Construction Management Manual Volume - I

Nuclear Power Corporation of India Ltd

(A Government of India Enterprise)

ii

The HQI 8005 (Rev-0) on Construction Management Manual Vol-1 for execution of works and service contracts shall be considered as void. Instead of the above this document is being issued as a Manual.

iii

PREFACE
The General Conditions of Contract for Works and Maintenance Contracts being followed in NPCIL have been derived mainly from the General Conditions of Contract being followed by CPWD in past. These General Conditions were mainly oriented for Civil works and certain clauses of these conditions needed modification as NPCIL started gaining the experience in handling the Contracts. The need was felt that the existing General Conditions of Contract are revisited and modified as per the prevailing concepts of managing the contracts and also include the concepts which are being followed by various General Conditions adopted internationally. The Revised General Conditions of Contract have been modified with respect to the general structure which is being adopted by the ministry of Statistics and programme implementation and internationally. The various clauses have been clubbed in such a manner that the roles and responsibilities of the Corporation, EIC and the Contractor are clearly brought out under major Sub Head and the same are well defined. The prequalification criteria has been introduced which deals with the initial financial capabilities, experience in execution of similar works, working out the financial capability to bid for the work, Technical capabilities and the capacity for resource mobilization of the Contractor. The pre-qualification criteria evolved are expected to ensure that the genuine tenderer only should submit their bids. The resource based schedule included in the General Conditions will demonstrate adequate capabilities of the Contractor for executing the Contract in a systematic manner. It is expected that such type of additions in the modified GCC will bring more professionalism in the Organization. The mega package concessions have been suitably introduced in order to obtain legitimate benefits to the Organization. The concept of price adjustment during execution of contract has also been modified which will ensure adequate compensation to the Contractor during unprecedented price rise of inputs. The management of Quality Assurance as per the Corporate Management systems has also been introduced in the modified General Conditions of Contract as a part of total quality management. Special emphasis has been given on health, safety and housekeeping during contract execution in order to ensure that provision of AERB guidelines are scrupulously followed. The health of workman has been adequately covered as per the provision of international standard. NPCIL has been executing the contract as per the existing GCC and have experienced certain difficulties. EIC of the works and Contractors have also felt the requirement of improvements in our GCC for smooth execution of works on a equitable basis. While drafting the modified GCC this particular aspects has been the key objective. Special attention has been given to certain clauses such as Force Majeure conditions, Suspension of work, Levy of compensation for delay, importance of pre-bid meeting etc. A three tier approach has been adopted in resolution of disputes. It is expected that the Revised General Conditions of Contract for handling Works Contract and Maintenance Contract may go a long way in executing contracts smoothly. We do expect that certain minor modifications may be required as we gain further experience. In view of the issual of modified G.C.C., it has become imperative that our Construction Management Manual (HQI-8005) also be modified to suit the Revised General Conditions of Contract. The Revised Construction Management Manual deals with information and guidelines for execution of Works Contract right from obtaining Administrative approval of the work and up to final closure of the Contract. It also includes the safe preservation of the final document as per the Record Management System. Efforts have been made to elaborate the GCC clauses in such a manner that the intent of the clauses are well understood and that the contract handling personnel fully understand the fundamentals of the general conditions and the boundary limits of the particular clause.

Practical difficulties in implementation of the process were discussed at length, while keeping the internal controls intact, a liberalized approach in reviving the duties and responsibilities of the EIC has been brought in here as one of the significant changes. Detailed use of the computerized software for measurements, billing and accounting has been defined. Handling the Works Contract as per the General Conditions of Contract is not just sufficient for contract handling personnel to fully understand the entire Project Management. The manual also deals with other important aspects of the project management such as the area required by the contracting agency, various tools and tackles needed for a particular job to accomplish a task, the resource management methodology, Construction methodology to be adopted, Quality Control Mechanism, various testing laboratories available in India which are approved by NPCIL, Risk Management during project execution and Vigilance dos and donts etc. Industrial safety has been a major issue of concern during execution of work. This manual covers in detail various provisions of AERB Safety Guide and also the Atomic Energy Factories Rule. It is expected that Engineer-in-charge of the works make himself fully conversant with the Industrial Safety requirements, prepares a detailed Industrial Safety Manual including job hazard analysis and develop a safety culture to ensure that all the stipulations of the above mentioned guidelines are scrupulously followed. Special emphasis has been given to the security aspects considering the present security scenario in the country. It is expected that security requirements would be well understood by the engineers handling the contracts and no short cuts are allowed in meeting the security norms. Emphasis on creating an environment that shall bring in independence / empowerment to the Engineers / officers that shall increase the responsibility and accountability of the Engineers / officers. This document is intended to provide the fundamental objective of the Corporation to Engineer, inspection staff and safety engineers who are responsible for overall quality control and inspection during construction, with the overall objectives to monitor the successful completion of the contract within the stipulated period of time with utmost priority given to industrial safety. The purpose of the manual set forth is that this should provide as a good reference document for contract management for any new officer joining NPCIL. It has been the endeavour that the language of the manual should be simple, brief and is well understood by the contract handling personnel. An attempt has been made to fulfil the purpose of the manual to provide a good insight of the detailed process in a flow which is easy in understanding. The committee comprising of Shri V.C. Agrawal, DIR(HR), Shri C. Raychaudhuri, AD(NP), Shri D.K. Jain, CE(Civil), Shri H.D. Singh, CE(GS, TAPS 1-4), Shri V.S. Khandekar, DGM(F&A) and Shri P.U. Boby, Dy.CE (Infra) Member Secretary have left no stone unturned in revising and rewriting the Manual. It is worth mentioning that one and all have contributed to their best efforts on re-writing the Manual to meet the objective of making this document as a reference Construction Manual. Review committee was also constituted under the Chairmanship of Shri Lokesh Kumar, CCE (KAPP 3&4), including Shri A.K. Srivastava, SO/G(KAPP 3&4), Shri S.B. Joshi, ACE(Jaitapur), Shri S.K. Sharma, ACE(Civil), Shri R.C. Shah, SM(F&A) and Shri P.U. Boby. Dy.CE. The special efforts and contribution by Shri Lokesh Kumar, CCE (KAPP 3&4) and Shri P.U. Boby, Dy.CE are worth appreciative. The manual supersedes all earlier version of the construction management manual. ******************** vi

TABLE OF CONTENTS VOLUME - I

SECTION-1 DEFINITIONS ___________________________________________________________ 1
1.1 1.2
1.2.1 1.2.2 1.2.3 1.2.4 1.2.5 1.2.6 1.2.7 1.2.8 1.2.9 1.2.10 1.2.11 1.2.12

DEFINITIONS ____________________________________________________________________ 1 CLASSIFICATIONS OF WORKS ____________________________________________________ 4

WORKS ______________________________________________________________________________ 6 ORIGINAL WORKS ____________________________________________________________________ 6 REPAIR WORKS _______________________________________________________________________ 7 PETTY WORKS ________________________________________________________________________ 7 DEPOSIT WORKS ______________________________________________________________________ 7 STAGES OF WORK ____________________________________________________________________ 8 PREPARATION OF TECHNICAL SPECIFICATIONS _________________________________________ 9 GENERAL CONDITIONS OF CONTRACTS ________________________________________________ 9 SPECIAL CONDITIONS OF CONTRACT __________________________________________________ 9 SCHEDULE OF DRAWINGS ____________________________________________________________ 10 MATERIAL TO BE SUPPLIED BY THE CORPORATION ______________________________________ 10 SCHEDULE OF RATES _________________________________________________________________ 10

SECTION-2 BUDGET & COST ESTIMATES ____________________________________________ 11 PROCESS OBJECTIVES ____________________________________________________________ 11

2.1
2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.1.6 2.1.7 2.1.8 2.1.9 2.1.10 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 2.2.8 2.2.9 2.2.10

PREPARATION AND COMPILATION OF BUDGET ___________________________________ 11

BUDGET ____________________________________________________________________________ 11 BUDGET ESTIMATE / REVISED ESTIMATES ________________________________________________ 11 CLASSIFICATION OF EXPENDITURE ____________________________________________________ 11 ACCOUNT CODE____________________________________________________________________ 12 PREPARATION & SUBMISSION OF DETAILED ESTIMATES __________________________________ 12 NEW ITEMS OF EXPENDITURE OR FRESH CHARGES ______________________________________ 15 INEVITABLE PAYMENTS _______________________________________________________________ 15 PERFORMANCE BUDGET _____________________________________________________________ 15 APPROPRIATION AND RE-APPROPRIATION ____________________________________________ 15 CONTROL OF EXPENDITURE __________________________________________________________ 17 PRELIMINARY ESTIMATE ______________________________________________________________ 17 ADMINISTRATIVE APPROVAL & FINANCIAL SANCTION __________________________________ 18 TECHNICAL SANCTION _______________________________________________________________ 19 PREPARATION OF DETAILED ESTIMATE _________________________________________________ 20 SCHEDULE OF RATES _________________________________________________________________ 21 PROVISION FOR CONTINGENCIES ____________________________________________________ 22 REVISED ESTIMATE ___________________________________________________________________ 22 RECASTING OF ESTIMATE _____________________________________________________________ 22 MAINTENANCE AND SERVICE CONTRACTS ____________________________________________ 22 APPROPRIATION OR RE-APPROPRIATION OF FUND (BUDGET PROVISION) ________________ 25

2.2

PRELIMINARY ESTIMATE & APPROVALS ___________________________________________ 17

KEY PERFORMANCE INDICATORS _________________________________________________ 25 MIS _____________________________________________________________________________ 25 SECTION-3 TENDERING ___________________________________________________________ 27 PROCESS OBJECTIVES ____________________________________________________________ 27
3.1
3.1.1 3.1.2 3.1.3 3.1.4 3.1.5

CONTRACT ____________________________________________________________________ 27

GENERAL ___________________________________________________________________________ 27 LUMP SUM CONTRACT _______________________________________________________________ 28 ITEM RATE CONTRACT _______________________________________________________________ 28 PIECE RATE CONTRACT ______________________________________________________________ 28 COST PLUS CONTRACT_______________________________________________________________ 29

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3.1.6

PERCENTAGE RATE CONTRACT _______________________________________________________ 29

3.2

3.2.1 3.2.2 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.4.7 3.4.8 3.4.9 3.5.1 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.6.7 3.6.8 3.6.9

PREPARATION OF TENDER DOCUMENT ___________________________________________ 29

GENERAL ___________________________________________________________________________ 29 PREPARATION OF NOTICE INVITING TENDER ___________________________________________ 30 NECESSITY FOR BID SECURITY _________________________________________________________ 31 RATES OF BID SECURITY ______________________________________________________________ 31 MODE OF DEPOSIT __________________________________________________________________ 32 WAIVER OF BID SECURITY ____________________________________________________________ 32 REFUND OF BID SECURITY ____________________________________________________________ 32 BID SECURITY IS NOT SECURITY DEPOSIT ________________________________________________ 32 FORFEITURE OF BID SECURITY _________________________________________________________ 32 PUBLICITY OF TENDER ________________________________________________________________ 33 CALL OF PUBLIC TENDER _____________________________________________________________ 33 CALL OF LIMITED TENDER _____________________________________________________________ 34 CALL OF SINGLE TENDER _____________________________________________________________ 35 AWARD OF WORK ON NEGOTIATION / NOMINATION/ WITHOUT CALL OF TENDER ________ 35 EXECUTION OF DEPOSIT WORKS ______________________________________________________ 35 TIME GAP BETWEEN CALL OF TENDER AND OPENING OF TENDERS _______________________ 36 EXTENSION OF TIME PERIOD FOR SALE AND RECEIPT OF TENDER _________________________ 37 FORMALITIES FOR RE-INVITATION OF TENDER ___________________________________________ 37 GENERAL ___________________________________________________________________________ 37 SALE OF TENDER DOCUMENT _________________________________________________________ 39 SCALE OF CHARGES FOR TENDER DOCUMENT _________________________________________ 39 SALE OF TENDER DOCUMENTS TO REGISTERED CONTRACTORS __________________________ 40 GUARANTEE BONDS _________________________________________________________________ 40 ISSUE OF TENDER DOCUMENT TO PRE-QUALIFIED TENDERERS FOR SPECIALIZED WORK _____ 40 SUPPLY OF DUPLICATE SET OF TENDER DOCUMENTS ____________________________________ 40 ACCOUNTING OF TENDER DOCUMENT ________________________________________________ 40 CENTRALIZED TENDERING CELL _______________________________________________________ 41 FILE TRACKING SHEET ________________________________________________________________ 41

3.3

BID SECURITY __________________________________________________________________ 31

3.4

PUBLICITY OF TENDER ___________________________________________________________ 33

3.5 3.6

PREQUALIFICATION OF CONTRACTORS __________________________________________ 37

SALE OF TENDER________________________________________________________________ 39

KEY PERFORMANCE INDICATORS _________________________________________________ 41 MIS _____________________________________________________________________________ 41 SECTION-4 CONTRACTING _______________________________________________________ 43 PROCESS OBJECTIVES ____________________________________________________________ 43
4.1
4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7

RECEIPT OF BID AND EVALUATION _______________________________________________ 43

RECEIPT OF BIDS AND OPENING THEREOF _____________________________________________ 43 DUTIES OF OFFICERS OPENING THE TENDERS ___________________________________________ 45 PROCEDURE FOR ACCOUNTING, CORRECTION, CONDITION & OVER WRITINGS __________ 45 EVALUATION OF TENDERS (COMPARATIVE STATEMENT) _________________________________ 46 CONDITIONS REGARDING ABNORMALLY HIGH / LOW RATES____________________________ 50 PROCEDURE FOR CONDUCTING NEGOTIATIONS _______________________________________ 51 PROVISION FOR PROVIDING ALTERNATIVE / UNIT RATE ITEMS ____________________________ 53 TIME SCHEDULE FOR DECISION ON TENDER ____________________________________________ 53 RESTRICTIONS ON ACCEPTANCE OF TENDER___________________________________________ 54 COMPETENT AUTHORITY TO ACCEPT THE TENDER_______________________________________ 54 ACCEPTANCE OF TENDER IN ANTICIPATION OF REVISED FINANCIAL SANCTION __________ 55 ACCEPTANCE OF TENDER BY NPCIL BOARD ___________________________________________ 56 PROCEDURE FOR ACCEPTANCE OF TENDER ___________________________________________ 57 ACCEPTANCE OF TENDER AT THE MARKET RATE WITH ALLOWABLE VARIATIONS ___________ 57

4.2

ACCEPTANCE OF TENDER _______________________________________________________ 53

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4.2.8 4.2.9

COMMUNICATION OF ACCEPTANCE OF TENDER ______________________________________ 58 PRESERVATION OF TENDER DOCUMENTS ______________________________________________ 58

4.3

4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.4.6

SECURITY DEPOSIT AND ITS RECOVERY ___________________________________________ 59

RATE OF SECURITY DEPOSIT ___________________________________________________________ 59 WAIVER OF SECURITY DEPOSIT ________________________________________________________ 59 FORMS OF SECURITY DEPOSIT _________________________________________________________ 60 INVOKING / ENCASHING OF BANK GUARANTEE AS SECURITY DEPOSIT ___________________ 60 TRANSACTION BETWEEN PSU AND GOVERNMENT ______________________________________ 61 FIXED DEPOSIT RECEIPTS AS PERFORMANCE GUARANTEE _______________________________ 61 REFUND OF SECURITY DEPOSIT ________________________________________________________ 61 ESSENTIAL FEATURES _________________________________________________________________ 64 POWER TO SIGN WORK ORDER / WORK AGREEMENT___________________________________ 65 SUPPLY OF COPIES OF CONTRACT / AGREEMENT TO CONTRACTORS ____________________ 65 CERTIFICATION AND SAFE CUSTODY OF AGREEMENTS __________________________________ 65 SUPPLEMENTARY AGREEMENTS _______________________________________________________ 66 COMPLETION OF AGREEMENTS _______________________________________________________ 66

4.4

EXECUTION OF AGREEMENTS / CONTRACTS ______________________________________ 64

KEY PERFORMANCE MEASURES ___________________________________________________ 67 MIS _____________________________________________________________________________ 67 SECTION-5 EXECUTION & MONITORING ___________________________________________ 69 PROCESS OBJECTIVES ____________________________________________________________ 69
5.1 5.2
5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.3.1 5.4.1 5.4.2. 5.4.3 5.4.4 5.4.5 5.4.6 5.4.7 5.4.8 5.4.9

PROJECT INFRASTRUCTURE REQUIREMENTS _______________________________________ 69 INFRASTRUCTURE FOR EXECUTION OF WORK _____________________________________ 70

GENERAL ___________________________________________________________________________ 70 LAND FOR EXECUTION OF WORK _____________________________________________________ 72 MODE OF HANDING OVER SITE FOR EXECUTION OF WORKS ____________________________ 73 HANDING OVER LAND FOR OTHER ACTIVITIES TO EXECUTE THE CONTRACT ______________ 74 POWER AND WATER SUPPLY __________________________________________________________ 75 SETTING OUT THE WORK ______________________________________________________________ 76 REQUIREMENTS FOR INSURANCES _____________________________________________________ 76 PROVISION OF THE ACT ______________________________________________________________ 77 PROVISIONS AND PENALTY FOR NON-COMPLIANCE OF LABOUR LAWS AS PER THE GCC__ 77 LIST OF ACTS / OMISSIONS____________________________________________________________ 79 MINIMUM WAGES ___________________________________________________________________ 79 RESPONSIBILITIES OF EIC ______________________________________________________________ 80 RESPONSIBILITIES OF CONTRACTORS __________________________________________________ 80 DEDUCTIONS TO BE MADE FROM CONTRACTORS BILLS ________________________________ 81 PROCEDURE IN CASE OF ACCIDENT __________________________________________________ 81 LABOUR WELFARE ___________________________________________________________________ 81

5.3 5.4

INSURANCE ____________________________________________________________________ 76 CONTRACTORS LABOUR REGULATIONS __________________________________________ 77

5.5 5.6
5.6.1 5.6.2 5.6.3 5.6.4 5.6.5 5.6.6 5.6.7 5.6.8

CONTROL & ISSUE OF DRAWING _________________________________________________ 81 ISSUE OF MATERIALS BY CORPORATION __________________________________________ 82

GENERAL GUIDELINES FOR ISSUE OF MATERIALS TO CONTRACTOR ______________________ 82 PREPARATION OF CONTRACTOR ISSUE VOUCHER (CIV) ________________________________ 82 EXCESS ISSUE BY THE CORPORATION __________________________________________________ 83 ISSUE OF MATERIALS FROM STORES____________________________________________________ 83 RETURN OF SURPLUS MATERIALS SUPPLIED BY THE CORPORATION/CONTRACTOR _________ 85 REMOVAL OF SUBSTANDARD MATERIALS ______________________________________________ 86 ACCOUNTING AND RECOVERY OF MATERIALS ISSUED__________________________________ 87 MATERIALS / EQUIPMENTS COVERED UNDER THE SCOPE OF PACKAGE CONTRACTOR ____ 89

5.7

PLANT & MACHINERIES _________________________________________________________ 90 ix

5.8

5.8.1 5.8.2 5.8.3 5.8.4 5.9.1 5.9.2 5.9.3 5.9.4 5.9.5 5.9.6 5.9.7 5.9.8 5.9.9 5.9.10 5.9.11 5.9.12 5.9.13 5.10.1 5.10.2

ISSUE OF TOOLS AND PLANTS ___________________________________________________ 90

CONDITIONS OF ISSUE _______________________________________________________________ 90 CALCULATIONS OF HIRE CHARGES ___________________________________________________ 91 TERMS AND CONDITIONS TO ISSUE PLANT AND MACHINERY ON HIRE ____________________ 92 BILLING AND ACCOUNTING OF HIRE CHARGES OF T&P _________________________________ 92 PLANNING _________________________________________________________________________ 93 SCOPE OF SANCTION ________________________________________________________________ 93 SUB CONTRACTS ____________________________________________________________________ 94 MATERIALS & SAMPLES _______________________________________________________________ 94 INSPECTION _________________________________________________________________________ 95 TESTING _____________________________________________________________________________ 95 REJECTION __________________________________________________________________________ 96 REMEDIAL WORK ____________________________________________________________________ 97 EXCESS OVER ESTIMATES _____________________________________________________________ 97 PROTECTION OF THE ENVIRONMENT __________________________________________________ 97 MATERIAL OBTAINED FROM EXCAVATION AND DISMANTLEMENT ________________________ 97 OCTROI, CESS, TAXES, ROYALTIES, ETC. ________________________________________________ 98 MISCELLANEOUS ____________________________________________________________________ 98 STAFF TO BE EMPLOYED BY CONTRACTOR ON WORKS_________________________________ 100 STAFFING, TRAINING AND CERTIFICATION ____________________________________________ 101

5.9

EXECUTION OF WORK __________________________________________________________ 93

5.10

CONTRACTORS SUPERVISION ___________________________________________________ 99

5.11

5.11.1 INTRODUCTION ____________________________________________________________________ 101 5.11.2 QA MANUAL FOR CONSTRUCTION___________________________________________________ 102 5.11.3 QUALITY ASSURANCE SYSTEM ________________________________________________________ 102 5.11.4 QUALITY CONTROL SYSTEM __________________________________________________________ 103 5.11.5 ORGANIZATIONAL SET UP FOR QUALITY CONTROL SYSTEM _____________________________ 103 5.11.6 LABORATORIES _____________________________________________________________________ 106 5.11.7 QA RECORDS ______________________________________________________________________ 106 5.11.8 VERIFICATION FUNCTIONS___________________________________________________________ 106 5.11.9 AUDIT AND AUDIT TEAM _____________________________________________________________ 107 5.11.10 ACTION IN UNITS/STATIONS/PROJECTS ON THE REPORTS OF QA TEAM & AUDIT TEAM ____ 107 5.11.11 QUALITY CONTROL FOR WORKS WHERE QA SECTION IS NOT DIRECTLY INVOLVED ________ 108 5.11.12 SUBMISSION OF RETURNS ____________________________________________________________ 108 5.11.13 HEALTH AND INDUSTRIAL SAFETY _____________________________________________________ 109 5.11.14 HOUSE KEEPING AND CLEANING OF SYSTEMS ________________________________________ 111 5.11.15 COMPETENT PERSON FOR TESTING & CERTIFICATION AS PER ATOMIC ENERGY FACTORY RULES,1996 _________________________________________________________________________ 112 5.12.1 5.12.2 5.13.1 5.13.2 5.13.3 5.13.4 5.13.5 5.13.6 5.14.1 5.14.2 5.14.3 5.14.4 5.14.5 5.14.6 5.14.7

QUALITY CONTROL AND TECHNICAL AUDIT _____________________________________ 101

5.12

SUB STANDARD WORK _______________________________________________________ 113

PROCEDURE FOR ACCEPTANCE OF SUB-STANDARD WORK ____________________________ 113 SANCTION OF RATES FOR SUB-STANDARD WORK ______________________________________ 113 CONTRACT RISK MANAGEMENT _____________________________________________________ 114 WORK PLANNING __________________________________________________________________ 115 EARLY DETECTION OF HINDRANCES __________________________________________________ 117 RATE OF PROGRESS_________________________________________________________________ 117 HINDRANCE REGISTER ______________________________________________________________ 117 INCENTIVES ________________________________________________________________________ 117 GENERAL PRINCIPLES _______________________________________________________________ 118 APPLICATION FOR EXTENSION OF TIME _______________________________________________ 119 PROVISIONAL AND FINAL EXTENSION OF TIME ________________________________________ 119 POWERS TO AUTHORITIES FOR GRANT OF EXTENSION OF TIME __________________________ 119 GRANT OF EXTENSION OF TIME WITHOUT APPLICATION ________________________________ 120 FORM OF APPLICATION FOR EXTENSION OF TIME______________________________________ 120 CATEGORISATION OF EXTENSION OF TIME WITH FINANCIAL IMPLICATION _______________ 121

5.13

PROGRAM, RATE OF PROGRESS AND HINDRANCES ______________________________ 114

5.14

EXTENSION OF TIME AND COMPENSATION FOR DELAY ___________________________ 118

5.14.8 DEFINITION OF FORCE MAJEURE ___________________________________________________ 123 5.14.9 COMPENSATION OF DELAY UNDER CLAUSE 7.7 OF GCC ______________________________ 123 5.14.10 PERFORMA FOR INTIMATING COMPENSATION UNDER CLAUSE 7.6 ______________________ 124

5.15

5.15.1 5.15.2 5.15.3 5.15.4 5.15.5 5.15.6 5.15.7 5.15.8 5.15.9

EXTRA, SUBSTITUTED AND DEVIATED ITEMS OF WORK _____________________________ 124

DEVIATIONS ________________________________________________________________________ 124 DEVIATION TO BE AVOIDED _________________________________________________________ 125 PRIOR SANCTION OF COMPETENT AUTHORITY NECESSARY FOR DEVIATIONS ____________ 125 POWERS TO SANCTION RATES FOR EXTRA/SUBSTITUTED ITEMS___________________________ 125 PAYMENTS OF PROVISIONAL RATES FOR EXTRA/SUBSTITUTED ITEMS______________________ 127 INSTRUCTIONS FOR FORWARDING EXTRA / SUBSTITUTED ITEMS __________________________ 128 GOVERNING CONDITIONS OF APPROVING ADDITIONAL QUANTITIES EXTRA ITEMS / SUBSTITUTED ITEMS __________________________________________________________________ 128 GUIDELINES AS PER GCC FOR FIXING RATES FOR EXTRA/SUBSTITUTED ITEMS & ADDITIONAL QUANTITIES ________________________________________________________________________ 130 MEASUREMENT FOR INADMISSIBLE ITEMS _____________________________________________ 131

5.16 5.17 5.18 5.19 5.20

CONTRACT PRICE ADJUSTMENT ________________________________________________ 131 COMPLETION CERTIFICATE _____________________________________________________ 135 SUSPENSION OF WORK ________________________________________________________ 137 PROVISIONS FOR TERMINATION / CANCELLATION OF CONTRACT_________________ 137 RECORD MANAGEMENT _______________________________________________________ 139

KEY PERFORMANCE MEASURES __________________________________________________ 139 MIS ____________________________________________________________________________ 140 SECTION-6 MEASUREMENTS & PAYMENTS _________________________________________ 141 PROCESS OBJECTIVES ___________________________________________________________ 141
6.1
6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 6.1.7

MEASUREMENT BOOK (MANUAL) _______________________________________________ 141

GENERAL __________________________________________________________________________ 141 RECORDING OF MEASUREMENTS ____________________________________________________ 141 TEST CHECKING OF MEASUREMENTS _________________________________________________ 144 REVIEW OF MEASUREMENT BOOKS ___________________________________________________ 144 LOSS OF MEASUREMENT BOOKS _____________________________________________________ 144 NON RETURN OF MB BY INSPECTION, VIGILANCE, COURT, ARBITRATION ETC. ____________ 144 STAGE PAYMENT ___________________________________________________________________ 145

6.2 6.3
6.3.1 6.3.2 6.3.3 6.3.4 6.4.1 6.4.2 6.4.3 6.4.4 6.5.1 6.5.2 6.5.3 6.5.4 6.5.5 6.5.6 6.5.7

DOCUMENT GENERATION THROUGH WORK CONTRACT MANAGEMENT SYSTEM ___ 145 PREPARATION, VERIFICATION AND PASSING OF BILLS ____________________________ 147
PREPARATION OF BILLS (MANUAL) ___________________________________________________ 147 FORMS OF BILL FOR PAYMENTS AND VOUCHERS ______________________________________ 147 AUTHORITY TO PASS THE BILLS________________________________________________________ 148 PAYMENT FOR WORK DONE _________________________________________________________ 148 REQUIREMENT OF CLAUSE 12.2 OF G.C.C ____________________________________________ 148 TIME-SCHEDULE FOR PAYMENT OF BILLS ______________________________________________ 149 PAYMENT THROUGH BANK __________________________________________________________ 150 INCOME TAX DEDUCTIONS FOR PAYMENTS MADE ____________________________________ 150 GRANT OF MOBILISATION ADVANCE TO THE CONTRACTORS __________________________ 152 OTHER CONDITIONS FOR PAYMENT OF MOBILISATION ADVANCE & ITS RECOVERY. ______ 153 ADVANCE PAYMENT OF ON ACCOUNT BILLS _________________________________________ 153 ADVANCE PAYMENT FOR WORK DONE BUT NOT MEASURED ___________________________ 154 ADVANCE PAYMENT FOR CHEMICAL ANALYSIS, TESTING AND CALIBERATION OF MATERIALS. ___________________________________________________________________________________ 155 SECURED ADVANCES _______________________________________________________________ 155 SUBMISSION / WAIVAL OF BANK GUARANTEE(BG) AGAINST ADVANCE PAYMENT: _______ 156

6.4

PAYMENTS TO CONTRACTORS _________________________________________________ 148

6.5

ADVANCE PAYMENTS TO CONTRACTOR ________________________________________ 152

xi

KEY PERFORMANCE MEASURES __________________________________________________ 157 MIS ____________________________________________________________________________ 157 SECTION-7 DISPUTE RESOLUTION, ARBITRATION & LITIGATION _______________________ 159 PROCESS OBJECTIVES ___________________________________________________________ 159
7.1 7.2 7.3
7.3.1 7.3.2 7.3.3 7.3.4 7.3.5 7.3.6 7.4.1 7.4.2 7.4.3 7.4.4 7.4.5 7.4.6 7.4.7 7.4.8 7.4.9 7.4.10 7.4.11 7.4.12

APPLICATION OF ARBITRATION CLAUSE 17 OF GCC _____________________________ 159 DISPUTE RESOLUTION __________________________________________________________ 159 DISPUTE RESOLUTION BOARD (DRB) _____________________________________________ 159
CONSTITUTION OF DISPUTE RESOLUTION BOARD ______________________________________ 159 GIVING INFORMATION TO DISPUTE RESOLUTION BOARD _______________________________ 160 OBTAINING DISPUTE RESOLUTION BOARDS DECISION _________________________________ 161 AMICABLE SETTLEMENT______________________________________________________________ 161 FAILURE TO COMPLY WITH DISPUTE RESOLUTION BOARDS DECISION ___________________ 162 EXPIRY OF DISPUTE RESOLUTION BOARDS APPOINTMENT ______________________________ 162 APPLICATION FOR APPOINTMENT OF ARBITRATOR ____________________________________ 163 PREPARATION FOR ARBITRATION CASES ______________________________________________ 163 PROCESSING OF CONTRACTORS APPLICATIONS FOR APPOINTMENT OF ARBITRATOR ___ 164 APPOINTMENT OF ARBITRATOR ______________________________________________________ 165 APPOINTMENT OFARBITRATOR IN THE ABSENCE OF AGREEMENTORARBITRATION CLAUSE 165 ACTION SUBSEQUENT TO APPOINTMENT OF ARBITRATOR ______________________________ 165 ARBITRATION PROCEEDINGS ________________________________________________________ 166 PUBLICATION OF AWARD ___________________________________________________________ 166 ACCEPTANCE OF ARBITRATION AWARD _____________________________________________ 166 SETTING ASIDE OF THE AWARDS _____________________________________________________ 166 PAYMENT OF AWARD MONEY _______________________________________________________ 166 COURT PROCEEDINGS ______________________________________________________________ 166

7.4

ARBITRATION _________________________________________________________________ 162

MIS ____________________________________________________________________________ 167 SECTION-8 MANPOWER REQUIREMENTS AND PROJECT ORGANISATION CHART ______ 169 PROCESS OBJECTIVES ___________________________________________________________ 169
8.1 8.2 8.3 GENERAL _____________________________________________________________________ 169 TYPICAL MANPOWER REQUIREMENT FOR VARIOUS SECTIONS OF NPP DURING CONSTRUCTION STAGE ________________________________________________________ 170 DEPLOYMENT OF MANPOWER AT VARIOUS STAGES OF CONSTRUCTION ___________ 171

VOLUME - II
ANNEXURES____________________________________________________________________________173

xii

SECTION-1 DEFINITIONS
1.1 1 2 3

DEFINITIONS
"Accepting Authority" means NPCIL Board or CMD, NPCIL or his authorised representative as per delegated power for the purpose of the contract. Corporation shall mean Nuclear Power Corporation of India Ltd. (NPCIL) and include its legal representatives, successors and permitted assigns. "Contract" shall mean an agreement where a proposal has been accepted and shall include notice inviting the tender, the tender and acceptance thereof and the formal agreement, if any, executed between Nuclear Power Corporation of India Ltd and the Contractor together with the documents referred to therein including General Conditions of Contract with appendices and any special conditions, specifications, designs, drawings, schedule of quantities with rates and amounts. All these documents taken together shall be deemed to form one Contract and shall be complementary to one another. Contractor is a person(s) named as contractor in the work order / agreement and its legal successors. Contract Price" shall mean: (i) (ii) In the case of "Lump sum Contracts" the sum for which the tender is accepted In the case of Item Rate Contracts", the total cost of the works arrived at after extension of quantities shown in Schedule of Quantities by the item rates quoted by the tenderer for various items. In the case of Rate Contracts the total payments made to the contractor for the approved quantities executed at the rate quoted by him. The quantities are not known at the time of quoting the rates. In the case of Percentage rate Contracts the net amount arrived after applying the percentage (increase /decrease) as quoted by the tenderer. The percentage shall be applied on the estimated amount arrived based on the schedule of quantities wherein the rates of individual items are based on SOR.

