Haramaya University

Haramaya Institute of Technology

Department of Civil Engineering

Contract, Specification, and Quantity

Survey ( Ceng-4231 )
Recap for Exit Examination

A.Y 2023/2024
 Contents

Questions will be designed to test your knowledge in the specification and Drawing, BoQ, Unit rate
analysis, Procurement Management, and Contract Management .

CLO1 - Explain the different types of specification and Understand different types of specification, know
how to assure and control quality of construction materials and construction products [1Q].

 CLO2 - Carry out quantity surveying and prepare BoQ and payment certificates for different type of
construction projects [2Q].

 CLO3 - Determine rates for construction activities using detailed cost estimation, [1Q].

 CLO4 - Understand the processes involved in Procurement and Contract Management and Formulate
Contract and or tender Documents, administer the contract in construction projects. [2Q].
 CLO1:-Specification Related

 CLO1 - Explain the different types of specification and understand construction project standards[1Q].

 You are going to answer at least the following questions to grasp the concept of this topic.

 what is specification?

 What is the purpose of specification and what is its relationship with drawing?

 What type of specifications are there in the construction industry?

 Which one is most commonly used?

 What are the standards/references you will use to prepare specification in the construction industry?
 Specification

what is specification?
 Specification is defined as the designation or statement by which written instructions are given
distinguishing and/or limiting and describing the particular trade of work to be executed.
 In short Specification is a statement of particular instructions of how to execute some task.
 In terms of an engineering project a specification contains a detailed written description of the quality
of materials and workmanship necessary to complete the work.
 In the construction activity therefore, the scope of the work that is described in drawings includes
such information as dimensions, form, or details while the specifications provide the description of
the qualities of materials for construction.
 Specification

what is specification? What is drawing?

 Information that is best transmitted in written form is addressed in the specification while that which is best
transmitted graphically will be addressed in drawings where both are so defined as to be mutually
complementary and understood in conjunction.
 In other words drawings show what is to be done in graphics form, specifications show how it is to be done by
furnishing written descriptions to supplement the drawings.
 Generally, specifications are written instructions which supplement the drawing to set forth the complete
technical requirements of the work.
 Therefore drawings and specifications in combination define the project in sufficient detail to enable the carrying
out of the works.
 Drawings and specifications should compliment each other and neither should overlap or duplicate the other.
 Specification

 what is the difference between specification and

 Specifications generally describe the following:
drawings?
 Type and quality of materials, equipments, labor
 The main difference b/n specification and drawing or workmanship
is that drawings  Methods of fabrication, installation and erection
should generally show the following:
 Standards, codes and costs
 Dimensions, extents, size, shape, and location of
 Allowance submittals and substitutions
component parts.
 Cost included, insurance and bonds
 Location of materials, machineries and fixtures.
 Project record and site facility
 Interaction of furniture, equipment and space.
 Schedules of finishes, windows and doors.
 Purpose of Specification

 what is the purpose of specification?

 The purpose of specifications generally include:
i. Guide the bidder at the time of tendering to arrive at a reasonable
cost for the work.
ii. Provide guidance for the execution of the work
iii. Guide contractor for the purchase of materials
iv. Serve as part of contract document to limit and describe the rights and obligations of each
contracting parties.
v. Guide the bidder to identify his capacity to execute the work
vi. Serve as fabrication and installation guide for temporary and
permanent works.
vii. Guide the contractor for purchase and/or hiring of equipment.
viii. Serve the owner to know what she/he is intended to receive.
 Purpose of Specification

 what is the purpose of specification?

