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ASSIGNMENT

Contracts Management 2012

NICMAR/CODE OFFICE

1. Course No. 2. Course Title 3. Assignment No. 4. Date of Dispatch At CODE Office

PGPM 14 Contracts Management 04 16th Nov 2012 -

5. Last date of Receipt of Assignment

6. Name of Student 7. Registration Nos.

Ashutosh Kumar 212-08-31-10966-2141

ASSIGNMENT

Contract administration and monitoring is the most important area of construction management. Contract administration process should start right from the day work is assigned to the company. Discuss any project contract currently in progress with your company and how administration and monitoring is being done. Draw the organization chart for this activity and explain all the function carried out. Do you think the system is achieving results? Discuss.

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Contracts Management 2012


NAME OF PROJECT: Main Interior Fit-Out Contract for Asian Paints Colour Signature Store, Connaught Place, New Delhi. INTRODUCTION
Contract Management is the process that enables both the parties to a contract to meet their obligation in order to deliver the objectives required from the contract. It also involves building a good working relationship between customer and provider. It continues throughout the life of a contract and involves managing proactively to anticipate future needs as well as reacting to situations that arise. The central aim of contract management is to obtain the services as agreed in the contract and achieve value for money. This means optimising the efficiency, effectiveness and economy of the service or relationship described by the contract, balancing costs against risks and actively managing the customer-provider relationship. Contract management may also involve aiming for continuous improvement in performance over the life of the contract.

Type of Contract:
Under an EPC contract, the contractor designs the installation, procures the necessary materials and builds the project, either directly or by subcontracting part of the work. In some cases, the contractor carries the project risk for schedule as well as budget in return for a fixed price called lump sum or LSTK depending on the agreed scope of work. When the scope is restricted to engineering and procurement, this is referred to as an EP or E and P or E+P Contract. This is often done in situations where the construction risk is too great for the contractor or when the owner does the construction.

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The EPC contractor (EPCC) agrees to deliver the keys of a commissioned plant (Perhaps should

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recognise that some EPC contracts take the work to Mechanical Completion but EXCLUDE Commissioning while Lump-Sum Trunkey (LSTK) contracts always INCLUDE Commissioning) to the owner for an agreed amount, just as a builder hands the keys of a flat to the purchaser. EPC is gaining importance worldwide. It requires good understanding by the EPCC to return a profit. An owner decides for an EPC contract for reasons that include:

Reduced stress for owner Single point of contact for owner simplifies communications. Ready availability of post-commissioning services Ensures quality and reduces practical issues faced in other ways Owner protected against changing prices for materials, labour, etc. Cost is known at the start of the project

Besides the plant sitting, in an EPC contract the owner defines:


Scope and the specifications of the plant Quality Project duration Cost

The cost (the price to be paid to the EPCC) is negotiated and finalised and paid in mutually agreed instalments.

Owner and Contractor Liabilities


Once an EPC contract is signed, the EPC contractor becomes liable for completing the project according to the tender conditions. The EPC contractor, in turn, may hire sub-contractors or sub-vendors to complete different portions. Payment commensurate with the work completed (in addition to an advance) is normally preferred by a contractor.

Projects are more likely to succeed when the owner:

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Defines guarantees well Defines scope and quality very carefully Defines milestones meticulously Defines LD/penalty clauses Makes payment terms very specific

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The contractor also has ways to improve project success:

Adopts similar terms and conditions as owner regarding quality, guarantee etc., for subcontracts/vendors Do not keep terms open-ended Coordinate vigilantly to reduce chances of errors at site.

Global Arena
An EPC contract is a complex agreement. In a global context, EPC management is more complex. The EPCC must have data and expertise in all the required fields. Some important areas are:

Local market conditions for materials and labour availability and capabilities Local code, statutory etc., requirements Availability of local supervisory personnel Availability of local engineering services Local and global subcontractor experience and performance

Cost Certainty
One main reason an owner may prefer an EPC arrangement is "certainty of cost". An EPC contract binds the Contractor to deliver the project at a firm, predetermined price regardless of any increase in costs that the Contractor may incure after the contract is signed. However, changes to specifications initiated by the owner (better finishes for example) may be incorporated through a "change order". Here, the owner and the Contractor negotiate the price to make the changes and these changes/prices are recorded in the change order document.
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Owner responsibility

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To ensure quality, the owner must select an experienced EPC contractor. A third-party or in-house consultant can verify the design of major structures and inspect the main equipment installations. Changes in scope of work can affect project schedule, cost and risk. Such changes are the responsibility of the owner .

SCOPE OF WORK
1.1 1.1.1 Contract Scope The New Delhi Signature Store premise has been secured at a prime location on the Inner Circle of Connaught Place, and comprises 3,500 Sqft. over two-levels. The design concept represents a truly innovative environment, providing an interactive experience for customers, including state-of-the-art lighting, AV and digital technologies. 1.1.2 The Main Interior Fit-out Contract (MIFC) shall comprise all civil and interior fit-out, custom fixtures and furnitures, MEPF services and the attendance and/or installation of the Clients specialist supplied items. The MIFC shall take an overall coordination role for the entire works, including other separate contracts which may be let directly with the Client, which may include fixtures, fittings & equipments (FF&E) installation, signage, digital, AV, security and specialist installation contracts. 1.1.3 The envisaged packages for the entire works are as follows: Ref Contract/ Supply Contract Packages 1 Main Interior Fitout Contract All Civil, Shell fit-out, and fixed furniture, (MIFC) incl. MEPF services; Item

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Overall Coordination Role Specialist Installations 2.1 2.2 'Heartbeat' Facade 'Heartbeat' Chandellier 2.3 2.4 Staircase & Balustrade Tri-Graphic Wall Systems Separate Contracts 3 4 Digital/AV Contract Lighting Fixture Supply Colour Faade Cladding Cloud Lighting Feature

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Specialist Internal Circular Stair

All Specialist digital and AV systems Supply only all specialist lighting (to be installed by MIFC)

Signage & Graphics Contract Client-Supplied Items

All specialist signages, graphics and VM's

6 7

Specialist APL Finishes IT (Data/Voice) Equipments

Specialist Finish Panels by APL Decorator PC; POS; Server & Peripherals; PABX by APL nominated vendor

8 9 10

Security Installation Loose Furniture Misc Client-Procured FFE

CCTV and access control by APL nominated vendor Non-custom loose furniture items Operational/ Staff Equipments

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1.2
1.2.1

General Scope of Works

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The Contractor shall be responsible for all matters relating to the fit out of the above areas including but not limited to all civil works, interior fit-out works, building services works, builders work in connection with services, temporary support, protection to all existing facilities and new works (including those of other contractors where specified), cleaning and rubbish removal, and handover of the new facilities. This includes, but is not limited to, production of all required shop drawings, programme schedules, record documents and operation and maintenance manuals, as well as the compilation of all product warrantees and certificates and other documentation required to complete the Works.

