Contract Management Issues Commonly Arising During Implementation and Doubts Raised

MWSIP
Contract Management Issues Commonly Arising During Implementation

and Doubts Raised
1 Increase in Royalty rates: Rates of Royalty for construction materials viz. soil, sand,
aggregate etc. are increased substantially after award of the contract. Contractors are
demanding for reimbursement of increased amount.
2 Contractors do not make any written request for extension of time limit in spite of the
facts- contract period is over and work is incomplete.
3 Liquidated Damages :
Common doubts-
 Milestone date is yet to reach. It is noticed that progress is less. Shall the Engineer
impose / recover L.D only after the milestone date is reached?
 Whether any written notice / letter is necessary communicating the contractor
about imposition / recovery about L.D?
 If milestone targets are not achieved- is L.D automatically imposed in absence of
any communication from either parties?
Contractor could not achieve first milestone targets. However he achieves both
milestone - 1st & 2nd milestone targets on or before second milestone date. Can the L.D
imposed on account of non-achievement of first milestone targets be refunded to the
contractor?
4 Time Extension :
Prior review case-
Time extension is required and cost increase is likely more than 15 %. Contract period is
over / Expenditure has reached the contract amount. Whether contractor be allowed to
work till No objection is received from the world Bank to the time extension/ cost
increase.
5. In certain portion of work site could not be handed over to the contractor and work
could not be started in this reach.
Can the milestones be revised?
If it is a prior review case, whether Bank’s No objection is necessary to such revision of
milestones.
6 In a prior review case, contract is to be terminated due to breach of contract by the

contractor, is it necessary to get Bank’s no objection before termination? Whether all
clearances (from the Bank) as required for original contract are necessary for balance
work even if the cost of balance work package is below prior review threshold.
7. In a prior review case, contractor has given notice about termination of contract giving
certain reasons which are not acceptable to the employer and subsequently contractor
MWSIP-436087708.doc Page 1 of 2
has communicated that contract is terminated. Contract period is over (even extended
period) in this case. Balance work is to be completed. What course of action shall be
followed?
8 Contract is terminated in a post review case. Can bids be invited for balance work
without any provision for package for balance work in the revised procurement plan
submitted to the Bank?
9 Contract period is over. Work is incomplete. Work is delayed due to reasons attributable
to the contractor. Shall L.D be continued?
10 Can Extension be given but L.D be continued?
11 Work is physically completed within stipulated / extended period. But final bill is yet to
be paid. Whether time extension is necessary in this case?
12 Price Escalation – Whether price escalation is payable during extended period?
13 Price Escalation – Whether price escalation is payable when L.D is imposed / is

recovered?
13 Whether milestone dates / targets can be revised? If so, shall L.D amount need to be
revised?
14 In a contract employer is Superintending Engr (S.E). Contractor is dissatisfied with the

decision given by the Executive Engineer on certain issues. Contractor wants to refer
the matter to the Adjudicator. Is it necessary for contractor to refer the matter to the
employer (S.E) prior to referring the matter to the Adjudicator?
15 Work is completed. But there are certain issues referred to the adjudicator and his
decision is awaited. Even after the decision from adjudicator there is possibility of
appeal to the Claims committee. In such cases whether final bill can be paid prior to
decision from adjudicator/ claims committee.
16 If contractor’s claim amount is more than 5 % of contract price in case of a disputed

matter. The contractor is dissatisfied with the decision of Engineer. To whom shall the
contractor refer the matter after decision of the Engineer? ( to the Adjudicator or Claims
Committee)
17 Contract is delayed. L.D is imposed. L.D amount to be recovered has reached the limit
of 10 %. On reaching this limit, does the contract gets terminated automatically?
18 If contract is terminated due to reasons attributable to the contractor, shall performance

security be forfeited?
MWSIP-436087708.doc Page 2 of 2

Contract Management Issues Commonly Arising During Implementation and Doubts Raised

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MWSIP

Contract Management Issues Commonly Arising During Implementation

6 In a prior review case, contract is to be terminated due to breach of contract by the

10 Can Extension be given but L.D be continued?

12 Price Escalation – Whether price escalation is payable during extended period?

13 Price Escalation – Whether price escalation is payable when L.D is imposed / is

14 In a contract employer is Superintending Engr (S.E). Contractor is dissatisfied with the

16 If contractor’s claim amount is more than 5 % of contract price in case of a disputed

18 If contract is terminated due to reasons attributable to the contractor, shall performance

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