CVE511 Engineering Quantities, Specifications and Contract 2 units

Synopsis
 Professional and legal relationship in preparation of working drawings
 Specification and bill of quantities
 Types of contracts, contract documents
 Advertisement and administration of tenders
 Awards of contracts
 Payments to contractors and consultants.

Content
1.0 Working Drawing
1.1 Client for building design and construction
1.2 The Traditional Roles of Professional Team Members
1.3 Consultant team for design and construction
1.4 Lead consultant for building design
1.5 Structural engineer
1.6 Cost consultant
1.7 Construction contractor
1.8 Sub-contractor
2.0 Statements of Work, Services and Technical Specifications
2.1 Technical Specification for construction
2.2 Types of specifications
2.3 Specification writing
2.4 Bill of quantities BOQ
2.5 Preparing bills of quantities
2.6 Approximate bill of quantities
3.0 Contract
3.1 Classification of Contract
3.2 Types of contracts
3.3 Contract Documents
4.0 Tender documentation for construction projects
4.1 Advertisement for Bids (Notice to Contractors, or Invitation to Bid)
4.2 Clarification
4.3 Submission
4.4 Programme
4.5 Settlement
4.6 Choosing the Contractor
4.7 Paying the Contractor
4.8 Calculating the Cost
4.9 The Duration of the Contract
4.10 Site Supervision
4.11 Construction Period
4.12 Schedule of Execution
4.13 Handover of the Completed Development
4.14 Monitoring Construction Process
5.0 PUBLIC-PRIVATE PARTNERSHIPS (PPP)
5.1 PARTNERING
5.2 Provisional sum
5.3 Prime cost sum
5.4 Contract sum
5.5 Contract sum analysis
5.6 Budget
6.0 As-built Drawings and Record Drawings

1.0 Working drawing

Working drawings provide dimensioned, graphical information that can be used by a contractor to construct the works, or by suppliers
to fabricate components of the works or to assemble or install components.
They may include:
Architectural drawings, structural drawings, civil drawings, mechanical drawings, electrical drawings, and so on.
Traditionally, working drawings consist of 2 dimensional orthogonal projections of the building or component they are describing,
such as plans, sections and elevations. These may be drawn to scale by hand, or prepared using Computer Aided Design (CAD)
software. However, increasingly, building information modelling (BIM) is being used to create 3 dimensional representations of
buildings and their components for construction. This may be described as a virtual construction model (VCM) and can comprise a
number of different models prepared by different members of the project team.
Working drawings may include title blocks, dimensions, notation and symbols. It is important that these are consistent with industry
standards so that their precise meaning is clear and can be understood.
Specification information can be included on working drawings or in a separate specification, but information should not be
duplicated as this can become contradictory and may cause confusion.
The scale at which drawings are prepared should reflect the level of detail of the information they are required to convey. Different
line thicknesses can be used to provide greater clarity for certain elements.
It is important that the purpose of the drawings and the people that will use them are considered. Working drawings might be prepared
for; statutory approvals, for contractors to plan the construction works, to provide instructions on site, for the procurement of
components, for the preparation of shop drawings, for the appointment of subcontractors and so on.
Drawings must be structured carefully so that they convey necessary information to carry out particular parts of the works. To give
greater clarity, they may be separated into packages, so that information is specifically tailored to separate parts of the works, specific
components, or separate suppliers or trades. The quality of production information is extremely important. Unless it is prepared and
coordinated properly, there will be disputes and delays on site, and costs will be incurred.

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Common problems with working drawings include:
 Poor co-ordination of information.
 Errors and omissions.
 Information not getting to the right people.
 Poor presentation.
Responsibility for the preparation of production information will depend on the selected system of procurement and the chosen form
of contract. On traditional contracts (and management contracts and construction management contracts), production information may
be produced by a consultant team, working for the client. Some specialist elements of production information may be produced by
specialist contractors, coordinated by the lead designer. On other forms of contract, such as design and build, responsibility for
preparing and coordinating production information may lie with the main contractor.
Working drawings may be updated when the works are complete to show ‘as constructed’ information, reflecting changes to the works
that may have occurred during the construction process.
Carefully prepared working drawings can be very beautiful and the very best have been exhibited as works of art.

1.1 Client for building design and construction

The term client refers to the organisation or individual that is procuring the building development. The client is also sometimes
referred to as the 'employer' as they are the body which employs consultants, contractors and suppliers.

1.2 The Traditional Roles of Professional Team Members

The architect is responsible for the design of the buildings in terms of aesthetics and functions following the developer’s brief and
budget.
The quantity surveyor is responsible for preparing estimates of building cost, preparing the Bill of Quantities (i.e. measured
specification of materials and work to enable the contractor to submit a price) and, during construction, for preparing valuations of
work.
A clerk of works or resident engineer may carry out a full-time ‘on-site’ supervisory role.
Other members of the team can vary and may include a project manager, structural engineers, mechanical and electrical engineers.

1.3 Consultant team for design and construction

Consultants are professionals, typically, appointed to by the client to perform expert tasks on a project. This might include:
 Providing advice on setting up and defining the project.
 Developing and coordinating the design.
 Preparing production information and tender documentation.
 Contract administration.
 Inspecting the work of contractors.
The members of the consultant team that are likely to be required on most projects are:
1. Architect.
2. Cost consultant.
3. Services engineer.
4. Structural engineer.
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The client may wish to allocate the roles of lead designer and lead consultant to one or more of these consultants to co-ordinate the
work of the rest of the team. It might also be appropriate to appoint a design coordinator for the co-ordination and integration of
design prepared by specialist contractors, and an information manager for building information modelling.
During the early stages of a project, the client might appoint independent client advisers to give them independent professional advice.
They might also appoint a project manager to represent the client and take responsibility for the day-to-day management of the
project.