1.2.2

The Contractor shall provide all necessary materials, labour, plant, tools, equipment, access equipment, transportation, site supervision, coordination of domestic and other subcontractors, insurances, samples, mock ups and shop drawings, testing and commissioning, and any other item required in full compliance with the tender documents to complete the Works.

1.2.3

The Contractor shall fully comply with the all local authority, statutory and other relevant legislation in connection with the Works. The proposed works shall obtain NDMC approval/sanction (currently in process), and general liaison with NDMC shall be managed by NEXUS in conjunction with the PMC. Copy of the NDMC approval shall be provided to the Contractor, copy of which shall be maintained at site by the Contractor. The Contractor is expected to facilitate the day-to-day process with any NDMC inspection and local Delhi Police requirements.

1.2.4

The Contractor shall fully comply with statutory Heath, Safety and Environmental (HSE) regulations, and further comply with any specific APL HSE policy (to be agreed).

1.2.5

Upon taking possession, the Contractor is required to secure the site by erection of a full height hoarding along the frontage of the site (or by retention of the extisting security shutter until such time this will be removed to install the faade cladding), and provide necessary protection to all adjacent public areas and adjacent tenancies.

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1.2.6

The Contractor shall provide all described MEPF Services works under direct or subcontract arrangements shall be disclosed in the Tender return.

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contract with suitably qualified services sub-contractor(s). The details of any sub-

1.2.7

The Client intends to separately engage specialist contractors to provide the specialist installations listed in 2.1.3 above. The assembly and installation of such installations may be provided by a third-party, or the Contractor may be requested to provide the same for an additional fee. This shall be decided later, and the Contractor should EXCLUDE ANY COSTS FOR ASSEMBLY AND INSTALLATION OF SPECIALIST INSTALLATIONS in this Tender, other than the provision of support (access, scaffolds; power; etc) and where described in the Bill of Quantities (BOQ), provision of structural support framing, include the provisional sum allowances for the same where described.

1.2.8

The Client shall supply all specialized equipment within the store unless otherwise specified. The Contractor is therefore to allow for receiving, protecting, insuring, and cleaning and rubbish removal of all such equipment. The assembly and installation of such equipment may be provided by a third-party, or the Contractor may be requested to provide the same for an additional fee. This shall be decided later, and the Contractor should EXCLUDE ANY COSTS FOR ASSEMBLY AND INSTALLATION OF CLIENT-SUPPLIED FIXTURES & EQUIPMENTS in this Tender.

1.2.9

It is intended to (later) tender a separate contract for all Signage and Graphics works (for which the Contractor may be offered to bid). The Contractor shall allow for all necessary access and support of this Separate Contractor, and for the general coordination and scheduling of these works in this Tender.

1.2.10

It is intended to (later) tender a separate contract for all Security works (for which the Contractor may be offered to bid). The Contractor shall allow for all necessary access and support of this Separate Contractor, and for the general coordination and scheduling of these works in this Tender.

1.2.11

The Contractor shall provide reasonable access and support for the third-party installations listed in 2.1.3, plus any other Client-Supplied Items.

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1.3
1.3.1

Project Program

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The tentative commencement date for the Works at site is 15th November 2012, pending NDMC approval.

1.3.2

We schedule to award contract by 5th November 2012, and the preconstruction period will allow for general site investigation and preparation, and the advance production of required MEPF shop drawings and other sample submissions.

1.3.3

The target completion date for the substantial completion of the Shell Fit-out and MEP Services Works is 31st December 2012, being approximately within 60-days of the commencement of works at site. However, various third-party installations, in particular the fixtures/furnitures, digital installation and other Client supplied items, is likely to continue beyond this date until end of Feb 2013, being approximately a further 60-days, and the Contractor shall continue to provide site supervision and coordination of these remaining works until final handover to Client. Target Final Handover to the Client is 01st March 2013.

1.3.4

Time is of the essence, and the ability to demonstrate the earliest completion date shall be a critical consideration in the selection of the Contractor. The Contractor is therefore required to submit a detailed programme with their Tender to describe their intended resourcing and scheduling to achieve this target completion date. Once agreed, it is the Contractors responsibility to programme his work in coordination with the Project Manager to ensure works are completed in all respect by stipulated date.

2.0 2.1 2.1.1

CONDITIONS OF TENDER Tender Documents The Tender Documents issued include: a) b) Invitation to Tender; Conditions of Tender;

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c) d) e) f) g) h) i)

Form of Tender; General Conditions of Contract (GCC); Particular Conditions of Contract (PCC);

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Architectural Design Drawings and Specifications; MEP Services Design Drawings and Specifications; Bill of Quantities (BOQ); Existing Premises Conditions Survey Drawings;

2.2 2.2.1

General Note to Tenderers The Contractor is to study all the Tender Documents, and familiarize themselves with the existing site conditions, to provide a full understanding of the scope of works.

2.2.2 2.2.3

All assumptions and exceptions must be stated clearly within the Tender. Should the Tenderer be in doubt about the precise meaning of any item or figure, he must inform the Project Manager, in writing, in order that the correct meaning may be decided before the date for submission of Tenders.

2.2.4

No unauthorised alteration or erasure to the text of the Tender Documents will be permitted. Any Tender containing such alteration or erasure may not be considered.

