ICTAD Procurement of Work ICTAD SBD 01 2007

::;:;:;;

111!!1!mmgmiim~::;JI

PROCUREMENT OF WORKS

Institute for ConstructionTraining and Development

STANDARD BIDDING DOCUMENT

APPRpVED BY NPAICTAD/SBD/Ol

Institllte for ConstructionTraining and Dt;velopment (ICTAD)

STANDARD BIDDING DOCUMENT

PROCUREMENT OF WORKS

.Second Edition - January 2007 . IMINISTRY OF HOUSING AND CONSTRUCTION

Published byInstitute for Construction Training and Development (leTAD)'Savsirlpayat123, Wije~ama MawathaColombo 07.

First Edition"':" January 2002Reprinted with amendments - January 2004First Edition (Revised) - January 2006Second .Edition - January 2007

Copyright reserved

No part of this publicationshall be reproduced ortransmitted in any form or byany means without permissionof the publisher.

PREFACE TO THE SECOND EDITION

ICTAD Standard Bidding Documents were revised to be in line with the ProcurementGuidelines (Goods & Works) - 2006 of National Procurement Agency (NPA).

Mr. Jayontha De Mel, Procurement Consultant volunteered to serve as a resource personfor the revision and the ICTAD Sub Committee, comprising of Dr. E M G de Zylva(CEO/CIGF), Mr. H D Chandrasena (Snr. Quantity Surveyor), Mr. D R N Ferdinando (Snr.Engineer), Mr. J K Lankatilake (DG/lCTAD), Mr. K P W Rajasirl (D. Dev./ICTAD), Mrs. VajiraRanasinghe (DD/ICTAD) reviewed and recommended the revision to' the SteeringCommittee on ICTAD Publications.

The Steering Committee on leTAD Publications which consisted of representatives from theInstitution of Engineers Sri Lanka, Sri Lanka Institute of Architects, Society of StructuralEngineers Sri Lanka, Association of Consulting Engineers Sri Lanka, Institute of QuantitySurveyors Sri Lanka, Institute of Town Planners Sri Lanka, Institute of Project Managers SriLanka, National Construction Association of Sri Lanka, Ministry of Housing and Construction,Institute for Construction Training and Development, recommended this revision for theapproval of Board of Management of ICIAD.

The Board of Management of ICTAD approved the recommendations of the steering .Committee.

I wish to acknowledge the co-operation extended by Mr. Daya Liyanage, Chairman/eEO,National Procurement Agency in this endeavour. I take this opportunity to extend mygrateful thanks for the services rendered by the uNPA Task Force on Standard BiddingDocuments" at the. previous revision. In this connection the contributions made by Mrs.Kanika Jayathilake, former Senior Manager, Legal of NPA regarding the legal aspects of thecontents of the document is much appreciated.

I wish to take this opportunity to express my sincere gratitude to the resource person, themembers of the sub committee and the Steering Committee on ICTAD Publications for.thevaluable contributions made for the successful completion of t.his revision.

I appreciate the assistance rendered by Mrs. Dammika Gunasekara for the ~tacretarial workand the staff of the Development Division of ICTAD, who contributed in numerous ways inthe publication of this document.

I wish to present this Second Edition to the Construction Industry with confidenceconsidering the careful thinki~gand hard work put in by those involved.

/'VIDYAJYOTHI PROF. LAKSHMAN Al:.WISCHAIRMAN -ICTAD

01 sf January 2007

- I

Foreword

To streamline the procurement process in Sri Lanka the Government has decided todevelop a series of Standard Bidding Documents for procurement of Goods and Works.

The Cabinet of Ministers has entrusted this task to NPA.. The Procurement Guidelines(2006) requires that all PE shall use the appropriate SBDs approved by NPA.Accordingly, as a joint effort ofNPA/ICTAD the SBDs published previously by ICTADwere revised for conformity with the Guidelines.

This Bidding Docwnent for Procurement of Works shall be used for NationalCompetitive Bidding (NCB) within the limits specified in the SBD, for the contracts that'are financed by Government of Sri Lanka. The publication is drafted to suit for foreignfunded contracts and is advised to use in such contracts with the concurrence of thefunding agencies.

These Bidding Documents for Procurement of Works, assumes that no prequalificationhas taken place before bidding. However, for the domestic contractors leTADregistration is a pre-reqnisite to eligible for contract award and for all contractors a

suitable post qualification should be carried out.

I take this opportunity to thank the following TASK force members appointed by NPA inassisting to complete this endeavor:

Mr. J K Lankathilake ( DG - leTAD)Ms. KJayathilake (Snr. Manager-NPA)Ms. S M C S Samarakoon (Chief Engineer - Dept of Buildings)Mr. Ravindra Ferdinando (GM SEC)Mr. Nalaka Perera (SLIA)

~;a~'aJI~e--'--"ChairmanJCEO

National Procurement Agency

11

PREFACE to THE FIRST EDITIONThe growing need to standardize procurement documents was"expressed from several sectors of the industry.It simplifies the prooess, and an attempt has been made to achieve these objectives with simplicity but withprecision. To achieve these objectives ICIAD commenced to develop new standard documents with theassistance of the lOA of the World Bank.

This task was carried out by Mr. Eddie de Zylva and Mr. Jayantha de Mel under the guidance of a SteeringCommittee and Sub Committee appointed for the review of ICTAD Publications.

. The first of the series of such documents is the Standard Bidding Document for Procurenlent of Works, whichwas largely based on the World Bank Standard Bidding Document for Smaller Contracts..This supersedes theleTADo Conditions of Contract for Works of Building &Civil Engineering (SCA/1) and is suitable for use both by

Int~rnational Competitive Bidding (ICS) and by National Competitive Bidding (NCB) procedures. This documentmay also be used for works of higher values provided that the works are not of a complex nature. Substantiveinstructions have been given in order to ensure that contracts are carried out.in accordance with policies andprocedures laid down by the Government of Sri Lanka without qeviating from the general requirements of theinternational funding institutions. A notable feature is that the text is very precise and leaves very little room forambiguity. The contents are comprehensive and covers the procurement process from the invitation to bid uptothe execution &completion of the works.

..

The steering committee I sub committee consisted of representatives of the following Professional and Policymaking organizations:

1. The Institution of Engineers, Sri Lanka2. Sri LanRa Institute of Architects3. Society of Structural Engineers, Sri Lanka4. The Association of Consulting Engineers, Sri Lanka5. Institute of Quantity Surveyors, Sri Lanka6. Institute of Town Planners, Sri Lanka7. Institute of ProJect Managers, Sri Lanka8. National Construction Contractors Association of Sri Lanka9. Ministry of Urban Development, Construction and Public Utilities10. Ministry of Finance and Planning11. Institute for Construction Training and Development (ICTAD)

I wish to acknowledge with grateful thanks the services of Mr. Eddie de Zylva and Mr. Jayantha de Mel and allthe members of the steering committee and the sub committee. Meanwhile my special thanks are also due toMr. G Somapala de Silva, 0 Rear Admiral K R L Perera, Mr. G J P Gunawardane, Praf. Lal Balasuriya,Mr. Y G Amaradasa, Mr. Patric Jayawardane, Eng. W MSC Piyadasa, Mr. H D Chandrasena,Mr. S A Karunaratne, Eng. Hemal A Pairis, Dr. T M Pallewatta, Dr. Gamini Kodikara, Mr. D Meemeduma,Mr. J K Lankathilake, Mr. K P W Rajasiri, Mrs. Vajira Ranasinghe and Mr. C Amarakoon who contributed innumerous ways in the publication of this document I also wish to appreciate the secretarial assistancerendered by Miss. Medhani IlIangasinghe.

I earnestly hope that the needs of a large cross section of the players in the Industry will be met by theadoption of this document and would also help to regularize the procurement system.

DR. ADC JAYANANDANACHAIRMAN ICTAD2001/11/29

iii

CONTENTSPage

FORMATS FOR INVITATION FOR BIDS

GUIDELINES FOR USE AS A-BIDDING DOCUMENT

APPLICAD1LITY OF ICTAD STANDARD BIDDING nOrlJMENTS

81

83

77-79

85-90

65-76

59-63

31-57

21-29

5-19

1-4

VI

v

STANDARD FORMS [CONToRACT]

CONDITIONS OF CONTRACT

INSTRUCTIONS TO BIDDERS

BIDDING DATA AND CONTRACT DATA

FORM OF BID ANDQUALIFICATIION INFORMATION

ORAWINGS (Notes)

STANDARD FORMS [BID]

BILLS OF QUANTITIES (Notes)

SPECIFICATIONS (Notes)

SEC'TION 8

SECTION 9

SECTION 7

SECTION 6

SECTION 5

SECTION 4

SECTION 3

SECTION 2

SECTION 1

CHECKLIST FOR BIDDERS 91

iv

Guidelines for Use as a Bidding Document

s Standard Bidding Document (SBD) is intended for use in measure and pay contracts.ncludes many guidance notes to the user. Hen~e this publication is not intended to usea bidding document for a specific procurement. Procuring Entities (PEs) are advised to~ Volum~ 1 and Volume 2, which are published separately as the bidding dOCllment forpecific procurement. The users are advised to follow the directions given below:

(a) All the sections listed in the C.ontentspage are included in this publication.Since a colour system is used the PEs shall not use photo copies ofVolume 1 when inviting bids. Volume 1 is published separately for thatpurpose. PEs may prepare Volume 2 based on the guidance given in thisdocument. Th~ Volume 2 is availabl~ in a CD form.

(b) Volume 1 consists of;o Section 1 - Instructions to Bidders Section 2 - Stal1dard Forms (Contract) Section 3 - Conditions of Contract

Volume 2 consists of; Invitation for Bidse Section 4 - Form of Bid and Qualification Information Section 5 - Bidding Data and Contract Data Section 6 - Specifications Section 7 - Bills of Quantities Section 8 - Drawingse Section 9 - Standard Forms (Bid)

The foot notes in this publication are guidance for the PE, for the purposeof preparing of bidding documents. Volume 1 and Volume 2 which arepublished separately will not contain foot notes except in the StandardForms..

