Documente Academic
Documente Profesional
Documente Cultură
(Govt. of India)
(Ministry of Railways)
Nov.Draft
- 2013
At present, the supervisors and officers of Mechanical department are not well versed
with procedures of contract management, therefore a need was felt to summarise
various guidelines about contract management.
In this handbook various topics such as, steps during contract management, general
conditions of contract, eligibility criteria, execution of work, special condition/ model
tender document of standard contract being under taken by mechanical department,
have been included.
It is clarified that this handbook does not supersede any existing procedures and
practices laid down by the Railway Board and instructions issued by Zonal Railways.
Learning is a continuous process, hence feel free to write to us for any addition /
modification in this handbook or in case you have any suggestion to improve the
handbook, your contribution in this direction shall be highly appreciated.
Page No.
Front Page 1
Forward 2
Preface 3
Contents 4-6
1.0 Introduction:
Most of the organizations both in private and public sectors are engaging other agencies for
doing various work/supply of materials and maintaining assets. In Railways due to increase in
volume of transport services it became difficult to carry out all activities through departmental
resources. Outsourcing the work to other agencies of higher technical qualifications having
better resources viz equipment, machinery etc came in to force.
As such it is absolutely essential for all, to be aware of basic ingredients of contract so that they
do not commit mistake.
Objectives of Tendering
To get most economic/competitive rates for activities of prescribed quality standards.
Getting works done through external agency within target date.
Procurement of materials/machines/equipments of specified quality from
manufacturers/traders.
Highest rate for commercial activities being outsourced while maintaining reasonable
standard of service to customers.
Equity in selection
Technical Bid
The Technical and commercial conditions are read out before the tenderers and the tender
committee evaluates the same. The tenderers are advised to enclose EMD in the technical bid.
Financial Bid
If the technical bid is found acceptable by the competent authority, the second packet
(Financial bid) is opened and the tenders processed for acceptance in the normal manner.
However, if on the basis of the information of the first packet, the tender committee needs
clarifications, regarding the design and specifications, discussions are held with each individual
contractor after obtaining the approval of the competent authority.
2. Single Tender:
This is resorted to in rare and emergent situations such as accidents, derailments, dislocation
to works etc. This should have the concurrence of FA & CAO and approval of GM.
AMCs for the equipments may be placed on single tender basis on authorized dealers with
the approval of GM.
Detailed justification should be spelt out.
All the cases of single tender shall require prior finance concurrence before the
administrative approval.
3. Limited tender:
Under this system, every railway unit is supposed to have an approved list of
contractors/suppliers/manufacturers. Tenders are sent to only approved parties. The contractors
are registered after screening by a committee available. There should be minimum 10 firms
registered for limited tender.
4. Special limited Tender:
It is invited under certain conditions with the concurrence of finance and the sanction of GM.
Special Limited Tenders may be invited from specialized and reputed
contractors/organizations/agencies.
Special limited tender can be invited for important works. These can be other than approved list.
Board has decided that CAO(C) with the concurrence of FA&CAO(C) may invite SLT not only
for specialized nature of work, but all type of works depending upon the merit of the case.
Tenderers from whom Special Limited Tenders are to be invited should preferably be more than
six but not less than four.
5. Bulletin Tender:
It floated for so many items to be purchased or work to be executed. These are processed
through Bulletin by Stores department.
1. Normally powers to dispense with calling of tenders should be excercised sparingly and
Circumstances should be spelt out.
2. Invited from at least 3 well experienced genuine contractors, not necessarily borne on
approved list.
3. Register showing the full details to be maintained and sent to Associate Finance while
seeking concurrence.
4. Reasonability of rates to be gone through objectively and in detail by Accepting Authority
(AA).
Quotations: – In general, any works proposal Value up to Rs. 2 Lakh and below can be
processed through work order by calling quotations. Work order should be open to all
contractors and minimum 3 quotations are required. Attempt should not be made to split the
works to bring the proposal under work order limit.
Tenders received by Post:
Tenders received by post should be entered in the Tender Register and the time of receipt
should be recorded on the cover of the tender and deposited before the closing time in the
tender box. (Engineering code, 1999 Para 1247)
3.3 Estimate:
An estimate is a statement prepared to gauge an idea of expenditure to be incurred on a work in
order to obtain sanction of the competent authority and also to see that the work is financially
justified.
This estimate is to be signed by the Branch Officer and sent to Associate Finance for
concurrence.
A copy of the estimate as verified by the Accounts Officer together with his note should be
submitted to the authority to sanction the estimate.
No work should be commenced until detailed estimate is sanctioned & funds are available.
Splitting of large work in to small works should be avoided.
(Board letter No. 2004/ dated 21.06.2004)
Vetting of tender schedule by account is necessary PVC should be included for tenders of
value more than 50 lakhs.
(Board letter No. 2008/ CE-I/ CT/Con/ 7 dated 15.12.2008)
3.4 Tender Notice:
After sanction of competent authority, a brief tender notice has to be prepared. Sufficient notice
should be given for submission of tender, which in case of large works should not be less than a
month. Further, it should be ensured that the tender notice is given maximum publicity while
releasing the advertisement for tenders depending upon the importance of work. Care should also
be taken to have a judicious mix of local, national and/or financial dailies in order to generate
adequate competition. The tender notice and tender documents should also be posted on a
website and the name of website should be given in the tender notice.
“In Partial modification to para 1238 (Tender notice) of Engineering Code, it has been decided
that CAO/C/DRM be empowered to reduce the minimum tender notice period for small value
tenders from one month to 21 days, wherever considered necessary without finance
concurrence. This should be resorted to only after the bid document, site survey reports, plans
etc. are ready and that such reduction in Tender Notice period does not restrict the level of
competition.
Further reduction of this Tender Notice period from 21 days (but not less than 12 days in any
case) in rare exceptional circumstances in the case of small value works shall be exercised by
CAO/C/DRM with concurrence of the FA&CAO(C)/FA&CAO. Reasons for such exceptional
circumstances should be recorded.
It has also been decided that for the purpose of these instructions, works of value upto Rs.50
lakh (rupees fifty lakhs) shall be deemed as ‘small value works’.
While publishing tender in news paper , CPRO/PRO must ensure that NIT has already been
uploaded on the website by taking certificate from Executive.
Any open tender not having token of confirmation (in the form of internet download record) ,
it will be treated as inadequately advertised tender.
The tender document should contain clear details of works, specifications, scope of work,
schedule of work, instructions to tenderers, general conditions, special conditions and contract
agreements. Eligibility criteria and similar nature of works should be specifically mentioned in
Tender documents for open tenders above Rs.50 lakhs.
The tender form supplied to tenderers apart from other thing should contain -
Amount of Earnest Money deposit to accompany the tender.
With whom or what authority, the acceptance of a tender will rest.
FOR
UNDER
Tender Document
TOP SHEET
Contract for: House keeping, Caretaking, Catering Facilities to the
IRCAMTECH Hostels.
8. Index:
Tender document cost: Rs. 2000/-
4.6 Late/Delayed/Post Tender Offers (Rly.Bd. guidelines):
Para 1251 of the Indian Railways Code for the Engineering Department (Revised Edition –
1982) stipulates that for dealing with „Delayed‟ and „Late‟ tenders, separate instructions as
issued by the Railway Board from time to time should be followed.
In this regard Railway Board‟s letter no.71/RS(G)/777 dated 01.08.1981 and 19.04.1984 are
reproduced below for guidance.
(Copy of Railway Board‟s letter no.71/RS(G)/777 dated 01.08.1981)
2. The matter has been reviewed and it has been decided that late tenders/delayed tenders/post
tender offers should be totally rejected.
Extract of Railway Board‟s letter no.71/RS(G)/777 dated 19.04.1984 is given below.
Non acceptance of late/delayed/post tender offers.
1. In terms of Ministry of Railway‟s letter of even number dated 01.08.81 delayed/post tender
offers have to be totally rejected.
2. Instances have come to the notice of the Board where on a strict application of the above
instructions, even late tenders submitted by Public Sector firms for highly specialized
equipments have been rejected.
3. The matter has, therefore, been reconsidered by the Board and it has been decided that
where late tenders from established/reliable suppliers and conferring a substantial financial
advantage is to be considered, notwithstanding the general ban, it will be open to the
railways to seek the Board‟s approval for the consideration of such tenders. Since, this
should be a very exceptional situation, such cases should be recommended for
consideration of the Board with the personal approval of the GM, duly concurred in by the
FA & CAO.
4. The Railways should not enter into any dialogue with the agency submitting a delayed
tender without obtaining Board‟s prior clearance.
5. These instructions apply uniformly to all tenders irrespective of the department floating
tenders.
6. This issues with the concurrence of the finance Directorate of the Ministry of Railways.
It should be ensured that the sealed tender box not tempered with and adequate
arrangements for its security are made to avoid complaints from any of the tenderers.
[ CE/CR’s L.No. W.187.R.VII OF 31.10.79, Para 10] annexure 56. & Bd’s letter dated 13.02.1991 ]
g. Tender box should indicate by a slip pasted on the box conspicuously, the name of the work
for which the tenders are to be deposited therein and date & time up to which tenders can be
dropped in the box.
h. The key of this lock should be kept in the custody of the Supervisory official.
i. For high value tenders, arrangements should be made for keeping tender boxes at 2 to 3
different locations so as to give max. scope for contractors residing in far off remote areas to
submit their offers.[ Boards letter No. 90/CE-I/CT/I of 28-10-98, annex.26].
The tenderers should be allowed to drop their offers in the tender box up to 15 minutes prior
to the opening of the tenders where after the boxes may be sealed. This should be indicated
in the NIT.
j. The tenderers should be allowed to drop their offers in the tender box up to the time specified
in NIT, where after the boxes may be sealed.
k. At the specified time for closing of tenders, the hole in the box should be covered by a slip
pasted over it under the signature of the supervisory official holding the key of the tender
box and preferably in the presence of the Section Officer (Accounts).
l. Immediately after sealing of the tender box, the same should be kept in the chamber of the
Gazetted officer nominated for tender opening.
Tender Box Opening:
m. Tenders to be opened at specified time, date and place by the officer nominated for this
purpose in the presence of the tenderers.
n. Accounts representative to be present during time of opening for all advertised tenders
valuing more than Rs. 10,000. [ 1248-E].
o. At the time of opening of the tender box, members of Opening Committee and tenderer‟s
representatives present at that time should be shown the pasted slip on the top of the box
covering the horizontal slot and also the intact seal on the lock.
p. Seal should then be broken, lock opened and all the tenders taken out, counted and empty box
seen by the opening committee and to other persons present.
q. All tenders should be taken out from their envelops, if any, and should be duly numbered by
indicating serial number in the numerator and the total numbers of tenders received for that
particular work in the denominator.
r. Tender Opening register should reflect: Sr. no., opening date, name of work, tender notice no.
& date, name of tenderer, EMD particulars, rates quoted, nature of tender, nos. of forms
sold, nos. of forms received and opened, signature of tender opening officials ( EO and
Accounts representative).
