Government of Nepal Contract Administration Manual

Government of Nepal
Ministry of Physical Infrastructure and Transport

Department of Roads
Project Directorate (ADB)
SASEC Roads Improvement Project

(ADB Loan No. 3478-NEP)
CONTRACT ADMINISTRATION /
CONSTRUCTION SUPERVISION MANUAL
July 2017
Korea Engineering Consultants Corp.

Kyong Dong Engineering Co. LTD.
JV in association with
MEH Consultants (P) Ltd., Multi-Disciplinary Consultants (P) Ltd. and Soil Test (P) Ltd
SASEC Roads Improvement Project Contract Administration Manual
TABLE OF CONTENT
SECTION–I : Team Composition & Organization .................................................................... 1

1.1 The Project Management Team................................................................................................ 1
SECTION–II : Contract Administration........................................................................................... 4
2.1 Summary of the Contract Clause .............................................................................................. 4
2.2 Site Possession...................................................................................................................... 23
2.3 Works Inspection and Approval .............................................................................................. 23
2.4 Program ................................................................................................................................. 23
2.5 Site Instructions, Day Works & Variation Orders ..................................................................... 24
2.6 Site meetings & Progress Reporting ....................................................................................... 25
2.7 Measurements & Payments Introduction................................................................................. 26
2.8 Management of Disputes........................................................................................................ 27
2.9 The Defects Liability Period & Final Completion Introduction................................................... 28
Abbreviation
ADB Asian Development Bank

AC Asphalt Concrete
ADF Asian Development Fund
EWH East West Highway
BoQ Bill of Quantity
CDC Compensation Determination Committee
CL Center Line
Col. Colonel
CRE Chief Resident Engineer
CSB Crushed Stone Base
DBST Double layer Bituminous Surface Treatment
DLP Defects' Liability Period
DoR Department of Road
EA Executing Agency
EMAP Environmental Management Action plan
EMP Environmental Management plan
EoT Extension of Time
GoN Government of Nepal
ICB Interactional Competitive Bidding
IEE Initial Environment Examination
LGRC Local Grievance Redress Committee
MPIT Ministry of Physical Infrastructure and Transport
NCB National Competitive Bidding
PIC/PM Project-in-Charge/Project Manager
RE Resident Engineer
ROW Right of Way
RP Resettlement Plan
RRP Report and Recommendation of the president
SIOW Senior Inspector of Works
SRCP SASEC Road Connectivity Project
TL Team Leader
TOR Terms of Reference
VDC Village Development Committee
VO Variation Order
KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST

SECTION–I : TEAM COMPOSITION & ORGANIZATION
CONTRACT ADMINISTRATION
Contract Administration involves making decisions and the timely flow of information and decisions to enable
completion of the project as required by the Contract documents. This is important to the client, Contractor
and Consultant not only to determine that the work is proceeding in conformity with the Contract documents,
but also because it allows a final opportunity to detect any inaccuracies, ambiguities or inconsistencies in the
design which include relevant bid document and Contract document.
1.1 THE PROJECT MANAGEMENT TEAM

The Project Director / Project Coordinator
In the Contract Agreements signed between the Consultant/the Contractor and Government of Nepal, Ministry
of Physical Infrastructure and Transport, Department of Roads, Project Directorate (ADB) is representative of
the Client and Project Managers are appointed for the respective package of the Project.
The Engineer / Engineer's Representative (Team Leader)

The Engineer's major role is to supervise and monitor the implementation of road construction by the
Contractor. The Supervision Consultant is therefore the Employer's representative personnel on site as
stipulated in accordance with Sub-Clause 1.1.2.6. Engineer's major role shall be to lead the project
management team through the construction phases. He is directly responsible for supervising and monitoring
of the Contract. Under conditions of Contract in FIDIC MDB Version, the Engineer is usually also the first line
of arbitration between the Client and Contractor. Some of the major tasks of the Engineer are to visit
construction sites at least once in month, to attend and chair the site meetings, to review progress of works.
As the role of the Supervision Consultant during the Construction stage, the consultant is required to carry out
supervision of the works and ensure that the works are carried out to the required standards as specified in
the Contract. Failure by the consultant in this stage may lead to inferior workmanship and quality of work and
no value for money. The role of the Contractor is to directly control the construction. Works should be carried
out at site according to provisions of the Contract. The Contractor shall assemble and organize the necessary
resources of men, materials and plant and equipment. The Contractor is guided by Conditions of the Contract
and Specifications provided in the Contract Document.
TEAM STRUCTURE AND DEPLOYEMENT

The relationship in the Contract Management Framework between all major parties is shown in Figure- I.
The strength of each link will be determined as the project progresses, but the Consultant will ensure that
all major Links are developed and maintained at the appropriate level.
In considering of the structure and size of the project team, the Consultant has identified the tasks, the
extent and nature of the project including their respective locations as stipulated in TOR. The Contractors
may package their works into subContracts and have many concurrent areas of operation in order to
complete their respective works within the stipulated construction periods. To effectively monitor the
Contractors' works, sufficient personnel will be deployed to observe every area of the activity.
A. International Key Experts:

Ø Team Leader/ Chief Resident Engineer 1
Ø Sr. Material Engineer / Pavement Engineer 1
Ø Sr. Contract Specialist 1
Ø Sr. Bridge / Structure Engineer 1
Ø PBM Expert 1
KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 1.

B(i) National Key Experts:

Ø Deputy Team Leader / Highway Engineer 1
Ø Resident Engineer 3
Ø Material Engineer 3
Ø Bridge/ Structure Engineer 1
Ø Road Safety Expert 1
Ø Transport Economist 1
Ø Environmental/ Bio Engineering Expert 1
Ø Wildlife Expert 1
Ø Social Resettlement Expert 1
Ø Gender (HIV/AIDS, Livelihood) Expert 1
B(ii) National Non Key Experts:
Ø Assistant Resident Engineer 6
Ø Social Development Officer 1
Ø Human Trafficking awareness officer 1
Ø Office Engineer/CAD Engineer 1
Ø Senior Inspector of Works 12
Ø Laboratory Technician 3
Ø Social Mobiliser 6
(HIV/AIDS, Human Trafficking & Gender)
Ø Surveyor(Social) 3
Organization Structure is shown in Figure-2
The Consultant’s Team Leader acts as Engineer’s Representative. The Team Leader will liaise with the
Employer in policy matters concerning the project and the performance of supervising staff on site acting on
behalf of Employer. He shall be responsible for the Construction Supervision Team. He would ensure that
the review of the design work is undertaken to a high degree of precision.
Figure 1 : Contract Management Framework

Figure 2 : Organization Chart

SECTION–II : CONTRACT ADMINISTRATION
2.1 SUMMARY OF THE CONTRACT CLAUSE

2.2.1 Summary of Contractor's Obligation
CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

CONSEQUENCES
OF NON-
COMPLIANCE
GENERAL CONDITIONS
1 Definitions
Enter into a Contract Agreement. Within 28 days after the None
1.6 Contract
Contractor receives the
Agreement
Letter of Acceptance,
unless the Particular
Conditions establish
otherwise.
1.8 Care and supply of a. Supply to the Engineers ix copies of each of the a. None None
Documents Contractor’s Documents. b. None
b. Keep on the Site a copy of the Contract, publications c. Promptly
named in the Specification, the Contractor’s
Documents (if any), the Drawings and Variations and
other communications given under the Contract.
c. In the case of an error in a document, give notice to
the other Party.
1.9 Delayed Drawings a. Give notice to the Engineer whenever the Works are a. Within a reasonable a) None
or Instructions likely to be delayed or disrupted if any necessary time. b) Loss of
drawing or instruction is not issued to the Contractor b. As soon as practicable entitlement to
within a particular time. and not later than 28 an extension
b. Give a further notice to the Engineer if the Contractor days after the to the Time for
suffers delay and or incurs Cost. Contractor became Completion
aware, or should have and additional
become aware of the payment
event or circumstance (Sub-Clause
(Sub-Clause20.1). 20.1)
1.12 Confidential Details Disclose all such confidential and other information as the None None
Engineer may reasonably be required in order to verify
compliance with the Contract
1.13 Compliance with a. Comply with applicable Laws. None. None.
Laws b. Give all notices, pay all taxes, duties and fees, and
Obtain all permits, licenses and approvals, as required
by the Laws.
1.14 Joint and Several a. In the case of a joint venture, consortium or other None None
Liability unincorporated grouping of two or more persons,
notify the Employer of the leader.
b. Not to alter the composition or legal status of the joint
venture without the prior consent of the Employer.
1.15 Inspections and Permit the bank and or persons appointed by the bank to None None
Audit by the Bank inspect the Site and or the Contractor’s account sand
records and to have the same audited by the Bank.