 The purpose of specifications generally include:
ix. Serve for the manufacturers of construction materials, equipments,
tools etc. to grade, classify, and improve qualities of their products.
x. Indicates method of testing and acceptance of final products.
xi. Guide parameters for rejection of non conforming works.
 Note: in the events of conflicts between specification and drawings, the specification governs.[NB:
communication between client, consultant, and contractor is the key to solve any claim].
 A clearly written specification will enable proper quality control and avoid disputes in administering
construction projects.
 Types of Specification

 In general, specs can be broadly classified into four:

• Manufacturer’s specification: Manufacturers prepare spec. of their product for the guidance of their users,
which may include property description and installation guide lines.
• Guide Specification: Specs prepared by an individual or group of individuals based on manufacturer’s specs,
established trends of workmanship, service and laboratory tests and research findings to be used as guide lines for
preparation of contract specs.
• Standard Specification: Specs which are intended to be used as a reference standard in the construction of a
project. The guide specification which has been standardized by a recognized authority
is considered as standard specification.
• Contract (Project) Specification: the spec prepared for a particular project to accompany the drawings and
other contract documents.
 Types of Specification

 There are the following types of technical specifications:

 Proprietary Specifications: These specs call for desired materials, producers, systems, and equipments by their
trade names and model numbers. For detailed descriptions reference should be made to manufacturer’s
specifications.
Example:
1. Water reducing agent shall be used in all concrete, in strict accordance with the manufacturer's printed
instructions. Total air entrained shall be 5.0% plus or minus 1.0% of volume of concrete with required strengths
maintained.
2. Air – Entraining Agent: “Darex” by W.R. Grace Company, “Aerolith” by Sonneborn Building Products or
equal meeting ASTM C260 as approved by the architect.
 Types of Specification

 Performance Specifications: specifications which define products based on desired end results which are
performance oriented; Most appropriate when new or unusual products or systems are required or when
innovation is necessary.
• Testing methods and evaluation procedures for defining the required performances must be explicitly specified.
• Example: - Stud shear connectors shall conform to the requirements of Article 4.26 of the American Welding
Society.

 Reference Specifications: Specifications which refer to levels of quality established by recognized testing
authority or standards set by quality control authorities. These specifications are also used in conjunction with
other types of specifications.
Example : C – 25 Concrete.
 Types of Specification

 Descriptive Specifications: Specifications which describe all components of products, their arrangements and
methods of assembly, physical and chemical properties, arrangement and relationship of parts and numerous other
details. The specifier shall take total responsibility for the function and performance of the product.
Example: - “Supply and fix 40mm thick flush wood door with hard wood frames and both sides covered with best
quality 4mm thick ply wood. Price includes approved quality lock, hinges, three coats of
varnish paint, door stopper & all necessary accessories to comply ES’’.

 Cash Allowance Specifications: Specifications meant to direct bidders to set aside a specified amount of money
to be applied to the construction work at the direction of the specifier.
Example: - “A lump sum of $3,000.00 for purchase of hard ware, as defined by and specified in Specification
sections of Division 8”
 References for Specification

 What are the useful references in specification writing?

 The following are useful references in Specification Writing:

– “Technical Specification and Methods of Measurement for Construction of Buildings”, of March
1991(BATCoDA)

 Codes and ordinances of governments, cities, or municipalities. For example, Ethiopian Building Code of
Standards (EBCS).
– Standards prepared by distinct societies and government agents. For ex. ACI standards, ASTM standards, BS, ES.
– Standards or model specifications prepared by manufacturers, professional societies, and government bodies.
– Master specifications and previously written specifications.
– Information or experience acquired by personal observation and contact with trained or experienced people in the
construction industry
 CLO2:-Quantity Take-off and BoQ Related

 CLO2 - Carry out quantity surveying and prepare BoQ and payment certificates for different type of
construction projects [2Q].

 You are going to answer at least the following questions to grasp the concept of this topic and you have
to practice at least taking off major building elements like footing, beam, and column etc.

 Why quantity takeoff is important?

 What are the methods used to estimate the quantity of civil works?

 What are the appropriate units of measurement for different work items?

 How can you compile the quantity you measured in appropriate standard [BoQ] format?
 Quantity Take-off

 Quantity Take-off

 Quantity takeoff is necessary to perform a cost estimate.

 The quantity of material in a project can be accurately determined from the drawing.

 The estimator must make a complete and thorough job analysis.

 The material quantity takeoff is extremely important for cost estimating.