2.2.5

No liability will be admitted, nor claim allowed, in respect of errors in the Contractor's Tender due to mistakes in the Tender Documents.

2.2.6

The Tenderer shall be deemed to have made allowance in his prices generally to cover items of Preliminaries, expense in connection with Provisional Sums and other items if these have not been priced against the respective items.

2.2.7

In the event of a Tenderer discovering a genuine error in his Tender after it has been submitted, attention in writing may be drawn to the error and an amendment

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submitted which, provided that the amendment shall have been deposited on or before the time fixed for receipt of Tenders, may be accepted. 2.2.8 The Tender Sum will be regarded as a lump sum and will not be amended for errors

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found in the examination of Tenders. The following errors should they occur in the tendered priced Schedules will be rectified and altered in red ink: a) The rate amended to agree with the quantity and the extension in the cash column or the extension to agree with the quantity and the rate; b) c) Errors in casting of cash columns; Errors in carrying forward totals to collections or summaries;

The total error will be calculated as a plus or minus percentage of the corrected Tendered Sum minus the corrected totals of Preliminary items and Provisional Sums (if any) and will be applied to the tendered rates for the purposes of pricing variations. If the percentage error is less than 0.50% no adjustment will be made. 2.2.9 All items of measured work shall be priced in detail and tenders containing lump sums to cover trades or groups of work must be broken down to show the price of each item before they will be accepted. 2.2.10 Should examination of a Tender reveal errors of such magnitude as in the opinion of the Project Manager would involve the Tenderer in serious loss then the nature and amount of such errors will be communicated to the Tenderer and he will be asked to confirm in writing that he is prepared to abide by his Tender. 2.2.11 In the event of part of or any section of a Tender not being returned or being returned un-priced or incomplete and not in accordance with the above then such Tender may not be considered. 2.2.12 The Client shall not be responsible for, nor shall pay for, any loss or expense incurred by the Tenderer in the preparation or submission of his Tender.

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2.2.13 2.2.14 2.2.15

Tenders shall be in Indian Rupees only.

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Payments shall be made in the local currency which is Indian Rupees. The Tenderer shall be deemed to be in possession of a valid business registration certificate and, if necessary, be registered with the relevant Authority authorising him to carry out the works described in the Tender Documents.

2.2.16

Tenderers are required to visit the Site and to make themselves thoroughly acquainted with the location, general site conditions, accessibility, restrictions for loading and unloading materials, etc. and other conditions which may affect their Tender. The Tenderer will be deemed to have satisfied themselves as to the conditions under which the works will be undertaken and have included all costs in their tender. Arrangement for this is to be made through the Project Manager.

2.2.17 3.0 3.1 3.1.1

The Client is not bound to accept the lowest or any tender he may receive. GENERAL CONDITIONS OF CONTRACT FIDIC Construction Contract 1st Edition (1999 Red Book) The Contract General Conditions shall be the Conditions of Contract for Construction for Buildings and Engineering Works Designed by the Employer, First Edition 1999, published by the Fdration Internationale des Ingnieurs-Conseils (FIDIC). Reference copy is appended to this document.

3.1.2

These General Conditions will be altered and amended by the Contract Particular Conditions as provided herein.

3.1.3

For purposes of definition, the following references within the contract documents shall be deemed to be one and the same: The Employer, may be elsewhere referred as the Client, being Asian Paints Limited (APL)

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The Engineer may be elsewhere referred as the Project Manager being Design and Projects Consultant Pvt. Ltd. (DPC)

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4.0

PARTICULAR CONDITIONS OF CONTRACT The General Conditions of Contract will be altered as set out below 1 GENERAL PROVISIONS

Sub-Clause 1.1.2.9 DAB: DAB means the Engineer acting under Sub-Clause 20.4. Sub-Clause 1.1.6.7 Site: The Site is generally known as Asian Paints Colours Signature Store, Unit A3, Inner Circle, Connaught Place, New Delhi Sub-Clause 1.2 Interpretation: In these Conditions, provisions including the expression Cost plus reasonable profit require this profit to be 15% of this Cost. Sub-clause 1.3 Priorities of Documents: Within 14 days of issue of the Letter of Acceptance, the Contractor will request the Engineer in writing for clarification of any ambiguity, discrepancy or inconsistency identified by the Contractor in relation to the Contract documents. The Engineer will issue an instruction to the Contractor as to the interpretation to be followed in reference to the ambiguity, discrepancy or inconsistency. This instruction will not constitute a variation nor entitle a claim for a variation or extension of time to the Time for Completion.

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Failure by the Contractor to notify the Engineer within 14 days of the Letter of Acceptance of any ambiguity, discrepancy or inconsistency in the documents will preclude the Contractor from making a claim for a variation or extension of time in relation to the ambiguity, discrepancy or inconsistency. NOTE: Sub-clause 1.7 Assignment: DPC consider no problem with this clause as per FIDIC general condition. This clause refers that neither party shall assign its responsibilities under the contract, except with sole agreement of the other this is reasonable. APL to provide any additional clause required for review

Sub-Clause 1.9 Delayed Drawings or Instructions: Within 14 days of receipt of the Letter of Engagement, the Contractor shall submit a schedule of drawings and other information he considers necessary to undertake the work, with a date nominated for each piece of information by which the information is required to be provided to enable the Contractor to undertake the Works. Further, if the Contractor has failed to provide adequate notice as defined in this Sub-Clause for the need for the information, the Contractor shall not be entitled to such extension of time, Cost or profit.