CONSEQUENCES
OF NON-
COMPLIANCE
2 The Employer
2.1 Right of Access to Give notice to the Engineer if the Contractor suffers delay As soon as practicable Loss of entitlement
the Site or incurs Cost as a result of failure to give right of access and not later than 28 days to an extension to
and possession of the Site after the Contractor the Time for
became aware, or should Completion and
have become aware of additional
the event or circumstance payment
(Sub-Clause20.1) (Sub-Clause 20.1).
3 The Employer
3.3 Instructions of the a. Only take instructions from the Engineer, or from an None None
Engineer assistant to whom the appropriate authority has been
delegated.
b. Comply with the instructions given by the Engineer or
delegated assistant on any matter related to the
Contract.
4 The Main Contractor
4.1 Contractor's a. Design (to the extent specified in the Contract), execute None None
General and complete the Works in accordance with the
Obligations Contract and with the Engineer’s instructions and
remedy any defects in the Works.
b. Provide the required Plant and Contractor's Documents
specified in the Contract and all Contractor‘s Personnel,
Goods, consumables and other things and services
Whether of a temporary or permanent nature.
c. Be responsible for the adequacy, stability and safety of
all Site operations and of all methods of construction.
d. Be responsible for all Contractor‘s Documents,
Temporary Works and such design of each item of
Plant and Materials as is required for the item to be in
accordance with the Contract.
e. Be responsible for this part and it shall, when the Works
are completed, be fit for such purposes for which the
part is intended as are specified in the Contract;
f. Submit details of the arrangements and methods
proposed for the execution of the Works.
g. Design any part of the Permanent Works if specified in
the Contract.
h. Submit to the Engineer the “as-built” documents and
Operation and maintenance manuals prior to the Tests
on Completion.
4.2 Performance a. Obtain a Performance Security for proper performance a. 28days after receiving Employer may,
Security and deliver to the Employer. of the letter of upon giving 14
b. Ensure that the Performance Security is valid and acceptance or after days’ notice to the
enforceable until the Contractor has executed and entering into the Contractor,
completed the Works and remedied any defects. Contract. terminate the
c. Extend the validity of the Performance Security until the b. None. Contract and
Works have been completed and any defects have c. As required expel the
been remedied. Contractor from
the Site
4.3 Contractor’s a. Appoint the Contractor’s Representative and give a. None. None.
him all authority necessary to action the Contractor‘s


CONSEQUENCES
OF NON-
COMPLIANCE
Representative behalf Under the Contract. b. Prior to the
b. Submit to the Engineer for consent, the name and Commencement Date.
Particulars of the person the Contractor proposes to. c. None
c. If consent is withheld or subsequently revoked, or if d. None
the appointed person fails to act, submit the name and
e. None.
particulars of another suitable person for such
appointment.
d. Not, without the prior consent of the Engineer,
revoke the appointment of the Contractor‘s
Representative or appoint a replacement.
e. If the Contractor’s Representative is to be temporarily
absent from the Site, appoint a suitable replacement and
notify the Engineer.
4.4 Sub- contractors a. Not to sub contract the whole of the Works. a. None. None.
b. Maximum percentage of Subcontracting permitted is : b. None.
40% of the total Contract Amount(PCC)
c. None
c. Be responsible for the acts or defaults of any Sub-
contractor, his agents or employees. d. Not less than 28 days.
d. Obtain prior consent of the Engineer to proposed Sub- e. None
contractors not named in the Contract. f. None
e. Give the Engineer notice of the intended date of the
commencement of each Sub-contractor’s work and of
the Commencement of such work on the Site.
f. Ensure that the requirements imposed upon the
g. Contractor by Sub-clause1.12 (Confidential Details)
apply to sub-contractors.
h. Where practicable, give opportunity for contractors from
the Country to be appointed as Sub-contractors.
4.5 Assignment of If instructed, assign the benefit of sub contract obligations None. None.
Benefit of Sub- that extend beyond the Defects Notification Period to the
contract Employer.
4.6 Co-operation a. Allow appropriate opportunities for carrying out work to a. None. None.
the Employer’s Personnel, any other contractors b. In the time and manner
employed by the Employer and the personnel of any stated in the
legally constituted public authorities. Specification.
b. Submit such documents, which require the Employer
to give to the Contractor possession of any foundation,
structure, plan to means of access to Engineer
4.7 Setting Out a. Set out the Works in relation to original points, lines a. None. a. None.
and levels of reference specified in the Contractor b. As soon as practicable b. Loss of
noted by the Engineer. and not later than 28 entitlement to an
b. Give notice to the Engineer if the Contractor suffers days after the extension to the
delay or incurs Cost as a result of error in the items of Contractor became Time for
reference. aware, or should have Completion and
become aware of the additional
even tor circumstance payment (Sub-
(Sub-Clause20.1). Clause20.1).
4.8 Safety Procedures a. Comply with all applicable safety regulations. None. None.
b. Take care for the safety of all persons entitled to be on
the Site.
c. Use reasonable efforts to keep the Site and Works
clear of unnecessary obstruction.
d. Provide fencing, lighting, guarding and watching of the


CONSEQUENCES
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COMPLIANCE
Works.
e. Provide any Temporary Works, which may be
necessary for the use and protection of the public and
of owners and occupiers of adjacent land.
4.9 Quality Assurance Institute a quality assurance system and submit details to Before each design and None.
the Engineer. execution stage has
commenced.
4.12 Unforeseeable a. Give notice of adverse physical conditions. a. As soon as practicable. a. None.
Physical Conditions b. Continue executing the Works, using such proper and b. None. b. None.
reasonable measures as are appropriate for the c. None. c. None.
physical conditions. d. As soon as practicable
c. Comply with any instructions, which the Engineer may d. Loss of
and not later than 28
give. entitlement to an
days after the
extension to the
d. Give a further notice if the Contractor suffers delay or Contractor became
Time Completion
incurs Cost due to unforeseen physical conditions. aware, or should have
and Additional
become aware of the
payment (Sub-
event or circumstance
Clause 20.1).
(Sub-Clause20.1).
4.13 Rights of Way and Obtain any additional right of way facilities outside the Site None. None.
Facilities which the Contractor may require for the purposes of the
Works.
4.14 Avoidance of Not to interfere with the convenience of the public or the None. None
Interference access to and use and occupation of all roads and
footpaths.
4.15 Access Route a. Use reasonable efforts to prevent any road or bridge None. None
from being damaged.
b. Be responsible for any maintenance, which may be
required for the use of access routes.
c. Provide all necessary signs or directions along access
routes.
d. Obtain any permission, which may be required from
the relevant authorities for use of routes, signs and
directions.
4.16 Transport of Goods a. Give the Engineer notice of the date on which any a. 21 days before delivery. None.
Plant or a major item of other Goods will be delivered b. None
to the Site.
b. Be responsible for packing, loading, transporting,
receiving, unloading, storing and protecting all Goods
and other things required for the Works.
4.17 Contractor's a. Be responsible for all Contractors’ Equipment. None. None.
Equipment b. Not to remove from the Site any major items of
Contractor’s Equipment without the consent of the
Engineer.
4.18 Protection of the a. Take all reasonable steps to protect the environment None. None.
Environment and to limit damage and nuisance to people and
property.
b. Ensure that emissions, surface discharges and
effluent shall not exceed the values indicated in the
Specification and shall not exceed the values
prescribed by applicable Laws.
4.19 Electricity, Water a. Be responsible for the provision of all power, water None. None.


CONSEQUENCES
OF NON-
COMPLIANCE
and Gas and other services.
b. Provide any apparatus necessary for use of services
as may be available on the Site and form ensuring
the quantities consumed.
c. Pay the Employer for the use of services available
on the Site.
4.20 Employer’s a.Be responsible for the employer’s Equipment when a. None. None.
Equipment and used by the Contractor. b. None.
Free-Issue b. Pay the Employer for the use of the Employer’s c. None.
Materials c. Equipment. d. Promptly.
d. Inspect free-issue materials.
e. Give notice of any shortage, defect or default in the free-
issue materials.
4.21 Progress Reports Prepare and submit monthly progress reports. Monthly, within 7 days of None.
the period to which the
report relates
4.22 Security of the Site Keep unauthorized persons off the Site. None None.
4.23 Contractor’s a. Confine the operations to the Site and to any None. None.
Operations on Site additional area as agreed by the Engineer as working
areas.
b. Take all necessary precautions to keep the
Contractor's Equipment and Contractor’s
Personnel within the Site and any agreed working
areas.
c. Keep the Site free from all unnecessary obstruction.
d. Store or dispose of any Contractor's Equipment or
surplus materials.
e. Clear away and remove from the Site any wreckage,
rubbish and Temporary Works.
f. Leave the Site and the Works in a clean and safe
condition.
4.24 Fossils a. Take reasonable precautions to prevent the a. None. a. None.
Contractor’s Personnel or other persons from b. Upon discovery. b. None.
removing or damaging fossils, coins, articles of value
c. As soon as practicable c. Loss of
or antiquity, structures and other remains or items of
and not later than 28 entitlement to an
geological or archaeological.
days after the extension to the
b. Give notice of the finding of such items. Contractor became Time for
c. Give further notice if the Contractor suffers delay or aware, or should have Completion and
incurs Cost as a result of such items. become aware of the additional
event or circumstance payment (Sub-
(Sub-Clause 20.1). Clause20.1).
5 Nominated Sub-contractors
5.3 Payments to Pay to the nominated Sub-contractor the amounts which None. None.
Nominated the Engineer certifies.
Subcontractor
6 Staff and Labor

6.1 Engagement of Make arrangements for the engagement of all staff and None. None.
Staff and Labor labor, local or otherwise, and for their payment, housing,
feeding and transport.


