GUIDELINES FOR CONTRACT ADMINISTRATION

Standard Operating Procedures Contract Administration

Project Pyramid 1

History of Revisions

Issue
No.
01
02

Issue
Date
16.12.20
13
15.01.20
14

Chapter/cla
use no. &
text
affected
New
Duly edited
as
Per inputs
from
regions

Standard Operating Procedures Contract Administration

Reason for revision

Draft
Final roll out

Project Pyramid 2

Table of Contents
Chapter
No.

Title of chapter
Cover Page
History of Revisions
Table of contents

1.0

Purpose

2.0

Scope and Application

3.0

Definitions

4.0

Predecessor & successor processes

5.0

Responsibility & Authority

6.0

Process Flow Chart

7.0

Process Description

8.0

Efficiency & Effectiveness measures

9.0

Records

10.0

Enclosures

11.0

Reference

Standard Operating Procedures Contract Administration

Page No.
01
02
03
04
04
04
04
04
05
05
06
07
07
07

Project Pyramid 3

1.0

PURPOSE

This process is to ensure management of all construction contracts in a

wholesome and unified manner to minimize disputes and delays
attributable to contractual issues.
2.0

SCOPE AND APPLICATION

This procedure shall apply to all construction/works contract entered

into by GPL with various contractors. Contracts with material suppliers
and consultants are outside the scope of this process.
3.0

DEFINITIONS AND ABBRIVIATIONS

PM Project Manager of the Company

CM Regional Contracts Manager
HOC- Head of Contracts of the Company
HOL-Head of Legal Division of the Company
HOF-Head of Finance of the Company
COO- Chief Operating Officer of the Company
CAD-Contract Appreciation Document
EOT-Extension of Time
DLP-Defects Liability Period
4.0

PROCESS PREDECESSOR & SUCCESOR

Predecessor Process: Tender Award Process as per SOP

Concurrent Process: Construction

5.0

RESPONSIBILITY AND AUTHORITY

Preparation of CAD: PM
Routine correspondence with contractor: PM. Otherwise By PMC,
under specific authority by Regional Head in writing.
Responding to claim letter: PM in consultation with RH/ HOC

Standard Operating Procedures Contract Administration

Project Pyramid 4

Suspension of Contract: By RH on agreement with HOC in writing

Resumption of Contract: By RH on agreement with HOC in writing
Maintenance Issues before start of DLP: PM
Maintenance issues during DLP- PMC / PM / RH /
Approving variation in contract: COO
Granting EOT: RH on receipt of approval by COO
6.0

PROCESS FLOW CHART

NA
7.0

PROCESS DESCRIPTION

6.1 Preparation of CAD: At the award of a contract to the Contractor,

PM/CM shall thoroughly read the tender documents submitted by the
Contractor including all the Conditions of the Contract both Special and
General, Scope of work and all the correspondence, amendments,
addenda, corrigenda etc. The PM/CM shall then prepare a Contract
Appreciation Document (CAD) as per the format attached within 7 days of
award of the contract and shall be got approved from RH with inputs from
HO contracts. The CAD is a ready reckoner/snapshot of important
provisions of the contract and will be handy guide to the user.
7.1.1 Activity ownership

Standard Operating Procedures Contract Administration

Project Pyramid 5

CPT

C&P

C&B

Design

Design

C&B

Liasion

C&P

Functions at HO

PM

Region
HeadRegional

Contract
appreciation
document

COO - JP

ED - Srini

ED - KT

Activity

MDCEO &

Sr. no.

GPL Leadership

7.1.2 Template
Sr. no

Description

Template for CAD

Format
template

/ Remarks

Format of CAD .xlsx

7.2 Contract kick off meeting: The PM in consultation with RH shall

invite the contractor for the kick off s meeting within 7 days from
completion of CAD.
7.2.1 Participation from following stakeholders is expected in this meeting
Regional Head
PM
Contracts Site
Safety In-charge CMC
Monitoring In-charge CMC
7.2.2 Discussions in this meeting shall broadly cover the following
Contractors Master construction schedule
Statutory Compliances from contractor and time lines for the
same
Contractor mobilization schedule and status
Project quality and safety plan from contractor
Formwork planning and deployment schedule
Submission status of various guarantees to GPL by contractor
as per contract conditions.
Standard Operating Procedures Contract Administration

Project Pyramid 6

 Understanding of major clauses with the contractor. In case

the contractor has a different interpretation of clause then the
official clarification shall be issued promptly by PM in due
consultation with HOC.
List of contractual submittals and their timelines
Communication

protocol

to

be

followed

for

Contract

management

6.3 Contracts register: A register of contractual events shall be

maintained at the site to log the events as they take place in the course of
execution of the work and administration of the contract. All contractual
correspondence shall be in hard copy. In case of any other mode of
communication, same shall be backed by letter in hard copy immediately.
The contracts register may be maintained as per the format attached.
7.3.1 Template for Contract Register
Sr. no

Description

Format
template

Template for Contract Register

/ Remarks

Format of Contract
Register .xlsx

6.4

Contractual

correspondence:

The

issues

identified

under

Responsibility and Authority clearly identifies major issues that shall be

raised during the Contract Period. The situation shall be dealt with the
officer identified having final responsibility. It is not possible to envisage
all the situations and variations in the life of a contract but the guiding
principle are as under
1. Deal with the communication at the lowest organizational level
possible unless there are implications on Contractual issues.

