contract conditions analysis

8/4/2019 Contract Conditions Analysis

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Project:- Berth 9,10 & 11, MPSEZ

CONTRACT CONDITIONS ANALYSIS,REDRAFTING AND COMPARISONS

EFFORTS BY:NAGENDRA PATEL (UC-1707)ROSHAN PRAJAPATI (UC-2007)


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Project Introduction

Name of Project: - BERTH 9, 10 & 11, MPSEZ

Name of Contractors: - SimplexInfrastructure Ltd.

Type of Project: - Marine Project

Type of Tender: - Item- Rate Tender

Civil cost of Project: - 280 Crores Contract Period: - 18 months [471 days]


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Project Introduction

Maintenance Guarantee Period: - 5 years fromcompletion of Project

Date of Award of Contract: - 23rd April 2010

Starting date of construction: - 10th June 2010 Estimated completion date: - 10th December

2011

Total length of Berth:-771.2 mtr.

Total width of Berth:-37.65 mtr.

Area developed for back up yard: - 86080 sq.m


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CONDITION-IRisk and Responsibility


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CONDITION-I

ORIGINAL CLAUSEThe subcontractor agrees to indemnify and holdharmless the contractor against loss or threatened loss orexpense by reason of the liability or potential liability of

the contractor for or arising out of any claims fordamages.

AMBIGUITY

An indemnity clause requires that one party indemnifythe other, in the event that certain expenses are incurred.This clause can significantly increase the exposure in theextent of an unexpected event or breach of the contract.


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CONDITION-I

REDRAFTED CLAUSEThe subcontractorwill not agreeto indemnify and holdharmless the contractor against loss or threatened loss orexpense by reason of the liability or potential liability of

the contractor for or arising out of any claims fordamages.

AS PER FIDIC CONDITIONThe Contractor shall not subcontract the whole of theWorks. The Contractor shall be responsible for the actsor defaults of any Subcontractor, his agents oremployees, as if they were the acts or defaults of theContractor. It is not mentioned regarding theindemnification of the sub-contractor.


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CONDITION-IICommunication


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CONDITION-II

ORIGINAL CLAUSEThe Contractor shall, unless it is legally or physicallyimpossible, execute and complete the works and remedydefects therein in strict accordance with the contract tothe satisfaction of the Engineer. The contractor shall comply

and adhere to the Engineers instructions on any matter,whether mentioned in the contract or not, concerning theworks. The Contractor shall take instructions only from theEngineer (or his delegates).

AMBIGUITYThe contractor may suffer a loss, if he has started the worknot specified in the contract only on the basis of oralinstructions of the engineer, and finally does not get approvalby the Employer.


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CONDITION-II

REDRAFTED CLAUSEThe Contractor shall, unless it is legally or physicallyimpossible, execute and complete the works and remedydefects therein in strict accordance with the contract tothe satisfaction of the Engineer. The contractor shall comply

and adhere to the Engineers instructions on any matter,whether mentioned in the contract or not, concerning theworks. The Contractor shall take instructions only from theEngineer (or his delegates). In case of execution of anywork commenced only on oral instructions of the

Engineer which is not specified in the contract, theContractor shall immediately start the work on the basisof the instructions and he shall get approval of theEmployer in written within 7 days.

AS PER FIDIC CONDITION

Not mentioned in FIDIC.


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CONDITION-IIIDelegation by the Engineer


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CONDITION-III

ORIGINAL CLAUSEAll communications from Engineers Representative shallhave the same effect as though given by the Engineer.The Engineer shall however retain the authority to

disapprove any work, materials or Plant in the event ofthe Engineers Representative failing to do so or revokethe decisions / instructions issued by the EngineersRepresentative.

AMBIGUITY

Engineer is not taking responsibility of the decisionstaken by Engineers representative.


