GUIDELINES ON
CONSTRUCTION PROJECT
MANAGEMENT
FOREWORD
1.0 RITES has been handling Project Management Consultancy assignments for the past few decades. While some of the Clients, particularly Government Departments and Public Sector Undertakings, insist upon RITES adopting the Tender Document and Contract Management procedures of specific organizations such as that of Railways, CPWD, State PWD, MES, World Bank etc, there are also cases of Clients leaving it to RITES to decide on the documentation and procedures.
2.0 The need to have well documented Guidelines/Manual in an organisation to execute its construction activities in a uniform and well coordinated manner with least time and cost over-runs cannot be over emphasised. Such Guidelines are required to guide officials in their day to day work, so that there is systematic and uniform approach in decision making. The purpose behind issue of these Guidelines is to bring uniformity in dealing with various aspects of Project/Contract Management by all the Project Offices. The Guidelines on Construction Project Management were first issued in 2005 and revised in 2009. The 'Guidelines 2011' is the revised edition of ‘Guidelines 2009’.
3.0 Since the issue of Guidelines 2009, a number of amendments/new clauses/new paras have been incorporated by way of issue of circulars/correction slips. RITES Standard Tender and Contract Document and GCC have since been thoroughly revised and issued in June / July 2011. A number of circulars have also been received from CVC. New CPWD Works Manual 2010 has also been published. All these changes that have taken place since the publication of 2009 edition have been considered and suitably incorporated in the Guidelines 2011.
4.0 These Guidelines have been made out generally on the basis of CPWD Works Manual 2010 but also incorporate good practices in the Manuals/Instructions of other major organizations like Indian Railways, World Bank, Military Engineering Service etc. A few examples in this context are given below. These are only illustrative in nature and do not cover all such items.
(i) Contract Documents of World Bank, CPWD and Indian Railways provide for Pre-qualification Criteria different to what has been indicated in this Guidebook.
(ii) World Bank does not provide for any negotiations even with the lowest tenderer.
(iii) In the Indian Railways Contract Documents, the practice is to go in mostly for Percentage Rate Tenders in place of Item Rate Tenders.
(iv) In CPWD Contract Documents, there is no provision for a Tender Committee.
5.0 These Guidelines do not, however, supersede specific provisions, if any, in the Contract Documents. Where on any issue, specific instructions exist in the Contract Documents, they will take precedence over the provisions in these Guidelines, but the provisions in Contract which gives full powers to the Engineer-in-charge in dealing with the Contract would not override the internal
powers of authorities competent to take decisions in various matters vis-à-vis Engineer-in-Charge.
6.0 Revised Standard Tender Document 2011 based on CPWD Document but with some modifications has been issued separately. Where the Client leaves it to RITES to adopt its own set of Tender Documents, these Documents should be adopted and the Guidelines will be fully applicable in such cases. In other cases where the Client insists on adoption of other Standard form of Tender Documents such as of Indian Railways, World Bank, MES etc., the Guidelines should be followed subject to the stipulation that the provisions, if any, in the Contract Documents on any specific aspect of Contract Management will supersede the corresponding provisions in these Guidelines.
7.0 The Guidelines are divided into 27 Sections with Annexures kept at the end. Annexures have been numbered separately for each Section and reference has also been given therein to the corresponding Para number. Modifications made on Guidelines 2009 and incorporated in these Guidelines are attached.
8.0 The attention of RITES SBU Heads who will be involved in entering into Agreements with the Clients for Project Management is specifically invited to Annexure 2.1 of the Guidelines giving details of a Model Agreement between RITES and the Client in cases where RITES acts for and on behalf of the Client as a Power of Attorney Holder and enters into the Works Contract with the Contractor. The provisions in this Annexure are the ideal ones and may require modification depending on the scope of works of the assignment and the provisions in vogue in similar consultancy agreements which the Client organisation may insist on adoption.
9.0 The attention of all RITES Engineers is also specially invited to Para 1.6 of the Guidelines on "Essential features of Good Project Management". The provisions should be carefully gone into and efforts made to follow the same. In exceptional circumstances where they cannot be observed in totality because of exigencies of work, reasons for the same should be kept on record with proper follow up action.
10.0 All SBU Heads must ensure that a copy of these Guidelines is given as a personal copy to each Engineer under them in whatever grade he is and take his acknowledgement in writing. An acknowledgement should also be taken from each such Engineer after a period of three months in confirmation of the fact that he has read and understood the contents of the Guidelines. The Guidelines may be retained by the Engineer till his retirement/leaving RITES service when the copy should be taken back by SBU Head. Similar procedure should also be adopted in future at the time of induction of fresh Engineers into RITES cadre. Same procedures will be required to be followed in future when dealing with Addenda & Corrigenda that may be issued to the Guidelines.
11.0 SBU Heads should also organise training programmes for the Engineers in their Units so that doubts, if any, can be got clarified.
12.0 It will be appreciated that in Guidelines/Manual of this nature, it may not be feasible to include material to cover each and every contingency that may arise in the course of execution of works, though efforts have not been spared to make it as comprehensive as possible. In the event of any contingency that might arise requiring supplementing/deviations from what is contained in these Guidelines so
as to suit the conditions on a particular project, the same may be done with the approval of appropriate authority.
13.0 This revised ‘Guidelines 2011’ has been prepared through the efforts put in by Shri R. Balasubramanian, ex-General Manager/Metro/Kolkata/Indian Railways and presently Advisor/RITES, who was also instrumental in making out the first Edition of Guidelines in 2005, Shri G.V.Chanana, Advisor, Contract Cell and a number of senior officers of RITES. No amount of words of appreciation and gratitude to them will be adequate for the purpose.
14.0 It is sincerely hoped that the ‘Guidelines 2011’ would serve the needs for which it has been published.
B.K. MAKHIJA
Gurgaon Managing Director
MODIFICATIONS MADE IN THE GUIDELINES “FEBRUARY 2009” AND INCORPORATED IN THE GUIDELINES “JULY 2011”
The following are the salient changes made in the “Guideline 2009” and incorporated in these Guidelines.
i) Section 4
Para 4.5.2 Detailed procedure to be followed in making out the Estimate for specialized Works like Box Pushing, Construction of PSC Girder Bridge over Railway Track etc., where the cost of enabling work is substantially high and also dependant on site conditions, has been indicated.
ii) Section 5
Para 5.2.2. GCC will not be available as a Priced Document and will be issued as a part of the Tender Document.
Para 5.3 This deals with Lump sum Contracts with an Annexure explaining the details.
iii) Section 6
Para 6.6.1 The existing provision that Press Notification is compulsory for all Open Tenders has been modified to restrict to only Tenders costing over Rs. 50 lakhs. Also it has been made clear that Addenda/Corrigenda to Tender Document will only be uploaded on RITES website with no individual communication to the Tenderers.
Para 6.7 The Minutes of the Pre-bid meeting etc. will be displayed only on RITES website. Also queries from Bidders should be sent at least 10 days in advance of the deadline for submission of Tender.
