GCC for Works - New clause - Bonus for early completion of work
· Contractor is entitled a Bonus for early completion of work i.e., before the prescribed date for completion.
· New clause in GCC for works
· Para No. 17 C of GCC – General Conditions of Contracts for Works
· Bonus - 1 % of Contract value for each 30 days early completion of work.
· Less than 30 days shall be ignored for working out the Bonus
· The completion date reckoned - the date of issuance of completion certificate by the Engineer.
· Maximum Bonus is 3 % of the original contract value.
· Conditions for availing Bonus by Contractors are :
1. Open Tenders having value of more than Rs. 20 Crores
2. Original period of completion is 12 months or more
3. No reduction in original scope of work by more than 10 %
· This clause is very good. Because it encourages the contractors for early completion of work for availing the Bonus to the extent of 3 % of Contract value. Also avoids the time over runs and cost over runs in Projects.
A work costing 25 Crores whose completion period is 18 months was awarded to the Contractor ABC Co, ltd on 01.10.2019. The completion date for this work is 31.03.2021. The scope of work is not reduced during the contract period. If the contractor completes the work on 15.12.2020, what is the eligible amount of Bonus entitled to the Contractor?
Saving period: 31.03.2021 Minus 15.12.2020 = 116 days.
Bonus is 1 % for every 30 days subject to maximum of 3 %
Bonus calculation = 3 % of 20 Crores = Rs. 60 Lakhs
1. The limit of Rs. 20 Crores can be reduced to Rs. 5 Crores or any reasonable limit
2. The Bonus shall be 0.25 % for every one week in lieu of 1 % for every 30 days period.