Professional practice semester VII Lecture-1 Professor Jayant Sahasrabudhe

Welcome students,
After completing six semesters now in fourth year, second phase of
Architectural education it becomes necessary to learn in addition
to academicsastohow is our profession, what are our duties and
responsibilities towards society in general
Westart with-
Introduction to syllabus,
Introduction to Architectural profession,
Role of professional bodies
Wewill learn here course contents and their usefulness in
Architectural Profession,role of professional bodiesmainly
Council of Architecture, Indian Institute ofArchitects
and other voluntary associations at national, state and locallevel
with their aims andobjectives.
 Professional practice semester VII Lecture-1 ProfessorJayantSahasrabudhe

Professional Practice 1 Credits- 3

Lectures- 54 periods of 50 minutes duration – 45hoursStudio-
Scheme of examination –
Theory: one paper of two hours duration
Max. marks- 50 Min marks for passing-20
Sessional marks Internal- 50 marks
Syllabus-
Introduction to Architectural profession, Role ofprofessional bodies,
Architect’s RegistrationAct 1972 , Theprofessional role, responsibilities,
duties, liabilities of Architects , Codeof professionalconduct,
Coderelation to Architectural competition, Copy-rights of drawings
Office structures – Smal practice, medium practice & Largepractice.
Nature of partnership, registration of firm and dissolution
Office set up and administration -Taskallocation, Work plans,
monitoring the plans, review meetings, record keeping, Inward, Phonecalls,
Minutes of meeting, Todo list, wish list-TimeManagement
Professional practice semester VII Lecture-1 ProfessorJayantSahasrabudhe

Tenders-
Types of tenders and tender document, World Bankformats,
Indian BanksAssociation guidelines, PWD,CPWD,Tenderforms,
Tender draft notices and inviting of tenders,
Procedure for opening and selection of tenders, Qualificationcriteria,
Bid capacity, freak rates, rate analysis..Analysis and report to owner,
Work order
Contract
Typesof contracts and contractdocuments,
Detailed knowledge about various conditions of contract aspublishedby
Indian Institute of Architects and specially about -EarnestMoney,
Security Deposit, Retention Money, Mobilization Fund, BankGuarantee,
Architect’s Instructions, Clerk of works, Variation andExtras,
Defects after completion, Certificate and Payments,
Insurance and fire insurance, Liquidate damage,Termination of Contract
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Typesof tenders and tender document, World Bankformats, Indian BanksAssociation

guidelines, PWD, CPWD,Tender forms Tender draft notices and inviting of tenders
Procedure for opening and selection of tenders Qualification criteria, Bid capacity,
freak rates, rate analysis..Analysis and report toowner Work order

Tenders Types of tenders and tender document, World Bank formats, Indian Banks
Association guidelines, PWD,CPWD,Tenderforms Tenderdraft notices and inviting of
tenders
Toelaborate Tenders- offers from contractors- and management of processof
tendering.
 Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Tenders
It is an offer made by one party to another for execution of a specified work
at a specified cost in keeping with all the terms and conditions set in the tender
document including the work shown in the plan.
Invitation to tender architect prepares detail tender papers on behalf of owner
and issues to contractor at specific tender fees. This is an invitation to offer. If
multiple offers are to be received, printed format of IIAis used along with copies
of plans and specialconditions.
Architect to ensure correctness of plans , specifications, bill of quantities, special
conditions etc….
Contractor inspects the same and building site also to ascertain that he will be
able to execute work and will be able to quote for work.
Professional practice semester VII Lecture- 6 ProfessorJayantSahasrabudhe
INVITATIONTO TENDER
• BYPRIVATEINVITATION • From architect’s panel few
contractors are invited to quote
for a particular job. Suitable for
private work where there is
surety of integrity andcapacity.

• BYPUBLICNOTICE • Tender notices are published in

news papers and any contractor
can quote for the work.All public
and charitable institutions are
supposed to advertise in
newspapers. Work is generally
given to lower tender if other
parameters are same.
• BYNEGOTIATIONS
• For smaller jobs Architect
negotiate with 2 known
contractors and assign the work
to the right contractor.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Types of tenders-
Item rate with rates or %upand down,
Lump sum with fixed price or %upand down,
Cost + %or cost + fixed fees / with bonus or penalty
Labour tender,
Tender for demolition work,
Other modes- Day work- Work tobe done in a day and can not be
measured or valued i.e. features like ornamental work, decorative plaster
etc. Cost of materials and certain percentage asprofit is given to the
contractor.Architect should award suchworks in writing. For this purpose
the payment made to the labourers shall be asper Payment ofWagesAct.
Piece work – certain item to be done, mainly any small but urgent work,
where day work is not possible, work is divided into parts and each part is
given to different contractors asper the cost agreed. There is no time
limit, S.D.or penalty.
Daily labour- daily wages per labour only and owner supplies materials,used
mainly for maintainance woks.Also known asdepartmental method of
execution.All labour required for the work are employed and their
attendance taken in daily muster.All plants and tools are given . Actual
amount of work executed entered in measurement book. Subletting by
main contraction or recurringwork.
 Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Item rate tender is an offer to execute the work based on different items of
work. Most suitable type oftender.
Thetender form contains bills of quantities with brief Specifications
The contractor is required to fill up the rate.
Thecontractor is paid asper the actual quantum of work carried out at site
This is a balance method and chances of extra work minimized

schedule of rates with percentage up or down (basic rate with rise and fall
clause) It is also known as basic rate with rise and fall clauses.
It is a modified form of item rate in which tenderers are provided with duly
priced quantities and asked to quote %up ordown.
Mostly adopted by public sector U/T andPWD