Sub-Clause 1.10 Compliance with Laws: Contractor to comply with all laws inter alia labour, civil, municipal, tax, insurance, construction etc. as may be necessary to carry out the purported works under this contract The Contractor shall ensure compliance/implementation of all the labour laws, statutes, rules and regulations of the appropriate State/Central Government and

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other Authorities, which are applicable including but not limited to the provisions of

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the Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Gratuity Act, 1972, Industrial Disputes Act, 1947, Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employee State Insurance Act, 1948, Workmens Compensation Act, 1923, the Contract Labour (Regulation and Abolition) Act, 1970, etc., and the municipal regulations. In the event of failure to comply with any of the statutory obligations by the Contractor as aforesaid and if the Company is held responsible for the same, the Contractor undertakes to make good the loss to the Owner. The Contractor shall bear all responsibility and indemnify the Owner against any accident, death and/or injury caused to any employees of the Contractor or any of its vendors, contractors, subcontractors or to any third party and/or its employees caused or suffered in the course of the execution of the scope of work and performance of obligations hereunder. The Contractor shall indemnify and keep the Owner harmless and indemnified against any claims, loss or damage in this regard including claim, loss or damage on account of any non-compliance of statutory or any non-statutory provisions and also for non-compliance of statutory requirements in this regard. Sub-Clause 1.11 Confidentiality: The Contractor shall treat the details and the terms and conditions of the Contract as private and confidential, except to the extent necessary to carry out obligations under it or to comply with applicable Laws. The Contractor shall not copy, publish, permit to be published, or disclose any particulars of the Works or the Project in any press, trade or technical paper or elsewhere without the previous agreement of the Employer. The Contractor shall refer to the Employer any inquiries concerning the Project from any media. SIGNING OF NON-DISCLOSURE AGREEMENT

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In consideration of the disclosure of Proprietary Information by the Tenderers, the Receiving Party hereby agrees: (i) to hold the Proprietary Information in strict

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confidence and to take all reasonable precautions to protect such Proprietary Information (including, without limitation, all precautions the Receiving Party employs with respect to its own confidential materials), (ii) not to disclose any such Proprietary Information or any information derived there from to any third person, (iii) not to make any use whatsoever at any time of such Proprietary Information except to evaluate internally its relationship with the Disclosing Party, and (iv) not to copy or reverse engineer any such Proprietary Information. The Receiving Party shall procure that its employees, agents and sub-contractors to whom Proprietary Information is disclosed or who have access to Proprietary Information sign a nondisclosure or similar agreement in content substantially similar to this Agreement Editions of Documents: Acts, Statutes, Local Regulations, Codes, Standards and Manufacturers Recommendation referred to herein shall mean the latest edition at the date of the execution of the Contract and amendments unless a specific edition is referred to. 2 THE EMPLOYER

Sub-Clause 2.1 Right of Access to the Site: Access to the Site Access is restricted to the gates nominated on the Site plan as construction access. No access will be allowed via other routes unless specifically approved in writing by the Engineer. Unauthorised access to the Site compound is a serious breach of security and the Employer will be entitled to terminate the Contract as provided for in Sub-Clause 15.2.

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Sub-Clause 2.2 Permits, Licences or Approvals:

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The contractor to get all the necessary statutory approval from the competent authorities. The Contractor is to determine the requirements under the Indian Government regulations and comply with them, arranging all certificates and clearances prior to, and subsequent to, arrival in the country and paying associated costs. The requirements and lead times for the Contractor to obtain travel permits/ visas, will be the full responsibility of the Contractor and will be deemed to have been included in the Accepted Contract Amount. The Contractor is to comply with the Indian Governments regulations with regard to issue and currency of work permits. 3 THE ENGINEER

Sub-Clause 3.1 Instructions of the Engineer: Any objection by the Contractor to an instruction issued by the Engineer or his delegated assistant must be in writing and given to the Engineer (with supporting particulars of the objection) within 7 (time to be reviewed) days of the date of issue of the Engineers instruction. If the Contractor does not object to the instruction within the time period stated, the Contractor shall not object to the Engineers instruction. Sub-Clause 3.2 Management Meetings The Engineer or the Contractors Representative may require the other to attend a management meeting(s) in order to review progress and the arrangement for future work. The Engineer shall record the business of management meetings and supply copies of the record to those attending the meeting and to the Employer. In the record, responsibilities for any actions to be taken shall be in accordance with the

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Contract. In case of contractors representatives do not attend the meetings; Engineer keeps the right to impose the penalty. 4 THE CONTRACTOR.

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Sub- Clause 4.1 Drawing Copies The contractor shall provide the operation and maintenance manuals also along with the as built drawings in the hard copied as well as soft copies. The disbursement of the final dues is subjected to receiving of the comprehensive project close out report as directed by the Project Manager

Sub-Clause 4.2 Performance Security: Without limitation to the provisions of the preceding paragraph, whenever the Engineer determines an addition to the Contract Price as a result of a change in cost and/or legislation or as a result of a Variation amounting to more than 25 percent of the portion of the Contract Price payable in a specific currency, the Contractor at the Engineers written request, shall promptly increase the value of the performance security in that currency by an equal percentage. The performance security of a joint venture shall be in the name of the joint venture. The Employer shall return the bank guarantee within 21 days of the issue of the Taking over Certificate for the Works. Sub-Clause 4.3 Contractors Representative: If approval of the Contractors Representative is withdrawn by the Engineer, the Contractor shall, as soon as is practicable, having regard to the requirement of replacing him as hereinafter mentioned, after receiving notice of such withdrawal, remove the Contractors Representative from the Works and shall not thereafter

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employ him again on the Works in any capacity and shall replace him by another representative approved by the Engineer. Sub-Clause 4.4 Setting Out:

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The Contractor shall be responsible for the correct positioning of all parts of the Works, and shall rectify any error in the positions, levels, dimensions or alignment of the Works. The Employer will provide the following datum points: One set of northing and easting coordinates adjacent to One level datum adjacent to One set of northing and easting coordinates adjacent to the existing One level datum adjacent to the existing One set of northing and easting coordinates One level datum