(c) This SBD is suitable for all procurements of works financed under theconsolidated fund or private sector. The SBD is also suitable for NeBprocurements under foreign funded projects. Modifications or amendmentsto the Volume 1 of this bidding document should not be done unless the)are really essential. Any such changes should be provided only in theVolume 2, Section 5 - Bidding Data and Contract Data as amendmentsto Instructions to Bidders and Conditions of Contract respectively only withthe prior cOQsent of the Institute for Construction Training. andDevelopment (leTAD).

v

APPLICABILITY OF ICTAD STANDARD BIDDING DOCUMENTS FOR PROCUREMENTOF WORKS

STANDARD BIDDING DOCUMENT PROCUREMENT OF WORKS FOR MINORCONTRACTS - ICTAD/SBD/03

(1 ) Recommend for use for works contracts up to Rs.l 0 million.

STANDARD BIDDING DOCUMENT FOR PROCUREMENT OF WORKS - ICTAD/SBDj01

(1 ) Recommended for use on works contracts between Rs. "10 million andRs. 100 million.

(2) May be used for works of higher values, which are not of a complexnature.

STANDARD BIDDING DOCUMENT PROCUREMENT OF WORKS FOR MAJORCONTRACTS -ICTAD/SBD/02

(1 ) Recommended for use on works contracts over Rs. 100 million and forcontracts of a lesser value, which are of a complex nature.