CONSEQUENCES
OF NON-
COMPLIANCE
6.2 Rates of Wages Pay rates of wages and observe conditions of labor which None. None.
and Conditions of are not lower than those established for the trade or
Labor industry where the work is carried out.
6.3 Persons in the Not to recruit, or attempt to recruit, staff and labor from None. None.
Service of the amongst the Employer’s personnel.
Employer
6.4 Labor Laws a. Comply with all the relevant labor Laws. None. None.
b. Require employees to obey all applicable Laws.
6.5 Working Hours Obtain the consent of the Engineer if working outside the None. None.
normal working hours.
6.6 Facilities for Staff a. Provide and maintain all necessary None. None.
and Labor accommodation and welfare facilities for the
Contractor’s Personnel.
b. Provide facilities for the Employer’s Personnel as
stated in the Specification.
c. Not to permit any of the Contractor's Personnel to
maintain any temporary or permanent living quarters
within the structures forming part of the Permanent
Works.
6.7 Health and Safety a. Take all reasonable precautions to maintain the health a. None. None.
and safety of the Contractor’s Personnel. b. None.
b. Ensure that medical staff, first-aid facilities, sick bay c. As soon as practicable
and ambulance services are available at all times and after its occurrence.
that Suitable arrangements are made for all necessary d. None.
welfare and hygiene requirements and for the e. None.
prevention of epidemics. f. None.
g. None.
c. Appoint an accident prevention officer and whatever is
h. None.
required by this person to exercise this responsibility
i. None.
and authority.
d. Send to the Engineer details of any accident.
e. Maintain records and make reports concerning health,
safety, welfare and damage to property.
f. Conduct an HIV awareness program and undertake
other measure as specified in the Contract with regard
to HIV.
g. Conduct in formation, education and consultation,
communication campaigns with regard to Sexually
Transmitted Diseases (STD) Sexually Transmitted
Infections (STI) and HIV/AIDS.
h. Provide for STI and HIV/AIDS screening, diagnosis,
counseling and referral.
i. Include in the program an all eviction program in respect
of STDs, STl and HIV/AIDS.
6.8 Contractor's Provide all necessary superintendence to plan, arrange, None. None.
Superintendence direct, manage, inspect and test the work.
6.10 Records of Submit to the Engineer, details showing the number of Each calendar month. None.
Contractor’s each class of Contractor’s Personnel and of each type of
Personnel and Contractor's Equipment on the Site.
Equipment


CONSEQUENCES
OF NON-
COMPLIANCE
6.11 Disorderly Conduct Take all reasonable precautions to prevent any unlawful, None. None.
riotous or disorderly conduct by or amongst the
Contractor’s Personnel.
6.12 Foreign Personnel a. In the case of foreign personnel, ensure that the None. None.
personnel are provided with the required visas and
work permits.
b. Be responsible for the return of foreign personnel and in
the event of death, make the appropriate arrangements
for their return or burial.
6.13 Supply of Food Arrange for the provision of suitable food for the None. None.
stuffs Contractor’s personnel at reasonable prices.
6.14 Supply of Water Provide an adequate supply of water. None. None.
6.15 Measures Against a. Take necessary precautions to protect the None. None.
Insect and Pest Contractor’s personnel from insect and pest nuisance,
Nuisance and to reduce danger to their health.
b. Comply with regulations of the local health authorities.
6.16 Alcoholic Liquor or Not to sell, give, barter or otherwise dispose of any None. None.
Drugs alcoholic liquor or drugs, or permit the same by the
Contractor‘s Personnel.
6.17 Arms and Not to give, barter or otherwise dispose of any or permit None None
ammunition the same by the contractor’s personnel
6.18 Festivals and Respect the Country’s festivals, days of rest and religious None. None
religious customs or other customs.
6.19 Funeral Be responsible for making funeral arrangement for any None None
arrangements employee who may die while engaged upon the Works.
6.20 Prohibition of Not to employ forced or compulsory labor. None None
forced or
compulsory labour
6.21 Prohibition of Not to employ any child to perform any work that is None None
harmful child labour economically exploitive or is likely to be hazardous to, or
interfere with the child seduction or be harmful to the
child’s health or physical mental spiritual moral or social
development.
6.22 Employment record a. Keep records of the employment of labor at the Site. a. None. None
of works
b. Summaries the records and submit them to the b. On a monthly basis.
Engineer.
6.23 Workers' a. Comply with laws that recognize worker’s rights to None. None.
Organizations form and join workers organizations.
b. In the case of laws that restrict worker’s organizations,
enable alternative means for the Contractor‘s
Personnel to express grievances and protect their
rights.
c. Not discourage the Contractor’s Personnel from
forming or joining worker’s organizations.
d. Engage with the representatives of worker’s
organizations.
6.24 Non-Discrimination a. Base the employment relationship on the basis of None. None
and Equal equal opportunity and fair treatment.
Opportunity b. Not to discriminate with respect to aspects of the


CONSEQUENCES
OF NON-
COMPLIANCE
employment relationship
7. Plant, Materials and Workmanship.
7.1 Manner of Carry out the manufacture of Plant, the production and None. None.
Execution manufacture of Materials, and all other execution of the
Works.
7.2 Samples Submit samples of Materials and relevant information to Prior to using the None.
the Engineer for consent. Materials.
7.3 Inspection a. Give the Employer’s Personnel the first opportunity to a. None. a. None.
carry out inspections. b. Uncover the
b. Whenever any work is
work, reinstate
b. Give notice to the Engineer to inspect. ready and before it is
and make
covered up, put out of
Good at the
sight or packaged for
Contractor's
storage or transport.
cost.
7.4 Testing a. Provide everything necessary to carry out the a. None. a. None.
specified tests.
b. None. b. None.
b. Agree with the Engineer, the time and place for the
testing. c. As soon as practicable c. Loss of
and not later than 28 entitlement to
c. Give notice if the Contractor suffers delay or incurs
days after the an extension
Cost as a result of complying with instructions or a
Contractor became to the Time for
delay for which the Employer is responsible.
aware, or should have Completion
Give notice if the Contractor suffers delay or incurs become aware of the and additional
Cost as a result of complying with instructions or a event or circumstance payment (Sub-
delay for which the Employer is responsible. (Sub-Clause20.1). Clause 20.1).
d. Forward to the Engineer certified reports of the tests. d. Promptly. d. None.
7.5 Rejection Make good defects notified by the Engineer. Promptly. None.
7.6 Remedial Work Comply with the instructions of the Engineer with regard to Within a reasonable time The Contractor
remedial work. as specified in the shall pay costs
instruction or immediately incurred by the
if urgency is expected Employer in
engaging other
persons to carry
out the work.
7.8 Royalties Pay all royalties, rents and other payments for natural None. None.
Materials obtained from outside the Site and disposal of
surplus materials.
8 Commencement, Delays and Suspension
8.1 Commencement of Commence the execution of the Works and proceed with As soon as is reasonably None.
Works the Works with due expedition and without delay. practicable after the
Commencement Date.
8.2 Time for Complete the whole of the Works and each Section within None. Contractor shall
Completion the times specified in the Contract. pay delay
damages to the
Employer
(SubClause8.7).
8.3 Program a. Submit a detailed time program. a. Within 28 days after None.
b. Submit a revised program. receiving the notice of
c. Proceed in accordance with the program. commencement.
d. Give notice to the Engineer of specific probable b. Whenever the previous


