Contract, Spec & Quantity
Contract, Spec & Quantity
IoT-ARC
CONTRACTS, SPECIFICATIONS AND QUANTITY
SURVEYING (CEng4172)
INSTRUCTORS: YASIN Y.
A.Y 2024
Course content (the description)
Course Outline
1. Contracts
1.1 definition and relationships
1.2 Basic Requirement of Contract
1.3 Contract Management Process
1.4 Standard Bidding Document (PPA’s)
2. Construction Specifications and Method of
Measurement
3. Quantity Surveying and Focus on BaTCoDA
Method of Measurement
I. Contract
1. Definition and Relationship
i. Definition
• Contract is a written agreement between
or among two or more parties whereby
each party promises to do or not to do
something and agrees to terms (conditions
and Warranties) set out in the contract.
Definition (cont’d)
• Conditions of Contract are terms in which
parties in the contract are governed /
administered with. That is, it is an
administrative law which is the legally binding
part of the contract.
• These promises and terms shall be
enforceable by law and incorporates the
rights, obligations and Remedial rights of each
contracting parties. (Which is discussed in
relationship part)
ii. Contract Relationship
Contracting parties in construction:
The Client (sometimes called the Promoter or
Employer)
The Contractor
The Consultant
Relationships Between the Parties:
The Client:
The Engineer:
Is not party to the construction Contract, but to a separate
agreement with the Client ( i.e. part of procurement of service)
The Engineer:
Has no power to relieve the Contractor of any of his
contractual obligations
Provides general Contract Administration, ensuring
compliance by the Contractor with time and quality
obligations
Acts as a Certifier
Acts as a Dispute Settler
Contract Relationships
The Rights and Obligations of the Client, the Contractor and the
Engineer:
It is important that all involved in a Contract are aware of their rights and
obligations
It is particularly important that the Client is aware of his involvement and
where he is required to act.
Untimely action may lead to delays and increases in cost. The main
requirements are:
those clauses defined in the Conditions of Contract and in the consultant’s services
agreement where the Engineer is required to seek the specific approval of the
Employer before exercising such authority
the provision of drawings and instructions relating to the Employer’s design of the
permanent works within a reasonable time
handing over the Site and access to enable the contractor to commence and
proceed with the execution of the works in accordance with the programme
payment to the Contractor, and possibly sub-contractors, of the amount certified by
the Engineer.
Contract Relationships
Client’s Specific Rights and Obligations
Rights
To be notified about the appointment of Engineer’s Representative and
assistants
To give consent to assignment of the Contract
To require the Contractor to complete a Contract Agreement
To require the Contractor to provide a Performance Security
To be consulted by the Engineer on determinations of additional costs
and/or extensions of time
To take out insurances (at the Contractor’s cost) in the event of the
Contractor’s non performance
To deduct Liquidated Damages for delay from payments due to
Contractor
To employ others to carry out remedial works if Contractor doesn’t do
them
To terminate the Contract upon various force majures
To proceed to arbitration if dissatisfied with an Engineer’s decision
Contract Relationships
Client’s Specific Rights and Obligations
Obligations
To appoint the Engineer
To define those duties of the Engineer which require prior
approval
To make the Site available
To be responsible for his own workmen on Site
To define time(s) for completion
To make payments within 28 days of receipt of Interim Payment
Certificates
To attempt to reach amicable settlement prior to arbitration
Contract Relationships
Contractor’s Specific Rights and Obligations
Rights
To be notified of the appointment of Engineer’s Representative and
assistants
To be consulted by the Engineer on determinations of additional costs
and/or extensions of time
To seek consent for work at night or on rest days
To give notice of substantial completion
To be paid the value of the Works determined by measurement
To receive payments within 28 days of receipt of Interim Payment
Certificates
To proceed to arbitration if dissatisfied with an Engineer’s decision
To determine employment under the Contract in the event of default
by the Employer
Contract Relationships
Contractor’s Specific Rights and Obligations
Obligations
To seek the Employer’s prior consent to assignment of the
Contract
To execute the Works with due diligence, remedy defects, and
provide all things required
To take full responsibility for operations and methods
To execute and complete the Works in accordance with the
Contract and comply with the Engineer’s instructions
