(For official use only)

(Govt. of India)
(Ministry of Railways)

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HAND BOOK
ON
WORKS CONTRACT
MANAGEMENT
CAMTECH/GWL/M/Contract Management- 1.0

CAMTECH/GWL/M/Contract Management- Rev.2.0

May - 2011

Nov.Draft
- 2013

Maharajpur, Gwalior (MP)

 FOREWORD

Due to increase in volume of transport services, it has become difficult to

carryout all activities through departmental resources. Therefore, outsourcing
through works contracts for non core activities to agencies having higher
technical qualifications and better resources is being resorted to. Since
Mechanical department of Indian Railways is generally not very acquainted with
the systems and procedures of works contracts, considerable difficulty is being
faced by the officers and supervisors dealing with works contracts.

CAMTECH has undertaken the important task of preparing a ‘Hand Book on

Contract Management for Mechanical Engineer’ to spread awareness about
guidelines, various steps to be followed and the standard tender conditions
circulated by the Railway Board for different activities.

I hope, this handbook will be very helpful in improving knowledge of supervisors

and officers of mechanical department about various aspects of contract
management.

CAMTECH Gwalior S.C. Singhal

09.05.2011 Executive Director
 PREFACE

Hitherto Mechanical Department has been managing their activities departmentally.

However due to increase in volume of transport services and rise in costumer
expectations, it has become very difficult to manage the services departmentally in cost
effective manner. Therefore outsourcing of following few non core activities is being
done.

 Mechanised cleaning of C&W depots.

 Mechanised cleaning of coaches.
 On board house keeping services.
 Washing of linen & other cloths.
 Rodent control treatment.
 Disinfection of passenger carrying vehicle.

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.

CAMTECH Gwalior (K.P. Yadav)

Date: 09.11.2013 Director/Mech.
 CONTENTS

Page No.
Front Page 1
Forward 2
Preface 3
Contents 4-6

PART-I TENDERS AND CONTRACTS

1.0 Introduction: 7
2.0 Canons of Financial Property 7
3.0 Contract and Agreement 7
3.1 Tender system 8
3.2 Types of Tenders 8
3.3 Estimate 10
3.4 Tender Notice 11
3.4.1 Minimum Tender Notice Period for contracts of small value 11
3.4.2 Care to be taken while preparing tender notice 11
3.4.3 Advertisement of Tender 12
4.0 Tender Processing: 12
4.1 Important tips on Tender Processing 12
4.2 Stages of Tender Proceedings 13
4.3 Terms of Contract 14
4.4 Framing of Tender documents 14
4.5 Cost of Tender Form 14
Sample format for Tender document top sheet 15
4.6 Late/Delayed/Post Tender Offers (Rly. Bd. guidelines) 16

5.0 Tender Box 17

5.1 Guidelines for Maintaining Tender Box Register 17
6.0 Opening of Tenders and scrutiny 21
6.1 Verification of Authenticity of documents of L-1 bidder 21
7.0 Tabulation statement & Briefing Note 22
7.1 Format of Briefing Note 24
8.0 Earnest Money Deposit (EMD) 26
8.1 Forms of Earnest Money 27
8.2 Refund of Earnest Money 27
8.3 Validity of offer 27
9.0 Security Deposit (SD) 27
9.1 Refunding of Security Deposit (S.D.) 27
10.0 Performance Guarantee (PG) 28
11.0 Conditions of contract 30-45
12.0 Eligibility Criteria for Finalizing Tenders: 46
12.1 Recommendations of Sudhir Chandra Committee 46
12.2 Stipulation of minimum eligibility criteria for open
tenders costing above Rs. 50 lacks 46
13.0 Tender Committee 47
13.1 Constitution of Tender committee is tabulated as under 47
13.2 Acceptance of Tender 47
13.3 Important tips for Tender committee 48
13.4 Role of Tender Committee members 49
13.5 Reasonability of offers 51
13.6 Consideration of TC recommendations by TAA 51
14.0 Negotiation 52
15.0 Counter Offer 53
16.0 Letter of acceptance (LOA) (GCC 2010 Part-I, Para8) 53
16.1 Signing of Agreement & Submission of PG 53
17.0 Execution of Work: 53
17.1 Important points to be observed while executing the work 53
17.2 Communication with the contractor 53
17.3 Progress of works 54
17.4 Supervision of Work 54
17.5 Special condition 54
17.6 Test check 54
17.7 Selectivity in execution 54
18.0 Measurement & Bills 55
 18.1 Maintenance of measurement books 55
18.2 Bills & Payments 55
18.2.1 Liquidated Damages (Clause 19.2) 56

19.0 Labour Laws 57

19.1 Provision of Contract labour (Regulation and Abolition)

Act-1970 - (1) 57
19.2 Provision of Minimum Wages Act 60
19.3 Provision of Payments & Wages Act 61
19.4 Checking of Records for Payment 61
19.5 Model Time Table for passing of bills 64
19.6 Details to be filled in MB (Illustrations) 64
19.7 Certificates on Bill/ MB 64

20.0 Payment of bills 66

20.1 Variation in Quantities of Items of Contracts – Limits & Rates 66
20.2 Control on high and low rated items 67
21.0 Time extension 67
22.0 Completion report 67
23.0 Arbitration and Termination 68
24.0 Summary of Tender Proceedings at a glance 68
25.0 Vigilance in Contracts 70
25.1 CVC guidelines 70-73
26.0 Do’s & Don’ts 74-76
27.0 Check Sheet for Tenders 76-82
 TENDERS AND CONTRACTS

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.

2.0 Canons of Financial Propriety

(Finance code Vol. I, Para 116)
 The expenditure should not prime facie be more than the occasion demands and that every Govt.
Servant should exercise the same vigilance in respect of expenditure incurred from public money
as a person of ordinary prudence would exercise in respect of the expenditure of his own money.
 No authority should exercise its powers of sanctioning expenditure to pass an order which will
be directly or indirectly to its own advantage.
 Public money should not be utilised for the benefit of a particular person or section of the
community.
 The amount of allowances such as TA, granted to meet expenditure of a particular type, should
be so regulated that the allowances are not on the whole source of profit to the recipients.

3.0 Contract and Agreement

When two or more persons have a common intension communicated to each other to create
some obligation between them, there is said to be an agreement. An agreement may or may not
be enforceable by law. „An agreement‟, which is enforceable by law, is termed as a “contract”.
A valid contract must contain the ten valid elements, which are:
1. Offer and acceptance
2. Intention to create legal relations
3. Lawful consideration
4. Capacity of parties
5. Free Consent. Any agreement/contract entered by force is illegal.
6. Lawful object
7. Writing and registration
8. Certainty
9. Possibility of performance
10. Not Expressly Declared Void
An agreement has to be entered into with the contractor ensuring that specification, all relevant
special conditions, period of contract and scopes of work have been included in the body of the
agreement. All contracts entered into by concerned Officers of Railways are to be signed for
and on behalf of President of India by the competent authority and witnessed by two
responsible persons – one from the Railways and the other from the contractor.
The work shall only be started after signing the contract agreement. It will enable the site
engineer to know all conditions, special conditions, period of contract, modus operandi, scope
of work etc., who has to certify the work for billing accordingly. It will help in curtailing the
arising of unwarranted disputes also.
3.1 Tender system
As per Para 1210 of Engineering code, it is the primary duty of the executive to obtain the best
value possible for the money spent and the tender system should be given a very careful and
serious consideration in all cases to secure competitive rates.
What is a Tender?
Tender is a sort of bid or offer made by a contractor for execution of certain work or supply of
materials for specified work under specified conditions with prescribed time limit.
Generally, when the value of the work exceeds Rs. 2 lakhs, it should be processed through
tender procedure. First, estimated cost of work should be worked out. This can be arrived at on
the basis of last accepted rates (LAR) or budgetary quotations. A detailed justification should
be made and administrative approval for the work should be accorded by the authority
competent to do so after thorough examination of the necessity, utility and financial aspects.

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

3.2 Types of Tenders

 Open Tender (OT)
 Two-packet Tendering system
 Single Tender
 Limited Tender (LT)
 Special Limited Tender (SLT)
 Bulletin Tender
 Quotations
1. Open Tender:
It is a system of invitation of tender by public advertisements in most open public manner. The
tender documents in the case of open Tenders, are to be issued to those prospective tenderers
who deposit the fee for tender documents irrespective of whether an eligibility clause is
prescribed or not. In case, an eligibility clause is prescribed, it is for tender committee to
evaluate whether the tenderer satisfies the prescribed eligibility clauses.

Two-packet system of Tendering:

„Two Packet System‟ of tendering may be adopted in specifically identified situations for
obtaining consultancy services, for highly technical works where parameters cannot be precisely
pre-defined or for execution of work, which are technically complicated and specialized in nature
and/or which are executed very rarely. With a view to access the tenders technically – without
being influenced by the bids, “Two packet system of tendering” may be adopted. Hence tender
condition, i.e. eligibility criterion, credentials and modus operandi has to be drafted carefully.
The ―Qualifying Criteria‖ in the tender documents should be defined duly concurred by
 FA&CAO & approved by GM. Care should be taken while ignoring the offers during TC
proceedings.
In this system, the tenderer are advised to submit their offers in two sealed envelops with one
cover containing the Technical and Commercials Bid and other containing Financial Bid.

 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.

Limits of Single Tender:

 Up to Rs. 20 Lakhs per case per PHOD subject to annual limit of Rs. 1 Crore (prior
finance concurrence at the level of FA& CAO).
 Up to Rs. 10 Lakhs per case per DRM subject to annual limit of Rs. 50 Lakhs (prior
finance concurrence at the level of Sr. DFM).
 All single tender cases (other than stores) will require GMs personal sanction and FA &
CAOs concurrence.
 TC & Accepting authority should be one step higher.

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.

6. Dispensing with Tendering:

AUTHORITY FINANCIAL LIMIT ANNUAL CEILING

Sr. Scale 1,00,000 5.0 lakhs

JAG 2,00,000 20.0 lakhs
SAG 4,00,000 40.0 lakhs

(Rly Bd’s letter No. 2007/CEI/13/PT Dt 05/03/2009)

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.

