Definition of Contract – 1.

An Agreement between two or more parties with well defined

Obligations & Considerations of the parties involved. 2. Enforceable by Law. Types- 1. Price based -
lump sum or unite rate contracts price or rates are submitted by the contractor in his tender 2.Cost based
- cost-reimbursable and target cost contract - actual cost incurred by the contractors is reimbursed(To
compensate with payment ; especially, to repay money spent on one’s behalf), together with a fee for
overheads and profit. TYPES - Lump Sum Contract, Item Rate Contract, Cost Plus Contract, Item Rate
Contract, Cost Plus Contract - Cost +%age, Cost + Fee, EPC/ Turnkey Contract, BOOT & Its Variants.
Lump Sum Contract- 1. In this type of contract, the Contractor constructs the works in accordance
with a design provided by the Employer, but for a fixed price. 2. The Contractor is only responsible for
the execution of the works as per the schedule within the frame work of the contract. 3.Preferred when a
clear scope and a defined schedule has been reviewed and agreed upon. Advantages- Low risk on the
owner,Higher risk to the contractor, Cost known at outset Contractor will assign best personnel,
Contractor selection is easy. Dis-advantages- Change is difficult and costly, Contractor is free to use the
lowest cost of material, equipment, methods, etc. , The contractor carries much of the risks. The tendered
price may include high risk contingency., Competent contractors may decide not to bid to avoid a high-
risk lump sum contract. Item Rate Contract -1. In this type of Contract, the Contractor constructs the
works in accordance with design & documents provided by the Employer. 2. The Contractor is only
responsible for the execution of the Works as per the schedule within the frame work of the Contract. 3.
Payment is made to the Contractor as per the Bill of Quantities (BOQ) 4. The risk aspects are less when
compared to Lump sum fixed or Turnkey contracts. Advantages- Easy for contract selection., Early start
is possible. ,Saves the heavy cost of preparing many bills of quantities by the contractors. ,Fair basis for
competition. ,In comparing with lump-sum contract, changes in contract documents can be made easily
by the owner. ,Lower risk for contractor. Dis-advantages- Final cost not known from the beginning (BOQ
only is estimated) ,Staff needed to measure the finished quantities and report on the units not completed.
,Unit price sometime tend to draw unbalanced bid. Cost Plus Contract - Actual cost plus a negotiated
reimbursement to cover overheads and profit. , Different methods of reimbursement : Cost + percentage
,Cost + fixed fee , Cost + fixed fee + profit-sharing clause. ,Higher risk to owner , Compromise :
guaranteed maximum price (GMP) reduces risk to owner while maintain advantage of cost plus contract.
Advantages- Construction can start before design is completed. , If the contractor is efficient in the
utilization of resources then the cost to the client should represent a fair price for the work undertaken.
Dis-advantages- The project total cost is completely unknown before the project start. , No incentive for
the contractor to be efficient in his use of labors, materials or equipment. , Minimum efficiency
maximizes the profit. Cost + Percent of Cost - The contractor is reimbursed for all his costs with a
fixed % age of costs to cover his services. , Project/site overheads may be covered by the %age or
computed as one of the costs. Fee = percentage of the total project cost (Cost = $500.000,Fee = 2%)
Advantages- Profitable for the contractor, the contractr is reimbursed for all his costs with a fixed
percentage of cost to cover his services, project maybe covered by the percentage . Dis-advantages- No
incentive to finish job quickly , Owner does not know total price , Larger the cost of the job, the higher
the fee the owner pays. Cost + Fixed Fee - Most common form of negotiated contracts , COST =
expenses incurred by the contractor for the construction of the facility , Includes: Labor, equipment,
materials, and administrative costs , FEE = compensation for expertise , Includes: profit, example - Fee =
percentage of the original estimated total figure , Utilized on large multiyear jobs , Ex: WW treatment
plant Facility (Cost = $20 million, Fee = 1%) ,$20 Million 1% fee = $200,000 Million Advantages- Fee
amount is fixed regardless of price fluctuation, Owner is safe , Provides incentive to contractor to
complete the project quickly Dis-advantages- Fee amount is fixed regardless of price fluctuation, risk for
contractor. EPC / Turnkey Contract - Includes Engineering (Design) and Procurement (Supply) apart
from construction as Contractor’s Responsibilities ,Usually has stringent clauses for delays and non
performances - the Delay LD and Performance LD , While it offers possibilities for good profit it is also
dangerous unless handled carefully , Usually has complex clauses for fixing Client’s and Contractor’s
responsibilities and liabilities , This type of Contract is suitable where a higher degree of certainty of final
price and time is required. Advantages -1 Less parties to coordinate hence less hassle for owner
2.Completed within a shorter period of time 3.Contractor can reduce cost with material management 4.
Contractor’s control over design details allows the contractor to use familiar construction methods . Dis-
advantages- Owner cannot compare designs. , Limited input from the owners. , The owner may not
obtain the lowest cost for the project.

