipment's, machineries which is not
fulfilled by local contractor.
2. For such big and specialised job or design, global tender are invited
to get competitive offers form various specialised firms or reputed
manufactures throughout the world.
3. These are published in internationally newspapers, sometimes its
also circulated through embassies offices located at different
important countries throughout world.
4. global tenders are invited for big projects such as construction of
airport, under water construction, express highway etc.

44. E-tendering
E-tendering or e-procurement or electric tendering system is tendering
process, in which complete tendering process right from advertising or
publishing tender to awarding or selection of contractor tender is done
online
1. In Maharashtra before year 2009, whole process done by manually.
2. In 2010 the state govt. started e tendering process after receiving
flak for corruption and many fraud cases against manual tendering
process.
3. Now onwards Maharashtra govt. make e tendering mandatory for
project over Rs. 3 lakh
Data is required for E tendering process.
1. Scan copy of all technical document
2. Online payment mode option
3. Computer/laptop
4. Specific version of browser with updated java
5. MS office
6. Digital Key.

45. E-tendering whole process done by online
1. Submission or attaching of all scan documents by contractor
2. Tender fees and EMD online payment
3. Rate quotation in financial bid is also done online.
4. Al last after tender is opened, comparative statement is also shown
online.
Classes of Contractor
1. Before 6th sept. 1982 govt. classified contractor class as Ai, A, B,
B+, C, D, E
2. After 6th sept. 1982 category of contractor classified as below
Class limit Clas
s
limit
I No limit VI Up to 50 lakh
II Up to 3 cr. VII Up to 2 lakh
III Up to 2 cr.
IV Up to 1 cr.
V Up to 50

46. Method of Executing Work
1. PWD PROCEDURE FOR WORK EXECUATION
a. Work :
i. the work is basically executed by public or private work
ii. The expenditure on public work is met form public funds.
iii. It consist of all the work pertaining to construction repairs, supply
of materials and carriage tool plants.
b. Work expenditure and works outlay : the term work expenditure
and work outlay refers respectively to expenditure and capital charges
on special service required for construction or maintenance of any
work.
c. Appropriation:
i. its authorised amount of expenditure that can be incurred under
major or minor head by disturbing officer
ii. Technically the term appropriation also refers to the provision made
in respect of charged expenditure.

47. Administrative setup of PWD
1. Govt.
2. Secretary of govt.
3. Chief engineer (CE)
i. Superintending Engineer (SE) (circle 1)
ii. Superintending Engineer (SE) (circle 2)
iii. Superintending Engineer (SE) (circle 3)
iv. Superintending Engineer (SE) (circle 4)
4. Executive Engineer (EE)
5. Deputy engineer or Assistant Executive Engineer (AEE)
6. Junior Engineer (JE)
7. Assistant of JE or supervisor
i. Skilled workers
ii. Semi-skilled workers
iii. Un-skilled workers.

48. Organization work setup of PWD
1. Project
i. Engaged by contractor
ii. Departmental – worked charge staff and casual labour
2. Material
i. supplied by contractor or supplier
ii. Manufactured by Department
3. Overheads
i. CE /ACE
ii. SE
iii. EE
iv. AEE
v. JE

49. Functions of PWD officer
1. Chief Engineer (CE) : CE administrative head of department. He is
directly responsible to govt, when department has to execute large
project.
2. Functions of chief Engineer
i. CE coordinates and supervises work of superintending engineer of
various circle.
ii. To give administrative approval of work under his control.
iii. He has full authority to sanction/accept unlimited amount tender.
iv. Purchase of live stock Rs. 30000/ at only one time.
v. He prepare the budget estimates annually relating to work under his
control.
3. Superintending Engineer (SE)
SE is responsible for execution of work under his circle.
Function
i. Inspect division in his circle and report to CE
ii. To check progress of work under his circle.
iii. Technical sanction under his control.
iv. Financial control over execution of original repair work.
v. Examine books of divisional offices and sub divisional offices

50. 1. Executive Engineer (EE) : EE is also known as divisional officer.
He is responsible to execution of work in his division. (eg. South
and north division)
2. Functions of Executive Engineer
i. He monitor administration for division
ii. His responsible to make payment towards contractor
iii. He need to undergo estimation for coming project
iv. Guiding and suggesting changes, requirement and necessities.
v. Invite tender for work valued within his power.
3. Deputy Engineer/ Assistant executive engineer
he is also known as sub divisional officer (SDO)
Function
i. Check muster roll
ii. Physical verification of measurement book and dead stock.
iii. Submit monthly report of progress of work to divisional officer.
iv. Administrative control over office and filed staff division.
v. Visit and impact all execution site once in week

51. 1. Junior Engineer (JE) : He is responsible for execution of
original/maintenance work in allotted area of particular
subdivision.
Functions
1. Supervision of work in his charge
2. Maintain attendance of daily worker, labour.
3. Taking measurement of all work form site and recording it in MB.
4. Preparation of running and final bills for work in his section.
5. Prepare estimate for all types of works in his section.
6. Carry out field survey for proposed project.

