Learn construction contracts and tendering with practical interview questions covering EPC contracts, FIDIC, claims, risk management, and tender process.

Introduction

In construction, many engineers focus only on site work, drawings, and execution. But real control of a project lies in contracts and tendering.

Contracts define:

Who is responsible
Who takes risk
How payment is made
How disputes are handled

Tendering decides:

Who will execute the project
At what cost
Under what conditions

If you understand contracts properly, you can avoid major problems like disputes, delays, and financial losses.

This guide explains important contract and tendering topics in a question and answer format, just like in real interviews.

1. What are the types of construction contracts?

Common types include:

Lump sum contract
Item rate contract
EPC contract
Cost plus contract

Each type defines how payment and risk are handled.

2. What is the tendering process step by step?

The process includes:

Preparation of tender documents
Invitation to contractors
Bid submission
Evaluation of bids
Selection of contractor
Award of contract

3. How do you read tender documents?

Focus on:

Scope of work
BOQ
Specifications
Contract conditions
Payment terms

Understanding these helps avoid mistakes.

4. What are important contract clauses?

Key clauses include:

Scope of work
Payment terms
Time of completion
Penalty clauses
Variation clause

These clauses define project rules.

5. What are variations and claims?

Variation means change in scope.

Claim means demand for:

Extra cost
Extra time

6. What is risk allocation in contracts?

Risk is distributed between:

Client
Contractor

Each party handles risks they can control.

7. What is EPC contract?

EPC means:

Engineering, Procurement, Construction

Contractor handles entire project.

8. Difference between lump sum and item rate contract?

Lump sum:

Fixed total cost

Item rate:

Payment based on quantity

9. What is contract management?

Managing contract during project:

Monitoring terms
Handling changes
Managing disputes

10. What is tender evaluation process?

Bids are evaluated based on:

Cost
Technical capability
Experience

11. What is prequalification process?

Shortlisting contractors before tender.

Based on:

Experience
Financial strength
Capability

12. How do you prepare a bid?

Study tender documents
Calculate cost
Add profit
Submit proposal

13. What are common contract disputes?

Payment delays
Scope changes
Quality issues

14. What is arbitration in construction?

A method to resolve disputes without court.

15. What is role of contract engineer?

Manage contracts
Handle claims
Coordinate between parties

16. Difference between tender and contract? Tender:

Process of selection

Contract:

Agreement after selection

17. What are international contract practices?

Standard formats
Clear terms
Risk sharing

18. What is FIDIC? FIDIC is a standard contract used in international projects.

19. What documents are included in contract?

Agreement
BOQ
Drawings
Specifications

20. What are payment terms in contracts?

Advance payment
Running bills
Final payment

21. What is delay claim? Claim for extra time or cost due to delay.

22. What is Extension of Time (EOT)? Extra time given to contractor due to delays.

23. What are liquidated damages? Penalty for delay in project completion.

24. What is contract risk management? Identifying and managing risks in contract.

25. How is tendering done for government projects?

Strict procedures
Transparent process
Detailed evaluation

Fri Mar 20, 2026