2. Activities in construction project
• Engineering
– Issues related to process finalization, structural
analysis & design, technical issues related to
equipment design & selection
• Procurement
– Procurement of materials , also includes
identification of suitable vendors
• Construction
– This covers construction, installation & test run of
a constructed facility before handed to owner
7. Separated
• Traditional system & sequential process
• Division b/w design & construction responsibility
• Design - project briefing, outlining proposal,
detail design, etc.
• Delay - preparation & approval of drawings,
mistakes in design documentation
• Lengthy tendering period & suitable for small to
medium sized projects where time is not critical
8. • Major drawbacks
– Time consuming aspects of development process
– Effect of cost uncertainty
– Effect of buildability
– Fragmentation of organizational interfaces
9. Lump sum contract
• Drawings & details provided by client &
contractor quotes single lump sum figure
which is the total contact value of work
• Total sum based on analysis of rates &
estimated quantities
• Advantage - client know exact amount of
funds required to complete structure
10. • Successful lumpsum contract
– Quantities of items Involved are calculated at
tendering stage itself
– Nature of work done must be reasonably
measurable
– Contractor must be give All the facilities to which
he is contractually entitled
• Revision of amount in Case of change in
design by client
11. Measurable contract
• Payment made according to actual work
varied out, which is determined by physical
measurements
12. Item rate contract
• The contractor agrees to carry out a unit quantity
of particular work (cm3,m2) for particular sum of
money
• In this tender document consists of detailed BOQ
, where estimated quantity of work for each item
involved in particular work are listed along with
detailed description
• Total contract value - multiply total quantity with
quoted item rate and add cost of all items
13. • Some items are not covered in BOQ but
essential for completing job, in such cases
rates are given on basis of labor, material,
equipment etc
S.no Item Measurement
unit
Quantity Rate Amount
1 Cement Kgs 50 280 14000
2 Steel Ton 2 42000 84000
14. Percentage rate contract
• Tender document contains scheduled rates for
each work in addition to detailed estimate for
execution of work
• Contractor works out his rates for items i
usual manner& arrives at total price which is
converted to total percentage by which
amount differs
• Adopted by government departments & large
organizations
15. • Contractor amount -- Z
• Z > W , the % rate = (z-w)/w *100 above W
• Z < W , the % rate =(w-z)/w*100 below W
S.no Item Measure
ment unit
Quantity Rate Amount
1 Cement Kgs 50 280 14000
2 Steel Ton 2 42000 84000
W 14000+84000
16. Cost plus percentage
• Client agrees to pay contractor a certain % of
actual cost incurred by contractor while
completing a job in addition to cost itself.
• Tenderer only quotes his percentage
• Usually taken up when time is not available to
make estimate and workout details of items
involved
• Suitable for small jobs.
17. Management contract
• Managing contractor is appointed and he
deals with number of small contractors
• Client deals with only contractor and designer
• Contractor provides planning, management &
coordination services to client
18. • Responsibilities
– Preparing overall construction schedule
– Work package schedule
– Coordinating with designer
– Assistance in subcontractors selection
– Coordinating among different subcontractors
19. Construction management contract
• Construction manager appointed by client to
provide planning, management &
coordination
• Owner appoints designer & contractors
• Role of construction manager is to coordinate
among different subcontractors & ensuring
timely completion of project within budget
cost according to specifications
20. • Some responsibilities are
– Advising the designer
– Advising on making suitable work package
– Assisting in procurement
– Managing bidding process
21. Design, management & construction contract
• Client appoints single contractor to take care
of design & construction
• Basic design concepts may be provided by
client himself or through an independent
agency
• After basic concepts client calls for tender and
selects appropriate agency for designing ,
management & construction services
22. Integrated contract
• Design- build
– In this contractor takes the responsibilities of both
design & construction based on basic plans drawn
up by the client
– This avoids conflict b/w designer & contractor
– Often adopted when client has no in-house design
with him
– This method Reduces the cost , develops the
technical power in contractor & reduces disputes
23. The turn-key contract
• Responsibilities of all activities are taken up by
contracting agency
• The owner simply wants to “turn the key” at
completion to take over the facility
• All activities related to surveying , drawing
specifications , design , project planning ,
construction & test operation are given to one
large organisation
24. • They are useful in projects involving combination
of civil, electrical, mechanical, chemical & mining
engineering
• Mostly seen in petrochemical plants & nuclear
power stations
• STEPS
• In a project client first prepares documents
regarding requirements of facilities to be
constructed
• Later he selects the best proposal submitted by
multiple bidders