CONSEQUENCES
OF NON-
COMPLIANCE
future events or circumstances, which may adversely program is inconsistent
affect the work, increase the Contract Price or delay with actual progress or
the execution of the Works. with the Contractor's
e. Submit a revised program on receiving a notice from the obligations.
Engineer that a program fails to comply with the c. None.
Contractor to be consistent with actual progress. d. Promptly.
e. None.
8.4 Extension of Time Give notice to the Engineer if the Contractor considers As soon as practicable Loss of
for Completion himself to be entitled to an extension of the Time for and not later than 28 Days entitlement to an
Completion. after the Contractor extension the
became aware, or should Time for
have become aware of Completion (Sub-
the event or Circumstance Clause20.1).
(20.1).
8.6 Rate of Progress Adopt revised methods in order to expedite progress and None None.
complete within the Time for Completion.
8.7 Delay Damages Pay delay damages in the case of failure to comply with None. None.
the Time for Completion.
8.8 Suspension of Protect, store and secure such part or the Works in the None. None.
Work case of an instruction to suspend the Works.
8.9 Consequences of Give notice to the Engineer if the Contractor suffers delay As soon as practicable as Loss of
Suspension or incurs cost as a result of complying with the Engineer’s and not later than 28 days entitlement to an
instructions under sub-Clause8.8. after the Contractor extension to the
became aware, or should Time for
have become aware of Completion and
the event or circumstance additional
(SubClause20.1). payment (Sub-
Clause20.1).
8.12 Resumption of a. Jointly examine the Works and the Plant and Materials None. None.
Work affected by the suspension, with the Engineer.
b. Make good any deterioration, defect or loss.
9 Tests on Completion
9.1 Contractor's a. Carry out the Tests on Completion. a. After providing the None.
Obligations b. Give to the Engineer notice of the date after which the documents in
Contractor will be ready to carry out each of the Tests accordance with Sub-
on Completion. Clause 4.l(d)
c. Submit a certified report of the results of these Tests to
b. Not less than 21 days‘
the Engineer. c. As soon as the Works or
a Section have passed
the Tests on
Completion.
9.2 Delayed Tests Carry out the Tests if the Engineer gives notice of undue Within 21 days of the The Employer’s
delay. Engineer’s notice. Personnel may
proceed with the
tests at the
Contractor’s cost.
10. Employer’s Taking Over


CONSEQUENCES
OF NON-
COMPLIANCE
10.2 Taking Over of a. Carry out any outstanding Tests on Completion. a. As soon as practicable‘ a. None.
Parts of the Works b. Give notice of Costs incurred as a result of the Employer b. As soon as practicable b. Loss of
taking over or using a part of the Works. and not later than 28 entitlement to
days after the additional
Contractor became payment (Sub-
aware, or should have Clause20.1).
become aware
Of the event or
circumstance (Sub-Clause
20.1).
10.3 Interference with a. In the case of prevention to the carrying out of the tests, a. As soon as practicable. a. None.
Tests on carry out any outstanding Tests on Completion. b. As soon as practicable b. Loss of
Completion and not later than 28 entitlement to
b. Give notice if the Contractor suffers delay or incurs Cost
days after the an extension to
as a result of interference with Tests on Completion.
Contractor became the Time for
aware, or should have Completion and
become aware additional
Of the event or payment
circumstance (Sub-Clause (Sub-Clause20.l)
20.1)‘
11 Defects liability
11.1 Completion of a. Complete any work which is outstanding on the date a. Within such reasonable a. The Employer
Outstanding Work stated in a Taking-Over Certificate. time as is instructed by may carry out
and Remedying the Engineer. the work himself
b. Execute all work required to remedy defects or damage.
Defects at the contractor's
b. On or before the expiry
cost (Sub-
date of the Defects
Clause11.4)
Notification Period.
b. A reduction in
the Contract
Price may be
made (Sub-
Clause 11.4).
11.8 Contractor to If required by the Engineer, search for the cause of any None. None.
Search defect.
11.11 Clearance of Site Remove any remaining Contractor's Equipment, surplus Within 28 days of receipt a) The Employer
material, wreckage, rubbish and Temporary Works from of the Performance may sell or
the Site. Certificate. otherwise
dispose of any
remaining
items.
Employer
entitled to
recover costs of
disposal.
12 Measurement and Evaluation
12.1 Works to be a. Show in each payment application, the quantities and a. With each payment a. None.
Measured other particulars, detailing the amounts to which he application. b. c) & d)The
considers to be entitled under the Contract. b. Promptly. Engineer’s
b. Assist the Engineer in making the measurement. measurement
c. None
c. Supply any particulars requested by the Engineer. shall be
d. Examine and agree the records with the Engineer and d. As and when requested.
accepted as
sign the same when agreed. e. Within14 days after accurate
e. In the case of disagreement with the records, give notice examination.


CONSEQUENCES
OF NON-
COMPLIANCE
to the Engineer. e. None.
12.4 Omissions Adequately compensated for omitted work. Give notice to None. None.
the In the case where the Contractor will incur cost or not
be Engineer with supporting particulars.
13 Variations and Adjustments

13.1 Right to Vary a. Execute and be bound by each Variation. None. None.
b. Not make any alteration or modification of the
Permanent Works, unless and until the Engineer
instructs or approves a Variation
13.3 Variation a. Respond in writing to a request for a proposal. a. As soon as None.
Procedure practicable.
b. Not to delay any work whilst awaiting a response.
b. None.
c. Acknowledge receipt of Variation instructions.
c. None.
13.5 Provisional Sums Produce quotations, invoices, vouchers and accounts or When required by the None
receipts in substantiation of the amounts paid to Engineer.
nominated Sub-contractors.
13.6 Day work a. Submit quotations to the Engineer. a. Before ordering Goods None
b. Submit invoices, vouchers and accounts or receipts for for the work to be
Goods. executed on a Day work
c. Deliver to the Engineer statements, which include the basis.
details of the resources used in executing the previous b. When applying for
day’s work. payment
d. Submit priced statements of these resources. c. Each day.
d. Prior to their inclusion in
the next Statement
under Sub-Clause14.3
13.7 Adjustments for Give notice if the Contractor suffers delay or incurs Cost As soon as practicable Loss of
Changes in as a result of changes in legislation. and not later than 28 entitlement to an
Legislation should have become extension to the
aware of the event or Time for
days after the Contractor Completion and
became aware, or additional
Circumstance payment (Sub-
Clause 20.1)
(Sub-Clause20.1).
14 Contract Price and Payment
14.1 The Contract Price a. Pay all taxes, duties and fees to be paid under the a. None. None.
Contract. b. Within 28 days after the
b. Submit to the Engineer, a proposed break down of each Commencement Date.
Lump sum price in the Schedules.
14.2 Advance Payment A. Submit an advance payment guarantee. None. a. Employer not
B. Extend the validity of the guarantee until the advance obliged to make
payment has been repaid. the advance
payment
b. None
14.3 Application for Submit a Statement in six copies, showing in detail the After the end of each No obligation on
Interim Payment amounts to which the Contractor considers himself to be month. the Engineer to
Certificates Entitled. certify payment
(Sub-Clause14.6).
14.4 Schedule of In the case that the Contract does not include a schedule a. First estimate within 42 None.
Payments of payments, submit non-binding estimates of the days after the


CONSEQUENCES
OF NON-
COMPLIANCE
payments expected to become due. Commencement Date.
b. Revised estimates at
quarterly intervals.
14.10 Statement at Submit a Statement at completion. Within 84 days after None.
Completion receiving the Taking-Over
Certificate for the Works.
14.11 Application for a. Submit a draft final statement. a. Within 56 days after a. None.
Final Payment b. Submit such further information as the Engineer may receiving the b. None.
Certificate reasonably require. Performance Certificatec. The Engineer
b. Within 28 days of will certify an
c. Prepare and submit the final statement as agreed with
receipt of draft amount as he
the Engineer.
statement‘ fairly
c. None. determines to
be due
14.12 Discharge Submit a written discharge. When submitting the Final None
Statement.
15 Termination by Employer
15.2 Termination by a. In the case of a notice of termination being served, a. None. a. None.
Employer leave the Site and deliver any required Goods, b. Promptly. b. None.
Contractor’s Documents and other design documents c. Immediately.
c. Items may be
to the Engineer.
sold by the
b. Use best efforts to comply with any
Employer.
reasonable instructions included in the
notice.
c. Arrange for the removal of Equipment and Temporary
Works.
15.5 Employer’s In the case of a notice of termination, cease all further 28 days from the None.
Entitlement to work, handover Contractor's Documents, Plant, Materials Employer’s notice or
Termination for and other work and remove all other Goods from the return of the Performance
Convenience Site(Sub-Clause16.3) Security, whichever is the
later.
15.6 Corrupt or Remove any employee who has been determined to have None. None.
Fraudulent engaged in corrupt/fraudulent practices and if appropriate
Practices appoint a suitable replacement person.
16 Suspension and Termination by Contractor

16.1 Contractor’s a. Give notice if the Contractor intends to suspend work a. 21 days before the a. None.
Entitlement to / reduce the rate of work. intended suspension or b. None.
Suspend Work b. Resume normal working when the Employer’s reduction in the rate of c. Loss of
obligations have been met work. entitlement to
b. As soon as is an extension to
c. Give further notice if the Contractor suffers delay or
reasonably practicable. the Time for
incurs Cost as a result of suspending work or
c. As soon as practicable Completion and
reducing the rate of work.
and not later than additional
aware, or should have payment
become aware 28 days (SubClause20.1)
after the Contractor
became of the event or
circumstance (Sub-
Clause 20.1).
16.2 Termination by Give notice of intention to terminate. 14 days before the None.
Contractor intended termination date
16.3 Cessation of Work In the case of a notice of termination, cease all further After the notice has taken None.


