Course No.: PGPM 14/ NCP 23

Course title: Construction Contracts and Contracting

Assignment No.: One

ASSIGNMENT ON

CONSTRUCTION CONTRACTS AND CONTRACTING

By

Shailendra Grover

Student Registration No. 212-07-31-10762-2141

NATIONAL INSTITUTE OF CONSTRUCTION MANAGEMENT AND RESEARCH

Pune

(2012)

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INDEX

1. INTRODUCTION………………………………………………………………. 3

2. PROJECT BACKGROUND……………………………………………………. 4

3. SCOPE OF PROJECT………………………………………………………….. 5

4. SCOPE OF WORK……………………………………………………………… 5

5. SPECIFICATIONS FOR PAVEMENT CONSTRUCTION…………………. 5

6. PROJECT BENEFITS……………………………………………………………..6

7. SALIENT FEATURES OF PROJECT………………………………………….. 7

8. IMPORTANT DETAILS OF CONTRACTS, COST, TIME & TYPE……….. 8

8.1 CONTRACTS…………………………………………………………… 8

8.2 CONTRACT AGREEMENT…………………………………………… 9

8.3 COST…………………………………………………………………….. 10

8.4 IMPORTANT POINTS FRON CONTRACTOR’S PT OF VIEW…10-11

9. PROJECT ORGANISATIONAL CHART WITH FUNCTIONS……………12-17

10. ARBITRATION…………………………………………………………………. 18

11. METHODS FOLLOWED FOR ADMINISTRATION/ MONITORING…….19

12. RECOMMENDATIONS/ CONCLUSION………………………………………19

13. BIBLIOGRAPHY………………………………………………………………… 20

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Project Name: -- Four Laning of NH-4

Client: -- Govt of India

Location: -- Hubli- Haveri section Of NH-4 in Karnataka

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.

1. INTRODUCTION

Contract management is the process that enables both parties to a contract to meet their

obligations 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.

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2. PROJECT BACKGROUND

The development and up-gradation of National Highway 4 which is a major National

Highway in Western and Southern India. NH 4 links four of the  most populous Indian

cities - Mumbai, Pune, Bangalore and Chennai. NH 4 is 1,235 km (767 mi) in length and

passes through the states of Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu.

As part of Upgradation under Phase vii an existing 2 lane highway is required to be

4 laned from Hubli to Haveri (NH-4) in the state of Karnataka is required to be constructed

on BOT(TOLL) Basis. The total length of the Project allotted to M/s Afcons Apil JV is 64

km and consists of a Four lane highway at Hubli-Haveri section of NH-4 as part of NHDP

Golden Quadrilateral Project.

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3. SCOPE OF PROJECT

The scope of the project shall mean and included, during the construction period:

a) Construction of Project Highway on the site set forth and as specified and in

conformity with specifications.

b) Operation and maintenance of the project highway in accordance with provisions of

agreement.

c) Performance and fulfilment of all other obligation in accordance with the provisions of

the agreement and matters incidental there to.

4. SCOPE OF WORK

The scope of work consists of providing four lane road with entry exit ramps from 340.00

km to 404.00 km with a minimum clear vertical clearance of 5.5m from formation level of

existing bridges /roads/culverts. The scope of work also includes, upgrading, widening,

improving the existing roads (NH-4/SH/local) roads near the entry exit rump locations with

suitable junctions drainage, cross drainage works , road safety features, lighting etc, and 8

lane toll plaza with concrete pavement, concrete retaining walls/ embankments for ramps,

drainage, restoration of embankment of river through which the alignment is passing, fencing

of row project highway, noise barriers.

5. SPECIFICATIONS FOR PAVEMENT CONSTRUCTION

The composition of the pavement for project road is as follows:

a) Subgrade -500mm (Min CBR value 10%)

b) GSB (Grading 400.2)-300 mm in two layers (0-10% passing 75 micron LL< 25 %;

c) WMM -250 mm in two layers

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d) BM -75mm

e) DBM -110 mm in two layers

f) BC - 50mm

A typical pavement cross section of the NH-4 section is as shown in figure below

Existing two- lane pavement will be widened by the same treatment as that for new

carriageway.

Profile Correction of existing carriageway will be done by Bituminous macadam

and strengthened by 5 cm thick by Bituminous concrete as wearing course.

