Contract Management

1. DELAY AND SUSPENSION
FIDIC,CPWD,NHAI AND MES
R.KARTHIK.REDDY (P2261004)

2. FIDIC
DELAYS:
• 8.6 Delays Caused by Authorities If: (a) the Contractor has diligently followed the procedures
laid down by the relevant legally constituted public authorities or private utility entities in the
Country; (b) these authorities or entities delay or disrupt the Contractor’s work; and (c) the
delay or disruption was Unforeseeable, then this delay or disruption will be considered as a
cause of delay under sub-paragraph (b) of Sub-Clause 8.5 [Extension of Time for Completion].
• 8.8 Delay Damages If the Contractor fails to comply with Sub-Clause 8.2 [Time for
Completion], the Employer shall be entitled subject to Sub-Clause 20.2 [Claims For Payment
and/or EOT] to payment of Delay Damages by the Contractor for this default. Delay Damages
shall be the amount stated in the Contract Data, which shall be paid for every day which shall
elapse between the relevant Time for Completion and the relevant Date of Completion of the
Works or Section. The total amount due under this Sub-Clause shall not exceed the maximum
amount of Delay Damages (if any) stated in the Contract Data. These Delay Damages shall be
the only damages due from the Contractor for the Contractor’s failure to comply with Sub-
Clause 8.2 [Time for Completion], other than in the event of termination under Sub-Clause
15.2 [Termination for Contractor’s Default] before completion of the Works. These Delay
Damages shall not relieve the Contractor from the obligation to complete the Works, or from
any other duties, obligations or responsibilities which the Contractor may have under or in
connection with the Contract. This Sub-Clause shall not limit the Contractor’s liability for
Delay Damages in any case of fraud, gross negligence, deliberate default or reckless
misconduct by the Contractor.

3. • 9.2 Delayed Tests
If the Contractor has given a Notice under Sub-Clause 9.1 [Contractor’s Obligations] that the Works or Section (as
the case may be) are ready for Tests on Completion, and these tests are unduly delayed by the Employer’s Personnel
or by a cause for which the Employer is responsible, Sub-Clause 10.3 [Interference with Tests on Completion] shall
apply. If the Tests on Completion are unduly delayed by the Contractor, the Engineer may by giving a Notice to the
Contractor require the Contractor to carry out the tests within 21 days after receiving the Notice. The Contractor
shall carry out the tests on such day or days within this period of 21 days as the Contractor may fix, for which the
Contractor shall give a prior Notice to the Engineer of not less than 7 days. If the Contractor fails to carry out the
Tests on Completion within this period of 21 days:
(a) after a second Notice is given by the Engineer to the Contractor, the Employer’s Personnel may proceed with the
tests;
(b) the Contractor may attend and witness these tests;
(c) within 28 days of these tests being completed, the Engineer shall send a copy of the test results to the
Contractor; and
(d) if the Employer incurs additional costs as a result of such testing, the Employer shall be entitled subject to Sub-
Clause 20.2 [Claims For Payment and/or EOT] to payment by the Contractor of the costs reasonably incurred.
Whether or not the Contractor attends, these Tests on Completion shall be deemed to have been carried out in the
presence of the Contractor and the results of these tests shall be accepted as accurate.

4. • 14.8 Delayed Payment
If the Contractor does not receive payment in accordance with Sub-Clause 14.7 [Payment], the Contractor shall be
entitled to receive financing charges compounded monthly on the amount unpaid during the period of delay. This
period shall be deemed to commence on the expiry of the time for payment specified in Sub-Clause 14.7 [Payment],
irrespective (in the case of sub-paragraph (b) of Sub-Clause 14.7) of the date on which any IPC is issued. Unless
otherwise stated in the Contract Data, these financing charges shall be calculated at the annual rate of three percent
(3%) above:
(a) the average bank short-term lending rate to prime borrowers prevailing for the currency of payment at the place
of payment, or
(b) where no such rate exists at that place, the same rate in the country of the currency of payment, or
(c) in the absence of such a rate at either place, the appropriate rate fixed by the law of the country of the currency
of payment. The Contractor shall by request be entitled to payment of these financing charges by the Employer,
without: (i) the need for the Contractor to submit a Statement or any formal Notice (including any requirement to
comply with Sub-Clause 20.2 [Claims For Payment and/or EOT]) or certification; and (ii) prejudice to any other right
or remedy.

