Assignment
On
DIFFERENCES BETWEEN
INDIAN CONDITIONS OF CONTRACT
AND
FIDIC CONDITIONS OF CONTRACT
Submitted By:
Apoorva Ajmera
Roll No. G03103
N ATI O N A L I N S T I T U T E O F C O N S T R U C T I O N
MAN AGEMENT AND RESEAR CH
GOA CAMPUS
Assignment:Study a contract executed under the Indian Contact Act and a Contract executed under
FIDIC condition of Contract and prepares a report giving a measure Difference
between the two contract conditions
Following are the measure differences between Indian and FIDIC conditions of
contract:S.NO.
1.
Performance Security
Performance Security
2.
3.
Suspension
Suspension
Extension of time
Extension of time
5.
Variation
Variation
work.
6.
Valuation of Variation
The Contractor shall provide the Engineer
with a quotation (with breakdown of unit
rates) for carrying out the Variation when
requested to do so by the Engineer. The
Engineer shall asses the quotation, which
shall be given within seven days of the
request or within any longer period stated
by the Engineer and before the Variation is
ordered.
Valuation of Variation
Claims
Claims
8.
Special Risk
Special Risk
The Employer carries the risks which this The Contractor shall be under no liability
Contract states are Employers risks, and whatsoever in consequence of any of the
the Contractor carries the risks which this special risks referred to in Clause 65
Contract states are Contractors risks.
whether by way of or indemnity or
otherwise for or in respect of:
Employers Risks
1. destruction of or damage to the
The Employer is responsible for the
Works save to work condemned
excepted risks which are
under the provisions of Clause 39
(a) in so far as they directly affect the
prior to the occurrence of any of
execution of the Works in India, the risks of
the said special risks,
2. Destruction of or damage to
war, hostilities, invasion, act of foreign
properly. whether of the Employer
enemies, rebellion, revolution, insurrection
or third parties, or
or military or usurped power, civil war, riot
3. Injury or loss of life.
commotion or disorder (unless restricted to
the
Contractors
employees),
and
contamination from any nuclear fuel or
nuclear waste or radioactive toxic
explosive, or
(b) a cause due solely to the design of the
Works, other than the Contractors design.
Contractors Risks
All risks of loss of damage to physical
property and of personal injury and death
which arise during and in consequence of
the performance of the Contract other than
the excepted risks are the responsibility of
the Contractor.
9.
Settlement of Disputes
Settlement of Disputes
The Dispute Review Expert (Board)* shall If a dispute of any kind whatsoever arises
give a decision in writing within 28 days of between the Employer and the Contractor
receipt of a notification of a dispute.
in connection with or arising out of, the
Contract or the execution of the Works.
The Dispute Review Expert (Board)* shall
be paid daily at the rate specified in the
whether during the execution of the
Contract Data together with reimbursable Works or after their completion and
expenses of the types specified in the whether before or after repudiation or
Contract Data,
other termination of the Contract,
including any dispute as to any opinion,
The cost shall divided equally between the instruction, determination,
Employment and the Contractor,
Any error in description, quantity or rate in bill of materials or any omissions thereof
shall not initiate the contract or release the contractor from execution of whole or any
part of the works comprised therein according to drawings and specifications or from
any of the obligations under the contract.
Comparison and comment
Comparing the clause with FIDIC clause no. 5.2 one can observe that both the
documents state that incase of discrepancies the contractor is required to seek
clarification from the engineer and proceed as per the instructions furnished by the
engineer, several documents forming part of the contract has been taken as mutually
explanatory. The priority of document given by the NTPC has bill of materials as top
most priority and conditions of contract being given the least priority
FIDIC has put more emphasis on contract agreement whereas NTPC has stressed
upon the technical matter deciding element incase of ambiguity. Technical details are
susceptible to variation hence giving priority to these documents might create further
complication to both contractor as well as NTPC.
2. Performance Security :
As per NTPC condition of contract clause no. 4.11 the condition is as follows
The contractor shall submit an initial security deposit of 2.5% of the initial contract
price in the form of a draft of any scheduled bank within 10 days of acceptance of
tender. It will be released on expiry of maintenance guarantee period and satisfactory
completion of rectification of defects and on issuance of Final Acceptance
Certificate by the Owner and submission of No claim Certificate by the contractor.