STANDARD BIDDING DOCUMENT PROCUREMENT OF WORKS FOR DESIGN AND BUILDCONTRACTS - ICTAD/SBD/04

Recommended to use for works contracts where the contractor is responsible forthe design and construction of the works on specified approvals obtained fromthe Employer. .

~~~ =Sib eeT~, qC))~ ecmir.JJd - ICTAD/SBD/05(~~mOl~)

(1) di.~ ~(;.j!S) 10 ~deJJ ~ ~~~ Cic)J51~)tSl ~eoJ ~~~ ~~

FORMATS FORINVITATION FOR BIDS

Note:

The relevant form shall be filled by the Procuring Entity andincluded in Volume 2 ofthe bidding documents.

1 .

~Ii .:..PR:..:.O.::.C.;;,..U~R;..;.;E;;;.;;.M..;.E...;.'N_T_O,,;-.F_w_O_R_KS ._..-__ l~,-:::j};ldon for Bids

Invitation for Bids (lFB)(GOSL FUNDED PROJECTS)

[All notes given inside the square brackets should be deleted when preparing the Volume 2 of thebidding document]

[insert: name of~ocuring Entity (i/relevant name ofthe Ministry)][insert: Title o/Contract & Contract (Bid) Number]

ow [state address] at or before [insert time and date]. Latened soon after closing in the presence of the bidders'

a~ 0 tai er m onnation from [insert name of Procuring Entity; insert.1of in charge] and inspect the bidding documents at the address

(Jr ss at end ofthis IF/J] from [inser~ affice hours].

7.

5.

The address(es) referred to above is(are):

6. A complet se Bidding Documents in English language may be purchased by interested bidderson the submission of a written application to the .[state addressee] from [state date ofcommencement ofissuing document] until [state date] from 0900 hrs to 1500 hrs. upon payment ofa non refundable fee of [insert amount in Rupees]. The method of payment will be [insert methodofpayment).

Name

Designation,

Address, fax number etc of the Procuring Entity

.8. All bids shall be accompanied by a [insert as appropriate, either "Bid Securing Declaration"l"Bid-Security, of (insert amount in Rupees ")]

4. Qualifications requirements tlegal and qther requiremen ~.

[Insert a briefdescription of the Works includi~g major quantities, location ofproject, and otherinformation necessary to enable potential bidders to decide whether or to respond to theInvitation. The construction period is {insert no. ofDays].

3. To be eligible for contract award, the success I hI dmeet the following requirements [list the requ e le

2. Bidding will be conducted through National Competitive Bi

1. The Chainnan~[insert MPCIDPCIPPCIR?C as appropr~ateJ on behalf of the [insert name ofProcuring Entity] now invites sealed bids from eligible and qualified bidders for

*constructionlrenovationlrehabilitationlrefurbishrnentlrepair of [insert the title of the Works to beprocured] as described below and estimated to cost [insert relevant cost ofconstruction in the latestTeE (Total Cost Estimate))

Select as appropriate

SECOND EDITION, JANUARY 2007 Institute for Construction Training and Development (ICTAD)

.:...P:.::.RO=-C,;:.;U:;.:R~E:.:.:M..:.;:E::.:..N~T.....;;O~F.......;W~O;;:;.;R;:.;.;;K;.;;;;;S~ l.:l ..~~.~~i:ion for Bids

Invitation for Bids (IFB)(FOREIGN "FUNDED PROJECTS)

[All notes given inside the square brackets should be deleted when preparing the Volume 2 of thebidding document]

[insert: name ofProcuring Entity (ifrelevant n'ame ofMinistryJ[insert: name ofProjectJ- [insert: loan / credit number

{insert: Title ofContract &: Contract (Bid) Number]

1. The Democratic Socialist Republic of Sri Lanka '[has received/hasappliedfor/intends to ~pp{v for]a [loan/credit} from the [insert name of the foreign funding agenc}'1 towards the cost of [insertname'of the Project}, and intends to apply part of the proceeds of this [loaitlcredit} to paymentsunder the Contract for [insert name/no. ofContract} ,

2. The Chairman [insert MPCIDPC/PPC/RPC as appropriate] on behalf ofProcuring Entity] now invites sealed bids. from. :eligible andconstruction/renovationJrehabilitation/refurbishmentlrepair of [insert titprocured] as described below and estimated to cost [insert relevant st if.coTeE (Total Cost Estimate)]

{Insert a briefdescription of the Works, includininformation ne..cessary to enable potential bidde ~Invitation to Bidders The construction pe is in rt

3. fu hi shall not have been blacklisted and shalleTAD registration]

4. r contract award include: [insert key technical, financial,

5. a .ootain further infonnation from [insert ~ame of Procuring Entity; insertname, address -mail of officer in charge] and inspect the bidding documents at the addressgiven below [state address at end ofthis IFB] from [insert office hours}.

6. A complete set of Bidding Documents in English language may be purchase4,.by interested bidderson the submission of a written application to the [state addressee] [state date ofcommencement ofissuing document} until (state date)'from 0900 hrs to 1500 hrs. upon payment of a non r~fundablefee of[insert amount inRupe~rnethod ofpayment will be [insert method ofpayment).

7. Bids shall be delivered tola. '. ~.1w [state address] at o.r before [l.nsert time and date]. Latebids will ~ rejected; Bid\,will be~lened soon after closing in the, presence of the bidders'representatives who choose to~. ',.'.. '

8.. All bids shall be accompanied by a {insert as appropriale, either "Bid Securing ,Declaration"/"Bid-Security, of (insert amount in Rupees ")J

The address(es) referred to above is(are):

NameDesignation,Address, fax number etc. ofthe Procuring Entity

. Se/eet as appropriate

4

II

SECOND EDITION, JANUARY 2007 Institute for Construction Training and Development (leTAD)

lS.r

"~I

I

~

Section -1

INSTRUCTIONS TO BIDDERS

Notes:

Instructions to Bidders shall he read in conjunction with Bidding Data under Section 5(Volume 2). Matters governing the performance of the Contractor, payments under theContract, or matters affecting the risks, rights, and obligations of the parties under theContract are included under Section 3 - Conditions ofContract (Volume 1) and ContractData under Section 5 (Volume 2). However, some information is reproduced in thissection to facilitate the bidders to price their bids.

Instructions to Bidders will not be a part ofthe Contract and will cease to have effect oncethe Contract is signed

-

5

_.!

Table of ClausesINSTRUCTIONS TO BIDDERS

- .-

A. Genel~al, 9 D. Submission of Bids, 13

1. Scope of Bid, 9 19. Sealing and Marking of Bids, 13'2. Source of Funds, 9 20. Deadline for submission of Bids, 143. Ethics, Fraud and Corruption, 9 21. Late Bids, 144. Eligibility and Qualification of the 22. Modification and Withdrawal of Bids, 14

Bidder, 95. One Bid per Bidder, 106. Cost of Bidding, 10

-

7. Site Visit, 10E. Bid Opening & Evaluation, 15

B. Bidding Documents, 10 23. Bid Opening, 1524. Process to be Confidential, 15 .

8. Content of Bidding Documents, 10 25. Clarification of Bids, 159. Clarification of Biddiilg 26. Examination of Bids and Determination

Documents, 10 ofResponsiveness, 1510. Amendment of Bidding 27. Correction of Errors, 16

Documents, 11. 28. Currency for Bid Evaluation, 1629 Evaluation and Comparison of Bids, 1630 Prefe~nce for Domestic Bidders, 17

F. Award or Contract, 17

C.. Preparation of 'Rids, 11 3'-1. Award of Contract, 1J32. Employer's Right to Accept any Bid and to

11. Language ofBid, 11 Reject any or all Bids, 1812. Documents Comprising the Bid, J1 33. Notification of Award and Signing of13. Bid Prices, 11 Agreement, 1814. Currencies of Bid, 12 34. Performance Security, 1815. Bid Validity, 12 35. Advance Payment & Security, 1916. Bid Security and Bid-Securing 36. Adjudicator, 19

Declaration, 1217. Pre-Bid Meeting, 1318. Fonnat and Signing of Bid, 13

7

. .~ ...".. ...-:. ::.

"':'/

'.\-'

.!'.: j

.. ~ ..;

:::-'

. ~ .

_________S....ec.......ti.-...on____..I- Ins!t~g~t.~-Dns to Bidders

44_

A. -General

1.1 The Employer as defined in the Bidding Data invites Bids for theconstruction of Works, as described in Section 5, Bidding Data.

D~~ :2. Source of Funds 2.1 Works will be financed by the source given in Bidding Data.

3. Ethics, Fraudand Corruption

3. I The attention of the bidders is drawn to the following guidelines ofthe Procurement GUidelines published by National ProcurelnentAgency:

D Parties associated with procurement actions., namely.,suppliers/contractors and officials shall ensure that they maintainstrict confidentiality throughout the process;

11 Officials shall refrain from receiving any personal gain from anyProcurement Action. No gi'fts or inducement shall be accepted.Suppliers/contractors are liable to be disqualified from thebidding process if found offering any gift or inducement whichmay have an effect of influencing a decision or impairing theobjectivity of an official.

3.2 The attention of the bidders is also drawn to the Sub-Clause 59.2(g)of the Conditions of Contract (Section 3) which shall apply to anybidder.

.~~)~111t~g~1i~~~~i~~~~It1!~~~~('

SECOND EDITION. JANlIARY 20079

Institute for Construction Training and Development (ICTAD)

PR()CI1REi\IENT OF WORKS Section 1 - Instruction '; ;:0 Bidders

50 One Bid perBidder

5.1 Each bidder shall stlbmit only ~ one Bid, either individually or as apartner in a joint venture. A bidder who submits or participates inmore than one Bid (other than as a subcontractor or in cases ofalternatives that have been permitted or requested) .will ca~se all the,proposals with the bidder's participation to be disqualified. '

Institute tor Construction Trait:ling an~ pevelopment (I~!.AD)10

B. Bidding Documents

Volume 1:Section 1 Instructions to Bidders

Section 2 Standard Forms {Contract]Section 3 Conditions ofContract

6.1 The bidder shall, bear:, all costs ass9ciated with the preparation and"submissi'on 'of: ~i~. Bid, ,,~and the. Employer wil1 in no case beresponsible or' I'iable for those 'costs regardless of the conduct oroutcome of the bid~ing,~rocess~, .

'J~.l-.

.. . \ . : .' ,: ..; ': . :,.. ~, :. \ -

Volume 2:Invitation to BidSection 4 Form of Bid and Qualification Information/~--sectlon 5 Bidding Data and Contract Data

t\/~@1,,,,:,~~o?~ 67

." Specificationsse~oJ Bills ofQuantities>.i "

.''''-..seGt1Bn 8 DrawingsSection 9 ,Standard Fonns'[Bid]

8.1 The set of bidding documents comprises the documents listed belowand add~nda. issued in accordance with Clause 10:

SECOND EDITI~N~JANUARY 2007

8. Content ofBiddingDocuments

6. Cost ,of Biddi~g

2.P~R~()~C~.ll.:.:R~E:.:.::M:.::::E~N-=-T..,:;;:O;..;.F......;\...;...;VO.;::...R;..;;.;K;..;;;S~ S_e_c.....t.o....;;io..o...;.n.-;..l_-~ln.......structi~~L:i2 Bidders

10. Amendment of 10.1BiddingDocuments

10.2

Before the deadline (or submission of Bids, the Employer maymodify-the.b.iddingdoc.uments .by .issuin.g addenda.

Any addendum thus issued shall be a part of the bidding documentsand shall be communicated in writing (to' be acknowledged in writing)to all those who have purchased the bidding documents.

11. Language ofBid

10.3 Prospective bidders shall be given a reasonable time of not less than07 Days to enable them to prepare their Bids in accordance with theaddenda.

c. Preparation of Bids

11.1 All documents r~'~ting to the Bid shall be in the language stated inthe Bidding Data. .. .

__.t~.~Z;-Y;0IIt~~rtlf~~~lfii~0~~~r~j~~~Q~'~Pfi,~?!~e;f9nOWi~~:(!igl~~ili~jifltli.~Bv~ji5~.k.idJ~tORlGINA:i.'~' ;

13.1 The Contract shall be for the whole of the Works, as described inSub-Clause 1.1, based on the priced Bills of Quantities submitted bythe bidder.

Sr.:COND EDITION" JANUARY 200711

Institute for Construction Training and Development (ICTAL))

1

PROCURf.J\'IENT OF WORKS Section 1 - Instructions to Bi,.:\iers______________________--:":'__..a...- _

14. Currenciesof Bid

14.1 The unit rates and price~ shall be quoted by the bidder entirely in SriLanka Rupees~lessotherwisel'rovided in the Bidding Data.

1,~siJ~5~(I.I\I.~i~i~'li'~~I~~/_~{~~e~~~;15.2 In exceptional circumstances" the Employer may request that the

bidders extend the period ofvalidity for a specified additional period.The request and the bidders' responses shall be made in writing. Abidder may refuse the request. A bidder agreeing to the request willnot be required or permitted to otherwise modify the Bid, but will berequired to extend the validity of ~e Bid and bid security for theperiod of the~eXtension, "and in compliance with Clause -16 "in all "respects. If a bidder 4oes.not .agree- for an unconditionalextension ofthe 'validity'.ofhis Bid,his';Bid shall be rejected without forfeiting thebid' $ecurlty or executing the bid-sec.uring declarion as appropriate.