4 5

(iii)

(iv)

Commissioning means the trial/initial operation of the works / facility or any part thereof by the contractor, for the purpose to demonstrate successful operation of the facility as per contract provisions. Completion Certificate means the certificate issued by the Corporation on completion of works in accordance with sub clause 8.1 (Completion Certificate) of the GCC. Completion Time means the period within which completion of the works or part thereof (where a separate time of completion of such part has been prescribed) is to be completed as stipulated in the work order and in accordance with the provisions of contract. Contract Documents means documents listed in the Contract Agreement including 1

any amendments therein to. 10 Contractors Equipment means all apparatus, machineries, vehicles and other things required for the execution and completion of the works and the remedying of any defects. However, contractors equipment excludes temporary works, employers equipment, plant, materials (if any) and any other things intended to form or forming part of the works. Contractors Representative means the person nominated or appointed from time to time by the contractor who acts on behalf of the contractor. Corporations Tools & Plants means the apparatus, machinery, tools, plants and vehicles (if any) made available by the Corporation for the use of the contractor in the execution of the work but it does not include plants which have not been taken over by the Corporation. Country means the country in which the site is located where the works are to be executed. Date of Commencement means the date when the contractor shall commence execution of the works as mentioned in the work order and the completion time for the work shall be reckoned from this date. A Day means a day of 24 hours from mid-night to mid-night irrespective of the number of hours worked in that day; a Week means seven days, a Month means a calendar month and a Year means 365 days without regard to the number of hours worked in any day. Defect means any part of the Works not executed in accordance with the Contract. The Defect Liability Period is the period defined in the Schedule A during which the contractor is responsible for defects with respect to the works as provided in clause No. 9 (Defect Liability) of the GCC. DFP means the Delegation of financial powers for works issued by the Corporation from time to time, defining the authority, powers and procedure for authorisation. Drawings means the drawings of the works, as included in the Contract, and any additional and modified drawings issued by (or on behalf of) the Corporation in accordance with the Contract. DRB means the Dispute Resolution Board appointed under sub-clause 17.3 (Appointment of the Dispute Resolution Board) of the GCC. "EIC" or The Engineer shall mean the Officer appointed by the Corporation or his duly authorized representative who shall direct, supervise and be in charge of the works for purposes of the particular Contract. "Excepted Risks", are the risks due to riots (other than that among Contractor's employees) and civil commotion (in so far as both these are uninsurable), war (whether declared or not), invasion, act of foreign enemies, global terrorism, civil war, rebellion, munitions of war, explosive materials, ionizing radiation or contamination by radio activity, revolution, insurrection, military or usurped power, any acts of Government, damage from aircrafts, sabotage, acts of God such as earthquake, lightning, cyclones, Tsunami and unprecedented floods and other causes over which the Contractor has no control and accepted as such by the 2

11 12

13 14

15

16 17

18 19

20 21

22

Accepting Authority or causes solely due to use or occupation by the "Corporation" of the part of Works in respect of which a certificate of completion has been issued. 23 24 25 26 27 Extra Items are the items which are completely new and in addition to the items in contract. GCC mean the General Conditions of Contract. Latent Defects shall mean any defects which exist but has not surfaced at the time of testing and has not manifested during defect liability period. Laws means all national (or state) legislation, statutes, ordinances and other laws and regulations and by-laws of any legally constituted public authority. Local Currency means the currency of India. Foreign Currency means a currency in which part (or whole) of the Contract Price is paid in currency other than the Local Currency. "Market Rate shall be the rate as decided by the EIC on the basis of the cost of materials and labour at the Site where the work is to be executed, plus 10 % to cover all overheads and profit. For material issued by the Corporation, the overheads and profit percentage shall be allowed @ 2.5%. Minimum Wages shall be the minimum wages declared from time to time by the state or central government, whichever is higher. Near Relatives means wife, husband, parents and grand parents, children and grand children, brothers and sisters, uncles and aunts, cousins and their corresponding in-laws. Part Completion Certificate means the certificate issued by the Corporation on completion of items or group of items for which separate period of completion have been specified in the contract, issued in accordance with sub clause 8.1 (Completion Certificate) of the GCC. Party shall mean Corporation or Contractor, as the context requires. Performance Guarantee is the guarantee to be submitted by the Contractor to the Corporation in accordance with sub-clause No. 4.2.3 (Performance Guarantee) of the GCC. Piece rate work means any work for which labour is paid on the basis of each unit of product produced. Pre-Commissioning means the testing, checking and other requirements specified in the technical specifications that are to be carried out by the contractor in preparation for commissioning. Retention Money means the accumulated retention money which the Corporation retains from the Running Bills as specified in sub-clause No. 4.2.5 (Retention Money) of the GCC Schedule(s) referred to in these conditions shall mean the relevant schedule (s) annexed to the tender papers issued by the Corporation. Scheduled Commercial Bank in India as per definition of Reserve Bank of India 3

28

29 30

31

32 33

34 35

36

37 38

shall include of the following bank groups (i) State Bank of India and its associates, (ii) Nationalized Banks, (iii) Regional Rural Banks, (iv) Foreign Banks and (v) Other Indian Scheduled Commercial Banks (in the private sector). 39 Site means the places where Works are to be executed, including storage and working areas, and to which Plant and Materials are to be delivered and any other places as may be specified in the Contract as forming part of the Site. Specification means the specification of the works included in the contract and any modification / addition made or approved by the EIC. Sub-Contractor means any person named in the Contract as a SubContractor, or any person appointed as a Sub-Contractor, for a part of the Works; and the legal successors in title to each of these persons. Piece rate Contractors are not to be considered as Sub-Contractor. Substituted items are the items which substitute the existing ones or are taken up in lieu of those already provided in the contract. "Temporary Works shall mean all temporary works of every the execution, completion or maintenance of the Works. kind required in or about

40 41

42 43 44

"Urgent Works" shall mean any urgent measures which, in the opinion of EIC, become necessary during the progress of Work to obviate risk of accident or failure or which become necessary for security and safety. A Variation is an instruction / communication given by EIC or his representative, which varies the works, originally intended. WCMS shall mean the Work Contract Management System software used by NPCIL for handling works contract. Work order is the formal communication by the Corporation to the bidder whose bid has been accepted Works shall mean the works to be executed in accordance with the Contract or part(s) thereof as the case may be and shall include all extra or additional, altered or substituted works as required for execution of the Contract. It shall include variations and urgent works. Note: (1) Any term which is not defined herein but defined under different enactment shall be construed to have the same meaning as defined in the act. Note: (2) All the above mentioned definitions have already been defined in the General Conditions of Contract duly approved by NPCIL Board. The above definitions have been incorporated in the document for having an easy reference and to develop a consolidated construction management manual. However, in case of any doubt / discrepancy, the definition incorporated in the GCC shall prevail.

45 46 47 48

1.2

CLASSIFICATIONS OF WORKS
Nuclear Power Corporation of India Limited (NPCIL) is a Public Sector Undertaking under the administrative control of Department of Atomic Energy (DAE), Govt. of India, and has a mission to develop nuclear power technology and to produce nuclear power as a safe, environmentally benign and economically viable source of electrical energy to meet the increasing electricity needs of the country. 4

NPCIL is responsible for design, construction, operation and life time management of Nuclear Power Plants. The construction of Nuclear Power Plants and associated infrastructure including township involve works in various disciplines of engineering such as Civil, Electrical, Mechanical, Control & Instrumentation, Piping, etc. The plants under operation also need various works to be executed for operation & maintenance of facilities. These include maintenance of plant systems, works related to shutdown jobs, housekeeping, transport, Hospitality services and other similar works. For each project there would be Network at various levels, assigning specific time slots to each construction activity - there would be hundreds of such capsules. It is needless to stress that every item of construction should be meticulously planned and executed in its allotted time slot so as to achieve the overall Project Target, while maintaining the highest standards of quality, safety and financial propriety. Similarly for the operating Stations there would be Networks at various levels, assigning specific time slots to each of operation and maintenance activity as well as addition of any new facility to meet the station requirement. Project or Station Authorities will be primarily responsible for execution of works connected with the respective units with suitable assistance from NPCIL Head Quarters as and when necessary. Normally all works" will be executed through 'Contracts' by call of' suitable tender, except for works of very special nature or urgent repair works or routine departmental maintenance works. These Guidelines assume Design and Detailed Engineering are ready before commencement of any work and deal with all aspects of construction management including Financial and Administrative Approvals. These would aid the Construction Manager in implementing the Contracts as per the Standard General Conditions of Contract issued for this purpose. However, in spite of the best efforts to foresee and provide for every contingency, there may arise some issues or some parts of works which may not be covered by the GUIDELINES. In such cases the Engineer should consult his next superior. In case the issue remains unresolved at a Unit, then Corporate Office should be consulted for clarifications/ instructions. Generally all materials of general nature involved in the work should be included in Contractor's scope. Departmental procurement involves additional establishment cost, storage cost, locked-up inventory, additional records keeping, watch and ward, issue, and also possible loss and damage in storage. However, if there are any special materials required and non-issue of which might abnormally increase the cost or time or which may be available only to the Corporation or of critical importance, Departmental procurement and issue could be resorted to. While putting up proposals for Administrative/ Financial Approval for any work, such items should be clearly highlighted and approval obtained.

1.2.1

WORKS WORKS as per dictionary mean Products of labour result of action; architectural or engineering operations. General guidelines before commencement of any work assume that design, detailed engineering, technical specification, administrative approval, financial sanction, mode of tendering etc, are decided and deviations if any, in tendering process are approved by the Competent Authority with full justification. This would facilitate Engineer-InCharge (EIC) to execute the contract as per the General Conditions of Contract. In case of any difficulty in understanding the contract conditions, it is recommended that EIC shall consult Sr. Officers to obtain clarifications / instructions. It is also expected that the aspects of defining the tender instructions and scope of work including the works under the scope of contractor, the items to be supplied by the contractor or corporation have been fully understood and considered by the EIC. The quantum of resources to be mobilized by the contractor in terms of human resource, material and material handling equipment etc. are well defined. It is also expected that the space requirement for the storage of material, office establishment, testing facilities, etc., those are to be established by the contractor, the security aspects those are to be observed by the contractor and his personnel, responsibility of the contractor towards any possible loss and damage of material during storage or during execution of the contract are clearly understood by the EIC. It is also expected that the work shall be executed as per the schedule of quantities and rates and variations are kept to bare minimum. Central Vigilance Commission (CVC) issues guidelines from time to time. These guidelines also need to be considered and due care is taken in defining the scope of work at the tendering stage and contract should be executed as per the scope defined in contract. In case of deviation from contract for any reason, it is expected from EIC that full justification and the cost implications shall be properly recorded and approved by the Competent Authority. It is desirable that the need for such exigencies is foreseen in advance and the variation limits are minimized to the extent possible. It is also expected that the rate analysis for extra / substituted items are carefully worked out either with ABC analysis OR establishing the market rates with justification and back up documents OR in absence of such details, the actual consumption of man days and material shall be considered. It is also desirable that the rate analysis from the contractor is obtained and the same shall be analyzed by the EIC and approval from Competent Authority is obtained before execution of such items. The works can be classified in the following categories:

1.2.2

ORIGINAL WORKS "Original works" mean the works comprising of all new constructions, whether of entirely new works or of additions and alterations to existing works and purchases and also works whether of additions and alterations of or special repairs to newly purchased or previously abandoned buildings/structures/plant/system required for bringing them into use . When a portion of an existing structure, systems or components is to be replaced or remodeled (whether or not the change involves any dismantlement), and the cost of the change represents a genuine increase in the value of the property, the work of replacement or remodeling, as the case may be, should be classified as "Original works". 6

1.2.3

REPAIR WORKS The repair works are generally carried out on the portion of existing structure, roads, bridges, plant and machinery, systems etc. where part or portion need to be replaced or remodelled to bring back to the operating conditions. However, in case the cost of the change represents a genuine and substantial increase in the value of the property, the work of replacement or remodelling, as the case may be, shall be classified as original work. The repair works shall be planned, estimates are prepared and due approval from competent authority is obtained.

1.2.4

PETTY WORKS The expenditure on minor additions or alterations to buildings, roads and plant & machinery etc., where estimated cost is not exceeding Rs.50,000/- (as per existing DFP) will be termed as petty work. In case of petty works, the award as well as all deviations before award and during execution of work including quantity variations up to 100% shall be approved by PD/SD/ED (CPE/CCE/CS if stationed as Unit Head) provided the proposal has been reviewed by 2 Engineers of the relevant Section. No Financial Concurrence is necessary while awarding petty works and approving the deviations, if any. Total value (including variation) of such various petty contracts should not exceed the limit specified in DFP for a Unit in a financial year. However, the maximum expenditure against petty works at each unit under Revenue/ Capital head should be as per the outlay specifically provided in the budget under separate heads for both Revenue and Capital nature of works. In order to exercise better control on petty works, a statement with full details of the petty contracts awarded during each month (including variations, etc., if any) should invariably be sent by the Head of the concerned Section to Finance Department of the Site in the first week of following month. Non-submission of monthly statement shall result in return of work order issued by concerned Section under "Petty Works" by Finance without payment. Finance section shall carry out post audit on random basis and omissions, if any noticed, shall be reported to PD/SD/ED for corrective action in future.

1.2.5

DEPOSIT WORKS The term Deposit work is applied to the works of construction or repairs, the cost of which is not met out of the funds of the organisation who executes the works, but being financed by other public bodies/ organisations. In NPCIL this can be in two categories (a) (b) The works executed for NPCIL by other public bodies/organisation where the corporations funds is deposited with other public bodies/organisations. The works executed by NPCIL for other public bodies/organisations where funds are deposited with NPCIL by other public bodies/organisations.

The technical specifications and scope of work are to be clearly defined while executing deposit works. The responsibilities for obtaining various clearances from concerned State/Central Authorities shall also be defined and documented before executing such works. NPCIL in general do not take any deposit work for construction and repair but in exceptional circumstances may undertake such deposit work in case the proposal is approved by CMD, NPCIL.

1.2.6

STAGES OF WORK As per DFP, approvals are required at various stages of work. After receipt of a request for execution of work, a preliminary estimate is prepared to give an idea of the approximate cost involved. In other words, it is referred as block estimate. There are four basic pre-requisites, which are required to be fulfilled before execution of any work. 1. Administrative approval 2. Financial sanction 3. Technical sanction 4. Appropriation or re-appropriation of funds. The formal acceptance of the proposal of the work to be executed with preliminary estimates is termed as administrative approval. Administrative approval by the Competent Authority is required for every work. In case of Main Plant works, it is recommended that comprehensive administrative approval, except for township works, shall be obtained from the competent authority. The administrative powers of various authorities have been defined in Annexure-2.2. After the administrative approval is received from the competent authority, the financial sanction is to be accorded indicating that the fund for the work has been provided for and liability can be incurred. Financial sanction for the project under construction is originally given by Govt. of India for entire project under various major heads or sub heads. The financial sanction for operating stations is given on yearly basis under revenue budget. After receipt of administrative approval and financial sanction, detailed estimates are required to be prepared for technical sanction. Approval from the competent authority for detailed estimate of the work with full justification for estimated rates and quantities is termed as Technical Sanction. This includes the background of work, general scope of work, time duration of work and the mode of tendering. A technical sanction shall also include the budget provisions, provided in the cost estimates as well as in the financial year for the said work. The technical sanction shall be signed by the authority preparing the technical sanction, reviewed by next senior officer and approved by the Competent Authority as per DFP. With the view to facilitate and speeding of the scrutiny of estimates, a check list of points should be drawn and it should be ensured that technical sanction is complete in all respects giving relevant details etc. It should also be ensured that contingency is added in technical sanction, in order to cope up with the exigencies. Further chapters in the manual elaborate the method of working out the rate analysis for preparation of cost estimates with illustrative examples. Appropriation means assignment, to meet specified expenditure of funds, included in a primary unit of appropriation. Re-appropriation means the transfer of funds from one primary unit of appropriation to another such unit. In case of "Urgency" or "Emergency" , works may be executed in the absence of any or all of above mentioned formalities. For "urgent works" the authority to commence them in anticipation of Administrative Approval and Financial Sanction shall vest with the CMD, NPCIL. For Emergency Work", PD/SD/ED shall have full authority within delegated financial limits to undertake such work in anticipation of Administrative Approval and Financial Sanction etc. On receipt of such written orders of the competent authority in each case the Engineer may proceed to 8

carry out necessary work with intimation to the Manager (F&A), that he is incurring unauthorized liability, stating therein the approximate amount of liability. The Engineer should pursue his action to obtain Administrative Approval and Financial Sanction and to accord Technical Sanction to regularize the action taken by him in incurring the unauthorized liability, as early as possible. The instances of incurring of unauthorized liability should be resorted in exceptional cases and after required Sanction / Authority is issued by the CMD/PD/SD/ED, as the case may be. 1.2.7 PREPARATION OF TECHNICAL SPECIFICATIONS It is extremely essential to review the technical specifications which form part of tender document. The technical specification includes the various specifications to be complied while executing the work or technical specifications for procurement of various items under the scope of Contractor or by the department. The technical specification also includes inspection and testing requirement essentially required for the execution of work. The technical specification also includes the design intent and detailed drawings required for execution of the work. Sometimes it may be necessary that fabrication drawings or in other words actual working drawings are required to be prepared by the contracting agencies as a part of the technical specifications. It is expected that a detailed construction methodology and/or various working procedures are developed by the contracting agencies as a part of technical specifications. It is therefore expected that EIC shall thoroughly review all the technical specifications in terms of I.S. code/ASME code/ASTM specifications/BS specifications or any other specifications referred in technical specifications and bring out any ambiguity. A list of codes/specification is enclosed as Annexure 1.1. It is also expected that various tolerances, finishes etc., referred in the specifications are thoroughly understood. In case of multi disciplinary contract, the technical specification for different discipline of the work such as civil, mechanical, electrical, control & instrumentation shall also be fully understood and integrated before preparation of tender document. It may sometimes happen that such a multi disciplinary contract may need additional resources in terms of infrastructure or providing various test facilities. The EIC is expected to review and understand technical specifications in depth and envisage the cost implications of such requirements. The need of various testing gadgets such as optical alignment instrument, laser equipment for precision alignment are also required to be examined by the EIC while reviewing the technical specification. It is also expected that the requirement of mock ups is also worked out by the EIC in case felt necessary. Such requirements become essential while handling and erection of large and heavy equipments, concreting of complicated joints/pours and/or very precision assemblies to be taken up in a radiation areas or otherwise. It is expected that cost implications for all such technical requirements shall be clearly brought out while preparing detailed cost estimates. 1.2.8 GENERAL CONDITIONS OF CONTRACTS The General Conditions of Contract (GCC) are approved by the NPCIL Board. No deviation is permissible without approval of the Competent Authority. The provisions of GCC are required to be scrupulously followed. Subsequent chapters of this manual elaborate the explanation of various clauses of GCC. 1.2.9 SPECIAL CONDITIONS OF CONTRACT Special Conditions of Contract (SCC) which are either Site/Unit specific or a particular work specific, also form part of tender document. These conditions of contract shall be 9

carefully drafted in a predefined sequential manner and be included as a part of tender with the approval of contract approving authority. The SCC supersedes the particular clause of GCC under specific circumstances. In case of any deviation from GCC the same shall be forwarded to CMD for approval. 1.2.10 SCHEDULE OF DRAWINGS It is essential that the list of drawings, which are required for execution of the work, be listed in the tender. EIC should ensure that sufficient information either in the form of tender drawings or erection drawings or general layout of the area is included in the tender so that the scope of work is well understood by tenderer. 1.2.11 MATERIAL TO BE SUPPLIED BY THE CORPORATION The list of materials including plant and machinery to be supplied by the Corporation either as a free issue material or on chargeable basis shall be included in the tender. The hourly/daily charges of the plant and machinery shall also be prepared and should be got approved by the competent authority. It is also expected that unit energy cost is worked out and approved for supply of electric power to the contractor. Similarly, small value contracts which need costly resources to be mobilized by the Contractor shall be carefully examined while preparing the tender. These measures shall avoid delay in execution of the work. 1.2.12 SCHEDULE OF RATES To facilitate the preparation of estimates, and also to serve as a guide in finalizing rates during the course of execution of contract, a schedule of rates for each kind of work commonly executed should be maintained up to date in the units duly approved by the Unit head. It should be prepared on the basis of the rates prevailing in each unit and necessary analysis of the rates for each description of work and for varying conditions thereof should, so far as practicable, be recorded. Further chapters in the manual elaborate preparation of schedule of rates.

10

SECTION-2 BUDGET & COST ESTIMATES

PROCESS OBJECTIVES
Preparation and submission of budget as per guidelines Preparation of revised estimates as per the guidelines Obtain initial approvals required for taking up works in NPCIL Obtain a detailed estimate for proposal based on Schedule of rates

2.1
2.1.1

PREPARATION AND COMPILATION OF BUDGET

BUDGET The Annual Financial Statement, popularly known as the Budget covers the NPCIL transactions of all kinds, occurring during the financial year in which the statement is prepared as well as during the ensuing year. The budget estimate and its utilization shall be dealt cautiously.

2.1.2

BUDGET ESTIMATE / REVISED ESTIMATES The estimates of the current financial year which are based on the actual transactions recorded till the time of their preparation and the transaction anticipated for the rest of the year are termed as Revised Estimate. The estimates for the ensuing financial year based on the transactions anticipated are termed as Budget Estimates. The instructions about the procedure for the preparation of the Budget Estimates/ Revised Estimates are issued by the Budget section, NPCIL Corporate Headquarters from time to time.

2.1.3

CLASSIFICATION OF EXPENDITURE The total expenditure is classified in two categories i.e., a) Capital Expenditure (Capital budget)

Expenditure relating to all major (Original) Works/Projects is falling under Capital Expenditure and schedule of Demands for such works form the part of Capital Budget. Further Capital Expenditure may broadly be defined as expenditure incurred with the object of tangible creation/increasing/acquiring of assets of permanent character. Capital expenditure is incurred for the following purposes: Acquiring/creation/addition of fixed assets for earning profit with their use but not for resale Acquiring a benefit or enduring nature or a valuable right Bringing them into business Legal costs of buying buildings The costs of raising capital funds for earning profit 11

Carriage inwards on machinery bought b) Lease cost of acquiring building / property Putting old assets into working condition Extension or improvement of an asset; to increase useful life of an asset/ to reduce cost of production/to improve its revenue earning capacity Any other cost needed to make a fixed asset ready for use including modification & replacement of existing assets. Revenue expenditure (Revenue Budget)

All expenditure relating to maintenance and repair to Building, Plant & Machinery, Equipments, Systems, & Administration Establishment are falling under revenue Expenditure and schedule of demands for such item of works form the part of Revenue Budget. Revenue expenditure is incurred for the following purposes: Purchasing/manufacturing/marketing of goods Maintaining the fixed assets Protection and Safety of business Employee cost Administrative cost, etc

The expenditure is required to be shown separately under revenue expenditure and capital expenditure. It is essential that expenditure of capital nature shall be distinguished with respect to revenue expenditure in the budget estimates. It may be broadly summarized that capital expenditure is incurred while the project is under construction and revenue expenditure is incurred when the project is converted into a station and becomes commercial. The capitalization of funds is also necessary for finalization of unit energy cost for the project. The revenue expenditure is incurred when the plant is under operation and the same shall be kept to an optimum level. Therefore it is essential that auxiliary cost of the power plant, establishment charges and optimization of human resource are carefully worked out to keep the revenue expenditure minimum. However, when there is a major up gradation or modernization of the operating plant, this portion of the budget can be reclassified as capital expenditure. 2.1.4 ACCOUNT CODE Account code is a numeric number assigned to a particular expenditure. This number is useful in identification of the work assigned to a particular nature and subsequent consolidation. The Account code Numbers to be used while preparing the Capital/Revenue Budget under Budget Estimate & Revised Estimate are detailed in Annexure 2.1. 2.1.5 PREPARATION & SUBMISSION OF DETAILED ESTIMATES In case of projects, each section of the unit such as civil, mechanical, electrical, control and instrumentation, reactor erection, site planning, HR department, C&MM, Finance 12

etc. and in case of station, each section such as training, operation group, maintenance group, technical services group etc. shall prepare detailed budget estimates before commencement of financial year and submit to planning or finance department. This budget estimate must take into account the jobs which are required to be taken up during the subsequent financial year and to be accounted against a particular account code. The finance group renders assistance in preparation, checking and consolidation of budget estimates as well as revised estimates. Budget estimates shall include all the financial requirements including grant in aides, expenditure towards corporate social responsibilities, establishment charges, in addition to the expenditure envisaged in technical area. The finance department after approval of the budget estimates / revised estimates shall prepare a detailed balance sheet for the particular unit and forward to HQs for final compilation. The balance sheet also includes all account of taxation, receipts, expenditures, liabilities and assets, sundry charges and all other essential features of balance sheet including profit and loss. 2.1.5.1 PREPARATION OF BUDGET ESTIMATES i) These demands should show further details of the provisions included in the Demand for grant and also actual expenditure during the previous year. A break up of the estimate by indicating the categories and nature of expenditure incurred on salaries, wages travel expenses, pension, foreign service contributions, loans and advances, repayment of debt, materials and equipment, grant-in-aid etc., should also be given. At the end of the detailed demand, the details of recoveries taken in reduction of expenditure in the accounts. ii) No outlay for new works/projects should be proposed in cases when no administrative and expenditure approval are issued by the competent authority. iii) The schedules are to be prepared separately for Projects where expenditure sanction has already been issued. Projects where expenditure sanction has not so far been issued. The projects where financial sanction has not so far been issued, but there is a need for taking up the works (These works are part of Pre-Project activities), in principle approval of the competent authority shall essentially be obtained. Generally, the works under the category of pre-project activities include acquisition of land for new projects, soil investigation, consultancy fee, infrastructure facilities at project site, housing etc. It is essential that all the major heads and sub heads are considered in cost estimates while taking the financial sanction from Government of India for a new project. iv) In case of capital works in progress, the revised estimates for current year and Budget Estimates for ensuing year shall be prepared giving the following details for the works: 1)Names of the work 2)Estimated cost of the work 3)Expenditure incurred up to March of the previous year 4)Budget Estimates for the current year 5)Expenditure incurred up to the given month of the current year 6)Revised requirements for the current year 13

7)Detailed reasons for variations, if any, between (4) & (6) 8)Totals of (3) and (6) 9)Requirements for the ensuing year 10)Reasons for variations, if any, between (6) & (9) v) The budget provisions for residential buildings shall clearly indicate estimates for various disciplines such as civil works, electrical works, air-conditioning, furnishing, computers and LAN services, telephones etc. Similarly, the budget estimates for technical multi disciplinary works shall also include estimate of individual disciplines such as mechanical, human resources, testing charges, commercial charges etc. The above statements are illustrative in nature indicating the importance of preparation of a detailed budget estimate. The budget estimate shall also include the time period of the job to be executed. It is quite likely that the part of the job may spill over to the next financial year and hence suitable provisions shall be made in revised estimates as well as in budget estimates for subsequent year. In case of Lump sum payment and also when there exists provision in the financial sanction and the budget estimates are now being planned may have a plan or non planned expenditures; detail justification shall be incorporated in preparation of the budget estimates in support of the demands made. [The lump sum budget estimates are prepared when job is of turn key in nature and includes design, supply, erection and commissioning. Changes in lump sum contracts are not envisaged]. 2.1.5.2 PREPARATION OF REVISED ESTIMATES i) Revised Estimates should indicate the requirements for the current financial year vis-avis the previous Demands for Grant/Budget Estimates submitted last year. The reasons for variations between the two are to be recorded, wherever required. This statement should include the items carried forward from the last year and indicate separately items for regnant of lapsed items, new items if any, approved or likely to be approved for execution during the current financial year. ii) In all cases, administrative approvals accorded or likely to be accorded during the current financial year should be indicated against each item. iii) While making provision in the Revised estimate for the current financial year, proper assessment of progress of the works for which the funds are required shall be made, keeping in view the availability of area/inputs required for the work, call of tenders, selection of contractor and actual commencement of the work. iv) The detailed demands for grants are presented in lacs of rupees rounded off to the nearest 1000 rupees. v) It may be noted that new proposals shall not be included in the revised estimates unless a specific approval has been obtained from the competent authority by the unit concerned. Note: All expenditure estimates will be entered on a gross basis and recoveries in reduction of expenditure exhibited there under. 14

2.1.6

NEW ITEMS OF EXPENDITURE OR FRESH CHARGES Proposals in respect of new expenditure or fresh charges, if any, shall be prepared by Heads of the units/other estimating authorities and submitted to Budget Section well in time for obtaining approval of competent authority to include them in the Budget. i) The term New Expenditures applies not only to expenditure on new items / services, provision for which has not been previously included in the sanctioned grants or apportioned, but also includes the expenditure involved on additions to the existing services / commitments made in the earlier budget estimates. Such provisions may occur due to natural calamities, additional demands in rehabilitation packages, expenditure needed for development of neighborhood, corporate social responsibilities, the change for grant in aides and establishment charges etc. This may also include emergency shut down jobs, meeting stipulations of regulatory boards and up gradation of the system due to unforeseen reasons. In case of doubt whether expenditure of a particular kind should be in the statement of new expenditure, the matter shall be referred to Budget section for clarification. ii) No scheme of new expenditure will be included in the Budget unless it is complete and finally approved. While submitting proposals for new expenditure or fresh charges, administrative difficulties and time needed for sanction should always be borne in mind. Further amount recommended for provision in the Budget should be in line with amount likely to be spent during the course of the financial year.

