CPWD FORMS OF CONTRACT

By

Dr. R.Venkatesan PhD (IIT Madras)

Professor, Director IQAC and Dean CoBEARC– NICMAR Hyderabad
[email protected]
[email protected]
Mobile: 9444091973
CENTRAL PUBLIC WORKS DEPARTMENT (CPWD):
INTRODUCTION
 CPWD came into existence in July 1854, established as a central agency
for the execution of public work.
 Through professional expertise in disciplines including Architecture,
Engineering, and Project Management CPWD has been serving the
nation for the last 170 years.
 CPWD has executed priority works in difficult and demanding
geographical and climatic conditions. It has now grown into a
comprehensive construction management department, which provides
services from project concept to completion, consultancy, and
maintenance management.
 CPWD has PAN India presence and can undertake the construction of
complex projects even in difficult terrain CPWD had been involved in
the construction of stadiums and other infrastructure requirements for
the Asian Games 1982 and the Commonwealth Games 2010.
FORMS TO BE USED FOR CONTRACTS

 The, following forms shall be used for agreements with the

contractors for the purpose noted against each.

 Standard clauses of various forms have been approved by

the competent authority and should not be altered/ violated
on any account except with the previous approval of that
authority
CPWD FORM NO.6
 This is Notice Inviting Tender Form and in brief known as NIT.
 It is required to be invariably issued in respect of works for which
tenders are to be called.
 The salient feature of this Form is that it includes the name of
work, estimated cost put to tender, period of completion, time and
date of receipt and opening of tenders and other relevant
conditions.
 Care is required to be taken with regard to Clause 4 which
provides two alternatives, viz.(i) the site for the work is available
or (ii) the site for the work shall be made available in parts as
specified.
 Only one of these two alternatives is required to be retained.
CPWD FORM NO.7 PERCENTAGE RATE TENDER

 This form is used for works in which contractors are

required to quote rates on a percentage basis i.e. above or
below the estimated cost put to tender.
 Form PWD 7 (percentage rate tender) could be used in
respect of leveling and development works including such
works
 as stormwater drainage,
 water supply and sewer lines and
 Repetitive types of works such as the construction of residential
quarters of various types as per standard design and drawing
CPWD FORM NO. 8 ITEM RATE TENDER
 This form is used for works in which contractors are required to
quote the rates against each item of work.

 This form is generally used where most of the items are non-
scheduled or specialized items and detailed analysis of rates is
not available.

 For item rate tenders contractors are required to quote rates for
individual items of work on the basis of the schedule of
quantities furnished by the Department, this form ensures a
more detailed analysis of cost by the contractor.

 The Contractors have to work out the rates against each item.
CPWD FORM NO. 9 SUPPLY OF MATERIALS

 This form is normally used where the purchase of

materials is involved.

 In this form, the contractors are required to quote

rates for the supply of the required quantity of
materials, whether raw or finished
CPWD FORM NO. 10 PIECEWORK
 This form is used mainly in cases, where it is necessary to start
the work in anticipation of formal acceptance of the contract.
 An agreement on piece work form may be drawn and the contract
may be canceled as soon as the regular contract is signed.
 For running contracts i.e. those for pipes, laying of sewerage etc.
 Quotations are called periodically and a running rate contract is
drawn up as a result of those quotations usually for one year.
 The piece work contract form provides for payment of stipulated
rates only when it refers to such quantity of time and also
stipulates that the Engineer-in-charge may put an end to the
agreement at his option at any time.
CPWD FORM NO. 11 A WORK ORDER

 This form is normally used for works that are to be

awarded without the call of tender.