3.4.1 Minimum Tender Notice Period for Contracts of small value:

[ Ref: Bd’s letter 2007/CE.1/CT/18 Pt.II dt.30.07.10 ( item 4) ]

“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’.

3.4.2 Care to be taken while preparing tender notice:

Lengthy Tender Notices:
( Ref. Railway Board letter No.2008/CE-I/CT/21 dt.05.03.2009)
It is observed that Tender Notices appearing in the press are needlessly long and that
unnecessary long tender notices, apart from causing loss of revenue to the Railway; also tend to
lose the clarity of the subject. It was further directed in this letter that due care should be
exercised by the concerned authority who approves the notices for inviting tenders to ensure that
the tender notices are crisp and clear and that they do not have unnecessary repetitions and
ambiguity.
The purpose of publishing Tender Notices in newspapers is to draw the attention of the eligible
contractors to the proposed work. Since the complete details are available in the Tender Notices
posted on the Railway website and also placed on the Notice Board of the concerned office, there
is no need to give exhaustive details about the work in the Tender Notices being published in the
News Papers.
It is sufficient if the Tender Notice furnishes only details such as:
(i) Name of Work with its location
(ii) Approximate Cost of the Work
(iii) Cost of Tender Form
(iv) Address of the office from where the tender form can be purchased
(v) Earnest Money to be deposited
(vi) Completion period of the work
(vii) Date & Time for submission of tender and opening of tender
 (viii) Website particulars and notice board location where complete details of tender can be
seen, etc.
The Railways need to be cautious while issuing notices and corrigendum/ addendum which
should invariably be published in all the concerned newspapers besides posting the same in the
Website/Notice Board of the Office, etc. where the original notice was pasted. The web-site
should also specify a date up to which the tenderers may note updates/ corrigendum/revised date
of opening.
The Railways may also arrange to have all the notices including tender notices published on a
fixed day in a week. For this, since the space requirements in newspapers will be in bulk, the
railway may negotiate for considerable reduction in the advertisement charges with the
newspapers concerned.

3.4.3 Advertisement of Tender

 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.

(Rly Bd letter No. 2008/RS(G)/779/2 Dated 7/11/2008)

4.0 Tender Processing:

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.

4.1 Important tips on Tender processing:

 Tender should have clear description of work.
 A tender must be received on specific date, time and place and opened at the specified time
by a Tender Opening committee in presence of all the tenderers or their authorized
representatives.
 This information should be available in the Tender Opening Register, duly signed by the
Tender Opening Authority and those present.
 Tender must be either on the tender form issued or downloaded from website and should be
signed by an authorized person.
 Tender must be accompanied with requisite earnest money in the acceptable form i.e.
demand draft, FDR, Cash railway receipt in favour of associate finance officer
(WAO/Sr.DFM).
 Late and delayed tenders should be clearly marked.
 A comparative statement and briefing note be prepared duly vetted by Accounts Officer.
 Writing of briefing note should be clear and comments on all accounts queries are duly
furnished.
4.2 Stages of Tender proceedings
S.No. Activity Time Limit
(Approx.)
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 --
11 Loading of Tender Notice and tender document on website before --
35 days of opening of tender & taking copy of proof of loading.
12 Issuing of tender booklet before 25 days --
13 Opening of tender 01 Day
14 Submission of tender cost of down loaded tender form to Sr. DFM 02 Days
(Same day)
15 Verification of EMD submitted by Tenderer 07 Days
16 Preparation of brief note & tender tabulation statement. 01 Day
17 Verification of brief note SO (Wks A/cs). 05 Days
18 Nomination of TC members 01 Day
19 TC preparation 05 Days
20 Verification of eligibility criteria 07 Days
21 TC Finalization 07 Days
22 Acceptance of TC recommendations 01 Day
23 Issuance of Letter of Acceptance 01 Day
24 Submission of PG by the firm within 30 Days [5% of contract 30 Days
value]

25 Verification of PG by law officer 02 Days

 26 Verification of BG by bank 05 Days
27 Preparation of Contract Agreement 02 Days
28 Signing of Contract Agreement 03 Days
29 Dispatching of copy of Contract Agreement to concerned depot in 01 Day
charge.
30 Updation of finalised tender on net for value more than 1.0 crores. 04 Days
31 Releasing of first on account bill by preparing office note --
TOTAL 85 DAYS

4.3 Terms of Contract:

The terms of contract must be precise and definite and there should be no room for ambiguity
or misconception and should include the following:
 The contractor is to do; what, when, where and to whose satisfaction.
 What the railway administration is to do, on what terms?
 What and when the payment is to be made and the method and the basis for making it?
 The responsibility of the contractor in respect of adequate supervision, care of government
property.
 Measures to be adopted in the event of breach of the contract by either party.
 The method of setting disputes as per GCC Para 1217 of Engineering Code.
(As far as possible, legal and financial advice should be taken in drafting contract before they
are finally entered into as per Para 1217 of Engineering Code).

4.4 Framing of Tender documents

The tender document should consist of –
 Updated general conditions of contract.
 Authentic schedule of items works based on approved drawings and design.
 Special conditions, if any, duly vetted by Accounts.
 Well defined technical specifications on which schedule of items of work is based.

4.5 Cost of Tender form:

(Ref: Engineering Code, Re-Print 1999, Para 1240A)
The present cost of tender form for various values of works is as under:
 Up to Rs. 5 lakhs Rs. 1000/-
 Above Rs. 5 lakhs and upto 20 lakhs Rs. 2000/-
 Above Rs. 20 lakhs and upto 50 lakhs Rs. 3000/-
 Above Rs. 50 lakhs and upto Rs. 2 cr. Rs. 5000/-
 Above Rs. 2 crores to 50 Crores Rs. 10000/-
 Above 50 Crores Rs.25000/-
 Sample Proforma for Tender Document

OPEN TENDER DOCUMENT

FOR

House keeping, Caretaking, catering and Transportation

facilities to the IRCAMTECH Hostels.

UNDER

EXECUTIVE DIRECTOR, IRCAMTECH/GWL

Tender Document
TOP SHEET
Contract for: House keeping, Caretaking, Catering Facilities to the
IRCAMTECH Hostels.

1. Tender Notice No. : IRCAMTECH/GWL/Hostel/Tender/2012-2014 Dated 25.08.2010

2. Approx. Cost/Estimated cost : Rs. 9,31,260/-

3.
3. Period of Contract : Two years.
4.
4. Earnest Money (EMD) : Rs. 18,630/-
5.
5. Date & Time of placement of T/ Box : 09.30 hrs. on 05.12.2012 near Main gate.

6. Date & Time of Closing Tender : 15:00 Hrs. of 15.12.2012.

7. Date & time of Opening of Tender : 15:15 Hrs. of 15.12.2012.

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)

Non-acceptance of late/delayed/post tender offers.

1. Reference Ministry of Railways letter NO.59/77/RS(G) dated 04.05.60 wherein the General
Managers were authorized to accept “Late Tenders” subject to certain conditions. These powers
were also delegated to HODs vide Board‟s No.F(X)IX/62-PW 4/3 dated 09.03.64 and
No.71/RS(G)/777 dt.01.09.1971.

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.

Precautions while opening Tenders:

 The tender opening should be done by tender opening committee in presence of all the
tenderers or their authorised representatives.
 All envelops pertaining to a particular tender to be serially numbered like 1/5, 2/5 .... 5/5 if
5 envelops are there and initialled by all the tender opening officials
 They are to be entered in the tender opening register in the same order 1/5, 2/5 ----- with
name of the firm.
  Then open envelop one after another and record number appearing on the envelop on each
page of the offer with initials of tender opening officials
 Better to indicate total number of pages after careful counting with initials so as to
eliminate page subsequently.
 Encircle all rates both figures and words as well conditions having financial implications
with initials without leaving any space around so as to eliminate possibility of any
insertions later on.
 Testify and indicate corrections and total number of corrections on each page so as to
eliminate possibility of further manipulation by corrections.
 Indicate ambiguities in rates by recording rate also in words if not written by the tenderer
with remark – rates not quoted in words.
 Record whether sample has been supplied and identify it with initials so as to eliminate
possibility of its subsequent replacement
 Number of conditions quoted on each page to be counted and indicated on each page so
as to eliminate possibility of later additions.
 Name and rates quoted by each tenderer to be read aloud.
 No opportunity to be given to tenderers to repudiate , amend, explain the rate or
conditions
 Value and form of EMD to be noted
 A summary of rate prepared
 In case of two packet system – packets containing technical bid are opened first.
 Care should be taken during tender openings so that following post opening
manipulations are avoided as these may change the interse position of the tenderers.
 Alteration/corrections in rates
 Alteration/corrections in conditions
 Insertion of additional offers
 Insertion of additional duties/taxes
 Alteration in discounts etc.

5.0 Tender Box

 Tender box should be kept in the office duly locked and sealed by the accounts
representative at the nominated date.
 Tenderers may be instructed to directly deposit the sealed tenders in the tender box at the
nominated date within the stipulated time.
 Tenders received by post within the time specified may be received by the Office
Superintendent concerned who should immediately drop the same in the tender box
without opening the envelope or breaking the seal.
 In case tenders are received well in advance or the size of packet of the tender document
is large so that it cannot be dropped in the tender box, special procedure should be
followed.
5.1 Guidelines for Maintaining Tender Box Register
a. Tender sale of tender document to be continued up to 4 hours of opening of tender.
b. Sealed tenders should be dropped in boxes, before notified date & time.
c. Multiple places for dropping of tenders may be permitted for high value tender, since it is
applicable for high value tenders.
d. Tenders received by post to be entered in 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.
[ 1247-E]
e. Test check should be conducted by executives to check whether any working contractor,
Railway employee or any other individual is obstructing or barring any tenderer for dropping
his offer in the tender box.
f. After tenders are put on sale, tender box should be placed at specified place, locked and
sealed with only a top horizontal slot (Large enough to drop the tenders) kept open.
As per Railway Board‟s letter No. CE-I/CT/1 dated 13.02.1991, it is desired that boxes
should be provided well in advance and in any case at least ten days before the last date of
receipt of the tenders so that tenderers feel free to deposit the tenders at their convenience.
Tender box once sealed to be opened at specified time and the opening should under normal
circumstances not to be postponed.[ CE/CR’s L.No. W.187.R.VII OF 31.10.79, Para 10] annex. 56.]