2.1.7

INEVITABLE PAYMENTS i) The amount indisputably payable should not, as far as possible, be left unpaid and the payments made should not be kept out of accounts. It is very important that actual obligations should be accessed at the earliest possible date and the payments are made. Suitable provisions for anticipated liabilities should, therefore, invariably be made in the Budget. ii) The finance group is not expected to authorize any payment unless, this has been approved by the competent authority and provided in a particular account code. If excess payment, against a particular work is required to be apportioned, the approval by the competent authority shall be obtained before enhancing the provisions under the particular account code. The EIC handling the contract is therefore, expected to keep a strict control on the financial outlay of the contract and take timely action for smooth handling of the contract.

2.1.8

PERFORMANCE BUDGET Performance Budgeting forms an essential and integral part of the annual budgetary process. It is intended to play an important role by fixing targets for various schemes activities based on norms and performance standards fixed for different events/operations, evaluating the achievements, analyzing reasons for shortfalls, if any, and taking corrective measures considered appropriate to achieve the goals. The performance budget also makes a part of MOU between NPCIL and the Administrative Ministry, i.e., Department of Atomic Energy.

2.1.9

APPROPRIATION AND RE-APPROPRIATION If provisions of funds from within the primary unit of appropriation are not sufficient, the whole grant must be examined in order to see whether savings exist under other units of the appropriation. A transfer of funds from one primary unit of appropriation to another 15

such unit may then become necessary and such a transfer is termed re-appropriation which can be sanctioned only by the competent authority. 2.1.9.1 GENERAL INSTRUCTIONS: i) Re-appropriation of funds shall be made only when it is known or anticipated that the appropriation for the unit from which funds are to be transferred will not be utilized in full or that savings can be affected in the appropriation for the said unit. ii) Funds shall not be re-appropriated from a unit with the intention of restoring the diverted appropriation to that unit when savings become available under other units later in the year. iii) All re-appropriation orders are issued with reference to unit of appropriation in the detailed demands for grants. iv) The EIC of works while submitting application for re- appropriation should take into account the above and submit his proposals by stating whether the re-appropriation is possible within his own budget in the section. v) Re-appropriation can be authorized at any time before, but not after the expiry of the financial year to which such grant of appropriation relates. All such orders must be communicated to the Sr. Manger (F&A) concerned, before the 31st March of the year. vi) Transfer of funds from one primary unit of appropriation under the same grant and involving two or more sections does not amount to re-appropriation because Appropriation Accounts are prepared on the basis of the total grant under a particular primary unit of appropriation. 2.1.9.2 RESTRICTIONS ON APPROPRIATIONS / RE-APPROPRIATIONS I) Funds shall not be appropriated or re-appropriated to meet the expenditure which has not been sanctioned by an authority competent to sanction it. ii) Funds shall not be appropriated or re-appropriated to meet expenditure on a new service not contemplated in the budget. iii) Re-appropriation is not permissible for any work, which has not received administrative approval and expenditure sanction as prescribed by the Rules from time to time. iv) The amount thus appropriated should not exceed the amount approved or sanctioned for the work by the permissible limit for excess which is authorized under the Rules. v) The transfer or reallocation of funds between different schemes provision for which is made in the same primary unit of appropriation does not constitute re-appropriation. Re-appropriation within revenue head in the budget between Major Works / Minor Works. Tools and Plants etc. is permissible. vi) The funds provided for capital expenditure shall not be re-appropriated to meet revenue expenditure and vice versa. vii) The re-appropriation shall be made with in approved budget provisions if the savings are available.

16

viii) The unanticipated credits i.e., credits not provided neither in the budget nor in excess of the amounts included therein, which are accounted for as minus expenditure shall not be re-appropriated to any work. 2.1.10 CONTROL OF EXPENDITURE A constant watch is required to be kept on variations so that as soon as it becomes clear that the funds are likely to be in excess or in short, action can be taken to surrender the savings or to obtain sanction for re-appropriation. In order to maintain proper control over the expenditure, a record of liabilities and commitments that have been or will be made or incurred against the budget allotments should be maintained by the EIC of work. It is advisable to prepare quarterly financial statements and forward it to Finance Department for cross checking in order to keep the financial records straight.

2.2
2.2.1

PRELIMINARY ESTIMATE & APPROVALS

PRELIMINARY ESTIMATE Preliminary estimate is required to be prepared on the basis of plinth area for civil works and on unit rate basis for the works of other disciplines or worked out on available market rate basis or such other method adopted for ready and rough calculation, so as to give an idea of the approximate cost involved in the proposal. In case of major works of various kinds, structures or special works, data required for preparation of such estimate shall be collected from agencies who have executed similar works in recent times. The preliminary estimates shall be based on the following: a) Preliminary drawings and specifications prepared in consultation with users and Design-Engineers incorporating specific requirements of regulatory bodies or local authorities for the work. The estimates prepared by Consultants or similar data available by virtue of experience in past in handling similar contracts can also be used for preparing the preliminary estimates. b) Adequate site investigations to collect data for fixing design parameters for works, prior to taking up construction, erection or up-gradation wherever necessary. c) The impact of environmental conditions (like radiation /non-radiation areas), limited access control, security aspects, verification of contract labours, type of contract labour required, etc., shall be factored for block estimates / preliminary estimates. d) Vendor survey / Market survey conducted wherever essential to fix proper commercial and technical parameters. e) Suitable topographical survey conducted and necessary survey plans to suitable scale prepared for the work site. Need for material handling equipment and development & validation of special tools required if any shall also be envisaged. While forwarding the preliminary estimate for Administrative Approval, the following information should invariably be furnished in the forwarding note i) Full justification for the proposal ii) Basis for plinth area rates or unit rate adopted and percentage for various services allowed in the estimate. 17

iii) Whether for the works proposed, necessary financial sanction and budget provisions are available. iv) Whether any re-appropriation of fund envisaged. 2.2.2 ADMINISTRATIVE APPROVAL & FINANCIAL SANCTION The formal acceptance of the proposal contained in the Preliminary Estimate is termed as Administrative Approval. Financial Sanction is to be accorded to indicate that funds for the project will be provided and liability can be incurred. In case of projects where Government of India sanction already exists, both Administrative Approval and Financial Sanction should be taken together. Only in respect of construction work on Housing and Public Buildings both Administrative Approval and Financial Sanction should be taken separately. The proposal should comprise of the following: Brief background of work and justification Block estimate, including financial implication of the proposal Cost benefit analysis Legal / other implications of the proposal Analysis of available options & alternatives and their implications

2.2.2.1 ADMINISTRATIVE APPROVAL Works connected with power projects receive Administrative and Financial Sanction when the Government approves setting up of the Power Project at a particular location along with Detailed Project Report and cost estimate. Entire scope of works that are envisaged for setting up of a Power Project is normally covered under this Financial Sanction. It is however necessary to obtain Administrative Approval to take up the individual works of the Power Project as per approved time schedule. Powers to accord this Administrative Approval to works connected with power project is given in Annexure 2.2. However, for works connected with Operating Stations, which are to be executed through Revenue Budget, Administrative Approval and Financial Sanction is accorded by the Board while passing of the annual Budget. With respect to works to be executed through Capital Budget for operating station, the Board can accord Administrative Approval and Financial Sanction up to the limit specified as per DFP beyond which the same is to be accorded by the Government of India. Construction work on Housing, Public Buildings and other infrastructure works (including alterations and modification of existing housing buildings) shall not be carried out unless Administrative approval from CMD, NPCIL (with financial concurrence) is obtained in advance. Maintenance & up keeping work of such buildings can be approved at Project/Station without further reference to Corporate Office as per DFP. Modifications / alterations of existing houses at projects/stations shall need CMDs prior approval with due financial concurrence. A combined approval for administrative cum technical sanction for main plant work from technical sanction approving authority can be obtained where approved project schedule and financial sanction exists, provided item wise / activity wise consolidated prior approval from CMD is available with site.

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2.2.2.2 FINANCIAL SANCTION As indicated above Financial Sanction with respect to new project is to be issued by the Government subsequent to approval of Power Project at a chosen location. Entire scope of works that are envisaged for setting up of a Power Project is normally covered under this Financial Sanction. In order to find the authority competent to accord financial sanction the engineer shall refer the Delegation of Financial Power (HQI-2001). Any new works to be included in the scope of already sanctioned project, costing less than Rs. 10 crores (as per DFP revised from time to time) can be financially sanctioned by CMD. For works connected with operating stations which are to be executed through Revenue Budget, Financial Sanction is accorded by the Board while passing of the annual Budget. With respect to works to be executed through capital budget for operating units, CMD can accord financial sanction up to Rs. 10 crores (as per DFP revised from time to time). Board Sub-Committee can accord financial sanction up to 50 crores (as per DFP revised from time to time), beyond this the same is to be accorded by NPCIL Board. Financial Sanction can be exceeded, if so required, at any stage during the execution of the work up to 10% by the Competent Authority within his delegated powers. Any excess beyond this limit will necessitate revised Financial Sanction which should be applied for, as soon as an excess is foreseen. Original conceptual design in the approved proposal should not be altered without the sanction of the authority which accorded the administrative approval to the work. The table showing plinth areas rates for block estimate is given in Annexure 2.3 and format for calculation of multiplication factor on plinth area rate based on the cost index applicable at the time of preparation of block estimate is given in Annexure 2.4. 2.2.3 TECHNICAL SANCTION After receipt of Administrative Approval and Financial Sanction as explained above, a detailed estimate is to be prepared based on detailed drawings and design relevant to the work and Technical Sanction (TS) is to be obtained from Competent Authority as per the delegation of financial powers. TS to the work are to be accorded by Competent Authority as per DFP for works. Refer Annexure 2.5 for the format for of Technical Sanction. TS amount should include the cost of free issue items which are to be used in the finished items of work. However, in the case where TS is to be issued for installations and erection works for the free issue item, such as equipment, Plant & Machinery etc. the TS amount should be excluding the cost of free issue of equipments, Plant & Machinery, systems etc. It should be ensured that the budget provision duly approved by Competent Authority available in the year in which the cash out flow is expected. It is extremely important to note that technical sanction prepares the primary basis of contracts to be executed. Central Vigilance Commission issue guidelines on preparation of Technical Sanction from time to time. Technical specification also forms the basis for comparison of rates after receipt of bids and also the basic input for Computerized Works Management System (WCMS). It is therefore expected that technical sanction is prepared carefully after taking into consideration all inputs from design group, the site conditions, accessible /non-accessible area, limits of radiation doses, working time limits, safety & security aspects, type of contract labour required, 19

development of tooling and its validation if required, type of resources to be mobilized by the contractor, the resources to be supplied by the Corporation as free issue materials or on chargeable basis, the type of inspection and testing required, requirement of mock-ups, the establishment charges, profit & overheads etc. It is expected that standard rate analysis is prepared for commonly used items by the units to have uniform rates for technical sanction. This would be helpful in satisfying most of queries normally raised by CVC during their examinations. It is also expected that the final amount of the contract remains within the financial limits of Technical Sanction including the contingencies. EIC must obtain revised technical sanction in case the variation of final amount is beyond 10% of the original value. Schedule of Rates (SOR) shall be prepared for all works for each unit. All estimates shall be based on approved SORs. Till the finalization of SOR at units, the detailed estimates shall accompany the rate analysis of each item. Further, if any of the item proposed to be executed is not included in the approved SOR, the rate analysis of such item shall be separately prepared and got approved by competent authority as part of technical sanction Refer Annexure 2.6 for sample calculation of rate analysis. It should be ensured that the TS amount for a particular work/package/ system is within the sanctioned cost estimates otherwise appropriate action like re-appropriation from overall project cost to be done (if Government of India sanction already exists) else approval of revised financial sanction has to be taken. 2.2.4 PREPARATION OF DETAILED ESTIMATE Preparation of detailed estimate and drawings and design should be taken up on receipt of necessary Administrative Approval and Financial Sanction for the works. The detailed estimate shall consist of a report, plans, specifications and a detailed statement of measurements, quantities and rates etc. with an abstract showing the total estimated cost of each item. The report accompanying the detailed estimate for technical sanction should be comprehensive enough under each sub-head as mentioned below: i)History: Particulars relating to initiation of and reasons leading up to the proposal. ii)Design: A description of the original proposal and those finally adopted with reference to design, analysis, specifications and drawings. iii)Scope: An explicit statement as to what the work is and is not covered by the estimate, and whether any other arrangements are being made for any portion of work which is not included in the estimate. iv)Rates: Particulars as to how the rates are arrived at giving reference to the standard Schedule of Rates and also to details accompanying the estimates, where necessary, with any explanation connected therewith. v)Cost: Cost of work and comparison with the amount originally provided under any previous Administrative Approval or detailed estimates in case of revision. vi)Mode: The mode proposed to carry out the work whether by lump sum contract or item rate contract, petty contract or executed departmentally or combination of any of these. vii)Establishment: Details of any provisions made in the estimate for work-charge establishment, when necessary. 20

viii)Construction Plant: Any special methods of construction to be adopted with reference to specifications or special tools and plant required. ix)Land: Arrangement of acquisition of land where necessary. x)Investigation: Requirement of any consultancy/investigations or any other item which has cost implications. xi)Time: Estimated time of completion of work, basis for the same. It is also recommended to enclose a summary network for the work. xii)Administrative Approval and Financial Sanction: Details of Administrative approval and Financial Sanction to be indicated. xiii)Budget Provision: Availability of approved Budget Provision with yearly cash flow expected. All technical sanctions shall be registered as follows: a)With Site Planning for projects. b)With Technical Services for stations, c)With Budget section at HQ While issuing Technical Sanction the estimated cost of the works shall be compared with provision available for the work in approved Financial Sanction. Any additional requirement of funds necessary for the works shall be recorded with Technical Sanction Registering Cell. 2.2.5 SCHEDULE OF RATES To facilitate the preparation of estimates, an up-to-date Schedule of Rates (SOR) for each kind of work commonly executed should be maintained in the Unit. The following guidelines may be observed in laying down a SOR: Data base for working out rates-for commonly executed items shall be as per norms stipulated by CPWD and standard handbooks published for working out the rates till NPC norms are issued in this regard. BARC civil group is also issuing SOR for most commonly used items in civil works which may also be taken for reference. Wherever there is need to specify new data base for items of works generally not stipulated by above agencies, same shall be formulated and got approved by the appropriate authority. Suitable enhancement for SOR to take into account applicable duties & taxes, Prevailing minimum wages for skilled & unskilled labour, specific Labour Welfare measures like PF, ESI scheme, bonus as applicable, etc. as per labour laws, (Refer Annexure 2.7 for guideline) and component for working in restricted areas to meet security and/or safety requirements. For main plant structures suitable enhancement of rates shall be done to take into account special regulatory and quality assurance requirements, insurance requirements, working conditions, restricted working hours and also deployment of special and heavy plant and machinery for execution of work. The impacts of these are to be worked out shall form part of the proposal seeking approval of competent authority. SOR should be prepared on the basis of the rates prevailing in each location and necessary analysis of the rates for each description of work and for the varying conditions thereof should, as far as practicable, be recorded. 21

Schedule of Rates shall be updated periodically based on applicable indices published by RBI/ Government and got approved by the Competent Authority. An overall revision of SOR should be done at least once in 3 years. 2.2.6 PROVISION FOR CONTINGENCIES In addition to the provision for all expenditure which can be foreseen for a work, a provision of contingency shall be as follows: (a) Estimated cost up to Rs. 1 crore: 5% (b) Estimated cost more than Rs. 1 crore: 3% subject to the minimum of Rs. 5 lacs 2.2.7 REVISED ESTIMATE When any excess beyond 10% over a sanctioned estimate is foreseen and there is likely to be unavoidable delay in the preparation of a revised estimate, an immediate report of the circumstances should be made to the authority whose sanction as per DFP of works will ultimately be required. When a revised estimate is submitted, it must be accompanied by a detailed statement comparing it with the latest existing sanction of the competent authority and by a report showing the progress made up to date. 2.2.8 RECASTING OF ESTIMATE After an estimate is technically sanctioned in exceptional cases, it may be necessary to make changes in the method originally contemplated for execution of work. In such cases, the original estimate should be suitably recast and got approved by the competent authority. Necessity of recasting of the estimate may also arise due to abnormal increase/decrease in prices of raw material due to Government Policy subsequent to approval of the estimate. This should be taken care whenever such changes are brought to the notice at any time during execution. 2.2.9 MAINTENANCE AND SERVICE CONTRACTS

2.2.9.1 MAINTENANCE OF BUILDINGS AND UTILITIES The Corporation owns and maintains a large number of buildings, of different sizes. It is essential that the standard of maintenance should be high and there should be no cause for complaint. Certain vigilance and check is essential to see that the maintenance work is carried out systematically and satisfactorily. Selection of qualified Contractors with trained human resources is essential in this type of Contracts for maintaining high quality standards. 2.2.9.2 ANNUAL MAINTENANCE AND SPECIAL REPAIRS At the beginning of the year, a survey of the buildings, structure or facilities should be conducted to identify the items of Special Repairs which are required to be carried out. A time frame for carrying out special repairs should be finalized by the EIC at the commencement of the year. Similarly, a programme for carrying out annual repairs should also be drawn up at the commencement of each year. Specific attention if required for painting and water proofing contracts where large time duration is generally contemplated by the Contractor. The annual survey of the building, structure or facilities should highlight defects of structural nature which require personal investigation of the Head of the Sections of the Project/Station. 22

The programme for annual repairs should be intimated to the users and they should be requested to co-operate with the executing agencies in carrying out the programme smoothly. 2.2.9.3 EXPENDITURE ON SURVEY WORK Where survey of site and/or digging of trial pits or the work of load bearing capacity and sub-soil observations are required to be undertaken before proceeding with the main project, the expenditure on these items should form part of the main project. In case, however, the project is abandoned as a result of these trials and examinations, the expenditure incurred on survey works, etc., should be treated on the same lines as for abandoned works. The administrative authority concerned may, in such cases, decide whether the expenditure on such surveys, trials etc. on a project which has been abandoned should be transferred to the Head Quarters Account/ Capitalization on project account. 2.2.9.4 REGISTER OF BUILDINGS Every unit should maintain a Register of Buildings up to date. The township-in-charge should certify to that effect at the end of every financial year after ensuring that necessary additions in the cost and in structures are made up to date. This certificate should be furnished by him to the Estate Management section of Project/Station every year in the month of July with intimation to unit head. He shall also ensure that all municipal taxes have been timely paid to the concerned state authority. 2.2.9.5 SAFETY OF BUILDINGS/ STRUCTURES/ SYSTEM AND EQUIPMENT All buildings / structures / system / equipment installed are required to be inspected at a regular period by the EIC concerned to ensure that the building / structure / system / equipment installed is not unsafe for use. The periodicity shall be finalized based upon the technical requirement and regulatory requirements. In case of any deficiency found in these, necessary report should be made to higher authorities and immediate steps taken to get the same inspected by the respective EIC and further action taken for remedial measures. The concerned PE/SME are also expected to draw an annual action plan for all repair and maintenance works needing attention for BSD (Bi-annual Shut Down jobs) for main plant and all other associated civil works for township and main plant. He shall bring to the notice of SD/PD/ED where he has reasons to doubt the structural soundness of any building/structure/system/ equipment installed and the latter will take such action as he considers necessary. In case of any deficiency found in the important buildings/structures/system/equipment installed report about unsafe condition of the same should always be reported to the SD/PD/ED for immediate remedial action. In case it is decided to demolish/ replace such unsafe building, it should be disposed off without land by auction under the powers vested in competent authorities. 2.2.9.6 DISPOSAL OF BUILDING/STRUCTURES/SYSTEM/EQUIPMENT INSTALLED Sale or dismantlement of any Building/structure/system/equipment installed other than purely temporary structure shall be as per delegated powers. 2.2.9.7 FIXING RESERVE PRICES After the survey report has been sanctioned, the Directors/CMD shall in all cases fix the reserve price, taking into consideration the life and condition of the 23

building/structure/system/equipment installed on the basis of survey report submitted by authorized survey committee. 2.2.9.8 POWERS FOR ACCEPTANCE OF TENDERS FOR DISPOSAL OF BUILDINGS STRUCTURES/ SYSTEM/EQUIPMENT INSTALLED The buildings /structure/system/equipment installed should be disposed off by call of public renders after due publicity. The authorities competent to accept the highest tender at or exceeding the reserve prices in such cases in accordance with their financial powers as defined in DFP. 2.2.9.9 MAINTENANCE & SERVICE CONTRACTS: i. When no tangible asset is created by a contract then such contracts will be deemed to be service contract. The following type of contracts will fall under the category of service contracts and financial powers as indicated against maintenance & service contract column will be applicable. ii. Maintenance / re-conditioning work of higher value if resulted in improving the efficiency of equipment / system, such work shall-be considered as capital works. Such works should be included, in capital budget and capitalized. iii. Maintenance & Service contracts shall normally be as follows: a) Annual servicing of the existing equipments, Plant & Machinery. b) Repairs and Maintenance of the existing Buildings, Roads, system, Plant & Machinery. c) Painting of Buildings Plant & Machinery. d) Up-keeping and maintenance of lawn and gardens, plantation and its related Plant & Machinery. e) Work of house keeping, watch and ward, data entry. f) Hiring of accommodation for a definite period. g) Hiring of services of travel agent, transport i.e., hiring of vehicles for staff, officers & goods transportation vehicle on regular basis. The following norms to be fulfilled for hiring of vehicles on regular basis: 1)Bus should have minimum 50 persons sitting capacity. 2)Requirement of Bus shall be calculated by taking one Bus for 100 employees. 3)Bus facility for Staff Welfare activities could be provided after office hours and no loading on this account shall be made while working out the Bus requirement. 4)Proper tendering procedure is followed. 5)Hiring of luxury AC vehicles should normally be avoided except in the case of visit of VIP / Secretaries to Govt. State Government / Ministers / MPs / MLAs. 6)The contract period should not be more than two years, including extension, if any. However, in case a brand new vehicle is hired in the contract, the contract period can be 3 years. 24

7)Hiring of light vehicles should not be more than the entitlements as prescribed by Corporate Office. 8)Price variation clause for POL items, if any, accepted in the contracts for the first year should not result in undue advantage to the contractor on extension of the contract otherwise fresh tenders to be called. h) Any other Service not covered in above. 2.2.9.10 ESTIMATE FOR MAINTENANCE & SERVICE CONTRACTS The total estimated cost of maintenance of various types of buildings, structures or facilities during a year should be within the prescribed monetary limits, as approved by the Corporation from time to time, both for Annual Repairs and Special Repairs. The plinth area rates for maintenance of various types of buildings, structures or facilities as approved for these purposes are given in Annexure 2.8. These may be suitably increased considering the increase in the cost index prevailing in the relevant year. Likewise, maintenance estimate shall be approved for various plant buildings, machineries, equipments, various systems and other utilities as per the requirements. For maintenance works no separate administrative approval is required. However, necessary provision should be available in the approved budget. Necessary estimate for Service Contracts shall be prepared based on prevailing market rates and got approved by the Competent Authority as described in DFP for works. 2.2.10 APPROPRIATION OR RE-APPROPRIATION OF FUND (BUDGET PROVISION) Requirement of funds for works connected with power projects will be provided in Capital Budget which receives Government of Indias approval every year. As regards works connected with operating station, requirement of funds is to be made in the Capital / Revenue budgets which require approval of the Government / Board as the case may be. In the case of emergency the approval limits for re-appropriation of funds on an annual basis by the Competent Authority are as specified in the Delegation of Financial Powers for works. The general instructions for such appropriation and re-appropriation have already been discussed in para 2.1.9.

KEY PERFORMANCE INDICATORS

Measure 1. Deviations in Budget Unit Rs.

MIS
Deviations in Budget and approvals obtained

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SECTION-3 TENDERING

PROCESS OBJECTIVES
Obtain a detailed estimate for proposal based on Schedule of rates Prepare complete tender documents Pre-qualify (in select cases) genuine parties with adequate resources and experience to participate for the job tendered Ensure timely sale of tender documents

3.1
3.1.1

CONTRACT
GENERAL When two or more persons have a common intention communicated to each other to create some obligation between them, there is said to be an agreement. An agreement which is enforceable by law is a Contract. The following are essential ingredients of a contract: a) Proposal made by one person called the Promisor. b) Acceptance of proposal made by the other person called the Promisee. c) Doing of an act or abstinence from doing a particular act by Promisor for promisee called consideration. d) The proposal and acceptance should relate to something which is not prohibited by law. e) Proposal and acceptance constitute an agreement which, when enforceable by law, become a contract. f) In order to make a valid and binding agreement, the party entering into such an agreement should be competent to make such agreement. The communication of acceptance of the proposal completes the agreement. A proposal may lapse for want of acceptance or be revoked before acceptance. Acceptance results in something which cannot be recalled or undone. A contract springs up as soon as the proposal is accepted and imposes an obligation upon the person making the proposal. It has been opined by the Ministry of Law that before communication or acceptance of any proposal, the tenderer can within his right withdraw, alter and modify the tender before its acceptance unless there is a specific promise to keep the proposal open for a specific period backed by a valid consideration.

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3.1.2

LUMP SUM CONTRACT Lump sum contract, as its name indicates, is used for work in which tenderers are required to quote a lump sum figure for completing works in accordance with the given designs, drawings, specification and functional requirements, as the case may be. Lump sum contract can be either for only executing the work as per given design, drawing and specification or it may include element of doing design work and preparation of structural drawings as well, which shall be in tandem with the given functional, structural and architectural parameters and subject to prior approval by the competent authority. Payment schedule for various interim milestones is to be included along with the tender by the tenderer. In case, work is to be executed as per design and drawing of the Corporation, all the detailed working drawing, both architectural and structural, must be prepared beforehand and should form part of the tender documents, which should also contain complete and detailed specifications of the work. The tender documents must set out complete scope of the work and if felt necessary, a rough schedule of quantities based on the relevant design, drawing and specification, may be appended to the tender for guidance. It should, however be made clear in the tender document that only the drawings and the detailed specifications as contained and/or referred to in the tender document shall form the basis of execution and payment and not the schedule of quantities which is given only for guidance, to the tenderers. The extra payment or recovery over and above the accepted rate shall, therefore be called for only in the event of authorized deviations from the drawings and specifications (as given and/or referred to in the tender document) in course of execution and not otherwise.

3.1.3

ITEM RATE CONTRACT For item rate contract, tenderers are required to quote rate for individual items of work on the basis of schedule of quantities furnished by the Corporation. This form of contract ensures more detailed analysis of cost by the tenderer and as such is more scientific. The tenderer has to work out the rate against each item. The authority competent to accept the tender can always check the rates with reference to his own calculations and decide which of the tender is suitable. Care, however, is needed in respect of likely variation in quantities particularly those of abnormally high and low rated items.

3.1.4

PIECE RATE CONTRACT This form of tender is to be used ; i)For a work costing less than Rs.20,000. ii)In cases in which it is necessary to start the work in anticipation of formal acceptance of contract and, iii)For running contracts i.e. those for pipelines, laying of sewerage, electrical cabling etc. 28

In cases of (ii) above the piece work contract is cancelled as soon as the regular contract is signed. Incase if (iii) above, quotations are called periodically and a running rate contact is drawn up as a result of those quotations usually for one year. The piece work contract form provides for payment of stipulated rates only when it refers to such quantity or time and also stipulates that the EIC may put an end to the agreement at his option at any time. 3.1.5 COST PLUS CONTRACT A Cost Plus contract means a contract wherein the price payable for supplies or services under the contract is determined on the basis of the actual cost of production of the supplies or services rendered plus profit either at a fixed rate or unit or at a fixed percentage on the actual cost of production. Cost Plus contract should be avoided except where they are inevitable. It may be ensured before adopting this type of contract that departmental estimates should be worked out meticulously to the extent possible by taking into account all the parameters of the items required. 3.1.6 PERCENTAGE RATE CONTRACT This form of contract is generally adopted for the following types of works : a) Repair and maintenance works of the existing buildings, roads, system, plant & machinery. b) Up-keeping and maintenance of lawn and gardens, plantation, etc. c) Housekeeping d) Any other service & maintenance work considered appropriate by competent authority i.e. SD/PD/ED. The adoption of conditions: percentage rate contracts shall be subject to the following

a) The estimated amount is worked out based on the estimated quantity and the rates as per the prevailing SOR. b) In the schedule of quantities, estimated quantities and rates as per the SOR is to be provided along with the amount for each item and total estimated amount. c) The bidders are to be asked to quote the percentage above/below the estimated amount given in the tender.

