CONSTRUCTION MANAGEMENT

CHAPTER NAME

1. Introduction
2. Construction Planning
3. Organization
4. Construction Labour
5. Inspection and Quality Control
6. Contracts

7. Tender and Tender Notice

8. Accounts

9. Stores
 CHAPTER 1

INTRODUCTION

1.1 Construction in India

India has a great heritage of construction work. The earliest known organized
structures at Mohenjo Daro date back to 3000 B.C. Skills in construction work is evident
in the structures such as Meenakshi temple at Madurai, cave temples at Ellora and the
Tajmahal. During the period of British, construction was confined to certain irrigation
schemes, and to the development of urban areas. After the independence, the
Government adopted different plans for fast development of the country. The
Government spent cores of rupees for the construction of dams, irrigation, and power
projects, heavy industries, urban development, communication etc. At present the
construction work in India is one of the most widespread activities, involving a range of
people from the small builder in villages and towns to large private companies, public
undertakings and various state agencies. A broad category of agencies which initiate
and execute construction works are given below:

(i) The Government and its agencies, such as the central and state public
works
departments, the military engineering services, municipalities etc.
(ii) Public under takings, such as the Railways, National Building Construction
Corporation etc.
(iii) Private companies.
(iv) Individuals.

1.2 Classification of construction work

Construction works can be classified as:
a) Light construction:
Light construction work is the work with light structural members. Heavy
machinery usually not required for these works. E.g. residential buildings, schools,
village roads, light industry sheds etc.
b) Heavy construction:
Heavy construction works are the works with heavy structural members on
massive foundations, requires heavy machinery and equipment and large quantities of
material, labour and finances. E.g. Bridges, railways, hydroelectric power generation
plants, etc.
c) Industrial construction:
Industrial construction works are the works related to industries which needs
special equipment and skill e.g. Oil refineries, Steel mills, Atomic reactors, etc.

1.3 Stages in construction work

Following are the stages in construction
(i) Conception (ii) Study and Evaluation (iii) Design (iv) Contract (v) Construction and
(vi) Utilization and Maintenance.
1.4 Construction team
The construction team includes the owner, engineers and builders. The owner is
an individual, group, private or public body that promotes the work and provides
finances and facilities for its execution. The engineer is responsible for the economical
and safe design and construction of the work under his supervision. The builder may be
any one from a small contractor to a large construction company undertaking projects
worth crores of rupees.
1.5 Resources of construction work
The resources needed for the construction industry are:
1) Men, skilled and unskilled.
2) Material such as cement, steel, bricks, aggregates, etc.
3) Machines such as trucks, cranes, etc. to facilitate construction.
Limited resources have to be utilized with in a given time to get maximum benefit in
terms of construction output.

1.6 Functions of construction management

The aims of management in construction work are to execute the construction
work in a planned and efficient manner. Following are the functions of management to
achieve its aims.
(i) Planning (ii) Organizing (iii) Directing (iv) Controlling (v) Coordinating
(i) Planning:
 In execution of construction works, deciding what to do, when and how to do is
known as planning. In planning of a construction work, various alternative methods of
executing the work are studied and decisions are taken regarding the time of starting
and completion, labor, materials, machines and finance needed for the provision of
construction facilities from time to time.
(ii) Organizing:
This function relates to the creation of an organizational set up capable of
execution of planned activity. The type of organization depends on the type of work,
volume of work as well as the method of execution of work.
(iii) Directing:
Directing involves motivating, guiding, supervising and leading the employees of
an organization. The function can be achieved by establishing good communication
between the employees and the management.
(iv) Controlling:
Controlling is the function of monitoring the progress achieved in comparison
with the planned program and identifying areas of deficiency, if any, so that remedial
steps can be taken.
(v) Coordinating:
Coordinating is the management function of harmonizing the action, approach of
various employees, and groups of employees to achieve a common goal.

1.7 Scientific Methods of Construction Management

Scientific methods are adopted in construction management to carry out the
construction work in a systematic and economical manner. Scientific management is an
approach to management, where in procedures followed are not based on traditional
thumb rules but are carefully planned and analyzed. The aim of scientific management is
to organize and execute the work, results in maximum productivity out of each worker.
Scientific methods of management depend upon network techniques which involves
graphical representation of inter-relationship among the elements of a project.
Uses of network techniques:
(a) Helps the management in planning, scheduling, and controlling the activities.
(b) Helps in guiding and directing the team more effectively.
(c) Permits advance planning, indicates current progress, and warns trouble spots
when there
may still be time to avoid them.
(d) Helps in handling uncertainties regarding time schedules, co-ordination of
different activities.
Following are the Scientific methods of management.
1. CPM 2. PERT
Critical Path method:
CPM is a network technique used for the planning and controlling the most
logical sequence of operations for completing a project. The project is analyzed in to
different activities whose relationships are shown on the network diagram. The network
is then utilized for optimizing the use of resources and, progress of the management
project.
Program Evaluation and Review Technique:
PERT is a network technique used for scheduling and controlling the
management projects, whose activities are subjected to considerable degree of
uncertainties in the performance time. The method of start and finish, critical path and
project time are similar to CPM method. CPM is an activity-oriented method and PERT is
the event-oriented method.
 CHAPTER 2
CONSTRUCTION PLANNING

2.1 Job Planning

While planning a construction project usually it is needed to divide the entire
project for phasing out the sequence of construction, and for dividing the operation of
one phase into number of jobs. Each job has to be planned with respect to the
following:
1. Method of execution of the work: Whether the work is executed
departmentally or through contract.
2. Duration of the job: This depends upon the urgency of the work and
availability of the resources of the construction work.
3. Planning of resources: The job should be planned such that the resources of
construction i.e. man power and material should be used economically.
2.2 Technical Planning
Technical planning is done by the engineers for economical execution of the
construction work.
Objects of the Technical planning
Following are the objects of Technical planning.
(i) Preparation of layout plan.
(ii) Finalization of design and specifications.
(iii) Preparation of detailed drawings.
(iv) Preparation of detailed estimates.
(v) Finalizing method of execution of work and initiating
Procurement action.
2.3 Pretender planning
The contractor does pretender planning after receipt of tender notice and before
submitting a bid. This helps the contractor in making a proper bid for the contract.
Pretender plan includes the following steps.
(i) Careful study of the drawings, time limit and other conditions of the work
(ii) Working out the quantities of required material, labour, equipment and
their
 availability etc.
(iii) Studying the bidding trends of other competitors.
(iv) Considering the profit margin and limits of risks that could be taken.
2.4 Contract planning
After the tender has been accepted and the work is allotted to the contractor for
execution of the work, the contractor has to undertake further intensive planning. This
planning at this stage is known as contract planning. Contract planning involves the
following steps
i) Studying alternatives to the construction methods decided at pretender
stage to arrive at the most economical method and deciding about the
sub contracting.
ii) Working out the quantities of material, labour, equipments at various
stages of work and locating the sources of supply of material, equipments
etc. and comparative cost from the various sources.
iii) Planning location of camp offices, layout of the site, service roads, facilities
for labour and their accommodation and other related matters.
iv) Studying inter dependencies of the different items of work.
v) Finalizing the work program for each item of work and fixing dates for the
start and completion of each item of work.
2.5 Scheduling
Scheduling means the preparation in advance of a list of different activities and
their order of sequence to carry out any work as per the planned program. For
completing a project as per the plan, scheduling should be known to not only to the
project managers, but also to all the links in the system namely engineers, supervisors,
contractors and other coordinating agencies.
Scheduling includes the following:
1. Determination of the amount of work to be done.
2. The order in which the work is to be performed at each stage
3. The time when each part of the work will start.
4. Allocation of the quantity and rate of output of departments.
5. The date of starting of each unit of work at each stage along
the route to be followed.
2.6 Need for scheduling
A project usually is a one-time effort. Every project will have its own features and
they are of non-repetitive nature. In order to complete a project efficiently, the project
manager must plan and schedule. During the course of project he will have to re plan
and schedule due to unexpected progress, delay or due to technical conditions. The
main aspect of project management will be scheduling different activities in an
acceptable time span and finally with controlling the progress of scheduled work.

2.7 Advantages of Scheduling

For construction work of any importance, planning and scheduling is
indispensable the following advantages are obtained thereby.
1. Alternative methods of construction and the effects of likely constraints can be
examined at the planning stage and the most economical methods identified.
2. The time of starting each activity is known and therefore prior and adequate
arrangements for the provision of resources, such as men, material, machines and
money at each stage of construction can be made.
3. Resource utilization can be optimized and the available resources directed
towards various activities to the best advantage.
4. The actual progress of each activity can be monitored with reference action in
speeding up the work taken up, before it causes a hindrance in other related
activities.
5. The effect of any changes that takes place due to variations in productivity
errors, whether geological conditions or modifications made in the original plans
can be properly evaluated and the program suitably amended.
6. The inter-relationship of various activities and the relative importance of each
at any stage of construction are known and this help in fixing priorities properly.
7. The ultimate advantage to be gained by scheduling is that the construction
work can be executed in an efficient manner without wastage of any of the
inputs, resulting in maximum possible economy.
2.8 Procurement of labour, material and equipment
In any construction project, it is necessary to estimate the required labour,
material and equipment required for completion of the project. This can be done with
the help of construction Schedules. Separate schedules are prepared for labour, material
and equipment. These schedules help in procurement of labour, material and equipment
at proper time and their efficient usage and storage.

Labour: Labour schedule, helps in providing future labour requirements and efficient
and optimum deployment of labour force where ever necessary.
Material: Material schedules helps in providing types of material required along with
their quantities and the actual time by which the materials are kept ready so as to avoid
any delays in completing a construction project.

Equipment: Equipment schedules are prepared to find the type of equipment required,
time and period for which particular equipment is needed. It helps in avoiding the
equipment keeping idle.