Some elements must be present before an agreement becomes a

contract.These elements are: -
 Competent Parties: For an agreement to be a contract, there must be two or more
competent parties. In order to be considered competent, a part must have a certain legal
standing.
 Proper Subject Matter: For the subject matter of a contract to be proper, the first
requirement is that it was be clearly defined as to the rights and obligations of each party.
Second, the purpose of the contract must not violate the law.
 Consideration: There must be a lawful and valuable consideration given b both parties. A
consideration often called "Something for Something." A consideration must, also, be
possible.
 Agreement: For valid contract, there must be a mutual agreement. An agreement is
considered to have been reached when an offer made by one party is accepted by the
second party. Both parties must wish and intend their bargain to be enforceable by law.
 Proper Form: The terms of a contract must be written so that both parties are very sure of
what their rights and responsibilities are.
 Consent of the Parties: The agreement must be free from: Misrepresentation, Duress
Undue influence, etc.
CONDITIONS OF CONTRACTS
 The conditions of a contract are rules by which the execution of the contract is to be
governed. They set-out the responsibilities, rights, and liabilities of the two parties. They
also set-out the actions to be taken by the parties if and when certain eventualities should
arise.
 No two civil engineering contracts are similar. Probably, no two construction contracts
are truly the same. Therefore, identical conditions of contracts are not likely to be
required.
 However, for work of a similar type, certain conditions will apply for the vast majority of
cases.
 It follows that a standard form of conditions for a given type of work will remove the
necessity of thinking out and drafting new sets of conditions for every new contract.
 By taking the standard form and modifying it to suit the requirements of a particular
contract, time and effort will be saved.

IMPORTANCE OF CONTRACTS
 Describe scope of work
 Establish time frame
  Establish cost and payment provision
 Set fourth obligations and relationship
 Minimize disputes
 Improve economic return of investment

SPECIFICATION IN ESTIMATION – 1.Specifications are the written requirements for a material,