Para 6.8 Annexure 6.5 relating to this para has been simplified to reflect the methodology to be followed in laying down the qualification criteria.
iv) Section 8
Para 8.9.22
Procedure to be followed on a relook of the Estimate etc. in case of persistent high rates received on re-invitation of Open Tenders has been stipulated.
Para 8.14
Stress has been laid on the need for maintenance of copies of agreements in bound volumes with page numbering and date / initials with seal of both RITES and Contractor.
v) Section 10
Para 10.4 Performance Guarantee can be released even on Provisional Certificate of Physical Completion. Additional Performance Guarantee can be released even earlier on completion of items of works with unbalanced rates. vi) Section 12
Para 12.5.5. This lists out the sequence of events on completion of work starting from Contractor’s Notice on completion of work till preparation of Final Bill.
Para 12.7.2 Clause 10CC on Price variation will be applicable only for works costing over Rs. 100 lakhs and not linked to the time of completion.
Para 12.7.7 Indices to be used for Price Variation have been modified in light of the Indices published by the Economic Advisor, Ministry of Commerce & Industry.
Para 12.8.5 The concept of making payment to the Contractor at 97% of BOQ rates for some quantity in excess of Deviation Limit has been introduced.
Para 12.9 Clause 14 of GCC has been re-introduced with the Heading “Taking away part work due to default of the Contractor and recovery of additional cost.”
vii) Section 17
Para 17.2.4 In case of quantities executed beyond the limit for which rates are available in Clause 12.2 of GCC, provisional payment may be made to the Contractor at 75% of BOQ rate pending approval of the revised rates by the Competent Authority.
viii) Section 19
Para 19.14.4 Stress has been made on the need for invoking Arbitration/Court Proceedings within the Limitation period laid down in the Limitation Act.
ix) Section 21
Para 21.1.5 There is no need for maintenance of two separate printed format of MBs. The Abstract of Measurements may be recorded in manuscript form in the same MB in which the measurements are recorded.
Para 21.6 The concept of “Computerised Measurement Book” as an alternative to conventional printed MB has been introduced. In the event of resorting to use of Computerised Measurement Book, the billing will also be computerized.
GUIDELINES
ON
CONSTRUCTION
PROJECT
MANAGEMENT
JULY
2011
CONTENTS
SECTION PARA
SUBJECT
PAGE
NO.
1
INTRODUCTION
1.1
Preamble
1.2
RITES
Documents
1.3
Integrity
Pact
1.4
Types of Project Consultancy Assignments
1.5
Financial Liability of RITES
1.6
Essential Features of Good Project Management
2
CONTRACT WITH CLIENT
2.1
Signing of Contract with Client
2.2
Definition of Deposit Works
2.3
Realization of Contribution for Deposit Works
2.4
Execution of Deposit Works
2.5
Endorsement of Copies of Documents to the Client
3
PROJECT ORGANISATION AND RESPONSIBILITY
FOR PROJECT IMPLEMENTATION
3.1
Organisational Set up
3.2
Field
Organisation
2.3
Organisation at SBU Office
3.4
Desirable Level of Organisation
3.5
Field Activities for which Controlling Site Engineer will
be responsible
3.6
SBU Office Activities for which the Project Coordinator
will be responsible
4
PREPARATION OF ESTIMATES
4.1
Preliminary
Estimate / Abstract Estimate
4.2
Detailed Estimate / Technical Sanction
4.3
Detailed Estimate for Technical Sanction – Procedure
for Preparation
SECTION PARA
SUBJECT
PAGE
NO.
4.4
Detailed Estimate-Non Schedule items-Market Rate
Analysis
4.5
Detailed Estimate –Compilation
4.6
Technical Check of Detailed Estimates
4.7
Supplementary
Estimate
4.8
Revised
Estimate
4.9
Market Rate Analysis
5
CONTRACTS AND FORMS
5.1
Definition of Contract
5.2
Contract
Documents
5.3
Lumpsum
Contract
6
PREPARATION OF TENDER DOCUMENTS AND
PUBLICIT
6.1
Tender
System
6.2
Single Tender
6.3
Limited Tender
6.4
Contents of Tender Documents
6.5
Invitation of Tenders for Component Parts
6.6
Publicity of Tenders
6.7
Pre Bid Conference
6.8
Pre Qualification of Tenderers – Joint Ventures
6.9
One Packet and Two Packet Systems
6.10
Time Limit for Publicity of Tenders
6.11
Re-invitation of Tenders – Extension of Period
7
SALE OF TENDER DOCUMENTS
7.1
Documents to be ready in time
7.2
Supply
of
Duplicate
set of Tender Documents
7.3
Time Interval between Sale of Tender Documents and
Opening of Tenders
7.4
Scale of Charges for Tender Documents
7.5
Supply
of
Drawings
7.6
Precautions in Sale of Tender Documents
8
RECEIPT, OPENING AND ACCEPTANCE OF
TENDERS
8.1
Procedure to be adopted
8.2
Delayed and Late Tenders
SECTION PARA
SUBJECT
PAGE
NO.
8.3
Instructions for Tender Opening Officers
8.4
Evaluation
of
Tenders
8.5
Preparation and Scrutiny of Briefing Note for Technical
Bids (Applicable for both Single Packet and Two Packet
Systems)
8.6
Evaluation of Technical Bids by Tender Committee
(Applicable for both Single Packet and Two Packet
Systems)
8.7
Opening of Financial Bids
8.8
Preparation and Scrutiny of Briefing Note and
Comparative Note for Financial Bids (Applicable for both
Single Packet and Two Packet Systems)
8.9
Evaluation of Financial Bids by Tender Committee
(Applicable for both Single Packet and Two Packet
Systems)
8.10
Tender
Committee’s
Recommendations and Action by
the Tender Accepting Authority
8.11
Purchase Preference to Public Sector Enterprises
8.12
Acceptance of Single Tender
8.13
Procedure for Conducting Negotiations
8.14
Communication of Acceptance of Tender
8.15
Time Limit for Finalization of Tenders
8.16
Reinvitation of Tenders
9
EARNEST MONEY
9.1
Necessity for Earnest Money
9.2
Rates of Earnest Money
9.3
Mode of Deposit
9.4
Refund of Earnest Money
9.5
Forfeiture of Earnest Money
10
PERFORMANCE GUARANTEE AND SECURITY
DEPOSIT
10.1
Performance
Guarantee
10.2
Validity of Performance Guarantee
10.3
Claim under Performance Guarantee
10.4
Refund of Performance Guarantee
10.5
Recovery of Security Deposit
10.6
Claims under Security Deposit
10.7
Validity Period of Security Deposit and Refund
10.8
Miscellaneous
Provisions
SECTION PARA
SUBJECT
PAGE
NO.