6. PROJECT BENEFITS

The National Highways Developed Project (NHDP) has great economic & social

benefits which are summarized as below-

a) Stimulate economic growth and reduce poverty in the medium and long term

b) Rapid industrial development in the adjoining

c) Increase in job opportunities & norms) 6

d) Benefits to trade especially in movement of perishable goods

e) Faster and comfortable journeys by reduction in travel time & traffic

f) Safer travel i.e. reduction in road accident congestion

g) Reduction in Vehicle Operating Cost and fuel consumption

h) Rise in land along the road and adjacent areas

i) All round development of areas

j) Reduced maintenance cost of road

7. SALIENT FEATURES OF PROJECT (NH4)

F

INANCIN

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1 STARTING CHAINAGE Km- 340.00 (Hubli )

2 END CHAINAGE Km- 404.00 Near Haveri

3 LENGTH OF PACKAGE 64.000 kms

4 PROJECT COST 256.20 Crore

5 CONSTRUCTION PERIOD 30 Months

6 NO. OF BRIDGES (Excluding R.O.Bs and Flyover)

15 Nos

7 NO. OF CULVERTS 43 Nos.

8 NO. OF Underpass 7 Nos.

9 NO. OF FLYOVER 2 Nos.

10 PROJECT REACH WHERE SERVICEROAD IS PROPOSED

6 kms

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HUBLI-HAVERI SECTION OF NH-4

The AFCONS JV is constructing the highway on a BOT contract as part of which the the

company has to Design, Finance, Construct, Operate and Maintain the Highway.

8. IMPORTANT DETAILS OF CONTRACTS, COST, TIME AND TYPE

8.1 CONTRACTS

Contract Management Framework

There are three key players in the Contract Management Framework:

a) Employer/Granting Agency (NHAI)

b) Concessionaire (AFCONS JV)

c) Independent Consultant (IE)

The inter relationship amongst these three key players is depicted as follows:

Hires

Reports To

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ConcessionaireAFCONS JV

Consultant Design Construction

Contractors

Consultant Supervision

EMPLOYERNHAI

Independent Consultant

(IE)

Supervises

The Concessionaire has to supervise, monitor, direct and control the activities of its

EPC Contractor. The Concessionaire has engaged an in-house team (CETL) as the

Supervision Consultant. The day to day supervision of construction work is being done

by the Supervision Consultant.

The Design Consultant is responsible for detailed design and IC reviews/concurs

before GFC drawings can be issued.

The NHAI appointed IE to act as the Independent Consultant (IC). The object is to act

independently and on behalf of NHAI. Essentially the role is to oversee, monitor and

review the activities of the Concessionaire to ensure compliance with Concession

Agreement requirements.

8.2 CONTRACT AGREEMENT

Subject to and in accordance with provisions the agreement, the exclusive right license

and authority during the subsistence of the agreement to construct, operate, and maintain

the project for a period of 15 years commencing from the appointed date.

a) Finance and construct the project highway

b) Manage operate and maintain the project highway and regulate the use thereof by

third parties.

c) Demand collect the appropriate fee from vehicles, persons for using and project

highway and any part thereof and refuse entry of any vehicle if the fee due is not

paid.

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8.3 COST

Subject to and on the terms and conditions of the agreement the concessionaire shall at

its cost expense procure, finance for and undertake the design engineering, procurement,

construction, operation and maintenance of project highway and observe, fulfill comply with:-

a) The concessionaire may procure at its cost an expense and on its own the land that

may be required by it for additional facilities. Subject to the provisions the site shall be

made available by the authority to concessionaire and during the concession period

the concessionaire shall protect the site from any and all occupations, encroachments.

b) The concessionaire shall bear all the cost for any special or temporary right of way

required by it in connection with the access to the site.

8.4 IMPORTANT POINTS FROM CONTRACTORS POINT OF VIEW TO BE

MONITORED / RESOLVED

a) Notwithstanding anything to the contrary contained the concessionaire shall

ensure that the respective entities owning the existing roads, right of way or utilities on

under or above the site are enabled by it to keep providing temporary or permanent

diversions. The concessionaire shall allow for laying telephone line, water pipes,

electric cable or other public utilities.

b) The concessionaire shall submit the authority the detailed design, construction

methodology, quality assurance procedures and the procurement, engineering and

construction time schedule for completion of the project.