Other consultants who might be required on some projects include:

 Access consultant.
 Acoustic consultant.
 Approved inspector (for building regulations approvals).
 Archaeologist.
 Business management consultant.
 Client design adviser.
 Client's representative.
 Civil engineer.
 Construction manager.
 Contract administrator.
 Ecologist.
 Employer's agent.
 Employer's BIM adviser.
 Environmental consultant.
 Facilities manager.
 Fire engineering consultant.
 Furniture, fixtures and equipment (FF&E) consultant.
 Health and safety consultant.
 Information and communications technology (ICT) consultant.
 Interior designer.
 Landscape architect.
 Local consultants with specialist knowledge of local procedures, culture and so on.
 Lighting designer.
 Management contractor.
 Master planner.
 Party wall surveyor.
 Planning consultant.
 Programme consultant.

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  Public health consultant.
 Rights of light surveyor.
 Security consultant.
 Site inspector (clerk of works).
 Specialist contractor.
 Surveyor.
 Transport/traffic engineer.

For consultants to work effectively as a team they should adopt collaborative practices as early in the project as possible.

1.4 Lead consultant for building design

The lead consultant is the consultant that directs the work of the consultant team and is the main point of contact for communication
between the client and the consultant team, except for on significant design issues where the lead designer may become the main point
of contact.
The lead consultant's role might include:
 Co-ordinating, monitoring and reviewing the work of the consultant team (and others, such as specialist designers and
specialist contractors).
 Arranging consultant team meetings and planning work stages.
 Preparing programmes and progress reports.
 Seeking instructions from the client.
 Advising the client on the choice of procurement route.
 Advising the client on the need to appoint additional advisers, consultants or specialist designers.
 Establishing change control procedures at key stages, for example when the project brief is frozen or when detailed design is
frozen.
 Arranging value management exercises.
 Advising the client on the choice of contract and contract conditions.
 Assist the client in defining selection criteria for contractors and preparing pre-qualification questionnaires.
 Co-ordinating the review of tenders.

Some of these roles may appear to duplicate tasks undertaken by the project manager, however the project manager is acting as if
they were the client, whereas the lead consultant is co-ordinating the activities of the consultant team.
As the role of lead consultant involves additional services, beyond those that might be expected from a consultant that is not appointed
as lead consultant, it is important that it is discussed with consultants before they are appointed and their scope of services and fee
agreed. The client cannot assume that these services will be carried out within the agreed fee unless the role of lead consultant has
been allocated.
The lead consultant will often be the architect, however this is not necessarily the case and appointment documents for other
consultants will generally offer provision for them the be nominated lead consultant.

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1.5 Structural engineer
Structural engineers design, assess and inspect structures to ensure that they are efficient and stable. Structural engineering was
traditionally considered a sub-discipline of civil engineering, however as it has developed as an important and complex specialism it
may now be considered an engineering discipline in its own right.
Structural engineers work on a very wide range of structures, including; buildings, bridges, oil rigs, ships and aircraft. It is both a
technical and creative role that involves close collaboration with professionals from other disciplines.
The scope of services provided by a structural engineer might include:
 Site appraisals - strength of subsoil / ground.
 Geotechnical and geological investigations - loading and foundation design.
 Supervision of surveys.
 Flood analysis.
 Contributing to the preparation of briefing documents, feasibility studies and options appraisals.
 Contributing to tender documentation and assessment of tenders.
 Assessment and integration of work by specialists.
 Environmental studies.
 Investigating materials.
 Ground improvement.
 Roads, Retaining walls and Drainage.
 Foundation design, Structural design and detailing.
 Special loads.
 Fire protection to the structure.
 Demolition.
 Building regulations submissions.
 Risk assessment.
 Value management.
 Site inspection.
 Witnessing tests.
 Developing remediation solutions.
 Expert witness testimony for courts, and insurance purposes.
 Aesthetics and beauty.

Structural failure can be devastating. It is therefore important to select an individual or company that has a good track record and
experience in structurally similar projects. Suitably qualified people include Chartered and Incorporated Engineers who are members
of the Institution of Civil Engineers and/or the Institution of Structural Engineers.
It is good practice to employ a structural engineer based on the quality of their design rather than the lowest fee. A good design that
explores a wide variety of options to find the best solution can save significant cost over the design life of a building.

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1.6 Cost consultant
Typically cost consultants are quantity surveyors by profession, but accountants and other professionals can also be effective cost
consultants.
The cost consultant provides estimates, and advice regarding the cost of construction works.

The cost consultants role might include:

 Helping determine the client's requirements and undertaking feasibility studies.
 Benchmarking requirements against similar projects.
 Assessing and comparing options.
 Helping define the project budget.
 Checking developing designs against the project budget.
 Assessing value for money.
 Checking designs meet legal and quality standards.
 Undertaking risk management and value management exercises.
 Preparing cost plans, estimates and cash flow projections.
 Advising on procurement strategy.
 Advising on packaging.
 Preparing bills of quantities.
 Preparing tender pricing documents.
 Collating and issuing tender documentation.
 Assessing tenders.
 Estimating the cost of variations.
 Preparing valuation statements for interim certificates.
 Assisting with the valuation of claims.
 Preparing regular cost reports, including out-turn cost and cash flow.
 Completing the final account.

