(ii)by public notice and

(iii)by negotiations.
By Private Invitation (Selected or Limited Invitation)
Generally, the architects and the engineers do maintain a panel of contractors and from
the panel a few are invited to quote for a particular job. In such a case, the architect
knows the contractor, together with his intelligence, integrity and financial standing and
thus he is sure of the type of work that he will get from him. It also prevents
inexperienced persons from entering the contract line. This is suitable for private works.
By Public Notice
All public works are required .to be advertised in the newspapers for the purpose of
tenders and any contractor can quote for the same. There are chances of getting the work
at a cheaper rate and these tenders are also not free from collusion. At time the tenders are
so low that it will not be possible to imagine whether the contractors will be able to
complete the work. Such tenders usually end in dispute, poor quality of work and a lot
headaches for the architects.
-The reverse is also true that the architect or the engineer may come in contact with new
and intelligent contractors and this opens the field for new entrants in the contracting line.
-The work is generally given to the contractor quoting the lowest amount. provided he is
otherwise equally qualified. By Negotiations
In this case the architect / engineer do possess some base for negotiations like the work
of a building not to cost more than Rs per S.M. of plinth area or at certain
percentage above or below the schedule of rates. With this base . negotiations are done
with one or two contractors and work thereafter is assigned to the right contractor. This
mode is popular with developers and for repair jobs .The UP PWD or CPWD schedule of
rates are taken as the base.
Nature of Tender
Tenders set out paths for completion of building jobs. The paths may vary from item rate
to labour work and the said paths have different terms and conditions. The accepted
contracts derive their names from the type of tender like
item rate contracts derived from
item rate tender. lump-sum contract from lump-sum tender etc.
Besides the above other paths available for execution of the works are:(1) Day work.
(2) Piece work.
(3) Dally labour.
Thus, nature of tenders leads to nature of contracts, and discussion hereunder will apply
to nature of contract also however, we shall study while discussing the Contracts
Nature of Tender can be Classified as Under
(1) (a) the ,rate tender.
(b) Schedule of rates with percentage up or down the basic. rate with rise and fall
clauses . .
(2) (a) Lump-sum tender.
(b) Lump-sum percentage tender (target tender).

(3) (a) 'Cost plus percentage or "cost plus fee tender".

(b) Cost plus fixed fee tender.
(c) Cost plus fixed fee with bonus and penalty.
(4) Labour tender.
(5) Tender for demolition work.nails. etc.. and the owner supplies only the materials
required for the construction work. The contractor is responsible for line, level and setting
out of the work.
The labour tender generally includes the labour work for the conStruction of water tank
for storage of water required for construction purpose as well as labour work for putting
up temporary sheds for office and cement godown of reasonable size.
The owner has to keep a close watch over the materials used by the contractor as he is
least concerned with their wastages.
This method of execution of work is very popular as the materials used and the
workmanship will be of standard quality. The points of dispute are minimised and the
payments for extra works are restricted to the labour charges only.
The labour tenders are invited sometimes on the basis of rate per square meter or cubic
meter'of the construction work:4'he contractor agrees to execute the complete work of the
building right from the stage of foundation till the completion of the building at a
specified rate per square meter or cubic meter. excluding drainage and electric Works.
It is suitable for all types of works like buildings, bridges. culverts, and Specially the
works of additions, alterations and repairs to the existing buildings.
Demolition Tender
These tenders are usually called for the demolition of the existing building up to ground
level or up to road level and removal of all the materials of the same including carting
away of the debris. The tenderer usually takes away all the materials that are there in the
old building and in turn he pays a specified amount to the owner:
Other Modes of Execution of Works The execution of the works can also be carried out
by anyone of the following arrangements depending upon the nature of works and other
factors:
(1) Day work.
(2) Piece work.
(3) Daily labour.
Day Work This method of execution of the work is adopted for all small items of work
which cannot either be measured or valued, e.g., architectural
features 'like petals or domes for mosques or temples, decorative design in plaster'work
or for works under water where time of working is limited due to rise and fall of tide
level.
The payments made to the contractor consist of net cost of materials and labour to
complete the work and usually, about 20 to 25 per cent on the same which will cover
contractor's profit, establishment charges, and rentals for the plants, if any. It requires
proper check on the materials consumed and labour employed and the reports to that
effect must be countersigned daily by the clerk of work. The contractor is required to
submit a weekly report of the same to the architect concerned .It is the duty of the

