Engineering, Procurement & Contracts CONTRACT Handbook

EPC Contract Handbook

1. EPC (Engineering, Procurement and
Construction) Contract

2. Presentation plan
What’s EPC Contract
Challenges of EPC Cont
Design Dir, S Con, P Con
Authorities’ Engineer
Quality assurance
PV, Payment
Levy of LD, Payment of Bonus

3. What all to expect today
WhatisEPCcontract,Issuesandchallenges
Scopeofworks,TechnicalSpecs
DesignDirector,SafetyConsultant,ProofConsultant
Authority’sEngineer
Qualityassurance,Variation/ChangeinScope
Assignment&Sub-contracting
Timeforprojectcompletion,levyofDamages,Bonusfor
earlycompletion
Insurance,Price,PriceVariationclauses,Payment
DefectLiabilityPeriod(DLP)

4. EPC contract
EPCstandsforEngineering,Procurementand
Construction
InEPCcontract,theownerprovidesitsrequirementsand
thecontractorpreparesthedetailedengineeringdesign,
procuresallthematerialsandequipmentsandthen
constructtodeliverafunctioningfacilityorassettothe
owner.
EPCC-Engg.Proc,ConstructionandCommissioning
EPIC-Engg,Proc,InstallationandCommissioning

5. Degree of Risk allocation
Contractor’s risk increases
Engineering,
Procurement
and
Construction
Procurement
and
Construction
Construction
Design work
by the
Contractor

6. Scope of EPC contract-NitiAyog
TheContractorshallundertakethe
survey,
investigation,
design,
engineering,
procurement,and
constructionoftheProjectandobserve,fulfili,comply
withandperformallitsobligationssetoutinthecontract

7. Schedule diagram of EPC contract
Site
access
Complete
engg
Contract
award
Pre-com
tests
Handover
project
Engineer
Procure
Const and pre-commision
Prog/
Time
Drgs,
Site data
Utilities,
Equip.
Materials
Milestone

8. Issues and challenges of EPC contracts
Addlocalproblems-Jharkhand&Chhattisgarh,Stress,
Personalissues,Covidetcandtheproblemincreases…
Skilled
manpower
Long
duration
Environmental
Forest clearance
Inhospitable
climate
Logistics
issues
Change
of people

9. Specification and standards for construction
Allmaterials,worksandconstructionoperationsshall
conformtotheStandardsandSpecificationscontained
in….(Maual/Annexure),egManual–IRC:SP:73-2007
forroadsandMORTHspecificationsforRoadsand
Bridgeworks
Wherethespecificationforworkisnotgiven,Good
IndustryPracticeshallbeadoptedtothesatisfactionof
ProjectAuthority’sEngineer

10. Responsibility of contractor
TheContractorshall,indischargeofallitsobligations,
conformwithandadheretoGoodIndustryPracticeat
alltimes
TheContractorshallcomplywithallapplicableLaws
andapplicablePermits(includingrenewalsasrequired)
intheperformanceofitsobligationsunderthiscontract.

11. Design work of the Project
Design Director
Within20daysofcommencement ofcontract,the
contractorshallappointa“DesignDirector”whowillhead
theContractor’sdesignunitandshallberesponsiblefor
surveys,investigations,collectionofdata,andpreparation
ofpreliminaryanddetaileddesigns
TheDesignDirectorshallbeappointedafterproposingto
theProjectAuthorityapanelof3namesofqualifiedand
experiencedfirmsfromwhichtheProjectAuthoritymay
chooseonetobetheDesignDirector

12. Safety aspectof the Project
Safety consultant
ThecontractorshallappointaSafetyConsultanttocarry
outsafetyauditatthedesignstageoftheProjectin
accordancewithApplicableLawsandGoodIndustry
Practice.
TheSafetyConsultantshallbeappointedafterproposing
totheProjectAuthorityapanelof3namesofqualifiedand
experiencedfirmsfromwhichtheProjectAuthoritymay
choose1tobetheSafetyConsultant

13. Safety Consultant
Ifanywork(s)recommendedbytheSafetyConsultantfall
beyondthescope,theContractorshallmakeareport
thereonandseektheinstructionsoftheAuthorityfor
ChangeinScope.
TheSafetyConsultanttobeengagedbytheContractor
shallbeindependentofthedesignandimplementation
teamoftheContractor.