10.9
Refund of Security Deposit – Guarantee on Specialised
Items of Works
10.10
SBUs Responsibility for Prompt Refund of Security
Deposit and Performance Guarantee
11
AGREEMENTS/CONTRACTS – ESSENTIAL
FEATURESG
11.1
General
Features
11.2
Power to Sign Agreements
11.3
Recording of Date of Acceptance of Tender in the
Agreement
11.4
Supply of Copies of Contract to Contractors
11.5
Certification and Custody of Agreements
11.6
Contents of Agreements
11.7
Safe Custody of Contract Agreement and Related
Documents
12
GENERAL GUIDANCE FOR OPEATION OF
CONTRACT CLAUSES
12.1
Clause
2
12.2
Clause
3
12.3
Clause
5
12.4
Clause
7
12.5
Clause
8
12.6
Clause 10 (C ) and Clause 10 CA
12.7
Clause 10 (CC)
12.8
Clause
12
12.9
Clause
14
12.10
Clause
16
12.10A
Clause
21
12.11
Clause
36
12.12
Clause
42
12.12A
Clause
45A
12.13
Clause
47
12.14
Performance for Notices to Contractor under various
Clauses of Contract and for Completion Certificate
SECTION PARA
SUBJECT
PAGE
NO.
13
EXTENSION OF TIME AND COMPENSATION FOR
DELAY
13.1
General
Principles
13.2
Requirements of Clause 5
13.3
Powers of Officers for Grant of Extension of Time
13.4
Grant of Extension of Time without Application
13.5
Form of Application for Extension of Time
13.6
Procedure for Granting Extension of Time
13.7
Compensation under Clause 2
13.8
Section 74 of the Indian Contract Act, 1872
13.9
Proforma for Intimating Extension under Clause 2
14
PAYMENT FOR SUB – STANDARD WORK
14.1
Procedure for Acceptance of Substandard Works
14.2
Acceptance of Substandard Work
15
ISSUE OF MATERIALS TO CONTRACTOR
15.1
Issue of Materials to be an Exception
15.2
Issue, Supply and Recovery of Cost of Materials
15.3
Issue
Rates
15.4
Return of Surplus Materials
15.5
Instructions regarding Storage of Cement in Godowns
15.6
Issue of Materials against Bank Guarantee
15.7
Recovery towards materials issued for verification of
defects/Reclosing of work
16
MATERIALS ARRANGED BY CONTRACTOR AND
MANDATORY TESTS
16.1
General
Principles
16.2
Mandatory Tests – CPWD Specifications
16.3
Design Mix Concrete – Acceptance Test
16.4
Nominal Mix Concrete – Action in case of Failure of
concrete in Mandatory Concrete Cube Tests
16.5
Design Mix Concrete – Action in case of Failure of
Concrete in Cube Tests
SECTION PARA
SUBJECT
PAGE
NO.
17
EXTRA, SUBSTITUTED AND DEVIATED ITEMS OF
WORK
17.1
Deviation
17.2
Prior Sanction of Competent Authority Necessary
17.3
Extra / Substituted Items
17.4
Fixation of Rates for Deviated / Extra /Substituted Items
17.5
Rates for Deviation (Extra / Substituted / Deviated
Quantities) Items allowing Profits and Overheads on
Stipulated Materials supplied to the Contractor
17.6
Measurements
for
Inadmissible Items
17.7
Deviations in Quantities of BOQ Items
18
FAIR WAGE CLAUSES AND CONTRACTOR’S
LABOUR REGULATIONS
18.1
Provisions of Act
18.2
Acts
/
Omissions
18.3
Fair Wages
18.4
Responsibilities of Field Officers
18.5
Responsibilities
of Contractor
18.6
Deductions to be made from Contractor’s Bills
18.7
Procedure in case of Accidents to Contract Labour
19
ARBITRATION AND LITIGATION
19.1
Application of Arbitration Claus 25 of Standard Contract
Form
19.2
Application for Appointment of Arbitrator
19.3
Preparation
for
Arbitration Cases
19.4
Processing of Contractor’s Application
19.5
Appointment
of Arbitrator
19.6
Action Subsequent to Appointment of Arbitrator
19.7
Engagement of Lawyers
19.8
Production
of
Official Documents before
Court/Arbitrators
19.9
Default of a Party
19.10
Making of Award
19.11
Acceptance of Award
19.12
Review of Arbitration Award
19.13
Setting Aside of Awards
19.14
Period of Limitation
19.15
Court
Cases
SECTION PARA
SUBJECT
PAGE
NO.
19.17
Legal Charges on Civil Suits / Arbitration Cases
19.18
Documentation for Arbitration Cases
19.19
Disposal of Old Records
20
RECORDS TO BE MAINTAINED AT SITE OF WORK
20.1
General
Provisions
20.2
Site
Order
Book
20.3
Periodic Inspection of Works – Inspection Record
20.4
Hindrance Register
20.5
Daily Progress Record
20.6
Cement
Register
20.7
Steel
Register
20.8
Non Conformance Items Record
20.9
Quality Audit Record
20.10
Site Coordination Meetings Record
20.11
Guarantee Bonds Record
20.12
Insurance Policies Record
20.13
Drawings
Record
20.14
Record of Mandatory and Non Mandatory Tests Carried
out
20.15
Paint and Chemicals Record
21
MEASUREMENT BOOKS
21.1
Measurement Book – General Instructions
21.2
Test Checking of Measurements
21.3
Recording Levels for Earth Levelling Works
21.4
Loss of Measurement Book
21.5
Proforma for Measurement Book
21.6
Compressed
Measurement
Books (CMBs) and Bills to
be submitted by the Contractor
22
PAYMENTS TO CONTRACTOR
22.1
Requirement of Clause 7
22.2
Final
Payments
22.3
Time Schedule for Payment of Bills
22.4
Inspection of Work Nearing Completion/After completion
22.5
Completion
Certificate
22.6
Payment through Banks
22.7
Deduction of Income Tax at Source
22.8
Deduction of ‘Sales Tax on Works’/Vat on Works
Contract at Source
22.9
Deduction of VAT and Building Workers Cess at Source
22.10
Deduction of ‘Service Tax On Works’ at Source
SECTION PARA
SUBJECT
PAGE
NO.
23
ADVANCES TO CONTRACTOR
23.1
Types of Advances
23.2
Certificates to Accompany Bills
24
PREPARATION, EXAMINATION, VERIFICATION AND
PASSING BILLS FOR PAYMENTS
24.1
Preparation of Bills
24.2
Forms of Bills for Payment
24.3
Authorities to Pass the Bills
24.4
Payment for Work done
24.5
Deviation
Statement
24.6
Bank Guarantees – Check and Custody
24.7
Documents to Accompany Bills
24.8
Check of Bills at SBU Office
25
QUALITY ASSURANCE AND CHECK LISTS
25.1
Introduction
25.2
Quality Assurance Plan
25.3
Methods
Statement
25.4
Responsibility for Quality Assurance
25.5
Checklists
25.6
Testing
Laboratory
26
CHIEF TECHNICAL EXAMINER’S ORGANIZATION
AND COMMON IRREGULARITIES OBSERVED
26.1
Functions of CTE Organisation
26.2
Returns
26.3
Inspection by CTE
26.4
Recoveries of Over Payments pointed out by the CTE
26.5
Common
Irregularities
pointed out by the CTE
27
OPENING , CUSTODY AND FINAL DISPOSAL OF
ESSENTIAL PROJECT DOCUMENT
27.1
Preamble
27.2
Common Deficiencies Observed in System of
Maintenance and Disposal of Records
27.3
Procedure Order on Opening, Custody and Final
Disposal of Essential Project Documents.