Above guidelines to be followed strictly by concerned staff
Proforma for Tender Box Register
Name of work :
Tender No. :
DME/Sr DME
6.0 Opening of Tenders and scrutiny:
Tender should be opened at the specified time, date and place by the officer nominated for the
purpose in the presence of an accounts representative and intending tenderers. The particulars
of the tenders should be recorded in the register as below:
(a) Serial No.
(b) Date of opening
(c) Name of the work and tender number
(d) Name of the tenderer
(e) Description of work
(f) Rate quoted by the tenderer
(g) Whether EMD enclosed or not
After making the above entries, the register should be countersigned by the Officer opening
the tender and Finance representative.
Delayed tenders: Tenders received before the time of opening but after due date and time of
receipt of tenders.
Late tenders: Tender received after the specified time and date of opening of tenders.
Delayed and late tenders should be dealt as per the latest guidelines of Railway Board
enumerated in para 4.6.
The comparative statement in addition to the rates quoted by the various Tenderers should also
indicate the total cost of work covered by each tender, particulars of earnest money of each
tenderer, period of validity of offers, financial implications of special conditions, relative
position of each tenderer starting from lowest etc. The evaluation of technical conditions should
be personally examined by the technical officer concerned.
Briefing note on tenders should give full details of the offers received, the previous accepted
rates, remarks on the special conditions, if any quoted by the Tenderers, the credentials of the
Tenderers, the estimated provision for the work etc.
Briefing note and the comparative statement, after being prepared and checked in the executive
office should than be send invariably in duplicate to the associate accounts office. In the account
office, the briefing note and the comparative statement shall be checked by the Section Officer
(Accounts) with a view to ensure that the information given therein is factually and
arithmetically correct. The Account Officer / Section Officer(Accounts) who is associate with the
opening of tenders, shall also check the comparative statement and sign each page thereof in
token of having done so.
One copy of the comparative statement and briefing note duly checked and signed by the
aforesaid officer shall be returned to the Executive Officer with comments, If any, under a
covering letter signed by the Account Officer.
Due to complexity of the Tenders now being received it is necessary to ensure that the technical
briefing is done at sufficiently higher level. It is therefore, decided that the technical briefing of
tenders for works should be done by an officer / subordinate at one step below the rank of the
officers empowered to sit in the tender committee. However, in case of tenders costing Rs. 30
lacks and above the technical briefing need to be done only by junior administrative officers.
Tender Committee proceedings
Tender committee members should go through the comparative statement briefing note and the
tender papers carefully in order to ensure that all the special conditions, quoted by the Tenderers,
deviations from standard specifications, and procedure etc. have been taken into account their
recommendations should bring out clearly all such aspects, including reasons for rejection of
various offers, so as to facilitate the approving authority to take them into consideration, while
according his decision on the tender. The members of the tender committee shall be individually
and severally responsible for the contents of the proceedings/ recommendations made by them.
The responsibility of the accounts members shall, however be restricted only to the advice
rendered by him in respect of financial matters. In respects of technical matters, such as
specifications, unsuitability of the contractors due to lack of practical experience, acceptability or
otherwise of samples, etc. the entire responsibility shall be of the members of the Technical
Department.
The proceeding of the Tender committee should be signed by all the members of Tender
committee on each and every page.
Acceptance of tender by the ―Accepting Authority
Under the existing orders, it is open to the “Accepting Authority” either to accept or reject the
recommendation of the Tender committee. Therefore, “Accepting Authority” shall also be
responsible in the cases where he accepts the Tender committee‟s recommendations. In the cases,
where he disagrees with the recommendations of Tender committee, he alone shall be
responsible for his decisions
Scrutiny by the Accounts Department.--The tabulation statement and the briefing notes shall
be sent thereafter for scrutiny together with the original tenders to the Accounts Officer
concerned. The tabulation statement should be signed by the Section Officer (Accounts)
nominated for the purpose. (Engineering Code, Re- Print 1999, Para 1254)
After the tenders have been opened, a tabulation statement with a briefing note is prepared. The
same should be scrutinized and signed by the Branch Officer
The briefing note contains the following information‟s/ details:-
Name of work:
Details of estimate:
Mode of tender:
Tender notice number:
Estimated cost of tender:
Period of contract:
Amount of EMD fixed:
Number of tender forms sold:
Number of offer received:
Tender opened on :
Tender valid upto :
Value of the lowest tenderer:
Specified conditions, if any :
Remarks:
Scrutiny by Finance
Duty of SSO- Vetting by accounts
The original tenders along with the tabulation statement and briefing note should be sent to
Associate Finance for scrutiny and vetting.
The tabulation statement should clearly indicate the following as per Para 1254 of
Engineering Code.
(a) Complete information in regard to contract rates.
(b) Any special conditions attached to the rates.
(c) Any other relevant information.
1. Name of Work
2. Directorate/Division
10. Cost of tender document has been taken during pre-bid meeting
Whether the offered tender document has been compared with master
14.
copy
16. Tender Notice No. & date (also specify date of publication, if different)
9.0 Security Deposit (SD) GCC- 2010, Part-II (Clause 16, Para 1 to 3)
The security deposit is for the due fulfillment of the contractual obligations of the tender by the
tenderers. The Security Deposit that is to be recovered from the tenderer shall be 5% of the
contract value. EMD should be adjusted against security Deposit and balance shall be recovered
from the progressive bills of the contractors @10% of each bill till it reaches 5% of the contract
value. Security deposit will be recovered only from the running bills of the contract and no other
mode of collecting SD such as SD in the forms of instruments like Bank Guarantee, FD etc shall
be accepted. In case of contracts of value Rs.50 crore and above, irrevocable Bank Guarantee can
also be accepted as a mode of obtaining security deposit. After the work is physically completed,
security deposit recovered from the running bills of a contractor can be returned to him if he so
desires, in lieu of FDR/ irrevocable Bank guarantee for equivalent amount to be submitted by
him.
9.1 Refunding of Security Deposit (S.D.)
Based on completion reports, the security deposit remitted by the contractor has to be
refunded with the approval of the competent authority.
Refund of SD is the last act in any contract. After its refund, the contract is concluded.
In exceptional cases, it can be refunded even before the finalization of the bill.
SD refund should be linked with the performance of the work and the cost incurred by the
department on the rectification should be deducted from it.
Security Deposit shall be returned to the contractor after the expiry of the maintenance period
in all the cases other than Note (i) mentioned below and after passing the final bill based on No
Claim Certificate with the approval of the Competent Authority. The Competent Authority
shall normally be the authority who is competent to sign the contract. If this Competent
Authority is of the rank lower than JA Grade, then a JA Grade Officer (concerned with the
work) should issue the certificate. The certificate, inter alia, should mention that the work has
been completed in all respects and that all the contractual obligations have been fulfilled by the
contractor and that there is no due from the contractor to Railways against the contract
concerned. Before releasing the SD, an unconditional and unequivocal no claim certificate
from the contractor concerned should be obtained.
i. After the work is physically completed, security deposit recovered from the running
bills of the contractor can be returned to him if he so desires, in lieu of FDR/
irrevocable Bank Guarantee for equivalent amount to be submitted by him.
ii. In case of contracts of value Rs 50 crore and above, irrevocable Bank Guarantee
can also be accepted as a made of obtaining security deposit.
(Ref: Railway Board‟s letter no. 2007/CE-1/CT/18 dated 07.03.2008)
I hereby undertake that I shall have no claim what so ever against the …… depot/Rly.
administration in connection with contract agreement No. ………………………….and
description of work… ……………………………………….subject to finalise the contract
without any liability on either side.
g) The engineer shall not make a claim under the Performance Guarantee except for amounts to
which the President of India is entitled under the contract (not withstanding and/or without
prejudice to any other provisions in the contract agreement) in the event of:
i) Failure by the contractor to extend the validity of the Performance Guarantee as
described herein above, in which event the Engineer may claim the full amount of the
Performance Guarantee.
ii) Failure by the contractor to pay President of India any amount due either as agreed by
the contractor or determined under any of the Clauses/ Conditions of the Agreement,
within 30 days of the service of notice to this effect by Engineer.
iii) The Contract being determined or rescinded under provision of the GCC, the
Performance Guarantee shall be forfeited in full and shall be absolutely at the disposal of
the President of India
Precautions with Bank Guarantee
Proper procedure for safe custody and monitoring of Bank Guarantees other Instruments
should be laid down. Monitoring should include a monthly review of all Bank Guarantees
or other instruments expiring after three months along with a review of the progress of
supply or work. Extensions of Bank Guarantees or other instruments, where warranted,
should be sought immediately.
(Ref: General Financial Rule 2005, Rule No. 205)
Immediate verification of its genuineness
Legal vetting
Monitoring the date of expiry
Encashment or extension of validity well in time to protect financial interests of
govt.
Computer based monitoring with in- built warning system
Proforma for Completion Certificate
The contractor has completed the above work in all respects satisfactorily on………….. and final
bill has been passed and paid to the contractor. The Maintenance period is also over
on……………..and the work has been satisfactorily completed and maintained in all respects for
the period specified in the special condition of contract and provision under clause 51 ( i) to (iii)
of GCC has been fulfilled and no defect has been noticed and no dues/recoveries are outstanding
on the contractor against this work.
[ RLy B‟ds letter No. 2010/CE-I/CT/11 dated 11.05.2010 & GCC 48 (I) & RLy B‟ds letter No.
2007/CE-I/CT/18 pt.XII dated 31.12.2010 & GCC 16 (iv) ]
Signature of Railway Supervisor
11.0 Conditions of Contract: (Ref: Engineering Code, Re-Print 1999, Para 1220)
These are the guidelines clearly defining the roles, obligation and rights of both the parties i.e.
client & the contractor. These detailed statements reduce the area of clash or dispute. These are
closely linked to the rates and specifications for an item of the work. Factually drafted conditions
go a long way in the successful performance of the contract as the contract is between the two
parties whose objectives are not fully concurrent.
Types of Conditions: The conditions are of two types: General conditions and Special
conditions of contract.
General Conditions of Contract: These are the basic conditions of the contract. These are
applicable to all the contracts and provided in the printed booklet form. These are revised and
updated periodically by the experts. Necessary amendments issued by Railway board from time
to time may please be referred in future.
There are 64 clauses provided in GCC. Some of these clauses have been revised and circulated
by board vide their letter No 2007/CE-I/CT/18 pt.XII dated 31.12.2010.
Special Conditions of Contract: These conditions are peculiar to the particular items of the
work of the contract, hence called the special condition of the contract. These conditions
stipulate date of completions, maintenance period, guarantee, warranty, price variation clause,
the variation in quantity or method of measurement etc. The SCCs are framed by the experienced
engineers, who know the detailed procedures of the various construction activities etc.
The GCC consists of 64 clauses, and deals with various issues, such as:
Clause1. (1) Definition:- In these General Conditions of Contract, the following terms shall have the
meaning assigned here under except where the context otherwise requires :-
(a) "Railway" shall mean the President of the Republic of India or the Administrative Officers of the
Railway or of the Successor Railway authorised to deal with any matters which these presents are
concerned on his behalf.