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

1. Name of the work:

2. Tender No:,
3. The date & time of availability of tender box for submission of tender:
4. The last date & time up to which tender box will be available for submission of tender –
5. The Name of Security staff:
6. The tender Box will be kept in the chamber of ……………….. in safe custody daily at 17.30 hrs. and
will again be kept at ……….. near the table of security supervisor at 09.30 hrs. in sealed & locked
condition.
Note: The tender box is made available on ……………., min.10 days before the last date of receipt of
the tenders as per guidelines of Railway Board‟s letter No. CE-I/CT/1 dated 13.02.1991.

Sr. Date of placement of Tender Time of Tender Time of tender Signature of

No. box at main gate of Box placement box taken in safe key holding
CAMTECH office custody by SSE supervisor
01
02
03
04
05
06
07
08
09
10

Format for Tender Box Slip

Reg. No. :

Date & time of placement of Tender Box :

Name of work :

Tender No. :

Estimated cost : Rs.

Earnest Money : Rs.

Last Date & time of submission of Tender :

Date & time of Opening the Tender :

Place where Tender Box is kept :

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.

6.1 Verification of Authenticity of documents of L-1 bidder

Instances have come to notice that Documents/Credentials submitted by some bidders
were found fake/forged. It is therefore imperative that the authenticity of documents
like Solvency Certificate, Works Experience Certificate, Bank Guaranty, Eligibility
Criteria etc. is ascertained before entering into contract with L-1 bidder. This has been
emphasized by CVC also.
In order to avoid delay in finalization of tenders within their validity period, following
procedure may be adopted.

1. Documents of all bidders be sent for verification immediately after opening of

technical bids.
2. The processing of tenders may continue without waiting for verification of
documents.
3. Authenticity of Bank Guaranty issued by banks, may be got ascertained by Fax or
e-mail from the issuing bank.
4. Authenticity of Performance/ Experience Certificate may be ascertained by Fax/
e-mail / deputing officer not below the rank of manager.
5. It may be ensured by Project Convener that before submission of recommendation
by the tender committee to the Tender Accepting Authority, report on verification
of Documents / Credentials of L-1 bidder is available.
6. The tender committee shall make suitable mention regarding verification of
documents in their recommendations to the Tender Accepting Authority.
(Vigilance circular issued for letter no. RITES/RI/MIS/11B dated 11.03.2008)
7.0 Tabulation Statement and Briefing Note
(Ref: Engineering Code, Re-Print 1999, Para 1253)
Briefing notes for the Tender Committee —
Along with the tabulation statement, a briefing note duly authenticated at an appropriate level
should be submitted clearly.
Preparation and check of Briefing Note & Comparative statements:
(a) Briefing note on tenders and comparative statement of the various offers received should be
prepared and checked in concerned section of the executive office and each page thereof should
be signed by the staff and the officer preparing and checking them. The departmental officer,
who associated with the opening of tenders should also check the comparative statement and sign
each page of it in token of having done so. The comparative statement shall also be checked by
the SO(A/Cs) wherever attached to the Executive Office and sign in token of having done so.

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.

(b) Specific Responsibility:

The primary responsibility for correct preparation and verification of comparative statement and
briefing note shall be on the staff and the officers who are associated in the preparation and
checking of the statement and the briefing note in the Executive offices. The Section Officer
(Accounts) in the Executive office and the Section Officer (A/Cs) in account office shall be
responsible for factual verification and for arithmetic accuracy. In case, where technical
conditions have been evaluated in the financial terms, the responsibility for each evaluation shall
rest solely on the technical officer who signs the comparative statement and the briefing note.
The staff of the account department shall not be responsible for technical evaluations, their
responsibility being limited to checking the arithmetical accuracy of such evaluations, as
furnished by the technical departments. The technical officers who examine the technical
appreciation and prepares and signs the briefing note of the tender committee and briefs, Tender
committee in person, whenever called upon to do so, shall also be responsible for briefing the
Tender committee regarding the other aspects, such as rates, conditions, delivery etc. to ensure
that in such cases, an integrated view if taken by the briefing officer, about the relationship
between the technical conditions, rates, delivery etc. etc.

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.

7.1 FORMAT OF BRIEFING NOTE FOR TENDERs

Part A: Pre Tender information

SN Description Remarks

1. Name of Work

2. Directorate/Division

3. Pink Book/Law Book/LWP Ref. No. for Demand No. 16

4. Reference of sanctioned detailed estimate (DE) & cost of DE

a. Nature of Tender (Open/Single/Global/Spl. Ltd.)

5.
b. Sanctioning authority with respect to nature of Tender

6. Works / Stores/ Consultancy tender

7. Two bid (two packet) or single bid

8. Whether pre-bid meeting required

9. Pre-bid minutes available/uploaded :

10. Cost of tender document has been taken during pre-bid meeting

11. Vetted Indent details/quantity (in case of stores tender)

In Global Tender, exchange rate on the date of tender opening @ BC

12.
selling price from SBI (for two packets technical bid opening date)
 Master copy of the tender document sealed at tag & signed by Competent
13
Authority placed at SI. No.

Whether the offered tender document has been compared with master
14.
copy

15. Approval of NIT taken.

16. Tender Notice No. & date (also specify date of publication, if different)

Whether complete bid documents published on website or not and date of

17.
publication.

1. In case of open/global tenders, News paper cuttings alongwith the dates

(atleast 03) including other document on mode of advertisement (such
as displaying on Notice Board, Notifications).
2. In case of Limited Tender-list of approved firms.
18. -Whether short listed firms have been duly approved by CA.
- Whether a minimum criterion is fulfilled.
3. In case of Spl. Ltd. Tender-Basis of short listed firms.
- Whether minimum criteria is fulfilled.
Whether tender notice period has been shortened.( Approval of competent
19.
authority)

20. Approx. cost of works as per tender notice.

21. Date of tender opening

FORMAT OF BRIEFING NOTE FOR TENDERs (Contd…

Part B: Post Tender information

1. No. of Tender forms sold.

2. No. of offers received

3. No. of Late Tenders/Delayed Tender

4. Tenders opened by
5. Rate Tabulation Chart placed at (single bid)
6. Validity of offer
7. level of TC
8. Accepting Authority
 Whether tender documents and terms & conditions signed by Tenderer or
9.
not (Details)
Partnership deed, Power of Attorney, Sole Partnership Certificate
10.
submitted or not (Details)
11. Completion period/Delivery period
12. Samples if required are submitted/not submitted

13. lowest offer vis-a-vis estimated cost (% age variation)

14. lowest offer vis-a-vis LAR (% age variation)

15. Allocation (chargeable head)

Funds availability (copy of Fund availability), available in current
16.
financial year.
From the participating firms whether business has been banned with any
17.
firm,

Part B: Post Tender information

18. Tender Document Cost:

S Amt. of Mode No. Issuing Exe Wal Validity, Whether Remar
N tender of EM & bank & mpti val, if any cross ks
docume (BG‟s Date whether ons, if indicatin checked
nt are not of is a if any g last with
deposite valid) instru schedule any date of issuing
d ments d bank. validity Bank

8.0 Earnest Money Deposit (EMD)

Every tenderer is required to deposit with the tender an Earnest Money Deposit for the due
fulfillment of the condition of the contract (Para 1241 & 1242).The earnest money is required
to test the earnestness of the tenderers and to discourage non serious parties. The earnest
money of unsuccessful tenderers is refunded whereas the earnest money of successful tenderers
is adjusted in the Security Deposit.
Earnest money to be deposited according to the estimated cost of work as detailed below
(Ref: Engineering Code, Re-Print 1999, Para 1242):-

Value of the work EMD

For works estimated to cost upto Rs. 1 crore 2% of the estimated cost of the work
For works estimated to cost more than Rs. 1 Rs. 2 lakh plus ½% (half percent) of the excess of
crore estimated cost of work beyond Rs.1 crore
The tenders without EMD are liable to be summarily rejected.

8.1 Forms of Earnest Money:

Earnest Money deposit can be remitted in any of the following forms:
1) Deposit receipt, Pay orders, Demand drafts. These forms of Earnest Money should be
either of the State Bank of India or any of the Nationalised Banks. No confirmatory
advise from the Reserve Bank of India will be necessary.
2) Deposit receipt executed by the other scheduled banks approved by the Reserve Bank of
India for this purpose.

8.2 Refund of Earnest Money:

The earnest money of all unsuccessful tenderers should be refunded as expeditiously as
possible (Para 1261). In case the tenderers withdraw their offer within the validity date of their
offer or fail to undertake the contract after acceptance of their tender, the full earnest money
will be forfeited.
The Earnest Money of the unsuccessful tenderer(s) will, save as here-in-before provided, be
returned to the unsuccessful tender(s) within a reasonable time but the Railway shall not be
responsible for any loss or depreciation that may happen to the Security for the due
performance of the stipulation to keep the offer open for the period specified in the tender
documents or to the Earnest Money while in their possession nor be liable to pay interest
thereon.
(GCC2010 Annexure 1 Second Sheet, Item No. 6d)

8.3 Validity of offer

The validity of offer will generally be 90 days from the date of opening of tender.

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)

Proforma for Unconditional & Unequivocal No Claim Certificate

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.

