TENDERS

CONCEPTS OF CONTRACTS

TYPES OF TENDERS REGISTRATION OF

CONTRACTORS
PRE QUALIFICATION OF CONTRACTOR
SCRUTINY AND SELECTION OF
CONTRACTOR
 INTRODUCTION:
CONSTRUCTION INDUSTRY IN BOTH DEVELOPED AS WELL AS IN DEVELOPING
COUNTRIES, MAY BE VIEWED AS A SECTOR OF ECONOMICS BY WHICH THE RATE
OF GROWTH OF ECONOMY IS MEASURED.

A LOT OF MONEY IS REQUIRED TO BE SPENT ON CONSTRUCTION PORJECTS TO

ACHIEVE THE GOALS. THEREFORE IT IS IN THE BEST INTEREST OF THE CLIENTS TO
CHOOSE THE BEST OF THE CONTRACTOR WHO IS MOST CAPABLE, EXPERIENCED,
INTERESTED, HAS GOOD REPUTATION AND IS COMPETITIVE.
TO FIND IT OUT, THE BEST METHOD IS THE TENDERING.
TENDERING IS A FORMAL, DOCUMENTAL AND A STRUCTURAL PROCESS, WHERE
THE TENDER UNDERTAKE INTO A FORMAL AGREEMENT WITH THE CLIENT. ALL
CONDITIONS OF THE CONTRACT INCLUDING FINANCIAL, LEGAL AND
CONTRACTURAL CONDITIONS ARE WRITTEN UP AND WORK IS OFFERED TO A
MOST LIKELY CONTRACTOR FOR EXECUTION.
TO UNDERSTAND ABOUT TENDERING, WE MUST KNOW ABOUT IT ENTIRELY
BEFORE AWARDING THE CONTRACT. OTHERWISE THE PROJECT MAY NOT
COMPLETE AND MAY GO IN FOR DISPUTE OR MAY INCURR HUGE LOSSES TO THE
CLIENT.
SO, WE MUST UNDERSTAND THE TENDERING PROCESS COMPLETELY.
 EXPLANATION OF TENDER

TENDERING IS A PROCESS OF MAKING AN OFFER, BID OR

PROPOSAL OR EXPRESSING INTEREST IN RESPONSE TO AN
INVITATION OR REQUEST FOR A TENDER. ORGANIZATIONS WILL
SEEK OTHER BUSINESSES TO RESPOND TO A PERTICUALR NEED
SUCH AS A SUPPLY OF GOODS AND SERVICES AND WILL SELECT AN
OFFER OR TENDER THAT MEETS THEIR NEEDS PROVIDES THE BEST
VALUE FOR MONEY.

TENDERING IS THE PROCESS OF CHOOSING THE BEST AND THE

CHEAPEST COMPANY TO SUPPLY GOODS AND SERVICES BY ASKING
SEVERAL COMPANIES TO MAKE OFFERS FOR SUPPLYING THE
GOODS AND SERVICES.
TENDER IS AN OFFER WHICH INCORPORATES THE MONEY, TIME
AND OTHER CONDITIONS REQUIRED TO CARYOUT THE CONTRACT
OBLIGATIONS IN ORDER TO COMPLETE A PROECT OR A PART OF IT
CONSISTING OF SPECIFIED WORKS.
 PRINCIPLES OF TENDERING
THE PURPOSE OF TENDERS IS TO PROVIDE FOR A FRAMEWORK FOR EFFECTIVE,
CONSISTANT AND EFFICIENT MANAGEMENT OF PROJECT WORK THROUGHOUT
THE CONSTRUCTION PERIOD. SUCCESSFUL PROJECTS ARE OFFEN CREDITED WITH
FINE TENDERING TECHNIQUES.

FOLLOWING ARE THE BASIC PRINCIPLES:

•ALL ASPECTS OF TENDERING SHOULD BE DEALT WITH COMPLETE HONESTY AT

ALL LEVELS.
•THERE SHOULD BE A CLEAR UNDERSTANDING OF RIGHTS AND OBLIGATIONS OF
ALL PARTIES.
•PARTIES MUST ADHERE TO LEGAL OBLIGATIONS.
•PARTIES MUST CLEARLY INDENTIFY OWNERSHIP.
•PARTIES MUST NOT SUBMIT THE TENDERS WITHOUT A FIRM GOAL.
•NO PARTY SHALL ENGAGE IN A CERTAIN PRACTICE TO GET IMPORPER
ADVANTAGE.
•CONDITIONS OF TENDERS SHOULD BE THE SAME FOR ALL PARTIES APPLYING
FOR TENDERS.
•CLIENTS MUST VERY CLEARLY PUT DOWN ALL REQUIREMENTS ON THE TENDER
DOCOMENT AND INDICATE THE CRITERIA OF EVALUATION.
•ALL THE INFORMATION DURING THE COURSE OF TENDERING MUST BE
PROTECTED.
 INFORMATION TO BE PROVIDED IN TENDER:
• NAME OF THE DEPARTMENT OR COMPANY INVITING TENDER.
• NAME OF WORK AND LOCATION.
• DESIGNATION OF OFFICER INVITING TENDER.
• LAST DATE AND TIME OF RECEIVING THE TENDER.
• PERIOD OF AVAILABILITY OF TENDER DOCUMENT.
• COST OF TENDER DOCUMENT.
• WATER AND ELECTRICTIY AT SITE AND ITS CHARGES.
• COOPERATION WITH OTHER CONTRACTORS APPOINTED BY CLIENT.
• THE ENTIRE TAXATION SYSTEM AND DEDUCTIONS TO BE MADE.
• COMPLIACE OF CONTRACTOR WITH EPF AND ESI.
• TIME OF COMPLETION AND TYPE OF CONTRACT.
• EARNEST MONEY TO BE DEPOSITED AND HOW IT IS TO BE DEDUCTED
FROM RUNNING BILLS.
• DATE, TIME AND PLACE OF OPENING OF THE TENDER.
• DESIGNATION OF THE OFFICER OPENING THE TENDER.
• COMPLETE TENDER DOCUMENTS.
• PANELTY CONDITIONS IF WORK IS DELAYED.
• DESIGNATION OF ARBITRATION AUTHORITY IN CASE OF ANY DISPUTES.
 CLASSIFICATION OF TENDERS:
OPEN TENDERS:
THIS USUALLY TAKES THE FORM OF AN ADVERTISMENT IN A LOCAL NEWS PAPER,
INVITING CONTRACTORS FOR TENDERING COMPETITION FOR CARRYINGOUT THE WORK. A DEPOSIT IS
NORMALLY REQUIRED TO DISCOURAGE FRIVOLOUS APPLICANTS, WHICH IS RETRUNED AFTER
CONCLUDING THE CONTRACT. THIS METHOD ALLOWS ANY CONTRACTOR TO BID FOR THE ADVERTISED
WORK.
PROCESS:
CLIENT ADVERTISES OPENLY IN A NEWSPAPER OR A TRADE MAGAZINE ABOUT THE CIVIL WORKS,
INVITING CONTRACTORS TO APPLY FOR THE PROJECT.
CONTRACTOR, WHO FEELS HE UNDERSTANDS THE WORK, IS CAPABLE AND WILLING, SHALL REQUEST
FOR THE TENDER DOCUMENTS. AFTER RECEIVING THE TENDER DOCUMENTS, THE CONTRACTOR MAY
HAVE TO SUBMIT A DEPOSIT TO ENSURE THAT HE IS A BONAFIDE CONTRACTOR.
THE BIDS ARE EVALUATED AND PROVIDED TO THE CLIENT.
A CONTRACTOR IS SELECTED, WORK AWARDED AND THE DEPOSITS OF ALL CONTRACTORS ARE
RETURNED.
ADVANTAGES:
COMPETITION AMONG A LARGE NUMBER OF CONTRACTORS. COMPETITIVE PRICING IS ACHIEVED.
NO FAVOURSM IS DONE.
PROVIDES OPPERTUNITIES TO NEW ENTRANTS. DISADVANTAGES:
TIME AND COST IS INVOLVED TO REVIEW A LARGE NUMBER OF CONTRACTORS AND FINDING THEIR
BACKGROUND WORKING.
USES:
THIS IS USED IN SMALL PROJECTS WHERE THERE IS COMPLETE CONTROL OF CLIENT ON THE PROJECT.
THE SCOPE OF WORK IS CLEARLY DEFINED, THE DRAWINGS ARE COMPLETED AT ONE TIME AND A LUMP
SUM PRICE IS WORKED OUT FOR THE WORKS WHICH ARE TO BE EXECUTED.
 CLASSIFICATION OF TENDERS:
SEALED TENDERS:
THESE ARE INVITED FOR LARGE OR PRESTEGIOUS PROJECTS.
A WIDE PUBLICITY IS GIVEN TO THEM. THE ENTIRE
DOCUMENTS ARE IN WRITING AND A PROPER LEGAL
PROCEDURE IS ADOPTED FROM ADVERTISING TO
