CONDITIONS OF BUILDING CONTRACT

[PROFESSIONAL PRACTICE]

SUBMITTED TO: AR. AMIT BHATTACHARYA

SUBMITTED BY:

NILANJANA SAIKIA

PRIYADARSHIKA DAS PRAGYAN KAR

SHIKHA SAH SWETALINA BISWAL

INTRODUCTION:

The following expressions hereunder and elsewhere in the Contract Documents used,
unless repugnant to the subject or context thereof, shall have the following meanings
hereunder respectively assigned to them, namely:

The "Contract" shall mean the agreement between the parties as derived from the
Contract Documents.

"Acceptance of Tender" shall mean the Acceptance of Tender issued by the OWNER to
the CONTRACTOR, and shall include a letter, telegram or fax of acceptance or other
notification of award of work, and a detailed Letter of Acceptance.
"Approval" shall mean the written and signed approval of the OWNER or of Engineer-in-
Charge or
Consultant authorized in this behalf by the OWNER, and with respect to a plan or
drawing.

The "CONTRACTOR" shall mean Individual, Agency. Firm or Company [whether

incorporated or not) selected by the OWNER for the performance of the Contract and
shall include its legal representatives, successors and permitted assigns
The "Contract Documents" shall mean the contract documents as defined in Article 1 in
the Form of Contract.
"Completion" or "Final Completion" shall mean the successful provision of all materials
and inputs and the successful completion and conclusion of all activities required in all
respects to complete the contractual works in accordance with the contract, but shall not
include the obligation to rectify defects during the Defect Liability Period.
'Completion Certificate" shall mean the Completion Certificate issued by the Engineer-
in-Charge in accordance with the provisions hereof.

Conditions of Contract:--

There are several clauses in the conditions of the contract to the govern the character of
the work to be carried out. Governments have their own standard conditions of
contracts provided in the printed tender form (as mentioned in 6 above). The conditions
specify mainly the following clauses:

(1) Amount of security

(2) Compensation for delay
(3) Action when whole of security deposited is forfeited
(4) Contractor remains liable to pay compensation
(5) Extension of time
(6) Completion certificate of work
(7) Payment on certificate
(8) Monthly bill
(9) Payment of bill
 (10) Departmental Materials
(11) Execution of work in accordance with drawing and specifications
(12) Alternations of designs and specifications
(13) No compensation for alteration
(14) Compensation in case of bad work
(15) Works to be opened for inspection
(16) Notice before the work in covered
(17) Maintenance period up
(18) Care of departmental tools and plants
(19) Labour
(20) Work on Sunday
(21) Contract may be rescinded
(22) Sum payable by the way of compensation by the contractor
(23) Changes in constitution
(24) Supervision by higher officers
(25) Arbitration etc

CLAUSE 1. SECURITY DEPOSIT:--

The person or persons whose tender may be accepted (hereinafter the contractor) shall
permit the Government to collect from the running bills of the contractor by the way of
security deposit such sum as along with the sum of earnest money already deposited
during submitting tender will amount to 10% of the estimated cost put to tender for
works costing up to tender for works costing up to Rs. 1,00,000/-; for works costing
more than Rs. 1,00,000/- and up to Rs. 2,00,000/- to 10% on the the first Rs. 1,00,000/-
and 7.5% on the balance. In the case of works costing more than Rs. 2,00,000/- the
amount of security deposit along with the sum of earnest money will amount to 10% on
the first Rs. 1,00,000/-, 7.5% on the next Rs. 1 lakh and 5% on the balance, subjecting
to a maximum of Rs. 1,00,000/- only.

CLAUSE 2. COMPENSATION FOR DELAY:--

The time allowed for carrying out the work as entered in the tender shall be started from
the 15th day after the date of giving order for its commencement or any other date
specified and shall be strictly observed by the contractor. Time allowed in the tender for
completion of the work is essence of the contract on the part of the contractor. When
the work allotted to the contractor remains uncommenced or there is delay in the
completion of the work or if the progress of the work is not proportionate to the time
escaped, been the contractor shall pay as compensation an amount equal to 1% or
such smaller amount as the Superintending Engineer may decide for each day of the
delay subject to the maximum of 10% of the tendered amount of the whole work. The
decision of the Superintending Engineer in writing as the quantum of compensation to
be levied shall be final.