To accept instructions only from the Engineer
To submit a programme and (if required) method statement
To submit a revised programme if requested
To suspend the Works if instructed
To submit detailed particulars of claims
To submit monthly statements of amounts due
To attempt to reach amicable settlement prior to arbitration
Contract Relationships
Engineer’s Specific Rights and Obligations
Rights
To exercise the authority to be implied from the Contract
To issue instructions to the Contractor as necessary
To request a revised programme
To require replacement of any member of the Contractor’s staff if
necessary
To instruct tests on materials
To instruct a suspension of the Works
To notify the Contractor to expedite progress
To make variations he considers appropriate
To value claims
To correct or modify Interim Payment Certificates
To certify if the Contractor is in default etc
Contract Relationships
Engineer’s Specific Rights and Obligations
Obligations
To obtain the Employer’s specific approval when required
To appoint the Engineer’s Representative
To determine additional costs and/or extensions of time when appropriate
To issue the Taking-Over Certificate or instruct the contractor to complete
outstanding works
To make variations he considers necessary
To value variations
To determine the value of the Works by measurement
To prepare Interim Payment Certificates
To issue the Defects Liability Certificate
To give an Engineer’s Decision within the stipulated time stated in the
Contract
2. Basic requirements for
a contract
Requirements to be fulfilled in a contract
Promises &
Capable Consideration Offer & Legal &
Standard, if any
& Lawful Acceptance Distinct
Contract
Requirements to be fulfilled in a contract ( Cont…)
Capable &
Lawful
Contract Drawings
Bill of Quantity
The contract has a legal objective Technical Specification
Terms & Conditions
Requirements to be fulfilled in a contract ( Cont…)
Promises &
considerations
Offer &
Acceptance
Willingness to be bound by
specific terms set out &
indication of consent.
offer Acceptance
Form of Tender
Conditional Acceptance
Priced BoQs
Unconditional Acceptance
Bid Security
Alternative, if any Contract
Requirements to be fulfilled in a contract ( Cont…)
Standards ,If
any
Terms
Contract Technical specifications
Forms, Formats, Schedules
Instructions
Requirements to be fulfilled in a contract ( Cont…)
Intent &
Agreement
Consent of contracting
parties is necessary
The parties have a clear
intent to create a legal Signature
relationship and to be Sealing (Optional for
bound by the contract
Individuals)
Contract
3. Contract Management
Process
Contract Management Process
Contract Implementation
Change management
Claim & dispute management
Contract Formulation
Negotiations
Offer Acceptance
Promises Consideration
Contract Agreement
Contract Administration
Closing of Accounts
Contract Evaluations
1. Limitation of Actions
2. Professional fault
3. Warranty due by the contractor
4. Warranty in respect of defects of construction
Contract Closing
1. The Contractor shall guarantee during ten years from its delivery
the proper execution and the solidity of the work done by him.
2. He shall be liable during this period for such loss or deterioration
of the work as is due to a defect in its execution or to the nature
of the soil on which the work has been done.
3. Any provision shortening the period laid down in 1 above or
excluding the warranty due by the contractor shall be of no
effect.
Contract Closing
Scope of Works
Technical Specifications
Drawings
Bill of Quantities/Activity Schedule
Part 3
Section 7-GCC (General conditions of Contract)
Section 8-SCC (Special Conditions of Contract)
Section 9- Contract Forms
Agreement
Contract Security
Performance Bond
Advance Payment Security
Section 7-GCC (General Conditions of Contract) of PPA:
“Plant” any integral part of the Works that shall have a mechanical,
electrical, chemical, or biological function.
2. The documents forming the Contract shall be interpreted in the
following order of priority:
(1) Agreement,
(2) Letter of Acceptance,
(3) Contractor’s Bid,
(4) Special Conditions of Contract,
(5) General Conditions of Contract,
(6) Specifications,
(7) Drawings,
(8) Bill of Quantities or Activity Schedule, and
(9) Any other document listed in the Special Conditions of Contract
as forming part of the Contract
3. Language and Law
Division of power in
the Constitution
Legislative Interpretation
Constitutional laws (The House of Federation, The executives
the Parliament)
The parliament
Statutory laws Judiciary Interpretation
Citizens
(proclamations) (The Courts)
7.Subcontracting
The Contractor shall cooperate and share the Site with other
contractors,
The Contractor shall also provide facilities & services for them as
described in the Schedule.
The Employer may modify the Schedule of Other Contractors, & shall
notify the Contractor of any such modification.