14. Design & Drawings
Proof Consultant
TheContractorshallappointaproofcheckconsultant(the
“ProofConsultant”)afterproposingtotheAuthorityapanel
of3namesofqualifiedandexperiencedfirmsfromwhom
theAuthoritymaychoose1tobetheProofConsultant.
TheProofConsultantshall(a)evolveasystemsapproach
withtheDesignDirectorsoastominimisethetime
requiredforfinaldesignsandconstructiondrawingsand(b)
proofcheckthedetailedcalculations,drawingsand
designs,whichhavebeenapprovedbytheDesignDirector

15. Authority’s Engineer
TheProjectAuthorityshall,within15daysofthedateof
thecontract,appointanengineer(the“Authority’s
Engineer”)todischargethefunctionsanddutiesspecified
inthisAgreement,and
Thisappointmentwillbecommunicatedtothecontractor

16. EPC Contract
Simplified structure
EPC
Contractor
Sub-ContSub-ContSub-ContSub-Cont
Owner
Engineer
Safety
consultant
Equipment Labour MaterialsUtilities
Design
Director
Proof
consultant

17. Design & Drawings
DesignandDrawingsshallbedevelopedinconformitywith
theSpecificationsandStandardssetforthinthecontract.
Intheevent,theContractorrequiresanyrelaxationin
designstandardsduetorestrictedRightofWayinany
Section,thealternativedesigncriteriaforsuchSection
shallbeprovidedforreviewoftheAuthority’sEngineer.

18. Quality of materials
TheContractorshallensurethattheconstruction,
materialsandworkmanshipareinaccordancewiththe
requirementsspecifiedinthecontract,specificationsand
standardsandGoodIndustryPractice
TheContractorwarrantsthatallmaterialsshallbenew,
unused,notreconditionedandinconformitywith
specificationandstandards,applicableLawsandGood
IndustryPractice,andthattheContractorshallnotuseany
materialswhicharegenerallyrecognisedasbeing
deleteriousunderGoodIndustryPractice

19. Quality assurance plan
Contractor to submit QAP
TheContractorshallPrepareacomprehensiveQuality
AssurancePlanandsubmitittotheProjectauthority’s
engineerwithin30days
TheengineershallconveyhiscommentstotheContractor
withinaperiodofdaysofreceiptoftheQAPstatingthe
modifications,ifany,required,andtheContractorshall
incorporatethoseintheQAP

20. Advance payment
TheProjectAuthorityshallmakeanadvancepayment
equalto10%(15%forlargevalueandcomplexprojects)
ofthecontractprice,formobilisationexpensesandfor
acquisitionofequipmentagainstbankguaranteeof110%
ofvalueofeachinstallment.
TheAdvancePaymentshallcarrysimpleinterestatthe
rateof8%(eightpercent)perannumandshallbemadein
twoequalinstallmentswithin15daysofreceiptof
respectiverequests.

21. What is Quality?
Philip Crosby
Qualityisconformancewithrequirementsthatthe
companyitselfhasestablishedforitsproducts,based
directlyoncustomerneeds
‘Doitrightfirsttime’and‘zerodefects’.

22. Quality Assurance
Inspection
Inspectioninvolvescheckingagainstwhatisrequiredfor
anyparameter:
Forthis,clearprocedureformeasuringthe
characteristicsofaproductorserviceisrequired.Only
thenacomparisonwiththe‘requirement’canbemade.
Wecannotsay:sinceitwasthefirsttime,itdidn’tgowell
Qualityhastobesustainedrightfromtheword‘GO’.
Firstproductmustbeasgoodaslastproduct
OurQAsystemshouldbesimilayto‘Brands’whichhave
goodqualitycontrolsystems

23. Inspection by
Project Authority’s engineer
TheProjectAuthority’sEngineeranditsauthorised
representativeshallatalltimes:
(a)havefullaccesstoallpartsofthesiteandtoall
placesfromwhichnaturalMaterialsarebeingobtained
foruseintheworks;and
(b)duringproduction,manufactureandconstructionat
thesiteandattheplaceofproduction,beentitledto
examine,inspect,measureandtestthematerialsand
workmanship,andtochecktheprogressof
manufactureofmaterials.