16.4 The bid security or the bid-securing declaration of unsuccessfulbidders shall be returned promptly upon the success'ful bidderfurnish~ng the performance security.

12SECOND EDITION, JANUARY 2007 Institute for Construction Training and Development (leTAD)

-!P~R~O~(~:tI~R~E:.!.!~l!.!=E~N~T~O~F~W~O~R~K~S~ ---.;;S~ec~..t.;..;;.io__.n....;.1_-1nstruct~Dn:) ~o Bidder~

II

16.5 The bid security may. be forfeited or the bid-securing declarationexecuted:

(a) if a bidder withdraws its bid during the period of bidvalidity specified by the bidder on the Form of Bid; or

(b) if the bidder does not accept the correction of its bidprice pursuant to ITS Sub-Clause 27; or

(c) .if' the successful bidder fails within the specifiedtime to:(i) sign the Contract; or(ii) furnish the required performance security .

17. Pre-BidMeeting

17.1 The bidder's designated r~presentative is invited to attend a pre-bidmeeting which, if convened and stated so in the Bidding Data, willtake place at the venue and time stipulated in the Bidding Data. Theminutes of such pre-bid meeting shall be made available to aUbidders within a reasonable time prior to the closing date of the Bid.Such minutes should be included by the bidder in his Bid.

17.2 The purpose of the meeting will be to clarify issues and to answerquestions on any matter that may be raised at that stage. The bidder isrequested, as far as possible, to submit any questions in writing or byfax to reach the Employer not later than one week before the meeting.It may not be practicable at the meeting to answer questions receivedlate.

D. Submission of Bids

13SECOND EDITION"JANlJARY 2007 Institute for Construction Traini'ng' and Development (ICTl\D)

PROCllREMENT OF WORKS Section I - Instructions to Bidders....:...::.:...:::.:..:..:..:=:..::=:...:...:....:..:...~:..::..:.:.=----------------_.:-! ----

,19.4~ The. in'rier,'andollt~r, ~riy~:19P~s,:~~all;1..: .,._~ ....~~." ::;,~L,':. ~~:;.::;;;~~.'.:!E'.:..l:~~L;.::':; ::.:'~.':'~,:;:;">:" ..;~ ;'':''::'~:~~.:1~,..;..:...-~:',.,,_:':. ,:-D,:7;"'~"':'

(ft~!:~\05"~~~L~m.~I~r~I~e'~lf!i~;:Pi2~~g];i~._the

~Jl.I~.fillr&i1~J!t~~1~~!"~~~,m~~~99i~~~~.as'g~JS11IIfJ[ell~l4i~j~~~~II.~ll~[~J;/(!ir~O'.I=lli~;~il.~!:sfLItl!;~M2;~ate

r,

.~

20.2 The Employer may extend the deadline for submission of Bids byissuing an addendum in accordance with Clause 10, 'in \vhich case alJrights and obligations of the Employer and the bidders previouslysubject to the original deadline will then be subjected to the newdeadline.

SECOND EDITION, JANUARY 200714

Institute for Con~truction Training and Development (leTAD)

r"""'~~:- -.I:I

III

PROClIREi\tQENT OF WORKS

23. Bid Opening 23.1

S~ction I - Instru:;:.~:..:~~~: to Bidders

E... Bid Opening-and Evaluation

The Employer. wilt' open $e. bids, including modifications madepursuant to Clause 22, in the presence of the bidders' authorizedrepresentatives who choose to .~ttend at the time and in the placespecifieQ in the Bidding Data. The bidders' representatives who arepresent shall sign therr aitenrlanc-e. .

.24r'~.;JlrOceSs.to:be5=iC~i'qg~~~!lI~~I:'

25. Clarification ofBids

23.2 Envelopes' marked "WITHDRAWAL" shall be opened and read outfirst. Bids for which an acceptable notice of withdrawal has beensubmitted pursuant to Clause 22 shall not be opened..

23.3 The envelope marked as "Original" will be opened. Ifno envelope ismarked as "Original" the Employer may open one of the envelopes.If the required documents are available in that envelope, Employer":lay mark it ~ the "Or!ginal" and the unopened envelope as the"Copy". If so the envelope marked as copy will remain unopened.If any of the required document is missing in the envelope openedfirst, the Employer may open the other envelope to search suchmissing information transfer such documents to one envelope andmark it as "Original" and resealed the other envelope and mark as"Copy".

23.4 The bidders' names, the bid prices, or any discounts, Bidmodifications and withdrawals, the presence or absence of bidsecurity / bid security declaration and such other details as theEmployer may consider appropriate, will be announced by theEmployer at the opening. No bid shall be rejected at bid openingexcept late bids.

23.5 After announcing and completing the other procedures, the Employershall reseal all the opened envelopes in the presence of the bidder'srepresentatives.24~:1: .

I' .'~ " . i.""':- -

~../25.1 To assist in the examination, evaluation, and comparison of Bids, the

Employer may, at the Employer's discretion, ask any bidder forclarification of the bidder's Bid, including breakdowns of unit rates.The request for clarificatio.n and the response shall be in writing butno change in the price or substance of the Bid shall be sought~offered, or. permitted except as required to confirm the correction ofarithmetic errors discovered by the Employer in the evaluation of theBids in accordance with Clause 27.

J}SECOND EDITION, JANUARY 2007

15Institute for Construction Training and Development (IC1~A.D)

PROCtJREl\'lENT OF WORKS

26.2

Section 1- )nstructions ~c B~ddersr

28. Currency forBid Evaluation

29. Eva11lation and, Co~parison of

.,,\~id$ ,".

27.1 Bids determined to be substanti1111y responsive will be checked by theEmployer for any arithmetic errors. Errors will be corrected by theEmployer as 'follows:

(a) where there is a discrepancy between the amounts in figures and inwords, the amount in words will govern; and

(b) where there is a discrepancy between the unit rate and the line itemtotal resulting from multiplying the unit rate by the quantity, the unitrate as quoted will govern, unless there is an obvious gross

" ' misplacement of the decimal point in the unit rate, in which case the'line item total as quoted will govern, and the unit rate .will becorrected.

(c) if the bid price changes by ~e above procedure, the amount stated inthe Form of Bid shall be adjusted with the concurrence of the Bidderand shall be considered as binding upon the bidder.

~unless specified in Bidding Data.29.1 The Employer will evaluate and compare only the Bids determined to

be substantially responsive.

29,.2 In evaluatin'g the bids,

(c) maki.!lg.l'!Ppr_

PR()CliREMENT OF WORKS

32. Employer'sRight toAccept any Bidand to Rejectany or all Bids "

33. Notification ofAward andSigning of

Agreeme~t

Section) - Instructions to Bidders

(a) made misl~adjrig or false rep~esentation in the 'forms, statements'. and' attach-ments- ,s'ubm-i-tted--in'proof of ,the eligibility alld

qualification requirements; or(b) participated in fraud and corrupt practice.(c) record of poor' .performa'nce in previous "contracts, such as

abandoning the works, inordinate delays resulted in payment ofliquidated damages up to the maximum limit specified in thecontr~ct etc; "

32.1 The Employer reserves the right 'to -accept or reject any bid, and tocancel the bidding process and" reject ~II ~ids, at any time prior to theaward of Contract, without thereby incun'ing any liability to theaffected bidder or bidders or any obligation to infonn the affectedbidder:or bidders of the grounds ~or the Employer's action.

33.1 Prior to expiration of the' bidvali4ity period, the Employer will notifythe .~~ucces~ful bidder that 'his bid has b~en accepted. This letter(hereinafter and in th~ ,Conditions of ,Contract called the "Letter ofAcceptance") will state the sum that the Employer will pay theContractor in consideration of the execution, completion, andmaintenance of the Works by the Contractor as prescribed by theContract (hereinafter and in the Contract called the "Initial ContractPrice")

33.2 The notification of award will" constitute the formation of theContract.

33.3 The agreement will incorporate the memorandurn of understanding ifany between the Employer ~nd the successful bidder, and shall besigned by the Emp)oy~r and the successful bidder.

33.4 Upon the furnishing by the successfl:J1 bidder of the performancesec~rity, the Employer will, prqmptly notify the other bi"dders thattheir bids have been ~nsucces~fuL"

33.5 At the same time that the Employer notifies the successful bidder that/""~d has been,accepteq, the Employer will prepare the agreement in

~/ the rm provided in the bidding documents, in~orporating allnf~ ents between the Parties. , 0U0U~~ , ..3 6 The mployer shallnQtify the successful bidder the date, time and~-- ven'uefor the signing of the agreement. The agreement shall besigned within 28 D~yso ofthe Le~~r of Acceptance.

.~ "~":~r'"~til~~~~I~~

...}.k,

r~fW""" P~OClIREMENTOFWORKS Section 1 - Instructi~~:E:_.i9 Bidders

r'

I

SECOND EDITION" JANlJARY 2007 19Institute for Construction Training and Development (leTAD)

Section .. 2

STANDARD FORMS [CONTRACT]

11 Letter ofAcceptance AgreementliI Performance Security Advance Payment Security Retention Money Guarantee

21

Section 2 - Standard Forms [Contract]

Notes 011 Standard Forms:

The successful bidder will be required to provide these securities in compliancewith the requirements herein or as acceptable to the Employer.

Bidders should not complete the Form ofAgreement at the time ofpreparationa/bids.

The Form of Performance Security, Form of Advance Payment Security andForm nfRetention Money Guarantee should not be completed b.v the bidders atthe time ofsubmission ofbids.

Any co"ections or modifications to the accepted bid resulting from arithmeticcorrections, acceptable deviations, or quantity variations in accordance withthe requirements of the bidding documents should be incorporated into theAgreement.

~~ successful bidder w;/l.ee required to Sip" the Form ofAgreement, after the.awardofcontract.

SECQND EDITION, JANUARY 200723


'II

PR.()('\IRF:!\'lENT OF WORKSP.

Notes on Form ofLetter oj'Acceptance

Section 2 - Standard F,JfH1S rContract]

The Letter ofAcceptal1ce will be the basis/or/ornlatioll o.fthe Contract as descrihed in Cl/ause33 of the Instructions to Bidders. This Form of Letter ofAcceptance should be filled in llndsent to the suc~essful bidder only after evaluation of Bids and after obtaining approval fr0l11the relevant authority.

.. .

FORM OF LETTER OF ACCEPTANCE

---------------------------------------- [Gfate][LETTER HEADING PAPER O~ THE PROCURING ENTITY]

lro: ---------------------------------------------------------------------------------------------------------------------[name and aadress ofthe Confractor}

This IS to notify you that your bid dated ----------~----:---- [insert date] foP'\ the construction andremedying defects of the ---------------------------------------------------.;.(~::.-..\--\-----.[nanle of the

. \ "\ \ 1Co'!!rq~.t.and identification number] for the Contract price of ---/~---~r---~~--\[nalneofcurrency J----:.:~,~:~~!:.~~~---------------------------------;-----[amount in figures and\wo\?sJ ~s ~orr~ted in accordancewith-'lnstructions to Bidders and / or modified by' a M~rrlo\ana~.lIrl'-/qf lJn~rst~nding2, is herebyaccepted ,.,/'\ \ \ \ ,,/ \. \ .\,.....,

. . . ("\ \ \~ \. \ \ \~:) \/ .. .The adjudicator shall be --------------------------~--~'\----'r--1\[n~n1e..arid' address of the Aajudzcalor. (fa[{reed] I shaH be appointed by the Insttf'ffr \on'tru~i~f\Jta{ningand Development (leTADi.You are hereby instructed to;p;~eed\W~'t;'~ e\Jtio';;'~f the said Works in accordance with theContract documents. /r~'~\ \ V\ \ \) ,.

\' \\ \ \ ( \,._..,,;/The Start DSlttrs~11 ~e: \~-i----~--~~:}--------(fill the date as per Conditions ofContract).(G'::::. \ \ \//. .The aITIount...Qf Pe"'9rn\an~e Security is : ------------------- (fill the date as per Conditions oj"Contract).

. '0e ~~rform~~Jecu:~:p~~ubmitted on or before --------------------- (fill the date as per. (.ondlllons ofContract). r r(~ lr/A\rol \, \ U" .. UlJ"\~) J ..

\ I 'Authorized Signature : ",,,--------7,,/-------------------------------

",......_..,--,'

Name' and title ofSignatory: ---------------------------------------------------------------Name of Agency: ----------------------------------------------------------------------------