product, or service for a proposed project, like a building, bridge or machine. Or 2.Specifications
describe the nature and the class of the work, materials to be used in the work, workmanship etc. and is
very important for the execution of the work. The cost of a work depends much on the specifications.
Specifications should be clear. 3. Specifications should describe the quality of workmanship necessary for
the project. This includes – All phases of creation and installation starting with •manufacturing, •
fabrication, • application, • installation, • finishing and adjustment. •For architectural projects, the
specifications are art of the Contract Documents included with the bidding and construction requirements
and the drawings. PURPOSE OF SPECIFICATIONS - The cost of an unit quantity of work is governed by its
specifications. •Specification of a work is required to describe the quality and quantity of different
materials required for a construction work and is one of the essential contract documents. •This also
specifies the workmanship and the method of doing the work. Thus specification of a work serves as a
guide to a supervising staff of a contractor as well as to the owner to execute the work to their
satisfaction. •A work is carried out according to its specification and the contractor is paid for the same.
Any change in specification changes the tendered rate. •As the rate of work is based on the specification,
a contractor can calculate the rates of various items of works in tender with his procurement rates of
materials and labour. Thus tender rate without specification of works is baseless, incomplete and invalid.
•Specification is necessary to specify the equipment tools and plants to be engaged for a work and thus
enables to procure them beforehand. •The necessity of specification is to verify and check the strength of
materials for a work involved in a project. TYPES OF SPECIFICATIONS - •General Specifications [ First
class Specifications] [ Second class Specifications] [Third class Specifications] [fourth class
Specifications] •Detailed Specifications. . GENERAL SPECIFICATIONS - •In general specifications, nature
and class of works and names of materials that should be used are described. •Only a brief description of
each and every item is given. It is useful for estimating the project. The general specifications do not form
a part of contract document. DETAILED SPECIFICATIONS - •The detailed specifications form a part of a
contract document. They specify the qualities, quantities and proportions of materials and the method of
preparation and execution for a particular item of works in a project. •The detailed specifications of the
different items of the work are prepared separately and they describe what the work should be and how
they shall be executed. While writing the detailed specifications, the same order sequence as the work is
to be carried out is to be maintained.
METHODS OF TAKING OUT QUANTITIES - The quantities like Earth work, Foundation concrete,
Brickwork in Plinth and Super structure etc., can be workout by any of following two methods: a) Long
wall - short wall method b) Centre line method.

: a) Long wall - short wall method

The walls running in one direction are termed as "long walls” and the walls running in the transverse
direction, as "Short walls", without keeping in mind which wall is lesser in length and which wall is
greater in length. or In this method, the wall along the length of room is considered to be long wall
while the wall perpendicular to long wall is said to be short wall. Lengths of long walls are measured or
found "Out-to out" and those of short walls as "In-to-in". Different quantities are calculated by
multiplying the length by the breadth and the height of the wall. The same rule applies to the
excavation in foundation, to concrete bed in foundation, D.P.C.,masonry in foundation and super
structure etc. • For symmetrical footing, the center line remains same for super structure, foundation and
plinth. So, the simple method is to find out the center-to-center lengths of long walls and short walls from
the plan. • Long wall lengthout-to-out = Out to Out length+ Horizontal projection on one Side(HP) +
Horizontal projection on other side(HP). • Short wall length in-to-in = = In to In length -Horizontal
projection on one Side(HP) - Horizontal projection on other side(HP)
1. CENTRE LINE METHOD
In this method the length of long wall is to be found out at the centre lines of the walls. The method of
finding out the lengths(centre to centre) of long wall and short walls is as below. CENTRE LINE
METHOD Length of long wall C/C = inner width of the room +1/2 thickness of wall on one side +1/2
thickness of wall on other side Or Length of long wall C/C = inner width of the room + full wall thickness
of wall on one side C/C LENGTH C/C LENGTH CENTRE LINE METHOD Length of short wall C/C =
inner width of the room +1/2 thickness of wall on one side +1/2 thickness of wall on other side Or Length
of short wall C/C = inner width of the room + full wall thickness of wall on one side

1. LONG WALL-SHORT WALL METHOD:

 In this method, the wall along the length of room is considered to be long wall while the
wall perpendicular to long wall is said to be short wall.
 To get the length of longwall or short wall, calculate first the centre line lengths of
individual walls. Then the length of long wall, (out to out) may be calculated after adding
half breadth at each end to its centre line length.
 Thus, the length of short wall measured into in and may be found by deducting half
breadth from its centre line length at each end.
 The length of long wall usually decreases from earth work to brick work in super
structure while the short wall increases. These lengths are multiplied by breadth and
depth to get quantities.
EXAMPLE-
 1. For finding out the length of long wall, simply add centre length of wall to the two times
half breadth on one side of the wall which gives the out-to-out length of long wall.
2. Length of Long Wall = Center to Center Length of wall + Half Breadth on One Side +
Half Breadth on the Other Side   
3. For finding out length of short wall or cross wall subtract from the centre length, so the
one breadth of the wall, which gives the length of the short wall (in-to-in) (instead of
adding).

