Professional Practice Assignment 2: Vaishnavi S 1RW17AT103

Professional Practice Vaishnavi S
Assignment 2 1RW17AT103
Part 1
a) EMD
Earnest money deposit is the money paid on the basis of a contract with a due amount at a
particular period of time. If the contract is breached by the contractor, then the EMD is kept
by the recipient (Client) as “committed damages” or compensation. It is like a safety deposit
for the Client for performance guarantee.
b) Interim Bill
Interim bill is a stage-wise payment during execution of the contract. It is way for the Client
to pay the Contractor periodically before the final completion. Interim payments can be
agreed in advance and paid at particular milestones, but they are more commonly, regular
payments whose amount is based on the value of work that has been completed.
c) Retention Money / Security Retention / Retention Amount
Retention amount is deducted in the running bills as a part of security deposit. They
represent the amount withheld from each progressive payment made to a contractor. It is
held to ensure that a contractor performs all his obligations under the contract and is then
released either on virtual completion or after the end of defects notification period.
d) Defects Liability period
A fixed period of time from the date of virtual completion during which the contractor has a
right to return to site to rectify defects, or complete unfinished work at his own cost. The
architect is entitled to continue holding security deposit to secure Contractor’s obligations in
respect of incomplete or defective work. It is usually 12 months for building works and
5years for water proofing.
e) Mobilisation Advance
It is a mandatory payment made by the Client to the contractor for initial expenditure with
respect to the site and a fair amount for job primaries. This is simply to protect the
Contractor from financial liabilities. This amount is recovered through running bills before
80% of the work is complete.
f) R.A. Bill
Running account bills are invoices issued by the Contractor during the course of the
construction. It denotes the account with a Contractor when payment for work is made to
him periodically, subject to final settlement of the accounts on the completion or
determination of his contract.
g) Engineer-in-charge
The officer nominated who is competent to direct supervisors and authorised to be in charge
of the works for the purpose of this contract. He has the power to make technical alterations
to the original specifications and drawings or instructions that seem necessary to him during
the progress of work and the Contractor is bound to carry out the work upon his instructions
given in writing.
h) Virtual Completion
Less than actual completion of work, fit for occupation. The presence of defects to be
checked during the defects liability period that begins from the date of issue of virtual
completion certificate.
i) Final Completion
Rectification of defects during defects liability period to be completed before this. The
quality and Contractor’s payment is also to be finalised and referred to the Client.
Virtual Completion Final Completion

Application is made to local authority for All claims scrutinized and settled
occupation certificate
is possible to occupy the building for the Final bills passed

purpose for which it was designed and built
List of defects is communicated to contractor All defects have been rectified;
for rectification prior to issue of final certificate Quality of work is certified as satisfactory
Defect liability period commences from the Arbitrator has not reviewed final certificate
date of issue virtual completion certificate issued by an architect engineer
The contractor is liable to handover the site

back to the owner on final completion of the
project after de-mobilization.
j) Clerk of Works
A person approved by the architect and appointed and paid by the Client to work under the
orders of the architect in inspecting the works in the absence of the architect. He has no
authority to order variations or review technical drawings. He has power to issue notice to
the contractor for non-approval of any material or work.
k) Idling Charges
Fees paid to the contractor if work is stopped for reasons beyond the control of the
contractor
l) Site Order book
Records clarifications or instructions by architect/engineer, signed by either of them, to be

checked before payment to the contractor.
m) Hindrance Register
It is a book maintained on site to note down any delays/obstructions in work along with all
the relevant details
n) Work Register
Records day to day progress needed to decide extension of time.
o) Material Register
Book of receipt and issue of materials and their physical stock verification record
p) Minimum Bill Value

It is the minimum amount stipulated in the contract which can be claimed by the contractor
as milestone payment.
Part 2
a) Liquidation charges
Liquidated damages are an amount of money, agreed upon at the time of the contract for
the damages that can be recovered in the event a party breaches the contract. The amount
is supposed to be the best estimate of actual damages when the parties sign the contract.
These usually apply to a specific type of breach like the failure to complete work on time.
b) Rate analysis
Rate analysis of Civil Works or Building Works is the determination of cost of each
construction work per unit quantity. This cost includes the cost of materials, labours,
machinery and added with contractors profit and other miscellaneous petty expenses
required for the particular work to be complete in unit quantity.
c) Provisional Items
It is an item excluded from the contract scope, but given as an optional item with unit rate
which may/may not end up being in the final project.
d) Non tendered items

Refers to the items which were not listed in the contract document, and if required by the
client, will be done on a mutually agreeable basis

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Professional Practice Vaishnavi S

c) Retention Money / Security Retention / Retention Amount

d) Defects Liability period

Virtual Completion Final Completion

is possible to occupy the building for the Final bills passed

The contractor is liable to handover the site

l) Site Order book

Records clarifications or instructions by architect/engineer, signed by either of them, to be

p) Minimum Bill Value

d) Non tendered items

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