CONTRACTS AND SPECIFICATION

CONTRACT
- A contract is any agreement between two or more parties where one party agrees to provide certain
deliveries or services, and the other party agrees to pay for those deliveries or services.

CONTRACT MANAGEMENT
It is the process that helps the two parties involved in a contract to meet the desired goals by meeting their
respective requirements. It is the process of having a good working relationship between clients and the supplier.

Basic Elements of Contract (Legal Aspects)

O Agreement (meeting of the mind) resulting from an offer and acceptance
O Consideration
O Competent Parties or Mutual Obligation
O A Lawful Purpose

Objectives of Contract Management

The primary objective of contract management is completion of work entrusted to a contractor with least
complication

Types of Contract
1. Lump Sum Contract
This is the traditional method in which a construction project is implemented.
2. Item Rate of Unit Price Contract
The contractor undertakes the execution of work at the unit rates agreed at the time of tender.
3. Cost Plus Fee Contract
The contractor given the job on turn-key basis. In this case, quantities and rates are not given to the
contractor but he is reimbursed on the basis of actual expenditure.
4. Turnkey Contract
The contractor takes full responsibility for design construction and commissioning of the facility of define
scope for a fixed lump sum price.
5. Build Own Operate and Transfer Contract (BOOT)
In this contract, the private sector is encouraged to execute public works, own them operate for a specific
period and transfer the same to public authority.

Contract Management Process

1. Pre Contract Award Management
Involves primarily preparing a quality contract by considering individual tasks required to be undertaken.
This are the task that must consider while preparing contract.
- Drafting the contract specification
- Planning the contract strategy
- Setting the evaluation criteria
- Making research of the marketplace
- Communicating with the potential contractors
- Using pre-qualification documents to select costumers requesting tenders and evaluating them
- Making tender negotiation
- Recommending tender for award
- Awarding contract
2. Post Contract Award Management
Involves efficient two way communication with both parties. This are the tasks involve in post contract:
- Helps in ensuring that the services or goods supplied by the contractor are in accordance with the
term and conditions and fulfill the requirements of the contract
- Helps in providing clear and documented evidence, where necessary, to involve any non-compliance
procedure.
 - Helps in measuring the total performance of the contractor against the requirements of the contract
- Helps in identifying the potential difficulties and alternative courses of action that can be taken to
remove those difficulties
- Helps in taking corrective actions to prevent the arising of similar problems in the future
- Ensures proper communication between the service provider and the contractor
- Ensures that cost are monitored and kept in line with contract rates and approve budgets

Breach of Contract
A contract is said to be broken if a party to it renounces his liability under it expressly or impliedly. Once it
becomes established that the contract has been broken, it stands discharged by breach.

Breach of contract can be two types:

O Actual Breach
Actual Breach of contract may take place in any of the following two ways:
a) On Due Date of Performance - if any party to contract refuses or fails to perform his part of the
contract at the time fixed for performance
b) During the Course of Performance if any party has to performed a part of the contract and then
refuses or fails to perform the remaining part of the contract
O Anticipatory Breach
An anticipatory breach of contract is a breach of contract before the time fixed for the performance has
arrived. It may take in two ways:
a) Expressly by Words Spoken or Written a party to the contract communicates to the other party,
before the due date of performance, his intention not to perform it.
b) Impliedly by the Conduct of one of the Parties a party by his own voluntary act disables himself
from performing the contract.

Contract of Indemnity
A contract, by which one party promises to save the other from loss caused to him by the conduct of the promisor
himself or by the conduct of any other person.

Contract of Guarantee
Is a contract to perform a promise or discharge the liability of a third person in case of his default.

O The contract drawings

Are the means through which the physical, quantitative and visual descriptions of the project are
conveyed to the contractor.
Classification of drawing
a) Site drawing
b) Architectural drawing
c) Structural drawing
d) HVAC (Heating, venting and air-conditioning and other services drawings)
e) Electrical drawing
f) Special details
O The specifications / Technical provisions
- Written instruction to carry out a work
Specifications commonly build with the following aspects:
a) The quality of materials
b) The quality of workmanship
c) The frequency of testing
d) The approve manufacture
e) The relevant Indian standards describing the material
f) The inspection and installation method
 O The bills of quantities (BoQ) if applicable
It shows the net quantity to be executed in each item of work. Item is classified into earthwork,
antitermite treatment, water proofing, brick work, concreting, whitewashing and painting, flooring and
finishing, doors and windows, structural steel, aluminum works, stone works, etc.
O The special conditions of contract (SCC)
Certain amendments/additions/deletions are made in general conditions of contract in order to make it
suitable for a particular projects. This amendments are contained in a separate document called Special
Condition of Contract or SCC. It may commonly address the following issues depending on the
requirement of the project.
a) Materials provided by the owner
b) Site visits
c) Mobilization advance
d) Start date of construction
e) Requirement of various reports related to progress
O The general conditions of contract (GCC)
- The general conditions of contract are essential part of the contract.
- The term general implies that the document is a standard one used in all the contracts entered by a
party (the owner).

Parties to a Contract of Guarantee

O Principal Debtor
The person in respect of whose default the guarantee is given.
O Creditor
The person to whom the guarantee is given.
O Surety
The person who gives the guarantee.

Specification
- Describe the nature and the class of work, materials to be used in the work, workmanship etc. and it
is very important for the execution of the work.
- According to AIA Document A201-2007, the General Conditions of the Contract for Construction
Specification are that portion of the contract documents consisting of the written requirements for
materials, equipment, systems, standards, and workmanship for the work, and performance of
related services.

Two types of Specification

1. General Specification
- In general specification, nature and class of works and names of materials that should be used are
described. Only a brief description of each and every item is given.
2. Detailed Specification
- They specify the qualities, quantities and proportions of materials and the method of preparation and
execution for a particular item of works in a project.

Two types of Detailed Specification

a. Standard Specification Standard specification are those which remain same for various types
of projects.
b. Special Specification Specification for these types of projects are not mentioned in detailed
specification book. Consultant has to write specifications for this type of work