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c) The concessionaire shall appoint its representative duly authorised to deal with

the authority.

d) During the construction period, the concessionaire shall furnish the authority a

monthly report on the progress of the works and shall promptly give such other

relevant information as may be required.

e) For determining that, the construction works confirm to the specifications and

standards. The authority shall require the concessionaire to carry out or cause to be

carry out tests at such time and frequency and in such a manner as may be required

in the event that results of any test conducted any defects or deficiencies in

construction work, the concessionaire shall carry out remedial measures and furnish a

report to the authority.

f) During the construction period, the concessionaire shall provide the authority

for every calendar quarter, a video recording, covering the status, progress of

construction work in that quarter. During the operation period, the concessionaire shall

operate and maintain the project highway in accordance with the agreement and shall:

(i) Permit safe, smooth and uninterrupted flow of traffic on the project highway

during normal operating conditions.

(ii) Collecting and appropriating fee.

(iii) Minimising the disruption to traffic in the event of accidents or other incidents

affecting the safety and use of project highway.

(iv) Carrying out periodic preventive maintenance of the project highway .

(v) Undertaking major maintenance such as resurfacing pavements, repairs to

structures etc.

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(vi) Preventing with the assistance of enforcement agencies, any encroachment

on the project highway.

(vii) Protection of environment and provision of equipment and materials thereof

(viii) Maintaining a public relation unit to interface with and attend to suggestions

from users, government agencies, media and other agencies.

(ix) Complying with safety requirements in accordance with safety requirements.

9. PROJECT ORGANIZATIONAL CHART WITH FUNCTIONS

Following are the organizational chart with their function.

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9.1) The Senior General Manager (CEO & COO)

The group head’s role would be the monitoring of the designer’s output and

activities, and taking responsibility for all the work that is generated by the

group.

9.2) Area Manager

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Interaction with contractors to detail out their requirements, obtaining signoffs

and overseeing the tendering and negotiating process. Subsequently, during

the execution stage, he monitors the project for cost, quality, and schedules

and local administration.

9.3) The Project Manager (GM):

The project manager audits the project during the drawing/design stage, for

conformance to the stipulated process, and for adherence to agreed schedules.

Subsequently, during the execution stage, he monitors the project for cost,

quality, and schedules. Following are the functions of General Manager.

a. Proper planning of every activity.

b. To make available all the requirements at the proper time.

c. Getting approval for the various items from the managing director.

d. Controlling all the Staff.

e. Taking decisions regarding consultant approval and action to be done.

f. Coordinating with the staff and taking proper feedback.

9.4) Deputy Project Manager (Civil)

For the civil work there are three field to look after. In highway section.

a) Highway department.

b) Structure Department.

c) Lab Department.

Following is the main function of DPM.

a) To take time to time feedback from all three department head and solving their

problem by which work being held.

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b) To report the entire major problem to GM and discuss on the problem and solve

them as early as possible.

c) Providing all the recourses at the site to complete the work as early possible.

Such as, equipments, material and engineers.

d) To look after the Staff welfare to satisfy the demands of Staff and to motivate

the Staff.

9.5) Deputy Project Manager (Mechanical)

The main function of DPM mechanical is to organize the routing maintenance

of plant and machinery and repair immediately the machinery or plant at the

time of break downs and given proper instructions to the Machinery Manager.

(i) Provide maximum machinery in working condition.

(ii) Fewer breaks down of plant.

(iii) Proper functioning of plant to get major output production throughout day

9.6) Construction Manager

The construction manager has some general responsibilities which correspond

with the job role. They are the ones who help in the acquisition of land, the

planning process, obtain permits, hire workers, keep tabs on the progress of

the construction job and ensure that it is being completed in a correct manner.

They are the go-to person for most of the parties involved with the entire

project. The construction manager is also responsible for handling complaints

or problems along the way.

9.7) Project Engineer (Highway) :- Main functions

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a) Providing required technical data to execute work on the site such as

cross section of highway, RLs along the cross section and longitudinal

section, vertical curves and horizontal curves details and offsets, super

elevation and extra widening details etc.

b) Utilize machinery and manpower with proper planning to get maximum

output in less time.

9.8) Project Engineer (Structure)

a) Providing required drawing of Structure details. And working drawing at

the site.

b) Providing all the activity program to the every engineer, which indicate

the activity get started and should be completed within the time limit.

c) Provided proper bar bending schedule which is convenient to

employment and less wastage of steel.

d) Giving the requirement of materials to the store department by proper

planning of work such as requirement of cement, steel aggregate sand

and admixture.

9.9) Site Engineer :-

a) Complete all the work which is assign by the Project Engineer.

b) Giving time to time feed back to the incharge (Project Engineer)

c) Making all the Bar bending Schedule and execute the work accordingly with

help of supervisor and skilled labours in case of structure.

d) Making all the level sheet and getting all the layer checked by the consultants

for approval of bed in case of living way.

