28 conditions of contract fidic

Buildings Practice Facilities Plants/PetrochemicalsChapter 28

General Contract Provisions Guidelines1 This chapter provides guidelines, often adopted on general construction contracts meeting in

line to international practice applied to contracts namely, use of FIDIC Red book.2 Provisions have been defined using simple contract language, so as to facilitate young

engineers, who are not very well experienced on body of construction contract3 It is envisaged that fundamental acquaintance pertinent to contract body of contents is of

utmost significant for engineer to interpret respective clause or provision to control projects4 It is not essential that only advocates/lawyers can only, understand such provisions, but fact

remains that experienced professional engineers are usually, seen expertly, dealing with such contract issues

5 Many explanations have also, been included ‘within parenthesis in italic letters’ at many locations for significant understanding of included or proposed contract clauses.

6 I have used term ‘clause’ or ‘provision’ everywhere, but ‘sub clause’ or ‘section’ may also, be used.

7 Even some contract body writers use term ‘article’ as well8 I have also, used words such as ‘it’, ‘its’, ‘itself’ etc. which stands for his, himself, they, these

themselves in contract consideration9 Purpose to give this page is to frame various clauses to cater on civil engineering

construction projects contracts of EPC nature or construction prosecution nature10 Various stages on project enlist FEED, design & detailing, bidding, award, mobilization,

construction prosecution/execution, safety requirements, quality requirements, planning & scheduling, materials, equipment, workforce, risks handling, costs, time, testing, completion, hand over, take over & finally completion & discharge

11 An attempt has been made to incorporate all required guidelines, so that a comprehensive statement is delivered for study to understand general contract requirement constituting body of general conditions of contract

General provisions1 In conditions of contract,

a which includes ‘particular conditions’ & these ‘general conditions’, b following words & expressions shall have meanings as stated hereinafter.

2 Words indicating persons or parties, include corporations & other entities, except where context requires, otherwise

3 Contract means ‘contract agreement’, ‘letter of acceptance’, ‘letter of tender’, a these conditions, specifications drawings/ schedules & b all further documents, which are listed within contract agreement or on letter of

acceptance4 Contract agreement means ‘contract agreement’ referred to

(Within documents in form of contract)5 Letter of acceptance means, ‘letter of formal acceptance’ by employer of/(pertinent) letter of

tender including all annexed memoranda, comprising agreement between & signed by both parties

6 If there is no document as such letter of acceptance, expression’ letter of acceptance’ means, ‘contract agreement’/date of issuing & receiving ‘letter of acceptance’ means, date of signing contract agreement

7 Letter of tender means document entitled tender, which was completed by contractor & includes signed offer to employer for works

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General Contract Provisions Guidelines8 Specification means documents entitled as specification/s as included within contract & all

additions or modifications to specification/s according to contract requirement, which document specifies works/scope of works included/defined within contract

9 Drawings means ‘drawings of works’ as included within contract & any/whatever additional or modified drawings, issued by employer in accordance with contract

10 Schedules means documents entitled ‘schedules’ completed by contractor & submitted with letter of tender, as included within contract, which document/s may include bills of quantities, data, list or schedule of rates or prices etc.

11 Tender means ‘letter of tender’ & all other document/s which contractor submitted with letter of tender as included within contract

12 ‘Appendix to tender’ means completed pages entitled ‘appendix to tender’, which are appended to & form part of ‘letter to tender’

13 Bills of quantities & ‘day work’ schedules means documents so named, which are comprised in schedules

14 Party means ‘employer’ or ‘contractor’ as context requires15 Employer means person named as ‘employer’ in ‘appendix to tender’ & ‘legal successor’ in

title to this position16 Contractor means a person named ‘contractor in letter of tender’ accepted by employer or

‘legal successors’ in title to this person17 ‘Engineer’ means a person appointed by person to act as ‘engineer’, for purpose of contract

& named in ‘appendix to tender’ or other person appointed by ‘employer’ from time to time & notified to ‘contractor’ (replacement of engineer)

18 ‘Contractor’s representative’ means person named by ‘contractor’ in contract or appointed from time to time by ‘contractor’, who acts on behalf of contractor

19 Employer’s personnel engineer & assistants (delegated engineers on behalf of engineer) & all other staff, labour & other employees of ‘engineer’ & of ‘employer’ or other personnel notified to ‘contractor’ by ‘employer’ or ‘engineer’ as employee’s personnel

20 Contractor’s personnel means ‘contractor’s representative’ & ‘all personnel’, whom contractor utilizes on site, who may include staff, labour & other employees of contractor/ subcontractors & all other persons assisting contractor in execution/prosecution of works

21 Subcontractor means any person named in contract as a subcontractor or any person appointed as a subcontractor for a part of works & legal successors to title on each of these persons

22 ‘DAB’ means person or three persons so named in contract or other person, so appointed to act ‘Disputes Adjudication Board’

23 ‘FIDIC’ means International Federation Of Consulting Engineers24 ‘Base date’ means date 28 days, prior to latest date for submission of tender25 ‘Commencement date’ means date notified for commencing contract works26 ‘Time for completion’ means time for completing works or section/part of a work, as stated

in ‘appendix to tender’27 ‘Test on completion’ means tests, which are specified on contract or agreed by both parties or

instructed as variation and which are carried out before a work or section of work are taken over by engineer

28 ‘Taking over certificate’ means certificate issued by ‘engineer’ for ‘employer’ taking over contract works duly completed



General Contract Provisions Guidelines29 ‘Test after completion’ means tests, which are specified in contract & carried out in

conformance with provisions of particular conditions, after works or section of work taken over by employer

30 ‘Defects notification period’ means period for notifying defects in work or section of work, as stated in ‘appendix to tender’ with any/whatever/every extension of defects notification period, calculated from date on which, work or section is completed as certified

31 ‘Performance certificate’ means certificate issued for contract work performance32 ‘Day’ means a calendar day comprising 24 hours & ‘year’ means comprising 365 days, while

‘week’ means comprising 7 days33 ‘Accepted contract amount’ means amount accepted in letter of acceptance for

execution/prosecution & completion of works & remedying of any/whatever/all defects34 ‘Contract price’ means price defined including adjustments in accordance with contract35 ‘Cost’ means all expenses reasonably, incurred by contractor, whether on or off site

including overheads & similar charges, but does not include profit36 ‘Final payment certificate’ means certificate issued for final payment37 ‘Final statement’, means statement included for final payment certification38 ‘Foreign currency’ means in which currency, part or whole payment is made, but not

local/domestic/national currency39 ‘Interim payment certificate’ means payments certificates issued, other than ‘final payment

certificate’40 ‘Local currency’ means currency of country, where work is carried out41 ‘Payment certificate’ means certificate issued under contract price & payments42 ‘Provisional sum’ means a sum specified in contract, as a provisional sum for any particular

part of works or for supply of plant, materials or services43 ‘Retention money’ means accumulated retentions moneys, which employer retains from

payments of valuation or bills & paid as retention money, when no contractor’s responsibility on contract applies

44 ‘Statement’ means a statement submitted by contractor as a part of application for payment certificate

45 ‘Contractor’s equipment’ means all apparatus, machinery, vehicles & other things required for execution, completion of works & remedy of any/whatever/every/all defects, however, contractor equipment excludes temporary works, employer’s equipment, plant, materials or any/whatever other things intended to form or forming part of permanent works

46 ‘Goods’ means contractor’s equipment, materials, plant & temporary works or any/whatever of them as appropriate

47 ‘Materials’ means things of all kinds other than plant, intended to form or forming part of permanent work, including ‘supply only materials’ to be supplied by contractor under contract

48 ‘Plant’ means apparatus, machinery & vehicles intended to form or forming part of permanent works

49 ‘Section’ means a part of works, specified in appendix to tender as a section50 ‘Temporary works’ means all temporary works of every kind other than contractor’s

equipment, required on site for execution & completion of permanent works & remedying of any/every/whatever defects

51 ‘Works’ means temporary works & permanent works or either of them as appropriate (Preparatory works are also, carried out on site)



General Contract Provisions Guidelines52 ‘Contractor’s documents’ means calculations, computer programme & other software,

drawings, manuals, models & other documents of a technical nature, supplied by contractor under contract

53 ‘Country’ means country in which site or most of it is located, where permanent work is to be executed

54 ‘Employer’s equipment’ means apparatus, machinery & vehicle made available by employer for use of contractor in execution of works, as stated in specifications, but does not include plant that has not been taken over by employer

55 ‘Force Majeure’ means natural calamities, forced disturbance, war breakout, strikes, unrest & all conditions that do not permit works to be continued at all for a specific duration (Force majeure cannot be controlled by either party on contract)

56 ‘Laws’ means all national & state legislations, statutes, ordinances & other laws, regulations & bye laws pertinent any/whatever legally constituted public authority (Contract law, arbitration law, labour law, custom law, health & safety laws, quality laws, international codes, environment law etc.)

57 ‘Performance security’ means a security or guarantee provided by contractor for satisfactory performance of contract requirements (Guarantee or bond that forces contractor to complete all contract scope woks)

58 ‘Site’ means place or places, where permanent works are to be executed & to which, plant & materials are to be delivered & any/whatever/every other places as may be specified in contract forming part of site (All locations involve within scope & all camping areas supporting works)

59 ‘Unforeseeable’ means not reasonably foreseeable by an experienced contractor by date of submission of tender (Force majeure, abnormal inclement weather conditions etc. which could not be observed during past 50 years on weather records)

60 ‘Variation’ means any/every/whatever change to works, which is instructed or approved as a variation (Variations can be extra items, substituted items, omitted items, additional scope of works, deleted scope of work etc)

Construction interpretationsIn contract, except where context requires otherwise1 Words indicating one gender, includes all other genders2 Words including singular also, includes plural & words indicating plural also, indicates

singular3 Provisions including word ‘agree’, ‘agreed’ or ‘agreement’ require agreement to be recorded

in writing &a Written or in writing means ‘hand written’, ‘type written’, ‘printed’ or ‘electronically’

made & resulting in ‘permanent record’4 Marginal words & other headings indicated on contract conditions document shall not be

taken into consideration pertinent construction/interpretation of these conditions5 Wherever these conditions provide for giving or issuing of approvals, certificates, consents,

determinations, notices, requests, these communications shall be conducted a In writing & delivered by hand against receipt, sent by mail or by courier or transmitted

using any agreed system of electronic transmission, as stated in appendix to tender &



General Contract Provisions Guidelinesb Delivered, sent or transmitted to address for recipient communications, as stated in

appendix to tender, however6 If recipient gives notice of another address, communications shall thereafter, be delivered

accordingly & a If recipient has not stated otherwise, when requesting an approval or consent, it may be

sent to address from, which request was issued 7 Approvals, certificates, consents & determinations shall not be unreasonably, withheld or

delayed. 8 When a certificate is issued to a party, certifier shall send a copy to other party.9 When a notice is issued to a party by other party or engineer, a copy shall be sent to other

party or engineer, as case may be10 Contract shall be governed by law of country or other jurisdiction, as stated in appendix to

contract/tender11 If there are versions of any/certain part of contract, which are written in more than one

language, version which is in ruling language, as stated in appendix to contract shall prevail12 Language for communication shall be, as stated in appendix to tender. 13 If no language is stated there, language for communication shall be considered ruling, in

which contract is written14 Documents forming contract are to be taken as ‘mutually explanatory’ of one another.

a (It has been seen that many professionals particularly, inexperienced, do not truly understand how to interpret/construe document.

b Since, many types of documents are included on lump sum EPC or C projects, which require to be related in such a manner that contract documents hierarchy is maintained, for example, when some item is not available in bill of quantities, but shown on drawings, no extra cost can be claimed.

c Also, when drawing does not show certain requirement, but specification demands it, requirement should be included etc.

d All such situations demand that contractor personnel should go through all documents one by one & extract exact onsite prosecution/execution requirements, without wasting time for no gains, as raising baseless claims or requesting scope clarifications, does not earn any reputation, but points to incompetency on contractor/contractor’s representative)

15 For purpose of interpretation/construction/implications, priority of documents shall be followed in accordance to following sequencea Contract agreement-

(Form filled giving both parties names/particulars & amount agreed, signed by parties & 2 witnesses, which procedure is called execution of contract)

b Letter of acceptance- (Communication signed by employer/engineer addressed to contractor announcing award of contract in reference to submitted bid)

c Letter of tender- (Communication signed by bidder addressed to engineer/employer sending & submitting all contract documents including technical & commercial bids together or separately as required)

d Particular conditions-



General Contract Provisions Guidelines(Conditions specifically, applied to bid project giving so many substitution to general conditions as well as additions to more provisions/requirements)

e General conditions- (conditions that generally, apply to all similar projects)

f Specifications- (General & project specifications, general specifications used as standards for all projects, while project specifications used only, for particular project)

g Drawings-(FEED, philosophy, schematic, detailed, working, shop, records, as built etc.)

h Schedules & any/every other documents forming part of contract-time schedule, bar bending schedule/milestones, material schedule, vendor’s schedule, payment schedule, contract schedule

16 If an ambiguity or discrepancy is found in documents, engineer shall issue necessary clarification or instruction-(Engineering query, site technical query. Contractor is obliged to raise queries on standard format or otherwise, referring to various clashing details & provisions. Upon receipt of such queries, engineer shall respond pertaining decision for execution. All such instructions or clarifications shall be implemented accordingly, followed by recording as redline mark ups)

17 Parties shall enter into contract agreement within 28 days after contractor receives letter of acceptance, unless they agree otherwise-(Execution of contract requires signing by both parties to contract, stamping & signing all documents, all pages)

18 Contract agreement shall be based upon ‘contract form’ annexed to particular conditions as explained in foregoing

19 Costs of stamp duties & similar other charges if applicable, as imposed by law in connection with entering into contract agreement shall be borne by employer

20 Neither party shall assign a part or whole of contract or any/certain benefit or interest in or under contract, however either party a May assign whole or part of contract with prior agreement of other party at sole

discretion of such other party & b May assign security in favour of a bank or financial institution, assign any/certain rights

to any/whatever money due or to become due under contract a (Practice on contracts states that main contractor proposes specialist subcontractors for

approval by engineer/employer for disciplines, in case contractor itself does not have required independent competency on related expertise.

b Engineer reviews proposal for approval. c Such approved subcontractor is officially, designated a subcontractor obliged to be

responsible on prosecution level, on full contract management responsibility of main contractor.

d Vendors names are included even at bid stage as a part of bid, within technical submission document of course, included with option)

21 Specification & drawings shall be recorded in custody & care of employer, unless otherwise stated in contract-



General Contract Provisions Guidelines(Specification means all specifications pertinent all disciplines including general specification & project specification, drawings mean all schematic drawings, working drawings, engineering schedules etc. whatsoever)

22 Two copies of contract & each of subsequent drawings shall be supplied to contractor, who may make or request further copies at cost of contractor

23 Each of contractor’s documents shall be recorded in custody or care of contractor, unless & until taken over by employer

24 Unless otherwise stated in contract, contractor shall supply to engineer in addition to soft copy, 6 copies of each of contractor’s documents

25 Contractor shall keep on site a copy of contract, publications named in specifications, contractor’s documents, drawings & variations & other communications given under contract (Codes, specifications etc. references are required to be recorded onsite for routine reference/consultation)

26 Employer’s personnel shall have right of access to refer/examine all these documents at all reasonable times during execution/prosecution of works (During every inspection, documents are required for reference)

27 If a party becomes aware of an error or defect of a technical nature in a document, which was prepared for use in executing works, party shall give notice to other party pertinent such error or defect (In form of engineering or site technical queries for clarification)

28 Contractor shall give notice to engineer, when works are likely to get delayed or disrupted if necessary drawing/s or instruction/s is/are not issued to contractor within a particular reasonable time a (List of required or pending drawings included on drawings schedule. b Contractor may also, include a proposal for approval should work is to be carried out

urgently, in particular case)29 Notice shall include details necessary pertinent drawings or instructions, details of why & by

when, it should be issued/ details of nature/amount of delay or disruption likely to suffer if issued late

30 If contractor suffers delays or incurs costs, as a result of failure of engineer to issue notified drawings or instruction, within a reasonable time specified in notice with supporting details, contractor shall give a further notice to engineer & consequently, shall be entitled to claims such asa Extension of time for any such delay, if completion is or shall be delayedb Payment of any such cost plus reasonable profit, which shall be included in contract price

31 After receiving with further notice, engineer shall proceed in accordance with, either to agree or determine these matters or (Assure tentative date, when required document would be issued, so that new areas could be attacked to save time)

32 However, if & to an extent, engineer’s failure was caused by an error or delay in submission of any/some contractor’s documents, contractor shall not be entitled to such extension of time, cost or such profit (For example, contractor provided incorrect surveys, or misinformed market availability of certain items that could affect release of drawings or erroneous drawing)

33 As between parties, contractor shall retain copyright & other intellectual property rights on contractor’s documents & other design documents made by contractor



General Contract Provisions Guidelines(Working FEED, detailed designs, working drawings, working schedules, method statements, time schedules, project plans, quality plans, safety plans etc.)

34 Contractor shall be deemed to give to employer, a non terminable transferable, non exclusive royalty free license to copy, use & communicate contractor’s documents including making & using modifications of them. (Contractor to enlist all such documents & submit to engineer/employer to use to contract & operational requirement)

35 This license shall Apply throughout actual or intended working life, whichever is longer of relevant parts of works (Contractor to enlist all such documents & submit to engineer/employer to use to contract & operational requirement)

36 Entitle any/every person in proper possession of relevant parts of works to copy, use & communicate contractor’s documents for purposes of completing, operating, maintaining, altering, adjusting, repairing & demolishing works

37 In case, contractor’s documents are on form of computer programmes or other software, permit their use on any/some computer on site or other places as envisaged by contract including replacement of any/every computers supplied by contractor

38 Contractor’s documents & other designed documents made by or on behalf of contractor shall not, without contractor’s consent be used, copied or communicated to third party by employer or its behalf for purpose other than those purposed permitted

39 As between parties, employer shall retain copyright & other intellectual property rights on drawings, specifications & other documents for contract purpose. (All contract documents involving copyright or design right shall only, be provided to related parties, vendor, subcontracts exclusively to be used for contract project maintaining confidentiality clause)

40 They shall not without employer’s consent be copied, used or communicated to a third party by contractor, except as necessary by Contract for execution/prosecution purpose

41 Contractor shall disclose all such confidential & other information, as engineer may reasonably require in order to verify contractor’s compliance with contract requirements

42 Contractor shall in performing contract, comply with applicable laws, unless otherwise stated in particular conditions (Relevant laws of land pertinent to all safety, quality, resources, operations & other requirements shall be abided)

43 Employer shall have obtained planning, zoning or similar permission for permanent works & any/every other permission described in specifications, as having been obtained by employer.

44 Employer shall indemnify & hold contractor harmless, against & from consequences of any/every failure to do so as mentioned in foregoing clause (Copies pertinent all such statutory or regulatory documents obtained from respective authorities shall be provided to contractor for reference)

45 Contractor shall give all notices, pay all taxes, dues, fees & obtain all licenses, permits & approvals, as required by law in relations to execution/prosecution/completion of works & remedying any/every defects. (All receipts & documents to be recorded in project office for reference & inspection by authorities)

46 Contractor shall indemnify & hold employer harmless against & from consequences of any/every failure to do so



General Contract Provisions Guidelines47 If contractor under applicable law, constitutes a joint venture, consortium or other

unincorporated grouping of two or more persons, these persons shall be deemed to be jointly & severally, liable to employer for performance of contract a (Joint venture or JV means minimum two bidders venture together for one package bid,

when one is designer or specialist & other is execution contractor. b There can be constituted more bidders together)

48 These persons shall notify employer of their leader, who would have authority to bind contractor & each of these persons (Such joint bidders JV team is called consortium, while one is designated leader of JV/consortium & all consortium partners agree on DOR, division of responsibilities extracted from within scope of contract works, which are defined on project charter, so that no dispute results in)

49 Contractor shall not alter its compositions or legal status, without prior consent of employer a (JV consortium draws an agreement pertinent job responsibilities, facilities to share with,

percentage of investment & all related conditions about project management, prior to bid is submitted.

b Such agreement remains valid only, should bid be awarded to JV & automatically, annuls/voids otherwise)

Employer1 Employer shall give contractor right of access to & possession of all parts of site within time,

stated in appendix to tender, which right & possession may not be for an exclusive use only by contractor (Common access can be used by owner & its personnel, contractor & all persons related to contract, other contractors working onsite, authorities personnel, visitors, but cannot be used as thoroughfare for general public)

2 If under contract, employer is required to give to contractor possession of any/certain foundation structure, plant or means of access, employer shall do so in time & manner stated in specification. (For example, mechanical erection contractor requires availability of completed foundations bases ready in all respects to allow erection of equipment or steel structure, such location possession is required to be released to contractor to avoid delays)

3 However, employer may withhold any/every such right or possession, until performance security has been received (No work can be carried out in absence of performance surety instrument, if so stated in annexure to bid)

4 If no such time is stated in appendix to tender, employer shall give contractor right to access to & possession of site, within such times, as may be required to enable contractor to proceed in accordance with programme schedule submitted (Site parts possessions can be handed over in sequence on or prior to respective scheduled start dates, provided, schedule does not impact adversely, so as not to cause delays)

5 If contractor suffers delay or incurs cost as a result of failure by employer to give any/every such right or possession within such time, contractor shall give notice to engineer to be entitled for claims toa An extension of time for any/every such delay, if completion is or shall be delayed



General Contract Provisions Guidelinesb Payment of any/every such cost plus reasonable profit, which shall be included in

contract price (It is required on part of contractor to timely, record with employer/engineer about delays expressing its intention to raise related claims, so that evidence supports future claims, while claims shall be filed within prescribed duration)

6 After receiving this notice, engineer shall proceed in accordance either to agree & determine these matters

7 However, if & to extent that employer’s failure was caused by any/some error or delay by contractor, including any/some error in or delay in submission of, any/some contractor’s documents, contractor shall not be entitled to such extension of time, cost or profit (Contractor is required to ensure that data should be reviewed by competent professionals prior to submitting to engineer)

8 Employer (where he/it is in a position to do so) shall provide reasonable assistance to contractor at request of contractora By obtaining copies of laws of country, which are relevant to contract, but are not readily

available & b For contractor’s application for any/some permits, licenses or approvals required by law

of country, which contractor is required to obtain, for delivery of goods including clearance through customs & for export of contractor’s equipment, when it is removed from site (Relevant applications to be moved on to statutory bodies to obtain required documents or permits or record drawings, shall be requested by contractor to engineer/owner for issuing introductory letters addressed to statutory bodies & also, if so required, endorse application directly as case me be)

9 Employer shall be obliged to be responsible for ensuring that employer’s personnel & employer’s other contractors performing on site, cooperate with contractor’s efforts by taking actions similar to those, which contractor is required to take under safety procedures & protection to environment a (On projects engaging many main contractors, it is imperative that all organizations

should coordinate for interactions to an extent, engineering coordination is concerned. b In addition to general liaison, schedules need coordinates, so that in case of interfaces

clash, resolution could be affected prior to stage, when, clashes lead to delays. c Similarly, site requires operate with all necessary provisions under SHES, which would

work successfully, only by joint cooperation among all contractors/operators) 10 Employer shall submit within 28 days, after receiving request from contractor, reasonable

evidences that financial agreements have been made & are being maintained, which should enable employer to pay contract price in accordance with agreed clause/sum. a (In past decades, it was not expected of a contractor to demand from employer or client

pertinent its degree of financial capacity, since globally projects were taken up by state.b But economical industrialization & global developments involve majority of promoters or

developers from private or corporate sector, which situation gives a chance of cognizing fraud & cheating, to avoid which, it is necessary that contractor is assured about work payments would be made, which surety clarification becomes contractual right of a contractor.

c Such clarification if so requested by a contractor at whatever stage should be responded by employer/engineer affirmatively)



General Contract Provisions Guidelines11 If employer intends to make any/certain material change to financial arrangements, employer

shall give notice to contractor with detailed particulars 12 If employer considers self to be entitled to any/certain payment under any/certain clause of

these conditions or otherwise in connection with contract &/or to any/some extension of any/certain defects notification period, employer or engineer shall give notice & particular to contractor.