The Contractor shall employ a licensed surveyor to verify the accuracy of the points provided by the Employer and to set out the Works and shall, within days from the receipt of the Letter of Engagement, notify the Engineer of any discrepancy between the datum points provided by the Engineer, The Contractor shall not be entitled to an extension of time or variation if the Contractor has failed to notify the Engineer within the time stipulated in this SubClause of any discrepancy with the datum points provided by the Employer. The Contractor shall not rely on the accuracy of lines, levels and datum provided by other contractors and shall at all times refer to the datum and level provided by the Engineer. Any Work constructed to incorrect lines or levels shall either be demolished and replaced in the correct position by the Contractor without additional time or cost or shall remain and any costs incurred in making good other Contractors work or additional work required to remedy the error in setting out will be deducted from the Contractor.
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Sub-Clause 4.5 Safety Procedures: The Contractor has a paramount obligation to ensure the safety of all workers on Site as well as staff, residents, workers and visitors to the Site. The Contractor shall provide a fully detailed Site Safety Plan to the Engineer within 7 days of the Commencement Date. Such Plan shall be amended and revised as directed by the Engineer. The performance and compliance with the Plan shall be reported under Sub-Clause 4.21 [Progress Reports]. The Engineer will be entitled to order additional safety requirements as he deems necessary to ensure the safety of all workers on Site as well as residents, workers and visitors to the Site. The Engineer will deduct the costs from the Contractors interim payment or retention amount for any Works ordered by the Engineer necessary to maintain the Contractors safety obligations. Sub-Clause 4.6 Protection of the Environment: At least 5 days prior to commencement of Works on Site, the Contractor shall submit a Site-specific Environmental Management Plan to the Engineer for approval. Works on Site shall not commence until the Environmental Management Plan is approved by the Engineer. Sub-Clause 4.7 Electricity, Water and Gas: The supply of electricity shall be facilitated by the Client as per requirement of the project. However, as a measure of continuity and unexpected break-down, The contractor shall park and reserve his own Diesel Generator (DG) set for electrical power at site as per his requirement for construction. The use of same per hour basis shall be monetarily taken care by the client

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Contractor shall take responsibility to safe guard the client supplied electrical Generator, Transformer or fitment and to make sure of use of all statutory approved electrical appliance, equipments and carriers. The Contractor is to provide reticulation and additional connections and supplies as necessary to carry out the Works. The Contractor shall make all electrical connections in accordance with Indian Standard Wiring Rules and in consultation with the Engineer. The Contractor shall remove and make good all such temporary supplies and extensions at the completion of the Works. The Contractor shall make good all distribution boards, outlets fixed points and the like. The Contractor shall meet all the cost of all additional connections and temporary service modifications The Contractor shall meet all the cost of the temporary telephone/fax/internet connections. The cost of all telephone calls/faxes/internet charges to the Contractors Site office is to be borne by the Contractor. Sub-Clause 4.8 Progress Reports: The Contractor shall also maintain a comprehensive daily Site diary that shall be available for access by the Engineer upon request. This diary shall include (but not be limited to) recording of the following information: Weather including precipitation Labour (no. of persons on Site) Materials Equipment Visitors to Site Site meetings Safety incidents (including all injuries) on Site
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Sub-Clause 4.9 Contractors Operations on Site: The Contractor will do all things necessary to avoid dust and fumes leaving the Site, including providing protective screens and sheets, extraction equipment, applying water to dampen the Site and work area. The Employer will be entitled to clean up any debris left by the Contractor or undertake work to minimise dust and fumes and shall deduct the cost of labour and materials necessary to perform the work on behalf of the Contractor. The Contractor shall comply maintain the Site in a clean and orderly manner and shall on a twice daily basis clean all rubbish and excess materials to the nominated rubbish points at ground level.

Sub-Clause 4.10 Import Duty and VAT Exemption: All exemptions, reductions or the like obtained by the Contractor or by the Employer in relation to import duty or VAT shall be deducted from the Contract Price. Contractors found abusing the diplomatic import duty procedures will be referred to the relevant authorities for their further action. The Employer will be entitled to reimport the same or new goods and all costs for the original and re-imported goods will be borne by the Contractor. Contractor shall share all internal purchase order and delivery dates related to the project with the Project Manager Sub-Clause 4.11 Parent Company Guarantee: Where the Contractor is a wholly owned subsidiary of another corporation, the Employer may require the parent corporation to guarantee the obligations of the Contractor under this Contract in a form reasonably required by the Employer. The

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form of guarantee set out in Annex A to these General Conditions of Contract is acceptable to the Employer.

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Sub-Clause 4.12 Employers Audit: The Contractor must give to the Employer, the Engineer or to any representatives and employees authorised in writing by the Employer, access to premises occupied by the Contractor and permit those persons to inspect and take copies of any material relevant to the carrying out of the Works. The rights referred to in this Sub-Clause 4.27 are subject to: (a) (b) (c) The provision of reasonable prior notice by the Employer; The Contractors reasonable security procedures; and if appropriate, execution of a deed of confidentiality relating to non-disclosure

of the Contractors confidential information. Without in any way affecting the statutory powers of the Auditor-General under the Auditor-General Act 1997 and subject to the provisions of that Act, the AuditorGeneral is a person authorised for the purposes of this Sub-Clause. Sub-Clause 4.13 Privacy: This Sub-Clause applies only where the Contractor: (a) Deals with personal information when, and for the purpose of, carrying out the Works; In this Sub-Clause, the terms agency, approved privacy code (APC), Information Privacy Principles (IPPs), and National Privacy Principles (NPPs) and personal information have the meaning given to them in section 6 of the Privacy Act. The Contractor acknowledges that it is a contracted service provider within the meaning of section 6 of the Privacy Act, and agrees in respect of the carrying out of the Works under this Contract:

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(a) (b) (c) (d)

To use or disclose personal information obtained during the course of carrying Not to do any act or engage in any practice that would breach an IPP which if To carry out and discharge the obligations contained in the IPPs as if it were an To notify individuals whose personal information the Contractor holds, that

