Professional Documents
Culture Documents
2 Tender Documents and Contractual Obligations
2 Tender Documents and Contractual Obligations
18-Jan-23 AM 2023 1
TENDER DOCUMENTS
INTRODUCTION
We will consider the admeasured contract (traditional) as it
embodies in a formalized way the typical components of all
contracts.
In an admeasured contract the client measure the works and
prepares a standard Bill of Quantities based on a known scope of
work and anticipated physical and other related conditions of
work.
In any contract the measurement of work must be carried out so
that a tenderer can give a price but in a lumpsum contract this will
remain secret to him alone.
Terms ‘tender’ and ‘contract’ are used interchangeably here as
they are really one and the same thing, except that once a tender
has been accepted by the client, the tender documents with some
additions form the basis of the contract between the two parties.
18-Jan-23 AM 2023 2
TENDER DOCUMENTS
ESSENTIAL ELEMENTS OF A CONTRACT
CONTRACT..
Agreement between parties
Offer and acceptance of offer
Consideration (value, i.e., ‘contractual glue’) to pass
between parties
An intention by the parties to create a legal relationship
between them
Genuine consent of the parties
Legal capacity of the parties to enter into a contract
Legality of the contract
18-Jan-23 AM 2023 3
TENDER DOCUMENTS
BASIS OF THE CONTRACT
1. The tender/contract drawings-showing the works to be
built and their dimensions, levels etc.
2. The specification describing the works to be built, the
quality of materials and workmanship to be used, and the
methods of testing etc. the specification is a technical
documents.
3. The bill of quantities (BOQs) setting out the expected
measure of each operation of construction as calculated
from the drawing probably classified according to the trade
or location within the proposed works.
18-Jan-23 AM 2023 4
TENDER DOCUMENTS
BASIS OF THE CONTRACT CONT’D
4. The general conditions of contract* (GCC), defining the
liabilities, responsibilities, and powers of the employer,
contract and engineers/consultants and covering such
matters as methods of payment, insurance, liabilities of
parties to the contract etc. It is a legal document.
5. Tender which is the signed financial offer of the
contractor to construct the works in accordance with
the above the items.
6. Letters of explanation agreed between the parties to the
contract which detail or expand on their intentions
regarding the above items.7. The Legal Agreement signed by
both parties legally confirming that the contract will be
carried out in accordance with all the above documents.
* cf : SCC – special conditions of contract
18-Jan-23 AM 2023 5
TENDER DOCUMENTS
DRAWINGS
Project drawings should be as complete as possible at tender
stage to reduce the chance of amendments leading to
expensive claims for additional payments.
Drawings must be read in conjunction with specifications
and great care should be taken to reduce conflict between the
two.
The drawings are the basis on which the BOQs are prepared
must therefore be reasonably accurate.
The details included on them should be sufficient to ensure
that the tenders have no doubt with the intended meanings.
18-Jan-23 AM 2023 6
TENDER DOCUMENTS
SPECIFICATIONS
Specifications purpose is to tell the tenderer
Precisely the extent of the work
The methods he may/may not use to construct the
works.
Quality and types of materials/workmanship that will
be acceptable
18-Jan-23 AM 2023 7
TENDER DOCUMENTS
SPECIFICATIONS CONT’D
Precisely the extent of the work
This requirement should be relatively easier to be
satisfied
The methods he may/may not use to construct the works.
This requirement is not easy as the engineer writing the
specs must be very careful not to bring on himself liability
which are actually the contractor’s
e.g. specifying some particular methods for temporal
works might place the liability on the engineer and not on
the contractor if things go wrong.
Quality and types of materials/workmanship that will be
acceptable
The objective here can be very onerous as it often requires
a wide range of specialist knowledge on a broad range of
materials and methods.
18-Jan-23 AM 2023 8
TENDER DOCUMENTS
SPECIFICATIONS CONT’D
Typical additional items to be included in project
specification (under special specifications) include:
General description of the project
Description of site and access
Nature of ground/subsurface conditions
Detail of contract suggested construction program
Site facilities available
Site facilities required
Features requiring special attention
Other special particulars of project and
Variations from standard specifications
NB: In case of conflict between drawings and
specifications – specifications take precedence.
Why? Always? Homework
18-Jan-23 AM 2023 9
TENDER DOCUMENTS
BILL OF QUANTITIES (BOQ)
This is expected to reflect all the measurable items of the
specifications.
It not only allows the client to pay the contractor for the
work carried out but also allow him to adjudicate the
tenders on a fair and equitable basis.
Schedule items should conquer with those in the
specifications and quantities given for each should as much
as possible be correct and not include for possible
contingencies
e.g. additional rock excavations.
18-Jan-23 AM 2023 10
TENDER DOCUMENTS
BILL OF QUANTITIES (BOQ) CONT’D
It is prudent for the Engineer to include the schedule of
rates (or rates only) items in the tender.
This consists a series of rates without quantities.
18-Jan-23 AM 2023 11
TENDER DOCUMENTS
GENERAL CONDITIONS OF CONTRACT (GCC)
It is required to show the division of responsibility and risks
between the two (2) parties namely: the client and the
contractor.
As Phillip Loots has stated;
“The basis of a successful contract is established by the
preparation of a concise unambiguous contract that
gives a clear picture of the divisions of responsibilities
between the parties. Risk areas should be identified
and allocated between the parties and incorporated
into the relevant documents.”