24. Inspection by
PA’s senior engineer & his team
TheProjectAuthorityoranyrepresentativeauthorisedby
theAuthorityinthisbehalfmayinspectandreviewthe
progressandqualityoftheconstructionofworksand
IssueappropriatedirectionstotheAuthority’sengineer
andthecontractorfortakingremedialactionintheevent
theworksarenotinaccordancewiththeprovisionsofthe
contra.

25. External technical audit
by an expert & his team
Atanytimeduringconstruction,ProjectAuthoritymay
appointanexternaltechnicalauditortoconductanauditof
thequalityoftheWorks.
Thefindingsoftheaudit,totheextentacceptedbythe
ProjectAuthority,shallbenotifiedtotheContractorandthe
ProjectAuthority’sEngineerfortakingremedialactionin
accordancewiththecontract.
TheContractorshallprovideallassistanceasmaybe
requiredbytheauditorintheconductofitsaudithereunder

26. Change in Scope
On PA’s request
IftheProjectAuthoritydeterminesthataChangeofScope
isnecessary,itmayaskitsEngineertoissueanoticeto
theContractorspecifyingthedetailsoftheworksand
servicescontemplatedthereunder(the“ChangeofScope
Notice”).
UponreceiptofaChangeofScopeNotice,theContractor
shall,withduediligence,providetotheAuthority,the
optionsforimplementingtheproposedChangeinScope
andtheeffecteachsuchoptionwouldhaveonthecosts
andtimethereof

27. Change in Scope
Issue of change order/ amendment
TheProjectAuthoritymaynegotiatewiththecontractorto
arriveatareasonablecostandtimelinetocarryoutthe
changeinscope
Uponreachinganagreement,theAuthoritymayissuethe
“ChangeofScopeOrder”requiringtheContractorto
proceedwiththeperformancethereof.

28. Assignment
Project Authority can decline
ThisAgreement/Jobshallnotbeassignedbythe
Contractortoanyperson,saveandexceptwiththeprior
consentinwritingoftheProjectAuthority.
TheProjectAuthorityshallbeentitledtodeclinethe
requestforassignmentwithoutassigninganyreason.The
decisionofProjectauthorityshallbefinalandbindingon
thecontractor.

29. Sub-Contracting
Forthepurposesofcomputingthevalueofsub-contracts,
theContractPriceshallexcludeanysub-contractforthe
procurementofgoodsandequipmentsuchas[bitumen,
cement,steelandequipment].
ThisobligationtocarryoutWorkscorrespondingtoatleast
30%theContractPriceshallbedischargedsolelybythe
LeadMember.

30. Sub-Contracting
(Sub-contractor performing > 5% but < 10%)
Intheeventanysub-contractforWorks,ortheaggregate
ofsuchsub-contractswithanySub-contractor,exceeds
5%oftheContractPrice,theContractorshall
communicatethenameandparticulars,includingthe
relevantexperienceofthesub-contractor,totheProject
Authoritypriortoenteringintoanysuchsub-contract.

31. Sub-Contracting
(Sub-contractor performing > 5% but < 10%)
TheProjectAuthorityshallexaminetheparticularsofthe
sub-contractorfromtheNationalSecurityandPublic
InterestperspectiveandmayrequiretheContractor,no
laterthan15(fifteen)businessdaysfromthedateof
receivingthecommunicationfromtheContractor,notto
proceedwiththesub-contract,andtheContractorshall
complytherewith.