SECTION 1 INTRODUCTION 1.1 PREAMBLE
RITES has been handling Project Management Consultancy assignments for the past few decades. While some of the Clients, particularly Government Departments and Public Sector Undertakings, insist upon RITES adopting the Tender Document and Contract Management procedures of specific organizations such as that of Railways, CPWD, State PWD, MES, World Bank etc, there are also cases of Clients leaving it to RITES to decide on the documentation and procedures. Some organizations such as Indian Railways, CPWD, MES, World Bank etc, have also printed their Standard Tender Documents and Manualsfor the guidance of the officers and field Engineers and these are followed in execution of works in their organizations.
1.2 RITES’ DOCUMENTS
For dealing with Projects in which the Clients permit RITES to adopt any System considered good by RITES, the following documents have been made out by RITES for uniform application by all RITES Offices while handling such projects.
(i) Guidelines on Construction Project Management 2011
This document is based mainly on CPWD Works Manual 2010 but with substantial modifications by incorporating the good practices of other organizations like Indian Railways, World Bank etc. The guidelines are comprehensive and cover almost all aspects of Contract Management of particular interest to the Site Engineers and officers in SBUs. The Guidelines should be read along with the Standard RITES Tender Documents referred to in item (ii) below. Various instructions/circulars/guidelines issued by different Deptts like CVC, Railway Board etc in the past have also been taken into consideration in preparing this revised edition. The provisions contained in this book can be adopted also in the Management of Contracts based on the formats of other organizations like Indian Railways and World Bank in so far as they don’t contradict each other.
(ii) Standard Tender Document 2011
The Standard Tender and Contract Document 2011 with components indicated below has been made out basically adopting CPWD Format but with some major modifications. It consists of three parts.
Part 1 (Technical Bid) comprises of following six sections. 1) Notice Inviting Tender and Instructions to Tenderers 2) Tender and Contract Form
3) Special Conditions 4) Schedules A to F
5) Technical Specifications 6) Drawings
Part 2 : Financial Bid–Schedule (Bill) of Quantities Part 3 : General Conditions of Contract
Section (7) Conditions of Contract Section (8) Clauses of Contract Section (9) RITES Safety Code
Section (10) RITES Model Rules for Workers
Section (11) RITES Contractor”s Labour Regulations
Depending on the nature and scope of work, Bill of Quantities, Drawings and site/work specific Special Conditions/Specifications will be required to be made out by NIT Approving Authority. The Standard Tender Document may be adopted in all cases other than those where the Client insists upon adoption of a specific format such as that of Railways, MES, World Bank etc. iii) Guidelines for Arbitration under Arbitration & Conciliation Act 1996 –
July 2007
iv) Checklist of Specifications for Civil Engineering Works for Quality Control – August 2008
v) Specifications for Railway Track and Bridge Works – September 2010 1.3 INTEGRITY PACT
RITES in cooperation with CVC has signed MOU with Transparency International (India) for adoption of Integrity Pact (IP) as a vigilance tool for promoting integrity / transparency and competitiveness in matter of major procurements. It has been decided by RITES that to begin with, Integrity Pact shall be made part of Bid Documents to be issued to all intending bidders, for works of estimated cost above Rs.10 Crore. For works of estimated cost of above Rs.10 Crores, Independent External Monitor (IEM) shall be pre-nominated to review independently, the compliance of Integrity Pact. The Competent Authority to appoint IEM shall be MD/ RITES. The Integrity Pact is available as Annexure VIII to Section I (Part I) of Bid Document viz. NIT & Instructions to Tenderers, in all Tender Documents for works of estimated cost above Rs.10 Crores.
a) IP shall cover all phases of the contract i.e. from the stage of NIT / Pre-Bid stage till completion of contract. Any violation of the same would entail disqualification of bidders.
b) Entering into this Pact by the bidder would be a preliminary qualification. c) IP would be implemented through a panel of IEMs appointed by RITES. For ensuring liaison between IEM and Contractor / Employer, RITES will nominate a suitable officer at HQ as Liaison Officer.
1.4 TYPES OF PROJECT CONSULTANCY ASSIGNMENTS
RITES as a Premier Consultancy Organization has been handling Project Management Consultancy Works of different types as detailed below, mostly for Central Government / State Government Departments and Organizations and in a few cases, for private parties.
(i) Project management on Supervision basis:- Client Organisation with adequate technical expertise, handles the Planning and Tendering phases, signs the Works Contract with the Contractor and entrusts to RITES, the complete responsibility of Project Management. Here the payments to the Contractor are effected by the Client on certification by RITES. There are some cases where the Client Organisation has taken the help of RITES in planning stage as well as in Tendering Stage. In some cases the Client, while deploying his own staff for day to day supervision, entrusts to RITES, General Supervision including Quality Control.
(ii) Project management on Deposit/Turnkey basis:- Client Organization entrusts through a Power of Attorney or other instrument like a Contract, complete responsibility to RITES for the Works including Planning, Tendering and Supervision of works. The funds are made available by the Client to RITES either in a lump sum or in installments. In such cases, the Works Contract with the Contractors are signed by RITES for and on behalf of the Client and RITES makes payment to the Works Contractors. In these cases, the Client generally does not possess the technical expertise to handle major works. But in all cases, even if Client does not possess the technical expertise, the Client expects RITES to keep them apprised of any developments with financial implications.
1.5 FINANCIAL LIABILITY OF RITES
The type of Project Management Contracts in 1.4 (i) above generally does not entail any financial liability on RITES since the Client is the Employer in the Works Contracts with the Contractor. But in the type of Project Management Contracts, in 1.4 (ii) above the financial liability of RITES can be of a large magnitude which may end up in disputes leading to Arbitration or Court case. With the Agreement executed between RITES and the Contractor, the legal provision is that there is no privity of Contract between the Client and the Contractor even though the Agreement may have been executed by RITES for and on behalf of the Client and the Client has granted a Power of Attorney to
RITES or appointed RITES as his Agent. There is hence the necessity for RITES staff to understand clearly the various aspects of Project Management in the Planning, Tendering and Supervision stages.
Irrespective of whether the Works Contract is signed by RITES or by the Client, the guidelines in this document should be followed to protect the interest of RITES in Project Management Consultancy Contracts. While various aspects of Project Management from tendering to execution have been covered in detail in subsequent Sections, the basic items to be kept in view for successful implementation of a Construction Project are detailed below.
Efforts should be made to ensure observance of the essential features discussed in para 1.6 below. However wherever it is not possible to observe the same in totality because of exigencies of work, reasons for the same should invariably be kept on record. Sufficient care should also be taken to ensure that follow up action on all such issues is taken up in a reasonable and defined time schedule. 1.6 ESSENTIAL FEATURES OF GOOD PROJECT MANAGEMENT
(i) Work should not be awarded to the contractor until ideally all the required construction drawings are available. However, in case of any exigency, which should be recorded, it should be ensured that construction drawings of foundation and floor one above or equivalent in other types of worksare available for construction activities for at least 3 to 4 months. It shall be the responsibility of the Project Coordinator to ensure that balance drawings are finalized during this period.