CONSEQUENCES
OF NON-
COMPLIANCE
and Removal of work, hand over Contractor’s Documents, Plant, Materials effect.
Contractor's and other work and remove all other Goods from the Site
Equipment and leave the Site.
17 Risk and Responsibility

17.1 Indemnities Indemnify and harmless the Employer’s, the Employer’s None. None.
Personnel, and their respective agents against and from
all claims, damages, losses and expenses in respect of
bodily injury, sickness, disease, death, damage to or loss
of property by reason of the Contractor's design, the
execution And completion of the Works or negligence,
willful act or breach of the Contract by the Contractor,
Contractor’s Personnel/agents.
17.2 Contractor's Care a. Take full responsibility for the care of the Works and a. From the None.
of the Works Goods. Commencement Date
b. Take responsibility for the care of any work, which is until the Taking-Over
outstanding on the date stated in a Taking-Over Certificate is issued.
Certificate. b. Until the outstanding
c. Rectify loss or damage, if any loss or damage happens work has been
to the Works, Goods or Contractor’s Documents. completed.
c. None.
17.4 Consequences of a. Give notice in the case of an Employer's risk event, a. Promptly. a. None.
Employer’s Risks which results in loss or damage. b. None. b. None.
b. Rectify the loss or damage as required by the Engineer. c. As soon as practicable c. Loss of
c. Give further notice if the Contractor suffers delay/caused as and not later than 28 entitlement to
by Employer’s Risks Incurs Cost as a result of rectifying days after the an extension to
loss or damage Contractor became the Time for
aware, or should have Completion and
become aware of the additional
event or circumstance payment
(Sub-Clause20.1). (Sub-Clause20.1)
17.5 Intellectual and a. Give notice of any claim under this clause. a. Within 28 days of a. Waiver of right
Industrial Property b. Indemnify and hold the Employer harmless against receiving a claim. to indemnity.
Rights and the manufacture, use, sale or import of any b. None. b. None.
goods, or any from any other claim which arises out c. None. c. None.
of, or in relation to Design for which the Contractor is d. None d. None.
responsible.
c. If requested by the Employer, assist in contesting the
claim.
d. Not to make any admission this might be prejudicial to
the Employer.
18 Insurance


CONSEQUENCES
OF NON-
COMPLIANCE
18.1 General a. Wherever the Contractor is the insuring Party, a. Within the periods Employer may
Requirements for effect and maintain the insurances in terms stated in the Contract affect the
Insurances consistent with any terms agreed by the Parties Data. insurances and
before the date of the Letter of Acceptance. b. None. recover the cost
b. Act under the policy on behalf of any additional joint c. Within the periods from the
insured parties stated in the Appendix Contractor.
c. Submit evidence that the insurances have been to Tender.
affected and copies of the policies to the Employer. d. Upon payment of
d. Submit evidence of payment of premiums. premium.
e. Inform the insurers of any relevant changes to the e. As appropriate.
execution of the Works and ensure that insurance f. None
is maintained.
f. Not to make any material alteration to the terms of any
insurance without approval of the Employer.
18.4 Insurance for Effect and maintain insurance against injury, sickness, From the time that the Employer may
Contractor’s disease or death of any person employed by the personnel are assisting in affect the
Personnel Contractor, or any other of the Contractor’s Personnel. the execution of the insurances and
Works. recover the cost
from the
Contractor (Sub-
Clause18.1).
19 Force Majeure
19.2 Notice of Force Give notice in the case that the Contractor is, or will be Within 14 days after the Contractor shall
Majeure prevented from performing any of its obligations under the Contractor became not be excused
Contract by Force Majeure. aware, or should have performance of
become aware of, the the obligations.
relevant event or
circumstance constituting
Force Majeure.
19.3 Duty to Minimize a. Use all reasonable endeavors to minimize any None. None.
Delay delay in the performance of the Contract
b. Give notice when the effects of the Force Majeure
cease.
20 Claims, Disputes and
Arbitration
20.l Contractor's Claims a. Give notice if the Contractor considers himself to a. As soon as practicable a, b, d) Loss of
be entitled to any extension of the Time for as and not later than 28 entitlement to
Completion or any additional payment. days after the an extension to
b. Submit any other notices which are required by the Contractor became the Time for
Contract and supporting particulars for the claim. aware, or should have Completion and
c. Keep such contemporary records as may be become aware of the additional
necessary to substantiate any claim and permit the event or circumstance. payment.
Engineer to inspect all the records. b. None. c, e, f) The
d. Send to the Engineer a fully detailed claim. c. None Employer will
e. Send further interim claims if the event or d. Within 42 days after the take account of
circumstance giving rise to the claim has a Contractor aware, if the the extent to
continuing effect. event or circumstance which the failure


CONSEQUENCES
OF NON-
COMPLIANCE
f. Send a final claim. giving became aware, has prevented
or should have become or prejudiced
Rise to the claim. proper
e. At monthly intervals. investigation of
f. Within 28 days after the the claim.
end of the effects
resulting from the event
or circumstance.
20.2 Appointment of the a. Jointly appoint the Dispute Board (DB). a. By the date stated in the a. The
Dispute Board b. Mutually agree the terms of remuneration for the Contract Data. appointment or
DB. b. None official named in
c. Not to consult the DB on any matter without the c. None the Appendix to
agreement of the other Party. d. None. Tender shall
d. Not to act alone in the termination of any member of the appoint (Sub-
DB. Clause 20.3)
b. None.
c. None.
d. None.
20.4 Obtaining Dispute a. Make available to the DB, additional information, a. Promptly. a. None.
Board's Decision access to the Site and appropriate facilities as the DB b. Promptly. b & c) The matter
may require. c. None. may be referred to
b. Give effect to a DB decision unless and until it is arbitration (Sub-
revised in an amicable settlement or an arbitral Clause20.7).
award.
c. Continue to proceed with the Works in accordance with
the Contract.
20.5 Amicable In the case of a Notice of Dissatisfaction being given with Within 56 days of the Arbitration may be
Settlement the DB’s decision, attempt to settle the dispute amicably. notice. commenced.

2.1.2 Summary of Employer's Entitlement to Claim
Sub-Clause Title
4.19 Electricity, Water, Gas if stated in the Contract
4.20 Employer’s Equipment and Free-Issue Material
7.5 Rejection (Defective Plant and Materials)
7.6 Remedial Work (Contractor fails to carry out)
8.6 Rate of Progress (Contractor adopts revised methods that cause Employer additional cost)
8.7 Delay Damages (Contractor fails to complete on time)
9.4 Failure to pass tests on completion (Only if Employer incurs additional costs)
Extension of Defects Notification Period (if the Works or section or major item of Plant cannot be used for
11.3
their intended purpose)
11.4 Failure to rectify defects (Contractor fails to rectify)
13.7 Adjustments for changes in Legislation (Reductions in cost to be refunded to Employer)
13.8 Adjustments for changes in Cost (Reductions in cost to be refunded to Employer)
15.4 Payment after Termination (Employer may claim losses and damage after Termination)
17.1 Indemnities (Employer claims costs of events for which he is indemnified by Contractor)
18.1 General Requirements for Insurances (Employer makes claim if Contractor fails to insure)
Insurance for Works and Contractor’s Equipment (Employer can claim refund if Contractor is unable to insure
18.2
in accordance with Contract)