Lumpsum tender- the contractor undertakes to carry out the work asper the
plans and specifications and other terms and conditions of the tender at
a specified lump sum amount. Here work to be executed should be
clearly shown on drawings and detailed in specifications includingperiod
of completion and mode of payment in advance- part/ stagewise or full
payment after completion of work.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Advantages of lumpsum tender
• Cost of construction known in advance
• Contractor will complete the work asearly aspossible to havebetter
margins
• Architect’s work is reduced asthe bills of quantity is not required to be
prepared
• Suitable for residential buildings and not suitable for additions and
alterations to existing bldg.
• Advantages of cost + %method
• Work can be commenced immediately
• Contractor can e chosen at any time
• Suitable for private and public work
• All details need not be given inadvance
• Necessary variation in plan can be made
• No guarantee of cost
• No time limit for completion
• No economy in purchase of material
• Chances of fictitious bills
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Lump- sum +%age tender

Sameaslump-sum tender except that the contractor will be paidcertain
%ageasincentives if he completes the work before thespecified dates.

Cost + %ageor cost +fee method

The expenditure incurred by the contractor is paid as agreed by the owner
and certain amount as profit for his professional services are paid extra
fixed in %age of actual cost.
Cost+ fixed fee-Amodified form of cost + %age.Here the contractor is given
a fixed fee irrespective of the cost of construction. Thecontractor will try
to complete work in time.All cost of material and labour is directly paid by
the owner and contractors liability isnil.
 Professional practice semester VII Lecture- 6 ProfessorJayantSahasrabudhe
Cost+ fixed fee with bonus and penalty- Thecost +fixed fee tender is slightly
modified to have a check over the cost of work. If the cost of work remains
the sameasagreed the contractor gets the samewith out any bonus or
penalty.
• If the cost of work executed is less than the estimated cost he gets a bonus
of up to50%of the savings +his fixed fee.
If the cost of work executed is more than the estimate certain %ageof the
increased cost is deducted from his fixed fee. Suchdeduction shall not be
more than 66%of his fee.

Labour tender – This can be on item rate or squre / cubic meters basis.
• Thecontractor agrees to carry out the labour work of entire items asper the
rates quoted.
• Thecontractor hasto provide all toolsand plants, scaffolding, centering
materials etc.
• The owner will supply the material required for construction. Water and
storage, worker’s sheds.
• Thecontractor is responsible for correctness of work asper drawings and
specifications.
• Here the owner has tokeep a close watch on the materials used by the
contractor to check if there is no wastage.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Demolition tender
• For demolition of existing bldg. and carting away thedebris asper rules
and regulations to specifiedlocations.
• He takes away all the materials from the existing building andpays a
specified amount for it. Thehighest bidder and not lowest will be selected
• Should accompanydeposit which can be utilized if contractordoesnot
complete full work.
• Entire amount is to be taken from the contractor before handing over
possession.
• Thecontractor should take insurance for accidents, workerscompension,
third party and otherclaims.
• He has to make arrangement to cut water, electricity anddrainage
connections.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
https://documents.worldbank.org/en/publication/documents-
reports/documentdetail/458841468739545677/standard-bidding-
documents-procurement-of-works
World bank tender format- This Standard Bidding Documents for Works
(SBDW)hasbeen prepared by the World Bankfor useby borrowers in the
procurement of admeasurement (unit price or rate) type of works
contracts through international competitive bidding. The procedures and
practices presented in this document havebeen developed through broad
international experience. They are mandatory for use in works contracts
financed in whole or in part by the World Bank, which are estimated to
cost more that US$10 million unless the Bank agrees to the use of other
Bank Standard Bidding Documents on a case-by-casebasis.

http://documents1.worldbank.org/curated/en/458841468739545677/pdf
/multi-page.pdf
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Handbook on Policy, Standardsand Proceduresfor RealEstateValuation by

Banksand HFlsIn India

Indian BanksAssociation guidelines,

Guidelines on Interior Works for the Banks
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Welcome to Electronic Tendering System of Government of Maharashtra. This
Systemis intended to be used by all Departments,Agenciesand Corporations of
Maharashtra for processing of the Tenders online. Suppliers and Contractors
intending to do businesswith those Departments,Agenciesand Corporations of
Maharashtra who have migrated their processesonline are invited to registeron
the ElectronicTenderingSystem.
Forprocessof applicationfor digital certificate, click here.
PWD, CPWD,Tender forms
https://pwd.maharashtra.etenders.in/tpoimages/pwd/tender/Tender93239.pdf
 Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Tender forms Tender draft notices and inviting of tenders

