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    25. Projecdt Procurement-Contract

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    justmeyash17

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    25. Projecdt Procurement-Contract

    Uploaded by

    justmeyash17
    12 views10 pages

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    Download as pptx, pdf, or txt
    12 views10 pages

    25. Projecdt Procurement-Contract

    Uploaded by

    justmeyash17

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    CONTRACT

    ADMINISTRATION
    CONTRACT
    According to Section 2b of Indian Contracts Act,
    1872 & 1940, a contract is an agreement
    enforceable by law.
    Thus, a contract is an enforceable agreement
    between two or more parties. The freedom to
    contract and the recognition by society of
    certain agreements as legally binding are
    indispensable to the efficient functioning of
    business enterprise in relation to the vast variety
    of commercial transactions involving contract.
    The courts have recognized following elements
    as being the essentials of a contract as per the
    Indian Contract Act, 1872 & 1940:
    a) Mutual Assent of offer and acceptance,
    b) Consideration,
    c) Competence of parties, and
    d) Legal Object.
    A flaw affecting any of the above renders the
    contract unserviceable and it is necessary
    that the project manager examines these
    aspects.
    Contract Objectives / Packaging
    The objective of project management contracts in any
    organization is to make available the required
    equipment/material works services of the right quality,
    in right quantity at right price, so as to reach the
    specified place at the right time, after giving fair and
    equal opportunity of bidding to all competent tenders.
    To achieve the objective in procurement for a major
    project, the project works are broken down into small
    well-defined packages. This ensure optimum number of
    contracts to be handled for better planning, co-
    ordination, implementation and project cost to the
    project authorities.
    Classification of Contracts
    Types of Contracts:
    Supply only contracts; supply and erection
    contract; supply and supervision of erection;
    civil works contract; supply erection and
    commissioning contract; consultancy contract;
    maintenance contract or servicing contract.
    Other Contracts are:
    • Fixed Quantity contract
    • Running contract as in government departments
    • Rate contract as in public sector undertakings
    • Contracts for plant and machinery
    • Contracts for sea and river crafts
    • Cost plus profit contracts
    • Production sharing or profit sharing contract
    • Transfer of technology contract
    • Turnkey contract
    • Bilateral contract
    • Multilateral contract
    • Unenforceable contract
    Contracts are classified usually as below in
    contract management parlays:
    • Bilateral and Unilateral contract
    • Void, Voidable and Unenforceable contract
    • Formal and Informal contract
    • Executory or Executed contract

    Formal Contracts include:


    a) Negotiable instruments
    b) Recognizances
    c) Contracts under seal
    Force Majeure
    The following shall constitute force
    majeure:
    Acts of God, acts of government and other
    causes such as strikes, lock-outs or other
    concerted action of workmen, war
    sabotage, riots, civil commotion, police
    action, revolution, flood, fire, earthquake
    and epidemic.
    If the contractor delays in the due execution of the
    contractual obligation due to delays caused by
    force majeure as defined earlier, the agreed time of
    completion of the work covered by this contract of
    the obligations of the contractor shall be extended
    by the period of force majeure, provided that on
    the contractor immediately reports to the
    purchaser, in writing the cause of delay with
    requisite documentary evidence.
    The decision of the project authority on whether
    there is a force majeure conditions or not should be
    final.
    Liquidated Damages
    When a contractor is placed on a higher tenderer
    grade in consideration of the machinery being
    offered, a price preference clause may be included
    binding the contractor to pay as damages the
    difference of price between the lowest acceptable
    offer and offer accepted as price preference. The
    clause on risk purchase enables the project
    authority to replace the items, which the contractor
    fails to deliver within the time allowed and the
    project authority is entitled to recover from the
    contractor the loss suffered

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