It is also certified that I the M/s……………………………..do hereby declare that the

measurements recorded at pages…………. to ………………. of MB No………….. have been
accepted by me and I have no claims what so ever for execution of excess/less quantities even
more than 25% excess/less of schedule N.S items of C.A No. …………………….. I have no
other claims outstanding for the work done or for labour/material supplied if any in the work
and on any other account, and payment of this bill i.e. nth and final bill shall be the final
settlement of all our claims in respect of the work to above mentioned C.A with ……
depot/Rly.

Contractor’s signature and seal

10.0 Performance Guarantee (PG)
(Ref: Rly. Bd. Letter no. 2007/ CE. I / CT/18 Pt. XII dated 31.12.2010 and GCC- 2010, Part-II
(Clause 16, Para 4)
a) “The successful bidder shall have to submit a Performance Guarantee (PG) within 30
(thirty) days from the date of issue of Letter Of Acceptance (LOA). Extension of time for
submission of PG beyond 30 (thirty) days and upto 60 days from the date of issue of LOA
may be given by the Authority who is competent to sign the contract agreement.
However, a panel interest of 15% per annum shall be charged for the delay beyond
 30(thirty) days, i.e. from 31st day after the date of issue of LOA. In case the contractor
fails to submit the requisite PG even after 60 days from the date of issue of LOA, the
contract shall be terminated duly forfeiting EMD and other dues if any, payable against
that contract. The failed contractor shall be debarred from participating in re-tender for
that work”.
b) The successful bidder shall submit the Performance Guarantee (PG) in any of the
following forms, amounting to 5% of the contract value:
 A deposit of Cash.
 Irrevocable Bank Guarantee.
 Government Securities including State Loan Bonds at 5% below the market value.
 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.
 Guarantee Bonds executed or Deposit Receipts tendered by all Scheduled Banks.
 A Deposit in the Post Office Saving Bank.
 A Deposit in the National Savings Certificates.
 Twelve years National Defence Certificates.
 Ten years Defence Deposits
 National Defence Bonds and
 Unit Trust Certificates at 5% below market value or at the face value whichever is less.
Also, FDR in favour of FA&CAO (free from any encumbrance) may be accepted.
c) The performance guarantee shall be submitted by the successful bidder after the letter of
Acceptance (LOA) has been issued, but before signing of the contract agreement. This P.G.
shall be initially valid upto the stipulated date of completion plus 60 days beyond that. In
case the time for completion of work gets extended, the contractor shall get the validity of
P.G. extended to cover such extended time for completion of work plus 60 days.
d) The value of P.G. to be submitted by the contractor will not change for variation upto 25 %
(either increase or decrease). In case during the course of execution, value of the contract
increases by more than 25% of the original contract value, an additional Performance
Guarantee amounting to 5% (five percent) for the excess value over the original contract
value shall be deposited by the contractor.
e) The Performance Guarantee (PG) shall be released after physical completion of the work
based on ―Completion Certificate‖ issued by the competent authority stating that the
contractor has completed the work in all respects satisfactorily. The Security Deposit shall,
however, be released only after expiry of the maintenance period and after passing the final
bill based on „No Claim Certificate‟ from the contractor
f) Wherever the contract is rescinded, the security deposit shall be forfeited and the
performance guarantee shall be encashed and the balance work shall be got done
independently without risk and cost of the failed contractor. The failed contractor shall be
debarred from participating in the tender for executing the balance work. If the failed
contractor is a JV or a partnership firm, then every member/partner of such a firm shall be
debarred from participating in the tender for the balance work either in his/her individual
capacity or as a partner of any other JV/partnership firm.

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:

DEFINITIONS AND INTERPRETATION

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.

Clause 65 to IR's General Conditions Of Contract (GCC)

{Ref : Railway Board's letter no. 2002/CE-I/CT/37, New Delhi, dated 07.09.2011}

Clause 65. Participation Of Joint Venture (JV) Firms In Works Tender-

This Clause shall be applicable for works tenders of value as approved and communicated by Railway
Board from time to time.
65.1 Separate identity/name shall be given to the Joint Venture Firm.
65.2 Number of members in a JV Firm shall not be more than three, if the work involves only one
department (say Civil or S&T or electrical or Mechanical) and shall not be more than five, if the work
involves more than one department.
65.3 A member of JV Firm shall not be permitted to participate either in individual capacity or as a
member of another JV Firm in the same tender.
65.4 The tender form shall be purchased and submitted only in the name of the JV Firm and not in the
name of any constituent member.
65.5 Normally EMD shall be submitted only in the name of the JV Firm and not in the name of
constituent member. However, in exceptional cases EMD in the name of Lead Member can be accepted
subject to submission of specific request letter from Lead Member stating the reasons for not submitting
EMD in the name of JV Firm and giving written confirmation from JV members to the effect that EMD
submitted by the Lead Member may be deemed as EMD submitted by JV Firm.
65.6 One of the members of the JV Firm shall be its Lead Member who shall have a majority (at least
51%) share of interest in the JV Firm and also, must have satisfactorily completed in the last three
previous financial years and the current financial year up to the date of opening of the tender, one
similar single work for a minimum value of 35% of advertised tender value. The other members shall
have a share of not less than 20% each in case of JV Firms with up to three members and not less than
20% each in case of JV Firms with more than three members. In case of JV Firm with foreign member
(s), the Lead Member has to be an Indian Firm with a Minimum share of 51%.
65.7 A copy of Memorandum of Understanding (MOU) executed by the JV members shall be submitted
by the JV Firm alongwith the tender. The complete details of the members of the JV Firm, their share
and responsibility in the JV Firm etc. particularly with reference to financial, technical and other
obligations shall be furnished in the MOU. (The MOU format for this purpose shall be finalized by the
Railway in consultation with their Law Branch and shall be enclosed alongwith the tender.)
65.8 Once the tender is submitted, the MOU shall not be modified / altered / terminated during the
validity of the tender. In case the tenderer fails to observe/comply with this stipulation, the full Earnest
Money Deposit (EMD) shall be liable to be forfeited.
65.9 Approval for change of constitution of JV Firm shall be at the sole discretion of the Employer
(Railways). The constitution of the JV Firm shall not be allowed to be modified after submission of the
tender bid by the JV Firm, except when modification becomes inevitable due to succession laws etc. and
in any case the minimum eligibility criteria should not get vitiated. However, the Lead Member shall
continue to be the Lead Member of the JV Firm. Failure to observe this requirement would render the
offer invalid.
65.10 Similarly, after the contract is awarded, the constitution of JV Firm shall not be allowed to be
altered during the currency of contract except when modification become inevitable due to succession
laws etc. and in any case the minimum eligibility criteria should not get vitiated. Failure to observe this
stipulation shall be deemed to be breach of contract with all consequential penal action as per contract
conditions.
65.11 On award of contract to a JV Firm, a single Performance Guarantee shall be submitted by the JV
Firm as per tender conditions. All the Guarantees like Performance Guarantee, Bank Guarantee for
Mobilization Advance, Machinery Advance etc. shall be accepted only in the name of the JV Firm and
no splitting of guarantees amongst the members of the JV Firm shall be permitted.
65.12 On issue of LOA (Letter Of Acceptance), an agreement among the members of the JV Firm (to
whom the work has been awarded) shall be executed and got registered before the Registrar of the
Companies under Companies Act or before the Registrar/Sub-Registrar under the Registration Act,
1908. This JV Agreement shall be submitted by the JV Firm to the Railways before signing the contract
agreement for the work. In case the tenderer fails to observe/comply with this stipulation, the full
Earnest Money Deposit (EMD) shall be forfeited and other penal actions due shall be taken against
partners of the JV and the JV. This Joint Venture Agreement shall have, inter-alia, following Clauses:
65.12.1 Joint And Several Liability - Members of the JV Firm to which the contract is awarded, shall be
jointly and severally liable to the Employer (Railways) for execution of the project in accordance with
General and Special Conditions of Contract. The JV members shall also be liable jointly and severally
for the loss, damages caused to the Railways during the course of execution of the contract or due to
non-execution of the contract or part thereof.
65.12.2 Duration of the Joint Venture Agreement - It shall be valid during the entire currency of the
contract including the period of extension, if any and the maintenance period after the work is
completed.
65.12.3 Governing Laws- The Joint Venture Agreement shall in all respect be governed by and
interpreted in accordance with Indian Laws.
65.13 Authorized Member - Joint Venture members shall authorize one of the member son behalf of the
Joint Venture Firm to deal with the tender, sign the agreement or enter into contract in respect of the said
tender, to receive payment, to witness joint measurement of work done, to sign measurement books and
similar such action in respect of the said tender/contract. All notices/correspondences with respect to the
contract would be sent only to this authorised member of the JV Firm.
65.14 No member of the Joint Venture Firm shall have the right to assign or transfer the interest right or
liability in the contract without the written consent of the other member sand that of the employer
(Railways) in respect of the said tender/contract.
65.15 Documents to be enclosed by the JV Firm alongwith the tender:
65.15.1 In case one or more of the members of the JV Firm is/are partnership firm (s), following
documents shall be submitted:
(a) Notary certified copy of the Partnership Deed,
(b) Consent of all the partners to enter into the Joint Venture Agreement on a stamp paper of
appropriate value (in original).
(c) Power of Attorney (duly registered as per prevailing law) in favour of one of the partners of the
partnership firm to sign the JV Agreement on behalf of the partner ship firm and create liability
against the firm.
65.15.2 In case one or more members is/are Proprietary Firm or HUF, the following documents shall be
enclosed:
Affidavit on Stamp Paper of appropriate value declaring that his/her Concern is a Proprietary Concern
and he/she is sole proprietor of the Concern OR he/she is in position of "KARTA" of Hindu Undivided
Family (HUF) and he/she has the authority, power and consent given by other partners to act on behalf
of HUF.
65.15.3 In case one or more members is/are limited companies, the following documents shall be
submitted:
(a) Notary certified copy of resolutions of the Directors of the Company, permitting the company to
enter into a JV agreement, authorizing MD or one of the Directors or Managers of the Company to sign
JV Agreement, such other documents required to be signed on behalf of the Company and enter into
liability against the company and/or do any other act on behalf of the company.
(b) Copy of Memorandum and Articles of Association of the Company.
(c) Power of Attorney (duly registered as per prevailing law) by the Company authorizing the person to
do/act mentioned in the para (a) above.
65.15.4 All the Members of JV shall certify that they are not black listed or debarred by Railways or any
other Ministry/Department of the Govt. of India/State Govt. from participation in tenders/contract on the
date of opening of bids either in their individual capacity as members of the JV or the JV Firm in which
they were/are members.
65.16 Credentials & Qualifying Criteria : Technical and financial eligibility of the JV Firm shall be
adjudged based on satisfactory fulfillment of the following criteria:
65.16.1 Technical Eligibility Criteria Ca' or 'b' mentioned hereunder) :
(a) Either the JV Firm or Lead Member of the JV Firm must have satisfactorily completed in the last
three previous financial years and the current financial year up to the date of opening of the tender, one
similar single work for a minimum of 35'10of advertised value of the tender.
OR
(b) (i) In case of composite works (e.g. works involving more than one distinct component, such as Civil
Engineering works, S&T works, Electrical works, OHE works etc. and in the case of major bridges -
substructure, superstructure etc.). for each component, at least 35'10of the value of any of such
components individually for single similar nature of work should have been satisfactorily completed by
the JV Firm or by any member of the JV Firm in the previous three financial years and the current
financial year up to the date of opening of tender. The member satisfying technical eligibility criteria for
the largest component of the work shall be the Lead Member and that Member shall have a majority (at
least 51'10) share of interest in the JV Firm.
(ii) In such cases, what constitutes a component in a composite work shall be clearly pre-defined
with estimated tender cost of it, as part of the tender documents without any ambiguity. Any work or set
of works shall be considered to be a separate component, only when cost of the component is more than
Rs.2 crore each.
(iii) However, as long as the JV Firm or any member of the JV Firm meets with the requirements, in
one or more components of the work, and has completed a minimum of 35'10 of the advertised value of
the tender for the same value of the component, and resultantly, all the members of the JV collectively,
then meet the prescribed technical eligibility criteria, the JV shall stand technically qualified.
Note: Value of a completed work done by a Member in an earlier JV Firm shall be reckoned only to the
extent of the concerned member's share in that JV Firm for the purpose of satisfying his/her compliance
to the above mentioned technical eligibility criteria in the tender under consideration.
65.16.2 Financial Eligibility Criteria: The contractual payments received by the JV Firm or the
arithmetic sum of contractual payments received by all the members of JV Firm in the previous three
financial years and the current financial year up to the date of opening of tender shall be at least 150'10
of the estimated value of the work as mentioned in the tender.
Note: Contractual payment received by a Member in an earlier JV Firm shall be reckoned only to the
extent of the concerned member's share in that JV Firm for the purpose of satisfying compliance of the
above mentioned financial eligibility criteria in tender under consideration.