1.7 Construction contractor

In very broad terms, contractors are the organisations appointed by clients to carry out construction works. However, this apparently
simple relationship is complicated by the fact that contractors tend not to have all the trades required to construct a building in their
direct employment. This means that a contractor is likely to appoint a range of sub-contractors to build the works for which they have
been contracted.
Contractors can be appointed in a number of different ways, with varying degrees of risk and reward:
General contractor, or main contractor, often appointed under traditional contract to construct a development for which the design is
complete.
Construction manager. The construction manager manages trade contractors, but the trade contracts themselves are placed with the
client. This generally requires an experienced client. A construction manager is generally appointed early in the design process so that

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their experience can be used to improve the buildability and packaging of proposals as they develop. A construction manager may also
programme construction to begin before the design is completed. This requires careful planning of information release so that the
construction process is not delayed by lack of production information.
Management contractor. This is similar to the role of the construction manager but the trade contracts (or works contracts) are placed
with the management contractor rather than with the client.
Design and build contractor. Responsible for the completion of the design as well as construction.
Prime contractors. The client enters into a long-term multi-project relationship with a contractor in which competition is introduced at
the sub-contract level. Prime contracting is generally only appropriate for very large clients such as the Ministry of Defence which is
continually commissioning new buildings and refurbishment work.
Integrated supply team. This is favoured by the Government, and involves appointment of a full project team (including contractors,
suppliers, designers and sometimes facilities managers) to design and construct the works.
Design, build and manage contractors. The contractor is appointed not only to design and build the works, but also to manage them
during operation, sometimes providing operational services over and above building maintenance, such as supplying prison staff or
sterilisation of hospital instruments.
The contractor may also be designated the principal contractor under the CDM regulations to plan, manage and co-ordinate health and
safety while construction work is being undertaken.
Other terms used to describe contractors and sub-contractors include:
Specialist contractors.
Domestic sub-contractors.
Nominated sub-contractors.
Named sub-contractors.
Trade contractors.
Works contractors.

1.8 Sub-contractor
As buildings become increasingly complicated, so it becomes less and less likely that any one contractor will have the required skills
to carry out all of the works necessary to construct them, and it may not make good commercial sense to take on new employees for
one project that would then have to be laid off for the next.
Increasingly therefore, contractors will use sub-contractors to carry out particular elements of the works.
Elements of the works that might be awarded to sub-contractors might include; piling, roofing, cladding, civil engineering, steelwork,
plumbing, electrical services and so on.

There are three main types of sub-contractor:

1. Domestic sub-contractor: A sub-contractor selected and appointed by the main contractor.
2. Nominated sub-contractor: A sub-contractor selected by the client to carry out an element of the works. The client
negotiates a price with the nominated sub-contractor and then instructs the main contractor to appoint them for those works.
The main contractor will include the sub-contractors price as a prime cost sum in the contract sum for the main contract, to
which they add overheads, profit and attendance

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 3. Named sub-contractor: A sub-contractor for a particular package selected from a list of acceptable sub-contractors provided
by the client. Named sub-contractors are allowed for in the tender documents for the main contract in the form of a
provisional sum for which the main contractor makes allowances for mark up, attendance and programme within it’s tender
offer. Once appointed, the main contractor seeks tenders for the package from the named sub-contractors, places a sub-
contract with the successful tenderer, and the provisional sum is replaced with the tendered figure.

The use of sub-contractors enables the main contractor to undertake more complex projects whilst not unacceptably increasing their
risk, however, concerns have been expressed about the prevalence of sub-contractors because of a perception that the main contractor
has less control over the skills and training of sub-contractor employees and so there may be a negative impact on quality and health
and safety on site.
'Attendance' is the main contractor’s mark up for specific services it has to provide for individual sub-contractors. This might include
items such as material handling, scaffolding and rubbish clearance. Attendance can be 'general attendance' describing items available
site wide to all subcontractors, or 'special attendance' where items are specific to a particular contractor/subcontractor.

2.0 Statements of Work, Services and Technical Specifications

Statements of work and services contain the scope of the work including description of the site for work, soil characteristics
determined by the reconnaissance soil survey carried out at the site, meteorological features needed for the construction works and the
operation of the project, description of the project in detail including the construction works and services required.
The technical specifications contain detailed descriptions of all workmanship, services and materials as well as testing methods which
are required to complete a project in accordance with the drawings and specifications.

2.1 Technical Specification for construction

Specifications describe the materials and workmanship required for a development. They do not include cost, quantity or drawn
information, and so need to be read alongside other information such as quantities, schedules and drawings.
Specifications vary considerably depending on the stage to which the design has been developed, ranging from performance
specifications (open specifications) that require further design work to be carried out, to prescriptive specifications (closed
specifications) where the design is already complete.
Having a prescriptive specification when a contract is tendered gives the client more certainty about the end product, whereas a
performance specification gives suppliers more scope to innovate, and adopt cost effective methods of work, potentially offering
better value for money.
Typically, performance specifications are written on projects that are straight-forward and are well-known building types, whereas
prescriptive specifications are written for more complex buildings, or buildings where the client has requirements that might not be
familiar to suppliers and where certainty regarding the exact nature of the completed development is more important to the client. An
exception to this might be a repeat client such as a large retailer, where a specific, branded end result is required and so whilst the
building type is well known, the specification is likely to be prescriptive.
Most projects will involve a combination of performance and prescriptive specifications. Items crucial to the design will be specified
prescriptively (such as external cladding) whilst less critical items are specified only by performance (such as service lifts).
Key to deciding whether to specify a building component prescriptively or not, is considering who is most likely to achieve best value,
the client, the designers or the contractor:

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Large clients may be able to procure certain products at competitive rates themselves (for example the government).

Some designers may have particular experience of using a specific product (although some clients may not allow designers to specify
particular products as they believe it restricts competition and innovation and may relieve the contractor of their liability for 'fitness for
purpose').
The contractor may be best placed to specify products that affect build ability.
Specifications should be developed alongside the design, increasing in level of detail as the design progresses. They should not be left
until the preparation of production information. By tender they should describe every aspect of the building in such a way that there is
no uncertainty about what the contractor is pricing.

Aspects of the works are generally specified by:

 Products (by standard, a description of attributes, naming (perhaps allowing equivalent alternatives) or by nominating
suppliers).
 Workmanship (by compliance with manufacturers requirements, reference to a code of practice or standards, or by approval
of samples or by testing).

It should be possible to verify standards of products and workmanship by testing, inspection, mock-ups and samples, and
documentation such as manufacturers certificates.