13 However notice is not required for payments due under relevant clause or for other services requested by contractor a (Contractor might use employer provided water, electricity, accommodation or

equipment etc for which, employer is to be paid at agreed rates. b Such payment shall be made to employer regularly as agreed or deducted from payment

certificates. c No contractual notice is required for such payments)

14 Notice shall be given as soon as, practical after employer became aware of event or circumstance/s giving rights to claim.

15 A notice relating to any/some extension of defects notification period shall be given before expiry of such period a (Defect notification period is limited by certain duration within which contractor should

remedy all punch listed defects. b In case, all such defects’ are not remedied in allowed duration or by appointed date,

appointed date requires to be extended. c For extending such date, notice shall be required to be given/ served on contractor. d It has to keep in consideration that defects notification period/operation & maintenance

period is/are linked to issue of discharge certificate/contract completion certificate)16 Particulars shall specify clause or other basis of claim & should include substantiation of

amount & or extension, to which employer considers itself to be entitled in connection to contract. a (Such defects notification period extension may possibly, give rise to certain claims that

impacted on employer due to inefficient use of works, or due to some other causes.b Contractor is obliged to deliver all works in efficient functioning state, so that no defects

may be seen that can lead to improper functioning of delivery. c If impacts are evident, contractor shall be bound to compensate employer in terms of

time loss & use loss)17 Engineer shall then proceed in accordance with, to agree & determine with, amount employer

is entitled to be paid by contractor & extension of defects notification period, which amount may be included as a deduction in contract price & payment certificate. a (Contractor shall include agreed amount to be deducted from final payment certificate,

while submitting final valuation. b Not only, this deduction, but all other deductions also, whatsoever agreed or notified

during execution of contract)18 Employer shall only be entitled to set off against or make any/every deduction from an

amount certified in a payment certificate or to otherwise, claim against contractor in accordance with relevant/provision clause

Engineer1 Employer shall appoint engineer to carry out duties assigned to him in contract



General Contract Provisions Guidelinesa (Engineer’s duty comprise mainly from concept of project scheme covering all stages

leading to hand over project deliveries finally, when project is transformed to operation unit.

b Position of engineer is contractual & not executive.c Engineer’s appointment is organized at very high responsibility key positiond Engineer should be a qualified chartered or a professional engineer pertinent to required

discipline that best fits in on to project demands.e On buildings projects, engineer can be suitable qualified charted civil or professional

engineer & also, qualified architectf Engineer can be considered a virtual member on employer’s board if not a paid

employee. g Engineer acts as a director on employer’s responsibility. h Whatever activity is conducted by engineer is deemed to be effected by employer or

client. i Engineer is accountable to employer in all respects, which are related to contract such as

designs & supervisionj Engineer can be liable to legal actions both civil & criminal.k Engineer is responsible for cost, time & quality as major heads. l Engineer is responsible for proper functioning of designs. m Engineer is responsible for all working designs, working supervisions & budget control)

2 Engineer’s staff shall include suitably qualified engineers & other professionals, who are competent to carry out these professional duties a (Qualification of key personnel deployed to associate engineer shall be similar to as

indicated in foregoing. b Main responsible staff associated with an engineer should be resident engineer, senior

engineers & discipline engineers. c Onsite supervisors or clerk of works or inspectors are also, associated on lower profiles)

3 Engineer shall have no authority to amend contract a (Engineer is responsible to draw composition of contract provisions & structure of

contract documents in consultation with law professionals. b Once all such documents have been drawn & approved for publication in bid form, no

changes can be incorporated, until certain queries are raised by bidders. c In response to all such queries, if necessary, changes shall be incorporated under

approval by employer. d Once all such documents are finalized & agreed inform of contract, no changes can be

allowed. e Engineer got no authority as such to make any changes, but if so required changes can

be made under agreement between both contract parties employer & contractor of course, on advice by engineer.

f In case, contract requires major changes due to, whatsoever reasons or to cover newer developments, which changes cannot be incorporated by simply, normal modifications or amendments or memorandum of understanding, such case shall require whole contract to be novated under contract act provisions)

4 Engineer may exercise authority, attributable to engineer contract position, as specified or necessarily, to be implied from contract provisions.



General Contract Provisions Guidelinesa (Engineer enjoys all powers, responsibilities & authorities descriptively included within

respective contract provisions. b While notifying to bidder about award of contract, appointment pertinent engineer is

also, announced including defining all powers, authorities & responsibilitiesc Contract has to ensure that all engineer’s defined job description, shall remain in force

until completion. d Therefore, it is in contractor’s interest to deal with engineer for all such issues & not

with employer. e Dealing with employer shall erode virtually, engineer’s responsibility, for which any loss

if so resulted to contractor shall be at its own riskf Employer should also, not entertain all such issues if brought to its attention by

contractor directly, by passing engineer, until there is complaint against engineerg All such other authorities shall also, be construed to have been included that are

normally, attributed with such a dignified position conventionally, as well as, professionally.

h Engineer does not require any permission from employer to use all such duties. i If employer so wishes, can notify withdrawal of certain powers by notification to

contractor j Post notification & coming into force, withdrawal of such powers, engineer shall require

every time approval from employer to use such powers)5 If engineer is required to obtain approval of employer, before exercising a specified

authority, requirement shall be as applicable stated in particular condition. a (For provisions referred within particular conditions, requiring employer’s approval

every time issue is submitted to engineer for decision, engineer shall make a case & forward with its recommendation to employer.

b Employer shall review & decide accordingly. c But, such time consumption required reaching certain decision shall delay particular

work, when contractor does not apply quiet in advance to engineer. d For all such decision, liability passes to employer)

6 Employer undertakes not to impose further constraints on engineer’s authority, except as agreed with contractor a (In interest of project, once agreed, employer should not interfere in prescribed powers

& authorities assigned to engineer. b New powers may not be added, but notified powers should not be curtailed. c It has been noticed that some contractors even, on international level are well qualified,

smart & convincing to employers/clients to restrict engineer’s role, so that contractor may have works effected directly involving employer.

d Contractor may have its own interest to earn additional profits by proposing design alterations to its own option.

e Contractor may propose alternative materials to suitability or procurable at lower prices.

f Contractor may convince about works carried out on site in compliance with specification requirement, when engineer rejected/disapproved such items.

g Contractor may convince employer that engineer is dishonest or demanding. Contractor may try to replace appointed engineer by another to its choice/preference.

h Professionally, such practice is harmful to quality project. of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesi Employer should remember that engineer is paid for professional services, which

employer can utilize properly to achieve a reliable delivery under strict control effected by engineer)

7 However, when engineer exercises a specified authority, for which employer approval is required then for contract purpose, employer shall deem to have given approval, except as otherwise stated in conditions

8 Whenever, carrying out duties or exercising authority, specified in or implied by contract, engineer shall on every action deem to act for employer

9 Engineer has no authority to relieve either party of any/some duties, obligations or responsibilities under contract &

10 An approval, check, certificate, consent, examination, inspection, instruction, notice, proposal, request, test or similar act by engineer, including absence of disapproval shall not relieve contractor from any/its responsibilities, which contractor has under contract, including responsibilities for errors, omissions, discrepancies & non compliances

11 Engineer may from time to time, assign duties & delegate authorities to assistants & may also, revoke such assignments & delegations a (Key assistant to engineer is contractually designated as resident engineer. b Next are senior engineers & discipline specialist engineers. c Then are site direct supervisors entitled clerk of works or junior engineers. d All such roles are descriptively defined by engineer. e Main role engineer defines refer to resident engineer. f Resident engineer is supervision in charge of project in executive terms. g No work can move on project without resident engineer’s involvement. h All works approvals are authorized by resident engineer only, based on engineer’s

contractual authority by delegation. i Engineer can reject whatever work has been approved by resident engineer or its

delegate engineer/senior engineer or specialist or clerk of work or junior engineers.j Resident engineer does not enjoy any financial authority, but supports processing &

applications of scrutiny & recommendations of whatever documents/proposals is/are submitted to resident engineer’s office related to contract performance issues)

12 Such assistants may include a resident engineer, independent inspectors appointed to inspect &/or test items or plants &/or materials (Refer to foregoing explanation)

13 Assignments delegation or revocations shall be in made/job described in writing & would not take effect, until assignment copies have been received by both parties

14 However, unless agreed by both parties, engineer shall not delegate authority to determine any/some matters under determinations clause a (Determination requires decision on extension of time as well as, on cost impact on

contract amount due to that. b Such issue is financial & contractual both.c Resident engineer is required to check past records pertinent to allowed extension of time

for completion as well as, cost paid in all those regards. d Resident engineer is required to forward all necessary documents package received from

contractor, working on package thorough investigation, obtaining clarification from contractor, adding its comments & recommendations for engineer’s reference, whether or not to include in to its considerations)



General Contract Provisions Guidelines15 Assistants shall be suitably/professionally qualified persons to carry out contract professional

duties, exercise delegated authority & who should be fluent in language for communication16 Each assistant to whom, duties have been assigned or authority has been delegated, shall

only, be authorized to issue instructions to contractor to an extent defined by delegation17 Any/every approval, check, certificate, consent, examination, inspection, instruction, notice,

proposal, request, test or similar act by an assistant, in accordance with delegation shall have same effect as though act had been an act of engineer however,Any/certain failure to disapprove any/certain work, plant or materials shall not constitute approval & should therefore, not prejudice right of engineer to reject work, plant or materials at whatever time, after approval granted by assistants

18 If contractor questions any/certain determination or instruction of an assistant, contractor may refer matter to engineer, who shall promptly, confirm, reverse or vary determination or instruction

19 Engineer may issue to contractor at any/whatever time instructions or additional or modified drawings, which may be necessary for execution of works & remedying of any/every defects, all in accordance in contract

20 Contractor shall take instructions from engineer or from assistants, on whom such appropriate authorities have been delegated only, by engineer

21 In case, instruction constitutes a variation, appropriate clause shall apply for confirmation respecting varying cost/time or both, prior to commencement of related activitya (Contractor may be issued certain instruction by resident engineer. b Such instruction could be site instruction as well as, engineer’s instruction. c Site instruction is issued directly by resident engineer. d Engineer’s instruction is issued after approval by engineer. e When, certain work has been instructed by resident engineering in writing as site

instruction, it has to be carried out assuming that defined work constitutes within scope of work.

f In case, contractor contends that such work, does not form part on scope of work, not necessary that work has to be carried out immediately.

g Contractor should write to resident engineer stating that instructed work constitutes variation for it does not part within scope of works.

h Resident engineer should investigate whether, or not instruction constitutes a variation& act accordingly,

i When, there is no variation constituted, resident engineer should respond to contractor giving reasons asking contractor to carryout instruction.

j When, there is an issue of constituting contractual variation, case should be forwarded to engineer for further instruction.

k Engineer may or may not order for carrying out instruction. In case, nevertheless, work is to be carried out, engineer’s instruction involving cost shall be issued.

l Engineer’s instruction constitutes cost variations. m Additional payment or deductions shall be made based on it only)

22 Contractor shall comply with instruction given by engineer or delegated assistant on any/every matter related to contract

23 Whenever practicable, instructions shall be given in writing only24 If engineer or delegated assistant

a Gives an oral instruction to contractor of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesb And receives a written confirmation of instruction from & on behalf of contractor within

two working days, after giving instruction & does not reply by issuing a written either rejection &/or instruction within two working days, after receiving confirmation

c Confirmation shall constitute written instruction by engineer or delegated assistant as case may be

d If employer intends to replace engineer, employer shall allow not less than 42 days, prior to intended date of replacement, give notice to contractor respecting name, address & relative experience of intended replacement engineer

25 Employer shall not replace engineer by a person, against whom, contractor raises reasonable objections by reply notice to employer appended with supporting particulars

26 Whenever theses conditions provide that engineer shall proceed in accordance with either to agree or determine any/certain matter, engineer shall consult with each party in an endeavour to reach an agreement & if agreement is not achieved, engineer should make a fair determination in accordance with contract, taking due regards to all relevant circumstances

27 Engineer shall give notices to both parties, pertinent each agreement or decisions with supporting particulars

28 Each party shall give effect to agreement or determination, unless & until, revised by DAB (disputes adjudication board) or arbitrator

Contractor1 Contractor shall design to an extent required by in scope of works, execute & complete

works in accordance with contract complying with engineer’s instruction & shall remedy any/every defects appearing on works a (Package provision stating gross project deliveries in one sentenceb Designs to comply with FEED requirements & defined philosophies c In case, complete design is to be carried out as delivery, FEED requires review &

approval by employer. d Design is a major task to prosecute works on site. e Contractor should professionally carry out design deliveriesf Contractor may assign design task to a professionally, qualified subcontractor duly

approved by engineer)2 Contractor shall provide plants & contractor’s documents specified within contract, all

contractor’s personnel, goods, consumables & other things/requirements & services, whether of a temporary or of a permanent nature, contractually demanded for this design, execution, construction & remedying of any/every defects a (Provision defines precisely, all resources to be managed for project working. b Resources of whatever type being for permanent works, temporary works & preparatory

works or works for some other related activities should be managed accordingly. c Vendors should also, be procured inline to contract scope requirement)

3 Contractor shall be responsible for adequacy, stability & safety of all site operations & all methods of construction whatsoever to be effected with for works deliveries a (Safety requirement counts to an utmost significance, though neglected on an average

globally. b Safety applies to whole project works. c Safety & adequacy applies to designs. d Designs should be safe &sustainable during service life of structures. of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinese Working safety applies to all activities carried out for prosecution during project life

cycle, until discharge or close out. f Involvement of working safety management allows all activities move safely without

meeting accidents. g Loss of life & materials should be avoided at whatever efforts applications. h Accidents costs immensely, which is not a good state of affairs on projects. i All personnel should be educated for maintenance of safety intact. j Safety, health, environment & security jointly keep project moving safe & inefficient

working surroundings for valued deliveries) 4 Except to an extent specified in contract, contractor shall be responsible for all contractor’s

documents, temporary works & such designs of each item of plant & materials, as is required for items to be prosecuted/executed in accordance with contract & should not otherwise be responsible for design or specifications for permanent worksa (Contractor’s documents constitute all required submissions made/produced by

contractor for purpose of engineer’s approval to authorize prosecution of works. b These documents could be designs documents for those works included within scope of

works as design activities. c Temporary works shall also, require approval of certain documents or submissions.

Various equipment required to be deployed shall also, require certain authentication or fitness certifications.

d In case, when contract scope is only, for construction, all working drawing, sop drawings, all schedules, all working details etc. shall require on site or engineer’s approval.

e When, contract involves design respecting permanent works, all design documents submitted for engineer’s approval.

f Moreover, it depends on scope of work, what documents shall be required to be produced & submit for approval)

5 Contractor shall whenever required by engineer, submit details of arrangements & methods, which contractor proposes to adopt for execution of works a (This provision is very broad & exhaustive. Arrangements involve all temporary works,

preparatory works. b Methods involve for permanent works as well as for temporary works. c Execution of works is related to permanent works. d Details pertinent scaffolding, supporting system, site safety elements etc should be

covered within all such requirements. e Most significant submission should be construction method statements related to all

major activities within all engineering disciplines. f Quality systems require submission of all disciplines method statements to be approved

prior to commencing with relevant activities on site)6 No significant alterations to such arrangements & methods shall be made, without this having

previously, been notified to engineer a (Once all methods have been approved by resident engineer, these shall be recorded by

documents controller, who should circulate copies of respective documents to relevant responsible personnel.

b Work on site shall be carried out in compliance to such statements only.



General Contract Provisions Guidelinesc In case, certain issue arises out of statements, after consulting resident engineer,

statement could be revised to ease out execution on site. d Method statement should be issued to site line management, so that work is properly

executed or prosecuted)7 If contract specifies that contractor shall design any/every part of permanent works then,

unless otherwise stated in particular conditions a Contractor shall submit to engineer contractor’s documents for this part according to

procedures specified within contract b These contractor’s documents shall be generated in accordance with specifications &

drawings, shall be written in language for communication defined within contract & include additional information required by engineer to add to drawings for coordination/s of each party’s designs

c Contractor shall be exclusively, responsible for this part & when works are completed, should be fit for purposes for which, part is intended to be used, as are specified in contract

8 Prior to commencement test on completion, contractor shall submit to engineer as built documents, operation & maintenance manuals in accordance with specifications requirements & in sufficient details for employer to operate, maintain, dismantle, reassemble, adjust & repair this part of worksa (As built documents are produced by contractor regularly, but handed over to engineer at

close out included as part of dossiers.b Whenever, certain changes occur on site, alterations are agreed by resident engineer or

engineer, all such confirmed changes & related prosecution are recoded as redline markups, which markups are in routine approved by resident engineer.

c Red lines markups are recorded to be further incorporated to contract drawings, so that actual work is reflected on copies of contract drawings.

d Such actual reflections of work incorporated with redline markups are termed as ‘As Built’ documents.

e These documents are regularly, submitted to resident engineer/engineer for approval for circulation inline to defined procedures.

f Operations manuals are documents delivered to contractor by vendors or manufacturers pertinent to equipment.

g Such documents or designated as operation & maintenance manuals are also, included as final dossiers for hand over to client)

9 Such part shall not be considered to be completed for purposes of taking over, until these documents & manual have been submitted to engineer (Refer to foregoing explanation)

10 Contractor shall obtain, at its cost performance security for proper performance in amount & currency, stated in appendix to tender a (Performance security is a surety bond document amounting to a sum stated in appendix

to bid/tender to be issued by a financial institution approved by employer. b This document binds contractor to perform contract works in scope of work’s entirety, in

line to requirements. c Until, bid remains in consideration, tender bond ensures guarantee by bidder to accept

contract if job awarded. d Performance bond remains in force till handover of works successfully. of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinese In fact, when job is awarded, tender bond is returned to bidder & performance bond is

demanded from contractor. f Guarantee bank or institution has to honour this surety at first demand by employer

itself, without requiring any reason, whatsoever, case may be)11 If an amount is not stated, this clause shall not apply

(Refer to explanation in foregoing provision)12 Contractor shall deliver performance security to employer within 28 days, after receiving

letter of acceptance & send a copy to engineer Performance security shall be issued by an entity & from within country or other jurisdiction, as approved by employer (Refer to explanation in foregoing provisions)

13 Contractor shall ensure that performance security is valid & enforceable, until contractor has executed/ completed works & remedied any/every defects

14 If terms of performance security specifies its expiry date & contractor has not become entitled to receive performance certificate by date 28 days, prior to expiration date, contractor shall extend validity of performance security to a date, until works would have been completed & any/every defects have been remedied

15 Employer shall not make a claim under performance security, except for amount to which, employer is entitled under contract in event of a Failure by contractor to extend validity of performance security as described in previous

paragraph, in which event employer may claim full amount of performance securityb Failure by contractor to pay employer an amount due as either agreed by contractor or

determined, within 42 days, after this agreement or determination c Failure by contractor to remedy a defect after 42 days, after receiving employer’s notice

requiring default to be remedied ord Circumstances, which entitle employer to termination irrespective of, weather notice of

termination has been given16 Employer shall indemnify & hold contractor harmless against & from all damages, losses &

expenses including legal fees & relevant expenses, resulting from a claim under performance security to an extent, to which employer was not entitled to make claim

17 Employer shall return performance security to contractor within 21 days, after receiving a copy of performance certificate a (It has to be checked whether or not, validity of performance surety is in force. b Generally, performance security can be claimed by employer within 60 days of expiry

datec When, works have been discharged or handed over, employer should return instrument to

contractor, so that it is returned to bank for a closure)18 Contractor shall appoint contractor’s representative & give him all authority necessary to act

on contractor’s behalf under contracta (Contractor’s representative is a contractual term, which applies to a person, who has

been appointed as contractor’s agent/representative. b Qualifications & competency required by such professional should be as such, stated

within contract superintendence definition. c Such personnel’s CV is submitted to engineer for review & approval. d Once CV is approved, representative is authorized to act for contractor for all

contractual purpose. of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinese Contractor’s representative acts as project site director to lead, guide, superintendent &

control all activities on site whatsoever. f For whatsoever issue required to be reported by contractor to resident engineer or

clarification sought, resident engineer & pertinent staff shall refer to contractor’s representative.

g Such personnel shall be reported by all other key & other profile personnel deployed by contractor.

h Representative shall liaise, coordinate & interact with resident engineer & its subordinate on all issue.

i Contractor representative shall be obliged to be responsible for all acts ongoing at site for contract purpose & report to contractor regularly

j Contractor’s representative shall not be removed by employer without prior approval by resident engineer/engineer

k Once removal is approved, employer shall immediately, propose a competent replacement)

19 Unless contractor’s representative is named in contract, contractor prior to commencement date, submit to engineer for consent names & particular of person, contractor proposes to appoint as contractor’s representative (Refer to explanation included on foregoing provision)

20 If consent is withheld & subsequently, revoked or if appointed person’s fails to act as contractor’s representative, contractor shall similarly, submit name & particulars of another suitable person for such appointment (Refer to explanation included on foregoing provisions)

21 Contractor shall not without prior consent of engineer, revoke appointment of contractor’s representative or appoint a replacement

22 (Refer to explanation included on foregoing provisions)23 Whole time/dedication of contractor’s representative shall be given to directing contractor’s

performance on contract24 If contractor’s representative is to be temporarily, absent from site during

execution/prosecution of works, a suitable replacement person shall be appointed subject to engineer’s prior consent & engineer shall be notified accordingly (Refer to explanation included on foregoing provisions)

25 Contractor’s representative shall on behalf of contractor, receive instructions under clause instruction by engineer

26 (Refer to explanation included on foregoing provisions)27 Contractor’s representative may delegate any/certain powers, functions & authority to

any/some competent person & may at any/whatever time revoke such delegationa (Contractor’s representative shall issue job descriptions pertinent to all key personnel to

associate, circulate such descriptions to resident engineer/engineer & to contractor’s head office.

b Job descriptions shall define for each key personnel its responsibilities, authorities, delegations & reporting functions

c In fact, all such descriptions are generally, included within project plan)28 Any/every delegation or revocation shall not take effect, until engineer has received prior

notice signed by contractor’s representative naming a person & specifying powers, functions & authority being delegated or revoked of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelines(Refer to explanation included on foregoing provision)

29 Contractor’s representative & all relevant delegated persons shall be fluent in language for communication defined within contract under law & language clause

30 Contractor shall not subcontract whole of works a (Contractor may sublet only those parts on scope of work, which were proposed during

bidding stage, list or proposed schedule included within technical submission bid. b Such subletting shall come into effect only, after engineer has approved all such

respective proposals. c All such proposed subcontractors shall submit CVs pertinent to respective key personnel

to main contractor, who after vetting, forward to resident engineer for engineer’s approvals.

d All subcontractors shall deal with resident engineer, only through proper channel, which means main contractor’s representative office.

e Contractor shall not be allowed to sublet whole of works)31 Prior consent of engineer shall be obtained for other subcontractors32 Contractor shall be responsible for acts or default by any/every subcontractor, its/their agents

or employees, as if they were acts or defaults of/by contractor a (Though subcontractors shall be approved by engineer & appointed by contractor for

various sections pertinent scope of works, yet overall contract’s obligations would be obliged by main contractor only.

b Whatever action should be undertaken by respective subcontractor shall be considered to have been resorted to by main contractor.

c Subcontractor’s representative shall represent main contractor to an extent, engineering or technical lead is related, but for contractual matters, contractor’s representative would oblige.

d In case of whatever default affected by subcontractor on respective discipline performance, main contractor shall be considered to have defaulted.

e Consequent upon such missing performance, subcontractor may be disapproved) 33 Unless otherwise stated in particular conditions

Contractor shall not be required to obtain consent to supplier of materials or to a subcontract for which, subcontractor is named in contracta (This provision applies to those cases, wherein only, one specific material or vendor for

materials has been specified. b Such provision within certain contract is biased & should not be encouraged. c Hardly, certain material is related for which, only one manufacturer is available.

Generally, contract documents state at least 3 manufacturers for every material or just provide specifications otherwise, leaving source identification. Such provision looks equity based & justified.

d Bidder shall select out of various options enlisted. Moreover, locally available sources to an extent, quality is complied with, should be preferred even at certain % of higher delivery price)

34 Contract shall give engineer not less than 28 days notice of intended dates of commencement of each subcontractor’s works as well as, of commencement of such works on sitea (Contractor shall ensure that even, prior to subcontractor’s notification period to

commence works, it is significant that every subcontractor concentrates on relevant submissions, which are required to be made.



