ANALYSIS OF CLAUSE 12 CPWD CONTRACTS

Clause 12:

This clause deals with following situations:

This clause gives following powers to Engineer-in-Charge for which the contractor shall be bound to carry out the works:-

to make alteration in
to make omissions from
to make additions to or substitutions for the original specifications, drawings, designs and instructions that may appear to him to be necessary or advisable during the progress of the work and also
to omit a part of the works in case of non-availability of a portion of the site or for any other reasons

Important constituents of this clause regarding powers of ENC & liabilities of contractor:-

Contractor is bound to follow the instructions and carry out the work as per instructions given to him
The instructions has to be in writing signed by the Engineer-in-Charge (It is mandatory)
The instructions issued by ENC for such alterations, omissions, additions or substitutions shall form part of the contract in the same manner as they had originally been provided in the contract.
The work shall be carried out on the same conditions in all respects including price on which he agreed to do the main work except as hereafter provided.
The instructions can be issued only for that work which may appear to him to be necessary to ENC.
The instruction must be given during the progress of the work not before work. the contractor may within fifteen days of receipt of order or occurrence of the item(s) claim rates, supported by proper analysis, for the work
the engineer-in-charge shall within prescribed time limit of the receipt of the claims supported by analysis, after giving consideration to the analysis of the rates submitted by the contractor, determine the rates on the basis of the market rates and the contractor shall be paid in accordance with the rates so determined.
Revision of rates is optional and as per the discretion of the contractor whether he is intended for revision of rates or not (Obviously revision is applicable only for deviated quantities as no rate is available for extra/ substitute items)
In case the Engineer In-charge orders for any extra work it is the duty of the contractor to submit his rates alongwith analysis which it is his intention to charge for variation of extra. The most important aspect for operation of this clause is that the orders should be given by the none other than engineer Incharge and that too under his own signature to avoid any controversy in future. But the contractor is duty bound to carry out the work in accordance with the instructions issued to him which ‘may’ be given to him in writing by the engineer Incharge. (It has been decided by the courts that the word ‘may’ would mean ‘shall’ here)
The ENC has the right not to accept the market rates and to cancel order but if no cancellation rates submitted by the contractor have been accepted.
Unless there is a written instruction for extra items, claim arising out of these extra items are not maintainable. It is a misconduct-
Drawing itself is instructions-
Contractor submitted the rates for deviated quantities beyond limit- Department didn’t refute in a reasonable time but after getting the work done department made their own analysis which was not acceptable to the agency- Claim of contractor allowed-
If the department didn’t refute the analysis of rates at the time of submission by the agency- It would be deemed as accepted
Contractor cannot refuse to execute extra items due to non finalsisation of rates or low rates finalization. He can send representation to SE/CE under clause 25
Written instructions are must for execution of extra items- word ‘may’ in clause 12 is of no help
Rates have to be fixed only and only by Executive Engineer not by Superintending or Chief Engineer. The official procedure or process adopted by a particular department is of no relevance. XEN can only take view of SE/CE but it does not mean the ultimate authority is SE/CE
If some verbal instructions are given by a party for providing some extra work or item and the said party takes the benefit of extra work, it cannot be allowed to put the other party to loss by taking the objection that the executing party did not obtain instructions in writing-
Contractor informed that he is doing some extra work as per site requirement- XEN requested to not do but till that time extra work had already been done-Claim justified
respondent did not refute the analysis at the time of its submission- Analysis submitted by the petitioner in arbitration found correct- - Claim allowed-
Rates once paid cannot be reduced later
the Department did not direct the contractor to provide grooves in the plaster but the arbitrator held that the work was done as per the requirement of site- objections dismissed.
The word used in this clause is “such works" which obviously means the work which is done as per the engineer's order
Incase ENC passes no cancellation order regarding market rates, it will be presumed that the rate submitted by the contractor have been accepted-
A contractor who carries out extra work which is not expressly or impliedly included in the original contract is entitled for extra work done either by subsequent mutual agreement between the parties or on quantum merit basis
If EE has not replied to the letter for market rates to the agency it means he has accepted the same
Can the rates for the extra items paid in first running bill were reduced later on- No.-
Extra items paid in RA bills- Deleted in Final Bill without reason- Contractor can claim-
Rates decided by EE for Extra item are final no power to any other authority to reduce the rates-
If some extra work has been done, contractor has to prove that it was indispensible and also that it was ordered by the department- If department has not ordered the extra work- no payment can be claimed-
Market rates allowed by the arbitrator as per provision of the manual, the same is not challengeable under section 34
No Authority has any power to change the rates admitted by EE –
A contractor is not at liberty to seek payment in respect of those items by way of arbitration for which he did not raise a claim during currency of the contract whether they were substituted items or extra items.
If execution of any extra item is not disputed it is to be allowed
Execution proved on the basis of Site order book and contractor’s letter- Admissible. –
Work existed- section 70 considered – Claim is payable
The contract does not give any specific form of writing in which directions for extra work is to be issued/given. It is also not the requirement of the contract that the direction in writing has to be prospective or in advance in the course of operation of the contract.
If final bill is not prepared, arbitrator can make award for extra items on the basis of recommended rates

Further this clause provides the effect on time of completion due to above changes under clause 12.1 as under:-

The time for completion of the works shall, in the event of any deviations resulting in additional cost over the tendered value sum being ordered, be extended, if requested by the contractor, as follows :
The time of completion is to be extended by (Extra work ÷ Tendered value) x 1.25 OR
such further additional time as may be considered reasonable by the Engineer-in-Charge.
125% is not a right of the contractor but it is only a guideline which may vary depending upon the nature of extra work.
The extra time has to be decided by ENC but it should pass the test of reasonability otherwise the formula of allowing 125% is safe.

