ASSIGNMENT ON CONTRACTS MANAGEMENT Contract administration and monitoring is the most important area of construction Management .

Contract administration process should start right from the day work is assigned to the company. Discuss any project contract currently in progress with your company and how administration and monitoring is being done.

Draw the Organization chart for this activity and explain all the functions carried out. Do you think the system is achieving the results? Discuss.

Name of Project
Chennai Metro Rail limited Construction of Underground Tunnel and associated stations at Government Estate , LIC and Thousand lights.

Scope of work

The work consists of construction of Underground tunnel having an internal diameter of 5.8 mtr. A tunnel Boring machine of Diameter 6.63mt is used for this purpose. Precast concrete segments of 1.4 m and 1.5m are used for the purpose of ring building once the mining is carried out by Tunnel boring machine.

Important Details of contract,cost,time,type etc.

The contract is Lump sum priced contract adjusted by price variation formula. It was awarded to Gammon OJSC Mosmetrostroy Joint venture as it was the least bid provided among the various companies for 3.9 km tunneling contract from May Day park to Gemini. The works are divided into price centers each representing one or more groups of inter related works forming part of the works.The individual item descriptions within each price center are indicative only for the work included in this contract and shall not be taken as defining the scope of work to be executed either under the price center or the contract. The southern railways standard schedule of rates 2008 (Chennai Schedule for zone B1 plus 50% for march 2010 and escalated in accordance with contract requirements ) shall be used as basis for evaluating any variations. The contractor is wholly responsible for accuracy and adequacy of the item description and quantities , if any contained in the price / cost breakdown .There shall be no correction of any error of description in or omission from the price/cost breakdown after the receipt of notice from employer representative. Any such error or omission shall not vitiate the contract nor release the contractor from his obligation to execute the whole or any part of the works in accordance with the contract. The contract was bagged by Gammon OJSC Mosmetrostroy for a sum of 830 Crore rupees . The Joint Venture bagged the contract for the above mentioned the length of the tunnel and the associated tunnels.

FIDIC (Federation Internationale Des Ingineers Concils) conditions of contract for Design ,Build and Turnkey are used for this contract. The contract shall be financed through equity partnership by Government of India ,Governemnt of Tamil Nadu and Japan International Cooperation agency. No party other than CMRL shall derive any rights from the loan agreement or have any claimto the loan proceedings .The above Loan agreement will cover only a part of the project cost.as for the remaining portion ,CMRL will take appropriate measures for finance. Payments to the contractor will be made on a monthly basis in accordance with the conditions of the contract .All items will be paid at 100% completion unless payment is noted as being paid proportionately using the percentage of the items of the works . For any additional items, payment will be made on the basis of actual measurement of work done and valued in accordance of the relevant item in Southern railways schedule of Rates 2008. In the event the items are not covered in the southern railways Schedule of rates ,then latest edition of Delhi schedule of rates related to Chennai and the latest edition of TNPWD schedule of rates will be used and escalated in accordance of the contract. No payment will be made against any item in the contractors pricing document which does not have a value entered against it within the amount column including NIL or intentionally left blank. The lump sums included for Tunnel price centers shall include for the capping ,removal or other measures necessary for dealing with the presence of the existing wells but the reprovision of the water supply shall be arranged by the Employer. Payment will be calculated using the schedule of payments subject to the Employers Representative being satisfied that the works for each item are 100% complete ,unless payment is on a percentage/monthly/quarterly basis.Payment will be based on the contractor submission of monthly statement .The employers Representative at his discretion certify partial completion and the payment of item units in parts of not less than 30% of that item. Subject to the Contractors monthly statement meeting the value of 1% of contract price and after the Employer Representatives assessment ,the Employers

Representative will issue an Interim Payment certificate calculated from the schedule of Payment Items . In the unlikely event that revisions to the price centers are required during the contract, the following procedures shall apply: 1. Where new items are required ,the schedule of payments and the price center description shall be revised ,by the contractor ,to include the new item with the appropriate description of the work and submitted to the employer Representative for a notice. 2. Where revisions to the existing price centers are required the appropriate price center description shall be revised by the Employer Representative to reflect the revision of the work. The affected price center total,the schedule of the payment ,and the contractors price shall be adjusted by the Employer representative to incorporate any change to the contract price.The contractor shall update the Schedule of payments and submit to the employer Representative for Notice of NO objection. In the contract FORCE MAJEURE events are : 1. War, hostilities, invasion, act of foreign enemies 2. Rebellion,terrorism,revolution,insurrection,military or civil war. 3. Partys personnel and other employees of the party subcontractors. 4. Munitions of war,explosive materials,ionising radiation or contamination by radioactivity 5. Natural catastrophes such as earthquake,hurricane,typhoon,tsunami,flood or volcanic activity. In the contract a party will not be treated as defaulting party in case the performance of a party is hindered or any loss or damage is caused to the JV due to any force majeure .However if a party is or will be prevented from performing any of its obligations under the contract by force majeure then it shall give notice to the other party and the employer of the event constituting Force majeure within seven days after the party became aware of the event or circumstance constituting force majeure. The party shall,having given notice be excused from the performance of such obligations for so long as such Force Majeure prevents it from performing them.