Price Variation Clause:

49. Price Variation Clause:
The amount payable on account of Price variation shall be settled every quarter as per the following method:-
(i) The amount paid during a quarter shall be divided as under: -
 X % Labour - To be fixed by Railways
 Y % Material - DO-
 Z % Fixed Component (this implies the cost of machines and fixed installations) – DO-
(ii) No price variation shall be payable on the fixed component of the cost, if any.
(iii) For calculation of PV on account of Labour, the Consumer Price Index Numbers for industrial workers
(Base 2001 = 100) published as Sh.35 in RBI Bulletins shall be used. The base shall be taken as the index no.
(All India Average) as on date of opening of tender. For a particular quarter, the average index for that quarter
shall be worked out and variation with reference to the base index no. shall be taken into account for calculation
purpose.
(iv) For material portion, Statement 39 of RBI Bulletin (All India Average) shall be used. The calculation of Price
Variation payable illustrated as under.
(v) Illustration:-
Amount paid in the first quarter = Rs 10,00,000/- (say)
Price Index for Labour as on date of opening (Lo) = 450
Price Index for material as on date of opening (Mo) = 160
st
Avg. Price index for Labour during I quarter (L1) = (452 + 456 + 455) / 3 = 454.3, where 452, 456 and
455 are the indices for the three months in the quarter under consideration.
st
Avg. Price index for material during I quarter (M1) = (165 + 164 + 168) / 3 = 165.7, where 165,164 and
168 are the indices for the three months in the quarter under consideration.

Bifurcation of amount paid is as under: -( assuming X=55 and Y=45)

Labour (W) Rs. 5,50,000/-
Material (M) Rs. 3,00,000/-
Fixed Rs. 1,50,000/-
PV for Labour = (L1 – Lo) x W/Lo= (454.3 - 450) x 5, 50,000 /450 = Rs 5,255/-
PV for material = (M1 – Mo) x M / Mo
i.e (165.7 - 160) x 3,00,000 /160 = Rs 10,687/-
No Price Variation will be payable on Rs. 1,50,000/- (i.e. the fixed component)

The contract will be valid for a period of 3 years with a provision for annual price variation as explained
in Price Variation clause.

12.0 Eligibility Criteria for Finalizing Tenders

(Ref.: Railway Board’s L.no.2007/CE.I/CT/18 Pt.XII dt.31.12.10)

As per extent instructions of Railway Board, issued vide letter no. 2008/ CE-I/ CT/ Con/ 7
(PCE/GM) dated 15.12.08, the eligibility criteria prescribed by Sudhir Chandra Committee
would apply only to tender of tenders of value more than Rs. 20 lakh. Since the limit was fixed
in the year 2008 and considering the need to increase this limit, Board have now decided that this
limit be enhanced to Rs. 50 lakh. Other conditions given in the letters referred above shall,
however, remain same.
12.1 Recommendations of Sudhir Chandra Committee:
Recommendations of Sudhir Chandra Commiittee approved by Railway board vide letter
No. 94/CE-I/CT/4 dated 22.10.2001 & 27.10.2002 may please be referred before tender
processing.

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
last three financial years( i.e. current year and three
previous financial years):
2. Total contract amount received during the last three
years as per current ITCC:
At least one similar single work , for a minimum
value of 35% of Advertised Tender Value of Work.
Should be a minimum of 150% of Advertised
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.

Note- The single similar work completed will be considered as under,

(1) Total value of similar nature of works completed during the qualifying period, and not the payment
received within qualifying period alone will be considered.

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.

13.1 Constitution of Tender Committee is tabulated as under

Value Constitution of tender committee Accepting

Authority
Executive Accounts Other
deptt.
Upto Rs. 10 lakhs Sr.Scale Jr.Scale ----- JAG/SG
Above Rs.10 lakhs and upto 50 lakhs Sr.Scale Jr.Scale Sr.Scale JAG/SG
Above Rs.50 lakhs and upto Rs.2 Sr.Scale Sr.Scale Sr.Scale JAG/SG
Crore
Above Rs.2 Crore and upto 5 Crore JAG/SG JAG/SG JAG/SG SAG/ADRM
Above Rs. 5 Crore and upto 8 Crores JAG/SG JAG/SG SG SAG/DRM
Note: Level of TC committee shall be followed as per SOPGEN, circulated by Zonal
Railway’s.
13.2 Acceptance of Tender
 Tender is accepted for and on behalf of the President of India by an Authority competent to
do so. This is stipulated in the schedule of powers.
 Tender Accepting Authority accepts the tender on the basis of proceedings on the TC.
 The level of TAA should be at the least one rank above the members of TC.
 In case of single tender, committee will be one stage higher as mentioned above.

13.3 Important tips for Tender Committee

(RB letter No. 2004/C-1/CVC1/18/ dt 12.01.06)

 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)

Role of tender accepting authority:

TAA is finally and ultimately responsible for the acceptance, although the TC is also
responsible for its recommendation. Therefore, TAA, while considering the TC proceedings,
should examine -
 Work is essentially required and is covered by sanction and funds are available.
 In case of Open Tender, full opportunity has been given to all the tenderers. This includes
sufficient notice for the tender.
 That response has been adequate, i.e. the number of tenders sold vis-à-vis number of offers
received. In case of poor response, this aspect should be specially examined.
 Reasonableness of offers has been properly examined by the TC.
13.5 Reasonability of offers:
Reasonableness of rates should be based on -
 A current market survey with a proper rate analysis of at least those items, which constitute
above 75-80% of the total cost, i.e. by an ABC analysis.
 The rate analysis is prepared by the Convenor but TAA must examine whether the analysis
is based on data / survey from the market.
 Comparison of last accepted rate for items, which are similar and comparable. All such
rates may be brought out and not only those which are favorable.
 If a lower offer is being overlooked, sufficient reasons have to be given for doing so.
 If some adverse factors are cited for justifying higher rates, they must be explained
adequately to justify the action.
 If high rates are justified on the basis of urgency, the fact should be available on record.
 Rates reasonableness on the basis of quotations is debatable.