(ii) Contract should not be awarded to the contractor until the site is available and ready for the construction with clear title deed and free from encroachments, encumbrance etc. If the Client insists on award of contract with only part land available and if RITES is to sign the works Contract as Agent / Power of Attorney Holder, the Client has to be advised in writing that if balance land is not made available as per the Project Schedule in the Tender Document, the Contract may have to be terminated and the resultant liability which may include claims from the contractor will be to Client’s account. It should also be checked in advance to ensure that the approval of the Local Authorities is available for use of the land for the intended purpose. Contract may not be awarded till approval of local body to the Layout and building plans is available.
(iii) Work should not be awarded till sufficient funds are deposited by the Client. Where the full contract amount is not made available in advance by the Client who desires to make available funds in installments, the Client should be advised right at the initial stage that in case funds are not made available promptly as asked for, the Works Contract will have to be terminated and the resultant liability which may include claims from the Contractor will be to Client’s account.
(iv) Contract conditions should not be ambiguous and vague. Proper care should be taken at the time of preparation of BOQ.
(v) All out efforts should be made to avoid any delay on part of RITES in issuance of drawings, clarifications on specifications of items, processing of bills for payment and giving decisions on matters referred to by the Contractor.
(vi) No extra or substituted item should be executed at site without prior in-principle approval from the competent authority of RITES and of the client, if the agreement with RITES requires the same. However in case of exigency the permission to execute the Substituted or Extra Item should be taken from the SBU Head or project coordinator respectively. Pending processing of the rate of Extra/Substituted Item, payment to contractor should be released @ 75% of the rates as tentatively determined by the SBU Head of RITES.
(vii) Quantities should not be executed beyond the permissible deviation limits in BOQ items for which rates have been fixed in the Contract, without the in principle approval of the Competent Authority of RITES and of the Client, if the Agreement with RITES requires the same. Payment to contractors for such deviated quantities should be made in accordance with contract provisions. Where the Contractor presses for payment for quantity executed in excess of specified limits, for which rate can be derived from BOQ rate, payment may be effected at 75% of BOQ rate with the approval of SBU Head. But expeditious action should be taken to decide on the revised rate.
(viii) It should be ensured that rates of Extra / Substituted Items as well as rates for the BOQ items for quantities beyond the Limits for which rates are available in the contract are duly accepted by the Contractor, before releasing payment of Final Bill.
(ix) Decisions sought by Project Coordinators with regard to drawings, details, specifications, additional items, Extra / Substituted Items, operation of BOQ items beyond permitted Limit etc. shall positively be communicated to them by the respective SBUs within a reasonable time (say 15 days). (x) Whenever there is any likelihood of increase in the cost of work beyond
the Clients’ Expenditure Sanction figure, Revised Estimate should be prepared well in advance and submitted to the Client for revised Administrative Approval and Expenditure Sanction.
(xi) All the letters and references of the Contractor should be replied to promptly. No letter or reference of the Contractor should remain unanswered.
(xii) Proper records should be maintained at site with regard to handing over of the site and issue of drawings as well as daily progress reports with details of plant, machinery and equipment deployed at site by the Contractor, supervisors and labours deployed at site and hindrance details. Site Order
Book is an important document to be maintained at site. Signature of the Contractor should invariably be obtained as token of his acceptance in the relevant records.
(xiii) All possible avenues should be explored to avoid contractual problems such as arbitration etc. All disputes should be attempted to be settled amicably within the frame-work of the Contract during the currency of the Contract.
(xiv) The contract should be kept live by extending the contract, even suo-moto, without prejudice to the right of RITES/Employer to levy Liquidated Damages. The contract must be extended within the contract period/extended period.
SECTION 2
CONTRACT WITH CLIENT
2.1 SIGNING OF CONTRACT WITH CLIENT
Any project management starts with the entering into a Contract with the Client. A good project management therefore has to start with a well drafted Contract document where the responsibilities and scope of the work of RITES and the Client are well defined. It is also to be ensured that the Contract does not result in RITES entering into long term liabilities with the Client or with the contractors engaged either by RITES or the Client.
Special care needs to be taken where RITES awards and signs the Contract with Contractor for execution of work, even if these are for and on behalf of the Client. In order to ensure uniformity, a format for Model Agreement between RITES and the Client generally in line with the above stipulation is enclosed as Annexure 2.1. The Conditions in the model agreement are generally based on CPWD Practice which are the ideal ones to protect the interest of RITES. They may be relaxed to the minimum extent necessary, by the Competent Authority of RITES during discussions / negotiations with the Client, keeping in view the scope of work to be carried out.
2.2 DEFINITION OF DEPOSIT WORKS
Works which are got executed by RITES where Works Contracts are signed by RITES for and on behalf of the Client and the Client makes funds available to meet the Works Contract expenditure, RITES fees and other related expenses, come under the category of Deposit Works. Before taking up any Deposit Work, an Agreement has to be executed between RITES and the Client indicating clearly the scope of work, the financial arrangements envisaged by the Client for smooth progress of works and the items on which RITES should take prior approval of the Client as well as the items on which RITES can take a decision on its own with or without advice to the Client, during the course of execution of work.
2.3 REALIZATION OF CONTRIBUTION FOR DEPOSIT WORKS
2.3.1 Whenever a Deposit Work is to be carried out, full contribution should normally be realized before any liability is incurred on account of the work. However, in cases where RITES is satisfied that money will be forthcoming when required, RITES may accept the request of the Client to make available the funds in suitable installments. Efforts should be made to realize about 1% of the anticipated project cost before preparation of preliminary estimates.
2.3.2 In cases of deposit works of financially sound Clients from whom receipt of money is generally assured, ideally 33-1/3% of the estimated cost of the work may be got deposited as advance. Thereafter, the expenditure incurred may
be got reimbursed through monthly bills simultaneously with rendering of monthly accounts on the progress of work. The deposit of 33-1/3% or any other percentage mutually agreed to between RITES and the Client; obtained as the first installment should be retained for adjustment against the last portion of the estimated expenditure. With regard to Deposit Works involving Clients who have earlier defaulted in payments, or where the works outlay is predominantly for purchase of capital equipments and machineries, the entire deposit should be obtained in advance.
2.3.3 Where delays are experienced in obtaining funds and where expenditure has to be incurred out of the 33-1/3% or agreed percentage reserve to keep the works going, the matter should be brought up by the Project Coordinator to the notice of SBU Head promptly for taking up the matter with the Client. It is reiterated that no expenditure is to be incurred on Deposit Works out of RITES’ funds.
2.3.4 To enable the Client to provide additional funds in time, Revised Estimates should be sent to the Client, at the appropriate stages during the execution of works wherever required.
2.3.5 It should be ensured that in no case deposits received in respect of one Deposit Work are diverted to other Deposit Works even for the same Client. The only exception will be in case when the Client specifically authorizes in writing such diversions.
