SPEAKER: SPEAKER: A. K. GUPTA EXECUTIVE ENGINEER (VIGILANCE)MANDI HOUSE, NEW DELHI

CONTRACT MANAGEMENT

CPWD CONTRACTS Clause 2 (compensation for delay) Fails to maintain progress Fails to complete work as per schedule Liable to pay agreed compensations Amount Compensation for delay:@ 1.5% per month of delay to be

computer on per day basis Not more than 10% of tendered value

compensation for delay

Amount of compensation may be adjusted or set off against any some payable

With holding amount if fails to achieve mile stone. Withheld amount to be adjusted against the compensation levied at the final grant of extension

If make up the progress subsequently, withheld amount to be released

INCENTIVE FOR EARLY COMPLETION Clause 2A Complete the work ahead of schedule Bonus @ 1% of tendered value per

month computed on daily basis payable to contractor

Not more than 5 of tendered value Amount of bonus payable along with

final bill on completion of work.

DETERMINATION OF CONTRACT (before completion date) Clause -3 Causes – delay

- inferior workmanship- claims for damages- violation of any other promise of contract

Determination of contract – after giving notice:i) Omit to comply with the notice given to contractor to

rectify, reinstruct or replace any defective work.ii) Suspended the progress of work without any

reasonable cause and unable to secure completion of work and continues even after notice.

iii) Fails to complete the work within stipulated dateContd.

DETERMINATION OF CONTRACT (before completion date) contd.iv) Persistently neglects to carry out his obligations

under the contract/commits defaultv) Contractor offers or give or agree to give any

person any gift or inducement to favour himvi) Commission has been paid or agreed to be paid

by him unless they are previously disclosedvii) Secured contract by wrong tendering or by any

other non-bonafide methodsviii) Becomes insolvent /company woundupix) Asignes, transfers or sublets or attempts to do

so.

DETERMINATION OF CONTRACT (before completion date) Consequences To determine the contracts SD & PG liable to be forfeited Measure the work and get the balance

work executed through other contractor Liability of contractor SD & PG liable to be forfeited No claim for compensation Only certified work by the E-in-C is

payable.

CLOSURE OF CONTRACT NOT STARTED Clause 3A Work not started for reasons not with in the

control of contractor within1/8 of time of completion or 1 month

whichever is more Either partly may close the contract PG of

the contractor to be returned Works up to Rs. 45 lacs – 15 days45 lacs and upt to Rs. 2.5 crore – 21 daysMore than 2.5 crore – 30 days

CLOSURE OF CONTRACT NOT STARTED Consequences: PG not returned, simple interest @

0.25% per month payable to contractor Compensation for damages @ 0.25% of

tendered amount & max upto Rs. 10 lacs

COMPENSATION Clause 4 If powers under clause (3) not exercised E-in-C if he so desires after giving notice May use as on hire all tools, plants, materials,

stores belonging to the contractor on work & pay to the contractor at contract rates/market rates

Remove such tool plants materials etc. at the contractor's expenses or sell them by auction or private sale on account of the contractors

certification of E-in-C as to expresses of proceeds shall be final

PROGRESS MONITORING Clause – 5 Time/extended time essence of contractIf failure to start govt. may be forfeit PG and

EM Clause – 5.1 Contractor to submit time and progress

chart and get approved. More than 5 crores use PM Software 5 crores to 20 crores – MS projects More than 20 crores use Primevera software

PROGRESS MONITORING Clause 5.1 Programme chart:a) Sequence of activitiesb) PERT/CPM/BAR Chartc) Procurement of materials If progress is lacking, E-in-C may ask revised PC

contractor to submit within 7 days For delays recovery @ 2500/perday for contracts upto

