Contract Policy 15.5.08 v2

8/6/2019 Contract Policy 15.5.08 v2

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Policy No. 04

Date W.E.F. 1st June 2008

Revision Fourth

Pages 3/36

Contract Policy

INDEX

Sr.No.

Particular Page No

1 Introduction 1 to 2

2 Major Works Covered under Contract System 3

3 Input of the Contract 4

4 Lead Time for Awarding Contract 5

5 Contract Intimation Note 6

6 Criteria for contractor selection 7 to 8

7 Procedure of selecting a contractor 9

8 Criteria for Issue of Repeat Contracts 10

9 Standard Contracts 11

10 Issue of Work Order 12 to 13

11 Authority Level to Finalise and issue work order 14

12 Termination of a Contract (work order) 15

13 Statutory Monitoring of Contracts 16

14 Approved formats

a. Contract Intimation Note 17

b. Comparative Statement 18

c. Proposal of Contract Award 19

d. Work Order 20

e. Indemnity Bond 21 to 22

f. Bank Guarantee for Mobilisation Advance 23 to 25

g. Bank Guarantee in lieu of Initial SecurityDeposit

26 to 29

h. Bank Guarantee for conversion of cashamount of Security deposit in form of RetentionMoney

30 to 32

LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES


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1. Introduction

Objective: To provide competent, quality conscious contractors, as per budgetand scheduling guidelines, to the Project Management department for executionof planned works. The objective can be further detailed as under:

1. Providing capable, skilled and efficient contractors on scheduled dates,taking care that work is not delayed.

2. Structuring contracts so as to create incentives for timely completion ofquality work and enabling reasonable profit for contractors adhering toagreed performance criteria.

3. Selecting the best permutation combination for the type of contract (FLO,PML, FML) keeping in mind the economics and the skillset of the contractor,combined with the prevailing best practices.

4. Constantly learning from local and international best practices incontracting policy, contract terms, implementation technologies andselection of competent contractors and implementing the same / engagingthem in our organization.

The Group is committed to having a sound Contract Policy that will developalong with the organic growth of operations thus continuously harnessinglatest available technology, expertise and skills in the process, developing apool of contractors who shall grow with the group.

The Groups standing Contract Policy is aimed at fulfilling the following keyobjectives among others geared to meet time-cost-quality effectiveness in theexecution of Projects and the product delivery system oriented to totalcustomer satisfaction.

What activity forms a contract?Both materials and services are needed to successfully execute a project.Hence, the Purchase department and Contract cell form an interlinked groupfulfilling the Procurement function.Any activity which only involves the delivery of a material to a location will behandled by Purchase viz. any activity on which only VAT / Sales Tax ischargeable. Any activity which involves the usage of labour at site shall betreated as a contract viz. any activity on which service tax is chargeable.

Structure of Contacts DepartmentThe Contracts cell is a part of the the Planning department. The Contracts cell

will be headed by a Level 1 (General Manager) associate who will be reporting theLevel 0 (VP) head of the Planning department. The Contracts cell also hasBudgeting and Estimation sub-cell headed by a Level 2 associate, who reports tothe Level 1 associate heading the Contracts cell. This policy only deals with theContracts cells functions, excluding the functions of the Budgeting and Estimationsub-cell, which are dealt with separately.



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The working of the Contracts cell will be handled on the basis of contract groups,with the contracts split into 3 groups (categories):

No.

Group Contracts Handled (eg.) MasterFormat 2004Divisions

1 Pre-constructionworks, Civilworks andmiscellaneousworks

Appointment of Consultants, Demolition,Survey, Soil Investigation,Barricading, Excavation,RCC, Masonary, Plaster,Road, Compound Wall

02, 03, 04, 11, 13, 31, 32,35, 41 (and any otherdivisions not covered bythe other groups)

2 FinishingWorks

Carpentary, Gypsum, FalseCeiling, Internal Painting,External Painting, Flooring, Tiling, Waterproofing,Kitchen Works, Windows,Fabrication,

05, 06, 07, 08, 09, 10, 12

3 ServicesWorks

Plumbing, Electrical, HVAC,Automation / Security,Power Backup, Sewage Treatment, Water Treatment, Vertical Transportation, MechanicalWorks

14, 21, 22, 23, 25, 26, 27,28, 33, 34, 44, 48

All composite contracts will be handled by the group which has the highest %value of the composite contract.

In addition, there will be a separate Contract Administration group. Thisgroup will have the responsibility of handling the contract once the contract isawarded and the contractor has mobilized at site. All activities thereafter,including dispute resolution, claims, changes, final bill, contractor rating etc.will be handled by the Contracts Administration group.

Each of the groups shall be handled by an associate of Level 2 (Manager).Each Manager shall have atleast 2 Level Sr. Engineers working under him / her.

Each group will also have a common pool of Engineers (0.25-0.5 Engineers foreach Sr. Engineer or Engineer) who will assist the Sr. Engineer in the variousprocesses described below on an as needed basis. All associates andmanagers would be rotated from one group to another on annual basis by VP Planning (in month of April of each FY). No associate will continue in any onegroup for a period of more than 36 months.

Types of Contracts:Each contract shall be of one out of the following three categories:



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1. Full Material and Labour (FML) Where the company provides nomaterial or labour required for execution of the project.

2. Part Material and Full Labour (PMFL) Where the company providespart of the material required for execution of the project.

3. Full Labour Only (FLO) Where the company provides all the material

required for execution of the project.

Contract CodeEach contract shall also be given a 13-digit code based on the following system:LXXXXXXCCCCCCWhere L Local Municipal Authority XXXXXX Project Code CCCCCC Codeidentifying type of Contract (numerals) based on the Master Format 2004 system.

Types of ProjectsProjects of the company primarily fall into one of the following types:

Residential Office Retail

Luxury Corporate MallHigh end Quality Shopping CentreAspirationalOther

The different types of projects require different levels of finishes, workmanshipand infrastructure.

Process:The contracts team will be responsible for the following outputs for each project:

The key responsibility of the contracts team is to ensure the selection andmobilization of quality contractors within the specified parameters of budget andschedule. In addition, the administration of the contract will also be handled bythe Contracts cell.

Other outputs:

No.

Output Responsibility

Recipient Timeline Inputsrequired

Input Fro

1 ComprehensiveList ofActivities

Managerof the 3contractsgroups

Scheduling;ProjectManagement;Estimation

Within 7 daysof the end ofDesignDevelopment

DesignDevelopmentdetails.

Architect

2 ContractsTracker

Sr.Engineerfrom the3contractsgroup

GM Contracts(monthly), VP Planning(quarterly)

Initiate within15 days ofreceipt of finalDD Package;Update eachmonth by each

EstimatedBudget,ContractsSchedule,

BudgetingEstimationScheduling



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group3 Contract

orDatabase

Managerof the 3contractsgroups

Internal Ongoing NewContractAssessment Form;

ContractorAppraisalform

ProjectManagem;Administra

ve Service(asapplicable

Selection of ContractorsBased on the type of project and the type of contract, the appropriateselection of contractors will be made on the basis of cost-value analysis and tothis end the prospective Contractors will be subjected to a careful evaluationprocess as to their qualifications, resourcefulness, technological capacity bothin terms of men and machines, experience and demonstrated professionalism.

Formulation of the terms of Contract

Whilst Contracts will be varying in nature according to the peculiarities of theproject, design, technology selected and the accepted terms of the contractorthe peculiarities will normally be compiled into a condensed code of specialconditions for each contract.

