Works Contracts - Types
Lump Sum Contracts:
- A contract under which the
contractor engages to carry out a work or effect supply as specified and
within a given period for a fixed total sum;
- His receipt of this sum being
dependent on his completing the work or supply to specification and time,
irrespective of the actual quantities and kind of work done or materials
supplied in achieving his result.
- In case of departure from the work
or supply as specified - Reduction from the consideration may be
made at the discretion of the Competent authority for failure on the part
of the Contractor.
In simple:
- Fixed Total sum - To be paid to
the Contractor.
- Complete the Work / Supply to the
specification.
- Within a given period.
- Not relevant: Actual quantities of
work or material supplied.
- Suitable for Contracts like
Construction of 100 Nos of Type I Quarters, Replacement of wiring in 200
Type I Quarters, etc.
Schedule Contract:
- It is simplest form of
Contract
- The contractor engages to carry
out a work or effect supply as specified and within a given period at
fixed unit rates or prices for each of the various items comprising such
work or supply,
- the sum he is to receive depending
on the actual quantities and kinds or work done or materials supplied in
completing the work or supply to specification and time.
- It is not repugnant to the above
definition to show in such contracts the approximate amount of the
contract, based on approximate quantities and the fixed unit
rates.
-
In simple:
- The sum paid to the
Contractor - Depends on the actual Quantities of work or material
supplied
- Fixed unit rates or prices for
each of the various items (Not Total work value)
- Within a given period as per
specifications.
- Contract rates and quantity of
various activities are fixed beforehand at the time of the award the
Work.
- Most commonly used type of
Contract in Indian Railways.
- No lump sum payment is permitted
except in Earth work.
Piece Work Contracts:
- A contract under which only unit
rates or prices for various kinds of work or materials are agreed upon,
- without reference either to the
total quantity of work to be done or material supplied;
- The Railway may indicate its
intention as to the maximum value of the orders it is likely to place;
- but the contractor cannot claim to
be given an order for more than one unit of work or supply.
- After the contract is executed,
specific orders for work or supply may be placed against it. Maximum value
of One Work Order is Rs.5 Lakhs
- The rate of progress may not be
specified;
- but if it is not satisfactory the
contract can be terminated.
In Simple:
- Agreed only unit rates or prices
for various kinds of works / materials
- No reference of Total work to be
done or Materials to be supplied.
- Railways indicate maximum value of
work to be executed or material to be supplied. But there is no
guarantee.
- Contractor cannot be claimed to be
given for more than one order.
- After the contract is executed,
specific orders for work or supply may be placed against it.
- Maximum value of One Work Order is
Rs.5 Lakhs
- Also called Fixed Rate
Contracts
- Generally Time period is One
year.
Example: Zonal
Contracts