((nZlIItiple currencies are involved indicate amounts under each currency separated with the word 'and' benveen then1[)elete "corrected in accordance with ITB and/or " or "and/or modified by a Menlorandum ofUnderstanding". ifnot applicahle!Jelele 'whichever inapplicable or delete both ifnot applicable

25Institute for Construction Training and Development (lGTAD)

PROCliREf\t1ENT OF WORKS

AGREEMENT

STANDARD FORM: AGREEMENT

IN WITNESS whereof the parties thereto have caused this Agreement to be executed the day and yearaforementioned in accordance with laws of S~i Lanka. .

26Institute for Construction Training and Deyelopment.(I.CTAD)SE(:OND EDITION. JANlJARY 2007

3.

1.

2.

The Common'Se;al of " /"'-':"---""was hereunto affixed i,o--:~,;-:~-~--r~-S-~n)f~~:-10-f-:-----------------

\ U~/ UL~ J\ '" /

Signed. Sealed, and Deliv~oy'the said----------------------

in the presence of:-----------------------------

WHEREAS the Employer desires that the Contractor execute ------------------------------------[name andidentification number of Contract] (hereinaft~r called "the Works") and the Employer has acceptedthe Bid by the Contractor for the execution and completion of such Works and the remedying of any

.r\defects therein. . . /~ \ \

\ '\\ \..."', \ '\ \

NOW THIS AGREEMENT WITNESSETH as follows: ('/

., ~ : . T. ' '

FoRM OF PERFORMANCE SECURITY(Unconditional)

. 27

... ~ .. ~~

Section 2 - Stand(lx~~.t ~);d7iS [Contract]

Institute for Construction Training and Development (leTAD)

------------------------------

:::r-:~. ': ' ,"":~f::f' ..' . . _. __~-------------------------- ..-------------------------------------------~- llssuing~~~;~~:~--;,----------d--A--;;dress ofIssuing Branch or-Office] . ...,~l!/~ S iVame, an .':. ':~'\:":~~~

~ji~fici;l~: -------------------------------------------------------------------------------" [lValne anGf:,~r~ss ofEmployer]

~(\\ \. \\\ \-:\ \\. '\ \,iW~y~"': :bd6i1" informed" that ,,-----------------~------------------~--;.0--f [~m,f "of Contractor]

exe;ffiiift:er called "the contractor) has enter~d Into Contra~i~lp. -\---\;:::}---\--~"':;-"'";.'7--- [reference.'i#?~~~:ofthe contract) dated ------------------ with you, for1l1'\\-,.--\----\---\:/ [ii~irr"construction "].;~7_-----~--'--------------------------~------------~--.~a~iA. ~f aen~act }mGf brief Gfescription of~.. :'.:-.(,hereinafter called "the contract ). -, \ \ \"~,\'~\ \ /n' . .' /.. \ "\\ "~\)~ot:e,we understand that,~di~t~cO~li~n~~ ~ontract, a performance guarantee:ire

FORM OF ADVANCE PAYMENT SECURITY. , .' '. '. ... . .-.. .~... ., ,-

..

PROCUREMENT OF WORKS Section 2 - Standar'!f,:~~L~ ~Contract] f-

------------------------------------------~-~-------~----------------------------------- [ lVanne anti aGfliressofAgency, and Address ofIssuing Branch or Office]

Beneficiary: -.--------~------------------------------------------:------:-----------------rName and Addre~~' 'ufEmployer]

Date: ---------------------------------- . ,

ADVANCE PAYMENT GUARANTEE No.: ---------------------------

Consequently, any demand for payment under this guarantee must be received by us at t~is office onor before that date.

Institute for Construction Training and Development' (leTAD')'" \?:.i

The Guarantor shall insert an amount representing the amount ofthe advance payment and denominated either in thecurrency(ies) ofthe advance payment as specified in the Contract.


4

[signature(s)]

We have been informed that --------~---------;-------------------:----_::--------~----[name of,C.ontractorJ(hereinafter called "the Contractor") has entered into Contrarct No. ------------------------ [referencenumber ofthe contract] dated ---------------------- with you, for the -------------r-y -- construction of ----------------------------------------------- ,[name ofcontract and briefdes~~(hereina~er cal\ed

~t::::::::I:e understand tha~ a~C~rding t:"ilie cOnd~~fth~~~~ance' payment i.~,:.',"~the sum. ------------------~-- [amount In figures] (----f"--\\-----\----\---'v\---~,---------,-) (am,ount znwords] IS to be made agamst an advance payme~ar\t~~ \ \ ,\ / ,'!' .. ,!" """', ': . i !~\\ \~~\V "At the request of the Contractor, we -~---r\--\---~--\----\--~\)-~----------- [name ofissuing agency]hereby irrevocably undertaket~ y a\i\vs'~m r s~msWt e~ceeding in,total an amount of -----.------------- [amount in figures] ~---~---- ---\+,--- - -------.-----------------) [amou.nt in ~ord~f uponreceipt by us ofYOU~de~~ in \rifiiJo/accompanied by a written ,statement ~tating that theContractor is in breac'\t o~ts\obl~aio in'repayment of the Advan

tli

.r-I

".;;'.

0 :)

.~~,.,'

_P-R-O-C-ll-R-E-M-E-N-T-O-F-W-O-R-K-rS-------------- S_ec_t_io_n_2_-_S_tan_dar~L:~~ ~ .. ::S l Contract]

Beneficiary: ,.--------------------------------------------------------------------------- [Name and AddressojEmployer]

---------------------------------------------------------------------------~--------------------[lssuin~Name, and Address ofIssuing Branch or Office] ,

Date: ---------------------

Agency's

RETENTION MONEY GUARANTEE No.:

Insert amount equivalent to the second halfofthe Retention Money

[signature(sJ]

. 29Institute for Construction Training and Development (lCTAD)SECOND EDITION, JANUARY 2007

We have been informed that ----------------------------------------------- [name of Contractor](hereinafter called "the Contractor") has entered into Contract No. ---------~---------- [referencenumber ,of the contract] dated --------------- with you, for the execution o~-L:-\---------- [name ofcontract and briefdescription ofWorks] (hereinafter called "the Contract").\ ~ \/\ \ \ \

.r' ~ \ "IFu.rthermore, we understand that, according to.the conditions,-et th\ ~tra~~,~e~ the works havebeing tak,en over and the first half of the RetentIon Mo~n~.b~n oort~ed r~r~ayfuent, payment ofthe second half of the Retention Money may be made a ins ,a\R~ent\on M?neyguarantee.

. ~\ \ \:'~ \ \ ./\'\ ~\ \ \ . ..-.,,-1" ,

. \ \ \ \\ \ \,r

At the request ofthe Contractor, we -----~.;.-.:::-...:----\---~---1--CtV------------------ [name ofagency]hereby irrevocably.undertake to pay you atf){~

I

If

,-

Section - 3


Conditions of Contract shall be read in conjunction with Section 5 - Contract Data inVolume 2, which shall take precedence over the Conditions of Contract

31

IIi

l]--I

Table of Cia'uses '


A. General, 35 c. Quality Control, 45

1. Definitions, 35 33. Identifying Defects, 452. Interpretation, 37 34. Tests, 453. Language and Law, 38 35. Correction of Defects, 454. Engineer's Decisions, 38 36. Uncorrected Defects, 465. Engineer's Representative, 386. Communications, 38

..D. Cost Control, 467. Subcontracting, 388. Other Contractors, 38 37. Bills of Quantities, 469. Personnel, 39 38. Changes in the Quantities, 4610. Employer's and Contractor's Risks, 39 39. Variations, 461I. Employer's Risks, 39 40. Payments for Variations, 4712. Contractor's Risks, 40 41. Cash Flow Forecasts, 4813. Insurance, 40 42. Payment Certificates, 4814. Site Investigation Reports, 40 43. Payments, 4815. Queries about the Contract Data, 41 44. Compensation Events, 4816. Contractor to Construct the Works~ 41 45. Change in Law, 5017. The Works to be Completed by the 46. Currencies, 50

Intended Completion Date, 41 47. Price Adjustment, 5018. Approval by the Engineer, 41 48. Retention, 5119. Safety,. 41 49. Liquidated Damages, 5220. Discoveries, 41 50. Bonus, 5221. Possession of the Site, 41 51. Advance Payment, 5222. Access to the Site, 41 52. Securities, 5223. Instructions, 41 53. Dayworks,5324. Dispute Resolution, 42 54. Cost of Repairs, 5325. Procedure for Adjudication, 4226. Arbitration, 43

E. Finishing the Contract, 53

B. Time Control , 44 55. Completion, 5356. 'raking Uver, 53

27. Programme, 44 57 Statement at Completion, 5328. Extension of the Intended 58. Operation and Maintenance

Completion Date, 44 Manuals, 5429. Accel~ration, 44 59. Tennination, 5430. Delays Ordered by the Engineer, 1/5 60, Payment upon Termination, 55310 Management Meetings, 45 61. Property,5532. Early Warning, 45 62. Release from Perfonnance, 55

63. Provisional Sums andN~minated Sub-contracting, 55

64. Sus ension of Works, 56

33

Note - Conditions of Co~tTt!-Ct.shall be reat! i~ cl!njunction "'ith Contract Data

The Contractor's Bid is the completed bidding documentsubmitted by the Contractor to the Employer.",...-~,

/'/ "-

I . n-g.~Contract Price is the price stated in the Letter of Acceptance( ~@lfl~ thereafter as adjusted in accordance with the provisions of the\ Co~act. ..'-.'---/

Costs shall be deemed to include overhead costs whether on or offsite but without profit.

PROCllREl\tlENT OF WORKS

35

Section 3 - Cond\ti0\r~~ uf ('cntracl

Institute for Construction Training and Development (lCTAD)

A Defect is any part of the Works nQt completed in accordancewith the Contract.

Dayworks are varied work inputs .subject to payment on a timebasis for the Contractor's employees and Equipment, in addition topayments for associated Materials and Plant.

Days are calendar days;

Compensation Events are those defined in Clause 44 hereunder.

The Contractor is a person, corporate body, partnership,proprietorship or jojnt :venture whose Bid to carry out the Workshas been accepted by the Employer.

The Contract is the Contract between the Employer and theContractor to execute the Work~ and shall include the documentslisted in Clause 2.3.

The Completion Date is the date of completion of the Works ascertified by Engineer, in accordance with Sub-Clause 55.1.

Completion shall mean when in the opinion of the Engineer the,Works have been completed to an extent to be consideredfunctional for the intended purpose.

A. General

The "Adjudicator~' is the person appointed in accordancewith Sub-Clause 25 jointly by the Employ~rand the Contractor orby the Institute for Construction Training and Development(IC'I'AO) as the case may be, fur d~lenl1ination of the disputes inthe first instance, as provided for in Clause 24 & 25.

Certificate of Completion is the certificate issued by the Engineeron completion of the Works.

Bills of Quantities means the priced and completed Bills ofQuantities forming part of the bid.

Boldface type is used to identify defined terms.Definitions1.

,. SECOND EDITION.JANlIARY 2007

II

Letter of Acceptance means the letter signed and issued by the/'-~ loyer accepting the Bid submitted by the Contractor for the

(

. exe tion and completion of the Works.~i~lA\@ . .U L'"j&t rials are.all suppli~s, .including consumables, used by the

"'----C tractor for Incorpurallun III lht: Wurk.s.

PROClIREMt:NT 0." WORKS

SE(:OND EDITION, JANUARY 2007

Section 3 "- Conditions of C"onlrul:t "

The Defects Liability Period is the period n.amed in the ContractData and ~alculated from the Completion Date.

Drawings include calculations and other information provided orapproved by the Engineer for, the execution ofttte Contract.

The, Employer is.the' Party named in the Contract Data, whoemploys the Contractor t~ c~rry ,out the Works.

The Engineer is the person named in the Contract Data (or anyother cOJ1lpetent person appoi.nted by the Employer and notified tothe Contractor) who is responsible for administering' andsupervising the execution of .~he work. Such person may be anengineer, architect or any other technical person. In the absence ofsuch appointment the Employer himself.

The Engineer's Representative .. means a person appointed fromtime to time by the Engineer under Sub-Clause 5.1 of theseconditions.

Equipment is the Contractor's machinery and vehicles broughttemporarily to the Site to construct the \Vorks.

Final Certificate is the certificate issued by the Engineer after theDefects Liability Period and on correction of the Defects by theContractor.

The Initial Contract Price is the price stated in the Letter of"Acceptance.

The Intended Completion Date is date on which it is intendedthat the Contractor shall, complete the Works. The IntendedCompletion Date is specified in the Contract Data." The IntendedCompletion Date may be revised only by the Engineer by issuingan extension of time or an acceleration order.

Party means either or both the Employer and the Contractor as thecontext requires.

Plant is any integral part of the Works that shall have amechanical, electrical, chemical, or biological function.

The Site is the area defined as such in the Contract Data.