 Quantity Take-off

 Quantity Take-off: Why?

 Owner perspective:
 Initial (preliminary) estimate of the project costs at the different stages of the project
 Preparing the BOQ as a requirement of the contract documents
 Estimating the work done for issuing the contractor payments
 Contractor perspective:
 Pricing different work items
 Identifying the needed resources (Labor, Equipment, etc.)
 Project schedule
 Preparing invoices for work done
 Subcontractors payments
 Review and control of crews production rates
 Quantity

 Units of Measurements

 Each (numbers/pcs): Piles, doors, Windows, Precast concrete, etc.

 Length (meter): Windows sills, Pipes, Skirts, stair steps, etc.

 Area (Square meter): Flooring, painting, plastering, Block Wall etc.

 Volume (Cubic meter):Excavation, Backfilling, Reinforced Concrete, Masonry etc.

 Weight (ton): Metallic works, Reinforcement steel, etc.

 Lump Sum: Some electrical and plumbing works, Manholes, lifts etc.

 Effort (Man-day): Renting of equipment or labor, etc.

 Taking Off

Column 3 is called squaring column. The stated

Column 1 is used for stating the number of times an
dimensions in column 2 are multiplied to determine the
item occurs and is called the timising column.
quantity of the work either in ml, m2, m3 or in Pcs. or No
Column 2 is called dimension column as it is used to Column 4 is called description column and description
enter the dimensions of the items of works[LxWxH/D]. of the work item is briefly stated.
 BOQ

Specification Worksheet (BOQ form)

 It is the format which is used in a bill of quantity to list (include) a short description of the specification along with
its measuring unit, quantity and unit prices to determine the total cost for each trade of item.
ITEM DESCRIPTION UNIT QUANTITY U.PRICE T.PRICE

A. SUB STRUCTURE

1.0 Excavation and Earth work

1.1 Excavate over site to a depth of 200mm to remove top soil m2 384.22

1.2 Excavate 800mm wide trench in ordinary ground for strip masonry
m3 47.36
wall to a depth not exceeding 1000mm below stripped ground level.

1.3 Excavate in ordinary ground for isolated footings to a depth of

m3 65.03
1500mm below stripped ground level.

1.4 Ditto as item no 1.3,but over 1500mm deep and not exceed 3000mm. m3 19.51

1.5 Bulk excavation on ground floor of the building to a depth not less than
m3 244.16
1300mm

1.6 Bulk excavation on walk way of the building to a depth not less than
m3 96.25
1750mm

1.7 Backfill below hard core with selected material brought from out side
m3 89.04
and well compacted in layers not exceeding 250mm thick.

1.8 Backfill below hard core with 450mm thick Borrow material with Ø
400mm bolders brought from out side and well compacted in layers m3 100.17
not exceeding 250mm thick.
 CLO3:- Detail Cost Estimation Related

 CLO3 - Determine rates for construction activities using detailed cost estimation [1Q].

 You are going to answer at least the following questions to grasp the concept of this topic.

 How can you estimate cost of a project before the project is officially launched ?

 What are the methods of cost estimation ?

 When do you apply the methods? Is it possible to apply each method of estimation in all stages of the
construction project? Why?
 Cost Estimation

 Required Information for Cost Estimate

 Detailed drawings

 Specifications

 Available site data

 Available resource data (labor, material & equipment)

 Government regulations

 Applicable owner requirements

 Cost Estimation

 Every estimate, whether it is generated in the conceptual phase of a project or at bidding time, must consider a
number of issues

 Project Size

 Project Quality

 Project Location

 Time (start of construction)

 Market Conditions

 The accuracy of an estimate is directly affected by the ability of the estimator to properly analyze these basic issues.

 There are two types of cost estimates: conceptual and detailed cost estimate.
 Conceptual Cost Estimate

 A conceptual cost estimate is also known as a top-down, order of magnitude, feasibility, analogous, or preliminary
estimate.