3.2
3.2.1

PREPARATION OF TENDER DOCUMENT

GENERAL Before tenders for a work are invited, administrative approval and Technical sanction should be available. In case of urgent works, when there is no time to prepare a complete estimate, rough quantities and rates for the main items of that part of the work for which tenders are

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called and which cover the major part of cost should be worked out before tenders are invited and adopted for the purpose of comparison. In the case of works for which tenders are to be invited, tender documents comprising of the following should be prepared and approved by an authority that is empowered to approve the NIT before notice inviting tender is issued: Section 1 : The notice inviting tender (including pre-qualification criteria)(Refer Annexure 3.1) Section 2 : Memorandum for tender (Refer Annexure 3.2 for format) Section 3 : Special Conditions of contract* Section 4 : General conditions of contract ** Section 5 : Technical specifications / data sheets Section 6 : Schedule of Drawings to be supplied to the tenderer Section 7 : Schedule of material to be supplied by the Corporation to the contractor Section 8 : Schedule of quantity and rate*** and, Checklist for tender opening committee. * requirement of technical manpower based on guidelines provided in para 5.10.1 shall be included in Special conditions of contract. ** A detailed guideline for filling up the Schedule A is provided in Annexure 3.3 . For the permissible variations required for filling schedule B please refer para 5.6.7.2 of this Manual. ***The tenderers should be asked to fill in the tenders properly and carefully. They should avoid quoting absurd rates and making too many corrections in the tenders. The amounts should also be correctly worked out. If any tenderer does not follow these instructions and desists from filling the tenders carefully, it would be open to the Corporation to take appropriate action against the tenderer. No tenders shall be invited unless proper arrangement for procurement of materials that are to be supplied by the Corporation is made. NIT shall be issued by the competent authority as per power delegated. 3.2.2 PREPARATION OF NOTICE INVITING TENDER All notice inviting tenders to be published in print media should be in standard forms (refer Annexure 3.4) and be serially numbered section wise, a proper register being maintained in each group/sector for this purpose. These should only be issued after the authority competent to accept the tender has approved the NIT papers. After approval of Technical Sanction by Competent Authority according to delegation, the respective contract approving authority (Refer Part I B, DFP for works) can issue tender under his own authority up to the financial powers delegated to him. However, SD/PD/ED is vested with full powers to issue tender provided the mode of tender has been approved by Competent Authority as per DFP.

30

In case of lump sum tenders, the Engineer should ensure that detailed drawings and specifications duly authenticated by the Competent Authority form part of the tender and that the cost of various items forming part of the sanctioned estimate of the work is correctly assessed with reference to the relevant schedule of rates or in the case of non-schedule items on the basis of rates supported by detailed analysis thereafter, sanctioned by the Competent Authority. The NIT papers are very important documents on which call of tenders and subsequent agreements with the contractors are based. It is, therefore, very necessary that each page and the correction slips as also other corrections and modifications made in the NIT papers are numbered and signed by the Competent Authority in token of approval so that all chances of tampering with such documents are avoided. All tenderers should be asked to give a declaration about the names of their relations employed on jobs in the Corporations Units with each tender. It is not the intention to debar the tenderer from working (if their relations are employed on jobs in the Corporation) but such a declaration is necessary in the interest of the Corporation against any possible lapses. All tenderers are required to submit list of works, and other information as required in Annexure 1 of the NIT. While fixing the prequalification criteria during preparation of NIT, a graded approach depending upon the value of work is recommended to be taken. The Notice Inviting Tender should stipulate the above and reasonable time for completion of work. The Schedule of Contract period should be carefully assessed taking into account the nature of work and methods deployed to carry out the work.

3.3
3.3.1

BID SECURITY
NECESSITY FOR BID SECURITY According to the practice, Bid Security is paid by each tenderer to enable the Corporation to ensure that a tenderer does not refuse to execute the work after it has been awarded to him. In cases where the tenderer fails to commence the work awarded to him, the Bid Security is forfeited to the Corporation.

3.3.2

RATES OF BID SECURITY The amount of Bid Security which a Contractor should deposit with the tender is regulated by the estimated cost put to tender. Normally Bid Security to be deposited with tender is 2% of the estimated cost subject to a maximum of Rs. 10,00,000/- . In case only a part of the work as shown in the tender is awarded and the Contractor does not commence the work, the amount of the bid security to be forfeited to the Corporation should be worked out with reference to the estimated cost of the part work so awarded. In respect of contracts for dismantling and removal of old structures, the amount of Bid Security which the contractors should be asked to deposit should be as high as the anticipated cost of removing all debris and cleaning the site completely and that it may be left to the authority sanctioning the demolition work to fix the amount of such deposit in each case. However, the amount of the deposit money should not be less than 5% (five percent) of the estimated sale value of the building(s)/ structure/ movable property / equipment etc.

31

3.3.3

MODE OF DEPOSIT The amount of Bid Security should be deposited in any one of the following form: i)Deposit at call receipt of a Scheduled Commercial Bank, duly pledged in favour of Manager (F&A) ______ (Project/station). ii)Demand draft of any Scheduled Commercial Bank drawn in favour of the Manager (F&A), NPCIL payable at __________ bank at ________(Place) iii)Bank Guarantee from a Scheduled Commercial Bank irrevocable and operative 30 days after the validity of the offer (as per standard proforma attached). iv)Fixed Deposit Receipt issued by Scheduled Commercial Bank endorsed in favour of Manager (F&A) __________ (Project/station). Tenders not accompanied by Bid Security in any one of above form shall be rejected. Bid Security shall have to be valid for 30 days beyond the validity of the bid. The accepted bid security shall be deposited with finance department by the concerned Engineer. Finance group shall do the needful for verification of all the BGs received after opening of tender and during the execution of work.

3.3.4

WAIVER OF BID SECURITY In certain special cases where waiver of Bid Security is found necessary same may be granted as per delegation of power in DFP of works (HQI 2001).

3.3.5

REFUND OF BID SECURITY The Bid Security given by all the tenderers, except the successful bidder, should be refunded within 15 days of the acceptance of the tender. Bid security of successful bidder will be returned after submission of the performance guarantee amount. In case of two part tender, the bid security of the bidders not getting technically qualified shall be refunded within 15 days of approval of evaluation of Part 1. The Engineer / Tender Section should periodically review the status of Bid Security release with a view to ensure that the Bid Security is refunded in time. Finance shall keep the Engineer informed about release of Bid Security. To avoid delay in refund of Bid Security and also to avoid chances of malpractices as a consequence of such delay, written intimation about rejection of tenders should always be sent and a note should also be recorded on the office copy of the acceptance letter that the intimation to the tenderers whose tenders have been rejected has been sent.

3.3.6

BID SECURITY IS NOT SECURITY DEPOSIT The Bid Security, which a tenderer is called upon to furnish along with his tender for the Contract is not a security deposit within the meaning, of Rule 45 of the Saving Bank Rules for depositors. No account can therefore, be opened for the deposit of such Bid Security in the Post Office Saving Bank.

3.3.7

FORFEITURE OF BID SECURITY The Corporation, without prejudice to any other right or remedy, will be at liberty to forfeit full amount of the Bid Security absolutely in the following cases: 32

a) b)

The Bidder withdraws / modify his Bid or any item thereof after opening of bid and within the validity period The successful Bidder fails within the specified time limit to commence the work.

3.4
3.4.1

PUBLICITY OF TENDER
PUBLICITY OF TENDER Tenders must be invited in the most transparent and public manner possible, whether by advertisement in the press, or by notice in English/Hindi and the official language of the state, pasted in public places at Units. Wide publicity should therefore, be given to the Notice Inviting Tenders. In respect of works estimated to cost more than Rs. 50 Lacs, a brief advertisement inviting tenders should invariably be inserted in the press to be published in national leading newspaper. NIT (English and Hindi Version) shall be uploaded on the corporation website well in advance before the start of sale of tender. Corrigendum if any, shall be published in newspapers and on corporations website well in time before submission of bids. All endeavours shall be made for wide publicity of such corrigendum. PD/SD are empowered to waive off the requirement of publication of tender in newspaper. As a matter of general philosophy following guidelines may be adopted by the units for publication of tenders.

Sr No 1 2

3 4

Estimated cost Publication Guideline Put to tender Up to 10 Lacs Wide publicity on notice boards & publication in one local popular newspaper. Over 10 Lacs up Wide publicity on notice boards & publication in one to 25 Lacs local popular newspaper plus one most popular regional news paper Over 25 Lacs up Wide publicity on notice boards & publication in one to 50 Lacs local popular newspaper plus two regional news paper Over 50 Lacs Wide publicity on notice boards & publication in all India newspaper

All public tender irrespective of their values shall be published on NPCIL websites as per the policies of the Corporation. Unit heads are expected to notify the publishing methodology of tenders based upon unit specific requirements. 3.4.2 CALL OF PUBLIC TENDER a) General: Normally in all cases, where estimated cost of work is above Rs. 50 Lacs, Public Tender to be invited. In case of tender with value up to Rs. 50 lacs the NIT for works shall be displayed in public places of the unit. Where it becomes essential to dispense with public tender, same shall be done in accordance with powers delegated in DFP for works. b) Two Part Tender: Tender for works costing more than Rs. 500 lacs should be called in two parts. In case two part tender is not envisaged where the estimated cost of work is more than Rs. 500 lacs, the prior approval of CMD, NPCIL to be obtained. In case of works of specialized nature below 500 lacs, also two part tender can be called with prior approval of competent authority. The tender issue and opening modalities can however, be decided at the level of SD/PD/ED. Tender to be split in 2 parts as follows: 33

Part I-(Technical bid): All tender documents along with the conditions stipulated by the tenderer except price schedule and financial conditions. Part II-(Commercial bid): Containing the price schedule of quantities and rates The tenderer shall submit their tender in two parts in two separate sealed envelopes. Part I shall be opened first and technical capability and financial implications shall be evaluated before Part II of the tender is opened. Evaluation of Part I shall require the approval of competent authority as per DFP. 3.4.3 CALL OF LIMITED TENDER Limited tenders can be called for on the following grounds: i) The work is required to be executed within limited period of time which not all contractors are in a position to generate. Sufficient number of Contractors with proven credentials and sound financial back up are already established in NPCIL ii) Where the work is of special nature requiring specialized equipment available which is not likely to be available with all contractors; and iii) Where the work is of secret nature and public announcement is not desirable This procedure should be adopted only when it is absolutely necessary. There is no need for fixed restricted list of contractors but when limited tenders are to be called the list of Contractors should be as big as possible so that competitive tenders are received. While calling limited tenders it is to be ensured that: a) Minimum 5 parties, who are technically and financially competent, are identified and tenders are issued to them. b) Where number of parties available are less than 5, the prior approval of next higher authority not below the level of CS/CCE/AD for relaxation in number of parties, giving justification, to be obtained. c) In the case where estimated cost is more than Rs. 50 Lacs but limited tender is proposed to be called, the prior approval of Competent Authority as per powers delegated in DFP for works to be obtained, after satisfying all conditions as laid down therein. d) Limited tenders are issued to those parties who have experience in executing similar works for PSUs or Government or well established Industrial house. They could be public limited enterprises well versed with NPCIL or have established their soundness in the area of concern. In case the number of parties is more in a particular field, chance to all parties is given, as far as possible depending upon their technical and financial capabilities. The most important aspect to be considered is the time commitment for deliveries. It is presumed that while calling the limited tender, the selected parties are qualified based on the minimum eligibility requirements as per Annexure I prequalification criteria of NIT. During evaluation of the offers received from the selected parties, the technical competency in terms of resource, etc shall not be assessed for acceptance/ rejection of the offer.

34

3.4.4

CALL OF SINGLE TENDER On approval by competent authority as powers delegated in of DFP for works, single tender can be called in any of the following cases: i)Work of proprietary nature ii)There is only one source of Supply/Contractor iii)Replacements and addition to existing equipment/structure is of a proprietary nature iv)Work requiring equipment, plant or process for which only one party has been developed by DAE/NPCIL and that is only source available v)Shutdown work / emergency work where normal course of tendering process will have an effect on overall plan performance / construction schedule. vi)Work of inescapable urgency which can directly effect the commissioning of the Power Plant and the party has already established equipments and necessary infrastructure at the project site, and the normal tendering process will cause time& cost overruns on project schedule. Full justification with cost benefit analysis shall be recorded while taking dispensation from competent authority. Note 1: Public / Limited tender resulting in only one effective technically acceptable offer shall be treated as a single tender for exercising the financial powers for approval.

3.4.5

AWARD OF WORK ON NEGOTIATION / NOMINATION/ WITHOUT CALL OF TENDER The cases where conditions for call of single tender (refer para 3.4.4) are not satisfied, the call of tender from one party will be regarded as Negotiated / Nomination / Without call of tender. Award of work on negotiation/nomination/without call of tender should not be resorted as a matter of rule, except in emergency when the time does not permit normal tendering action. This needs to be justified adequately and partys name is to be identified. Award of work on Negotiation/nomination/without call of tender can be considered on satisfying conditions as laid down in the delegation of financial powers. (DFP for works HQI 2001). Estimate for the work is to be prepared and got approved from competent authority. While according the approval for award of work on nomination basis, the approving authority shall record and give justification for approving the award of work on nomination. Half yearly MIS on award of work on nomination is to be submitted to SD/PD/ED with the copy to the concerned Finance Head.

3.4.6

EXECUTION OF DEPOSIT WORKS The officers of NPC have been empowered to undertake deposit works only on authorization by the CMD. The deposit work may be accepted by the Corporation to utilize the spare capacity and should not in any way affect the Corporation's works. Whenever a deposit work is to be carried out, the contribution should be realized before any liability is incurred on account of the work. In addition to the amount payable by the contributors, cost of Establishment, T&P, Audit and 35

Accounts charges, pensionery charges, etc at percentages as given in Annexure 3.5 or at such percentages prescribed by the Corporation from time to time is also to be recovered in advance. No interest will be allowed on sums deposited for works. The contributors or the authority on whose behalf the work is to be done is also to be made to understand clearly that NPCIL does not bind itself to complete the work within the amount of estimate and time period and that the authority depositing or administering the funds agree to finance the excess including escalation that may occur. An acknowledgment of this clear understanding is required to be obtained from the party concerned before the work is taken in hand. The depositing party should also be made aware of the fact that no advance of Corporation money for this purpose will be permitted. The Corporation will not be responsible for any increase in cost or damage to the uncompleted work caused by temporary stoppage of the work pending receipt of funds. It should be ensured that the expenditure is not more than the deposits received for the work. Where the EIC is doubtful about the timely receipt of the deposits the matter should be taken up with the clients by giving notice that if further deposit is not received, work will be stopped. While agreeing to execute Deposit Works, a formal letter with due financial concurrence stipulating required conditions shall be issued. Concurrence of the client shall be obtained before acceptance of the work. With regard to the design, estimate and execution of work, instructions and delegation of power the same procedure as in normal work execution should be followed. EIC is required to send to Accounts the Statement of Expenditure along with Schedule of Deposit Works showing the progress of expenditure on deposit work setting forth the amount of the estimate, the total deposit received and the progressive expenditure for transmission to the depositor concerned after verification by the Manager (F&A). Such statements should be sent by all the Engineers who are handling deposit works regularly to enable the adjustment of outstanding amounts in the books of the depositors and to avoid difficulty in reconciliation of accounts, relating to the deposit works after passage of time. 3.4.7 TIME GAP BETWEEN CALL OF TENDER AND OPENING OF TENDERS Any tender document which is for sale is issued under the signature of the competent authority or his authorized representative. In order to ensure keen competition and prevent loss to the Corporation of the benefit of competitive rates, the following timeschedule is recommended. Tendered Value Optimum number of days for the sale of tender 8 12 16 23 36 Optimum number of days between the close of sale of tender and the last date of receipt of tender. 10 15 21 30

up to Rs. 50 Lacs Above Rs.50 up to 100 Lacs Above Rs.100 up to 500 Lacs above Rs.500 Lacs

The above time limits will not apply to global tenders and in such cases the NIT approving authority should take decision for fixing the period. Any reduction in time shall be only in rare cases and on the prior approval of CS/CCE/AD for recorded reasons. Every tender document issued contains the following information at the time of its issue: i)Name of the Contractor to whom the tender is issued ii)Date of application for tender by tenderer / date of receipt of Application in the Corporation Unit. iii)Date of issue of tender and last date and time of submission Tenders down loaded directly from the NPCIL website will not be accepted if received without cost of tender on the date of receipt. 3.4.8 EXTENSION OF TIME PERIOD FOR SALE AND RECEIPT OF TENDER In cases when the date and time for sale and receipt of tenders is required to be extended due to unavoidable circumstances, the approval of authority competent to issue the tender shall be obtained and a proper notice for the same shall be put up on the notice board and copy sent to the tenderers. Necessary corrigendum is desirable to be issued in such cases. In case tenders issued by SD/PD/ED and above such approval shall be given by SD/PD/ED. 3.4.9 FORMALITIES FOR RE-INVITATION OF TENDER In case of re-invitation of tenders all the formalities mentioned above shall be observed. Before invitation of tenders it shall be ensured that the original tenders received, if any, are rejected and parties intimated. The reasons for re-invitation of tenders shall be recorded & approval from competent authority accorded.

3.5
3.5.1

PREQUALIFICATION OF CONTRACTORS
GENERAL For specialized works or for works of large value (value criteria as well as specialized nature of works shall be decided by unit head i.e. SD/PD/ED), it is always advantageous to pre-qualify the prospective bidders so that genuine parties with adequate resources and experience participate for the work tendered. This saves considerable time in evaluating tenders for specialized and/or large value works. The minimum qualification, experience and number of similar works of a minimum magnitude satisfactorily executed in terms of quality and period of execution will be fixed in advance as per the pre-qualification criteria. It is desirable that expression of interest is published with minimum pre-qualification criteria for larger participation. Prequalification tenders are to be invited in the same manner as like other public tenders with the approval of competent authority who has been delegated with the powers to issue tender as per the DFP for Works (amended from time to time) and shall comprise the following: Chapter I - Notice inviting prequalification tender (Including Prequalification Criteria) Chapter II - Form of application for prequalification tender (Annexure 3.6) Chapter III - Work related information covering Technical specifications, Standards and Codes of practice applicable. Approximate magnitude of work involved, proposed 37

work completion schedule, list of relevant drawings enclosed, supply of material and other instructions to the tenderer. Chapter IV- Forms for demonstrating the information as required in the pre-qualifications like Financial statement, Key personnel / resources, plant & equipments, on going job etc are provided in the NIT. After publication of Notice Inviting Tender for prequalification in the format as mentioned above, application for prequalification tender document shall be received by the Units. Chapter III of the prequalification tender document shall provide detailed information to the bidder with respect to the project, location, general information about site, brief particulars about approaches to site, site geology/seismology, meteorology (wherever necessary), scope of work, material and services proposed to be provided by the Corporation, drawings proposed to be enclosed for the information of the bidder and technical specification for works tendered including standards and codes of practices involved, site layout, estimated work completion schedule for various items tendered and other work related information and important general conditions of contract. It is expected that the work though related to the contract but not included in the scope of contract shall also be indicated in the pre-qualification tenders for better clarity. All prospective bidders who have purchased the prequalification tenders shall be called on a pre-appointed day given in NIT for a pre-bid meeting to clarify all points relating to work and site conditions. All such queries and the clarifications provided during pre-bid meeting having relevance to the tender will be noted down and communicated to all bidders by the Units. The same shall form part of the contract. The Units may organize additional pre-bid meetings if so desired depending upon nature of work involved and queries raised by the bidders. After detailed study of the information provided to him the bidder is expected to fill-in various particulars as per formats referred to in standard prequalification forms referred in the NIT. Duly completed prequalification tenders shall be received on pre-appointed date given in NIT and shall be opened by the engineer in the presence of intending bidders and Accounts representative. Main tender letter along with detailed particulars provided by each bidder in the prescribed format shall be signed by the Engineer and Accounts representative of the Corporation. Bids so received shall be evaluated by a specialist committee inclusive of a FinanceMember in detail for various resources available with the bidder and experience, he possesses for the work. Due pre-determined (before opening of bid) weightage shall be given for individual resources and experience in the field. Certain predetermined cut off level may be fixed for qualifying or disqualifying the parties and evaluation process completed by the committee. A guide for the evaluation criteria for pre-qualification purpose is provided in Annexure 3.7. A detailed evaluation report shall then be prepared and put up to the competent authority who is competent to award the work when tendered, for consideration and acceptance of list of prequalified bidders. Prequalified bidders shall then be informed about their prequalification and certain guarantee bond for predetermined amount may be obtained from each of the prequalified bidders to keep them empanelled on prequalified list. In case the empanelled prequalified bidder did not submit the tender when he is invited to quote against the tender for the actual execution of work after prequalification, the guarantee bond (guarantee money) so submitted along with prequalification bid shall be forfeited. Prequalification done at one location can be used at other location with 38

approval of Authority who is competent to accept and approve tenders at that location and with the consent of the Contractors. When the actual work is programmed to be taken up, invitation to purchase the tender document for the work need be sent only to prequalified tenderers for that work. When bids are received from such prequalified tenderers on opening of Part I - Technical Bid, scrutiny of technical and financial position of the bidders is to be reascertained between the period they were prequalified for the job and date of bidding for the actual work. If the same is found satisfactory the bidder gets qualified for opening of Part II - Financial Bid for the work for further evaluation.

3.6
3.6.1

SALE OF TENDER
SALE OF TENDER DOCUMENT Tender document should be prepared and kept ready for sale to the contractors before the NIT is actually sent to the press or is displayed on the Notice Board and every tenderer desiring to bid shall be asked to make a written application. Alternatively, he can submit his information and download the tender documents from the NPCIL web site. It is the responsibility of the EIC to see that tender documents are made available to the eligible contractors as soon as the application is made and approved by competent authority. In order to obviate difficulty to get competitive rates in respect of all specialized jobs, it is necessary that the tenders for specialized works should be issued to the firms concerned who deal in the items of works for which the tenders are being invited in addition to registered contractors. It should be made very clear in the press Notice and NIT that qualifying the Minimum eligibility criteria is necessary, details of which should be appended, along with the bid by the Contractor. Besides, the Contractor should possess the necessary special T&P for proper execution of job. Estimated cost referred to in the NIT should be as per actual cost estimate of the work. The practice of making certain reduction in the estimated cost with a view to obtain competitive bids shall be discouraged.

3.6.2

SCALE OF CHARGES FOR TENDER DOCUMENT The following are the scale of charges of the sale of tender forms to tenderers: Works of Value Up to Rs. 1 Lac Between Rs. 1 to 50 Lacs Between Rs. 50 Lacs to Rs. 2 Crores Above Rs. 2 Crores Sale Value of Tender (Rs.) 150 500 1000 1500 Cost of additional copy (Rs.) 110 350 750 1,100

The taxes as applicable shall also be levied on above sale value. Authorities competent to approve NITs has got the discretion to add to the prices, mentioned above, any additional cost of drawing to be supplied along with the tender documents depending on the labour actually involved in their preparation. In certain special cases waiver of cost of tender document can considered as per powers delegated in DFP of works (HQI 2001) 39

3.6.3

SALE OF TENDER DOCUMENTS TO REGISTERED CONTRACTORS Tender for NPCIL works can be issued to contractors registered in NPCIL in appropriate classes. However, in the case where no contractor registered with NPCIL comes forward for the tender, or where such registration does not exist, the contractors registered with PSUs and Government in the appropriate classes or contractor having adequate experience of similar nature of works may be considered for sale of tender as per NIT.

3.6.4

GUARANTEE BONDS In the case of some specialized jobs viz. Water proofing works, anti-termite treatment, special painting works etc. by specialized firms, Guarantee Bonds are also required to be executed on stamp paper of appropriate value.

3.6.5

ISSUE OF TENDER DOCUMENT TO PRE-QUALIFIED TENDERERS FOR SPECIALIZED WORK For the specialized nature of works the process of pre-qualification of tenders shall be carried out by the Committee set up for this purpose. Once the pre-qualification of tenderer is made and the panel is drawn for the specialized works the tenders for such works should be issued to them only and no fresh public tender need be called for.

3.6.6

SUPPLY OF DUPLICATE SET OF TENDER DOCUMENTS Where a request is received from a contractor for the supply of a duplicate /additional set of tender documents, the same may be supplied to him at the cost indicated under para 3.6.2. The copy to be supplied should be stamped Duplicate so that it may not get mixed up with the original render documents.

3.6.7

ACCOUNTING OF TENDER DOCUMENT The following is the procedure, laid down, for accounting of tender document when issued manually: i)All tender documents should be priced and the price be mentioned on the document. ii)All tender documents for sale should be kept in the charge of the Manager(F&A) at units. Tender sale register containing chronological record of issue of tender documents showing the name of the person/party to whom issued, the number of documents issued and the amount received shall be maintained in and forwarded to Finance department. iii)The amount towards cost of tender document is to be paid to Manager (F&A) of the unit on authorization issued by appropriate authority for this purpose and based on receipt issued by the Manager(F&A), tender documents could be issued to the tenderer after making suitable noting on the receipt and in the tender sale register. To avoid the possibility of bogus and fake tenders being submitted, it is necessary that the tender document are sold individually and acknowledgments taken from tenderers or their accredited representatives in the sale register of tenders, while handing over tender document to them. Unsold tender documents shall be kept with the Engineer responsible along with list of tenders to whom the tenders have been sold on closing of sale of tender but prior to opening date of tender.

40

3.6.8

CENTRALIZED TENDERING CELL Each site shall have a Centralized Tender Cell (CTC). It shall cater to the tendering requirements for works to be executed through contracts pertaining to all disciplines. The objectives of the CTC are: a) To handle tendering work only by the experienced officials who possess specialization in the field. b) To make the task of executing agencies simpler and allowing them to concentrate more on their core performance area. c) To bring uniformity in procedure & documentation of tendering, schedule of quantities & rates and specification. d) To ensure conformity and compliance to Head Quarter Instructions, CVC Guidelines etc. e) To minimize deviations and disputes in the tendering work and to have an identified agency to handle such issues.

3.6.9

FILE TRACKING SHEET With a view to improve the process of file processing a File tracking sheet is introduced. This file tracking sheet enables the tracking of file and provides readily available information regarding processing time required for each department. This data can be utilized for the performance measure for file processing. This file tracking document will accompany every file that moves among various departments. It contains the date of receipt of file and the date of forwarding the file. The officer forwarding the file will sign against it and authenticate the file transfer from his department. Similarly, the officer receiving the file will sign against the date of forwarding the file from his department to another department. A sample format of the File tracking sheet is provided in Annexure 3.8. File tracking system software has already been prepared at NPCIL Head Quarters. This software may be used in tracking the tendering process and taking timely corrective actions.

KEY PERFORMANCE INDICATORS

Measure Unit Average time taken to for a Proposal stage till date of sale of bid Days documents

MIS
List of proposal initiated during the month with status and reasons for delay, if any.

41

SECTION-4 CONTRACTING

PROCESS OBJECTIVES
Ensure proper receipt and evaluation of tenders according to guidelines Ensure that sealed tender document is accepted in accordance with the guidelines. Ensure security deposit from the selected contractor is in time and in correct form Ensure the final agreement with the selected tenderer is complete and incorporating all the changes agreed upon and accepted to form part of contract

4.1
4.1.1

RECEIPT OF BID AND EVALUATION

RECEIPT OF BIDS AND OPENING THEREOF The bid submitted by the Bidder shall comprise the following: a) Documents in support of Minimum requirements as per Clause 1 of Pre-qualification criteria (Annexure 1 of the NIT) along with the purchase price of the bid documents in case it is downloaded from internet. b) Bid Security c) Priced Bill of Quantities (d) Pre Qualification Information in Formats, as specified along with the rest of the bid documents and any other information required to be completed and submitted by Bidders in accordance with tender document. For single part bid, the Bidder shall submit the Envelope 1 o Documents in support of Minimum requirements as per clause 1 of Prequalification criteria (Annexure 1 of the NIT) along with the purchase price of the bid documents in case it is downloaded from internet / NPCIL web site

Envelope 2 o Bid security

Envelope 3 o Pre Qualification Information in Formats, as specified along with the rest of the bid documents Priced Bill of Quantities

43

For two part bid the Bidder shall submit the, A) Part I Technical Bid Envelope 1 o Documents in support of Minimum requirements as per clause 1 of Prequalification criteria (Annexure 1 of the NIT) along with the purchase price of the bid documents in case it is downloaded from internet/NPCIL website, Pre Qualification Information along with the rest of the bid documents.

Envelope 2 o Bid security,

B) Part II Commercial Bid Envelope 3 o Priced bill of quantities

All the envelopes should be sealed & super scribed with appropriate envelope number and heading as defined above. The bids shall be submitted in sealed envelope containing these envelopes as described in clause 25 of NIT. The bids shall be received in the tender box provided at a place as mentioned in NIT. The practice of accepting bids by hand is not a good practice and must be avoided. The place of receipt of tender should be easily accessible so as to avoid inconvenience to the bidders in submission of bids within specified time limit. With a view to avoid the possibility of original tender documents being tampered with, a well established procedure shall be adopted in connection with the receipt and opening of tenders and their acceptance. The tender box shall be clearly marked with tender number, date, time of closing and time of opening and shall be kept at a guarded place. The tender box and tenders should be opened in the presence of such intending tenderers or their representatives as may choose to attend at the time and place which should be specified in the tender documents. The Manager (F&A) or his representative should be present at the time of opening of the tenders. Tenders received should be entered in the register as per Annexure 4.1. The tenders received after the due date and time of receipt shall be returned unopened to the bidder. In exceptional cases (where only one bid is received within the deadline), bids received after the deadline but before the time of opening of the bid may be considered on approval from the Contract approving authority as per DFP (HQI 2001) and till approval of competent authority, the opening shall be deferred and new date/ time shall be declared. However, the right to approve and accept delayed bids solely rests with the authority / corporation. The officer opening the tender should first open the envelope containing documents in support of Minimum requirements as per Pre-qualification criteria. If minimum requirements for pre-qualifications are satisfied prima facie then envelope containing bid security shall be opened (as per details specified in section 28 Bid Opening of NIT).