Important points from contractors point of view to be monitored/resolved

The terms and the conditions of sub contracts or suppliers and the payments shall be the sole responsibility of the contractor. The contractor shall be responsible for maintaining the works until final hand over to the Employer and for the provision of maintenance manuals and drawings. The Terms and the conditions of the sub contract are the sole prerogative of the contractor and are deemed to be included in the Lump sum price. The contractor shall maintain a quality assurance system for Design , construction procedures and the interfaces between them and the interfacing contractors . The contractor shall outline occupational , Heath ,safety and environmental plan which shall contain sufficient information to demonstrate clearly the contractors proposals for achieving effective and efficient health, safety and environmental procedures .The outline Occupational, Health, safety and environmental Plan should include an outline of the safety procedure and the regulations to be developed and the mechanism by which they will be implemented for ensuring the safety. In order to ensure satisfactory execution,achievement of key dates and timely completion of the works ,the contractor shall submit an outline project management plan as part of his contract .This plan in coordination with the contract shall clearly demonstrate proposed management system ,methods,procedures ,organization,sequence of activities etc.required to meet the key dates and the completion date . A narrative shall describe the sequence ,nature and inter relationship of the main activities including timing for exchange of the information. All taxes,duty charges,statutory or otherwise of any kind imposed upon the joint venture in india arising out of and in connection with performance of the contract shall be the responsibility and paid by the joint venture. The joint venture shall be solely responsible for obtaining advice from tax advisors in relation to taxation implications of and arising from contract.

Organisation chart with functions

THE EMPLOYER (CHENNAI METRO RAIL LIMITED)

EMPLOYERS REPRESENTATIVE (GENERAL CONSULTANTS)

Monthly Report

Feedback

Feedback and Management

Liaison status
INTERFACING CONTRACTOR S

Liaison status Status Report

CONTRACTORS INTERFACING MANAGEMENT TEAM

Action Report

OTHER INTERFACING CONTRACTORS

Status report and meetings

Regular site meetings Status/action Report

CONTRACTORS DESIGN AND CONSTRUCTION TEAM

Method followed for administer and monitor

The contractor shall submit to the Employers Representative six copies of a Monthly Progress report ,describing the progress and current status of the works .The MPR shall address the matter set out in the works programme. The MPR shall be submitted by the last day of each calendar month. It shall account for all works actually performed from the twenty sixth day of the last month an upto the twentyfifth day of the current month.The processing of the Interim payment Certificate will commence after the receipt of the MPR on due date .Late receipt will delay the processing of IPC. The MPR shall be divided into two sections .The first section shall cover the Progress and the current status relating to design and the next will contain the progress and the current status of construction. The MPR shall be signed by the following key staff : Project manager , QA Manager ,Safety Manager, Chief Interface coordinator and the Engineering Manager who by signing the MPR shall certify that all information contained in the MPR, as relating to the section of the works has been accepted and verified by each signatory as being accurate ,honest ,true and meets the requirements of the contract. A monthly meeting to monitor the progress of the project shall be convened by the Employers Representative and the contractor and the representative of the interfacing of the contractor shall also attend the meeting . The Employer shall arrange Quarterly Review Meetings for the project which the contractor shall attend and participate as required. The contractor shall establish and maintain a quality assurance system to the Employers requirements for design and the construction procedures and the interfaces between them. This quality assurance system shall be applied without prejudice to, or without in anyway limiting ,any quality assurance system that the contractor already maintains. Weekly meetings shall be held on site to discuss detailed technical and construction issues plus the status of contractor submittals. These meetings shall be chaired by the Employer Representative ,who shall also prepare and distribute minutes .The contractors key staff shall attend this meeting with the exception of the project Manager whose presence is exceptional.

Sub contractor representatives shall also attend those meetings when requested to do so by Employer Representative. The contractor shall provide copies of all computer program used/propsed to be used, by the contractor under the contract. Quarterly review meetings shall be arranged at a time and the venue determined by the Employers Representative to generally review progress and outstanding issues in regard to the contract and the project .They shall be attended by the Project Manager and supervisory board members of the contractor and the interfacing contractors .The agenda for the meetings will be advised by the employers representative atleast 5 days in advance .The Employers Representative or his designated representative will chair the meeting and prepare and distribute the minutes.

Conclusion

The contract is of Lump sum contract type and is adjusted by price variation formula. The cost of building one ring comprising of 1.5 mt segments and having a diameter of 6.35mt is about 13 lakh Rupees and consists of all the cost of excavation of the muck ,casting of concrete ,cost of labourers and finally the erection of the ring. During the tunneling work if any problems such as sudden seepage of water and occurrence of sinkholes occur the contractor (Mosmetrostroy India) has to look after the measures such as pouring of concrete for sinkholes and will not be paid extra for these conditions. Any items that are not listed in the contract agreement and the Employer Representative feels that the contractor needs to be paid for the work done shall be measured and then paid accordingly.

References
1. Contract Management in Civil works Projects - V.A.Prakash, NICMAR Publications. 2. Chennai Metro Rail Project Contract Documents (VOl 1 To 9)