TenderNotice Text DisplayView Tender DocumentTender No:93239
TenderNotice Date:29-06-2020Tender Notice No:PWYC/YTL/6/2/2020-2021
Vendor Class:ClassVIIVendor Level:Above93Tender
Category:PWD,PercentRate,B1Tender,RestrictedTender
Currency:INRAdministrative Division:Amravati
TenderMain Category:Restricted contractorDistrict:YavatmalTahsil:Yavatmal
Description:Constructionof Samajil Sabhagruhain open spaceof G.P.at SakurTq.& Distt.
YaReport Title:Construction of Samajil Sabhagruha in open space of G.P.at Sakur Tq.&
Distt. Yavatmal
No. Of Item:1Splitting Rule:No RestrictionsTender Type:Restricted TenderCircle:Public
Works Circle, YawatmalDivision:Public Works Division, YawatmalOfficer:C. S.
MarpallikarDesignation:Executive EngineerRemark:Construction of Samajil Sabhagruhain
open space of G.P.at SakurTq.& Distt.Yavatmal
TenderNotice TextContentsTenderNotice In Marathi Marathi
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
EMD (Earnest Money Deposit)
Initial deposit submitted with tender to show the genuineness of the
contractor. It varies from 1 to 2%of the estimated cost of work. It remains
in the safecustody of architect till finalization of bid and selection of one
contractor. Other unsuccessful contractors EMD is returned. The main
purpose of EMDis to seethat a fair competition takes place. Itis forfeited
in favour of owner in case the contractor refuses to enter into a contract
after acceptance of histender.
SECURITYDEPOSIT

TheEMDpaid by the contractor becomesSDonce the tender is accepted.

Hewill also be askedto pay further amount of 2 to 5%of costasSDeither
by cheque or as bank guarantee. This amount is kept as security so that
the contractor fulfills all the terms and conditions and carry out the work
to the entire satisfaction. If he fails in the same the said amount is
forfeited. It does not carry any interest and is returned to the contractor
after defect liability period.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Retention amount
When a work is awarded to a contractor, he is supposed to deposit a fixed
amount either with the architect or owner as a guarantee for the faithful
performance of the terms of contract. As he has to shell out money for
construction as well, he wont be in a position to pay up the retention (
other than the S.D. already paid) money immediately. Hence as specified
in the contract the said amount will be deducted on %agebasisfrom the
interim bills of the contractor. These installments are retained by the
owner and is known asretention money. This generally is 5 to 10 %of
value of work. This is retained in each bill and 50% of the retention money
will be paid back to the contractor on virtual completion of the bldg. The
remaining 50% after defect liability period. Retention percentage of the
amount certified asdue to the contractor on an interim certificate, is
deducted from the amount due and retained by the client. Purpose-
adjustments in final bill, during defect liability period if contractor does
not rectify defects, or there is any claim, compensation , balance payment
to sub-contractor, then thismoney is used by owner.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Mobilization Fund
Normally the contractors are paid as per the interim bills submitted by them
and also for the material brought to the site. This is his investment till he
gets first interim bill after work to that stage is done.
In case of large projects they will have to invest a large amount for
infrastructure / preparatory work before starting with the actual work.
In suchcasessomeamount asmutually agreed will be paid to thecontractor
asmobilization fund which willbe deducted from the subsequent bill/bills
asagreed upon. The main purpose of this is to enable the contractor to
make all initial arrangements for commencement ofwork.
Maximum 10 %. Paidin one installment against bank guaranteeand
recovered in stagesasper agreement from each running bill.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
Contents of a tender document-
Tender notice, Special notice, letter of intent, Special conditions
General specification, Setof plans incl. R.C.C.plans,Bill of quantities
Detail description of work onlump-sum tender

TenderNotice – Isa notification for contractors expert to execute saidwork

at large to give their offer.Tendersare generally given at cost soasto
recover expencesincurred to prepare the same.
Essential characteristics of tender- Must mention the name of owner, place,
nature and extent of work and estimatedcost,
Must mention amount of EMD and tender fee, date by which tenders duly
filled to be returned alongwith EMD generally -15 – 20 days, place of
delivery of completed tenders, guidelines for mode of measurements
and units for eachitem,
Architect and the owner is not bound to accept/reject any or all tenders with
out assigninganyreasons.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
FROM- OWNERS Date-
Sealedoffers are invited from reputed contractors for construction of a
residential building on ………basison plot bearing No……..at
………..for ……………
Tender copies can be had from the office of the ArchitectsM/s
……….onpayment of Rs.……../- only (Non Refundable).
Thelast date for submissionof completed tender along withan EMD
of Rs………….is up to 4 PM on ...……inthe Architect’s office.
Also date and time of opening of tenders may be notified if open
tenders and all contractors may be called.
The owners and the architect reserve the right to accept or reject any
or all tenders without assigning any reasons there of.
SD/-
Architect
Also special notice and offer letter may also be sent to thecontractors.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Typesof tenders and tender document, World Bankformats, Indian BanksAssociation

guidelines, PWD, CPWD,Tender forms Tender draft notices and inviting of tenders
Procedure for opening and selection of tenders Qualification criteria, Bid capacity,
freak rates, rate analysis..Analysis and report toowner Work order