9. Personnel
From the Starting Date until the Defects Correction Certificate has
been issued,
The risks of personal injury,
Death, and
Loss of or damage to property
20. Discoveries
Anything of:
Historical/significant value
Unexpectedly discovered on the Site
Shall be the property of the Employer.
The Contractor shall notify the Engineer of such discoveries and carry
out the Engineer’s instructions for dealing with them.
21.Possession of the site
The Employer shall give possession of the Site to the Contractor.
If possession of a part is:
Not given
by the date stated in the approved work program,
The Employer will be deemed
If the Adjudicator:
Within 30 days,
The Adjudicator shall be designated
By the Appointing Authority
Designated in the SCC
A Program showing
The Engineer shall record such meetings & provide copies of the
record to those attending the meeting & to the Employer.
32.Early warning
The Contractor shall warn: The Engineer
At the earliest opportunity of likely future events
That may Adversely affect:
The quality,
Increase the Contract Price or
Delay the execution of the Works.
The Contractor may be required to provide:
An estimate of the expected effect of such events
On the Contract Price &
Completion Date. &
This estimate shall be provided as soon as reasonably posible.
If there is no Defect:
The test shall be a Compensation Event.
35. Correction of Defects
The Defects Liability Period shall be extended for “as Long as Defects
remain to be corrected”.
Every time notice of a Defect is given, the Contractor shall correct
the notified Defect within the length of time specified by the
Engineer’s notice.
36. Uncorrected Defects
If the Contractor has not corrected a Defect within the time specified:
The Engineer will assess “The cost of having the Defect corrected”
&
The Contractor “Will pay this amount.”
Cost Control
Change in Bill of Quantity
Currencies
Variations Price adjustment
payment for variations Retention
Cash Flow forecasts Liquidated Damages
Payment Certificates Bonus
Payments Advance payment
Compensation Events Securities
Tax Day works
Cost of repairs
38.Change in the Bill of Quantities
If the final quantity of the work done: Differs from the quantity in the BoQ,
The Engineer shall adjust the rate to allow for the change.
The Engineer shall not adjust rates if:
The Contractor shall provide a quotation for carrying out the Variation
when requested to do so.
The timing of its execution do not cause the cost/ unit quantity to
change,
The rate in the BoQ shall be used to calculate the value of the
Variation.
If the cost per unit of quantity changes, or
If the nature or Timing of the work in the Variation does
not
correspond with items in the BoQ;
The quotation by the Contractor shall be in the form of new
rates;
The urgency of varying the work would prevent a quotation being given &
considered without delaying the work,
No quotation shall be given &
The Variation shall be treated as a Compensation Event.
The Contractor shall not be entitled to additional payment: for
Advance Payments
&
Retention
The Contractor shall be paid interest on the late payment in the next
payment.
From the date by which the payment should have been made
up to the date when the late payment is made
At the prevailing rate of interest for commercial borrowing for each
of the currencies in which payments are made.
If an amount certified is increased:
In a later certificate
or
As a result of An award by the Adjudicator/Arbitrator,
The Contractor shall be paid interest upon the delayed payment
No Rate
or
No price has been entered in
Will not be paid for by the Employer
&
Shall be deemed covered by other rates & prices in the Contract.
Compensation Events
The Employer does not give access to the Site by the Site
Possession Date stated in the Contractor’s approved work
program.
The Engineer will assume that the Contractor will react competently &
promptly to the event.
Clause 44.4
Unless otherwise specified in the SCC, the Engineer shall not adjust
the Contract Price
Ln Mn En
pn A b c d etc.
Lo Mo Eo
Where:
pn is a price adjustment factor to be applied to the amount
for each payment certificate;
A is a Constant, specified in the Contractor’s Bid,
representing the nonadjustable portion in contractual
payments;
b, c, d, etc., are weightings or coefficients representing
The estimated proportion of each cost element (labour,
materials, equipment usage, etc.) in the Works or sections
thereof,
The Sum of A, b, c, d, etc., shall be one
Ln, Mn, En, etc.,
The index value shall be deemed to take account of all changes in cost
due to fluctuations in costs.
48. Retention
All Defects notified by the Engineer to the Contractor before the end
of this period have been corrected.
The total amount of liquidated damages shall not exceed the amount
defined in the SCC
If applicable:
56 Taking over
The Employer shall take over the Site
&
The Works within 7 days of
The Engineer’s issuing a Certificate of Completion.