2.1.3 Time Bar Provisions of the Contract
(Delay Schedule)
a. Contractual Events in Early stage of the Project
Delay
Event or circumstance Sub-clause Description
(Time Bar)
Engineer shall give prior notice to contractor
No delay indicated.
Condition)
a. Signed Contract Agreement
Commencement date b. Receipt of the Contractor of the Advance Payment
GCC 8.1
(Engineer) provided that the corresponding bank guarantee has
been delivered by the Contractor.
After receiving of the letter of acceptance or entering into
180 days
the Contract
Employer shall supply 2 copies of Contract and
Supply of Documents subsequent Drawing to Contractor
GCC 1.8 No delay indicated
(Employer / Contractor)
Contractor shall supply 6 copies of Contractor’s Document
evidence of insurance :
Contract Data 18.1 (a) After the Commencement Date
Periods for submission of 14 days
insurance
(Contractor) copies of relevant
Contract Data
policies : After the Commencement Date
18.1 (b)
21 days
Performance security After receiving of the letter of acceptance or after
GCC 4.2 28 days
(Contractor) entering into the Contract
42 days/ After receiving the letter of acceptance or
Advanced payment
GCC 14.7 entering into the Contract
(Employer)
21 days After receiving the performance security
Time for access to the Site Contract Data
14 days After the Commencement Date
(Employer) 2.1
Program After receiving the notice under Sub-Clause 8.1
GCC 8.3 28 days
(Contractor) [Commencement of Works].
Safety Manual Specific Provision
28 days After Commencement Date
(Contractor) 4.8
Date by which the DB shall be
Contract Data After the commencement [or as otherwise agreed by the
appointed 28 days
20.2 Employer and the Contractor]
(Employer/Contractor)

b. Delay Schedules[Time-Barred Provisions] in the Contract

Delay
(Time Bar)
42 days/ After receiving the letter of acceptance or entering into the
Advanced payment Contract
14.7
(employer)
21 days After receiving the performance security
Approval / disapproval of a
20.1 42 days After receiving the particulars of the claim
claim (engineer)
Claim notice After becoming aware of the event (should have become
2.5 / 20.1 28 days
(Employer / Contractor) aware)
Claim with continuing
20.1 Monthly No clear starting point
Effect (Contractor)
No delay indicated. Engineer shall give prior notice to contractor
Commencement date
GCC 8.1
(Engineer) 180 days After receiving of the letter of acceptance or entering into
the Contract
DB decision (DB) 20.4 84 days After receiving a referral
DB
DB Site visits Intervals
procedural
(permanent DB) of 140 days
rules
3.5 28 days.
Determination (engineer) 20.1 (Dis)/Approval After reception of particulars of the claim
within 42 days
Early warning Specific probable future events which may adversely
8.3 Promptly
(Contractor) affect the work, increase the Contract Price or delay
Final payment
14.7 56 days After receiving certified final payment certificate
(employer)
Final statement
14.11 56 days After receiving the performance certificate
(Contractor)
Carrying out Inspection Without
7.3 Upon notice by contractor
(Engineer) unreasonable delay
Interim payment (employer) 14.7 56 days After Engineer receives the statement of Interim Payment
Issue of Interim payment
14.6 28 days After receiving of the statement
certificate (engineer)
Application of Interim Contractor shall submit a Statement in six copies to the
14.3 Monthly
statements (Contractor) Engineer after the end of each month
14.3 Monthly
14.3 Monthly
Within 7days after the last day of the period to which it
Monthly reports (Contractor) 4.21 Monthly
relates
Notice for inspection
7.3 Whenever work is ready and before it is covered up
(Contractor)
Notice of errors in technical
documents 1.8 Promptly After becoming aware of it
(Employer/Contractor)
Notice for tests on Notice of the date after which the contractor will be ready
9.1 21 days
completion (Contractor) to carry out the tests on completion
Notice of a force majeure After becoming aware of the event (should have become
19.2 14 days
event (Contractor) aware)

Delay
(Time Bar)
Notice of dissatisfaction
20.4 28 days After receiving the DB decision
(Employer / Contractor)
Notice of intention to attend
7.4 24 h
the tests (engineer)
Notice of unforeseeable As soon
physical conditions 4.12 as After becoming aware
(Contractor) practicable
28 days (Submission) After receiving of the letter of acceptance

Performance security
4.2
(Contractor)/(Employer) (Return) Employer return the Performance Security after
21 days
receiving a copy of the Performance Certificate
Program (Contractor) 8.3 28 days After reception of the notice of commencement date
Provision of evidence for
financial arrangement 2.4 28 days After receiving any request from the contractor
(employer)
First Half On the date when the Taking- Over Certificate is issued
Retention monies (employer) 14.9
Second Half On the expiration of the defects notification period
Statement at completion
14.10 84 days After receiving the Taking-Over Certificate
(Contractor)
Suspension by contractor
16.1 21 days After receiving the notice
(Contractor)
Termination by convenience After receiving the notice or the date on which or the
15.5 28 days
(employer) employer returns the performance security

2.2 SITE POSSESSION

Following the successful submission of the relevant securities by the contractor, the Consultant and
the Client should arrange to facilitate the handing over of the site to the Contractor. Reference marks
Kilometer pegs, Permanent and Temporary Benchmarks, Culvert locations, Culvert positions should
be identified and any adjustments must be marked in the Detailed Project Report (DPR, if any).
Gravel, Stone & Sand Sources, Selected Quarry areas and test pits should be located.
2.3 WORKS INSPECTION AND APPROVAL

The major responsibility of the Supervision Consultant is to ensure that the contractor’s workmanship
always complies with the technical specifications provided in the contract document. The Supervision
Consultant should maintain a daily record of inspected and certified works in use of the forms which is
included in Part II, Construction Supervision Manual. It should be noted, however, that the final
approval and acceptance of the works is only possible at final completion inspection following the
“Defects Liability Period”.
Works Inspection & Approval

The Engineer is required to give consent or approval to various submissions made by the contractor in
accordance with the Conditions of the Contract. Verbal consent or approval must be confirmed in
writing and written consent or approvals must state in certain days as stipulated in the Contract.
Once the contractor has started to implement the works the supervision consultant should regularly
visit the site to inspect the quality of works and give approvals before the contractor can proceed with
certain critical activities such as gravelling and concrete works. The Supervision Consultant should
maintain an accurate record of inspected and certified works.
Consent or approval does not relieve the Contractor of responsibility for correctness of detail nor does
it waive any of the Contractor's obligations under the Contract unless specifically stated in writing by
the Project Manager or the Employer.
Quality Control Aids

The Supervising Consultant should ensure that the Contractor has a full set of quality control aids on
site for checking works during and at the end of each worker’s task. During works inspections, the
Supervising Consultant must also use these quality control aids to check the works.
2.4 PROGRAM
Construction works are unique in that each activity needs to be sequenced in order for the project to
be completed. Efficient programming can mean significant time and cost savings to both the
contractor and the employer.
At the start of each Contract, the Contractor is required to prepare a programme within 28days after
receiving the notice of the Commencement of Works as stipulated in Sub-Clause 8.3 and have it
agreed to by the Engineer. This programme indicates the duration and logic of the sequencing of
activities for the project. The Employer or his representative will evaluate whether the logic is sound
and whether the estimated time frames for completion of the works are reasonable.
The programme is an important tool for managing time to ensure that the works are completed in
accordance with contractual requirements. It also allows the Employer’s representative to establish
the reasonableness of any claims for an extension of time.

2.5 SITE INSTRUCTIONS, DAY WORKS & VARIATION ORDERS

Communication in Contract administration is key to smooth management of any contract. Means of
communication must be clearly understood by all concerned parties in the implementation process of
a road Contract. The Supervision Consultant should expeditiously respond to requests of Site
Instructions or extra works that a Contractor may have noticed. This will minimize delays in
implementation of the Contract.
Site Instructions
Communication between the Supervision Consultant and the Contractor on site usually starts with the
Contractor submitting a Request for Inspection (RFI) in which he may request certain information from
the Project Manager through the Supervision Consultant. In response to RFI, the Supervision
Consultant issues Site Instructions providing the necessary information requested by the Contractor. It
is important that both parties in writing issue these RFI and Site Instructions and the records of signed
copies, which are acknowledged by the other party, are kept on site for future reference.
Purpose of Site Instructions

Site Instructions are used to amplify, correct or make minor amendments to the details of the work
within the Engineer’s delegated authority and to order the use of provisional items required to carry
out the works as required. A Contractor may be instructed to remove improper works or materials,
expose work which has been covered up without permission, re-execute unsatisfactory workmanship,
and in general, carry out the requirement of the Contract. None of these are variations and the
Contractor’s personals must be left in no doubt on that score. The instruction should contain a
reference to the clause from which it draws the authority to exclude the possibility that the
Contractor’s personals might mistake it for a variation. Good communication requires not only speed
and clarity but also define which information and instructions can flow. Contractor’s staff must direct
requests for information or for approval of completed work to the appropriate member of the
supervisory team either directly or leaving a clear message. The Engineer must ensure that the team
members can be easily contacted or if absent from site have their duties temporarily reassigned.
Instructions or other contractual directions are never given to labors, machine operators or other
members of the work force. In a site situation where responsible Contractor’s staff cannot be found
and work is going on which will have to be rejected, the rule of thumb is to inform whoever is involved
that the work should stop and confirm it with the foreman or the assistant foreman as soon as they
can be contacted. If additional, new or changed work is required, instructions may only be issued to
the Contractor.
Any approval, check, certificate, consent, examination, inspection, instruction, notice, proposal,
request, test, or similar act by the Engineer (including absence of disapproval) shall not relieve the
Contractor from any responsibility he has under the Contract, including responsibility for errors,
omissions, discrepancies and non-compliances in accordance with Sub-Clause 3.1.
A Contractor should however not be instructed on the method they are to use to realize their objective.
If, at any time, the Engineer gives notice to the Contractor that a programme fails (to the extent stated)
to comply with the Contract or to be consistent with actual progress and the Contractor’s stated
intentions, the Contractor shall submit a revised programme to the Engineer in accordance with Sub-
Clause 8.3.
Checklist
A valid Instruction is issued in accordance with Contract provision and confirmed in writing. All site
instructions are prepared in triplicate using standard formats. Similar forms may be issued to site staff
in the form of books or blank forms printed in sets of three, as the case may be. It is suggested that
the first copy is given to the Contractor while the second is for the Supervising Consultant’s record
and the last copy is retained in the site file.
Clarity of instructions
Site instructions must be completely explicit, and where necessary should be accompanied by
sketches or drawings uniquely cross referenced to the instruction. There must be no room for
arguments as to the precise nature of the works that have been ordered. Site instructions must not be

issued which instruct additional work of a value in excess of the Supervisor’s delegated authority. If
this is the case and unless instructed otherwise, the Client's approval must be obtained prior to
authorization of variations, as defined in Civil Contract.
Day Works and Variation Orders