2.2 Types of specifications

The specifications are divided into two types as follows:
Standard specifications
The governmental departments and other public agencies sponsoring public works publish "standard specifications", ensuring
uniformity of administrative procedure and of quality of constructed facilities, as evidenced by specific requirements of materials and
workmanship (Merritt, 1968).
Master specifications
In order that the specifications for a particular contract may be completely adaptable to the work of a contract, the standard
specifications almost always require modifications and additions. Therefore, master specifications are prepared by design
organizations. A master specification covers a particular item of construction, such as excavation of drains, dikes and concrete
structures of ponds, etc. It contains requirements for all possible conditions and construction that can be anticipated for that particular
item.

2.3 Specification writing

Specifications usually are written in the traditional style of composition. They should be prepared with as much detail as necessary to
convey that which is required and hence agreed to. Ambiguity and verbosity should be avoided. A good specification is clear, concise
and easily understood. The courts have traditionally interpreted ambiguous requirements against the party who prepared them. Since
specifications supplement the drawings, the special provisions and standard specifications together should not leave any doubt as to
the quality of the required work.

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2.4 Bill of quantities BOQ
The bill of quantities (sometimes referred to as 'BoQ') is a document prepared by the cost consultant (often a quantity surveyor) that
provides project specific measured quantities of the items of work identified by the drawings and specifications in the tender
documentation. The quantities may be measured in number, length, area, volume, weight or time. Preparing a bill of quantities
requires that the design is complete and a specification has been prepared.
The bill of quantities is issued to tenderers for them to prepare a price for carrying out the works. The bill of quantities assists
tenderers in the calculation of construction costs for their tender, and, as it means all tendering contractors will be pricing the same
quantities (rather than taking-off quantities from the drawings and specifications themselves), it also provides a fair and accurate
system for tendering.
The contractor tenders against the bill of quantities, stating their price for each item. This priced bill of quantities constitutes the
tenderer's offer. As the offer is built up of prescribed items, it is possible to compare both the overall price and individual items
directly with other tenderers’ offers, allowing a detailed assessment of which aspects of a tender may offer good or poor value. This
information can assist with tender negotiations.
The priced bill of quantities will also:
 Assist with the agreement of the contract sum with the successful tenderer.
 Provide a schedule of rates assisting with the valuation of variations.
 Provide a basis for the valuation of interim payments.
 Provide a basis for the preparation of the final account.

2.5 Preparing bills of quantities

Bills of quantities can be prepared elementally or in works packages, by a process of 'taking off' which involves identifying elements
of construction works that can be measured and priced.
See Taking off for more information: This is also the categorisation of work that is used for the National Building Specification (nbs):
A - Preliminaries and general conditions.
B - Complete buildings, structures and units.
C - Existing site, buildings and services.
D - Groundwork.
E - In situ concrete and large precast concrete.
F - Masonry.
G - Structural carcassing, metal and timber.
H - Cladding and covering.
J - Waterproofing.
K - Linings, sheathing and dry partitioning.
L - Windows, doors and stairs.
M - Surface finishes.
N - Furniture and equipment.

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P - Building fabric sundries.
Q - Paving, planting, fencing and site furniture.
R - Disposal systems.
S - Piped supply systems.
T - Mechanical heating, cooling and refrigeration systems.
U - Ventilation and air conditioning systems.
V - Electrical systems.
W - Communications, security, safety and protection systems.
X - Transport systems.
Y - General engineering services.
Z - Building fabric reference specification.

Bills of quantities are most useful to the contractor when they are prepared in work sections that reflect likely sub-contract packages.
This makes it easier for the contractor to obtain prices from sub-contractors and is more likely to result in an accurate and competitive
price.
The bill of quantities should identify the different kinds of work required, but should not specify them as this can lead to confusion
between information in the bill of quantities and information in the specification itself.
Disputes can occur where there is discrepancy between the bill of quantities and the rest of the tender documents (for example where
an item is included in the drawings and specification but not in the bill of quantities), or where there has been an arithmetical error.
Generally the priced bill of quantities will take precedent, and the client will be responsible for their own errors or omissions, which
may be classified as relevant events (or compensation events) giving rise to claims for an extension of time and loss and expense.
However if an ambiguity or error is noticed by the contractor during the tender process, it is best practice for them to tell the client,
even if there may be some commercial advantage to them not doing so.
Increasingly, software packages are available to assist in the preparation of preparation of bills of quantities, and building information
modelling systems can be used to produce bills of quantities from information already contained within the model.
Bills of quantities are normally only prepared on larger projects. On smaller projects, or for alteration work the contractor can be
expected to measure their own quantities from drawings and schedules of work. Schedules of work are 'without quantities'
instructional lists that allow the contractor to identify significant work and materials that will be needed to complete the works and to
calculate the quantities that will be required.

2.6 Approximate bill of quantities

An approximate bill of quantities (or notional bill of quantities) can be used on projects where it is not possible to prepare a firm bill
of quantities at the time of tendering, for example if the design is relatively complete, but exact quantities are not yet known. However
this will tend to result in more variations during construction and so less price certainty when the investment decision is made.
Some contracts allows for re-measurement of approximate quantities (for example, this is common on cut and fill on roadworks).
Here, quantities are simply revised and payments made accordingly without the need to instruct a variation.
If an approximate quantity turns out not to have been a realistic estimate of the quantity actually required, this may constitute a
relevant event giving rise to claims for an extension of time and loss and expense.

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Approximate bills of quantities can also be used during the design process as a tool for controlling design. They are then sometimes
included in the tender documents as a guide with a caveat stating that responsibility for measuring quantities lies with the contractor,
and drawings and specifications take priority over any description in the approximate bills (see Approximate quantities cost plan).

3.0 Contract
For implementation of the construction works of a project, an agreement, commonly called a contract, between Client and Contractor
should be concluded which requires that certain legal formalities be observed by the parties.

What is a contract?
A contract is an agreement between two or more parties which creates reciprocal legal obligations to do or not to do particular things.
For it to be valid there must be mutuality of purpose and intention. The nature and content of contracts vary from country to country
and the terms of the contract should be precise and definite and there should be no room for ambiguity or misconstruction therein. To
avoid this contingency, the government department and agencies as well as the Association of Consulting Engineers or the Institutions
of Civil Engineers have established standard printed contract forms (Abrahamson, 1969).