 In Form 11A, the contractor is bound in respect of the

quantity of work and the time in which it is to be
completed.
CPWD FORM N0.12-LUMP-SUM CONTRACT

 This form, as its name indicates, is used for work in which

contractors are required to quote a lump-sum figure for
completing the works in accordance with the given designs,
drawings, specifications and functional requirements as the case
may be.
 Lump-sum tender can be either for only executing the work as
per the given design, drawing and specification or it may include
the element of doing design work and preparation of structural
drawings as well which shall be in keeping with the given
functional, structural and architectural parameters and subject
to approval by the competent authority beforehand.
CONDITIONS OF CONTRACT
Works to be carried out under the contract

 Work to be carried out under the contract includes all

labour, materials, tools, plants, equipment & transport
required for and in full and entire execution and
completion of works

 Descriptions given in schedule of quantities include

wastage of materials, carriage & cartage, carrying and
return of empties, hoisting, setting, fitting and fixing in
position and all other labours necessary in full and for
the entire execution and completion of the work
CONDITIONS OF CONTRACT
Sufficiency of Tender

 Contractor shall be deemed to have satisfied himself

before tendering as to the correctness and sufficiency of
his tender for the works and of the rates and prices cover
all his obligations under the contract for the proper
completion and maintenance of works

 Tenderer shall make the required interpretation of any

and all information provided in the tender documents
and verify all necessary data and information
CONDITIONS OF CONTRACT
Discrepancies and Adjustments of Errors :
 The several documents forming the Contract are to be
taken as mutually explanatory of one another
 In case of discrepancy between schedule of quantities,
specifications and/or drawings the following order of
preference shall be followed
 Description of Schedule of Quantities
 Particular specification and Special Condition, if any
 Drawings
 CPWD Specifications
 Indian Standards

 Signing of Contract
 Within 15 days from the stipulated date of start of the work
 IMPORTANT CLAUSES OF CONTRACT
CLAUSE 1: Performance Guarantee

 5% of the tendered amount for proper performance of contract

agreement from the date of issue of LOA.

 Valid up to 60 days from the scheduled date of completion

 Failure by the contractor to extend the validity of PG, in which

event the Engineer-in-Charge may claim the full amount of PG

 In the event of the contract being determined or rescinded under

provision of any of the Clause/Condition of the agreement, the PG
shall stand forfeited in full
CLAUSES OF CONTRACT
CLAUSE 1A: Recovery Of Security Deposit

 2.5% of gross amount of each running bill

 Security deposit as deducted can be released against BG

issued by a scheduled bank.

 In case of contracts involving maintenance of buildings

and services after construction work, 50% of PG shall be
retained as security deposit
CLAUSES OF CONTRACT
CLAUSE 2: Compensation for Delay

 Compensation for delay of completion of work @ 1% per

month of delay to be computed on per day basis

 Total amount of compensation shall not exceed 10% of

tendered value of work

 For Milestone delay stipulated amount will be withheld

and catching up of progress in subsequent milestone the
withheld amount will be released.
CLAUSES OF CONTRACT
CLAUSE 3: When Contract Can be Determined
 Contractor fails to comply with the notice specifying
rectify, reconstruct or replace any defective work within 7
days
 Contractor suspended the progress of work without
reasonable cause and unable to complete the work within
specified time.
 Contractor fails to complete the work within the
stipulated date or items of work with individual date of
completion
 Contractor persistently neglects to carry out his
obligations
 Contractor offering any gift or consideration of any kind
as an inducement or reward for doing
CLAUSES OF CONTRACT
 Contractor entering into contract by paying commission
or agreed to pay
 Secured the contract by wrong tendering or commits
breach of integrity agreement or non-bonafide methods of
competitive bidding
 Court making an order that the company shall be wound
up
 Contractor assigns, transfers, or sublets entire work or
portion without any prior approval of the engineer-in-
charge
Upon such determination
 PG will be forfeited
 Not allowed to participate in the tendering process of
balance works
CLAUSES OF CONTRACT
CLAUSE 3A:

 In case the work cannot be started due to reasons not

within the control of contractor within 1/8th of stipulated
completion time or 1 month whichever is higher, in such
cases PG shall be refunded
 Tendered value Up to Rs.1 Crore – within 15 days