2.9 Program of work

Programming is very important and essential for completing a project
successfully. It guides and controls the execution of work.
Programming involves in
1. Identifying the various outputs.
2. Fixing accountability to carry out contribution.
3. Preparing detailed schedules for the construction resources.
4. Controlling the quality and quantity of work.
5. Minimizing the time required to complete the project.
2.10 Scheduling by bar charts
A construction project consists of a sequence of various activities like preparation
of the site, foundation, substructure, super structure, fittings, finishing, and other
activities. Some of the activities may be of critical nature and if the activity is not
completed in estimated time, it delays the entire project. The sequence of activities in
the construction of a building is given below.
1. Earth work in excavation. 9. Door panels
2. P.C.C bed and BW in foundation 10.Plastering
3. D.P.C 11.Flooring
4. Pre-casting RCC lintels 12.Electricalworks
5. Casting RCC columns 13.Sanitary works
6. BW in super structure 14.White washing
7. Sanitary work 15.Sanitary fittings
8. RCC roof slab 16.Clearing up site
 The bar chart lists various activities involved in a construction project and the
period of time that each activity takes for completion. Indicate in the form of a
horizontal bar plotted to a suitable time scale against each activity. The conventions

commonly used in bar chart are shown in the fig below.

Fig 2.1

The planned program is shown by a thick or double line with the planned start
and finish by short vertical lines. The float is shown by a hyphenated horizontal line and
indicates that, lthough the item is scheduled to be completed by a certain date, yet
subsequent items are not likely to be held up in case of delay up to the period
represented by the hyphenated line. A hyphenated vertical line, connecting the start of
the item with the completion of the item on which it is dependant, indicates the
dependency of one work on another. In fig 2.1, item 3 is dependent on item 1 and
cannot be started till item 1 is completed. The actual progress shown in single line
drawn below the line showing planned program.
Bar charts are suitable for determining the resources, such as materials, labour,
machinery and finance, required for construction work. Figure 2.2 shows the resource
aggregation chart for RCC work.
 Bar chart is simple, easily understandable and widely used method of scheduling.
However it has certain limitations, firstly it is difficult to depict complicated
interdependencies of various items of work. It does not give actual progress of the work.
It is not possible to know the peak rate of work necessary for timely completion of a
project. The bar chart, there fore, is a static representation and does not respond to the
dynamic happenings on the construction site of a complex project.
2.11 Critical path method of scheduling
Critical Path Method is a network method. In CPM the project is analyzed into
different activities whose relationships are shown on the network diagram. The
limitations of the bar charts can be over come with the Critical Path Method. CPM is
widely used in construction industry by a number of private and public organizations.
The concept of CPM is that only a small number of critical activities take most of
the estimated project time. Speeding up the rest of the activities has no effect on the
completion of work. Only these critical activities need to be speeded up and the rest of
the activities can be allowed to proceed normally. The work can then be completed by
the target date.
2.12 Basic network construction
A network diagram is a graphical representation of the sequence in which various
activities of a project are under taken and the relationship among them. The method of
construction of Network diagram is given below
1) Listing the activities: All the activities of which the work is composed of are listed.
2) Arrow: Individual activities such as excavation, plastering, brickwork, plumbing etc.
which consumes time are denoted by arrows. The direction of the arrow indicates the
general flow of the work, tail representing the start and the head the completion of the
activity. The length of an arrow does not have any significance.

3) Events: The head and tail of an arrow represent events which are represented by a
circle, square or a triangle. An event is just a point of time and it is not a time consuming
element.
4) Activity

Identification: All events are given unique numbers which may or may not be in serial
order. Activity is identified by the event numbers preceding and following it; or by
letters A, B, C etc. The activity, Excavation is identified by number 1-2 or A, ‘Plumbing’ by
8-12 or B.
5) Sequence convention: All activities shown as entering an event must be completed
before those emerging from it can be started. In fig (2.6) the activity emerging from
event 2, i.e 2-3 (laying foundation concrete) can not be started before activity
1-2 (excavation of foundation) entering in
to event 2 has been completed.

6) Net work logic: The following points have to be considered before deciding where
an activity fits.
i) Which activities must be completed before this activity can be started?
ii) Which activities cannot be started before this activity is completed?
iii) Which activities can be started simultaneously?

Some commonly occurring network situations, along with their bar charts are given
below:
2.13 Terms used in CPM method
Dummy Activity: Dummy Activity is an activity, which do not consume any time.
Dummies are used only to ensure separate activity numbers and maintain the correct
logic of the network. This activity is represented by dotted arrow.

Duration: Duration is the estimated time, required to complete an activity and is shown
on or under the activity in the network.

Earliest start time: It is the earliest possible time for the activity to start without
changing the sequence of the activities in the network. It is denoted by E.S.T.
Earliest finish time: It is the earliest time by which the activity can be completed and is
denoted by E.F.T. EFT of an activity = EST + Duration of activity (T).

Earliest event occurrence time: It is the earliest time that the event start can occur. It is
denoted by TE.

Latest start time: It is the latest time by which an activity can be started without
delaying the project. It is denoted by L.S.T.

Latest finish time: It is the latest time by which an activity can be completed without
delaying the project. It is denoted by L.F.T.

Latest allowable event occurrence time (TL): It is the latest time, the event can occur.

Symbolic Representation

Total float: It is the difference between the maximum time allowed for an activity and
its duration time. It is also called total activity slack or spare time and is denoted by (TF).
TF = LST - EST
= LFT - EFT
= TL - EFT
Free float: The free float of an activity is an amount of time by which the activity
completion time can be delayed without interfering with the start of succeeding
activities.
It is denoted by F.F. = TE-EFT
Critical path: The events which have no float or slack are the critical events i.e., If TE =
TL. These events must be completed on schedule, if the project is to be completed in
the minimum total time. The path joining such critical events is called the critical path of
the network.
Critical activities: The activities lying on the critical path are called critical activities.
Critical activity has a zero float
2.14 Steps in Critical Path Scheduling
Before applying the critical path method of scheduling to a construction project,
it is necessary to follow the given steps.
1. Prepare a list of activities for the project.
2. Estimate the durations of each activity.
3. Determine which activity or activities immediately follow each activity.
4. Determine which activity/activities immediately precedes each activity.
5. Draw a network with the activities and events properly interconnected.
6. Assign number to the events and make sure that the number at the head of
each arrow is larger than the number at the tail of arrow.
7. Prepare a chart with vertical columns and horizontal lines on which to list each
activity with an appropriate designation. Duration, earliest start, earliest finish,
latest start, latest finish, and total float are to be mentioned. A column of free
float may be included if this information is required.
8. Determine which activities lay on the critical path.
2.15 Determination of project schedule and Critical Path
After estimating the performance time for each activity, scheduling of activities is
begun to determine the network critical paths. The basic scheduling computations
involve a forward and backward pass through the network. Based on a specified
occurrence for the initial network event, the forward pass computations give the earliest
start and earliest finish times for each activity and also the earliest occurrence time for
each event.
By specifying the latest allowable occurrence time for the terminal network
events, the backward pass computations will give the latest allowable start and finish
times for each activity, and the latest allowable occurrence time for each event. After the
forward and backward pass computations are completed, the float can be computed for
each activity and thereby critical and the sub critical paths through the network are
determined. When an activity has float, there is more time available to do it than it
requires.
In initial stages it is convenient to begin with zero as the starting time of the
initial project event and estimate the activity performance times in working days. Finally
these computational results are converted to calendar dates. It is also assumed that
there is only one initial event and one terminal event. Also the latest allowable finish
time for the project is equal to the earliest finish time computed in the forward pass
computations.

The rules in forward pass can be summarized as:

(i) The earliest occurrence time of the single initial event of the network is taken
as zero TE = 0.
(ii) Each activity begins as soon as its predecessor event occurs (Where T = time
duration for the Activity) Also EST = TE for Predecessor event EFT = EST + T =
TE + T.
(iii)The earliest event occurrence time is the largest of the earliest finish times of
the activities Merging to the event in question TE = largest of EFT1, EFT2 ....etc.

The rules in backward pass can be summarized as:

(i) The latest allowable occurrence time of the single terminal event of the
network is set equal to the earliest occurrence time computed in the forward
pass. TL = TE for terminal event.
(ii) The latest allowable start time LST for an activity is its successor event latest
allowable time minus the duration time of the activity in question.
LST = LFT - T = TL – T.
(iii) The latest allowable time for an event is the smallest of the latest allowable
start time of the activities bursting from event in question. TL = Smallest of
LST1, LST2 etc of bursting activities.

Example 2.1: Draw a Network for the following logic Activities B and C depend upon
activity A; Activity D depends upon Activity B; Activity E depends upon activity C and
activity F depends upon activities D and E.

Solution: Fig.2.8
Example 2.2: Draw a C.P.M. Network diagram for the following logic:
Activity B follows activity A.
Activities C and D follow activity B
Activities E and F follow activity C
Activity G follows activity D
Activity H follows activities F and G
Activity I follows activity E
Activity J follows activities H and I.
Solution:

Example 2.3: Draw a

Network diagram and calculate earliest time for the event of the network diagram.
Activities A and B starts simultaneously
Activity C follows Activity A
Activity D follows Activity B
Durations of Activities A, B, C and D are 10, 13, 15 and 8 days respectively.
Solution:

If event 1 is at work 0 (Zero) then even 2 has an earliest time of 10 days. Event 3 has an
earliest time of 13 days but event 4 has two paths leading into it
 (i) 1-2-4 of duration (10+15) = 25 days
(ii) 1-3-4 of duration (13+8) = 21 days.
The earliest time for event 4 is determined by the longest path. In this case 1-2-4 has
maximum continue duration time of 25 days. Hence the earliest time for the terminal
event is 25 days

Example 2.4: Find the Latest allowable time for the events and prepare a time schedule
and calculate float for each activity and show the critical path for the given network
diagram.