General Contract Provisions Guidelinesb Submission shall be made for proposed permanent materials c Submissions shall also, be made for discipline shop drawings. d Submissions shall be made for charting out pending inter disciplinary coordination)

35 Each subcontract shall include provisions, which would entitle employer to require subcontractor to be assigned to employer, under assignment benefit of subcontract or in event of termination by employera If a subcontractor’s obligations extend beyond expiry date pertinent relevant defects

notification period, while engineer prior to arriving this date, instructs contractor to assign benefit respecting such obligation to employer, contractor shall do so

b Unless otherwise stated in assignment, contractor shall have no liability to employer for work carried out by subcontractor, after assignment takes effect a (Though it appears fine at first instance to appreciate assignment of subcontract from

main contractor to engineer/employer, absolving main contractor of liability post assignment works effected by subcontractor, but a prudent professional may not accept such provision favourably, due to fact that it remains an issue pertinent functional performance & liability)

36 Contractor shall as specified in contract or as instructed by engineer, allow appropriate opportunities to carryout works toa Employer’s personnelb Any/all other contractor/s contracted by employer &

a Personnel pertinent any/relevant legally, constituted public authority, who may be employed on execution on or near site of any/some work not included in contract

b Any/every such instruction shall constitute a variation, if & to extent, it causes contractor to incur unforeseeable cost

c Services for these personnel & other contractors may include use of contractor’s equipment, temporary works or access arrangements, which are responsibilities of contractor

37 If under contract, employer is required to give contractor possession of any/some required foundation, structure, plants or means of access in accordance with contractor’s documents, contractor shall submit such documents to engineer in time & manner stated in specification a (Provision requirement states that contractor should make submission formally to

resident engineer quiet in advance of schedule date to receive foundation, so as to allow approval process adequate time to engineer/employer.

b All such contractor’s documents should be delivered on submissions as package. c Such documents may be delivered to other relevant party for purpose of coordination/

interaction & if so required, even contractor would coordinate with other contractor through resident engineer.

d It is imperatively, required to allow employer to carryout work on relevant items either directly or through other contractor as case may be)

38 Contractor shall set out works in relation to original points, lines & levels of reference specified in contract or notified by engineer a (Setting out works is very tedious & complicated land surveying activity, which has to be

affected with required accuracyb All surveying references indicated on design drawings have to be interpreted correctly

with reference to national datum prior to adoptingc National datum provide coordinates as well as, level master control related to GPS of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesd Certain plants operators keeping security aspect into consideration, convert actual

coordinates to plant coordinates, which point must be made clear prior to commencing works of surveying

e When, plant coordinates are referred to, equivalent must have been indicatedf It is better to interact with plant responsible operator to ensure correct information

availabilityg Similarly, accuracy of defined & indicated national level to plant level requires

clarificationh Once, both technical issues are clear, surveyor of an independent third party/freelancer

could locate from common national reference to site local references & certification obtained

i After such resolutions on site, surveyor should record all existing contours or levels on scope site parcels for a permanent records to be submitted to resident engineer)

39 Contractor shall be responsible for correct positioning all parts of works & rectify any/every error in positions, levels, dimensions or alignment of works(Reference to foregoing provision explanation)

40 Employer shall be responsible of any/every error/s in these specified or notified terms of reference, but contractor should use reasonable efforts to verify setting out accuracy, before such setting outs are used for execution/construction(Reference to foregoing provisions for explanation)

41 If contractor suffers delays &/or incurs cost from executing works, which was necessitated by an error in items of reference & an experienced contractor could not reasonably, have discovered such error/s, so as to avoid delay &/or cost, contractor shall give notice to engineer to be entitled under contractor’s claims to

a An extension of time for any/every such delay, if completion is or shall be delayed under extension of time for completion

b Payment of any/every such cost & reasonable profit, which shall be included within contract price a (Provision is contemplating a wide scope, though it relates to references to

surveys, but may extend implications on generally, to all documents & drawings. b It is true that, while working on bid, it is not feasible to ensure accuracy &

reliability of information or references included. c During working out surveys & other engineering activities of, whatever sort

errors on provided design may erupt, that would obstruct ongoing activities, to surely cause delays on performance)

42 After receiving this notice, engineer shall proceed in accordance with clause of determinations either to agree or determine, whether & if so, to what extent, error could not reasonably have been discovered & relevant matters described in sub paragraph above related to this extent (Refer to foregoing provision explanation)

43 Contractor shall comply with all applicable safety regulations, whatsoever related to activities, which could pose involved workers to accidents or damages, a Take care of all persons entitled to be on site, b Use reasonable efforts to keep site & works clear of unnecessary obstructions, so as

to avoid dangers to these persons,



General Contract Provisions Guidelinesc Provide fencing, lighting, guarding & watching of works, until completion & taking

over under clause employer’s taking overd Provide any temporary works including roadways, footways, guards & fences, which

may be necessary, because of execution of works for use/protection of public, owners & occupiers of adjacent lands a (HSES/safety discipline points out to generally, neglected state of provisions on

various projects, excepting industrial major jobs. b It has been noticed that no considerable safety issues are seriously, taken up

leaving personnel & workers to life risk. c Safety should be given preference over all disciplines, since it is only safe work

that can lead to contract completion successfully, with zero accident tolerance. d All personnel & workers require safety update on knowledge & site drills.e Equipment pertinent safety, have to be issued to all persons. f Induction of required job safety should be introduced prior to personnel start

work onsite.g Continuous training & short courses should be allowed to all workers.h On site surveillance is required on a continuous basisi All projects are provided with specific safety plan for involved activities, which

should be complied with virtuallyj Safety plan is approved by contractor & by engineer for implementationk Various method statements pertinent safety discipline are charted out for

implementation)44 Contractor shall institute a quality assurance system to demonstrate compliance with

requirements of contract, which system would be in accordance with details stated in contracta (Quality assurance requirement is well known system worldwide, applied everywhereb On all engineering construction projects, system is applied to suit requirementc Total quality system for management & quality system on works controls are requiredd Quality system on management process is applicable on all divisions on projecte Quality system on works is applicable on all activities requiring inspections & testingf Quality system on divisions ensures that all divisions comply with approved

procedures defined within project plan approve by contractor & engineerg Quality system for site inspection & testing require compliance of all activities to be

inspected & checked for defined procedures by non destructive testingh All works on site shall be carried out complied with approved methods to ensure

compliance/meeting contract requirementi Operated system is audited internally as well as externally on schedule datesj Internally, records pertinent all divisions, are audited by quality manager at schedule

datesk Externally, records are audited by entrusted external auditor on schedule dates)

45 Engineer shall be entitled to inspect any/every aspect of systema (On project, in line to included provisions within contract & employer’s regulations,

projects records are checked by engineer on set schedule to ensure, whether or not, contractor complies with quality system requirements

b When observations are noted, information is circulated to contractor & engineer for improvement



General Contract Provisions Guidelinesc During next audit, all observations must have been complied with)

46 Details of all procedures & compliance documents shall be submitted to engineer for information, before each design & execution stage is commenced with for prosecutiona (Contractor also, requires submit designs supported by compliance to FEED &

philosophy, soil investigation reports & recommendations/applicable codes/practices etc. made as criterion to deliver design

b Contractor requires submit all method statements pertinent to activities going to be involved on planned construction execution

c Method statement should define all requirement such as scope, reference documents to be used, materials approvals, procedures, inspection & testing plans, equipment, workforce & all other necessary details)

47 When any/some document of technical nature is issued to engineer, evidence of prior approval of contractor itself shall be apparent on document authenticallya (Documents such as shop drawings, materials submittals, all discipline drawings,

specifications, safety plan, quality plan, project plan, quality documents, method statements, engineering queries etc all are submitted to engineer for approval purpose to meet contract requirement.

b All such documents shall be prepared, checked, reviewed, approved & authorized for transmission to engineer

c All relevant personnel shall put respective initials on respective boxes on to documents title prior to transmission approval is given by contractor’s representative)

48 Compliance with quality assurance shall not relieve contractor of respective duties, obligations or responsibilities under contract a (As is well known that quality system guarantees its working only & not product

guarantee as being basic principle of this systemb System works as has been designed by organization allowed continuous

improvementsc Contractor is obliged to ensure that contract demands are met & accordingly

deliveredd Contract requires to be analyzed for detailed requirements by complete scopee Contract also, requires to be thoroughly, ensured about input pertinent to demanded

standards’ compliance, so that a quality product is deliveredf Even, if works are approved by engineer, all such approval are considered as help

without any obligation or responsibilityg Ultimate responsibility is to be obliged by contractor from every aspect on contract)

49 Employer shall have made available to contractor for information, prior to base date, all relevant data available in employer’s possession on subsurface & hydrological conditions at site including environmental aspectsa (Generally, contract documents contain relevant information pertinent to site & its

geography as well as climatic conditionb Also, is covered within site investigation report, which is submitted by a material

testing laboratory, about soil nature & various parameters that may affect foundationc Somehow, when such report is not available, a query can be raised at bid timed Whatever, could be reason, it is contractor’s responsibility on EPC projects to ensure

all data pertinent to requirements are available for use on calculation probable cost) of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelines50 Employer shall similarly, make available to contractor all such data, which come into

employer’s possession after base date during execution/prosecutiona (Employer is fully authorized to provide whatever data is available related to works

& site post award of contract, but contractor should verify such datab But, contractor itself is obliged to gather all such data, should it be not provided)

51 Contractor shall be responsible for engineering interpretation of all such provided data(Refer to explanation in foregoing provision)

52 To extent which was practicable, taking account of cost & time, contractor shall be deemed to have obtained all necessary information as to risks, contingencies, job hazards & other circumstances, which may influence or affect tender or worksa (Risks, contingencies, job hazards etc are significant factors that can impact project

adverselyb Risk can be categorized to permanent work related as well as, to working safety

relatedc Work related can be from inadequate designs that may result in failure of structuresd Safety related risks can lead to major or fatal accidents costing life & propertye Job hazards can lead to long term diseases as well as to epidemicsf Contingencies got no limited definitiong It is a difficult task to anticipate &include cost covering all possible expenses

incurable on such requirements h Depending on experience of contractor & type of job, such factors can be to certain

limited evaluated/estimated for covering probable costsi Irrespective of cost, whether or not covered, contractor is liable)

53 And to similar extent, contractor shall be deemed to have inspected & examined site, its surroundings, available data, other information & to have satisfied itself before submitting tender as to involving/considering all relevant matters including, without limitation toa Form & nature of site including subsurface conditions, hydraulic & climatic

conditions, extent/nature of works, availability of goods necessary for execution/completion of works & remedying any/every defects, law procedures & working industrial labour practices of country & contractor’s requirements for access, accommodation, facilities, personnel, power, transport, water & other services(Refer to explanation in foregoing provision)

b Contractor shall be deemed to have satisfied itself as to correctness, adequacy, sufficiency of accepted contract amount, which have based on provided data, site data, interpretations, necessary information, inspection, examinations & satisfaction, as to all relevant matters referred to in clause site data(Refer to explanation in foregoing provision)

54 Unless otherwise stated in contract, accepted contract amount covers all contractor’s obligations defined under contract, including those under provisional sums & all things necessary for proper execution, completion of works & remedying of any/every defectsa (Item rate basis awarded contract does not cover as such b But, lump sum based package contract does cover all items as stated within provisionc No claim of any kind shall be accepted if so made by contractord Therefore, bidder should be prudent during bidding stage to include all possible

expenses, which is only opportunity to assess all costs related to doing works) of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelines55 In this clause, physical condition means natural physical conditions, manmade & other

physical obstructions & pollutants, which contractor encounters at site, when executing works including subsurface & hydrological conditions, but excluding climatic conditionsa If contractor encounters adverse physical conditions, which contractor considers to

have been unforeseeable, contractor shall give notice to engineer as soon as, practicable

b This notice shall describe physical conditions, so that they can be inspected by engineer & should set out reasons, why contractor considers such conditions to be unforeseeable

c Contractor shall continue executing works, using such proper & reasonable measures, as are appropriate for physical conditions & should comply with any/every instructions whatsoever, which engineer may give from time to time during currency of contract

d If an instruction constitutes variation, relevant variations & adjustment clause shall apply

e If & to an extent that contractor encounters physical conditions, which are unforeseeable, gives such a notice & suffers delay or incurs cost due to such conditions, contractor shall be entitled to contractor’s claims to an extension of time for any/every such delay, if completion is or shall be delayed under extension of time clause & payment of any/every such cost, which should be included in contractor’s price

f After receiving such notice inspecting & or investigating prevailing physical conditions, engineer shall proceed in accordance with to agree or determine, whether & to what extent these physical conditions were unforeseeable & matters described in foregoing paragraph related to this extent

g However, before additional cost is finally agreed or determined under relevant clause, engineer may also, review, whether or not, other conditions on similar parts of works were more favourable than reasonably, have been foreseen, when contractor submitted tender

h If & to extent that these more favourable conditions were encountered, engineer may proceed in accordance under clause determinations, either to agree or determine reduction in cost, which were due to these conditions, which may be included as deduction in contract price & payment certificates

i However, net effect of all adjustments & all reductions for all physical conditions encountered in/on similar parts of works shall not result in net reduction in contract price

j Engineer may take account of any/every evidence of physical conditions foreseen by contractor, when submitting tender, which may be made available by contractor, but shall not be bound by any/some evidencea (Definition pertinent physical condition is easy, but its implications are

complicated.b Just statement that such conditions are met, does not amount to anything on lump

sum fixed price contractsc It is clearly instructed on various provisions that contractor shall be responsible

for all situations/conditions, which makes contractor obliged to visit site & ensure



General Contract Provisions Guidelinesd After having visited & knowing work scope, contractor should have included all

such costs in fixed price consideratione Unforeseeable status of physical conditions is very complex, which contractor

may not prove & if so considers, more than favourable conditions may nullifyf Therefore, at bid stage, many thoughts & considerations, need be applied)

56 Contractor shall bear all costs & charges for special & temporary rights of ways, which it/contractor may require including those for access to site

57 Contractor shall also, obtain at its risk & cost any/every additional facilities outside site, which me be required for purpose of works

58 Contractor shall not interfere unnecessarily or improperly, with convenience of public, access to & use of occupation of all roads & footpaths, irrespective of whether or not, they are public or in possession of employer or others

59 Contractor shall indemnify & hold employer harmless against & from all damages, losses & expenses including legal fee & related expenses, resulting from any/every such unnecessary or improper interference

60 Contractor shall deem to have satisfied as to suitability & availability of access routes to site.

61 Contractor shall use reasonable efforts to prevent any/every road or bridge from being damaged by contractor’s traffic or by contractor’s personnel.

62 These efforts shall include proper use of appropriate vehicles & routes63 Except as otherwise stated in these conditions, contractor shall be responsible for

any/every maintenance, which may be required for its use of access routes. 64 Contractor shall provide all necessary signs & directions along access routes or shall

obtain any/every permission, which may be required from relevant authorities for its use of routes, signs & directions.

65 Employer shall not be responsible for any/every such claims, which may arise from use or otherwise of any/every access route for which, employer does not guarantee suitability or availability of particular access routes.

66 Cost due to non suitability & non availability for use required by contractor of access routes shall be borne by contractor a (Contractor is required to ensure & asses during bid stage about all accesses to site

& to costs that could be spent on such requirementsb All precautionary measures should be resorted to by contractor, while using such

available facilitiesc For example, some equipment crawler mounted has to use a bituminous road, should

be transported using trailer & not otherwise, since crawler would damage road surfaces

d Whatever, temporary road signs shall be required in line to international manual, should be installed on all locations for public to be informed adequately, about works or traffic diversions management

e All such arrangements shall be complied with approved method statements)67 Unless otherwise stated in particular conditions, contractor shall give engineer not less

than 21 days notice of date on which any/every plant or a major item of goods should be delivered to site. a Contractor shall be obliged to be responsible for packing, loading, transporting,

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General Contract Provisions Guidelinesb Contractor shall determine itself to hold employer harmless against expenses from all

damages, losses & expenses, whatsoever resulting from transport of goods, that it should negotiate to pay, all claims arising from respective transport

c Contractor shall be obliged to be responsible for all contractors’ equipment, when brought on to site.

d Contractor’s equipment shall be deemed to be exclusively, intended for execution of works.

e Contractor shall not remove from site any/some major items of contractor’s equipment without prior consent of engineer.

f However, consent shall not be required for vehicles transporting goods or contractor’s personnel off sites a (Contractor should ensure that only, approved goods or equipment procuredb In case, goods delivered do not comply with approvals, shall be rejected &

required to be removed from site, even such items have been imported from distant country

c In addition to 21 days notice, goods when arrives on site, a report shall be submitted to engineer & materials inspection requested, after contractor’s self inspection

d Payment of goods can be claimed only, when delivery meets specifications requirements)

68 Contractor shall take all reasonable steps to protect environment both on & off site & to limit damage, limit nuisance to people/property resulting from pollution, noise & other results of its operations. a (Standard practice requires various preventive measures to be applied to control

environment pollutionb Such measures are described in details within health safety & environment plan,

pertinent every projectc Site representative should refer to such provisions respecting required measuresd All such provisions do not cost considerably, but require attention & timely actione Namely, spraying water on site areas for dust settlement, removing hazardous

materials etc. & keeping site tidy to acceptable levels) 69 Contractor shall ensure that emissions, surface discharges & effluent from contractor’s

activities shall not exceed values indicated within specifications, which should not exceed values prescribed by applicable lawsa (Contractor’s safety officer should monitor all such activities so as to apply adequate

measures as & when requiredb Vehicles require routine & timely testing, maintenance & adequate servicec All heavy equipment, should similarly be servicedd All discharges from site waste should be handled to meet regulatory requirementse No oil discharge or seepage should be allowed to be dripped to ground, but to drip

trays)70 Contractor shall except as stated below, be responsible for provision of power, water &

other services, it may requirea Contractor shall be entitled to use for purposes of works, such supplies of electricity,

water or gas & other services, as may be available on site, of which details & prices are given within specifications



General Contract Provisions Guidelinesb Contractor shall at its risk & cost, provide any/every apparatus necessary for its use of

respective services & measuring quantities consumed. c Quantities consumed & amount due at certain prices for such services shall be agreed

& determined by engineer in accordance with, under employer’s claims & determinations clause, which amount contractor shall pay to employer a (Not essential on all contracts to avail employer provided services, as it depends

on respective provisionsb Contractor may be required to arrange its sources for all required services for

whatever duration necessaryc But, in that situation, employer should assist contractor for applications, if so

required to be moved on statutory or local bodiesd Contractor may be free to install its own electrical supply by use of generators &

transformerse Contractor may be free to procure water for construction from defined source)

71 Employer shall make employer’s equipment available for use by contractor in execution of works in accordance with details, arrangements & prices stated in specifications &,a unless otherwise, stated in specifications, b employer shall be responsible for employer’s equipment, c except that contractor should be responsible for employer’s equipment, d while any/some of contractor’s personnel is operating it, driving it, directing it or

remains either in possession or in control of it a (Not necessary that contractor may use employer’s equipment on major works.b Contractor can use own equipment for each & every purposec But whatever equipment is used, should meet functional & environment

requirements)72 Appropriate quantities & amounts due at such stated prices for use of employer’s

equipment shall be agreed &a determined by engineer in accordance with under employer’s claims & b determinations clause, which amount contractor would pay to employer

(Refer to foregoing explanation)73 Employer shall supply free of charge, free issue materials in accordance with details

stated within specifications. a Employer shall at its risk & cost, provide such materials at time & place specified

within contract. b Contractor shall then visually, inspect such materials & promptly give notice to

engineer of any/certain shortage, defect or default in such delivered materials. c Unless otherwise agreed by both parties, employer shall immediately, rectify

shortage, defect or defaultd After this visual inspection, free issue material shall come under care, custody &

control of contractor. e Contractor’s obligations of inspections, care, custody & control shall not relieve

employer of its liability for any/certain detected shortage, defect or default not apparent from a visual inspection a (When free issue materials are delivered by employer, it saves contractor’s time

& financing of procurement cost, but also, impacts on profits that could have been made on such procurement



General Contract Provisions Guidelinesb Moreover, contractor is required after receiving all such materials, to care about

safe custody, until materials are installed or consumed, which cost contractor should include in firm price, means handling, storing & caretaking charges

c Other situation can also, be noticed for long lead items, which cannot be procured by contractor during project duration allowed due to requirement of manufacturing as well as, material shipment & delivery time

d In such cases, engineer/employer may decide item source, procurement cost, delivery time & order materials on an agreement included with a particular condition of ‘novation’ of supply contract/agreement

e Once, material is delivered to project, it exists in title of employer, but after of ‘novation’ clause coming into force, supply contract is transferred to contractor, as if, from its original date effect, it had been agreed between contractor & supplier/vendor & not between employer& supplier/vendor

f Consequent upon such ‘novation’ provision, all payment &responsibilities shall be dealt by contractor)

74 Unless otherwise, state in particular conditions, monthly progress report shall be prepared by contractor & submitted to engineer in 6 copies. a First report shall cover period up to end of first calendar month following contract

appointed/notified commencement date. b Report shall be submitted thereafter, each within 7 days, after last day of period, to

which it relatesc Reporting shall continue, until contractor has completed all work, which is known to

be outstanding at completion date, stated in taking over certificate for worksi. Each report shall include charts & detailed descriptions of progress,

ii. including each stage of design, contractor’s documents, iii. procurement, manufacture, delivery to site, iv. construction, erection, testing & including all/every such stages v. for works by each nominated subcontractor,

vi. photographs showing status of manufacture & vii. of progress on site, for manufacture of each main item of plant & materials,

viii. name of manufacturer, manufacture location, % progress, ix. actual & expected dates of commencement of manufacture, x. contractor’s inspections, tests, shipment & arrival at site,

xi. details described as within records of contractor’s personnel & equipment, xii. copies of quality assurance documents, test results & certificate of materials,

xiii. list of notices given under employer’s claims & xiv. notices given under contractor’s claims, xv. safety statistics including details of any/every hazardous incidents,

xvi. activities relating to environment aspects, xvii. public relations,

xviii. comparison of actual & planned progress, xix. with details of any/every events or circumstances, xx. which may jeopardize completion in accordance with contract

xxi. & measures being or to be adopted to overcome delaysa (Foregoing list provides report documents pages to be submitted prior to meeting as

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General Contract Provisions Guidelinesb Monthly progress review meeting has been a old procedure, but now, all projects, in

general conduct weekly progress meeting, to keep close track on project performancec Not only that project progress review meetings are conducted weekly, but also, safety

walks, quality walks, site walk though for all considerations are conducted in routine every week, so that no escalations is permitted to loosen grip on project performance

d Minutes are recorded for all meeting for action by respective partiese Next meeting requires review of past meeting minutes & questions are raised for no

actions & required solutions means accountability coefficient is upgradedf It had been considered that on current fast track projects, monthly meeting is too

distantg Meetings are very comprehensive in nature & all minute details can be considered

from all contract disciplineh Whatever, point considered worth by some party, can be added to agendai Results pertinent weekly meetings have been reported to be useful for projectsj Weekly meetings keeps every party awake, resulting in actions are taken timely)

75 Unless otherwise, stated in particular conditions, contractor shall be responsible for keeping unauthorized persons off site & authorized persons shall be limited to contractor’s personnel, employer’s personnel & to any/every other personnel notified to contractor by employer or engineer as authorized personnel of employer’s other contractor/s on sitea (Current international practical requires individual passes to be issued by employer

management for all personal & other related to have entry to site for whatever purpose, even for visit for few hours

b Security personnel do not allow unauthorized persons entry to site even for few minutes

c For visitors, even after issue of passes, entry into register located at security gate is made

d Some sites require passes for vehicles as welle Foregoing provisions help keeping away unauthorized persons from site as well as to

keep on record all times number of persons available within sitef In case of certain emergent situation, say fire break out or some other type of

emergency, head counts shall be easily conducted)76 Contractor shall confine its operations to site & to any/every additional areas, which may

be obtained by contractor & agreed by engineer as working areas. a (All site areas & lay down areas are fenced with specific entry & egress gates locatedb Security personnel are posted with gate controls using c When there is no work, site gate is closed & security personnel remains on duty 24

hours a day 7 days a week) 77 Contractor shall resort to all necessary precautions to keep contractor’s equipment &

contractor’s personnel within site & these additional areas as well as, to keep them off adjacent landa (Contractor’s equipment are parked at designated area, after shift is closedb All vehicles too are parked in designated areasc No equipment or vehicle can leave site or enter site without authorized entry or

egress)



General Contract Provisions Guidelines78 During execution of works, contractor shall keep site free from all unnecessary

obstruction, store or dispose of any/every contractor’s equipment or surplus materials.a (Site is required to be kept tidy all times even, during working hoursb All concrete & other droppings should be removed from all over sitec All nails & reinforcing bars cut pieces shall be removed from here & there all over

regularlyd Nails can penetrate feet & tyres of vehicles & equipmente All wooden cut pieces shall be removed regularlyf Good housekeeping is a must all over on site in offices as well as , on working areas)

79 Contractor shall clear away or remove from site any/every wreckage, rubbish & temporary works, which are no longer required. a (Whenever certain activities are completed, relevant rubbish, debris, wreckage & all

temporary works elements shall immediately, require to be removed from working locations & piled up a certain suitable area , so that from there, all these materials can be removed permanently, from project site

b We should remember that many, materials & equipment are procured by hire, for which rent keeps on increasing, if not delivered immediately

c Removal of all such materials adds to circulation areas on site)80 Upon issue of taking over certificate, contractor shall clear away & remove from part of

site & works, to which taking over certificate refers, all contractors’ equipment, surplus materials, wreckage, rubbish & temporary works. a (Upon issue of taking over certificate, site shall be cleared by contractor in all

respects, excepting those items related to defects remedy as well as, required by engineer for further activities, if so applicable

b Security passes from all those personnel not related thereafter, shall be returned or written off

c All effects of items that required to be reinstated to original state, shall be so carried out to respective states, when these were taken over from employer

d If not required to continue as installed, name board of contractor & other vendors shall be removed

e All diversion sign boards shall be removed )81 Contractor shall leave part of site & works in a clean, tidy & safe condition.