52. Administrative Approval
1. For any new original work, including special repair work initiated
by or related to the requirement of department. Its necessary to
obtain formal acceptance with respect to cost and work which is
called administrative approval.
2. For administrative approval the department (PWD) send a proposal
to govt. for taking up the work.
3. After considering all aspects like feasibility of project and financial
aspect, the govt. accept proposal.
4. After getting administrative approval the detailed drawing, design
and estimate are prepared and submitted for technical sanction.
Stages of administrative approval
1. Initiation of proposal by concerned department.
2. Preparation of “ Block estimate” by engineering department.
3. Approval form competent authority of the head of the concerned
department.

53. Technical Sanction
1. After obtaining administrative approval to a work. Its necessary to
prepare detailed drawing and estimates of the proposed work,
which are to be submitted to the appropriate of PWD of state govt.
for further sanction. Such a sanction competent authority is called
technical sanction.
2. Technical sanction means the sanction of detailed estimate, design,
drawing, quantities of different items of work and their rates and
cost of work.
3. The work is taken for execution only after getting technical
sanction.
4. If the estimated amount exceed 10% of administratively approval
amount, technical sanction is granted only after obtaining revised
administrative approval for work.
5. Technical sanction once given to any work, it will remain valid for
5years.
Power of technical sanction to various officer
1. Chief Engineer – full power
2. Superintending Engineer – up to 50 lakh
3. Executive Engineer – up to 25 lakh

54. Budget Provision
1. Budget is annual financial statement showing the estimated receipts
and expenditure in respect of financial year before commencement
of that year.
2. After getting administrative approval and technical sanction, a
report is prepared mentioning raw materials, organization setup and
total cost required for execution of project
3. Considering budget proposal, provision are made in five years plan
and yearly budgetary provision are made. This budget sanction is
approved by financial department.
4. Originally estimate are prepared from different division and
submitted to superintending engineer.
5. The chief engineer prepared annual estimate after receiving the
estimate form superintending engineers.
6. Budget statement is send to minister concerned and to financial
department after scrutiny by secretary of the department.

55. Classification of original works on the basis of expenditure
1. Major work : its an original work, estimated cost of which
excluding departmental charges is more than rs. 1 lakh or any other
ceiling fixed by the engineering department.
2. Minor work : its an original work, estimated cost of which
excluding departmental charges is less than rs. 1 lakh or any other
ceiling fixed by the engineering department.
3. Project work : it may either work or repair work, the estimated
cost of which is up to 5000/- or any other limit fixed by PWD.

56. Method of execution of minor work in PWD
1. Piece work agreement (PWA)
2. Rate list
3. Day Work
4. Employing labour on daily wages.
1. Piece work agreement (PWA):
i. its adopted for small work of very urgent nature and where labours
cooperative society are not willing to accept such work.
ii. In this method, piece worker is to be paid as per measurement of
actual work carried out by him at agreed rate.
iii. Piece of work is agreement which involve the payment for work
done at agreed rate without quantity of work to be done or time of
completion
2. Rate List : if the work costing less than Rs. 5000 is carried out by
piece worker as per Schedule of cost or rate quoted by him is called as
rate list.
3. Day work : there having certain items of work which can neither be
measured accurately nor valued correctly due to its complexity.

57. 4. Employing labour on daily wages
Part1. Nominal Muster roll (form no. 21)
Part2. Measurement Book ( form no. 23)
5. Various Account forms and their uses
1. Nominal Muster roll (form 21)
2. Measurement book (form no. 23)
3. Imprest cash account (form no. 2)
4. Intent (from no.7)
5. Invoice

58. Registration of contractor for PWd
1. Regular Civil contractor
a. Work done certificate of last 3 years
b. BID capacity certificate
c. Last 3 years ITR with pan card
d. Technical staff appointed by contractor
e. List of plants and machines ( rent / purches)
f. Attested copy of partnership
g. Copy of power of duly signed
1. Unemployed Engineer - license
a. degree/diploma
b. College leaving certificate
c. Marksheet of SSC, final year
d. Employment exchange card
e. Domicile, pan card, affidavit, bank certificate

59. Contracts
contract is a mutual or legally binding agreement between two parties
based on policies and conditions recorded in document form.
1. The two parties involved are one or more owners and one or
more contractors.
2. The owner has full authority to decide what type of contract should
be used for a specific development to be constructed and to set forth
the legally-binding terms and conditions in a contractual agreement.
3. A construction contract is an important piece of document that
outlines the scope of work, risks, duties, and legal rights of both the
contractor and the owner.
Objective:
1. To execute the work in quality.
2. To execute the work as per agreed competitive rate.
3. To completing the work as per specification.
4. To use latest machineries and techniques.
5. To avoid dispute between two parties, while completing work.