Solution:
For the terminal event 4, the latest allowable occurrence time (TL) will be equal to the
earliest occurrence time (TE)
Therefore .TL of event 4 =31
TL for event 3 = TL of event 4 – duration of activity (3-4) = 31-
11 =20
TL for event 2 = TL of event 4 – duration of activity (2-4) = 31-
18 =13
For TL for event 1 has two paths i.e. 2-1 and 3-1 TL for event 1 along path 2-1 = 13-
13 =0
Or TL for event 1 along path 3-1 = 20-16 =4 Least is to be taken i.e., 0.
In the network critical path is (1-2-4) and the duration of the project is 31 on this path
the activities have no float (when TE=TL; then flow is zero)

Example 2.6: The table given below represents the activities of the network of a
construction project. The durations for the activities for the network are also given.
(i) Prepare the network diagram
(ii) Find the Critical Path and time of completion of construction project
(iii) Prepare time schedule indicating total
float and free float.
Solution: Refer Fig.

(ii) Network diagram of Construction project,

Finding the TE for events

TE for event 0 = 0
TE for event 1 = 0 + 5 = 5
TE for event 2 = 5 + 11 = 16
TE for event 3 = 16 + 9 = 25
TE for event 4 = (i) 25 + 7 = 32, (ii) 16+35 = 51
Highest among the above is to be taken
TE for event 4 = 51,
TE for event 5 = 51 + 13 = 64
TE for event 6 = (i) 64 + 0 = 64, (ii) 51 +15 = 66
Highest among the above is to be taken
TE for event 6 = 66
TE for event 7 = (i) 16 + 5 = 21, (ii) 66 + 11 = 77, (iii) 25 + 9 = 34
TE for event 7 = 77 (Highest value from the above three values)
TE for event 8 = 77 + 7 = 84

Finding TL for events: For the terminal event 8, the latest allowable occurrence time
(TL) will be equal to the earliest occurrence time (TE) as calculated from forward pass
and is equal to 84
TL for event 8 = 84
TL for event 7 = 84 – 7 = 77
TL for event 6 = 77 – 11 = 66
TL for event 5 = 66 – 0 = 66
TL for event 4 = (i) 66-15 = 51, (ii) 66-13 = 53 Least value = 51.
TL for event 3 = 51 – 7 = 44
TL for event 2 = (i) 51-35=16, (ii) 77-5=72, (iii) 44-9=35
Least among the above is to be taken, hence
TL for event 2 = 16
TL for event 1 = 16 – 11 = 5
TL for event 0 = 5 – 5 = 0
for activity 7-8 77-77 = 0
Free Float = TE-EFT
Total Float = LST-EST=LFT-EFT Free float for activity 0-1 5-5 = 0
Total float for activity 0-1 0-0 = 0 for activity 1-2 16-16= 0
for activity 1-2 5-5 = 0 for activity 2-3 25-25= 0
for activity 2-3 35-16 = 19 for activity 2-4 51-51= 0
for activity 2-4 16-16 = 0 for activity 2-7 77-21=56
for activity 2-7 72-16 = 56 for activity 3-4 51-32=19
for activity 3-4 44-25 = 19 for activity 3-7 77-34=43
for activity 3-7 68-25 = 43 for activity 4-5 64-64= 0
for activity 4-5 53-51 = 2 for activity 4-6 66-66 = 0
for activity 4-6 51-51 = 0 for activity 5-6 66-64 = 2
for activity 5-6 66-64 = 2 for activity 6-7 77-77 = 0
for activity 6-7 66-66 = 0 for activity 7-8 84-84 = 0
In the diagram 2.15 the critical path is shown by thick line and the activities along critical
path will not have any slack time.

Critical Path = (0-1-2-4-6-7-8)

Time of completion of construction project = 84 days

The Time schedule analysis is shown in the Table given below.
 CHAPTER 3
ORGANISATION

3.1 Introduction
Organization can be defined as the managerial function of fixing the
responsibilities of individuals and establishing good relationships with one another for
effectively achieving a common goal in a group activity.

3.2 Types of Organization

Depending upon how responsibility and authority in any enterprise are
distributed, the organization can be divided into three main types:
a) Line Organization
b) Line and staff Organization.
c) Functional Organization.

3.3 Line Organization

This is the simplest form of Organization where in responsibility is distributed
from top to bottom. This pattern is borrowed from military organization where a
number of sepoys formed squads under the control of a squad leader. A number of
squads are formed in to a company under the control of a commander. There is a single
line of communication through the commanders and respective formations. An example
of line organization is given in Fig.
The salient features of line organization are
1) These are simple.
2) Responsibilities at all levels are defined and fixed.
3) It generates strong discipline
4) Decisions can be taken quickly
However it has following defects
1) The person in authority tends to get over loaded with work and the efficiency
of the organization depends upon the performance of the senior bosses.
2) There is inadequacy of communication from lower level to higher level.

3.4 Line and staff organization

The main disadvantage of the line organization is that the top executive has to
take every decision related to the project. The system is therefore unsuitable for large
and complex projects
requiring services by specialists in different fields. In Line and Staff organization the
expert knowledge of the specialists is added to the line organization. An example for
line and staff organization is given in fig.
The salient features of Line and Staff organization are
1) The advice of experts is available at all levels.
2) It results in increased efficiency and economy.
3) The staff at site is competent to take decisions and hence work is not delayed.
The system however has the following demerits.

3.5 Functional Organization

In Functional organization, the work is divided in such a way that each person has
to perform the minimum number of functions and he is fully responsible for that work.
An example for a functional organization is given in Fig.
The merits of functional organization
I . It enables division of labour on the basis of specialization of functions.
ii. It enables increased efficiency.
iii. Manual work is separated from mental work

The organization having following demerits

i. It is unstable.
ii. It is too complicated.
iii. There is no clear-cut line of authority.

3.6 Principles of organization

An organization has to follow certain basic principles to be effective. Following
are the important principles of organization in the field of management.
(i) Principle of span of management: The number of persons that can be
managed by one person is limited.
(ii) Principle of command: The subordinates should be responsible to a single
person.
(iii) The scalar principle: A clear line of authority from the top to the bottom.
(iv) Principle of delegation: The delegation of authority with responsibility is
essential to enable managers to carry out their duties efficiently.
(v) Principle of division of work: Each person is assigned work for which he is
qualified.
(vi) Principle of separation of work: Checking and control should be performed
by persons other than those whose work is checked.
3.7 Organization Suitable for the Construction Industry
The type of organization suitable for a small work is a simple line type of
organization. The engineer in charge exercises full authority and is responsible for the
timely and economic execution of the work in accordance with the specifications laid
down. Under him, there might be a few section officers and foremen, who are
responsible for the execution of work at the site. The gangs of workers are subordinate
to them. In very small works such as the construction of a private residential building,
the contractor himself may perform the functions of the engineer and the foreman.

For medium-sized works, a more elaborate arrangement is called for and the
organization is generally of the line and staff pattern. The engineer in charge may be
assisted by a team of experts, such as architects, design engineers, accountants,
planning engineers and personnel officers. This constitutes the staff portion of the
organization. The staff is usually located at a permanent place, known as the head
quarters. The construction work is carried out by field officers who are organized in a
line form. The field staff receives guidance and instructions from the head quarter staff.

For large projects, the number of people involved may run into thousands and
the staff portion of the organization may be departmentalized. Each departmental head
looks after a particular aspect of the work, such as design, planning, purchase of
materials, personnel, etc. and is assisted by a team of subordinates grouped under the
charge of different heads.

The grouping of work in the field could be on the basis of the type of work, such
as civil works, mechanical works, electrical engineering works, piping or other
specialized types of works. For works such as highways, canals, etc. which extends over
large areas, field work may also be divided on the basis of territory and placed under the
charge of a departmental head, assisted by a subordinate staff organized in a line form.

Typical organizational charts of small, medium and large construction

organizations are indicated in Figs.
3.8 Job layout
A site drawing of the proposed construction showing the location of entry, exit,
temporary services, material stores, plant and equipment and site office is known as job
lay out. A job layout is prepared to ensure that the work proceed in a smooth and
orderly manner that results in maximum efficiency. In order to prepare a job layout, an
overall idea of the nature and extent of work and the way in which it is to be carried out
must be known from a careful study of the construction plans, specifications and other
documents. For preparing a good job layout, knowledge of the storing materials and
placing equipments is necessary.
A job layout depends upon
(i) The nature and type of work,
(ii) The topography, location and size of the site
(iii) The methods used for its execution.

3.9 Preparation of job layout

The first duty of a site engineer is to prepare a job layout. The construction plans,
specifications, contract documents are carefully studied to get an idea of the nature and
extent of the work. A drawing drawn to scale is then prepared showing the out lines of
the jobs to be constructed. The entry and exit points, areas to be used for various
temporary facilities, such as office, repair sheds, reinforcement structural fabrication,
carpentry and form work fabrication, material stacks, and personal facilities such as
toilets, canteen, labour huts, drinking water supply, first aid measures and other
essential requirements for construction purposes are marked on the drawing. When
deciding the layout of equipment, the following points should be kept in mind.

(1) The equipment should be placed near the material it utilizes.