CONCLUSION OF CONTRACTORS.
LIMITED TENDERS:
ONLY A SELECTED NUMBER OF CONTRACTORS ARE INVITED
FOR THE PURPOSE WHO ARE SPECIALISTS IN THAT
PERTICULAR TYPE OF PROJECT. THE ADVANTAGE OF SUCH
TYPE OF TENDERING IS THAT NUMBER OF TENDERS ARE
REDUCED TO A GREAT EXTENT. TIME CONSUMED IN
EVALUATION OF TENDERS IS REDUCED. ALLOWS ONLY
CAPABLE CONTRACTORS TO COMPETE AMONG
THEMSELVES. THE DISADVANTAGES ARE THAT SEVERAL
CAPABLE CONTRACTORS WHO DO NOT GET SHORT LISTED,
COMPLAIN OF BEING NON SHORT LISTED.
 CLASSIFICATION OF TENDERS:
SINGLE TENDER:
A SINGLE FIRM IS INVITED TO HANDLE THE JOB. IF THE RATES
PROVIDED BY THE FIRM ARE HIGH, THESE ARE NEGOTIATED AND THE
WORK IS AWARDED. THIS HAPPENS IN THE CASE OF EXPANSION
WORKS AND THE CONTRACTOR WHO HAD ORIGINALLY DID THE CIVIL
WORKS IS AWARDED THE EXPANSION WORK ALSO. ALSO, IT WORKS
OUT FOR VERY SMALL JOBS OR WHERE THE CLIENT WANTS TO TEST
THE WORK OF A CONTRACTOR BY AWARDING HIM A SMALLER JOB.
RATE CONTRACT:
THIS USUALLY APPLIES TO THE SUPPLY OF MATERIALS, MACHINES,
TOOLS AND PLANTS ETC. IT ASSURES THE SUPPLIES AT THE FIXED
RATES FOR A CERTAIN SPECIFIED PERIOD. IN THIS CASE, THE
CONTRACTOR HAS TO ACCEPT THE ORDER AND COMPLY WITH IT.
PROCEDURE FOR INVITING TENDER:
 PROCEDURE FOR INVITING TENDER:
PREPARATION OF TENDER DOCUMENTS:
• DRAWINGS ARE COMPLETED IN ALL RESPECTS.
• SPECIFICATIONS ARE FROZEN.
• CONDITIONS OF THE CONTRACT ARE FINALIZED.
• CONSULTANTS ARE APPOINTED FOR
FURTHER WORKING.
APPROVAL TO TENDER:
• DISCUSSION AND DECISION ON HOW TENDERING IS TO
PROCEED.
• SELECTION OF TENDERING PROCESS.
• ALL PARTIES GET INVOLVED AND
PROVIDE FEEDBACK. (CLIENT, ARCHITECT,
CONSULTANT, PROJECT MANAGER)
 PROCEDURE FOR INVITING TENDER:
TENDER DOCUMENTATION:
•LETTER OF INVITATION TO TENDER
•LETTER OF ACCEPTANCE
•BILLS OF QUANTITIES
•RELAVENT DRAWINGS
•SCHEDULE OF RATES PROCESSING:
•RECEIVING OF TENDERS
•TENDER PRELIMINARY ASSESSMENT
•TO GET THE TENDERS COMPLETED FOR ALL LEFT OVER ISSUES.
•ARITHMATICAL CHECKING.
•CHECKING TENDER SUM
•CHECKING COMPLETION TIME
•CAPABILITIES OF TENDERERS UNDER CONSIDERATION
•TENDER RECOMMENDATION REPORT
 PROCEDURE FOR INVITING TENDER:
AWARD OF THE CONTRACT:
•PRE AWARD MEETING WITH THE MOST LIKELY AWARDEE
CONTRACTOR. VALIDATION OF THE LOWEST AWARDEE LIST.
•PRE CONTRACT MEETING WITH THE CONTRACTOR ABOUT
SIGNING OF THE CONTRACT.
 TENDER DOCUMENTS
1. INVITATION OF BID
2. INSTRUCTION TO BIDDER
3. STANDARD FORMS
4. GENERAL CONDITIONS OF CONTRACT
5. SPECIAL CONDITIONS OF THE CONRACT.
6. FORM OF TENDER
7. BIDDING DATA
8. CONTRACT DATA
9. SPECIFICATIONS, GENERAL AND SPECIAL
10. BILLS OF QUANTITIES OR BOQ WITH PRICING PREAMBLES.
11. DRAWINGS (ARCHITECTURAL AND STRUCTURAL) COMPLETE IN ALL RESPECTS.
12. DESIGNATION OF ARBITRATION AUTHORITY.
13. SCHEDULE OF ADDITIONAL INFORMATION:
14. SAMPLE COPY OF LETTER OF ACCEPTANCE
15. SMAPLE COPY OF BANK GUARANTEE FOR PERFORMANCE
16. SCHEDULE OF DAY WORK RATES
17. SAMPLE COPY OF BANK GUARANTEE FOR ADVANCE PAYMENT
18. SOBSOIL INVESTIGATION REPORT
19. WEATHER OF THAT AREA.
20. PANELTY CLAUSES FOR DELAYED WORK.
21. EPF AND ESI ISSUES TO BE CLARIFIED.
22. APPLICATION OF GST ON BILLED AMOUNTS.
 SHORT TENDER NOTICE:

