Construction through Contract

For the construction work entrusted to a contractor the owner furnishes a bill of quantities if he intends to obtain offer from tenderer on item rate basis. Such a bill of quantities is prepared by the client by extracting those items from the sanctioned estimate which are proposed to be entrusted to a contractor. Tenderer will quote his rates against the items of bill of quantities.

Tenderer will, however, prepare his own bill of quantities which forms the basis of his offer and later assist him in planning, scheduling and construction of the work. 

Programme of Work: As a prerequisite to the preparation of contractor's  bill of quantities, he should 

• study the tender documents very carefully, 
• visit the site of work and collect detailed information that will help him in preparing the bill of quantities, and 
• prepare a tentative construction programme. This programme shows the principal items of construction, the duration required by them and the scheduled dates of their start and completion. Such a programme is of considerable assistance in accurate pricing of material, labour, plant and equipment, scaffolding etc. 

Important divisions of the contractor's bill of quantities are as below: 

1)  Contractors's Own Work 

Many contractors generally carry out only certain items of work by employing their own labour. The contractor should identify these items. He should then build up the rate for the unit item considering materials, lahour and plant equipment. The items should be priced on the basis of these rates. 

2)  Work Dune by the Sub-contractor 

Certain items of the work are entrusted by the main contractor to his sub-contractors after obtaining client's approval. The main contractor obtains the sub-contractors' bids, selects the most competitive bid. To this he adds his own expenses and profit, Supervision and any other reason and adds the total amount in his own hill of quantities. 

3)  Nominated Sub-contractor and/or Supplier 

Main contractor has to get certain portion of the work done by sub-contractor nominated by the owner and/or obtain certain materials from suppliers nominated by the owner. These items are included under provisional sums or prime cost sums. The main contractor has to add for the work he has to do in connection with these items such as unloading, handling, storing, fixing, supervision as well as his margin of profit. 

4)  Insurances 

The main contractor is required to insure the works against possible damage due to tire or by other risk. Such insurances have to be priced as per the requirement of contract conditions. 

General Items 

In addition to the above provision has to he made for the following. 

• Haulage to and from the site; erection and dismantling of large plant and equipment. 
• Scaffolding. 
• Setting out works. 
• Watch and ward. 
• Providing and maintaining access roads to the site as well as of facilities like offices, stores, canteen, roads, and latrines in the works area. 
• Lighting and water and power. 
• Bailing out water. 
• Telephone facilities. 
• Expenditure on hospitality. 
• Any other related expenditure. 

All the expenses discussed above total up to the cost which the contractor will have to spend on the construction work. By addition of profit margin the contractor will arrive at the price he can offer to the client.