 Tendered value > Rs.1 Cr < Rs.10 Cr– within 21days

 Tendered value > Rs.10 Crore – within 30 days

CLAUSES OF CONTRACT
CLAUSE 5: Time and Extension for Delay
 Time allowed for execution will be specified
 The Contractor shall submit a Time and Progress Chart with each
mile stone.
 The Engineer-in-Charge may within 7 (seven) working days
thereafter, if required modify, and communicate the program
approved to the contractor
 Failing which the program submitted by the contractor shall be
deemed to be approved by the Engineer-in-Charge.
o The work programme shall include all details of balance drawings
and decisions required to complete the contract with specific dates by
which these details are required by contractor without causing any
delay in execution of the work.
o Schedule in mutually agreed software
 Schedule should include all activities with manpower, machinery etc
 Programme for procurement of materials
CLAUSES OF CONTRACT
o If at any time actual progress of work does not conform to the
approved programme, revised program with action plan shall be
submitted within 7 days
If the works delayed due to
❖ Force majeure,
❖ Abnormally bad weather
❖ Serious loss / damage by fire
❖ Delay on the part of other contractors
❖ Non availability of materials, etc
❖ Any other cause which is beyond contractors control
Contractor shall give immediate notice upon happening of the any such
event causing delay based on EOT will be given to contractor
CLAUSES OF CONTRACT
CLAUSE 6: Computerized Measurement Book
o Ascertain and determine by Measurement the value of Work
Done in accordance with contract
o All measurements of all items having financial value shall be
entered by the contractor
o It will be compiled in the shape of the Computerized
Measurement Book having pages of A-4 size as per the format
of the department
o so that a complete record is obtained of all the items of works
performed under the contract.
o The Engineer-in- Charge and/or his authorized representative
would thereafter check this MB, and record the necessary
certificates for their checks/test checks.
CLAUSES OF CONTRACT
CLAUSE 7:
 For works estimated to cost over Rs. Twenty lac the interim or running
account bills

 Advance payment - 75% of value on intermediate certificate

 Bill shall be submitted based on the actual measurement of work

Payment in Composite Contracts

In case main contractor fails to make payment to the contractor
associated by him within 15 days of receipt of payment, then on the written
complaint of contractor associated, engineer in charge shall make
necessary payment directly to the associated contractor

CLAUSE 7A: No RA bill without labour licence and registration with

EPFO, ESIC and BOCW
CLAUSES OF CONTRACT
CLAUSE 10A: Materials be provided by the Contractor
Conformity with respect to specifications
Regular testing of materials by engineer-in-charge
 Contractor at his own expense provide material testing lab at
the site for routine field test
CLAUSE 10B:
(i) Secured Advance on Materials
75% of assessed value of Non-Perishable materials
Also for Perishable Materials on production of comprehensive
insurance policy
No secured advance for high risk material like: Glass, sand,
fuel etc.,
 CLAUSES OF CONTRACT
 10 B (ii) Mobilization Advance: not exceeding 10% of the tendered value
 BG for an amount of 110% against the value of mobilization advance
 First installment on request and subsequent only after contractor furnishes proof of
utilization of earlier installment

10 B (iii) Interest & Recovery

 Simple interest at 8% per annum, from the date of payment to the date of recovery,
both days inclusive, on the outstanding amount of advance.
 Recovery of sums through deduction from contractor bills commencing after 10% of the
gross value of the work is executed and paid, on a pro-rata percentage basis such that
the entire advance is recovered by the time 80% of work executed and paid
 CLAUSES OF CONTRACT
CLAUSE 10C: Payment on account of increases in prices /wages
due to statutory orders
Clause 10CC: Price adjustment for works
• If the prices of materials and/or wages of labour required for execution of the
work increase, the contractor shall be compensated for such increase as per
provisions detailed below
• The amount of the contract shall accordingly be varied, subject to the
condition that such compensation for escalation in prices and wages shall be
available only for the work done during the stipulated period of the contract
including the justified period extended under the provisions of clause 5 of the
contract without any action under clause 2.
 Clause 10CC: Price adjustment for works ( conti..)

