Construction

Labor Contract vs. material contract

For building construction either our dream home or office etc, one wants that the construction should be in time, economical, strong and earthquake proof. In construction work there are many things to be done by the owner like arranging drawings, design, sanctions, labor and material etc. Apart from drawings and other formalities there are two possibilities or ways to take construction work in hand. One is through rate contact and second is labor rate contact. Here are some points which give us comparison in between these two options.

 Through Rate contact/ material contact  Labor Rate contact 
Through rate contact means that contractor arrange  both i.e. building materials and labor In labor rate contact, house owner arrange all the building materials and labor is arranged by the contractor.
 Through rate contact is of two types, one is lump sum basis in which contractor give  rate per square feet for complete work of all items and second is item rate contract in which all the items are measured separately and paid accordingly as per contact,   this is very typical and generally used in government work.  In labor rate contact the rate is per square meter, there are further sub contract i.e. one for complete structure, second for electrical, 3rd for water supply and sewerage,4th for flooring and dado, 5th for joinery and painting etc.
As for item rate it is in use in government work.
 In through rate contact, house owner have to spend less time at construction work as all materials and labor is arrange by the contractor. In labor contact, house owner have to spend more time as he has to arrange all building materials required for construction.
 As all material is arranged by the contractor, he cannot blame house owner for delay in material arrangement. In this case for delay in materials arrangement or shortage in quantity or not arrange according to sequence is responsibility of house owner.  In this case for delay in materials arrangement or shortage in quantity or not arrange according to sequence is responsibility of house owner.
 In this case contractor is responsible for watch and ward, wastage and destruction/ damage of all items of building materials.  In this case house owner is responsible for watch and ward, wastage and destruction/ damage of all items of building materials.  In this case house owner is responsible for watch and ward, wastage and destruction/ damage of all items of building materials.
 In this case there is every possibility of arranging sub standard building materials by contractor to save money.  No such possibility  No such possibility
  Contractor tries to save the materials by using less quantity especially in cement and steel bars to save money.  No such possibility arises as materials belong to house owner and contractor has no any benefit for this act.  No such possibility arises as materials belong to house owner and contractor has no any benefit for this act.
 Contractor tries to reduce the size of beam, slab, column etc from design drawing to save materials and money. No such possibility arises as materials belong to house owner and contractor has no any benefit for this act.  No such possibility arises as materials belong to house owner and contractor has no any benefit for this act.
 In this case, generally it is seen that many dispute arises for changing drawing, scope of work and for specifications, material quality quantity etc. Rare chance.  Rare chance.
 In through rate contact, it is necessary to see the credibility of contractor in market as he has to arrange the materials. Not required.  Not Required
 In this case there is more possibility for work delay taking more time to complete the work as for some time he face difficulty in arranging materials and labor due to financial problem. Fewer chances as he has to arrange labor only.  Fewer chances as he has to arrange labor only.
 In through rate contact, the house owner has to pay for materials and labor i.e. heavy amount. In this case many time contractors brought less material and ask money frequently and some time leads to break contract in mid way. House owner will be strict to payment schedule and also have a check on quantity and quality. Fewer chances as he has to pay for labor only.  Fewer chances as he has to arrange labor only.
 In this case house owner or his supervisor have to be very vigilant about the work quality as contractor tries to save the material and money at every point if it so small where he can.  No such possibility  No such possibility

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