4. Length of Short Wall = Centre to Centre Length – One breadth

5. Note: The length of the long wall usually decreases from earthwork to brickwork, and the
length of the short wall is increased.
6. Using the above image, you can first find the length of long wall and short wall.

7. Centre to Centre length of long wall  = 5+ (1/2×0.30) + (1/2 x 0.30) = 5.30 m

8. Centre to Centre length of short wall = 4+ (1/2 x 0.30) + (1/2×0.30) = 4.30 m

2. CENTRELINE METHOD:
 This method is suitable for walls of similar cross sections. Here the total centre line
length is multiplied by breadth and depth of respective item to get the total quantity at a
time.
 When cross walls or partitions or veranda walls join with main wall, the centre line length
gets reduced by half of breadth for each junction.
 Such junction or joints are studied carefully while calculating total centre line length. The
estimates prepared by this method are most accurate and quick.
EXAPMLE OR DIAGRAM
 S

TENDER A tender is a submission made by a prospective supplier in response to an invitation

to tender. It makes an offer for the supply of goods or services.In construction, the main tender
process is generally for the selection of the contractor that will construct the works.An invitation
to tender might be issued for a range of contracts, including; equipment supply, the main
construction contract (perhaps including design by the contractor), demolition, enabling works,
etc.
There are three parties of tender process.
 A client is a person (individual or organization) which carry out a project or a work
himself or another person or an organization. It means client is anyone having
construction or building work carried out as part of their business. Without a client we
can't a construction project. He is the man who authorized the project.
 A consultant is an individual who possesses special knowledge or skills and provide that
expertise to a client for a fee. It means a construction consultant someone who is hired to
assess and advise on structural issues.Consultant helps all sort of businesses find an
implement solution to wide variety problems. They usually have several years of
experience in construction field. They are familiar with all kind of construction
companies.
 A contractor is a person who in the course or furtherance of a business, carries out or
manages construction work. It means in construction he is the man who responsible day
to day happening in the site. The contractor is employed by the client.
Process:
 An invitation to tender may follow the completion of a pre-qualification questionnaire
(PQQ) in response to an advert posted by the client and perhaps a pre-tender interview.
The purpose of a pre-qualification questionnaire and pre-tender interview is to enable the
client to produce a shortlist of suppliers that are likely to be most appropriate for their
particular project who will then be invited to tender. This helps reduce inefficiency and
wasted effort in the tender process.
  Mid-tender interviews may be arranged to allow clarification of matters that might
otherwise lead to an inaccurate tender being submitted; they can also give the client
insights into potential problems or opportunities in the project as it is described by the
tender documentation.
 In response to an invitation to tender, invited tenderers will submit their tender, which
will include their price for supplying the goods or services along with proposals for how
the client's requirements will be satisfied - if these have been requested.
 Alternative or non-compliant proposals, sometimes referred to as 'variant bids' may be
submitted if the tenderer believes that what they are proposing offers better value for
money. However, non-compliant proposals should only be submitted if they have been
requested and should be accompanied by a compliant proposal.
 Once the client has identified the preferred tenderer (this may involve further interviews)
they may hold a tender settlement meeting to enter into negotiations. This may result in
further adjustment of the tender documents and the submission of a revised tender.

