OFFICE MEMORANDUM

No.DGW/MAN/184
ISSUED BY AUTHORITY OF DIRECTOR GENERAL OF WORKS
NIRMAN BHAVAN, NEW DELHI DATED:08.6.09

Sub: Clarification regarding Enhancement of Contractor’s Profit and Overheads

to 15%

As per O.M. No. DGW/MAN/150 dated 14.12.2007 and O.M. No.

DGW/MAN/169 dated 31.12.2008, Contractor’s Profit and Overheads @ 15% (CP
@7.5%+O.H. Charges @7.5%) is being adopted in Analysis of Rate of various items to
work out estimated cost and justification of rates.
A reference from CE (E) DR, has been received vide which a clarification
regarding adding of T&P component in ‘SAR’ has been sought. CE (E) DR, has stated
“whether normal T&P component @2% or so, as provided in their “Standard Analysis of
Rates” is to be excluded while preparing justification of rates for normal E&M works or
not”.
In this context it is clarified that at the time of increasing contractor’s profit and
over heads from 10 to 15 % no change has been made in the contractor’s profit @ 7.5 %
as applicable earlier whereas the contractor’s over head has been increased from 2.5 to
7.5 % on account of various factors which includes Cost of T&P, and heavy machinery
including tower crane, material hoists, excavators, vibrators and heavy machinery for
road constructions.
Keeping in view the above, no extra cost for T&P @2% is to be added in
Standard Analysis of Rates prepared either to work out estimated cost of item or market
rate justification of the item.

Superintending Engineer (C&M)

Issued from file no.CSQ/CM/18(7)2005/Vol.-II

Copy to:

1) The ADG (SR), CPWD, 1 st Floor, G-wing 3 rd Avenue, Rajaji Bhawan,

Besant Nagar, Chennai-600090.
 2) The ADG (ER), CPWD, Nizam Palace, 234/4, AJC Bose Road, Kolkata-
700020.
3) The ADGs (WR), CPWD, Old CGO Bldg. Annexe, 15th Floor, 101, M.K.
Road, Mumbai – 400020.
4) The ADG (NR), CPWD, Sewa Bhawan, R.K. Puram, New Delhi-110066.
5) The ADG (Border), CPWD, Nirman Bhawan, New Delhi-110011.
6) The Chief Engineer (E) NR, CPWD, East Block-1, R.K.Puram, New Delhi-
110066
7) The Chief Engineer (E) ER, 234/4, Acharya J.C. Bose Road, Kolkata-
700020
8) The Chief Engineer (E) WR, New CGO Bldg. 4th Floor, V.T. Road, New
Marine Lines, Mumbai – 400020.
9) The Chief Engineer (E) SR, G – Wing 3rd Floor, Rajaji Bhawan, CGO
Complex, 3 rd Avenue, Besant Nagar, Chennai – 600090.
10) The CE (E) PLP, CPWD, Parliament House Complex, Pt. Pant Marg,
New Delhi-110001.
11) The Chief Engineer (E) DR, CPWD, Vidhyut Bhawan, New Delhi-110001
12) The Chief Engineer (E) NDR, CPWD, Vidhyut Bhawan, New Delhi-
110001
13) The Chief Engineer (E) BFLZ, CPWD, Vidhyut Bhawan, New Delhi-
110001

Executive Engineer (M)