CLAUSE 3. ACTION WHEN WHOLE OF SECURITY DEPOSIT IS FORFEITED:--

When the contractor has made himself liable to pay compensation amounting to the
whole of his security deposit (due to taking action of clause 2) the Engineer-in-Charge,
on behalf of the President/ Governor shall have the power to adopt any of the following
courses as he may think best suited to the interests of Government---

(a) To rescind the contract with a written rescission notice of the Engineer-in-Charge
provided the security deposit of the contractor shall stand forfeited and shall be
absolutely at the disposal of the Government’s right to recover losses under clause
3(b) and 3(c).
(b) To employ labour paid by the department and to suply materials to carry out the
unfinished work, or any part of the work for and on behalf of the contractor. For the
costs of the labours and prices of the materials cerificates of the Engineer-in-Charge
shall be final and conclusive against the contractor.
(c) To measure up the work of the contractor, and to take such part thereof as has
been uncommenced out of his hand and allot it to another contractor, and to take such
part thereof as uncommenced out of his hand and to allot it to another contractor for its
execution at the risk cost of the original contractor.

The extra expenditure if any under clause (3b) or (3c) shall be borne by the contractor
and shall be deducted by the Engineer-in-Charge from the security deposit. If the extra
expenditure exceeds the forfeited amount of security deposit, the difference between
the extra expenditure and the security deposit shall be recovered from any money due
to the contractor under the contract or otherwise.

If the Engineer-in-Charge adopts any of the above clauses then the contractor shall
have no claim to compensation for any loss sustained by him due to any reason
whatsoever. On the other hand if the unfinished work is executed at a lesser cost,then
the contractor shall have no right to claim the amount saved.

CLAUSE 4. CONTRACTOR REMAINS LIABLE TO PAY COMPENSATION AND

POWER TO TAKE POSSESSION OR DISPOSAL OF THE CONTRACTOR’S
PLANT:--

If there be any delay or no action is taken to exercise clause 3 the same shall not be
constituted a waiver of any of the conditions thereof and the contractors shall not be
constituted a waiver of any of the conditions thereof and the contractor remain liable to
pay compensation. In the event of the Engineer-in-Charge putting in force the powers of
clause (3a) or (3c) vested on him under the preceeding (after serving a written notice to
the contractor) of all or any tool, plants, materials and stores in or upon the works and
sell them by auction on account of the contractor. The certificate of the Engineer-in-
Charge as to the expense of any such removal and the amount of the proceeds and the
expense of any such sale shall be final and binding.

CLAUSE 5. EXTENSION OF TIME:--

If the contractor cannot complete the work due to having been unavoidably hindered in
its execution or any other ground; of tihe contractor shall give an immediate report of
such hindrance to the Engineer-in-Charge, he can then apply for extension of of time in
writing to the Engineer-in-Charge within 7 days of the date of completion. The Engineer-
in-Charge may grant such extension of time on reasonable grounds.

CLAUSE 6. COMPLETION CERTIFICATE:--

On completion of the work including removal or surplus materials, site godown or any
other materials in connection with the work, the contractor shall be noted in the the
Measurement book according to date as certified in the certificate. In case the
contractor fails to remove these at the expense of the contractor.

CLAUSE 7: PAYMENT ON THE CERTIFICATE:--

The contractor shall be entitled to receive monthly payment on bills submitted by him to
cost more than Rs. 5000/- and duly approved and passed. by the Engineer-inCharge,
whose certificate of the sum so payable shall be final and conclusive. But all such
intermediate payment shall be regarded as advance against the final payment and not
as payment for work actually done.