(Refer to foregoing explanation)82 However, contractor may retain site, during defects notification period, such goods as are

required for contractor to fulfill obligations under contract(Refer to foregoing explanation)

83 All fossils, coins, articles of value or antiquity, structures & other remains or items of geological or archeological interest, found on site shall be placed under care & authority of employer. a Contractor shall take reasonable precautions to prevent contractor’s personnel or

other persons from removing or damaging any/every of these findings. b Contractor shall upon discovery of any/every such finding, promptly give notice to

engineer, who should issue instructions dealing with it. a (Internationally, all such properties discovered during all excavations belonging

to ancient past, are owned by government/country



General Contract Provisions Guidelinesb It amounts to cognizable offence, in case, someone collects it for personal

ownership)84 If contractor suffers delay, or incurs cost from complying with instructions, contractor

shall give further notice to engineer to be entitled under contractor’s claims for such claims, a to an extension of time under extension of time for completion clause, for any/every

such delay if completion is or shall be delayed, b payment of any/every such cost, which should be included in contract price.

85 After receiving this further notice, engineer shall proceed in accordance with under determinations clause either to agree or determine these matters/issues

86 In contract, nominated subcontractor means subcontractor, a who is stated in contract as being a nominated subcontractor or whom, b engineer under variations & adjustments clause, instructs contractor to employ as a

subcontractor87 Contractor shall not be under any/certain obligation

a to employ a nominated subcontractor b against whom, contractor raises reasonable objection by notice to engineer as soon as,

practicable, with supporting particulars. 88 An objection shall be deemed reasonable,

1 if it arises from among other things, any/every of following matters/issues, 2 unless employer agrees to indemnify against & from consequences of matter/issues.

a There are reasons to believei. that subcontractor does not have sufficient competence,

ii. resources & financial strength. b Subcontract does not specify

i. that nominated subcontractor shall indemnify contractor against & from any/every negligence or misuse of goods

ii. by nominated subcontractor, its agents & employees or c Subcontract does not specify

i. that for subcontracted work, including design if any, ii. nominated subcontractor shall undertake to contractor such obligations

&liabilities, iii. as shall enable contractor to discharge its obligations & liabilities arising

under or in connection with contract &iv. from consequences of any/every failurev. by subcontractor to perform these obligations

vi. or to fulfill these liabilities89 Contractor shall pay to nominated subcontractor amounts,

a which engineer certifies to be due in accordance with subcontract. 90 Such amounts plus other charges

a shall be included in contract price in accordance with clause of provisional sums, b except as stated in evidence of payment clause

91 Before issuing a payment certificate, a which includes amount payable to nominated subcontractor, b engineer may request contractor to supply reasonable evidencec that nominated subcontractor has received all amounts due,



General Contract Provisions Guidelinesd in accordance with previous payment certificates, less applicable deductions for

retention or otherwise.92 Unless contractor submits reasonable evidence to engineer

a or satisfies engineer in writing b that contractor is reasonably, entitled to withhold or refuse to pay these amounts &c submits to engineer reasonable evidence d that nominated subcontractor has been notified of contractor’s entitlement.

93 Then employer may at its sole discretion, a pay directly to nominated subcontractor, part or all such amounts previously certified,

less applicable deductions, b as are due to nominated subcontractor & c for which, contractor has failed to submit evidence described in foregoing paragraphs.

94 Contractor shall then repay to employer a amount, which nominated subcontractor was directly paid by employer

i. (Nominated subcontractor clause is included in certain contracts due to its requirement of specific task, which engineer or employer considers to carry out, but for which, no separate bid or work order is essential, keeping in view very minute scope of work

ii. Fact remains that even, nominated subcontractor is virtually appointed by engineer/employer, yet contractually, main contractor remain responsible for what is delivered by such nominated subcontractor

iii. Therefore, it becomes imperative/incumbent on main contractor to coordinate & control such subcontractor on equal pattern, as control is operated on other subcontractors)

95 Staff & labour–a except as otherwise stated in specification, contractor shall make arrangements for

engagement of all staff, labour local or otherwise & b for their payment, housing, feeding & transport.

96 Contractor shall pay rates of wages & observe conditions of labour, a which are not lower than those established for trade or industry, where work is carried

out. 97 If no established rates or conditions are applicable,

a contractor shall pay rates of wages & observe conditions, b which are not lower than general level of wages & conditions, observed locally by

employers, whose trade or industry, is similar to that of contractor.98 Contractor shall nor recruit or attempt to recruit staff & labour from amongst employer’s

personnel. 99 Contractor shall comply with all relevant labour laws applicable to contractor’s

personnel, a including laws relating to their employment, b health, safety, welfare, immigration /emigration &shall allow them all their legal

rights. 100 Contractor shall require its employees to obey all applicable laws, including those

concerning safety at work101 No work shall be carried out on site on locally, recognized days of rest or

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General Contract Provisions Guidelinesb unless otherwise stated in contract, engineer gives consent or work is unavoidable orc necessary for protection of life or property or for safety of works d in which case, contractor shall immediately, advise engineer

102 Except as otherwise stated in specifications, a contractor shall provide & maintain all necessary accommodations &b welfare facilities for contractor’s personnel.

103 Contractor shall also, provide facilities for employer’s personnel as stated in specifications.

104 Contractor shall not permit any/every of contractor’s personnel a to maintain any/some temporary or permanent living quarters within structures

forming part of permanent works105 Contractor shall at all times take all reasonable precautions

a to maintain health & safety of contractor’s personnel in collaboration with local health authorities.

106 Contractor shall ensure a that medical staff, first aid facilities, sick bay & ambulance service are available all

times at site & b at any/all accommodation for contractor’s & employer’s personnel &c that suitable arrangements are made for all necessary & hygiene requirements as well

as,d for prevention of epidemics.

107 Contractor shall appoint a an accident prevention officer at site, responsible for maintaining safety & protection

against accidents. 108 This person shall be qualified for carrying out effectively,

a this responsibility & delegated required authority to issue instructions &b take protective measures to prevent accidents.

109 Throughout execution of works, a contractor shall provide, whatever is required by this preventive officer person to

exercise this responsibility & authority. 110 Contractor shall send to engineer

a details of accidents as soon as, practicable after its occurrence. 111 Contractor shall maintain records &

a make reports concerning health, safety & welfare of persons & b damage to property, as engineer may reasonably require

112 Throughout execution of works & as long as, thereafter as is necessary to fulfill contractor’s obligations, a contractor shall provide all necessary superintendence to plan, arrange, direct,

manage, inspect & test works. 113 Superintendence shall be given by sufficient number of persons,

a having adequate knowledge of language for communication under law & language clause &

b of operations to be carried out including methods & technique required, c hazards likely to be encountered & d methods of preventing accidents for satisfactory & safe execution of works



General Contract Provisions Guidelines114 Contractor’s personnel shall be appropriately/adequately qualified, skilled &

experienced in their respective trades, callings or occupations. 115 Engineer may require contractor to remove or cause to be removed

a any/every person employed on site or works including contractor’s representative if applicable,

b who persist in any/some misconduct or lack of care, c carried out duty incompetently, or negligently, d fails to conform with any/every provisions of contract or e persists in any/some conduct, which is prejudicial to safety, health or protection of

environment. 116 If appropriate, contractor shall then appoint or cause to be appointed a suitable

replacement person117 Contractor shall submit to engineer showing details of each class of contractor’s

personnel working/attending & each type of contractor’s equipment available on site. 118 Details shall be submitted each calendar month in a form approved by engineer,

a until contractor has completed all work, which is known to be outstanding at completion date stated in taking over certificate for works

119 Contractor shall all times, a take reasonable precautions to prevent any/every unlawful, b riotous or disorderly conduct by or among contractor’s personnel &c to preserve peace, protection of personnel/persons & property on & near site

i. (main, common, but mandatory concept pertinent labour or workforce provisions is that main contractor should be liable for all facilities required by all personnel & workforce

ii. Facilities mean food, clothing & housing for duration of project (being basic requirements)

iii. Medical treatment of whatever category (health is significant or worker cannot work)

iv. Entertainment to all workers including games, videos or films or weekly picnicv. Transport to all worker from camp to site & back to camp

vi. Cultural regard to all workers relating to religion etcvii. Main point that should be kept in view that all workers are human beings first)

Plant materials & workmanship1 Contractor shall carry out

a manufacture of plants, b production & manufacture of materials & all other execution of works, c in manner specified in contract, in a proper workmanlike/ careful manner, d in accordance with recognized good industrial practice, e with properly equipped facilities based on non hazardous materials, f except as otherwise, specified in contract

2 Contractor shall submit a following samples of materials & relevant information to engineer for consent, b prior to using inclusion of materials in for works, c a manufactured standard samples of materials specified in contract, d all at contractor’s cost &



General Contract Provisions Guidelinese additional samples instructed by engineer as a variation

3 Each sample shall be labeled as to its origin & intended use on works4 Employer’s personnel at reasonable times shall have access to all site parts &

a to all places from which natural materials are being obtained, b during production, manufacture & construction at site or elsewhere, c be entitled to examine, inspect, measure & test materials & workmanship as well as, d to check progress of manufacture of plant, production & manufacture of materials

5 Contactor shall give employer’s personnel full opportunity a to carry out these activities, including providing access, facilities, permission & safety

equipment. 6 No such activity shall relieve contractor from any/whatever obligation or responsibility7 Contractor shall give notice to engineer,

a whenever any/every work is ready & b before it is covered up, put out of sight or packaged for storage of transport.

8 Engineer shall either carry out a examination, inspection, measurement or testing without unreasonable delay or b promptly, give notice to contractor that engineer does not require to do so.

9 If contractor fails to give notice a as & when required by engineer b shall uncover works & thereafter, reinstate & make good all at contractor’s cost

10 Testing clause shall apply to a all testing specified in contract, other than test to be conducted after completion

11 Contractor shall provide a all apparatus, assistance, documents & other information, b electricity, equipment, fuel, consumables, instruments, c labour, materials, suitably qualified & experienced staff d as are necessary to carry out specified testing efficiently.

12 Contractor shall agree with engineer, a time & place of specified testing of any/every plant, materials & other parts of works

13 Engineer may under variations & adjustments clause, a vary location or details of specified tests or instruct contractor to carry out additional

test. 14 If these varied or additional tests show

a that tested plant, materials or workmanship is not in accordance with contract, b cost of carrying out variation shall be borne by contractor, c notwithstanding other provisions of contract

15 Engineer shall give contractor a not less than 24 hours notice of engineer’s intention to attend test.

16 If engineer does not attend test at place & time agreed, a contractor may proceed with tests, b which unless otherwise instructed by engineer shall then be deemed to have been

made in engineer’s presence17 If contractor suffers delays &/or incurs cost from complying with these instructions or

a as a result of delay, for which employer is responsible, b contractor shall give notice to engineer considering to be entitled to contractor’s

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General Contract Provisions Guidelinesc to an extension of time under extension of time for completion clause, d for any/every such delay if completion is or shall be delayed, e payment of any/every such cost plus reasonable profit, f which should be included in contract price.

18 After receiving this notice, a engineer shall proceed in accordance with determinations clause b either to agree or to determine matters/issues.

19 Contractor shall submit promptly to engineer a duly certified reports of tests, when specified tests have been passed, b which contractor’s test certificate, engineer should endorse or c issue a certificate to contractor to that effect.

20 If engineer has not attended test, a he shall be deemed to have accepted readings as accurate

21 Rejection- If as a result of examination, inspection, measurement or testing, a any/every plants, materials or workmanship is found to be defective or b otherwise not in accordance with contract, c engineer may reject plant, materials or workmanship by giving notice to contractor

with reasons. 22 Contractor shall then promptly,

a make good defects & ensure that rejected items comply with contract. 23 If engineer requires this plant, materials or workmanship to be retested,

a tests shall be repeated under same terms & conditions. 24 If rejection & retesting cause employer to incur additional costs,

a contractor shall under employer’s claims pay these costs to employer25 Remedial work-

a Notwithstanding any/every previous test or certification, b engineer may instruct contractor to remove from site & c replace any/every plant or materials, d which is not in accordance with contract, e remove & re execute any/every other work, which is not in accordance with contract

&f execute any/every work, which is urgently required for safety of works, g whether because of accidents or unforeseeable event or otherwise.

26 Contractor shall comply with instruction within a reasonable time, a specified within instruction or immediately, if urgency is so specified.

27 If contractor fails to comply with instruction, a employer shall be entitled to employ & pay other persons to carry out work.

28 Except to extent that contractor would have been entitled to payment for work, a contractor shall under employer’s claim, b pay to employer all costs arising from this failure

29 Ownership of plants & materials-a each item of plants & materials shall to extent consistent with laws of country, b become property of employer at whichever, is earlier of following times, c free from liens & other encumbrances, when it is delivered to site,



General Contract Provisions Guidelinesd when contractor is entitled to payment of value of plant & materials under payment of

plants & materials clause in event of suspension30 Unless otherwise stated in specification,

a contractor shall pay all royalties, rents & other payments for natural materials obtained from outside site &

b disposal of materials from demolitions, excavations & other surplus materials, c whether natural or manmade, d except to extent that disposal areas within site are specified in contract

i. (Foregoing explained is common practice adopted as on project deliveries respecting plants & materials

ii. Plants or equipment are very expensive items, which must be tested at factory prior to being shipped in to country where required delivery to

iii. On site testing should be done only after factory testing FAT is conducted successfully

iv. Often, major plants which are regulated by statutory authorities or otherwise, are pre conditionally required to be inspected & tested at source of production by independent third party

v. Documents related to design pertinent to all such equipment, should have been collected from manufacturer long in advance for designing foundations, on to which these equipments would be located

vi. Whatever, materials are sourced from natural queries, such as sand, gravel or aggregate etc. must have been tested prior to procurement or source approved as case may be

vii. All such procedures requires personnel from both parties should cooperate to attend test, witness test & approve or reject tests

viii. It is not necessary that all testing should be qualifiedix. Incorrect qualification can lead to major problems, when such equipment fail to

perform on plant processing trains & production stops)

Commencement delays & suspensions-Engineer shall give contractor not less than 7 days notice of commencement date. 1 Unless otherwise stated in contract particular conditions,

a contract commencement date shall be appointed within 42 days, b after contractor receives letter of acceptance.

2 Contactor shall commence execution of works as soon as, a is reasonably, practicable after appointment of commencement date & b shall then proceed with works with due expedition & without unexpected delay.

3 Time for completion-a contractor shall complete whole work & b each section within time allowed/agreed for completion of whole work or section as

case may be, c including achieving passing all tests on completion/completing all works, d which are stated/included within contract scope of works/being required for works ore sections/to be considered completed f for purpose of taking over under taking over of works & section/s clause



General Contract Provisions Guidelines(Fast track projects cannot wait for contract conditions

1 Saving on time means saving on projects & virtually, early delivery amounts to value2 In competition world, no organization can afford slow progress of project3 Efficient equipment & methods are available throughout world in global scenario4 Many site work 24 hours a day in 2 shift or 3 shifts depending on management & safety

provisions5 Designs can be done much faster than used to be effected decades back6 Contractor should attempt to make sure that there should be no constructability issue on

produced or delivered designs7 Early completion of project adds value to project & keeps liquidated damages

application off8 Such situation keeps workers happy as well for they get some amount of over time

working)

Programme-Contractor shall submit a detailed time programme/schedule to engineer within 28 days, after receiving notice under commencement of works clause. 1 Contractor shall also, submit a revised programme/schedule,

a whenever previous programme/schedule is inconsistent with actual progress or with contractor’s obligations.

2 Each programme/schedule shall include order, a in which contractor intends to carry out works including anticipating/forecasting

timing of each stage of design, b contractor’s documents, procurement, manufacture of plant, delivery to site, c construction, erection & testing, d each of these stages for work by each nominated subcontractor under nominated

subcontractors clause, e sequence of timing of inspections & tests specified in contract & supporting reports,f which include a general description of methods contractor intends to adopt for major

stages in execution of works, g including details showing contractor’s reasonable estimate of number of each class of

contractor’s personnel & h each type of contractor’s equipment, required on site for each major stage

3 Unless engineer within 21 days, after receiving a programme/schedule, a gives notice to contractor stating extent to which, b it does not comply with contract, c contractor shall proceed in accordance with programme/schedule, d subject to other essential obligation within/under contract.

4 Employer’s personnel shall be entitled to rely upon programme/schedule, a when planning respective onsite activities.

5 Contractor shall promptly give notice to engineer a pertinent specific probable future or circumstances, b which may adversely, effect work, increase contract price or delay execution of

works. 6 Engineer may require contractor to submit

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General Contract Provisions Guidelinesb a proposal under variation procedure.

7 If at any time, a engineer gives notice to contractor that a programme/schedule fails b to an extent stated, to comply with contract or c to be consistent with actual progress & contractor’s stated intentions, d contractor shall submit a revised programme/schedule to engineer e in accordance with meeting requirement

i. (Programme/schedule is an entirely technical exercise that requires set planning respecting various components involved on certain project

ii. No one should plan a project, without composing a thought about sequences iii. It is essential to understand contract requirement, prior to attempting/charting

out barsiv. Planner should understand all contract priorities & set milestones as well as,

liquidated damages & further restrictions imposed by contract commercial conditions

v. More than all such requirements, overall commissioning/performance of project cycle & unit must be understood clearly

vi. Entering dates just to produce bar charts does not point to schedulingvii. Scheduler should understand on site issues that could generate due to various

combinationsviii. Integration of smaller components to merge into programme, should be well

analysedix. Budget amount that contractor plans to spend must be given due weightx. It has to be made sure that allowed duration for a particular area/part is

adequate xi. In case, it is extracted that milestone cannot be achieved during allowed period,

conference or query to engineer should be raisedxii. Project manager should confer & interact with planner, to brainstorm on various

activities & quantities involvedxiii. Resources require good consideration, depending on availability & possible cost

impact, in case additional resources are to be managed)

Extension of time for completion- Contractor shall be entitled subject to, 1 under contractor’s claims, for an extension of time for completion clause, if & to certain

extent 2 that completion for purposes of taking over of works & sections, 3 is or shall be delayed by any/every following reason, which causes a variation,

a unless an adjustment to time of completion has been agreed under variation procedure or other substantial change in quantity for an item of work included within contract,

b a cause of delay giving an entitlement to extension of time under these conditions, c exceptionally, adverse climatic conditions, d unforeseeable shortages of availability of personnel or goods, caused by epidemic or

government actions or e any/every delay impediment or prevention, caused by or attributable to employer,

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General Contract Provisions GuidelinesExtension of time procedure1 If contractor considers itself to be entitled to

a an extension of time for completion, b contractor shall give notice to engineer in accordance with under contractor’s claims.

2 When determining each extension of time, a engineer shall review previous determinations & may increase, b but shall not decrease total extension of time

3 Delays caused by authorities, if following conditions apply namely, a contractor has diligently, followed procedures laid down by relevant legally,

constituted public authorities in country, b these authorities delay or disrupt contractor’s work & delay or disruption was

unforeseeable, c this delay or disruption shall be considered, as a cause of delay, under extension of

time for completion clausei. (It is sure that certain delays are caused on projects, which involve

multidiscipline engineering designs, material procurement & equipment procurement

ii. All such activities involve many procedures, while all defined specifications need be complied

iii. Project defined time is not comfortable often, which requires high degree of additional efforts & arrangements related to funding

iv. Many reasons dictate loss of time leading to requirement of extension, since every action is not perfect.

v. Materials, which were approved, may be out of production requiring alternative proposals

vi. Equipment could be out of production requiring new proposals meeting compatibility

vii. All such issues should be based on right interface, which too cost timeviii. Many instances on contractual issues cost time loss, where statutory functionaries

& functions are involvedix. Contractor should keep engineer well notified for all such cases, to constitute a

firm basis, so that applications for extension of time are well supported with authentic evidences

x. In fact, no contractor is interested for extension of time, since delays cost contractor unexpectedly disturbing contractor’s budget

xi. Contractor’s agent & head office managers should be very much in coordination, to keep tracks of respective controls)

Rate of progress-1 If at certain time, actual progress is too slow to complete works within time for

completion, 2 or progress has fallen or shall fall behind current programme/schedule under clause

programme, 3 other than as a result of cause listed under extension of time for completion,

a engineer may instruct contractor to submit, under programme clause, a revised programme/schedule &



General Contract Provisions Guidelinesb supporting report describing revised methods, c which contractor proposes to adopt in order to expedite progress & complete works

within time of completion.

1 Unless engineer notifies otherwise, a contractor shall adopt these revised methods, b which may require in increasing working hours &/or number of contractor’s

personnel/goods at risk & cost of contractor. 2 If these revised methods cause employer incur additional costs,

a contractor shall under employer’s claims, b pay these costs to employer, in addition to delay damagesa (Due to so many reasons that can easily be listed, progress may fall b But, every attempt should be effected to accelerate progress to keep inline to

approved schedule, if not ahead of schedule, at least on line progress go wellc Once progress lost time is recovered, additional hours can be utilized for additional

workd Augmentation of resources, when site is clear for additional mobilization, can prove

to be a reliable approach to run ahead of schedule, but cost factor should be considered

e Cost, time & quality are three factors that should analyzed in an overall statef Many projects have been reported to have completed on time as well as, ahead of

schedule by converting progress cycle from normal to fast track)

Delay damages-If contractor fails to comply with time of completion

a under time of completion clause, contractor shall subject to under employer’s claims, b pay delay damages to employer for delay damages default.

1 These delay damages shall be equal to sum per each day stated in appendix to tender, a which would be paid for everyday, for which/all daysb elapse between time of completion & date stated in taking over certificate.

2 However, total amount due under this clause a shall not exceed maximum amount of delay damages stated in appendix to tender.

