CONTRACTS MANAGEMENT

ASSIGNMENT

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

The project under study	Contract BC-44 : Construction of underpass at airforce station, arjangarh on Qutub Minar-Gurgaon corridor of Delhi MRTS Project.
Name of the company	Delhi Metro Rail Corporation Ltd., New Delhi
Name of contractor	-Not to Display-
Type of Contract	Lump sum
Value of Contract	-Not to Display- The contract is of Lump sum contract. The price is quoted on the basis of tender drawing issued at the time of tender, detailed drawings are given during the execution stage.
Time Schedule	8 Months The agency shall submit with the tender “Time Schedule” for completion of various portions of works. This schedule is to be within the overall completion period of 8 Months. The intermediate key-dates as mentioned in clause 17.0 of ‘Special conditions of Contract’ are to be indicated specifically in the time schedule and these will have to be achieved for each station comprising the lot. The detailed programme in the form of a quantified bar chart or CPM network shall include all activities starting from design to completion

Scope of work in brief

General

The work content in this contract consists of “Construction of underpass at Airforce Station, Arjangarh on Qutub Minar-Gurgaon Metro Corridor of Phase-II Delhi MRTS Project. The work includes Earth work, Rock excavation, RCC structural work drainage work and external development work etc. The work includes RCC box type underpasss with entry & exit ramps on both side of RCC box. The underpass is to be laid across the running Mehrauli-Gurgaon road connecting two campus of air force station Arjangarh.The work is to be constructed and maintained as per relevant Codes, CPWD Specifications, Special Specifications, drawings and/or as directed by the Engineer. The scope of works shall, inter-alia, include the following but not be limited to:

1. Site clearance and dismantling of obstructions etc., before commencement of work all as specified or as directed. 
2. True and proper setting out and layout of the works, bench marks and provision of all necessary labour, instruments and appliances in connection therewith all as specified or as directed. 
3. Excavation and Provision of building foundations including ramp portion as per detailed structural drawings. 
4. Provision of walls, columns, beams and slabs as per specification or as directed. 
5. All aspects of quality assurance, including testing of various components of the work, as specified or as directed. 
6. Architectural works comprising brick work, concrete work, flooring work, veneering to walls and columns, doors and windows, railing, and screen wall etc. as described in the detailed schedule of quantities. 
7. Development works comprising Excavation, leveling, road work in ramp, approaches to ramp and it is vicinity as shown in the enclosed drawing in the campus for the Airforce station. The road work include sub-grade preparation of sub-base /base coarse in the WBM, paving road, drainage etc. 
8. Cleaning of site and handing over of all the works, as specified or as directed. 
9. Maintenance of the completed work during the period as directed. 
10. Submission of completion i.e as built drawings and other related documents as specified. 
11. Any other item of work as may be required to be carried out for completing the work under this contract in all respect in accordance with the provisions of the contract and/ or to ensure the structural stability and safety during and after construction.

Execution of works

The execution of structures and all other works in the scope of work and enclosed drawing will have to be planned in such a manner that they do not obstruct or interfere with the existing roads/ railways, drain, water supply, electrical lines and other utilities. Where work is required to be carried out at locations adjacent to such roads/ railways, utilities, structures, monuments etc. suitable safety and protection arrangements will have to be ensured for which nothing extra will be payable. It should be ensured that no damage is caused to any such element and DMRC shall be indemnified against such damage at no extra cost.

Interface Works

1. Co-ordination/co-operation with other contractors
2. Interface with Structural Contractor
3. Interface with E&M Works 
4. Interface with Elevator/escalator contractor
5. Interface with False Ceiling Contractor

Traffic Management

The Contractor shall follow the approved traffic diversion plans in liaison with the civil contractor for traffic management.

Important points form contractor’s point of view

Clause 9.0 of SCC, Quality Assurance Manual

The Contractor shall submit a detailed Quality Assurance Manual demonstrating the proposed method of achieving the required quality standards of the Employer. The quality manual should address the quality system as required by ISO 9001-1991. 