Comparison and Comment:
1. NTPC condition requires to submit the security deposit of 2.5% of initial contract
price within 10 days of letter of acceptance where as FIDIC suggest Submission
of performance security within 28 days of letter of acceptance.
2. As per NTPC condition security deposit will be returned after the issuance of
Final acceptance certificate by owner and no claim certificate by contractor while
FIDIC says performance guarantee to be returned with in 14 days after the issue of
defect liability certificate.
3. Suspension :
As per NTPC conditions of contract Clause no. 45.1 the condition is as follows:
The owner may suspend the work in whole or part at any time by giving the
contractor notice n writing to such effect stating the nature, the effective date and
duration of such suspension.
Comparison & comment:
Both conditions requires engineers/owner to provide instruction in writing to the
contractor before suspending the work and the contractor is required to resume the
work immediately after the notice for resumption by the engineer/Owner.
4. Extension of Time:
As per NTPC conditions of contract Clause no. 3.4 the condition is as follows:
1. Force Majeure.
2. Major challenges or substantial addition to the work ordered by the Owner
adversely affecting the completion time. Extension of time shall be as per decision
of the Owner.
3. Delay in handing over the site etc.
Comparison & Comment:
NTPC conditions suggest the extension of time to be decided by the owner for the
conditions such as Force Majeure, Substantial change in the work and delay related to
handing over the site. Incase of FIDIC conditions then an event under the extension of
time is clearly spelt out avoiding any scope of ambiguity later on. Also as per FIDIC
conditions, engineer determines the extension of time after due consultation with
contractor and employer.
5. Variation:
As per NTPC conditions of contract Clause no. 15.1 the condition is as follows:
The owner/engineer shall have the right, during the performance of the agreement to
make any condition to, alterations in and omission from the works or any alterations
in the kind or quality of the materials to be used there in and shall give notice thereof
in writing to the contractor.
As per NTPC conditions of contract Clause no. 15.3 the condition is as follows:
The contractor shall not carry out any work extra to or make any omission or
additions to or omission from the works or any deviation from any of the provisions
of the agreement, stipulation, specification, or contract drawing without the previous
consent in writing from the engineer.
Comparison & Comment
NTPC condition suggest that the contractor is liable to carry out any conditions or
alterations or omissions from the work in the kind of quality or material to be used for
work on instructions of engineer whereas FIDIC condition has given detailed version,
including all the possible variations that the contractor is required to follow on
instruction of engineer.
FIDIC condition also specifies that if the increase or decrease is due to inadequate
quantities of bill then it will not be considered as variations. While NTPC conditions
also bring out that if there is a requirement of increase or decrease in work and which
is not specifically mentioned but is required to complete in any of the documents hall
be carried out by the contractor at no extra cost
6. Valuation of Variation:
As per NTPC conditions of contract Clause no. 15.3 the condition is as follows:
Should it be found necessary to execute any item of work which is not included in the
schedule of items and as such no contract rate is available, the rate for such items of
work shall be fixed as per the following procedure.
1. Where the extra works are of similar character under similar conditions as to any
of item of work appearing in the contract agreement, then the rates for such extra
items shall be derived from contract rates of similar/closest items of work.
2. Where the nature of items is such that the rate for same cannot be derived as per
article 12.01 i) then the rate shall be established based on the market rates and
taking into 20% over cost of labour and materials to cover supervision, overheads
and profits. The norms followed by CPWD or MES, as may be approved by the
engineer with the concurrence of the owner regarding labour and material content,
shall be adopted for this purpose.
3. Where the nature of extra work is such that it has to e got executed through a
specialized agency, the agency shall be got approved from the owner on
recommendation of engineer and decision of the owner regarding appointment of
the agency and the rates shall be final and binding.
Comparison & Comment:
FIDIC condition states that the variations will be valued on the rates in the bill of
quantities if it is with in 15% in case it exceeds 15% the rates shall be decided by the
engineer with due consultation with employer and contractor, if rates in bill of
quantities are applicable it will be considered for varied work, if the rates are not
available then it will be fixed based on contractor rates or else the engineer shall fix
the rates with due consultation with the employer and the contractor . In case of
disagreement the engineer shall fix the rates.