3.1 Classification of Contract

There are 2 types in common law namely:
Formal contract: this is made by deed. It is also known as a contract under seal. It must be in writing, signed, sealed and delivered.
Simple contract: All other types of contracts are simple either in writing or verbal, and they are:
 Express contract: The terms are clearly stated. e.g. contract for construction of a house whose duration, cost, materials, etc
are clearly stated.
 Implied contract: The terms are not clearly stated. e.g. A passenger usually enters a bus without dialogue between him and
the driver. His action implies that, he will pay & the driver will take him safely to his destination.
 Bilateral contract: This is an exchange of promises. e.g. An offerer promising to do something in exchange for the offeree’s
promise to do something else in return. If X accept d tender of Y to build him a house such that X promise to pay Y an agreed
fee.
 Unilateral contract: There must be actual performance in return for a promise. e.g. The offeror or promisor offers a reward for
info leading to arrest of a criminal or recovery of a lost item. Also, sales promotion is another good example. In this case, the
offeree ‘‘accept’’ by actually providing the info.

3.2 Types of contracts

1. Unit-price contract
For unit-price contracts. Contractors are required to quote rates for various items of work on the basis of the corresponding unit price.
Advantages of unit-price contract:
(i) This form of contract ensures a more detailed analysis of cost by the Contractor. The authority concerned with accepting the tender
can easily control the rates with reference to its own calculations and decide which of the tenders is favourable.
(ii) Since the Contractors are to write rates of individual items in figures as well as in words, it is not easy to form a ring during
submission of tender and allot work to one of the Contractors without competition.

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(iii) The Contractors work out the unit prices of all items of the Bill of Quantities in order to put them in the bid. Thus, an unworkable
rated tender may be avoided, which leads to smooth progress and timely completion of the work.
2. Lump-sum contract
In this form of contract the Contractor is required to quote a fixed sum for execution of the work completed in all respects. For such a
contract, it is very important that the drawings and specifications be comprehensive and show in complete detail all features and
requirements of the work.
Advantages of lump-sum contract;
(i) The employer knows exactly what the work will cost.
(ii) Detailed measurements of the work executed are not required to be recorded except in respect of additions and alterations.
3. Contract with lump-sum and unit prices
In this form of contract the Contractor is required to quote partly a fixed sum for execution of an entire structure completely detailed
on the drawings, and partly unit prices which may be required for features of variable quantities such as excavation of drains for
ponds.
4. Negotiated contract
When work is awarded on contract by mutual negotiation between the parties without call of tenders, it is said to be a negotiated
contract. It may be in any of the forms mentioned above. Advantages of this contract are that it brings some economy in expenditure.
The parties selected being always reliable and financially sound, ensure interrupted work with less chance of dispute.

3.3 Contract Documents

• Contract agreement
• The letter of acceptance
• The tender – B.O.Q, drawings, spec
• Conditions of contract – completion date, payment schedules, etc.
• Any other document

4.0 Tender documentation for construction projects

A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of
goods or services.
Tender documents are prepared to seek tenders (offers). Generally, tendering refers to the suppliers required to complete construction
works, rather than the process of selecting consultancy services which is commonly referred to as appointment.
Tender documents may be prepared for a range of contracts such as; equipment supply, the main construction contract (including
design by the contractor), demolition, enabling works etc.
Ideally, tender documents should be broken down into a series of packages (even if there will only be one main contract) each with its
own design drawings and specifications suitable to be issued by the main contractor to potential sub-contractors. This makes the
tender easier to price for the contractor and easier to compare with other tenderers for the client. It is important when this is done to
ensure that the interfaces between packages are properly identified and clearly allocated to one package or another. Having too many
packages increases the number of interfaces and so the potential problems. The cost plan (pre-tender estimate) should also be re-
assembled package by package to allow easy appraisal of tenders received.

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Tenders documents may include:
 A letter of invitation to tender
 The form of tender.
 Preliminaries (including pre-construction information and site waste management plan).
 The form of contract, contract conditions and amendments. This might include a model enabling amendment if building
information modelling (BIM) is being used, to make a BIM protocol part of the contract documentation.
 Employer's information requirements if BIM is being used.
 A tender pricing document (or contract sum analysis on design and build projects).
 A drawing schedule.
 Design drawings, and perhaps an existing building information model.
 Specifications.

Copies of the tender documentation should be kept for records.

An invitation to tender might be issued for a range of contracts, including; equipment supply, the main construction contract
(perhaps including design by the contractor), demolition, enabling works etc.
An invitation to tender may follow the completion of a pre-qualification questionnaire (PQQ) in response to an advert posted by the
client and perhaps a pre-tender interview. The purpose of a pre-qualification questionnaire and pre-tender interview is to enable the
client to produce a short list of suppliers that are likely to be most appropriate for their particular project who will then be invited to
tender. This helps reduce inefficiency and wasted effort in the tender process.
Ideally, tender documents should be broken down into a series of packages (even if there will only be one main contract) each with its
own design drawings and specifications suitable to be issued by the main contractor to potential sub-contractors. This makes the
tender easier to price for the contractor and easier to compare with other tenderers for the client. It is important when this is done to
ensure that the interfaces between packages are properly identified and clearly allocated to one package or another. Having too many
packages increases the number of interfaces and so the potential problems. The cost plan (pre-tender estimate) should also be re-
assembled package by package to allow easy appraisal of tenders received.

4.1 Advertisement for Bids (Notice to Contractors, or Invitation to Bid)

For wide publicity of a major work, the sealed bids concerned are invited by advertising in a minimum of two daily local newspapers.
All tender notices should be in the standard form established by the competent department. The advertisement should contain the
following information: issuing office, brief description of work, location of project, estimated cost of work, office where plans and
specifications can be obtained and charges for them, price of tender form and other tender documents, class of Contractors, earnest
money to be deposited, time of completion, date for receipt of bids and time of opening of bids, accepting authority and rights
reserved to the Owner. An example of a tender call notice is shown below.