57. Final Account
The Contractor shall supply the Engineer with:
The Contractor shall supply them by the dates stated in the SCC.
The Engineer shall withhold the amount stated in the SCC from
payments due to the Contractor.
59.Termination
Offering,
Giving,
Receiving or
Soliciting,
The Engineer shall certify that: The Contract has been frustrated.
The Contractor shall:
Make the Site safe
&
Stop work as quickly as possible
After receiving this certificate
&
– Be unambiguous.
– Complement the drawings and be consistent with
the other documents and the method of
procurement
Technical Docs: The Specification…
• The specifications are the part of the contract
documents that define the qualitative requirements
of the project that is to be built. The dictionary
defines specification as
– “a detailed description of requirements,
dimensions, materials, etc., as of a proposed
building, machine, bridge, etc.,”
– and further as “the act of making specific.”
Specifications
• “Specifications” is a general term applying to
all directions, provisions, and requirements
pertaining to the performance of the work
and payment for the work.
– One part of the construction contract documents
is the Specification…
• The specification is part of the Technical section
– Specifications= written description
– Drawings….Graphical Description..
– BOQ=Quantitative description
Technical Docs: The Drawings…
• The role of the drawings is to …
– define the geometry of a project, including dimensions, form,
and details.
– The specifications are intended to complement this by defining
the nature of the materials that are to be used and the
description of the workmanship and procedures to be
followed in constructing the project
– Drawings and specifications in combination define the project
in sufficient detail to enable the carrying out of the works.
Purpose of Specifications
• The purpose of a Construction Specification is to tell
the contractor precisely the,
– Quality and type of materials required to be incorporated
in the works
– the workmanship and finish, anticipated with consideration
given to practical limitations such as tolerance, clearances,
– Extent of the work to be executed
–Descriptive
–Performance
–Reference Standards
–Proprietary
Descriptive Specifications
DESCRIPTION
• This part consists of short, brief statements
summarizing the work covered by this Section
of the Standard Specifications
• The Description should not contain details,
materials or construction requirements, or
explanations of measurement and payment
Five-Part Format of Organizing
Specifications
MATERIALS
METHOD OF MEASUREMENT
BASIS OF PAYMENT
• Specific Requirements,
– Any requirements to be adhered to in the specific
work area
Layout of Specifications
• Types and Quality of Materials that must be
used
– Description of materials, Standards
– Testing
– Workmanship, Technical procedure of carrying out
works, (e.g. concrete, mixing and placing etc )
Layout of Specifications
Reading Assignment
Read ERA 2002 Technical specification and
summarize the work included in each trade of work
and identify unit of measurement of each activity.
Quantification of works
Take-off sheet (formats)
T D P U Description D P U Description
Quantification of works
Take-off sheet (formats)
FOOTING
F1 F1
Example
Compute the quantity
2800
1400 1400
600
1400
2700
600
600
1400
600
Example
Compute the quantity
3 4
2800
50
SECTION
Example
Compute the quantity
FOOTING
Excavation and earthwork
Excavation
Backfill around footing
Surplus /Caraway
Formwork
Concrete
Reinforcement
Cost Estimation
• Direct and indirect cost analysis
• Example
1. Concrete work (C-30)
2. Form work
3. Reinforcement bar
Cost Analysis
ANALYSIS SHEET FOR DIRECT & INDIRECT COSTS
PROJECT: CONCRETE WORK LABOR DAILY OUTPUT: 8.5 m 3 / Dy
WORK ITEM: ( 2.24 ) C-30 Concrete (mechanical mix) Beams and lintels EQUIPMENT DAILY OUT PUT: 8.5 m 3 / Dy
TOTAL QUANTITY OF WORK ITEM: 1m 3 1 m3 RESULT: 2,122.32 Birr/m 3
A= Materials Unit Cost 1341.58 Birr/m 3 B=Manpower Unit Cost 105.88 Br./m 3 C= Equipment Unit Cost 52.941
Total of (1:02) Total of (1:03)
Daily Output Daily Output
Direct Cost of work item = A+B+C = 1500.40 Birr/m 3
Overhead Cost: 15% 225.06 "
Profit Cost: 10% 172.55 "
Total : 1845.50 Birr/m 3
Remark ________________________________________________________ Vat 15% 276.82 Birr/m 3