(2) For costly equipment, temporary sheds should be provided.
(3) Provision should be made for repair and maintenance work.
(4) Adequate parking space should be provided for equipment.
(5) The main office should be located near the entrance so that visitors on
business need not have to go across the work site.
(6) The location of security checkpoints should be such that no materials could
pass in or out with out proper check.
(7) Fire prevention equipment and safety measures should be provided in the
layout.
3.10 Principles of storing material at the site
Large quantities of construction material have to be stored at the construction
site. Correct methods of storing materials should be known so that the layout of a job at
the site can be properly done.
Following are the important points to be considered while storing materials.
1. Materials should be stored in such away that they are not affected by
impurities or by atmospheric agencies, such as the sun, wind or moisture. Cement
and lime must be stored in covered sheds, Timber, which is affected by the sun
and poor ventilation should be stored in a shady place.
2. Inflammable materials must be stocked separately from other combustible
material and in an area protected from fire hazard.
3. Explosives should be kept in a safe place.
4. Bricks, tiles and concrete blocks are stocked at ground level limiting the height
of the stack to 1.5m. 1m and 2m, respectively.
5. Aggregates are stacked on a clean hard surface in stacks of 2mx2mx0.5m.
6. Cement should be stacked in covered sheds on raised platforms at least 30cm.
away from walls and in stacks of not more than 12 bags.
7. Reinforcing bars should be stacked in yards away from moisture, oils and
lubricants.
8. Heavy items must be kept away from trenches preferably kept near the ramp
for easy handling.
9. Cement and lime, which deteriorate with time, must be kept constantly moving
by using the earliest arrivals first.
 CHAPTER 4
CONSTRUCTION LABOUR
4.1 Types of labour
Construction labour can broadly divided into two types
1. Casual labour 2. Regular establishment
Casual labour:
Casual labour is employed as and when required for the execution of work,
payment is made on the basis of the number of days the labour works. There is no
provision of leave, except the weekly holidays. This is also known as daily labour.
Regular Establishment:
Regular establishment generally includes supervisory personal that are required
for more or less continuous period during construction. They are paid monthly wages
and entitled to leave and other benefits. The employees may be temporary or
permanent. Permanent employees have great security of service and may be entitled to
more service benefits than the temporary employees.
4.2 Labour welfare-Human relation
Construction is the largest industry in India and most of the employees who are
working in construction industry are labours and skilled workers. As the nature of
construction work is temporary the workers are recruited as and when required for the
execution of work and are retrenched when no longer needed. Construction labour is
migratory in nature, moving from one site to another site, and the labour attached to
big contractors tends to migrate to new work sites taken up by them. Construction
labour has not been able to organise it self to the extent that labour in factories and
other organised sectors of trade has.
This is mainly because the construction labours do not have a permanent place of
work. Consequently construction labour has extremely poor bargaining power and this
situation is fully exploited by employers. The construction labour beside low wages, they
live in crowded unsanitary temporary huts built at the construction sites in unhygienic
surroundings without basic amenities of life. For the welfare of the labour, the
Governments have, from time to time, brought out labour laws.
Labour laws are classified into the following types
(i) Laws concerning the working conditions of labour.
(ii) Laws concerning wages and other payments to labour.
(iii) Laws concerning the social security of labour.
These laws are proved very much helpful to the labour for Improving their living
conditions.
4.3 Labour Insurance
Insurance laws are applicable only to regular employees. In construction industry
most of the labour is of casual nature and insurance laws are not applicable to them. For
the welfare of
casual labour, different Acts such as Minimum wages Act, Compensation Act etc. are
passed by the Government.

4.4 Payment of Wages

The remuneration given to workers for work performed by them is known as
wages. Wages are of two types.
1. Nominal wage:
This is the remuneration paid to the worker in the form of money, but it does not
include the value of any other benefit that may be provided.
2. Real Wage:
Labour is often entitled to different benefits, such as leave, medical care, house
rent allowance, bonus etc. If the value of such benefits is added to the nominal
wage, it is known as real wage.
Wages are paid to the labour based on two methods:
1. Depending upon time devoted to the work. This method is known as time rate
system.
2. Depending upon the quantity of work performed. This method is known as
piece rate system.
4.5 Time Rate system
In Time rate system of payment of wages, a suitable rate of payment is fixed per
unit of time devoted to work by the labour. The unit of time can be hours, days, weeks
or months. regular employees per month in the construction industry.
 The advantages of this system are:
1. It is simple and easily understood by labour.
2. The quality of work will be good.
3. The workers do not get overstrained.
There are, however, the following disadvantages in the system
1. Constant supervision is required.
2. Effective cost control can not be ensured.
4.6 Piece Rate System
In this system payment is made on the basis of the output of the workers. The
work done by each labour is measured and payment is made at the agreed rate. Thus a
worker can make more money by increasing his output. The rate of each item of work is
fixed on the basis of the past record of output.
The piece rate system has the following advantages.
1. The overall productivity is increased.
2. The need of supervision is reduced.
3. Effective cost control can be ensured.
4. The system is fair to the workers and employers.
5. The better workers with higher outputs get higher payment.

However, the system has following disadvantages

1. The system is unsuitable for works which can not be measured.
2. The quality of work is lowered.
3. There are no guaranteed wages for workers. What ever the system may be,
there must be an adequate compensation for the labour put in and this is known
as “fair wages”.
4.7 Minimum Wages Act, 1948
The Minimum wages Act of 1948 was passed for the welfare of labour and
provided for fixing the minimum rate of wages of labour. The Act aims at making
provisions for the statutory fixation for the minimum rate of wages in number of
industries where there are extensive chances for the exploitation of labour.
The main provisions of Minimum wages Act are:
1. The setting of advisory committees to collect information on which the minimum
wages are based.
2. The wages of a worker in any scheduled employment shall be paid on a working day
by:
(i) The 7th day after the last day of the wage period if the establishment has
less than
1,000 employees.
(ii) The 10th day after the last day of the wage period if establishment has
more than
1,000 employees.
3. The wages of an employee should be paid without any deductions except those items
given
below.
(i) Fines in respect of acts of omission
(ii) Absence from duty
(iii) Loss of goods directly attributed to the neglect of the employee
(iv) House accommodation provided by the employer
(v) Amenities and services provided by the employer
(vi) Income tax
(vii) Subscription to the provident fund
(viii) Recovery of advances
(ix) Deductions ordered by the court
(x) Payments to co-operative societies / Life Insurance Corporation
4.8 Workmen Compensation Act, 1923
The Workmen Compensation Act passed to protect the victims of accidents and
their families from hardships out of and in the course of employment. The Act covers
workers employed in hazardous occupations as specified in the schedule but excludes
those employed in clerical or administrative work. The Act provides for payment of
compensation in case of accidents on work sites.
The compensation, however, is not payable for injuries due to
i) Disobedience or negligence,
ii) Non observance of safety measures
iii) Consumption of liquor
iv) Diseases which are not contracted as a result of the occupation. In the case of
the death of a worker, compensation is paid under all circumstances.
Accidents are due to
(i) Human causes such as poor eye sight, negligence, effect of intoxicants,
(ii) Mechanical causes such as inadequate safety devices, live electrical
equipment, unreliable scaffolding etc.
(iii) Environmental causes. Such as poor lighting, heat, noise etc.
The result of an accident may be
1. Temporary disablement, which may be total or partial.
2. Permanent total disablement.
3. Permanent partial disablement.
4. Death.
The Compensation to be paid is depends on the result of the accident. The Act
provides for the appointment of Commissioner for the quick disposal of claims for
compensation. The employers are required to notify fatal or serious accidents to the
commissioner within seven days. Civil courts are debarred from considering cases rising
out of the Act and these are under the jurisdiction of the commissioner.
4.9 Contract labour act, 1970
The contract labour Act, 1970 was passed to regulate the employment of contract
labour in certain establishments. It also provides for improving the service conditions of
contract labour.
The Act is of importance to the construction industry where works are executed through
contractors or by contract labour.
The Act applies to every establishment and contractor employing twenty or more
workmen. The Act does not apply to establishments in which only work of an
intermittent or casual nature is performed.
The Act provides for the constitution of a Central Advisory Contract Labour Board
under the Central Government and of state Advisory contract labour Board under each
State Government to advise the Central and State Governments on matters arising out
of the administration of the Act and to carry out the functions assigned to it under the
Act.
The main provisions of the Act are
1. Registration of Establishments:
Every principal employer of an establishment to which the Act applies is required
to make an application to the registering officer on the prescribed form for the
registration of the establishment.
2. Licensing of Contractors:
 Every contractor executing any work through contract labour is required to
obtain a license.
3. Welfare and Health of Contract Labour:
Under the Act, the following facilities are required to be provided for the welfare
and health of the contract labour:
(i) For works likely to continue for more than three months, where labour is
required to halt at night in connection with the working of the establishment, the
contractor should provide rest rooms. Separate rooms should be provided for women.
(ii) For works likely to continue for more than six months and employing more
than 100 or more labour, an adequate canteen should be provided.
(iii)Latrines and urinals must be maintained in clean and sanitary conditions.
4. Payment of wages:
Responsibility for the payment of wages rests upon the contractor.
 CHAPTER 5
INSPECTION AND QUALITY CONTROL
5.1 Introduction
Quality Control of construction is one of the important functions of management.
It has to be ensured that the quality of work is in accordance with the prescribed
specifications. This can be achieved by carrying out inspections of the work as it
progresses through various stages. Inspection is the art of comparing the materials,
performances or products with the laid down standards.
The standards prescribed generally specify limits of permissible variability and the
purpose of inspection is to find out by observations or testing whether the quality of
work done falls within the acceptable limits of variability. If the work is got done through
a contractor, it is the interest of the contractor to concentrate on quality control to
satisfy the owner or the inspectors about the quality of work.
As it is very difficult to rectify a structure after its construction, it is necessary to
inspect the structure during different stages of construction. For large projects, a
separate inspection agency is generally appointed for effective inspection and quality
control.
5.2 Methods of Quality Control
Generally quality control begins by inspecting the construction work at different stages
like:
1. Sampling, examination and field testing of all the materials of construction.
2. Measurement and proportioning of material.
3. Examination of layout, form work, foundations etc
4. Testing the specimens in the laboratory.
5. Observation of construction equipment.
 6. Skill levels of labour.
5.3 Functions of Inspection Department
The inspection department has to perform the following functions regarding the
quality control of construction work.
1. Inspection of sub soil
2. Inspection of materials.
3. Inspection of equipment and
4. Inspection of works at each stage.
1. Inspection of sub soil:
Inspection of sub soil is necessary to test the bearing capacity of the sub soil.
2. Inspection of materials:
Supplies of materials for construction work need to be inspected before they are
used.
Field and laboratory tests may be conducted for this purpose.
3. Inspection of Equipment:
Supply of equipment must be inspected before the items are recorded in books.
Thereafter, regular periodical inspections are necessary to ensure that the equipment is
kept in serviceable condition.
4. Inspection of works at each stage:
The Inspectors must inspect the work before the contractor proceeds with the
next stage.
For example, inspections are necessary after excavation has been complete, before all
under groundwork is covered up; for the form work and steel before concrete is poured.
In case any defects are noticed, they must be got rectified before proceeding to the next
stage. Inspection of mixing and placing of concrete is also necessary in some cases to
ensure that the proper procedure is being followed.