3 These delay damages shall be only damagesa due from contractor to compensate employer for such default, b other than, in event of termination under termination by employer clause, prior to

completion of works.4 These damages shall not relieve contractor from its obligation to complete works or

a from any/every other duties, obligations or responsibilities, b which it may have under contracta (Delay damages are recovered by employer from contractor’s due, whenever so

occursb In case, extension of time for completion is granted, no such liquidated damages or

LD shall be imposed on contractorc Old contracts used to include term penalty for delay damages, but that was not

correctd Penalty amounts to criminal punishment & not civil action



General Contract Provisions Guidelinese To respond to that incorrect word, LD or liquidated damage has been introducedf LD is charged per day or part of a day on all current/interim payment certificatesg When extension of time for completion is granted, LD stops its impositionh LD can be charged to a maximum extent, generally not to exceed 10% contract sumi Even after, LD recovery, responsibility of contractor to complete works in all respects

remain in force, until project is handed over/closedj Once, employer realizes that contractor is unable to complete works even after,

imposition of liquidated damage, an alternative solution to further carry out works by employing another contractor at risk & cost of existing is resorted to)

Suspension of works-Engineer may at any/every time instruct contractor to suspend progress of part or all works. 1 During such suspension,

a contractor shall protect store & protect such part of works against any/every deterioration, loss or damage.

2 Engineer may also, a notify cause for suspension, if & to that extent cause is notified &b is responsibility of contractor, clause shall not apply.

3 If contractor suffers delay & a or incurs cost from complying with engineer’s instruction b under suspension of works clause & or from resuming work, c contractor shall give notice to engineer to be entitled under contractor’s claims clause d to an extension of time for any/every such delay, e if completion is or shall be delayed under extension of time for completion & f payment of any/every such cost, g which should be included in contract price.

4 After receiving this notice, a engineer shall proceed in accordance with under determinations clause b to agree or determine these matters.

5 Contractor shall not be entitled to a an extension of time for or to payment of cost incurred in, b making good consequences of contractor’s faulty design, c workmanship or materials or of subcontractor’s failure d to protect store or secure in accordance with, under suspension of work clause.

6 Contractor shall be entitled to a payment of value as on date of suspension, pertinent plants &/or materials, b which have not been delivered to site, c if work on plant/or delivery of plant &/or materials has been suspended for more than

28 days, d while contractor has marked/entitled plant &/or materials as employer’s property in

accordance with engineer’s instructions. 7 If suspension of work has continued for more than 84 days,

contractor may request engineer’s permission to proceed for resumption of suspended works.

8 If engineer does not give permission within 28 days, after being requested to do so,a contractor may by giving notice to engineer,



General Contract Provisions Guidelinesb treat suspension as an omission under variations & adjustments of affected parts of

works clause. 9 If suspension affects whole of works,

a contractor may give notice of termination under termination by contractor clause. 10 After permission or instruction to proceed is given,

a contractor & engineer shall jointly examine works as well as, b plant & materials affected by suspension.

11 Contractor shall make good a any/every deterioration or defect in or loss of works or plants or materials, b which has occurred during suspension period

i. (Suspension of work can be imposed on part of a work or an area or on whole project

ii. Unexpected design changes lead to suspension during prosecution of projectiii. Delays caused by contractor can lead to suspensioniv. Unexpected non requirement raised by client due to non availability of funding

leads to suspension of worksv. Other reasons & circumstances that relate to general policy of government also,

lead to suspensionvi. In fact, suspension is not at all a positive development on project in interest of

neither partyvii. But, suspension on account of an intension to change contractor should not be

encouraged)

Test on completion- Contractor shall carry out tests on completion

a in accordance with requirements under testing clause, b after providing documents in accordance with general obligations.

1 Contractor shall give to engineer a not less than 21 days notice of date, b after which contractor should be ready to carry out each/every required test/s on

completion. 2 Unless otherwise agreed,

a tests on completion shall be carried out within 14 days, b after this date, on such day or days as engineer would instruct.

3 In considering results of tests on completion, a engineer shall make allowances for use of works by employer on performance or

other characteristics of works. 4 As soon as, works or a section,

a have passed any/every required test on completion, b contractor shall submit a certified report of results of all such tests to engineer.

5 If tests on completion are being unduly delayed by employer, a interference with tests on completion clause shall apply.

6 If tests on completion are being unduly delayed by contractor, a engineer may by notice, require contractor to carry out tests within 21 days, after

receiving notice. 7 Contractor shall carry out tests on such day or days within that period, of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesa as contractor may fix respecting which contractor would give notice to engineer.

8 If contractor fails to carryout tests on completion within a period of 21 days, a after receiving notice, b employer’s personnel may proceed with tests at risk & cost of contractor.

9 Tests on completion shall a then be deemed to have been carried out in presence of contractor & b results of tests shall be accepted as accurate.

10 If works or a section fails a to pass test on completion, rejection clause shall apply, b while engineer or contractor may require failed test or tests on completion on

any/every related work c to be repeated under same terms & conditions.

11 If work or a section fails a to pass a test on completion under retesting clause, b engineer shall be entitled to order further repetition of test at completion under

retesting.12 If failure deprives employer of substantially,

a whole benefit of work or section as case may be, b in which event, employer shall have same remedies as are provided in failurec to remedy defects clause or issue of a taking over certificate if employer so requests.

13 When employer agrees for issue over taking over certificate, a contractor shall proceed in accordance with all other obligations b under contract with contract price reduced by such amount c as would be appropriate to cover reduced value provided to employer d as a result of repeat tests failure.

14 Unless relevant reduction of this failure is stated ora its method of calculation is defined within contract, b employer may require reduction to be agreed by both parties c in full satisfaction of this failure only & d paid before taking over certificate is issued or determined & e paid under employer’s claims clause & under determinations claim clause

i. (For completion, various stage testing is conducted, namely pre commissioning, commissioning, performance etc

ii. On non plant projects, such testing can be classified as first fix test, second fix test & final testing & handover

iii. Pre commission testing involves through tests on each componentsiv. Commissioning requires testing of all assemblies within process trainsv. Performance defined working or functioning process involving performances by

all equipment involvedvi. Such performance is protected by performance guarantee delivered by contractor

valid for a specific periodvii. Failure on performance requires retesting on performance from zero

viii. Failure on every type of testing should be of serious concern for contractor as well as for employer)

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General Contract Provisions GuidelinesExcept as stated under failure to pass test at completion,

a works shall be taken over by employer, when scope of works b have been completed in accordance with contract c including matters described under time of completion clause & d except as allowed taking over certificate e subject to minor repairs to be taken care of during post handover maintenance.

1 Contractor may apply a by giving notice to engineer for a takeover certificate b not earlier than 14 days, before works shall in contractor’s opinion be complete &

ready for taking over process. 2 If works are divided into sections,

a contractor may similarly, apply for taking over certificate respecting each section. 3 Engineer shall within 28 days,

a after receiving contractor’s application, b issue taking over certificate to contractor stating date, c on which works or sections were completed in accordance with contract, d except for any/every minor outstanding work & defects, e which should not substantially, effect use of works or sections for their intended

purpose either, f until or whilst, these works are completed or g these defects are remedied or h reject application giving reasons with specifying remaining works i required to be done by contractor to enable taking over certificate to be issued.

4 Contractor shall then complete this work, a before issuing a further notice for taking over certificate.

5 If engineer fails a either to issue taking over certificate or to reject contractor’s application b within a period of 28 days & c if works or sections, as case may be are substantially, d in accordance with contract requirements, e taking over certificate shall deem to have been issued on last day of that period.

6 Engineer may a at sole discretion of employer, b issue a taking over certificate for any/every part of permanent works.

7 Employer shall not use a any/every part/s of works b other than as a temporary measure, c which is either specified in contract or as agreed by both parties, d unless & until engineer has issued a taking over certificate for this part.

8 However, a if employer does not use any/every part of works, b before taking over certificate is issued, c part which is used d shall be deemed to have been taken over as from date, on which it is used.

9 Contractor shall a cease to be liable for care of such part as from this date,



General Contract Provisions Guidelinesb when responsibility should pass to employer & c if requested by contractor, engineer shall issue a taking over certificate for this part.

10 After engineer has issued a taking over certificate for a part of works, a contractor shall be given earliest opportunity to take such steps b as may be necessary to carry out any/every outstanding tests on completion.

11 Contractor shall carry out a these outstanding tests on completion as soon as, practicable b before expiry date of defects notification period.

12 If contractor incurs cost a as a result of employer taking over for using a part of works b other than such use as specified in contract or agreed by contractor, c contractor shall give notice to engineer d to be entitled subject to contractor’s claims e to payment of any/every such costs plus reasonable profit, f which should be included in contract price.

13 After receiving this notice, a engineer shall proceed in accordance b under determinations clause either to agree or determine this cost & profit.

14 If a taking over certificate a has been issued for a part of works other than a section, b delay damages thereafter, c for completion of remainder of works shall be reduced in proportion.

15 Similarly, a delay damages for remainder of section, b in which this part is included shall also, be reduced.

16 For any/every period of delay a after date stated in this taking over certificate, b proportional reduction on these delay damages shall be calculated proportionally, c which value of part so certified taken over d bears to value of works or section, as case may be as a whole.

17 Engineer shall a proceed in accordance with under determination clause b either to agree or determine such proportions.

18 Provisions shall only, a apply to daily rate of delay damages under delay damages clause & b should not affect maximum amount of delay damages limits

i. (Contractor should hand over deliveries to employer through engineer based on successful performance of works included with satisfactory testing

ii. Such handover to employer through engineer is also, called mechanical completion or practical completion or physical completion

iii. On non oil building projects practical completion term is used iv. On facilities plants projects, mechanical completion term is usedv. Snags are permitted to be enlisted & handed over, while defects remedies can be

applied during maintenance period respecting buildings or civil worksvi. Punch list is drawn for all defects on facilities projects, which requires remedies

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General Contract Provisions Guidelinesvii. When, punch snags are of high concern nature that can effect plants functioning,

defects or punch snags should be rectified prior to take over, otherwise, during maintenance or performance period, remedies can be effected)

Interference with tests on completion-If contractor is prevented for more than 14 days

a from carrying out tests on completion by a cause for which employer is responsible,b employer shall be deemed to have taken over works or sections, c as case may be on date, d when tests on completion would otherwise have been completed.

1 Engineer shall then issue a a taking over certificate accordingly, b while contractor shall carry out tests on completion as soon as practicable, c before expiry date of defects notification period.

2 Engineer shall require tests a on completion to be carried out by giving 14 days notice & b in accordance with provisions of contract.

3 If contractor suffers delay &/or a incurs cost as a result of such delay b in carrying out tests on completion, c contractor shall give notice to engineer d to be entitled to contractor’s claims e to an extension of time for any/every such delay, f if completion is & shall be delayed under extension of time for completion clause, g while payment of any/every such cost plus reasonable profit h should be included in contract price.

4 After receiving this notice, a engineer shall proceed in accordance with b under determinations clause either to agree or determine these matters.

5 Except as otherwise a stated in taking over certificate, b a certificate for section or part of work c shall not be deemed to certify completion d of any/every ground or other surfaces requiring reinstatement

i. (Engineer & contractor should cooperate each other to an extent testing is required since, a successful delivery of project by contractor leads to success of both engineer & contractor

ii. It is not contemplated what interest either engineer or employer might have, when project is delayed because of pending testing of work, excepting unavoidable circumstances or force majeure)

Defects liability- In order that works,

a contractor’s documents & each section b shall be brought in to meeting conditions/required by contract provisions, c with fair wear & tear excepted,



General Contract Provisions Guidelinesd by expiry date of relevant defects notifications period or as soon as, practicable.

1 Thereafter, contractor shall complete any/every work, a which is still outstanding on date stated in taking over certificate, b within such reasonable time, as is instructed by engineer c to execute all work required to remedy defects or damage, d as may be notified on behalf of employer e on or before expiry date of defects notification period, f for works or section as case may be.

2 If a defect appears or damage occurs, a contractor shall be notified accordingly, on behalf of employer or by employer.

3 All work referred to a under notification of completion of outstanding work & b remedying defects clause shall be executed at risk & cost of contractor c if & to extent, work is attributable to d any/every design for which contractor is responsible, e while all such remedial actions should apply on f plant, materials or workmanship not being in accordance with contract requirements

or g a failure by contractor to comply with any/every other obligation.

4 If & to extent that such work is attributable to a any/every other cause, contractor shall be notified promptly by or b on behalf of employer & variation procedure should apply

5 Employer shall be entitled for under employer’s claims clause a to an extension of defects notification period for works & section b if & to extent that works, section or major item of plant, c as case may be & after taking over, d cannot be used for purposes, for which they were intended, e but by reason of a defect or damage.

6 However, a a defects notification period shall not be extended by more than two years.

7 If delivery or erection of a plant & or materials was suspended under suspension of works clause b under contractor’s entitlement of suspended works, c contractor’s obligations under this clause d shall not apply to any/every defects or damages e occurring more than two years, f after defects notification period for plants & g or materials would otherwise have expired.

8 If contractor fails to remedy a any/every defects or damage within a reasonable time, b a date may be fixed by or on behalf of employer, c on or by which defect or damages is to be remedied.

9 Contractor shall be given reasonable notice pertinent this date. 10 If contractor fails

a to remedy defect or damage by this notified date & b this remedial work was to be executed at cost of contractor



General Contract Provisions Guidelinesc under cost of remedying defects clause, d employer may at its option, carry out work himself or e by others in a reasonable manner & at contractor’s cost, f but contractor would have no responsibility for this work & g contractor shall subject to employer’s claims pay to employer, h costs reasonably incurred by employer in remedying defect or damage, i require engineer either to agree or determine a reasonable deduction in contract price j in accordance with determinations clause or k if defect or damage deprives employer of substantially, l whole benefit of work or any major part of work, m terminate contract as a whole or n in respect of such a major part, which cannot be put to intended use.

11 Without prejudice to a any/every other right under contract or otherwise, b employer shall then be entitled to recover all sums paid for works or part, as case may

bec plus financing cost & cost of dismantling same, d clearing site, returning plant & materials to contractor.

12 If defect or damage cannot be remedied expeditiously, a on site & employer gives consent, b contractor may remove from site for purposes of repair, c such items of plant as are defective or damaged.

13 This consent may require contractor a to increase amount of performance security by full replacement cost pertinent these

itemsb or to provide other appropriate security.

14 If work of remedying a any/every defect or damage may affect performance of work, b engineer may require repetition of any/every test described in contract, c which requirement shall be made by notice within 28 days, d after defect or damage is remedied.

15 All such tests a shall be carried out in accordance with terms applicable to previous tests, b except that they would be carried out c at risk & cost of party liable under cost of remedying defects clause for cost of

remedial work. 16 Until performance certificate has been issued,

a contractor shall have such right of access to work as is reasonably, b required in order to comply with this clause, c except as may be inconsistent with employer’s reasonable security restrictions.

17 Contractor shall if required by engineer, a search for cause of any/every defect under direction of engineer.

18 Unless defect has to be remedied a at cost of contractor under cost of remedying defects clause, b cost of search plus reasonable profit shall be agreed or determined by engineer c in accordance with under determinations clause &



General Contract Provisions Guidelinesd which cost shall be included in contract price.

i. (while it is true that once, site has been cleared by contractor, after taking over certificate is received, it is too difficult for contractor to organize defects remedies due to facts that remedies involves cost

ii. But, it is also, in interest of contractor to carry out all works on defects remedies just after taking over certification has been received

iii. Longer period for rectification involved means, more funding is required for defects remedies

iv. Contractor knows well that remedies shall not be paid by employer, since it is a part of permanent works

v. Yet, timer is money, while 50% of retention is still with employer, who can demand defects rectification period giving one reason or other, as long as defects are not remedied efficiently

vi. To avoid of all such situation, it is better that all defects be remedied as soon as possible)

Performance certificate-Performance of contractor’s obligations shall not be considered to have been completed, until engineer has issued performance certificate to contractor stating date, on which contractor completed its obligations under contract. 1 Engineer shall issue performance certificate within 28 days, after latest of expiry date of

defects notification periods or as soon as thereafter, as contractor has supplied all contractor’s documents, completed & tested all works, including remedying any/every defect.

2 A copy of performance certificate shall be issued to employer. 3 Only performance certificate shall be deemed to constitute completion of works. 4 After performance certificate has been issued, each party shall remain liable for

fulfillment of any/every obligation, which remains unperformed at that time. 5 For purpose of determining nature & extent of unperformed obligation, contract shall

deem to remain in force. 6 Upon receiving performance certificate, contractor shall remove any/every remaining

contractor’s equipment, surplus material, wreckage, rubbish & temporary works from site.

7 If all these items have not been removed within 28 days, after employer receives a copy of performance certificate, employer may sell or otherwise, dispose of any/evey remaining item.

8 Employer shall be entitled to be paid cost incurred in connection with or attributable to such sale or disposal & restoring site.

9 Any/whatever balance of moneys from sale shall be paid to contractor. 10 If these moneys are less than employer’s cost, contractor shall pay outstanding balance to

employera (Performance certificate can be issued only, once all defects have been remedied &

approvedb Performance certificate allows release of project risibility pertinent prosecution r

execution viewpoint, but not from warrantee viewpoint



General Contract Provisions Guidelinesc All warrantees involving longer duration than project completion, remain in force for

required duration, which contractor with vendors shall remain liable ford Various projects components demand stability warrantee for structures for 10 year or

more depending on referred conditionse Generally, all process equipment bearing guarantee of defined performance for a

number of years, which part of agreement remains in forcef Such conditions apply on all or relevant part of contract, even if contractor dies)

Measurement & evaluation-Works shall be measured & valued for payment in accordance with this clause. 1 Whenever engineer requires any/every part of works to be measured, reasonable notice

shall be given to contractor’s representative, who should promptly either attend or send another qualified representative to assist engineer in making measurements & supply whatever particulars requested by engineer.

2 If contractor fails to attend or send a representative, measurement made by or on behalf of engineer shall be accepted as accurate.

3 Accept as otherwise stated in contract, whenever whatever permanent works are to be measured from records, these shall be prepared by engineer.

4 Contractor shall as & when requested attend to examine, agree records with engineer & shall sign same, when agreed.

5 If contractor does not attend, records shall be accepted as accurate. 6 If contractor examines & disagrees with records or does not sign them as agreed,

contractor shall give notice to engineer of respects, in which records are asserted to be inaccurate.

7 After receiving this notice, engineer shall review these records & either confirm or vary them.

8 If contractor does not so, give notice to engineer within 14 days, after being requested to examine records, records shall be accepted as accurate.

9 Except as otherwise stated in contract & notwithstanding local practice, measurements shall be made of net quantity of each item of permanent works, while method of measurement should be in accordance with bill of quantities or other applicable schedules.

10 Except as otherwise, stated in contract, engineer shall proceed in accordance with under determinations clause to agree or determine contract price by evaluating each item of work, applying measurement agreed or determined, in accordance with foregoing provision with appropriate rate or price for item.

11 For each item of work, appropriate rate or price for item applicable shall be rate of price specified for such item in contract or if there is no such priced item, specified for similar work elsewhere.

12 However, a new rate or price shall be considered appropriate for an item of work a if measured quantity of item is changed/varied by more than 10% from quantity of

this item in bill of quantities or other schedule, b this change in quantity multiplied by such specified rate exceed 0.01% of accepted

contract amount, c this change in quantity directly changes cost per unit quantity of this item by more

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General Contract Provisions Guidelinesd this item is not specified in contract as a fixed rate item or, e work is instructed under variations & adjustment clause, f no rate or price is specified in contract for this item & no specified rate or price is

appropriate, because item of work is not of similar character or is not executed under similar conditions as any/every item in contract.

13 Each new rate or price shall be derived from any/some relevant rate/s or prices in contract with reasonable adjustments to take account of matters described in foregoing as applicable.

14 If no rates or prices are relevant for derivation of a new rate or price, it shall be derived from reasonable cost of executing work together with reasonable profit taking account of any/some other relevant matters.

15 Until such time, as an appropriate rate or price is agreed or determined, engineer shall determine a provisional rate or price for purposes of interim payment certificates.

Omissions-Whenever omission of any/some work forms part or all of a variation, value of which has not been agreed if, 1 contractor incurs or has incurred cost, which if work had not been omitted, would have

deemed to be covered by a sum forming part of accepted contract amount, 2 omission of work shall result or has resulted in this sum not forming part of contract price

& 3 this cost is not deemed to be included in evaluation of any/some substituted work, 4 then contractor shall give notice to engineer accordingly, with supporting particulars. 5 Upon receiving this notice, engineer shall proceed in accordance with under

determinations clause to agree or determine this cost, which should be included in contract price.

Variations & adjustments-Variation may be initiated by engineer at any/every time prior to issuing taking over certificate for works, either by an instruction or by a request for contractor to submit a proposal. 1 Contractor shall execute/be bound by each variation, unless contractor promptly gives

notice to engineer stating with supporting particulars, that contractor cannot readily obtains goods required for variation.

2 Upon receiving this notice, engineer shall cancel, confirm or vary instruction. 3 Each variation may include changes to quantities of any/every item of work included

within contract, 4 however such changes do not necessarily, constitute a variation, 5 changes to quality & other characteristics of any/every item of work, 6 changes to levels, positions & or dimensions of any/every part of works, 7 omission of any/every work, unless it is to be carried out by others, 8 any additional work, plant, materials or services, necessary for permanent works

including any/every associated tests on completion, 9 boreholes or other testing & exploration works, 10 changes to sequence or timings of execution of works.



General Contract Provisions Guidelines11 Contractor shall not make any/every alteration &/or modification of permanent works,

unless & until engineer instructs or approves a variationa (Method of measurement depends on type of contract adoptedb Item rates based contract requires all agreed items to be measured for whatever

works have been prosecuted in line to defined ratesc Lump sum exclusively does not require any rate consideration for measurement, but

dictated by work % carried out, while an agreement in relation to stages of works shall guide about completion of project status

d All items can tentatively be broken down to related % for each item & summed to 100%

e On lump sum firm price based on itemized rate, it is much easier to evaluate work done, omissions effected or extras required

f Since all rates are available on schedule within contract, related rates can be applied to additional items as well as, to deleted or omitted items

g Depending on rates, cost of related items can be worked out & % agreed for each item to be applied throughout duration of project prosecution)

Value engineering– Contractor may

a at anytime/sometime submit to engineer a written proposal, b which in contractor’s opinion shall if adopted, c accelerate completion, reduce cost to employer of executing, d maintaining or operating works, improve efficiency or e value to employer pertinent completed works or otherwise, f be of benefit to employer.

1 Proposal shall be prepared at cost of contractor & a should include items listed in under valuation procedures.

2 If a proposal, a which is approved by engineer includes a change in design of part of permanent

works, unless otherwise agreed by both parties, i. contractor shall design this part.

ii. contractor’s general obligations clause shall apply, iii. if this change results in reduction in contract value respecting this part,

a engineer shall proceed in accordance under determination clause b either to agree or determine a fee, c which shall be included in contract price, d which fee shall be half/50% of difference between following amounts.

iv. Such reduction in a contract value resulting from change excluding adjustments, b under adjustments for changes in legislation & c adjustments for changes in cost & reduction if any/some, d in value to employer of varied works, e taking accounts of any/every reductions in quality, anticipated life or operational

efficiencies. 3 However if 1st amount is less than 2nd amount, there shall not be allowed a fee



General Contract Provisions Guidelinesa (Fundamental philosophy behind value engineering is that added customer

satisfactionb Employer pays on contract performance for a value agreed between both partiesc This payment is for services provided by contractor to its customer employer, which

is a binding between two partiesd Contractor should contemplate to deliver more than what is expected by employer on

contracte This factor is also, applied now on contracts, when many parties bidf All bidding parties are qualified, professionally competent& can work out cost as

wellg Employer can know easily based on cost factor as well as capability of bidder, who is

more suitableh But simultaneously, employer/engineer should make sure who can add value of

whatever expectation on projecti Value can be procurement of better technology related to state of art j Lower maintenance cost during operation of plant or other projectsk Lower chances for accidents or unforeseen on bidder’s offerl Lower expenses required on project, means economical projectm Consideration of reduction on project deliveries duration, so that production can be

started earlier than plannedn Assurance of best quality at optimum quality priceo And so many other considerations based on type of projects)

Variation procedure-1 If engineer requests a proposal prior to instructing a variation, 2 contractor shall respond in writing as soon as, practicable 3 either by giving reasons, why it cannot comply or by submitting it,

a a description of proposed work to be performed & a programme for its execution,b contractor’s proposal for any/every necessary modifications to programme according

to programme clause & to time for completion & c contractor’s proposal for evaluation of variation.

1 Engineer shall as soon as, a practicable after receiving such proposal under value engineering clause or otherwise,b respond with approval, disapproval or comments.

