CONTRACTS AND ACCOUNTS
Syllabus: Types of
engineering contracts, Tender and tender documents, payment, specifications.
1.
Establishment – It is the employees working in
the office and field in each office.
2.
Types of establishment –
(a) Regular and temporary/adhoc employees.
(b) Work charged employees
(c) Daily wage employees
(d) DFR means Departmental Financial Rules
(i) Volume 1 – financial powers of officers.
(ii) Volume 2 – pay and allowances
(iii) Volume 3 – TA and DA
(iv) Volume 4 – pension rules
(v) Volume 5 – financial transactions
(vi) Volume 6 – financial transactions of work, stock and T
& P.
3.
P.W.D code – It is a book which contains the
rules, instructions and regulations for treasury, account, financial
transactions, competency and procedures.
4.
Budget – It is a set of annual
anticipated receipts and expenditure for the coming financial year.
5.
Earnest money – It is a certain sum deposited by
the contractor/company on account of purchase of tender form. It is about 2% of
the estimated cost. This amount is for a check so that contractor may not
refuse to accept the work when his tender is accepted.
6.
Tender – It is an offer in writing to
execute some specified work/supply at certain rate and specified period under
certain conditions of contract and agreement between contractor and department.
7.
Security – It is an amount for check for
the contractor so that he may fulfill all terms and conditions of contract and
to carry out work according to specifications. This amount is 10% of the
estimated cost.
8.
Powers for accepting tenders –
CE – full power
SE – upto 50
Lacs
XEN – upto 5 Lac
SDO – upto 50 thousand
9.
Classification of works as per
nature –
(a) Original work
(b) Repair work & maintenance
10. Classification of works as per cost –
(a) Major work – costing above 1 lacs
(b) Minor work – costing 20 thousand to 1 lacs
(c) Petty work – costing below 20 thousand
11. Tender
notice – It is a
departmental document to be published in newspapers for wide publicity to
invite contractors/companies/suppliers for execution of a particular work or
supplies.
12. Methods
of carrying out works –
Departmentally
Through contractor/supplier –
piece work agreement, work order basis, lump sum contract, labour contract or
scheduled contract including material
13. Daily
labour – When
work is executed departmentally, labour on daily wages base is employed which
is called daily labour.
14. Temporary
advance – It is
a particular sum of amount paid to the JE for making payment against a past
bill/muster roll for disbursing wages of the labour.
15. Temporary
imprest – It is
a particular sum of amount paid to the JE in advance for particular petty
payments at the project site.
16. Muster
roll – It is a
departmental document for recording daily attendance of daily labour employed.
It has three parts –
a)
Nominal
roll for marking attendance
b)
Part
2 for recording unpaid wages
c)
Part
3 recording work executed
17. Labour
report – daily
labour employed on the muster roll their day to day report of total labour
employed on the muster roll is sent to the SDO by JE incharge.
18. Contract
document –
before start of work an agreement/bond between contractor and department is
prepared and each page of this document is signed by both which includes
following documents.
a)
Title
page
b)
Index
page
c)
Tender
notice
d)
Tender
form
e)
BOQ
(Bill of Quantities)
f)
Schedule
of issue of material
g)
General
specification
h)
Detailed
specification
i)
Drawings
j)
Terms
and conditions of the contract
k)
Special
conditions
19. Liquidated
damages – It is
the fixed stipulated some of penalty by contractor having no relationship with
real damage. It is per day penalty varying from Rs 50 to 100 per day for a
delayed period beyond a fixed period.
20. Unliquidated
– This is a
ordinary damages having relation with the actual damage done for not
maintaining progress as per condition or work not done as per specifications.
21. Time
extension – It
is the sanction to extend the time period beyond specified on the request of
the contractor on reasonable grounds.
22. M.B.
– It is a book
for recording all measurements of each item on the project and recording all
the bills for payment. It is maintained by J.E.
23. S.M.B
(Standard Measurement Book) –
M. B. having detailed measurements of all the items of the works recorded
correctly and duly checked by SDO/XEN for further use in annual maintenance and
repair.
24. Check
M.B. – The
measurement books used for recording the checking of items by SDO/XEN.
25. Suspense
head – It is a
head which is maintained or reserved for temporary booking of transactions of
supplies.