Apart from handling requests that may only require permissions to use certain materials, adjust
working hours, carry out tests on completed works or locations of structures such as culverts, scour
checks, etc., the Contractor may also request for variations in the scope of works. In dealing with
these requests, the Supervision Consultant must discern whether these may be treated as either Day
Works or Variation Orders.
Day Works
Day Works usually involve a few extra worker days or machine hours to carry out a specific task that
may not be covered by the Bill Items. They hardly affect the Contract Sum. The Day Work rates are
usually provided in the Schedule of Day Work Rates.
NOTE: The scope, worker days, material quantities or machine hours must be agreed and recorded in
the Day Works Request Form prior to commencement of the task complying to the Format given in
Construction Supervision Manual.
Variation
Changes in quantities of works occur in virtually any Civil Works Contracts for a variety of reasons
(quantities could not be accurately measured at the time of design, modifications of the conditions on
site etc.). Variations are therefore not only normal in a Civil Works Contract, but also necessary to
correct shortcomings in the design, to improve the proposed technologies, to allow for the use of
newer or better materials etc. The Engineer is important in this equation because it’s the Engineer’s
duty to make sure that the variations requested by the Contractor are (i) necessary; and (ii) make
technical and economical sense. Depending on the limits of Engineer’s authority established in the
Particular Conditions, the Employer should approve the variations that exceed the respective
threshold.
Variations to the Quality or Quantity of the Works

These types of Variations are common features of construction Contracts and most of the standard
forms of Contract recognize and make provision for this by including ”Variation Clauses”. Such
Clauses empower the Engineer to amend the specifications and extent of the works and bind the
Contractor to carry them out. The Engineer also has power to order any variation that, in his opinion is
desirable for the satisfactory completion and functioning of the works. Such variations include:
Additions, Omissions, Substitutions, Alterations, Changes in quantity, form, character or kind,
Changes in position, dimensions, level or line. Details of Variation procedure and types shall be
referred to Sub-Clause 13.1
2.6 SITE MEETINGS & PROGRESS REPORTING

Site meetings are usually conducted to review progress of Works in a month. It also affords the
Contractor opportunity to seek the Engineer’s decision on some matters that may affect progress of
Works on site. Therefore, the Supervision Consultant must ensure that invitation letters to parties are
sent early and confirmation sought for attendance. Before the site meeting, representatives from the
Client, Contractor and Supervision Consultant first jointly visit the site and check progress before
sitting to conduct a site meeting. The Client’s representative as Project In-Charge chairs the site
meeting while the Supervision Consultant records the minutes. Minutes should be recorded in a
standard format and distributed to all relevant stakeholders. The Supervision Consultant should also
follow Site Meetings & Progress Reporting and handling of site problems is one of the major
responsibilities of the Project Manager/Project In-Charge and the Supervision Consultant. Site
Meetings and progress meetings provide a formal arrangement for checking Contractor’s performance
against the work program and providing on spot solutions to site problems. Reporting requirements
are important as a management tool to monitor progress and take corrective action in case, deviation
from the program noticed up with those given responsibilities for certain actions and decisions.

Monthly Progress Reports

On a monthly, quarterly and yearly basis, the Consultant prepares progress reports to document and
record activities, decisions, and any deviations from the original Contract. Such information is
particularly useful as a monitoring tool as well as settling future legal disputes. Progress reports
contain among other things; Contract Details, Summary of Important Dates, Schedules of Plant,
Personnel and Materials on Site, Work quantities completed during the Period under review Materials
Reports, Program versus Actual Progress, Financial Progress and Cash flow Forecast
2.7 MEASUREMENTS & PAYMENTS INTRODUCTION

The Contract agreement, conditions of Contract and specifications always specify the procedures for
payment to include timing of payment, measurement guidelines, unit of measurements, who is to
check and certify the certificates etc.
Advance Payment
Advance payments as stipulated in the Conditions of Contract may be paid to the Contractor upon
submission to the Employer of a Bank guarantee or if acceptable, insurance guarantee. These funds
assist the Contractor in the initial stages of implementation of Works such as payment for the first
month and mobilization of plant and materials. The Supervision Consultant should ensure that the
Advance is repaid in accordance with the provisions of the Contract.
Interim Payment Certificates

Payment of the Interim Payment Certificates issued by the Engineer based on Contractor’s monthly
statements is one of Employer’s key responsibilities and also the moment with the maximum
involvement of its technical, procurement and financial staff.
At agreed intervals usually monthly, the Contractor jointly with the Measurements & Payments,
Measurement and valuation is clearly a prerequisite to certification and payment of works. Most
Contracts are of the bill of quantities type and their measurement and valuation shall be governed by
the conditions of Contract under Clause 12. Supervision Consultant must carry out measurements of
completed Works. A record of these measurements and derived quantities must be kept by both the
Contractor and the Supervision Consultant on site to form a basis for preparation of the Interim
Payment Certificates
Interim Payment Certificates are useful in maintaining liquidity for the Contractor. Therefore, the
Supervising Consultant must not unnecessarily reject whole sections of works claimed by the
Contractor, but make amendments for unsatisfactory works.
Issues in Measurement of Works
Ø Has notice been given by Engineer to Contractor about intention to carry out measurement?
Ø Has Contractor sent qualified personnel to assist Engineer?
Ø Have all particulars requested by Engineer been provided by Contractor?
Ø Are certified laboratories/testing institutions hired for the tests?
Measurement of the Price of Non - Conformance (PONC)

Measurement is the only way in which the Contractor can assess how well it is doing in its quest for a
quality product. Each time a mistake is made the Contractor should keep a record of the cost of
rectifying the works. It is more difficult to measure the loss of credibility with the Employer or
professional team.
The Contractor would have made an allowance in the tender for time spent by the site agent with the
client to go through the project quality checks and hand over of the works. The Contractor should also
have priced the cost of a finishing team in fixing up the snags as a result of the final inspections. This
amounts to the costs that were allowed and what constitutes conformance to requirements.
Any additional work done over this allowance is due to the Contractor’s non - conformance to the
requirements.
All the re - work costs (PONC) must be added up on each project and the PONC for each project
should be noted. The PONC of all projects could be displayed on the Contractor’s notice board,
website, in a marketing brochure, or discussed at company meetings to make sure that everybody

knows the seriousness of the pursuit for quality and that improvement from each employee is
expected on each of their subsequent projects. Monitoring can be done on an ongoing basis and is
not restricted to the end of a project.
Remedies against non-performing Contractors (Pursuant to Sub-Clause 15.1):

Ø Deny approval or acceptance of non-compliant goods, defective work, or sub-standard materials;
Ø Rejection of non-performing staff;
Ø Penalties for failure to meet functional guarantees;
Ø Actions against the Performance Security;
Ø Termination of Contract.
Terms of the Payments
The Contractor will be paid monthly, following approval of a payment certificate submitted to the Team
Leader, based on the accepted measurements. Conditions of Contract provide that within 56 days
after the Engineer receives the Statement and supporting documents, the Employer should effect
payment to the Contractor. Usually delays are experienced between submission of the valuation from
the Contractor and the payment of the Interim Payment Certificate. These delays are very disturbing
for the Contractor, who in most cases relies on the interim payments to pay the wages to the laborers
and to procure fuel and materials. In order to avoid such delays, the Contractor should develop a
more disciplined behavior in his spending and carry out better financial planning. At the same time,
the Supervision Consultant and the Client should carry out their part in the payment process with
promptness and diligence.
Final Payment Certificate