32. Sub-Contracting
(Qualifying the Sub-Contractor performing > 10%)
Ifanysub-contract(totalexceeding..say10%)relatesto
asub-contractorwhohas,overthepreceding3years,not
undertakenatleastoneworkofasimilarnaturewitha
contractvalueexceeding40%ofthevalueofthesub-
contracttobeawardedhereunderandreceivedpayments
inrespectthereofforanamountequaltoatleast80%of
suchcontract,theAuthoritymay,nolaterthan15
businessdaysfromthedateofreceivingthe
communicationfromtheContractor,requiretheContractor
nottoproceedwithsuchsub-contract,andtheContractor
shallcomplytherewith

33. Sub-Contracting
Liability rests with Contractor
Thecontractorshall,atalltimes,beresponsibleandliable
forallitsobligationsunderthiscontractnotwithstanding
anythingcontainedintheagreementswithitsSub-
contractorsoranyotheragreementthatmaybeentered
intobythecontractor,andnodefaultunderanysuch
agreementshallexcusethecontractorfromitsobligations
orliabilityhereunder

34. Insurance against accident to workmen
TheContractorshallobtaininsurancecoverforitsown
personnelandanyotherpersonsemployedbyitonthe
project
ThisshallincludeSub-contractorsandtheirpersonnel
IftheSub-contractorsobtaininsurancecoverforthem
andtheirpersonnel,theContractor’sobligationsto
insurewillbedeemedtobedischarged

35. Insurance for works, plant & machinery
Thecontractorshallobtaininsurancecoverforworks,
PlantandMaterialsfromthedateofappointeddatetill
thedateofissueofcompletioncertificate.
Thisshallbe15%inexcessofthevaluetocover
additionalcostsinreconstruction/replacement
Thecontractorshallalsoobtaininsurancecoverforits
ownequipments,materialsbroughttoprojectsite.

36. Accident or injury to workmen
Indemnity
Notwithstandinganythingcontainedinthisagreement,itis
herebyexpresslyagreedbetweenthepartiesthatthe
ProjectAuthorityshallnotbeliablefororinrespectofany
damagesorcompensationpayabletoanyworkmanor
otherpersonintheemploymentoftheContractororSub-
contractor,saveandexceptasfordeathorinjuryresulting
fromanyact,omissionordefaultoftheProjectAuthority,
itsagentsorservants.

37. Accident or injury to workmen
Thecontractorshallindemnifyandkeepindemnifiedthe
ProjectAuthorityfromandagainstallsuchclaims,
(previousslide)proceedings,damages,costs,charges,
andexpenseswhatsoeverinrespectoftheabovesave
andexceptforthoseacts,omissionsordefaultsforwhich
theProjectAuthorityshallbeliable.

38. Time for completion of Project
L/D @ 0.05% per day
TheContractorshallconstructtheprojectinaccordance
withtheProjectCompletionSchedulesetforthin…
IftheContractorfailstoachieveanyProjectMilestoneor
anyScheduledCompletionDatewithinaperiodof30days
fromthedatesetforththerein,itshallpaydamagestothe
ProjectAuthority
[email protected]%ofContract
Pricefordelayofeachday(subjecttoaceilingof…)
DelayattributabletoFMandProjectAuthorityshallbe
excluded

39. Time for completion of Project
L/D to be refunded if project completed on time
IftheWorksarecompletedwithinorbeforetheScheduled
CompletionDateincludinganyTimeExtension,the
damagespaidshallberefundedbytheAuthoritytothe
Contractor,butwithoutanyinterestthereon.
ItisagreedthatrecoveryofdamagesunderthisClause
shallbewithoutprejudicetotherightsoftheAuthority
underthiscontractincludingtherightofTermination
thereof.

