15ENG 4.

6: SPECIFICATION, QUANTITY
AND COSTING OF BUILDINGS
MODULE -1

FEBRUARY 1, 2019
BY
RAKESH R
Assistant Professor, BGSSAP
+91 - 9844660661
15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

Contents (Click on the content)

15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS .......................................... 3
MODULE 1 Introduction .................................................................................................................. 5
Definition .................................................................................................................................... 5
BOQ: ................................................................................................................................................ 5
Steps in BOQ ................................................................................................................................... 5
Measured works: ........................................................................................................................ 5
Preliminary: ................................................................................................................................. 5
Why is BOQ Required: .................................................................................................................... 5
Advantages of BOQ at pre-contract phase: .................................................................................... 6
Database - ............................................................................................................................... 6
Fee calculation - ...................................................................................................................... 6
Asset management - ............................................................................................................... 6
Taxation - ................................................................................................................................ 6
Disadvantages of BOQ at pre-contract phase: ............................................................................... 7
Cost and time - ........................................................................................................................ 7
Estimating practice - ............................................................................................................... 7
Procurement - ......................................................................................................................... 7
Advantages of BOQ at post contract phase:................................................................................... 7
Certainty of progress payments - ........................................................................................... 7
Variation management - ......................................................................................................... 7
Risk management - ................................................................................................................. 7
BOQ errors - ............................................................................................................................ 7
Disadvantages of BOQ at post contract phase: .............................................................................. 7
BOQ errors - ............................................................................................................................ 7
Unit rates - .............................................................................................................................. 7
Responsibilities - ..................................................................................................................... 8
Standard Method of Measurement -...................................................................................... 8
Advantages of Having BOQ’s for a Project ..................................................................................... 8
A comprehensive detail of the work:...................................................................................... 8
No guess work: ........................................................................................................................ 8

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

Comparison: ............................................................................................................................ 8
Time limit: ............................................................................................................................... 8
CONTRACTS ..................................................................................................................................... 9
LUMP-SUM CONTRACTS ............................................................................................................. 9
(1) Advantages of lump-sum contracts:.................................................................................. 9
Disadvantages of lump sum contracts: ................................................................................. 10
UNIT-PRICE OR ITEM-RATE CONTRACTS ................................................................................... 10
Advantages of unit-price contracts:...................................................................................... 11
Disadvantages of unit-price contracts: ................................................................................. 11
COST-PLUS OR PERCENTAGE CONTRACTS ................................................................................ 12
BASIC PRICE CONTRACTS .......................................................................................................... 13
TYPES OF CONTRACTS: .................................................................................................................. 13
Labour contracts: .................................................................................................................. 13
(2) Negotiated contracts: ...................................................................................................... 14
(3) Schedule of prices contracts:........................................................................................... 14
(4) Package deal contracts: ................................................................................................... 14
(5) Demolition contracts: ...................................................................................................... 15
(6) Implied contracts: ............................................................................................................ 15

RAKESH R (Assistant Professor) BGSSAP

15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

CONTACT PERIODS : : 3 (Lecture) per week

DURATION OF EXAM : 3 Hrs
THEORY MARKS: 100
PROGRESSIVE MARKS:50
OBJECTIVE: To develop the necessary skills for establishing and writing specifications based on
proposed materials for the preparation of Bill of Quantities leading to cost estimation of proposed
architectural works.
OUTLINE:
MODULE 1
1) Introduction to Estimation: Need for estimation, relationship between choice of
materials, their specifications, Bill of Quantities (BOQ), project costing, project
quality/cost/ time management.
2) Specifications: How to arrive at abstract and detailed specifications for various
materials leading to ‘items of work’ used in construction?. Including influence and
impact of local and national building codes on specifications.
MODULE 2
3) Bill of Quantities (BOQ): Why and how to build flexibility, resilience and redundancy
in BOQ.
4) Mandatory tests & Safety Measures in Specifications: Procedures, frequency and
submission of results as part of specifications and their inclusion in the BOQ for
different materials document. Integrating workers’ safety and material security into
specifications.
MODULE 3
5) Introduction to Costing: Why do rates vary? - study of government rates (CPWD/
Karnataka PWD Schedule of Rates) and market rates. Concept of inflation and its effect
on [Link]. escalation clause, extra items, variations
6) Detailed rate analysis of building: Basic knowledge of items as per current schedule
of rates (CSR) of local PWD. Percentages (based on thumb rule calculations) of various
bulk materials used in construction like cement, steel, rubble, metal, sand, brick, tiles
etc.
MODULE 4
7) Introduction to sequence of construction activity: Project time/ labor /materials
costing and impact of delay in project on costing.
8) Term project 1: Detailed specifications writing and estimation of Bill of Quantities
(BOQ) for an RCC framed house with an attached temporary shed.
9) Term project 2: Detailed specifications writing and estimation of Bill of Quantities
(BOQ) for an office interior work.
MODULE 5
10) Term project 3: Detailed specifications writing and estimation of Bill of Quantities
(BOQ) for Water supply and sanitary works including overhead tanks and Sump tanks.
11) Term project 4: Detailed specifications writing and estimation of Bill of Quantities