13.6 Considerations of TC recommendations by TAA

 The first step is to examine all the basic facts about the tender.
 Whether the recommendation of TC is unanimous or otherwise.
  Even in case of unanimous recommendation, all the aspects about reasonableness of the
rate must be examined. Any deficiency noticed may be referred to TC.
 TAA can not function as a rubber stamp and must apply his/ her mind independently and
such appreciation should be visible. The acceptance or otherwise must be recorded on the
body of TC proceeding itself.
 In case of non-unanimous recommendations, if TAA wants to accept either single or
majority recommendation, it should record detailed reasons for doing so.
 TC recommendations should normally be accepted, but in case TAA rejects/ modifies the
same, grounds should be given for the same.
 It is not correct to obtain additional details from a third person but if such details are
considered necessary, TC should be asked to obtain them and put up to TAA after proper
examination of the same by TC.
 TAA should take the decision in a reasonable period of time. Unavoidable delays should be
explained.
14.0 Negotiation:
 Negotiation should be an exception rather than rule.
 Negotiation is normally conducted is case of –
(i) High rates
(ii) Some unacceptable conditions
(iii)No benefit likely to accrue if tender is cancelled and re-invited
 According to the latest instructions, negotiation must be held with technically suitable L-1
only.
 Contractor may be asked to furnish rate analysis to assess as to how much could be
reduced.
 If L-1 party backs out during negotiations, there should be retendering. L-1 should be
defined as the lowest, valid, eligible and technically acceptable tenderer who would have
been otherwise considered for award of contract directly, if the rates were not unreasonably
high.
 Negotiations with L1 as well as the lowest PSU (offer within 10% of L1) to be conducted
and after negotiations, if the difference between the PSU and L1 is more than 10% the offer
of PSU need not be considered.
Negotiation with L-1 tenderer
1. There should normally be no negotiations strictly be an exception rather than rule and only
where rates received are unjustifiably higher and also in situation of cartel formation with
unreasonable rates.
2. Negotiations, wherever held, should only be with the L-1 tenderer as explained in
Board‟s letter of even no. dated 01.03.2000.
3. There shall be no compromise to transparency, equity or fair treatment in acceptance of
tenders. Prescribed time frame of settling tenders is to be strictly adhered to.
(Rly. Bds letter no. 99/RS(G)/779/2 dated 15.10.2007 RBS No. 15/2007)
 The negotiation should be with technically acceptable L1 and to be resorted in following
exceptional cases:-
• Where the lowest tender is considered to be unreasonably high, and it is felt that re-
tendering would not secure better advantage to the Railway and / or
 • Where lowest tender is not acceptable due to any reason and next higher offer is found
to be unreasonably high
Tender to be discharged if negotiations fail
(RB Letter no 2008/CEI/CT/1 DATED 12/09/08)
 A tenderer during negotiations is required to give a declaration that in event of failure of
negotiation, his original offer shall remain open for acceptance and not allowed to increase
rates of any of items.
 Board has modified existing form of declaration.

15.0 Counter Offer

• Sometimes, counter offer may be given to the contractor on the reduced rate or without
accepting some conditions.
• Contract can be awarded only after contractor‟s acceptance of counter offer
(RB Letter NO. 94/CEI/CT/4 DT 17.10.2000)
 In cases where the overall value of L1 is not unreasonably high but rates of certain items or
total value for a schedule happen to be higher than those quoted by other tenderers or
higher than LARs, method of counter offer may be adopted
It is substitute/in lieu of negotiation
16.0 Letter of Acceptance (LOA) (GCC2010 Part- I, Para 8)
The LOA will be issued to the contractor to undertake the work duly specifying the date and
the amount of Security Deposit to be remitted within the specified time limit as per Para 1256
of Engineering Code.
A duly authorized representative at the office shall so appear and execute the contract
documents within 7 days after notice that the contract has been awarded to him. Failure to do
so shall constitute a breach of the agreement affected by the acceptance of the tender in which
case the full value of the earnest money accompanying the tender shall stand forfeited without
prejudice to any other rights or remedies.
16.1 Signing of Agreement & Submission of PG
 Tenderer shall have to submit a PG within 30 days from date of issue of LOA.
 Extension of time beyond 30 days and up to 60 days from issue of LOA may be given
by CA signing authority with a penal interest of 15% per annum for the delay beyond
30 days after issue of LOA.
 In case of the contractor fails to submit PG even after 60 days, the contract shall be
terminated forfeiting EMD.
 The failed contractor shall be debarred from participating in “re–tender for that work”.
(Rly. Bd. Letter No. 2007/CE. I/CT/18 Pt. XII Dated 31.12.2010)
 Contract agreement be signed within 15 days (old) after LOA.
(GCC 2010, Annexure I, Second Sheet , Item No.6(c))

17.0 Execution of Work:

17.1 Important points to be observed while executing the work.
 Execution of work starts with handing over of the site to the contractor under clear
signature in the site order book.
 Record the observation in case of obstruction, which is not likely to affect the work at the
initial stage.
 Hand over the site as per tender condition to avoid preferring of claim for compensation by
the contractor for idling of labour and other resources.
17.2 Communication with the contractor
 Communication should be at an appropriate level.
 It should only be in writing.
 Best way to communicate it through the observation in the site order book (it is very
important and useful in case of arbitration).
 Do not delegate to lower official to do any correspondence with the contractor.
 Do not leave any of the contractor‟s letter unanswered. There should be no ambiguity in
reply. It should be in clear terms.

17.3 Progress of works

 Supply all necessary drawings and designs in time.
 Give your decision on technical matters only
 Draw an agreed programme for the execution of the work in the form of CPM/ PERT chart.
 Record your periodical views on the progress of the work.
 Give timely notices for the poor progress.

17.4 Supervision of Work

 In most of the cases, field supervisors are site Engineers.
 Works are seen suffering from lack of supervision.
 Establish a well defined chain of command for the supervision.
 Supervisory team should not be disturbed except in rare circumstances.
 At the time of transfer of the supervisor, they should be asked to give a detailed handing
over notes.
17.5 Special conditions
 All the special conditions discussed in the TC should be clearly brought out in the
agreement.
 Watch should be kept on the financial implications of various special conditions. Finance
generally keep close scrutiny of all special conditions.
 Watch should be kept on variations.

17.6 Test check

 Schedules of test checks should be prescribed.
 Prescribed test checks are must before the bill is passed.
 Test checks means physical verification of dimensions, quantity and quality of work.
 Items checked must be specified in the Measurement Book (MB).

17.7 Selectivity in execution

 Do not be selective in execution.
 While changing the items, please ensure that you are not inadvertently helping the
contractor.
 Do not give instant decisions for changing the items, the proposal should be examined
financially.
 Changes in the scope of work is not desirable.
  In case if it is unavoidable, follow the provision in Para 1265 and 1268 of Engineering
Code.
 This must be processed before the physical execution of the such items.
18.0 Measurements and Bills
 All payments are made on the basis of measurements made in the M. Book (MB).
Measurements must be recorded directly in the MBs by authorized officials.
 Prescribed checks on measurements should be carried out by senior officers in MBs and in
Bills.
 Payment at full rate should not be made until the item has been completed to the required
specifications.
 Measurements should be taken from time to time at the discretion of Engineer.
 Contractor to witness measurements and sign the records.
 Measurements taken in the absence of contractor are binding on him if he fails to attend
after receiving communication.
 Objections of Contractor on measurements - Any re-measurements taken by Engineer in
the presence of contractor are final and binding and no claim on this will be entertained.

18.1 Maintenance of measurement books

• Pages should be machine numbered

• Register to be maintained showing
i) S. No of each book
ii) Name & designation of person to whom issued
iii) Date-of issue
iv) Date of return.
• Measurement books should be preserved for 10 years.
• No page should be torn nor should any entry be erased or effaced so as to be illegible.
• If a mistake be made, it should be corrected by crossing out the incorrect words or
figures and rewriting the correct words or figures and the corrections should be
initialed.
• Measurements must be made directly at site of work. Copying of entries from rough
note book is strictly forbidden.( E 1322)
• Entries should be made in ink, if possible. When not possible, it should be recorded
with indelible ink or special copying pencil so as to render it difficult to tamper with or
make unauthorized additions or alterations in entries once made. Pencil entries should
not be inked over but left untouched.(E 1323)
• Entries should be made continuously. No place should be left blank. Where any
measurements are cancelled, the cancellation should be supported by the initials of the
officer ordering the cancellation or by reference to his orders. However the reasons for
the cancellation should be recorded.(E 1324)
• All quantities should be clearly traceable into the documents on which payments are
made and a reference to the voucher should be made in the M.Book.(E1326)
• Power to record measurements are given under para 1315E.
18.2 Bills and Payments

 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.

18.2.1 Liquidated Damages (Clause 19.2)

 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))

 Contract Labour (Regulation and Abolition) Act, 1970.

 Provision of Workmen Compensation Act
 Child labour: Non-employment of Labours below the age of 15.

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 23. Contravention of provisions regarding employment of contract labour.-

Whoever contravenes any provision of this Act or of any rules made there under prohibiting,
restricting or regulating the employment of contract labour, or contravenes any condition of a
license granted under this Act, 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, and
 in the case of continuing contravention with an additional fine which may extend to Rs. 100/-
for every day during which such contravention continues after conviction for the first such
contravention. Provide penalty for Contravention of provisions regarding employment of
contract labour 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 and in the case of a
continuing contravention with an additional fine which may extend to Rs. 100/- for every day
during which such contravention continues after conviction for the first such contravention.

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.

Contract Labour (Regulation & Abolition) Act, 1970

The main objective of this act is to regulate the contract labour and abolish it in certain cases.
Applicability
1. This act is called contract labour ( Regulation and Abolition) Act -1970.
2. It extends to the whole of India.
3. It applies to every establishment in which 20 or more workmen employed or were
employed on any day of the preceding 12 months as contract labour.
4. It applies to every contractor who employs or who employed on any day of the preceding
12 months 20 or more workmen.
5. It shall not apply to establishment in which work only of an intermittent or casual nature
is performed.
Explanation
Work performed in an establishment shall not be deemed to be of an intermittent nature.
 If it was performed for more than 120 days in the preceding 12 months.
 If it is of a seasonal character and is performed for more than 60 days in year.
Welfare and health of contract labour
Canteens: Wherein contract labour numbering 100 or more is ordinarily employed by a
contractor.
Rest Rooms:
 In every place wherein contract labour is required to halt at night in connection with the
work of contractor shall be provided and maintained by the contractor for the use of
contract labour.
 Rooms shall be sufficiently lighted and ventilated and shall be maintained in a clean and
 comfortable condition.
Other facilities:
 Sufficient supply of drinking water for the labour at convenient places.
 Sufficient no. of latrines and urinals.
 Washing facilities.
First Aids facilities:
 These shall be provided and maintained by the contractor.
Liability of principal employer in certain cases:
 If any amenity required to be provided under section 16,17,18 & 19 for contract labour is
not provided by contractor within the time prescribed, such amenity shall be provided by
the principal employer.
 All expenses incurred by the principal employer in providing the amenity may be
recovered by the principal employer from the contractor either by deduction from any
amount payable to contractor or as a debt payable by the contractor.