(b)"General Manager" shall mean the Officer in-charge of the General Superintendence and
Control of the Railway and shall also include the General Manager of the successor Railway.
(c) "Chief Engineer" shall mean the Officer in-charge of the Department of Railway successors of
the Successor Railway.
(d) "Divisional Railway Manager" shall mean the Officer in-charge of a Division of the Railway
and shall mean and include the Divisional Railway Manager of the Successor Railway.
(e) "Engineer" shall mean the Divisional Engineer or the Executive Engineer, in executive charge of
the works.
(f) "Engineer's Representative" shall mean the Assistant Engineer, in direct charge of the works
and shall include any Sr. Sec./Sec./Jr.Eng.
(h) "Contractor" shall mean and include the Agreement of Work Order, the accepted schedule of rates
of the Schedule or Rates of Railway .
(i) "Works" shall mean the works to be executed in accordance with the contract "Specifications"
shall mean the Standard specifications for materials and works of ---------------- Railway as
specified .
(k) "Schedule of Rates of Railway” shall mean the schedule of Rates issued under the authority time
to time.
(I) "Drawing" shall mean the maps, drawings, plans and tracings or prints there of annexed to the
contract .
(m) "Constructional Plant" shall mean all appliances or things of whatsoever nature required for the
execution, of the works
(n) "Temporary Works" shall mean all temporary works of every kind of works.
(o) "Site" shall mean the lands and other places on, under, in or through which the works are to be
carried out.
(p) "Period of Maintenance" shall mean the specified period of maintenance from the date of
completion of the works as certified by the Engineer.
(2) Singular and Plural:- Words importing the singular number shall also include the plural and vice
versa where the context requires.
(3) Headings & marginal headings:- The headings and marginal headings in these general condition
are solely for the purpose of facilitating reference and shall not be deemed to be part thereof or be
taken into consideration in the interpretation or construction thereof or the contract. .
GENERAL OBLIGATIONS
Clause 2 (1) Execution Co-relation and intent of contract Documents:- The contract documents be
signed in triplicate by the Railway and the Contractor..
(2) If a work is transferred from the jurisdiction of one Railway to another Railway or to a Project
authority or vice versa while contract is in subsistence, the contract shall be binding on the Contractor.
(3) If for administrative or other reasons the contract is transferred to the Successor Railway the contract
shall not withstanding any things contained herein contrary there to, be binding on the Contractor.
Clause 3: (1) Law governing the contract:- The contract shall be governed by the law for the time
being in force in the Republic of India.
(2) Compliance to regulations and bye-laws:- The Contractor shall conform to the provision of any
statute relating to the works and regulations and bye-laws of any local authority and of any water and
lighting companies or undertakings.
Clause 4: Communications to be in writing:- All notices, communications, reference and complaints
made by the Railway or the Engineer or the Engineer's Representative or the Contractor interse
concerning the works shall be in writing.
Clause 5: Service of Notices on Contractors:- The Contractor shall furnish to the Engineer the name
designation and address of his authorized agent and all complaints, notices, communications and
references shall be deemed to have been duly given to the Contractor.
Clause 6: Occupation and use of land:- No land belonging to or in the possession of the Railway shall
be occupied by the Contractor without the permission of the Railway. Whenever non-railway
bodies/persons are permitted to use railway premises with competent authority‟s approval, conservancy
charges as applicable from time to time may be levied.
Clause 7 Assignment or subletting of contract:- The Contractor shall not assign or sublet the contract
or any part thereof or allow any person to become interested therein any manner whatsoever without the
special permission in writing of the Railway. Any breach of this condition shall entitle the Railway to
rescind the contract under clause 62 of these conditions.
Clause 8. Assistance by the Railway for the Stores to be obtained by the Contractor:- Owing to
difficulty in obtaining certain materials (including Tools & Plant) in the market, the Railway may have
agreed without any liability therefore to endeavour to obtain or assist the Contractor in obtaining the
required quantities of such materials as may be specified in the Tender.
Clause 9. Railway Passes:- No free Railway passes shall be issued by the Rly. to the Contractor or any
of his employee/worker.
Clause 10.Carriage of materials:- No forwarding orders shall be issued by the Railway for the
conveyance of Contractor's materials, tools and plant by Rail which may be required for use in the
works and the contractor shall pay full freight charges at public tariff rates therefore.
Clause 11. Use of ballast trains:-
Clause 12. Representation on Works:- The Contractor shall, when he is not personally present on the
site of the works place and keep a responsible agent at the works during working hours. Before
absenting himself, the Contractor shall furnish the name and address of his agent for the purpose of this
clause and failure on the part of the Contractor to comply with this provision at any time will entitle the
Railway to rescind the contract under clause 62 of these conditions.
Clause 13. Relics and Treasures:- All gold, silver, oil and other minerals of any description and all
precious stones, coins, treasures relics antiquities and other similar things which shall be found in or
upon the site shall be the property of the Railway.
Clause 14. Excavated material:- The Contractor shall not sell or otherwise dispose of or remove except
for the purpose of this contract.
Clause 15. Indemnity by Contractors: - The Contractor shall indemnify and save harmless the
Railway from and against all actions, suit proceedings losses, costs, damages, charges, claims and
demands of every nature and description brought or recovered against the Railways by reason of any act
or omission of the Contractor
Clause 16. (1) Security Deposit: - The Earnest Money deposited by the Contractor with his tender will
be retained by the Railways as part of security for the due and faithful fulfillment of the contract by the
contractor.
(2) Unless otherwise specified in the special conditions, if any, the Security Deposit/rate of
recovery/mode of recovery shall be as under:
(a) Security Deposit for each work should be 5% of the contract value,
(b) The rate of recovery should be at the rate of 10% of the bill amount till the full security deposit
is recovered,
(c) Security Deposits will be recovered only from the running bills of the contract.
(3) No interest will be payable upon the Earnest Money and Security Deposit or amounts payable to the
Contractor
(4) Performance Guarantee (P.G)
The procedure for obtaining Performance Guarantee is outlined below:
(a) The successful bidder may give Performance Guarantee amounting to 5% of the contract value in
any of the following forms:-
(i) A deposit of Cash. (ii) Irrevocable Bank Guarantee. (iii) Government Securities including
State Loan Bonds at 5 percent below the market value, (iv) Deposit Receipts, Pay Orders, Demand
Drafts and Guarantee Bonds. These forms of Performance Guarantee could be either of the State
Bank of India or of any of the Nationalized Banks; (v) Guarantee Bonds executed or Deposits
Receipts tendered by all Scheduled Banks; (vi) A Deposit in the Post Office Saving Bank; (vii) A
Deposit in the National Savings Certificates; (viii) Twelve years National Defence Certificates; (ix)
Ten years Defence Deposits; (x) National Defence Bonds; and (xi) Unit Trust Certificates at 5 per
cent below market value or at the face value whichever is less. Also FDR in favour of FA&CAO/C,
(free from any encumbrance) may be accepted.
Clause 17. Force Majeure Clause:- If at any time, during the continuance of this contract, the
performance in whole or in part by either party of any obligation under this contract shall be prevented
or delayed by reason of any war, hostility, acts of public enemy, civil commotion, sabotage, serious loss
or damage by fire, explosions, epidemics, strikes, lockouts or acts of God (hereinafter, referred to
events) provided, notice of the happening of any such event is given by either party to the other within
30 days from the date of occurrence.
Clause 18.(1) Illegal Gratification:- Any bribe, commission, gift or advantage given, promised or
offered by or on behalf to the Contractor or his partner, agent or servant or, anyone on his behalf, to any
officer or employee of the Railway, or to any person on his behalf in relation to obtaining or execution
of this or any other contract with the Railway shall, in addition to any criminal liability which he may
incur, subject contractor to the rescission of the contract .
EXECUTION OF WORKS
Clause 19.(1) Contractor's understanding:- It is understood and agreed that the Contractor has, by
careful examination, satisfied himself as to the nature and location of the work.
(2) Commencement of works:- The Contractor shall commence the works within 15 days after the
receipt by him of an order in writing to this effect from the Engineer and shall proceed with the same
with due expedition and without delay.
(3) Accepted programme of work:- The Contractor who has been awarded the work shall provide
programme as soon as possible but not later than 30 days after the date of receipt of the acceptance letter
in respect of contracts with initial completion period of two years or less or not later than 90 days for
other contracts.
(4) Setting out of works: - The Contractor shall be responsible for the correct setting out of all works in
relation to original points.
Clause 20.(1) Compliance to Engineers Instructions:- The Engineer shall direct the order in which the
several parts of the works shall be executed and the Contractor shall execute without delay all orders
given by the Engineer from time to time but the Contractor shall not be relieved thereby from
responsibility for the due performance of the works in all respects.
(2) Alterations to be authorised:- No alterations in or additions to or omissions or abandonment of any
part of the works shall be deemed authorised.
(3) Extra works:- Should works over and above those included in the contract require to be executed at
the site, the contractor shall have no right to be entrusted with the execution of such works which may
be carried out by another contractor or contractors or by other means at the option of the Railway.
(4) Separate contracts in connection with works:- The Railway shall have the right to let other
contracts in connection with the works. The Contractor shall afford other contractors reasonable
opportunity for the storage of their materials and the execution of their works.
Clause 21. Instruction of Engineer's Representative:- Any instructions or approval given by the
Engineer's representative to Contractor in connection with the works shall bind the Contractor as
through it had been given by the Engineer provided always as follows:-
(a) Failure of the Engineer's representative to disapprove any work or materials shall not prejudice .the
power of the Engineer thereafter to disapprove such work or material and to order the removal or
breaking up thereof.
(b) If the Contractor shall be dissatisfied by reason of any decision of the Engineer's representative, he
shall be entitled to refer the matter to the Engineer who shall there upon confirm or vary such
decision.
Clause 22 (1) Adherence to specifications and drawings:- The whole of the works shall be executed
in perfect conformity with the specifications and drawings of the contract.
(2) Drawings and specifications of the works:- The Contractor shall keep one copy of Drawings and
Specifications at the site, in good order.
(3) Ownership of drawings and specifications:- All Drawings and Specifications and copies thereof
furnished by the Railway to the Contractor are deemed to be the property of the Railway.
(4) Compliance with Contractor's request for details:- The Engineer shall furnish with reasonable
promptness, after receipt by him of the Contractor's request.
(5) Meaning and intent of specification and drawings:- If any ambiguity arises as to the meaning and
intent of any portion of the Specifications and Drawings or as to execution or quality of any work or
material.
Clause 23. Working during night:- The Contractor shall not carry out any work between sun-set and
sun-rise without the previous permission of the Engineer.
Clause 24. Damage to Railway property or private life and property:-The contractor shall be
responsible for all risk to the work and for trespass and shall made good at his own expense all loss or
damage whether to the works themselves or to any other property of the Railway or the lives, persons
or property of others on account of any negligence of contractor in connection with the works until they
are taken over by the Railway and in case the Railway shall be called upon to make good any costs,
loss or damages, or to pay any compensation, including that payable under the provisions of the
Workmen‟s Compensation Act or any statutory amendments.