Quality manual should clearly list out the procedures, activities, checks, standards and any such thing such as schedule of tests, which he proposes to carry out during the progress of the works and are necessary to comply with the quality objectives of the Employer.

Manual should also list the corporate policy adopted by the Contractors firm

No extra payment will be made for complying with the provisions of this clause and the cost of the work under this element shall be deemed to be included in the Bill of Quantities

Sub-clause 4.15 and clause 7.5 of SCC, Safety, Health and Environment

The Contractor shall be responsible for total compliance of Safety, Health and Environmental Protection safeguards as elaborated in combined Safety, Health, and Environmental Manual (SHE) of the Employer.

The Contractor shall provide all necessary access, assistance and facilities to enable the Engineer and Employer to carry out surveillance to verify that the site safety and safety assurance plans are being properly and fully implemented in accordance with the Contract.

No extra payment will be made for complying with the provisions of this clause and the cost of the work under this element shall be deemed to be included in the Bill of Quantities.

1. Contractor may note that housekeeping at Work sites and safe surrounding are very important. Mishandling of bentonite (like splashing of bentonite outside specified width of barricading or non cleaning of tyres of dumpers and transit mixers before leaving the piling site thereby making the road dirty is strictly prohibited. Noncompliance of same shall attract a liquidated damage as follows:
1. On first observation –Rs one lac
2. On second observation- Rs two lac
3. On third and each subsequent observations- Rs three lac
2. Penalties as provided in the conditions of contract on safety ,health and environment shall be levied to the contractor for any violation to the provisions.
3. Sub-clause 4.12, Temporary Works
   The Contractor’s proposals for erection of all ancillary and temporary works shall be in conformity with the proposals submitted along with the tender and modifications thereto as approved by the Engineer. 
   The Contractor shall submit drawings, supporting design calculations where called for by the Engineer and other relevant details of all such works to the Engineer for approval at least one month before he desires to commence such works. Approval by the Engineer of any such proposal shall not relieve the Contractor of his responsibility for the sufficiency of such works.
   No extra payment will be made for complying with the provisions of this clause and the cost of the work under this element shall be deemed to be included in the Bill of Quantities.
4. Sub-clause 4.20 Right of Ways and facilities, 4.21 Avoidance of Interference and Safety of Public and 4.32 Extraordinary Traffic
   Existing roads and other public roads may be used by the Contractor at his risk and cost to carry out construction activities, with prior approval of the competent authority.
   The Contractor’s heavy construction traffic or tracked equipment shall not travel on any public road or bridge, unless the Contractor has made arrangements with the authority concerned and has obtained the approval of the Engineer to such arrangements. The Contractor shall include in his price the cost of strengthening any such public road or bridge if he considers it would be necessary
   The Contractor shall repair any damage to the road or bear the cost thereof due to movement of contractor’s plants and equipment, vehicles etc. to the specifications and satisfaction of road authorities as well as of Engineer.
   The Contractor shall plan transportation of construction materials to work site in accordance with traffic regulations enforced by local traffic authorities from time to time and in such a way that road accidents are avoided.
   No claim whatsoever shall be entertained on this account. The transportation of certain equipments and materials and launching may not be possible during day and may have to be carried out within time schedule specified by traffic police.
   No extra payment will be made for construction and maintenance of temporary haul roads if any needed including any special protection or strengthening required and all cost of such works shall be deemed to have been included in the costs of items in Bill of Quantities.
5. CARE OF THE WORKS
   (1) Any error in the execution of work leading to redesign work shall be duly compensated by the contractor as per the decision of Engineer. Any error attributable to the construction including failure to locate underground utilities shall attract penalties.
   (2) Unless otherwise by the Employer’s Representative all works shall be carried out in dry conditions.