• WHEN WORK IS TO BE COMPLETED VERY

QUICKLY AND NO CONTRACTOR PREFERS TO
ACCEPT THE WORK, SHORT TERM TENDER
NOTICE IS PUBLISHED.
• THE TERMS AND CONDITIONS REMAIN THE
SAME AS THE ORDINARY TENDER.
 QUOTATIONS:

• FOR SMALL JOBS, THE OWNER OR ENGINEER

GIVES AN OFFER TO THE CONTRATOR FOR
QUOTING RATES FOR WORKS AND SUPPLIES
REQUIRED.
• NO EARNEST MONEY IS REQUIRED WITH A A
QUOTATION.
 EARNEST MONEY DEPOSIT
• IT IS THE AMOUNT OF MONEY TO BE DEPOSITED
ALONG WITH THE TENDER DOCUMENT TO THE
DEPARTMENT BY THE CONTRACTORS QUOTING
A TENDER. THIS MONEY IS A GUARANTEE
AGAINST THE REFULSA OF ANY CONTRACTOR TO
TAKE UP THE WORK AFTER ACCEPTACNE OF HIS
TENDER. IN CASE OF REFUSAL, THIS AMOUNT IS
FORFEITED.
• EMD OF THE CONTRACTORS WHOSE TENDERS
ARE NOT ACCEPTED WILL BE REFUNDED.
• EMD AMOUNT IS NORMALLY 1-2 PERCENT OF
THE ESTIMATED COST OF THE WORK.
 LIQUIDATED DAMAGES
UNLIQUIDATED DAMAGES
LIQUIDATED DAMAGES:
IT IS AN AMOUNT OF COMPENSATION PAYABLE BY A CONTRACTOR
TO THE OWNER DUE TO DELAYED CONSTRUCTION WORK. THIS
AMOUNT OF COMPENSATION IS NOT RELATED WITH REAL DAMAGES.
THIS DOES NOT RELIEVE THE CONTRACTOR FROM HIS OBLIGATIONS
AND LIABILITIES UNDER THE CONTRACT. IN CASE A PART OF THE
PROJECT OR PREMISE IS USED BY THE OWNER BEFORE ITS
COMPLETION, THE ANOUNT TO BE PAID IS REDUCED IN PROPORTION
TO THE VALUE OF THE PART THAT HAS BEEN UTILIZED, AFTER
ISSUING THE CERTIFICATE OF OCCUPANCY.
UNLIQUIDATED DAMAGES:
IT IS AN AMOUNT OF COMPENSATION PAYABLE WHEN A CONTRACT
IS BROKEN. THE PARTY WHO SUFFERS SUCH A BREACH IS ENTITLED
TO RECEIVE THIS AMOUNT FROM THE PARTY WHO HAS BROKEN THE
CONTRACT.
 FIRM PRICE-FIRM PERIOD
• SOMETIMES THE OWNER WANTS TO AWARD
THE WORK AT A FIXED PRICE OR FIXED RATE. IT
COULD BE LUMP SUM OR ITEM RATE. FOR
EXAMPLE THE EXPANSION WORK IS ON
VARIOUS LEVELS AND IT WOULD COST MORE TO
WORK ON UPPER LEVELS AS COMPARED TO
LOWER LEVEL.
• FIRM PERIOD SHALL MEAN THAT THE PRICE
FIXED SHALL BE APPLICABLE FOR A FIXED TIME
ONLY. THE ENTIRE WORK HAS TO BE FINISHED
WITHIN FIXED RATE AND FIXED PERIOD.
 CONTRACT DOCUMENTS
WHEN THE TENDER OF A CONTRACTOR IS
ACCEPTED, AN AGREEMENT BETWEEN THE
CONTRACTOR AND THE OWNER TAKES PLACE
AND THE DOCUMENTS DEFINING THE RIGHTS
AND OBLIGATIONS OF THE OWNER AND THE
CONTRACTOR ARE ATTACHED TO THE
AGREEMENT BOND AND THIS IS CALLED A
CONTRACT DOCUMENT. EACH PAGE OF THE
CONTRACT DOCUMENT BEARS THE
SIGNATURE OF THE CONTRACTOR AND THE
ACCEPTING AUTHORITY AND ANY
CORRECTION IN IT IS INITIALED.
 CONTRACT DOCUMENTS