Clause 25. Sheds, Stores houses and Yards:- The Contractor shall at his own expense provide himself
with sheds, storehouses and yards.
Clause 26. Provision of efficient and competent staff:- The Contractor shall place and keep on the
works at all times efficient and competent staff .
Clause 27. (1) Workmanship and testing:- The whole of the works and/or supply of materials
specified and provided in the contract.
(2) Removal of Improper work and materials:- The Engineer or the Engineer's Representative shall
be entitled to order from time to time.
Clause 28. Facilities for Inspection:- The Contractor shall afford the Engineer and the Engineer's
Representative every facility for entering in and upon every portion of the work at all hours for the
purpose of inspection .
Clause 29.Examination of work before covering up:- The Contractor shall give 7 days notice to the
Engineer or the Engineer's Representative whenever any work or materials are intended to be covered.
Clause 30. Temporary Works:- All temporary works necessary for the proper execution of the works
shall be provided and maintained by the Contractor and subject to the consent of the Engineer shall be
removed by him at his expenses.
Clause 31. (1) Contractor to supply water for works:- Unless otherwise provided in the Contract, the
Contractor shall be responsible for the arrangements to obtain supply of water.
(2) Water supply from Railway System:- The Railway may supply to the Contractor part or whole of
the quantity of the water required for the execution of works from the, Railway's.
(3) Water supply by Railway Transport:- In the event of the Railway arranging supply of water to the
Contractor at or near the site of works by travelling water tanks or other means, the freight and other
charges incurred thereby, including demurrage charges that may be levied, shall be paid by the
Contractor.
(4)(a) Contractor to arrange supply of Electric power for works - Unless otherwise provided in the
contract, the Contractor shall be responsible for arrangements to obtain supply of Electric Power for the
works.
(b) Electric supply from the Railway system:- The Railway may supply to the Contractor part or
whole of the electric power wherever available and possible, required for execution of works from the
Railway's existing electric supply systems.
Clause 32. Property in materials and plant:- The materials and plant brought by the Contractor upon
the site or on the land occupied by the Contractor in connection with the works and intended to be used
for the execution thereof shall immediately, they are brought upon the site of the said land, be deemed to
be the property of the Railway.
Clause 33.(1) Tools, Plant and Materials Supplied by Railway:- The Contractor shall take all
reasonable care of all tools, plant and materials or other property whether of a like description or not
belonging to the Railway and committed to his charge for the purpose of the works and shall be
responsible for all damage or loss caused by him.
(2) Hire of Railway's Plant:- The Railway may hire to the Contractor such plant as concrete mixers,
compressors and portable engines for use during execution of the works on such terms as may be
specified in the special conditions or in a separate agreement for Hire of Plant.
Clause 34. (1) Precaution during progress of works:- During the execution of works, unless otherwise
specified, the Contractor shall at his own cost provide the materials for and execute all shoring,
timbering and strutting works .
(2) Roads and Water courses:- Existing roads or water courses shall not be blocked cut through,
altered, diverted or obstructed in any way by the Contractor.
(3) Provision of access to premises:- During progress of work in any street or thoroughfare, the
Contractor shall make adequate provision for the passage of traffic, for securing safe access to all
premises.
(4) Safety of Public:- The Contractor shall be responsible to take all precautions to ensure the safety of
the public.
Clause 35. Use of Explosives:- Explosives shall not be used on the works or on the site by the
Contractor without the permission of the Engineer. and then only in the manner and to the extent to
which such permission is given. Where explosives are required for the works, they shall be stored in a
special magazine to be provided by and at the cost of the Contractor in accordance with the Explosive
Rules.
Clause 36. Suspension of works:-
The Contractor shall on the order of the Engineer suspend the progress of the works or any part thereof
for such time or times and in such manner as the Engineer may consider necessary, if such suspension
is:
Provided for in the contract, or
Necessary for the proper execution of the works.
Necessary for the safety of the work.
Clause 37. Rates for items of works:- The rates, entered in the accepted Schedule of Rates of the
Contract are intended to provide for works duly and properly completed in accordance with the general
and special (if any) conditions of the contract.
Clause 38. Demurrage and wharfage dues:- Demurrage charges calculated in accordance with the
scale in force for the time being on the Railway and incurred by the Contractor.
Clause 39 Rates for extra items of works:- Any item of work carried out by the Contractor on the
instructions of the Engineer or his representative which is not included in the accepted schedules of rates
shall be executed at the rates agreed upon between the Engineer and the Contractor, before the execution
of such items of work.
Clause 40. (1) Handing over of works:- The Contractor shall be bound to hand over the works
executed under the contract to the Railway complete in all respects to the satisfaction of the Engineer.
(2) Clearance of site on completion:- On completion of the works, the Contractor shall clear away and
remove from the site all constructional plant, surplus materials, rubbish and temporary works of every
kind and leave the whole of the site.
VARIATIONS IN EXTENT OF CONTRACT
Clause 41. Modification to contract to be in writing:- In the event of any of the provisions of the
contract requiring to be modified after the contract documents have been signed, the modifications shall
be made in writing and signed by the Railway and the Contractor and no work shall proceed under such
modifications until this has been done.
Clause 42. (1) Powers of modification to contract:- The Engineer on behalf of the Railway shall be
entitled by order in writing to enlarge or extend, diminish or reduce the works.
(2) (i) Unless otherwise specified in the special conditions of the contract, the accepted variation
in quantity of each individual item of the contract would be up to 25% of the quantity.
(ii) In case of earthwork, the variation limit of 25% shall apply to the gross quantity of earth
work and variation in the quantities of individual classifications of soil shall not be subject to this
limit. .
(iii) In case of foundation work, no variation limit shall apply and the work shall be carried out
by the contractor on agreed rates irrespective of any variation.
(3) Valuation of variations:- The enlargements, extensions, diminution, reduction, alterations or
additions referred to in sub-clause (2) of this clause shall in no degree affect the validity of the
contract.
CLAIMS
Clause 43. (1) Monthly Statement of Claims:- The Contractor shall prepare and furnish to the
Engineer once in every month an account giving full and detailed particulars of all claims.
(2) Signing of "No Claim" Certificate:- The Contractor shall not be entitled to make any claim
whatsoever against the Railway under or by virtue of or arising out of this contract after he shall have
signed a "No Claim" Certificate
Clause 44. Quantities in schedule annexed to Contract:- The quantities set out in the accepted
schedule of rates with items of works quantified are the estimated quantities of the works and they shall
not be taken as the actual and correct quantities of the work to be executed by the Contractor in
fulfillment of his obligations under the contract.
Clause 45 Measurement Book: The entire work will be inspected and replacements made therein along
with measurements shall be recorded in a separate measurement book.
The Contractor will provide all the facilities to the Inspecting Officer..
(a) It shall be open to the Contractor to take specific objection to any recorded measurements or
Classification on any ground within seven days of the date of such measurements. Any re
measurement taken by the Engineer or the Engineer's representative in the presence of the
Contractor.
(b) (b) If an objection raised by the Contractor is found by the Engineer to be incorrect the Contractor
shall be liable to pay the actual expenses incurred in measurements.
PAYMENT TERMS
Clause 46. (1) "On-Account " Payments:- The Contractor shall be entitled to be paid from time, to
time by way of "On-Account" payment only for such works as in the opinion of the Engineer he has
executed in terms of the contract.
(2) Rounding off amounts:- The total amount due on each certificate shall be rounded off to the nearest
rupee i.e. sum less than 50 paise shall be omitted and sums of 50 paise and more upto Re.1 /- will be
reckoned as Re. 1/-
(3) On Account Payments not prejudicial to final settlement:- "On-Account" payments made to the
'Contractor shall be without prejudice to the final making up of the accounts (except where
measurements are specifically noted in the Measurement Book as "Final Measurements".
(4) Manner of payment:- Unless otherwise specified payments to the Contractor will be made by
cheque but no cheque will be issued for and amount less than Rs.100/-.
Clause 47. Maintenance of works:- The Contractor shall at all times during the progress and
continuance of the works and also for the period of maintenance specified in the Tender Form after the
date of passing of the certificate of completion by the Engineer .
Clause 48. (1) Certificate of completion of works:- As soon as in the opinion of the Engineer, the
work has been completed satisfactorily, completion certificate shall be provided.
(2) Contractor not absolved by completion Certificate:- The Certificate of completion in respect of
the works referred to in sub-clause (1) of this clause shall not absolve the Contractor.
Clause 49. Approval only by Maintenance Certificate:- No certificate other than maintenance
certificate referred to in Clause 50 of the conditions shall be deemed to constitute approval of any work.
Clause 50. (1) Maintenance Certificate:- The Contract shall not be considered as completed until a
Maintenance Certificate shall have been signed by the Engineer stating that the works have been
completed and maintained to his satisfaction.
(2) Cessation of Railway’s Liability: The Railway shall not be liable to the Contractor for any matter
arising out of or in connection with the contract of the execution of the works.
(3) Unfulfilled Obligations: Railway shall remain liable for the fulfillment of any obligation incurred
under the provision of the contract.
Clause 51.(1) Final Payment:- On the Engineer's certificate of completion in respect of the works
adjustment shall be made and the balance of account based on the Engineer or the Engineer's
representative's certified measurements of the total quantity of work executed by the Contractor
(2) Post Payment Audit:- It is an agreed term of contract that the Railway reserves to itself the right to
carry out a post-payment audit.
Clause 51-A. Production of vouchers etc. by the Contractor:- For a contract of more than one crore
of rupees, the contractor shall, whenever required, produce or cause to be produced for examination.
Clause 52. Withholding and lien in respect of sums claimed:- Whenever any claim or claims for
payment of a sum of money arises out of or under the contract against the contractor.
Clause 52-A Lien in respect of claims in Other Contracts:- Any sum of money due and payable to
the contractor (including the security deposit returnable to him) under the contract.
Clause 53. Signature on Receipts for Amounts:- Every receipt for money which may become payable
or for any security which may become transferable to the Contractors under these presents.
LABOUR
Clause 54. Wages to Labour: - The Contractor shall be responsible to ensure compliance with the
provision of the Minimum Wages Act, 1948 (hereinafter referred to as the "said Act" and the Rules
made there under in respect of any employees directly or through petty contractors or subcontractors
employed by him on road construction or in building operations or in stone breaking or stone crushing
for the purpose of carrying out this contract.
Clause 54-A Apprentices Act: - The Contractor shall be responsible to ensure compliance with the
provisions of the Apprentices Act, 1961 and the Rules and Orders issued there under from time to time
in respect of apprentices directly or through petty contractors or sub-contractors employed by him for
the purpose of carrying out the Contract.
Clause 55. Provisions of payments of Wages Act: - The Contractor shall comply with the provisions
of the Payment of Wages Act, 1936 and the rules made there under in respect of all employees directly
or through petty contractors or sub-contractors employed by him in the works.
Clause 55-A (1) Provisions of Contract labour (Regulation and Abolition) Act, 1970 - (1) The
Contractor shall comply with the provision of the contract labour (Regulation and Abolition) Act, 1970.
(2) The Contractor shall obtain a valid licence under the aforesaid Act.