26. Reserved
stock limit –
The financial/physical limit upto which the stock material can be kept in
stores.
27. Storage
charges – means
expenditure incurred on store material after acquisition such as work charge
employee and petty expenditure for the safety of material.
28. Supervision
charges – also
called as departmental charges i.e. 10% is charged on stock issue rates if
material is sold or transferred out of division.
29. Rates
–
a)
Stock
issue rates
b)
Market
rates
c)
CSR
rates
30. Stock
account – all
transactions of receipts and issues of the materials are recorded day to day
basis and maintained on the register called stock register.
31. System
of account –
a)
P.W.D
account system – Which is maintained at divisional office (XEN) where XEN is
responsible for all receipts and payments and a monthly account is sent to A.G
(Account and General) office.
b)
Civil
account system – Which is maintained in government treasury for all receipts
and payments.
32. Bin
card – daily
receipt and issue record of each material is maintained in the store on the bin
card with balance on each transaction.
33. Indent
– It is a
document for demand in a proper form for issue of material from stock is called
indent. It is in five counter files.
34. M.A.S.
account – It is
a register maintained to keep account of all the materials receipt issue at
site of the project
35. T
& P account –
It is a daily record of receipt/issue of tools and machinery and monthly
account is maintained. Also its annual return is prepared and submitted to the
divisional office.
36. Duties
of JE –
a)
Works
b)
Account
(stock and T & P)
c)
R
& M of building and machinery
37. Bill
– Bill is the
account of work done/supply made their rates and amount for which payment of
the contractor is due is called bill.
a)
First
and final bill
b)
CC
first running bill
c)
Nth and final bill
38. Advance
payment – It is
the payment made to the contractor for work done him but not actually measured
under special case.
39. Secured
advance – It is
an advance payment made on the security of material supplied by the contractor
at site. Up to amount not exceeding 75% of the value of material
40. Labour
Contract: In
labour contract the contractor undertakes contract for the labour portion. All
materials for the construction are arranged and supplied at the site of work by
the department or owner, the labour contractor engages labour and gets the work
done according to specifications. The contract is on item rate basis for labour
portion only and contractor is paid for the quantities of work done on
measurement of the different items of work at the stipulated rate in the
contract agreement, Materials for scaffolding, centering and stuttering and
other similar materials are supplied by the department or owner; contractor may
also use his own materials for scaffolding, centering and shuttering, etc., if
provided in the agreement. Contractor uses his own tools for working, but
plants and machineries are arranged by the department or owner. An agreement
with all conditions of contract, rates, bill of quantities etc., is prepared
before the work is given out to the contractor. This system of contract is not
generally adopted in the Government department. Private buildings are however
constructed by labour contract system which is less troublesome.
41. Cost
plus percentage contract: In
this system contractor is given certain percentage over the actual cost of the
construction as his profit. Contractor arranges materials and labour at his
cost and keeps proper account and he is paid by the department or owner the
whole cost together with certain percentage, say 10% as his profit as agreed
upon beforehand. An agreement is prepared with all conditions of contract in
advance. In this case proper control in the purchase of the materials and in
labour shall have to be exercised by the department or owner.
42. Labour
engaged through contractors: Normally, labourer should not be engaged and
paid through contractor. In the case of emergency when labourer are not
available directly and the work is required very urgently, laboureres may be
employed through contractor. In such case if possible, the quantities of work
done should be determined by measurement at the completion of the work and
contractor paid at suitable rates on the measured quantities. But if this
method is not practicable, it is permissible to pay the contractor on the basis
of number of labourers employed day-to-day at current rates a profit or
commission being included in the rate or paid separately on lump sum or
percentage basis.
When
payment on measured work is not possible a record of the number of labourers
employed day-to-day should be kept by the overseer incharge and a report
submitted to the Assistant Engineer or Executive Engineer to enable him to keep
a check on the work and expenditure and to deal with the contractor’s claim.
43. Penalty:
Penalty is a
short of fine for non-fulfillment of terms of contract. Every contract usually
contains certain provisions for penalty for breach of terms and conditions of
contract as for not maintain the progress, for delay in completion, for bad
work, etc. The penalty may be a fixed-sum per day, or a certain percentage of
the estimated cost up to 10% etc.