2.3.6 The Client on whose behalf the work is to be done is also to be made clear that RITES does not bind itself to complete the work within the amount of estimate and that the Client should agree to finance the excess that may occur. An acknowledgement of this clear understanding is required to be obtained from the Client before the work is taken in hand.
2.3.7 It should be ensured that the expenditure is not more than the deposits received for the work. Where the SBU Head is doubtful about the timely receipt of the deposits, matter should be taken up with the Client by giving notice that if further deposit is not received, work may be stopped and any contractual liability arising out of such stoppage of work will have to be borne by the Client. Efforts should also be made by higher officers, if need be, to follow up with the Client. In exceptional circumstances, if the work has to be continued, permission of the Divisional Head should be obtained.
2.3.8 While submitting preliminary estimates for Deposit Works for obtaining Administrative Approval and Expenditure Sanction from the Client, a copy of the terms and conditions under which the works would be taken up by RITES generally as given in Annexure 2.1 should also be enclosed with the estimate. Alternatively these provisions should be incorporated in the Agreement between RITES and the Client.
2.4 EXECUTION OF DEPOSIT WORKS
2.4.1 With regard to design, estimation and execution of work, instructions as contained in subsequent sections should be followed. The scope of work should not be altered without written permission of the Client.
2.4.2 SBU Heads should keep a close watch on the progress of expenditure on Deposit Works, particularly on the estimated cost of work, RITES fees and related expenses, the total deposit received and the progressive expenditure. A copy of the monthly expenditure statement should be forwarded to the Client by the SBU Head indicating the additional funds, if any, to be made available, keeping in view the trend of progress of works. Ideally a separate Bank account should be maintained for each Deposit Work which should be credited with all deposits of the Client and debited with payments to the Contractor, RITES’ fees and other expenses as per provisions in the Agreement between RITES and the Client. This will facilitate easy reconciliation of accounts, monthly and on completion of works. It is desirable that in case of opening of such Bank Account, the Agreement between RITES and the Client clearly stipulates whether interest accruing out of short term deposits from the surplus funds if any available in the Account from time to time will be retained by RITES or refunded to the Client. The consultancy fee to be quoted by RITES should take into consideration this factor. Where the Client does not agree for the interest on such short term Fixed Deposits being credited to RITES account, keeping in mind the Income Tax implications on accrued interest and expenditure in management of such short term fixed deposits, the Client’s funds may be kept in current account without any conversion into Short Term fixed deposits.
2.5 ENDORSEMENT OF COPIES OF DOCUMENTS TO THE CLIENT
2.5.1 The Agreement between RITES and the Client will indicate what items will require prior approval of the Client, what items will require post facto approval of the Client and what items can be decided by RITES and the Client just kept advised.
2.5.2 Irrespective of the provisions in the Agreement between RITES and the Client, copy of the following documents should be endorsed to the Client without any delay.
(i) Detailed Estimate as sanctioned by RITES (ii) Detailed drawings as approved by RITES (iii) Tender Document
(iv) Letter of Acceptance to the selected Contractor
(v) Contract with the Contractor / Supplementary Agreement (vi) Letters of Extension of Time issued to the Contractor
(vii) Deviations and Rates as approved by RITES for Extra items, Substituted items and Deviation in Quantity of BOQ items
(viii) Notice to Contractor on Termination / Rescission / Foreclosure of Contract. (ix) Running Account Bills and Final Bill with supporting documents
(x) As–built drawings / Maintenance & Operation Manuals (where applicable). (xi) Completion Certificate
SECTION-3
PROJECT ORGANISATON AND RESPONSIBILITY FOR PROJECT IMPLEMENTATION
3.1 ORGANISATIONAL SET UP
Every project involving field supervision will have :
i) A field unit headed by a Controlling Site Engineer designated as Controlling Engineer/Project Manager/Chief Project Manager, who may be assisted by one or more Engineers and Technical Assistants designated as Site Engineers.
ii) One of the officers at SBU office designated as Project Coordinator for liaison with the field office and who will be responsible for all actions to be taken in the SBU office in connection with that project.
3.2 FIELD ORGANISATION
The strength of field organization will depend on the magnitude of the project in terms of its financial value and the complexity of works involved. The staff strength will be deployed on the basis of the funds provided in the approved input estimate and the average monthly expenditure for different grades of staff. In cases where a definite commitment has been given to the Client on the number and grades of staff that will be deployed by RITES for the Project, this requirement should be kept in mind while deciding on the field organization. Where required, deployment of Technical staff on contract terms for limited periods may be resorted to.
The senior most officer in the field organization irrespective of his grade, will be designated as the “Controlling Engineer/Project Manager /Chief Project Manager” and the technical staff working under him will be designated as “Site Engineers”. While the Controlling Site Engineer will be overall responsible for all the field activities as defined in a subsequent para 3.5, he can allocate specific duties to his supporting technical staff depending on the number available and their grades.
3.3 ORGANISATION AT SBU OFFICE
The SBU Head who may be of the grade of GGM, GM or CPM will be dealing with a number of projects at any one time. He will also be assisted by officers and staff in both technical and financial matters. SBU Head will allocate projects among his senior technical officers who will work as Co-ordinating Officers for the Project or Project Coordinators. Each such technical officer who may be G.M, Addl.GM, Jt.GM, Sr. Dy.GM, Dy.GM or Manager may be required to deal with one or more projects and it will be his responsibility to take care of all activities related to the Project for which the SBU office is responsible as indicated in
subsequent Para 3.6. The nominated Project Coordinator will also keep the SBU Head advised fully on the Project and initiate action for referring through SBU Head to the higher authorities in the Head Quarters, proposals which require sanction of higher authorities at Head Quarters level.
The nominated Project Coordinator will take the assistance of the officers and staff in the Technical Section of the SBU office for dealing with all technical matters related to the project. He will liaise with the Accounts Officer dealing with all financial matters related to the Project.
3.4 DESIRABLE LEVEL OF ORGANIZATION
The table below gives the desirable level of organization for projects of different values. The SBU Head can modify them suitably depending upon the nature and complexity of the project and the availability of engineering personnel under him:
Project Size Project Coordinator Controlling Site Engineer Site Engineer
For Projects costing upto 5 Cr. Rupees Manager Engineer NIL For Projects costing between 5 & 20 Cr.
Rupees
Manager AM Engineer For Projects costing between 20 & 50 Cr.
Rupees
DGM Manager Engineer For Projects costing above 50Cr.