 A conceptual estimate is usually performed as part of the project feasibility analysis at the beginning of the project

 The estimate is usually made without detailed design and engineering data.

 However, the owner must know the approximate estimate to evaluate the economic feasibility of proceeding with
the project.

 Consultant to compare design alternatives.

 Conceptual Cost Estimate

 Characteristics

 Early project stages

 Accuracy ± 25 %

 The availability of a good, complete scope definition is considered the most crucial factor for conceptual
estimating.

 Conceptual estimating is a resource restricted activity where the time and cost available for making the estimate is
restricted.

 Therefore, the estimate, although important, cannot be given much time and resources
 Conceptual Cost Estimate

 Examples of approximate cost estimations are as follows:

A. Cost per functional unit:- Hospital =cost per bed, Dormitory = cost per student, Cinema or theatre = cost per seat,
residential buildings = cost per area, road works = cost per kilometer length, culverts or bridges = cost per meter
span, water supply or sewerage projects = cost per head of population.
B. Plinth area method – cost per m2
 Based on Plinth Area- roof area or external dimensions at the plinth level (Courtyard & open area shall not be
included) The rate per meter square is assumed from the cost of similar building projects in the locality.
C. Cubical Content method – cost per m3

 Based on cubical contents of various buildings, i.e. Plinth area of the building x height x cubic content rate.

 Height should be taken from the top of flat roof (or halfway of the sloped roof) to the top of concrete in foundation.
 Detailed Cost Estimate

 This is the most reliable and accurate type of estimate.

 The quantities of items are carefully prepared from the drawings and the total cost worked out from up to date
market rates. A detail cost estimate thus requires:

 Quantity surveying and

 Analysis of the different rates for the quantities prepared

 Basically the cost of any construction project comprises

 Direct costs, which include the direct cost of materials, labor as well as equipments and

 Indirect costs, which include but not limited to head office and site overhead costs.
 Detailed Cost Estimate

 Unit Rate Analysis

 Rate Analysis is the process of fixing cost per unit of measurement for the different item of works.

 Total cost per unit of work (TC) = Direct cost (DC) + Indirect cost (IC)

 Direct Cost (DC) includes cost due to material (MC), cost due to labor (LC), cost due to equipment (EC)

 Indirect Cost (IC) covers overhead costs, and contractor’s profit.

 Detailed Cost Estimate

I. Direct Material Unit Cost:- Direct material cost is the total cost of construction materials required to execute a unit
of specific activity in a project.

II. Direct Labor Unit Cost :-In calculating the direct labor cost, contractors need to calculate the direct labor hourly
cost which is the total hourly cost of labor crew required to execute a specific activity in the project.
 Detailed Cost Estimate

III. Direct Equipment Cost :- In order to calculate the direct equipment cost, contractors need to calculate the direct
equipment hourly cost which is the total hourly cost of equipment crew required to execute a specific activity in a
project.

NB:- Refer your lecture notes for sample examples.

 CLO4:-Procurement and Contract Related

 CLO4 - Understand the processes involved in Procurement and Contract Management and Formulate
Contract and tender Documents, administer the contract in construction projects [2Q].

 You are going to answer at least the following questions under this broad topic.

 What do you understand by the terms ‘Contract’ and ‘project delivery method’?

 What are the different types of procuring methods?

 What are the different types of contract delivery systems? What are the pros and cons of each delivery
system?

 What are the different types of construction contract? Why do you prefer one type of construction
contract over another?

 What are the legal, commercial, and technical parts of contract documents?
 Contract Strategy

 At the early stage of a project and once a project manager is selected, the main issue that faces the owner is to
decide on the contract strategy that best suits the project objectives.

 Contract strategy means selecting organizational and contractual policies required for executing a specific project.