• TITLE PAGE: NAME OF WORK, NAME OF OWNER, NAME OF
CONTRACTOR, CONTRACT AGREEMENT NUMBER, CONTENTS OF
CONTRACT.
• INDEX PAGE: CONTENTS OF THE AGREEMENT WITH REFERENCE PAGES
• TENDER NOTICE: BRIEF DESCRIPTION OF WORK, ESTIMATED COST OF
WORK, DATE AND TIME OF RECEIVING TENDER, AMOUNT OF EMD AND
SECURITY DEPOSIT, ETC.
• TENDER FORM: THE BILL OF QUANTITIES, CONTRACTOR’S RATES, TOTAL
COST OF WORK, TIME OF COMPLETION, AMOUNT OF SECURITY DEPOSIT.
• SCHEDULE OF ISSUE MATERIALS: LIST OF MATERIALS TO BE ISSUED BY
THE OWNER OR DEPARTMENT TO THE CONTRACTOR WITH THE RATES
AND PLACE OF ISSUE.
• DRAWINGS: COMPLETE SET OF DRAWINGS INCLUDING ALL
ARCHITECTUAL AND STRUCTURAL DRAWINGS.
• SPECIFICATIONS: GENERAL SPECIFICATIONS WHICH SPECIFY THE CLASS
AND TYPE OF WORK, QUALITY OF MATERIALS, ETC. DETAILED
SPECIFICATIONS AND DESCRIPTION OF EACH ITEM OF WORK INCLUDING
MATERIALS AND METHOD TO BE USED ALONG WITH THE QUALITY OF
WORKMAHSHIP REQUIRED.
 CONTRACT DOCUMENTS
• CONDITIONS OF CONTRACT:
– RATES OF EACH ITEM OF WORK INCLUSIVE OF MATERIALS, LABOR,
TRANSPORT, AND OTHER EXPENSES.
– AMOUNT AND FORM OF EARNEST MONEY AND SECURITY DEPOSIT.
– MODE OF PAYMENT TO THE CONTRACTOR INCLUDING RUNNING
PAYMENT, FINAL PAYMENT AND REFUND OF SECURITY DEPOSIT.
– TIME OF COMPLETION OF WORK.
– EXTENSION OF TIME FO COMPLETION OF WORK
– ENGAGEMENT OF SUB CONTRACTORS AND OTHER AGENCIES AT
CONTRACTOR’S COST AND RISK.
– PENALTY FOR POOR QUALITY AND UNSATISFACTORY WORK
PROGRESS.
– TERMINATION OF CONTRACT.
– ARBITRATION FOR SETTLEMENT OF DISPUTES.
– SPECIAL CONDTIONS: DEPENDING UPON THE NATURE OF WORK
TAXES AND ROYALTIES INCLUDED IN THE RATES, LABOR CAMP,
LABOR AMINITIES, COMPENSATION TO LABOR IN CASE OF ACCIDENTS
ETC.
• DEED OF PLEDGE.
 CONTRACT DOCUMENTS
• LUMP SUM CONTRACT:
• COST PLUS A FIXED PERCENTAGE CONTRACT:
• COST PLUS A FIXED FEE CONTRACT:
• TARGET CONTRACT:
• PERCENTAGE RATE CONTRACT ( B1 SYSTEM)
• ITEM RATE CONTRACT ( B2 SYSTEM)
• LABOUR CONTRACT:
• JOINT VENTURE CONTRACT:
• TURN KEY CONTRACT:
• INDIRECT LUMP SUM CONTRACT FOR FLATS AND
BANGLOWS
• BOT SYSTEM:
 CONTRACT DOCUMENTS
LUMP-SUM CONTRACT: IN THIS SYSTEM, THE CONTRACTOR
UNDERTAKES THE EXECUTION OF A SPECIFIC WORK FOR A
DEFINITE LUMP-SUM AMOUNT WITHIN A SPECIFIED TIME PERIOD.
ON COMPLETION OF THE WORK, IT IS CHECKED AS PER DRAWINGS
AND SPECIFICATIONS AND IF APPROVED, THE AMOUNT IS PAID TO
THE CONTRACTOR.
THE QUANTITIES OF VARIOUS ITEMS IS NOT MEASURED.
FOR THE CONSTRUCTION OF SURPLUS AND DECORATIVE WORKS THIS