   (3) The Works, including materials for use in the Works, shall be protected from damage due to water. Water on the Site and water entering the Site shall be promptly removed by temporary rainage or pumping system or by other methods capable of keeping the Works free of water Silt and debris shall be removed by traps before the water is discharged and shall be disposed of at a location or locations to which the Engineer has given his consent.
   (4) The discharge points of the temporary systems shall be as per the consent of the Engineer. The Contractor shall make all arrangements with and obtain the necessary approval from the relevant authorities for discharging water to drains, watercourses etc. The relevant work shall not be commenced until the approved arrangements for disposal of the water have been implemented.
   (5) The methods used for keeping he Works free of water shall be such that settlement of, or damage to, new and existing structures does not occur.
   (6) Measures shall be taken to prevent flotation of new and existing structures.
6. PROTECTION OF THE WORKS FROM WEATHER
   (1) Work shall not be carried out in weather conditions that may adversely affect the works unless proper protection is provided to the satisfaction of the Engineer.
   (2) Permanent Works, including materials for such Works, shall be protected from exposures of weather conditions that may adversely affect such Permanent Works or materials.
   (3) During construction of the Works storm restraint systems shall be provided where appropriate. These systems shall ensure the security of the partially completed and on going stages of construction in all weather conditions. Such storm restraint systems shall be installed s soon as practicable and shall be compatible with the right of way, or other access around or through-out the Site.
   (4) The Contractor shall at all times programme and carry out the work duly ensuring protective arrangement such that the Works can be made safe in the event of storms.
7. PROTECTION OF THE FINISHED WORK
   (1) The finished Works shall be protected from any damage that could arise from any activities on the adjacent site/works.
8. DAMAGE AND INTERFERENCE.
   (1) Work shall be carried out in such a manner that there is no damage to or interference with:
      (a) Watercourses or drainage systems;
      (b) Utilities;
      (c) Structures (including foundations), roads, including street fixtures, or other properties.
      (d) Public or private vehicular or pedestrian access;
      (e) Monuments, graves or burial grounds other than the extent that is necessary for them to be removed or diverted to permit the execution of the Works. Heritage structures shall not be damaged or disfigures on any account. The Contractor shall inform the Engineer as soon as practicable of any items which are not stated in the Contract to be removed or diverted but which the Contractor considers necessary to be removed or diverted to enable the Works to be carried out. Such items shall not be removed or diverted until the consent of the Engineer to such removal or diversion has been obtained.
   (2) Items which are damaged or interfered with as a result of the Works and items which are removed to enable the Works to be carried out shall be reinstated to the satisfaction of the Engineer and to at least the same condition as existed before the Work started. Any claims by Utility Agencies due to damage of utilities by the Contractor shall be borne by the Contractor.
9. STRUCTURES, ROADS AND OTHER PROPERTIES
(1) The Contractor shall immediately inform the Engineer of any damage to structures, roads or other properties.
10. ACCESS
    Alternative access shall be provided to all premises if interference with the existing access, public or private is necessary to enable the Works to be carried out. The arrangements for the alternative access shall be as agreed by the Engineer and the concerned agency. Unless agreed otherwise, the permanent access shall be reinstated as soon as practicable after the work is complete and the alternative access shall be removed immediately it is no longer required, and the ground surfaces reinstated to the satisfaction of the Engineer. Proper signage and guidance shall be provided for the traffic/users regarding diversions.
11. PROTECTION OF THE ADJACENT STRUCTURES AND WORKS
    The Contractor shall take all necessary precautions to protect the structures or works being carried out by others adjacent to and, for the time being within the Site from the effects of vibrations, undermining and any other earth movements or the diversion of water flow arising from its work.

PROJECT MONITORING

Clause 10.2 of General Conditions of Contract

Activities in the initial works programme would be arranged as per the Works Break Down Structure (WBS) of the work developed by the contractor in consultation with and approved by the Engineer.

The contractor will prepare Construction Programme based on Computerized CPM network using the Precedence Diagramming Method within 30 days of award for approval as ‘Baseline Programme’ The base line program shall clearly reflect interface and access dates for other civil/ system-wide contracts.