3. TYPES OF TENDERS:
Before any tendering process can be done, a professional team and employer must make sure all
necessary tender documents have been prepared, checked and approved.The source of the funding
also must have been identified and the project financing put in place.The procedures for
subsequent stages should have been established with the express consent of the employer to
ensure the tendering process will go smoothly.
Types of tendering depends on nature of contract, complexity of the construction, expertise
needed and several reasons. There are several types of tender.
Open Tender: Open tendering allows anyone to submit a tender to supply the goods or
services that are required. Generally, an advert will be placed giving notice that the contract is
being tendered, and offering an equal opportunity to any organisation to submit a tender.
Advantages:
 Traditional method of tendering, familiar to all sector of the engineering and construction
industry.
 It allows any interested contractor to tender. Therefore, it gives opportunity for an
unknown contractor to compete for the work.
 Allowing the tender list to be made without bias. Client will obtain the bargain possible.
No favouritism in selecting contractors.
 Ensuring good competition not obliged to accept any offers.
Disadvantages:
 Uneconomic use of source.
 The tender list can be long as too many contractors tendering for one job.
 Public accountability may be questioned if the lowest offer is not accepted.
 Does not attract reputable and established contractor unless they are forced to, due to lack
of work.
Selective Tender: Selective tendering only allows suppliers to submit tenders by invitation.
A pre-selected list of possible suppliers is prepared that are known by their track record to be
suitable for a contract of the size, nature and complexity required. Consultants or experienced
clients may maintain ‘approved’ lists of prospective suppliers and then regularly review
performance to assess whether suppliers should remain on the list.
Advantages:
 Only the competent contactors were invited to tender, then the lowest can be accepted.
 Reduces the availability of work for other contractors especially new contractors.
  It reduced the cost of tendering (economic use of resources, reduced tender
documentation, shorter tender periods, better management of the tender process, etc.)
Disadvantages:
 Tender Price may invariably higher than would have been in open tendering.
 Greater chance of collusion.
 Tendering period longer because it involved two distinct stages.
 Favouritism may occur in the short listing.
Negotiated Tender:Negotiating with a single supplier may be appropriate for highly
specialist contracts, or for extending the scope of an existing contract. It can reduce the costs of
tendering and allow early contractor involvement, but the competitive element is reduced, and
unless the structure of the negotiation is clearly set out there is the potential for an adversarial
atmosphere to develop, even before the contract has been awarded.
Advantages:
 Only reputable contractors are invited for negotiation.
 The Contractor can contribute his expertise during design stage.
 Early Commencement of work on site. It shortens the period involved in appointing the
contractor.
 Reduce risk of failure.
 Best alternatives for the employer to adopt is special circumstances such as emergencies,
security reasons and etc.
 Leads to fewer disputes and claims during the construction stage.
Disadvantages:
 Should the negotiations be deadlock or prove eventually unsuccessful, this causes
wastage of valuable resources on both sides and loss of time for the employer, thereby
delaying the overall selection of suitable contractor.
 The cost work is likely higher than competitive tender.
 Reduces the availability of work for other contractors.
Two-stage Tender: Two-stage tendering is used to allow early appointment of a supplier,
prior to the completion of all the information required to enable them to offer a fixed price. In the
first stage, a limited appointment is agreed to allow work to begin and in the second stage a fixed
price is negotiated for the contract.
Advantages:
 Benefit of the contractor's expertise in buildability, specialist knowledge in proprietary
systems, project scheduling, etc resulting in value for money.
 Early commencement of work at site even when the magnitude of the works is not known
with sufficient certainty at the time of site possession.
 Savings of time due to the overlap of the design and tendering stage.
 The procedure utilizes the best aspects of both competition and negotiation to arrive at
the most favourable arrangement at an optimum firm price before work commences.
 Since the contractor is part of the project team at a very stage of the project, this results in
better communication and information flow.
 Generally, there will be fewer claims and disputes in the post contract award stage due to
the contractor's involvement at the design / pre contract stage. Experience has shown that
the contractor has a clearer understanding of the requirements and a better appreciation of
the intricacies of the design and contract documentations.
Disadvantages:
 Its application requires a high level of familiarity and commitment on the part of
employers and contractors.
  Owing to a relatively smaller element of competition, but on the other hand higher
negotiations content, the tender process is relatively more expensive and longer than
other common procedures.
 Should the second stage be deadlocked or result in no acceptable agreement being
reached, the tender process has to be initiated all over again, albeit, through a different
route. This incurs a time and cost penalty to the project as a whole.
 This procedure requires a high level of commitment, integrity and good faith on the part
of both sides which sadly is usually lacking, hence the apparent failures encountered to
date.