Site Investigation Reports are those that \\,ere included in thebidding documents and are factual and interpretative reports aboutthe surface and subsurface conditions at the Site."

36Institute for Con6truction Training and Development (lCTAD)

- I

II,

PROCllREMENT OF WORKS Section 3 - Conditic.', ,'~' Contract

Specification means the Specification of the Works included in.the Contract and any modification or addition made or approvedby the Engineer.

The Start Date is given in the Contract Data. It is the latest datewhen the Contractor shall commence execution of the Works. Itdoes not necessarily c.olnclde with (\ny ot the Site PossessionDates.

c) A: reference to a natural person includes any company,/~:rthei-ship, trust, joint venture, association, corporation or

! ;l?fi\rm ,her body corporate and any authority ;(~@IJ' A ref~ren~e to ~ document includes an amendment or~, /~uppleinent to, or replacement or innovation of, that document----"

but disregarding any anlendment, supplement, replacement orinnovation made in breach of this Contract; and

SECOND EDITION.. JANllARY 2007

2. Interpretation 2.. 1

A Subcontractor is a person or corporate body who has aContract with the Contractor to carry out a part of the work in theContract, which includes' work on the Site.

Temporary Works are works designed, constructed, installed,and removed by the Contractor that are needed for construction orinstallation of the Works ..

A Variation is an instruction given by the Engineer whi,ch variesthe Work~, \vhich is instructed or approved as a Variation underSub Clause 39.4 ..

The Works are what the Contract requires the Contractor toconstruct, install, and hand over to the Employer, as defined in theContract Data.

In the interpretation of these Conditions of Contract, unless thecontext otherwise requires:

a) Headings are for convenience only and do not affect theinterpretation of this Contract;

b) Words impol1ing the singular or the gender shall include the,; ~"'.plural and the other gender and vice versa.. Words have their

i~"nonnal meaning under the language of the Contract unless::,.lspecifically defined;

e) A reference to a Party to any document includes that Party'ssuccessors and permitted assigns.

Any clarification of,these Conditions of Contract will be providedby the Engineer.. :

If sectionil1 completion is specified in the Contract Data,references in the Conditions of Contract to the Works.. theCompletion Date, and the Intended Completion Date apply to anySection of the Works (other than references to the CompletionDate and Intended Completion Date forthe whole of the Works).

. 37Institute for Construction Training and Development (ICTAD)

J,

Institute for Construction Training and Development (lCTAD)38

The Contractor shall cooperate and share the Site with othercontractors~ public authorities, utilities, and the Employerbetween tbe dates given in the Schedule of Other Contractors,as referred to in the Contract Data. The Contractor shall alsoprovide facilities and services for them as described in theScheduJe. The Employer may modify th~ Schedule of otherContr~tors, and shall notify the Contractor of any suchmodj{~ation.

Section 3 - Condition3 Jf Contract

The documents fanning the Contract shall be interpreted in thefollowing order of priority:(1 ) Agreement,(2) L~tter of Acceptance,(3) Memorandum of understanding (if any)(4) Contractor's Bid,(5) Contract Data,(6) . Conditions of Contract,(7) Specifications,(8) Drawings,(9) Bills ofQuantities"

(lO) any other document.' listed in the Contract Data as formingpart of the Contrac~. ~, .

5.2 The Engineer may delegate any of his duties and responsibilitiesto Engineer's Representative or others, except to theAdjudicator, after notifying the Contractor, and may cancel anydelegation after notifying the Contractor.

5.1 The Engineer's Representative shall be appointed by and beresponsi~le to the Engineer and shall carry out such duties andexercise such authority as may be delegated to him by theEngineer under Sub-Clause 5.2

4.1 Except where otherwise specifically stated, the Engineer wilidecide c~ntractual \rmatters between the Employer and theContractorin the role representing the Employer.

3.1 The language of;' tne Contract shall be English.. The lawgoverning the 'Con~r:aGt is' the law of the Democratic SocialistRepublic of Sri Lank.a_..

6.1 Any verbal communication between the Parties including anyinstructions given, shall be deeme~ to be duly given for thepurposes of this sub-clause, if either Party within seven (7)Days, confinns to the other Party in writing of such verbalommunication or instructions. If the recipient Party does not

nf0i9r;\rn! tradict such confirmation in writing within seven (7) Days. itU\~ .lll~h 11 be deemed to ha:ve been accepted.

. e Contractor may subcontract with the approval of Engineer,1;>ut shall not assign the Contract without the approval of theEmployer in writing. Subcontracting shall not alter theContractor's obligations. .

2.3

Other Contractors 8.1

r \

SECOND EDITION. JAJ'1,. ..~a~ 2007

7. >.,,:)Sub Contracting

6. Communications

8.

3. Language andLaw

4. Engineer'sDecisions

5. Engineer'sRepresentative

PROClJREMENT OF WORKS

PROCiIRE:MENT OF WORKS Section 3 - Con~!.i.'~t:.o ..:o:~o' Contract

11.2 From the Completion Date until the Final Certificate has beenissued, the risk of loss of or damage to the Works, Plant, andMaterials is an Employer's risk except loss or damage due to;

10.1 The Employer carries the risks which this Contract states areEmployer's risks, and the Contractor carries the risks which thisContract states are Cdntractor's risks.

(b) The risk of damage to the Works, Plant, Materials andEquipment to the extent that.is due to :

(i) a fault of the Employer or the Employer~sdesign

Institute for Construction Training and Development (ICTAD)39

a Defect which existed on the Completion Date,

an event occurring before the Completion Date, whichwas not itselfan Employer's risk, or

the activities of the Contractor on the Site after theCompletion pate.

(iii) riot, commotion or disorder within ~he country andwhich is not caused by or due to thOe employees ofthe Contractor

(ii) due to war, hostilities, rebellion, revolution,insurrection, radioactive contamination within thecountry

(c)

(a)(b)

11.1 From the Start Date until the Final Certificate has been issued, thefollowing are Employer's risks:

(a) The risk of personal injury, death, or loss of or damage toproperty (excluding the Works, Plant, Materials, andEquipment), which are due to;

(i) use or occupation of the Site of the Works or for thepurpose of the Works, which is the unavoidableresult of the Works or

(ii) negligence, breach of statutory dut)', or interferencewith any legal right by the Employer or by anyperson employed by or contracted by him except theContractor.

Q '2 If the E.ngineer asks the Contractor to remove a person '~/ho is amember of the Contractor's staff or work force., stating thereasons, the Contractor shall ensure that the persn leaves the Site

wi~~in seven Days and has no further connection with the work inthe Contract.

9. 1 The Contractor shall employ the key personnel if named by theEmployer in the schedule of key personnel, as referred to in theContract Data, to carry out the functions stated in the schedule orother personnel approved by the Engineer. The Engineer mayapprove any proposed replacement of key personnel only if theirrelevant qualitications and abilities are substantially equal to orbetter than those of the personnel listed in the schedule.

;;:: !~!~'.J.::.\';~;~~;.~{. ,:~@lflNID)

"'l;.:~~~~~?r: .. .~~ I ~:.\~.'~ ~,:,;~:;o~h'; 'iL'o;~,~n ~

Employer's Risks

Employer's andContractor'sRisks

SECOND EDITION.JANlIARY 2007

~o.

11.

9. Personnel


Site InvestigationReports

PROCVREMENT OF WORKS

40Institute for Construction Training and Development (leTAD)

14.1 The Contractor, in preparing the Bid, shall rely on any SiteInvestig.ation Reports referred to in the Contract Data,supplemented by any infonnation available to the bidder.

(a) liability for personnel injury or death of workmen or other~mployees of the Contractor. The Contractor's liability forpersonal injury or death of workmen shall be as providedfor in the Workmen's Compensation Act and any otherstatutory modifications or amendments thereto.

13.1 The Contraet(lr c;hall provide, in the joint names of theEmployer an~.the Contractor, insurance cover from the Start Oate tothe end of tile Defects Liability Period, in the amounts anddeductibles stated in the Contract Data for the follo\ving events:which are due to the Contractor's risks:

. (a) loss of or damage to the Works, Temporary Works, Plantand Materials.

(b) 'oss ofor damage to Eq~.ipment;(c) loss of or damage to property of third parties and that of the

Employer; (except to Works, Temporary Works, Plant,Materials, and Equipment) in connection with the Contract~

(d) personal injury or death to any person of a third party andincluding employees of the Employer and other personsengaged by the Employer in connection with the Contract~

1'.":'--:';

13.2 The Contractor shall provide insurance cover from the Start Date tothe end of the Defects Liability Period, in the amounts stated inthe Contract Data for the following event which is due to theContractor's risk:

13.6 Both Parties shall comply with any conditions of the insurancepolicies.

13.5 Alterations to the terms of an insurance shall not be madewithout the approval of the Engineer.

12.1 From the Start Date until the Final Certificate has been issued,the risks of personal injury, death, and loss of or damage toproperty (including,' without limitation, the Works, Plant,Materials, and Equipment) which are not Employer's risks areContractor's risks.

-., 13.3 Policies and certificates for insurance shall be delivered by' the'Contractor to the Engineer for the Engineer's approval before

. the Start Date. All such insurance shall provide for~."". . c.o..:m.... ,pe.n.sation ~o be pay~ble in the types and.. proportions of~(~/A\rnclesreqUired tp rectifY the loss or damage Incurred.\n~.:~~ff!"~he: co.ntractor does not provide "any of the policies and~,~rtificates required, the Employer may effect the insurance

;' which~i the 'Contractor should have provided and recover thepremiums .the Employer has paid from payments otherwise dueto the Contractor rOf, if no payment is due, the payment of thepremiums shall be a debt due.

Contractor'sRisks

Ihsuranc~IJ.

12.

14.

20. Discoveries 20.1 Anything of historical or other interest or of significant valuediscovered on the Site shall be the property of the Employer.The Contractor shall notify the Engineer of such discoveries/r'---'~dcarry out the Engineer's instructions for dealing with them.

21. Possession of the ( ~@1fiiQ}l Employer shall give possession of all parts of the Site to theSite "C);trootor. The Employer if required may give possession of

,,'-------"1he Site in accordance with the approved programme. Ifpossession of a part is not given by the date stated in theContract Data, the Employer will be deemed to have delayed thestart of the relevant activities, and this will be a CompensationEvent.

SECOND EDITION" JANUARY 200741


23.1 Th~ Contractor shall carry out all instructions of the Enginee~which comply with the applicable laws where the Site islocated.

22. 1 The Contractor shall allow the Engineer and any personauthorized by the Engineer access to the Site and to any placewhere work in connection with the Contract is being carried outor is intended to be carried out.

18.5 All Drawings prepared by the Contractor for the execution ofthe Temporary or Permanent Works, are subject to priorapproval by the Engineer before use.

19.1 The Contractor shall be responsible for the safety of allactivities on the Site.

18.4 The Contractor 'shall obtain approval of third parties to thedesign of the Temporary Works, where required.

18.3 The Engineer's approval shall not alter the Contractor"sresponsibility for design of the Temporary Works.

18.2 The Contractor shall be responsible for design of TemporaryWorks.

18.1 The Contractor shall submit Specifications and Drawingsshowing the proposed Temporary Works to the Engineer, whois to approve them if they comply with the Specifications andDrawings.