5. SUSPENSION:
• 8.9 Employer’s Suspension The Engineer may at any time instruct the Contractor to suspend progress of part or all
of the Works, which instruction shall state the date and cause of the suspension. During such suspension, the
Contractor shall protect, store and secure such part or all of the Works (as the case may be) against any
deterioration, loss or damage. To the extent that the cause of such suspension is the responsibility of the
Contractor, Sub-Clauses 8.10 [Consequences of Employer’s Suspension], 8.11 [Payment for Plant and Materials
after Employer’s Suspension] and 8.12 [Prolonged Suspension] shall not apply.
• 8.10 Consequences of Employer’s Suspension If the Contractor suffers delay and/or incurs Cost from complying
with an Engineer’s instruction under Sub-Clause 8.9 [Employer’s Suspension] and/ or from resuming the work
under Sub-Clause 8.13 [Resumption of Work], the Contractor shall be entitled subject to Sub-Clause 20.2 [Claims
For Payment and/or EOT] to EOT and/or payment of such Cost Plus Profit. The Contractor shall not be entitled to
EOT, or to payment of the Cost incurred, in making good: (a) the consequences of the Contractor’s faulty or
defective (design, if any) workmanship, Plant or Materials; and/or (b) any deterioration, loss or damage caused by
the Contractor’s failure to protect, store or secure in accordance with Sub-Clause 8.9 [Employer’s Suspension].

6. • 8.12 Prolonged Suspension If the suspension under Sub-Clause 8.9 [Employer’s Suspension] has continued for
more than 84 days, the Contractor may give a Notice to the Engineer requesting permission to proceed. If the
Engineer does not give a Notice under Sub-Clause 8.13 [Resumption of Work] within 28 days after receiving the
Contractor’s Notice under this Sub-Clause, the Contractor may either:
(a) agree to a further suspension, in which case the Parties may agree the EOT and/or Cost Plus Profit (if the
Contractor incurs Cost), and/or payment for suspended Plant and/or Materials, arising from the total period of
suspension; or (and if the Parties fail to reach agreement under this sub-paragraph (a))
(b) after giving a (second) Notice to the Engineer, treat the suspension as an omission of the affected part of the
Works (as if it had been instructed under Sub-Clause 13.3.1 [Variation by Instruction]) with immediate effect
including release from any further obligation to protect, store and secure under Sub-Clause 8.9 [Employer’s
Suspension]. If the suspension affects the whole of the Works, the Contractor may give a Notice of termination
under Sub-Clause 16.2 [Termination by Contractor].

7. CPWD
DELAYS:
• Compensation for Delay: Clause 2
• If the contractor fails to maintain the required progress in terms of clause 5 or to complete the work and clear the site
on or before the contract or justified extended date of completion as per clause 5 (excluding any extension under Clause
5.5) as well as any extension granted under clauses 12 and 15, he shall, without prejudice to any other right or remedy
available under the law to the Government on account of such breach, pay as compensation the amount calculated at
the rates stipulated below as the authority specified in schedule 'F' may decide on the amount of accepted Tendered
Value of the work for every completed day/ month (as determined) that the progress remains below that specified in
Clause 5 or that the work remains incomplete.
(i) Compensation for delay of work With maximum rate @ 1% (one percent) per month of delay to be computed on
per day basis based on quantum of damage suffered due to stated delay on the part of Contractor. Provided always that
the total amount of compensation for delay to be paid under this condition shall not exceed 10 % (ten percent) of the
accepted Tendered Value of work or of the accepted Tendered Value of the Sectional part of work as mentioned in
Schedule 'F' for which a separate period of completion is originally given.
• In case no compensation has been decided by the authority in Schedule 'F' during the progress of work, this shall be no
waiver of right to levy compensation by the said authority if the work remains incomplete on final justified extended
date of completion. If the Engineer in Charge decides to give further extension of time allowing performance of work
beyond the justified extended date, the contractor shall be liable to pay compensation for such extended period. If any
variation in amount of contract takes place during such extended period beyond justified extended date and the
contractor becomes entitled to additional time under clause 12, the net period for such variation shall be accounted for
while deciding the period for levy of compensation. However, during such further extended period beyond the justified
extended period, if any delay occurs by events under sub clause 5.2, the contractor shall be liable to pay compensation
for such delay.