All other contractual terms meeting the strict requirements of the company asper standard policies in practice shall be codified into a uniform GeneralConditions of Contract, which will remain standard terms for every contract thecompany enters into with various vendors, barring nominal variations here andthere.

Central to every contract however will be the legal framework in which acontract has to be drawn in, therefore it is essential that every contract meetsthe legal criteria compulsorily.

For every PMFL or FML contract, it shall be assessed as to what is the quantumof material value vis--vis the total contract value. If the same is estimated tobe at 70% or higher, then the process of award of contract will be as follows:

1. Finalization of Specifications Contracts, in consultation with Purchase

w.r.t. materials to be procured by company / contractor.2. Float of Tender Contracts3. Technical Evaluation Contracts4. Shorlisting of 3 top bidders, after Technical Evaluation and forwarding

same to Purchase for Commercial Negotiation Contracts5. Commercial Negotiation and recommendation of contractor to be

selected Purchase6. Award of Contract and Contract Administration - Contracts



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2. Major Works Covered under Contract System

Contracts

Consultants Contractors

~ Architect ~ Demolition

~ RCC Consultant ~ Bore well

~ Prestress Consultant ~ Soil Investigation

~ Landscape Architect ~ Excavation

~ Land Survey ~ Piling (Foundation/Shore)

~ Geotechnical Consultant ~ Pile breaking

~ Hydrographic Survey ~ Anti-termite treatment

~ Service Consultant ~ Civil work RCC masonry, Plastering etc

Electrical ~ Electrical work

Plumbing ~ Waterproofing

Fire Fighting ~Carpentry work

HVAC ~ Flooring

BMS ~Aluminium Windows

STP~ Plumbing work

Chillers ~ Fire Fighting work Rain water Harvesting ~ Fabricationwork

Solar Energy ~ Security system

Acoustic ~ Painting work

Swimming Pool, Steam Bath, ~ POP& False ceiling

Sauna Bath ~ Elevators, Air Conditioner etc.

~ External Faade Consultant ~Furniture

~ Building Illumination ~ Swimming pool, Gymnasium

~ Environmental Consultant ~ Decorative items (FRP, Mirrors etc)

~ LEED Consultant ~ STP

~ Building Graphic Consultant ~ D. G. Set

~ Infra structure works

~ Dry Cladding

~ Structural Glazing

~ Roofing (FRP etc)



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~BMS

~ Chillers

~ Tree cutting

~ China Mosaic work

3. Input of the Contract

Various inputs required from Architect Cell, Project Co-ordinating cell & Estimationcell to finalise any contract as tabulated below :

Sr.No.

DescriptionResponsible form

Planning Dept.External Agency

1 Specification of work Architect / Projectcoordinator

Architect / Consultant

2 Bill Of QuantitiesProject coordinator

/Q.S.Architect / Consultant

3Advance Copy ofpreliminary drawings

Architect Architect

4Tender document(Services)

Project coordinator Service Consultant

5Tender drawings(Services)

Project coordinator Service Consultant

6Estimates or Budget /rate analysis

Project coordinator/Q.S. Consultant

7Constructionschedule of theProject

Project coordinator /Schedule Engineer

-

8 Working drawings Architects -

9Changes indrawing/specifications

Architects -

10Changesmodifications done at

site

Project management -

11 Rates of materials Purchase -

12Changes in Taxationrules

Taxation -

13Structural drawings/consumption limits

Structural consultants -

4. Lead Time for Awarding Contract



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Sr.No.

Typeof

Contract

Type of workWorkorder

Limit

Minimum Lead time from date ofActivity Initiation Certificate

Startof

Contract

process

T

E

N

D

E

R

P

R

E

P

A

R

A

TenderFlow

N

E

G

O

T

I

A

T

I

O

N

S

Issueof

workorder

1 PettyContracts

- TemporaryGodown

- TemporaryGate

- Barricading

- Supply of

water- Borewell

- SoilInvestigation

- Carting ofdebris

- Departmental Laboursupply

Upto Rs. 1Lacs

(ContractbeyondRs.1 lacwill be

treated asminor

contract)

- 30days

N.A. -3 days

2 MinorContracts

- Carpentrywork

- POP &Gypsum work

- M.S. Grill &Railing work

- Compoundwall Gate

- Waterproofing work

- Infrastructure work

- CCTV &Security system

- IntercomSystem

Rs. 1-10Lacs

(Contractbeyond

Rs.10 lacwill be

treated asmajor

contract.)

- 60days

- 55days -15

days



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T

I

O

N

3 MajorContracts

- Piling work- MassExcavation

- Flooringwork

- Internalpainting work

- ExternalPainting work

Above 10lacs

- 60

days

- 55

days

-15

days

- Aluminiumwindow work

- Electricalwork

- Plumbingwork

- FireFighting work

- Civil work(Labour)

- Civil work(with material)

- 90days

- 80days

-21days

4

SpecialContracts

- StructuralGlazing work

- STP- Chillers- HVAC

- SwimmingPool- BMS

- D.G.Set

- Lifts

-

- 90days

- 90days- 240days

- 85days

- 85days

- 235days

- 21days

- 60days

- 150days

5. Contract Intimation Note (CIN)(For Contracts not in Contract Schedule)

During the progress of work at project site, new activities may arrive which arenot included in Construction Schedule and so in contract schedule. In suchcases the Project in-charge should inform to the contract department well inadvance. The Project in-charge will prepare a contract intimation note (CIN) asper approved format with brief specifications of work, quantum of work, natureof contract (i.e. labour contract or labour cum material contract etc) etc. andforward it to Planning/Contract department. On receipt of CIN, the contract



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department will select a contractor by following standard procedure forawarding of contract.

The contract intimation should be submitted well in time so that properanalysis of work/rates and negotiation could be done with the potential

contractors. The contract department needs enough time for the exercise. It isrequired to intimate the contract department in time after considering the leadtime required for the activity so that thework could be commenced without any delay.

6. Criteria for contractor selection

Quality

Schedule

Capacity of Contractor

Cost

Quality

The quality of work is one of the important factors while selecting a contractorand hence it should be given proper weightage. We can not select a contractoronly on the basis of rate but also consider his quality of work executed inrecent past. Therefore, before going for rate comparison we should approvethe quality of work of the contractor. This can be done by visiting hisongoing/completed work. The quality factor plays an important role in

selection of contractor for high end projects.

Schedule

Meeting schedule and completing project in time is very important not only tostay in the business but also to increase our reputation, market premium andsave indirect cost. We should keep this issue in mind while selecting acontractor if contractor completes his job in time then only we can completeour project as per schedule.

Time over run will not only spoil our name in the market but also end up withhigher project cost. Meeting schedule is more important in high end projectbecause time over run is more expensive in these projects. Therefore, whileselecting we should analyse the contractor commitment and his ability to meetthe schedule.

Capacity

The capacity of contractor can be judged by his background, past experience,financial strength, technical competency, availability of machine, equipment



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and manpower etc. The background and experience of the contractor can beanalyse from the size and type of project handled in the past, technicalbackground of his employees etc. The other major factor, which decides thecontractor ability to deliver is the present quantum of work in hand. There maybe case that the contractor is competent to handle the job but he is over

burdened with quantum of jobs in hand. In those cases we should be extracareful in awarding jobs to such contractor.