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CONDITION-III

REDRAFTED CLAUSEAll communications from Engineers Representative (Delegated persons),to whom duties have been assigned or authority has been delegated; shallhave the same effect as though given by the Engineer. The Engineer shallhowever retain the authority to disapprove any work, materials or Plant inthe event of the Engineers Representative failing to do so.


However also,

1. Unless otherwise stated in the delegated persons communication relating tosuch act, it shall not relieve the Contractor from any responsibility he has underthe Contract, including responsibility for errors, omissions, discrepancies and

non-compliances;2. Any failure to disapprove any work, Plant or Materials shall not constitute

approval, and shall therefore not prejudice the right of the Employer to rejectthe work, Plant or Materials; and

3. If the Contractor questions any determination or instruction of a delegatedperson, the Contractor may refer the matter to the Employer, who shallpromptly confirm, reverse or vary the determination or instruction.


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CONDITION-IVRight of Access


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CONDITION-IV

ORIGINAL CLAUSEThe Contractor shall afford every facility for and everyassistance in obtaining the right to access for the Engineer orany of his representative at all reasonable times to the Site

and to all workshops, places where materials or plant arebeing manufactured, fabricated or prepared.

AMBIGUITY

If the contractor is not manufacturing the materials or partsof the work which are being used, and he is using thematerials manufactured by some other manufacturers, it isnot stated that who will arrange for the permission to inspectthe manufacturing facility by the Engineer, if at all it is

required.


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CONDITION-IV

REDRAFTED CLAUSEThe Contractor shall afford every facility for and every assistance inobtaining the right to access for the Engineer or any of his representativeat all reasonable times to the Site and to all workshops, places wherematerials or plant are being manufactured, fabricated or prepared. Ifmaterials, plant or parts of works are manufactured, fabricated or

prepared in places not belonging to the Contractor, the Contractorshall organize necessary permissions from the owners of suchfacilities for the Engineer to inspect such places or plants wherematerials are manufactured, fabricated or prepared.


The Contractor shall bear all costs and charges for special and/ortemporary rights-of-way which he may require, including those for accessto the Site. The Contractor shall also obtain, at his risk and cost, anyadditional facilities outside the Site which he may require for the purposesof the Works.


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CONDITION-VInsurance


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CONDITION-V

ORIGINAL CLAUSEThe Contractor shall provide, in the joint names of theEmployer and the Contractor, insurance cover from theCommencement Date to the end of the Defects LiabilityPeriod, in the amounts and deductibles as stated below and

the contract data, for the following.(a) Loss of or damage to the Works, Plant and Materials.

(Minimum full replacement costs and additional 15% costs);(b) Loss of or damage to Contractors Equipment and other

things at site (minimum full replacement costs).

(c) Loss of or damage of property and personnel (other than theWorks, Plant, Materials and Equipment in connection withthe Contract); i.e. Third Party Insurance; and

(d) Personal injury or death. (I.e. Workmen compensationpolicy)


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CONDITION-V

AMBIGUITYThe insurance cover up to the end of defect liabilityperiod is not required. After completion of the

project to the defect liability period, no plan,machinery or equipments are involved; there is noneed of increasing the cost unnecessarily.

There is not clear statement regarding the

execution of work in the absence of proper insurancecover.


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CONDITION-V

REDRAFTED CLAUSEThe Contractor shall provide, in the joint names of the Employerand the Contractor, insurance cover from the CommencementDate to the end of the project, in the amounts and deductibles asstated below and the contract data, for the following.Wheneverdefects occur during the defect liability period additionalinsurance shall be taken for the period of repair work.

(a) Loss of or damage to the Works, Plant and Materials. (Minimumfull replacement costs and additional 15% costs);

(b) Loss of or damage to Contractors Equipment and other things atsite (minimum full replacement costs).

(c) Loss of or damage of property and personnel (other than theWorks, Plant, Materials and Equipment in connection with theContract); i.e. Third Party Insurance; and

(d) Personal injury or death. (i.e. Workmen compensation policy)


It is as per the original clause. But, it is not mentioned regarding


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contract conditions analysis

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