CLAUSE 8: MONTHLY PAYMENTON BILLS:--

Monthly bill shall be submitted by the contractor on or before the date fixed by the
Engineer-in-Charge for all works executed in the previous month. The Engineer-in-
Charge for all works executed in the previous month. The Engineer-in-Charge or his
authorised representative shall check the measurements for its admissible payment
within 10 days from the date of submission of bill. If the contractor does not submit the
monthly bill, the Engineer-in-Charge may depute a subordinate to measure up the said
work in the presence of the presence of the contractor who will countersign who will
countersign the bill in order to receive his payment.
CLAUSE 8A: OBJECTION TO THE MEASUREMENT RECORDED BY
DEPARTMENT:--

Before taking up any measurements of any work by the department staff the Engineer-
in-Charge shall give a notice to the contractor to attend at the time of measurements. If
the contractor fails to attend at the measurements or fails to countersign or to record the
difference within a week from the date of measurements, then in any such event the
measurement taken by the Engineer-in-Charge or by the subordinate deputed by him,
as the case may be, shall be final and binding on the contractor.

CLAUSE 8. MONTHLY PAYMENT ON BILLS :-

Monthly bill shall be submitted by the contractor on or before the date fixed by the
Engineer –in-Charge for all works executed in the previous month. The Engineer –in-
Charge or his authorized representative shall check the measurements for its
admissible payment within 10 days from the date of submission of the bill. If the
contractor does not submit the monthly bill, the engineer-in-charge may depute a
subordinate to measure up the said work in the presence of the contractor who will
countersign the bill in order to receive his payment.

CLAUSE 8A. OBJECTION TO THE MEASUREMENT RECORD BY DEPARTMENT :-

Before taking any measurement of any work by the departmental staff the engineer-in-
charge shall give a notice to the contractor to attend the time of measurements. If the
contractor fails to attend or fails to countersign or to record the difference within a week
from the date of measurements, then in any such event the measurement taken by the
Engineer-in-Charge or by the subordinate depute by him, as the case may be, shall be
final and finding on the contractor.

CLAUSE 9. BILL TO BE ON PRINTED FORM :-

The contractor shall submit all bills on printed forms supplied by the department on
payment at the specified rate.

CLAUSE 9A. PAYMENT OF CONTRACTOR’S BILL TO THE BANK :-

If a contractor desires and furnishes legal authorization as well as his own acceptance
to the Engineer-in-Charge payment maybe made to his bank instead of direct to him.

CLAUSE 10A. MATERIAL AND STORES SUPPLIED BY THE GOVERMENT:-

When departmental materials are issued to a contractor from time to time for the
purpose of the contract only at a fixed issue rate as provided in the tender, the value of
the full quantity of material and stores so supplied may be deducted from sums then
due or thereafter to become due to the contractor shall remain the absolute property of
government and shall on any account be removed from the site of the work, and shall at
all times be open to the inspection by the Engineer-in-Charge or his authorized persons.

On completion of the work excess quantity of the materials in perfectly good condition
can be returned by the contractor to the departmental store if so required by the
Engineer-in-charge.but without the consent of the Engineer –in-Charge the contractor
shall not be entitled to return any such material so supplied and unused by him. the
government shall not be responsible for any loss wastage or damage to any such
material . Provided that the contractor shall in no case be entitled to any compensation
or damage on account of any delay in supply or non supply thereof any such materials
and stores.

CLAUSE 10B. SECURED ADVANCE:-

Under this sub-clause the contractor shall be entitled to get 75% advance payment
against the estimated value of any materials which has been brought on the site in
connection with the work during its progress and which are in the opinion of the
Engineer- in-Charge securedly stored and protect from any damage. Any such above
mentioned material shall not be used in the works at the time of advance payment. To
get such advance payment the contractor shall sign an indenture in the form to be
specified by the Engineer-in-Charge. When materials, on account of which an advance
payment has been made are used in the work the full amount shall be deducted from
the next payment made under this contract.

