CONTRACT - GENERAL EXPENDITURE

CONTRACT

Definition of Contract.-When two or more persons have a common intention communicated to each other to create some obligation between them there is said to be an agreement.  "An agreement" which is enforceable by law is a "Contract".  According to Section 10 of the Indian Contract Act 1872 only those agreements are enforceable bylaw which are made by the free consent of the parties

 (see para 1256), competent to contract (see para 1259), for a lawful consideration (see para 1224) and with a lawful object, and are not expressly declared to be void.  This is subject to any special condition.

Works Contracts.-All works and supplies relating to the Engineering Department executed through the agency of contractors may be broadly classed as follows :-

Zone Works Such as works of ordinary repairs and maintenance and others of petty nature in a particular zone. or area:

Special Works Such as the construction of bridge, the formation of an embankment etc. other than zone works . 

Supplies of building materials Such as bricks, tiles, lime, bamboos, ballies, mattings doors. windows, ballast, boulders, moorum, stone chips, fire bricks.  

Forms of Works Contracts.-The following forms of contract are

 primarily  intended for application

to Works Contracts (c.f. Para 408 S):-

(i)        Lump sum contract;

(ii)       Schedule contract; and

(iii)      Piece work contracts.

"Lumpsum" Contracts.-The  Lumpsum Contract is 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 kinds of work done of materials supplied in achieving his results (c.f. para 403 S). In the case of such contracts a scale of rates or prices may be agreed upon by which enhancement of or reduction from the lumpsum may be regulated in the event of any departures from the work or supply as specified being made subsequently under the order of competent authority; or by which reductions may be made, at the discretion of competent authority for failure on the contractor's part to conform to specification. (c.f. paras 1328 and 404 S).

1207.  Schedule Contract.-The Schedule Contract is a contract under which the contractor engages to carry out a work or effect supply as specified anti 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 of 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. (c.f. para 405 S).

1208.  Piece Work Contract.-This means 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 materials supplied; or to the quantity of work to be done or material supplied within a given period. The Zonal Contract adopted on the Railways (refer para 1209) fall under this category (c.f. para 406 S).

1218.     Documents forming integral part of contracts.-

q  the conditions of contract standard or special;

q the specifications, standard or special (and any plans necessary)

q the schedule of items,

q quantities and rates;

q the agreement form;

q instructions to tenderers, and

q tender forms (if any). (c.f. paras 630 F and 416 S).

1211.  Circumstances when tenders need not be called for.-Except where for reasons which should be in public interest the General Manager decides that it is not practicable or advantageous to call for tenders, all contracts over Rs. 25,000/- in value should be placed after tenders have been called for in the most open and public manner possible and with adequate notice.  For works contracts based on Schedule of Rates in force on the Railway, calling of tenders up to Rs. 50,000/- can be dispensed with by the General Manager without recording reasons for doing so.  In all other cases where it is decided not to call for tenders. the reasons should be recorded and financial concurrence obtained.