Ambiguities of Contract

8/7/2019 Ambiguities of Contract

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Aayushi Agarwal (UC 0106) Karan Deshmukh (UC 1106)

1Professional Practices - II

1.INTRODUCTION OF THE PROJECT:NAME OF THE PROJECT: Construction of Ring Road Bypass fromSalimgarh Fort to Velodrome Road (SH: Construction of Flyover/ Stilted

Portion etc from Ring Road and Velodrome Road Junction (RD 0.00) to back of

Rajghat Power Station (RD 1+800): PACKAGE:1

CLIENT/ EMPLOYER: Public Works Department (P.W.D.), New Delhi

CONTRACTOR: M/S Simplex Infrastructure Ltd.

STRUCTURAL CONSULTANT: M/S B & SES Consultants

PROJECT COST: 157.5 Crores

EARNEST MONEY DEPOSIT: 1.67 Lakhs

SECURITY DEPOSIT: 5% of the tendered amount

PERFORMANCE GUARANTEE: 5% of the tendered amount

DATE OF COMMENCEMENT: 29th January, 2009

DATE OF COMPLETION: 28th July, 2010

STIPULATED TIME FOR COMPLETION OF THE PROJECT: 18

Months

PURPOSE OF THE PROJECT: This project is mainly to divert the traffic

and thus reduce the traffic congestion near the indoor stadium.


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2.Ambiguities in Contract Clauses2.1AMBIGUITY NO. 1

Defect Liability Period:

Original Clause

The contractor shall be liable for rectification of defects in structure and all

components of the Project for a defect liability period of 1 year after

completion of the project. Nothing extra shall be paid on this account. The

Engineer-in-Charge shall give notice to the Contractor of any Defects before

the end of the Defects Liability Period, which begins at Completion as

recorded by Engineer-in-Charge and ends after one year. Such notice shall not

absolve the contractors from his responsibility to find out the defects

independently. The Defects Liability Period shall be extended for as long as

Defects remain to be corrected. Every time a defect noted, the Contractor shall

correct the notified Defect/Defects within the length of time specified by the

Engineer-in-charge. Contractor shall review and submit maintenance reports

on monthly basis to the Engineer-in-Charge.

Further a maintenance period of 4 years is required by the department which

shall be payable as per BOQ item or as per DSR-2007 except the items of

Bituminous work. The maintenance period shall start after the defect liability

period. The Contractor shall do the routine maintenance of the project

components including roads, pavement, road sides and cross drains including

surface drains and keep the entire road surface and structure in Defect free

condition during the entire maintenance period which begins at Completion of

defects liability period.

The routine maintenance standards shall meet the following minimum

requirements that are not exhaustive and the contractor shall remain liable for

rectification of all defects.

i) Potholes on the road surface to be repaired soon after these appear orbrought to notice either during contractor's monthly inspection or by the

Engineer-in-Charge.

ii)Road shoulders to be maintained in proper condition to make them freefrom excessive edge drop offs, roughness, scouring or potholes.

iii)Cleaning of surface drains including reshaping to maintain free flow ofWater.


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iv)Cleaning of culverts and pits for free flow of water.v) Any other maintenance operation required to keep the road traffic worthy at

all time during the maintenance period.

vi)Regular inspection of bearings, expansion joints, etc.vii) Regular inspection of main flyover lighting and fixtures and painting if

required

viii)The Engineer-in-Charge may issue notice to the Contractor to carry outmaintenance of defects, if any, noticed in his inspection, or brought to his

notice. The Contractor shall remove the defects within the period specified

in the notice and submit to the Engineer-in-Charge a compliance report.

Uncorrected Defects

If the Contractor has not corrected a Defect pertaining to the Defect Liability

Period, to the satisfaction of the Engineer-in-Charge, within the time specified

in the Engineer-in-Charge's notice, the Engineer-in-Charge will assess the cost

of having the Defect corrected, and the Contractor will pay this amount, on

correction of the Defect.

Ambiguity

It does not state how long the Rectification carried out on the defect should

last. If a defect were to occur towards the end of the Liability Period, the

Contractor could get away with low quality work and rectify the damage again

during the Maintenance Period allowing him to recover costs for the same

from the Client.