After the work has started, the Contractor shall deliver in the first week of every month to the Engineer an update of the Construction Programme showing changes, if any, in planning or progress scheduling and reflecting the progress of all the activities of the network and the project status as at the end of previous month.

If the Contractor falls behind the approved Construction Programme by more than one month, he shall, within fourteen days of the date of such information, submit for approval, a revision of the construction programme showing the proposed measures, including augmentation of plant, labour and material resources to complete the works on time.

Whenever the Contractor proposes to change the construction programme he shall immediately advise the Engineer in writing and, if the Engineer considers the change a major one, the Contractor shall submit a revised programme for approval.

Detailed Network Plan (Works Programme)

Detailed Network Plan shall be prepared by the Contractor for each and every activity within the same time frame and in the same sequence as indicated in the master network plan. Activity at this level shall not be more than 15 days duration, except for summary items like procurement/ mobilization etc.

The Contractor shall select a PC-based broad planning and control software on which the two networks shall be implemented. Software selected shall be Microsoft Project, Version-2002 (MSP-2002) or higher version. If any other compatible software is used, approval of the Engineer will be required. The Contractor shall supply one original licensed copy of the software selected along with the Baseline program network and detailed network plan free of cost and load it on the PC system of the Engineer so that uniform monitoring of the project is done and any slippages are identified well in time and corrective action taken.

The following reports, in agreed formats and frequency, shall be submitted by the Contractor at his own cost
(a) Progress Reports
(b) Material Status Reports
(c) Equipment and Manpower Development Reports
(d) Inspection and Testing Report

Any other Report desired by the Employer or the Engineer

The Engineer’s monitoring team will have access to all the data/information of the Contractor, required for the assessment of the progress and monitoring. If necessary, the monitoring team will visit the Vendor/Contractor’s works in order to assess the status of critical activities.

Periodic Project Status Review Meetings will be held by the Employer or the Engineer. The Contractor shall depute his Engineers/Managers at appropriate level as decided by the Engineer to attend the Review Meetings.

Progress photographs of the major events shall be submitted by the Contractor along with the Progress Reports.

The Contractor shall provide additional inputs whenever the PERT-CPM diagram indicates a possible slippage in the completion schedule. Such additional inputs may require supplementing of equipment, personnel, work in excess of the normal work per day, work in excess of the normal work per week or other resources. Provisions under Sub-Clause 10.6.2 and 10.8.1 of General Conditions of Contract will be applicable in cases of delays due to Contractor.

Contract Administration

It is done by the Chief Project Manager (CPM) with the team of deputy engineers (Dy CE), executive engineers (XEN), and junior engineers (JE).

Powers are delegated by the CPM to his junior staff, who then supervise the work and take appropriate actions.

There is a schedule of power also available which show the capacity of spending to get work done not included in the tender of to change certain work or method. For special circumstances permission is sought form the direction project or the Managing Director.

Conclusion and suggestion

The present form of contract agreement has developed in Delhi Metro Rail Corporation over a period of time and it is successful. It is evident from the fact that the projects taken up by DMRC are completed on/before time.

This in my opinion is partially because of the clauses added in the SCC for the better quality and the SHE (safety, Health and Environment clauses).

But it is sometimes felt by the people administrating the contract that the contact in itself is too time consuming if things start to go wrong. At many occasion a need is felt to bypass the contract to shorten the time.

On analysis of the contract agreement it is found that it is lacking a key area i.e. incentive clauses. Incentive clauses are important because pressure and fear (negative forms of motivations) are not always effective. Although the Indian form of contract has achieved a no lose situation but at the same time it is also a no win situation in many cases.

We need to include the positive motivation factor to shorten the project time. These clauses can be made in a manner in which they will also reduce the project cost due to shortening of the project time.

References:

- NICMAR publication lesson books on Construction Contract Management
- Contract Management in Civil Works Projects – V.A. Prakash, NICMAR Publications
- Contract BC44, (procured strictly for academic purposes only) from Delhi Metro Rail corporation Ltd.