44. Compensation
for delay in completion: contractor
is liable to pay as compensation or penalty an amount equal to 1% of the
estimated cost of the work (contracted amount) or such smaller amounts as the
Executive Engineer or the competent authority may decide for every day that the
work remains uncommented or unfinished after the due date. The maximum limit of
penalty is 10% of the total contract amount.
45. Liquidated
damages: It is a fixed stipulated sum of
penalty by the contractor or having no relationship with real damage. It is
usually exorbitant and fixed per day varying from Rs.50.00 to Rs.100.00 per day
for the excess period taken for the completion of the work than that specified
in the contract.
46. Un-liquidated
Damages This is
known as ordinary damages having relation with the actual damage done. It will
increase or decrease according to increase or decrease in the damage, for the
non-completion of the work within due date of completion , or for not
maintaining progress as per condition of contract.
47. Extension
of Time: The
Executive Engineer or competent authority may grant the necessary extension of
time for valid reasons if the contractor applies for extension of time within
the time. Reason may be the materials, labour, etc., not being available, bad
weather condition, land not available in due time, etc. The contractor should
apply for extension of time before the due date of completion as provided in the
contract agreement.
48. Termination
of Contract: The
contract can be terminated by the Executive Engineer or by competent authority
in default or bankruptcy of the contractor and penalty may be imposed as per
terms of the contract agreement.
If
the contractor does not fulfill the terms and conditions of contract as-if he
leaves the work, if he does not maintain progress, if he does not observe the
rules, instruction, etc., the contract agreement may be rescinded and all of
his security money be confiscated or penalty up to the extent of 10% of the
estimated cost may be imposed on the contractor. For termination of contract
due notice shall have to be served on the contractor.
Debitable
Agency: This is
an agency which is employed to execute a
work or part of a work at the cost of a contractor who fails to complete or to
show unsatisfactory progress of the work. The debitable agency may be in the
form of daily labour or another contractor and may be employed by giving proper
notice to original contractor and the whole cost which is usually higher, is
debited or charged to the original contractor.
SPECIFICATIONS
Ø
Definition – It describes the quality nature
and class of work, material, workmanship and method of execution of each
item/subheads of work.
TYPES OF SPECIFICATION
1.
General
specification – It gives a general idea and brief descriptions of different
items of work and material.
2.
Detailed
specification – It specifies the quality, quantity, proportions, workmanship,
method of preparation, execution, measurement, mixing, curing, laying, joints,
finishing, all tests, lab/field, size, strength, watering, soaking and all
properties of material.
3.
General
specification specifies the types of buildings –
a)
First
class building
b)
Second
class building
c)
Third
class building
d)
Fourth
class building
4.
Detailed
specification – specified the quality strength proportion & method for
a)
Individual
material – e.g. cement, sand, stone, bricks, lime, wood, paint etc.
b)
Different
items – e.g. earth work, cement concrete, brick masonry, flooring, cement
plastering, RCC, RB work, white washing/ distempering, wood work, painting
& varnishing.
c)
Method
of operation – e.g. excavating, mixing, laying, curing, centering shuttering,
bending binding of steel, all tests before & after construction & method
of measurement.
5.
Example
of detailed specification –
a)
Classification of bricks –
(i) First class
(ii) Second class
(iii) Third class
(iv) Pilla bricks
(v) Jhamma bricks
b)
Specification of first class
brick –
(i) Clay used should be free from organic
material & Kankars.
Sand - 20 to
45%
Silt - 25 to
45%
Clay – 20 to 35%
(ii) Brick shall be hand moulded/machine moulded of
suitable soil free from cracks, flaws, noduls & lime, having a frog of size
10mm to 20mm deep ´ 40 mm ´ 100
mm.
(iii) Shape & size – should have smooth and
rectangular faces with sharp edges & corners.
(iv) Colour – should have uniform colour of cherry
red/copper colour.
(v) Compressive strength – should be more than
10.5 N/mm2.
(vi) Tolerance in size – should be
L = 3800
B = 1840
T = 1840
(vii)
Water absorption = cold water for 24 hours more than 15% above strength 12.5
N/mm2 & 20% below strength 12.5 N/mm2.