2 Contractor shall not delay any/every work, while awaiting a response.

3 Each instruction to execute a variation a for any/every requirements for recording of costs b shall be issued by engineer to contractor, who should acknowledge receipt.

4 Each variation a shall be evaluated in accordance with under measurement & evaluation clause.

5 If contract provides for a payment of contract price in more than one currency, b whenever an adjustment is agreed, approved or determined as stated in foregoing, c amount payable in each currency shall be specified, d for which purpose, reference shall be made



General Contract Provisions Guidelinese to actual or expected currency proportions of cost respecting varied works & f to proportions of varied currencies specified for payment of contract price

i. (Addition of works to scope of works within permissible % as defined within contract

ii. Deletion/omission of works from scope of works as defined within contractiii. Alteration to works provided within contract documents irrespective of limitationiv. Generally, foregoing situations require involvement of variations on contractv. Prior to instructing contractor, engineer should request contractor’s opinion or

reactionvi. Contractor might have procured materials or equipment, involved with scope to

be omittedvii. If so omitted, contractor certainly, enjoys right to claims on omitted item to be

paidviii. Respecting whatever, contractual variation, official instruction is a must to be

issued by engineer in form of Engineer’s instruction a minimum requirement to make contractual claims commercially

ix. Site instructions do not support claims, since such instructions are related to contract performing in nature

x. Whatever, instruction contractor receives relating to variation, must respond immediately notifying financial impact on contract)

Provisional sum- a Each provisional sum b shall only be used in whole or in part, c in accordance with engineer’s instructions & d contract price should be adjusted accordingly.

1 Total sum paid to contractor a shall include only, such amounts for work, supplies or services b to which provisional sum relates, c as engineer shall have instructed.

2 For each provisional sum, engineer may instruct, a work to be executed including plant, materials or services b to be supplied by contractor & values under variation procedure & c plant, materials or services d to be purchased by contractor from a nominated subcontractor e as defined under nominated subcontractors clause or f otherwise & for which, this shall be included in contract price, g actual amounts paid or due to be paid by contractor, h a sum for overhead charges & a profit calculated as a % of these actual amounts i by applying relevant % rate if any/some, stated in appropriate schedule.j If there is no such rate, % rate stated in appendix to tender shall be applied.k contractor shall when required by engineer, l produce quotations, invoices, vouchers & accounts or receipts in substantiation.

i. (Engineer adds certain minor items required to be used on project during performance



General Contract Provisions Guidelinesii. A certain % of contract value is reserved to be assigned to meet such requirement

iii. This amount can be used for procurement pertinent certain units as well as, to avail certain specific services through contractor

iv. It is not mandatory for engineer or employer to spend this sum, but depends on requirements pertinent to project)

Daywork- For work of minor or incidental nature, engineer may instruct that a variation shall be executed on a daywork basis. 1 Work shall then be valued in accordance with daywork schedule included in contract &

following procedures shall apply, if daywork schedule is not included in contract-a before ordering any goods for work, contractor shall submit quotation to engineer. b When applying for payment, contractor shall submit invoices, vouchers & accounts or

receipts for any/every/all goods. c Excepts for any/every items for which daywork schedule specifies that payment is not

due, contractor shall deliver each day to engineer, accurate statements in duplicate, which shall include following details of resources, used in executing previous day’s work,

a names occupations & time of contractor’s personnel, b identification, type & time of contractor’s equipment & temporary works & c quantities & type of plants & materials used.

2 One copy of each statement shall if correct or when agreed, be signed by engineer & returned to contractor.

3 Contractor shall then submit priced statements respecting these resources to engineer, prior to their inclusion in next payment/valuation statement under applications for interim payment certificates clause.a (On projects, many instances do not allow rates defined on bill of quantities, to apply

on to certain works required to be carried out due to whatsoever reasonb Resolution pertinent to payment is usually, effected by daywork methodc Daywork is stated as a method of measurement, based on practical actual records

collected from field location, where work is carried outd Rates pertinent each unit respecting workforce, materials & equipment are agreed

between both parties, either from schedule of rates, if so defined or from current market rates as obtained by quotes

e Resident engineer or clerk of works supervise al activities carried out by site engineerf Daily reports are presented to clerk of works for endorsementg All such report statements are submitted along with daily report to resident

engineer/engineerh When required works are completed, such reports are filed in to reach a pricei As a part of variation, such statements are submitted to resident engineer/engineerj Daywork should not continue for months but only for few days or certain weeksk For major works, engineer should require quotes from contractor)

Adjustment for changes in legislation-Contract price shall be adjusted

a to take account of any/every increase or decrease in cost of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesb resulting from a change in laws of country c including introduction of new laws or d repeal or modification of existing laws (laws in force for time being) or e judicial or official government interpretation of such laws, made after base date, f which effect contractor in performance of obligations under contract.

1 If contractor suffers or would suffer delay & or incurs additional cost a as a result of these changes in laws or such interpretations, made after base date,b contractor shall give notice to engineer to be entitled subject to contractor’s claims c to an extension of time clause for such delay, d if completion is or shall be delayed under extension of time for completion clause &e payment of any/every such cost, which should be included in contract price.

2 After receiving this notice, a engineer shall proceed in accordance with under determinations clause, either to agree

or determine these matters.i. (Post award of contract, legislation results may allow additional wages to

workersii. Due to increase in customs, increase in prices of items based on budgetary

provisions etc. in case contractor has clearly stated, within bid that certain datum line used to calculate rates pertinent to resources in question

iii. Based on such, datum consideration, contractor virtually, defines a type of qualification, which might or might not have been noticed by engineer/employer

iv. Engineer during scrutiny of bid, should have commented on such condition for contractor’s clarification & for further negotiation

v. In case, when contractor notifies engineer for variation on such legislative changes, engineer should make consideration

vi. But, when contractor has unconditionally, submitted bit bearing all such liabilities during contract duration, no such variation should be permitted

vii. This means, contractor might have covered such risks elsewhere)

Adjustments for changes in cost-In this clause,

a ‘table of adjustment data’ means completed table of adjustment data b included in appendix to tender.

1 If there is no such table of adjustment data, provision shall not apply. 2 If applies,

a amount payable to contractor shall be adjusted for rises or falls b in cost of labour, goods or other inputs to works c by addition or deduction of amounts determined by formula d prescribed within this provision.

3 To an extent that full compensation a for any/every rise or falls in costs is not covered by provisions of this or other clauses,b accepted contract amount shall be deemed to have included amounts whatsoever, c to cover contingency of other rises & falls in costs.

4 Adjustment to be applied a to amount otherwise payable to contractor, b as valued in accordance with appropriate schedule &



General Contract Provisions Guidelinesc certified in payment certificates d shall be determined from provided formula for each of currencies, e in which contract price is payable.

5 No adjustment is to be applied to work valued on basis of cost on current prices. 6 Formula to be used

a shall be of following general type Pn=a+b*(Ln/Lo)+c*(En/Eo)+d*(Mn/Mo)+………..

i. where ‘Pn’ a is an adjustment multiplier b to be applied to estimated contract value in relevant currency of work, c carried out in period ‘n’, d which period being a month, unless otherwise stated in ‘appendix to tender’,

ii. while ‘a’ a is a fixed coefficient stated in relevant table of adjustment data b representing non adjustable portion in contractual payments,

iii. while ‘b’, ‘c’ & ‘d’……..’a are coefficients representing estimated proportions of each cost element b related to execution of works as stated in relevant table of adjustment data, c which such tabulated cost elements may be indicative of resources, d such as labour, equipment & materials.

iv. ‘Ln’, ‘En’, ‘Mn’……..’ a are current cost indices or reference prices for period ‘n’ b expressed in relevant currency of payment, c each of which is applicable to relevant tabulated cost element on date, d 49 days prior to last day of period e to which particular payment certificate relates &

v. ‘Lo’, ‘Eo’, ‘Mo’…….’a are base cost indices or reference pricesb expressed in relevant currency of payment, c each of which is applicable to relevant tabulated cost element on base date.

7 Cost indices or reference points stated in table of adjustment data shall be used. a If their source is in doubt, it shall be determined by engineer. For this purpose a reference shall be made to values of indices at stated dates b quoted in respective columns respectively, c of table for purposes of clarification of source, d although these dates & thus these values may not correspond to base cost indices.

8 In case, where currency of index stated in table is not relevant currency of payment, a each index shall be converted into relevant currency of payment at selling rate,b established by central bank of country, c of this relevant currency on above date d for which index is required to be applicable.

9 Until such time as each current cost index is available, a engineer shall determine a provisional index for issue of interim payment certificates.

10 When a current cost index is available, a adjustment shall be recalculated accordingly.



General Contract Provisions Guidelines11 If contractor fails to complete works within time for completion,

a adjustment of prices thereafter, b shall be made using either each index or price applicable c on date 49 days prior to expiry of time for completion of works or d current index or price, whichever is more favourable to employer.

12 Weighing coefficients of each factors of cost a stated in tables of adjustment data b shall only, be adjusted if they have been rendered unreasonable, unbalanced or

inapplicable, as a result of variations.i. (Provision itself explains methods to be adopted to adjust changes in cost for both

increase or decrease in prices or costii. It also, covers as explained in foregoing relating to changes on laws effecting cost

iii. It is very delicate issue requiring upkeep of a reliable record by contractor, so as to involve claims pertinent variations, when required

iv. Simply, notifying to engineer shall not work for a settlementv. All propositions should be duly supported by evidences

vi. Regular notification to engineer & employer should be served for records purpose)

Contract price & payment-Unless otherwise stated in particular conditions,

a contract price shall be agreed or determined under evaluation clause & b be subject to adjustments in accordance with contract.

1 Contractor shall pay all taxes, duties & fees, a required to be paid by it under contract, b for which contract price shall not be adjusted for any/every of these costs, c except as stated under adjustment for changes in legislation.

2 Any/every quantities, a which may be set out in bills of quantities or other schedule are estimated quantities, b not to be taken as actual & correct quantities of works, c which contractor is required to execute or d for purpose of measurement & evaluation clause.

3 Contractor shall a submit to engineer within 28 days, after commencement date, b a proposed breakdown of each lump sum price within schedules.

4 Engineer may account of break down, a when preparing payment certificates, but shall not be bound by it.

i. (BOQs or bills of quantities constitute part of contract documents & located at lowest level of documents precedents

ii. Such level does not allow BOQs to dictate contract provisionsiii. Though BOQs play very significant role to reach price, yet are secondary in

natureiv. BOQs are considered guide &support documents for non formal referencesv. BOQs give an idea regarding, what was intended by contractor during bidding

vi. All rates within BOQ are required to be filled post award for logical references, but not as contract’s references



General Contract Provisions Guidelinesvii. Contract price agreed is considered firm on lump sum fixed price contracts

viii. When BOQ is also used to reach to final price based on included items rates, contract can be termed as itemized lump sum fixed price

ix. Employer or engineer shall have procedural right to use relative BOQ rates to use on every omission & addition within a prescribed limit of varying cost in comparison to contract sum

x. Contractor gets no justification not to agree on such use of unit prices by engineer/employer

xi. But, once prescribed variation limit crosses, contractor can demand non BOQ rates based on agreement between both parties

xii. Foregoing requirement is for BOQ to be included within contract documentsxiii. It is not necessary that bidder refer to engineer provided BOQ, but may generate

its own BOQ in addition to contract BOQxiv. Whatever price bidder gets on its own generated BOQ, can be proportioned on

contract BOQ, but contract BOQ shall only be utilized by engineer & employer to an extent payment calculations are related to

xv. Should considerable difference in quantities emerge BOQ, should be brought to engineer’s notice, but prior to bid is closed

xvi. Should whatever item be missing on BOQ, should also, be brought to engineer’s notice, prior to bid closure

xvii. In whatever case, bidder should include prices for all considerationsxviii. Once bid is closed, post award, contractor shall be obliged to be responsible for

all effects of missing or short in quantities itemsxix. Officially, no hearing on such accounts shall be entertained by engineer or

employerxx. During scrutiny of bid, engineer may require bidder to confirm that no such

claims at later stage, during contract prosecution shall be madexxi. When bidder does not accept undertake such condition/criteria, engineer &

employer got every right not to consider bid any furtherxxii. Every such potential & prospective bid requires an undertaking to be signed by

contractor that each & every aspect included or intended within bid, has been fully understood from every aspect, with no qualification included within)

Advance payment-Employer shall make an advance payment as an interest free loan for mobilization,

a when contractor submits a guarantee in accordance with this provision.1 Total advance payment,

a number & timing of installments if more than one & b applicable currencies as well as, c proportions shall be in accordance with as stated in appendix to tender.

2 Unless & until a employer receives this guarantee or b if total advance payment is not stated in appendix to tender, c this provision shall not apply.

3 Engineer shall issue a an interim payment certificate for first installment,



General Contract Provisions Guidelinesb after receiving a statement under application of interim payment certificate clause.

4 After employer receives a performance security in accordance under performance security clause & b an equal guarantee in amount/& currencies equal to advance payment.

5 This guarantee shall be a issued by an entity within a country or b other jurisdiction, approved by employer, c which shall be in form annexed to particular conditions or d in another form approved by employer.

6 Contractor shall ensure a that provided guarantee is valid & enforceable, b until advance payment has been repaid, c but its amount maybe progressively, reduced by amount repaid by contractor, d as indicated in payment certificates.

7 If terms of guarantee specify its expiry date & a advance payment has not been repaid by date 28 days prior to its defined expiry date,b contractor shall extend validity of guarantee, until advance payment has been repaid.

8 Advance payment a shall be repaid through % deductions in payment certificates.

9 Unless other %s are stated in appendix to tender, a deductions shall commence in payment certificates,

1 in which total certified interim payments excluding advance payment, 2 deductions & repayment of retention exceed 10% 3 of accepted contract amount less provisional sums &

b deductions shall be made at 1 amortization rate of one quarter 0.25 times amount of each payment certificate,2 excluding advance payment, 3 deductions & repayment of retention in currencies & 4 proportions of advance payment, until such time as advance payment has been

repaid. 10 If advance payment

a has not been repaid prior to issue of taking over certificate of works or b prior to operating termination under termination by employer clause, c operating suspension & termination by contractor’s clause or d operation of force majeure clause e as case may be, f whole balance outstanding shall immediately, g become due & payable by contractor to employer.

i. (Advance payment assures contractor that employer certainly has current funds required to kickoff project, while such payment would help contractor mobilize immediately

ii. Moreover, it costs employer due to its being free of interest, excepting that advance payment guarantee is required to be obtained from employer desired bank

iii. In some cases, even advance payment surety is not even required, but corporate guarantee is considered adequate to move project



General Contract Provisions Guidelinesiv. By such provision, contractor enjoys a comfort to at least commence with job

without any considerable investment on projectv. Of course, recovery or repayment applies, but that shall be affected from earned

value of project progressvi. Contractor should not find it problematic to provide this surety & renew from

time to time)

Application for interim payment certificates-Contractor shall

1 submit a statement in six copies in addition to soft copy 2 to engineer after each month, 3 in a form approved by engineer, showing in details amounts to which, 4 contractor considers itself entitled together with supporting documents, 5 which should include report on progress during this month 6 in accordance under clause progress reports.

1 Statement shall 1 include following items as applicable, 2 which should be expressed in various currencies 3 in which contract price is payable in sequence listed,

a estimated contract value of works executed & 1 contractor’s documents produced up to end of month including variations, 2 but excluding items described in subparagraphs below

b whatever amount to be added & deducted for changes in legislation & 1 changes in cost in accordance with2 clause adjustment for changes in legislation & 3 clause adjustment for changes in cost

c whatever amount to be deducted for retention, 1 calculated by applying % of retention stated in appendix 2 to tender to total of above amounts, 3 until amount so retained by employer, reaches limit of retention money 4 if any/some stated within appendix to tender

d whatever amount to be added or deducted for advance payment & 1 repayment in accordance with advance payment clause

e an amount to be added or deducted 1 for plant & materials in accordance with plant & materials intended for works

clausef whatever other additions or deductions,

1 which may have become due under contract or otherwise, 2 including those under claims, disputes & arbitration clause &

g deductions of amounts certified in all previous payment certificatesh also, liquidated damages amount, if so started to be applicablei recovery pertinent whatever amount

1 to be paid to employer on account of 2 damaging free issued/supplied material or equipment

a (Interim payment documents should be submitted to engineer on set date every month, prior to day of monthly meeting



General Contract Provisions Guidelinesb Contractor’s representative supported with quantity engineer & planner

should confer with respective counterparts associated with resident engineer to reach both parties agreed sum

c This is requires, since its projections shall be required during monthly progress review meeting, wherein both parties should plead with full preparation

d Such record shall then be included on records by minutes of meeting)

Schedule of payments-If contract includes

a a schedule of payments specifying installments, b in which contract price shall be paid then unless otherwise, stated in this schedule1 Installments quoted in this schedule of payments

a shall be estimated contract values b for purposes of application for interim payment certificates clause

2 Plants & materials intended for works clause shall not apply &/may apply as well 3 If these installments are not defined

a by reference to actual progress achieved in executing works & b if actual progress is found to be less than that, c on which this schedule of payments was based, d engineer may proceed in accordance with under determinations clause e either to agree or determine revised installments, f which should take account of extent to which, g progress is less than that on which installments were previously based.

4 If contract does not provide a schedule of payments, a contractor shall submit non binding estimates of payments, b which amounts it expects to become due during each quarterly period.

5 First estimate shall be submitted within 42 days, after contract commencement date. 6 Revised estimates shall be submitted

a at quarterly intervals, until taking over certificate has been issued for works i. (On major bids, generally payment schedule is not included

ii. Bidder has to provide progress schedule in form of % wise achievement from start to closure

iii. Such schedule certainly directs pertinent expected payment on monthly basisiv. In addition to progress projection, cash flow is also, required to be included to

make sure that bidder understand financial requirements v. Post award of contractor, all such schedules & cash flow etc. are submitted

officiallyvi. Such state does not require provision of payment schedule for major projects

vii. Payment schedule may assist smaller projects, where complexities are not tremendous)

Plants & materials intended for works- If so applies,

a interim payment certificate shall include under application for interim payment certificates,



General Contract Provisions Guidelinesb an amount of plant & materials, c which have been sent/delivered to site for incorporation within permanent works/& d to apply a reduction, when contract value of such plant & materials have been

included as part of permanent works. 1 If lists pertinent plant & materials are not included within appendix to tender,

a this provision shall not apply. 2 Engineer shall determine &

1 certify each addition to works done interim payment, if following conditions are satisfied.

a Contractor has kept satisfactory records including orders, receipts, costs of use of plants & materials, 1 which are available for inspection & 2 submit a statement of cost of acquiring, delivering plant & materials to site, 3 supported by satisfactory evidence & either relevant plant & materials are those 4 listed in appendix to tender for payment,

b when shipped, have been shipped to country en route to site, c in accordance to contract & are described in a clean shipped bill of lading or

1 other evidence of shipment, d which has been submitted to engineer

1 together with evidence of payment of freight & insurances, e any/every other document reasonably, required & f a bank guarantee in a form & issued by an entity approved by employer

1 in amounts & currencies equal to amount due per this provision, g this guarantee may be provided on a similar form

1 as referred under advanced payment & should be valid, 2 until plant & materials are properly stored on site & protected against loss,

damage or deterioration or h relevant plant & materials are those listed in appendix to tender for payment,

1 when delivered to site, have been delivered to & are properly stored on site, 2 are protected against loss, damage & deterioration & 3 appear to be in accordance with contract

3 Additional/materials secured advance amount 1 to be certified shall be an equivalent to 70-80% of engineer’s determination 2 of cost of plant & materials, including delivery to site, 3 taking account of documents mentioned in this clause as well as, 4 considering contract value of plant & materials

4 Currencies for this additional/materials secured advance amount 1 shall be same as those, in which payment shall become due, 2 when contract value is included under application for interim payment

certificates. 5 At that time

1 payment certificate shall include applicable reduction, 2 which should be equivalent to/in same currencies & proportions as this additional

amount for relevant plant & materialsi. (On international practice, once equipment or material is delivered to site &

approved by engineer’s inspection, properly located, either in store or in of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelinesrequired secured place within site, interim payment can be considered on an advanced basis

ii. Generally, all projects in middle east & elsewhere, are run as suchiii. Recoveries or repayment of such interim payments are made from progressive

interim payments)

Issue of interim payment certificates- No amount shall be certified or paid,

a until employer has received & approved performance security. 1 Thereafter, engineer shall within 28 days,

a after receiving a statement & supporting documents, b issue to employer an interim payment certificate, c which would set amount, d which engineer fairly determines to be due with supporting particulars.

2 However, prior to issuing taking over certificate for works, a engineer shall not be bound to issue interim payment certificate, b in an amount which would, after retention & other deductions c be less than specified minimum amount of interim payment certificate d if any/some stated in appendix to tender, in which context, e engineer shall give notice to contractor accordingly.

3 An interim payment certificate a shall not be withheld for any/some other reason, although, b if anything supplied or work done by contractor c is not in accordance with contract requirements, d cost of rectification or replacement may be withheld, e until rectification or replacement has been completed &/or f if contractor was or is failing to perform any/some work or g obligation in accordance with contract & had been so notified by engineer, h value of this work & obligation may be withheld, i until work or obligation has been performed.

4 Engineer may in any/every payment certificate a make any/certain correction or modification that should be properly made to

any/some previous payment certificate. 5 A payment certificate

a shall not be deemed to indicate engineer’s acceptance, approval, consent or satisfaction.

i. (Contracts on respective particular conditions includes a provisions that interim payments shall be made on a monthly basis, provided a minimum amount is due

ii. In case, defined amount is not due, payment for respective month shall not be processed

iii. It is also, to be ensured by contractor’s agent that only approved items pertinent works should be included on statement, so as to avoid observations

iv. Contractor’s agent should submit monthly payment certificate statement on or before due date allowing adequate time to resident engineer to scrutinize, process & issues interim payment certificate



General Contract Provisions Guidelinesv. It is to be noted that on every contract, post issue of interim payment certificate, a

duration is fixed, within which certified amount should be transferred to contractor’s account)

Delayed payment-If contractor does not receive payment

a in accordance of provisions under payment clause, b contractor shall be entitled to receive financing charges, compounded monthly, c on amount unpaid during period of delay, d which period shall be deemed to commence on date for payment e specified under payment clause, f irrespective of date, on which any/every interim payment certificate is issued.

1 Unless otherwise stated in particular conditions, a these financing charges shall be calculated at an annual rate of 3 % points above b discount rate of central bank in country, c of currency of payment & shall be paid in such currency.

2 Contractor shall be entitled to this payment a without requirement of giving formal notice or certification & b without prejudice to any/every other right or remedy

i. (According to provisions included within contract, contractor may record delays on certified payments by notifying engineer & employer

ii. Every long delay should be recoded, so as later, to facilitate operation of delayed payment clause to claim financing charges

iii. Long back during past decades, on many contracts a reasonable time was just described for payment without mention exact maximum time

iv. But, now certain time is prescribed on contract form & appendix to contract, which permits contractor to receive due payment in time)

Payment of retention money- When taking over certificate

a has been issued for works b first half of retention money shall be certified by engineer for payment to contractor.

1 If a taking over certificate is issued for a section or part of works, a a proportion of retention money shall be certified & paid.

2 This proportion shall be two fifth of proportion a calculated by dividing estimated contract value of section or b part by estimated final contract price.

3 Promptly, after latest of expiry dates of defects notification period/s, a outstanding balance of retention money shall be certified by engineer b for payment to contractor.

4 If a taking over certificate was issued for a section, a a proportion of second half of retention money shall be certified & b paid promptly, after expiry date of defects notification period for section.

5 This proportion shall be two fifth of proportion a calculated by dividing estimated contract value of section b by estimated final contract price.



General Contract Provisions Guidelines6 However, if any/every work remains to be executed under defects liability,

a engineer shall be entitled to withhold certification of estimated cost of this work, b until it has been executed.