5.4 Major Items of quality control:

Some major items which need to be carefully watched from the quality control
point of view.
1. Concrete.
2. Steel.
3. Form works.
4. Masonry.
5. Water proofing.
 6. Joinery and Timber work and
7. Services.
Concrete:
Concrete is usually specified by nominal mix, but for large and important works,
controlled concrete may be specified. Adequate control should be there on the quality
of materials and the process of mixing, placing, compacting and curing. The minimum
quantity of water that gives the specified slump should be used. In the case of
controlled concrete, the aggregates must be tested at regular intervals to ensure that
the grading is within acceptable limits. Regular field tests must be conducted to ensure
the proper slump and compressive strength of the samples taken from the concrete mix.
The time between the mixing of water and the final compaction of concrete should be
within the initial setting time of the cement used. Concrete should be placed carefully to
avoid segregation of aggregates. Curing should be carried out for the full period in the
prescribed manner.
Steel:
Steel constitutes a major part of expenditure in most of the works. For structural
work it is necessary to see that there is minimum wastage. In Reinforced Cement
concrete, the process of bending, binding and placing should be checked carefully to
ensure proper spacing and shape of the bent bars. It should also be ensured that the
bars are free from rust, scales, oil and or other
coatings.
Form works:
The shape and surface finish of concrete depends upon the form work. The form
work must be strong enough to support the wet concrete and have a smooth surface so
that the finished concrete requires the least amount of rendering.

Masonry:
It is necessary to see that the bricks used are of the specified quality and have the
require bearing capacity when used in load bearing walls. The bond should be
maintained properly. The dimensions and verticality of masonry are also important items
to be controlled.
Water proofing:
Water proofing also needs quality control. The damp proof courses and the
damp proofing of roofs, etc are very important items needing special attention.
Joinery and Timber work:
 In this item both the quality of timber used and workmanship are important for
quality control.
Services:
Services include such as electrical, sanitary, water supply, air conditioning etc.

CHAPTER 6
CONTRACTS
6.1 Introduction
 Contract is an undertaking by a person or a firm to do any work under certain
terms and conditions, which should invariably be in writing. The work may be for the
construction or maintenance and repairs, for the supply of labour or the transport of
materials, etc.
Contractor means a person or a firm who undertakes any type of contract.
Usually this term is confined to the contractors who are engaged in construction or
execution of works or repairs.
The system through which the works are carried out by the contractors, who
arrange all the materials, labour and equipment required for proper completion of the
works is known as the contract system. The work should satisfy the specifications with
expected quality .It should also be completed within the stipulated time.
6.2 Legality of Contracts
All the contract conditions should be according to the law because the court can
force only those conditions, which are according to the established public policy and
should put up good examples on the morals of the society as a whole.
As per the Indian Contract Act Sections 10, 11, and 68 the parties entering into
the contract should be legally competent. The law relating to contract imposes upon
each party of the contract a legal obligation to observe the terms of the contract and
give the other party the right to enforce fulfillment of these terms or to claim damages
in respect of the loss suffered in consequence of the breach of the contract.
The obligation, which a contractor accepts, which he submits a tender are
determined by the conditions of the tender, such acceptance of tender gives rise legally
to a binding contract.
Some of the legal aspects of contracts are given below.
i) For a contract to complete a definite piece of work, recovery is possible only
after completion.
ii) The impracticality of a work cannot be excuse for nonperformance.
iii) A contractor who refuses to carryout the work before completion can be
subjected for breach of contract.
iv) When an employer makes it impossible for contractor to complete the work in
accordance wth the contract, the contractor can sue for the rate of the completed
work.
v) The penalties described in the penalty clause will not be applicable if the
execution of the contract is delayed because of the fault of the employer.
 vi) In case of the contractor’s inability to complete the work, after part execution
the employer can consider the contract as rescinded and take an action for the
damages. The contractor under such circumstances has no lien for the money
spent on the work by the contractor.

vii) When a contractor has finished part of a work and refused to complete the
entire work and the employer without the consent of the contractor takes the
work in his own hands for completion. In this case the law implies that the
employer has to pay for the work, which has done by the contractor.
viii) When a contractor without lawful excuse, refuses to carry on the work after
part performance, the employer may have to pay for the materials delivered on
the site by the contractor as distinguished from the materials, which have
become fixed in to the work.
ix) When a contract is formed and it becomes impossible to perform the work
immediately or at a later date, it may be possible to adjust the rights and
liabilities of the parties.
6.3 Types of Contract Agreements
Contract agreements fall into the following two clauses.
1. Piece-work agreements. 2. Contracts.
6.4 Piece-work agreements.
These are agreements for doing the work at agreed rates, without reference to
the total quantity of work or time. Small works or piecework up to Rs.5000/- are got
done through the contractors by piecework agreement.
Piecework agreements are of the following types.
1. Piece-work. 2. Work Order.
Piece-work: In piece-work, the quantity of work is not mentioned and only the rate is
mentioned. This agreement is used
(i) For small works
(ii) When it is necessary to start work in anticipation of the formal acceptance of
the contract.
(iii) For running contract.
Work Order:
Work order is used for petty works; work orders may sometimes also mention the
time limit within which the work is to be completed. No formal agreement is drawn up
with the contractor as in the case of piece-work when the work is awarded by a work
order.
6.5 Types of Contracts
Contracts are of the following types.
1. Item rate Contracts.
2. Percentage Rate Contracts.
3. Lump sum contracts.
6.6 Item Rate Contract:
In this type of contract, the contractor undertakes the work on the item rate
basis. The payment is done on the basis of quantities of items done and their respective
rates. The quantities of various items are worked out by detailed measurements. This
type of contract is also known as unit price contract.
The approximate quantities of all possible items of work are worked out and are
shown in the tender form. Every contractor quotes his rates against each item are arrives
at the final total amount of the work. This is the most common type of contract system,
which is widely adopted.
Following are the advantages of item-rate contract
1. The additions and alterations in the plan and specifications can be easily made
at any stage.
2. As the contractor gets the payment against the actual quantities of items done
by him, the method is economical. No possibility for excess payment.
3. As the rates are item-wise the contractor is not worried regarding the
uncertainties in the plan and specifications.
4. The work can be started after accepting the tenders without waiting for all the
detailed drawings and specifications.
Disadvantages:
1. The total cost of the work can only be computed after completion of entire
project. In such case the contractor may face financial difficulties if final cost
increases abnormally.
2. Before preparing the bills for payment of money to the contractor, all
measurements of various items of work have to be carefully taken and suitably
entered in the measurement book.
3. Great care shall be taken by the department officers to strictly enforce the
specifications during execution of work to avoid the using of substandard
materials by the contractor.
6.7 Percentage Rate Contract:
This is also known as cost-plus percentage contract. In this type of contract the
contractor agrees to take the work of construction for fixed percentage over the actual
cost of construction. This type of contract is given when no contractor is agreeing to do
work on other types due to uncertainties and fluctuations in the market rates of
materials and labour.
The department keeps the actual up to date records of the expenditure incurred
on the work and pays the fixed percentage as agreed over it to the contractor. The
contractor arranges for the labour, materials required for completion of the work, and
maintains proper account of the construction costs.
The cost plus or percentage contracts can be of the following types:
1. Fixed Percentage of Cost
2. Cost plus a fixed sum
3. Cost plus a fixed sum with profit sharing
4. Cost plus variable percentage.
6.8 Lump sum Contracts:
In this type of contract, the contractor undertakes the construction work or the
execution of the specified work and completes it in all respects for a fixed amount of
money. The detailed specifications of all items of works, detailed drawings, plans etc.,
are supplied by the department to the contractor.
The contractor on the basis of given details, works out the total cost of the
construction and quotes it in lump sum. The design, shape and materials are as per the
choice of contractor, but they have to be got approved before the start of the work.
Following are the advantages of Lump sum Contracts.
1. Due to competition among the contractors, the contractor tries to take the
work even at less profit, resulting in low cost of the work.
2. As the total cost of the work is known before hand, the owner can arrange the
funds in time.
3. The contractor’s profit directly depends on the time of completion; hence for
getting more profit, the contractor tries to complete the work as early as possible.
4. The materials used on te temporary works during construction are relieved
earlier resulting in their effective use in other works also.
Following are the disadvantages of Lump sum Contracts:
1. The owner tries to get the maximum work out of money he spends, where as
the contractor tries to get the maximum profit, this causes conflicting interests.
 2. It becomes very difficult to adjust the additions and alterations in the plan and
the specifications at a later stage.
3. If the plans and specifications are not clear, the contractors will quote higher
rates, resulting in high cost of the work.