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

(BOQ) for a typical residential layout plan with roads, culverts, pavements, etc.
12) Billing requirements: Role of the architect in monitoring the specifications follow-up
for quality control, the measurement book (MB), RA bills, interim and final checking and
certification of works on site based on the BOQ and terms of contracts.
REFERENCES:
1. Dutta B.N ,Estimating and Costing in Civil Engineering- Theory and Practice, UBS
Publishers, 1993.
2. Rangwala, Estimating, Costing and Valuation, Charotar Publishing House.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

MODULE 1 Introduction
Definition
BOQ: A bill of quantities (BOQ) is a document used in tendering in the construction industry /
supplies in which materials, parts, and labor (and their costs) are itemized. It also (ideally) details
the terms and conditions of the construction or repair contract and itemizes all work to enable a
contractor to price the work for which he or she is bidding.

Steps in BOQ
Measured works:
• These are the record of actual works executed on site.

• Materials Procured r entered and Materials consumed are recorded.

• The Running Account/Running bill r paid according to measurement book.

• Final contract sun would b the sum of all running account payment plus preliminary etc.

Preliminary:
• Advance payment to contractor.

• Payment to workers.

• Housekeeping during work in progress.

• Site surveying and fencing.

• Cost toward project management services.

• All other indirect cost but vital for commencement.

Why is BOQ Required:

1. to provide sufficient information on the quantities of Works to be performed to enable
bids to be prepared efficiently and accurately; and when a contract has been entered
into
2. To provide a priced Bill of Quantities for use in the periodic valuation of works executed.
3. Save the cost and time of several contractors measuring the same design in order to
calculate their bids for competition.
4. Provide a consistent basis for competitive bids so that the contractor who is the most
efficient and least expensive in providing the items of work is likely to be commissioned
for the job.
5. Provide an open basis for the contract; the client provides an extensive and clear
statement of the work he/she requires and the contractor states the price at which
he/she is prepared to undertake the job.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

6. Provide a very strong basis for financial administration of the contract.

7. It provides basic idea of the project by giving the quantities to tenderers.
8. It defines the extent of the work. (But it should be identified in line with drawings &
specification as well).
9. It gives estimated or anticipated contract sum. (very important to client)
10. It provides a basis for valuation of variation. (Variation is to be discussed in detail).
11. To provide a coordinated list of items with identifying descriptions and quantities, that
comprise the works to enable contractors to prepare tenders efficiently and accurately;
and
12. When a contract has been entered into; to
13. - provide a basis for the valuation of work executed for the purpose of making interim
payments to the contractor; and
14. - provide a basis for the valuation of varied work
15. It saves considerable time and cost of several contractors measuring the same design in
order to calculate their bids for competition;
16. It provides a consistent basis for obtaining competitive tenders from contractors;
17. It provides an extensive and clear statement of the work to be executed;
18. It provides a very strong basis for budgetary control and accurate cost reporting of the
contract including:
19. - the preparation of cash flow forecasts,
20. - a basis for valuing variations, and
21. - a basis for the preparation of progress payments (ie. interim payments)
22. It allows, when BQ items are codified, reconciliation and any necessary transfers and
adjustments to be made to the cost plan;
23. When priced it provides data to support claims for grants;
24. It provides one of the best sources of real-time cost data, which can be used for
estimating the cost of future building projects

Advantages of BOQ at pre-contract phase:

Database - The pricing details within the BOQ provides a cost database for future estimating.
Fee calculation - The BOQ provides an absolute basis for the calculation of consultants' fees.
Asset management - The BOQ provided readily available data for asset management of the
completed building, life cycle costing studies, maintenance schedules, general insurance and
insurance replacement costs.
Taxation - BOQ provide a basis for quick and accurate preparation of depreciation schedules as
part of a complete asset management plan for the project.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

