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    Post Contract Management

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    RajanRanjan
    The document discusses different types of construction contracts and payment structures. It describes traditional, turnkey, design-build, construction management, and guaranteed maximum price contracts. It also covers lump sum, bill of quantity, and cost reimbursement pricing methods. Key points include how contract type depends on scope, risk, and responsibilities, advantages of lump sum pricing, importance of payment terms, potential for delay penalties, and standard use of retention money until work is complete.

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    Post Contract Management

    Uploaded by

    RajanRanjan
    229 views19 pages
    The document discusses different types of construction contracts and payment structures. It describes traditional, turnkey, design-build, construction management, and guaranteed maximum price contracts. It also covers lump sum, bill of quantity, and cost reimbursement pricing methods. Key points include how contract type depends on scope, risk, and responsibilities, advantages of lump sum pricing, importance of payment terms, potential for delay penalties, and standard use of retention money until work is complete.

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    The document discusses different types of construction contracts and payment structures. It describes traditional, turnkey, design-build, construction management, and guaranteed maximum price contracts. It also covers lump sum, bill of quantity, and cost reimbursement pricing methods. Key points include how contract type depends on scope, risk, and responsibilities, advantages of lump sum pricing, importance of payment terms, potential for delay penalties, and standard use of retention money until work is complete.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    229 views19 pages

    Post Contract Management

    Uploaded by

    RajanRanjan
    The document discusses different types of construction contracts and payment structures. It describes traditional, turnkey, design-build, construction management, and guaranteed maximum price contracts. It also covers lump sum, bill of quantity, and cost reimbursement pricing methods. Key points include how contract type depends on scope, risk, and responsibilities, advantages of lump sum pricing, importance of payment terms, potential for delay penalties, and standard use of retention money until work is complete.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 19

    Contract and Payment

    structures
    The nature of the contract
    depend on
    - scope of the work
    -Responsibility of the contractor
    - The risk involved
    - Required time for the
    completion of the work.

    Things to considered during the


    Selection of contractors
    Whether responsibility for the design,
    procurement , construction,
    commissioning is allocated to one
    contractor or not
    Whether the main contractor will both
    mange the project and undertake
    construction or will be responsible
    management only while the
    construction is undertaken by other
    contractor
    2

    Procurement routes

    1. Traditional system
    - Characteristics of traditional
    system
    a. The client has
    engineer/architect who is is
    responsible for the design
    b. Contractors are responsible
    for construction
    c. Client is responsible for the
    management of the contract
    3

    2. Turnkey contract

    -The client is responsible for the


    preparation of their work
    specification/statement of requirement
    -The client does not retain an engineer
    during the construction
    -The clients role is limited to
    inspection , payment and ensuring the
    successful completion of the work.

    3. The design and build

    The contract is responsible for


    both construction design and
    construction
    The client should have an
    engineer who protect the interest
    of the client

    4. Construction management and managing contract

    The contractor is responsible only


    for the management of the
    contract whereas the construction
    of the work will be undertaken by
    other contractors appointed by the
    client
    Construction Management
    Contract is for use on construction
    projects where the employer
    appoints separate contractor to
    carry out the works, and a
    6

    5. Guaranteed maximum
    price
    Is a cost-type contract (also known as an
    open-book contract) where the contractor
    is compensated for actual costs incurred
    plus a fixed fee subject to a ceiling price.
    GMP Combines construction
    management with the design and build
    The contractor is responsible for the
    management of the design such as
    programming, coordinating the work of
    designers
    7

    . Guaranteed maximum price


    continued
    The contractor is responsible for cost
    overruns, unless the GMP has been
    increased via formal change order
    (only as a result of additional scope
    from the client, not price overruns,
    errors, or omissions).
    8

    The contract pricing


    There are three main ways in
    which contract is calculated
    Lump sum
    Remeasurement/bill of quantity
    and
    Cost reimbursement(cost plus)

    Lump sum
    Advantages of lump sum
    It provides the maximum
    incentives to the contractor to
    complete the work on time
    It reduces to minimum the amount
    of administration involved after
    contract agreement

    10

    Conditions related to lump sum


    method
    The ground condition on the site
    Material quantity and specification
    number of labors and labor hours
    Descriptions and quantities of boughtout
    items
    Types of constructional plant which will
    be
    required and for what periods
    Time required by the designers
    11

    Conditions related to lump


    sum method continued
    The site organization and facilities and
    which will be required and for how long.
    Factors which will affect the site
    productivity
    Geographical and climatic factors as
    they affect site work
    Access to site
    Local availability of material and labor
    NB: The contractor should give similar
    information to the subcontractors
    12

    Bill of quantity
    It involve in estimation of quantity,
    cost of the materials, labor, supervision
    and plant which will be required to
    execute the work.
    It is commonly used in building and
    engineering contracts

    13

    Cost reimbursement
    In Cost reimbursement contract (cost
    plus contract), the contractor is
    reimbursed the actual cost they incur.
    It can be used where the scope of the
    work to be carried out can not be
    properly defined at the beginning and
    the risk associated with the works are
    high (repair/rehabilitation). This is a high
    form of contracting for the client as the
    final cost is not known when the
    14

    Terms of payment
    Advantage of terms of payment
    The employer avoids having to restrict
    the tender list to large firms possessing
    the resources to finance the contract.
    It ensures that the renderers do not
    have to inflate their tender prices by
    financing charges.
    It gives encouragement to and allow the
    employer to take advantage of firms
    possessing technical initiatives who
    15

    Advantage of terms of
    payment continued

    The employer minimizes the risk of


    being saddled with a contractor who
    has insufficient cash with which to
    carry out the contract and of having
    therefore to either support the
    contractor financially or terminate
    the contract.

    16

    Delay in payment
    After issue of completion certificate by
    the architect or engineer, there is no
    excuse for delay
    Late payment is breach of contract
    Many contract charge interest on
    client of being delay of payment
    If payment is delayed after notice from
    the contractor for more than a specified
    period, the contract has right to
    suspend the work or terminate the
    contract
    17

    Advance payment
    It is recommended to avoid advance
    payment

    18

    Retention money
    With contracts for building and civil
    engineering works, it is usual for the
    purchaser to retain a proportion of the
    contract price until the work has been
    completed.
    This percentage varies but is usually
    between 10 per cent and 20 per cent.

    19

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