(viii)
Standard Size Nominal
Size
190
´ 90 ´ 90mm 200 ´ 100 ´ 100
mm
(ix) Efflorescence – Nil on drying or above moderate
(x) Sound – should have a clear ringing sound on
stricking.
(xi) Should be burnt thoroughly without being
vitrified having deep red, cherry or copper colour.
(xii)
Water – water used for preparation of clay should be free from organic
impurities & salts.
(xiii)
Hardness – On scratch by nail of finger no impression should be marked.
(xiv)
Described – all methods of preparing clay moulding, drying, burning, loading,
unloading & stacking
GENERAL
SPECIFICATIONS OF A FIRST CLASS BUILDING
Ø Foundation and plinth –
Foundation and plinth shall be of I-class brick work in lime mortar or 1:6
cement mortar over lime concrete or 1:4:8 cement concrete.
Ø Damp proof course – D.P.C.
shall be 2.5 cm (1”) thick cement concrete 1:11/2 : 3, mixed with
one kg of Impermo per bag of cement or other standard water proofing materials
as specified and painted with two coats of bitumen.
Ø Superstructure –
superstructure shall be of I–class brickwork with lime mortar or 1 ; 6 cement
moertar. Lintels over doors and windows shall be of R.C.C.
Ø Roofing – Roof shall be of
R.C.C. slab with an insulation layer and lime concrete terracing above,
supported over R.S. Joists or R.C.c. beams as required. Heightr of rooms shall
not be less than 3.7m (12 feet).
Ø Flooring – Drawing room and
dining room floors shall be of mosaic (terrazzo). Bathroom and W.C. floors and
dado shall be of mosaic (terrazzo). Floors of bedrooms shall be coloured and
polished of 2.5 cm(1”) cement concrerte over 7.5 cm(3”) lime concrete. Floors
of other shall be of 2.5 cm (1”) cements
concrete over 7.5 cm (3”) lime concrete polished.
Ø
Finishing - Inside and outside walls shall be
of 12 mm (1/2”) cement lime plastered 1 : 1 : 6. Drawing, dining and bedrooms –
inside shall be distempered, and others – inside whit washed 3 coats. Outside shall be coloured
snowcem washed two coats over one of while wash.
Ø
Doors and windows - Chaukhats
shall be seasoned teak wood. Shutters shall be teak wood 4.3 cm (1 ¾”) thick
paneled glazed or partly paneled and partly glazed as required, with additional
wire gauge shutters. All fittings shall be of brass. Doors and windows shall be
varnished or painted two coats with high class enamel paint over one coat at
priming. Windows shall be provided with iron gratings or grills.
Ø
Miscellaneous – Rain water pipes of cast iron or
of asbestos cement shall be provided and finished painted. Buildings shall be
provided with 1st class Sanitary and water fittings and Electrical
installations. 1 metre wide 7.5 cm thick C.C. 1:3:6 apron shall be provided all
round the buildings.
Ø
Contract: -
An agreement which is enforceable
by law is a contract. It is an undertaking given by a person (not being a Govt.
servant), syndicate or firm, for the execution of any work or supply of
materials or performance of any service in this connection.
Ø
Tender: -
Tender is a written offer
submitted by contractors in response to tender call notice, to execute certain
work or supply of specified materials or transport of materials at certain
rates, within a fixed time with the terms and conditions laid down in the
tender documents.
Ø
Tender form: -
Tender form is a printed standard
form of contract giving terms and conditions of tenders. It is obtained from
the office of the officer inviting tender on payment. The amount of payment
called the ‘cost of tender from’ is decided by the department concerned
inviting the tender. In the tender form, there is also a memorandum for giving
(i) general description of work, (ii) estimated cost, (iii) time allowed for
the work from date of written order to commence, (iv) estimated cost, (v)
earnest money, (vi) columns for signature of the officer by whom accepted and
signature of contractor before submission of tender, signature of witness to
contractor’s signature. It is a part of tender document.
Ø
Earnest Money: -
|
Earnest Money is generally 2–3% of estimated cost |
Ø
Security Deposit: -
|
Security money is generally 10% of estimated cost |
Ø
Retention Money: -