Procedure for opening and selection of tenders

Qualification criteria, Bid capacity,freak rates, rate
analysis..Analysis and report to owner Workorder

Tender bids evaluation

Toteach process of scrutiny of tenders and

advising client to select goodcontractor
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Letter of offer at first page is to be signed by contractor, which

implies hat he has accepted terms and conditions and has
agreed to execute works and has all necessary material,labor,
tools and tackles etc.
 Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Tender bidsevaluation- It’s a process of analyzing offers made by

contractors for execution ofproject tendered.
Purposeis to select right contractor for smooth and satisfactory
execution and completion of work.
Bids evolution puts all tenders on a common platformeliminating
uncertainties and converts special conditions into monitory
evaluation for arriving at final quoted price by the contractor.
Bid evaluation is done in three parts-
1) Tender document - contract form brought out by the I.I.A. It
containing Articles of agreement, General conditions of
contract, The appendix, Bill of quantities, specifications,
special term and conditions, drawings and all thatwas asked
for and enclosed to tender.
2) EMD and 3)letter of offer bytendered,
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

• Opening of tender in architect’s office

• Acomparative statement of all the tenders received is madewith
• Items Units Rates Amount Tender 1 Tender 2 Tender 3 …
• Excavation CuM …….. ………… ……….
• RCCfootings
• ………..
• Steel reinfircement Mton………..
• Masonry SqM
• ……….
• Doors
• Windows
• Finishing items
• ………..
• Total…Remarks...Lowest….highest…not quoted…calculation error….Etc
 Professionalpractice semester VII Lecture- 6 Professor Jayant Sahasrabudhe

This process evaluates loading of relevant amount for

comparison. Shows too high/ too low items, checks
specifications and wordings of items / rates finds discrepancies.

These discrepancies are then evaluated and revised comparative

statement made

EMDtendered is checked for appropriate format, amountand

validity period,
Offer letter is checked for mention of any additional condition or
otherwise, which is not acceptable or the same so also
evaluated for implications onproject.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Revised Summary- All the deficiencies, corrections, waitage for

terms and conditions, Arithmatical checks are done and and
all the tenders are brought onone base.
Two or three contractors are then selected on their merits and
then askedto resubmit tender basedonrevisions.
Final recommendation is then made to client for acceptance of
tender.
Contractor’s credentials-
Finantially stable particularly for the estimated cost of project.
Knowelagble, good organizing skills and credit in industry, having
good jobs in hand.
Certified for quality of works executed in past by previous
Architects and clients.
Positive attitude and good nature.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Twopart tendering- Prebid conference is held for clarification

Three envelop system-
Outer envelop 3 contains sealed envelop 1 and envelop 2.
Envelop 1 contains covering letter agreeing all terms and conditions, firm
profile and details with , EMDand financial documents, list of counter
terms and conditions if any

Envelop 2 contains priced offer asper the mode of tender called for, Item
rate/ lump sumetc..
Process- Envelop 3 opened-
Envelop 1 taken out first- If there is deviation from stipulated terms and
conditions, and if they don’t withdraw it can be rejected. If rejected, their
envelop 2 is not opened.

If felt necessary, they are requested to submit fresh submission after loading/
deloading conditions in proced offer in envelop 2 which is not yet
opened.
Process of envelop 1 is redone.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe
After this process of envelop 1 is done, for those who have
complied with the conditions, their envelop 2 containing
prices offer is opened.

Again if this is incomolete or not correctly filled, it stands

disqualified and no further negotiations aremade.
For those whose tenders are accepted, results aretabulated,
analyzed and negotiated if required.
Generally lowest one is then accepted and if within owners
prescribed limit and called to execute contract. However
abnormally low tenders may be rejected if found
inappropriate to assignthe work tosuch contractor.

If not , tenders arereinvited

Opening of tenders is done in Architect’soffice

Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Tendersare opened in Architect’s office presence of owners, if by

private invitation, contractors are not askedto remainpresent.

Incase of public tenders contractors are invited for opening and

opened in front ofthose who remain present.

Tenders are opened and listed with deposit cheques.

They are then scrutinized and forwarded to owners with scrutiny
report and recommendations with reasons.
If client insists for a non reccomonded tenderar, Architect should not
take any responcibility for the same and the same should be
informed in writing andrecorded.
Acceptance of tender-
Should be made in prescribed timelines asstated or in reasonable timeor
else offer will be ineffective.Also in caseof death of either party.
If contractor withdraws tender or alters it after opening, or withdraws, his
deposit will beforfeited.
Client andArchitect should give correct information and not misguide
contractor about the project.
Deposits of unsuccessful tenderaers should be returned with thanks and
due acknowledgement after contract with selected contractor is signed.
Work order- Letter of acceptance of tender and confirmation of
award of work, request to sign contract with owner on a
stipulated date and request to commence the work .
 TENDERNOTICE
to be published in newspaper

