Phase 3

Phase 3

Before the contractor can start the executive operation, the task of how to monitor the contractor's performance must be specified (although the appointment of an executive contractor supervisor does not happen in some contracts, which is explained below in the types of contracts section). Therefore, the monitoring phase, known as phase 3, should be notified to the consulting company as a separate contract. The consultant chosen for Phase 3 may be different from the consultant for Phases 1 and 2 (although for many reasons it is much better than this does not happen, ie the Supervisor Phase Consultant should be the project plan designer, the most important reason being the responsibility of the designer. Must have in return for the plans prepared.)

Holding a tender and selecting a contractor:

The consulting company is responsible for holding a tender (limited or unlimited) to select an executive contractor. Of course, like the consultant selection methods, the contractor may be selected without a tender.

The presented steps are a summary of the actual process of project implementation in Iran. Of course, there are other contracts and implementation methods, but mostly the stages of project implementation and its pillars are presented in the same way.

Fourth agent or project manager:

As mentioned, the pillars of the project mainly include the employer, consultant, and contractor, who are known as agents 1, 2, and 3 of the project, respectively. However, in some cases where the employer has multiple projects in different areas and is not able to manage the consultant and contractor professionally or temporally, he hires a trusted company as his representative to manage and lead. This trusted company is called the project manager or agent of 4 projects.

Contractor literally means someone who undertakes to do something for a certain amount of money

General terms of the contract:

In 1342, the Program and Budget Organization, using domestic and foreign experts and also with the experience gained by the government in the implementation of projects, wrote a standard legal document for all contracting and development contracts in the country and all governmental and semi-governmental organizations. The government was required to comply with the law in its contracts with contractors. The necessity of this issue was since the lack of uniform rules that can be used for all government organizations and all types of contracts, led to the fact that each of the individuals and government organizations in the contracts concluded with individuals, personal tastes and circumstances To rule themselves, which ultimately led to the confusion and widespread multiplicity of contract types. As a result, due to the need and necessity, the preparations for the development of new rules and regulations were gradually provided to apply a harmonized and uniform legal system for government contracts. To achieve this goal in 1351 and at the time of drafting the Program and Budget Law, Article 23 of the said law provided: "The book of general conditions of the contract must be used in all contracts related to construction and installation work." Thus, according to this article, first of all, contracts related to construction works and operations and facilities, one of which is one of the government organizations of the two executive bodies, must comply with the same general rules and provisions in the form of a "model contract".

Secondly, in the implementation of the subject of the contract between the contractors and all government agencies, the provisions of the general conditions book of the contract and other attached documents shall prevail.

From that date onwards, the text of all the above-mentioned agreements states that "the general terms of the agreement govern this agreement", meaning that the parties have agreed to accept the laws contained in the general terms of the agreement.

Private terms of the contract:

There is usually another part of the contract called the private terms of the contract. These terms are in the explanation and completion of some of the general terms of the contract in which the assignment of some items is left to the privacy terms of the contract and can never play a role in the general terms of the contract. The numbers and letters used in the case of these private terms are the same as the number and row associated with the general terms.

A contract is an agreement that, together with the terms and additional documents, is inseparable in a set and is concluded between the employer and the contractor.
Types of contracts

The types of contracts that exist for the implementation of projects can be divided into two general aspects:

A- In terms of assigning different stages of project implementation and the relationship between the pillars of the project

B- In terms of how financial transactions

A- Types of contracts in terms of project implementation stages, including:

A contract usually includes the stages of financing, management, design and engineering, supply and supply of goods and materials, as well as construction. These different steps may be done individually or together with a contractor. Therefore, contracts for various stages of the project, including design and engineering, procurement and supply of goods, equipment and materials, executive operations, installation and commissioning simultaneously and with special conditions can be done in the following ways:


The same is the case with three pillars. That is, the design is done separately by a consulting company, and the contractor does the execution.

Engineering, Procurement, and Execution (EPC design-build contracts)

The responsibility of designing the supply and procurement of materials and execution is assigned to a contractor.

Engineering Management, Procurement, Execution (EPCM or MC)

In this case, the employer enters into a contract with a company to manage the entire design, supply, and construction. The company does not do the design, procurement, and construction work, but manages the design, procurement, and construction. That is, it finds different contractors and manages the contractors after concluding a contract with the employer.

Some other types of contracts include:

Engineering, procurement of goods and equipment

Engineering, procurement of goods and equipment

Engineering, procurement, implementation, and installation
Engineering, procurement, and implementation supervision
Engineering, procurement, and construction planning

Engineering, procurement, and production planning

Engineering, Procurement; Construction and financing

B- Types of contracts in terms of financial transactions

1- Fixed-price

In this type of contract, the employer carefully determines the scope or requirements and specifications that lead to the development of the scope, and then a contract is concluded with the contractor to perform the entire work at a fixed price. These contracts may also be adjusted (i.e., the depreciation of the money that is calculated and paid).
2 - Contracts with reimbursement

In this type of contract (known in Iran as contract management), the contractor receives all project costs from the employer in such a way that after spending the bill, he pays the costs to the employer and receives it, and receives an additional amount for his fee, which This amount can be received in one of the following ways:

The cost-plus fixed percentage for fee
Fixed plus fee (lump sum)
A cost-plus variable percentage fee
Cost based on an optimal estimate (a trust contract in which the initial cost ceiling is estimated and after the completion of the work, the difference between the cost ceiling and the actual cost is divided based on the agreement between the employer and the contractor).

3 - Pricelist or wage list contracts

In a wage contract, the contractor receives wages for the work he has done based on the number of hours worked and the hourly wage paid in the contract. If the contractor's contract also includes materials, the price of each unit of materials used in the contract must be specified by multiplying it by the number of materials purchased by the contractor to determine his fee. In this case, the contract will be on the price list.

4 - Turnkey contracts or turnkey contracts

The responsibility for the design and implementation is transferred to the contractor until the operation stage without the supervision of the institution and at certain prices.

5 - Mutual sale contracts

Concluding a contract with a foreign investor and investing the investor's account through the goods and services produced by the project.

6- Concession transfer agreements

Assignment of investment concessions, design, implementation, operation, sale of products and repayment of costs, and finally transfer of the project in favorable conditions to the party, in the following ways:
Construction, operation, and transfer
Construction, ownership, operation, and transfer
Design, construction, operation
Design, construction, operation, and transfer
Construction, ownership, operation
Construction, assignment, operation
Design, construction, supply, operation