CONSTRUCTION CONTRACTS

Construction Contracts Preparation of Documents



Construction Contracts Preparation of Documents

Introduction

This paper will discuss the documents required for starting a new project. Second part of the paper will discuss the successful projects elements and how they are making a continual progress. Then it will discuss the issues faced by the projects that do not comply with the contractual laws of project. Lastly a brief conclusion will summarize the paper.

A contract proposes to formalize an affirmation between two or more parties, in relative to a subject. Contracts can cover an exceedingly very broad range of matters, encompassing the sale of items or genuine house, the periods of employment or an unaligned contractor connection.

Documents Required While Starting a Project

While starting a new project, there are some requirements that must be followed in order to comply as the laws of the state. In the preparation of these documents for an upcoming project the considerations in preparing these documents are given below that ensure the smooth functioning of the project from the owner's side and the contractor's side (Schumacher, 1997).

Schedule of Quantities

After the architectural/engineering design is determined (Schumacher, 1997), a schedule of quantities for all the proposed works will be prepared and to ascertain the true cost of the project by entry of estimated unit rate against each work item. For the sake of not changing the design, the cost of the budget can only be fine toned by the change of building material or lower requirement of the specification.

Estimation/Cost Planning

An estimate of capital cost (direct cost and indirect cost) and an estimate of capital expenditure (plant, labor, material, temporary works, fixed overhead, subcontractors, suppliers, operation and maintenance) will be well prepared in some kind of financial schedule to assess the economic viability.

Financial Support

Financing of a project, particularly for a commercial project, may significantly affect the choice of size of the project and type of contract to be selected by the client (Keith, 1997). In case the financial status mainly governs the size and sequence of the project, the client itself should know well about the financial schedule of its capital investment and expenditure.

Contingency

No matter how much time and efforts have been spent on preliminary investigations and in engineering design stage (Jergeas & Hartman, 1994), there are always unforeseen problems encountered in civil engineering projects after the commencement of work. In order to eliminate the situation of running out of budget, the client or its engineer usually allows a contingent sum of money to cover the unexpected additional works.

Preparation of Contract Documents

During the design stage, the engineer should recommend to the client which type of contract will be used for construction and an early decision should be made for the engineer to prepare the right form of contract documents. Ample time must be allowed for careful preparation of contract documents or otherwise may lead to unexpected additional expenditure.

Preparation of Work bidder Documents

At the time of calling for work bidders, it is the best to portray the full design (Jergeas & Hartman, 1994), detailed requirements, ...