‘TIME IS THE ESSENCE OF A CONTRACT’

Time is the essence of a contract is an expression in a contract which means that the performance
by one party at or within the period specified in a contract is necessary to enable that party to
require performance by the other party.The meaning of time is essence is that the parties have
agreed to perform at a given time agreed in a contract and shall not extend the specified time in a
contract. In case a contract does not expressly provide this phrase then in that case time is not the
essence of a contract.
When time is the essence in construction contracts the standard rule is that the parties have agreed
to perform their obligation as per the time specified in a contract and there shall not be any
extension of time. Whereas, if time is not the essence of the contract, the court allows the parties
to a contract perform at some other time than agreed upon.
A contract becomes voidable if the promisor fails to perform within the specified time in a
contract and the promisee is entitled to compensation from the promisor for any loss incurred by
such failure.
However, in case a contract becomes voidable on account of the promisor’s failure to perform his
promise at the time agreed, the promisee accepts performance of such promise at any time other
than that agreed, the promisee cannot claim compensation for any loss suffered by the non-
performance of the promise at the time agreed, unless, at the time of such acceptance he gives
notice to the promisor of his intention to do so.
Thus, if the parties do not expressly illustrate any intention to make time is the essence of
contract then the promisee is not entitled to claim compensation on loss incurred due to
promisor’s failure to perform his obligations as per contract.

PREQUALIFICATION OF CONTRACTORS: Contractor prequalification is an

information gathering and assessment process that determines a contractor’s capability, capacity,
resources, management processes, and performance.Typical subject matter areas include financial
capacity and surety, work history, licensing and qualifications, management standards and,
regulatory, quality, safety, and environmental performance data.When used by local government,
the potential bidders on projects are audited to assess their prequalification standing before bids
are accepted. Only those bidders that are prequalified will be invited to submit a bid.
Sealed technical and financial bids in separate envelops are required to be submitted mentioning
the name of the event at the envelope within 10 days from the date of release of this
advertisement. Bidders may note that conditional bids are not allowed and would be rejected
summarily.
Cover 1: Technical Bid: Super scribe the name of the event and “Technical Bid” to include the
following documents:
a. Details of the Bidder:
  Profile of the company/agency
 Track Record: previous experience of handling similar nature of work.The company must
have 5 years work experience in event management (excluding advertising and printing).
 A CA certificate verifying the turnover of the applicant bidder for the last 5 financial
years.
 Latest Income Tax Return and copy of the PAN Card
 Earnest Money Deposit “EMD”

b). Details pertaining to the pavilions of the Events.

 Design of the APEDA pavilion in print and soft copy. ii. Materials and their
specifications to be used for the pavilion and displays/decoration in the pavilion.
Cover 2: Financial Bid: Should be sealed and super scribe the name of the event and “Financial
Bid”, To include the following documents/details:
1.The Financial Quotation, duly dated, with detailed breakup of each component suggested
separately in Indian Rupees only. No lumpsum amount shall be considered.
2. The financial bid should be inclusive of all applicable taxes.The selected vendor will be asked
to submit the invoice mentioning applicable taxes separately.
The outer sealed cover containing cover 1 and cover 2 as indicated above should be super scribed
with “Technical and Financial Bid, and should have the full name, Postal Address, Fax, E-mail,
Telephone number of the bidding agency.
SHORT NOTES-
1. EARNEST MONEY AND FIXED DEPOSIT:EMD (Earnest money deposit) and Security
both come into picture while quoting for a tender (for both private and govt. departments).
Earnest money deposit: To ensure that a Bidder does not submit a Dummy Bid or back out at
time of tender opening, Department collects a small refundable fee from each bidder, which is
called EMD. EMD is always in form of a Demand Draft & cheques or cash are strictly not
allowed. EMD is returned when all Bids are opened & tender is awarded to other firm. In case
Tender is cancelled, the EMD is returned. in case, your firm is the winning bidder, the said EMD
shall be returned to you only after you complete the supply or you make a security deposit. After
Bid is opened, if a Bidders refuses to take the contract, then his EMD is forfeited. EMD is
generally less than 5% of the Tender Value.
Security Deposit: Once it is decided that a Tender is awarded to a Bidder, he has to deposit a
Security Deposit with the Buyers such that if he does not complete the task as per the work order,
the Buyer can recover the loss by forfeiting his Security Deposit. For e.g. If a Bidders gets Rs.10
Cr contract to construct a Bridge within 12 months, then he has to deposit a Security deposit of
10% i.e. 1 Cr with Buyers. Now if he does not complete the bridge on time or leaves it
incomplete, the Department can forfeit his 1 Cr as penalty.Security Deposit can be in form of
Bank Guarantee, National Saving certificates, Cash, etc. Only when the Winning Bidders makes
the Security Deposit, he gets his EMD Back.
2. SCHEDULED AND NON SCHEDULED - Scheduled personal property is a
supplemental insurance policy which extends coverage beyond the standard protection provided
in a homeowners' insurance policy. By purchasing a scheduled personal property policy, owners
can ensure the full-value coverage of expensive items, in the event of a claim. NON
SCHEDULED -  Non-Scheduled Personal Property. Non-scheduled personal property refers to
the items automatically covered by homeowners insurance without the need for an appraisal or
receipt, usually including common items that most people own. Non-scheduled personal property
tends to cover items not valued highly enough to warrant separate insurance. For example, under
home insurance or renters’ insurance, clothes, jewelry, common sports equipment, kitchen
 appliances, cameras and other small electronics typically qualify as non-scheduled personal
property.
3. N.I.T:

Notice Inviting Tender Form, and in brief is known as NIT. It is required to be invariably
issued in respect of works for which tenders are to be called. The Form includes the name of work,
estimated cost put to tender, period of completion, time and dates of receipt and opening of tenders, and
other relevant conditions. This is also known as FORM 6 in CPWD. NITs are published in newspapers,
on government websites and notice boards. TYPES – Direct These are normally opportunities that are
sent direct from the system they were created on. For example, if a government institution used a certain
brand of tendering software, then this brand would also offer a tender service to notify the user of tenders
on that specific system.Repacks Repacks are normally provided by external organizations
and software as a service providers. Feeds from multiple sources are combined, collated and then sent out.
The aim of repacks is normally to give the supplier as many opportunities as possible on a daily basis.

4 BOQ - A bill of quantities (BOQ) is a document used in tendering in the construction industry 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.The quantities may be measured in number, length, area, volume,
weight or time. Preparing a bill of quantities requires that the design is complete and a specification has
been prepared.
The bill of quantities is issued to tenderers for them to prepare a price for carrying out the construction
work. The bill of quantities assists tenderers in the calculation of construction costs for their tender, and,
as it means all tendering contractors will be pricing the same quantities (rather than taking-off quantities
from the drawings and specifications themselves), it also provides a fair and accurate system for
tendering.
5 ARBITRATION: Arbitration is a private, contractual form of dispute resolution. It provides for
the determination of disputes by a third-party arbitrator or arbitration panel, selected by the
parties to the dispute. Disputes are resolved on the basis of material facts, documents and relevant
principles of law.The arbitration process is administered by an appointed arbitrator subject to any
relevant contractual rules and subject to the statutory regulatory framework applied by the
domestic courts. There are only limited rights of appeal and legal costs are usually awarded to the
successful party.
6 BOT CONTRACTSBuild–operate–transfer (BOT) or build–own–operate–transfer (BOOT) is a
form of project financing, wherein a private entity receives a concession from the private or public sector
to finance, design, construct, own, and operate a facility stated in the concession contract. Due to the
long-term nature of the arrangement, the fees are usually raised during the concession period. The rate of
increase is often tied to a combination of internal and external variables, allowing the proponent to reach
a satisfactory internal rate of return for its investment.
6 PIECE WORK Piece work (or piecework) is any type of employment in which
a worker is paid a fixed piece rate for each unit produced or action performed[1] regardless
of time.
8 . ANALYSIS OF RATES:
In order to determine the rate of a particular item, the factors affecting the rate of that item are
studied carefully and then finally a rate is decided for that item. This process of determining the
rates of an item is termed as analysis of rates or rate analysis.
The rate of particular item of work depends on the following:
  Specifications of works and material about their quality, proportion and constructional
operation method.
 Quantity of materials and their costs.
 Cost of labours and their wages.
 Location of site of work and the distances from source and conveyance charges.
 Overhead and establishment charges
 Profit
9. DEFECT LIABILITY PERIOD:
A defects liability period is a period of time following practical completion during which a
contractor remains liable under the building contract for dealing with any defects which become
apparent. Depending on the form of contract you are reading, it may also be referred to as a