The contractor financial strength is the other major issue to be considered inrating. Though the financial strength of a contractor is an indirect issue it isvery important to complete the job on time. The financially weak contractorcan not have control over the progress of work rather it will be dependent onavailability of finance. Such contractors will ask for payment every now andthen without much progress in work. Therefore, it is necessary to check thefinancial strength of a contractor, it can be done by obtaining income taxclearance certificate, solvency certificate etc. All these factors should be dulyconsidered at the time of rating the contractor. Though the contractorpromises to complete the work in given schedule we should analyse his abilityto complete the work as per schedule.

Cost

Cost efficiency is the common objective in the current competitiveenvironment. Therefore, cost is one of the most important parameter forcontractor analysis. However, we can not take cost in isolation rather weshould compare the rates of different contractors for given quality of work,execution schedule etc. The objective is to go for most competitive rateand not the cheapest rate.

However, the parameter for contractor selection may differ fromproject to project. If the rate is the deciding factor for massconstruction projects, it is the work speed, work quality, contractorreliability, etc for premium projects. The contractor credentials andhis ability to deliver work are important issues for premium projects.If a tried and tested contractor is marginally expensive as comparedto new one, we should go for tried contractor provided he has provenhis commitment to timely completion and quality of work in previousprojects.

It does not mean that we are not cost conscious in premium projectsbut we try to achieve cost efficiency by meeting quality standard andproject completion in time. Therefore, our objective is to achieveoverall cost benefit and efficiency, balancing quality, schedule andcost depending on the type of project.

Criteria for contractar Selection for major contracts



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Capacity Strength TestimonialsPastExperience

Size andnature ofprojects

completedand ongoingworks

Completion certificates,certified final bills, duediligence.

Financials Income tax, sales taxclearance certificates, Banksolvency, PF, ESICregistration and receipts.

Organizational strength

Machinery,Staff andworkmen

Machinery list andorganizational chart

QualityQuality ofwork of pastand ongoingprojects

Due diligence and certificatesof past clients, repute ofpresent and past clients.

Completionon time

Record ofpast projects

Workorders, final billcertificates of previous clients

EconomyHow he fareswith otherwith othercompetitors

Comparison statement / RateAnalysis

7. Procedure of selecting a contractor

Preparation of Tender document including specification of work, Bill ofQuantities Terms and conditions as per standard contracts (described underStandard Contract), tender drawings etc. For services, arrange the tenderdocument from the Service Consultants.

Study the tender document received from Consultants to ensure theSpecification, Bill of Quantities, Terms & Conditions, tender drawings etc.along with estimate.



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Invite quotation from at least 5-6 potential contractors of which 4 should befrom an approved list of contractors. All the quotations should be receivedin writing.

Prepare comparative statement to compare quotations in approved

standard format. All agencies should be called for negotiation. All quotes tobe treated confidentially before rival/competing contractors.

If any contractor agrees for a change in quoted rate during the meeting,collect a revised quotation from him or make a note on the originalquotation and get it signed by him as acceptance of negotiated rates.

Visit potential contractor place to check their capability to handle the workand also visit some of their previous work to check work quality, speed ofwork, general performance, co-operation and attitude etc. Take references.

Shortlist contractor / contractors at best possible rates after bringing allcontractors at par as to terms and conditions.

Prepare a proposal of Bids as per the approved standard format withrecommendations/rankings and submit it to Head of Planning departmentfor interview of the contractor/Final negotiations/approval if decided by theAuthority.

Prepare work order in quadruplicate and distribute one each to (1)contractor (2) Accounts dept. (3) Contracts dept. (4) Site.

8. Criteria for Issue of Repeat Contracts

An existing Contractor can be considered for a similar job in the same oranother project without calling for competitive quotations on the satisfaction ofthe following criteria :-

Has demonstrated adequate financial resources and his history should showthat at no stage of his prior execution, the work had suffered for want of areasonable requirement of finance. He should have demonstratedreasonable conduct in abiding by the payment cycles administrated by theCompany for his progressive / final payments.

Has adequate experienced staff / skilled workmen strength deployed atwork site. Contractor should have demonstrated sound organization at alltimes during the course of his prior execution.

Has adequate and modern fleet of equipment necessary and deployed forperforming the given work.

Has ability to augment additional resources in terms of finance, manpower,and equipment/tools/tackle/machinery at any time during the progress ofwork, on exigency.



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Is not a habitual claims maker.

Does not have a history of serious or unresolved dispute and is amenable tosettlements enforced by the Authority.

Is willing to work at the same item rates that have applied in hisprior/existing contract while taking up the new job for similar or identicalitems.

The new job has all or most items of work similar or identical to the prior orexisting execution the Contractor has been/is involved in.

The new site conditions are similar or identical to the prior/existing sitewhere the Contractor has worked/is working.

Is willing and able to mobilize for the new job immediately without loss oftime with men and machinery.

The existing Contractor, so nominated for the new Contract, will not claimany fresh mobilization advance unless warranted and allowed by theOwner.

He will abide by the same terms and conditions that have applied to hisprevious Contract to the extent the new Contract is similar or identical innature.

Feed back from Project Manager for satisfactory performance of contractorfor work executed/executing.

In the event the Contractor prefers to apply different or new rates to the itemsin the new Contract, or is unable to mobilize men and machinery within the

required time, or is lacking financially to take up the job immediately, or theproposed site/work is largely dissimilar in nature or conditions, then it wouldbe pragmatic to call for competitive offers for the work.

9. Standard Contracts

These are the standard formats of each type of contract include standardspecifications of work, scope of work, standard conditions, special conditions,standard modes of measurements, payment terms and all other aspectsrequired to form a complete contract document. These will be used as a

reference document before going for any contract. All tender documentsshould be made as per these standard formats. Terms & Conditions mutuallyagreed in the negotiations at variance with the stipulations of the standarddocument shall be incorporated in work orders.

Standard Rates

These are commonly accepted rates by all agencies working with organizationor any new agency. These can be derived for items such as Tiling, Painting,POP, Carpentry, civil works related to infrastructure etc. Rates for such itemscan be finalized by inviting quotations from at least 6-8 potential contractors



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out of which 4 should be from the approved list of contractors. Common ratesshould be derived for all items by comparing quotes in standard format. Therates derived should be accepted by all the agencies called. These rates will beapplicable to all projects and will be used as reference before awarding newcontracts. Petty works (below 1 lac) at sites can be certified at these rates. The

rates will be reviewed twice in a year.

10. Issue of Work Order

Construction is a complex job it needs quite a long time to complete and manyagencies would involve in the process. Therefore, it is essential to documentthe terms and conditions of agreements with the outside agencies failing towhich may lead to a dispute between owner and contractor. It is essential toissue a work order / enter into an agreement with the contractor once all termsand conditions of the contract are finalized.

The payment schedule should be clearly mentioned in work order. The detailslike advance money to be paid, deduction of advance paid in the form of cash,material, machine, amount and period of retention money to be held by thecompany, etc should be spelt out in work order.

Payment of Advance : To pay only against Bank Guarantee of equivalentamount from Scheduled / Nationalised Banks. B. G. should be in prescribedformat of the Owner. Mode of recovery of advances to be mentioned.

Retention Money: Standard percentage of retention will be 5% for the period

of 12 months after completion of Job. No retention will be kept underaggregate value of Rs. 5000/-. Retention can be kept in cash through R.A.billsor in form of Bank Guarantee kept valid upto completion date and it should bein prescribed format of the Owner.