40. Contract Price and weightages
TheContractPriceisRs……..say,150crs
Proportionsofcontractpricefordifferentstagesof
constructionoftheProjectshallbeasunder
Item % Weig-
tage
Stage of
Payment
% Weig-
tage
Road works
including culverts,
Minor bridges,
underpasses,
overpasses
***** 1)Earth work
2)Granular work
3)Bituminous wrk
4) Culverts
5)Minor bridges
*****
*****
*****
*****
*****
Weightagein percentage to the contract price

41. Determination of value of work done
for stage payment
ContractPrice-Rs150crs……………………… .P
Totallengthofroadis100KMs…………………… L
10Kmsofbituminousworkdonebycontractor...l
Weightageforroadwork(wr)…………… ..say0.8
Weightageforbituminouswork(wb)…..say0.05
Value={Pxwrxwb}x(l/L)
Value={150x0.8x0.05}x(10/100)=Rs60,00,000
Note-This determination will vary from case to case

42. Stage payment statement (Bill)
Thecontractorshallsubmitastatement(StagePayment
Statement),bythe7thdayofamonthtotheAuthority’s
Engineerintherequiredformwithsupportingdocuments,
showingtheamountduetohimforthecompletedstage(s)
ofworks.
Thecontractorshallnotsubmitanyclaimforpaymentof
incompletestagesofwork.Ifthereisnoclaimforamonth,
thecontractorshallsubmita‘Nil’claimtotheAuthority’s
Engineer

43. Stage payment
Within10daysofreceiptofStagePaymentStatement,
ProjectAuthority’sEngineershallbroadlydeterminethe
amountduetotheContractorandrecommendtherelease
of90%oftheamountsodeterminedaspartpayment
againsttheStagePaymentStatement,pendingissueof
theInterimPaymentCertificatebyProjectAuthority’s
Engineer.
Within10daysofthereceiptofrecommendationofthe
Authority’sEngineer,theAuthorityshallmakeanelectronic
paymentthereofdirectlytotheContractor’sbankaccount.

44. Stage payment-IPC
Within15daysofthereceiptoftheStagePayment
Statement,theAuthority’sEngineershalldelivertothe
Authorityandthecontractor,anIPCcertifyingtheamount
dueandpayabletothecontractor,afteradjustingthe
paymentsalreadyreleasedtothecontractor.
TheIPCshallspecifyalltheamountsthathavebeen
deductedfromtheStagePaymentStatementandthe
reasonstherefor.

45. Stage payment (Time 30 days)
Paymentshallbemadewithin30daysfromthedateof
submissionoftheStagePaymentStatementbythe
contractortotheAuthority’sEngineerforcertification.
IfInterimPaymentCertificate(IPC)isnotissuedbythe
Authority’sEngineerwithin30days,theAuthorityshall
paytheamountshownintheContractor’sStagePayment
Statementandanydiscrepancythereinshallbeadjusted
inthenextIPC.

46. Stage payment
(Interest due to delay)
IncaseoffailureoftheProjectAuthoritytomakepayment
tothecontractorwithin30daysfromthedateof
submissionofStagePaymentStatementbythecontrctor,
theProjectAuthorityshallbeliabletopaytotheContractor
interestatrateequaltotheBankRateplus3%

47. Price adjustment/ variation
Road Works(RW)
Priceadjustment/variationforRoadworksandotherworks
shallbepaidinaccordancewiththefollowingformula:
VRW=0.85RWx[PLx(LI–LO)/LO+PAx(AI–AO)/AO+
PFx(FI–FO)/FO+PBx(BI–BO)/BO+PMx(MI–
MO)/MO+PCx(CI–CO)/CO+PSx(SI–SO)/SO]
RW-Valueofworkdoneforcompletionofastage
VRW-Variationpayable

48. Price adjustment/ variation
Bridges(BR)
Priceadjustment/variationformajorBridgesand
Structuresshallbepaidinaccordancewiththefollowing
formula:
VBR=0.85BRx[PLx(LI–LO)/LO+PAx(AI–AO)/AO+
PFx(FI–FO)/FO+PMx(MI–MO)/MO+PCx(CI–
CO)/CO+PSx(SI–SO)/SO]
BR-Valueofworkdoneforcompletionofastage
VBR-Variationpayable