IS ADOPTED.
COST PLUS A FIXED PERCENTAGE CONTRACT: UNDER THIS SYSTEM,
THE CONTRACTOR FURNISHES LABOUR AND MATERIALS AND
COMPLETES THE WORK FOR THE ACTUAL TOTAL COST PLUS AN
AGREED PERCENTAGE OF IT AS THE PROFIT OF THE CONTRACTOR.
THE SPEED AND THE QUALITY OF WORK IS MAINTAINED IN THIS
SYSTEM BUT THERE IS ALWAYS TREMENDOUS WASTAGE OF
MATERIALS AND LABOUR AS THE CONTRACTOR’S AIM IS TO
INCREASE THE TOTAL COST OF WORK.
THIS SYSTEM IS ADOPTED ONLY IN CASE OF EMERGENCY WORKS.
 CONTRACT DOCUMENTS
COST AND A FIXED FEE TENDER: IN THIS SYSTEM, A FIXED FEE IS GIVEN AS
CONTRACTOR’S PROFIT IRRESPECTIVE OF THE TOTAL COST OF CIVIL
WORKS. THIS IS TO CONTROL THE TENDENCY OF THE CONTRACTOR TO
INCRESE THE COST OF THE PROJECT UNNECESSARILY.
IN THIS CASE THE CONTRACTOR HURRIES UP TO COMPLETE THE WORKS TO
GET HIS DUES. THIS COMPROMISES WITH THE QUALITY OF
WORKMANSHIP.
THIS SYSTEM IS NOT GENERALLY USED.
TARGET CONTRACT: IN THIS SYSTEM, THE CONRTACTOR IS PAID A FIXED FEE
ON THE PRIME COST BASIS FOR THE WORK PERMORMED UNDER THE
CONTRACT AND IN ADDITION HE RECEIVES A PERCENTAGE ON THE
SAVINGS EFFECTED AGAINST EITHER A PRIOR AGREED ESTIMATD TOTAL
COST OR A TARGET VALUE ARRIVED WITHOUT CHANGING THE
SPECIFICATIONS.
BY THIS SYSTEM, IT WAS PRESUMED THAT BY PROPER MANAGEMENT OF
THE WORK, THE CONTRACTOR CAN REDUCE THE COST OF WORK.
HOWEVER, DUE TO INFLATION AND INCREASE IN COSTING OF
MATERIALS, IT NEVER MATERIALISES AND HENCE THIS SYSTEM IS NOT
GETTING ITS DUE POPULARITY.
 CONTRACT DOCUMENTS
PERCENTAGE RATE CONTRACT ( B1 SYSTEM): IN THIS SYSTEM, THE CONTRACTORS
ARE REQUIRED TO QUOTE A SINGLE PERCENTAGE, EITHER HIGHER OR LOWER AT
WHICH HE WANTS TO EXECUTE THE JOB. HERE SCRUTINY OF THE TENDERS
BECOME EASIER AND AS THE CEMENT AND STEEL IS USUALLY SUPPLIED BY
DEPARTMENT, CHANCES OF MANIPULATION IS LESS. THIS THE MOST COMMONLY
ADOPTED SYSTEM OF CONTRACT IN THE PRIVATE INDUSTRY AND GOVERNMENT.
ITEM RATE CONTRACT ( B2 SYSTEM) : HERE THE CONRACOTR GETS THE PAYMENT
DEPENDING ON THE RATE AT WHICH HE HAS QUOTED EVERY ITEM OF THE
WORK. IT WAS RATHER DIFFICULT TO SCRUTINISE THE TENDERS SUBMITTED BY
VARIOUS BIDDERS AND THE SYSTEM WAS HENCE MODIFIED. NOW, QUANTITIES
ARE PROVIDED AND THE CONTRACTOR HAS TO PROVIDE RATES IN FORNT OF
THAT AND A FINAL COST IS WORKED OUT BASED UPON WHICH THE LOWEST ONE
IS FINALISED.
LABOUR CONTRACT: THIS IS THE MOST COMMONLY ADOPTED SYSTEM FOR THE
CONSTRUCTION OF PRIVATE INDIVIDUAL BUILDINGS IN SMALL CITIES. THE
CONTRACTOR ARRANGES ALL NECESSARY LABOUR, TOOLS AND PLANT AND