Work order should be self explanatory in terms of labour contract or labourand materials contract, details of activities, specification of work, rate, workorder value, terms of payment, retention , taxes etc.

Send original copy of work order to the selected contractor to whom the workis being awarded and obtain his acceptance in the form of acceptance letter

and also by signing the work order.When there is a possibility of exceeding work order quantity or contractor billexceeding work order limit, in such cases amendment / variation to the workorder should be done and approved by the competent authority beforeaccounting or making payments for such an exceeding work.

The contract department should maintain a contractors register containingcontractor wise details of work awarded (i.e. ref. work order no, type ofcontract, work order amount etc.)



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Following points should be considered in the work order / agreement in detail.

Scope of work

Progress of work Quality of work

Schedule of work

Rejection of work

Defects, improper work and substandard materials

Lead of material

Additions and alterations

Temporary labour hutments

Supervision of work Salary and wages of labour

Subletting

Damage done

Contractor Default

Termination of work

Payment terms

Advance payment

Retention amount

Penalty/Bonus

Final bill

Escalation

Arbitration

Workmens compensation

Insurance of material against fire, theft etc.

Defects liability period

Liquidity damages

Mode of measurements(including area norms)

Advance recovery

Wastage and reconciliation norms

Taxes and duties

Free supply of materials (in case of part material contract)

Water and electricity LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES


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Risk and purchase clause

Safety measures

Co-ordination with other agencies

Extra items

Delay/stoppage of work

Drawings

Specifications of materials brought by contractor

General conditions of contract

Special conditions of contract.

The work order should be serially numbered and specific to each company /

project / Building no. / Year. All future correspondence / transactions relating toa work order should have work order number reference.

Copy of work orders will be distributed by planning dept. one each to (1)contractor (2) Accounts dept. (3) Contracts dept. (4) Site.

It is recommended to have work order issue record which will provideinformation about all work orders issued for various activities under givenproject. The work order register will act as a reference document for control.

11. Authority Level to Finalise and Issue Work Order

Type ofContrac

t

Type of work Work OrderLimit

Committee

FinalAuthorit

y

SigningAuthorit

yPettyContract

- Temp.Godown

- Temp.Gate

- Soil

Investigation- Waterresourcesurvey

- Carting ofdebris

- Supply ofwater

- Temp.Fencing

Upto Rs. 1Lacs

(Contract

beyond Rs.1lac will betreated asminorcontract)

Proj. In-charge

Proj. In-charge

Proj. In-charge



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MinorContract

- Dept.Labour Supply

- Woodwork

- Provide &

Fixing Glass- Mass

excavation- Compoun

d Gates- Window

grills- P.O.P.

work & Falseceiling

- Staircase& Balconyrailing

- C.C.T.V.Securitysystem

- EPABX,Telephones

Rs. 1-10Lacs

(Contract

beyondRs.10 lac willbe treatedas majorcontract.)

Sr.EnggManagerDGM

DGM

V.P.

MajorContract

- Piling work- Civil work

(Labour)- FireFightingsystem

- Alu.Windows

- Flooring &Tiling

- InternalPainting

- ExternalPainting

- Plumbingwork- Electrical

work- Waterproofi

ng work

- Civil work (withmaterials)

Rs.10-25 lacs

Rs.25-50 lacs

Rs.50 lacs-10

Cr

Above 10 Cr

Sr.Enginee

rManagerDGMGM

Sr.EnggManagerAGMDGMGM/VP

-do-

-do-

GM

V.P.

V.P.

V.P.

V.P.

Director

Special - Structural



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Contracts

Glazing- Lifts- HVAC- Chiller- Swimming

Pool- STP- D.G.Set

-

ManagerAGMDGMGM/VP

V.P. V.P.

Note : 1. For contract below Rs.1.0 lac the Project in-charge will finalize contract andissue work order to contractor and send one copy to contract/planningdepartment for record through I.O.M.

12. Termination of a Contract (Work Order)

Termination Guidelines

Contract shall be terminated in case of one or more of the following items. Not starting the work on schedule date even after signing the

workorder/commintment. Failing to give relative progress according to the schedule. Work carried out by the contractor not in accordance with the

specifications of the work order. Quality of work not upto the required standards. Not adhering to the terms and conditions of the workorder.

The Employer is entitled to determine and terminate the contract at any timeshould, in the opinion of the Employer, the cessation of work becomesnecessary for any reason whatsoever like paucity of funds, or breachescommitted by the Contractor, faulty workmanship or etc. However, terminationin all cases has to be legal and therefore lawfully carried out. That meanslawful termination requires the principles of natural justice to be followed. Anillegal termination can lead to dispute and claims, which might affect theCompany adversely. For lawful termination the following procedure is to befollowed:-

1) The contractor should be given a Notice in writing shall be given in advanceaccording to the case, stating reasons and after expiry of the Notice theContract can be forthwith determined but without prejudice to the claims ofeither party in respect of any antecedent breach thereof in which case thevalue of approved materials at site and of work done to date by the Contractor(and accepted) will be settled in full at the rates specified in the Contract.Notice in writing from the Employer of such determination and the reasontherefore shall be conclusive evidence thereof.



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2) The termination clause included in the contract should therefore alsostipulate the mode of settlement of all accounts with the Contractor andallocate a specific time period for such settlement.

3) The Contractor shall have no claim to any payment of compensation or

otherwise on account of any profit or advantage which he might have derivedfrom the execution of the contract in full but which he did not derive inconsequence of determination of the contract.

Cost of completing remaining work to be worked out before finalizing the bill ofthe terminated contractor

In the normal course, it is not advisable to terminate the contract in the middlebecause it normally end up with higher cost and time over run. Therefore, it isnecessary to appraise the contractor in detail before placing a work order toavoid such strapped situation.

In case of termination of contract it should be clearly studied the implicationon the project in terms of cost, execution schedule, legal hazards, etc.

13. Statutory Monitoring of Contracts

All contracts entered into shall be continuously monitored by Planningdept./Contract cellthrough fixed periods for the following :-

1) Bank Guarantees : Requirement as per contract.- Stage wise submissions as indicated in the contract.- Expiry dates- Renewal alerts

2) Labour licenses/Registration of the Contractor/Migrant labor Registration/ESICRegistration /Workmens compensation policy etc. wherever applicable.

3) Indemnity Bonds as prescribed under the Contract

4) Contractors All Risk Policy as prescribed under the Contract.

5) The Project Manager as the nominated representative of the Owner forAdministration of the Contract shall carry out all routine correspondence withthe Contract. However, all issues pertaining to the Contractors performance,Contractors request for Time Extensions, Extra Items, Variation of Quantities,Purchase of material, selection of material (wherever required), Contractualconditions and their interpretation, scope of an item (if disputed by theContractor), etc. shall be escalated by the Project Manager to the Planning



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Dept. for redressal or resolution and therefore all assistance required thus bythe Project Manager shall be rendered by the Planning Dept.

6) Changes in laws of Govt. rules, taxes, duties etc.

14. Standard penalty and bonus clause

Time shall be the essence of all the contracts issued by the group. Timelycompletion of Projects shall be given utmost important and therefore thecompany shall levy Penalty and bonus clauses to ensure the same. Penalty andbonus clause should be related to value of the contract

ScheduledContractDuration(Days)

Penalty /Bonus as % ofContract Value

MaximumPenalty /Bonus(excludingDamages)

Damages (for penalty only)

0-92 0.33% per day 5% .66% per day for all delays beyond15 days

93-183 1.5% per week 6% 3% per week for all delays beyond4 weeks.