49. Percentages contributions for variation
Component Earth work
and other
works %
Bitumin-
ous
Work %
Cement
Concrete
pavement
Culvert
Minor
Brigde
Major
Bridges/
Structures
Labour(PL) 20 20 20 15 15
Cement (PC) 5 Nil 20 15 15
Steel (PS) Nil Nil Nil 15 20
Bitumen (PB) Nil 15 Nil Nil Nil
Fuel and
Lubricants (PF)
10 10 10 10 10
Other materials
(PM)
50 40 35 30 25
Plant, machinery
and spares (PA)
15 15 15 15 15

50. Price adjustment/ variation
(Factors)
PB,PC,PL,PM,andPSarethepercentagesofBitumen,
Cement,Labour,otherMaterials,andSteel/components
(includingstrandsandcables)respectivelyfortherelevant
items
PAisthepercentageofPlant,Machineryandspares
componentfortherelevantitems.
PFisthepercentageofFuelandlubricantsforthe
relevantitems.

51. Price Index
(Machinery)
AO=Thewholesalepriceindexaspublishedbythe
MinistryofCommerce&Industry,GovernmentofIndia
(hereinaftercalled“WPI”)forconstructionMachineryfor
themonthoftheBaseDate
AI=TheWPIforconstructionMachineryforthemonth
whichisthreemonthspriortothemonthtowhichtheIPC
relates

52. Price Index
(Bitumen, Cement)
BO=Theofficialretailpriceofbitumenatthenearest
refineryat[sayPanipat]ontheBaseDate
BI=Theofficialretailpriceofbitumenatnearestrefineryat
[sayPanipat],onthefirstdayofthemonthwhichisthree
monthspriortothemonthtowhichtheIPCrelates
CO=TheWPIforcementforthemonthoftheBaseDate
CI=TheWPIforcementforthemonthwhichisthree
monthspriortothemonthtowhichtheIPCrelates

53. Price Index
(Fuel, Lubricant)
FO=Theofficialretailpriceofhighspeeddiesel(HSD)oil
attheexistingconsumerpumpsofIndianOilCorporation
(“IOC”)intheStateof[sayinDelhi]ontheBaseDate
FI=TheofficialretailpriceofHSDattheexistingconsumer
pumpsofIOCintheStateof[sayinDelhi]onthefirstday
ofthemonthwhichisthreemonthspriortothemonthto
whichtheIPCrelates

54. Price Index
(Labour)
LO=Theconsumerpriceindexforindustrialworkersfor
the[circle****intheStateofHaryana],publishedby
LabourBureau,MinistryofLabour,GovernmentofIndia,
(hereinaftercalled“CPI”)forthemonthoftheBaseDate
LI=TheCPIforthemonthwhichisthreemonthspriorto
themonthtowhichtheIPCrelates

55. Price Index
(Steel, Other Materials)
SO=TheWPIforsteel(rods)forthemonthoftheBase
Date
SI=TheWPIforsteel(rods)forthemonthwhichisthree
monthspriortothemonthtowhichtheIPCrelates
MO=TheWPIforallcommoditiesforthemonthofthe
BaseDate
MI=TheWPIforallcommoditiesforthemonthwhichis
threemonthspriortothemonthtowhichtheIPCrelates

56. Price Variation
General Formula
PricevariationSteel,Cement,Labour,Fueletc
Work done (W)
minus FE
% of
component
in the T/E
% change
in price
index
x x

57. Major Bridge
How to calculate price variation for steel
WokdoneW=1,00,000
Materialcomponent(Steel)=20%weightageforBridge
Basepriceindex=100
Priceindexforthequarterinwhichworkdone=110
Price variation =0. 85 x 1,00,000 x
110 -100
100
20
100
x
=1700

58. Major Bridge
How to calculate price variation for Labour
WokdoneW=1,00,000
Labourcomponent=15%weightageforBridge
BaseLabourindex=100
Labourindexforthequarterinwhichworkdone=110
Price variation =0. 85 x 1,00,000 x
110 -100
100
15
100
x
=1275
Class exercise: What will the total amount of variation if there is uniform
increase of 10% in price of all inputs in a quarter?

