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Post Contract Management 02

Published on June 2016 | Categories: Types, Presentations | Downloads: 5 | Comments: 0

Post Contract Management



Lump sum
Advantages of lump sum
•It provides the maximum
incentives to the contractor to
complete the work on time
•It reduces to minimum the amount
of administration involved after
contract agreement


Conditions related to lump sum method

•The ground condition on the site
•Material quantity and specification
• number of labors and labor hours
•Descriptions and quantities of boughtout
•Types of constructional plant which will
required and for what periods
•Time required by the designers

Conditions related to lump sum
method continued
The site organization and facilities and
which will be required and for how long.
• Factors which will affect the site
• Geographical and climatic factors as
they affect site work
• Access to site
•Local availability of material and labor
NB: The contractor should give similar
information to the subcontractors

Bill of quantity
•It involve in estimation of quantity,
cost of the materials, labor, supervision
and plant which will be required to
execute the work.
•It is commonly used in building and
engineering contracts


Cost reimbursement
In Cost reimbursement contract (cost
plus contract), the contractor is
reimbursed the actual cost they incur.
•It can be used where the scope of the
work to be carried out can not be
properly defined at the beginning and
the risk associated with the works are
high (repair/rehabilitation). This is a high
form of contracting for the client as the
final cost is not known when the

Terms of payment
Advantage of terms of payment
•The employer avoids having to restrict the
tender list to large firms possessing the
resources to finance the contract.
• It ensures that the renderers do not have to
inflate their tender prices by financing charges.
•It gives encouragement to and allow the
employer to take advantage of firms possessing
technical initiatives who would otherwise be
held back from expanding by lack of liquid cash.

Advantage of terms of payment continued

The employer minimizes the risk of
being saddled with a contractor who
has insufficient cash with which to
carry out the contract and of having
therefore to either support the
contractor financially or terminate
the contract.


Delay in payment
•After issue of completion certificate by the
architect or engineer, there is no excuse
for delay
• Late payment is breach of contract
• Many contract charge interest on client of
being delay of payment
•If payment is delayed after notice from the
contractor for more than a specified period,
the contract has right to suspend the work
or terminate the contract

Advance payment
It is recommended to avoid advance


Retention money
With contracts for building and civil
engineering works, it is usual for the
purchaser to retain a proportion of the
contract price until the work has been
This percentage varies but is usually between
10 per cent and 20 per cent.


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