Rectification

Addition of a Clause which states the duration for which a Rectification shouldlast when carried out within the Defect Liability Period.


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2.2AMBIGUITY NO 2Site Conditions

Original ClauseSite conditions given hereunder and elsewhere are given as guidelines and

contractor shall satisfy himself regarding all aspects of site conditions and no

claim will be entertained on the plea that the information supplied by the

department is erroneous or insufficient or at variance with site condition.

Ambiguity

Use of an Exemption Clause

Rectification

This is a Clause generally found in Indian Tenders. It needs to be rectified

because it amounts to being an Exemption Clause.

The Rectified Clause should be:

Site conditions given hereunder and elsewhere are given as guidelines and

contractor shall satisfy himself regarding all aspects of site conditions and

claims will be entertained only if the information supplied by the department

is erroneous or insufficient or at variance with site conditions to a large extent

(or in terms of % of cost difference it would cause).


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2.3AMBIGUITY NO 3Site Conditions

Original ClauseThe PWD will bear no responsibility for the lack of any knowledge and also

the consequence thereof to the contractor. The information and site data shown

in the drawing and mentioned herein and elsewhere in these tender documents

are furnished for general information and guidance only. The Engineer-in-

charge in no case shall be held responsible for the accuracy thereof or/and

interpretations or conclusion drawn there from by the contractor and no claim

shall be entertained whatsoever if the site conditions/information is different or

otherwise incorrect as it is presumed that the contractor has satisfied himself

for all possible contingencies, situation, bottlenecks and acts of co-ordinationwhich may be required between the different agencies.

Ambiguity

Again an Exemption Clause has been used. It is unfair to put all of the Clientsrisk on the Contractor. The PWD has to bear responsibility and accountability

for its actions/information/drawings/data.

Rectification

There has to be a Clause which states the extent to which the Risk factors canbe shared and what basis will be used to distribute expenses for any change in

schedule or construction work due to variances observed on site. This has to be

in line with Natural Justice.


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2.4AMBIGUITY NO 4Materials found at Site

Original ClauseHowever, all fossils, coins, articles of value or antiquity and structures or other

remains or things of geological or archaeological interest discovered on the

site shall be the absolute property of the Department and the contractor shall

take reasonable precautions to prevent his workmen or any other person from

removing or damaging any such articles or valuables and shall immediately

upon discovery thereof and before removal, acquaint Engineer-in-Charge and

obtain his directions as to the disposal of the same at the expense of

department.

Ambiguity

Fossils, Coins Articles/Structures of Value, Antiquity etc are not Property of

the PWD, Commonwealth Project Division. They should be handed over to the

Indian Government or any other relevant authority.

Rectification

However, all fossils, coins, articles of value or antiquity and structures or other

remains or things of geological or archaeological interest discovered on thesite shall be the absolute property of the Indian Government or any other

Relevant Authority as decided by the Engineer In Charge and the

contractor shall take reasonable precautions to prevent his workmen or any

other person from removing or damaging any such articles or valuables and

shall immediately upon discovery thereof and before removal, acquaint

Engineer-in-Charge and obtain his directions as to the disposal of the same at

the expense of department. The material belonging to other agencies/ local

bodies, if recovered during excavation, shall be handed over to them, if

required by them.


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2.5AMBIGUITY NO 5Particular Specifications

Original ClauseUnless otherwise expressly stated to the contrary either in Schedule of

Quantities or elsewhere in this Tender, the method of measurements as

generally laid down in the CPWD and/or MORT&H specifications, shall be

applicable for this contract.

Ambiguity

2 Sets of Specifications have been provided to be followed. There could be the

possibility of any Conflicts between the two. Order of Relevance/Precedence

should be provided.

Rectification

Unless otherwise expressly stated to the contrary either in Schedule of

Quantities or elsewhere in this Tender, the method of measurements as

generally laid down in the CPWD and/or MORT&H specifications, in

respective order of precedence, shall be applicable for this contract.

Ambiguities of Contract

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