Sealedoffersare invited from reputed contractorsfor constructionof a

residential building on lump sumbasison plot bearing CTS
No…….at……….Mumbaifor………………….
Tendercopiescanbe had from the office of the Architects M/s
……….onpayment of Rs.……../- only (Non Refundable).
Thelast date for submissionof completed tender along with an EMD
of Rs.………isupto 4 PM on ...… /- The Society and the architect
reserve the right to acceptor reject any or all tenders with out
assigninganyreasonsthere of.
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Bid Capacity : Thebidding capacity of the contractor should be equal to or

more than the estimated cost of the work put to Tender.
Thebidding capacity shall be worked out by the following formula :
Bidding Capacity =[ Ax N x 2] – BWhere,
A= Maximum value of construction works executed in any one year during
the last five years taking into account the completed as well as works in
progress
N = Number of years prescribed for completion of work for which bids have
been invited
B= Value of existing commitments and ongoing works to be completed during
the period of completion of work for which bids have been invited

Freak rates- Rates which are unrealistic anamoly) . More or less than the
actual rate prevailing or in the schedule of PWDat the time if tendering on
the said project based on rateanalysis.
E.G.- Thepresent rate asper PWDschedule of rates for last year is
considered asthe base rate and deviation above i.e more than (+/-25%)
will be considered asfreak rate asper Central Vigilance Commission
guidelines Jan31, 2019 to address corruption.
 contents
Basic rates -
Clerk of work
Liquidated damages
Extras
Defect liability period
Period of final measurement andvaluation
Date of commencement and completion
Value of work for interim certificates
Retention %ageand limit of retention fund
Installment after virtual completion
Period of honoring certificates
Rate of interest for delayedpayment
Virtual completion
Final certificate
Penultimate certificate
Professional practice semester VII Lecture- 6 Professor JayantSahasrabudhe

Problames in practice-
Client decides to abondonework
Client does not know recommended contractor
Contractor refuses to execute work after his tenderis a accepted
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Contract -Types of contracts and contract documents

Detailed knowledgeabout variousconditionsof contractas
published by Indian Institute of Architects and specially
about EarnestMoney Security Deposit Retention Money
Mobilization FundBank Guarantee

Architect’s Instructions Clerk of works Variation and Extras

Defects after completion Certificate and Payments Insurance
and fire insurance Liquidate damageTermination of Contract.

Teachstudents why and how a legal document i.e. contract

is made between client and contractor and administrating
the samebyArchitect foreffective , dispute free execution of
project in a responsible way till it'scompletion .
 Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Indian contract act 1872- taken over by British government and modified to
suit our requirements. Study of this is very essential. Contract is defined as
agreement enforceable at law. Essentiatiols for enforcement are – free
consent, parties to be competent to contract, lawful consideration and object,
agreement must not be expressly declared to be void.
Acceptance of contract should be In absolute i.e. without counter offer and
within reasonable time / asper period stated in tender to remain in force.

https://en.wikipedia.org/wiki/Indian_Contract_Act,_1872#:~:text=The%20Indi
an%20Contract%20Act%2C%201872,principles%20of%20English%20Common%
20Law.&text=It%20determines%20the%20circumstances%20in,contract%20sh
all%20be%20legally%20binding.
Agreement between employer and contractor should be equitableand
reasonable.
and satisfactory completion of job still depends upon mutual confidence and
understanding between parties rather than the form of words in the contract.
 Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe
Types of contract-
Thisdepends on the mode of execution of work similar to form of tenders-
Lump sum- Fixed sum / Area based/turn key- Itis similar to sale but only for
building work. Thiscreates problems in caseof disputes. It is indivisible.
Part payment terms are important. In case if work is abandoned
incomplete, Quantum Meruit basis to beadopted.
For area based contract, terms plinth area, carpet area, built up area, stilt area,
FSI,free of FSIetc to be well defined in the contract.
Item rate- measurement of each item, quoted rate, Quantities in tender are
estimated and approximate but payment as per contract to be on actual
executed quantity based on actual measurement. Owner has right to
increase, decreasequantities or omit any item. No claims or extra on this
account however if this is beyond reasonable limit, creates un wanted
situation. Generally this is accepted at actual for below plinth work and up
to 25%in superstructure. If this exceeds, therates may be revised .
Similar issues like variation in cost, defective or sub standard work, in
percentage, labour ,Area based contracts are resolved with suitableclauses
in agreement.
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Building contract is an agreement enforceable at law between two or more

parties made by free consent of parties competent to contract for a lawful
consideration and lawful object
Execution of contract-
Tobe on stamp paper of appropriate value asper Indian stamp act1899.
Unstamped agreement can not be evidence in arbitration or at court of
law. Theycan then pay stamp duty, penalty and get it stamped if required .
It should be signed, sealed anddelivered.
Private party- Bysigning necessary documents.
Public body- By signing and seal by authorized persons to beaffixed.
 Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