ANALYSIS OF CLAUSE 12 CPWD CONTRACTS

ANALYSIS OF CLAUSE 12 CPWD CONTRACTS

Clause 12:

This clause deals with following situations:

This clause gives following powers to Engineer-in-Charge for which the contractor shall be bound to carry out the works:-

to make alteration in

to make omissions from

to make additions to or substitutions for the original specifications, drawings, designs and instructions that may appear to him to be necessary or advisable during the progress of the work and also

to omit a part of the works in case of non-availability of a portion of the site or for any other reasons

Important constituents of this clause regarding powers of ENC & liabilities of contractor:-

Contractor is bound to follow the instructions and carry out the work as per instructions given to him

The instructions has to be in writing signed by the Engineer-in-Charge (It is mandatory)

The instructions issued by ENC for such alterations, omissions, additions or substitutions shall form part of the contract in the same manner as they had originally been provided in the contract.

The work shall be carried out on the same conditions in all respects including price on which he agreed to do the main work except as hereafter provided.

The instructions can be issued only for that work which may appear to him to be necessary to ENC.

The instruction must be given during the progress of the work not before work. the contractor may within fifteen days of receipt of order or occurrence of the item(s) claim rates, supported by proper analysis, for the work

Revision of rates is optional and as per the discretion of the contractor whether he is intended for revision of rates or not (Obviously revision is applicable only for deviated quantities as no rate is available for extra/ substitute items)

The ENC has the right not to accept the market rates and to cancel order but if no cancellation rates submitted by the contractor have been accepted.

Unless there is a written instruction for extra items, claim arising out of these extra items are not maintainable. It is a misconduct-

Drawing itself is instructions-

Contractor submitted the rates for deviated quantities beyond limit- Department didn’t refute in a reasonable time but after getting the work done department made their own analysis which was not acceptable to the agency- Claim of contractor allowed-

If the department didn’t refute the analysis of rates at the time of submission by the agency- It would be deemed as accepted

Contractor cannot refuse to execute extra items due to non finalsisation of rates or low rates finalization. He can send representation to SE/CE under clause 25

Written instructions are must for execution of extra items- word ‘may’ in clause 12 is of no help

Rates have to be fixed only and only by Executive Engineer not by Superintending or Chief Engineer. The official procedure or process adopted by a particular department is of no relevance. XEN can only take view of SE/CE but it does not mean the ultimate authority is SE/CE

If some verbal instructions are given by a party for providing some extra work or item and the said party takes the benefit of extra work, it cannot be allowed to put the other party to loss by taking the objection that the executing party did not obtain instructions in writing-

Contractor informed that he is doing some extra work as per site requirement- XEN requested to not do but till that time extra work had already been done-Claim justified

respondent did not refute the analysis at the time of its submission- Analysis submitted by the petitioner in arbitration found correct- - Claim allowed-

Rates once paid cannot be reduced later

the Department did not direct the contractor to provide grooves in the plaster but the arbitrator held that the work was done as per the requirement of site- objections dismissed.

The word used in this clause is “such works" which obviously means the work which is done as per the engineer's order

Incase ENC passes no cancellation order regarding market rates, it will be presumed that the rate submitted by the contractor have been accepted-

A contractor who carries out extra work which is not expressly or impliedly included in the original contract is entitled for extra work done either by subsequent mutual agreement between the parties or on quantum merit basis

If EE has not replied to the letter for market rates to the agency it means he has accepted the same

Can the rates for the extra items paid in first running bill were reduced later on- No.-

Extra items paid in RA bills- Deleted in Final Bill without reason- Contractor can claim-

Rates decided by EE for Extra item are final no power to any other authority to reduce the rates-

If some extra work has been done, contractor has to prove that it was indispensible and also that it was ordered by the department- If department has not ordered the extra work- no payment can be claimed-

Market rates allowed by the arbitrator as per provision of the manual, the same is not challengeable under section 34

No Authority has any power to change the rates admitted by EE –

A contractor is not at liberty to seek payment in respect of those items by way of arbitration for which he did not raise a claim during currency of the contract whether they were substituted items or extra items.

If execution of any extra item is not disputed it is to be allowed

Execution proved on the basis of Site order book and contractor’s letter- Admissible. –

Work existed- section 70 considered – Claim is payable

The contract does not give any specific form of writing in which directions for extra work is to be issued/given. It is also not the requirement of the contract that the direction in writing has to be prospective or in advance in the course of operation of the contract.

If final bill is not prepared, arbitrator can make award for extra items on the basis of recommended rates

Further this clause provides the effect on time of completion due to above changes under clause 12.1 as under:-

The time for completion of the works shall, in the event of any deviations resulting in additional cost over the tendered value sum being ordered, be extended, if requested by the contractor, as follows :

The time of completion is to be extended by (Extra work ÷ Tendered value) x 1.25 OR

such further additional time as may be considered reasonable by the Engineer-in-Charge.

125% is not a right of the contractor but it is only a guideline which may vary depending upon the nature of extra work.

The extra time has to be decided by ENC but it should pass the test of reasonability otherwise the formula of allowing 125% is safe.