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Time & Cost Overrun in North Eastern Projects – Causes and Solutions.

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

Barapani Terminal Building

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Tools of Contract Management

Contract Agreement.

Important clauses of contract for time management :• Clause 13 • Handing over of site.• Site order book.• Obtaining time & progress chart.

Diligence notices in the event of not meeting the commitment given in time & progress chart :

•The notice should specify the default / breach on the part of the contractor.

•Notice should indicate the intended action under clause 32 i.e. Compensation for Delay

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Proper Interpretation of Contract Clauses

Discrepancies and adjustment of errors.

•Description in Schedule of Quantities.

• Particular specification and special conditions.

• Drawings.

• General Specifications.

Timely decision.

Prompt reply to letters of contractors.

Deployment of requisite plant and machineries.

Job mix formula and its approval.

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Case Study

Construction of isolation bay and connecting taxiway at Guwahati Airport :

Scheduled date of start : 07.04.2006

Contractual date of completion : 06.10.2007

Actual date of completion : 25.03.2010

Delay in completion : 901 Days.

Action taken for delay : Levied compensation. From 07.10.2007 to 25.03.2010

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Case Study

Existing Runway Extended Runway

Original Alignment of Taxiway

Isolation Bay

New Alignment of Taxiway

• Taxiway : Flexible Planed.• Hot mix plant : Not mobilized.•Extended runway contract : Awarded•Taxiway to I-bay directly connected to extended runway.•Connecting taxiway made rigid.•Crux of the issue : site for taxiway original planned not made available.• There was slow progress of work. Meantime,

runway got extended.• Hence, alignment of taxiway changed• Summary : Right decision at right time will save

time.

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Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Important tips for effective contract management

•Immediately on receipt of letter of acceptance, open site order book.

•Hand over the site. This is important, since time allowed in contract for execution of work commences from 10 th day after the date on which the Engineer-In-Charge issues written orders to commence the work.

•If handing over site is made in phases. Please make an entry in site order book to the extent site handed over.

•In accordance with clause 13, insist time & progress chart from the contractor.

•Closely monitor the progress made. Compare the progress achieved in relation to clause 13.1 of contract. This clause envisage progress of work with relation to time lapsed.

Workshop on ‘Enforcement of Contract Clauses and Timely Recovery’

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Important tips for effective contract management

•In case, there is back log in the progress, promptly issue a diligence notice. The notice should highlight the slippages.

•Clause 32 of contract envisage compensation for delay. This clause stipulate that the contractor, if failed to maintain the required progress (as agreed), they are liable to pay compensation. Hence, diligence notice should invariably notify the intended action for breach caused.

•Closely watch the progress at the portion of site handed over.

•Read the contract thoroughly.

•Take timely decision.