Responsibility for Payment of wages

 Employed by him as labour and such wages shall be paid before the expiry of such period as
may be prescribed.
 Every principal employer shall nominate a representative duly authorised by him to be present
at the time of disbursement of wages by the contractor.
 It shall be the duty of such representative to certify the amounts paid as wages.
 It shall be the duty of the contractor to ensure the disbursement of wages in the presence of
authorised representative of the principal employer.
 In case the contractor fails to make payment of wages within the prescribed period or makes
short payment, then the principal employer shall be liable to make payment in full or “unpaid
balance due” to the contract labour and recover the amount paid from the contractor by
deduction from amount payable to the contractor.

Penalties & Procedure

 Whoever obstructs an inspector in the discharge of his duties under this act or refuses or
willfully neglects to afford the inspector any reasonable facility for making inspection, shall be
punishable with imprisonment for a term which may extend to 03 months or with fine which
may extend to Rs. 500/- or both.
 Contravention of provisions regarding employment of contract labour whoever contravenes any
provision of this act or any rules made there under prohibiting, restricting shall be punishable
with imprisonment with 3 months or with fine Rs. 1000/- or with both.

Registers and other records to be maintained

 Every principal employer and every contractor shall maintain such registers, and records giving
particulars of contract labour employed, the nature of work, the rates of wages paid to the
labour etc.
 Every principal employer and every contractor shall keep exhibited in such manner as may be
prescribed within the premises where the contract labour is employed, notices in the prescribed
form containing particulars of hours of works, nature of duties and such other information also.
19.2 Minimum Wages Act:
The Contractor shall be responsible to ensure compliance with the provision of the Minimum
Wages act, 1948 and the Rules made there under in respect of any employee directly or
through petty Contractors or sub Contractors employed by him.
Object: This act aims securing minimum rates of wages in those categories of employment
whose wages are low, in order to prevent exploitation of un-organized labour. It applied to
persons engaged on scheduled employment on specified class of work in respect of which
minimum wages have been fixed.
Minimum Wages Fixation: The minimum rates of wages admissible to workers in the various
localities are fixed by the Central Government , Ministry of Labour (by issue of notification &
at present, 05 zones have been made viz. A, B1, B2, C & D and all the cities have been
grouped). These rates are reviewed by Railway administration (mostly at division level) every
year. DRM & GM‟s are empowered to sanction the daily rates 20% and 33-1/2% respectively
over the rates notified by the Ministry of Labour.
The minimum rates of wages showing the basic rates and variable Dearness allowance payable
w.e.f 01.04.2012. (Ministry of Labour L.No.1/6(3)/2012-LS-II dated 16.03.2012.)

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.

Display of Notices: Notices in the prescribed form containing –

 Minimum rate fixed
 Abstract of act
 The rules there under
 The name and address of inspector
 Shall be displayed in English & Hindi & in the language understood by the majority of
labour at a place selected by the inspector appointed under the authority

Hours of work & grant of rest:-

 The hour of work for adult not more than 9 hours and spread over shall not be more
than 12 hours in a day.
 It should not exceed 48 hours in a week.
 If any labour works more than the maximum number of hours fixed, he would be
entitled to over time at double the rates of wages.
 A contract labour in scheduled employment shall be allowed a day of rest every week
normally on Sunday but labour can fix any other day in a week.
 Labour is entitled for rest only if he works for continuous period of not less than 6 days
under the same contractor.
Inspections:
A labour inspector can enter any premises and can exercise inspection of records maintained
including examination of documents and taking evidences.
Claims & Complaints:
 Can be made by labour within six months to the appointed authority.
 An application beyond this period may be admitted by authority if satisfied.

Penalties Under the Act:

 For offence in respect of minimum wages - Imprisonment for a term which may extend to
normal working hours and weekly holidays. 6 months or with fine up to Rs.500/- or both.

 For offence in respect of maintenance of - Fine up to Rs. 500/-

registers or records

19.2 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.
(GCC 2010, Labour , Item No 55)

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

19.3 Checking of Records for Payment

Amounts passed for payment duly indicating deductions towards Security Deposit, IT, Cess,
Sales Tax etc should be made in the bill and should be submitted to Accounts Office with
voucher no. and date along with relevant enclosures for arranging payment. Following should
be checked.
• Whether the bill is in the prescribed format.
• Top sheet accompanying the bill is checked.
• In case of final bill, whether no claims certificate from the contractor and no dues
certificate from the executive are enclosed.
• Whether any accounts or audit paras are pending against the agreement is verified.
• That there are no delays in making measurements or in preparing bills after the
measurements are made.
• The rates are verified with those given in the agreement.
• The currency of the contract.
• Validity of Bank Guarantee is verified.
• Quantities in the bill are checked with those in the M. Book.
• Whether all relevant enclosures have been submitted along with the bill.
• Whether payment is arranged as per the payment clause given in the agreement.
• Whether recoveries have been correctly made according to the rules on account of
materials issued
• Whether quantities executed are according to the sanctioned plans and estimates.
• The variation statement and vitiation statements are verified.
• That the methods of measurement are correct.
• Whether the work has been satisfactorily completed for Which payments are arranged.
• Whether technical check has been done by drawing office under the supervision of EE
• Whether test check has been done.
• Whether the bills are signed by the executive officer as well as the contractor.
• Whether the funds availability has been certified and has been allocated to proper heads of
accounts.
• Whether all deductions have been made and the bill is arithmetically accurate.
• Whether penalties, if any, to be recovered from the bill have been made.
• Once the bill is checked, the bill is passed for payment.
19.4 Model Time Table for passing of bills:
• On account bills : 7 days after measurement.
• Final bill : Within 61 days of completion of work.

19.5 Details to be filled in MB (Illustration)

nth on account bill
1. Name of work :
2. Name of contractor :
3. Situation of work :
4. Contract agreement no. and date :
 5. Date of commencement :
6. Date of completion :
7. Total working period :
8. Total value of work :
9. Date of measurement :
10. Period of bill :
11. Last reference : Page no……to …of MB no…..

Measurement of on account bill

A typical example of an on account bill is as under:
NS-1 : Provision of ………………………………………..
Qty. executed – 03 nos (person) per month @ Rs…….p.m.
Since work done - 02 months ( unit)
Total work done - 14 months
Prepaid (Ref. MB page no…) – 12 months
Now to pay - 02 months
@ Rs. 2100/- x 2 - Rs.4200/-
Total absents during the month - Nil
Total penalties during the month - Nil
Gross amount Rs……………………..

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 …….

Signature of the Contractor

Certificate of Officer In charge

 Certified for Gross amount Rs. ……………. (Rupees ……………….. only).

 Certified for Net payable amount Rs. …………… (Rupees…………………… only).
 Certified that the payment made through this bill is actually for the work done by the
contractor from …………….. to ……………….
 Certified that no plants and machinery hired by the contractor.
 Certified that the work has been carried out as per items, terms and conditions of the contract
agreement.
 Certified that the measurements have been recorded by Shri ……….., JE/SSE on Measurement
Book page no. …………… to …………… R.
 Certified that the 20% test check has been carried out and found correct.
 Certified that there is no any audit/account/vigilance para is pending against the Contract
Agreement.
 Funds are available for the year …………….
Gross amount of the Bill Rs. …………
Total deductions Rs. .…………
Net Payable amount Rs. ………….
(Rupees……………………………… only)

Signature of officer in charge

20.0 Payment of bills
 Payment of bills in time is mandatory in terms of Para 1484 of Engineering Code.
 Income Tax at the specified rates of government, Cess and Surcharge on Income Tax at the
rates applicable from time to time will be recovered from the contractor‟s bill.
 Delay in payment of final bills is one of the root cause for arbitration.
 If final bill is not passed in time, the following problems can occur –
(a) Material outstanding with the contractor can not be taken back.
(b) Provision of the maintenance clause can not be invoked.
(c) Over payment can not be detected.
(d) Quality can not be ascertained.

Running bill payment

 Running bill should be paid promptly.

 All the recovery must be made regularly.
 No recoveries should be kept pending.
 Be careful while making the lump sum payment. Payment made in such ways should
always be less than the work actually done.

20.1 Variation in Quantities of Items of Contracts – Limits & Rates

(Ref: Railway Board’s letter no. 2007/ CE-I / CT / 18 dated 28.09.2007)

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.

20.2 Control on high and low rated items

 There should be no positive variations in the abnormally high rated items.
 There should be no downward variations in the abnormally low rated items.
 Do not fall prey to the tendency of contractors to avoid the loosing items and vice-versa.

21.0 Time extension

It should be given as per tender condition and provision made in the Engineering Code.

22.0 Completion report

After completion of the contract, the depots have to submit completion reports as to –
 Whether the work has been satisfactorily completed by the contractor within the stipulated
time frame.
 Certificate that no recoveries are outstanding against the contractor.
 Certificate that Railways has suffered no loss due to late completion of work.

Certificate of completion of works. Amendment to clause 48(1) of the General Conditions

of contracts:
(Ref.: Railway Board Letter No.2010/CE-I/CT/11 dt.11.05.2010)

“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:-

 Do not start the work without signing the agreement

 Do not leave any written correspondence/ query from the contractor unanswered. It should
be replied within a reasonable time in clear terms.
 Do not delay the handing over of the site beyond the stipulated period for undertaking the
work after signing the agreement.
 Do not give any oral consent for doing the work which may be beyond the scope of work.
 Go through LOA completely before signing. A copy of it is to be kept in your personal file
as some clauses may be altered in convenience of the contractor. It is used effectively by
the contractor during arbitration Tribunal.
 Ensure timely passing of running bill and final bill payment.
24.0 Summary of Tender Proceedings at a glance
To sum up the proceedings of work contract, various stages of tender are summarized below:

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.

ii) Inviting & Opening of Tenders

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.

iv) Tender Evaluation and Award of Work:

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 ….

• Evaluation of tenders exactly as per the notified criteria.