Standard Operating Procedures Contract Administration

Project Pyramid 7

2. If there are contractual issues involved like time and/or cost then
it should be referred to the head office through RH.
3. All the communications received from the contractor shall be
replied to, unless otherwise decided by the RH/PM.
4. References to the Contractual clauses, dates and facts shall be
verified and proper evidence shall be gathered.
5. All the correspondence shall contain verified references and facts
which can be ascertained.
6. For all outgoing correspondence dealing with issues such as for
EOT,

Claims,

recovery

from

the

Contractor,

Suspension,

resumption, certificates etc. an acknowledgement of receipt shall

be obtained. For such correspondence in case electronic media is
used for its conveyance, a hard copy shall follow with an
intention to obtain proof of delivery.
7. Any important issue that has an impact on time and cost shall be
separately conveyed to the Contractor notwithstanding its
mention in Minutes of Meeting.
6.5 Audit of contracts administration: The HOC shall arrange an audit
of the contract administration at every site through in-house team
member. The purpose of the audit will be to identify any weaknesses in
GPLs administration of the contract and ensure that no contractually
adverse situation is allowed to build up due to over sight. . The audits may
be conducted once every 6 months or as per the frequency as decided by
HOC in consultation with RH
6.6. Site Review meetings :
To discuss on all issues related to site execution including progress ,
review meeting shall be conducted with following frequency
With contractors site team every fortnightly

Standard Operating Procedures Contract Administration

Project Pyramid 8

 With Contractors

site team alongwith contractors

H O

representative with Regional head and GPL site team Every

month
All discussions and actions points shall be recorded in Minutes of
Meetings. Hard copy of the same shall be signed by all stake holders. A
separate record shall be maintained for MOMs. It is recommended to start
every review meeting by confirming MOM for earlier meeting.

6.7 Contractor Running Bills :

Contractor will raise running account bills as per the frequency mentioned
in contract conditions. PM or its representative shall certify it promptly. In
case of any discrepancy, over billing etc. bill shall be returned to
contractor with a covering letter clearly indicating reasons for return and
advising contractor to resubmit after necessary correction. Date of
submission of revised bill shall be considered as date of submission of bill.
In case of number of revisions in bill, date of submission of last revision
shall be considered as date of submission.
All R A bills shall be for cumulative quantities and shall be recorded in
attached prescribed format.
6.7.1 Template for R A Bill Tracker:
Sr. no

Description

Template for Recording R A Bill

Format
template

/ Remarks

RA bill format.xlsx

Template for R A Bill Tracker

R A Bill Tracker
format.xlsx

6.8 Extra Items:

PM is responsible for identification and settlement of extra items.
Following are the guidelines to address extra items.
Standard Operating Procedures Contract Administration

Project Pyramid 9

6.8.1 Upon receipt of GFC from consultants, PM shall verify these drawings
and identify any discrepancy / Deviations with BOQ items.
6.8.2 PM / CM shall inform such deviations immediately to respective
consultant and shall insists on implementing items covered in BOQ.

6.8.3 In case extra item need to be executed due to any reason, the same
shall be dealt in accordance with the provisions in contract conditions.
6.8.4 : Activity Ownership

6.9: Insurance (CAR Policy)

H.O. Contracts is responsible for obtaining CAR policy for all projects.
Following are the guidelines
6.9.1 PM / CM through RH shall send requisition for insurance to H O
contracts within 7 days from issue of LOA to Contractor.
6.9.2 H.O. contract will organize for best possible quotes from Insurance
companies and shall finalise with insurance provider within 15 days from
receipt of requisition from site.
6.9.3 PM/CM shall monitor CAR policy validity including premium payment
as per agreed installments and will ensure it is in force throughout
construction period.
6.9.4 In case it is required to extend CAR policy due to extension in
construction period, PM/CM through RH shall notify the same to H O

Standard Operating Procedures Contract Administration

Project Pyramid 10

CPT

C&P

C&B

Design

Design

C&B

C&P

Liasion

PM

Functions at HO

HeadRegional

Contract
appreciation
document

Region

COO JP

ED - Srini

ED - KT

Extra Items

MDCEO &

Sr. no.

GPL Leadership

Contracts 30 days in advance. The requisition shall also confirm the time
for which policy need to be extended.
6.9.5 H O Contracts is responsible to ensure extension for CAR policy
within the time frame as mentioned above.

6.9.6 - Templates
Sr. no

Description

Template for
information

7.0 Closing contract:

Format
template
Project

/ Remarks

insurance
Insurance Template.xls

PM shall produce a summary

report at the

closure of contract such as the original cost, the final cost, Contract time,
Actual Time taken, Major reasons for delays and cost overruns, a list of
major contractual issues encountered and the solution described briefly. It
shall also incorporate suggestions and/or suggested modifications to the
contractual conditions. This report shall be discussed with HOC.
7.0.1 Templates

8.0

Sr. no

Description

List of documents to be checked

before Issue of VCC and FCC

Format
template

/ Remarks

Documents to be
checked before issuing VCC and FCC.docx

EFFICIENCY & EFFECTIVENESS MEASURES

Efficiency Measure
Average time taken to respond to Contractors communication

Standard Operating Procedures Contract Administration

Project Pyramid 11

Effectiveness Measures
Average number of issues pending at audit
Total number of Disputes till closure
9.0

RECORDS

CAD
Contract Register
Contract audit report
Closure report

Standard Operating Procedures Contract Administration

Project Pyramid 12