Main Form of Contract

Main Form of Contract
As the construction industry is expanding, nature of the construction projects also get complicated.
Many parties are involving in a project, therefore its essential to have a clear understanding about
obligations and duties of each party. Mainly there are two types of contract forms, Standard and Non
Standard. Forms of contracts bond the parties legally In terms of obligations, rights, duties and
commercial relations.
There are various types of standard forms of contracts published by authorized organizations such as;
FIDIC Federation Internationale Des Ingenieurs Conseils
JCT- Joint Contract Tribunal
ICTAD Institute of Corporation Training and Development
These types are implementing in both international and local project. As Gunawardana (2003,p20)
indicate, local competitive bidding contracts are mainly carry out using Standard Bidding Document
Published by ICTAD.
There is a further classification in Standard Bidding Document Published by ICTAD. Considering the
amount of the contract, applicability can be varied.
In the Standard Bidding Document / 02 Published by ICTAD (2007, p vi) point out the applicability as
follows;
1. Standard Bidding Document procurement of Works for Minor Contracts ICTAD/SBD/03
( Recommend for contracts up to Rs 10 million)
2. Standard Bidding Document procurement of Works ICTAD/SBD/01
( Recommend for contracts between Rs 10 - 100 million also higher values which are not
complex in nature)
3. Standard Bidding Document procurement of Works for Major Contracts ICTAD/SBD/02
( Recommend for contracts over 100 million also lesser values which are complex in nature)
4. Standard Bidding Document procurement of Works for Design and Build Contracts
ICTAD/SBD/04 ( Recommend for contracts where the contractor is responsible for design and
construction works on specified approvals obtained from the employer)
Considering the nature of the scenario base project and the estimated amount of Rs 5 Billion, Standard
Bidding Document procurement of Works for Major Contracts ICTAD/SBD/02 can be recommend as
applicable standard form of contract.

As mentioned before most of the construction projects need a higher amount of investment therefore
there is a certain amount of risk as well. Implementing a Standard form of contact is always recommend
in the present as they benefit partied involved in various ways.
To select the optimum tender project requires competitive bidding. In the time of selecting the tenders
if there is uniformity, its easy to pay attention to prior sections and compare each.
Considering the recommended type construction management procurement type, various parties are
directly connected with the employer. Importance of implementing a standard form of contract is to
negotiate clearly their responsibilities and obligations to carry out the project in a certain manner.
These standard documents contain a large amount of information which is essential to both parties such
as instructions to bidders, guidelines, bidding formats, conditions of contract etc. From these sections
conditions of contract section plays a major role in the contract. It provides the responsibilities,
obligations and duties of each party during the contract period. General conditions are included in this
section addressing twenty crucial areas.
1. General Provisions
2. The Employer
3. The Engineer
4. The Contractor
5. Nominated Subcontractors
6. Staff and Labour
7. Plant, Material and Workmanship
8. Commencement Delays and Suspension
9. Test on completion
10. Employers taking over
11. Defects Liability
12. Measurement and Evaluation
13. Variations and Adjustment
14. Contract Price and Payment
15. Termination by Employer
16. Suspension and Termination by Contractor
17. Risk and Responsibility
18. Insurance
19. Claims ,Disputes and Arbitration
20. Force Majeure
Standard Bidding Document(2007,p36)
Almost all the areas are covered by this section. It enhances the understanding between parties. And
also it provides a guide to carry out a project in a certain approved manner.
Though it covers the general areas, considering the nature and the priorities of the project there may be
project specific requirements. For the circumstances there is a separate section call Contract Data. If
the conditions of the contract are silence or there is an ambiguity additional clauses can be added or
amendments can be done to general conditions. But it should be done by a professional expert.
According to the recommended procurement type, employer is directly dealing with the parties.
Considering experiences and the capabilities of the scenario base employer, involvement will be higher.
So the contract data section can use efficiently.
Furthermore standard documents benefit the project until the completion. Also these legal bound
documents can act as a reliable proof to get justify. It provides a balanced and fair platform to
professionals to interact. By practicing these types of standards it will enhance the quality of the
construction industry to a higher level.

Reference
Gunawardena, N. D. (2003). Assuring project quality: The importance of enhancing contract documents.
Build Environment Sri Lanka, 4(1), pp 20-26.
Standard Bidding Document/ 02 (2007) Published by ICTAD
Web links
http://www.ukessays.com/essays/construction/the-importance-of-using-standard-forms-of-contracts-
in-construction-industry.php

Main Form of Contract

Uploaded by

Copyright:

Available Formats

Main Form of Contract

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Main Form of Contract

Uploaded by

Copyright:

Available Formats

Main Form of Contract

You might also like