 A proper contract strategy for a project involves four key decisions:

1. Setting the project objectives and constraints

2. Selecting a proper project delivery method

3. Selecting a proper contract form / type

4. Contract administration practices

 Project Objectives

 Project Objectives

1. Time 2. Cost

3. Performance 4. Other Objectives

 1.Time

 If the top-rank owner objective is to start the project as early as possible to maximize the profit or for political
reasons, then a contracting strategy that allows speedy project delivery, such as overlapping design and
construction, may become desirable.
 Project Objectives
 2. Cost

 There may be a need for minimum project cost to ensure 4. Other Objectives
adequate economic return. The selected contract
* Risk sharing between the owner and the contractor
strategy, therefore, should be flexible to the owner’s cost
* Staff training or transfer of technology
requirements while also maintaining the other objectives
desirable. * Involving the contractor in the design

 3. Performance * Use of local material and resources

 If the performance of the work at top-rank to the owner * Choice of labor-intensive construction

then a contracting strategy that accommodates changes * Protection of the environment

to achieve a better performance and a teamwork
approach may be desirable.
 Contract

What is a contract?

 It is a legally binding document that describes the responsibilities and rights of the parties.

 According to its simple definition, a contract is an agreement enforceable at law, but not all agreements are
contracts. Some elements must be present before an agreement becomes a contract. These elements are:
 Competent Parties
 Proper Subject Matter
 Consideration
 Agreement
 Proper Form
 Consent of the Parties
 Contract

How are contracts formed?

 Owner issues Invitation for Bids (IFB)

 Contractor prepares and submits bid

 Owner reviews and accepts bid

 A contract document is developed, reviewed, and agreed upon by parties

 The contract is signed by parties

 Project Delivery Methods

What is project delivery method?

 The project delivery method translates what project parties are involved in the project and how they interact with
each other and also called project organizational structure. It can be facilitated considering the following factors:

 Size and nature of the work packages within the project.

 Selection of the design team form in-house resources external consultants or contractors.

 Process of supervision of construction.

 Restrictions upon using combination of organizational structures within the project.

 Expertise which the client wishes to commit to the project.

 Project Delivery Methods

 When plans are completed and the owner is interested in securing the low price, the use of competitive bids is
suggested.

 A negotiated contract should be used when construction should start before plans are completed or when the many
unknown factors of the project make an accurate estimate impossible.

 When many changes are expected and when inspection and supervision cannot be done efficiently, the negotiated
type of contract should be used.
 Project Delivery Methods

1. Traditional approach(Design Bid Build/DBB):- This is the most common approach in civil engineering
projects in which the design has to be completed before construction can start. Design and construction are
usually performed by two different parties who interact directly and separately with the owner. The pros and cons
of this approach are summarized as follow:
Advantages:
- Price competition
- Total cost is known before construction starts
- Well documented approach used in most government projects.
 Project Delivery Methods

Disadvantages

- Long time

- Design does not benefit from construction expertise

- Conflict between owner, contractor and A/E

 Therefore, this method is fine in many cases where the project is clearly definable, design is completed, time need
not be shortened, and changes are unlikely to occur during construction.
 Project Delivery Methods

2. Force Account/Direct labor

 In this approach, owner organization performs both the design and construction using its in-house labor force.

- Used by large authorities

- The owner performs both the design and the construction

- May use consultants for some specialized designs

- Most suitable for small projects

- Can be used when expertise are available

- Low risk projects

- Inadequate scope definition

 Project Delivery Methods

3. Design-Build/DB

 In this approach, a single organization is responsible for performing both design and construction and, in some
cases, providing certain “know-how” for the project. The pros and cons of this approach are summarized as
follow:

Advantages:

- One contract that may include know-how

- Minimum owner involvement

- Used for fast-track projects in order to reduce time

- Co-ordination between design and construction and easier in implementing the changes
 Project Delivery Methods

Disadvantages

- Cost may not be known until end of the construction

- High risk to contractor and more cost to owner

- Design-build company may reduce quality to save cost

 The use of this approach, therefore, should be considered when contractors offer specialized

design/construction/know-how expertise or when design is strongly influenced by the method of construction.

 Project Delivery Methods

4. Turnkey

 This approach is similar to the design-build approach but with the organization being responsible for performing
both design, construction, know-how (if any), and project financing.