17.1 The Contractor may commence execution of the Works on theStart Date and shall carry out the Works in accordance with theprogramme submitted by the Contractor, as updated with theapproval of the Engineer, and shall complete them by theIntended Completion Date. .

16.1 The Contractor shall construct and install the Works inaccordance with the Specifications and Drawings andEngineer's instructions.

15.1 The Engineer will clarify queries on the Contract Data.

Instructions

Access to theSite

Safety

Approval by theEngineer

Queries about theContract Data

The Works to beCompleted by theIntendedCompletionDate

Contractor toConstruct theWorks

23.

22.

19.

18.

17.

16.

15.

PR()CJ.lREl\JIENT OF WORKS

PR()CIIREMENT OF WORKS

24. DisputeResolution

25 Procedure forAdjudication

24.1 Any dispute of whatever nature arising out of or in relation tothis agreement shaH in the first instance be attempted to beresolved by way of adjudication in accordance with theadjudication procedure set forth in Clause 25.

25.1 EitlJ~t"~;nP:wtY may initiate the reference of a dispute to theAdjijscficaior by giving 07 Days notice to the 'other Party. : .'

25.2 The Adjudicator shall be appointed by agreement between theParties. In the event the Parties are unable to reach agreel~enton the appointment of the Adjudicator within fourte~1i (14)Days from the date of such request, either Party may'make anapplication to the Institute for Construction r.raining andDevelopment (JeTAD) to appoint an Adjudicator.

25.3 The Adjudicator shall be a professional with experience relevantto th'e Works and in the interpretation of contractual documents.Such Adjudicator shall have no interest financial or otherwise inthe Employer, the Contractor or the Engineer nor any financialinterest in the Contract, except in respect of his professionalfees.

25.4 The Adjudicator's fee shall be agreed by both Parties and shallbe borne by both Parties in equal amounts.

25.5 The Adjudicator shall give the determination in writing within28 Days or such other period of receipt of a notification of adispute. The Adjudicator shall detennine procedures as he seesfit ensuring that each Party is given a reasonable opportunity tomake representations including written submissions and/orhearing of witnesses in person.

25.6 With the prior concurrence of both Parties the Adjudicator maytake advice and assistance from independent professionaladvisorls or other person/s to enable him to reach adetermination on the dispute. Such costs shall be borne by bothParties in equal amounts.

(

25.7 ch of the Parties shall upon and in accordance ,\\,ith a request~@ll&lID'y the Adjudicator supply him fre~ .of charge such information

a documents as he shall require for the purposes of the~,.,." ference to him. That information and those documents shall be

kept confidential by him and by the Parties.

25.8 The Adjudicator shall not act as an Arbitrator. The decision ofthe Adjudicator shaH be deemed final and binding on the Partiesif neither Party refers the dispute to arbitration in aCb'ordance'with Sub-Clause 26.1 within twenty eight (28) Days of theAdjudicator's determination.

25.9 Replacement ofAdjudi~ator

Should the Adjudicator resign or die or is removed by agreementof the Parties on the basis of his unsatisfactory performance,. theParties may jointly appoint another Adjudicator and such anappointment shall be made within fourteen (14) .Days after the

SECOND EDITION, JANlJARY 2007 42Institute for Construction Training and Development (ICTAD)

.....:P_R...;..;;O~(;....;;~l_rR.:..;.;E_M.....;;;E~N.....;;.T-.,;O;..;.F_W_O_R_KS~ Se_c_ti_on} - Condt~~~::.:~ 'Jf Contrac.;t

SECOND EDITION, JANlJJ\RY 2007

26 Arbitration

resignation or death or removal of the Adjudicator. If the Partiesare unable to reach agr,eement on the appointment of a newAdjudicator then the Adjudicator shall be appointed by theInstitute for ,Construction Training and Development (leTAD)at the request of eith~r Party with in fourteen (14) Days of receiptof such request.

26.1 (a) Any dispute of whatever nature arising from, out of or inconnection with this agreement, on th~ interpretationthereof: or the rights, duties, obligations or'liabilities of anyParty, or the operation, breach, tennination, abandonment,foreclosure or invalidity thereof, shall be' referred to byeither Party to arbitration for final settlement, in accordancewith the Arbitration Act No. 11 of 1995, or any amendmentthereof,

(b) Pending the :award In any arbitration proceedingshereunder,(i) this Contract and the rights and obligations of the

Parties shall remain in full force and effect and

(ii) each of the Parties shall continue to perform theirrespective obligations under this Contract. Thetermination of this Contract shall not result in thetermination of any arbitration proceedings pending atthe time of such tennination nor otherwise affect therights and obligations of the Parties under or withrespect to such pending arbitration.

(c) Any award rendered by the arbitral tribunal shall determinethe extent to which the cost of arbitration is to be borne byeach Party. The arbitration centre charges (if any) and thecompensation to the arbitrator shall be equally shared bythe Parties initially.

26.2 Composition of the Arbitral Tribunal:

/,..~The arbitral tribunal shall consist of a sole arbitrator who shall(u appointed in the manner provided in Sub-Clause 26.3.nrM?fA\fm\U~g!~fetion Procedure: ." /"---..-'/The Party desiring arbitration shall nominate three arbitrators

out of which one to be selected by the other Party within 21Days of the receipt of such nomination. If the other Party doesnot select one to serve as Arbitrator within the stipulated periodthen the Arbitrator shall be appointed in accordance with theArbitration Act No. 1] of 1995, or any amendments thereof.

26.4 Venue & Language:

The venue of arbitration sha-1I be in Sri Lanka.

Unless otherwise agreed to by the Parties the proceedings shallbe conducted and the award shall be rendered in the Englishlanguage.


~/28.2 he Engineer shall decide whether and by how much to extendn~fA\fi\\t e Intended Completion Date within 21 Days of the Contractor;': ~; / U~U~a ing the Engineer for a decisiQrI upon the effect of a," . .. . .. nlp~llsaliulI EVt:llt or Variation and submitting full supporting' ..~ 'Information. If the Contractor has failed to give early warning of

a delay or has failed to cooperate in dealing with a delay asforeseeable by an experienced contractor, the delay by thisfailure shall not be considered in assessing the new IntendedCompletion Date.

SECOND EDITION" JANUARY 2007

PROClIREMENT OF WORKS

27. Programme

28. Extension of the.Intended

,_ Completion pate.t,~ '~.. ~

29. Acceleration

Section 3 - ConB. Time Control

27.1 Within the time stated in the Contract Data, the Contractor shallsubmit to the Engineer for approval a programme showing the

g~IJ~&~:J;':,:!m.~$.~~8~, arrangements, order, and timing for all theactiv1tii~s~4iti'tlltfWorks.

27.2 An 'update of the programme shall be a programme showing~,theactual progress' achieved on each activity and the effect of theprogress achieved on the timing of the remaining work, includingany changes to,~he sequence of the activities.

.1,

27.3 The Contractor' shall submit to the Engineer for approval anupdated programme at intervals no longer than the period statedin the Contract Data.

27.4 If the Contractor does 'not submit a program in accordance withSub-Clause 27.1 above or an updated programme in accordancewith Sub-Clause 27.3 above, within the periods specified, theEngineer may withhold the amount stated in the Contract Datafrom the next payment certificate and continue to withhold this ._amount until the next payment after the date on which theoverdue programme has beet:t submitted.

27.5 The Engineer's approval of the programme shall not alter theContractor's obligations. The _Contractor may revise theprogramme and submit it to the Engineer again at any time. Arevised programme shall show the effect of Variations andCompensation Events.

28.1 The Engineer shall extend the Intended Completion Date if aCompensation Event occurs or a Variation is issued whichmakes it impossible for completion to be achieved by theIntended Completion Date without the Contractor taking steps toaccelerate the remaining work, which would cause theContractor to incur additional Costs.

29.1 When the Employer wants the Contractor to finish before theIntended Completion Date, the Engineer will obtain pricedproposals for-~achieving the necessary acceleration from theContractor. .If the Employer accepts these proposals, theIntended Compl~tion Date will be adjusted accordingly andconfirmed by both the Employer and the Contractor.


PROCllREl\-lENT OF WORKS Section 3 - Conditio;:'" 0'/ Contract

c. Quality Control33. IdentifyingDefeC~~~e Engineer shall check the Contractor's work and notify the

\ u!SU~cfn~acto~ of any Defects that are fou~d and shall specii! a time\ wJthln which the defects are to be rectified. , Such checking shall"", Alot affect the Contractor's responsibil ities. '('he Engineer may

instruct the Contractor to search for a Defect and to uncover andtest any work that the Engineer considers may have a Defect.

SECOND EDITION, JANUARY 2007 Institute for Construction Training and Development.(JCTAD)45

35.1 The Engineer shall give notice to the Contractor of any Defectsbefore the end of the Defects Liability Period, which begins atcompletion, and is defined itl the Contra~tData.

34.1 If the Engineer instructs the Contractor to carry out a test whichis not specified in the Specification or Bills of Quantities insufficient detail to enable the Contractor to have priced orallowed for the same in the Bid and the test shows that theworkmanship or Material is defective then the Contractor shallpay for the tests and samples. If there is no def~ct the test shallbe a Compensation Event.

32.2 The Contractor shall cooperate with the Engineer in making andconsidering proposals for how the effect of such an event orcircumstance can be avoided or reduced by anyone involved inthe work and in carrying out any resulting instruction of theEngineer.

32.1 The Contractor shall warn the Engineer at the earliestopportunity of specific likely future events or circumstances thatmay adversely affect the quality of the ~'ork, increase theContract Price or delay the execution of the Works. TheEngineer may require the Contractor to provide an estimate ofthe expected effect of the future event or circumstance on theContract Price and Completion Date. The estimate shall beprovided by the Contractor as soon as reasonably possible.

3 1.2 The Engineer shall record the business of management meetingsand provide copies of the record to those attending the meetingsand 'to the Employer. The responsibility of the Parties for actionto be taken shall be decided by the Engineer either at themanagement meeting or after the management meeting andstated in writing to all who attended the meeting and to theEmployer.

31.1 Either the Engineer or the Contractor may require the other toattend a management tneeting. The business of a managementmeeting shall be to review the progranlme/progress for theremaining work.

30.1 The Engineer may instruct the Contractor to delay the start orprogress' ofatiy activity within the Works.

29.2 If the J Contractor's priced proposals for an acceleration areaccepted by the Employer, they are incorporated in the ContractPrice and treated as a Variation.

35. Correction ofDefects

34. Tests

32. EarlyWarning

31. ManagementMeetings

30. Delays Ordered bythe Engineer

PROCI JREMENT OF WORKS Section 3 CondH}.~.~~~~~. ui' Contract

SE(:O~D EDITION, JANlIARY 2007 46Institute for Construction Training and Development (ICTAD)'

39.3 ':Th~ Contractor shall execute and be bound by each Variation,."';;-I(ilnless:the Contractor promptly gives notice to the Engineer with. supporting documents to establish that he cannot obtain the

necessary Equipment, Materials, Plant & Temporary Works or anyof them as appropriate, required for the Variation. Upon receivingthis notice, the Engineer' shall re-confirm, vary or cancel theinstruction:

