Contract Management

Prof. Dr. Ammad Hassan Khan

Project and Contract Management
Beijing National Stadium, China

Project ?
Design Project
Supervision Project
Construction Project
 Resources in Management

4 Ms
1. Manpower 1st M
2. Material 2nd M
3. Machinery 3rd M
4. Money 4th M
Parties of the Project
Employer / Owner/ Client
Design Consultants
Contractor
Supervision Consultants
Components of the Project

Scope

Schedule Project

Budget
Engineering Project
 Classification of the Project

Electrical

Construction Mechanical

Industrial
Engineering Telecommunication
Project
 Disciplines of Construction Project
Highways and Motorways
Multistory Buildings
Dams and Barrages
Canals and Hydraulic Structures
Power Plants
Steel structures and Buildings
Oil Refineries
Telecommunication Towers
Harbor Construction
Railways and Airports
Bridges etc.
 Leading Clients in Pakistan
Federal Govt.
PIA/CAA
NHA
Pakistan Railways
WAPDA
Provincial Govt.
C&W
P&D
Private Sector
Eden Pvt Limited
Bahria Pvt Limited
Leading Design Consultants in Pakistan
NESPAK
ACE
REC
Mott MacDonalds
AAA Associates
Indus Associates
 Leading Contractors in Pakistan
DESCON
NLC
FWO
SKB
ECHO WEST
KRC
HRL
 Leading Supervision Consultants in
Pakistan
NESPAK
ACE
REC
Mott MacDonalds
AAA Associates
 Examples of Engineering Projects
Construction of Fly over at Canal Crossing of
Ferozepur Road Lahore.
Client : Govt. of Punjab C & W Dept.
Design Consultant : NESPAK
Contractor: NLC
Supervision Consultants: NESPAK
 Examples of Engineering Projects
Construction of Chechawatni Sahiwal Section
of N-5 (GT Road) by Cold Recycling.
Client : Govt. of Pakistan , NHA .
Design Consultant : SMEC
Contractor: SKB
Supervision Consultants: SMEC
 Examples of Engineering Projects
Construction of PACE Towers, Gulberg
Client : PACE Pvt. Limited.
Design Consultant : NDA
Contractor: PACE Pakistan
Supervision Consultants: NDA
Contract Management
Contract Management
Prequalification of

Design Consultants

Tendering of

Design Consultants

Tender Documents

Prequalification of Contractor

Tendering of

Contractor
 Prequalification in Engineering
Technical Ability
Financial Ability
 Technical Ability

Registration of the Company

Registration of the Co. with PEC
Registration of Co. with Govt. & Pvt. Clients
List of Past Works
List of Present Works in Hand
List and Contact of all Present and Past Clients
List of Technical Staff
List of Equipment and Machinery (For Contractor Only)
List of Registered Office with Telephone, Fax and Email
 Financial Ability
Bank Reference Certificate
Latest Bank Statement
Income Tax Registration Statement
Sales Tax Registration Certificate
National Tax No.
List of the Cost of All Past and Present Projects
Details of Joint Venture
Litigation and Arbitration
Annual Turn Over
Auditors Report
Tendering in Engineering

Tendering for
1. Design Consultant
2. Contractor
3. Supervision Consultant
 Tendering of Design Consultant
Tender Documents
 Tendering of Design Consultants
Should always after Prequalification of Design
Consultants.
Will only be between Prequalified Companies of
Design Consultants.

Lump sump basis

% age against total
project cost
 Holding of Tender Event for Design
Consultants Selection

Tender Date
Tender Time
Presence of Representatives
Non responsiveness
Sealing of the Tender
Preparation of tender summary
Unofficial declaration
 Tender Documents

Contract and Conditions of Contract

Project Drawings
Technical Specifications
Bill of Quantity
Design and Analysis Calculations
Addendum
Vetting Consultants
 Prequalification of Contractors
Technical Ability (Same as Design Consultant
Except List of Equipment and Plants)
Financial Ability