CHAPTER 7
TENDER AND TENDER NOTICE
7.1 Tender:
A Tender is the contractor’s bid in writing offering to execute the specified work
of construction, supply of materials etc., at the rates and amounts indicated, within the
time limit and under conditions specified and agreed to.
7.2 Necessity of Tenders:
Works, which are to be awarded to contractors, are publicized to enable a
sufficient number of interested parties to bid. The lowest bid is generally accepted,
unless there are good reasons for not doing so. The process of inviting bids and
accepting them is known as tendering. The bid is usually made on the tender forms
specified by the owner. The following tender documents are made available along with
the tender forms to enable contractors to bid for the job.
1. Layout plan.
2. Set of drawings, including working drawings.
3. Detailed specifications or reference to standard specifications for each item of
work
4. Schedule of stores to be issued by the owner indicating the rates and their
place and issue.
5. Schedule of tools and plant and other facilities to be made available by the
owner, indicating the conditions, hire changes and the place of delivery.
6. General conditions of the contract including time limits.
7. Special conditions of the contract that may have to be highlighted.
8. Amount of Security deposits to be paid /deducted.
7.3 Tender Notice:
Whenever works are to be let out on contract, tenders are to be invited from the
registered contractors or both registered and unregistered contractors depending on
the
magnitude and nature of the work by issuing notice in newspapers. The notice that
includes various particulars of work is named as Tender Notice.
7.4. E.M.D:
Earnest Money Deposit is the amount, which the contractor has to deposit with
the department at the time of submitting a tender. This accompanies the tender form
and this is usually 2% of the total estimated cost of the project. This serves as a check to
prevent the contractor from refusing to accept the work when the tender has been
accepted.
The other objects of collecting earnest money are:
1. To reduce unnecessary competition: If no earnest money is collected, heavy
competition may start among the tenderers. The contractors who do not have
sound financial status may also offer their tenders, which increase the
unnecessary competition among the tenderers.
2. To act as a tool for punishment: In case the contractors quote lower without
intention of doing work, the earnest money shall be forfeited by the department
as a punishment to such contractors.
 3. To act as compensation: When the lowest contractor refuses to take up the
work, the work can be allotted to the second lowest contractor. The earnest
money forfeited from the first lowest contractor compensates to loss of the
department.

7.5 Security Money Deposit

The contractor has to deposit about 10% of the tendered amount with the
department as soon as his tender is accepted. This is inclusive of the earnest money
already deposited by the contractor. This money is kept as a check so that the
contractor fulfils all the terms and conditions of the contract and carries out the work
satisfactorily in accordance with the specification and maintains satisfactory progress for
completion of the work.
In case he fails to fulfill the terms of the contract, the whole of the security money
or part of it is forfeited by the department. When the contractor completes the work as
per drawings, specifications and directions of the department within the specified time,
the security money is refunded to the contractor. Normally the security deposit is
refunded after the maintenance period, which may be 6 to 12 months after the
completion of work, and it’s handing over to the department.
7.6 Publicity and Sale of Tenders
It is essential that tenders be given adequate publicity so that a sufficient number
of contractors may bid and the most attractive offer may be obtained. At the same time
it is also necessary that bids be obtained from contractors who have the capability and
capacity to undertake the work.
For this purpose, organisations like the Railways and Public works Departments,
which regularly get works executed through contractors, maintain lists of approved
contractors. These lists are prepared after examining the past performance and capacity
of the contractors. Approved contractors may be classified in terms of the value of work
that could be assigned to them. Tenders are publicized by the issue of a notice inviting
tenders,
This indicates
(1) Name and description of the work
(2) Estimated cost
(3) Completion time
(4) Earnest money payable indicating the manner in which payment is to be
made
 (5) Security deposit
(6) Time and place where tender documents may be inspected or obtained
(7) Last date and place of obtaining tender papers and submission thereof
(8) Time and place of opening the tenders

(9) Authority competent to accept tenders. The tender notice may be advertised
in newspapers and issued to registered contractors by post. Copies of the tender
notice are also put up on the notice boards of various offices of the organization.
For very large works or those involving special techniques, which may not
be within the capacity of the construction industry in the country, global tenders
will be issued all over the world inviting bids for the work.
Contractors are given a reasonable period of time, depending upon the
size of the work to prepare and submit their tenders. Tender documents are
usually priced and are issued on payment of the prescribed amount. The sale of
tender papers starts and closes at the time notified in the tender notice.

7.7 Opening of Tenders and their Scrutiny

Tenders must be submitted latest by the prescribed date and time in a sealed
cover to ensure secrecy till they are opened. The name of the work and the due date
should be written on the envelope for the purpose of identity, dispensing with the need
to open the envelope. Tenders may be delivered by post or deposited in the sealed
tender box generally provided in the premises of the owner.
The earnest money if any must be deposited in the manner prescribed along with
the tenders. Tenders submitted without earnest money, if prescribed are rejected. The
amount is refundable if tenders are not accepted and is usually adjusted against the
contractor’s security money if the bid is accepted. Generally about 2% of the estimated
amount is asked for as earnest money.
In the case a contractor, whose tender is accepted, fails to undertake the work,
the earnest money deposited by him is forfeited. Tenders received after the due date
and time is rejected. The valid tenders are opened at the time notified in the presence of
representatives of the tenders, who may choose to be present. Each tender is carefully
scrutinized and any cuttings or over writings are initialed to ensure that tenders are not
tampered with at a later stage. A record of the
tenders received is also kept.
7.8 Acceptance of Tenders
 The rates and amounts quoted in all the valid tenders are tabulated in the form of
a comparative statement to enable a comparison of the bids made. While preparing the
comparative statement, careful note is made of all the conditions that may have been
mentioned and their financial implications worked out.
For example, in the case of the supply of material, if a tenderer does not quote
rates inclusive of sales-tax, octroi and other charges as required, the financial
implications thereof should be worked out, so that a proper comparison can be made.
The arithmetical calculations with respect to rates, quantities, amounts and totaling
should also be checked.

The lowest tender is generally accepted unless there are good reasons not to do
so, such as poor past performance and limited financial or physical capacity of the
tenderer. If the rates quoted are on the high side, all tenders may be rejected and re-
invited to obtain a reasonable bid. In order to ensure that there is no legal complication
in not accepting any tender, a clause is added in the tender notice reserving the right to
reject any or all tenders without assigning any reason.
The tenderer whose bid is accepted is intimated in writing and asked to sign the
contract documents within a specified period of time. If he fails to do so, the offer is
cancelled; the security deposit forfeited and the work allotted to the contractor whose
tender is the next highest. After signing the contract agreement, the site of the work is
formally handed over to the contractor, then he can start the work. The time for
completion is reckoned from the day the site is handed over to the contractor.
7.9 Work Order
Work order is used for petty works; work orders may sometimes also mention the
time limit within which the work is to be completed. No formal agreement is drawn up
with the contractor as in the case of piece-work when the work is awarded by a work
order.
7.10 Contract Agreement
Contract agreements are fall into the following categories:
1. Contracts
2. Piece work agreements
Contracts are classified as:
1. Percentage Rate contracts.
2. Item Rate contracts.
 3. Lump sum contracts.
Piece-work agreements are of following types
1. Piece work 2. Work order
7.11 Conditions of Contract
The Conditions of contracts includes the following
1. Time of completion of work.
2. Volume of work.
3. Specifications of work.
4. Rates of payment.
5. Penalties for default on the part of the contractor etc.

CHAPTER 8
ACCOUNTS
8.1 Necessity of Accounts
The accounts of an organisation are maintained in accordance with a system
which lays down the detailed procedures to be followed in entering into different
transactions involving financial matters and keeping a record of such transactions. The
system of accounts is devised to suit the requirements of the organisation, taking into
consideration the volume and type of transactions entered into at various levels of the
organisation for smooth and efficient functioning.
8.2 Different Methods of Carrying out Works
Public works are carried out either departmentally or through contractors.
Complicated and important works, where a high degree of reliability in the quality of
work is essential, are generally executed departmentally by engaging labour.
This method requires intensive planning and supervision, so that the output of
labour and machines is commensurate with the expenditure incurred. For most works,
however, the contract method is employed, when the department, taking advantage of
competitive bidding by rival contractors, is able to get the work executed at the lowest
possible rates.
 Moreover, the risks involved in construction and the day-to-day problems are the
headaches of the contractor and the departmental staff can devote sufficient time to
ensure that the contractor's work is in accordance with the designs, specifications, time
schedule and other conditions laid down in the agreement.
8.3 Public Works Department System of Accounts
The Main features of the system are:
1. The divisional officer obtains money required for disbursement in connection
with the execution of works and contingent charges by cheque on the civil
treasury/bank. He also collects some of the departmental receipts and deposits
them in the treasury /bank.
2. The accounts of all these transactions, as well as transactions of subordinate
officers acting on behalf of the divisional officer are compiled under the
supervision of the divisional accountant and are submitted to the pay and
accounts officer/accountant general.
3. The divisional officer also maintains clear accounts of the stores received by
him and makes these accounts available to the accountant general at the time of
audit.
4. The charges for each project, work or sub-work under each major head of
expenditure are maintained separately in the accounts of the divisional officer.
5. Personal payments of all Government employees of the department are made
on bills presented to the treasury/pay and accounts officer and these are,
therefore, brought to account by the accountant general/pay and accounts
officer himself.

The divisional officer is the primary disbursing officer and maintains a detailed
account of the departmental receipts-and payments kept by him and not at the
treasury/pay and accounts office as in the civil accounting system.
The accountant general audits the accounts maintained by the divisional officer
and, therefore, the accountant general has not only to satisfy himself about the
maintenance of accounts, but also about the audit. The divisional officer should,
therefore, keep the following points in view.
1. That a claim, which has been accepted, is valid and that a voucher is a
complete proof of the payment which it supports and that the account is correct
in all respects.
 2. It is necessary that all accounts are so kept and the details so fully recorded
that they can support any enquiry.
3. It is further necessary that the record of all transactions in general are so clear,
explicit and self-contained that it can form convincing evidence in a court of law,
if so required.
4. Every transaction involving the giving and taking of cash, stores, other
properties, rights, privileges and concessions, which have money value, should be
brought to account.
8.4 Definition of some of the terms used in accounts
1. Administrative Approval: This term denotes the formal acceptance by the
Administrative department concerned, of the proposal for incurring expenditure
in the PWD.
2. Technical sanction: It is an order by a competent authority sanctioning a
properly detailed estimate of the cost of a work to be carried out by the PWD.
3. MajorEsimate: An estimate whose sanctioned amount exceeds a certain fixed
limit is known as major estimate. In PWD this limit is fixed at Rs.1 lakh.
4. Minor estimate: An estimate whose sanctioned amount islower than a fixed
limit is known as minor estimate. In PWD this limit is fixed at Rs.1 lakh.
5. Detailed Estimate: An estimate prepared on the basis of the detailed
quantities of all items worked out from the designs and drawings is known as a
detailed estimate.
6. Petty Work: A work, which does not cost more than Rs.7500 is known as a
petty work.
7. Debit and Credit: In simple terms, ’debit’ means expenditure and ‘credit’
means a receipt.
8. Cash: The term ‘cash’ as defined in the CPWD code includes legal coins, notes,
cheques, deposit-at-call receipts of scheduled banks, drafts and payments on
demand.
8.5 Classification of Transactions and Heads of Accounts
The functions of the Government are widely varied and complex and as a result,
the financial transactions are so huge that it needs a system of identifying the various
types of financial activities of the Government to maintain the accounts and to control
the expenditure.
Basically the transactions of the Government are of two types, i.e., receipts and
expenditure. For accounts purposes, receipts and expenditure are divided into a number
of sectors. Each sector is further divided into major heads. Under each major head there
are minor heads, subheads and detailed heads. Each sector has an alphabetical series for
identification.