Disadvantages of BOQ at pre-contract phase:

Cost and time - The preparation of a BOQ tends to increase the cost and lengthen the
documentation period.
Estimating practice - Tenderer's may ignore the specification (e.g. workmanship requirements),
pricing only according to the BOQ. This may lead to under pricing and the consequent risk of
unsatisfactory performance as contractors try to avoid losing money.
Procurement - The use of a detailed design and associated BOQ discourages contractors from
submitting alternative design solutions, as alternatives will amend quantities. The BOQ is only
suitable (if at all) to the traditional procurement system

Advantages of BOQ at post contract phase:

Certainty of progress payments - The BOQ provides a post-contract administration tool and
becomes a basis for the evaluation of progress payments. The calculation of these progress claims
is straightforward and reliable. This certainty offers contractor, principal and financiers peace of
mind in the knowledge that all work is being carried out at prices fair and reasonable to all
involved.
Variation management - The BOQ provides a sound, common basis for the valuation of variations.
Also, the prices for variations are reduced by the use of BOQ unit rates. Without a BOQ, the
pricing of variations leads to more protracted negotiations.
Risk management - The prices in the BOQ can be used as a basis for comparing a contractor's
price with current trends in the marketplace. This provides a basis for management to determine
the likely manifestation of risk factors.
BOQ errors - Errors are not a major cause of variations. Choy (1991) found the average change
order to be 7.7 per cent of contract value with BOQ errors representing 4.5 per cent of total
variations.

Disadvantages of BOQ at post contract phase:

BOQ errors - Because of the amount of detail required in a BOQ, there is a significant chance of
finding errors, omissions and discrepancies between drawings and the BOQ, with consequent
disputation. This risk of disputation arising from misinterpretation and error outweighs the
advantages of BOQ.
Unit rates - The cost data obtained from contactor-priced BOQ is often used by QSs for cost
management, such as valuing interim valuations. This data can be suspect for reasons such as:
contractors increase rates on early trades above their real cost, and reduce the cost of later

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

trades, to improve cash flows; some contactors may load later trades to gain benefits from rise
and fall.
Responsibilities - BOQ involve a shift in, or "risk blurring" of, the contractor's responsibility that
results in claims and disputes.
Standard Method of Measurement - it is often said that the SMM is much too complex and many
disputes arise from its language and how it is interpreted by the contractor and QS.

Advantages of Having BOQ’s for a Project

A comprehensive detail of the work: As already said the BOQ contains descriptions of the various
components required for the work. Thereby the contractor willing to quote for the work will get
a comprehensive detail of the work involved and also the material required for taking up the
work. The BOQ would specify the quantity of the material required, the specific quality of the
material along with all other details relating to the material. This would give a complete picture
of the material needed for the work and this also helps the contractor to quote for the work.
No guess work: In the absence of BOQ, the contractor would have quoted for the work by guess-
work. But it does not allow any guess work because every component needed for the work is
described with abundant clarity. They contain various details like the preliminary description of
the work, the preamble which provides details of the work involved. Thereafter, the
comprehensive list of the materials needed is also provided. All these will enable the Building
contractors to quote for the work with crystal clear clarity.
Comparison: As you know, when a BOQ is announced, several contractors would quote for the
work. They will quote on the standard format provided by the owner of the building. The
contractor is required to quote for the work in the same standard format. As a result, it helps to
compare the rate quoted by different contractors. It also helps to make a cost analysis by adding
up overheads and other unforeseen expenses.
Time limit: The building owner calls for tenders or quotes from various contractors and he will
also stipulate the last date by which the quotes should be received by him. At the same time, the
building owner may also prescribe certain standards for evaluating the quotes.
For example, the building owner may say only contractors who have taken up particular nature
of works alone should quote. There are also instances where the building owner may restrict the
BOQ only to contractors who have taken up works costing more than a particular sum of money.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

CONTRACTS
Following four forms of contract are found in common use:
(l) Lump-sum contracts
(2) Unit-price or item rate contracts
(3) Cost-plus or percentage contracts
(4) Basic price contracts.
We will now discuss these contracts in detail.