rectification period or defects correction period.A defects liability period is usually a period of
around six or 12 months but it can vary depending on the contract used. Any defects or faults
which arise during this period (for example – due to defective materials or workmanship) must be
put right by the contractor at its own expense.
10. PERFORMANCE GUARANTEE:
A Performance Guarantee is issued by an insurance company or bank to a contractor to guarantee
the full and due performance of the contract according to the plans and specifications.A project
requiring a payment & performance bond will usually require a bid bond, in order to qualify to
bid for the project. A payment and performance bond will then be required of the winning bidder
as a security to guarantee job completion.Should the contractor fail to construct the building
according to the specifications laid out by the contract, the client is guaranteed compensation for
any monetary losses up to the amount of the performance bond.
Foreclosure OF CONTRACT is a legal process in which a lender attempts to recover the balance of a
loan from a borrower who has stopped making payments[1] to the lender by forcing the sale of
the asset used as the collateral for the loan.[2]
Formally, a mortgage lender (mortgagee), or other lienholder, obtains a termination of a mortgage
borrower (mortgagor)'s equitable right of redemption, either by court order or by operation of law (after
following a specific statutory procedure).[3]
BANK GURANTEE - A bank guarantee is a type of guarantee from a lending institution. The bank
guarantee means a lending institution ensures that the liabilities of a debtor will be met. In other words, if
the debtor fails to settle a debt, the bank will cover it. A bank guarantee enables the customer, or debtor,
to acquire goods, buy equipment or draw down a loan. HOW IT WORKS - A bank guarantee is when a
lending institution promises to cover a loss if a borrower defaults on a loan. The guarantee lets a company
buy what it otherwise could not, helping business growth and promoting entrepreneurial activity.
MOBILIZATION ADVANCE - The Mobilization Advance is a monetary payment made by the client
to the contractor for initial expenditure in respect of site mobilization, and a fair proportion of job
overheads or preliminaries. Mobilization Advance Payment (MAP) reduces contractors' need for
working capital.
PLINTH AREA AND CARPET AREA:
Plinth area is the covered built-up area measured at the floor level of any storey or at the floor
level of the basement. Plinth area is also called as built-up area and is the entire area occupied by
the building including internal and external walls. Plinth area is generally 10-20% more than
carpet area.
Carpet area the covered area of the usable spaces of rooms at any floor. It is measured between
walls to walls within the building and is the sum of the actual areas of the rooms where you can
carpet.
CAPITAL COST:
Capital costs are costs associated with one-off expenditure on the acquisition, construction or
enhancement of significant fixed assets including land, buildings and equipment that will be of
use or benefit for more than one financial year. Very broadly, capital enhancements should either:
 Significantly lengthen the life of the asset.
 Significantly increase the value of the asset.
 Significantly increase usefulness of the asset.

DEFECT LIABILITY PERIOD - A defects liability period is a period of time following practical completion
during which a contractor remains liable under the building contract for dealing with anydefects which
become apparent. ... A defects liability period is usually a period of around six or 12 months but it can
vary depending on the contract used
COMPLETION CERIFICATE - Completion certificate is a legal document that attests the fact that a
building has been constructed in line with construction norms. ... It is mandatory for all developers to
show completion certificate to have water and electricity connection in the building.

• Fee amount is fixed regardless of

price fluctuation, Owner is safe
• Provides incentive to contractor to
complete the project quickly