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out the Works only for the purposes of this Contract; done or engaged in by an agency, would be a breach of that IPP; agency under the Privacy Act; complaints about acts or practices of the Contractor may be investigated by the Privacy Commissioner who has power to award compensation against the Contractor in appropriate circumstances; (d) To notify the Employer immediately if the Contractor becomes aware of a breach or possible breach of any of the obligations contained in, or referred to in, this Sub-Clause, whether by the Contractor or any subcontractor; and (e) To ensure that any employee of the Contractor who is required to deal with personal information for purposes of this Contract is made aware of the obligations of the Contractor set-out in this Sub-Clause. The Contractor agrees to ensure that any subcontract entered into for the purpose of fulfilling its obligations under this Contract contains provisions to ensure that the Sub-contractor has the same awareness and obligations as the Contractor has under this Sub-Clause, including the requirement in relation to subcontracts. Sub-Clause 4.14 PROTECTIONS OF THE WORKS: The Contractor is responsible for protection of the Works and shall make good and any damage that occurs to the Works up until the Employer has taken over the Works under Clause 10. The Engineer may elect to order or arrange for additional protection if the Engineer considers the Works are not being properly protected, and all costs incurred by the Engineer will be paid for by the Contractor. 6 STAFF AND LABOUR

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Sub-Clause 6.1 Working Hours The Contractor should note that certain cultural practices may impact on the attendance of any local workers employed on the Project or operation of local business. The Contractor shall be deemed to have made due allowance in the Accepted Contract Amount for local practices and no extension of time will be granted for delays relating to local labour practices. If special permission is required to undertake certain parts of the Works (e.g. demolition) it should be sought from the Engineer on Site a minimum of two weeks in advance. The public holidays observed by the Engineer are to be treated as Sundays in terms of permissible working hours. included for this condition. Working hours shall be subject to the requirements of the Embassy and its operations. Some weekend or night work may be prevented from time to time due to Embassy operational constraints. Due to the local guidelines for areas within Connaught Place the following working hours will apply: Generally: 24 hrs/ round the clock/ in three shifts 7 days a week Specific conditions include: Quiet work is permitted at any time within the permissible working hours. Weekdays. Noisy work includes work involving percussive tools such as scrabbles and hammer-drills. It may also include the relatively quieter but still noiseemitting tool operations such as drilling, saw-cutting, grinding, sanding, hammering, etc, noting that some of these works will take place close to tenanted areas. Liaison with tenants through the Engineer may be required when such The Accepted Contract Sum is deemed to have

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works are contemplated. The definition of noisy work to be agreed between the Contractor and the Engineer. The above working hours constraints shall not be a reason in support of a claim for any extra payment or for an extension of time. Sub-Clause 6.2 Health and Safety:

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The Contractor shall satisfy all current Indian legislation with respect to the health and welfare of all workers. The Contractor shall demonstrate safe and effective procedures for all operations to be carried out during the course of the Works and must comply in all respects to the requirements of the Minimum Construction Site Safety Standards. Sub-Clause 6.3 Contractors Superintendence: The Contractor shall use the same team of key personnel throughout the execution of the Works. The key personnel named in the Tender schedule shall not be replaced unless: the Engineer approves the proposed substitute; an instruction is given by the Engineer pursuant to Sub-Clause 6.9 of the Conditions of Contract; or; that person suffers from ill health, dies or other serious circumstances arise which prevent the person continuing to work on the project, retires or whose employment is terminated (other than to accept other employment with the Contractor or any other associate of the Contractor), or that persons section of work under the Contract has been completed Any vacancy of key personnel shall be promptly filled by the Contractor with a person approved by the Engineer. The Contractors supervision personnel shall not do tradesmans or labourers work to the detriment of overseeing the correct execution of the Works.
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Sub-Clause 6.4 Foreign Staff and Labour: The Contractor may import any specialised personnel who are necessary for the execution of the Works, in accordance with the Laws of the Country. The Contractor must ensure that these personnel are provided with the required residence visas and work permits. The Contractor shall be responsible for the return to the place where they were recruited or to the domicile of imported Contractors Personnel. In the event of death in the Country of any of these personnel or members of their families, the Contractor shall similarly be responsible for making appropriate arrangements for their return or burial. Sub-Clause 6.5 - Alcoholic Liquor or Drugs: The carriage onto Site and the use on Site of alcohol or drugs is strictly prohibited. No persons are to enter the Site intoxicated by alcohol or drugs and any persons caught on Site affected by drugs or alcohol will be permanently barred from the Site. Sub-Clause 6.6 - Arms and Ammunition: The Contractor shall not bring onsite any arms, explosives or ammunition of any kind, or allow Contractors Personnel to do so without the written permission from the Engineer. 7 PLANT, MATERIALS AND WORKMANSHIP.

Sub-Clause 7.1 Manner of Execution:

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The Contractor shall prepare and offer to the Engineer for approval all necessary quality of work proposed to be undertaken by the Contractor. The contractor shall make all arrangements for working at heights safe in nature and certified by engineer.

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samples, shop drawings, prototypes, mock-ups, to demonstrate the scope and

The contractor shall made adequate arrangement for toilets at site and should be responsible for housekeeping of the complete area on daily basis. The Contractor is to submit a list of samples, shop drawings, prototypes, and mockups to the Engineer for the Engineers approval within 14 days of receipt of the Letter of Acceptance. The Engineer may from time to time request further samples, shop drawings, prototypes, and mock-ups as are deemed necessary by the Engineer. The Contractor is to submit all samples, shop drawings within 28 days after receipt of the Letter of Acceptance or 14 days after receipt of an instruction from the Engineer to provide additional samples, shop drawings, prototypes, and mock-ups.

COMMENCEMENT, DELAYS AND SUSPENSION.

Sub-Clause 8.1 Program: The Contractor shall update and resubmit the programme for approval, including any additional explanation or amplification as and when required by the Engineer. The Contractor shall comply with all such requests within 7 calendar days from the date requested by The Engineer. In the event the Contractor fails to comply with the Engineers request to update, explain or amplify the programme, then The Engineer will be entitled to update the Contractors programme and deduct the costs for time incurred preparing, reviewing and agreeing the Contractors programme. The costs incurred by The Engineer will be charged at the following rates and deducted from The Contractors interim payment or Retention Monies:

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Hourly rate for Project Director/Construction Director: Hourly rate for General Manager: The above rates may/ shall be reviewed The Contractors programme must identify every activity having a duration of two days or more. The Contractor shall update and resubmit the programme for approval, including any additional explanation or amplification as and when required by the Engineer. The Contractor shall comply with all such requests within 7 calendar days from the date requested by The Engineer. Sub-Clause 8.2 - Cash Flow Estimate to be submitted: The Contractor shall, within 14 days of the Commencement Date, provide to the Engineer for his information a detailed cash flow, in monthly periods, of all payments to which the Contractor will be entitled under the Contract, and the Contractor shall subsequently supply revised cash flow estimates at monthly periods, if required to do so by the Engineer. These cash flow estimates shall not form the basis of any schedule of payments. 9 MEASUREMENT AND EVALUATION. INR. 10,000 per hour INR. 8,000 per hour

Hourly rate for Senior Project Manager/Project Manager: INR. 1,000 per hour

Sub-Clause 9.1 Method of Measurement: All measurement of work for the purpose of the Contract shall be in accordance with the Indian Standard of Measurement of Building Works current at the closing date of Tenders. Along with the monthly claims of bills (Hard copy as well as soft copy), the contractor shall provide all the above mentioned supporting documents in the prescribed format by the Engineer.

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The contractor shall depute the officials and provide all necessary assistance to the Engineer to check the materials/ measurements at site/bills/claims etc. 10 VARIATIONS AND ADJUSTMENTS.

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Sub-Clause 10.1 Variation Procedure Upon instructing or approving a Variation, the Engineer shall proceed in accordance with Sub-Clause 3.5 to agree or determine adjustments to the Contract Price and to any schedule of payments under Sub-Clause 14.4. These adjustments shall include reasonable profit, and shall take account of the Contractors submissions under SubClause 13.2 if applicable. Sub-Clause 10.2 Payment in Applicable Currencies: All payments of the Contract Price will be in the single currency of the Contract, unless specifically stated otherwise in the Contract Agreement. Sub-Clause 10.3 Provisional Sums: Provisional Sums for items to be supplied, fixed or supplied and fixed include an allowance for the Contractors profit and for co-ordination of, supervision of and general attendance upon Sub-contractors. Sub-Clause 10.4 Adjustments for Changes in Legislation: Notwithstanding the provisions of this Sub-Clause, no extensions of time or increase in costs will be granted to the Contractor for changes in Laws that result in an increase in the cost of petrol, diesel or electricity, or that result in an increase in the cost of supply of Materials due to a change in Law that increases the cost of petrol, diesel or electricity.

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Sub-Clause 10.5 Adjustments of the Changes in Cost:

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There shall be no adjustment in the Contract Price for rise and fall in the cost of labour, Materials or any other matters affecting the cost of execution of the Contract, or any adjustments whatsoever on account of exchange rates or for variation of any costs other than specifically allowed for under the Contract. 11 CONTRACT PRICE AND PAYMENT.

Sub-Clause 11.1 Contract Price: The Contract Price shall be Item Rate Re-measurable and be subject to adjustments in accordance with the Contract; Sub-Clause 11.2 Application for Interim Payment Certificate: The Engineer may require the Contractor to submit the applications for Interim Payment Certificates electronically via the internet. The Contractor shall ensure he has access to the necessary computer hardware, high speed modem and internet browser to enable submission of applications for Interim Payment Certificates. Supporting documents maybe submitted either electronically or in hard copy as determined by the Engineer. Sub-Clause 11.3 Issue of Interim Payment Certificate No amount will be certified or paid until the Engineer has received and approved: (i) (ii) (iii) the Performance Security in accordance with Sub-Clause 4.2 [Performance Security]; and where requested, the parent company guarantee from the ultimate parent company in accordance with Sub-Clause 4.26 [Parent Company Guarantee]; the advance payment guarantee in accordance with Sub-Clause 14.2; and

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(iv)

a satisfactory statement from the Contractor that all of the Contractors entitlements have been paid or provided for.

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Subcontractors and employees have been paid up to date, and that all

Sub-Clause 11.4 Payment of Retention Money: When the Taking-Over Certificate has been issued for the Works, Bank Guarantees provided by the Contractor as Performance Security under Sub-Clause 4.2 [Performance Security] shall be certified by the Engineer for return to the Contractor. Amount of 5% deducted from Contractors payments as retention money shall be retained until completion of Defects Liability Period of 12 months from date of Taking Over Certificate provided by the Engineer, however, the contractor can provide the Bank Guarantee of equal amount valid until completion of Defects Liability Period in lieu of the 5% cash retention. Sub-Clause 11.5 Statement of Completion: The contractor shall submit the necessary documents like operation and maintenance manuals, as built drawings etc with the sufficient no. Of copies with a soft copy also to the engineer. And within 10days completion certificate will be issued considering Employers satisfaction. Sub-Clause 11.6 Discharge: A pro-forma Letter of Discharge is attached at Part C4, Item 4 to the Particular Conditions of Contract. 12 CLAIM, DISPUTES AND ARBITRATION.

Sub-Clause 12.1 Obtaining Dispute Adjudication Boards Decision

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The Engineer shall act as the DAB in accordance with this Sub-Clause 20.4, acting fairly, impartially and at the cost of the Employer. In the event that the Employer

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intends to replace the Engineer, the Employers notice under Sub-Clause 3.4 shall include detailed proposals for the appointment of a replacement DAB.

Sub-Clause 12.2 Rights not affected Nothing in this Clause 20 shall be construed as preventing a Party from: (a) (b) Seeking urgent interlocutory or injunctive relief; or Terminating this Contract under Sub-Clauses 15.2, 15.5 or 16.2.

5.0 5.1 5.1.1

APPENDIX TO TENDER Schedule of Contract Particulars The following schedule describes the contractual and financial particulars required under Contract, and which shall be included within the Appendix to the FIDIC form:

Commencement Date

The tentative award date is 25th October 2010, and tentative commencement date for the Works at site is 01 st November 2010. The work shall commence within 7-days of issuance of a Letter of Acceptance (LOA).

Completion Date

The target completion date for the substantial completion of the Shell Fitout and MEP Services Works is 31st December 2010, being approximately within 60-days of the commencement of works at site. However, various third-party installations, in particular the fixtures/furnitures, digital installation and other Client supplied items, is likely to continue beyond this date until end-Feb 2011, being approximately a further 60-days, and the Contractor shall continue to provide site supervision and coordination of these

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remaining works until final handover to Client.