8. SUSPENSION:
• Suspension of Work: Clause 15
• (i) The contractor shall, on receipt of the order in writing of the Engineer-in-Charge, (whose decision shall be final
and binding on the contractor) suspend the progress of the works or any part thereof for such time and in such
manner as the Engineer-in-Charge may consider necessary so as not to cause any damage or injury to the work
already done or endanger the safety thereof for any of the following reasons:
(a) on account of any default on the part of the contractor or;
(b) for proper execution of the works or part thereof for reasons other than the default of the contractor; or
(c) for safety of the works or part thereof. The contractor shall, during such suspension, properly protect and secure
the works to the extent necessary and carry out the instructions given in that behalf by the Engineer in- Charge.
• (ii) If the suspension is ordered for reasons (b) and (c) in sub-para (i) above:
(a) the contractor shall be entitled to an extension of time equal to the period of every such suspension PLUS 25%,
for completion of the item or group of items of work for which a separate period of completion is specified in the
contract and of which the suspended work forms a part, and;
(b) If the total period of all such suspensions in respect of an item or group of items or work for which a separate
period of completion is specified in the contract exceeds thirty days, the contractor shall, in addition, be entitled to
such compensation as the Engineer-in- Charge may consider reasonable in respect of salaries and/or wages paid by
the contractor to his employees and labour at site, remaining idle during the period of suspension, adding thereto
2% to cover indirect expenses of the contractor provided the contractor submits his claim supported by details to
the Engineer-in- Charge within fifteen days of the expiry of the period of 30 days.

9. • (iii) If the works or part thereof is suspended on the orders of the Engineer-in-Charge for more
than three months at a time, except when suspension is ordered for reason (a) in sub para (i)
above, the contractor may after receipt of such order serve a written notice on the Engineer-in-
Charge requiring permission within fifteen days from receipt by the Engineer in- Charge of the
said notice, to proceed with the work or part thereof in regard to which progress has been
suspended and if such permission is not granted within that time, the contractor, if he intends
to treat the suspension, where it affects only a part of the works as an omission of such part by
Government or where it affects whole of the works, as an abandonment of the works by
Government, shall within ten days of expiry of such period of 15 days give notice in writing of
his intention to the Engineer-in-Charge. In the event of the contractor treating the suspension
as an abandonment of the contract by Government, he shall have no claim to payment of any
compensation on account of any profit or advantage which he might have derived from the
execution of the work in full but which he could not derive in consequence of the
abandonment. He shall, however, be entitled to such compensation, as the Engineerin-Charge
may consider reasonable, in respect of salaries and/or wages paid by him to his employees and
labour at site, remaining idle in consequence adding to the total thereof 2% to cover indirect
expenses of the contractor provided the contractor submits his claim supported by details to
the Engineer-in-Charge within 30 days of the expiry of the period of 3 months .

10. NHAI
DELAYS
• 8.3 Damages for delay in handing over the Site
(i) In the event the Right of Way to any part of the Site is not provided by the Authority on or before the date(s)
specified in Clause 8.2 for any reason other than Force Majeure or breach of this Agreement by the Contractor, the
Authority shall pay Damages to the Contractor a sum calculated in accordance with the following formula for and in
respect of those parts of the Site to which the Right of Way has not been provided:
AMOUNT OF DAMAGES IN Rs FOR DAY PER METER = 0.05 X C X 1/L X 1/N
Where, C = the Contract Price; L = length of the Project Highway in metres; and N = Completion period in days
(Appointed Date to Scheduled Completion Date)
In the event that any Damages are due and payable to the Contractor under the provisions of this Clause 8.3 (i) for
delay in providing the Right of Way, the Contractor shall, subject to the provisions of Clause 10.5, be entitled to Time
Extension equal to the period for which the Damages have become due and payable under this Clause 8.3 (i), save
and except that:
(a) if any delays involve time overlaps, the overlaps shall not be additive; and
(b) such Time Extension shall be restricted only to the Works which are affected by the delay in providing the Right
of Way.