18-Jan-23 AM 2023 12
TENDER DOCUMENTS
GENERAL CONDITIONS OF CONTRACT (GCC) CONT’D
One of the provisions which must be added is that, in any
industry it is far better to have one set of general conditions
of contract than several.
The general conditions of contract have been revised over
the years to standardize the duties of contractors, clients
and engineers and to distribute fairly risks inherent in Civil
Engineering Contracts.
The GCC could perhaps be considered to be the legal side
of the contract what the specifications are to technical
side.
18-Jan-23 AM 2023 13
TENDER DOCUMENTS
GENERAL CONDITIONS OF CONTRACT (GCC) CONT’D
Because the legal or contractual matters requiring attention
tend to vary less, they can normally be handled by a
standard GCC, with special conditions (SCC) being written
into the contract to cover those items which need to be
varied or amended or supplemented.
SCC (special conditions of contract) should be avoided as
much as possible because if not written properly then cause
conflict with standard conditions.
The courts tend to penalize drafters of disputatious special
clauses.
18-Jan-23 AM 2023 14
TENDER DOCUMENTS
Prescriptive v Performance Specifications
The prescriptive specifications set forth in detail the
materials to be utilized and the manner in which the work is
to be performed and the contractor would be expected to
follow them without deviation.
On the other hand, performance specifications describe
the end result or a standard to be achieved and leave the
determination of how the result is to be achieved by the
contractor.
While it is thought that performance specifications
encourage innovation, it also carries a higher risk.
(ADB, 2014)
18-Jan-23 AM 2023 15
TENDER DOCUMENTS
Prescriptive v Performance Specifications cont’d
On the other hand, prescriptive specifications are presumed
to carry a lower risk of achieving project objectives but do
not engender innovation.
Mixing performance and prescriptive specifications for the
same project has been found to dilute responsibility and can
lead to serious legal disputes.
It is conceivable that performance specifications will
become more prevalent in the future; the current capacity
levels of most implementing agencies however require that
a shift to performance specifications is pursued with
caution.
(ADB, 2014)
18-Jan-23 AM 2023 16
CONTRACTUAL OBLIGATIONS
INTRODUCTION
A contract is a legally enforceable agreement, freely entered
into, which
imposes duties, rights and obligations upon the parties
entering it.
Various responsibilities but different interpretation
particularly in the areas of risk can lead to disputes.
18-Jan-23 AM 2023 17
CONTRACTUAL OBLIGATIONS
EMPLOYER ( CLIENT, PROMOTER, CUSTOMER)
Otherwise known as the client
Person (s) wanting to build the works.
His obligations are to make available the site and any
necessary accesses and make payments in accordance with
the contract as work proceeds.
However, interference by clients* in recent past has led to a
clause (s) restricting contractors liability if any of the
engineers powers are removed by such a client.
* how can an engineer exercise all fairness between
client and contractor?
18-Jan-23 AM 2023 18
CONTRACTUAL OBLIGATIONS
EMPLOYER ( CLIENT, PROMOTER, CUSTOMER) CONT’D
The contractual obligations also includes;
Site availability for pre-tender inspection
Not assign works without agreement
Approve bond or surety
Accept responsibility for expected risks
Insure works in certain circumstances
Indemnify (secure/insure against loss or damage) the
contractor against certain risks
etc
18-Jan-23 AM 2023 19
CONTRACTUAL OBLIGATIONS
THE CONTRACTOR
The other party to the contract.
His main obligation of the construct the works according to
design.
The main clauses in the general conditions of contract relate to
this basic aim;
e.g. such as using acceptable methods of working, quality
requirements, safety etc from the legal perspective.
In some cases the contractor must carry out some design.
He must carry out full superintendence of the work budget by
a competent and authorized agent who must be extremely
prudent in his actions as he is deemed to represent the
contractor on site.
18-Jan-23 AM 2023 20
CONTRACTUAL OBLIGATIONS
THE CONTRACTOR CONT’D
Also, provide all labour, materials and equipment necessary
Provide surety
Give notice of changed or adverse conditions
Follow instructions and perform satisfactorily
Provide programme of works
Set out the works
Provide security and work protection
Insurance to work, public and workmen
Indemnify employer in some instances
etc
18-Jan-23 AM 2023 21
CONTRACTUAL OBLIGATIONS
THE ENGINEER ( CONSULTANT)
The engineer is not party to the contract between the client
and the contractor but will have separate agreement with the
former to act as his agent.
His position is difficult, for he must also be an “honest broker”
between the two parties and exercise complete fairness.
This can conflict with perceived interest of the client who not
only pays his fees but apply pressure related to potential future
work he may be awarded.
Unlike the contractor’s agent, the engineers representative on
site (Resident Engineer) does not have the same powers or
responsibilities and his position can be nebulous (imprecise)
The GCC deals with this at length particularly the delegation
of powers to him.
18-Jan-23 AM 2023 22
CONTRACTUAL OBLIGATIONS
THE ENGINEER ( CONSULTANT) CONT’D
Observe the works and test all materials
Issue drawings and instructions timeously
Record all facts and circumstances of adverse conditions
Approve programme and monitor progress
Certification and variations approval
Valuation of claims and measure quantities of works
etc
18-Jan-23 AM 2023 23