7 When calculating these proportions, a no account shall be taken of any/every adjustments, b under adjustments for changing legislations clause & c adjustment for changes in cost clause

i. (Practically, retention money is generally, released as a contractual practice against an irrevocable security/guarantee of an equal amount from bank provided to employer

ii. But, release of retention money & delivery of security guarantee does not mean that contractor has been relieved

iii. Contractor remains obliged & liable, until discharge certificate or final completion certificate is issue by engineer

iv. Contractor is required to comply with defects remedies & all maintenance works required contractually, for a defined duration satisfactorily for final inspection by engineer)

Statement for payment certificate at completion-Within 84 days, after receiving taking over certificate for works,

a contractor shall submit to engineer b under issue of interim payment certificate, in addition to soft copy,

6 copies of statement at completion with supporting documents, 1 showing value of all work in accordance with contract up to date,

a stated in taking over certificate for works.2 any/every further sums, which contractor considers to be due & 3 an estimate for any/every other amounts,

a which contractor considers shall become due to it under contract, 4 estimated amount shall be shown separately, in this statement at completion. 5 engineer shall then certify in accordance with under issue of interim payment certificate

a (Since, this statement is a final opportunity for contractor to include each & every due payment, whether or not considerable in price with detailed descriptions & references of past submissions

b Statement should be prepared in professional manner, so that it could be easily, understood with clarity

c No point should be left unattended, while concerned quantity surveyor should review many times to avoid certain error)

Application for final payment certificate-Within 56 days after performance certificate has been issued,

a contractor shall submit to engineer, b in addition to soft copies, 6 copies of draft final statement with supporting documents,c showing in detail in a form approved by engineer, d value of all works in accordance with contract & any/every further sums, e which contractor considers to be due to him under contract or otherwise. 1 If engineer disagrees with or cannot verify



General Contract Provisions Guidelinesa any/every part of draft final statement, b contractor shall submit such further information,c as engineer may reasonably require & d should make such changes in draft as may be, agreed between them.

2 Contractor shall then prepare & submit to engineer a a final statement as agreed, b which agreed statement is referred to in conditions as final statement.

3 However, a if following discussions between engineer & contractor leading consequently,b any/certain changes to draft final statement, c which draft final statement is party agreed & party not agreed, d it becomes evident that a dispute exists between two parties.

4 Engineer shall deliver to employer with a copy to contractor, a an interim payment certificate for agreed parts of draft final statement.

5 Thereafter, a if dispute is finally, resolved under b either DAB (disputes adjudication board) decision or c by amicable settlement, d contractor shall then prepare & submit to employer e with a copy to engineer, a final payment statement.

i. (Generally, when disputable amount is not considerable in size, it is suggested to try to reach an amicable settlement to avoid contractual disputes

ii. Contractual disputes do not get any benefit to either partyiii. Otherwise, disputes can be referred either to DAB or Arbitrationiv. When, no disputes exists, process for discharge & final payment should proceed

with)Discharge-When submitting final payment statement,

a contractor shall submit written discharge, which confirms that b total of final statement represents full & final settlement of all moneys due to

contractor under or in connection with contract. 1 This discharge may state that it becomes effective,

a when contractor has received performance security & outstanding balance of this total,

b in which event, discharge shall be effective on such date.i. (Employer should return performance security & defects liability security, once

contract has completed in all regardsii. Contractor is discharged from contract obligations, once securities are released

& final payment received)

Issue of final payment certificate-Within 28 days, after receiving final statement & written discharge

a in accordance with, under application for final payment certificate clause & discharge clause,

b engineer shall issue to employer a final payment certificate, c stating amount, which is finally due &



General Contract Provisions Guidelinesd after giving credit to employer for all amounts previously, paid by employer & e to all sums to which employer is entitled, f balance if any/some due from employer to contractor or g from contractor to employer, as case may be.

1 If contractor has not applied for a final payment certificate in accordance witha under application for final payment certificate clause & discharge clause, b engineer shall request contractor to do so.

2 If contractor fails to submit an application within a period of 28 days, a engineer shall issue final payment certificate b for such amount as engineer finally, determines to be due.

i. (Engineer should process final payment certificate meeting requirements pertinent contract provisions, even if contractor does not respond

ii. In case, contract does not either accept or reject certificate, it shall be presumed that certificate is acceptable

iii. Such affirmative attitude affected by engineer shall support employer’s case in arbitration or elsewhere in case of disputes proceedings)

Cessation of employer’s liability-a Employer shall not be liable to contractor b for any/every matter or thing, under or in connection with contract or execution of

works,c except, to an extent that contractor shall have included an amount expressly, d for it in final statement & also, e except for matters or things arising, after issue of taking over certificatef for works in statement at completion.

1 However, this clause shall not limit employer’s liability a under its indemnification obligations or b employer’s liability in any/some case of fraud, c deliberate default or reckless misconduct by employer

i. (Employer is in no case, liable to contractor as far as, respective provisions included within contract being complied by employer

ii. Objective for both parties is successful delivery of project to employer, respecting which, both should work together as a group

iii. Factually, loss to one party is a loss to other party to an extent project is related)

Currencies of payment-Contract price shall be paid in currency or currencies, named in appendix to tender. 1 Unless otherwise stated in particular conditions,

i. if more than one currency is so named, payments shall be made as follows-a if accepted contract amount was expressed in local currency only, b proportions or amounts of local currencies &

fixed rate of exchange to be used for calculating payments shall be as stated in appendix to tender, except as otherwise agreed by both parties-

c payments & deductions under provisional sums & adjustment for changes in legislation clause shall be made inapplicable currencies & proportions &



General Contract Provisions Guidelinesd other payments & deductions under applications for interim payment certificates

shall be made in currencies & proportions as specified above- e payment of damages specified in appendix to tender

shall be made in currencies & proportion specified in appendix to tender-f other payments to employer by contractor

shall be made in currency, in which sum was expended by employer or in such currencies as agreed by both parties-

g if any/whatever amount payable by contractor to employer in a particular currency,exceeds sum payable by employer to contractor in that currency, employer may recover balance of this amount from sums otherwise, payable to contractor in other currencies &

h if no rates of exchange are stated in appendix to tender, they shall be those prevailing on base date & determined by central bank of country

i. (Employer should comply with respective provision included on contract in every regard

ii. Both parties may agree for an alternative settlement to currency issue)

Termination by employer-If contractor fails to carry out an obligation under contract,

a engineer may by notice, require contractor to make good failure & b to remedy it within a specified reasonable time.

1 Employer shall be entitled to terminate contract if contractor-a fails to comply with performance security clause or with a notice to correct-b abandon works or otherwise, plainly demonstrates intention not to continue

performance of its obligations under contract &c without reasonable excuse fails, d to proceed with, works in accordance with under commencement, delays &

suspension clause or e to comply with, a notice under rejection clause or remedial works clause, within 28

days, after receiving it, f subcontracts whole works or assigns contract without required agreement, g becomes bankrupt or insolvent, goes into liquidation, h has a receiving or an administration order made against it, i compounds with its creditors or carries business under receiver, trustee or manager

for benefits of its creditors or j if any/some act is done or event occurs, which under applicable laws, k has a similar effects to any/every of these acts or events or, l gives or offers to give directly or indirectly, m to any/some person any/some bribe, gift gratuity, commission or other thing of value

considered as an inducement or reward n for doing or forbearing to do any/some action in relation to contract or o for showing or forbearing to show, favour or disfavor to any/some person in relation

to contract- p or if any/some of contractor’s personnel, agents or subcontractor/s gives or offers to

give, directly or indirectly, q to any/some person any/some such inducement or reward as is described.



General Contract Provisions Guidelinesr However, lawful inducement & rewards to contractor’s personnel shall not entitle

terminations In any/every of these events or circumstances, t employer may upon giving 14 days notice to contractor, terminate contract & expel

contractor for site. 2 However, when case pertains bribing etc. & insolvency etc. being noticed,

a employer may by notice terminate contract immediately. 3 Employer’s election to terminate contract

a shall not prejudice any/every other right/s of employer, under contract or otherwise. 4 Contractor shall then leave site & deliver any/every required good/s

a all contractor’s documents & other design documents made by or for it to engineer. 5 However, contractor shall use its best efforts to comply immediately,

a with any/every reasonable instruction/s, included in notice for assignment of any/every subcontract,

for protection of life & property or for safety of works. 6 After termination,

a employer may complete works &/or arrange for any/some other entities to do so. 7 Employer & these entities may then use any/every goods,

a contractor’s documents & other design documents made by/or on behalf of contractor.

8 Employer shall give notice that contractor’s equipment & a temporary works shall be released to contractor at or near site.

9 Contractor shall promptly arrange their removal at risk & cost of contractor. 10 However, if by this time

a contractor has failed to make a payment due to employer, b these items may be sold by employer in order to recover this payment.

11 Any/every balance of proceed shall then be paid to contractor.

Valuation at date of termination-As soon as practicable,

a after notice of termination under termination by employer clause has taken effect, b engineer shall proceed in accordance under determinations clause c either to agree or determine value of works, goods or contractor’s documents & d any/every other sum due to contractor for works executed in accordance with contract

Payment after termination-After notice of termination under termination by employer clause, has taken effect,

1 employer may a proceed in accordance with under employer’s claims clause provision, b withhold further payments to contractor, c until cost of execution, completion & remedying of any/every defects, d damages for delay in completion if any/some & e all other costs incurred by employer, have been established & or, f recover from contractor any/every losses & damages incurred by employer &g any/every extra costs of completing works, after allowing for h any/every sum due to contractor under valuation at date of termination,



General Contract Provisions Guidelinesi after recovering any/every such losses, damages & extra costs, j employer shall pay any/every/whatever balance to contractor

Employer’s entitlement to termination-Employer shall be entitled a to terminate contract at any time/every time for employer’s convenience, b by giving notice of such termination to contractor.

1 termination shall take effect 28 days, 2 after later of dates, on which contractor receives this notice or 3 employer returns performance security. 4 Employer shall not terminate contract under this provision 5 in order to execute works itself or 6 to arrange for works to be executed by another contractor. 7 after this termination, 8 contractor shall proceed in accordance under 9 cessation of work & removal of contractor’s equipment clause & 10 shall be paid in accordance under optional termination, payment & release.

a (Termination of a contract is not a jokeb It involves many & every complexity on performance & financesc Thousands of hands are involved on projects, future of whom goes at stake by

terminationd Employer & contractor should be both pragmatic & serious to have job

successfully deliverede Rights exists on contract for both parties, but such adverse effect action should be

tried to be avoided to utmost levelf When, contractor fails to perform due to whatsoever reason, employer & engineer

are affected adverselyg Employer has to respond to all stakeholders pertaining to project statush Hold on projects, impacts on share values & further growthi Employer should also, try to digest certain issues, which could help contractor,

when certain concessions are made within employer’s capacityj Generally, disputes start on payments delayed by employer as envisaged in many

cases by contractor, which can be a result of incorrect construction of various clauses

k Sometimes, clauses are mixed at various levels say particular conditions speaks of one thing, while general conditions something else

l Contract form states one thing, while addenda tells somethingm Well, to my understanding, maturity on both parties require high degree of

pragmatism & trust that lacks in many cases, due to employment of too young senior managers on both ends

n Personal management egos should be avoided that has been practically witnessedo It is no good to earn personality or loyalty marks by creating disputes between

two partiesp Pragmatism & professionalism require, to project push ahead by serious

involvement, so that project delivery should be made timely



General Contract Provisions Guidelinesq Termination by either party is no solution as far as price & relevant clauses are

tenable Engineer & DAB should be involved on project to avoid a range of misunderstandings & possible disputes

r Should remember that once, termination is affected, it shall lead to many contract actions impacting on both parties

s Payment to contractor shall be disputed, while employer shall suffer due to drastic delay on final deliveries & operations

t Reputation of both parties shall be staked badlyu Suspension or prolonged suspension may also, result in termination, but both

parties batter agree on resumption of works, soon after, problem responsible for suspension is overcome

v Such case, may require of revision of price to certain extent or additional compensation to contractor

w Also, suggested for, while issuing or serving notice on contractor for termination after period of pre termination notice is over, detailed reasons should be incorporated with

x Comprehensive details on project including history & reasons leading to termination should be included

y In what way, financial status on project respecting contractor shall be impacted on, when immediately, works are not resumed

z Possible tentative financial claims should be listed along with body of notice text stating that all pages constitute body of notice

aa Contractor should be extended sincere advise on professional basis to resume job for avoiding all arbitrations or courts disputes)

Suspension & termination by contractor- If engineer fails

a to certify in accordance with issue of interim payment certificates or b employer fails to comply with employer’s financial arrangements or payments, c contractor may after giving not less than 21 days notice to employer, d suspend work or reduce rate of work, unless & until e contractor has received payment certificate, f reasonable evidence of payment as case may be & as described in notice.

1 Contractor’s action a shall not prejudice its entitlements to financing charges under delayed payment & b to termination under termination by contractor’s clause.

2 If contractor subsequently, a receives such payment certificate, b evidence or payment as described in above served notice, c before giving/serving a notice of termination, d contractor shall resume normal working as soon as, is reasonably practicable.

3 If contractor suffers delay &/or incurs cost, a as a result of suspending work or reducing rate of work, b contractor shall give/serve notice to engineer c to be entitled subject to under contractor’s claims d to an extension of time for any such delay clause,



General Contract Provisions Guidelinese if completion is or shall be delayed f under extension of time for completion & payment clause g for any/every such cost plus reasonable profit, which should be included in contract

price. 4 After receiving this notice,

a engineer shall proceed in accordance with under determinations clause b either to agree or determine these matters.

5 Contractor shall be entitled to terminate contract if-a contractor does not receive reasonable evidence within 42 days, b after giving notice under contractor’s entitlements c to suspend works in respect of d failure to comply with employer’s financial arrangements-e engineer fails within 56 days, f after receiving a statement & supporting documents g to issue relevant payment certificate-h contractor does not receive amount due i under an interim payment certificate within 42 days, j after expiry of time stated under payment clause, k within which payment is to be made l except for deductions in accordance with employer’s claims-m employer substantially, fails to perform its obligations under contract-n employer fails to comply with contract agreement clause & assignments clause-o prolonged suspension effects whole works as described in prolonged suspension

clause-p employer becomes bankrupt or insolvent or goes into liquidation, q has a receiving or administration order r made against it, s compounds with its creditors or t carries on business under a receiver, trustee or manager for benefit of its creditors oru if any/every act is done or event occurs, v which under applicable laws, has a similar effect to any/every of these acts or events. In any/every of these events or circumstances, contractor may upon giving 14 days notice to employer, terminate contract.

6 However, in case of prolonged suspension of works or employer’s insolvency, contractor may by notice, terminate contract immediately.

7 Contractor’s election to terminate contract shall not prejudice any/every other rights of contractor under contract or otherwise.

(Refer to explanation on foregoing provision)

Cessation of work & removal of contractor’s equipment- After a notice of termination under employer’s entitlement to termination/termination by contractor/optional termination, payment & release has taken effect, contractor shall promptly–a cease all further work, excepting such work, as may have been instructed by engineer for

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General Contract Provisions Guidelinesb handover contractor’s documents, plants, materials & other work, for which contractor

has received payment & c remove all other goods from site except as necessary, for safety & leave site. (Refer to explanation on foregoing provisions)

Payment on termination-After a notice of termination under termination by contractor has taken effect, employer shall promptly, a return performance security to contractor-b pay contractor in accordance with under optional termination & release clause & c pay to contractor amount of any/every loss of profit or other loss or damage sustained by

contractor, as a result of this termination (Refer to explanation on foregoing provisions)

Risks & responsibility- IndemnityContractor shall indemnify & hold harmless employer, 1 employer’s personnel, employer’s respective agents against & from

all claims, damages, losses & expenses, including legal fee & expenses, in respect of a bodily injury, sickness, disease or death of any/some person, whatsoeverb arising out of or in course of or by reason of contractor’s designc if any/some, execution of works & remedying of any/every defects, d unless attributable to any/some negligence, e willful act or breach of contract by employer, employer’s personnel or f any/some of employer’s respective agent &g damage to or loss of any/some property, real or personal, h other than works to extent that such damage or loss

i. arises out of or in course of or by reason of ii. contractor’s design if any/some, execution & completion of works &

iii. remedying of any/every defects & iv. is attributable to any/some negligence, v. willful act or breach of contract by contractor, contractor’s personnel or

vi. contractor’s respective agents or anyone/someone directly or indirectly, vii. employed by any/some of them

1 Employer shall indemnify & hold harmless contractor, contractor’s personnel or contractor’s respective agents, against & from all claims, damages, losses & expenses including legal fee & expenses in respect of a bodily injury, sickness, disease or death, which is attributable to b any/every negligence, willful act or breach of contract by employer, c employer’s personal or employer’s respective agents & d matters, for which liability, may be excluded from insurance cover, e as described in insurance against injury to persons & damage to property clause

i. (In fact both parties on contract are bound by respective rights, duties. Obligations, responsibilities, accountability & liability pertinent to contract & to project performance



General Contract Provisions Guidelinesii. Should both parties affect respective roles sincerely, project would move

smoothly, from commencement to deliveryiii. But, practically, idealism does not exist on majority of projects, due to each

party’s interests involved along with making profit targetsiv. Issue is too simple to define that contractor has to deliver required project, while

employer has to receive delivery after making paymentsv. Professional relation works as if one is a shopkeeper & other is a customer

vi. Why should then disputes erupt?vii. Disputes erupt because of misunderstandings, miss-concepts misinformation,

incorrect interpretation of contract requirements, misrepresentations on contracts etc.)

Contractor’s care of worksContractor shall take full responsibility

a for care of works & goods from commencement date, until taking over certificate is issued or is deemed to be issued, under taking over of works & sections clause for works, when responsibility for care of works shall pass to employer.

1 if a taking over certificate is issued or a is so deemed to be issued for any/some/every section or part of works, b responsibility for care of section or part of work shall pass to employer. c after responsibility has accordingly, passed to employer, d contractor shall take responsibility for care of any/every work, e which is outstanding on date stated in taking over certificate, f until this outstanding work has been completed.

2 If any/certain loss or damage happens to works, a goods or contractor’s documents during period, b when contractor is responsible for their respective care c from any/every cause not listed in under employer’s risks clause, d contractor shall rectify, whatever loss or damage at contractor’s risk & cost, e so that works, goods or contractor’s documents, conform to contract

requirements. 3 Contractor shall be liable for any/every loss or damage,

a caused by any/every action performed by contractor, b after taking over certificate has been issued.

4 Contractor shall also, be liable for any/every loss or damage, a which occurs after taking over certificate has been issued, b while such loss or damage arose from a previous event, for which contractor was

responsible.i. (Contractor is contractually, responsible to carry out works incompliance

with contract documents, standards & fully compliance with specificationsii. Also, contractor is responsible to take full care of all works in all respects,

until delivered at taking over certification timeiii. During defects liability period as well, adequately, required care of works

should be affected)



General Contract Provisions GuidelinesEmployer’s risksProject state referred to consequences of employer’s risks area war, hostilities, war whether be declared or not declared,

invasion act of foreign enemiesb rebellion, terrorism, revolution, insurrection, military or

usurped power or civil war within countryc riot, commotion or disorder within country by persons

other than contractor’s personnel & other employees of contractor & subcontractorsd munitions of war, explosive materials, ionizing radiation or radioactivitye pressure waves caused by aircrafts or other aerial devices

travelling at sonic or supersonic speedsf use of occupation by employer of any/some part of permanent works,

except as may be specified in contractg design of any/every part of work by employer’s personnel or

by others, for whom employer is responsible &h any/every operation of forces of nature, which is unforeseeable or against which,

an experienced contractor could not reasonably, have been expected to have taken adequate preventative precautions.

Consequences of employer’s risks- If & to extent that any/every of risks listed above, a results in loss or damage to works, goods or contractor’s documents,

contractor shall promptly, give notice to engineer & would rectify this loss or damage to extent required by engineer.

1 If contractor suffers delays &/or incurs cost from rectifying this loss or damage, contractor shall give further notice to engineer to be entitled to contractor’s claims to a an extension of time for any/every such delay if completion is or shall be delayed

under extension of time for completion clause & b payment of any/every such cost, which should be included in contract price

in case of occupancy use by employer or design by employer personnel as indicated in foregoing provisions, under employer’s risks clause, with reasonable profit on cost shall also, be included.

2 After receiving this further notice, a engineer shall proceed in accordance with, under determinations clause b either to agree or determine these matters

i. (As explained previously within foregoing, on contracts both parties do remain responsible for all aspects respective roles

ii. Definitions of certain roles pertinent risks described are common everywhereiii. Main risks are investigated on plants facilities project, which always are

susceptible to spread of fire due to many reasoniv. Designs prepared for installation may not be adequate risking plants failures &

risking human livesv. Many facilities have been noticed catching fires, which could not be extinguished

for many days



General Contract Provisions Guidelinesvi. All such requirements must be fulfilled under contract at initial consideration

stagesvii. All other risk should be in depth studied for proper solutions)

Intellectual & industrial property rights- In this provision ‘infringement’ meansa an infringement or alleged infringement of any/every patent, registered design, copyright,

trademark, trade name, trade secret or other intellectual or industrial property right, relating to works &

Claims means a a claim or proceedings pursuing a claim, alleging infringement.

1 Whenever a party does not give notice to other party of any/every claim, within 28 days of receiving, first party shall be deemed to waive any/every right to indemnify, under this provision.

2 Employer shall indemnify & hold contractor harmless against & from any/every claim alleging an infringement, a which is or was an unavoidable result of contractor’s compliance with contract orb a result of any/every works being used by employer for a purpose, other than that

indicated by or c reasonably to be inferred from contract or in conjunction with anything not supplied

by contractor, d unless such use was disclosed to contractor, prior to base date or is stated in contract.

3 Contractor shall indemnify & hold employer harmless a against & any other claim, which arises out of or in relation to b manufacture, use, sale or import of any/every goods or any/every design for which

contractor is responsible. 4 If a party is entitled to be indemnified under this provision,

a indemnifying party may at its cost, conduct negotiations for settlement of claim orb any/every litigation or arbitration, which may arise from it.

5 Other party shall at request & cost of indemnifying party, assist in contesting claim. 6 This other party & its personnel shall not make any admission,

a which might be prejudicial to indemnifying party, b unless indemnifying party failed to take over conduct of any/every negotiations,

litigation or arbitration, upon being requested to do so, by such other party.i. (All intellectual properties are governed under relevant copy right acts, design

act, patent act, publication act etc. in force in country of workii. Design rights apply on designs such as drawings & details

iii. Copy rights apply on literary works, such as specificationsiv. Whatever operational research resulting documents are governed under copy

right as well as publication rightsv. Materials of proprietary value are governed under patents

vi. All such rights require regards as well as due legal protectionvii. Licenses may be procured from right owner based on payment of royalty or

otherwise, if so required by licenser)



General Contract Provisions GuidelinesLimitation & liability-a neither party shall be liable to other party for loss of use of any/every work, b loss of profit, loss of any/certain contract or for any/some indirect or consequential loss

or damage, c which may be suffered by other party in connection with contract, other than under

payment on termination clause & indemnities clause. 1 Total liability of contractor to employer, under or in connection with contract, other than

a electricity, water & gas, b employer’s equipment & free equipment materials clause, c indemnities clause, d intellectual & industrial properties rights clause e shall not exceed sum stated in particular conditions or f if sum is not stated, g accepted contract amount.

2 Clauses shall not limit liability in any/whatever case of fraud, deliberate default or a reckless misconduct by defaulting party

Insurance- Insuring party means a for each type of insurance party responsible for effecting & maintaining insurance,

specified in relevant insurance clause. 1 Whenever contractor is insuring party,

each insurance shall be affected with insurers, in terms approved by employer. 2 Such terms shall be consistent with any/every terms agreed by both parties,

before date of letter of acceptance. 3 Such agreement of terms shall take precedence over provisions of this clause. 4 Wherever, employer is an insuring party, each insurance shall be affected with insurers in

terms consistent with details annexed to particular conditions.5 If a policy is required to indemnify joint insured, cover shall apply separately,

to each insured, as though a separate policy had been issued for each of joint insured. 6 If a policy indemnifies additional joint insured namely,

a in addition to insured specified in this clause, b contractor shall act under policy on behalf of such additional joint insured, c except that employer should act for employer’s personnel, d while additional joint insured shall not be entitled to receive payments, e directly from insurer or not to have any/every other direct dealings with insurer, f while insuring party shall require all additional joint insured to comply with

conditions stipulated within policy. 7 Each policy insuring against loss or damage shall provide for payments to be made in

currencies, required to rectify loss or damage. 8 Payments received from insurers shall be used for rectification of loss or damage.9 Relevant insuring party shall within respective period stated in appendix to tender,

calculated from contract commencement date, submit to other partya evidence that insurances described in this clause have been effected & b copies of policies for insurances, described under insurances for works & contractor’s

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General Contract Provisions Guidelinesc insurance against injury to personnel/persons & damage to property clause, d when each premium is paid, insuring party shall submit evidence for payment to other

party.10 Whenever, evidence or policies are submitted, insuring party shall also, give notice to

engineer. 11 Each party shall comply with conditions stipulated within each of insurance policies. 12 Insuring party shall keep insurers informed of any/every relevant changes to execution of

works & ensure that insurance is maintained in accordance with this clause. 13 Neither party shall make any/certain material alteration to terms of any/every insurance,

without prior approval from other party. 14 If an insurer makes or attempts to make any/certain alteration, party first notified by

insurer shall promptly, give notice to other party. 15 If insuring party fails to effect & keep in force any/every of insurances,

a it is required to effect & maintain under contract provisions or b fails to provide satisfactory evidence with copies of policies in accordance with under

this provision, c other party may at its option & without prejudice to any/every other right or remedy,d effect insurance for remedial coverage & pay premiums due.