FUOYE FISH SEED

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 DEVELOPMENT
CORPORATION LIMITED.
IKOLE EKITI CAMPUS -751002
TENDER CALL NOTICE
No. CAD-385K: - Managing Director, FUOYE Fish Seed Development Corporation Limited. IKOLE EKITI CAMPUS-2, FUOYE
invites sealed tenders for the following work from the registered contractors of State Public Works (R & B) and Irrigation
Departments; Name of work:- Construction of 10 hectare fish seed hatchery project at Ikole Ekiti. Cost of tender paper:- N30,000 (Son
refundable). Class of Contractor:- 'A' Class & above. Time of completion:-Twelve months. The tender paper will be sold during the
office working days up to 9-12-15 and will be received on 10-12-15 at 2 p.m. and will be opened on the same day at 2.20 p.m. in the
presence of the tenderer or their authorised representatives. Certified copy of the Sales Tax and Income Tax clearance certificates are
also to be attached and the original to be shown at the time of opening. The authority reserves the right to cancel any or all the tenders
without assigning any reason thereof.
MANAGING DIRECTOR

For smaller projects, an invitation for bids is issued by the owner to a selected group of Contractors. It conveys much of the
information that would be included in an advertisement. In this case, instructions to bidders should be provided in the letter of
invitation to the Employer.

4.2 Clarification
Mid-tender interviews may be arranged to allow clarification of matters that might otherwise lead to an inaccurate tender being
submitted, they can also give the client insights into potential problems or opportunities in the project as it is described by the tender
documentation.
Responses to queries raised during the tender process can lead to clarification or amendment of the tender documentation which may
also result in an extension of the tender period. It is better to allow sufficient time during the tender process to investigate
opportunities and clarify problems, as the resulting tenders will then be better prepared and will be likely to save time and money later.
It is important that any clarification, additional information or changes to the tender documents are circulated to all of the tenderers to
ensure a level playing field. However this should not give away a particular supplier’s proposed methodology, commercial proposals
or programming advantages, which may have been divulged to the client consultants in interviews. Such information must be treated
as confidential.

4.3 Submission
In response to an invitation to tender, invited tenderers will submit their tender, which will include their price for supplying the goods
or services along with proposals for how the clients requirements will be satisfied if these have been requested.

The precise content of tenders will vary considerably depending on procurement route, however they might include:
 A tender return slip, with details of the contract, return address, tender checklist etc.
 A completed tender pricing document (or contract sum analysis on design and build projects).
 Schedules of rates.

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  An initial construction phase plan.
 Any design proposals or method statements that have been requested.
 Alternative or non-compliant proposals. These should only be submitted if they have been requested and should be
accompanied by a compliant proposal.

4.4 Programme.
Procedures to be adopted such as procurement procedures, cost management procedures etc.
Demonstration of capability, for example design capability, systems used etc.
A BIM execution plan if building information modelling is being used.
Key project personnel.
Management organisation.
Plant and labour resources and availability.
Prior experience.
References.

4.5 Settlement
Once the client has identified the preferred tenderer (this may involve further interviews) they may hold a tender settlement meeting to
enter into negotiations. This may result in further adjustment of the tender documents and the submission of a revised tender.

Public Projects
On publicly-funded projects the procurement processes preferred by the Government Construction Strategy are all based on inviting
tenders from an integrated supply team (including designers, suppliers and contractors) to design, build and sometimes operate and
finance the development. On private finance initiative (PFI) projects, the process of securing offers from integrated supply teams is
referred to as 'bidding' rather than 'tendering'.

4.6 Choosing the Contractor

Once the detailed design is completed, the quantity surveyor prepares the Bill of Quantities, which specifies and quantifies the
materials and the work to be carried out in great detail.
When choosing contractors to be invited to submit competitive tenders for carrying out the work, it is necessary to limit the total
number of contractors invited to submit competitive tenders.
If the work is specialised, contractors skilled in that type of work are selected. Sometimes it will be preferable to use a large national
contractor, while at other times local or regional contractors are favoured.
Developers are often guided by their architect, project manager and/or quantity surveyor on the selection of the contractors for the
tender.

The prices submitted by each of the contractors are examined by the quantity surveyor and the project manager to ascertain what is
offered.

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The reliability and financial stability of the contractor are vital considerations since the failure of a contractor is a major disaster from
the developer’s perspective as long delays occur while the legal position is resolved and another contractor is found to complete the
work.

4.7 Paying the Contractor

The method of payment for the works has a substantial impact on the developer’s cash-flow position. It also has significant impact on
the cash-flow of the contractor, who has to consider the method of payment when preparing the price for the work.
The developer has to pay out very substantial sums of money over a considerable period of time before obtaining the benefit of a
completed building at the end of the contract.
The ideal arrangement for developers is for the whole of the contract price to be paid when the building is handed over, so that they do
not part with their money until the time when they should be receiving an income from the building or have the benefit of occupation
of it.
The method of paying for the work has to be related to the circumstances of each contract. The contractor is more likely to be flexible
if they are a partner in the scheme and stand to benefit in terms of a profit share.

4.8 Calculating the Cost

An accepted approach is for the contractor to submit a bid on either a ‘firm price’ or a ‘fluctuations’ basis.
Quantity surveyor’s re-measurements, architect’s variation orders and instructions and extensions of time may affect the cost.
Developers and their professional advisers must decide on what basis they wish contractors to prepare their competitive bids in order
that the contractors submit prices on the same basis.
Often there are two main alternative methods of calculating the cost:
1. A cost-plus contract where the contractor is paid on the basis of the actual cost of the building work (‘prime cost’) plus a fee
to cover their overheads and profit.
2. A target cost contract might be negotiated or established by tender. A target cost is agreed with the contractor plus the
contractor’s fee and any savings or additions to the target cost are shared by the parties.