183 365 .75% per week 6% 2% per week for all delays beyond8 weeks

366 + .5% per week 6% 1% per week for all delays beyond12 weeks

15. Attribution of delays

Providing of the following on time shall be in companies scope, and any delayoccurring other than the following list shall be in contractors scope:

Type of Contract Drawings &Specifications

Permissions Agreed Material

FML Yes Yes NoPMFL Yes Yes Yes

FLO Yes Yes YesDelay shall be noted by the Contractor, along with the Project Managementteam, on the contract document each month. Such a tracking sheet will beinserted in each Work Order. Any delays, other than as recorded in the saidsheet, shall be deemed to be to the Contractors account / scope.

FormatDelay Tracking Sheet:



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Following delays are attributable to the Employer / Contract giver (no. ofdays):

Month Drawings &Specifications

Permissions

AgreedMaterial

TotalDelayfor

Month*

ContractorsSign &

Date

PMsSign &Date

April 08

* This is the total delay for the month on account attributable to Lodha andnot the sum of the 3 individual delay components.

16. Payment Period

It shall be assured that Payment terms mentioned in Work orders areadhered to. No. of days required for processing of bill to payment shall befixed for each department processing the bills.

Preparation and checking on site ---------------------Accounts dept. ----------------------Cheque signing --------------------Issue to the contractor ----------------------

17. Linkage of quality and time to payment

A percentage of the total value of contract 2% shall be kept for quality ofwork.

18. Approved Formats

Contract Intimation Note Comparative Statement Proposal of Contract Award Work order Indemnity Bond

Bank Guarantee For Mobilisation Advance Bank Guarantee For Security Deposit Bank Guarantee For conversion of cash amount of Security Deposit in form

of Retention Money.



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CONTRACT INTIMATION NOTE

Intimation No : Date :

Project Name /CodeBuilding Name /NoWork DetailsType ofContract

Sr.No

.

Activity

details

BriefSpecificatio

n

Qty. ofMateria

linvolved

Quantum of

labourworkinvolved

Date of

Start

Date ofCompletio

n

Remark(Numb

er &date ofworkorder

Prepared by : Checked by :

Site Engg. Site in-charge Contract Dept.



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COMPARATIVE STATEMENT OF QUOTATIONS

Date :

Name of Project : .

Name of work : .

Type of Contract : .

No. of quotations called for : .

No. of quotations received : .

Sr Descriptionof items

Unit

Quantity

Contractor I Contractor II Contractor III

Rate

Amount Rate

Amount Rate

Amount

1 Break up

2

3

Total

VatService taxOther taxesTotal withtax

AdvancerequiredPaymenttermsRemarks

Prepared By : Authorised By :Contract Dept. (DGM/GM/VP)



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PROPOSAL FOR AWARD OF CONTRACTDate :-

Name of Project :-

Paying Company :-Subcontract :-

Estimated Cost :-

Following are the Agencies who were invited to Quote :

Sr.No.

Name ofSubcontractor

OriginalQuote

Final Quote Remarks

Recommendation Of Contract Manager / Engineer

Signature/Date

Recommendation Supported By V.P

Comments:

S



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ignature/Date



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Work Order

To,Date :

Contractor Name & Address

Name of Project :

Work order Ref. No. :

Subject : _____________________ work. (Labour/with material work)

Reference : Your quotation ref. no. dated and oursubsequent discussions at our H.O.

Dear Sir,We are pleased to issue you the work order for above mentioned work. YourScope of work, Bill Of Quantities and Terms & conditions are as stipulated below :

A. Scope of work :

B. Terms and Conditions :

Progress of work Quality of work Schedule of work

Rejection of work Defects, improper work and substandard materials Lead of material Additions and alterations Temporary labour hutments Supervision of work Salary and wages of labour Subletting Damage done Contractor Default Termination of work

Payment terms Escalation Penalty/Bonus Arbitration Workmens compensation Insurance of material against fire, theft etc. Contract Authority ISO requirement



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C. Bill Of Quantities

Yours Truly,

For

Authorised Signatory We

accept & Confirm

Encl- Schedule of work

FORMAT OF INDEMNITY BOND

THIS DEED OF INDEMNITY made on this the _________ day of ________ Two

thousand by ____________ having its office at ________hereinafter referred to asContractors (which term or expression shall unless excluded by or repugnant tothe subject or context be assigns) IN FAVOUR OF CLIENT NAME/COMPANY NAMEAND ADDRESS a Company having its registered office at CLIENT Addresshereinafter referred to as CLIENT NAME (which term or expression shall unlessexcluded by or repugnant to the subject or context to be deemed to mean &include its legal representatives, executors, administrators and assigns).

WHEREAS:

CLIENT NAME is desirous of

____________________________________________________________________________________________________ (hereinafter referred to as the Site).

AND WHEREAS CLIENT NAME of desirous of executing_____________________________________________________________ (hereinafter referred to as the Works) at the Site andhas invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuantthereto by its letter No. _______________ dated ______________________ accepted thetender given by ____________ a registered __________________ having its place of

business at _____________________(hereinafter referred to as the Contractor whichexpression shall unless repugnant to the context or meaning thereof deemed toinclude his/its heirs, legal representative, executors, administrators and assigns).

AND WHEREAS it is one of the terms of the said Tender/Contract that thecontractors shall give an indemnity in the manner hereinafter.

NOW THIS DEED OF INDEMNITY WITNESSETH AS FOLLOWS:



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In pursuance of the said Tender/Contract and for the consideration aforesaid wethe Contractor hereby do indemnify and keep harmless CLIENT NAME against andfrom all claims, demands, actions, proceedings, losses, damages, recoveries, judgements, costs, charges and expenses which may be made or brought orcommenced against the CLIENT NAME or which the CLIENT NAME may or may

have to bear or pay or suffer directly or indirectly:

1. In respect of all claims, civil or criminal complaints/liabilities, sitemishaps, fire hazards and other accidents including injury or damagewhatsoever to any property real or personal or death of any person/s ordisputes and/or damages occurring, or arising out of any mishaps at thesite due to faulty work, negligence, faulty and unsound construction and/orfor violating any laws, rules and regulations in force for the time being whileexecuting/executed the said Works by us.

2. As result of our non payment of any statutory duties levied/leveiable on

us or we committing breach of any of the rules, regulations, orders,directives, instructions that may be issued by any authority under theCentral Excise Act, 1944, Central Sales Tax Act, 1956, or any other statuteor law for the time being in force.

3. Resulting from any willful default or negligence or breach of duty on ourpart or any sub-contractor/s if any, servants or agents.

4. By our employee or of sub contractor/s, if any, under the Workmencompensation Act and Employees liability Act, 1939 or any other law, rulesand regulations in force for the time being and any acts replacing and/or

amending the same or any of the same as may be in force at the time andunder any law in respect of injuries to persons or property arising out of andin the course of the execution of the contract work and/or arising out of andin the course of employment of any workmen/employee.

5. Any non-compliance or improper compliance of statues, rules andregulations which are applicable to us and/or our employees, in respect of(a) Employee provident fund act, 1952, b) Employees State Insurance Act,1948, c) Contract Labour (R&A) Act, 1971, d) Minimum Wages Act, e) Shopsand Establishment Act, f) Payment of wages Act, g) Bonus Act, h) theBombay Municipal Corporation Act and any other law which may become

applicable in respect of the Tender/Contract work.