Rs. 20 crores Recovery @ 5000/perday for contracts above Rs. 20

crores Submit proper report monthly failure impose recovery

of 2500/5000

EXTENSION OF TIME Clause 5.2 Work delays by i) Force majure/act of Godii) Abnormally bad weatheriii) Fireiv) Commotionv) Delay attributable to governmentvi) Beyond the control of contractor Contractor to give notice to Govt. Request for rescheduling and extension of time Govt. (authority) to give fair and reasonable extension of

time Authority to take a balance view and delays attributable to

both parties should be mentioned in EOT

FORECLOSURE (Clause -13) (due to abandonment or reduction in scope of work) On reduction of scope of work E-in-C

shall give notice to contractor Contractor to act accordingly Contractor not entitled for compensation

for contractor’s profit He will be paid for work executed

FORECLOSURE (Clause -13) (due to abandonment or reduction in scope of work) He will be paid further:a) On prepatary works 9nuts, roads)b) Govt. will take over materials and cost shall be paidc) Govt. materials will be taken back giving allowance

for wastage, paid for transportationd) For T&P from site to permanent storese) Reasonable compensation for repatriation of staff Contractor to submit books of accounts and relevant

documents (a+b+c+d+e) not more than 2% of the work remain

incomplete Compensation for damages will be paid @ .5% of the

work remaining incomplete.

Carrying out part work at risk and cost of contractor (clause – 14) Contractor makes defaulter doesn't execute any

part of work Continues to do so after notice Violates term and condition of contract Fails to complete/the work/part of the time with

stipulated period Gives notice to contractor to take the part

work/part incomplete work and of hands of contractor

E-in-C have power to Take possession of site, materials, T&P Carryout part work/incomplete work at risk & cost

of contractor

Carrying out part work at risk and cost of contractor (clause – 14) E-in-C will determine Recoverable amount from contractor Contractor liability on account of loss and damage

suffered by government not more than 10% of tendered value

If the expenses by government is less than the amount payable to contract (@ agreement rates) difference not payable.

Excess expenditure to be recovered from contractor If contractor fails to pay within 30days, e-in-C shall

sell any or all the contractor’s material and T&P etc. Balance as per T/C of contract No compensation to contractor

SUSPENSION OF WORK (Clause-15) E-in-C gives in writing to suspend work for reasonsa) Default of contractsb) Reasons other than default of contractorc)For safety of work Contractor shall protect the work during this period For b) and c) above Contractor entitled for extension of time for such

period +25% If exceeds 30 days contractor entitled for wages of

staff/labour sitting idle + 2% indirect expenses Contractor to submit claim with in 15 days

SUSPENSION OF WORK (Clause-15) If work is suspended for 90 days for reasons

b) and c) the contracts to give notice to government within 10 days after expiry of 15 days

Contractor if treats it as abandonment by Govt, shall have no claim for compensation on account of loss of profit.

Contractor is entitled for:a) Salaries and wages of employees/labours at

site remaining idleb) +2% indirect charges.

Compensation for delay in supply of Govt. materials (Clause 15 A) No compensation if delay is beyond the

control of Govt. Extension of time to be granted

DEFECT LIABILITY PERIOD (Clause – 17) Defect liability period 6 month, less than

work Rs. 10 lacs Defect liability period 12 month, more than

work Rs. 10 lacs Liable for damages during defect liability

period All defects to be made good during the

period If not firm the SD of the contractor For road work 50% of SD to be refunded after

six months

SETTLEMENT OF DISPUTES (Clause – 25) Arbitration clause: All questions and disputes during the progress of work,

after cancellation, terminiation, completion/abandonment

Any dispute, refer it to SE within 15 days, SE to reply within 30 days

If SE fails or contractor is dissatisfied appeal to CE within 30 days, CE will hear the contractor. Give his decision within 30 days.

If dissatisfied, appeal before the DRC (Dispute Redressal committee). DRC will give decision within 90 days.

Dissatisfied with the decision of DRC, either party may give notice to CE(C) within 30 days for appointments of arbitrator failing which decision shall be final/binding.

SETTLEMENT OF DISPUTES (Clause – 25) CE(C) shall refer the matter to sole arbitrator Contractor to give list of disputes with amounts

claimed If the contractor does not request for

appointment of arbitrator after 120 days of receiving intimation of final bills, the claims becomes time barred.

Arbitration and conciliation Act- 1996 applicable Where claim exceeds Rs. 1 lakh, arbitrator to

give reasons.

Thanks Thanks E mail: akgupta07@nic.in