I.I.A. form of contract in it’s present form is done in 1979. It

comprises of
1)Articles of agreement, 2) General conditions of contract and 3)
Appendix,
Architects all over the country in general adopt the form of IIAsubject
to changesif required. Generally all contract conditions are
interwoven with rights, duties, relationship of parties andArchitect
standing between them with quaci judicialfunctions.
Laws are formed to deal with most of the problems that may arise
between parties and to discover intensions due to ambiguity,
inconsistency and to solve them.
Everycontract is attached withall the contents in tender document as
per the mode of tender.
It may suffer due to unexpected circumstances like cost inflation,taxes,
revisions in project if any,unexpected delays, obstaclesetc yet
Architect has to carry needed amendments and reduce disputes.
Concept of building contract- Building construction involveshuge
numbers of technical terms , variations inconstruction works , wide
rangeof building typology,
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe
Articles of agreement- First page of IIAform of contract- Upper part of first
page is for stamp or the page is to be typed on stamp paper. Since
Architect performs role of arbitrator, he should notsign aswitness.
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

General conditions of contract-

Definitions- of termsused,
Contract document- including specifications and bill ofquantities, this
remains in Architect’s office and copies given tocontractor and owner,
Type of contract- Item rate, lumpsum etc,
Schedule of quantities
Contract drawings- mentioned in words and details
Contract sum-
Contract bills-
Scope, intent and extent of contractdocuments-
Architect’s instructions- given during execution of work from time to time in
writing,
Facilities and co-operation- for site work and rectification of defects
Setting out – line and level tobegin work,
Site- visits, possession , treasures antiques to be given to owner
Material samples-approval byArchitect,
Shopdrawings- to be done by agency and get approved byArchitectbefore
proceeding with work
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Progresschart- scheduling of commencement and completion ofeach item of

work including that of submission ofsamples and shop drawings
AccessofArchitect to work- to site, workshop etc asrelated to work ( not
exhaustive or continuous – not responsible for contractor's failure)
Architect’s status and decisions- General, periodical, qualitative and
quantitive, express authority, can stop inappropriate work,
Contractor to act uponArchitect’sdecisions
Performance bond- EMD, security deposit,
Clerk of works- person approved byArchitect acting underhis instructions,
appointed and paid by owner
Contractors organization and equipments- Engineer in charge, responsiblefor
correctness of work, all equipments to be provided and used.
Office, security, storage, water and sanitation facilities,
Taxes-contractor to assume and include in rates, not claim on this account
Statutory obligations, notices, fees and charges-to be complied bycontractor
and indemnify owner against liability in respect of work
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Royalties and patent rights-deemed to have been included in contractsum.

Contractor to indemnify owner against royalties and any patent rights in
relation to work.
Licenses and permits- to be obtained asrequired
Water forconstruction- shall be obtained, used and paid by contractor and
included in contract sum. Sample to be checked for suitability for
construction.
Assigning or subletting to be with Architect’s written consent.
Sub contractor- appointment to be notified to architect with details and
approve in writing, will work under contractor, all the conditions will be
binding on him,
Prime cost- direct cost of a commodity in terms of the materials and labour
involved in its production, excluding fixed costs. Payment to supplier by
contractor.
Artists and tradesmen
Separate contracts- Owner has right to appoint other contractor in
connection with work , contractor to co-ordinate and support him
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Variations, Provisional and Prime cost sums- Alteration in design, quality,

quantity of work to be given in writing and not vitiate the contract.
Valuation of variations, incidental day work etc- Provisional and Prime cost
sums- direct losses or expenses by contractor can be added to contract
sum.
Certificates and payments- Interim certificates asper agreement and certified
byArchitect due to contractor from owner, after deducting retention
percentage,
Claim for extra- to be approved byArchitect before proceeding with the work,
otherwise not accepted asextra.
Deduction for uncorrected work,
Fluctuation in prices shall not be claimed asextra unless basicrate.
Unfixed goods and materials- once brought in site , shall notbe removed if
paid in interim certificate as it becomes ownersproperty.
Materials and workmanship- as per ISI code and specifications. Tobe
approved and removed if found defective. Certificate of quality to be
obtained.Approval ofArchitect necessary if brand is to be changed.
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Inspection- Architect has right to inspect and reject if defective and demand
correction.
Defects- Contractor to rectify at his own cost all defects in the opinion of
Architect.
Possession, completion and postponement- Possessionof site to be given to
contractor to begin work diligently. Contractor shall complete workasper
contract on or before the date of completion. Architect may instruct to
postpone the work if necessary.
Extension- If for somereason extension is required, contractor to give in
writing andArchitect may give in writing fair extension of time.
Damagesfor non completion- if project is not completed in time, contractor
shall pay to owner a sum asagreed liquidated damagesasper contract.
Virtual completion and defect liability period- on practical completion
Architect shall issue certificate of virtual completion of work , defects id
any noticed within defect liability period shall be made good by contractor
at his own cost.
Loss and expense caused by disturbance of regular progress of work- if
regular progress if work is disturbed by reasonsfor which contractor is not
at fault, Architect shall determine amount of such loss or expenses and
paid to contractor in addition to amount due.
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Paymentswithheld- Architect shall protect owner fromloss on