Normally carried out during Preparation of

Tender Documents.
 Tendering of Contractor
Can be carried out by
Client
Design consultants
Only After
Prequalification of Contractors
Preparation of Tender Documents
 Tender Notice
Advertisement in Newspapers & Official letters to
Prequalified Contractors
Tender documents fee
Time of tender opening
Date and Venue of tender opening
Presence of Representatives
Non responsiveness
Sealing of the Tender
Earnest money [(2 to 5) % in favor of Client]
Bank guarantee
Insurance company guarantee
Demand draft
Holding of Tender Event for Contractor
Selection
Representatives
RepresentativesofofContractors
Contractors
Verification
VerificationofofSeals
Sealsby
byAll
AllContractor
Contractor
Representatives
Representatives
Tender
TenderSummary
Summary
Unofficial
UnofficialLowest
LowestRate
RateCompany
CompanyDeclaration
Declaration
Non
NonResponsiveness
Responsiveness
Tenders
Tenderswith
without
outEarnest
EarnestMoney
Money
Late
LateTenders
Tenders
Unsealed
UnsealedTenders
Tenders
Holding of Tender Event for Contractor
Selection
Representatives of Contractors
Verification of Seals by All Contractor
Representatives
Tender Summary
Unofficial Lowest Rate Company Declaration
Non Responsiveness
Tenders with out Earnest Money
Late Tenders
Unsealed Tenders
Tender Prices Evaluation or Analysis
Sr Description Qty Unit Rate Amount

1 Excavation 1000 m3 5 5,000

2 PCC (1:4:8) 5000 m3 8 40,000
3 Brick work in Foundation 4500 m3 11 49,500
4 DPC 3200 m3 34 108,800
5 Brick work in Super structure 4000 m3 10 40,000
6 Plastering 1200 m2 100 120,000
7 Flooring 2500 m2 50 125,000 Second
Lowest
Total 488,300

Sr Description Qty Unit Rate Amount

1 Excavation 1000 m3 15 3,000

2 PCC (1:4:8) 5000 m3 8 40,000
3 Brick work in Foundation 4500 m3 11 49,500
4 DPC 3200 m3 34 108,800
5 Brick work in Super structure 4000 m3 10 40,000
6 Plastering 1200 m2 100 120,000
7 Flooring 2500 m2 50 125,000
First Lowest
Total 486,300
Tender Prices Evaluation or Analysis
Sr Description Qty Unit Rate Amount

1 Excavation 1000m3 5 5,000

2 PCC (1:4:8) 5000m3 8 40,000
3 Brick work in Foundation 4500m3 11 49,500
4 DPC 3200m3 34 108,800
Brick work in Super
5 structure 4000m3 10 40,000
6 Plastering 1200m2 100 120,000
7 Flooring 2500m2 50 125,000

Total 488,300

Sr Description Qty Unit Rate Amount

1 Excavation 1000 m3 15 3,000

2 PCC (1:4:8) 5000 m3 8 40,000
3 Brick work in Foundation 4500 m3 11 49,500
4 DPC 3200 m3 34 108,800 Corrected Amount
5 Brick work in Super structure 4000 m3 10 40,000 = 498,300
6 Plastering 1200 m2 100 120,000
7 Flooring 2500 m2 50 125,000

Total 486,300
 Post Tendering Issues
Detailed evaluation of tender documents
especially BOQ submitted by all contractors.
Return of Earnest Money to Unsuccessful
Bidders
Two Bidders come on same price
Officially deceleration of Project Contractor
 Tendering of Supervision Consultants
If design and supervision consultants are same
If design and supervision consultants are not
same
Preparation of Tender documents require 2 months to
three years depending on the nature of the project.
The charges asked for supervision of the project by
Design consultants is more than the originally
anticipated by the Client
Overloaded design consultants
Design consultant do not have in house supervision
consultancy facilities
 Tendering of Supervision Consultants
Only Prequalified design consultants can
participate

Lump sump basis

% age against total project cost
Monthly supervision charges
 Supervision Consultant Scope of
Services
To implement Tender Documents and ensure
quality with respect to
Scope
Schedule
Budget
 Contracts in Engineering
Contract between
Client and Design Consultants
Client and Contractor
Client and Supervision Consultants
Construction Contract Management
Engineers are not lawyers
Classification of contracts
Main contracts
Subcontracts
Local Contract
International Contract (FIDIC)
 Contracts Based on Risk Sharing
1. Lump Sum Fixed Price Contract
2. Unit Price Contract
3. Lump Sum Fix Price plus Escalation Contract
4. Target Cost Incentive Contract
5. Cost plus fixed fee with guaranteed maximum cost
6. Cost plus fixed fee Cost Reimbursable
7. Cost plus Percentage of cost Contract
 Contracts based on Project Delivery
System
Design Bid Build Contract
Design Manage Build (Turnkey)
Design Build Contracts
Build Operate Transfer Contracts
Build Own Operate Transfer (BOOT) Contracts
Design Build Operate Maintain (DBOM)
Contracts
 Contract Documents
Contract Agreements
General conditions of contract
Project Drawings
Project Specifications