LUMP-SUM CONTRACTS
In this form of contracts, the complete work as per plans and specifications is carried out by the
contractor for a definite amount of money. The owner Supplies the required information to the
contractor and on the strength of this data, the contractor arrives at a certain amount. It is
evident that this form of contracts will be useful only when it will be possible to work out the
exact quantities of the items to be executed and also. when the number of the items is limited
e.g. a sanitary block for school building or for public, a compound wall, a small room for
watchman, a septic tank, a soak well, a manhole, a typical tenement for a housing society
consisting of identical tenements, etc.
Sometimes, miscellaneous items which cannot be ordinarily carried out under any other form of
the contracts are given on lump-sum basis e.g. ornamental door, demolishing existing structure,
making an opening in an existing wall, designs in plaster work, ornamental grillwork, etc.
(1) Advantages of lump-sum contracts:
(i) Low cost: Each contractor works out the lump-sum at his own rates with a certain profit. Due
to competition among the contractors, the percentage of the contractor’s profit may go lower,
resulting in the low cost of the work to the owner.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

(ii) Definite amount: The definite amount to be spent on the work is know1 to the owner as soon
as the contract is given. Thus, the owner is in 21 position to arrange beforehand for the required
amount of money. Early completion of the work: The contractor is eager to complete thi work as
early as possible, mainly for two reasons:
(a) His materials and equipment’s engaged on the work will be relieved earlier and can be
effectively used on some of his other works. As the work is on a lump-sum basis, the speed in
construction will naturally increase the contractor’s profit.
(iii) Early completion of the work: The contractor is eager to complete the work as early as
possible, mainly for two reasons:
(a) His materials and equipment’s engaged on the work will be relieved earlier and can be
effectively used on some of his other works.
(b) As the work is on a lump-sum basis, the speed in construction will naturally increase the
contractor’s profit.
Disadvantages of lump sum contracts:
l) Conflicting interests: The interests of the owner and the contractor will always be conflicting
under this form of the contract. The owner will be interested in taking the maximum advantage
of the contractor for the amount that he is giving to him. The contractor, on the other hand, tries
to execute the minimum that is required under the contract and thereby intends to increase his
profit.
(ii Extra work: It is quite clear that the plans and the specifications of the work should be
completely ready in all respects before the work is allotted to the contractor. It is very difficult
and sometimes annoying to adjust the changes in the plans and the specifications at a later stage.
The extra work takes away the essence of a lumpasum contract.
(iii) High cost due to uncertainties: In case the plans are indefinite and the specifications are not
clear, the contractor filling the tender for the work will gamble on the uncertainties and in doing
so, he may increase the amount of his tender to meet the worst situation. This will result in the
increase in the cost of the work.

UNIT-PRICE OR ITEM-RATE CONTRACTS

In this form of the contracts, the contractor quotes his rate per unit of each item of the
construction. The approximate quantity of all the possible items of the construction are worked
out and put up in the tender form. Against each item, every contractor fills up his own rate and
arrives at the final total amount of the work. This procedure is adopted so that the different
tenders can be easily compared.
The rate of the contractor for unit of item includes materials, labour, overhead cost and profit.
This form of the contract is very much useful especially when the quality of the work, but not the
exact quantities of the items to be executed, is previously known. Most of the public works are

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

carried out under this form of the contract. These are also known as the measure and value
contracts or simply measured contracts
Advantages of unit-price contracts:
(I Elasticity: This form of the contract is elastic in nature and it is possible to make reasonable
variations in the quantities of the tender items during the progress of the work. The difference
in cost due to such variations can easily be worked out by the contractor’s rates for the
corresponding items.
(11) Economical: As the payment to the contractor is to be made on a unit basis, only the amount
for the actual work done by the contractor shall be paid by the owner and thus, it may prove to
be economical.
(II) Absence of uncertainties: The contractor is not worried regarding the uncertainties in the
plans and the specifications of the work as his rate is on a unit base and hence, he will not unduly
increase his rate for the items.
(1v) Starting of the work: The work can be started as soon as the contractor is fixed and it is not
necessary to wait until the final plans and ths specifications of the work are ready.
Disadvantages of unit-price contracts:
(1) Conflicting interests: Naturally, the owner will be interested in getting such items to be
executed by the contractor for which his prices ars lower while on the other hand, the contractor
will be willing to do more quantity of such items for which his rates are comparatively higher or
in which he is getting more profit. However, such situation seldom arises,
(ii) Classification of the materials: Sometimes, the classification of the materials results into the
dispute between the owner and the contractor e.g. if earth is met with in the excavation, the
contractor may classify it as loose rock and charge the owner accordingly. However, in all such
cases, the engineer’s decision is treated as final.
(iii) Final cost: Under this form of the contract, it is practically impossible to know exactly the final
cost of the work previously. It may be lower or higher than the estimated amount and can be
known only when the work is completed in all respects. If the final cost exceeds considerably
than the estimated cost of the work, the owner is put in a financial difficulty, which may even
lead to the suspension of the work.
(iv) Damage due to changes: If the work is started before the final plans and the specifications of
the work are ready, the demolishing of some work shall have to be done to accommodate the
subsequent changes in the plans. This demolishing work shall be carried out at the owner’s cost
and thus, the damage due to such demolishing may increase the cost of the work.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