account of faulty work of contractor. Payment shall be
withheld till investigation and released upon corrections.
Injury to persons and property owners- Contractor is liable for
injury or death of any person arising out of carrying out of
work, negligenceof contractor and indemnify owner
unles
s owner is responsible for the same.
Insurance against injury to personsand property- Tobe in joint
names with owner.Necessory to cover liability.Policy and
receipts of premium paid tobe produced.
Insurance of work against fire etc, Tobe in joint name with
owner. Storms, earthquake, flood, lightning, aircraft or aerial
dropping, riot, civil commotion, - full value – works, materials,
plants, tools, equipments, till virtual completion of works.
Contractor may have such general policy with ownersinterest
endorsed. Upon settlement of policy claim, contractor to
make good damagedwork. Making good the loss andremoval
of debris will deemed tobe variation.
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Determination by owner- In caseof default by contractor- without reasonable

cause suspend or delay work before completion, fails to proceed diligently,
neglects written instructions, refuses to remove defectivework,
Architect to give notice with recorded delivery specifying default, and if he
continues default determine employment of contractor.
Bankruptancy of contractor- his employment under this contract will
automatically determined. It can be reinstated if owner and contractors
trustees agree, if contractor offers any gift or consideration to anybody-
offence under prevention of corruptionact,
Owner may employ and pay other person to complete work, pay to
subcontractors and deducted form sum due tocontractor. Difference shall
be payable to the contractor.
Determination by contractor- if owner does not pay contractor his bill within
time limit of honoring certificate, if owner interfere with issueof
certificates, Force measure, riots, inconsistency in drawings and
specifications, variation, postponement of work, notreceiving drawings in
time, delay on part of owner, owner to pay for completed work till date,
direct loss to contractor bydetermination,
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Co-ordination of work- Contractor to makeseparate contracts with sub

contractor and other people involved in the work , co-ordinate with
different agencies for coordination related with work like services,
structural, material supply etc,
Labor- no child labor to be employed, arrangementsfor female labor, their
children to be made, drinking waterand sanitation,
Protection of trees and shrubs- as directed byArchitect, Protected,fenced
and earth around to beretained.
Guarantee- general for work and specific for procured items to be submitted
Antiquities- during excavation if Antiques, fossils if found , to be carefully
excavated and deliver to owner. It’s owners property. In doing this if extra
work is required to be done, contractor to be suitably compensated.
Expected matters- Everything that is expected to be done shall be binding on
parties. Any other decision, direction shall be subject to review and right
of arbitration
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe

Protection and cleaning- Contractor to protect the work from damage by

temporary roofing, covering, asrequired. Clean, remove debris, remove all
temporary works and handover to clerk of works to the satisfaction of
Architect.

Tolerance-Contractor during execution to ensure that all workis asper given

drawings, specifications and in perfect line and level. Any rectification if
required, to be done with all expenses requited including those of sub
contractors. Architects decision will be final and binding of both the
parties.
 APPENDIX
contents
• Defect liability period
• Period of final measurementand valuation
• Date of commencement
• Date of completion
• Agreed liquidated damages
• Value of work for interim certificates
• Retention %age
• Limit of retention fund
• Installment after virtual completion
• Period of honoring certificates
• Rate of interest for delayed payment
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe
 Insurance Contract

• Fire Insurance, essential for formation, ProposalForm, Covernote,

•
• Reinstatement clause,Procedural conditions for claims,Average
Clause,

• HowArchitect is professionally connected with Fireinsurance,

• Salvage value,
•
• Type of contracts.

• Defects liability period, Clerk of work, Basic rate, Insurance,

liquidated damages,contract bills are to be prepared inaccordance
with standard methodical measurements of IIA. interim bill, final
bill, penultimate bill etc.
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe

Insurance and Fire Insurance-

All buildings shall be insured for fire, flood and other natural
disasters including earth quakes,rioting etc.
Other than the building the workers at the site also shall be
insured under workmen’s compensation act by the
contractor and the copy shall be submitted to the local body
before getting CCfor theproject.
 Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

General Insurance Cos. In Public Sector

New India Assurance Company Limited.
National Insurance CompanyLimited.
The Oriental Insurance Co.Ltd.
United India Insurance Co.Ltd.
Agriculture Insurance Companyof India Ltd.
Life insurance-General Insurance
Nationalization -L.I.C.-1956, G.I.C-1972
Now Private insurance companies are also allowed.
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe

Fire Insurance
How Architect is professionally connected with fire insurance
While finding the fair market value insurance comesasoutgoing
Under the bldg. contracts
Toadvise on the insurable value of the property
Toprepare the claim report in case of loss due to fire and to
represent the claim beforecompany.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Essentials for formation of Insurance and Fire insurance contract

Proposal must be made by the insured in prescribed format
Deposit receipt for payment ofPremium called cover note
If proposal rejected premium deposit will be refunded otherwise
policy issued
Cover note- essential characteristic
If the fire takes place between the date of receipt of cover note
and the date of intimation by the company of
acceptance/rejection of policy the company will be
responsible.
It is a protection for a limited periodasintimated.
It is also known asinterim protection note.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