59. General Formula for variation
Cost of materials method
PricevariationSteel,Cement,bricks,Fueletc
Weight of steel Difference in ratex
Steelused1000kgduringthisperiod
Differencebetween(i)thepriceprevailingduringthis
periodand(ii)initialpriceofsteelisRs5perkg
VariationRs5X1000=Rs5000

60. Bonus for early completion
(Bonus upto3%)
IftheProjectiscompletedearly,thecontractorshallbe
entitledtoreceiveabonusequivalentto0.03%ofthe
contractpriceforeachdaybywhichtheProjectompletion
dateprecedestheScheduledcompletiondate
Thiswillbesubjecttoaceilingof3%ofContractPrice.
Fordeterminingthebonus,theContractPriceshallbethe
amountspecifiedinitiallyinthecontractandshallexclude
anyrevisionthereof
Paymentofbonuswillbemadeonlyaftertheissueofthe
CompletionCertificate

61. Monthly Inspection report
TheProjectAuthority’sEngineershallsubmitamonthly
inspectionreporttotheProjectAuthorityandthe
contractorbringingouttheresultsofinspectionsandthe
remedialactiontakenbythecontractorinrespectof
Defectsordeficiencies.
SuchinspectionorsubmissionofInspectionReportbythe
ProjectAuthority’sEngineershallnotrelieveorabsolvethe
contractorofitsobligationsandliabilitiesunderthis
contractinanymannerwhatsoever.

62. Monthly progress report
DuringtheConstructionPeriod,theContractorshall,no
laterthan10daysafterthecloseofeachmonth,furnishto
theProjectAuthorityandtheProjectAuthority’sEngineer
amonthlyreportontheprogressofWorksandshall
promptlygivesuchotherrelevantinformationasmaybe
requiredbytheProjectAuthority’sEngineer.

63. Defect liability period
TheContractorshallberesponsibleforallthedefectsand
deficiencies,exceptusualwearandtearintheProjector
anySectionthereof,tilltheexpiryofaperiodof2years
fromthedateofProvisionalCertificateorexpiryofaperiod
of18monthsfromthedateofCompletionCertificate,
whicheverislater
TheDefectsLiabilityPeriodforaStructureorMajorBridge
havinganestimatedconstructioncostexceedingRs.50
croreeach,shallbeextendedbyafurtherperiodof3
yearsaftertheexpiryoftheaboveDefectsLiabilityPeriod.

64. Rectification of defects & deficiencies
TheContractorshallrepairorrectifyalldefectsand
deficienciesobservedbytheAuthority’sEngineerduring
theDefectsLiabilityPeriodwithinaperiodof15daysfrom
thedateofnoticeissuedbytheAuthority’sEngineeror
withinsuchreasonableperiodasmaybedeterminedby
theAuthority’sEngineerattherequestoftheContractor,in
accordancewithGoodIndustryPractice.

65. Contractor’s failure to rectify the defects
Ifthecontractorfailstorepairorrectifythedefector
deficiencywithinthespecifiedperiod,theAuthorityshall
beentitledtogetthesamerepaired,rectifiedorremedied
attheContractor’scost.
Allcostsconsequentthereonshall,afterdueconsultation
withtheAuthorityandtheContractor,bedeterminedby
theAuthority’sEngineer.Thecostsodetermined,andan
amountequalto20%(twentypercent)ofsuchcostas
Damages,shallberecoverablefromanymoniesdueto
thecontractor

66. Dispute Resolution
IntheeventthepartyagainstwhomtheAwardhasbeen
grantedchallengestheAwardinaCourtoflaw,itshall
makeaninterimpaymenttotheotherpartyforanamount
equalto75%oftheAward,pendingfinalsettlementofthe
Dispute.
Theaforesaidamountshallbepaidforthwithupon
furnishinganirrevocableBankGuaranteeforasumequal
totheaforesaidamount.

67. Dispute Resolution
UponfinalsettlementoftheDispute,theaforesaidinterim
paymentshallbeadjustedandanybalanceamountdueto
bereturned,shallbereturnedwithinterestcalculated@
10%fromthedateofinterimpaymenttothedateoffinal
settlementofsuchbalance.

68. Thank you so much
for
active participation