Tender and Contract

Professional Practice I
Institute Of Architecture, H.N.G.U,Patan
 TENDER

 It is an invitation from the owner to the consultant/contractor to

prepare/execute some work at specified cost in specified
time.
 It is published in the form of tender notice in news papers,
notice boards, internet, etc. according to the cost of works.
 TYPES OF TENDER

PUBLIC TENDER
 Compulsory for public works.

 Suitable for public and private works.

SELECTED TENDER

tender—Only a selected no. of contractors are invited to
quote their rates

Suitable for private works

Suitable for specialized and skilled works.
 TYPES OF TENDER

NEGOTIATED TENDER
 Suitable for private works of small magnitude or for repair
works, and works of additions and alterations to an existing
building.
 Suitable for specialized and skilled works but cost will be very
high.
RATE CONTRACT TENDER
 usually adopted for supply of materials, machine, tools &
plant, etc. It specifies the supply at a fixed rate during the
period of contract. The quantities are not mentioned in type of
contract and the contractor is bound to accept any order which
would be placed before him
 INVITING TENDER

Procedure for inviting tender

 Preparation of tender documents

 Issue of notice inviting tender or tender call notice
 Submission and opening of tenders and their scrutiny
 Acceptance of tender and award of contract
 TENDER NOTICE

Information to be given in a tender notice

 Preparation of tender documents
 Name of the department inviting tender
 Name of work and location
 Designation of officer inviting tender
 Last date and time of receipt of tender
 Period of availability of tender document
 Cost of tender document
 Time of completion and type of contract
 Earnest Money Deposit to be paid
 Date, time and place of opening the tender
 Designation of the officer opening the tender
 TENDER DOCUMENT

 Layout plan, location of work

 Schedule of quantities of work

 Set of drawings including working drawings

 Availability of materials in the vicinity

 Detailed specifications or reference to standard specifications

for each item of work

 Complete architectural and structural drawings

 Rate of supply of power and the point of supply

 Location of water supply point

 TENDER DOCUMENT

 Time for completion and the progress to be made at intervals

of time
 Conditions regarding employment of technical personnel

 Weather conditions in the area

 Amount of EMD and the form in which it is to be paid

 Insistence on Income tax and GST clearance certificate

 Amount of Security deposit to be paid/ deducted from

running bills of contractors should be notified in the tender call
notice
 Power to reject tenders without assigning reasons
 TENDER DOCUMENT

 Penalty conditions for slow progress and delay in the

completion of work
 Designation of arbitration authority in case of disputes
 EARNEST MONEY DEPOSIT

 It is the amount of money to be deposited along with the

tender document to the department by the contractors quoting a
tender. This money is a guarantee against the refusal of any
contractor to take up the work after the acceptance of his
tender. In case of refusal, this amount is forfeited.
 EMD of contractors whose tenders are not accepted will be

refunded.
 1% - 2% of the estimated cost of work is the Earnest Money

Deposit.
 EARNEST MONEY DEPOSIT

 Security deposit is the amount the contractor has to deposit with

the owner before awarding a work, after his tender is accepted.
This amounts to generally 5% to 10% of estimated cost of the
project and is inclusive of the EMD already deposited by the
contractor along with the tender. This will be refunded to the after
the completion of the project. No interest is paid on SD.
 The contractor has to fulfil all the terms and conditions laid
down in the contract and maintain quality and speed
satisfactorily
 If he fails to do so, a part or whole of the SD is forfeited by
the department, If there is any fault in the construction and the
contractor refuses to demolish and reconstruct then the department
will carry out that work using the SD
 CONTRACT

What is a contract?
 When two or more persons have common intention communicated to
each other to create same obligation between them there is said to be
an agreement. An agreement which is enforceable by law is a
Contract.
 Types of building contracts
 Lump-sum contract
 Cost plus a fixed percentage contract
 Labour contract
 Joint venture contract
 Turn-key contract
 BOT system
 LUMP-SUM CONTRACT

 Scope of Work, construction drawings & detailed specifications

are given to renderer along with terms and conditions of
contract.
 Schedule of quantities may or may not form a part of tender
documents. The renderer quotes a fixed price for whole work
tendered.
 If this type of contract is adopted, the owner will be knowing
cost of work. However, this is subject to the conditions that there is
no variation in scope of work.
 This type of contract can be considered when scope of work is
frozen; when planning, designing and working drawings are
completed before inviting tenders.
COST PLUS A FIXED PERCENTAGE CONTRACT

 Under this system, the contractor furnishes labour, materials

and completes the work for the actual total cost plus an
agreed percentage of it as the profit of the contractor.

 The speed and quality of work is maintained in this system but

there is always tremendous wastage of materials as the
contractor’s aim is to increase the total cost of the work.

 This system is adopted only in the case of emergency works.

 LABOUR CONTRACT

 This is the most commonly adopted system for the construction

of private individual buildings in small cities. The contractor
arranges all necessary labour, tools & plant and equipments
required. The materials are supplied by the owner and he
appoints an Engineer to supervise the work to maintain the
quality and economy in construction.
 JOINT VENTURE CONTRACT

 In case of huge important projects the construction works can

be categorised into different parts and each part can be
given to a specialised contractor in that field. This method
improves the quality of work and the project can be
completed within a short period of time.
 Thus the project works can be divided among different
contractors and hence joint venture system of contract
developed.
 TURN-KEY CONTRACT

 In this system all the works related to a project including

designing, planning, execution etc. are to be done by the
contractor. Once the project is completed it is handed over to
the owner. The owner has to complete the transaction works
and occupy the structure by simply turning the key
 BOT SYSTEM

 Build operate and transfer is a new system in which the land is

acquired by the Govt. and the contractor is asked to build the
structure and then operate it until he collects the money he
had spent for the construction, as fees from the users. Once the
construction cost is recovered, the structure is handed over to
the owner. No payment is made to the contractor by the
owner/Govt.
 Security is provided to the builder by the Govt. regarding law
and order problems if any.
 Bridges and roads are usually constructed by adopting this
system of contract. Toll is collected from the users/vehicles
passing over it by the contractor to recover the construction
cost.
 Pre-Qualification of contractors

Registration of contractors
 The contractor must get himself registered in the departments
for which he is interested to take up works.
 Government contractors are entitled to do govt. jobs if

awarded.
 Contractors are classified according to the registration and

registration fees and depending on this they can undertake

works up to certain amount.
 To get a contractor to be registered under certain class, he
has to apply to thecompetent authority
 Pre-Qualification of contractors

Registration of contractors
 Current GST certificate

 Work certificates for all the works performed during the last

three years and those in progress

 Solvency certificate for an appropriate amount

 Attested copy of deed of partnership and power of attorney

on stamp paper if needed

 Undertaking for employment

 Application in duplicate with all documents

 Attested photos of all the partners if any