6. Any act or omission or default by us or our sub-contractor/s if any,our/their servants or agents or of any person employed or engaged upon orin connection with the Works or any part thereof which may involve anyloss, damage, liability, civil or criminal action.

IN WITNESS WHEREOF THE PARTIES HAVE HERETO SET THEIR RESPECTIVEHANDS ON THIS _________ DAY OF _________ MONTH OF 2002.



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Signed & Delivered by

Contractor/s

In the presence of __________________

BANK GUARANTEE FOR MOBILISATION ADVANCE

This deed of guarantee executed at Mumbai on this _________ day of ________ 2002by the ____________ Bank, a Schedule/Nationalized Bank registered under the

registered under the _______________________ Act ___________having their Branchoffice at ___________________ to as the Guarantor, which expression shall unlessrepugnant to the context or meaning thereof includes its successors and assigns)IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated under thecompanies Act 1956, having its registered office at CLIENT ADDRESS (hereafterreferred to as CLIENT NAME which expression shall unless repugnant to thecontext or meaning thereof include its successors and assigns).

WHEREAS:

CLIENT NAME is desirous of getting ______________________________________

(hereinafter referred to as the Site).

AND WHEREAS CLIENT NAME of desirous of executing_____________________________________________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuantthereto by its letter No. _______________ dated ______________________ accepted thetender given by ____________ a registered __________________ having its place ofbusiness at _____________________(hereinafter referred to as the Contractor whichexpression shall unless repugnant to the context or meaning thereof deemed to

include his/its heirs, legal representative, executors, administrators and assigns).

AND WHEREAS pursuant to acceptance of the Tender of the said Contractor,CLIENT NAME and the said Contractors have entered into an Agreementon______________ along with Annexures and schedules thereto (hereinafter referredto as Tender/Contract).

AND WHEREAS it is one of the Tender/Contract that CLIENT NAME may onapplication by Contractor and in its sole discretion advance to the Contractor tothe extent of ___% of contract amount as and by way of mobilization advance



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against the bank guarantee to secure the repayment of the same and for use bythe Contractor for the purpose of the said works and for no other purpose.

AND WHEREAS the Contractor have requested CLIENT NAME to grant to them thesaid mobilization advance of Rs. _________which CLIENT NAME has agreed to grant

on the Contractor furnishing guarantee for Rs. __________.

NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT:

I) In consideration of CLIENT NAME agreeing to advance to the Contractor thesaid sum of Rs. ___________ (Rupees________________________) as and by wayof mobilization advance subject to the terms and conditions as set out in theaforesaid Tender/Contract executed by the Contractor, we the ______________________bank, the said Guarantor hereinabove mentionedhereby unconditionally and irrevocably guarantee unto CLIENT NAME thatthe said Contractor will diligently, efficiently and satisfactorily perform alltheir obligations under the various terms and conditions of the said contractand the tender conditions within the time stipulated therein to the fullsatisfaction of CLIENT NAME and its Architects failing which Guarantor shallon demand by CLIENT NAME without demur or protest and without recourseto the Contractor or anybody else pay unto CLIENT NAME the sum ofRs.________________(Rupees ____________________ Only) at the registered officeof CLIENT NAME at Mumbai.

II) It is agreed that notwithstanding what is contained hereinabove CLIENTNAME shall be entitled to invoke this guarantee if the contract with theContractor is terminated either by CLIENT NAME as provided in thecontract/Tender conditions, and certificate issued by CLIENT NAME to theeffect that contract is so terminated shall be conclusive and binding uponthe Guarantor and shall not be called in question either inside or outside thecourt, arbitration, tribunal or any other authority.

III) The guarantor hereby further covenants that-

1) The Guarantor shall pay the aforesaid sum on demand made in writingby CLIENT NAME without any demur or without any recourse toContractor or anybody else and not withstanding any dispute ordifference that may exist or arise between CLIENT NAME and theContractor.

2) This guarantee shall be a continuing guarantee and shall not berevoked by the guarantor without prior consent in writing of CLIENTNAME.

3) The notice of demand in writing issued by CLIENT NAME shall beconclusive proof as regards the amount due and payable to CLIENT



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NAME under this guarantee and it shall not be disputed by theGuarantor either inside or outside the court, tribunal or arbitration orother authority.

4) The decision of CLIENT NAME on the breach of the terms and

conditions of the said Contract/Tender by the Contractor of their failureto perform obligations or discharge their duties under the saidTender/Contract shall be final and binding on the Guarantor and shallnot be disputed by the Guarantor inside or outside the court, tribunal,arbitration or other authority.

5) The Guarantor shall also indemnify and keep CLIENT NAME indemnifiesfrom and against all losses, damages, costs, claims, actions,proceedings, recoveries, judgement and expenses whatsoever whichCLIENT NAME may suffer, pay or incur by reason of or in connectionwith any such default on the part of the Contractor in theirperformance, obligations including cost of any legal proceedings ifany, which may be initiated against CLIENT NAME.

6) Any neglect or forbearance on the part of CLIENT NAME in enforcingany of the terms and conditions of the said Tender/Contract or anyindulgence shown by CLIENT NAME to the Contractor or any variationin the said Tender/Contract made by mutual agreement betweenCLIENT NAME and Contractor or any other act or deed on the part ofCLIENT NAME which but for this clause may have the effect ofdischarging the Guarantor under the law relating to the

guarantees shall not discharge the Guarantor from its obligationsherein and the Guarantor shall be discharged only by compliance bythe Contractor of all their obligations, duties under the saidTender/Contract and recovery/repayment in full to CLIENT NAME.

7) This guarantee shall not be affected by any infirmity or absence orirregularity in the exercise of the powers by or on behalf of theContractor to submit the said tender and enter into the said Contractor any change in the constitution or dissolution of the Contractor orchange in the name of the said Contractor.

8) We, as guarantors hereby agree that without our concurrence ornotice to us, the contractors, CLIENT NAME shall be at liberty to varyalter or modify the terms and conditions of the said Tender/Contractand in particular to defer, postpone or revise the payments on suchterms and conditions as may be considered necessary by CLIENTNAME and the Contractor. We as guarantors agree that a liabilityunder this guarantee shall be in no manner be affected by any such,variations, alterations, modifications, waiver, dispensation with orrelease of security and that no further consent of us as Guarantors is



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required for giving effect to any such variations, alterations,modifications, waiver, dispensation with or release of security liability.

9) It shall not be necessary for CLIENT NAME to exhaust its remediesagainst the Contractor before invoking this guarantee and the

guarantee herein contained shall be enforceable against the Guarantornot withstanding any other security which CLIENT NAME may haveobtained or may obtain from the Contractor or may, at the time whenthis guarantee is invoked, be outstanding and unrealized.

10) To give effect to this guarantee, CLIENT NAME may act as though wethe Guarantors are the principal Debtors to CLIENT NAME.

11) The Guarantor undertakes to pay to CLIENT NAME, the amount herebyguaranteed within 24 hours of being served with a written noticerequiring the payment of the amount either by hand delivery or byRegistered Post or by Speed Post.

12) The Guarantor hereby agrees that this guarantee shall be valid and bein force for a period of __________months i.e. upto _____________(Date).