• Such compensation for escalation in the prices of materials and labour, when due,
shall be worked out based on the following provisions:
(i) The base date for working out such escalation shall be the last stipulated date of
receipt of tenders including extension, if any
ii) The cost of work on which escalation will be payable shall be reckoned as below :
(a) Gross value of work done up to this quarter : (A)
(b) Gross value of work done up to the last quarter : (B)
(c) Gross value of work done since previous quarter (C) = (A-B)
 CLAUSE 10CC: PRICE ADJUSTMENT FOR WORKS ( CONTI..)
• (d) Full assessed value of Secured Advance fresh paid in this quarter : (D)
• (e) Full assessed value of Secured Advance recovered in this quarter : (E)
• (f) Full assessed value of Secured Advance for which escalation Payable in this
quarter, (F) = (D-E)
• (g) Advance payment made during this quarter: (G)
• (h) Advance payment recovered during this quarter: (H)
• (i) Advance payment for which escalation is payable in this Quarter (I) = (G-H)
• (j) Amount paid based on prevailing market rates due to deviations/variations as per
clause 12 during this quarter: (J)
• Then, M = C+F+I-J
 Clause 10CC: Price adjustment for works ( conti..)

 Cost of work for which escalation is applicable (W) = 0.85M

• Components for materials, labour, etc. shall be pre-determined for every work and
incorporated in the conditions of contract attached to the tender documents included
in Schedule 'F’.

• The decision of the Engineer-in-Charge in working out such percentage shall be binding
on the contractors.
 Clause 10CC: Price adjustment for works ( conti..)
• The following principles shall be followed while working out the payment/recovery
on account of variation of prices of materials and/ or wages of labour:

• (a) The compensation for escalation shall be worked out at quarterly intervals
and shall be with respect to the cost of work done as per bills paid during the three
calendar months of the said quarter
• Price adjustment for change in cost shall be paid in accordance with the following
formulae:
• (i) For Construction period of this work:

VW = W*(1/100)*[CP *(CI -CO )/CO + LP * (LI -LO )/LO +CMP *(CMI -CMO )/ CMO
+EMP *(EMI -EMO )/EMO +FP * (FI -FO )/FO +SP * (SI - SO )/SO + Bp *(BI - Bo )/BO ]
(* means multiplication)
 Clause 10CC: Price adjustment for works ( conti..)
• Where
• W=cost of work done as per para (ii) above.
• VW (Variation of cost of Work) =Increase or decrease in the cost of works during the period
under consideration due to changes in the rates for relevant components.
 Percentage components of materials &labour as specified in the schedule F are defined as
under:-
 CP - Cement component,
 LP - Labour component,
 CMP - Civil component of other construction materials,
 EMP - E & M component of construction materials
 FP - POL (Diesel) component
 SP - Reinforcement steel bars/TMT bars/structural steel (including strands and cables)
component
 BP - Bitumen component
CLAUSES OF CONTRACT

CLAUSE 11: work to be executed in accordance with

specifications, drawings, orders etc.,
The contractor shall comply with the provision of
contract- with care and diligence execute and maintain the
work with proper supervision.
The contractor shall take the full responsibility for
adequacy, suitability and safety of all the works and
methods of construction.
CLAUSES OF CONTRACT

CLAUSE 12: Deviations/ Variations extent and pricing:

 E-in-C shall have power for alterations in, omissions from, additions
to or substitution for the original specifications and drawings
(i) In the proportion which the additional cost of the altered, additional
or substituted work, bears to the original tendered value plus
(ii) 25% of the time calculated in (i) above or such further additional
time as may be considered reasonable by the Engineer-in-Charge.
In case of extra items (completely new ) – contractor shall submit
rate analysis from similar items / as per standard procedure for
arriving cost on the basis of market rates
CLAUSES OF CONTRACT
CLAUSE 13: Foreclosure of contract due to
abandonment / reduction in scope of work
Contractor shall have no claim to any payment /
compensation
Contractor shall be paid at contract rates, full amount for
works executed, and in addition a reasonable amount for
the following items by providing valid proofs like time
sheets etc
Expenditure incurred for preliminary site work, access roads,
labor huts, storage accommodation and water storage tanks etc
Contractor’s material which are legally bound to accept delivery
from suppliers
Materials supplied by client
Reasonable compensation for repatriation for contractor site
staff, imported labor etc
CLAUSES OF CONTRACT
CLAUSE 14: Carrying out part work at risk and cost
of contractor
If contractor not executed with due diligence