44

In case all bidders have submitted unconditional Bids together with requisite Bid security, all the bidders can be informed about the status of final bid value. If any Bid contains deviation from the bid documents which tender opening committee decides technically unacceptable and/or if the same does not contain bid security in the manner prescribed in the bid documents, then that bid will be rejected and the bidder shall be informed accordingly. The sealed envelope containing priced BOQ of such bidders will be returned without opening. All other valid Bid shall be considered for evaluation. The bidders name, the bid prices, any discounts, bid modifications and withdraws, and such other details as the Corporation may consider appropriate, will be announced by the Corporation at the time of opening. Any deviation from this procedure considered necessary by the NIT approving authority in individual cases shall be referred with full justification to next higher level not below SD/PD/ED for a decision. Lump sum tenders should be read out to the tenderers as far as possible. In case of item rate tenders, the total amount worked out by different tenderers, may be read out, if required by the tenderers present. 4.1.2 DUTIES OF OFFICERS OPENING THE TENDERS Officers (including Manager, F&A, or his representative) opening the tenders should invariably date and sign all the corrections, conditions and additions in the Schedule of Quantities, specifications and other essential parts of contract documents, and also date and sign on pages of other important parts of the tendered documents such as tender covering letter, deviation list, schedule of quantities and unit rates etc. irrespective of fact whether they contain or do not contain any corrections or overwriting, etc. The Officers concerned should record the fact in writing at the end of those pages individually. He should mark all corrections, cuttings, conditions, additions and over-writings and number them and attest them with red ink. In case of a number of corrections in any rate, either in words or in figures or in both, the number of corrections marked should indicate the corrections serially, (say in case three corrections in rates of any one item, each of these corrections should be allotted independent numbers serially). Representing all the three corrections by one number is not a good practice and must be avoided. In case of more than one correction where the correction is not legible, the rates should be written afresh by the hand of the officer opening the tenders and counter signed by the representative of Finance. The tenders shall be opened in presence of authorized officer of finance group and officer not below the rank of SO/F and nominated by tender inviting authority shall be the Chairman of tender opening committee. The officers opening the tenders should fill and sign the checklist for opening of the tender (Refer Annexure 4.2). It is desirable that one additional officer be also made a part of tender opening committee and he shall independently scrutinize / verify all the tenders to ensure completeness of the tenders. 4.1.3 PROCEDURE FOR ACCOUNTING, CORRECTION, CONDITION & OVER WRITINGS The number of such corrections and over writings must be clearly mentioned at the end of each page of schedule attached to the tender document and properly attested with the date. Any omission observed should also be brought out clearly on each page of the Schedule. 45

The corrections, cuttings, conditions, additions and overwriting should be allotted separate numbers i.e., corrections should start from 1, 2, 3, etc. and over-writings should similarly start separately from 1, 2, 3, etc. Any ambiguities in rates quoted by tenderers, in words or figures, must be clearly indicated on each page of the schedule attached to the tender to whom it concerns. In case where the tenderer has quoted rates in rupees and no paisa is mentioned, the word only should invariably be added after the words rupees and the corrections should be signed and dated with suitable remarks at the end. Where the tenderers have omitted to quote the rates in figures or in words, the omissions should be recorded by the Officer opening the tender on each page of the schedule. The Engineer should see that the tenderers quote entire rates in words including paise to avoid chances of tampering in rates and if the tenderer fails to do so, the Engineer should himself write the rates in words at the time of opening of tenders. 4.1.4 EVALUATION OF TENDERS (COMPARATIVE STATEMENT)

4.1.4.1 PREPARATION OF COMPARATIVE STATEMENT A complete comparative statement of all tenders received in response to the notice should be drawn up by the EIC and the following instructions should be carefully noted. The Officers opening the tender should prepare a list of tenders received. Care should be taken in preparing and scrutinizing Comparative Statements of tenders to guard against arithmetical and other mistakes. Failure to do this may result in work being awarded to a contractor who is not lowest acceptable tenderer, a contingency which must be guarded against. The engineer responsible for preparation of comparative statement shall also ensure that the tenders are complete in all respects and all corrections, overwriting, conditions have been accounted for and duly signed by the representative of Finance. A format for Comparative statement is provided in Annexure 4.3. The comprehensive methodology for proper check of tenders and preparation of comparative statements are left to the Engineer but any such methodology must define the responsibilities of Finance and Engineer opening the tender and provide: i) That Manager (F&A) makes satisfactory and efficient arrangement for checking the computed tender. He should also conduct personally a test check of computed and checked tenders sufficient to satisfy himself reasonably that checking work has been properly done. That if on checks there are differences between the rates given by the contractor in words and figures or in amount worked out by him the following procedure shall be followed: When there is a difference between the rates in figures and in words, the rates which correspond to the total amount for that particular item worked out by the bidder, shall be taken as correct When the amount of an item is not worked out by the bidder or it does not correspond with the rates written either in figures or in words, then the rate quoted by the bidder in words shall be taken as correct. When the rate quoted by the bidder in figures and in words tallies but the amount is not worked out correctly, the rates quoted by the bidder shall be taken as correct and not the amount. 46

In the event bidder has not quoted rate for any item(s), leaving space both in figure(s), word(s) and amount blank, it will be presumed that the bidder has included the cost of this/ these item(s) in other items and rate for such item(s) will be considered as zero and work will be required to be executed accordingly. No payment is required to be made for such items. In the case of percentage rate tender, the bidders are required to quote their rates both in amount as well as in the percentage below/above the rates entered in the schedule. In such cases in the event of arithmetical error committed in working out the amount by the bidder, the tendered percentage and not the amount should be taken into account. ii) That the Engineer himself makes an intelligent scrutiny of the tenders and the statement. The comparative statement should be prepared and got verified by next higher level. iii) That the Engineer makes proper arrangements for the safe custody of tenders and comparative statements while computations are being made in his office. iv) In case of conditions stipulated in the tenders, engineer shall adequately load the conditions to define the common base of price structure. All corrections should be carried out neatly and clearly, endorsed to for attestation by the authority concerned. 4.1.4.2 RESPONSIBILITY OF MANAGER (F&A) The responsibilities of Manager (F&A) for the computation, checking of tenders and the preparation of comparative statements are as follows: The Manager (F&A) is responsible for the safe custody of tender documents during the period when they remain in the Accounts Section until submission to the Engineer. He is responsible for the arrangements for checking the computed tenders, i.e., for ensuring that satisfactory and efficient arrangements are made for checking. He should conduct personally a test check of the computed and checked tenders to satisfy himself reasonably that the checking work has been properly done. He should see that the comparative statement correctly incorporates the totals as checked on the individual tenders. He shall also ensure that all omissions, over writings, etc have been duly verified while opening the tenders. The Manager (F&A) himself should not be called on to do any of the actual computing work or of the intermediate verifications of the computations or of the preparations of comparative statements. His responsibility extends to the final checking arrangements and himself doing reasonable amount of test checking. The Manager (F&A) should record the following certificate on the comparative statement: Certified that

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1. I have personally conducted a test-check of the computed and checked tenders including the three lowest tenders and have satisfied myself that the checking work has been properly done. 2. The comparative statement correctly incorporates the totals as checked on the individual tenders. 4.1.4.3 PROPOSAL FOR ACCEPTANCE OF TENDER Engineer after receiving the Comparative statement from finance groups shall carefully scrutinize the observations of accounts. He shall ensure that all the observations are responded to the satisfaction of Finance and before forwarding the proposal for financial concurrence shall ensure the following: If the tender is at variance beyond the permissible limits, whether the adequate efforts have been made to bring down the contract value within permissible limits. A detailed justification for the variation is to be furnished with the proposal. Further a certificate to the effect that the rates are reasonable and representing to present market rate is also recorded in the proposal by Engineer. Abnormally high / low rated items (items with quoted rates more / less than 25% above the estimated rates) have been identified. The quoted rates are in general shall remain firm as already specified in GCC. The rates for AHR items beyond the tendered quantity shall be negotiated. All efforts shall be made to obtain best possible rates in order to ensure that the tender structure does not get altered while operating these quantities. Beyond the specified tender deviation limits it shall be regulated as per clause 11.2 (Payment for variations) of GCC. Financial soundness of the contractor should be ascertained by the Engineer and facts to be recorded in the proposal before financial concurrence. The work in hand with the bidder shall also be ascertained. It is a recommended practice that for large value contracts, a local tender committee be constituted who can review all the satisfactory progress of all the tendering process and take collective decision in case of difference of opinions and advice the competent authority accordingly. 4.1.4.4 GUIDELINES TO BE FOLLOWED FOR FINANCIAL CONCURRENCE: Financial concurrence to the proposal to be accorded after checking the following points in Finance though the broad guidelines indicating the areas in which the proposal to be scrutinized for concurrence are given below yet there may be other relevant issues concerning canons of financial propriety and procedure, which may vary from case to case, shall also to be seen. Technical sanction for the work exists and appropriate funds for the particular work have been approved by Corporate Office through Budget for the year. Estimates have been got approved by Engineering/Tendering Section from the competent authority and correct amount exhibited in NIT. However, a copy of Technical Sanction/Estimates after approval by competent authority is to be endorsed to Accounts. Proper tendering mode has been adopted; otherwise prior approval of competent authority exists for deviation.

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Tenders have been opened in the presence of Finance representative and correction / over-writing in rates/rebates, if any, have been jointly attested at the time of tender opening. Bid Security has been furnished by all the bidders in acceptable form and the same has been forwarded to Accounts for crediting to NPCILs account. Comparative statement sent by Engineering Section has been checked arithmetically and found correct. It may also be ensured that delayed/ late tenders have been kept away from the consideration zone. In exceptional cases (where only one bid is received within the deadline), bids received after the deadline and before the time of Opening of the bid may be considered on approval from the Contract approving authority as per DFP (HQI 2001). It may be ensured that financial implications of the deviations, if any, asked for by Bidders have been accurately calculated and loaded on the respective bidders offer before arriving the lowest offer. Whether recommendations of EIC for award of work are in favour of the lowest bidder, if not, sufficient reasons on account of technical or financial incapability or lacking experience, mobilization of resources, past experience with bidder etc with reasonable justification have been recorded for ignoring the lowest offer. In case of extreme emergency, where time is the essence for award of work, fax offers have been called or other deviations have been taken by the Engineer, it shall be ensured that approval of competent authority has been obtained. The overall tender is within permissible variation. Otherwise rates to be negotiated with contractor and efforts to be made to bring down the rates within permissible variation from the estimated value as per the DFP (HQI 2001). 4.1.4.5 INSTRUCTIONS TO BE FOLLOWED DURING TENDER EVALUATION The following instructions should be scrupulously followed: Delayed Tenders (tenders received before the time of opening but after the due date and time of receipt of tenders), and Late tenders(tenders received after the specified time of opening), are not to be considered. However, in exceptional cases (where only one bid is received within the deadline), bids received after the deadline and before the time of Opening of the bid may be considered on approval from the Contract approving authority as per DFP (HQI 2001). The tenderers are not expected to make any post tender modifications. Any such case should be viewed seriously and appropriate action to be taken against such bidder in order to curb such tendency by other bidders in future. However, in the case where it becomes necessary for NPCIL to consider such tender even after post tender modification, due to compelling reasons such as non availability of other bidders in the field or extreme emergency, the provision made in Delegation of Financial Powers shall be invoked. In any case, the contractor should not be allowed any undue advantage of such modifications. It shall be ensured that the post tender change has aroused out of reasonable and justified reason and that the same does not attract any vigilance query. A collective decision by a committee constituted by the competent authority is recommended who has recorded all the facts, weighed all the pros & cons in the interest of Corporation before taking such decision by competent authority.

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When the tenders are under examination, no other authority should make queries or call for reports/clarifications from the tenderers except with the approval of the accepting authority. In case of two part tenders, during evaluation of part I but before opening of the part II (Price Bid), whenever tenderers give unacceptable conditions outside the strict stipulations in the tender, e.g., shorter validity period, withdraw - modification of offer while tenders under consideration, the Engineer concerned should immediately write to the tenderers asking them to comply with the tender conditions. In case of contracts only for labour supply, if the rates quoted are less than the Minimum wages and taxes applicable, the same shall be rejected in order to avoid labour being paid less than the Minimum wages. It has been experienced that contractors some times give reasons that they will forgo their profit & overheads while quoting rates which are just sufficient to pay minimum wages. It is not a good practice to accept offers with such conditions. Engineer should carefully read the latest Contract Labour Laws and load all such stipulations for which principle employer may be responsible to pay to contract labour in case of default by the contractor. Before acceptance of tenders, all the conditions, etc, submitted by the tenderers should be finally settled before issue of acceptance letter. While forwarding tenders to higher authority, details like a) validity period of tender; b) time already taken for scrutiny; c) balance period available; d) period required after receipt of decision by the Engineer to convey acceptance should prominently be indicated to ensure that there is no delay in processing of tenders and decisions are taken and conveyed to the EIC well in time. In case of tender where validity period has already expired, decision to accept the same should be taken only after validity period is got extended. Also conditional tender cannot be accepted ignoring the conditions. Clause 32.1 of NIT (GCC) states that the corporation reserves the right to accept or reject any tender. CVC Office Order No. 15/3/05 dated 24th March, 2005 emphasises that such a clause in the bid document does not mean that the tender accepting authority is free to take decision in an arbitrary manner. He is bound to record clear, logical reasons for any such action of rejection / recall of tenders. Engineer shall ensure that before opening of tender and after the closing date for sale of tender, pre-bid meetings are arranged in line with the stipulation of NIT to ensure that all relevant specification requirements are clarified to all the tenderer and that to ensure that the scope of work is clearly understood by them. In case some of the tenderers are not attending the pre-bid meeting, it is considered that they have well understood the specification requirements. However, a copy of clarifications issued to the tenderers who have attended the pre-bid meetings shall also be forwarded to all the tenders in order to maintain transparency. 4.1.5 CONDITIONS REGARDING ABNORMALLY HIGH / LOW RATES i) Where tenders accepted contain abnormally high/low rated (AHR/ALR) items, the authorities accepting such tenders should satisfy themselves about their acceptability taking into consideration the standard Schedule of rate plus increase in cost index plus other facts, if any, and should be in a position to justify the rates at which the work is awarded. This justification should be placed on record. Abnormally high / low rated are those where the variation between the quoted and estimate rates, is more than 25% plus or minus. 50

All Engineers are required to ensure that whenever a work is accepted imposing this restriction on the quantities of items carrying high or low rates, they should invariably bring to the notice of the EIC concerned specific items which carry such rates. Powers as per DFP for works (HQI 2001) has been delegated to the officers of NPCL to award additional quantities against abnormally high rated items (variation being more than 25% as compared to the estimated rates). ii) It has further been enjoined that additional quantities in excess of the limits and powers mentioned in the DFP of works (HQI 2001) where the contractors have quoted abnormally high rates (variations being more than 25% as compared to the estimated rates) should not be exceeded except with the written permission of the SD/PD/ED in case tender is accepted by SD/PD/ED. In regards to tender accepted by higher authority, the authority to vary the quantities for such item by more than prescribed limit should rest in them. In all these cases it should be ensured that as far as possible the contractors do not receive undue benefit in any way. In a case where the main Contractor is not prepared to work at the Scheduled rates (quoted rates) or estimated rates and if in such case the rate of the main Contractor as quoted in the accepted tender is found to be reasonable on examination, the Engineer may refer the case to the Competent Authority to decide whether the work should be got done from the original Contractor. However it shall be ensured that tender structure remains unchanged. iii) In respect of items for which a contractor has quoted abnormally low rates, the EIC should inform the SD/PD/ED, if the quantities of such items are reduced by more than 25% of quantity in SOQ. This is considered necessary to see whether the reduction in the quantities of such items was justified due to change in scope or otherwise. Such conditions shall however be foreseen and avoided. iv) The following procedure should be observed strictly: A watch should be kept on the quantities of the items for which abnormally high or low rates are quoted so that the quantities of such items do not exceed beyond the limits, and powers referred to in section 4.1.5(i) above. The EIC of the work will be held responsible and should ensure that the quantities in respect of such items are not exceeded by more than the prescribed limit. He will maintain register for each work in the form prescribed (Annexure 4.4) for the purpose of keeping watch on the execution of the quantities of such items will also be required to attach a certificate along with the bills that quantities of such items have not been exceeded by the permissible limits, while submitting bills for payment by bill passing authority. v) It has also been observed that some of the engineers also inform the contractors about the embargo imposed on the execution of the quantities of such items beyond the prescribed limits while communicating acceptance of their tenders. This procedure is not in order. The instructions issued are of an administrative nature and are not meant to be communicated to the contractors, as otherwise practical difficulties are likely to arise if the contractors refuse to carry out such items beyond the prescribed limits. 4.1.6 PROCEDURE FOR CONDUCTING NEGOTIATIONS i) Normally no negotiations should be resorted with identified party in order to bring down rates when the tender as a whole is only up to 5% (as per DFP revised from time to time) in excess of the estimates put to tender.

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In case of Abnormally High Rated(AHR) items, (whose quoted rate is more than 25% higher than estimated rate) for which no reason exists in the opinion of Contract approving authority to justify, the possibility of executing such items at the departmental rates for the quantities beyond the tendered quantity up to the variation limit may be confirmed. It is expected that the EIC shall closely monitor the execution of AHR/ ALR items so that the tender structure is not altered during the execution of contract. In case of change in tender structure during execution /completion of work it shall be put up to higher authority for his approval. For conducting the negotiation prior approval of Competent Authority as given in DFP to be obtained and it is to be conducted in presence of representative from finance department. ii) Convener of the negotiation committee should not be below the rank of PE/Dy.CE/ SO/F /SME/Sr Manager. iii) As a remedial step to avoid change in status of lowest bid during execution of increased quantity against abnormally high rated items, efforts to be made during the negotiations with the bidder to whom the award of work is being considered to bring down the rates of such items to the estimated rate or lowest quoted rate by other bidders for such items. iv) Procedure for conducting negotiations for award of contracts requiring approval of the Board. No tenders, which are required to be accepted with the approval of the Board, should be rejected by any lower authority and all such tenders should be submitted to the Board for consideration. In case where the negotiations are recommended the same shall be carried out with approval of Competent Authority as per Delegation of Financial powers. v) Procedure for conducting negotiations for award of Contract by Negotiations. Where response to the call of tender is considered unsatisfactory, negotiations may be conducted as per the powers delegated as per DFP (HQI 2001). In cases where the cost of the works exceeds the delegated power of the Officer inviting tender, he shall report the case to the authority competent for decisions. Negotiations should be restricted only with the lowest tenderers, unless otherwise authorized by the competent authority, for which their prior approval should be obtained. The following guidelines of CVC for negotiation are reproduced below for reference: (a) As post tender negotiations could often be a source of corruption CVC has directed that there should be no post-tender negotiations with L-1, except in certain exceptional situations. Such exceptional situations would include procurement of proprietary items, items with limited sources of supply and items where there is suspicion of a cartel formation. The justification and details of such negotiations should be duly recorded and documented without any loss of time. (b) In cases where a decision is taken to go for re-tendering due to the unreasonableness of the quoted rates, but the requirements are urgent and a re-tender for the entire requirement would delay the availability of the item, thus jeopardizing the essential operations, maintenance and safety, negotiations would be permitted with L-1 52

bidder(s) for the supply of a bare minimum quantity. The balance quantity should, however, be procured expeditiously through a re-tender, following the normal tendering process. (c) Negotiations should not be allowed to be misused as a tool for bargaining with L-1 with dubious intentions or lead to delays in decision-making. Convincing reasons must be recorded by the authority recommending negotiations. Competent authority should exercise due diligence while accepting a tender or ordering negotiations or calling for a re-tender and a definite timeframe should be indicated so that the time taken for according requisite approvals for the entire process of award of tenders does not exceed one month from the date of submission of recommendations. In cases where the proposal is to be approved at higher levels, a maximum of 15 days should be assigned for clearance at each level. In no case should the overall timeframe exceed the validity period of the tender and it should be ensured that tenders are invariably finalised within their validity period. (d) As regards the splitting of quantities, some organisations have expressed apprehension that pre-disclosing the distribution of quantities in the bid document may not be feasible, as the capacity of the L-1 firm may not be known in advance. It may be stated that if, after due processing, it is noticed that the quantity to be ordered is far more than what L-1 alone is capable of supplying and there was no prior decision to split the quantities, then the quantity being finally ordered should be distributed among the other bidders in a manner that is fair, transparent and equitable. It is essentially in cases where the organisations decide in advance to have more than one source of supply (due to critical or vital nature of the item) that the Central Vigilance Commission insists on pre-disclosing the ratio of splitting the supply in the tender itself. This must be followed scrupulously. (e) Counter-offers to L-1, in order to arrive at an acceptable price, shall amount to negotiations. However, any counter-offer thereafter to L-2, L-3, etc., (at the rates accepted by L-1) in case of splitting of quantities, as pre-disclosed in the tender, shall not be deemed to be a negotiation. However, in case of L1 backing out, re-tendering should be done. 4.1.7 PROVISION FOR PROVIDING ALTERNATIVE / UNIT RATE ITEMS No alternative Rate Only items shall be provided in the tender. If alternative items with quantities are provided in the major tenders due to unavoidable reasons, selection of alternatives shall be finalized before opening of the price bid. This will avoid uncertainties with respect to establishment of L-l tender in-case of tenders received with narrow margins. Provisions of unit rates some times become unavoidable due to the unexpected additions/alterations of works due to change in design or due to imposition of regulatory requirements. The unit rates under such circumstances may be included in tender, however, these rates shall be negotiated w.r.t. established rates finalized at unit level or established market rates prevailing at specific unit and ensure that no undue advantage is passed on to the contractor. The lowest unit rate quoted by any of the bidder in case found reasonable can also be adopted to ensure that tender structure remains unaltered while executing such unit rates.

4.2
4.2.1

ACCEPTANCE OF TENDER
TIME SCHEDULE FOR DECISION ON TENDER Top priority should be given to decide the award of work and acceptance of tender should be communicated to the tenderer well before expiry of validity of the offer 53

given in the tender. Nevertheless, the following time schedule given is required to be adhered to take the decision about acceptance of tender and communicated thereof to bidder. Recommended Time schedule Within 30 days from date of opening of the Up to Rs. 100 lacs tender Above Rs. 100 lacs but up to Rs. Within 45 days from the date of opening of 150 lacs the tender Above Rs. 150 lacs but up to Rs. Within 60 days from the date of opening of 1,250 lacs the tender Above Rs. 1,250 lacs but up to Rs. 5,000 Within 90 days from the date of opening of lacs tender Within 120 days from the date of opening of Above Rs. 5,000 lacs tender The above time-schedule should be adhered to and if any officer is unable to follow the same, he should invariably give reasons while forwarding the tenders to the authorities competent to accept it. It shall be noted that time is the essence of completion of work and hence all efforts shall be made to finalize the tender and award of work within the specified time schedule. 4.2.2 RESTRICTIONS ON ACCEPTANCE OF TENDER No officer of the NPCIL can accept any tender pertaining to following: i)Which relates to a work not yet technically sanctioned. ii)Which exceeds the amount technically sanctioned for the work by an amount greater than he is empowered to pass. iii)Which involves liabilities exceeding the sanctioned cost of the work by an amount greater than 10%, as such excess will require a revised expenditure sanction which should be applied for as soon as such an excess is foreseen. iv)Until an assurance has been received either at the time of communication of financial sanction or subsequently from the authority competent to provide the necessary funds that they will be allocated before the liability matures. v)Any provision which infringes any standard rule or order of higher authority. vi)Which involves an uncertain or indefinite liability or any condition of an unusual character. vii)Which exceeds the amount up to which he is empowered to, accept tenders. Revised technical sanction (wherein the amount to be accepted is more than 10% above the estimated amount) is required to be issued by the competent authority before acceptance of tender. 4.2.3 COMPETENT AUTHORITY TO ACCEPT THE TENDER To determine the authority competent to sanction works as well as to give financial concurrence the total cost of the work to be computed by taking into account the following: Work order cost

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i)Contractors portion of work including all taxes and other levies, if any(excluding free issue material) ii)Interest on interest free advance iii)Financial loading on account of deviations from the standards terms & conditions of NIT asked for by bidder For obtaining approval from the competent authority for the acceptance of the tender, the Engineer shall forward the recommendation note in the prescribed format, refer Annexure 4.5. In case of tenders from the pre-qualified bidders, if the value of the contract to be awarded for executing the work crosses the limits of the delegated powers to the authority who had earlier approved the pre-qualification of the parties based on the value shown in the estimated cost of work while inviting bids, post-facto approval of the competent authority who is competent to approve the award of work shall be invariably be obtained for the pre-qualification of bidders. 4.2.4 ACCEPTANCE OF TENDER IN ANTICIPATION OF REVISED FINANCIAL SANCTION Corporation Officers at appropriate level are authorized to accept tenders in anticipation of revised financial sanction by the competent authority, subject to the following conditions and limits: i) The tendered rates are certified as reasonable by the appropriate officer in the Corporation accepting the tender as per the provisions in this Manual. ii) The Corporation officers, accepting the tender also certify that the scope of the work, as administratively approved by the competent authority, remains unchanged iii) Where the items included in the tender are available in the current schedule of rates, the amount of tender to be accepted does not exceed more than 10% of the amount worked out on the basis of the current schedule of rates plus (or minus) the enhancement (or decrease) on account of relevant cost index authorized by the concerned SD/PD/ED. Excess up to 25% only may be permitted with the prior approval of next higher authority after furnishing detailed justification for variation. Where total amount quoted is more than 25% of estimate value, normally re-tendering should be followed or alternatively furnish full justification with rate analysis and the approval of SD/PD/ED to be obtained subject to the condition that this amount is within his financial powers as per DFP, else it has to be approved by next higher authority. iv) Where the current schedule of rates referred to in para (c) above is not available or the items covering bulk of work are not available in that schedule of rates, approval of concerned SD/PD/ED is obtained regarding the reasonableness of the tendered rates. The Corporation officers, accepting the tender involving extra expenditure must immediately report to the competent administrative authority so as to enable to make necessary additional provisions in the budget. Expenditure in excess of the budget allotment will not be incurred without assurance of additional funds from the concerned authority approving administratively. The revised estimates for the work should be submitted within a month of acceptance of the tender, to the competent authority administratively.

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4.2.5

ACCEPTANCE OF TENDER BY NPCIL BOARD The Government of India have constituted NPCIL Board which acts as a body in the matter of acceptance of contracts and other miscellaneous matters relating to execution of works. 1) Composition of the Board The Board consists of a Chairman and Managing Director, NPCIL and Members consisting of full time and part time members appointed / nominated by the Govt. from time to time. The Board has the authority to co-opt as members, non-official experts when so required for advice on matters as to the execution of specialized projects. In addition the Board may constitute a Board sub-committee to consider the proposals expeditiously. Tenders and works without call of tender above the power of acceptance of CMD, are submitted to the Board Sub-Committee/ Board for their consideration. These tenders are concluded by the respective SD/PD/ED. NPCIL Board will constitute Tender Committee from time to time. 2) Submission of proposal to Board Tenders, submitted to Board for consideration and approval, are required to be submitted with memo (Annexure 4.6) forwarding tenders to NPCIL Board and information as per the proforma in Annexure 4.7. This proforma has to be very carefully compiled so that the information furnished is complete in all respects, and there is no room for further queries and back references to Units. The proforma along with necessary supporting documents with one soft copy containing this material should be forwarded by the Units to the Company Secretary for submission to the Board in accordance with Headquarters Instructions (refer HQI-9001) issued in this regard. In this connection, following points may be noted: Name of work against item No. l of the Proforma should be as per technically sanctioned estimates and approved NIT. Against item 2(iv), the proportionate amount available in the preliminary estimate, on the basis of which administrative approval has been accorded, may be worked out and shown. This should also include the element of contingencies and other ad hoc increases allowed in the preliminary estimate. Against the item 3(i) brief details of the work included in the technically sanctioned estimate may be given. Against item 4, it may be clearly brought out whether the tenders have been called for all the items included in the technical sanction. Full details of the items omitted along with cost, if any, maybe given. It may also be stated as to how the remaining items will be executed against item 7 (iii), reasons for postponement of the date of receipt of tenders must be given to enable the authority competent to accept the tender to know as to why the date of receipt of tender was postponed. The information against item 11 may be supplemented by a separate statement (in the following format) and submitted with the tenders: (a) Name of Contractor (b) Tendered amount / percentage above or below (c) Conditions given by the Contractor 56

(d) Financial effect against each condition (e)Tendered amount/percentage above or below consideration the financial effect of all the conditions. (f) Comments on the conditions given by the contractors. Proposal should be submitted to CMD, through Director (F) by the concerned unit head and / or Directorate, which is initiated not below SD/PD/ED. On approval of the proposal by CMD the same to be forwarded to the Company Secretary for submission to the Board. The observations of Finance Directorate shall be carefully examined and responded. Final concurrence of Director (F) shall be included in proposed Board Note. All other statutory requirement in the prescribed board note shall be carefully addressed. Cost benefit analysis, other alternatives, legal requirements etc. shall be carefully incorporated in the board note. The approval on the proposal required by the board shall be very carefully drafted in order to avoid any ambiguity in future. 4.2.6 PROCEDURE FOR ACCEPTANCE OF TENDER after taking into

4.2.6.1 OTHER THAN THE LOWEST The authority competent, to approve the award of work as per Delegation of Financial Powers may accept the tender other than the lowest provided the full contract value is within the powers delegated to him as per DFP. Further the authority while accepting the tender other than the lowest shall record the full & proper justification in the file for doing so. 4.2.6.2 SPLIT OF WORK Split of works for the purpose of inviting tenders or award of work after having invited tender should not normally be resorted to. However in exigency of work in order to adhere to the time schedule if it becomes inevitable to split the award of work - after inviting the tender for consolidated work, the approval of authority who is competent to sanction the work as a whole, to be obtained. 4.2.6.3 GENERAL The fact that the financial effect of all the conditions has been taken into account for determining the position of tenders does not mean that all conditions shall be accepted. The Officer accepting the tender has to take a decision on each individual condition regarding its acceptability or otherwise. If the conditions are not acceptable in the form in which the tenderer has stipulated them, the tenderer can be requested during negotiation to bring them into an acceptable form. But in all cases the authority vested with the Officer competent to accept a tender is restricted to carry out negotiations only with the lowest tenderer. However in all cases negotiations shall be conducted only with approval of competent authority as defined in DFP (HQI 2001). The amount of the tender which is accepted to be indicated in the acceptance letter should not, however, take the financial effects worked out by the Corporation on its own assessment. The amount should, however, include the effect of definite rebates offered by the tenderer, if these (conditional rebates) are accepted. 4.2.7 ACCEPTANCE OF TENDER AT THE MARKET RATE WITH ALLOWABLE VARIATIONS The rates at which works are awarded should be reasonable considering the market conditions and other factors pertaining to particular works. The officer of NPCIL before award of shall also ensure that the overall rates quoted by the bidder are reasonable, 57

especially in manpower intensive works, after taking into consideration the minimum wages along with income tax, service tax, VAT, overheads, profit etc. Further, Only variations up to 10% in rates received as a result of call of tenders and the rates prevalent in the market could be overlooked, due to various reasons, depending upon the market rates, the capacity of bidders, the local circumstances and the establishment of the bidder at existing unit or otherwise. Hence variation up to 10% of rates w.r.t. estimated rates may be considered reasonable. In case of variations up to 25%, full justification for acceptance of tender shall be recorded by EIC and accepted by competent authority before approving the proposal. The Officers of the NPCIL should bear the above instructions in mind while accepting the tenders for works falling within their powers of acceptance. It is not enough that the tender accepted is the lowest. In case the variations are greater than the limits set out above, approval/instructions of the competent authority as per delegation of financial powers should be obtained. Value of contract / work for the purpose of working out the variation shall be the estimated cost put to tender. The authority competent, to approve the award of work as per Delegation of Financial Powers may accept the tender above estimated cost put to tender provided the full contract value is within delegated powers to the concerned authority. 4.2.8 COMMUNICATION OF ACCEPTANCE OF TENDER (1) After the tender for the work has been accepted, the same will be communicated to the contractor in the form prescribed (Refer Annexure 4.8) after the same is duly vetted in finance. (2) The tenders for works shall be valid for 120 days. (3) The tenderers whose tenders are rejected should be sent written intimation about the rejection. Format (Annexure 4.9) to be made by EIC. (4) In case of any letter submitted by the Contractor along with the tender or thereafter, such letter may be referred and a clear indication of the fact of acceptance or rejection of the conditions mentioned in the letters of the Contractor should be mentioned in the said acceptance letter. (5) It shall be ensured that all the correspondence having financial implications, technical clarifications after opening of tender during negotiations up to final acceptance are referred in the letter of acceptance in order to avoid unforeseen circumstances and that the legality of the accepted tender is maintained. 4.2.9 PRESERVATION OF TENDER DOCUMENTS All unaccepted tenders concerning a work shall be preserved till completion of the work. The accepted tender pertaining to the work shall however be preserved for a minimum period of ten years from the date of passing of the final bill. It is suggested individual unit shall formulate its own method for preservation of such contract documents. It is however recommended such preservation be done in electronic form.

