Step 8. Preparation of Contract Packages

Construction of the works may be carried out either through one contract or a number of contracts. The following guidelines shall apply in splitting the works into suitable contract packages:

• The works may be too large to be undertaken by a single contractor when considering the technical, managerial and financial capability of suitable available contractors.
• The project may consist of diverse works such as civil works, mechanical works, and electrical works and suitable multi-disciplinary contractors may not be available.
• The work packages may physically separate from one another requiring separate site management for the construction activities.
• The work may require a range of plant and equipment that is not available to a single contractor.
• The work may require a range of skills and expertise that a single contractor may not have.
• The consultant and implementing agency shall consider all practical combinations of contract packages and decide the preferred combination based on their expert judgement and consideration of supervi sion and administration costs.

PPR 2007 Chapter 3, Rule 20, 22, Sub-rule (2) and Schedule-4

Procurement contract of construction work
A Public Entity may, in order to have a construction work carried out, conclude any of the following contracts:-

(a) Unit rate contract : In order to cause to be carried out a construction work the quantity of which is not ascertained at the time of conclusion of procurement contract or to have the per unit activity of a construction work carried out at the rate referred to in the Bill of Quantities, a unit rate contract may be concluded. The bidder shall have to include the materials, labor and other things required to complete the proposed construction work in such unit rate.

In making payment for the work done pursuant to this contract, payment shall be made of the amount to be found out from computing the quantity of construction work as ascertained from measurement of construction site by per unit rate.

(b) lump sum contract: In order to cause to be carried out a construction work difficult to measure such as installation of underground water pipeline or a construction work that can be measured such as structure of a bridge, a lump sum contract may be concluded. This contract shall be so concluded as to rest all risk and liability relating to the construction work on construction entrepreneur.

Provided that if the financial liability of the construction work is increased for the reason that the Public Entity having ordered to make a change of any type in the construction after start up of the construction work upon conclusion of the procurement contract, the Public Entity shall have to bear such liability.

(c) Cost-reimbursement contract:- In order to cause to be carried out a construction work of the nature of high risk and unpredictable conditions of work, which a construction entrepreneur does not agree to do or cannot do under the unit rate contract, cost-reimbursement contract may be concluded. In making payment to the construction entrepreneur for the construction work to be carried out by concluding this contract, payment may be made for the actual cost for carrying out such construction work, overhead cost thereof in addition to the profit as stated in the approved cost estimate. In having a construction work carried out by conclusion of this contract, the chief of the Public Entity shall have to fix the maximum amount of cost-reimbursement and if an amount exceeding such limit is to be paid s/he shall have to obtain the pre-approval of the Departmental head.

(d) Time and material rate contract:- In order to have a work carried out by computing the labor on the basis of time and the materials on the basis of unit rate, due to unpredictability at the time of conclusion of procurement contract of the labor and materials required for the repair and maintenance of a construction work, a time and material rate contract may be concluded. This contract shall clearly mention that payment shall be made to a construction entrepreneur as follows:-

(a) The amount found out after the overhead cost and the profit referred to in the approved cost estimate to the sum find out by dividing the labor of the construction entrepreneur on the basis of per hour or per day or per month, and

(b) The payment amount of the price of the material used for maintenance subject to the limitation of the amount referred to in the procurement contract.

(e) Design and build contract: A design and build contract may be concluded in order to have a design and construction of a construction work carried out by the same construction entrepreneur. A Public Entity shall have to start the work under this contract only after approving the design of the construction work after causing such design to be examined by a technical or a team of technicians. The technician or the team of technicians who so examines the design shall have to examine and approve such design, drawing and cost estimate by application of the procedure set forth in the Regulations for examination and approval.

(f) Management contract: A management contract may be concluded in order to have a construction work carried out through different sub-contractors subject to the conditions that legal and contractual obligation relating to the quality and completion period of construction work shall be undertaken by the construction entrepreneur himself/herself with whom the Public Entity concludes procurement contract and such work is carried out under his/her management and supervision.

The payment for the work under this contract shall be made only to the construction entrepreneur who has concluded procurement contract with the Public Entity.

(g) Performance based maintenance or management contract: A performance based maintenance or management contract may be concluded in order to have a construction work carried out without mentioning the equipment required to maintain and manage a construction work and item wise work by mentioning only the final performance.

(h) Piece work contract: In order to cause to be carried out construction work related to small scale maintenance and repair which requires to be carried out frequently as and when required, a piece work contract may be concluded by establishing the list of price of such work.

Generally, the period of this contract shall not exceed twelve months.

20. Selection of Procurement Contract:

(1) A Public Entity shall, select a procurement contract after the selection of procurement method in regard to any procurement proceedings through which the procurement is to be made, out of the contracts as referred to in Rule 21 if goods or other services are to be procured, in Rule 22 if a construction work is to be procured and in Rule 23 if consulting services is to be procured..

(2) The procurement contract under Sub-rule (1) shall have to be selected by taking the following matters into account:-

• The type and quantity of procurement,
• The likelihood of re-procurement of the same nature,
• Distribution of risk between the Public Entity and the supplier, construction entrepreneur or consultant and other party, and
• Method of supervising procurement contract.

22. Procurement of Contract for Construction Works:

A Public Entity may conclude any contract out of the contracts set forth in Schedule-4 to carry out a construction work.