Commits default in complying with any of the terms and

conditions of the contract

CLAUSE 15: Suspension of work

1. On account of any default on the part of the contractor

2. For proper execution of works or part thereof for reasons

other than the default of contractor

3. For the safety of work

CLAUSES OF CONTRACT
If the suspension is for reasons 2 & 3

Extension of time equal to period of suspension + 25%, for

completion of the item / group of items of work

If the period of suspension exceeds 30 days, engineer in

charge may consider compensation for salaries to staff /
labor, 2% to cover indirect expenses

If the period of suspension is more than 3 months, within

15 days of receipt of order the contractor has to reply his
willingness to take suspension or abandonment of contract.
CLAUSES OF CONTRACT
CLAUSE 16: Action in case work not done as per
specification

 If found within 12 months of the completion of the work

then contractor has to rectify or remove or reconstruct as
per the instructions
If contractor failing to do so then liable to pay
compensation
CLAUSES OF CONTRACT
CLAUSE 17: Contractor Liable for Damages, defects
during Defect Liability Period (DLP)

 Contractor shall upon receipt of notice in writing on that

behalf make the same good at his own expense

 Security deposit shall not be refunded before 12 months

after getting completion certificate or final bill whichever
is later
CLAUSES OF CONTRACT
CLAUSE 25: Settlements & Disputes

 If found any discrepancy in drawing / specification / any

decision given in writing to be unacceptable, he shall
promptly within 15 days request the superintending
engineer for written instruction
CLAUSES OF CONTRACT
 If Superintending engineer fails to give his instructions /
decision or contractor dissatisfied with the instructions,
contractor within 15 days may appeal to chief engineer
 Chief engineer shall give his decision within 30days
 If contractor is dissatisfied then within 30days, appeal
before Dispute Redressal Committee (DRC) along with
list of disputes with amounts
 DRC shall give his decision within 90 days
 If DRC fails to give his decision or any party is
dissatisfied then either party may within 30days give
notice to Chief engineer for appointment of arbitrator
CLAUSES OF CONTRACT
 Arbitration shall be conducted in accordance with
arbitration and conciliation act, 1926

 If claim > 1,00,000 then arbitrator shall give reasons

 Fees shall be paid equally by both parties

 Venue decided by arbitrator

CONDITIONS OF CONTRACT
Income Tax Deduction

 Income tax deductions shall be made for all payments

made to the contractor in accordance with income tax act

Insurance of Works

 Contractor’s All Risk policy (CAR)

 Erection all risk policy

 Insurance under Workmen Compensation Act, 1923

 Third Party Insurance (5% of contract Value)

CONDITIONS OF CONTRACT
Quality Assurance Programme (QAP)

 Organization structure for the management and

implementation of QAP

 Documentation Control System

 Inspection and Test Procedure

 System of Maintenance of records

 System of handling storage and delivery

 System of site controls including process controls

CONDITIONS OF CONTRACT
 Contract Coordination Procedures, Coordination
Meetings and Progress Reporting
 Format, reporting date, reporting people etc.

 Work in Monsoon and Rain

 No special / extra pay, time period includes monsoon period, no
extra cost for dewatering / maintenance of roads etc

 Work on Sundays, Holidays and During Night

 Prior approval for working in holidays / at nights
CONDITIONS OF CONTRACT
 Land for Labour Hut / Site Accommodation and
Storage Space
 Client / Contractor

 If client, provide information of space requirement

 Watch, Ward and Lighting of Work Place

 Has to be maintained by Contractor

 Cement & Cement Godown

 Shall be used as first in first out basis

 Stored beyond 90 days has to be tested before use

CONDITIONS OF CONTRACT
 Waterproofing Treatment
 Effective for a period of 10 yrs from the expiry of DLP

 Borrow Areas
 For disposal / bring of material for backfilling

 Valuable Articles Found at Site

 Shall be the property of owner

 Providing Plantation of Trees at Project Site and

Maintenance up to DLP

 Jurisdiction
Thank you