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4.3
4.3.1

SECURITY DEPOSIT AND ITS RECOVERY

RATE OF SECURITY DEPOSIT Total Security Deposit (SD) shall be calculated as under (i) Contract value up to Rs.100 Crores - 10% of Contract Value. (ii) Contract value more than Rs. 100 Crores 5% of Contract Value subject to a minimum of Rs 10 Crores. Note: The contract value for the above purpose shall be taken as the value of the contract awarded. Security Deposit as calculated based on above parameters shall be split in the following two parts and furnished accordingly; a) Performance Guarantee to be submitted on award of work (50% of Security Deposit), and b) Retention money to be recovered from Running Bills (50% of Security Deposit). The Person(s) whose tender(s) are accepted (hereinafter called the Contractor) shall submit performance guarantee equal to 50% of the total security deposit amount calculated as per guidelines given in the para 4.3.3 as Bank Guarantee, FDR from Scheduled commercial bank or any other form of deposit stipulated by the Owner, within 30 days from date of issue of work-order. Failure of the successful bidder to comply with furnishing the performance guarantee within 30 days after issue of work order shall constitute sufficient grounds for cancellation of the award of work. Retention Money shall be deducted as a percentage from Running Bills at the rate of 6% of the bill amount. Total of Performance Guarantee & Retention Money should not exceed the total Security Deposit amount calculated as per guidelines given above. When the retention money reaches the limit of Rs. 5 Lacs, if the contractor desires the same shall be converted into bank guarantee from Scheduled commercial bank. The Bid Security shall be returned after submission of performance guarantee to the successful bidder. All documents with regards to security deposit shall be maintained at the finance section of the respective unit. No interest will be paid against the security deposits. The bank guarantee is required to be verified carefully by finance department. It has been noticed that fake bank guarantees have been submitted in the past. Hence all necessary care shall be taken and cross verification be carried out as a precautionary measure. In case the bank guarantee is required to be extended, the same be taken up at appropriate time sufficient in advance before expiry of bank guarantee.

4.3.2

WAIVER OF SECURITY DEPOSIT In certain special cases such as award of works to PSUs or Government Agencies, or where period of Contract is one month and the work does not carry maintenance guarantee / post contract recovery clause or contract value is Rs. 50,000/- or less (revised time to time as per DFP) , waiver of security deposit may be considered. This shall be granted in accordance with powers delegated as per DFP (HQI-2001). 59

4.3.3

FORMS OF SECURITY DEPOSIT The Security from a contract or should be taken in one of the forms recognized by the Corporation. Conditions noted against each form of security deposit should invariably be kept in view. The recognized forms of interest bearing securities and the conditions to which they are subject to, are indicated below: Forms of Security Deposit 1) Bank guarantee 2 )Deposit receipt of all scheduled commercial banks. Conditions Bank Guarantee shall be executed in the form prescribed in Annexure. 1) The deposit receipt shall be made out in the name of the pledgee, or, if it is made out in the name of the pledger, the bank shall certify on it that the deposit can be withdrawn only on the demand, or with the sanction of the pledgee. The bank shall agree that on receiving a signed treasury challan and withdraw order from the pledgee in respect of the deposit, or any part thereof, it will at once remit the amount specified into the nearest Treasury / specified bank along with the challan and send the treasury / bank receipt to the pledgee. 2) The depositor agree in witting to undertake any risk involved in investment and make good the depreciation if any. 3) The depositor shall receive the interest when due, direct from the Bank in a l e t t e r from the pledgee authorizing the Bank to pay it to him. 4) The responsibility of the pledgee in connection with the deposit and the interest on it will cease when he issues a final withdraw order to the depositor and sends intimation to the bank that he has done so. 5) The deposit receipt should be held in custody by such officer as the local administration may prescribe. Bankers cheques / drafts may be accepted as security from private contractors / suppliers. When a contractor / supplier have furnished a cheque / draft the authorities concerned shall ensure the same is encashed immediately.

3) Bankers cheques / drafts issued by the Scheduled commercial Banks

The corporation will not pay any interest on any security 4) Cash in the form of percentage deductions deposit (retention money or performance guarantee) or any from the contractors Bills other type of retention money recovered from the contractor. only for retention money. 4.3.4 INVOKING / ENCASHING OF BANK GUARANTEE AS SECURITY DEPOSIT Invoking / encashing a guarantee by the Corporation on insufficient grounds will cause discontentment and avoidable disputes and litigation. They should be invoked only when there is a specific breach on the part of the Contractor of the terms and conditions of the relevant agreement and the bank guarantee bond and the approval to invoke the guarantee should be taken by the Engineer from SD/PD/ED. All claims under the guarantee bond should be made and lodged with the bank within the period specified in the relevant guarantee bond. This action shall be taken by the Head of the Financial Group of the unit. He shall also inform the EIC of the contract well in advance for the expiry of BG.

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4.3.5

TRANSACTION BETWEEN PSU AND GOVERNMENT In regard to furnishing of bank guarantees in respect of transactions between two public sector enterprises or between a public sector enterprise and a Government department, the following procedure may be followed: There is no need for insisting on the bank guarantee in respect of advances paid by public sector enterprises or government department to another public sector enterprise as there is no risk of the advance being lost. Since the transactions between two public sector enterprises or between public sector enterprises and the government department are of commercial nature, it would not be appropriate to exempt the public sector undertaking from furnishing the bank guarantee in lieu of security deposit for the fulfillment of the contract. In fact, such guarantee show the earnestness of the public sector enterprises for the fulfillment of the contract and in such cases the normal commercial principles should be followed. It is necessary that proper bank guarantees are furnished by public sector undertakings/enterprises for the satisfactory performance of the equipment and/or contract, as the case may be. This would ensure prompt action for rectification in case of deficiencies noticed in the execution of the contract or defective performance of the equipment.

4.3.6

FIXED DEPOSIT RECEIPTS AS PERFORMANCE GUARANTEE The fixed deposit receipts should be accepted as security when these cover the stipulated period of contract plus the defect liability period mentioned in the contract. It may, however, be seen that the Fixed Deposit Receipt is made out in the name of the Corporation and should only from scheduled commercial banks of India.

4.3.7

REFUND OF SECURITY DEPOSIT

4.3.7.1 CONDITIONS FOR REFUND OF SECURITY DEPOSIT. (i)Retention Money The security deposit shall not be refunded to a contractor except in accordance with the terms of his security bond or agreement. In, case of works executed against agreements with the standard G.C.C, the refund of Retention money of the security deposit to a contractor on the completion of works is regulated by Clause 4.3 of the GCC. This clause envisages the issue of completion certificate in terms of Clause 8.1 of the GCC. Such completion certificate shall be furnished by the EIC immediately after completion of the work. Otherwise, the date of completion as recorded in the measurement book shall be taken as the date of completion for the purpose of refund of the security deposit. The EIC, if present at the site of work on the date of completion or, in his absence, his representatives should record a certificate in the Measurement Book / of the physical completion of the work on the date the work is completed. In case where the billing is done through WCMS this certificate should be prepared and kept on record. Before refunding the Retention Money the EIC should be satisfied that the balance amount of Security Deposit (Performance Guarantee) is sufficient to cover the Liabilities. This completion certificate should be in the following form:

61

Certified that the work has been physically completed within the due date/ex tended date according to the contract, viz., that no defect is apparent and the contractor has removed from the premises on which the work was being executed, all scaffolding, surplus materials and rubbish and cleaned off the dirt from all buildings & structures, equipments and systems upon or ground on which the work was to be executed or of which he had possession for the purpose of execution thereof to the satisfaction of EIC. This is, however, subject to measurements being recorded and Quality being checked by the competent authority. EIC shall certify that cleanliness has been restored to his satisfaction. In cases this certificate is recorded by an officer other than the EIC the latter shall countersign it as soon as possible. (ii)Performance Guarantee The Defects liability period as prescribed in Clause 9.1 of the GCC will be counted from the date of physical completion as recorded in the certificate mentioned above, provided the measurements are found to be correct and quality as per technical specifications. The Performance Guarantee of the Contractor should be refunded after the prescribed defects liability period as stipulated in the agreement or after the final bill has been prepared and passed for payment whichever is later. Where ever, there is delay in payment of final bill, concerned senior officer shall make an assessment of the likely recoveries against the Contractor and order release of as much security deposit as possible unless he has reasons to withhold the security deposit of the contractor. These reasons should be recorded by him in writing based on advice of competent authority in such cases the finance group shall release performance guarantee or part thereof. In case the work is fully completed, the Engineer concerned must record the details of all peripheral items like site clearance, etc remaining incomplete on that date. Concerned senior officer should satisfy himself that the following formalities are completed by all concerned before exercising his discretionary power for part payment of security deposits. i) Formalities to be completed by the Corporations Personnel a)Completion of prescribed test checks of measurements by the Engineers concerned b)Sanction of extra and substituted items by the competent authorities c)Decision of levy of compensation, etc has been taken d)If part payment, the same is in proportion to the cost of work of the Buildings, structures etc have been put to use and equipments / systems are performing as per design intent. ii) Formalities to be completed by the Contractor a)Acceptance of final measurement recorded by the Corporation Officers b)Applying for extension of time as and when required. c)Rectification of defects pointed out by Corporation Officers d)Completion of work in all respects, including clearance of site etc. 62

e)Return of surplus material issued by the Corporation immediately on completion of work. f)Excess material procured by the contractor deposited with the corporation, if applicable g)Final material accounting completed. The Engineers should keep a close watch in case of delays in the refund of security deposit to contractors and for this purpose they should periodically review the record of Security Deposit. 4.3.7.2 RECOVERIES AND RELEASE Once the recoveries become due from the Contractor, the same should be affected from the amount due to the contractor either from the same work or from any other work or from the security deposit. Action to recover the over paid amount should not be pending or be kept in abeyance on account of the case, being before the arbitrator. Action in terms of the award can be taken after the award is received and accepted by the competent authority. The recoveries of over paid amounts should be effected as early as possible and the recovery should not be held in abeyance during the tenancy of arbitration proceeding. 4.3.7.3 REFUND OF SECURITY DEPOSIT REGARDING SPECIALIZED ITEMS: The water proofing and anti-termite treatment works shall be entrusted to specialized firms or registered Contractor and they should be asked to give a general guarantee that they shall be responsible for removal of any defect cropping up in these works executed by them within the guarantee period. The form of Guarantee to be executed by the Contractor is given in Annexure 4.10. It has further been decided that the security deducted from the bills of the Contractors shall be refunded to them after expiry of maintenance period in accordance with the terms of the contract in this behalf. The EIC shall, however, maintain a register in which all these specialized works carried out shall be entered and which shall be reviewed periodically. The register will contain the following heads 1. Name of the Work 2. Date of Completion 3. Specification in brief 4. Rate Paid 5. Name of the Firm / Registered Contractor 6. History of all defected with date noticed during the guarantee period and 7. Action Taken by the firm The history will help as a ready reference about the efficiency and quality of work done by the firm.

63

4.3.7.4 TIME LIMIT ON CLAIMS FOR REFUND OF SECURITY DEPOSIT The claim for refund of security deposit is governed, by the Limitation Act. The period of limitation is 3 years commencing from the date the right to due accrues. In the case of security deposit paid along with the individual contract, the right to due would accrue at the end of defect liability period (Clause 9 of the GCC) or payment of Final bill whichever is later.

4.4
4.4.1

EXECUTION OF AGREEMENTS / CONTRACTS

ESSENTIAL FEATURES The Board has full powers to accept tenders and is authorized to frame subsidiary rules relating to the calling for or acceptance of the tenders and the general procedures connected with the contracts for sanctioned projects. There are, however, certain general principles and guidelines laid down for acceptance of tenders which are required to be observed by subordinate authorities empowered to enter into contract or agreement involving expenditure from the Corporation. No contract shall be made by a subordinate authority which has not been directed or authorized to do so. The Corporation should be made a party to every contract and the words for and on behalf of the NPCIL should follow the designation appended below the signature of the officer authorized in this behalf and executing the contract. Terms of contract must be precise and definite and there must be no room for ambiguity or misconstruction therein. In NPCIL standard contract forms have been prescribed to avoid this contingency. The alternative conditions given in the standard forms which are not applicable to a particular contract should be invariably scored out. In case, where standard forms of contracts are not convenient to be used, legal and financial advice should be taken in drafting the contracts before they are finally entered into. No relaxation of specification in a contract or relaxation of the terms of an agreement entered into by the Corporation should be made without proper examination of the financial effect involved in consequence of such relaxation. The interest of the public exchequer should be taken due care before agreeing to any relaxation of agreement or contract. Save in exceptional circumstances, no work of any kind should be commenced without prior execution of contract documents. Even in cases where a formal written agreement is not made, no order for supplies, etc., should be placed without at least a written confirmation as to the price and other terms of contract. The terms of the contract once entered into should not be materially varied without the previous consent of the authority competent to accept tender/offer for the contract as so varied. No such variation involving payment to contractors by way of compensation or otherwise outside the strict terms of the contract or in excess of the contract rates, shall be authorized without prior approval from competent authority. A variation of the terms of contract which has been approved by such officer shall be made by writing executed for and on behalf of NPCIL by an officer who is authorized by the proper delegation to execute the original contract. An Format for an agreement is provided as Annexure 4.11 No contract involving an uncertain or indefinite liability or any condition of an unusual character should be entered into without the previous consent of CMD NPCIL. 64

4.4.2

POWER TO SIGN WORK ORDER / WORK AGREEMENT Powers to sign work order and to sign the agreement rests with 2 stages below (revised from time to time as per DFP) the contract approving authority after the contract has been approved by the competent authority. Two stages below authority will be as per seriatim of the delegation of financial power chart but not below the level of PE/SME. However, in the case of contracts approved by authority higher than SD/PD/ED the full powers to conclude the contract rests with SD/PD/ED.

4.4.2.1 RECORDING OF DATE OF AGREEMENT Where an agreement is signed after the issuance of the work order actual date of signing of the agreement shall be mentioned in the body of the agreement. In case no date is mentioned, the date of signing of the agreement shall be date of the agreement. It is reiterated that the EIC shall ensure the purchase of stamp paper well in advance and execution of agreement at the earliest after issue of work order. 4.4.3 SUPPLY OF COPIES OF CONTRACT / AGREEMENT TO CONTRACTORS An agreement with copy of documents of contract as submitted by the tenderer and all relevant subsequent correspondence exchanged between the parties including the detailed work order should be prepared and signed by both the parties. This set should be stamped original and two duplicate copies to be prepared from this original. One of the duplicate copies shall be supplied to the Contractor free of cost. Additional copies can be supplied to the contractor on payment as decided by the unit head commensurate with cost of tender. 4.4.4 CERTIFICATION AND SAFE CUSTODY OF AGREEMENTS The Corporation has decided that the following instructions should be strictly followed regarding safe custody of agreements. The original contract documents and the agreement should be kept in the custody as follows: (i) (ii) (iii) For Projects For Stations For Others - With Concerned section/ group - With Concerned section/ group - With EIC

These should be given to the Manager (F&A) whenever required by him after obtaining acknowledgment. EIC shall also forward one certified copy of the agreement to the Manager (F&A) concerned to whom the bills of the contract are being sent. Every page of the agreement should be signed by the authority competent to sign the agreement and the contractor. The EIC should supply certified true copies of agreements especially of those which contain some special and unusual conditions or clauses to the site Engineers. If for some reason or the other, it is not possible to supply copies of complete agreement, certified true copies of the special/unusual conditions or clauses along with schedule of quantities and schedule of materials should at least be supplied to concerned engineer for their information and guidance. 65

To avoid delay in finalization of accounts of contractors, a certified copy of the contract should be made available to all section heads and above as far as possible at the site of major works that would be associated with the execution of works. Where it is not possible, an extract of the agreement including schedule of quantities, rates, special conditions and specifications may be supplied. As the agreements are required to be finally completed in the office before these are signed by the designated officer, it is very important that the agreements should be properly checked and compared with the NITs as approved by the competent authority. The draft agreement shall be got duly vetted by the Manager (F&A) before the same is signed by the designated officer. Before copies of the accepted agreements are forwarded to the authorities concerned, the EIC shall ensure that they are complete in all respects. Designated officer should certify each copy, including the duplicate copy of an agreement as True copy and put his full signature in token of such certification. Also, the original as well as the copies of an agreement should be properly sealstamped in the office. These shall be preserved for a minimum period of ten years from the date of passing of the final bill of the work. 4.4.5 SUPPLEMENTARY AGREEMENTS In cases where it is not desirable to keep the complete contract open for minor items, execution of which is not immediately possible on account of certain prerequisites which is not the responsibility of the contractor, the main contract may be finalized and the residual work may be got done through the same Contractor by execution of a supplementary agreement on the form prescribed, vide Annexure 4.12. The authority competent to accept the tender, will be the authority to order provisional closure of the original contract and drawing up the supplementary agreement. The bill in relation to the work already done by the Contractor against the first or original agreement should be provisionally finalized on the final bill form by adding the words Provisional Final on the top as well as against the entry Serial Number of his Bill of the said bill form, as per condition 2 (f) of the Supplementary Agreement. The Final Bill relating to the entire work under the two agreements, i.e., original and supplementary agreements, shall be prepared after completion of the entire work on the Final Bill Form A supplementary agreement could also be entered into while the original agreement is in force to meet the special/additional requirements related to main and original contract. 4.4.6 COMPLETION OF AGREEMENTS Adequate care should be taken to complete the agreement to be entered into between the Contractor and the designated officer for and on behalf of Corporation. A complete agreement would consist of notice inviting tender(which is invariably issued by the Engineer irrespective of the fact whether he is competent to accept the tender or not), standard General Condition of Contract, or any other form used for the contract , Schedule of Quantities which indicate items of work, quantity rates, unit amount , letter of the Contractor submitting the tender, other letters of the Contractor and the Engineer before the tender is accepted, letter of the Corporation communicating acceptance of the tender, NPCIL Safety Code, Model rule for protection of health and sanitary arrangements for workers employed by the NPCIL or its contractors, Contractors' Labour Regulations, Fair Wages clauses, etc. Instances have come to notice, where there are a number of correction slips which are required to be inserted at the time of drawing the agreement and in some cases the 66

Contractors fail to sign one or more correction slips resulting in dispute and disregarding claims of the Corporation. As such special care is required to be taken to see that all corrections, additions, alterations, or slips attached to the agreements are duly signed both by the Contractor and the Engineer. Every effort shall be made to prepare and sign the agreements immediately on issue of work order. In any case signing of an agreement shall be completed within the following time limits. Work order cost Up to Rs. 100 lacs above Rs. 100 lacs but up to Rs.150 lacs above Rs. 150 lacs but up to Rs.1,250 lacs Above Rs. 1,250 lacs but up to Rs. 5,000 lacs Above Rs. 5,000 lacs Recommended Time Schedule Within 30 days from date of issue of work order Within 45 days from the date of issue of work order Within 60 days from the date of issue of work order Within 90 days from the date of issue of work order Within120 days from the date of issue of work order

KEY PERFORMANCE MEASURES

Measure Unit

1. Time taken b/w the receipt of sealed tender bids and the Days signing of final agreement. 2. Variance in the quoted rates and expected rates. Percentage 3. Average time taken to issue work orders. Days

MIS
Annual report on contractor database additions and new contractors. Variance report on rates finalised with the estimated rates.

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SECTION-5 EXECUTION & MONITORING

PROCESS OBJECTIVES
Infrastructure requirements Ensure timely handover of site and start of work Monitor and ensure proper compliance to labour regulations acts & laws, industrial safety and quality provisions during the execution of the work Ensure proper and timely issue and accounting of materials Ensure that the issue / supply and recovery of cost of materials are done according to guidelines Ensure that the sub-standard materials are rejected according to stipulated guidelines Ensure timely completion and closure of contract Ensure that all security provisions issued from time to time are complied

5.1

PROJECT INFRASTRUCTURE REQUIREMENTS

It is essential to work out the basic requirement at the project site prior to starting up a new project. This shall include the following: i) Sanction of project ii) Completion of pre-project activities iii) Allotment of land by the concerned State and physical possession iv) Finalisation of rehabilitation and resettlement plan for the project affected persons as per the applicable National Rehabilitation Policy and or Policy of the State. v) Various permissions such as clearance from the Ministry of Environment, clearance by Govt. of India and the necessary authorizations from AERB at various stages of project execution are available. Similarly, in case of major refurbishment/up gradation of operating stations, necessary authorization may be required from AERB. The site authority shall ensure timely construction of boundary walls and access roads for proposed construction site as well as for the township soon after the physical possession has been taken. The Master plan of the township shall be prepared and duly approved by the Competent Authority. The Master plan shall contain, all infrastructure facilities like boundary wall, access roads & drains, security arrangements, housing, public buildings, power & water supply system, sewage disposal system, Communication system, recreation facilities etc. The plant site infrastructure facilities includes access roads & drains, security arrangements and entry permit system, construction power supply, drinking and construction water supply, communication system, Construction Fire water system, LAN & intranet, testing laboratories, ware houses, Diesel power house for emergency power

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supply, administrative building, guard house, canteen, workshops, offsite emergency control center, Scrap dump yard (5Ha. approx), Yard for excavated material (10Ha approx.) etc. The detailed requirements for most of these infrastructure requirements are provided in the Standard Infrastructure norms (Refer HQI 8002). The construction of Nuclear Power Project involves execution of many items of work in large quantities. A list of major items and their quantities are enclosed as Annexure 5.1.

For the execution of various contracts, the Contractor requires many infrastructure facilities which include tools & tackles, plant & machinery, access roads, CAD facility, gas cylinder shed, office job shacks, shot/grit blasting facility, painting facility, canteen, open & closed storage yard, CS & SS fabrication shops, mock-up shops, cleaning & pickling facility, radiography etc. A list of major resources to be mobilized by package Contractors and its approximate quantities are provided in Annexure 5.2 for reference.

5.2
5.2.1

INFRASTRUCTURE FOR EXECUTION OF WORK

GENERAL i) Engineer-in Charge (EIC) EIC of each work is the one empowered and entrusted with the responsibility of achieving the purpose of the works in the manner specified in the contract. In the effort of fulfilling his task he would seek full cooperation and assistance from the design, QA, security, site engineers, HR, finance and accounts and the last but not the least the top management at site. It should also be noted that the Contractor is an equal partner to the EIC in the task. The EIC should have a proactive involvement in the work, plan well ahead, anticipate problem areas and work out proper approach to solve them, instruct and guide the workers at site. The EIC shall advise the Contractor to program the various activities in the correct sequence and arrange for manpower, material and machinery. To ensure a smooth cash flow for speedy execution of work the EIC shall ensure timely payment of bills for the works carried out. In this responsibility the finance and accounts shall play very transparent and supportive role which shall strengthen the EIC in fulfilling this task. A list of dos and donts for the EIC is attached as Annexure 5.3. 70

The Contractor shall nominate his representative, by sending an authorization letter, which also has the specimen signature of the representative. The representative shall have the right to sign the bills, receiving store materials and all other important communications. ii) Monitoring EIC shall develop a resource based network consisting of time schedule, human resource and the plant & machinery required to be deployed by the contractor, the pre requisites required for the execution of work, mock-ups if required, placement of orders for materials required for execution of work, availability of free issue materials to be issued by the Corporation, issue of working drawings, etc.. It is desirable that networks are prepared with suitable well known monitoring software through which the various activities of the work required to be monitored on regular basis can be identified and monitored.

EIC shall develop a monitoring structure to closely monitor all the pre-requisites of work as well as the main work at various levels and shall bring out the constraints which may otherwise delay the execution of work. He shall also keep the higher authorities informed to take timely remedial actions. iii) Works With receipt of technical sanction of the estimate, action is immediately initiated by engineer for identification of land for Contractors workshop, fabrication, storage etc. Where the scheme includes mechanical, instrumentation, electrical, air-conditioning, public health, horticultural works, etc, concerned group in respect of these portions are immediately informed and plans furnished to them to initiate further action on these items. For external services Municipal Corporation/Local Bodies/Electric Companies should be simultaneously contacted in writing. Where the Corporation has to depend upon local municipal authorities and other state agencies for provision of external services viz, roads, drains, water supply mains, sewerage, electric mains etc., matter should be taken up simultaneously for provision of these services. Provisions for such external services wherever required to be provided by the Corporation, should invariably be made in the main project estimate. Wherever construction clearances are required to be obtained from the statutory authorities, the 71

same shall be obtained before the start of work. The conditions if any shall be complied before / during the execution of the works as the case may be. iv) Land

Land is to be handed over to the Contractor for the following purposes: 1) Execution of work 2) Other work related activities: a) Contractors office, stores, workshops etc. b) Labour colony 5.2.2 LAND FOR EXECUTION OF WORK Before issue of work order, the land where the construction activities are to be taken up, shall be physically inspected by the concerned engineer and confirmed about the readiness of site to be handed over to the Contractor. The area of land to be allotted for site enabling works and other requirements shall also be identified and marked in a plan. If any obstructions, such as pipelines, electric cables, structures, sewer lines etc. are noticed, the site of the proposed allotment has to be finalized with reference to shifting of the above obstacles/realignment of the structure/building. These are to be planned well in advance before award of contract. Separate plan for Contractors colony (wherever to be provided to Contractor as per contract conditions), indicating proposed location to be allotted to the Contractor, shall be earmarked and physically verified before issue of work order. The site planning engineer shall be the nodal agency for allotment of area of site to Contractor. The EIC shall consult the Site Planning Engineer for the detailed plan before Contractor establishes the facilities at the site. 72

The land shall be allotted to the Contractor, as specified in GCC, based on the accepted requirement including land required for proper approaches, etc., on the request of the Contractor and depending on availability of the land. Internal approval from the competent authority shall be obtained before issue of allotment letter. Along with the details of the period for which the land is allotted and the process / requirements for handing over of the site after completion, the following shall invariably be added in the allotment letter. The land allotted to the Contractor is public premises, within the meaning of provisions contained in the Public Premises (Eviction of unauthorized occupants). Act 1971 and rules framed there under and that the provision of this Act shall be applicable to the subject land. The EIC should ensure that the Contractor is not permitted to enter on (other than for inspection purposes) or take possession of the site until instructed by him in writing. The portion of the site to be occupied by the Contractor shall be defined and /or marked on the site plan, failing which these shall be indicated by the EIC at site and the Contractor shall on no account be allowed to extend his operations beyond these areas. It is deemed that the Contractor has inspected and has full knowledge of the site. The EIC shall give the Contractor right of access to and possession of, part or all parts of the Site (as deemed necessary) within the time specified in the Schedule A of the GCC. If no such time is stated in the Contract, the Corporation shall give the Contractor right of access to, and possession of, the Site within such times as required to enable the Contractor to proceed without disruption in accordance with the program submitted. The Corporation may withhold the action on giving the right of access to and possession of site to the Contractor till the acceptance of work order has been received. Further the Corporation shall provide, on the request of the Contractor, such reasonable assistance or direction, which shall be limited to the issue of necessary certificates as required under law of land so as to allow the Contractor to obtain the following: (a) Copies of the Laws of the Country which are relevant to the contract, and (b) Any permit, license or approval required by the Laws of the Country which the Contractor is required to obtain as required for the execution of contract, for the delivery of Goods, including clearance through customs, and or the export of Contractors Equipment when it is removed from the Site. However, no claim shall be entertained by the Corporation against any delay in providing assistance or non-obtaining of the relevant licenses and permits as required under the provisions of the contract. 5.2.3 MODE OF HANDING OVER SITE FOR EXECUTION OF WORKS The area of the site of work for carrying out the work/structures/buildings etc. shall be handed over in writing to the Contractor. The areas shall be defined by the EIC and a marked copy of the site plan shall be furnished to the Contractor. In certain cases such as maintenance contracts where it may not be feasible to hand over the site plan, the area of responsibility for execution of works shall clearly be identified and shown to the Contractor. The Contractors shall co-operate with each other on common areas 73

allotted between various Contractors, including proper housekeeping and if any disputes arise, the decision of the Engineer shall be final. The Contractor shall take possession of site on as is where is basis. Wherever the handing over of the area of site is done part by part the above guidelines shall be adhered to for each and every part. A joint record on handing over of areas shall be kept. 5.2.4 HANDING OVER LAND FOR OTHER ACTIVITIES TO EXECUTE THE CONTRACT

5.2.4.1 LAND FOR CONTRACTORS OFFICE, STORES, WORKSHOPS ETC. The Contractor shall furnish the actual area requirement for setting up of office, stores , workshop etc. separately as given below. Area required for general storage Area required for weather protected storage Area required for fabrication shop Area required for Site office Additional area requirement, if any Total area required _________ Sq. mtrs. _________ Sq. mtrs. _________ Sq. mtrs. _________ Sq. mtrs. _________ Sq. mtrs. __________Sq. mtrs.