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e) Making all the testing and work out the test result, making all the design trial

accordingly to instruction of ME and finalize the mire design in case of quality.

9.10) Foreman/ Supervisor:- These are non technical staff and they have to follow

the instruction of there incharges and doing work accordingly.

9.11) Material Engineer ( Quality) :- the main function is.

a) Testing of Materials and suggest to management regarding good quality

materials to be used in the project.

b) Taking source approval of all the materials from the consultant such as.

Approval of aggregate quarry, approval of cement source, approval of steel

source approval of sand ghat. Etc.

c) Carry out all the main design of all concrete grade and all bituminous work.

Such as m15, m20, m30,m35, m40 DBM, BM, SDBC, BC. Etc.

9.12) Store Department :- The main function are :

a) Which are the requirement coming from the various department such as

highway. Structure, quality and mechanical all the materials should be

purchase by the purchase officer and maintain in the Store department.

b) All the inward and outward materials record is to be maintained by the store

department.

c) And time to time balance stock is to be get checked few further placing of

purchase order according to the requirement of material at the site.

9.13) Safety Officer :-

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Making safety working environment, safety all site worker and staff, improving and

applying all safety instruction on site is the main work of this dept. Cleaning of site

office maintains and cleans all site awareness, cleaning of labor camp periodically,

making arrangement of good drinking water, good latrine / w.c. Facility on site is the

main work of health dept. Personnel structure & reporting system - Safety engineer

and Jr. Safety engineer’s work as per site condition and safety supervisor help to

Jr.engineer.

9.14) Quantity Surveying officer:-

Checking of all drawing and specification regarding site, estimating and surveying

quantity of each work activity separately, calculating material required quantity, labor

required quantity for each and every item is the main work of this dept. Personnel

structure & reporting system - Quantity estimation engineer is the head of this dept. Jr.

engineer will help to estimation engineer. All basic plans and calculation Jr. engineer

make and report to sr. engineer under supervision of estimation engineer.

9.15) Store Keeper

Inspection of material and goods coming on site, intimate or instruct to respective

dept. (material ordered by) maintaining material inward, outward registers making

GRN, storing and housing all material on site in proper place as per the site condition

and handover material to contractor as per their requirement, keeping their records is

the main work of store dept. Personnel structure & reporting system - In this dept store

manager is the head of our site and storekeeper and store asst. will help and report to

store manager.

With all these functions of each authority we can maintain a good administration and

monitoring every level of working we think that with this type of system we can achieving the

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required result, because in this system we interlink, each level with each other from top to

bottom. And by this method we can easily find out the any obstruction occurred in the

organization.

10. ARBITRATION

In case of any dispute occurrs with the client then the management call for the arbitration,

which is domestic forum of resolution of dispute the cause of disputes could be due to the

contractor or the employer. The arbitrator resolves the disputes between the employer and

the contractor and his verdict is legally enforceable arbitration is one of the quickest and

amicable means of dispute resolution.

Following are the various types of disputes in engineering contracts.

a) Giving timely possession of site.

b) Making prompt payment.

c) Supplying correct instruction, drawing and design, for carrying out the work.

d) Not interfering with the progress of the works.

e) Allowing contractor to carry out the whole of the work.

These are the some methods by which disputes occurred and some non-arbitration dispute

resolve by the following method, such as.

(i) By appeal at higher levels.

(ii) By advisory committee.

(iii) Empowered committees.

(iv) Litigation of courts

With these method contractor resolves the disputes.

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11) METHODS FOLLOWED FOR ADMINISTRATION/MONITORING

Methods followed for the proper administration and monitoring of the project are as

follows:

a) Maintaining proper communication with the concerning parties through telephones

and letters.

b) Making it very clear the duties of the contractor in the tender document itself.

c) Clearly specifying all the materials specifications in the tender document.

d) Timely site visits by architect/asstt. Architect to monitor the construction work.

e) Proper preparation of tender and working drawings.

f) Demanding site progress reports weekly from the contractor

g) Sending site visits report to the clients/owners for their feedback.

h) Asking for manufacturer's report, testing reports of various materials used for

construction from the contractors.

12) CONCLUSION

From all these elements of organization and scope of work and type contract and with the

management authority we can achieve the success to complete the project with less time

and big profit.

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BLIOGRAPHY/ READINGS

1. Contract Management in Civil Works Project—V. A. Prakash NICMAR Publication.

2. NCP23 ( Construction Contract and contracting).

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