As soon as the works are substantially completed or upon termination of the Contract (at an earlier
stage), the Supervision Consultant and the Contractor must conduct a joint inspection and take final
measurements of the completed works. Based on the final measurements and As-Built Drawings a
Final Payment Certificate is prepared by the Contractor and agreed with the Supervising Consultant.
The Final Payment Certificate shall be computed as the total value of work executed under the
Contract less any previous payments and all amounts such as Advances and cost of tools and
equipment supplied by the Project Manager. The Supervising Officer must also ascertain that all
outstanding labor wages are settled and no other amounts are due to suppliers in the project area.
These could include rental charges for site accommodation, food catering charges, charges for use of
water sources, gravel sources and rental charges for equipment hired by the Contractor. If the works
are approved by the Supervision Consultant, it is customary that 50% of the Retention is paid back to
the Contractor and that the Performance Bond is released, so that the Contractor has means to
engage in new Contracts. The remaining 50% of the Retention forms the only source of security for
the Project Manager to cover the Contractor’s liability during the Defects Liability Period. A
Contractual dispute occurs when the Contractor does not agree with the final decision by the Client
and should be resolved in accordance with procedures specified in the Conditions of Contract. The
resolution of a Contractual dispute may be a costly and time consuming affair for both parties. All
efforts should therefore be taken to reach an amicable settlement. Failing this, a procedure in two
steps is normally recommended and specified in the Contract before the matter may eventually be
brought before the court. For both parties in a Contractual dispute it is important to be aware of the
formal requirements: Time limits for rejection of decisions and referral of the dispute to a higher level;
All communication to be in writing and with notice to the other party. Failure to comply with these
formal requirements will in itself result in a lost case and the decision to be declared “final and
binding" on both parties. Within 28 days after receiving the Final Statement and the written discharge,
the Engineer shall issue the Final Payment Certificate and the Employer shall pay any outstanding
amounts due to the Contractor with due allowance for any credits due to the Employer from the
Contractor.
2.8 MANAGEMENT OF DISPUTES

The Consultant shall evaluate possible Contractor’s Claim in accordance with Sub-Clause 20.1 and
3.5, and Employer’s Claim in accordance with Sub-Clause 2.5 and relevant Sub-Clauses accordingly.
In a Contractual relationship, disputes can arise as a result of disagreement about issues related to
quality, quantity, payment or program of the work. Parties are advised to settle disputes amicably.

Ø Claims and settlement of disputes(Except DB referral)

Ø Check the exact provisions of the Contract with regard to the settlement of disputes and costs
incurred (in terms of time, money and resources);
Ø Check if the Contract management team has consistently and correctly enforced the conditions of
Contract;
Ø Duly document any deviations from the specifications and conditions of Contract.
- Site daily diary
- Site minutes & Files
- Instruction Books
- Contract close-out
Appointment of the Dispute Board (DB)

It is preferable that the DB is selected and functional as soon as practical after the Contract is
awarded. However, the selection of board members and conclusion of their service agreements do
require time to execute. A principal feature of the three member DB is that the Parties, having
nominated their proposed member (and had the same accepted by the other Party), leave the two
selected members to agree and nominate a third member, who is most likely to act as the Chairman
of the Board, for the approval of the Parties.
Amicable Settlement
Where a Party has given notice of dissatisfaction under the provisions of Sub-Clause 20.4, both
Parties are required to attempt to settle the dispute amicably before commencing arbitration. There is
no formal role for the Engineer in this procedure. A degree of formality, recording that amicable
discussion has taken place is appropriate, if there is no settlement.
Arbitration
The arbitration procedure is laid down in the Conditions of Contract. Arbitration is a more formal and
comprehensive procedure than adjudication. If the parties still fail to reach an agreement as a result of
arbitration, they may refer the matter to the court.
Unless settled amicably, any dispute in respect of which the DBs decision has not become final shall
be finally settled by international arbitration. The cost of arbitration will be significantly greater
than the similar process already conducted by a DB.
2.9 THE DEFECTS LIABILITY PERIOD & FINAL COMPLETION INTRODUCTION

The Defects Liability (or Notification) Period starts a day after the Completion Date stipulated in the
Conditions of Contract. Substantial Completion refers to the situation where the Contractor may have
completed the major works that are keys to functioning of the road but only minor works are
outstanding. The outstanding works are then completed during the DLP (or DNP) and therefore do not
affect Contractor’s demobilization of major equipment from site. Depending on the Contract signed,
the DLP last one year or shorter. For example, the DLP could be linked to the end of the rain season.
The principle behind determination of the period of the DLP is to allow the critical sections of the
completed Works to be tested by the worst weather conditions.
Once the Works are substantially completed they are further observed for a period stated in the
Conditions of Contract to ensure that any defects noticed are corrected. This period starts with the
issuance of a Certificate of Substantial Completion.
Final Inspections
Prior to commencing the Defects Liability(or Notification) Period, the Supervision Consultant and the
Contractor conduct a joint inspection, to ensure that completed works meet the specifications given in
the Contract document. They also identify any outstanding works, the so-called “Snag List”, that on
mutual agreement are completed during the Defect Liability Period.
Notification of Defects to Contractor
During the whole period of the DLP at regular intervals the Supervision Consultant must inspect the
works to identify any defects. Any defects noticed during the inspections should be communicated to

the Contractor in writing. The Supervision Consultant should distinguish between normal wear and a
defect. Temptation to issue variation orders for new works should also be avoided. Variation orders
for new works are not allowed during the defects liability period. In accordance with Conditions of
Contract, Defect Notification Period may be extended by 2 years in accordance with Sub-Clause 11.3.
Payment for Defects
Defects that are attributed to poor workmanship, are supposed to be paid for by the Contractor.
However, where the Contractor fails to correct the defects despite being notified, the Project Manager
may use the Retention to cover the cost of these repairs carried out by someone else. Defects that
are not as a result of Contractor’s poor workmanship may be paid for as a separate negotiated
Contract and not as variation orders. Before the end of the DLP (or DNP), the Contractor and the
Supervision Consultant carry out another detailed inspection jointly, to ascertain that no defects exist.
During this inspection the team must concentrate on the performance and condition of drainage
structures and pavement layers.
Performance Certificate
Once all defects are corrected, the Contractor must be issued a Final Completion Certificate within 28
days after the latest of the expiry dates of the Defects Notification Periods. This is usually preceded by
a ceremony at which the Contractor hands over the completed Works to the Client. At this stage, the
Performance Security is also released within 21 days after receiving a copy of the Performance
Certificate. Only the Performance Certificate shall be deemed to constitute acceptance of the Works.
Closing of Project Account
After the joint site inspection referred to under above paragraph ‘Payment for Defects’, the Contractor
prepares a claim for repayment of Retention, which must be agreed with the Project Manager. The
Project Manager will then settle the claim with the Contractor and closes the Project Account.
Discharging
When submitting the Final Statement, the Contractor shall submit a written discharge which confirms
that the total of the Final Statement represents full and final settlement of all moneys due to the
Contractor under or in connection with the Contract.
Penalties for late completion
Provisions for penalties or delay damages (a monetary value representing the damage caused by the
delay) are contained in the Contract. These are imposed where the Employer has specific deadlines
or other requirements and will experience a loss of revenue, loss of use of the premises if the project
is delivered late or have to pay additional supervision and administration costs relating to the late
completion. The Contract document specifies the value of the penalties per day. Penalties are
deducted from interim payment certificates as soon as they occur and can be objectively quantified.
They are based on the difference between the time that the works were actually completed and the
time according to the Contract when they were supposed to be completed.

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Government of Nepal Contract Administration Manual

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Government of Nepal

Ministry of Physical Infrastructure and Transport

SASEC Roads Improvement Project

Korea Engineering Consultants Corp.

SECTION–I : Team Composition & Organization .................................................................... 1

ADB Asian Development Bank

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST

SECTION–I : TEAM COMPOSITION & ORGANIZATION

1.1 THE PROJECT MANAGEMENT TEAM

The Engineer / Engineer's Representative (Team Leader)

TEAM STRUCTURE AND DEPLOYEMENT

A. International Key Experts:

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 1.

B(i) National Key Experts:

Figure 1 : Contract Management Framework

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 2.

Figure 2 : Organization Chart

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 3.

SECTION–II : CONTRACT ADMINISTRATION

2.1 SUMMARY OF THE CONTRACT CLAUSE

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 4.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 5.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 6.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 7.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

6 Staff and Labor

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 8.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 9.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 10.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 11.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 12.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 13.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

13 Variations and Adjustments

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 14.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

16 Suspension and Termination by Contractor

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 15.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

17 Risk and Responsibility

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 16.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 17.

CLAUSE OBLIGATIONS TIME FRAME SPECIFIC

KECC/KDEC (JV) in association with MEH/MULTI/SOILTEST 18.

2.1.2 Summary of Employer's Entitlement to Claim

4.19 Electricity, Water, Gas if stated in the Contract

4.20 Employer’s Equipment and Free-Issue Material

7.5 Rejection (Defective Plant and Materials)

7.6 Remedial Work (Contractor fails to carry out)

8.7 Delay Damages (Contractor fails to complete on time)

11.4 Failure to rectify defects (Contractor fails to rectify)

13.7 Adjustments for changes in Legislation (Reductions in cost to be refunded to Employer)

13.8 Adjustments for changes in Cost (Reductions in cost to be refunded to Employer)