The area for various requirements like site office, stores, workshops etc. shall be allotted as indicated in the plan. Any development like leveling and dressing of site, construction of temporary roads, offices, workshops, etc. as per plan approved by the EIC shall be done by the Contractor at his own cost. Tentative area requirement for various construction package contractors are given in Annexure 5.4. 5.2.4.2 LAND FOR CONTRACTORS LABOUR COLONY Land if specified in GCC (Schedule A), will be given by the Corporation for the Contractors colony. Where ever applicable the Contractor may indicate the requirement of land for the colony along with his tender. Land will be made available for the period of Contract. The Contractor shall make his own arrangement for water supply, electric supply, sanitation, access road, general cleanliness, health and hygiene of his colony. All these amenities shall be got approved by the EIC prior to construction of the camp. The Contractor shall not permit any of his personnel to maintain any living quarters within the Corporations land other than the land allotted for colony. In case the land allotted for setting up the camp / colony is on lease, the contractor shall pay the appropriate municipal taxes / duties as applicable. 5.2.4.3 CONDITIONS FOR ALLOTMENT OF LAND In respect of any land allotted to the Contractor for purposes of or in connection with the Contract, the Contractor shall be a licensee subject to the following and such other terms and conditions as may be imposed by licenser:(i) that he shall pay a nominal license fee of Re.1 per hectare per year or part of a year for use and occupation, in respect of each and every separate area of land allotted to him or the rate as decided by the Corporation and provided in the Contract. (ii) that such use or occupation shall not confer any right of tenancy of the land to the Contractor. 74

(iii) that the Contractor shall be liable to vacate the land on demand by the EIC. (iv) that the Contractor shall have no right to any construction over this land without the written permission of the EIC. In case, he is allowed to construct any structure he shall have to demolish and clear the same before handing over the completed work unless agreed to the contrary. (v) that the contractor is not authorized to sub-let the land allotted to him. On completion of work, the Contractor shall handover the land duly cleared to the EIC. Until and unless the Contractor has handed over the vacant possession of land allotted to him for the above purposes, the payment of his final bill shall not be made. The Contractor shall be made liable to pay at the rate of Rs. 5,000 per week as a penalty for the use and occupation of land beyond 6 months from the date of physical completion of work. 5.2.5 POWER AND WATER SUPPLY

5.2.5.1 POWER SUPPLY The peak demand of electric power supply during construction stage of Nuclear Power Project is about 6 to 10 MVA depending upon the size of the project. This has to be worked out precisely as possible, during the planning stage and timely action to be taken to make it available for execution. Electric power, if to be supplied by the Corporation (as per the GCC) shall be provided at one point or as per agreed conditions of contract. The power supply point will be provided by the Corporation at a reasonable distance within 100 meters from the site. However, further distribution system along with panel and metering unit shall be arranged by the Contractor himself at his own cost, complying with all relevant act/regulations. Charges for energy consumed shall be as per Schedule `A'. For the purpose of planning, the estimated requirement of electric power for execution of work provided by the contractor at the time of bidding in terms of maximum demand and daily energy in kWh shall be considered. Disruption in supply or non-availability of electricity shall not entitle the Contractor for any claim for compensation either in time or money. The Contractor has been informed to (through GCC) make prior arrangements for such contingency to carry on with the work without interruption. Load required by the Contractor shall not be frequently changed. Electric power, if available can be provided to one or more places, in case in the opinion of EIC it is absolutely necessary and will accelerate the work. 5.2.5.2 WATER SUPPLY Departmental water shall be made available for if it is agreed as per the GCC. The distance of the available water supply shall not be more than 100 meters from the work site. The water charges as stipulated in Schedule A shall be recovered from the Contractor. The Contractor shall make his own arrangement for water connection and laying of pipelines from existing mains of source of supply and metering. The Corporation does not guarantee to maintain uninterrupted supply of water. It will be incumbent on the Contractor to make alternative arrangements for water at his own cost so that in the event of any temporary breakdown in the Corporations water mains, the progress of his work is not held up for want of water. No claim of damage or refund/reimbursement of water charges will be entertained on account of such breakdown.

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5.2.6

SETTING OUT THE WORK The EIC shall supply layout plan/drawings, levels and provide all necessary information to enable the Contractor to set out the works. The EIC shall make reasonable efforts to verify the accuracy of the details being forwarded before issue to the Contractor. The contractor shall also make reasonable efforts to verify its accuracy before its use and the Corporation shall not be responsible for any error at a subsequent stage. Any deviations noted while verifying the data shall be mutually discussed and issues resolved before setting out the works. The Contractor shall protect and preserve all reference baseline and bench marks used in setting out the works till end of the Defect Liability Period unless the EIC directs their earlier removal.

5.3
5.3.1

INSURANCE
REQUIREMENTS FOR INSURANCES The EIC shall ensure that the Contractor provides insurance cover in the joint names of the Corporation and the Contractor, from the date of commencement of work to the end of the Defect Liability Period. The Contractor is liable to take Contractors All Risk policy for the whole contract value. Apart from Contractors all risk policy, the Contractor shall also take insurance policy to cover third party liability for 10% of the contract value, subject to a maximum of Rs. 50Lakhs. In addition to this the contractor shall also take Workmen Compensation Policy before start of any work or work related activities. The EIC shall verify that the Contractor delivers Policies /certificates of insurance to him before the date of commencement of work. In case of failure by the Contractor, the EIC shall not release any payment against the running bill till the submission of the policies / certificates of insurance. All such insurances shall provide for compensation to be payable in the types and proportions for which these policies are intended. The EIC shall also ensure that the Contractor provides the premium receipts from time to time, as a proof that he has paid the necessary premiums for keeping the policies alive till completion of the work or expiry of the Defect Liability Period as the case may be. The EIC shall from time to time call for the policies and premium receipts pertaining to the authorised Sub-Contractor, which the Contractor shall produce or arrange to produce. Alterations to the terms of insurance shall not be made without the approval of the EIC. Both parties shall comply with all conditions of the insurance policies. All risks of loss or damage to physical property and of personal injury and death which arise during and in consequence of the execution of the Contract shall be the responsibility of the Contractor. However this shall not include excepted risks which are not covered under the above said insurance policies. All consequential losses with reference to insurance claims shall be borne by the Contractor. This shall include all expenses and differential loss due to short claim / sanction by the Insurance Company and loss of profits of the Contractor. Though the CAR policy along with third party insurance and workmen compensation policy are essential as per clause no: 15.1.1 of GCC, in certain cases like small value contracts(work costing less than 10Lacs), Service & Maintenance contracts, Development contracts and Horticultural contracts the CAR policy may not be 76

required. However this condition shall be incorporated in the Special Conditions of Contract with the approval Unit head.

5.4
5.4.1

CONTRACTORS LABOUR REGULATIONS

PROVISION OF THE ACT The Contract Labour (Regulation and Abolition) Act, 1970, applies to every establishment / Contractor. The regulations of the act applies differently for establishments/ Contractor who employs or employed workers below 20 or 20 & above on any day of the preceding 12 months as contract labour. The EIC is expected to have the knowledge of all the essential features of the act. The EIC shall ensure that all provisions (amended from time to time) of the act are fully complied with. The Act also provides for registration of establishments and licensing of contractors. As required under Section 2(i) (g) of the Act, the Ministry has decided to declare every Head of Unit of Corporation (PD/SD/ED) as "Principal Employer". Every principal employer shall make an application to the Registering officer for registration of the establishment: a) As per Rule 38 all fees to be paid under these rules shall be paid in the local Treasury under the Head of Account: 0230 - Labour and Employment. - Fees under Contract Labour(Regulation and Abolition) Central Rules, 1971 (Central) and a receipt obtained which shall be submitted with the application or the memorandum of appeal, as the case may be. b) The fees to be paid for the grant of Certificate of Registration under Section 7 as prescribed by respective State Governments. In pursuance of Section 12 of the Act , no Contractor to whom the said Act applies, shall undertake or execute any work through contract labour except under and in accordance with a license issued in that behalf by the, Licensing Officer.

5.4.2. PROVISIONS AND PENALTY FOR NON-COMPLIANCE OF LABOUR LAWS AS PER THE GCC The Contractor and his authorized Sub-Contractors shall abide at all times by all existing labour enactments and rules, regulations, notifications, amendments and bye laws etc. issued by the State or Central Government or local administrative authorities applicable therein issued from time to time during the subsistence of contract. The Contractor shall keep the Corporation indemnified, in case any action is taken against the Corporation by the competent authority on account of contravention of any of the provisions of any Act or rules made there under, regulations or notifications including amendments. In the event of the Contractor committing a default or breach of any of the provisions of the aforesaid Contractor's Labour Regulations as amended from time to time the corporation may impose penalty for each of such default as necessary. The EIC shall deduct such amount from bills or security deposit of the Contractor. The decision of the EIC in this respect shall be final and binding. The employees of the Contractor and the Sub-Contractor in no case shall be treated as the employees of the Corporation at any point of time. 77

List of some of the Major laws applicable to establishments engaged in building and other construction work are listed below. For details, latest versions of relevant Acts and laws should be referred. Workmen Compensation Act, 1923 Payment of Gratuity Act, 1972 Employees P.F and Miscellaneous Provision Act, 1952: Maternity Benefit Act, 1951: Contract Labour (Regulation & Abolition) Act, 1970 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1979 Payment of Bonus Act, 1965: Industrial Disputes Act, 1947 Child Labour (Prohibition & Regulation) Act, 1986: Inter-State Migrant workmens (Regulation of Employment & Conditions of Service) Act, 1979 The Building and Other Construction workers (Regulation of Employment and Conditions of Service) Act, 1996 and the Cess Act, 1996 Employees State Insurance Act, 1948 Atomic Energy Factories Rules, 1996

Contractor shall at his own expense comply with or cause to be complied with the provisions of all labour laws or rules framed by the Government from time to time for the protection of health and for making sanitary arrangements for workers employed directly or indirectly on the works. In case the Contractor fails to make arrangements as aforesaid, the EIC shall be entitled to do so and recover the cost thereof from the Contractor. Failure to comply with the model rules of labour welfare (as annexed part of GCC) and to grant of maternity benefits to female workers, the Contractor shall be liable to pay to the Corporation as penalty an amount not exceeding Rs.5000/- for each default or materially incorrect statement. The Contractor shall be liable to pay his contribution and the employees contribution to the State Insurance Scheme in respect of all labour employed by him for the execution of the Contract, in accordance with the provisions of "The Employees State Insurance Act, 1948" as amended from time to time. The Contractor shall submit to the Corporation the copy of monthly challans of payments made for PF and ESI. The EIC shall have the powers to deduct any sum from the amount due to contractor for making good the loss suffered by worker(s) by reason of non-fulfilment of the conditions of contract or non-payment / short payment of wages or non-observance of 78

the Labour laws / regulations. In every case in which by virtue of the provisions sub-section(1) of Section 12, of the Workmen's Compensation Act,1923, the Corporation is obliged to pay compensation to a workman employed by the Contractor, in execution of the works, the Corporation without prejudice to its right under sub-section (2) of section 12 of the said act, shall be at liberty to recover such amount or any part thereof by deducting it from the security deposit or from any sum due by the Corporation to the Contractor whether under this contract or any other contract at the same unit or any other units of the Corporation. The decision of the EIC in such matters based on reports from the Inspecting Officers as defined in the Contractor's Labour Regulation shall be final and binding and deduction(s) for recovery of such penalty may be made from any amount payable to the Contractor. 5.4.2.1 WORKMEN FROM FOREIGN COUNTRY The Contractor may depute in to the country foreign personnel who are necessary for the execution of the Works to the extent allowed by the applicable Laws. The Contractor shall ensure that these personnel are provided with the required residence visas and work permits. The Corporation will, if requested by the Contractor, use its best endeavours with regards to issuing of necessary letters in a timely and expeditious manner to assist the Contractor in obtaining any local or government permission required for bringing in the Contractors personnel. EIC is expected to ensure that the applications are forwarded to administrative ministry (DAE) well in time to obtain clearances. The foreign personnel shall have to comply with all the security procedures of the corporation. The responsibility of the return of all such staff and labour to the place from where they were recruited or to their domicile remains with the Contractor. The Contractor shall be responsible for their lawful stay till the time they leave the country. EIC shall inform in writing that the workmen of foreign country follows the rules and regulations of the land and do not indulge in any wrongful act during their stay. EIC is also expected to ensure that their Passports and Visas are valid for sufficient period. EIC shall further ensure that returns with regard to foreign nationals are submitted in time to HQs in the prescribed format. 5.4.3 LIST OF ACTS / OMISSIONS The list of Acts and Omissions for which fines can be imposed on workers by contractors is given in Annexure 5.5. 5.4.4 MINIMUM WAGES Wages means wages as defined under the provisions of Section 2 of Payment of Wages Act, 1936, and amended from time to time and subject to Section 12 of Minimum Wages Act, 1948. In case of difference in minimum wages notified by the state and central government, the higher wage shall be considered for payment. The wage payment shall be subject to conditions laid down in Para 5.4.6 below. EIC is expected to know all the components of wages which are liable to be taken into account while estimating for technical sanction. EIC is also expected to know the various components of wages like Minimum wages, Bonus, EPF etc. which may have to be paid by the principle Employer incase of default by the Contractor. The Contractor, under such circumstances shall be issued warnings and the amount if 79

disbursed by the Corporation shall be recovered from Contractor at the very first opportunity. It is the duty of the concerned officer of Corporation (Manager HR ) to make enquiries about non-payment of wages for preventing wage claims of contractors' labour falling in arrears. For this purpose, it is essential that he makes frequent site inspections as this is the only way of contacting labour in the field and thus preventing wages falling in arrears. Any case of accumulation of arrears should be specially brought to the notice of EIC for enquiry. The responsibility for identification of labour rests with the concerned officer. The EIC shall provide all necessary assistance to him. 5.4.5 RESPONSIBILITIES OF EIC In order to ensure regular payment of wages to the labour by the Contractor, the EIC or his authorized representative concerned shall have the right to deduct from the money due to the Contractor any sum required or estimated to be required for making good the loss suffered by a worker, non payment of wages or of deductions from his or their wages which are not justified by the terms of the contract or non-observance of the labour regulations. In view of this provision and other provisions of Wage Clause as embodied in the agreement, it is incumbent upon the Engineer to see that the labour employed by the contractor is paid regularly and no arrears are allowed to accumulate on this account. For this purpose they should see that the returns prescribed are duly submitted by the Contractor and they should scrutinize them with a view to see that the Contractor is duly fulfilling the conditions of the contract. They should also get in touch with the Manager (HR) frequently and make independent enquiries whether payment to them is being made by the Contractor regularly and that there are no arrears on this account. In case the Manager (HR) advises the Engineer for withholding necessary amount from the Contractor's bill in a particular case and his advice is not implemented by the Engineer, the case must be reported in writing immediately to the next higher authority concerned. It is also incumbent on the Engineer to extend maximum cooperation to Manager (HR). Similarly, in case the Engineer finds it difficult to take action on the advice tendered by the Labour Officer, under Contractors Labour Regulations for any reasons, the matter should immediately be reported to the next higher authority concerned. 5.4.6 RESPONSIBILITIES OF CONTRACTORS a) The Contractor shall comply with all the provisions of Minimum Wages Act, 1948. Contract Labour (Regulation and Abolition) Act, 1970 and rules framed there under and other labour laws affecting contract labour that may be brought into force from time to time. b) It shall be the duty of the Contractor to ensure the disbursement of the wages in the presence of the Engineer or his representatives who will be required to be present at the place and time of disbursement of wages by the Contractor to workmen. c) The Contractor shall obtain from the Engineer or his representatives as the case may be, a certificate under his signature at the end of the entry in the prescribed 'Register of Wages' or the 'Wage-cum-Muster Roll' as the case may be, in the following form:"Certified that the amount shown in column No.__ has been paid to the workman concerned in my presence on _____________at _________________. 80

5.4.7

DEDUCTIONS TO BE MADE FROM CONTRACTORS BILLS a) Manager (HR) or other persons authorized as aforesaid shall submit a report of result of his investigation or enquiry to the Engineer concerned indicating the extent, if any, to which the default has been committed with a note that necessary deductions from the Contractor's bill be made and the wages and other dues be paid to the labourers under these regulations. Actual payment to labourers will be made by the Engineer after the authorisation by competent authority. b) The EIC shall positively arrange payments to the labour concerned within 45 days from the receipt of the report from the Manager (HR) or the concerned authorised officer as the case may be. c) The Contractors in the Corporation are required to pay to the labour employed by them either directly or through authorised Sub-Contractors, wage as defined in the Contractors' Labour Regulations or as per the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the rules made there under.

5.4.8

PROCEDURE IN CASE OF ACCIDENT In respect of any accident occurring at the site the procedure and guidelines issued by AERB and Directorate of Health and Safety, NPCIL shall be followed. The formats for reporting various types of accidents shall be as given in HQI 7018 (Guidelines for reporting & investigation of Industrial accidents and near miss accidents) revised from time to time.

5.4.9

LABOUR WELFARE Contractors shall take all measures for labour welfare as detailed in various acts / laws (refer para 5.4.2) and General Conditions of Contract (GCC). The salient features on labour welfare measures which are to be provided include: a) First Aid facility b) Accommodation for Labour c) Drinking water facility d) Washing and bathing places e) Latrines and Urinals f) Shelter during rest g) Crche facility h) Canteen i) Anti-malarial precautions etc.

5.5

CONTROL & ISSUE OF DRAWING

The site construction activities are carried out as per approved documents. The design drawings & specification for all the permanent plant items are prepared and approved by Engineering Directorate & are made available to the Project. 81

Similarly DCNs (Design Change Notice) ECNs (Engineering Change Notice) issued by Engineering Directorate and FCNs (Field Change Notice) & ECNs issued by field Engineering section at Project are also made available to the Site Planning group at Project for issue / distribution and control. Drawing office under Site Planning group is the nodal agency for registration, distribution, storage and preservation of all Engineering drawings and documents as stated above. A typical construction drawings management manual for project is attached as Annexure 5.6.

5.6

ISSUE OF MATERIALS BY CORPORATION

The following guidelines shall be followed for all materials declared to be issued by the corporation as per the provisions of the contract.

5.6.1

GENERAL GUIDELINES FOR ISSUE OF MATERIALS TO CONTRACTOR In case the Corporation undertakes to supply materials to contractor, full description of materials and also its condition should be indicated in the relevant conditions/paras of agreement with a view to safeguard the interest of the Corporation. The Engineer should not make any provision in the tender for supply of materials by the Corporation to the contractor, if the materials are not available for issue from the stores. While inviting tenders the provision for issue by the Corporation of only those materials should be made which are available or of which there are reasonable chances of availability, so that the necessity for suspension of work or delay in its execution may not arise.

5.6.1.1 UNSTAMPED RECEIPT (USR) FOR THE ISSUE OF MATERIAL An unstamped but dated acknowledgment detailing full particulars of the materials including rates and value chargeable to him should immediately be taken from the Contractor as soon as any materials required for issue to the Contractor is made over to him. Similarly, USR for free issue materials should also be taken from contractor. 5.6.1.2 ASSESSMENT OF QUANTITY OF MATERIAL TO BE ISSUED It should be clearly borne in mind that stores/materials issued to the Contractors under the terms of their contract are intended for the exclusive use and consumption on the work, for which these are issued. There is inherent risk of their pilferage and misuse if such stores are issued in bulk to Contractors long before to the time of actual requirement. It should be ensured that the materials are not issued to contractors arbitrarily and without keeping a record of the actual requirements at the site. To safeguard and prevent such invisible losses to the Corporation, it is essential that issues to Contractors should be regulated and restricted to actual requirements only. It should be ensured that proper cutting plans are prepared and the likely wastage is predetermined for most economic usage of material. 5.6.2 PREPARATION OF CONTRACTOR ISSUE VOUCHER (CIV) Material required to be issued to the Contractor either on chargeable or free issue basis should be issued through the Contractors Issue Voucher (CIV) in the form prescribed by Contracts and Materials Management (C&MM). The CIV book for drawing materials should be drawn from C&MM and kept in safe custody in the office of the EIC of the work. It will be preferable to use a separate book of CIV for each contract so the continuity of the CIV numbers can be maintained for preparation of material 82

accounting. The CIV should be authorised by the EIC of work or his authorized representative who holds the authorisation for draw of material from the stores. While authorizing the CIV by the EIC or his authorised representative as the case may be, the signature of the contractor or his authorized representative for draw of required material for the particular item/work should be obtained on CIV at appropriate place by the EIC and it should be attested by him or by his authorised representative as the case may be before CIV is sent to stores for draw of material. CIV should be handed over to only authorized official of the contractor. All the columns of header portion of CIV should be filled in with the Contractors name, work order number and date, description of work, Account code to which material issued is debitable and chargeable or free issue, if chargeable, the rate at which it is to be charged. The detailed procedure in force at site shall be adhered to for draw of material from stores. The Material issued to contractor should be recorded in the WCMS. 5.6.3 EXCESS ISSUE BY THE CORPORATION It is the responsibility of the EIC of the work to ensure that the materials are not issued in excess of the quantities actually required. In order to have better control and also to have equal distribution of material to all the Contractors, if more than one Contractor is in need of such particular material for the work, the reasonable Quantity required for smooth execution of the job should only be issued. In this regard, the instructions issued by the authorities shall be strictly adhered to by the EIC. 5.6.4 ISSUE OF MATERIALS FROM STORES Manager(Materials) should exercise all the checks as stipulated in material issue procedure issued by Executive Director, C&MM from time to time, at the time of issue of stores to Contractor/or his representative on CIV. Issue of materials to Contractors with whom agreements in respect of completed items of works i.e., for both labour and materials, have been entered into, the material shall be issued on Contractor Issue Voucher (CIV). 5.6.4.1 ISSUE OF MATERIAL WHEN STIPULATED IN CONTRACT The issue of materials to the contractors is generally permissible only in the following circumstances:i) When it is necessary to retain in the hands of the Corporation supply of special materials / equipment/ component. ii) When in the interest of work or with the object of utilizing the existing stocks of materials, it is desirable to retain in the hands of the Corporation the supply of specific materials / component/equipment. In both cases, the contract should clearly specify; 1) The materials to be supplied by the Corporation for use on the work. 2) The place or places of delivery, and 3) The rates to be charged to the Contractor for each description of material if issued on chargeable basis. 4) Transportation, loading and unloading responsibilities.

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The Contractor shall be responsible for obtaining from NPCIL all such materials required for the work and for making payment by deduction from his bills, & the rates specified, regardless of fluctuation in the market rates or in the stock rates of the Unit. Conditions for supply of materials by the Corporation should be so explicit that no doubt or ambiguity is left which may encourage the Contractor to derive undue financial benefit subsequently. The tender documents should include the specific items of work for which materials are intended to be issued by the Corporation with detailed description of materials. Full description including technical details of the material shall be clearly indicated to ensure that same materials/fittings as issued by the Corporation are kept in safe custody by the Contractor at all times and used on the works for which these are issued. The storage procedure shall be prepared by the Contractor and approved by the EIC for safe storage of material. Unstamped receipt for materials issued to Contractors should not be treated as mere formality. The acknowledgments for money or moneys worth carry equal importance. It should only be taken in Form prescribed. Taking receipts on loose papers or forms printed by private agencies which do not incorporate the specified columns or detail, generally result in loss to the Corporation and as such to be avoided. The materials which are available in stock with the Corporation and intended to be supplied by the Corporation, for use in the work where Contract is for completed items of works i.e. for both labour and materials, should be indicated in Section VII of tender document with proper specification of the material, place of issue, firm rate at which it is to be issued and estimated quantity. In case the material to be issued free of charge, a specific mention to this effect to be made in Rate Col. of Section VII against particular item. The stores which are available through import or are critical in nature, should be supplied to the contractor by corporation with due care and special conditions for such materials should be indicated in section VII of the tender. Note l: The rate charged to the contractor for material to be supplied should be clearly specified (vague provision i.e. at stock rate should not be mentioned). Note2: The rate for the above purpose should cover basic cost, excise duty/Custom duty, packing and forwarding cost, VAT, Octroi charges, handling charges and freight plus storage charges, as specified form time to time. This should be specifically mentioned in the tender document. Please note that these rates may vary from place to place. Note3: No carriage charges or incidental charges to be borne by the Corporation for moving the materials beyond the place where the contract specifies the place of delivery of the materials. 5.6.4.2 ISSUE OF MATERIALS WHEN NOT STIPULATED IN CONTRACT As a general guideline, materials supply to the contractor should be avoided to the extent possible, unless stipulated in the contract, for use on works. However in the circumstances when the specific material is not available in the market but the same is available in the stock with the Engineer, the above restriction may be considered for waiver by SD/PD/ED on case to case basis provided a request is made by the contractor for issue of such material for use in the work for which he has been given the contract. The EIC, in consultation with the concerned officer should finalize in each case, the rate to be charged for the materials inclusive of delivery at the place where they are stored. While submitting such a case the Engineer should elucidate the circumstances which gave rise to this contingency and should also add his 84

recommendations in respect of the recovery rates for such materials. It shall be ensured by the EIC that rate proposed to be charged should be as per rate calculated and no carriage or incidental charges should be borne by the Corporation in connection with the supply. Issue rate for materials to be issued shall include the following: a) b) c) d) e) f) g) h) i) Basic cost, plus Excise duty / Custom duty as the case may be, plus Packing forwarding charges plus (2.5% of (a) and (b) unless otherwise specified in PO) VAT, plus Octroi charges, any other charges of similar connotation, plus Insurance charges plus, Handling and storage charges at actual, otherwise 4% of aggregate value arrived at (f) above, plus Freight / Transportation charges at actual, otherwise 5% of the aggregate value arrived at (f) above plus Overheads at the rate 30% or as specified form time to time.

The issue rate so calculated above or the present prevailing market rate (date of use of material in work shall be the base date to compare with market rate) or the rate quoted by contractor in schedule of quantities and rates for material portion whichever is higher shall be charged from the Contractor. However, in exceptional cases when material is available with Corporation and its condition is getting deteriorated due to long storage and also where issue rate as above is more than the prevailing landed market rate (this excludes overheads at the rate 30% as indicated under para (j) above) at the time of issue, material of such category may be supplied at the prevailing landed market rate after approval from respective Director with financial concurrence of GM(F) / ED (CF). 5.6.4.3 DIRECT ISSUE TO WORKS AGAINST LABOUR CONTRACT Issue of materials when work is done departmentally or by contractors whose contract are for labour only, shall be done through material issue voucher (MIV) or issue through sectional stores. 5.6.5 RETURN OF SURPLUS MATERIALS SUPPLIED BY THE CORPORATION/CONTRACTOR

5.6.5.1 RETURN OF MATERIAL SUPPLIED BY THE CORPORATION AND ADJUSTMENT OF COST The surplus material, arrived after the preparation of material account for the entire material issued by Corporation either on chargeable basis (as per the rates specified in contract) or free of charge i.e. after allowing the normal wastage on actual consumption shall be returned by the Contractor and the same shall be credited by the Engineer to stores through Contractor Credit Voucher (CCV). On being required to return the stores/materials, the Contractor shall hand over the stores/materials on being credited such price as the EIC shall determine, having due 85

regard to the condition of the stores/materials. The price allowed to the Contractors, however, shall not exceed the amount charged to him. 5.6.5.2 MATERIAL PROCURED BY CONTRACTOR AND SURPLUS THEREOF Surplus materials, which were originally procured by the Contractors as per the contract can also be taken over by the Corporation, if required for use on other works and at contract rates or market rates, if not specified in the Contract. SD/PD/ED shall have full powers to decide about accepting surplus material which was originally procured by contractor as per the contract terms. The material procured by Contractor willfully in excess of quantities/requirement as per work order issued to him may not be accepted by NPCIL if found surplus. The Contractor, on the request of EIC, shall maintain and submit material accounting for the materials procured by him. The material account must be submitted as and when required by the EIC and on completion of the contract. The retention money shall be released only after completion of material accounting. Note: Contractors are, however, not at liberty to remove from the site of works, without the written permission of the Engineer, materials which have been issued to them for use on a work and stipulation to this effect should invariably be incorporated in their agreement. 5.6.6 REMOVAL OF SUBSTANDARD MATERIALS The following procedure should be followed in case of removal of rejected/substandard materials from the site of work: i) Whenever any material brought by the Contractor to the site of work is rejected, entry thereof should invariably be made in the Site Order Book under the signature of the EIC giving the quantity of such materials. The rejected material shall be immediately quarantined and sent out of the plant premises. ii) As soon as the material is removed, a certificate to that effect may be recorded by the EIC against the original entry, giving the date of removal and mode of removal, i.e. whether by truck, parts, or by manual labour. If removal is by truck, the registration number of the truck should be recorded. iii) When it is not possible for the EIC to be present at the site of work at the time of actual removal of the rejected/sub-standard materials from the site, the required certificate should be recorded by his authorized representative and the EIC should countersign the certificate. a) In order to discourage Contractors from executing sub-standard work, no allowance is to be given for the materials issued for rectification of defects. The materials issued on this account are to be treated as part of the total issue of materials to the Contractor for the purpose of working out the difference of theoretical consumption, total issues and the recovery. b) If, however, it becomes necessary to issue materials/components for rectification of defects or for redoing works necessitated due to natural calamity beyond the control of a Contractor, i.e. floods, earthquakes, etc., such issues should be treated as legitimate consumption on works and should not be charged at penal rates. On the question whether redoing of work or rectification of defects, in a particular case, been necessitated by natural calamities, etc., the decision of the SD/PD/ED will be final.