11. For the avoidance of doubt, the Parties expressly agree that the Damages specified hereunder and the Time
Extension specified in Clause 10.5 shall be restricted only to failure of the Authority to provide the Right of Way for
and in respect of the “Construction Zone” which shall comprise the following components: Main in
carriageway Median (for 4 lane carriageway or more) Paved and earthen shoulders Area for Structures including
ROBs/RUBs. Safety measures including Roadside Drains and Furniture. A parallel working space for
accommodating slopes/retaining structures etc.
(ii) Notwithstanding anything to the contrary contained in this Agreement, the Contractor expressly agrees that
Works on all parts of the Site for which Right of Way of Construction Zone is granted on the Appointed Date, or with
respect to the parts of the Site provided in Schedule-A, no later than the date(s) specified therein, as the case may
be, shall be completed before the Scheduled Completion Date and shall not qualify for any Time Extension under
the provisions of Clause 8.3 (iii).
(iii)
(a) Notwithstanding anything to the contrary contained in this Agreement, the Authority may at any time withdraw
any Works forming part of this Agreement, subject to such Works not exceeding an aggregate value, such value to
be determined in accordance with Schedule-H, equal to 10 (ten) percent of the Contract Price. 47
(b) Provided that if any Works cannot be undertaken within the municipal limits of a town or within any area falling
in a reserved forest or wildlife sanctuary or the stretches where vacant access and Right of Way could not be handed
over, as the case may be, because the requisite clearances or approvals or affected land parcels for commencing
construction of Works therein have not been given within 180 (one hundred and eighty) days of the Appointed date,
the affected Works shall be deemed to be withdrawn under the provisions of this Clause 8.3.3. Such Works shall not
be computed for the purposes of the aforesaid ceiling of 10% (ten per cent) hereunder.

12. (c) Provided further that in case such stretches (as mentioned in Sub-Clause (b) above) can be handed over to the
Contractor before the expiry of the original Scheduled Construction Period of the Project Highway, and the
Contractor agrees to take up the work, the same may be allowed to be executed by him with corresponding
Extension of Time, subject to the condition that the Contractor shall not be entitled to raise any claims on account
of prolongation costs in this behalf.
(iv) In the event of withdrawal of Works under Clause 8.3 (iii) (a), the Contract Price shall be reduced by an amount
equal to 90 (ninety) per cent of the value of the Works withdrawn and the Contractor shall not be entitled to any
other compensation or Damages for the withdrawal of Works.
Provided that if any Works are withdrawn after commencement of the Construction of such works, the Authority
shall pay to the Contractor 110% (one hundred and ten per cent) of the fair value of the work done, as assessed by
the Authority’ Engineer.
The parties expressly agree that the value of the Works withdrawn shall be determined from the details available in
Schedule-H. In the event that it is impossible to determine the value from Schedule-H, then the value shall be
determined in accordance with the provisions of Clause 13.2 (iii).
• 11.14 Delays during construction
Without prejudice to the provisions of Clause 10.3 (ii), in the event the Contractor does not achieve any of the
Project Milestones or the Authority’s Engineer shall have reasonably determined that the rate of progress of Works
is such that Completion of the Project Highway is not likely to be achieved by the end of the Scheduled Completion
Date, it shall notify the same to the Contractor, and the Contractor shall, within 15 (fifteen) days of such notice, by a
communication inform the Authority’s Engineer in reasonable detail about the steps it proposes to take to expedite
progress and the period within which it shall achieve the Project Completion Date.