 Owner payment is then made at the completion (when the contractor turns over the “key”). An example is franchise
projects in which a new branch of a restaurant chain needs to maintain the same design, construction quality, and
food service quality.
 Project Delivery Methods

5. Finance Build-Operate-Transfer (BOT):- In this approach, a business entity is responsible for performing the
design, construction, long-term financing, and temporary operation of the project.

 At the end of the operation period, which can be many years, operation of the project is transferred to the owner.

This approach has been extensively used in recent years and is expected to continue. An example of its use is in
express routes and turnpikes. A consortium of companies shares the cost (design, construction, financing, operation,
and maintenance) and the profits gained from user fees, for a stipulated number of years. Afterwards, the project
returns to the government to become publicly owned.

 This approach has also been used extensively in large infrastructure projects financed by the World Bank in parts of
the world that cannot afford the high investment cost of such projects.
 Project Delivery Methods

6. Professional Construction Management (PCM):-In this approach, the owner appoints a PCM organization (also
known as Construction Management organization) to manage and coordinate the design and construction phases of a
project using a Teamwork approach.

 With high level of coordination between the participants, innovative approaches of overlapping design and
construction (i.e., fast tracking) can be adopted. The services offered by the PCM organization overlap those
traditionally performed by the architect, the engineer, and the contractor.

 The use of PCM approach, therefore, should be considered when there is a need for time saving, flexibility for
design changes is required, and owner has insufficient management resources.
 Types of Contracts

 The three main factors that influence the choice of a given contract including: the incentive, risk sharing and the
flexibility.

 Contracts are classified according to the method of payment to the contractor.

1.Lump-sum contract

 A single tendered price is given for the completion of specified work to the satisfaction of the client by a certain
date. Payment may be staged at intervals on the completion.

 The contract has a very limited flexibility for design changes. The tendered price may include high level of
financing and high risk contingency.

 Where considerable risk has been places with the contractor, this contract may lead to cost cutting, trivia claims, or
bankruptcy. Contract final price is known at tender.
 Types of Contracts

 A lump-sum contract would seem to prevent risks for the client where in fact it just changes them. An important risk
to the client is that of not receiving competitive bids from desirable contractors who may avoid a high-risk lump-
sum contract.

 This contract may be used for a turnkey construction. It is appropriate when work is defined in detail, limited
variations are expected, level of risk is low and quantifiable, and client does not wish to be involved in the
management of his project.

2. Admeasurement/Unit-Price contract

 In this type of contracting, items of work are specified in Bills of Quantities or Schedule of Rates. The contractor
then specifies rates against each item. Payment will be payed based on agreed days/months for all completed works.
 Types of Contracts

 The contractor can claim additional payment for any changes in the work content of the contract. Tender price is
usually increased by variations and claims.

 The admeasurement contract is well understood and widely used. It can be used when little or no changes are
expected, level of risk is low and quantifiable, and when design and construction need to be overlapped.

3. Cost-reimbursable contract (cost-plus contract)

 The contractor is reimbursed for actual cost plus a special fee for head office overheads and profit, no special
payment for risk. Payment may be made monthly in advance. The contract involves a high level of flexibility for
design changes.

 The contractor must make all his records and accounts available for inspection by the client or by some agreed
third party
 Types of Contracts

 The fee may be a fixed amount or a percentage of actual costs. This contract has no direct financial incentives for
the contractor to perform efficiently.

 It may be used when it is desirable for design to proceed concurrently with construction and when the client wishes
to be involved in contract management.

4. Target cost contract

 Cost targets may be introduced into cost-reimbursable contracts.

 In addition to the reimbursement of actual cost plus percentage fee, the contractor will be paid a share for any
saving between target and actual cost, while the fee will be reduced if actual cost exceeds the target. The target
figure should be realistic and the incentive must be sufficient to generate the desired motivation.

 NB:- There are different types of Contracts in your lecture material which are under these four contract types.
 Types of Contracts

 As shown in the figure, competitive bidding contracts (Lump Sum and Unit Price) are among the top risky contracts
to contractors and thus present a challenge in estimating their cost and schedule at the bidding stage and before a
commitment is made.