39.2 Variations may be ordered by the Engineer provided thecumulative value of all such variations issued does not exceed a

:.:( sum specified in the Contract Data. Any variation ordered above, this limit would need the prior approval of the Employer.

38.2 The Engineer shall not adjust rates arising from changes inquantities if thereby the Initial Contract Price is exceeded exceptwith the prior approval of the Employer.

37.1 The Bills of Quantities shall contain items for the construction,installation, testing, and commissioning work to be done by theContractor.

37.2 The Bills of Quantities is used to calculate the Initial ContractPrice. The Contractor is paid for the quantity of the work done atthe rate in the Bills ofQuantities for each item.

D. Cost Control

38.1 If the final quantity of the work done differs from the quantity inthe Bills of Quantities for the particular item by more than 25percent, provided the change exceeds one (1 ) percent of the InitialContract Price, the Engineer shall re-examine the rate based onmarket conditions and adjust the rate to allow for the changedquantity exceeding the 25 percent.

36.1 If the Contractor has not corrected a Defect within the timespecified in the Engineer's notice, the Engineer will assess thecost of having the Defect corrected, and the Contractor 'will paythis amount.

35.3 On completion of the Defects Liability P~rjod and correction ofDefects in' accordance with Sub-Clause 35.2 or 36.1, and oncertification of the final payment, the Engineer shall issue theFinal Certificate to the Contractor.

35.2 Every time notic.e of a Defect is given, the Contractor shallcorrect the notified Defect with'in the length of time" specified by'the Engineer's notice. . . . ,!~

38.3 If requested by the Engineer" the Contractor shall provide theEngineer with a detailed cost breakdown of any rate in the Bills of

uantities.

~~&@Y iations may be initiated by the gngineer at any time prior tois uing the Certificate of Completion for the Works, either by an

, nstructio~ or by a request for the Contractor to submit a proposal.

39. Variations

38. Changes in theQuantities

37. Bills of 'Quantities

36. UncorrectedDefects

PROCllREMENT OF WORKS Section 3 - Condi~.i.o~l'::. ~f Contract


40. Payments forVariations

39.4 Each Variation may include:(a) changes to the quantities of any item of work included in the

Contract (however, such changes may not necessarily arise froma written order);

(b) changes to tbe quality and other characteristics of any item ofwork;

(~) ~hRne~S to the levels. ,positions and dimensions of any part ofthe Works;

(d) omission of any work other than work intended to be carried outby others;

(e) any additional work, Plant, ~v1aterials or services necessary forthe Works, including any associated Tests on Completion,boreholes and other testing and exploratory work; or

.39.5 The Contractor shall not make any alteration and/or modificationof the pennanent Works, unless and until the Engineer instructs orapproves a Variation.

39.6 All Variations shall be included in updated programmes producedby the Contractor.

40.1 . The Contractor shall provide the Engineer with a quotation forcarrying out the Variation when requested to do so by theEngineer within 07 Days or such extended time given by theEngineer. The Engineer shall assess the quotation before theVariation is ordered, taking into consideration the provision givenin the Contract Data.

40.2 If the work in the Variation corresponds with an item descriptionin the Bills of Quantities and if, in the opinion of the Engineer, thequantity of work within the limit stated in Sub-Clause 38.1 or thetiming of its execution do not cause the cost per unit of quantity tochange, the rate in the Bills of Quantities shall be used tocalculate the value of the Variation. If the cost per unit ofquantity changes, or if the nature or timing of the work in the

//""-iriation does not correspond with items in the Bills ofI n~h\r antities, the quotation by the Contractor shall be in the form of\ U~U~Ie rates for the relevant items of work.\ / ..

'~O.3/tf the Contractor's quotation is unreasoilabJe, the Engineer may;order the Variation and make a change to the Contract Price,which shall be based on the Engineer's own forecast of the effectsof the Variation on the Contractor~s Costs. The contractor mayrefer the matter to the adjudicator if he disagrees with the ratedecided by the Engineer.

40.4 If the Engineer decides that the urgency of varyjng the worlJ.!lputs I Xb

~ere:F = Price adjustment ~f~:~he period concerned.V = Current valuatiori ~(workdone for the period.Vna Value of non adjustable element or value of work not

considered for pric~ variation.Px Input percentag~.. of\nput named X.1xc Current indice~:of.itlput X.1xb Base indices of input X.

47.1 Unless otherwise stated in the Contract Data the amounts computedfrom the formula given under this sub-clause in respect of the rise orfall in the cost of labour, Material, Plant and other inputs to theWorks, shall be added to or deducted from the payment to theContractor.

46.1 Where payments are mad~:~n currencies other than Sri Lankan Rupees,the exchange rates used for calculating the amounts to be paid shall bethe exchange rates stated in the Contract Data.

SECOND EDITION. JANUARY 2007

47. PriceAdjustment

46. Currencies


'---Il

PROCl!REMENT OF WORKS

48. Retention

Section 3 - Conditior.',', :r Contract

(b) The "Input Percentage" means the percentage proportionatecontribution of any input in terms of cost of the construction based

" . on the prices prevailing on one month prior to submission of theBid and listed under Clause numbered 47 in Contract Data.

(c) The "Non:,adj~~~8:Q;le,elements" means,

(i) The work done under the BOQ items that shall not beconsidered for valuation of price adjustment which are listedunder Clause 47 in Contract Data.

(ii) Extra work or additional work carried out by the Contractoron orders of the Engineer and are valued under Clause 40based on the prices prevailing at the time of execution.

(iii) Works done under Dayworks rates.(iv) The "Current Valuation" means the gross value of work

executed during the current valuation period and w.ill includethe cost of Materials the contractor has purchased or delivered.to site but were not consumed for the physical work done.

(v) The "Indices" means the monthly indices published byInstitute for Construction Training and Development fordifferent Inputs.

(vi) "Base Indices" means the indices for the input, prevailing onemonth prior to the latest date for submission of Bids.

(vii)In the case of first interim bill, the current indices for thepurpose of calculation of price adjustment shall be taken asthe indices prevailing on first month after the commencementof the Contract. For any other interim claim or for the finalclaim the current indices shall be taken as the indicesprevailing for the calendar month, one month after theprevious valuation was done.

If the Contractor fails to complete the Works within the time for/----....~ompletion prescribed under Clause 17 or 28 the price adjustlnent

(

fo~the work performed after the due date of completion as~lJlA\~s ribed above shall be ~ade using the current indices prevailed

I rul&t e due date for completion./ -'--fhe weightings for each of the Inputs of'cost given in this

Clause sh"all be adjusted it: in the opinion of the Engineer, theyhave been rendered unreasonable, unbalanced or inapplicable as aresult of varied or additional work already executed or instructedunder Clause 39 or for any other reason.

48. 1 The Employer shall retain from ~ach payment due to the Contractor theproportion stated in the Contract Data subject to the limit of retentionstated in the Contract Data..

48.2 'On Completion of the whole of the Works, first half the total amount. retained shall be repaid to the Contractor and second half when theDefects Liability Period has passed and the Engineer has certifie-d'thatall Defects notified by the Engineer to the Contractor before the end ofthis- period have been corrected.

51Institute for Construction Training and Development (lCTAD)

SECOND EDITION, JANllARY 2007

~ 48.3

BM *

PROClJREMENT OF \VORKS

49. LiquidatedDamages

so. Bonus'

51. AdvancePayment

52.. Securities

Section 3 - C{Jnditip~~;:~. ~fContract

As an alternative upo~ the i"ssue of the Certificate of Completion theContractor may' submit an unconditional, on demand guaranteeacceptable to the Employer to a value equal to the second half of theretention money, and valid up to 28 days beyond the end of DefectLiability Pe~i(),p,., .. iOn receipt of such guarantee the Employer shallrepay the second half of the retention money.

49.1 The Contractor s~.~J1 pay liquidated 'damages to the Errlployer at therate per Day staled in the Contract Data for each Day that theCompletion Date is later than the Int~ndedCompletion Date. The totalamount of liquidated danlages shall not exceed the amount defined in

,the Contract Data. The Employer may deduct liquidated damages frompayments due to the Contractor. Payment of liquidated damages shallnot affect the Contractor's liabilities.

49.2 If the Intended Completio.n Date is ~xtended after liquidated damageshave been paid, the Engineer shall correct any overpayment ofliquidated damages by the Contractor by adjusting the next paymentcertificate. The Contractor shall be paid interest on the overpayment,calculated from the date' of payment to the date of repayment, at therates specified in Sub-Clause 43. 1.

5~:..1 The Contractor shall not be entitled to a bonus unless otherwise statedin the Contract Data .

51.1 The Employer shall make advance payment to the Contractor in anamount equivalent to 20% of the Initial Contract Price excluding

, provisional sums and contingencies, within 14 Days after furnishing ofan unconditional guarantee in a fonn and by a bank or a companyacceptable to the Employer. The guarantee shall remain effective until

o the advance payment has been repaid, but the amount of the guaranteeshall be progressively reduced by the amounts repaid by the Contractor.Interest will not be charged on the advance payment. 0

51.2 The Contractor is to use the advance payment only to pay forEqUipment, .Plant, Materials, and mobilization expenses required

/" catty f().r execution of the Contract. The Contractor shallI. demonJ1ate that advance payment has been used in this way by(~~~in copies of invoices or other docu~ents to the Engineer.5~ The vance payment shall be repaid by deducting proportionate

amounts from payments otherwise due to the Contractor, following theschedule of-completed percentages of the Works on a payment basis.The advance payment shall be repaid in fu 11 when the total certifiedvalue of work reaches 90% of the Initial Contract Price. No accountshall be taken 'of the advance payment or its repayment in assessingvaluations of work done, Variations, price adjustments, CompensationEvents, Bonuses, or Liquidated Damages.

52.1 0 The pe~ormance security shall b~.provided to the Employer no laterthan the date specified in the Letter. of Acceptance and shall be issuedin an amount specified in Contract Data and in the form of aunconditional guarantee acceptable to the Employer. The performancesecurity shall be valid until a date 28 Days beyond the IntendedC~mpletion Date as specified under Sub-Clause .17 and Sub-Clause 28.

52Institute for Construction Training and Development (lCTAD)

54. Cost of Repairs 54.1 Loss or damage to the Works or Materials to be incorporated in theWorks between the Start Date and the end of the Defects LiabilityPeriod shall be remedied by the Contractor at the Contractor's Costs ifthe loss or datnage arises frolll the Contractor's acts or omissions.


E. Finishing the Contract


The Contractor shall supply the Engineer an account of the tinalamount that the Contractor considers payable under the Contract, afterCOITPQtion of all De.fects notified and within 7 Days after the end ofDefect Liability Period. The Engineer shall certify any payment that isdue to the Contractor within 42 Days of receiving the. Contractor~saccount if it is correct and complete. If it is not, the Engineer shallissue within 14 Days a schedule that states the scope of the correctionsor additions that are necessary.