Rupees Sr.DGM/ Jt. GM/ AGM DGM/ Sr. DGM Engineer
3.5 FIELD ACTIVITIES FOR WHICH CONTROLLING SITE ENGINEER WILL BE RESPONSIBLE
3.5.1 PRE-CONSTRUCTION STAGE
a) Check the “Good for Construction Drawings” with the site conditions and see if any modification will be required to be made in the drawings such as change in the layout, type of foundation, increase in depth of foundation, increase in plinth height etc. If any such modifications are called for, the same should be brought to the attention of SBU office promptly for taking necessary action.
b) Do a general check of the BOQ in the Contract Agreement with the “Good for Construction Drawings” and see if there are any obvious errors such as missing items of work, incorrect estimation of quantity of any item, rates in figures and words not tallying for any item etc. If any such error is noticed, it should be brought to the attention of SBU office promptly for taking necessary corrective action.
c) Check if the Contractor has submitted the following documents and if so, xerox copies of the same should be retained in the Site Office and the originals sent to SBU Office. The list given below is based on CPWD General and Special Conditions of Contract and may require modification depending on the provisions contained in GCC & SCC of other type of contracts such as that of World Bank, Indian Railways etc as will be required to be followed for that work.
i) Performance Guarantee Bond.
ii) Insurance Policy on Secured Advance on perishable materials. iii) Bank Guarantee Bond on Mobilization Advance.
iv) Hypothecation deed on Plant, Machinery Advance v) Insurance Policy on Plant & Machinery Advance vi) Bank Guarantee Bond on free supply of materials. vii) License under the Contract Labour (R&A) Act and Rules. viii) Indemnity Bond against patent rights.
ix) Indemnity Bond on Employer’s Plant & Machinery hired to the Contractor.
x) Registration with Sales Tax Department for Sales Tax on Works Contracts.
xi) Insurance Policy on Cost of Works. xii) Third Party Insurance.
xiii) Workmen’s Insurance.
xiv) Indemnity Bond on damages to persons and property. xv) Registration with Service Tax Department
xvi) Registration with Labour Department
d) Check with the provisions in the General and Special Conditions of Contract and see if the following requirements have been complied with i) Site Laboratory fully equipped and manned by adequate numbers of
technically qualified staff.
ii) Availability of qualified and experienced technical personnel at site. e) Check the quality of construction materials arranged by the Contractor by
arranging tests where required and see if the Manufacturers’ Test Certificates have been furnished, where the Contract provides for the same.
f) Check if proper storage arrangements for Cement, Steel and other materials have been provided by the Contractor.
a) Maintenance of records at site of work as detailed in Sections 20 and 27 of this book.
b) Conducting mandatory and other tests on materials and workmanship as indicated in Section 16 of this book, and as per ‘Checklists of Specifications for Civil Engineering works for Quality Control’ issued separately.
c) Quality control and Technical Audit on works.
d) Keeping a watch on the Contractor’s compliance with Labour Regulations as detailed in Section 18 of this book.
e) Taking measurements of work including test checking as detailed in Section 21 of this book.
f) Submission of Running Account Bills with all accompanying documents as stipulated in Section 24 of this book.
g) Processing Contractor’s submissions with his recommendations to SBU office on the following:-
i) Rates for deviated quantities of BOQ items, substituted items and nonscheduled items.
ii) Extension of Time with or without compensation.
iii) Acceptance of substandard work and reduced rates for the same. iv) Contractor’s claims.
h) Issue of notices to the Contractor on progress of work, quality of work, number and competence of technical personnel deployed, functioning of Site Laboratory etc.
i) Keeping a watch on deviation of quantities, reasons thereof and recommend to SBU office, measures to minimise deviations.
3.5.3 CONSTRUCTION STAGE (ON PHYSICAL COMPLETION )
a) Inspect the works on receipt of report from the Contractor that the works are completed, point out the deficiencies, if any, and issue Provisional Certificate of Physical Completion/ Completion Certificate.
b) Submission of Final Bill with all accompanying documents as stipulated in Section 24 of this book.
c) Furnish to SBU office comments on the claims, if any, submitted by the Contractor along with the Final Bill.
d) Ensure that the Contractor cleans up the area before handing over the completed works.
e) Hand over the completed work to the Client under proper Handing over / Taking over Notes along with Guarantees /Warrantees (if any), Completion plans and Operations & Maintenance Manual (if any).
3.5.4 POST CONSTRUCTION STAGE
a) Check on the defects if any pointed out by the Client during the maintenance period and give notice to the Contractor for rectification of the defects.
b) Issue “Maintenance Certificate” to the Contractor on expiry of Maintenance Period after checking that all defects have been rectified. Arrange refund of the balance Security Deposit as per provisions in the Contract.
c) Furnish to SBU office for passing on to the Client, copies of Guarantee Bonds for specialized works.
d) Furnish to SBU office all relevant records properly indexed to facilitate dealing with further Arbitration/Court cases, if any.
3.6 SBU OFFICE ACTIVITIES FOR WHICH THE PROJECT COORDINATOR WILL BE RESPONSIBLE
3.6.1 PRE-CONSTRUCTION STAGE a) Co-ordinate with client regarding:
(i) Entering into contract with client in the format given at Annexure 2.1 modified, if necessary with the approval of competent authority.
(ii) Obtaining his functional requirements relating to the project.
(iii) Obtaining his approval for preliminary drawings/General Arrangement Drawings, specifications etc
(iv) Obtaining his approval for preliminary cost estimates (v) Realization of funds for initial expenses
b) Take necessary action for:
i) Preparation of drawings, design and estimates, if required, through sub-consultants.
ii) Appointment of sub-consultants.
iii) Preparation of input estimates and obtaining approval of the same from competent authority after vetting by finance.
iv) Preparation of tender documents, obtaining approval of the same from Competent Authority, inviting tenders, co-ordinating for
opening of tenders, for evaluation of tenders by Tender Committee and for award of work after acceptance of tender by the accepting authority.
v) Signing of contract by competent authority and sending copies of the same to finance and Controlling Site Engineer.
c) Where the Controlling Site Engineer recommends modifications of “Good” for Construction Drawings” as indicated in Para 3.5.1(a), to issue, in consultation with the Client, necessary corrections to the drawings, workout the Contract implications and advise the Contractor suitably.
d) Where the Controlling Site Engineer points out errors in the BOQ in the Contract Agreement when compared with “Good for Constructions Drawings” as indicated in para 3.5.1 (b), to scrutinize and take corrective action in consultation with the Client to advise the Contractor suitably . e) Check the originals of the documents sent by the Controlling Site Engineer
in terms of para 3.5.1(c) and see if they are in order. Keep them in safe custody along with the originals of Contract Agreement and one set of “Good for Construction Drawings.”
3.6.2 CONSTRUCTION STAGE (WORKS IN PROGRESS)
a) Do periodic inspection of the site of work and see if the records are being maintained as detailed in Sections 20 and 27 of this book. Record inspection notes in the Register covering progress and quality of the materials and workmanship. Carry out mandatory tests, if any, due at the time of inspection. Test check measurements, particularly on classification of soil and items of large value, where there is only one Site Engineer at the project site.
b) Check the Running Bills and accompanying documents as stipulated in Section 24 of this book and take necessary follow up action.
c) Submit to the Client, periodic Progress Reports and Statements of Accounts as stipulated in the Agreement between RITES and the Client. d) Take prompt action in processing approval of the competent authority and
the Client where necessary, and advise the Client, Contractor and the Controlling Site Engineer on the following:
i) Rates of deviated quantities of BOQ items, Substituted items and Non-schedule items.
ii) Extension of Time with or without levy of compensation. iii) Acceptance of substandard work and rates for the same. iv) Contractor’s claims.
e) In cases where the Controlling Site Engineer foresees large deviation of quantities, to take prompt action to study his recommendations and advise the Controlling Site Engineer on the action to be taken.
f) Keep a watch on the validity of Bank Guarantees and take action as detailed in Section 24 of this Document.