COST-PLUS OR PERCENTAGE CONTRACTS

In this form of the contracts, the contractor agrees to complete the structure for a certain fee for
his services. This form of the contract becomes very much useful when the quality as well as the
quantity of the various items of construction are not known previously and also in times of
unsettled market conditions when no contractor is coming forward to carry out the work on unit-
price basis.
The various methods, as discussed below, are found out to adjust the fee of the contractor for
his services in relation to the total cost of the work.
Advantages of cost-plus contracts:
(i) No conflicting interests: The contractor is guaranteed for a certain fixed profit even in an
unstable market and hence, normally, he will act 1n the best interests of the owner. On the other
hand, the owner will also be free to spend on the works as much as he likes.
(ii) Extra work: The disputes arising due to extra work will be totally eliminated since the rates of
such extra work are not to be decided
(iii) Early completion of the work. The framework of this form of the contract is such that the
decisions can be taken earlier and hence, it reduces the time of completion.
(iv) Starting of the work: The work under this form of the contract can be started even before the
final plans and the specifications of the work are ready and hence, this type of contract becomes
useful for exploratory or urgent work, where it is not possible to spare time for the detailed
design and estimate of the project.
Disadvantages of cost-plus contracts:
(0 Final cost: As in case of unit-price contracts, here also, the final cost of the construction cannot
be predicted. It may, therefore, put the owner into financial difficulty.
(ii) Inferior work: The work of inferior quality is demolished and replaced at the owner’s cost and
also subsequent changes in the plans are incorporated at the owner’s cost. This results in
unnecessary increase in the final cost of the work.
(iii) Illegal for public bodies: In cases where the owner is a public body, this form of the contract
becomes illegal under ordinary circumstances.
(iv) Checking of the contractor’s accounts: The contractor maintains an account of the materials
purchased by him, labour employed, miscellaneous expenditure, etc. It is troublesome and
sometimes difficult to check all such amounts. Thus, the owner is likely to pay more for the
contractor’s mistakes which may either be intentional or by oversight.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

BASIC PRICE CONTRACTS

When the market IS unstable and the prices of essential materials are fluctuating to a great
extent, it is quite likely that no contractor will come forward to carry out the work or if the
contract is already in existence, the owner and the contractor will come into conflict quite often.
Hence, a slight modification of unit-price or item-rate contract is made. The contractor mentions
in his tender the basic prices of some of the essential engineering materials such as cement, steel,
bricks, etc. It is thus understood that the rates of various items mentioned by the contractor are
based on these basic prices. Hence, if there is rise or fall in the prices of these materials, the same
is adjusted without any serious conflict between the owner and the contractor.
For instance, if in a particular contract, with basic price of cement, there is say a rise of Rs. 4/per
bag of cement and the total number of cement bags purchased and utilized by the contractor is
250, the contractor will claim from the owner an extra amount of (4 X 250) = Rs. 1000/a. Similarly,
on the other hand, if there is a fall in rate of bricks to the extent of say Rs. 20/per 1000 nos. of
bricks and the number of bricks consumed works out to 50000, the contractor will give to the
owner a rebate of (20 x 50) = Rs. 1000/-.

TYPES OF CONTRACTS:
Types of contracts are found in common use:
Labour contracts
Negotiated contracts
Schedule of prices contracts
Package deal contracts
Demolition contracts
Implied contracts.
Labour contracts: Sometimes, the owner IS in a position to purchase the materials himself. In
such cases, he invites tenders only for the labor requiring contractors put up their rates for the
labour required per unit execution of each item.
It is absolutely necessary to state that these rates include:
(i) use of the contractor’s plant and equipment; in now discuss these types of contracts in detail.
(ii) all necessary falsework;
(iii) contractor’s supervision;
(iv) contractor’s profit.

