Professional Documents
Culture Documents
Contracts and Valuation
Contracts and Valuation
Integrity
Transparency
Accountability
Tenders & BIDS
Preparation Work
Advertisement of the Tender
Evaluation of Modalities
Reception of BIDS
Opening of BIDS
Technical Evaluation
Financial Assessment
Assessment of Best Combined Offer
Awarding the Contract
Contract Supervision
Payments
Advance
Routine progress
Variation
Final
Final Inspection and Measurements
CONTRACT
While construction contracts serve as a means
of pricing construction, they also structure the
allocation of risk to the various parties
involved. The owner has the sole power to
decide what type of contract should be used
for a specific facility to be constructed and to
set forth the terms in a contractual
agreement. It is important to understand the
risks of the contractors associated with
different types of construction contracts
Types of Contracts
Lump Sum Contract
Unit Price Contract
Cost Plus Fixed Percentage Contract
Cost Plus Fixed Fee Contract
Cost Plus Variable Percentage Contract
Target Estimate Contract
Guaranteed Maximum Cost Contract
Tender means the Contractors priced offer to
the Employer for the execution and
completion of the Works and the remedying
of any defects therein in accordance with the
provisions of the Contract, as accepted by the
Letter of Acceptance.
Depending upon the context, Tender may
designate:- either one of the tender
documents, the executed and signed Form of
Tender, which becomes one of the Contract
Documents, called The Tender, or- the
Contractors detailed offer in a complete set of
tender documents as defined in the Tender
Contract Document
Contract Agreement
Letter of Acceptance
Tender and Appendix to Tender
Particular Conditions of Contract
General Conditions of Contract,
Specifications (part of Tender Documents)
Drawings (-do-)
Priced Bill of Quantities (-do-) - Lead
Other Documents, in Appendix of Tender
New Terms
Earnest Money (1 to 2 %)
Security Deposit (2.5 10 %)
Valuation
Cost: It is the expenditure to produce a commodity having a
value. In our construction Industry cost means the original
cost of the construction including the cost of materials and
labour. Hence the cost is a FACT.
Price: It is the cost of a Commodity plus additional reward to
the producer for his labour and Capital. In our construction
industry the original cost of construction with certain
percentage of profit. The profit or additional reward may be
varied from Builder to Builder, and Business to Business
because the Price is a POLICY.
Value: Valuation is an opinion or an estimate which will be
determined by many factors like the purpose, supply,
demand, depreciation, obsolescence etc. Valuation is a
function of place, date and purpose.
Properties Affecting Value
Supply and Demand
Cost of reproduction
Occupational value
Town Planning Act
Rent Control Act
Urban Land Ceiling Act
Any abnormal conditions like War, Riots, etc.
Sinking Fund
amount of annual installment of the Sinking
fund may be found out by the formula.
I = Si/((1+i)n-1),
where I = annual installment required
S = total amount of Sinking fund to be
accumulated, n- number of
years required to accumulate the Sinking fund,
i = rate of interest in decimal
Depreciation
Wear and tear
Fall in market value
Accidents like fall of a tree
Obsolescence
Decay
Changes in demands
Changes in Arts and fashion
Calamity like flood, lightning etc.
Actions of elements of Nature like heat, cold, wind
etc.,
Structural deterioration.
Method of calculating depreciation
Straight line Method
Constant percentage method
Sinking fund method and
Quantity survey method.
Straight line Method