13) Notwithstanding anything to contrary contained hereinabove ourliability under this guarantee is restricted to Rs. _____________/-(Rupees _________________ Only) and any claim arising under thisguarantee shall be preferred by CLIENT NAME within a period of sixmonths from the aforesaid date of expiry of this guarantee.

IN WITNESS WHEREOF THE WITHIN NAMED GUARANTOR HAS CAUSE THESEPRESENTS TO BE EXECUTED ON ITS BEHALF BY THE HAND OF ITS DULYAUTHORISED OFFICIAL ON THE DATE AND AT THE PLACE FIRST HEREINABOVEWRITTEN.

Signed and delivered forAnd on behalf of ______________(Bank) The guarantor

Shri______________its duly authorized official

BANK GUARANTEE IN LIEU OF INITIAL SECURITY DEPOSIT

This deed of guarantee executed at Mumbai on this _________ day of ________2002 by the ____________ Bank, a Schedule/Nationalized Bank registered underthe registered under the _______________________ Act ___________having theirBranch office at ___________________ to as the Guarantor, which expression shallunless repugnant to the context or meaning thereof includes its successors and



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assigns) IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated underthe companies Act 1956, having its registered office at CLIENT ADDRESS(hereafter referred to as CLIENT NAME which expression shall unless repugnantto the context or meaning thereof include its successors and assigns).

WHEREAS:

CLIENT NAME is desirous of getting ______________________________________(hereinafter referred to as the Site).

AND WHEREAS CLIENT NAME of desirous of executing_____________________________________________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuantthereto by its letter No. _______________ dated ______________________ accepted thetender given by ____________ a registered __________________ having its place ofbusiness at _____________________(hereinafter referred to as the Contractor whichexpression shall unless repugnant to the context or meaning thereof deemed toinclude his/its heirs, legal representative, executors, administrators and assigns).

AND WHEREAS pursuant to acceptance of the Tender of the said Contractor,CLIENT NAME and the said Contractors have entered into an Agreementon______________ along with Annexures and schedules thereto (hereinafterreferred to as Tender/Contract).

AND WHEREAS it is one of the terms of the said Tender/Contract that thecontractor shall deposit with CLIENT NAME Rs. ___________being the _______% ofthe accepted Tender/Contract value agreed by the Contractor at the time ofsubmitting the Tender which shall not bear any interest and which shall be liablefor forfeiture in the event of Contractor failing to observe any terms ofTender/Contract or non complying which the conditions of the Tender/Contract.

AND WHEREAS at the request of Contractor, CLIENT NAME has agreed not toinsist for the initial security Deposit and accept a bank guarantee from theGuarantor in lieu thereof as hereafter contained.NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT:

I) In consideration of CLIENT NAME agreeing not to insist upon the initialsecurity Deposit and accepting this Guarantee in lieu thereof from theContractor for the sum of Rs. _________ (Rupees_____________________________), we the ______________________bank,the said Guarantor hereinabove mentioned hereby unconditionally andirrevocably guarantee unto CLIENT NAME that the said Contractor willdiligently, efficiently and satisfactorily perform all their obligations underthe various terms and conditions of the said contract and the tenderconditions within the time stipulated therein to the full satisfaction of



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CLIENT NAME and its Engineers/Architects failing which Guarantor shall ondemand by CLIENT NAME without demur or protest and without recourse tothe Contractor or anybody else pay unto CLIENT NAME the sum ofRs.________________(Rupees ____________________ Only) at the registeredoffice of CLIENT NAME at Mumbai.

II) It is agreed that notwithstanding what is contained hereinabove CLIENTNAME shall be entitled to invoke this guarantee if the contract with theContractor is terminated either by CLIENT NAME as provided in thecontract/Tender conditions, and certificate issued by CLIENT NAME to theeffect that contract is so terminated shall be conclusive and binding uponthe Guarantor and shall not be called in question either inside or outsidethe court, arbitration, tribunal or any other authority.


1) The Guarantor shall pay the aforesaid sum on demand made inwriting by CLIENT NAME without any demur or without any recourseto Contractor or anybody else and not withstanding any dispute ordifference that may exist or arise between CLIENT NAME and theContractor.


3) The notice of demand in writing issued by CLIENT NAME shall beconclusive proof as regards the amount due and payable to CLIENTNAME under this guarantee and it shall not be disputed by theGuarantor either inside or outside the court, tribunal or arbitration orother authority.

4) The decision of CLIENT NAME on the breach of the terms andconditions of the said Contract/Tender by the Contractor of theirfailure to perform obligations or discharge their duties under the saidTender/Contract shall be final and binding on the Guarantor and shallnot be disputed by the Guarantor inside or outside the court, tribunal,arbitration or other authority.

5) The Guarantor shall also indemnify and keep CLIENT NAMEindemnifies from and against all losses, damages, costs, claims,actions, proceedings, recoveries, judgement and expenseswhatsoever which CLIENT NAME may be made or brought orcommenced against CLIENT NAME or which CLIENT NAME may suffer,pay or incur directly or indirectly by reason of or in connection withany such default on the part of the Contractor in their performance,



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obligations including cost of any legal proceedings if any, which maybe initiated against CLIENT NAME.

6) Any neglect or forbearance on the part of CLIENT NAME in enforcingany of the terms and conditions of the said Tender/Contract or any

indulgence shown by CLIENT NAME to the Contractor or any variationin the said Tender/Contract made by mutual agreement betweenCLIENT NAME and Contractor or any other act or deed on the part ofCLIENT NAME which but for this clause may have the effect ofdischarging the Guarantor under the law relating to the guaranteesshall not discharge the Guarantor from its obligations herein and theGuarantor shall be discharged only by compliance by the Contractorof all their obligations, duties under the said Tender/Contract andrecovery/repayment in full to CLIENT NAME.

7) That this guarantee shall not be affected by any infirmity or absenceor irregularity in the exercise of the powers by or on behalf of theContractor to submit the said tender and enter into the said contractor any change in the constitution or dissolution of the Contractor orchange in the name of the said Contractor or change in theconstitution of the Company/CLIENT NAME.

8) We, as guarantors hereby agree that without our concurrence ornotice to us, the contractors, CLIENT NAME shall be at liberty to varyalter or modify the terms and conditions of the said Tender/Contractand in particular to defer, postpone or revise the payments on suchterms and conditions as may be considered necessary by CLIENTNAME and the Contractor. We as guarantors agree that a liabilityunder this guarantee shall be in no manner be affected by any such,variations, alterations, modifications, waiver, dispensation with orrelease of security and that no further consent of us as Guarantors isrequired for giving effect to any such variations, alterations,modifications, waiver, dispensation with or release of security liability.

9) It shall not be necessary for CLIENT NAME to exhaust its remediesagainst the Contractor before invoking this guarantee and theguarantee herein contained shall be enforceable against theGuarantor not withstanding any other security which CLIENT NAMEmay have obtained or may obtain from the Contractor or may, at thetime when this guarantee is invoked, be outstanding and unrealized.


11) The Guarantor undertakes to pay to CLIENT NAME, the amounthereby guaranteed within 24 hours of being served with a writtennotice requiring the payment of the amount either by hand delivery



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or by Registered Post or by Speed Post without demur and objectionsand without reference to the Contractor and without questioning theright of CLIENT NAME to make such demand or the propriety orlegality of the demand.

