Advantages, Disadvantages and Types of Contract In House Maintenance

We should go for contract maintenance or in house maintenance, depending upon equipment, maintenance facilities available and the cost of maintenance. We have got the Indian contract Act 1872.

All agreements are contracts if they are made by the preconcert of parties competent to contract for a lawful consideration and with lawful object and are not hereby declared to be void.

Advantages of Contract Maintenance:

(a) Reduction of labour cost.

(b) Reduction of the cost of supplies-tools, spare parts, materials,

(c) Reduction of the cost of equipments

(d) Use of latest techniques and methods

(e) Saving in administrative time.

(f) Flexible to meet emergencies

(g) No need to negotiate with labour union

(h) No need to recruit and train maintenance employees.

Disadvantages of Contract Maintenance:

(a) Management laziness - failures to negotiate the best price for the service.

(b) Loss of contact with the needs of the facility and staff contractor provides.

In hotel contract maintenance may be for

(a) Ground maintenance - Routine maintenance.

(b) Preventive maintenance, water treatment plant, HVAC, etc.

(c) Building maintenance.

(d) Changing of fire extinguisher chemicals.

(e) Testing and adjusting fire alarm.

(f) Kitchen duct work cleaning.

(g) Dispose of grease.

(h) Removal of snow from parking space etc.

Contract must have -

(a) Insurance of maintenance employees.

(b) Inspection facility of work done.

(c) Safe practices should be used during maintenance.

(d) Local codes must be followed during maintenance.

Types Of Contract May Be:

(a) Lump-sum contract:

Offer by a contractor to furnish labour and materials and equipments necessary to complete a certain definite work.

Advantage - Low cost, definite amount, early completion of work.

Disadvantage - Conflicting interest, extra work, High cost due to uncertainties. Sometimes Lump Sum contract may not be advantageous. For efficient working complete plans and specifications must be prepared and written in contract, otherwise dispute will arise.

(b) Unit price contract (Counteracts given for individual work item):

Nature of work is simple and clearly understood. Quality of work should be well defined otherwise dispute will arise.

This contract is done where plans and specifications may not be made, work quality is not known at present eg remove all of the dirt from an excavation. Work schedule rates are decided in different departments every year. Advantages - elasticity, economic absence for uncertainties starting of work is easy.

Disadvantage - Conflicting interest classification of materials, final cost dam­age due to changes.

(c) Cost plus a fixed percentage contract:

Contractor agrees to furnish all labour and materials (including equipment) necessary to complete the entire work for cost plus an agreed percentage of the said cost.

It works well when plans and specifications are not complete and prices are not stable. In this case owner has full control. It is fair. Final cost may be less in this case because contractor has not to control the cost. Quality of the work will be good. Work can be started immediately.

(d) Cost plus fee.

(e) Cost plus contract with upper limit.

Advantage none conflicting interest extra work early completion of where starting of the work is easy.

Disadvantages - Final cost, interior cost Illegal for public bodies checking of contract account difficult.