Fig: Level of risk associated with various contracts

 Contract Documents

 The contract is defined by the contract documents, which are developed from the tender documents.

 The Tender Document, in addition to the following shall also include the Invitation for Bids & Instruction to
Tenderers & Amendments thereto, if any.

 The following are typical tender (contract) documents in the Construction Contract & divided in to legal,
commercial & technical parts.

I. The Legal Part

 The Contract Agreement;

 The (latest) Minutes of Meeting, if any;

 The Letter of Acceptance(Award);

 Contract Documents

 The Tender ( NB: Including the Appendix to Tender, if any);

 The Special Conditions of Contract;

 The General Conditions of Contract;

 Others, if any;

II. The Commercial Part

 The Performance Security Form, The Payment Security Form;

 The Advance Payment Guarantee Form;

 The Bid Security Form, The Insurance Forms;

 The Retention Money Security Form; Others, if any

 Contract Documents

III. The Technical Part

 The Technical Specifications;

 The Drawing;

 The Bill of Quantities;

 Others, if any;

 The Contract Agreement shall also declare the priority of the Contract Documents i.e. which Contract Document
shall have precedence or priority over the other in case of ambiguity or discrepancy between or among the
relevant Contract Documents.
 Contract Documents

Conditions of contract:-The conditions of a contract are rules by which the execution of the contract is to be

governed. They set-out the responsibilities, rights, and liabilities of the two parties.

 Some of the subjects to be defined in the conditions of contract are:-Definitions & interpretations, Duty &
responsibilities of the engineers, Contract period, Method of payment and periods, Retention money, Payment for
materials on site, Payment for variation orders, Escalation (wages, cost of materials), Procedures on sub
contracting, Insurance & indemnities, Liquidated damages, Granting of extension time, Conditions for contract
termination
 Contract Documents

 In Ethiopia Construction Industry the following conditions of contracts are commonly used:

 FIDIC – Condition of Contract[Which is available in different forms for different purpose and used in ICB].Please
refer your lecture material

 PPA(2011), Standard Bid Document

 MoWUD, Standard Condition of Contract (1994)

 BaTCoDA, Condition of Contract

 Contract Documents

PPA condition of contracts

 The Standard Conditions of Contract cover the following types of procurement.

These are Standard Conditions of Contract for the procurement of:-

 Consultancy Services;

 Non-consultancy Services;

 Works;

 Goods; Including Simple Request for Quotations & Local Purchase Order;
 Major Types of Construction Bonds

1.Bid Bonds:-guarantee that if chosen as the winning bidder, the contractor will accept the job. If the winning bidder
chooses not to accept the job, the project owner can submit a claim to cover any resulting costs related to soliciting
and evaluating new bids and selecting a new contractor.

2. Performance Bonds:-guarantee that the contractor will carry the project through to completion and abide by
applicable laws and industry standards. Failure to do so can result in the project owner filing a claim to recover any
financial loss from having to pay for the work to be redone or completed by another contractor.

3.Payment bonds:- guarantee that the contractor will pay its workers, subcontractors, and suppliers in accordance
with the terms of the contract. The contractor’s failure to pay can result in a claim by any of these parties against the
bond for the amount owed.

 Although there are other kinds of bonds, these are the most common types of bonds in construction sector.
 Construction claims

Construction claims

 A construction claim is a request for payment or time extension to which the contractor considers him/herself
entitled. There are three types under which claims are required:

- Extension of time only.

- Additional cost.

- Both extensions of time and additional cost.

 Construction claims

 The main reasons for construction claims may include:

• Late possession of site or late provision of working drawings.

• Change of contract start or activities schedule.

• Design change and variation.

• Delays in approval and examining work.

• Work acceleration by the client.

• Late delivery of materials supplied by the client.

• Different ground and/or site conditions.

• Unforeseen events and disasters.

The End!
Good luck!

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