(3) The Contractor shall pay to the labour employed by him directly or through subcontractors the wages
as per provision of the aforesaid Act and the Rules wherever applicable.
(4) In respect of all labour directly or indirectly employed in the work for performance of the
contractor's part of, the contract.
(5) In every case in which, by virtue of the provisions of the aforesaid Act or the Rules, the Railway is
obliged to pay any amount of wages to a workman employed by the Contractor.
Clause 56. Reporting of Accidents to Labour:- The Contractor shall be responsible for the safety of
all employees directly or through petty contractors or sub-contractor employed by him on the works and
shall report serious accidents to any of them.
Clause 57. Provision of Workmens Compensation Act:- In every case in which by virtue of the
provisions of Section 12 Sub-section (1) of the Workmen's Compensation Act 1923, Railway is obliged
to pay compensation to a workman directly or through petty contractor or subcontractor employed by
the Contractor in executing the work.
Clause 58. Railway not to provide quarters for Contractors: - No quarters shall normally be
provided by the Railway for the accommodation of the Contractor or any of his staff.
Clause 59. (1) Labour Camps:- The Contractor shall at his own expense make adequate arrangements
for the housing.
(2) Compliance to rules for employment of labour: - The Contractor(s) shall conform to all laws, bye-
laws rules and regulations.
(3) Preservation of peace: The Contractor shall take requisite precautions and use his best endeavours to prevent
any riotous or unlawful behaviour.
(4) Sanitary arrangements: The Contractor shall obey all sanitary rules and carry out all sanitary measures that
may from time to time be prescribed by the Railway medical Authority
(5) Outbreak of infectious disease: The Contractor shall remove from his camp such labour and their families as
refuse protective inoculation and vaccination.
(6) Treatment of Contractor's staff in Railway Hospitals: The Contractor and his staff, other than labourers
and their families requiring medical aid from the Railway Hospital and dispensaries will be treated as private patients.
(7) Medical facilities at site: - The Contractor shall provide medical facilities at the site.
(8) Use of intoxicants. The sale of ardent spirits or other intoxicating beverages upon the work or in any of the
buildings, encampments or tenements owned, occupied
(9) Non-employment of female labour: The Contractor shall see that the employment of female labour on in
Cantonment areas, particularly in the neighborhood of soldier’s barracks, should be avoided as far as possible.
(10) Restrictions on the employment of retired Engineers of Railway services within two years of
their retirement.
Clause 60. (1) Non-employment of labourers below the age of 15:- The Contractor shall not employ
children below the age of 15 as labourers directly or through petty contractors or subcontractors for the
execution of work.
(2) Medical Certificate of fitness for labour:- It is agreed that the contractor shall not employ a person
above 15 and below 19 years of age for the purpose of execution of work under the contract unless a
medical certificate produced.
(3) Period of validity of medical fitness certificate: - A certificate of fitness granted or renewed for the
above said purposes shall be valid only for a period of one year.
(4) Medical re-examination of labourer:
DETERMINATION OF CONTRACT
Clause 61. (1) Right of Railway to determine the contract: - The Railway shall be entitled to
determine and terminate the contract at any time should, in the Railway‟s opinion, the cessation of work
becomes necessary owing to paucity of funds or from any other clause whatever, in which case the value
of approved material at site and of work done to date by the Contractor will be paid for in full at the rate
specified in the contract.
(2) Payment on determination of contract: - Railways shall admit and consider such claims as are
deemed reasonable and are supported by vouchers to the satisfaction of the Engineer.
(3) The Contractor shall have no claim to any payment of compensation or otherwise, howsoever on
account of any profit or advantage which he might have derived from the execution of the work in full
but which he did not derive in consequence of determination of contract.
Clause 62, Determination of contract owing to default of contractor: - If the Contractor should:-
Becomes bankrupt or insolvent, or
Being a company or corporation, go into liquidation (other than a voluntary liquidation for the
purpose of amalgamation or reconstruction), or
Assigns the contract or any part thereof otherwise than as provided in Clause 7 of these
conditions (GCC clause 7)or
Abandon the contract, or
Persistently disregard the instructions of the Engineer or contravene any provision of the
contract, or
Fails to adhere to the agreed programme of work by a margin of 10 percent of the stipulated
period, or
Fails to remove materials from the site or to pull down and replace work after receiving the
Engineer notice to the effect that the said materials or works have been rejected and condemned
under clause 25 & 27 of GCC or
Fails to take steps to employ competent or additional staff and Labour as required under clause
26 of GCC of the conditions, or
Fails to afford the Engineer or Engineer‟s representative proper facilities for inspecting of the
works or any part there of as required under clause (28) of GCC or
Promise, offer or give any bribe, commission, gift or advantage either himself or through his
partner, agent or servant to any officer or employee of the Railway or to any person on his or on
their behalf in relation to the execution of this or any other contract with the Railway.
SETTLEMENT OF DISPUTES – INDIAN RAILWAY ARBITRATION RULES
Clause 63. Matters finally determined by the Railway – All disputes and differences of any kind
whatsoever arising out of or in connection with the contract, whether during the progress of the work or
after its completion and whether before or after the determination of the contract, shall be referred by the
contractor to the GM and the GM shall within 120 days after receipt of the contractor‟s representation
make and notify decisions on all matters referred to by the contractor in writing provided that matters for
which provision has been made in clauses 8, 18, 22(5), 39, 43(2), 45(a), 55, 55-A(5), 57, 57A,61(1),
61(2) and 62(1) to (xiii) (B) of General Conditions of contract or in any clause of the special conditions
of the contract shall be deemed as „excepted matters‟ (matters not arbitrable) and decisions of the
Railway authority, thereon shall be final and binding on the contractor; provided further that „excepted
matters‟ shall stand specifically excluded from the purview of the arbitration clause.
Clause 64 (1) (i) - Demand for Arbitration-In the event of any dispute or difference between the parties
hereto as to the construction or operation of this contract, or the respective rights and liabilities of the
parties on any matter in question, dispute or difference on any account or as to the withholding by the
Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to
make a decision within 120 days, then and in any such case, but except in any of the “excepted matters”
referred to in Clause 63 of these conditions, the contractor, after 120 days but within 180 days of his
presenting his final claim on disputed matters shall demand in writing that the dispute or difference be
referred to arbitration.
64 (1) (ii) - The demand for arbitration shall specify the matters which are in question, or subject of the
dispute.
64 (1) (ii) - (a) The Arbitration proceedings shall be assumed to have commenced from the day, a
written and valid demand for arbitration is received by the Railway.
(b) The claimant shall submit his claim stating the facts supporting the claims along with all the relevant
documents and the relief or remedy sought against each claim within a period of 30 days.
(c) The Railway shall submit its defence statement and counter claim(s), if any, within a period of 60
days.
(d) The place of arbitration would be within the geographical limits of the Division of the Railway
where the cause of action arose or the Headquarters.
64 (1) (iii) - No new claim shall be added during proceedings by either party. However, a party may
amend or supplement the original claim.
64 (1) (iv) - If the contractor(s) does/do not prefer his/their specific and final claims in writing, within a
period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment.
64 (2) - Obligation During Pendancy of Arbitration - Work under the contract shall, unless otherwise
directed by the Engineer, continue during the arbitration proceedings.
64 (3) (a) (i) - In cases where the total value of all claims in question added together does not exceed
Rs.10,00,000/- (Rupees ten lakhs only), the Arbitral tribunal shall consist of a sole arbitrator who shall
be a gazetted officer of Railway.
64 (3) (a) (ii) - In cases not covered by the clause 64(3) (a)(i), the Arbitral Tribunal shall consist of a
Panel of three Gazetted Rly. Officers not below JA grade or 2 Railway Gazetted Officers not below JA
Grade and a retired Railway Officer, retired not below the rank of SAG Officer, as the arbitrators.
64 (3) (a) (iii) - If one or more of the arbitrators appointed as above refuses to act as arbitrator,
withdraws from his office as arbitrator, or vacates his/their office/offices or is/are unable or unwilling to
perform his functions as arbitrator for any reason whatsoever or dies or in the opinion of the General
Manager fails to act without undue delay, the General Manager shall appoint new arbitrator/arbitrators.
64 (3) (a) (iv) - The arbitral Tribunal shall have power to call for such evidence by way of affidavits or
otherwise as the Arbitral Tribunal shall think proper, and it shall be the duty of the parties hereto to do
or cause to be done all such things as may be necessary to enable the Arbitral Tribunal to make the
award without any delay.
64 (3) (a) (v) - While appointing arbitrator(s) under sub-clause (i), (ii) & (iii) above, due care shall be
taken that he/they is/are not the one/those who had an opportunity to deal with the matters to which the
contract relates or who in the course of his/their duties as Railway servant(s) expressed views on all or
any of the matters under dispute or differences.
64 (3) (b) (i) - The arbitral award shall state item wise, the sum and reasons upon which it is based. The
analysis and reasons shall be detailed enough so that the award could be inferred there from.
64 (3) (b) (ii) - A party may apply for corrections of any computational errors, any typographical or
clerical errors or any other error of similar nature occurring in the award of a tribunal and interpretation
of a specific point of award to tribunal within 60 days of receipt of the award.
64 (3) (b) (iii) - A party may apply to tribunal within 60 days of receipt of award to make an additional
award as to claims presented in the arbitral proceedings but omitted from the arbitral award.
64 (4) In case of the Tribunal, comprising of three Members, any ruling on award shall be made by a
majority of Members of Tribunal. In the absence of such a majority, the views of the Presiding
Arbitrator shall prevail.
64 (5) where the arbitral award is for the payment of money, no interest shall be payable on whole or
any part of the money for any period till the date on which the award is made.
64 (6) The cost of arbitration shall be borne by the respective parties. The cost shall inter-alia include fee
of the arbitrator(s), as per the rates fixed by the Railway Board from time to time and the fee shall be
borne equally by both the parties.
64 (7): Subject to the provisions of the aforesaid Arbitration and Conciliation Act 1996 and the rules
there under and any statutory modifications thereof shall apply to the arbitration proceedings under this
clause.
The contract will be valid for a period of 3 years with a provision for annual price variation as explained
in Price Variation clause.
12.2 Stipulation of minimum eligibility criteria for open tenders costing above Rs. 50
lakhs.
1. Should have completed from start to finish, in the At least one similar single work , for a minimum
last three financial years( i.e. current year and three value of 35% of Advertised Tender Value of Work.
previous financial years):
2. Total contract amount received during the last three Should be a minimum of 150% of Advertised
years as per current ITCC: Tender Value of Work.
Note: (A) However, the above eligibility criteria may be modified on case to case basis in respect of
urgent Project/Works and specialised nature of work with concurrence of FA&CAO and
personal approval of General Manager.
In case final bill of similar nature of work has not been passed, paid amount including statutory
deductions is to be considered if final measurements have not been recorded OR if final
measurements have been recorded and work has been completed with negative variation.
However, if final measurements have been recorded and work has been completed with positive
variation but variation has not been sanctioned, original contractual value of work will be
considered for judging eligibility.