13. SUSPENSION
• 11.17 Suspension of unsafe Construction Works
(i) Upon recommendation of the Authority’s Engineer to this effect, the Authority may by notice require the
Contractor to suspend forthwith the whole or any part of the Works if, in the reasonable opinion of the Authority’s
Engineer, such work threatens the safety of the Users and pedestrians.
(ii) The Contractor shall, pursuant to the notice under Clause 11.17 (i), suspend the Works or any part thereof for
such time and in such manner as may be specified by the Authority and thereupon carry out remedial measures to
secure the safety of suspended works, the Users and pedestrians. The Contractor may by notice require the
Authority’s Engineer to inspect such remedial measures forthwith and make a report to the Authority
recommending whether or not the suspension hereunder may be revoked. Upon receiving the recommendations of
the Authority’s Engineer, the Authority shall either revoke such suspension or instruct the Contractor to carry out
such other and further remedial measures as may be necessary in the reasonable opinion of the Authority, and the
procedure set forth in this Clause 11.17 shall be repeated until the suspension hereunder is revoked.
(iii) Subject to the provisions of Clause 21.6, all reasonable costs incurred for maintaining and protecting the Works
or part thereof during the period of suspension (the “Preservation Costs”), shall be borne by the Contractor;
provided that if the suspension has occurred as a result of any breach of this Agreement by the Authority, the
Preservation Costs shall be borne by the Authority.
(iv) If suspension of Works is for reasons not attributable to the Contractor, the Authority’s Engineer shall
determine any Time Extension to which the Contractor is reasonably entitled.

14. Suspension of Contractor’s Rights
• 22.1 Suspension upon Contractor Default
Upon occurrence of a Contractor Default, the Authority shall be entitled, without prejudice to its other rights and
remedies under this Agreement including its rights of Termination hereunder, to (i) suspend carrying out of the
Works or Maintenance or any part thereof, and (ii) carry out such Works or Maintenance itself or authorise any
other person to exercise or perform the same on its behalf during such suspension (the “Suspension”). Suspension
hereunder shall be effective forthwith upon issue of notice by the Authority to the Contractor and may extend up to
a period not exceeding 90 (ninety) days from the date of issue of such notice.
• 22.2 Authority to act on behalf of Contractor
During the period of Suspension hereunder, all rights and liabilities vested in the Contractor in accordance with the
provisions of this Agreement shall continue to vest therein and all things done or actions taken, including
expenditure incurred by the Authority for discharging the obligations of the Contractor under and in accordance
with this Agreement shall be deemed to have been done or taken for and on behalf of the Contractor and the
Contractor undertakes to indemnify the Authority for all costs incurred during such period. The Contractor hereby
licences and sub-licences respectively, the Authority or any other person authorised by it under Clause 22.1 to use
during Suspension, all Intellectual Property belonging to or licensed to the Contractor with respect to the Project
Highway and its design, engineering, construction and maintenance, and which is used or created by the Contractor
in performing its obligations under the Agreement.
• 22.3 Revocation of Suspension
(i) In the event that the Authority shall have rectified or removed the cause of Suspension within a period not
exceeding 60 (sixty) days from the date of Suspension, it shall revoke the Suspension forthwith and restore all rights
of the Contractor under this Agreement. For the avoidance of doubt, the Parties expressly agree that the Authority
may, in its discretion, revoke the Suspension at any time, whether or not the cause of Suspension has been rectified
or removed hereunder.
(ii) Upon the Contractor having cured the Contractor Default within a period not exceeding 60 (sixty) days from the
date of Suspension, the Authority shall revoke the Suspension forthwith and restore all rights of the Contractor
under this Agreement.