The sectors in the receipt section are:

A. Tax revenue.
B. Non-tax revenue.
C. Grants-in-aid and contributions.
The sectors under the expenditure heads in the revenue account section are:
A. General services.
B. Social and community services.
C. Economic services.
D. Grants-in-aid and contributions.
Some of the sectors under the expenditure head in the capital account section are:
A. Capital account- general services.
B.Capital account-social and economic services.
C. Capital account of economic services.
D. Grants-in-aid and contributions.
Code numbers are assigned to each major head in the form of three digits Arabic
numbers. The first digit indicates the section to which the transaction belongs, as
mentioned below:
0 and 1— receipt section.
2 and 3—expenditure on revenue account.
4 and 5—expenditure on capital account.
6 and 7—expenditure on public debts, loan, etc. and transfer to counting every
fund.
8 and 9—Public account.

The last two digits indicate the major heads, the same number representing the
same major head, whether it is in the revenue receipt section, revenue expenditure
section, capital expenditure section, etc.
8.6 Payment to Labour- N.M.R. Format
Except for the regular and work charged establishments, all persons engaged
departmentally for the execution of works are considered as casual labour. Their wages
are drawn on "Muster rolls". Muster rolls are prepared in the prescribed form. The
Nominal Muster Roll (N.M.R) form consists of two parts.
Part I of N.M.R. form consists of necessary columns for entering the names of
labour, designation, father's name, their attendance particulars, rates of wages and the
total amount payable for each labour. N.M.R form has the provision for entering the
total amount of the muster, signature or left hand thumb impression of the labour as a
receipt. At the bottom of this form, the person preparing such N.M.R form should sign
before submitting to A.E / D.E.E who in turn verifies the details entered and makes the
payment.

Part II of the muster roll is used for recording the name of work, amount of work
done in cases in which the work is susceptible to measurements. Other details like the
number of measurement book, pages in which the measurements are recorded will also
be entered in this part. If the work is not susceptible to measurement, a remark to that
effect is recorded. Some important instructions regarding the preparation of Muster
rolls are:
1. Duplicate copies of muster rolls should not be prepared.
2. Separate muster rolls are prepared for each period of payment. Labour may be
paid more than once a month depending upon local conditions and practices.
3. The daily record of attendance and times should be recorded in such a way as
to leave no possibility of tampering or making unauthorized entries.
4. After the muster roll has been passed, payment should be made as early as
possible.
5. A record of wages that remains unpaid must be kept in a register of unpaid
wages.
6. Subsequent payment of unpaid wages is recorded in the hand receipt. A note
of the same is recorded in the register of unpaid wages as well as in the muster
roll.
7. Wages that remain unpaid for three months must be reported to the divisional
office.
8. Progress of work done by the labour is recorded and is to be compared with
departmental rates.
 9. Muster rolls are checked with reference to entries in the measurement book to
the extent of 50% in the sub-divisional and 50% in the division office, when the
divisional engineer makes payments.
8.7 Measurement Books (M-BOOKS)
The measurement book, (common Form No. 298) is a most important record
since it is the basis of all accounts and quantities whether the work is done by daily
labour, piece work, Schedule contract, lump-sum contract or of materials received. It is
the original record of actual measurements or accounts and forms a reliable record as it
may have to be produced as evidence in court of law. All the books belonging to a
division should be numbered serially and the pages of each book should be machine
numbered. A register of M-Books should be maintained in Form PWD VI-20, in the
divisional office showing
(a) The serial number of each book,
(b) The names of sub-divisions to which issued,
(c) The date of issue and the date of its return, so that its eventual return to the
divisional office may be watched.
A similar register should be maintained in the sub divisional office showing the
names of the sub-divisional officer and section officers to whom measurement books
are issued. Books no longer in use would be withdrawn promptly even though not
completely written up. All completed measurement books containing measurements of
the works executed by contractors, having running accounts should be sent to the
Divisional Office for final record after final bills have been paid to the contractors.

The following instructions should be observed carefully while recording detailed

measurements in the M. Book.
1. Topmost lines under columns 1 to 4 on each page of a measurement book
should invariably filled in the field.
2. Any lines not required should be carefully scored out in order to prevent
additional entries being made later on
3. Only Executive, Deputy Executive or Asst. Executive Engineers should record
detailed measurements.
8.8 Check measurement of works
The object of check measurement is to detect errors in measurements and to prevent
fraudulent entries. Check measurements should therefore be conducted on such items:
 (a) Which appear obviously incorrect?
(b) Which would be more easily susceptible of fraud?
(c) Which would more seriously affect the total amount of the bill if inaccurate?
The entry "measured in my presence" by a sub-divisional Officer cannot be
accepted as check measurement. Sub-divisional Officers should necessarily check
measure before payment and in proper time in the following cases:
(i) All final bills on running accounts,
(ii) All first and final bills over Rs.5000/-
(a) Check measurements are necessary when supplies are arranged by the public
Works Stores Division from the firm direct to the Division concerned.
(b) In addition to check measurement by the sub-divisional officers, it is an important
duty of Executive/Divisional engineers to check measure the works which are in
progress during their inspections. They should also maintain a register of such check
measurements.
(c) The number of check measurements by the Executive/Divisional Engineers in
charge of regular divisions should be at least 36 in a financial year.
(d) Divisional Engineers in charge of special divisions should check at least 24 in a
financial Year. Further the Divisional Engineer should check measure at least once, all
individual works costing Rs.50, 000/- and more.
(e) The check measurements to be done by Executive Engineer should be spread out
throughout the year and there should be no rush of check measurements towards the
end of the financial year.
(f) The frequency of check measurements should be correlated with the amount of bill
to be paid in the respective months.
(g) In addition to the above, the Superintending Engineers of circles should also check
measure works at random in a particular year or years as directed by the Chief
Engineers from time to time.
(h) The fact of check measurement by the sub-divisional Officer or the Executive
Engineer should invariably be noted in the M-Book at the time of check
measurement. The items check
measured should be indicated by the initials of the checking officer, which should be
placed on the left side of the column "particulars" in line with the item check
measured.
(i) When the date of measurement and the date of check measurement are the
same, a certificate to that effect should be recorded.
(j) When the measurement is done in the presence of higher officer, the higher
officer himself should record the measurements.
 CHAPTER 9
STORES
9.1 Stores
A wide variety of stores and equipment is utilised for construction work. This
includes building materials like bricks, stone, aggregates, cement, lime, steel bars,
structural steel, sanitary fittings, water supply, electrical stores and fittings as well as a
variety of machinery and equipment ranging from survey and drawing instruments to
transport and special purpose vehicles like dumpers, bulldozers and other earthmoving
equipment, batching and mixing plants for concrete, vibrators, drilling and pumping
equipment, air compressors, pile drivers and a host of other items.
Special types of equipment may be necessary for some works like bridge
construction and for large works it may be necessary to provide material handling
equipment like cranes, lifts, conveyors etc. As large part of expenditure on construction
works is on materials and equipment it is necessary that the accounting of stores should
be done systematically, and a set of rules have been prescribed by the PWD for the
purpose. The administration of the stores of a division is vested in the hands of
divisional officer, who is primarily responsible for
(1) The procurement of stores,
(2) Their custody and distribution
(3) Their disposal when rendered surplus or unserviceable.

9.2 Classification of Stores

The PWD classify the stores into the following types.
1. Stock.
2. Machinery and equipment.
3. Road metal.
4. Materials charged to works.
9.3 Stock
Items of common use in construction work, such asbricks, aggregates, cement,
steel, etc., are kept in the stock of a division and are issued as and when required for the
execution of works. The following are the advantages of keeping a stock of materials.
1. The procedure for the procurement of the same item is not repeated for
different works.
 2. The use of approved materials of the prescribed specifications is ensured. It is
however, ensured that only such quantity of material is stocked as can be utilised
during a reasonable period of time.
Unnecessary accumulation of material may
i. Cause deterioration in storage.
ii. Result in increased costs of storage and handling Stock.
` The maximum amount of materials that can be kept in a stock in a division is
fixed and is known as the reserve stock limit. The limit is fixed by the Government
keeping into consideration the normal requirements of stock in the division.