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

The overall responsibility of the work is of the contractor and he has to arrange In such a way
that proper rate of progress is maintained for the work. The owner gas to see that the necessary
materials are brought on site as and when required. The owner has also to watch that there is no
wastage of the materials since the Contractor is to be paid only for the labour work. Usually, the
work done by the labour contracts is of superior quality since materials of better quality are used
and [here is no mischief in the proportions of mortar, etc. The rate for extra work is adjusted in
labour contracts as usual.
As an alternative to the labour contract, the owner can employ the labour directly for different
trades of the project without entering into any type of contract The owner engages his own
labour and he also supplies all the necessary plant, equipment and materials. Thus, there is
absence of contractor in this arrangement and as the work is carried out directly under the
supervision of the owner, he is responsible for all the risk involved in the construction. This
arrangement 0f employing direct labour is usually adopted by large organizations such as heavy
industrial units, big factories, large institutions, etc. who have their own departments and staff
to provide the necessary technical services.
(2) Negotiated contracts: When a contract is awarded simply by negotiation, it is known as a
negotiated contract. It may be of any form of the contract as discussed. previously. In case of
negotiated contracts, there is no open competition and the Owner carries out negotiations with
selected contractors after studying their previous Experience, financial status, general
reputation, etc. Thus, there are less chances 0f dispute in a negotiated contract because the
competition is restricted to a small number of equal ranking contractors and any one from this
group can be relied upon to respect the engineer’s interpretation of the specification. It is quite
clear that negotiated contracts cannot be awarded for the public works due to absence Of open
competition. However, in case of emergency period or under Special circumstances, when time
of completion is a major consideration, the negated contracts for the public works can be given
by special laws.
(3) Schedule of prices contracts: In this type of contracts, the tender contains only descriptions of
all possible items of construction. The tenderers simply fill their prices for unit of items and thus
a schedule of prices of each competing contract is obtained. In another form of this type of
contract, the engineer quotes his rates in the tender and the competing contractors are simply
asked t0 qu0te a higher or a lower percentage to the rates mentioned by the engineer.
This form of contract is useful for the simplest type of work such as maintenance works. But it
creates difficulties for construction works. The contraction not given enough information to
quote correctly for each item and on the other hand, it is not possible by the engineer to compare
correctly the tenders received by him as final estimated cost is not known to him.
(4) Package deal contracts: In this type of contract, the owner gives his requirements in broad
outline to the contractors together with the site data. The contractors then proceed to prepare
their own design of the project and finally submit the same to the owner with the estimated cost

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15ENG 4.6: SPECIFICATION, QUANTITY AND COSTING OF BUILDINGS

of the project as per their design on a lump-sum basis. Thus, the owner receives a number of
competitive designs or alternatives for his project and after studying the details, financial aspect
and various other factors, the owner decides the design most suitable to him. The construction
work of the project is then given to the contractor whose design is accepted by the owner. This
type of contract is suitable only under certain circumstances, especially when the project
demands special considerations for its design and successful completion e.g. oil-refineries,
nuclear power stations, important bridges, sewage treatment plants, chemical factory,
engineering workshop, etc. This type of contract is also referred to as all-in contract and it is
usually not suitable for majority of ordinary common civil engineering works.
(5) Demolition contracts: This is the simplest type of contract in the sense that the owner invites
tenders for the demolition of an existing structure so that the land on which such structure is
standing can be developed in the best lucrative manner. As such, there is no construction activity
and the successful tenderer has to take away all the materials of the old building and to hand
over the site in the form of an open plot of land. The contractor in turn pays a specified amount
to the owner.
Following points should be noted:
(i) The contract is given to the contractor quoting the highest amount and not the lowest one as
in case of ordinary building contracts.
(ii) The owner should take the entire amount from the contractor before handing over the
building to him for demolition.
(iii) The Contract must clearly state that the contractor is responsible for making necessary
arrangements for cutting off the existing serv1ce connections of water supply, drainage and
electricity.
(iv) The contractor should be asked to take out insurance policies for laborer’s, third party risks,
etc. and to keep the owner free from all such claims.
(6) Implied contracts: An implied contract is said to be created when there are no expressed terms
of contract. But the circumstances and the actions of the parties concerned are such that a
reasonably prudent man would believe that the parties anticipated mutual obligations. It is thus
clear that no particular procedure is required to establish an implied contract. It should only be
proved that the parties acted with full knowledge of mutual obligations.

RAKESH R (Assistant Professor) BGSSAP