4.9 The Duration of the Contract

The date agreed in the contract for the completion of the building is not certain as the contractor can apply for extensions of time for a
number of reasons.
Extensions of time usually result in an increase in the cost which will certainly include the contractor’s ‘preliminaries’ (overheads
such as insurance, cost of plant hire, etc.). The impact of an extension is felt twice by the developer: firstly, it affects cash-flow and,
secondly, it increases costs.
The main reasons for extension of time which entitle the contractor to recover additional loss and expenses include inadequacy and/or
errors in the contract documents, the drawings and/or the Bill of Quantities; delays by the architect in issuing drawings or instructions;
delays caused by tradesmen directly employed by the developer; failure by the nominated subcontractors; bad weather; strikes and
lockouts; shortage of labour; damage by fire and natural disasters.

4.10 Site Supervision

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The project manager should be continually satisfied about the arrangements made by the architect for site supervision during
construction.
The size and complexity of the scheme may merit the appointment of a full-time site supervisor, such as a clerk of works or a resident
engineer or indeed a resident architect.

4.11 Construction Period

When the contractor has taken possession of the site, the project manager ensures that the works are carried out on schedule and that
the overall cost is kept within the budget.
To carry out his duties effectively, regular meetings of the project team are held, such as on a monthly or fortnightly basis. The
architect should report as to whether any variation orders or instructions have been given to the contractor, the quantity surveyor then
presents a report on the financial situation and other professionals provide their reports.
The project manager summarises the overall financial situation, particularly with regard to payments to the contractor, compares them
with the budget, checks on dates of handover and compares the estimated date for the receipt of income or capital payments with the
budgetary expectation.
These are matters of vital importance to the developer’s cash-flow. If it appears that the project is running behind schedule, then
methods of speeding up the work to recover the position are considered, together with the implications for cost.

4.12 Schedule of Execution

The Contractor shall complete the work and services of the project to be executed under the contract in accordance with the schedule
of execution.
Schedules may be performed in either tabular or graphical form, although the graphical form is generally used because of ease in
visualization.
The most widely used graphical presentation of schedule of execution is the rectangular bar chart (Figure). It shows starting and
completion dates for each item of work. It indicates the items on which work must proceed concurrently, items that overlap others and
by how much, and the items that must be completed before work on others can begin. It is a convenient way to advise the Contractor
of necessary material delivery dates.
For comparing performance of work with that scheduled, a bar is usually placed above the schedule bar showing actual start and
completion dates. The chart in Figure 9 indicates that clearing and preparing of site started on the date programmed and was
completed ahead of time whereas construction of outlets began late. At the close of August, construction of outlets was 75% complete.
This method has the advantage of being simple. It can be used for a small-scale project, however a more detailed schedule of
execution is required for a large-scale project. In this case bar charts have to be separately prepared for performance of work items and
others showing materials and different machinery needed for all items of works.

Figure. Rectangular-bar progress schedule

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4.13 Handover of the Completed Development
A short time before the date for completion and handover of the building from the contractor to the developer, the architect prepares a
list of all minor defects that must be remedied before handover occurs.
If the development has been pre-let or pre-sold to an owner-occupier, then the occupiers and/or their contractors may wish to have
access before formal handover by the main contractor working for the developer.
The project manager, with the architect, needs to attribute and resolve problems quickly.

The quantity surveyor should then be asked when any outstanding re-measurement work will be completed and be in a position to
agree the final account with the contractor, so that the architect may issue a final certificate.
The importance of inspecting the site and its immediate environs on the handover date should not be overlooked.
Where an occupier is not taking possession immediately, then the developer is responsible for a vacant building and a programme of
regular cleaning and maintenance should be instigated.

4.14 Monitoring Construction Process

The project manager’s objective is to produce the building on time and within budget for the developer client.

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Any delays in completion or increase in costs will affect the profitability of the development; therefore it is essential that a developer
is kept regularly informed on progress and cost.
Typical reporting methods include: bar (or Gantt) chart (Figure 7.1), cashflow table and graph, financial report, checklist.
Whilst regular reporting on progress and cost is a way of keeping the developer informed, it also provides the project manager with an
essential tool, especially if the developer insists on regular reporting. The project manager will know whether the aims are being
achieved and it will bring into sharp focus the targets that need to be achieved and the problems that need to be tackled.

5.0 PUBLIC-PRIVATE PARTNERSHIPS (PPP)

In the public sector, there are three main procurement approaches:
(a) PPP, (b) Design and Build and (c) Prime Contracting.
In bringing the public and private sector together, the aim is that the business community’s management and financial skills will lead
to better value for money for taxpayers.

5.1 PARTNERING
Clients, designers and contractors have evolved their relationships with developments and developed different types of business
relationships, among these is partnering.
Partnering is a business relationship for the benefit of all parties, built on trust, openness and respect.
There is a requirement to develop an environment for long-term profitability and to encourage innovation.
Partners commit to improved project build ability and a lowering of project costs through the process of value management.

5.2 Provisional sum

A provisional sum is an allowance, usually estimated by the cost consultant, that is inserted into tender documents for a specific
element of the works that is not yet defined in enough detail for tenderers to price. This, together with a brief description, allows
tenderers to apply mark up and attendance costs within their overall tender price and make allowance for the work in the contract
programme.
An example of a situation where a provisional sum might be appropriate is when work is required below an existing structure, where
the ground conditions cannot be determined until the existing structure is demolished and the ground opened up.
Provisional sums can be 'defined' or 'undefined':
Defined provisional sums are considered to have been accounted for within the contractor's price and programme. In effect the
contractor is taking the risk that their estimate will be sufficient. Undefined provisional sums are not accounted for in the contractor's
price and programme. This means that the client is taking the risk for the works and the contractor may be entitled to an extension of
time and additional payments.
Provisional sums are provided for in different ways in different forms of contract, and some forms of contract can be a little vague
about how provisional sums should be handled, in particular regarding adjustments to the programme.
Provisional sums place either the contractor or the client at risk of unexpected costs or delays. Agreeing the cost of such work or
extensions of time that might be claimed can result in tension between the contractor and client. For this reason, they should only be
used as a last resort, they should not be an easy fall-back position for consultants (who are not bearing any of the risk) when designs
are incomplete or information is difficult to obtain.