(2) In the case of composite works involving combination of different works, even separate PORTION
OF SIMILAR WORK completed works of required value i. e 35% of total tender value will be
considered while evaluating the eligibility criteria.
(B) The following documents should be specified for submission along with tender.
o List of Personnel, Organisation available on hand and proposed to be engaged for the subject
work.
o List of Plant and Machinery available on hand (own) and proposed to be inducted (own and
hired to be given separately) for the subject work.
o List of Works completed in the last three financial years giving description of work,
organization for whom executed, approximate value of contract at the time of award, date of
award and date of scheduled completion of work. Date of actual start, actual completion and
final value of contract should also be given.
o List of works on hand indicating description of work, contract value, approximate value of
balance work yet to be done and date of award.
Note: 1. In case of items (c) and (d) above, supportive documents/ certificates from the
organizations with whom they worked/are working should be enclosed.
2. Certificates from private individuals for whom such works are executed/ being executed
should not be accepted.
13.0 Tender Committee (Ref: Engineering Code, Re-Print 1999, Para 1255)
Tender Committee is to be formed for evaluating the offers. The level of TC and number of
members in it, depend on the value of the work. For works tenders of value upto Rs.20 lakh,
the tender committee shall hereafter be constituted with only two members out of which, one
should essentially be from the Accounts Deptt. and the other from the concerned Executive
Deptt. However, the existing practice of three member Tender Committee will continue to be
applicable for tenders of value more than Rs. 20 lakh each. Tender Committee should evaluate
the documents/credentials submitted by the tenderer and assess the eligibility. Tender
Committee/Tender Calling authority should not enter into correspondence with the tenderer
after the tender is opened. However, originals of certificates, documents, testimonials etc.,
already submitted by the tenderer along with his/her tender may be called for and their
genuineness verified by checking the originals or by verification from the concerned
departments, if needed. Any paper submitted by the tenderer after opening of the tender, should
not be given any cognizance.
The TC will record the minutes and their recommendations. Recommendations will normally be
accepted by the Tender Accepting Authority (TAA). After acceptance, letter of acceptance
(LOA) is issued to the contractor.
TC members should give an undertaking at the appropriate time, that none of them has
any personal interest in the companies / agencies participating in tender process and that
any member having interest in any company should be refrained from participating in
TC.
(RB letter No 94/C-1/CT/4(Pt ii) dt19.11.05)
Financial capacity, capability and past performance of tenderer / contractor should be
investigated / examined in detail by TC before recommending for awarding a contract
duly considering existing work load with the tenderer (s).
Tender committee to be constituted as per SOP.
All the members are collectively responsible for given recommendations.
Eligibility criteria of tenderers have to be examined in detail.
The Tender committee minutes should be self contained and self explanatory .
Rate reasonability of individual item to be examined.
TCM to be finalised within validity of tender.
No TC member to be related with any of the tenderer.
Each page of TCM to be signed with date.
TC to verify that:
• MIC (if applicable) approval exists
• Similar work definition as approved by PHOD was included in NIT
• There was clear 30 days gap between NIT and TOD
• Escalation to be based on relevant and established index
• Don‟t sign TCM in haste
• Get the TDs downloaded from INTERNET verified
• Invitation of tender was approved by CA
• Tender conditions are latest
• Offer has been signed by authorised representative
• Members to check nominations.
• TC to meet on pre-fixed date & venue and decision be recorded.
• Check and ensure that:
• Work is appearing in current PB/LB/MLB
• DE is valid (< 5 yrs)
• L1 value not exceeding sanction limit
• Funds are available.
• Credentials have been verified
• Each offer has been gone through
• Tender file contains all referred LARs/letters, published NIT with date
• Tender was posted on Internet
• EMD of correct amount and in valid form.
• FDRs have been discharged.
• Special conditions have been evaluated financially
• No banned LARs taken into account
• Avg of 3-4 current LARs taken for comparison
• ABC analysis of rates (Overall rate reasonability not adequate)
• Delay in tender finalisation to be explained
• Rate analysis to be critically seen and signed by JAG
• Offers from 2-3 firms controlled by same person
• Declaration from L1 before negotiation
• Critical evaluation of NS items
• Segregation of major groups of Tender schedule
Consideration of tender
In case Tenderer does not quote above/below %, above will be considered.
If quoted rate in words and figures are not tallying , then tender will be rejected
(CVO (E)/GRC‟s letter no GM/V/system improvement/45 dt 29.11.02)
13.4 Role of tender committee members
The TC essentially consists of:-
A technical member, who is normally known as Convenor.
Finance Member – A member from Associate Finance
Third Member – From any other technical department.
Role of TC member (Convener):
He has normally full knowledge of work to be executed, all special features, site conditions,
specifications of the work, credential of the tenderers, time frame, urgency etc. Market survey
for rate analysis and implication of special conditions, if any, are also to be evaluated by him.
He must fully brief the TC.
Role of TC Member (Finance):
He must ensure that all tenderers have fulfilled the prerequisite conditions, i.e.
Tenders are in properly issued form.
Tenders are signed by authorized persons.
All tenders are correctly filled and if there are corrections and overwriting then they have
been initialed by tender opening officials.
Tender have been opened correctly.
Earnest money is requisite and in acceptable form.
All valid tender offers are serially placed and put up in a comparative statement along with
a briefing note, duly vetted.
All special conditions have been mentioned and those having financial implications are
evaluated.
The arithmetical accuracy of the offer.
A proper rate analysis has been prepared and placed on record by the Convenor.
The funds position and if work is sanctioned or not.
The partnership deed and any legal issue involved is examined.
All special conditions having financial repercussions have been examined.
Consistent approach is taken in dealing with tender for all similar cases, as he is a common
member for all tenders.
Role of third member
He must ensure that –
Rules are followed in general.
Reasonableness of rates has been properly examined.
A uniform and consistent approach has been adopted in dealing with the tender.
In cases of difference of opinion between members of TC he gives his definite opinion.
Responsibility of TC as a whole:
It is the collective responsibility of the TC to give a definite recommendation with full facts
and reason bringing out all the known facts, background and valid apprehensions, which
have formed the basis for its recommendation.
It must also clearly specify the authority competent to consider recommendations of the
TC.
Para 1215 of engineering code (1999) – No work or supply should ordinarily be
entrusted for execution to a contractor whose capability and financial status has not
been investigator and found satisfactory.
Para 617 of Indian Railway finance code, Volume-I (Reprint – 1998) : Provides that
“ in the case of open tenders, if the lowest tenderer is not on the approved list of
contractors kept by the Railways, but his tender is otherwise satisfactory, he should be
asked to produce evidence of his capacity to carry out the proposed work for supply
efficiently and of a sound financial capacity. If he is unable to produce this evidence,
and it is proposed to pass over his tender and consider the next higher one, the fact of
the lowest tenderer having failed to produce necessary evidence of his capacity and
sound financial position should invariably be placed on record.”
It is once again reiterated that the financial capacity, capability and past performance of
the tenderer / contractor should be investigated / examine in details by the tender
Committee before recommending him/ her for awarding a contract duly considering the
existing work load with the tenderer(s).
(Railway board letter no. 94/CE.ICT/4(Part II) dated 19.11.2013 from EDCE(G), Railway Board)
Payments for all work done by contractor should be made on the basis of measurements
recorded in Measurement Books.
There should be no delay in taking measurements and preparation of bills after the
measurements are taken.
Petty bills should be used for making payments to contractors when a single payment is
made for a job or contract on its completion.
The running or on account bill form is used in contract works only and where payment is
made in installments.
Final bill form should be used for making final payments.
Before forwarding a contactor‟s bill to the Accounts Office, the Executive Engineer should
satisfy himself as to the correctness of the quantities billed, the rates and all recoveries.
All particulars / columns in the bill form should be filled up. Quantities since last
certificate, quantities up to-date, units, rate, amount, total value for the bill, total value of
work done so far etc. are filled up.
Technical Check of Bills to be done in the Drawing office under the supervision of
Executive Engineer.
Contractor's accounts to be closed without any delay on completion of work. If contractor
delays to receive final payment for more than one month, final bill to be passed and kept
under deposit.
Final Measurements to be recorded with in 21 days of completion of work.
The time for the execution of the work or part of the works specified in the contract
documents shall be deemed to be the essence of the contract.
If the contractor fails to complete the works within the time as specified in the contract for
the reasons other than the reasons specified in clause 17 and 17-A of GCC, the Railway
may, if satisfied that the works can be completed by the contractor within a reasonable
short time thereafter, allow the contractors further extension of time as the Engineer may
decide.
On such extension the Railway will be entitled without prejudice to any other right and
remedy available on that behalf, to recover from the contractor as agreed damages and not
by way of penalty a sum equivalent to ½ of 1% of the contract value of the works for
each week or part of the week.
The total amount of liquidated damages under this condition, shall not exceed the under
noted percentage value or of the total value of the item or groups of items of work for
which a separate distinct completion period is specified in the contract.
For contract value up to Rs.2 lakhs : 10% of the total value of the contract.
For contracts valued above Rs. 2 lakhs : 10% of the first Rs. 2 lakhs and the 5% of the
balance.
19.0 Labour Laws:
19.1 Provisions of Contract labour (Regulation and Abolition) Act, 1970 - (1)
The Contractor shall comply with the provision of the contract labour (Regulation and
Abolition) Act, 1970 and the Contract labour (Regulation and Abolition) Central Rules 1971 as
modified from time to time.
(GCC 2010, Labour , Item No 55A(1))
Enforcement of Contract Labour (R&A) Act, 1970 & Rules, 1971 framed there under-
Engagement of workers through Contractors by the Ministries and Departments of
Central Government.
(Railway Board’s Letter No. 2013/E(LL)/80/CNR/8 dated 26.02.2013.)
It has been noticed in the recent past that a large number of workers are being engaged on
contract by various central Government Ministries and Departments. Parliament Questions
have been received in this regard apart from various complaints relating to non-compliance of
various provisions of law. These include wages and social security benefits flowing out of
various legislations.
Similarly in cases where the workmen employed by the contractor perform the same or similar
kind of work as the workmen directly employed by the principal employer of the establishment,
the wage rates, holidays, hours of work and other conditions of service of the workmen, of the
contractor shall be the same as applicable to the workmen directly employed by the principal
employer of the establishment on the same or similar kind of work.
You may be aware that Government has enacted the Contract labour (Regulation and Abolition
Act- 1970) and central rules made there under which provide regulation of contract labour in
the establishments. The Act also provides for prohibition of employment of contract labour
where a notification is issued under Section 10. So far, 82 Notifications have been issued. This
Act casts obligation on employing departments to register their establishments under the Act
before the authority notified by the Central Government, the contractors have also to obtain
license before engagement of contract labour in the establishments. The Act & Rules provide
for certain facilities to be provided to the contract workers engaged in the establishments and
also to maintain registers and records, to issue wages slips and employment cards to the
contract workers by the employing department and contractor.
The Act also provides for penal action against the defaulters. The relevant Sections are as
under:
Section 24. Other offences.- If any person contravenes any of the provisions of this Act or any
rules made there under for which no other penalty is elsewhere provided, he shall be punishable
with imprisonment for a term which may extend to 03 months, or with fine which may extend
to Rs. 1000/- or with both. Provide penalty for contravention of other offences shall be
punishable with imprisonment for a term which may extend to 03 months, or with fine which
may extend to Rs. 1000/- or with both.