EQUIPMENTS REQUIRED. THE MATERIALS ARE SUPPLIED BY THE OWNER AND HE
APPOINTS AN ENGINEER TO SUPERVISE THE WORKS TO MAINTAIN THE QUALITY
AND ECONOMY IN CONSTRUCTION.
THIS SYSTEM IS SUITABLE IN THE WORKS FOR PRIVATE CONTRACTS FOR SMALL
BUILDINGS, HOUSES AND INSTITUTIONAL BUILDINGS, WHERE ALL DRAWINGS
CAN BE PREPARED AT ONE TIME AND THE SPECIFICATIONS CAN BE FROZEN AT
ONE TIME. THESE ARE PROVIDED TO THE CONTRACTOR FOR LABOUR RATES.
LABOUR RATES CAN ALSO BE ITEM RATE AND LUMPSUM RATES.
 CONTRACT DOCUMENTS
JOINT VENTURE CONTRACT: IN CASE OF IMPORTANT LARGE SCALE PROJECTS,
THE CONSTRUCTION WORKS CAN BE CATEGORISED INTO DIFFERENT
PARTS AND EACH PART CAN BE GIVEN TO A SPECIALIZED CONTRACTOR IN
THAT FIELD. THE IS METHOD IMPROVES THE QUALITY OF WORK AND THE
PROJECT CAN BE COMPLETED WITHIN A SHORT PERIOD OF TIME.
THUS THE PROJECT WORKS CAN BE DIVIDED AMONG DIFFERENT
CONTRACTORS AND HENCE A JOINT VENTRUE SYSTEM OF CONTRACT IS
DEVELOPED.
TURN KEY CONTRACT: IN THIS SYSTEM, ALL WORKS RELATED TO A PROJECT
INCLUDING DESIGNING, PLANNING, EXECUTION ETC ARE TO BE DONE BY
THE CONTRACTOR. ONCE THE PROJECT IS COMPLETED ENTIRELY IN ALL
RESPECTS, IT IS HANDED OVER TO THE OWNER READY TO USE. TURN KEY
MEANS THE OWNER HAS TO ONLY USE A KEY TO USE THE PROJECT.
INDIRECT LUMP-SUM CONTRACT: IN THIS SYSTEM, THE RATE OF
CONSTRUCTION PER SQ METERS OF PLINTH AREA IS JOINTLY FIXED BY
THE CONTRACTOR AND OWNER WHICH INCLUDES CONTRACTORS ALL
COSTS AND PROFITS. ONCE THIS AGREEMENT IS MADE, THE CONTRACTOR
STARTS THE WORK AND RECEIVES PAYMENTS AT REGULAR INTERVALS
DURING THE DIFFERENT STAGES OF WORK.
 SECURITY DEPOSIT
SECURITY DEPOSIT IS THE AMOUNT THE CONTRACTOR HAS TO
DEPOSIT WITH THE OWNER BEFORE AWARDNG A WORK, AFTER
HIS TENDER IS ACCEPTED. THIS AMOUNTS TO GENERALLY 5 % TO
10% OF THE ESTIMATED COST AND IS INCLUSIVE OF THE EMD OR
EARNEST MONEY DEPOSIT ALREADY DEPOSITED BY THE
CONTRACTOR ALONG WITH THE TENDER THIS WILL BE REFUNDED
AFTER THE COMPLETION OF THE PROJECT. NO INTEREST IS PAID
ON SD.
THE CONTRACTOR HAS TO FULFILL ALL THE TERMS AND
CONDITIONS LAID DOWN IN THE CONTRACT AND MAINTAIN
QUALITY AND SPEED SATISFACTORILY. IF HE FAILS TO DO SO, A
PART OF WHOLE OF THE SD IS FORFEITED BY THE OWNER. IF
THERE IS ANY FAULT IN THE CONSTRUCTION AND THE
CONTRACTOR REFUSES TO DEMOLISH AND RECONSTRUCT THEN
THE OWNER SHALL CARRYOUT WITH THE WORK AND DEDUCT THE
AMOUNT FROM CONTRACTOR’S SD.
 QUALIFICATIONS FOR THE
CONTRACTOR
REGISTRATION OF THE CONTRACTOR:

THE CONTRACTOR MUST REGISTER HIMSELF IN THE DEPARTMENTS (GOVERNMENT)

OR COMPANIES FOR WHICH HE IS INTERESTED TO TAKE UP THE WORKS.
GOVERNMENT CONTRACTORS ARE ENTITLED TO DO GOVERNMENT JOBS IF
AWARDED.
CONTRACTORS ARE CLASSIFIED ACCORDING TO THE REGISTRATION AND
REGISTRATION FEES AND DEPENDING UPON THIS, THEY ARE ENTITLED TO DO THE
WORKS UP TO A CERTAIN AMOUNT ONLY.
TO GET A CONTRACTOR TO BE REGISTERED UNDER CERTAIN CLASS, HE HAS TO APPLY
WITH THE FOLLOWING DOCUMENTS:
•CURRENT INCOME TAX CERTIFICATE.
•WORK CERTIFICATES FOR ALL THE WORKS PERFORMED DURING LAST THREE YEARS
AND THOSE IN PROGRESS.
•SOLVANCY CERTIFICATE FOR AN APPROPRIATE AMOUNT.
•ATTESTED COPY OF DEED OF PARTERSHIP AND POWER OF ATTORNEY ON STAMP
PAPER IF NEEDED.
•UNDERTAKING FO REMPLOYMENT OF THE CLASS I AND II STAFF.
•APPLICATION IN DUPLICATE WITH ALL DOCUMENTS.
•ATTESTED COPIES OF ALL THE PARTERERS IF ANY.
PRE QUALIFICATIONS OF CONTRACTORS:
SOMETIMES CIVIL WORKS ARE AWARDED ON
THE BASIS OF QUOTATIONS INVITED FROM A
GROUP OF SELECTED TENDERER ( A GROUP OF
KNOWN REPUTED CONTRACTORS) WHO ARE
CONSIDERED SUITABLE FOR THAT JOB. THIS
METHOD IS KNOWN AS PRE-QUALIFICATION
AND SAVES A LOT OF TIME.

IN THE ADVERTISMENT ITSELF IT MUST BE

MENTIONED THAT ONLY CONTRACTORS HAVING
EXPERIENCE IN THE PERTICULAR WORK SHOULD
SUBMIT THE TENDER.
 QUALITY CONTROL IN
CONSTRUCTION:
THE BASIC ELEMENTS OF QUALITY ARE:
QUALITY CHARACTERISTICS: THIS INCLUDES THE CHARACTERISTICS AND
PROPPERTIES OF MATERIALS, MACHINES, MAN POWER ETC USED FOR
WORK.
FOR EXAMPLE IF THE MATERIAL USED IS CONCRETE, SLUMP STRENGTH,
WATER CEMENT RATIO ECT ARE CHECKED FREQUENTLY.
QUALITY OF DESIGN: NO DESIGN CAN PRODUCE PERFECT RESULTS. HENCE
THE DESIRED STANDARD THAT DEFINE A MATERIAL SUCH AS DIMENSION,
STRENGTH, ETC AND THE TOLERANCES, THE ACCEPTABLE VARIATIONS
FROM THE STANDARDS ARE ALSO SPECIFIED.
FOR EXAMPLE, IF THE MATERIAL USED IS CONCRETE, IN ADDITION TO
SPECIFYING THE REQUIRED COMPRESSIVE STRENGTH, THE RANGE OF
VARIATION PERMITTED , FOR EXAMPLE, NO MORE THAN 20% OF THE
SAMPLE CAN HAVE VALUE LESS THAN THE ONE SPECIFIED. IF HIGH
STANDARDS OF TOLERANCES AND STRENTH ARE SET, THEN THE COST OF
THE PROJECT WILL INCREASE .
QUALITY OF CONFORMANCE