architect and the engineer to sanction those extra works in writing which cannot be
measured or valued properly to be paid at day work prices.
DailyLabour This method is suitable for the maintenance works of roads, canals, etc.,
and is also known as departmental method of execution. The owner or the Government
agencies usually employ all the labours required like masons, bhistis, mazdoors, etc.,
whose attendance is recorded daily in the muster roll by the'Jr. Engineer. The materials of
construction, and tools, etc., are obtained from the central stores department by sending
the necessary indent for the same. The works executed are recorded in the measurement
book and are checked by the sub-divisional engineer and executive engineer before the
payments are effeted. The labour is usually paid weekly, fortnightly or monthly as agreed
upon.
Earnest Money It is an initial deposit made along with the tender in order to show the
genuineness of the contractor. The amount of earnest money varies from I to 2 per cent of
the estimated cost of the project. This amount remains in the safe custody of the architect
or the engineer till the work is allotted to a particular contractor who will be asked to
deposit further sum towards the security deposit. The earnest money of the other
contractors whose tenders are not accepted are refunded to them. The main purpose of the
earnest money is ~ see that a fair competition takes place for the work.
The earnest money is forfeited in favour of the owner in case the contractor refuses to
enter into a contract after his tender has been accepted. It is accepted in cash or cheque at
times in the form of negotiable Government securities.
Security Deposit The approved contractor is asked to deposit a further amount of 2 to
5% of the estimated cost of project with the architect as security deposit. It includes the
earnest money already deposited by the contractor. It is paid in cash or cheque and at
times in the form of negotiable Government securities.
This amount is kept as a check so that the contractor fulfills all the terms and conditions
of the contract, carries out the work to entire satisfaction and maintains proper progress
of the work. If he fails the whole or part of the security deposit is forfeited. It does not
carry any interest and is returned to the contractor after his defect liability period is over.
Retention Amount When a contract of the work is assigned, it is essential for a
contractor to deposit a fixed amount either with the architect or with the owner as a
guarantee for the faithful performance of the terms of the contract.
If it is very difficult for a contractor to pay such amount all at once as his business it is
arranged that the contractor should pay the so called security deposit by installments from
the payments due to him for the works already executed. .It is usually 10 % of the value
of the work . As soon as the total retention fund of 10 per cent of the tendered amount has
been collected, the subsequent interim certificates are required to be issued at their full
values.. The Retention Amount is a Security Deposit. Normally 50% of the said amount
is paid after the virtual completion of the work.. Final installment of50% is paid after the
defect liability period has passed and after issue .of the final certificate by the architect.
In case of bankruptcy of the contractor, he will have no claim over the retention fund, till
the final certificate has been issued by the architect for the work. The Retention fund does
not carry any interest.
Mobilisation Fund ' In case of big projects a lot of money is required by the Contractor ,
for the recruitment of labour ,travel of staff ,erection of temporary accommodation staff/
labour ,storage of certain , insurance premium etc .Therefore Employer pays the

Contractor certain amount called Mobilisation Funds, the main purpose of which are to
enable the contractors to make all initial arrangements for commencement of works on
basis of interim certificates it may be 90% or even 95% of its value and materials on site
paid at varying percentages from 50% to 75% o( the value of such materials on site
depending upon the terms and conditions as may have been agreed upon subject to 2%
deduction of the amount released as deduction of Income-tax at source. i.e.TDS
Mobilisation Fund is essential for construction of big projects It is required before
executing .
Maximum amount is limited to about 10% of the contract amount, exact percentage
depends upon the terms of contract.
2. It is paid in f\ill or paid in two to three stages like:
Stage-1-: 50% of the mobilisation fund as agreed is paid within one month of the award
of the work and signing of the contract against bank guarantee for it.
Stage-2 Part is released on completion of preparatory works depending upon their value.
Stage-3- is released on bringing plants and machineries on site again depending upon
their value. '
. It is recovered from each of the interim bill at specified percentage of interim payment
and entire mobilisation fund is recovered on completion of 80% of the work. It can be
interest free fund or carrying a specified rate of interest..
The mobilisation fund is the backbone of successful implementation of big construction
projects.

Tender Document.

The tender documents occupy important position for contractors and employers, the
architects.
And comprise of the following:
1) Tender notice.
(2) Specta1 notice.
(3) Letter of offer.
(4) Specla1 conditions.
(5) Form of Contract with conditions.
(6) General Spec1fications.
(7) One complete set of drawings .
(9) Bill of quantities. (OR) Detailed description of work for tender on lump-sum basis.
(OR) Unit of S.M. basis: which at times take the form of "Supplementary
specifications" .
Tender Notice and Cost of Tendering It is the notification for the contractors at large
possessing either expertise in that branch of civil work for which the notification has been
issued or having the skill and human resources to get the work in question executed, to
give their offers for the specified work. In the notification the employer invites the offer
and does not make art offer by himself that he is prepared to give the contract for the
work for a specified sum. Even if the owner has made an offer, still he has got rights to
withdraw the same at any time before acceptance is confirmed by him
Cost of Tendering It is usually a practice in vogue that cost involved in preparation and
completion of the tender papers including site inspection by the contractor as well his
adm1n1strative expenses are to be borne by the contractors alone and the owners are not
saddled with such tender expenses.
Characteristics of a Tender Notice
1. Tender notice must mention the name of the owner, the place, nature and extent of

work, and the estimated cost.

2. It must mention amount of earnest money and tender fees.
3. Minimum time of returning the tender by the contractor should be atleast 15 to 20 days
from the date of issue of the same.
4. The place of delivery of the tenders by the contractors should be specified.
5. The contractors should be requested to inspect the site prior to filling of the tender, so
that they can ascertain well in advance the Working Conditions, the nature of soil for the
foundation etc.