3.6.3 CONSTRUCTION STAGE ( ON PHYSICAL COMPLETION)
a) Check the Final Bill and the accompanying documents as stipulated in Section 24 of this book and take necessary follow up action.
b) Scrutinize the claims, if any, submitted by the Contractor along with the Final Bill and get the decision of the Competent Authority in consultation with the Client on action to be taken for dealing with the claims.
c) Submit to the Client the Final Statement of Accounts as provided for in the Agreement between RITES and the Client.
d) Submit to the Client the following documents: i) Completion Certificate
ii) Sets of Completion Plans and Operating & Maintenance Manual as provided for in the Contract
iii) Charge Paper-Handing over by the Controlling Site Engineer to the representative of the Client, the completed works.
3.6.4 POST CONSTRUCTION STAGE
a) Submit to the Client the following documents: i) Maintenance Certificate
ii) Bank Guarantees/Guarantees for specialized works.
b) Keep safe custody of all records as detailed in Annexure 19.5 of this book. c) Deal with Arbitration/Court cases as detailed in Section 19 of this book. d) Deal with Inspection Notes of CTE as detailed in Section 26 of this book.
SECTION 4
PREPARATION OF ESTIMATES 4.1 PRELIMINARY ESTIMATE/ABSTRACT ESTIMATE
4.1.1 Preliminary Estimate is required to be prepared in order to facilitate the Client to accord Administrative Approval and Expenditure Sanction. These estimates should be prepared on the following basis
Building Works:- On the basis of plinth area rates published by CPWD with Delhi Base index of 100 as on 1/10/2007 read with upto date correction slips and updating it with cost index. CPWD issues such Cost Index figures from time to time to facilitate updating of plinth area rates. Extra provisions for superior specifications not covered in the scope of PAR to be taken in the Preliminary Estimate.
Railway Works:- Where supply of P. Way material is to be given by Zonal Railway:-
Track items based on the rates circulated by Railway Board/Zonal Railways and adding the factors of transportation by road, contractor’s profit, taxes etc. Earthwork and ballast supply based on the prevailing rates in the project area.
Railway Works:- Where supply of P. Way material is not to be given by Zonal Railway:-
A) P. Way Material
i. The rates of rails from SAIL which can be obtained from their Delhi or Zonal / State Offices.
ii. The rates of sleepers shall be based on rates to be obtained from PSC sleeper manufacturing company or companies supplying sleepers to the Railways in the area where work is to be executed or else based on recently accepted rates in the area, if available. Rates should be for supply of sleepers to parties other than Indian Railways.
iii. The rates of Points & Crossings and PSC sleepers for the same shall be based on rates circulated by Railway duly enhanced by the % by which the rates of rails/sleepers as obtained vide (i) & (ii) above are over and above Railway circulated rates.
B) Execution of work
The rates for execution of PW works should be based on rates circulated by Railways.
C) General:
In addition to above, provision shall be made for– i) Sales Tax/VAT as applicable.
ii) Freight including handling charges.
iii) General charges including charges for Bank Guarantees and Insurance etc. as required.
iv) Works Tax. v) T & P charges.
vi) Contractor’s profit and overheads
vii) Service Tax, Workers Welfare Cess Act 1996 etc.
Road Works:- Length of road, no. of lanes etc worked out and the rate per unit area, length or other such method adopted for ready and rough calculation, so as to give an approximate idea of the cost involved in the proposal.
Railway Bridges:- On the basis of Bridge opening / span and the number of Tracks to be crossed, adopting Unit Rate per metre of opening per Track.
Road Over Bridges:- On the basis of area of road on bridge proper and on approaches, Unit rate per Sq. Metre of approach will vary depending on the design.
4.1.2 The Preliminary estimate should invariably provide for the probable escalation in the prices based on trend of increase in price of materials and labour for the period between estimate preparation and start of work as also during the period of construction. In case these provisions are not accepted/approved by client, its implication should be conveyed to them in writing.
4.1.3 The estimate should include RITES’ fee which should include fees of sub-consultants, for project management.
4.1.4 Following steps need to be taken before preparation of the estimates: Freeze the requirement of project and specifications of work with the Client. Prepare concept plan based on the requirement and obtain approval of the Client.
Where required, conduct sub-soil investigations and tests to determine subsoil strata and the safe bearing capacity of soil for design of foundations.
4.1.5 While forwarding the Preliminary Estimate to the Client for according Administrative Approval and Expenditure Sanction, an indication shall be given in the history sheet that the cost projected in the Preliminary Estimate is liable to revision due to probable escalation in cost of construction apart from reasons such as change in scope, design and specifications etc, which may be desired by the Client at a later date.
4.2 DETAILED ESTIMATES/TECHNICAL SANCTION
4.2.1 As soon as Administrative Approval and Expenditure Sanction for Work is received based on the Preliminary Estimate and an assurance from the Client that the site is available duly approved by the Local Body for its use for the purpose intended, General Arrangement Drawings and Detailed drawings will be prepared by RITES or got prepared from RITES sub-consultant. Based on the drawings, Detailed Estimate will be prepared.
4.2.2 Detailed Estimate should, as far as possible, be prepared for the entire project as a whole. It will, however, be advisable to decide on the tender packages in advance and prepare estimates packagewise. Technical sanction to the Detailed Estimate should be obtained from the competent authority as per schedule of powers of RITES.
In case of a Composite Estimate, the concerned disciplines like Civil/Electrical/Signal/Mechanical etc, shall obtain Technical Sanction for their respective portion from the SBU Head and then forward the same to the competent Authority for consolidation and sanction.
4.2.3 In case of exigencies of work/requirement of the Client, Detailed Estimate for a part project may be prepared and Technical Sanction obtained for the same. Reasons for the same, however, should invariably be kept on record.
4.2.4 In case the Estimated Cost including the element of RITES fees, Price Escalation during the course of execution of works and unforeseen items, exceeds the amount for which Administrative Approval and Expenditure Sanction has been obtained inclusive of the allowable %age excess as per contract agreement with the Client, the Client should be advised of the revised increased Cost for fresh Administrative Approval and Expenditure Sanction.
4.2.5 When RITES undertakes a project where Detailed Estimate/ DPR has already been approved by the Client, no separate Technical Sanction to the estimate is required from the competent authority of RITES. However during the scrutiny of such estimates, if deficiencies are noticed which have cost implications, the same should be brought to the notice of the Client after it is seen by the competent authority of RITES. The Project Coordinator will be responsible for such scrutiny of estimate and for taking necessary follow up action with the Client.
4.2.6 The Detailed Estimate will include:
References of Name of Work, Estimate Number and a report as detailed in para 4.2.7.
Name and Designation of the official preparing the Estimate and the official doing technical check.
Detailed Statement of Measurements for each item of Work based on the drawings.
Rate analysis for items not available in Standard Schedules of Rates along with supporting documents for rates of materials and labour.
Supporting documents when rates are based on prevailing market rates in the project area.