It is also noticed that some establishments are engaging contract workers in the employments
which have been prohibited under section 10 of the Contract Labour (Regulation and Abolition)
Act 1970. Some principal employers and contractors are violating the provisions of Act &
Rules.
In view of above; the employing departments are hereby notified to ensure the compliance of
the provisions of the Act & Rules in all establishments including PSU's under them.
Category of worker Rates of wages including V.D.A. per day (in rupees)
A-Area B-Area C-Area
Unskilled 180.00+90.00 150.00 +73.00 120.00 +60.00
= 270.00 = 223.00 = 180.00
Semi-skilled/ unskilled 200.00 +98.00 170.00 + 83.00 140.00 +70.00
supervisory = 298.00 = 253.00 = 210.00
Skilled/ Clerical 220.00 +108.00 200.00 +98.00 170.00+83.00
= 328.00 = 298.00 = 253.00
Highly Skilled 240.00 + 117.00 220.00 +108.00 = 200.00 +98.00
= 357.00 328.00 = 298.00
Mode of Payment:
1. Wages period should be fixed for the payment of wages at interval not exceeding one
month or such other period as prescribed.
2. Wages should be paid on working day within 7 day of the end of the wages period.
3. Wages of person discharged, should be paid not later than the second working day after
the discharge.
4. Wages should be paid without deductions except those authorised under the rules.
5. 26 days should be taken as a month for the purpose of calculating wages at the daily
rate.
Object:
This act aims securing prompt and regular payment of wages without any arbitrary deductions
to the contract labour employed in contract works either directly or through a sub contractor by
a person fulfilling agreement with railway and employing or having employed 20 or more
persons on any day of the preceding 12 months.
The contractor/ employer shall fix wages period which shall not exceed 01 month in any case.
The mode of payment as under –
The wages shall be paid on working day.
All wages shall be paid in current coin or currency notes.
The wages shall be paid –
a. Where less than 1000 labour employed, within 7 days of the expiry of wages
period.
b. For more than 1000 persons – before expiry of 10th days of wages period.
When the employment is terminated by the contractor/ employer, wages shall be paid
before the expiry of second day after termination.
Fines:
Fine can be imposed only in respect of acts and omissions and list of such acts and
omissions should be displayed.
No fine shall be imposed without giving an opportunity of “show cause” against the fine.
The amount of fine shall not exceed 03 paise in a rupee of wages in respect of that wages.
Fine can not be imposed/ recovered after the expiry of 90 days from the date of offence
and also can not be recovered in installments.
A register is required to be maintained to record fines and deductions made for loss and
damages.
List of Acts & Omissions
Disregarded or disobedience of order.
Breach of discipline
Late or irregular attendance
Improper behavior such as drunkenness, quarrelling or sleeping on duty.
Causing inconvenience to the public
Making false and misleading statements.
Inefficient, careless, wasteful, dangerous obstructing working
Failure to observe rules and regulations.
Causing loss or damage to railway properties.
Deduction Permissible
No unauthorized deduction shall be made and the following some of the authorised deductions –
Fines, for acts and omissions as notified after show cause notice.
Deductions for absence from duty
Deductions for adjustment of over payment
Deductions of income tax
Deductions required by the order of court.
Recovery in respect of theft.
Display of Notices
Abstract of act and the rules made thereunder, in English, Hindi and the regional
language shall be displayed.
Notice of wage period
Date of payment
List of acts and omissions
Punishment for Breach of acts
Delay in payment, non payment or - Penalty up to Rs. 7500/- (Minimum
unauthorised deductions Rs. 1500/-).
In all other cases, viz; non display of notices, - Fined up to Rs. 7500/- (Minimum
non maintenance of register of fines, register Rs. 1500/-).
of deductions for damage or loss
Registers to be maintained:
Register of Fines
Register of Deductions for loss or damage
Register of Wages at work spot
Deductions
1. Income tax @ 2% :
2. Surcharge on IT @12% :
3. E.Cess on IT @ 3% :
4. Conservancy cess @ 128/- p.m.
( upto 10 persons)
Total deductions ----------
Net payable ----------
19.6 Certificates on Bill/MB
Certificate of Supervisor
Certified that the payment made through this bill is actually for the work done by the
contractor during the period from……………to……………….
Certified that the work has been carried out as per items, terms and conditions of the
contract agreement.
Certified that no plants and machinery hired by the contractor.
100 % measurement check has been exercised by me.
The penalties of Rs. ………/- as calculated on page no. ……….. to ………… of MB no.
…….. has been deducted for the absents during the period from ……….. to………….
Signature of Supervisor
Certificate of Contractor
Certified that the labour engaged by us have been paid minimum wages as per prescribed by
Labour Commissioner and also mandatory commencement in ESI/PF.
Certified that the measurements as recorded at page no. …..to ………..R of the measurement
book no. ………… for the period ………. to …………. are correct and accepted without any
protest.
The bills are correct and accepted without any protest by us and have no claim against any item
of C.A. No. ……………………………………. dated …….
There is general experience that significant effort & time are involved in negotiating the rates
with the contractor where quantities of certain items in the agreement are required to be operated
beyond 125% of the tendered quantity. For such items after examining pros and cons of the
issue, Railway Board has decided that Para 9(ii) of Board‟s letter no. 2007/ CE-I / CT / 18 dated
28.09.2007 be modified as under:
I. In case an increase in quantity of an individual item by more than 25% of the agreement quantity
is considered unavoidable, the same shall be got executed by floating a fresh tender. If floating a
fresh tender for operating that item is considered not practicable, quantity of that item may be
operated in excess of 125% of the agreement quantity subject to the following conditions:
a. Operation of an item by more than 125% of the agreement quantity needs the approval of an
officer of the rank not less than S.A. Grade.
i) Quantities operated in excess of 125% but upto 140% of the agreement quantity of the concerned
item, shall be paid at 98% of the rate awarded for that item in that particular tender.
ii) Quantities operated in excess of 140% but upto 150% of the agreement quantity of the concerned
item, shall be paid at 96% of the rate awarded for that item in that particular tender.
iii) Variation in quantities of individual items beyond 150% will be prohibited and would be
permitted only in exceptional unavoidable circumstances with the concurrence of associate
finance and shall be paid at 96% of the rate awarded for that item in that particular tender.
b. The Variation in quantities as per the above formula will apply only to the individual items to the
contract and not on the overall contract value.
c. Execution of quantities beyond 150% of the overall agreemental value should not be permitted
and, if found necessary, should be only through fresh tenders or by negotiating with existing
contractor, with prior personal concurrence of FA&CAO/ FA&CAO(C) and approval of General
Manager.
II. In case where decrease is involved during execution of contract:
a. The contract signing authority can decrease the items upto 25% of individual item without
finance concurrence.
b. For decrease beyond 25% for individual items or 25% of contract agreement value the approval
of an officer not less than rank of S.A. Grade may be taken, after obtaining “ No Claim
Certificate” from the contractor and with finance concurrence, giving detailed reasons for each
such decrease in the quantities.
c. It should be certified that the work proposed to be reduced will not be required in the same work.
III. The aspect of invitation of tender with respect to variation in quantities should be checked and
avoided. In case of vitiation of the tender (both for increase as well as decrease of value of
contract agreement), sanction of the competent authority as per single tender should be obtained.
“As soon as in the opinion of the Engineer, the work has been completed and has satisfactorily
passed any final test or tests that may be prescribed, the Engineer shall issue a certificate of
completion duly indicating the date of completion in respect of the work and the period of
maintenance of the work shall commence from the date of completion mentioned in such
certificate. The Engineer may also issue such a certificate indicating date of completion with
respect to any part of the work (before the completion of the whole of work), which has been
both completed to the satisfaction of the Engineer and occupied or used by the Railways. When
any such certificate is given in respect of part of a work, such part shall be considered as
completed and the period of maintenance of such part shall commence from the date of
completion mentioned in the completion certificate issued for that part of the work.”
23.0 Arbitration and Termination:
Following are some of the tips to avoid disputes with contractors leading to arbitration:-
SN Activity
01 Preparing office note for approval
02 Calling for budgetary quotation from Firm
03 Concurrence to proposal
04 Preparation of estimate/ Est. cost
05 Vetting of estimate
06 Sanction to estimate
07 Tender booklet preparation with Terms and Conditions, Scope of work etc.
08 EMD (2% of the estimated tender value up to 1.0crores), above this, 2 lakhs
+ 0.5% of the excess of estimated cost
09 Ensure Unit of Advertised Tender
10 Preparation of tender notice for open tenders/OEM
11 Loading of Tender Notice on Net before 35 days of opening of tender
12 Issuing of tender booklet before 25 days
13 Opening of tender
14 Submission of tender cost of down loaded tender form to Associated finance
(Same day / next working day)
15 Verification of EMD submitted by Tenderer
16 Preparation of brief note & Tender tabulation statement
17 Verification of brief note SO (Wks A/cs) .
18 Nomination of TC members
19 TC preparation
20 Verification of eligibility criteria
21 TC Finalization
22 Acceptance of TC recommendations
23 Issuance of Letter of Acceptance ( LOA)
(Vetting of LOA from associated finance before issue of LOA if required.)
24 Submission of PG by the firm within 30 Days [ 5% of contract value ]
25 Verification of PG by law officer
26 Verification of BG by bank
27 Preparation of Contract Agreement
28 Signing of Contract Agreement
29 Dispatching of copy of Contract Agreement to concerned depot in charge.
30 Updation of finalised tender on net for value more than 1.0 crores.
31 Releasing of first on account bill by preparing office note
32 Completion report from depots.
33 Refund of Performance Guarantee (PG) after physical completion of work
( After completion certificate)
34 Refund of security deposit (SD) to the contractor after expiry of
maintenance period and after passing the final bill. ( After getting No Claim
Certificate from tenderer)
35 Arbitration, if any.
25.0 Vigilance in Contracts:
Every Railway man is a vigilance official. But, at times, greed and selfishness shroud us
and the canons of financial propriety are not exercised. Some times, it happens willfully,
other times it happens due to the haste, ignorance, the lack of application, or simply the
laziness by not doing complete homework or the stipulated test check in the tender
processing.