CLAUSE 11. DRAWING AND SPECIFICATIONS :-

All work shall be carried out in the most work-manlike manner faithfully and truly in
accordance with the design, drawings and specifications and all material in every
respect shall be in strict accordance with the specifications. The contractor shall be
entitled at his own expense to make copies of the specifications, and of all such design,
drawing as aforesaid.

CLAUSE 12. ALTERNATION SPECIFICATION AND DESIGNS :-

The Engineer-in-Charge reserves the right to make any change in, omission from, and
additions to or substitutions for, the original designs,drawings,specifications and
instructions as are necessary in the opinion of the Engineer-In-Charge during progress
of the work and which may be given to him in writing and signed by the Engineer-In-
Charge, such changes omissions or substitutions shall be deemed to have formed as
work included in the original tender and the contractor shall be bound to carry out the
work. The time of completion shall be extended proportionately by the Engineer-In-
Charge due to above reasons.

The rate for such additions, alternations or substituted work shall be worked out with the
following provisions (i) same rates if any may be specified in the tender, if not (ii)the
departmental schedule of rates at the time of the acceptance of the contract with the
contractual percentage, if none of the above (iii) by analysis worked out from the basic
rates are not in schedule then from current market rates, the decision of superintending
Engineer of the circle shall be final and binding.

CLAUSE 12. REVISION OF THE RATES :-

in case any altered, additional or substitute work involves the employment of additional
materials and equipments, the contractor may claim revision of the rate specified in the
tender for the main work within 7 days from the receipt of the order. The Engineer-In-
Charge may revise such rates having regard to the increase in the market price of such
materials. In the event of disputes, the decision of the superintending engineer of the
circle shall be final and binding. But under no circumstances the contractor shall
suspend the work on the ground of non-settlement of rates of items.

CLAUSE 13. NO COMPENSATION FOR RESTRICTION OR ALTERNATION OF

WORK :-

The contractor shall not have no claim to any payment or compensation for (i) any
curtailment of the work as specified in the due to any reason what so ever on account of
profit or advantage from the execution of the original work in the full or for (ii) any
alternation in the original drawings, designs, specification and instruction which may
cause any curtailment of original work.

CLAUSE 14. ACTION AND COMPENSATION PAYBLE IN CASE OF BADWORK:-

If any work is found to have been executed by the contractor with unsound, imperfect or
unskillful workmanship, or with materials of any description or is not in accordance with
the contract, the contractor shall make good the defect in work at his own expense and
remove the materials or articles complained in writing by the Engineer-in-Charge. If the
contractors fails to do so within a period as per day up to a maximum limit of the amount
of the estimate. Even so if the contractor fails to rectify the defects or remove and
replace the defective materials the same may be done at risk and cost of the contractor.
CLAUSE 15. WORKS TO BE OPEN TO INSPECTION:-

All work at all times shall be open to inspection and supervision of the Engineer-in-
Charge or his subordinate. The contractor or his authorized responsible agent shall be
present at all times during the usual working hours or all other times as previously
informed to receive order and instructions.

CLAUSE 16. NOTICE TO BE GIVEN BEFORE THE WORK IS COVERED UP :-

The contractor shall not cover up or place beyond the reach of measurement any work
of the tender without seven days notice in writing to the Engineer-in-Charge or his
subordinate in charge of the work or without consent obtained from the Engineer-in-
Charge. Unless otherwise permitted the said work shall be uncovered by the contractor
at his own expense, or in default thereof no payment or allowance shall be made for
such work or the materials with which the same was executed.

CLAUSE 17. MAINTENANCE PERIOD :-

The contractor shall be liable for any damage done or any defects noticed within the
prescribed maintenance period of 3 months (6 months in case of road work). The work
shall at or as soon as practicable after the expiration of the period of maintenance be
handed over to the Engineer-in-Charge in good and perfect condition. If any damage,
defect, imperfections or other faults become apparent in it from the agreed date of
commencement until the end of the maintenance period the contractor shall make good
the same at his own expense or in default, the Engineer-in-Charge shall be entitled to
carry out such work by other workmen and deduct the expense from any sums that be
due to the contractor or from his security deposit.