It is a contract of insurance with consideration ( premium)and

not a policy of insurance.
Procedural conditions to claims
Notice of fire forthwith and to file claim report within 15 days
with details
Forfeiture condition if claim found fraudulent
Reinstatement clause
Right of entry and salvagevalue.
Arbitration condition
Average Clause
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe

Average clause
If the value of the property insured is greater than the insured value
then a proportionate cost of the difference in the reinstatement value
shall be borne by the owner in caseof damage due to fire. This is
known as average clause and all fire policies in India are subject to
averageclause.
If the property is over insured the companyis liable to pay only the value
of the property.
If there are multiple policies on the sameproperty, then all the insurance
companies together will pay the actual cost of damage
proportionately.
If it is under insured ,the companywill pay only on pro-rata basismaking
the owner also to pay proportionately for the loss.
 Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Double Insurance
Onecan take more than one policy on the sameproperty buton
the following conditions
The insured has to give notice to the company about other
policies failing which the insured will lose benefit of the policy
under consideration.
In case of fire both companies will share the loss
proportionately and the owner can not claimdamagesfrom
both companies separately as ‘making profit by insured is
prohibited.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Salvagevalue- Valuerealized on sale when it’s useful spanof life

is over but it has notbecome useless.
Reinstatement clause- It,s a claim condition in fire policy giving
right to company either to pay amount of loss due to damage
or to reinstate or replace proprty damaged or destroyed
solely or jointly with other company.
When property under-insured
Liquidated damages-
Termination of contract
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Liquidated damages- Damagesfor non compliance- ‘Time

being the essence of contract, if contractor finds that he will
not be able to complete the work in time, or granted
extended time, he must give a notice to that effect stating the
causeof delay and apply for further extension. If there is no
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

such reason beyond the control of contractor then some

provision is essential tocompensate the loss of owner he will
undergo , it is obligatory on contractor to compensate it in
some form or the other.
Damages for non-completion due to failure of contractor to
complete work in time and extended time, certified by
Architect, LIQUIDATEDDAMAGEScalculated asmentioned in
appendix become due to the owner. Owner may deduct this
from the dues payable to thecontractor.
Theterm penalty canalso be usedfor liquidateddamages.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Bonus clause- Canbe introduced in contract so asto give positive

motivational influence on contractor to complete work in time
and within specified financial limits, bonus clause at the rate
agreed may be introduced in contract. In case if variation or
delay from owner is established, then also bonus can be
claimed by the contractor.
Abank guarantee is a type of financial backstop offered by a
lending institution. The bank guarantee means that the
lender will ensure that the liabilities of a debtor will be met. In
other words, if the debtor fails to settle a debt, the bank will
cover it. Abank guarantee enables the customer, or debtor, to
acquire goods, buy equipment or draw down aloan.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe
Professional practice semester VII Lecture- 8 Professor JayantSahasrabudhe
Arbitration-
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe

Kinds of Arbitration-
Based on clause of Agreement-
Disputes arising are sorted out as per Arbitration
clauses of IIA form of contract.

With intervention of court where there is no suit pending-

If any one party applies to judicial authorities and they
refer parties to Arbitration.

Arbitration in suits-
If the suit is pending in court and before the judgement
is pronounced, parties agree to settle dispute by
Arbitration.
Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Building contractAdministration-
Objectives- to carryout and complete work with quality, in time
limit and in set cost for mutual benefit.
Architect is enforced with powers for faithful performance of
both parties and avoidlitigations.
It so happens thatArchitects role is to perform for owners and in
doing so in caseof dispute, matter goesforArbitration. Soit is
to be established that the role of Architect should impartial
instructions issuing authority.
There is fear of failure of contract when either party refuses or
fails to perform or defective performance, incapacity to
perform due to external reasons with or without lawful
excuse.
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Incompetency of contractor- Inexperienced,

Rigid, indifferent attitude of Architect- workingunder influence of
owner,
Greyareas walked through- in drawings, specifications, site conditions,
quantities, etc….
Alternatives to be offered to contractorfirst,
Physicalcondition of site, particularly sub-soil condition etc to be
handled tactfully to avoid contractfailures,
Unreasonable suspension of work to be avoided,considered
reasonably
Sonof soil concept- Nearby old settlements, compulsory acquisition of
Agricultural land by government for development and nearby local
people are deprived of their means of living and force contractor to
employ local labor irrespective of skilled or unskilled. Forcedto buy
materials, sublet works to localities irrespective ofquality, costs
etc…
Professional practice semester VII Lecture- 9 Professor JayantSahasrabudhe

Changeorder of work, variations and fluctions- claims forextra

Final phase of administration-
Contractor translates owner andArchitects paper dreams into reality.
He should be treated with fairness andequitably.
Architect has to act in differentcapacities which are conflicting and
overlapping nature.
Heis at crossroadsand these guidelines from different institutions
help him to prevent contractfailures.
They should appoint Techno- legal consultants on professional basis
when there is fear of contract failure, remain fare and equitable for
satisfactory completion of project.

ALL THE BEST TO BE A PROFESSIONALARCHITECT

Professional practice semester VII Lecture-9 ProfessorJayantSahasrabudhe