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Target Final Handover to the Client is 01st March 2011. The work shall be treated as completed upon the successful handover of the site and necessary documents to the client. The actual completion date shall be mutually agreed after consideration of the Contractors detailed construction programme prior to Contract award.

Tender Security (Earnest Money)

Rs. 1,00,000/- (Rupees One Lacs Only) as a Demand Draft / Pay Order in favor of Asian Paint Limited payable at New Delhi.

Advance Payment (Mobilization 10% of contract value against bank guarantee of equivalent amount Advance) valid till the completion of the work. The completion of the work shall be considered upon the completion letter issue by the Client.

Performance (Performance Bond)

Security For the value of 5% of the contract value in the form of scheduled bank guarantee to be submitted up on issue of the order and valid till 30 days after the expiry of defects liability period, in approved format as acceptable to Project Manager/ Client.

Interim Claims

One claim per month subject to the amount being at least 30 % of the Contract Value and shall be addressed to Project Manager/Client The claims shall be submitted to the Project Managers along with all supporting documents. The date of receipt of the bills shall be the date when all supporting documents of the errorless bill are submitted.

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Retention Money 5% of the value of work done in each interim bill up to a maximum of 5% of total adjusted contract value.

Release of Retention

The retention money shall be returned upon the expiry of defect liability period. The same can be paid on the completion of the work against the bank guarantee of equivalent amount in favour of the client.

TaxDeducted at Source

Tax, including Works Contract Tax (WCT), shall be deducted at source, as applicable, in accordance with the statutory requirements from all payments made to the Contractor, including that in respect of the Mobilization advance, if paid.

Delay

Damages

(Liquidated Rs. 50,000/- per day subject to a maximum of 5% of the contract value.

Damages)

Defect

Notification

Period 12-months from the date of completion.

(Defect Liability Period) Period of Final Claim Final Claim shall be submitted within 1-month of completion of works.

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Organisational Chart from Employer:

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Senior Project Manager

Manager (Services)

Manager (Procurement)

Manager (CoOrdinatio)

Manager (Contracts)

Assistant Manager (Interior)

Project Engineer (Service)

Quantity Surveyor

Senior Project Manager:


The Senior Project Manager gives the directive and is the final authority for approvals for the Project for all the issues related to technical and financial matters. He also has the power to sanction the financial approval for the resolved discrepancies etc. which is amounting to the excess cost of the project than the estimated cost.

MANAGER (Contracts Administration) The function of a Manager (Contracts) is to regularise the work flow in the project. He forms a planning department under which all the essentials of the project are been maintained and recorded. The Manager (Contracts) being the head of the planning department has to keep up the above mentioned functions. He is assisted by:

Quantity Surveyor: Preparing and checking Bills of Quantity related to all civil, interior, MEP related work on site.

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MANAGER (Procurement)

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The commercial Manager looks after finance, administration and HR related work Site Legal matters and General books of account maintenance Subsidiary records and Financial reports Billing and Payment of invoices Personnel records, Payrolls and records Wage and personnel reports to public agency

Manager- Service (MEP) He will be responsible for all Service related work on site. Service work is very critical here as lot of co-ordination is required between electrical and lighting vendor.

Manager (Co-ordination): He will be senior manager who will be responsible for co-ordination for all the activity on site. He should be specialized in sequencing of activity and planning schedule of activity over site. He will be assisted by:

Assistant Manager: He will be reporting to Manager (Co-Ordination) and reporting all the site activities related to services. He has to prepare all site reports, progress reports etc.

Project Engineer (Service) He has to deliver multiple roles for reporting as he has to work under Manager (Services) and also adhere instruction from Manager (Co-ordination) for site activity related to services.

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Organisation Chart for Contractor

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Director Project In-Charge Site Engineer (Interior) Site Supervisor (Marketing) Site Engineer (Services)

Site Supervisor

Site Supervisor

Director:
The director of the company is the Proprietor and reserves all the final rights of the activities of the company. He is the decision making authority in participation for the tenders and quoting the rates for the concerned works. He does make the policy decision in a broader perspective for the activities and the growth of the Company.

Project In-Charge: It is the Key Co-ordinator between the Client and the management of the Company. He has to Co-ordinates regularly with the Manager (Co-ordination) of Employer/Client team for all the activity pertaining to the progress of the project. He is the person who communicates all the matters to the client on behalf of the Contractor. He is the sole responsible person for the progress and quality of construction of the Project. He has to make periodical schedules and plan for the resources like material and man-power.

Site Engineer (Interior): He will be permanent site staff who had to look after all the interior related work on site. He has to report to Project-in Charge. His responsibilities include estimation of quantities for interior work, sequencing of activity, site staff supervision etc
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Site Engineer (Services): He will be also permanent site staff who had to co-ordinate with Manager Services and his Project-In Charge. His responsibilities include estimation of quantities for MEP Work, sequencing of activity for High Side, Low Side, Electrical, Plumbing work.

Recommendations and Conclusion:


The above concludes the mode of operations undertaken within a FIDIC environment and having a well executed EPC Contract placed between Asian Paint (Client) and its stakeholder responsible for the complete project delivery. The body of contract explains about throws light on specific issues majorly important points of construction, payment terms, quality norms, technology and knowledge transfer. In parallel, the mean of EPC intends to empower the hierarchy top down bottom organizational structure, its function and authority of each person. The scope definition is well audited under EPC form of Contract management with FIDIC Administration. Whilst EPC Cater the basic need of the fulfilment of the clients requirement, FIDIC deals with more technical reasons of contentions like ambiguity, classification, dispute etc and various ways and means of settlement majorly DAB, EOT, IPC etc.

Bibliography:
"Best Practices in Contract Management: Strategies for Optimizing Business Relationships<". Aberdeen Group. Retrieved 2008-07-10. "Contract Management: Optimizing Revenues and Capturing Savings". Aberdeen Group. May 2007. Retrieved 2008-07-10. Contact Management in Civil Works and Project by V.A Prakash, NICMAR Publication.

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