The security deposit of the contractor shall not be refunded before the expiry of
maintenance period or till the final bill has been prepared and passed whichever is later.
Provided that if in the opinion of the Engineer-in-Charge , half of the security deposit
may be refunded after 3 months from the date of completion in order to afford relief to
the contractor in the matter of early refund of the security deposit against the contract.

CLAUSE 18. CONTRACTOR TO SUPPLY TOOLS AND PLANT :-

The contractor shall supply at his own cost materials (except such materials if any, in
accordance with the contract to be supplied from the departmental stores) tools, plant,
appliances, implements , ladders, scaffolding etc. for the proper execution of the work.
The contractor shall also supply without charge the requisite number of persons, with
the necessary means and the materials in order to setting out works assisting in the
measurements of the work or materials. The contractor shall also provide all necessary
fencing, lighting in order to protect the endangered from accident. The contractor shall
be bound to bear all legal expenses and to pay damages and costs owing to neglect of
the above precautionary measures.

CLAUSE 18A. CARE OF DEPARTMENTAL TOOLS AND PLANTS :-

The contractor shall be responsible for and shall take proper care and caution in respect
of all department rollers, tools, machinery etc. issued to the contractor in connection
with the work, and shall be liable for any loss or damage caused by any reason
whatsoever during the period the same are in the possession of the contractor.

CLAUSE 18B. WORKMEN’S COMPENSATION :-

By virtue of the workmen’s compensation Act, 1923 of section 12, sub-section (1), the
Government is obliged to pay compensation to a workman employed by the contractor,
in execution of the works and as such Government will recover the amount of
compensation so paid from the contractor. Government shall not be bound to contest
any claim against it under section 12, sub-section (1) of the said Act, except on the
written request of the contractor.

CLAUSE 19. LABOUR :-

No Labourer under the age of 15 years shall be employed on the work. The contractor
shall obtain a valid license under the Contract Labour Act and Rules before
commencement of the work and shall continue till the completion of the work. The
minimum wages and amenities of the labourers shall be maintained according to the
provision of labour and wages Acts.

CLAUSE 20. WORK ON SUNDAYS :-

No work shall be done on Sundays without written permission of the Engineer-in-

Charge.

CLAUSE 21. SUBLETTINGS OF WORKS AND CONTRACT MAY BE RESCINDED:-

The contractor shall not assign or sublet the contract or any work of the contract in
whole or in part without the written permission of the Engineer-in-Charge. The Engineer-
in-Charge shall have power to rescind the contract and to adopt any of the courses
specified in clause (3) if the contractor shall –

(i) assign or sublet his contract or attempt to do so

(ii) Become insolvent or commence any insolvency proceedings or make any
composition with his creditors etc.
(iii) if any bribe, loan, gift, reward or advantage, gratuity, perquisite, pecuniary or
otherwise shall either directly or indirectly be given, promised or offered by the
contractor or his servants to any officer or person of Government in any way connected
in the contract.

CLAUSE 22. SUMS PAYBLE BY WAY OF COMPENSATION :-

Under any of these conditions all sums payable shall be considered as reasonable
compensation without reference to actual loss or damage sustained.

CLAUSE 23. CHANGES IN CONSTITUTION OF FIRM :-

The previous approval in writing of the Engineer-in-Charge shall be obtained before any
change is made in the constitution of the firm specially before an individual or family
business contractor enters into any partnership agreement or any change is made in the
constitution of the partnership firm. Unless otherwise permitted the contract shall be
deemed to have been assigned in contravention of clause 21 thereof and the contract
shall be rescinded and the security deposit shall be fortified.

CLAUSE 24. DIRECTION OF WORK:-

All works under the contract shall be executed under the direction and subject to the
approval in all respects of the Engineer-in-Charge or the Superintending Engineer of the
circle for the time being who shall be entitled to direct at what point or points and in
what manner the work are to be commenced and carried out.