60. Essentials of a valid contract as per Indian contract ACT (1872)
1. Free Consent : Free Consent means an act of assenting to an offer.
According to section 13, "Two or more persons are said
to consent when they agree upon the same thing in the same thing in
same sense.
2. Legally Competent parties: basically depend upon as per section 11
of indian contract act.
a) The age should be more than 18 years.
b) who is sound mind
c) who is not idiot and lunatic ( mentally ill)
d) who is not drunken person.
3. Lawful subject matter :
a. The subject matter of agreement must be legal and definite.
b. It should be easy to understand and not too complex to understand
and execute
4. Can be enforced in court of law : all term and condition should be
according to law.
5. Contract should be in writing and attested by witness

61. Types of Contract
1. Lump-sum Contract
a. In lump sum construction contract contractor bids a single fixed price
for all activities in the project scope.
b. This method is particularly used for large construction projects and is a
conventional but most popular types of construction contract.
c. The contractor bears the risks associated with this contract and is
responsible for estimating project costs from drawings including overhead
and his profit to determine the price of the project.
d. lump sum construction contract is considered as the most effective
means of reducing construction price and is useful when projects and
its activities are well defined.
Advantages :
1. Fixed Amount
2. Early Completion of work
3. No need for measurement
4. Low cost

62. Disadvantages
1. Unbalanced contract
2. Extra items and extra cost
3. More Dispute
4. Quality of materials and good workmanship is not guaranteed
5. Delay in commencement of work
2. Unit price contract.
1. In a unit price contract, the total contract price is based upon the price
of all the individual item of the work.
2. Under a unit price contract, the contractor provides the owner with a
specific price for one or more tasks or a partial “segment” or a “block”
of the overall work that’s required on the project.
3. The owner agrees to pay the contractor for the units that the contractor
expends to complete the project.
4. rather than taking a look at the project as a whole and setting a price
based on that finished product, a unit price contract will determine the
price based on the “units” that will be required to make up that job..

63. Advantages
1. Flexibility
2. Economical
3. Balance Contract
4. Early commencement of work
5. Quality of work
Disadvantages
1. classification of materials
2. final cost
3. clashing of interests
4. more measurement
5. variation in plan

64. 3. Cost plus or Percentage contract
1. Cost plus percentage of cost is a method contractors often use to price
services.
2. This type of contract specifies that the buyer must pay all the project
costs incurred by the seller, plus an additional amount for profit.
3. Cost plus percentage of cost is a method contractors often use to price
services.
4. This type of contract specifies that the buyer must pay all the project
costs incurred by the seller, plus an additional amount for profit.
5. Products such as purses and services such as car detailing have fixed
prices. Other services and projects, such as home remodels, have
variable costs that are hard to predict.
Classification
1. cost plus fixed percentage
2. cost plus fixed sum
3. cost plus fixed sum with profit sharing
4. cost plus fixed sum with bonus
5. cost plus varying percentage

65. 1. Cost plus fixed percentage : fixed % of total amount spent by owner
ie. between 10 to 15%
2. Cost plus fixed sum : instead of making payment to contractor on
fixed % basis of contractor for his service.
3. Cost plus fixed sum with bonus: the cost of work lower than
estimated work and sharing will be 25 to 50%.
4. Cost plus fixed sum with bonus : when the work is completed
urgently and before time.
5. Cost plus varying % : payment to contractor is made on varying %
basis.

66. 4. Basic Price Contract
1. Unit Price Contracts are based on anticipated quantities of items which
are counted in the project in addition to their unit prices.
2. The final price of the project depends upon the quantities required to
carry out the work.

67. Condition of Contract
1. Earnest Money deposit : the amount a buyer pays to show that his
interest in a said property is genuine. The money is often paid once a
verbal acceptance upon an offer has been made. The Earnest Money
deposit is also known as a binder, token money or good-faith deposit
2. Security Deposit : The contractor is required to deposit with the
owner a sum stated as a percentage of the cost of the work in order to
safeguard the interests of the owner in the event of improper
performance of the contract.
3. Time as an Essence of contract : A Time is of the Essence clause
may mean that one party to the contract must perform
its contractual obligations at a specific date and time as required in
order to compel performance by the other party to the contract. A
failure to perform by the time specified will be a material breach of
the contract.
4. Voidable contract : it means a contract has been created which a party
is able to annul at their pleasure. A voidable contract is only considered
an enforceable contract against the party which cannot void
the contract.

68. 5. Extension of time for delay in completion : a delay which could not be
reasonably foreseen at the time of contract signing. The granting of
an Extension of Time relieves the contractor from liability of damages
such as Liquidated Damages from the original date of contract
completion for the period of the claim.
6. Extension of time due to addition and alteration
7. Extra Item
8. Price variation Clause : in order to protect the contractor against the
risk of rising prices due to inflation. At each interim payment the
formula is applied using the latest published indices to give a
multiplier representing the change in construction prices since the
date of tender.
Vm = {0.88 V-[C+S-x]}x (70(W1-Wo)/100Wo
9. defective materials and workmanship
10. Subletting of Contract
11. liquidity damages.