Following are the common irregularities which take place during various stages of
awarding works by open tenders:
i. Publishing of advertisement in the newspapers at far off places rather than the area of
demand.
ii. Non finalization of tenders within the validity period.
iii. Defective Tender schedule, lacunae in the technical description requiring clarifications
/negotiations after opening of the tenders.
iv. Playing with the technical aspects for rejecting inconvenient bids on the grounds of
technical unsuitability.
v. Resorting to the negotiations to create opportunities for a firm to be favoured.
vi. Incorrect evaluation of the bids, special conditions offered by the tenderers were not
properly assessed.
vii. Acceptance of an unsolicited offer from other than the lowest tenderer and awarding of
the contract without giving an equal opportunities to others.
viii. Consideration of a tender based on the data materially different from that given in the
general and special conditions of contract without the knowledge of tenderers.
ix. Placement of orders at higher rates on flimsy ground, technical or otherwise, shorter
completion period/delivery schedule but the period is extended later and the excuse that
the lower tenders do not belong to a developed source.
x. File held up after the acceptance of tender before the order are issued.
xi. Waival of the inspection or change in the inspecting authority or relaxation of technically
rigid requirements or relaxation in the commercial terms
xii. Splitting of the demands to bring the tender value within the powers of lower level
sanctioning authority.
xiii. Inclusion of dummy firms to inflate the number and ultimately consider the favoured
firms in case of the limited tenders.
xiv. Acceptance of higher rates on the plea that the accepted offer is lowest without
adequately justifying the reasonableness.
25.1 CVC guidelines:
CVC has also issued guidelines from time to time. For easy understanding the tendering
process can be divided into four stages. The guidelines issued and the checklist for each
stage is summarized below.
i) Preparation of tender documents:
Allow adequate and reasonable minimum time (as prescribed) for opening of all tenders
to encourage proper response.
Ensure timely supply of copies of approved plans for tenders where special items rates
have to be quoted for the particular details of the approved plans.
Ensure the comparative statement and briefing note have been prepared and duly signed
by the concerned officials on each page.
Only consider offers accompanied by requisite earnest money in proper term.
Attempt identification of sister concerns to detect cartel formations especially in the case
of limited tenders.
The tender after acceptance and signing becomes „the contract‟ – a legal document. An
ambiguous agreement leads to poor contract performance and litigations. It also gives an
opportunity to a contractor to make profit out of ambiguous conditions. It has been
observed that the tender documents are prepared in a hurried manner without checking the
conformity among the schedule of items, drawings, specifications, and contract conditions
etc. This generally happens due to the reason that different parts of the tender document
such as schedule of quantities, specifications, drawings, and general conditions prepared
by different people are compiled without correlating them. Sometimes they are copied
from old tenders without giving a thought to the applicability of the conditions to the
present work.
Checklist :
• Adopt updated standard bidding document
• Ensure conformity among nomenclature of items, specifications, drawings,
general and special conditions.
• Avoid stipulating such conditions in the contract, which are not feasible to be
operated.
• Stipulate performance guarantee clause to eliminate non serious bidders
• Conduct pre-bid meeting i) to bring clarity regarding sprit of various provisions &
ii) to bring necessary modifications, if required. Make minutes of the pre-bid
meeting as part of agreement.
• Provide clause to deal with ambiguous provisions (order of precedence) in the
tender document and ambiguity in the tender submitted by the contractor.
• Notify objective evaluation criteria in the tender document.
• Stipulate condition regarding splitting of quantities, if required, in the tender
document.
The award of Public Contract through open tender is to ensure - transparency in public
procurement, to maximize economy and efficiency in public procurement, to promote
healthy competition among tenderers, to provide for fair and equal treatment to all the
tenderers and to eliminate irregularities, interference and corrupt practices by authorities
concerned. This is also required by the Article 14 of the Constitution of India.
The Commission vide its Circular No. 06-03-02-CTE-34 dt. 20.10.2003 and Circular No.
15/5/06 issued vide letter no. 005/CRD/19 dt. 9th May 2006 has emphasized upon open
tendering as the most preferred mode of tendering and insisted on transparency in the
preparation of panel in case of limited tenders. During intensive examination of various
contracts awarded by many organizations, it is observed that they do not have a clear-cut
policy for inviting tenders through various modes as discussed above.
Widest possible publicity through well-circulated national and local newspapers is essential
for greater transparency in open tenders. In addition to the existing rules and practices
regarding publicity through newspapers, trade journals, the Commission vide their circular
no. 98/ORD/1dt.18.12.2003 has instructed for up loading the Notice Inviting Tender and also
tender documents in a down loadable form on the web site. The web site publicity is to be
given even in the case of limited tenders.
In the various booklets issued by the CTE Organization of the Commission, the need to
maintain transparency in receipt and opening of tenders has been emphasized and it has been
suggested therein that suitable arrangements for receipt of sealed tenders at the scheduled date
and time through conspicuously located tender boxes needs to be ensured. The Commission
vide their Circular No. 05-04-1-CTE-8 dt. 8.6.2004 has further instructed that in case of bulky
tender documents the provision for submission of bids to designated officials by hand should
be made in the tender document itself.
To maintain transparency in the opening of tenders, the Commission in its circular dated 8.6.04
has instructed to open the bids in the presence of bidders. Despite the reiteration from the
Commission regarding maintaining transparency in inviting & opening of the tenders, a
number of cases indicating lack of transparency, openness and fairness have come to light.
- Checklist :
• Prefer open tendering as far as possible
• In case limited tenders are resorted to, prepare & update panel of contractors/ vendors in a
transparent way.
• Ensure adequate & wide publicity. (Web publicity is necessary even in case of limited
tenders)
• Ensure adequate time for submission of offers.
• Upload NIT & tender document on web site, even in case of limited tenders (cvc‟s circular
dated 11.2.2004).
• Notify complete address of place of tender submission (cvc‟s circular dated 8.6.2004).
• Open the bids in presence of bidders.
• Attest and account for corrections, omissions, insertions, overwriting
• Prepare „on the spot summary‟ in tender opening register
iii) Pre-qualification
The success of a project largely depends on the capability of the contractor/vendor. Pre-
qualification is a process to select competent contractors having technical and financial
capability commensurate with the requirements of the particular procurement (Project / supply
of goods/ hiring of services).
The pre-requisites of pre-qualification process are-
-Transparency
-Fairness
-Maintenance of competition
The Commission has issued guidelines vide circular No12-02-1-CTE-6 dated: 12.12.2002 and
07.05.2004 advising the organizations to frame the pre-qualification criteria in such a way that
it is neither too stringent nor too lax to achieve the purpose of fair competition.
Checklist:
• Keep the PQ criteria neither too stringent nor too lax.
• Prepare the PQ criteria specific to the requirement of the work in clear terms.
• Notify the evaluation criteria in the PQ document.
• Verify PQ credentials.
• Evaluate the bids exactly as per the notified criteria
• Retender if relaxation in PQ criteria is necessary.
This is the most sensitive area susceptible to corruption. Corruption is inversely proportional
to transparency and fairness. To ensure that evaluation is done in most transparent and fair &
open manner, following points should be taken care of ….
Do’s:
1. Allow adequate and reasonable minimum time (as prescribed) for opening of all tenders
to encourage proper response.
2. Ensure timely supply of copies of approved plans for tenders where special items rates
have to be quoted for the particular details of the approved plans.
3. Ensure the comparative statement and briefing note have been prepared and duly signed
by the concerned officials on each page.
4. Only consider offers accompanied by requisite earnest money in proper term.
5. Attempt identification of sister concerns to detect cartel formations especially in the case
of limited tenders.
6. Ensure consideration of reasonableness of rates in the tender committee minutes. This
should not be with reference to presumably accepted rates, but also after taking in to
accounts market rates and analysis of rates. Reasonableness has to be explain in detail.
7. Obtain views of the Competent Authority to deal with the lowest acceptable offer of
contractors with adverse reports.
8. Treat the Tender Committee recommendations with dissenting notes carefully. Dissent
should be part of running minutes with views of other members also on it.
9. Negotiation should be an exception and not the rule in acceptance of tenders. These are to
be held with lowest valid tenders only.
10. Record relevant reasons for overlooking the lowest offer if it is not acceptable. Speaking
decision is a must.
11. Order calling for fresh tenders if items are to be revised or their value is to be enhanced.
12. Ensure that special conditions do not give avoidable scope for acceptance of high rates
(like mentioning steel to be supplied by the tenderers and later including payment for
such supply, which has a tendency to boost the percentage rates quoted by the tenderers).
13. Ensure that the tender committee minutes contain the relevant information as the date,
venue of the meeting and dated signatures of the members.
14. Record the acceptance or otherwise on the body of the tender committee minutes only &
not on the noting side of the file.
15. Ensure that the rating of the offers received is done properly after evaluating the special
conditions and vetting by finance.
16. Ensure that the reasonableness of rates is examined critically, logically and specifically
both in respect of total cost and rates of important individuals items.
17. Beware that the low offers are in facts so in reality and price, differential for similar but
different items of schedule is reasonable.
18. Ensure that the tender committee is duly constituted of competent level of officers
specified.
19. Ensure prior sanction of competent authority before executing additional quantities
(beyond 25%) in such items (overall for earthwork) so that the contracts are not vitiated.
Don’ts:
1. Do not change the Tender Committee members once constituted without prior approval
of competent authority.
2. Do not consider delayed/ late tenders except under specified exceptional circumstances &
that too only by following prescribed procedure.
3. Do not treat the Tender Committee‟s recommendations with dissenting notes from one or
more members of the Tender Committee as unanimous recommendations.
4. Do not order negotiation on the repeated advice of tender committee to invite fresh
tenders, particularly where response to the call for negotiations is poor.
5. Do not exercise the power of accepting authority in case you have been a member of the
Tender Committee. Let it go to higher authority.
6. Do not hold negotiation with those who had either not tendered originally or whose
tender was rejected because of unsatisfactory credentials, inadequacy of capacity or
where tenders were unaccompanied with adequate earnest money or any other invalid
tenders.
7. Do not accept open quotations from contractors during negotiations.
8. Do not entertain letter/ representations of tenders subsequent to opening / negotiations/
consideration of tenders.
9. Do not accept modified offers, not considered by the Tender Committee.
10. Do not allow subsequent revision of the minutes unless the reconsidered minutes are put
up in addition.
11. Do not advise the tender committee prior to their deliberations on the suitability or
otherwise of any particular offer.
12. Do not allow anomalies in evaluation of special conditions to affect the acceptance of the
offer recommended.
13. Do not operate non-schedule items without sanction of competent authority. In
exceptional cases where it has to be done, maintain necessary site records.
14. Do not operate non-schedule items where it possible to do work as per schedule items or
a combination there of.
15. Do not award works on quotations in a routine manner and strictly follow annual
financials limits laid down.
27.0 CHECK SHEET FOR TENDERS
Department status
a
b
c
7 Is the DOC reasonable? Has the work plan been made?
8 Kind of role of Railway in execution
a Provision of material
b Provision of M&P
c Provision of any support service
d Transportation
9 Is the drawing/plan approved by user deptt and the competent authority?
10 Is the work or any portion of the work covered by any other estimate? if
yes, has it been considered?
11 Is the ultimate user aware and satisfied with the scope of work?
12 Is the estimated cost based on Avg of atleast 3 Railway’s LAR and takes
into consideration all deviations/rate analysis ?
13 Has the detailed estimate been sanctioned?
14 Does the estimate incorporate inputs of all deptt.?
15 Is the ‘similar work’ criteria well defined by competent authority (PHOD)?
16 Are payment terms standard and clearly defined?
17 Is tender document ready?
3 Is tender name, no., date of tender notice written on top of the page?
9 Is closing time of tender sale mentioned at the last and blank space
scored out and finally countersigned by officer?
Sheets