CLAUSE 25. ARBITRATION:-

Except where otherwise provided in the contract, all questions, disputes, meanings,
claim arising out of or relating to the contract, estimates, specifications, designs, quality
of workmanship or materials used on the work, instructions, order or those conditions or
otherwise concerning the works or the execution or failure to execute the same arising
at any stage shall be referred to the sole arbitration of the Chief Engineer of the
department (or if there be no Chief Engineer the administrative head of the
department).If the Chief Engineer be unwilling to act as such arbitrator, he shall appoint
a person as an Arbitrator and such appointment shall be valid. It is also a term of this
contract that no person other than a person appointed by the Chief Engineer shall act
as arbitrator. The person thus appointed shall be the sole arbitrator and his award shall
be final and binding on all parties to the contract, unless it is set aside by the Court .

The contractor invoking arbitration shall specify the disputes to be referred to

arbitration together with the amount of claim. The prayer of the contractor for arbitration
shall not be time barred, in accordance with the provisions of Limitation Acts 1908 or
1963 as the case may be.
CLAUSE 26. PATENT RIGHTS:-

In the event of any action, or proceeding relating to infringement or use of any patent or
design rights etc. The contractor shall fully indemnify the Government provided the
same in not he direct result of an order passed by the Engineer-in-Charge.

CLAUSE 27. LUMP SUM IN ESTIMATES:-

Whenever there are lump sum items, such items in the estimate on which the tender is
made any intermediate payment, the contractor will be entitled to payment in respect of
the items of works involved at the same rates as are payable under the contractor for
such items, but if the opinion of the Engineer-in-Charge the work in question is not
capable of measurement , payment shall be made on a certificate given by the
Engineer-in-Charge to the effect that by superficial measurement the value of the work
done is not less than the specified amount. The certified amount shall be final and
conclusive against the contract.

CLAUSE 28. ACTION WHERE NO SPECIFICATION EXISTS:-

For any work for which specification do not exist, such work shall be carried out in
accordance with the distinct specification and in absence of direct specification the work
shall be carried out in accordance with the instruction of the Engineer-in-Charge.

CLAUSE 29. WITHHOLDING AND LIEN IN RESPECT OF SUMS CLAIMED i.e.

RETENTION MONEY:-

Whenever any claim or claims for payment of a sum of money arises out of or under the
contract against the contractor, the Engineer-in-Charge or the Government shall be
entitled to withhold and also have a lien to retain such sum or sums in whole or part of
the security deposit pending finalization of such claim. In the event of the security being
insufficient to cover the claimed amount or amounts the Engineer-in-Charge of the
Government shall be entitled to withhold and have a lien to retain such claimed amount
for any sum or sums found payable or which at any time thereafter may become
payable to the contractor under the same contract or any other contract with the
Engineer-in-Charge of the Government. The account in respect of such withholding or
retained under the lien till the claim arising out of or under the contract is determined by
the Arbitrator or by the competent Court, as the case may be.

CLAUSE 30. EMPLOYMENT OF LABOUR:-

The contractors shall not employ coal mining or controlled area labour falling under any
category whatsoever on or in connection with the work. No labour should be imported
from any district other than where works are to be executed without prior consent of the
Engineer-in-Charge. Imported labour can only be engaged with permission of the
Engineer-in-Charge when progress of work so demands.70% of the unskilled labour
shall have to be recruited locally.

CLAUSE 31. SUPPLY OF WATER:-

The contractor (s) shall make his/their own arrangements for such water as shall be fit
for construction purpose to the satisfaction of the Engineer-in-Charge required for the
work and nothing extra will be paid for the same. The Engineer-in-Chief shall make
alternative arrangements for supply of water at the risk and cost of contractor(s) if the
arrangements made by the contractor(s) for procurement of water are in the opinion of
the Engineer-in-Charge, unsatisfactory. Where there is no piped water supply
arrangement the contractor shall be allowed to draw water from the Government hand
pumps and wells without any charge. The contractor shall be allowed to construct
temporary tube wells or wells on Government land for taking water for construction
purpose only without any charge after he has got permission of the Engineering-in-
Charge in writing.