CONTRACT ADMINISTRATIONBY- ARVIND SOLANKI

CONTRACT A contract is a legally binding or valid agreement between two parties.What is Contract?

CONTRACT

1. offer and acceptance;2. an intention between the parties to

create binding relations;3. consideration to be paid for the promise

made;4. legal capacity of the parties to act;5. genuine consent of the parties; and6. legality of the agreement.An agreement that lacks one or more of the elements listed above is not a valid contract.

Elements of contract

CONSTRUCTION / BUILDING CONTRACT

A Contract between an Owner (Client) and a Building Contractor, setting forth the terms under which construction is to be carried out, the basis of remuneration, the time scale, and the penalties, if any, (for failure to comply with terms of the Contract) is termed as a Building/Construction Contract.

What is Construction / Building contract

CONSTRUCTION / BUILDING CONTRACT

1. The Contract or Agreement letter.

2. General Conditions of the Contract – these define the legal rights and obligations of the parties; another way of describing the general conditions is as the rules by which each party will operate in performing their obligations as set down under the Contract.

3. Special conditions of Contract – these are an extension to the general conditions and apply specifically and individually to each project/Contract.

4. Bill of quantities – it lists quantities of the various items and the material to be included in the Contract. It can also be used as the basis for valuation of variations and assists the preparation of progress claims. The extent to which the Owner warrants the completeness of a bill of quantities or a schedule of rates depends upon the terms of the Contract.

5. All drawings required in building the structure (contract plans including Architectural and Structural). These include drawings from relevant Consultants.

6. All Specifications – 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.

7. All other documents considered necessary, for example, Schedule or Annexure to the Contract completed, all technical schedules, all pricing schedules.

Principle elements of Construction / Building contract

ROLE OF CONTRACT IN PROJECTS

Project is a temporary endeavour undertaken to create a unique product (such as a building, conservation of structure, laying a pipeline etc.). The temporary nature of a project indicates a defined beginning and end. The end is reached when project objective have been achieved or when the project is terminated because its objective cannot be met.

What is a Project?

ROLE OF CONTRACT IN PROJECT

When client wish to hire the services of other agencies to do full or part of project, he offers for bid. The successful bidder enter into a contract with client. Project may have many contracts

Contracts a Project?

PROJECT

1. Initiation2. Planning3. Execution4. Monitoring and Control5. Closure

Phases of Project

PIU’S ROLE 1. Execution2. Monitoring and Control3. Closure

Phases where PIU’s has to play major role

PIU’S ROLE 1. Direct and Manage Project Execution2. Perform Quality Assurance3. Distribute InformationExecution Phase

PIU’S ROLE1. Monitor and Control Project work2. Perform Integrated Change control3. Report Performance 4. Identify, Monitor and control Risk

Monitoring and Control Phase

PIU’S ROLE 1. Close project/phase 2. Close Procurements/contractClosure Phase

1.1DIRECT AND MANAGE PROJECT EXECUTION1. Ask in writing to contractor to submit all statuary documents (and make sure

he has submitted the same)- such as BG(as per GCC 59), Insurances (as per GCC 19) etc. as per contract agreement.

2. Ask in writing to contractor to submit Project Schedule (and make sure he has submitted the same) (as per GCC 35).

3. Ask in writing to contractor to mobilise key personal and machinery (as per GCC 15) to meet the time line in contractors submitted schedule.

4. Ask and guide to contractor to prepare a quality control plan based on specifications in contract agreement.

1.2 PERFORM QUALITY ASSURANCE

1. Ensure that all the test required in specifications are included in Quality control plan.

2. Maintain Test register and verify the results of test conducted.3. Ensure frequency of tests are as per specifications.4. Inspect and verify Material Data Sheet of factory supplied materials.

And get the material stored and applied as per mentioned in material data sheet.

1.3 DISTRIBUTE INFORMATION -IN THE FORM OF MOMS, PROGRESS REPORTS

1. Write letter to contractor about required Progress, Quality, EHS, extension of BGs and copy to relevant stakeholders (such as PIU Civil Engineer, PMU Civil Engineer, CGM, APD, PD, TL PMC, TL DSC)

2. Write letter to PMU for approval of Extra Items, Variation statements, Bill verifications and copy to relevant stakeholders (such as PIU Civil Engineer, PMU Civil Engineer, CGM, PD, TL PMC, TL DSC).

3. Write letter to DSC for required drawings, bill preparation, design submission, quality control issues copy to relevant stakeholders (such as PIU Civil Engineer, PMU Civil Engineer, CGM, APD, PD, TL PMC,)

4. Issue completion Certificate to Contactor and copy to relevant stakeholders (such as PMU Civil Engineer, CGM, APD, PD, TL PMC, TL DSC)

5. Circulate MoMs of weekly and monthly review meetings to all participants and copy to relevant stakeholders (PMU Civil Engineer, CGM, APD, PD, TL PMC).

6. Submit Monthly Progress Report to PMU and copy to relevant stakeholders (such as PMU Civil Engineer, CGM, APD, PD, TL PMC, TL DSC)

2.1 MONITOR AND CONTROL PROJECT WORK

1. Track each activity of schedule submitted by contractor as described in item 2 of Direct and Manage Project Execution. Take immediate action as and when you find that there is deviation from schedule.

2. Check that necessary key personal and equipment are deployed by contractor as described in item 3 of Direct and Manage Project Execution.

3. Evaluate the hazards at site and instruct contractor to maintain safe working environment.4. Ensure that contractor is complying with all the points given in EMP (Environmental Management Plan)

of contract agreement. 5. Cash flow to be taken from Contractor which should be based on contractor’s schedule (

as per GCC 48).6. Recommendation of Extension of Time has to be as per GCC 36. Please read carefully 36.2 before

recommending EOT.

2.2 PERFORM INTEGRATED CHANGE CONTROL1. After instruction by PM for variation, contractor has to submit the quotation to

carry out variation (as per GCC 47.2).

2. Contractor’s schedule will be revised to incorporate the variation (as per GCC 47.1)

3. At some cases contract price of an item may be revised due to deviation in from BOQ quantity (as per GCC 46).

2.3 REPORT PERFORMANCE

1. Monthly Progress reports2. Environmental Monitoring Report (Every 6 months)3. Social Safeguard Monitoring Report (Every 6 months)4. Gender Action Plan (Every 6 months)5. Any other information feel necessary to be informed

2.4 IDENTIFY, MONITORING AND CONTROL RISK1. Identify risk due to:

a. Schedule over runb. Scarcity of a particular material in marketc. Met a sever accident at sited. Etc etc etc….

2. Monitor the impact of the risk.3. Control Risk by adopting mitigation actions such as:

1. Liquidated damage clause as per(as per GCC 56)2. May be substituting of material in subject by any other suitable material or hazing of material3. Insure that insurance cover has been taken and its date has not expired (as per GCC 19).

3.1 CLOSE PROJECT/ PHASE

1. Check that all the activities has been completed.2. Make area wise punch list3. Lebel the key of locks4. Prepare inventory 5. Complete the works mentioned in punch list.6. Inspection with client/concessionaire and prepare client’s punch list7. Rectify as per client’s punch list8. Record of Handing over the property 9. Issue of completion Certificate (As per GCC 69)

3.2 CLOSE PROCUREMENT/CONTRACT

1. Collect as built drawing/ operation and maintenance Manuals from Contractor (As per GCC 72).

2. Write and submit lesion learnt during the contract.

THANK YOU