Works Contracts - Types

 

 

 

Works Contracts - Types 

 

Lump Sum Contracts: 

• A contract under which the contractor engages to carry out a work or effect supply as specified and within a given period for a fixed total sum;

• His receipt of this sum being dependent on his completing the work or supply to specification and time, irrespective of the actual quantities and kind of work done or materials supplied in achieving his result. 

  

• In case of departure from the work or supply as specified  - Reduction from the consideration may be made at the discretion of the Competent authority for failure on the part of the Contractor. 

 

In simple: 

• Fixed Total sum - To be paid to the Contractor. 
• Complete the Work / Supply to the specification. 
• Within a given period.  
• Not relevant: Actual quantities of work or material supplied.   
• Suitable for Contracts like Construction of 100 Nos of Type I Quarters, Replacement of wiring in 200 Type I Quarters, etc.

 

Schedule Contract: 

• It is simplest form of Contract 

• The contractor engages to carry out a work or effect supply as specified and within a given period at fixed unit rates or prices for each of the various items comprising such work or supply,

• the sum he is to receive depending on the actual quantities and kinds or work done or materials supplied in completing the work or supply to specification and time.  

 

• It is not repugnant to the above definition to show in such contracts the approximate amount of the contract, based on approximate quantities and the fixed unit rates.   
•  

 

In simple: 

• The sum paid to the Contractor  - Depends on the actual Quantities of work or material supplied 
• Fixed unit rates or prices for each of the various items (Not Total work value)  
• Within a given period as per specifications.  
• Contract rates and quantity of various activities are fixed beforehand at the time of the award the Work. 
• Most commonly used type of Contract in Indian Railways.  
• No lump sum payment is permitted except in Earth work. 

 

Piece Work Contracts: 

• A contract under which only unit rates or prices for various kinds of work or materials are agreed upon,
• without reference either to the total quantity of work to be done or material supplied; 
• The Railway may indicate its intention as to the maximum value of the orders it is likely to place;
• but the contractor cannot claim to be given an order for more than one unit of work or supply. 
• After the contract is executed, specific orders for work or supply may be placed against it. Maximum value of One Work Order is Rs.5 Lakhs 
• The rate of progress may not be specified;
• but if it is not satisfactory the contract can be terminated. 

In Simple: 

• Agreed only unit rates or prices for various kinds of works / materials 
• No reference of Total work to be done  or  Materials to be supplied. 
• Railways indicate maximum value of work to be executed or material to be supplied. But there is no guarantee. 
• Contractor cannot be claimed to be given for more than one order. 
• After the contract is executed, specific orders for work or supply may be placed against it. 
• Maximum value of One Work Order is Rs.5 Lakhs  
•  Also called Fixed Rate Contracts 
• Generally Time period is One year. 

  

 

Example: Zonal Contracts