12) The Guarantor hereby agrees that his guarantee shall be valid and bein force for a period of __________months i.e. upto _____________(Date).If it becomes necessary to extend this guarantee beyond theaforesaid date on account of any reason whatsoever, we undertake toextend the validity period of this guarantee on CLIENT NAME requestuntil such time as requested by CLIENT NAME. CLIENT NAME decisionin this respect shall be final and binding.


14) The guarantee shall be in addition to and not in substitution for orderogation of any other security held by the CLIENT NAME and shallnot merge with or otherwise prejudice or affect or be prejudiced oraffected by such other security, right, remedy, guarantee orindemnity and may be enforced without first having recourse to suchother security remedy, guarantee or indemnity.






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Policy No. 03Date W.E.F. 07/09/07Revision ThirdPages 33/36

BANK GUARANTEE FOR CONVERSION OF CASH AMOUNT OF SECURITYDEPOSIT IN THE FORM OF RETENTION MONEY

This deed of guarantee executed at Mumbai on this _________ day of ________2002 by the ____________ Bank, a Schedule/Nationalized Bank registered underthe registered under the _______________________ Act ___________having theirBranch office at ___________________ to as the Guarantor, which expression shallunless repugnant to the context or meaning thereof includes its successors andassigns) IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated underthe companies Act 1956, having its registered office at CLIENT ADDRESS(hereafter referred to as CLIENT NAME which expression shall unless repugnantto the context or meaning thereof include its successors and assigns).

WHEREAS:

CLIENT NAME is desirous of getting ______________________________________(hereinafter referred to as the Site).

AND WHEREAS CLIENT NAME of desirous of executing___________________________________

__________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuantthereto by its letter No. _______________ dated ______________________ accepted thetender given by ____________ a registered __________________ having its place ofbusiness at _____________________(hereinafter referred to as the Contractor whichexpression shall unless repugnant to the context or meaning thereof deemed toinclude his/its heirs, legal representative, executors, administrators and assigns).

AND WHEREAS pursuant to acceptance of the Tender of the said Contractor,CLIENT NAME and the said Contractors have entered into an Agreement

on______________ along with Annexures and schedules thereto (hereinafterreferred to as Tender/Contract).

AND WHEREAS it is one of the terms of the said Tender/Contract that thecontractor shall deposit cash amount of Security Deposit in the form of RetentionMoney with CLIENT NAME made by the Contractor at the time of submitting theTender which shall not bear any interest and which shall be liable for forfeiture inthe event of the Contractor failing to observe any terms of the Tender/Contract ornon complying with the conditions of the Tender/Contract.



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AND WHEREAS at the request of Contractor, CLIENT NAME has agreed not toinsist for the cash amount of security deposit in the form of Retention Money andaccept a bank guarantee from the Guarantor in lieu thereof as hereaftercontained.



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NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT:

I) In consideration of CLIENT NAME agreeing not to insist upon the cash

amount of Security Deposit in the form of Retention Money and acceptingthis Guarantee in lieu thereof from the Contractor for the sum of Rs. _________ (Rupees_____________________________), we the ______________________bank, the said Guarantor hereinabove mentionedhereby unconditionally and irrevocably guarantee unto CLIENT NAME thatthe said Contractor will diligently, efficiently and satisfactorily perform alltheir obligations under the various terms and conditions of the said contractand the tender conditions within the time stipulated therein to the fullsatisfaction of CLIENT NAME and its Architects failing which Guarantor shallon demand by CLIENT NAME without demur or protest and without recourseto the Contractor or anybody else pay unto CLIENT NAME the sum ofRs.________________(Rupees ____________________ Only) at the registeredoffice of CLIENT NAME at Mumbai.

II) It is agreed that notwithstanding what is contained hereinabove CLIENTNAME shall be entitled to invoke this guarantee if the contract with theContractor is terminated either by CLIENT NAME as provided in thecontract/Tender conditions, and certificate issued by CLIENT NAME to theeffect that contract is so terminated shall be conclusive and binding uponthe Guarantor and shall not be called in question either inside or outsidethe court, arbitration, tribunal or any other authority.


1) The Guarantor shall pay the aforesaid sum on demand made inwriting by CLIENT NAME without any demur or without any recourseto Contractor or anybody else and not withstanding any dispute ordifference that may exist or arise between CLIENT NAME and theContractor.


3) The notice of demand in writing issued by CLIENT NAME shall beconclusive proof as regards the amount due and payable to CLIENTNAME under this guarantee and it shall not be disputed by theGuarantor either inside or outside the court, tribunal or arbitration orother authority.

4) The decision of CLIENT NAME on the breach of the terms andconditions of the said Contract/Tender by the Contractor of their



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failure to perform obligations or discharge their duties under the saidTender/Contract shall be final and binding on the Guarantor and shallnot be disputed by the Guarantor inside or outside the court, tribunal,arbitration or other authority.

5) The Guarantor shall also indemnify and keep CLIENT NAME

indemnifies from and against all losses, damages, costs, claims,actions, proceedings, recoveries, judgement and expenseswhatsoever which CLIENT NAME may suffer, pay or incur by reason ofor in connection with any such default on the part of the Contractor intheir performance, obligations including cost of any legal proceedingsif any, which may be initiated against CLIENT NAME.

6) Any neglect or forbearance on the part of CLIENT NAME in enforcingany of the terms and conditions of the said Tender/Contract or anyindulgence shown by CLIENT NAME to the Contractor or any variationin the said Tender/Contract made by mutual agreement betweenCLIENT NAME and Contractor or any other act or deed on the part ofCLIENT NAME which but for this clause may have the effect ofdischarging the Guarantor under the law relating to the guaranteesshall not discharge the Guarantor from its obligations herein and theGuarantor shall be discharged only by compliance by the Contractorof all their obligations, duties under the said Tender/Contract andrecovery/repayment in full to CLIENT NAME.

7) This guarantee shall not be affected by any infirmity or absence orirregularity in the exercise of the powers by or on behalf of theContractor to submit the said tender and enter into the said contractor any change in the constitution or dissolution of the Contractor orchange in the name of the said Contractor.

8) We, as guarantors hereby agree that without our concurrence ornotice to us, the contractors, CLIENT NAME shall be at liberty to varyalter or modify the terms and conditions of the said Tender/Contractand in particular to defer, postpone or revise the payments on suchterms and conditions as may be considered necessary by CLIENTNAME and the Contractor. We as guarantors agree that a liabilityunder this guarantee shall be in no manner be affected by any such,variations, alterations, modifications, waiver, dispensation with orrelease of security and that no further consent of us as Guarantors isrequired for giving effect to any such variations, alterations,modifications, waiver, dispensation with or release of security liability.

9) It shall not be necessary for CLIENT NAME to exhaust its remediesagainst the Contractor before invoking this guarantee and theguarantee herein contained shall be enforceable against theGuarantor not withstanding any other security which CLIENT NAME



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may have obtained or may obtain from the Contractor or may, at thetime when this guarantee is invoked, be outstanding and unrealized.


11) The Guarantor undertakes to pay to CLIENT NAME, the amounthereby guaranteed within 24 hours of being served with a writtennotice requiring the payment of the amount either by hand deliveryor by Registered Post or by Speed Post.

12) The Guarantor hereby agrees that his guarantee shall be valid and bein force for a period of __________months i.e. upto _____________(Date).







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Contract Policy 15.5.08 v2

Documents

Transcript of Contract Policy 15.5.08 v2