• Timely decision within validity period.
• Complying with commission‟s circular regarding negotiation.
• Ensuring that conditions / specifications are not relaxed in favour of contractor to
whom the work is being awarded.
• Ensuring that L1 is not ignored on flimsy grounds.
• Compliance with the purchase preference policy of the govt.
• Ensuring that work order / supply order is placed within justified rates.
 26. Do’s and don’ts for Tenders & Contracts

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

PRE NOTICE CHECK SHEET

S.N ITEM REMARKS

1 Is the work essential and has, exact description of work been given?
2 Is sufficient outlay available?
3 Has work-site been defined clearly and inspected/surveyed?
4 Has the signed site plan been annexed with the estimate?
5 Is the work-site available/clear for starting the work, both over ground and
underground? (if not by what time?)
6 Status of works of other deptts., if involved

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?

DATE: NAME, DESIGNGATION AND SIGN

 CHECK SHEET FOR TENDER NOTICE
S.N ITEM REMARKS
1 Is tender notice bilingual?
2 Has Tender notice No. and date been put and is it same in both
languages?
3 Has tender been numbered and description of work and location of site
are as per estimate and clear
(no abbreviations ) ?
4 Is advertised cost of work within sanctioned estimate?
5 Is cost of tender document in line with advertised cost of work and cost
of drawing included with taxes if any?
6 Is it mentioned that internet down-loaded tender form will be rejected if
cost of tender form is not submitted at the time of opening of tender?
7 Is date of opening in consonance with Minimum gap as prescribed? (
Normally it is 30 days and for deviations proper procedure has to be
followed, also tender opening at different places if planned to be
mentioned in the notice and opening to be at the same time at all places)
8 Is date/ time/place of keeping Tender box (min. 10 days before closing)
is mentioned and date/ time/place of closing mentioned?
9 Is earnest money value/form mentioned correctly and rounded off to the
nearest Rs. 10/-
10 Is date/ time/place/duration of sale of Tender document prescribed? (3
weeks before opening, minimum 15 days for small tenders)
11 Is minimum Eligibility criteria including similar work properly defined?
a for technical eligibility
b for financial eligibility
12 Is there any special eligibility criteria?
13 Is Price variation applicable and mentioned for high value tenders.
14 Is it mentioned that in case of contradiction between GCC and special
Conditions, later will prevail?
15 Is security deposit amount/deposition procedure/instrument given
correctly?
16 Is Performance guarantee amount/form given correctly?
17 Does work require site visit/pre bid conference and if so whether it has
been mentioned?
18 If corrigendum to be issued
a Is it Bilingual?
b Does it have original notice No, date name of work and date of
publication of NIT
c Has it been published before original date of opening
d Has sufficient time been given to take care of corrigendum correction?
19 Is the tenders advertised in
a Railway offices notice boards
b Vernacular/Local newspaper (evidence preserved with date)
 c National Newspapers (evidence preserved with date)
d International Newspaper (evidence preserved with date)
e Internet (Railway and GOI website and evidence preserved with date)
20 Is copy of tender notice given to the following
a Finance & Audit
b Vigilance
c RPF
d District administration
e Different notice boards
21 Is tender notice signed for and on behalf of President of India?
22 Is it mentioned that detailed terms and conditions will be as per tender
document?
23 If specifications after invitation undergo a change, issue corrigendum for
minor change/re-invite tenders for major change
24 Is it mentioned that in case of date of opening is declared a holiday
tender will be opened on next working day ?

DATE: NAME DESIGNGATION AND SIGN

CHECK SHEET FOR TENDER DOCUMENT

S.N ITEM REMARKS

1 Is GCC with latest corrections, Special conditions, SOQ, SOR, Technical
spec, drawings and explanatory notes included?

2 Do special conditions cross checked and require Legal and financial

advice, if so has it been taken?
3 Has tender document been approved by competent authority?
4 Have alternatives been struck out?
5 Have all pages been numbered properly and there are no blank pages
in the tender document ?
6 Is master copy stamped and preserved ?
7 Have all pages of tender document signed and no space left between
printed material and signature
8 Is tender document stamped and numbered before selling and the
address of the party mentioned on the tender document sold ?

DATE: NAME DESIGNGATION AND SIGN

CHECK SHEET FOR ADVERTISEMENT OF TENDER

S.N ITEM REMARKS

While publishing tender in News paper, CPRO/PRO has ensured that
NIT has already been uploaded on the website by taking certificate from
executive.
1
Has the token of confirmation in the form of internet download record for
open tender ensured (non confirmation will be treated as in adequately
advertized tender (Rly. Bd. Letter NO. 2008/RS(G)/779/2 dated
07.11.2008
2

CHECK SHEET FOR TENDER SALE

S.N ITEM REMARKS

1 Has Sale of Tender document denied to anyone?

2 Is tender sale register available duly page numbered?

3 Is tender name, no., date of tender notice written on top of the page?

4 Are tender documents sold serially?

5 Is Name of party with address to whom tender sold mentioned in

register?

6 Is tender document stamped and numbered before selling ?

7 Has acknowledgement of party that tender document received in sealed

condition been taken?

8 Details of payment for tender

9 Is closing time of tender sale mentioned at the last and blank space
scored out and finally countersigned by officer?

DATE: NAME DESIGNGATION AND SIGN

 CHECK SHEET FOR TENDER OPENING

S.N ITEM REMARKS

1 Is tender box available at all specified locations duly locked and sealed
with horizontal slot to drop tender document
2 Is name of work, date, place & time of closing mentioned on box?
3 Is key of tender box in proper custody of supervisory official?
4 Has tender opening committee formed and informed regarding tender
opening time and location well in advance?
5 Is tender opening register available duly page numbered properly?
6Does tender opening register have following
aS.No.
bDate of opening
cName of work
dTender Notice No. & date
eName of the tenderer with address
fDetails of EMD
gRates quoted (if rates quoted only in words or only in figure it should be
mentioned)
h Details of Payment for down loaded tender documents?
I No. of Tender documents sold and received
j Time of closing of Tender
k Time of opening of Tender
l Place for certificate that the rates,EMD details, counter offers if any are
all encircled and signed
m Place for signature of all members of Tender opening committee (should
include A/C members)
n Place for signature of tenderer's representative
7 Has the tenderer's representative shown slip pasted on the horizontal
hole and sealed lock before opening of tender box and empty tender box
after opening?
8 Have all tenders been duly numbered (serial no. in numerator and total
nos. in the denominator)?
9 Has A/C member used red ink?
10 Has the cover, front cover page and every page on which rates, counter
offer, EMD, and tender doc payment details of each tender document
initialled with date by executive and accounts member?
11 Have all over-writings, corrections encircled, numbered separately and
initialed and total numbers also mentioned?

12 Is there any ambiguity/descrepancy in rates quoted in words and figures.

If so has it been mentioned?
13 Have rates in words and figures been encircled so that no tampering can
be done later on ?.
 14 Have names and rates quoted by each tenderer read out to the
representatives present?
15 Have details of late/delayed tender received been mentioned (
late/delayed tenders are not to be opened)?
16 Has Tender opening register filled properly and no item left blank?

DATE: NAME DESIGNGATION AND SIGN

CHECK SHEET FOR TENDER FINALISATION

S.N ITEM REMARKS
1 Has the following check sheets filled properly
2 Pre notice check sheet
3 Check-sheet for tender notice
4 Check-sheet for tender document
5 Check-sheet for tender sale
6 Check-sheet for tender opening
7 Are Newspaper cuttings of tender notice available on tender file ?
8 Is internet uploading evidence available on tender file ?
9 Is MIC (material intensive contract) approval available in file , if
applicable?
10 Has briefing note been prepared and vetted?
11 Has comparative statement been prepared and vetted and all LAR
references available in file?
12 Is detail estimate been vetted and Valid?
13 In case of partnership firm, has legal vetting obtained for the partnership
deed ?.
14 Have EMD details been prepared and vetted?
15 Have details of special conditions as quoted by parties been prepared,
evaluated and vetted?
16 Has EMD been received in acceptable form?
17 Has EMD been verified by issuing bank?
18 Has No. of tenders received without proper EMD been mentioned?
19 Summary of all tenders received with proper EMD ordered as L1, L2 etc
20 Have credentials been verified from the issuing Authority for
a Technical eligibility
b Financial eligibility
21 Has it been checked that no unscrupulous effort been made to meet
eligibility criteria by:
a Forming partnership firm after date of tender notice
b Claiming to have Assets/M&P's without actually possessing it
c Giving incorrect experience certificate
22 Is firm complying with the special conditions which are essential as per
tender notice ?.
 23 Has fair competition been ensured
a By ensuring wide publicity
b By adequate notice period
c By non-participation of firms having different names but same
management.
24 Has it been examined that firm does'nt have excessive workload w.r.t.
it’s capacity and capable of performing the task within the DOC?
25 Following has been checked for Rate reasonability
a Location
b Quantum of work
c Geographical expanse of work
d Availability of resources
e Technical requirements for the work
f Composition of various items
g Inflation upto date of Tender opening
h Change of Tax rates
I Completion Target (If stiff target is given as reason for accepting high
rates, extension should be only in exceptional cases and that too with
penalty if delay is on account of contractor)
j Time of finalisation( pre/post budget, monsoon etc)
k Special condition of the contract
l LAR is realistic comparable and complete (normally more than one LAR
should be considered)
m Rate analysis if done has been on basis of exhaustive market survey,
complete and not tailor made
n Unworkably low rates
o Are some items to be restricted for very high/low rates (
justification to be given)
p Variation to be allowed without vitiation after adopting proper procedure
q Have all out efforts been made for having rate reasonability before
discharging the tender on this account
26 Has rate reasonability of A cat items individually checked?
27 Has tender committee given clear cut recommendation ?
28 Has the tender been finalised within validity period ?. If not, reasons to
be given
29 Does LOA cost exceed work sanctioning limit of concerned Authority
(MLW/LW/PB)?

DATE: NAME DESIGNGATION AND SIGN

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Sheets