9.4 Subheads of Stock

'Stock' is a suspense head of account. When an item of stock is purchased, its
cost is debited to the suspense head 'Stock'. When the item is issued for use in a work,
the cost of the item issued is credited to the suspense, head 'Stock' and debited to the
final head of the work concerned.
The CPWD has the following sub-heads of stock:
1. Small stores (like nails, screws, hinges, bolts, etc.).
2. Building materials (like cement, aggregates, bricks, lime, etc.).
3. Timber (like deodar, chir, plywood, hardboard, etc.).
4. Metals (like mild steel bars, rolled steel sections, aluminium etc.)
5. Fuel (like kerosene, coal, etc.).
6. Painter's, stores (like paints, varnishes, etc.).
7. House fittings (like bathroom fittings, pelmets, etc.).
8. Miscellaneous stores (like cord, wood preservatives, fertilisers, etc.)
9. Lands, kilns, etc. (like road metal quarries),
10. Manufacture (i.e. manufacture in Government workshops).
11. Storage (i.e. charges incurred on the storage of articles, such as rent of
godowns, payment to work charged store establishment etc.)
9.5 Machinery and Equipment
The machinery equipment, vehicles, furniture and instruments required for use in
construction works are known as machinery and equipment. The machinery and
equipment are of two kinds.
1. General machinery and equipment. These are required for general use in the
division
 2. Special machinery and equipment. These are not required for general use in
the division, but are procured for use in the specific works.
9.6 Road Metal
A record of Road metal is kept in measurement books and claims for payment
examined on the basis of the recorded measurements. Road metal is often kept by the
road side before use and an account of its quantity is kept in the sub-divisional office in
Form 16, statement of receipts, issues and balance of road metal.
Copies of these statements are submitted to the divisional office. Road metal
found surplus, as a result of physical verification or otherwise should immediately be
brought on account, treating it as a receipt, Shortage should be noted in the form of a
remark in red ink and should be carried forward from month to month, until the
discrepancy is set right by recovery, write-off or other means.

9.7 Material Charged to Works

In addition to the charges falling under the main classes namely, cash and stock,
there are other transactions affecting the cost of work. They may be charges incurred in
other divisions or departments, materials received from them or services rendered by
them or there may be cash receipts that are taken in reduction of expenditure in
accordance with the rules. The cost of special establishment employees on the
acquisition of land when chargeable to the accounts of the works should be treated as
part of the works expenditure.
9.8 General Stock Items
Items of common use in construction work, such as bricks, cement, steel rods,
lime, AC sheets etc., are kept in the stock of a division and issued as and when required
for the execution of works.
9.9 Issue of Stores Material
Materials are issued from stock for the following purposes.
1. for use on works either by contractors or departmentally.
2. for dispatch to other subdivisions or departments.
3. for sale to contractors, employees and other outside parties.
Materials are issued only on receipt of an indent, Form No.7, signed by the
divisional or sub divisional officer. Five copies of the indent are prepared, using carbon
paper. One copy is retained by the indenter and the other copies sent to the supplying
authority. The storekeeper of the stores finds out from the stock balances if the
quantities indented can be issued. If it is not possible to issue the who le quantity, he
records the quantities that are actually issued on all the four copies of the indents and
puts his signatures on them. At the same time he makes corresponding entries of issues
on the 'bin cards'. He also obtains the signature of the indenter on one copy, which is
retained as a voucher in support of the transaction. One copy is returned to the indenter
and the remaining two are sent to the divisional office for further record.
9.10 Common Irregularities in Stock Account
The irregularities that commonly occur in stock accounts are given below:
1. Items not recorded in the bin card simultaneously with the entries on the
indents.
2. Stock issued to contractors not recorded in contractor’s ledger.
3. Transactions not recorded at the time of issue/receipt and in the order of their
occurrence.
4. Shortages or surplus not adjusted when the book balances do not tally with
the ground balances.
5. Corrections, etc., not initialed.
6. Transactions not duly supported by indents.
7. Issues not acknowledged by the indenter on the copy of the indent, which is
retained by the store holder.

9.11 Issue of Material to Contractors

Sometimes it is desirable to retain the supply of the certain materials in the hands
of the Government. The use of items of good quality can be ensured by supply is made
by the Government from its stock.
Items like cement, steel, bricks, asphalt material etc., are therefore generally
issued to contractors even though the contract may be for completed items of work.
When the supply of certain items from the stock isenvisaged, the contract should specify
the following.

1. The full description of the materials to be supplied by the Government for use
on works.
2. The place of delivery.
3. The rate including the storage rate, to be charged to the contractor for each
item.
 4. The contractor shall be responsible for obtaining the items and making
payment there of at the rates specified, by deduction from bills.
5. No carriage or incidental charges are to be borne by the government beyond
the place of delivery.
The cost of material issued to the contractor for use on a work should ordinarily
be recovered by deduction from the first bill authorising payment for the work. The
divisional officer may, however, permit recovery in phases to the extent the material is
actually used in the construction at the time of payment.
Moreover stores should not be issued to contractors in bulk long before they are
atually required due to the risk of pilferage and misuse. The issue of stores to the
contractors should therefore, be regulated and restricted to the actual requirements
over a reasonable period of time.
9.12 Issue of Machinery and Equipment
Construction Machinery like road rollers, concrete mixers, vibrators, etc., can be issued
to contractors for use on works of the department. A provision for the supply of such
items is made in the notice inviting tenders and in the contract documents, clearly
indicating the rates of recovery. The recovery of charges should cover the following
1. Direct charges:
i) Running expenses, i.e., the charges that would be incurred when the machinery
is actually utilized.
ii) Maintenance charges which include
a) Supervision charges b) minor repairs
c) Special repairs d) other miscellaneous charges
2. Indirect Charges
i) Yearly depreciation, which is calculated by dividing the value of the article by
the life of the machine in years.
ii) Interest on capital investment, i.e., the cost of the machine.
iii) Departmental charges on direct charges.
When the supply of materials and equipment is envisaged in the contract, for
Government or contribution work, only the direct charges are recovered from the
contractors. When such a supply of articles is not stipulated in the contract, or when the
items are provided to commercial departments and private bodies for use on works
under their supervision, full hire charges including both the direct and indirect charges
are recovered.
9.13 Receipts
Materials are received on stock from the following sources:
1. Suppliers or Contractors: Most supplies are procured by direct purchase from
suppliers and contractors.
2. Other Subdivisions, Divisions or Departments: Supplies are obtained from
these sources when the materials available exceed their requirement.
3. Departmental Manufacture: Items like bricks, charcoal, etc., may be
manufactured departmentally.
4. Works Buildings etc.: Some items may be obtained by recovery from
works/buildings, etc. that are dismantled.
9.14 Record of Receipt of Stock
All materials, when received, must be examined and weighed, counted, or
measured, as the case may be and an entry made in the 'goods received sheets’ in Form
8-A. The goods received sheets’ are printed in booklet form in triplicate or quadruplicate
and the pages are machine numbered. These are fitted in triplicate with the help of
carbon paper. The storekeeper retains one copy and the other two are sent to the sub-
divisional officer, who passes on one of the copies to the divisional office for record and
payment.
9.15 Receipt of Machinery and Equipment
When articles of machinery and equipment are received, they should be
examined and counted. A record of these is kept in the tools and plant received sheet.
Form 13, which are prepared in triplicate. The storekeeper retains one copy and the
other two sent to the sub-divisional officer, who retains one copy for his record and
sends the other to the divisional office for making payment.
9.16 Materials at Site Account
In the case of minor works in which transactions relating to the materials at site
are not likely to be heavy, an account in form P.W.D VI-83 should be maintained of all
departmental materials brought on to the site of a work. This should clearly show the
sources and quantities of all receipts and of their issues to the work as the transactions
occur.
The detailed account of the material issued to the work is known as the
'materials-at-site account’. All departmental materials brought on to the site of work for
use on that work, from any source, should be entered as receipts in the ‘Materials-at-site
accounts’, immediately on their receipts giving a reference to the measurement book.
The register of material-at-site account should show separately for each material:
(i) The estimated requirement.
(ii) The issue rate.
(iii) Receipts, issues and balances, month to month
(iv) Net issues at the end of each month.
After completion of work, a theoretical calculation of the quantities of materials
used on each subhead is made on the basis of the magnitude of work executed. These
are recorded in Part I and Part II indicating the surplus or deficit as per actual
consumption and the theoretical calculations, together with an explanation of the
difference. Part III of the form is a statement showing the disposal of material remaining
unused as per 'Material-at-site accounts'. The unused material is disposed off in the
following manner.
(i) Transfer to stock, provided the items are serviceable and are likely to be
required for other works.
(ii) Transfer to other works in progress, if required.
(iii) Sale of the items those are no longer required.
9.17 Indent
Material should issue only on receipt of an indent, form 7 signed by the divisional
or the sub-divisional officer. These indents on stores are demands on store keeper
signed by authorised persons to issue to bearer to be charged to a particular job or
department and signified there in.
9.18 Invoice
The store keeper will prepare and sign the form of the invoice attached to the
indent according to the supply as actually made. Simultaneously an entry should be
made in the register of stock issues Form 8.
9.19 Bin Card
This is a card, which is attached to each Bin, or the container for stores a record
of all materials entering or leaving the bin and the balance of materials in hand is kept in
this card.
9.20 Stock Register
The accounts branch of the divisional office maintains day- to- day record of both
the quantity and value of transactions relating to each item of stock. Separate ledgers
are maintained for articles falling under each subhead of stock. The register has different
sets of pages for different articles. The value of items posted on ‘goods received sheet’
on the basis of bills. The ‘goods received sheets’ are then posted in the priced stores
ledger. The pages of the register are machine numbered.
9.21 Issue Rate
The issue rate is the unit rate at which the item is issued from the stock. It covers
the cost of the procurement and storage of the article. The issue rate for each article
should be fixed at the beginning of each year.

9.22 Accounting shortages and surplus

The value of the stores found shortage or deficit should, however, not be debited
to the relevant final head of account, but kept under ‘Miscellaneous P.W. Advance’
pending recovery or adjustment. When the loss is treated as unrecoverable and ordered
to be written off, the head ‘Miscellaneous P.W. Advance’ is cleared by debit to the work
for which the stores were collected if the accounts are still open. If not, to the general
head ‘Losses on Stock’ under the related major head.
9.23 Write off
When stores of any type become unserviceable, a report is immediately made on
Form 18 ‘Survey report of Stores’. This should be done at once on discovery of the fact,
as it is desirable to avoid keeping worthless materials on stock. In the report all proper
explanations must be given including the period in which the articles have been in store
or in use, and the cause of deterioration must also be stated. This report should be sent
to the competent authority for obtaining further orders. The stores are written off after a
sanction to that effect is obtained and an entry made in the store records reducing the
balance by the quantity written off, giving reference to the sanction.