15. MES
SUSPENSION:
• 9. Suspension of Works
(a) The Contractor shall, on receipt of the order in writing of the Garrison Engineer, suspend the progress of the
Works or any part thereof for such time and in such manner as the Garrison Engineer may consider necessary for
any of the following reasons :-
(i) on account of any default on the part of the Contractor; or
(ii) for proper execution of the Works or part thereof for reasons other than the default of the Contractor; or
(iii) for safety of the Works or part thereof.
The contractor shall, during such suspension, properly protect and secure the Works to the extent necessary and
carry out the instructions given in that behalf by the Garrison Engineer.
(b) If the suspension is ordered for reasons (ii) and (iii) in Sub-para (a) above:
(i) the Contractor shall be entitled to an extension of time equal to the period of every such suspension plus 25% for
completion of the item or group of items of work for which a separate period of completion is specified in the
Contract and of which the suspended work forms a part, and
(ii) If the total period of all suspensions in respect of an item or group of items of work for which a separate period
of completion is specified in the Contract exceeds 60 days the Contractor shall, in addition, be entitled to
compensation, as the Garrison Engineer may on the basis of facts consider reasonable, in respect of salaries and/or
wages paid by the contractor to his employees & labour at site actually remaining idle during the period of
suspension.

16. • (c) If the Works or part thereof is suspended on the orders of the Garrison Engineer for more than four months at
a time, except when suspension is ordered for reason (i) in Sub-para (a) above, the Contractor may after 60 days
from receipt of such order serve a written notice on the Garrison Engineer requiring permission within fifteen
days from receipt by the Garrison Engineer of the said notice, to proceed with the Works or part thereof in regard
to which progress has been suspended and if such permission is not granted within that time, the Contractor, if he
intends to treat the suspension, where it affects only a part of the Works as an omission of such part by
government under Condition 7 or where it affects the whole of the works, as an abandonment of the Works by
Government, shall within ten days of expiry of such period of 15 days give notice in writing of his intention to the
Garrison Engineer. In the event of the Contractor treating the suspension as an abandonment of the Contract by
Government. He shall have no claim to payment of any compensation on account of any profit or advantage which
he may have derived from the execution of the work in full but which he could not derive in consequence of the
abandonment. He shall, however, be entitled to compensation, as the Garrison Engineer may on the basis of facts
consider reasonable, in respect of salaries and/or wages paid by him to his employees and labour at Site actually
remaining idle in consequence and also for loss on materials collected which could not be utilised on these or
other Works including 5% as overheads on materials, salaries and wages.

17. DELAYS
• 50. Compensation for Delay.-
If the Contractor fails to complete the Works and clear the site on or before the date(s) fixed for completion, he
shall, without prejudice to any other right or remedy of Government on account of such breach, be liable to pay
compensation as under:-
(a) in the case of Term Contracts, one per cent of the estimated value of the Requisition or the Works order for
every week that the whole of the work remains uncompleted;
(b) in the case of other contracts, one per cent of the Contract value of the item or group of items of Work
(excluding the contract value of such individual items as are completed and taken over by G.E. on or before the
date(s) fixed for completion, in terms of Condition 49 hereof) for which a separate period of completion is given in
the Contract, for every week that the whole of the work in respect of the item or group of items of Works concerned
remains uncompleted, even though the Contract as a whole be completed by the latest date-specified in the
Contract for any item or group of items of Works.
For the purpose of this condition the „Contract Value‟ shall be the value at contract rates of the work as actually
ordered including all deviation orders on the Contractor.
When the delay is not a full week or in multiples of a week but involves a fraction of a week the compensation
payable for that fraction shall be proportional to the number of days involved.

18. Provided always that the total amount of compensation to be paid under this Condition shall not
exceed as mentioned below:-
(a) In the case of Term Contracts, ten per cent of the estimated value of the Requisition or Works
order as a whole;
(b) In the case of other Contracts:-
(i) Where the Contract sum does not exceed Rs.10 lakhs- Ten per cent of the contract value of
the item or group of items of Work for which a separate period of completion is given.
(ii) Where the Contract sum exceeds Rs.10 lakhs but does not exceed Rs.20 lakhs- Ten per cent of
the contract value of the item or group of items of work for which a separate period of
completion is given or Rupees one and a half lakhs whichever is less.
(iii) Where the Contract sum exceeds Rs.20 lakhs- Seven and a half per cent of the Contract value
of the item or group of items of Work for which a separate period of completion is given subject
to a maximum of Rupees seven and a half lakhs.