16 Insuring party shall pay amount of such premiums to other party, respecting which contract price shall be adjusted accordingly.

17 Nothing in this clause limits obligations, liabilities or responsibilities of contractor or employer, under other terms of contract or otherwise.

18 Any/every amount not insured or not recovered from insurers shall be borne by contractor &/or employer in accordance with undertaken obligations, liabilities or responsibilities.

19 However, if insuring party fails to effect & keep in force an insurance, a which is available & b which, it is required to effect & maintain under contract & c other party neither approves omission nor effects insurance for coverage relevant to

this default, d any/all moneys, which should have been recoverable, under this insurance e shall be paid by insuring party.

20 Payment by one party to other party shall be subject to under employer’s claims clause or under contractor’s claims clause, as applicable.

21 Insurance for works & contractor’s equipment- Insuring party shall insure works, a plant, b materials & c contractor’s documents d for not less than full reinstatement cost e including cost of demolition, f removal of debris, g professional fee & profit.

22 This insurance shall be effective from date by which, a evidence is to be submitted, under general requirements for insurances clause, b until date of issue of taking over certificate for works.



General Contract Provisions Guidelines23 Insuring party shall maintain this insurance to provide cover,

a until date of issue of performance certificate b for loss or damage for which contractor is liable c arising from a cause occurring, d prior to issue of taking over certificate & e for loss or damage caused by contractor in course of any/every other operations f including those, under defects liability clause.

24 Insuring party shall insure contractor’s equipment a for not less than full replacement value, including delivery to site.

25 For each item of contractor’s equipment, a insurance shall be effective, b while it is being transported to site & c until it is no longer required as contractor’s equipment.

26 Unless otherwise stated in particular conditions, insurances under this clause-a shall be effected & maintained by contractor as insuring party- b shall be issued in joint names of parties, c who should be jointly, entitled to receive payments from insurers, d payments being held or allocated between parties, for sole purpose of rectifying loss

or damage-e shall cover all loss or damage from any/every cause, not listed in employer’s risks

clause-f shall also, cover loss or damage to a part of works, g which is attributable to use or occupation by employer of another part of works &h loss or damage from risks listed in employer’s risks clause, i excluding in each case risks, which are not insurable at commercially, reasonable

terms, j with deductible at each/per occurrence of not more than amount stated in appendix to

tender k if an amount of deductibles is not so stated, such provision shall not apply & l may however exclude loss of, damage to & reinstatement of-m a part of works, which is in a defective condition due to a defect in its design,n materials or workmanship, o but cover shall include any/every other part/s, p which are lost or damaged, as a direct result of this defective condition & q not as described as explained further-r a part of work/s, which is lost or damaged in order to reinstate any/every other part of

works,s if this other part is in a defective condition, due to a defect in its design, materials or

workmanship- t a part of works, which has been taken over by employer, except to extent that

contractor is liable for loss or damage &-u goods, while they are not available in country, subject to under plant & materials

intended for works clause. 27 If so required, during more than one year, after base date, cover described above for loss

or damage ceases to be available at commercially, reasonable terms, a contractor shall as insuring party, give notice to employer with supporting particulars.



General Contract Provisions Guidelines28 Employer shall then be entitled subject to under employer’s claims,

a to payment of an amount equivalent to such commercially, reasonable terms as contractor should have expected to have paid for such cover &-

b be deemed, unless it obtains cover at commercially, reasonable terms to have approved omission under general requirements for insurances clause.

29 Insurance against injuries to persons & damage to property- a insuring party shall ensure against each person’s liability for any/every loss, damage,

death or bodily injury, b which may occur to any/every physical property, c except things insured under insurance for works & contractor’s equipment clause ord to any/every person, except persons insured under insurance for contractor’s

personnel clause,e which may arise out of contractor’s performance of contract & occurring, before issue

of performance certificate. f Insurance shall be arranged /ensured for a limit per occurrence of not less than

amount stated in appendix to tender, with no limit on number of occurrences. 30 If an amount is not stated in appendix to tender, this clause shall not apply. 31 Unless otherwise stated in particular conditions, insurance specified in this clause-

a shall be effected & maintained by contractor as insuring party-b shall be issued in joint names of parties-c shall be extended to cover liability for all loss & damage to employer’s property, d except things insured under insurance for works & contractor’s equipment clause, e arising out of contractor’s performance of contract & - f may however, exclude liability to extent that it arises from, g employer’s right to have permanent works executed on, over, under, in or through

any/every land & h to occupy this land for permanent works, i damage, which is an unavoidable result of contractor’s obligations to execute works

& remedy any/every defect/s & a cause listed under employer’s risks, j except to an extent that cover is available at commercially, reasonable terms.

32 Contractor shall effect & maintain insurance against liability of claims, damages, losses & expenses, including legal fees & expenses, arising from injury, sickness, disease or death of any/every person, employed by contractor or any/every other of contractor’s personnel.

33 Employer & engineer shall also, be indemnified, under policy of insurance, except that this insurance may exclude losses & claims to extent that they arise from any/every act or neglect of employer or of employer’s personnel.

34 Insurance shall be maintained in full force & effect, during whole time that all involved personnel are assisting in execution of works.

35 For a subcontractor’s employees, insurance may be affected by subcontractor, but contractor shall be responsible for compliance with this clause.a (Contractually, each & every person should be covered by third party insurance all

time from commencement of project to completion of projectb Cover may be either affected on an individual basis or on group insurance basisc Engineers shall not allow persons to work onsite without insurance cover,

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General Contract Provisions Guidelinesd All equipment & areas shall also, be required to be ensured from all expected riskse All vehicles, transports, equipment available onsite or procurable shall be insured

accordingly, with reasonable full costf Parties may face heavy liabilities, in absence of insurance, when it mishaps onsiteg Engineer has authority on its role to stop works in absence of required insurance

cover)

Force Majeure-a means an exceptional event or circumstance- b which is beyond a party’s control-c which such party, could not reasonably, have provided against, before entering into

contract-d which having arisen, such party could not reasonably, have avoided or overcome &

which is not substantially, attributable to other party. Definitions for referencea Force majeure may include, but is not limited to, exceptional events or circumstances of

kind listed below, so long as conditions indicated in foregoing are satisfied. 1 war hostilities whether or not, war be declared, invasion, act of foreign enemies-2 rebellion, terrorism, revolution, insurrection, military or usurped power or civil war- 3 riot commotion, disorder, strike or lockout by persons, other than contractor’s personnel

& other employees of contractor’s or subcontractors-4 munitions of war, explosive materials, ionizing radiations or contamination by

radioactivity, except as may be attributable to contractor’s use of such munitions, explosives, radiation or radioactivity &-

5 natural catastrophes, such as earthquake, hurricane, typhoon or volcanic activity.

Notice of force majeure- If a party is or shall be prevented from performing any/every of its obligations, a under contract by force majeure b then it shall give notice to other party of event or circumstances, c constituting force majeure, d specifying obligations, performance of which, is or shall be prevented.

1 Notice shall be given within 14 days, after party became aware or should have become aware of relevant event of circumstances, constituting force majeure.

2 Party shall having given notice, be excused performance of such obligations for so long as such force majeure, prevents it from performing them.

3 Notwithstanding any/every other provision of this clause, force majeure shall not apply to obligations of either party to make payments to other party under contract.

Duty to minimise delay- 1 each party shall all times, use all reasonable endeavours to minimize any/every delay in

performance of contract, as a result of force majeure.

Consequences of force majeure-



General Contract Provisions Guidelinesa if contractor is prevented from performing any/every of its obligations under contract by

force majeure, b of which notice has been given under notice of force majeure clause & c suffers delay &/or incurs cost by reason of such force majeure, d contractor shall be entitled subject to under contractor’s claims clause e to an extension of time for any/every such delay, if completion is or shall be delayed

under extension of time for completion clause &f if event or circumstances of kind described, under definition of force majeure, occurs in

country, payment of any/every such cost. 1 After receiving this notice, engineer shall proceed in accordance with, under

determinations clause, either to agree or determine these matters.

Force majeure effecting subcontractor- 1 if any/every subcontractor is entitled under any/every contract or agreement relating to

works to relief from force majeure, on terms additional to or broader than those specified in clause,

2 such additional or broader force majeure events or circumstances shall not excuse contractor’s non performance or entitle him to relief under this clause.

Optional termination payment & release- a if execution of substantially, all works on progress is prevented for a continued period of

84 days by reason of force majeure, b of which notice has been given under notice for force majeure clausec or for multiple periods, d which total to more than 140 days due to same notified force majeure e then either party may give to other party a notice of termination of contract.

1 In this event, termination shall take effect 7 days, after notice is given/served &2 contractor shall proceed in accordance with under cessation of works & removal of

contractor’s equipment clause.3 Upon such termination, engineer shall determine value of works done & 4 issue a payment certificate, which shall include–5 amounts payable for any/every work carried out for which, a price is stated in contract-6 cost of plant & materials ordered for works, 7 which have been delivered to contractor or of which, 8 contractor is liable to accept delivery, 9 which plant & materials shall become property of & be at risk of employer,10 when paid for by employer & 11 contractor shall place same at employer’s disposal-12 any/every other cost or liability, which in circumstances, was reasonably, incurred by

contractor in expectation of completing works- 13 cost of removing temporary works & contractor’s equipment from site & 14 return of these items to contractor’s works in its country or to any/preferred other

destination at no greater cost &- 15 cost of repatriation of contractor’s staff & labour employed, 16 wholly, in connection with works at date of termination. of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelines

Release from performance under law- 1 notwithstanding any/every other provision of this clause, 2 if any/certain event or circumstance outside control of parties including, but not limited to

force majeure, 3 arises, which makes it impossible or unlawful for either or both parties to fulfill its or

repective contractual obligations or 4 which, under law governing contract, entitles parties to be released from further

performance of contract 5 then upon notice by either party of such event or circumstance-6 parties shall be discharged from further performance, 7 without prejudice to rights of either party in respect of any/every previous breach of

contract &- 8 sum payable by employer to contractor shall be same, as would have been payable under

optional termination, payment & release clause 9 if contract had been terminated under optional termination clause.

a (Description provisions pertinent force majeure are self explanatory as indicated in foregoing provisions

b Since, force majeure occurrence is in control of neither party, it should be viewed in that respect only, while project interest should be served to best possible requirementsrequirement can force project to be stopped temporarily for affected duration, which makes it essential for parties to have cordial professional working relations, so that project is secured

c No hostilities last too long, which status requires resumption of project working soonest post extinction of force majeure

d Certain force majeure such as floods do not continue for months, but for weeks onlye Therefore, due care & consideration should be given to class of force majeuref Employer should compensate contractor on good consideration so that contractor is

compensated minimum, but reasonableg Force majeure should not be made as an issue for money claims for sake of making

moneyh Termination of project, should be preferred as last step only, when there is no

opportunity for project to be reinitiated at all for many months or even for yearsi Contractor should demand only, reasonable dues from employer in case of force

majeure termination on pattern of optional termination)

Claims, disputes & arbitration- If contractor considers itself entitled to any/every extension of time for completion & a or any/every additional payment, under any/relevant clause of these conditions or b otherwise, in connection with contract, c contractor shall give notice to engineer, d describing event or circumstances giving rise to claim.

1 Notice shall be given as soon as, practicable & not later, than 28 days, a after contractor becomes aware or should have become aware of event or

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General Contract Provisions Guidelines2 If contractor fails to give notice of a claim, within such period of 28 days,

a time for completion shall not be extended, b contractor would not be entitled to additional payment & c employer could be discharged from all liabilities in connection with claim, d otherwise following provision of this clause shall apply.e Contractor shall also, submit any/every other notices, f which are required by contract & supporting particulars for claim, g all as relevant to such event or circumstance.

3 Contractor shall keep such contemporary records, a as may be necessary to substantiate any/every claim, b either on site or at any/certain other location acceptable to engineer.

4 Without admitting employer’s liability, engineer may, a after receiving any/every notice under this clause, b monitor record keeping & or instruct contractor to keep further contemporary

records. 5 Contractor shall permit engineer to respect all these records &

a should if instructed, submit copies to engineer. 6 Within 42 days, after contractor becomes aware or should have become aware or

event or circumstance, a giving rise to claim or within such other period, as may be proposed by contractor

& approved by engineer, b contractor shall send to engineer a full detailed claim, c which includes full supporting particulars of basis of claim & d extension of time & e or additional payment claimed.

7 If event or circumstance giving rise to claim has a continuing effect- a this fully detailed claim shall be considered interim-b contractor shall send further interim claims at monthly intervals, c giving accumulated delay &/or amount claimed & d such further particulars, as engineer may reasonably require &-e contractor shall send a final claim within 28 days, after end of effects resulting

from event or circumstance or f within such other period as may be, proposed by contractor & approved by

engineer. 8 Within 42 days, after receiving a claim or any/every further particulars supporting a

previous claim ora within such other period as may be proposed by engineer & approved by

contractor,b engineer shall respond with approval or with disapproval & detailed comments.

9 Engineer may also, request any/every necessary further particulars, a but shall nevertheless, give its response on principles of claim within such time.

10 Each payment certificate shall include such amounts for any/every claim, as have been reasonably, substantiated as due under relevant provisions of contract.

11 Unless & until particulars, supplied are sufficient to substantiate whole claim,a contractor shall only, be entitled to payment of such part of claim, as it has been

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General Contract Provisions Guidelines12 Engineer shall proceed in accordance with, under determinations clause, either to

agree or determine, a extension if any/every, for time of completion & additional payment if any/every,

to which contractor is entitled under contract. 13 Requirements of this clause are in addition to those of any/every other clause, which

may apply to a claim. 14 If contractor fails to comply with this or another clause, in relation to any/every

claim,a Any/every extension of time &/or additional payment shall take account of extent

if any/every, b to claim, unless claim is excluded, under not operating by contractor clause of

giving notice within 28 days c regarding intention to raising claim, for extension of time of completion &

relevant payment. i. (Significantly, contractor’s agent must be very careful, while dealing with

contractual matters, since incorrect implications or missing operations pertinent various relevant provisions can mar, propositions

ii. Extension of time additional amount by virtue of its impact is a contractual right that should not be ignored

iii. Every day is valuable on contracts due to continuous probable impactiv. A prudent representative shall not allow any time or money go waste because

of no actionsv. Representative must send timely reports& pre claim submission notices to

engineer with prescribed period & discuss with resident engineer or engineer about detailed submission

vi. Al records pertinent to such claims should be affected with authentic documentation

vii. All records references should be copied to resident engineer for information & response

viii. It shall be too easy for contractor to file claims for considerations, when supported by consistent documentation, which does not require further explanations

ix. It should also, be remembered that at stage of claims considerations, neither resident engineer nor contractor’s agent may be available on project, but documents shall speak to justify claims propositions & that is what contract management demands from professionals)

Appointment of disputes adjudication board DAB- a Disputes shall be adjudicated by DAB in accordance with, under obtaining disputes

adjudication board’s decision clause. 1 Parties shall jointly appoint a DAB by date stated in appendix to tender. 2 DAB shall comprise, as stated in appendix to tender, either one or three suitably qualified

persons/members. 3 If number is not so stated in appendix to tender as well as, parties also, do not agree

otherwise, DAB shall certainly comprise of three persons.



General Contract Provisions Guidelines4 If DAB is to comprise of three persons, each party shall nominate one member for

approval by other party. 5 Parties shall consult both nominated & approved members, to agree upon nomination of a

third member, who should be appointed to act as DAB chairman. 6 However, a list of potential members may be included, within contract provisions from

which, nomination of respective members shall be selected other than someone, who is unable or unwilling to accept appointment to DAB.

7 Agreement between parties & either sole member or each of three members, including remuneration of any/every expert, whom DAB could consults shall be mutually agreed upon by parties, when agreeing to terms of appointments.

8 Each party shall be obliged to be responsible for paying one half of required remuneration.

9 If at any/every time, parties so agree, they may jointly refer a matter to DAB for its consideration to give its opinion.

10 Neither party shall consult DAB on any/certain matter, without agreement of other party. 11 If at any/every time parties so agree, they may appoint a suitably qualified person or

persons to replace or to be available to replace, anyone/someone or to add more members to DAB.

12 Unless parties agree otherwise, appointment shall come into effect if a member declines to act or is unable to act as a result of death, disability, resignation or termination of appointment.

13 If any/some of defined circumstances occur/s & no such replacement is available, a replacement shall be appointed in same manner, as replaced person was required to have been nominated or agreed upon as described in this clause.

14 Appointment of any/some member may be terminated by mutual agreement of both parties, but not by employer or contractor acting alone.

15 Unless otherwise agreed by both parties, appointment of DAB, including each member shall virtually/automatically expire, when discharge referred to under discharge clause shall have become effective.

Failure to agree DAB- a If any/some of following conditions apply namely-1 parties fail to agree upon appointment of sole member of DAB by date stated for

appointment of DAB in accordance to provision on appendix to tender-2 either party fails to nominate a member for approval by other party of a DAB of three

persons by such date-3 parties fail to agree upon appointment of third member to act as chairman of DAB by

such date or-4 parties fail to agree upon appointment of a replacement person within 42 days, after date

on which, sole member or one of three members declines to act or is unable to act as a result of death, disability, resignation or termination of appointment.

5 Then appointing entity or official named in appendix to tender shall upon request of either or both parties & after due consultation with both parties, appoint this member of DAB.

6 This appointment shall be considered final & conclusive.



General Contract Provisions Guidelines7 Each party shall be responsible for paying one half of remuneration of appointing entity

or official.

Obtaining DAB’s decisions- a if a dispute of any/every kind whatsoever, b arises between parties in connection with or arising out of contract c or execution of works including any/every dispute as to d any/every certificate, determination, instruction, opinion or valuation of engineer, e either party may refer dispute in writing to DAB for its decision, with copies to other

party & engineer.

1 Such reference shall state that it is given ‘under this clause’/ provision. 2 For DAB of three persons, DAB shall be deemed to have received such reference on date,

when it is received by chairman of DAB. 3 Both parties shall make available to DAB, all such additional information, further access

to site & appropriate facilities, as DAB may require for purposes of making a decision on such disputes.

4 DAB shall be deemed to be not acting as arbitrator/s. 5 Within 84 days, after receiving such reference or within such other period as may be

proposed by DAB & approved by both parties, DAB shall give its decision, which should be reasoned & state that it is given under provision of this clause.

6 Decision shall be binding on both parties, who should promptly give effect to it, unless & until, it is revised as either an amicable settlement or an arbitral award as described.

7 Unless contract has already been abandoned, repudiated or terminated, contractor shall continue to proceed with works in accordance with contract.

8 If either party is dissatisfied with DAB’s decision, dissatisfied party may within 28 days after receiving decision, give notice to other party of its dissatisfaction.

9 If DAB fails to give its decision within period of 84 days or as otherwise approved, after receiving such reference, either party within 28 days, after this period has expired, give notice to other party of dissatisfaction.

10 In either event, this notice of dissatisfaction shall state that it is given under this provision/clause & a shall set out matter in disputes giving reasons for dissatisfaction, except as stated

under failure to comply with DAB’s decisions clause & under expiry of DAB’s clause,

b neither party shall be entitled to commence arbitration of a dispute, unless a notice of dissatisfaction has been given in accordance with this provision clause.

11 If DAB has given its decision as to a matter in dispute to both parties & no notice of dissatisfaction has been given by either party within 28 days, after it received DAB’s decision, a decision shall become final & binding on both parties.

Amicable settlement- 1 where notice of dissatisfaction has been given under DAB provisions above, 2 both parties shall attempt to settle dispute amicably, before commencement of arbitration. 3 however, unless both parties agree otherwise, of 94 2012 Int. P Eng Suraj

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General Contract Provisions Guidelines4 arbitration may be commenced on or after 56th day, after day on which notice of

dissatisfaction was given, even if no attempt for amicable settlement has been made-

Arbitration-a unless settled amicably, b any/every dispute in respect of which, DAB’s decision if any/some, c has not become final & binding d shall be finally settled by international arbitration.

1 Unless otherwise agreed by both parties-a dispute shall be finally settled under rules of arbitration under international chambers

of commerce-b dispute shall be settled by three arbitrators appointed in accordance with these rules

&-c arbitration shall be conducted in language for communications, defined under law &

language clause.2 arbitrator/s shall have full powers to open up, review & revise

a any/every certificate, determination, instruction, opinion or valuation of engineer & any/every decision of DAB relevant to dispute.

3 Nothing shall disqualify engineer from being called as a witness & a giving evidence before arbitrators on any/every matter, whatsoever relevant to

dispute. 4 neither party shall be limited in proceedings before arbitrators to

a evidence or arguments previously, put before DAB to obtain its decision or to reasons for dissatisfaction given in notice of dissatisfaction.

5 Any/every decision of DAB shall be admissible in evidence in arbitration. 6 Arbitration may be commenced prior to or after completion of works.

a Obligations of parties, engineer or DAB shall not be altered by reason of any/every arbitration being conducted during progress of works.

Failure to comply with DAB’s decision- 1 in event that-2 neither party has given notice of dissatisfaction within stated period under obtaining

DAB’s decisions clause-DAB’s related decision if any/every has become final & binding &

3 a party fails to comply with this decisions. 4 Other party may without prejudice to any/every other rights it may have, refer failure

itself to arbitration under arbitration clause. 5 Obtaining DAB’s decision clause & amicable settlement clause shall not apply to this

reference.

Expiry of DAB’s appointment- 1 if a dispute arises between parties in connection with or arising out of contract or

execution of works & 2 there is no DAB in place, whether by reason of expiry of DAB’s appointment or

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General Contract Provisions Guidelines3 obtaining DAB’s decision & amicable settlement clause shall not apply &-4 dispute may be referred directly to arbitration under provision of arbitration clause

a (On major projects of complex nature, it is suggested that presence of DAB be encouraged to save valuable time for both parties to contract

b Employer &owner should devote respective roles on project management rather than on following disputes up

c Disputes may not be avoided in many cases due to whatever reason, but should be resolved at an earliest in interest of projects

d In past decades, only contractual position for contract administration & management had been that of Engineer, whose professional role has already been defined elsewhere

e Disputes were resolved by reference to engineer for time being even if, parties were dissatisfied, which later could be referred further to arbitration

f Keeping in consideration, experience related to disputes, a concept has been added to designate one additional authority by name DAB (Disputes Adjudication Board) being contractual in performance on contract at third party or independent level financed equally by both parties on to contract

g DAB after being appointed, is involved on project on a regular basis, though not dedicated

h Only, joint references respecting disputes or to deliver opinion of contractual & professional issues, can be requested for decisions

i DAB cannot advise a single party without approval by other partyj DAB requires to be updated regularly by contracting partyk All major decisions by engineer as well as both parties are often copied to DABl All updated project documents/records are copied to DABm All minutes of meeting & progress reports are copied to DABn DAB members are professionally experts, whose services can be utilized to project’s

besto In case, decision delivered by DAB is not acceptable to wither party, it remain

disputed, but work does not stopp Disputes can be referred to arbitration later, who shall consider further actions on

proceedingsq DAB is not an arbitrator, but an independent professional support to both parties)