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Provisional sums should not be confused with prime cost sums, which are allowances for the supply of work or materials to be
provided by a contractor or supplier nominated by the client. Prime cost sums might include items that have already been purchased
by the client, such as equipment, or a specific installation by a company with a strong existing relationship with a client organisation.

5.3 Prime cost sum

A prime cost sum is an allowance usually calculated by the cost consultant for the supply of work or materials to be provided by a
contractor or supplier that will be nominated by the client.
The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance etc) by
the main contractor.
Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.
Historically nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three
reasons:
 For long delivery items where design and manufacturing times could not wait for the appointment of a main contractor. For
example, lifts, switchgear or refrigeration plant.
 Where specialist design input was required in the early stages of design development. For example, for a cladding system.
 Where the client directly orders a preferred piece of equipment on which design is to be based. For example, an MRI scanner,
laboratory fume cupboards or bottling plant.

It should be noted that courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies
with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead
to a claim for extension of time under the main contract and entitlement to consequential losses.
Prime cost sums should not be confused with provisional sums which are allowances for specific elements of the works not yet
defined in enough detail for contractors to price.

5.4 Contract sum

The contract sum is the price agreed with the contractor and entered into the contract. The contract sum should be calculated and
checked very carefully as errors are deemed to have been accepted by both parties.
The contract sum may be subject to adjustment under the terms of the contract for example:
 Variations.
 Fluctuations.
 Prime cost sums.
 Provisional sums.
 Payments to nominated sub-contractors or nominated suppliers.
 Statutory fees.
 Payments relating to opening-up and testing the works.
 Loss and expense.
When the contract sum is adjusted, this adjustment should be taken into account in the valuation of subsequent interim certificates.
Preparing the final account is the process of calculating and agreeing any adjustments to the contract sum at the end of the defects
liability period so that the amount of the final payment to the contractor can be determined. The amount of the final payment is then
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set out in the final certificate (or final statement). NB it is possible for the final certificate to show that money is owed to the client,
rather than due to the contractor.
Construction contracts may in fact not require the preparation of a final account, although they generally do require the contractor to
provide all documents necessary for the adjustment of the contract sum within a specified time, and set out the time scale for, and
consequences of, issuing the final certificate.
On measurement contracts, the contract sum may not be known when the contract is entered into, but instead is calculated as the
works progress based on some agreed method of measurement.

5.5 Contract sum analysis

A contract sum analysis is generally prepared by a contractor as part of their tender on design and build projects. It breaks down the
contractor's price into a form allowing the client to analyse it and to compare it to other tenders, and may then be used as a basis for
calculating payments due to the contractor as the works progress. A contract sum analysis is necessary as there is unlikely to be a bill
of quantities on a design and build project when the contract is entered into, and so an alternative means of assessing tenders and
valuing payments is necessary.
The more precisely the employer's requirements prescribe the format and break down that the contract sum analysis should take, the
easier it will be for the client to directly compare the detail of offers by different tenderers.
The contract sum analysis might be re-visited and expanded before construction commences to ensure that it still properly reflects
the nature of the project and to ensure that it is a suitable basis for payment (contractors may be tempted to front-load the contract
sum analysis so that they receive more payment at the beginning of the construction process).

5.6 Budget
Budgets for projects should be set as early as possible.
A budget can be established by:
 Assessment of projected income and expenses through the life of the project.
 Comparison with similar projects.
 Assessment of the funds available.
 Pre-design analysis of requirements.
 Analysis of preliminary design options.
The budget is set by the client and is distinct from cost plans prepared by a cost consultant which are likely to focus on the
construction cost.
The client's total project budget may include:
 The construction cost.
 Land or property acquisition and Approvals fees.
 Planning costs or Community Infrastructure Levy).
 Financing costs.
 Site investigations.
 Fixtures, fittings and equipment.
 The cost of decanting and relocating, including costs associated with moving staff.

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  Contracts outside of the main works.
 Insurance and Consultant fees.
 Inflation and Contingency.
 VAT.
It is important that the client makes clear what costs should be monitored by the cost consultant and what will remain within the
control of the client organisation.

6.0 As-built Drawings and Record Drawings

On building projects it is common for changes to be made during construction because of circumstances that emerge on site. These
changes can be relatively minor or can be very significant.
As a result, it is common for the client to require that as-built drawings are prepared, either during the construction process or when
construction is complete, to reflect what has actually been built. The contractor will generally mark up changes to the ‘final
construction issue’ drawings on-site using red ink, and these can then be used by the consultant team to create record drawings
showing the completed project. This information may be supplemented by as-built surveys.
These record drawings (sometimes referred to as 'as constructed' drawings) may be required for the Health and Safety File or the
operation and maintenance manual issued to the client on completion of construction.
Apart from registering on site changes to the engineers' and architect's drawings it is essential that specialist trade contractors record
what has been installed on site. Records of installations such as under-floor cabling in city offices is a particular problem because
successive tenants cut off, but leave in, their predecessors cables then install their own systems. Without cabling records this can prove
very problematic for subsequent companies that occupy the premises.
The client’s facilities management team must keep record drawings up to date, incorporating details of future modification to the
building. If they do not do this, ultimately, surveys may become necessary to re-create accurate measured drawings.
The requirement to produce as-built drawings and record drawings must be set out in tender documentation, and should not be
assumed to be part of ‘standard’ services. It can be a time-consuming exercise, and as the project team will be keen to move on to
other jobs, it is important that adequate retention remains to ensure completion of as-built and record drawings.
If a building information model has been produced, this must be updated to reflect any changes to the design, and then issued to the
client in a form that the facilities management team can continue to develop.

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