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5.6.7

ACCOUNTING AND RECOVERY OF MATERIALS ISSUED

5.6.7.1 PROCEDURE TO WORK OUT THEORETICAL CONSUMPTION OF MATERIAL ISSUED BY THE CORPORATION The Contractor shall account for all materials issued as free / chargeable by the Corporation. The material account must be submitted as and when required by the EIC and on completion of the contract. Retention money shall be released only after completion of material accounting. The actual consumption of quantity of materials shall be calculated based on the measurements with reference to the standard formula /Bureau of Indian Standards/approved cutting plan as applicable on the basis of drawings and specifications. The permissible returnable wastage and invisible wastage shall be as per schedule B of the GCC. The Contractor shall prepare and submit reconciliation statement indicating the quantities of material issued to him and/or procured by him and the quantities of material consumed as per design and drawings including permissible wastage to the satisfaction of the EIC within 15 days of the issue of written notice by him. The Contractor shall be liable to be charged penalty in addition to the cost of material at market rate landing at NPCIL stores incase he fails to submit the reconciliation statement and/or deposit the excess material issued to him over the theoretical consumption including the permissible wastage, back to the NPCIL stores. Although the contract provides for comparison of actual consumption of material issued to the Contractor and theoretical consumption after the completion of the work, the Engineer should keep broad check on the consumption of material at various intermediate stages of work to ensure most economical usage of material. EIC should also ensure that there is no pilferage and misuse of materials. The theoretical consumption statement for consumption of material on the work executed from the start of the work up to the work included in the bill should invariably be prepared along with every running bill. This should be got signed from the Contractor at the time of obtaining his signature on the running account bill so that he is aware of the basis on which the theoretical quantity of material is worked out and it may be possible for the Contractor as well as for the Corporation to exercise a check over the consumption of material during the execution of the work. The theoretical quantity (for all types of material issued on chargeable or free) so worked out should be compared with the actual issue of material as per issue records as on the last date of measurement of the work. Should there be any difference beyond the normal limits of the variations between these two quantities, such difference should be properly explained both for less or more consumption and the Engineer should investigate into such explanations and give his directions about the actual progressive recovery to be made from bill. Following are the few recommendations on issue of material: a) Cement :- It would be desirable to check stock of the cement godowns before a fresh CIV of cement is issued to the Contractor. b) Steel :- Theoretical consumption statement for steel bars should be preferably prepared along with every running bill. Should there be any case of issue being less or just equal than the actual consumption this should be properly investigated. If such issue is very much higher than the consumption, it should be generally ensured that 87

balance steel is available at site in good condition and this should be certified by the Engineer. The issue of reinforcement or structural steel should not be made too much in advance of the actual requirements at site. Normally, issue should not exceed beyond the requirements of the next two/three months at the site. However, depending on the type and importance of the work, availability and scarcity of steel, if more quantities are required to be issued in advance for any particular work, this should be done with specific approval of the concerned authority. The steel issued to the Contractors should be properly stacked at the site in a proper accountable manner till it is consumed in the work. c) Other materials :- Similar precautions should be taken in the case of all other materials issued by the Corporation Unit. 5.6.7.2 RECOMMENDED VARIATIONS PERMISSIBLE ON THEORETICAL QUANTITIES.
Material Maximum Invisible wastage (non returnable) % Maximum permissible wastage (Returnable in case of free issue) %

Cement for works with estimated cost put to tender not more than Rs. 5 lakhs Cement for works with estimated cost put to tender more than Rs.5 lakhs Bitumen Steel Reinforcement * CS Structural and plates* CS Pipes SS Pipes GI Conduit / SS tube GI Sheet Cables All other Material

3%

NIL

2%

NIL

2.50% 2% 3% 2% 1% 1% 3% 1% Nil

NIL 5% 7% 4% 4% 4% 7% 2% Nil

* The permissible variation shall be finalized and got approved by unit head before inviting the tenders. 5.6.7.3 DEFINITION OF SCRAP Items and materials of the following limiting dimensions shall be treated as scrap: i) CS/GI pipes 50 mm dia. and below pipe pieces less than 2 meters in length. ii) SS pipes 50 mm dia. And below SS pipe less than 0.5 meter in length. iii) Structural steel sections less than 1 meter in length. iv) In respect of plates having thickness 20 mm & below, the size of plate having dimension 1 mtr x 1 mtr & below. In case of plates having thickness of above 20 mm, the size of plate having dimension 1 mtr x 0.5 mtr & below may be considered as scrap. v) CS/GI/SS pipes, all sizes above 50 mm dia. Pipe pieces less than 0.5 mtr in length. 88

vi) GI sheet less than 2 mtr x 2 mtr size. vii) GI Conduit / SS tubes of various sizes of length less than 3 meters. viii) Power and control cables of various types and sizes of length less than 50 meters. ix) Wires of different types and sizes of length less than 20 meters shall be treated as scrap. x) Pipe fittings & valves, lighting fixtures & receptacles and other similar items shall not be accepted as scrap. However, the welded fittings and valves etc. above 50 mm dia, which are rendered surplus by virtue of change in layout, drawings, errors etc. shall be deposited to the engineers stores after the edges have been prepared by the contractor without any extra charges. In case, the contractor fails to prepare the edges, an amount equal to the cost of edge preparation as mutually agreed upon will be recovered from the contractors bill at the rates prescribes in schedule of quantities &rates. For any other item/ material not covered above, the sizes of scrap will be mutually agreed as per the industry practices. 5.6.7.4 COMMENCEMENT/METHOD OF RECOVERY OF COST OF MATERIAL ISSUED TO THE CONTRACTOR The recovery from a Contractor on account of the cost of materials issued to him on chargeable basis, for use on a work should be effected progressively as the materials issued to the Contractor are actually used in construction and the items of work in which they are used are paid for, whether by an advance payment or by an onaccount payment. Such quantity shall include permissible wastages for recovery. 5.6.7.5 METHOD OF RECOVERY OF COST OF MATERIAL USED BEYOND PERMISSIBLE LIMITS The exact proportion in which the materials are to be used by the Contractor for which he has tendered for finished items of works is laid down in the specifications. Theoretical quantities of the materials which should have been used by the Contractor on execution of the work should be calculated based on the measurements with reference to the standard formula / Bureau of Indian Standards / approved cutting plan as applicable on the basis of drawings and specifications. Difference of theoretical consumption and the total actual issues, not returned by the Contractor, shall be recovered at the prescribed rate after allowing variation allowed therein. The excessive variation in consumption of material which was issued by the Corporation for use in works either on chargeable or free of charge basis, the recovery of cost for such excessive variation shall be made from the Contractor at the net landed cost to NPCIL with penalty as decided by the head of the Project/ Station. In case of negative variation i.e. required quantity of material was not consumed during the execution of the work, a justification to the effect shall be obtained from the contractor. The EIC shall assess and take decision against the justification provided, and if not satisfied declare the work as sub standard work and the relevant clause shall be applicable and dealt with. 5.6.8 MATERIALS / EQUIPMENTS COVERED UNDER THE SCOPE OF PACKAGE CONTRACTOR The acceptance of materials /equipments covered under the scope of package contractor and its storage & issue shall be governed as per the procedure detailed in Annexure 5.7.

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5.7

PLANT & MACHINERIES

The suggested list of Plant & Machinery including the heavy duty cranes which NPCIL should have is enclosed as Annexure 5.8. List also includes the special tools being used by the Reactor Erection Group for Coolant Channel jobs of PHWR reactors, Alignment Equipments and items of Concrete Test Laboratory, Control and Instrumentation Lab and RT Lab etc.

5.8
5.8.1

ISSUE OF TOOLS AND PLANTS

CONDITIONS OF ISSUE When tools and plants (T&P) are available for issue to the Contractor for bonafide use on works of the Corporation, the Engineer should ensure invariably to stipulate a provision for the supply of such T&P in the contract documents specifying clearly the hire charges. Before making such a stipulation, the availability of the T&P is to be ascertained. Advance intimation to unit concerned should also be given for arranging the T&P at the proper time. In exceptional cases, where T&P are hired out to the Contractor without being provided for in the agreement, the hire charges should be worked out as per the guideline in para 5.8.2 and got approved by the unit head.

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5.8.2

CALCULATIONS OF HIRE CHARGES The following procedure should be adopted in determining the hire and other charges when T&P are lent to Outsider/ Contractors:As a matter of principle, only such T&P should be issued to Contractors or others, as can be spared without inconvenience to the Corporation. The recovery should cover the following charges:a) INDIRECT CHARGES CAPITAL COST: It should be either present value of original Purchase price (P) including fright considering the cost inflation index notified by GOI from time to time. OR Replacement cost i.e. present market price inclusive of all taxes, duties, fright, etc., whichever is less. The present value of original purchase price may be calculated as under:CI-1 P = C x CI-2 Where C - Original purchase price CI-1 - Cost inflation index of the last year CI-2 - Cost inflation index for the year, of purchase. i) Depreciation 10% of Capital cost per year. Per hour rate will be calculated based on 240 working days/year and 8 hours of working per day. ii) Return of Investment 16% p.a. on capital cost. For per hour rate same rule as above is applicable. b) DIRECT CHARGES i) Fuel Lubricant ii) Repairs and Maintenance Actual charges 30% of Depreciation for normal working hours and 45% Depreciation for overtime. 91

iii) Manpower charges

Actual cost (including Salary, HRA, CCA, EPF, Medical, LTC, EL encashment, etc.) during normal time and double rate for overtime. The direct and indirect cost on manpower shall be taken into account.

In addition to above, taxes as applicable shall be levied on the hire charges. Normal working hours will be from 0800 hrs to 1600 hrs (inclusive of the one hour lunch break). Beyond these hours, rates shall be worked out considering the overtime charges for manpower. When tools and plants are to be hired to outside parties or to the contractor when not specified in the contract, 10% overheads & profits shall also be charged over and above the charges mentioned above. 5.8.3 TERMS AND CONDITIONS TO ISSUE PLANT AND MACHINERY ON HIRE 1) Plant and Machinery when supplied on hire charges shall be handed over and taken back at the NPCILs stores and the party shall bear the cost of carriage from the place of issue to the site of work and back. The Contractor shall be responsible for return of the T&P in the condition in which it was handed over to him and he shall be responsible for all damages caused to the said T&P at the site of work or elsewhere in operation and otherwise during transit. 2) The hire charges shall be for each day of 8 hours (inclusive of the one hour lunch break) or part thereof. 3) Hire charges shall include service of operating staff as required and also supply of lubricating oil and stores for cleaning purpose. 4) The period of hire shall be reckoned from the time of issue up to the time of return (including all holidays) irrespective of the actual hour of use. 5) In case the equipment is allowed to be taken out from the unit premises on hire, a suitable insurance coverage for the equipment should be obtained from the Contractor before allowing the equipment to be taken out. Permission of unit head is required in such cases. 5.8.4 BILLING AND ACCOUNTING OF HIRE CHARGES OF T&P With a view to streamline the procedure for billing, collection and accounting of hire charges of T&P of the Units the following procedure should be followed by all the Units. 1. The Unit at which the equipment has been capitalized will be the custodian of the equipment. 2. The respective unit shall prepare a list of equipments which are under their custody and are likely to be hired out.

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3. Hire charges of all such equipments shall be worked out/revised every year based on the guidelines as per 5.8.2 (Calculation of hire charges) above. 4. Copies of all statement of hire charges along with approval for charges fixed/revised shall be forwarded to finance group of Corporate Office or site, as the case may be, by the respective unit. 5. Requisition for hiring will be received and the equipment will be hired out by the custodian with proper agreement indicating the conditions for hiring etc. 6. Hire charges at the rates approved from time to time will be billed on the Contractors through EIC by the custodian of the equipment by effecting recovery from RA bills. Under exceptional cases and for emergency works, T&P may be provided to the Contractor as a free issue material, however prior permission shall be obtained from Unit head with full justification.

5.9
5.9.1

EXECUTION OF WORK
PLANNING The EIC shall spend adequate time in understanding the specification of work and planning the activities of work. He shall plan the work schedules and the necessary actions to be initiated by his representative and the Contractor on a timely basis. Availability of adequate resources and use of the technology/ software e.g. primavera /MS Projects and the readiness of the networks should be part of the planning.

Planning for manpower requirement and material procurement for the purpose of the Contract should also be worked out and followed up on regular basis to ensure timely completion of the milestones / entire work in line with the overall completion schedule of the project. A daily /weekly/fortnightly/monthly schedule for the work shall be prepared and EIC shall ensure that additional resources (Manpower, T&P etc.) are mobilized and deployed to avoid / make up delays. 5.9.2 SCOPE OF SANCTION The authority granted by a sanction to an estimate must be on all occasions be looked upon as strictly limited by precise objects for which the estimate is intended to provide. Accordingly, material deviations from original proposal should not be made without the sanction of the authority which accorded the administrative approval to the work even though the cost of the same may be covered by savings on other items.

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Similarly, if subsequent to the grant of technical sanction, material/structural alterations are contemplated, the approval of the authority that sanctioned the estimate technically should be obtained, even though no additional expenditure may be involved due to such alterations. Any development of a project considered necessary while a work is in progress, which is not fairly contingent on proper execution of work as originally sanctioned, must be covered by a supplementary estimate as explained in earlier chapter. During the course of execution of works the EIC should not enter into commitments without sanction of the competent authority in the matter. No religious edifice should be destroyed or injured in the execution of works without the full and free consent of the persons/institutions interested in it; nor without the written concurrence of head of the unit. Such cases are recommended to be forwarded to head quarters for legal opinion and concurrence before granting permission. 5.9.3 SUB CONTRACTS The EIC shall ensure that the Contractor shall not sub-contract the work or any portion of the work without his prior written approval. Piece rate work shall not be deemed as subcontract. Sub contracting shall not alter the Contractors obligations and responsibilities. The contractor shall furnish all the required documents of Sub-Contractors proposed to be hired by them and obtain a written consent from the EIC. As per the GCC, the Contractor shall not employ Sub-Contractor against whom the EIC raises reasonable objection by notice to the Contractor with supporting documents. The Contractor shall pay to the Sub-Contractor the amount shown on the SubContractors invoices approved by the Contractor. The Corporation may pay, directly to the Sub-Contractor, part or all of such amount which is due to the Sub-Contractor and for which the Contractor has failed to make the payment. The Contractor shall then repay, to the Corporation, the amount which the Sub-Contractor was directly paid by the Corporation with interest at prevailing rate. If the Contractor fails to repay, the same shall be adjusted against any dues payable to the Contractor along with interest for the intervening period. In this regard the decision of the EIC shall be final. In addition to the conditions above, the EIC shall obtain prior approval of PD/SD/ED for granting sub-contract if any giving justification on the following points: (i) Sub-contracting should be permitted only in exceptional cases and for recorded reasons as to why Contractor himself cannot directly execute the contract. (ii) In all cases, sub-contractor should be a Contractor whose credentials, financial standing and technical capabilities have been assessed to the satisfaction of the EIC. (iii) Sanctioning authority must see the terms and conditions of the agreement between the Contractor and the sub-contractor in order to satisfy himself that the Contractor is not sub-contracting the work to earn as a commission agent. (iv) It should be seen at the time of subcontracting that the Corporation will not be put to any loss on this account and that no risk is involved. 5.9.4 MATERIALS & SAMPLES Before accepting any materials to be incorporated in the work, the EIC should confirm that the requirements of technical specifications are satisfied. Necessary test required in 94

this regard should be got done at approved labs. The Corporation shall not provide with any materials required for the work, other than the material which are agreed to be issued by the Corporation. As per GCC, Contractor shall, at his own expense and without delay, supply to the EIC samples in accordance with QA program of materials proposed to be used in the works. The EIC shall, within 7days of supply of samples or within such further period as he may require, intimate to the Contractor in writing, whether samples are approved by him or not. If samples are not approved, the Contractor shall forthwith arrange to supply to the EIC for his approval fresh samples complying with the quality assurance plan finalised and approved before execution of work. The rejected material shall be immediately taken out of the plant premises. 5.9.5 INSPECTION It is incumbent upon various officers concerned with the work, to inspect the works, to ensure that the works, in general, are being executed according to design and specifications laid down for the purpose. An officer who records/test-checks the measurements for an item of work will be primarily responsible for the quality, quantity and dimensional accuracy of the work, he has measured/test checked. Overall responsibility for work, including co-ordination with FE/QA and other agencies involved, shall be that of EIC of the work. Senior officers are also expected to inspect the work to ensure that the work is being carried out to meet the specified intent. The Corporations personnel shall at all reasonable times: a) have full access to all parts of the Site and to all places from where materials are being obtained, and b) during production, manufacture and construction (at the Site and elsewhere), be entitled to examine, inspect, measure and test the materials and workmanship, and to check the progress of manufacture of Plant and production and manufacture of materials. It is the responsibility of the Contractor to give the Corporations personnel full opportunity to carry out these activities, including providing access, facilities, permissions and safety equipment along with required manpower. No such activity shall relieve the Contractor from any obligation or responsibility. It is the responsibility of the Contractor to give notice to the EIC for inspection of material whenever any work is ready and before it is covered up, put out of sight, or packaged for storage or transport. The EIC shall then either carry out the examination, inspection, measurement or testing without unreasonable delay, or promptly give notice to the Contractor that the EIC does not require to do so. If the Contractor fails to give notice, the EIC shall have full powers to uncover the work and thereafter reinstate and make good, at the cost of Contractor as per Quality Assurance Plan (QAP) duly approved. 5.9.6 TESTING Except as otherwise specified in the Contract, the Contractor shall provide all apparatus, assistance, documents and other information, electricity, equipment, fuel, consumables, instruments, labour, materials, and suitably qualified and experienced staff, as are necessary to carry out the specified tests efficiently. The Contractor shall 95

agree, with the EIC the time and place for the specified testing of any plant, materials and other parts of the work.

The EIC shall give the Contractor adequate time (not less than 24 hours) notice of the Engineers intention to attend the tests. If the EIC does not attend at the time and place agreed, the Contractor may proceed with the tests, unless otherwise instructed by the EIC. If the EIC requires the plant, materials or workmanship to be retested, in case of any doubt, the tests shall be repeated under the same terms and conditions. The cost of such additional tests shall be mutually agreed upon, with prior approval from contract approving authority. 5.9.7 REJECTION The EIC shall have full powers to instruct the removal of any or all of the materials brought to Site by the Contractor which are not in accordance with the Contract specifications or do not conform in character or quality to samples approved by him. In case of default on the part of the Contractor in removing rejected materials, the EIC shall be at liberty to have them removed by other means. The EIC shall have full powers to procure other proper materials to be substituted for rejected materials, in the event of the Contractor refusing to comply. However, a notice to this effect shall be given to the contractor before exercising these powers. All costs, which may accrue upon such removal and/or substitution, shall be borne by the Contractor. The decision of EIC shall be final and binding on the Contractor.

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5.9.8

REMEDIAL WORK The EIC shall have powers to instruct the Contractor to: (a) (b) (c) remove from the Site and replace any Plant or Materials which is not in accordance with the Contract, remove and re-execute any other work which is not in accordance with the Contract, and execute any work which is urgently required for the safety of the Works, whether because of an accident, unforeseeable event or otherwise.

The Contractor is bound to comply with the instruction within a reasonable time, or immediately if urgency is specified under sub-paragraph (c) above. If the Contractor fails to comply with the instruction, the Corporation shall be entitled to employ and pay other persons to carry out the work at the risk and cost of the Contractor. 5.9.9 EXCESS OVER ESTIMATES In case of any excesses anticipated during execution of the work, necessitating preparation of revised estimate, action should be taken as explained in para 2.1.5.2 and 2.2.7. It should be ensured that timely action is initiated to get the expenditure incurred in excess of permissible limits regularized. Financial value of the deviation to be recorded and necessary approval as per the DFP (HQI 2001) should be obtained. 5.9.10 PROTECTION OF THE ENVIRONMENT i)The EIC shall ensure that the Contractor takes all reasonable steps to protect the environment (both on and off the Site) to avoid damage and nuisance to people and property resulting from pollution, noise and other consequences of his operations. It is also to be ensured that dust pollution due to crushing plant, smoke pollution etc. should be maintained within the specified limits of pollution control board. ii)Contractor shall not at any time do, cause or permit any nuisance on site or do anything which shall cause unnecessary disturbance to owners, tenants or occupants of other properties near the site and to the general public. iii)The Contractor should ensure that emissions, surface discharges and effluent from the Contractors activities shall not exceed the values stated in the specification, if any, or prescribed by applicable Law of the land / limits specified by pollution control board. iv)Trees designated by the EIC shall be protected from damage during the course of the works and earth level within 1 metre of each such tree shall not be changed. Where necessary, such trees shall be protected by providing temporary fencing. Where tree uprooting is unavoidable, the EIC shall obtain requisite approvals from the local authorities, and comply to the necessary procedures. v)The EIC shall also ensure that the Contractor plants and maintains the number of trees as specified in schedule A of the General conditions of contract during the currency of Contract. 5.9.11 MATERIAL OBTAINED FROM EXCAVATION AND DISMANTLEMENT Materials of any kind obtained from dismantling of a structure, excavation on the Site 97

etc. shall remain the property of the Corporation and the EIC shall ensure proper utilisation / disposal of the same. The EIC shall record all the materials obtained from dismantlement / excavation in the register (refer Annexure 5.9) before deciding on utilisation or disposal of material. All fossils, coins, articles of value or antiquity, and structures and other remains or items of geological or archaeological interest found on the Site from dismantling of structure, excavation etc shall be placed under the care and authority of the Corporation. The EIC shall ensure that the Contractor takes reasonable precautions to prevent Contractors Personnel or other persons from removing or damaging any of these findings. 5.9.12 OCTROI, CESS, TAXES, ROYALTIES, ETC. All charges on account of octroi, cess, VAT, service tax, royalty, terminal or Sales Tax and other duties on materials obtained for the works from any source (excluding materials supplied by the Corporation) shall be borne by the Contractor. Care should be taken to include all the statutory taxes and levies into account while preparing the estimates and inviting the Notice Inviting Tender. In pursuant to or under any law, notification or order any royalty, cess or the like payable by the Contractor but paid by the Corporation in respect of any material used by the Contractor in the works then in such a case, the Corporation shall be entitled to recover the amount paid in the circumstances as aforesaid from dues of the Contractor. Any change in rate of or new statutory levies, customs duty, VAT, service tax, octroi and other duties during the currency of the contract shall be affected by the Corporation on submission of documentary proof for payments by the Contractor. 5.9.13 MISCELLANEOUS 5.9.13.1 SITE ORDER BOOK Site Order Book shall be maintained in the form prescribed in Annexure 5.10. Site order book, log register etc. shall be maintained properly and preserved for a period of 5 years or up to the time all disputes/arbitration cases of the work are finally settled, whichever is later, after completion of a work in the same manner as measurement book. Any instructions on erection of work by the EIC or other site engineers should be recorded in the site order Book. In regard to important matters however proper communication in letter should be communicated to the contractor by the EIC. The Contractor or his authorized representatives will also be at liberty to note their difficulty etc in these books. The compliance of orders/instructions given should be recorded side by side in the Site Order Book with dated initials of the Engineer recording the same. Site order Book should be maintained on the site of works and should never be removed under any circumstances. 5.9.13.2 SITE DRAWING REGISTER Site drawing register shall be maintained by the EIC with respect to receipt of various drawings and issue of the same to the contractor with respect to each work which shall cover full particulars about drawings received/issued. EIC shall ensure that only latest drawings are used by the Contractor for work. Old / obsolete drawings should be 98

withdrawn form site. Date of declaring the drawings void / obsolete shall be clearly recoded in the register in order to avoid dispute at a later date. 5.9.13.3 SECURITY The Contractor shall follow at site all security rules as may be framed by the Corporation from time to time regarding the movement of materials and equipment to and from site, entry of Contractors personnel, police verification, issue of identity cards for control of entry of personnel(format of application form for issue of entry pass is enclosed as Annexure 5.11) and all similar matters. The Contractor and his personnel shall abide by all security measures imposed by the EIC or his authorized representatives from time to time. The Contractor shall also follow the rules and regulations applicable to the area being declared / pronounced as vital area or non-accessible from time to time by the authorities or authority of existing Nuclear Power Station in the vicinity or any other statutory orders. Nothing extra will be payable on account of stoppage / hindrance of the work due to the enforcement of security measures / emergency conditions. The Contractor, his employees and agents shall not disclose any information or drawings furnished to him by the Corporation. Any drawing, report and other information prepared by the Contractor or by the Corporation or jointly by both for the execution of the Contract shall not be disclosed without prior written approval of the EIC. No photographs of the facilities or plant within site premises shall be taken without prior written permission of the EIC. The Contractor will have to make his own arrangement for security guards to ensure proper safeguards for materials under his control and for his establishment. He may have to liaison with local police and Corporations security. 5.9.13.4 WORK DURING NIGHT OR ON SUNDAYS AND HOLIDAYS The EIC shall ensure that necessary written permissions are taken by the contractor whenever the works are proposed to be carried out during night or on Sundays or on authorized Holidays. In cases when the work is unavoidable or absolutely essential for safety of plant or individual, the Contractor shall immediately inform the EIC accordingly. 5.9.13.5 CHANGES IN CONSTITUTION Any change(s) in the constitution of the firm, after it has been awarded a contract, requires prior approval of the EIC. When a Private limited company becomes a deemed Public Company by virtue of coming into force of sub-section (A) of Section 43-A of the Companies Act, 1956, there is no need to ask the company to execute a fresh bond either for the purposes of continuance of exemption facility from depositing bid security when they have already deposited lump sum security of the appropriate amount. Specimen form of agreement required to be executed before change in constitution of the firm is allowed, is provided in Annexure 5.12.

5.10

CONTRACTORS SUPERVISION
It is the sole responsibility of Contractor to supervise the execution of work as per the approved plans, drawings and specifications. The Contractor shall be fully responsible for industrial safety of workers and their training programs. He shall, in coordination with EIC, plan and execute the works. The Contractor shall follow all security instructions 99

issued from time to time by the Corporation and ensure that such instructions are disseminated to all the workers. Any abnormality noticed during the execution of works, shall be intimated to the EIC for remedial action. He shall also coordinate with other Contractors for smooth progress of work. The Contractors representative / Engineer shall be capable of understanding the drawings and specifications, and be aware of various codes applicable to the work. EIC should ensure that the Contractor is called upon, immediately after award of work, to intimate the details, i.e., name, qualifications, and address of the qualified Engineer(s) required to be employed by him as per terms of the contract to supervise the works. He shall also ensure that a properly qualified engineer employed by the Contractor is available at site for supervision and to carry out the instructions conveyed by the EIC or his representative. The Engineer should invariably be present during important stages of the execution of the work and intimation to this effect shall be timely given by EIC to contractor. The Engineer should also be associated with measurement of important items of work. In addition, the Contractors Engineer shall be present at the site of the work whenever desired by the EIC. In this respect advance intimation shall be given by the EIC verbally or in writing. Suitable directions should be issued to the Corporation Engineers to verify this during their inspection of work and measurements recorded by them. It is also essential that the certificate that a qualified Engineer has been satisfactorily employed by the Contractor and he has looked after the work during its execution is recorded by the EIC along with each running bill. 5.10.1 STAFF TO BE EMPLOYED BY CONTRACTOR ON WORKS While qualification of staff to be deployed by the contractor shall be as per requirement of the work and finalised during the pre-bid meetings, following are the recommended qualifications: (a) For Main plant works: (i) One Graduate Engineer, when the tendered cost of work exceeds Rs. 50 lacs but less than Rs. 100 lacs and additional one Graduate Engineer for every additional 200 lacs value of work. One qualified Diploma holder with experience not less than 3 years when the tendered cost of work exceeds Rs. 25 lacs but is less than Rs. 50 lacs.

(ii)

(iii) One qualified Diploma holder when the tendered cost of work is more than Rs. 10 lacs but less than Rs. 25 lacs. (b) Miscellaneous Service Contracts: One qualified Diploma holder with relevant experience of not less than 5 years when the tendered cost of work is more than Rs. 5 lacs but not exceeding Rs. 50 lacs. (c) A suitable provision indicating supervising manpower requirement depending on the nature and the magnitude of the work shall be made in the special conditions of contract while preparing tender specifications. Provision for a suitable penalty for default at par with the salary cost of NPCIL for a similar profile of Engineer / Diploma holder shall also be provided in the special conditions of contract.

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5.10.2 STAFFING, TRAINING AND CERTIFICATION Plans are developed and implemented for timely selection and training of personnel to perform activities affecting quality, as enshrined in the Corporate Management System Document. All Personnel performing activities and processes shall have requisite basic education and qualification, relevant experience and proficiency required for carrying out a specific assigned task, and then the Personnel duly authorized. Where required by codes, standards, specifications or other specific requirements, Personnel performing activities affecting quality shall obtain necessary qualification/ certification and or recertification/ re-qualification. These include welders and NDT Personnel. In many special areas/tasks as considered necessary by NPCIL procedures are established for the qualification of personnel on the basis of workmanship and/or any other criteria set. Personnel deployed for performing work and those for inspecting or verifying works shall be suitably trained and qualified to develop and maintain necessary proficiency in the areas of work assigned to them. All personnel involved in inspection and for non-destructive testing activities shall have knowledge of the requirements of the items, equipment, systems and of the applicable specifications and specific procedures. All such personnel shall be suitably qualified as per guidelines of BIS 13805 / SNT- TC-IA (issued by ASNT) / similar guidelines applicable for different levels of proficiencies. All the welders, brazers are qualified as per the requirements of relevant codes, standards and specifications. For activities where formal qualification requirements do not exist, suitable procedures shall be established for the qualification of personnel on the basis of workmanship and experience. Some of such identified activities are: Calandria tube/ pressure tube joints rolling, tube to tube welding, special material welding, wire terminations, equipment alignment, cable glanding, handling of various alignment equipment, instrument tubing, electrical / instrumentation relay testing, Routine Testing of Concrete ingredients, Fresh and Hardened Concrete, Concrete Consolidation and Finishing, Pre-tensioning and Post-tensioning operations of Prestressing activities, Steel structure fixing by bolting, Heat jointing of PVC Water stops / Pipes, Sand/shot blasting, Air/airless spray Painting etc. Aforesaid are only illustrative examples. EIC shall work out all such activities and take appropriate action. The typical procedure for training and qualification of Engineers / Supervisors and workmen is enclosed as Annexure 5.13.

5.11

QUALITY CONTROL AND TECHNICAL AUDIT

5.11.1 INTRODUCTION The Quality Assurance (QA) programme of the Corporation has been evolved to meet the requirements set forth by the Atomic Energy Regulatory Board and also to meet the intent of applicable International guidelines. Top management is committed to the QA programme and enforces it in all phases of the Projects/stations by creating appropriate organizational structure with requisite delegation of authority. All Heads of Units have the responsibility to ensure effective implementation of the QA programme requirements of the Project/Station sites. This responsibility with unit heads to implement QA programme is delegated to the Heads of all line functional groups of various disciplines including the Head Quality Assurance group. The Head, QA group who reports to the Project/Station Director has the responsibility for formulating, reviewing, monitoring, verifying and assessing the 101

effectiveness of the Project/Station QA programme. Head QA has been delegated the powers to stop work in case deviations to quality related issues are noticed.

The Corporation has brought out a corporate management system document, which forms the 1st level document for the implementation of the quality assurance activities. This document lays down the requirement and guidelines for the 2nd level and subsequent level QA documents at the Project/Station. In line with this policy, the Project/Station has a second level QA Manual which lays down the Quality Assurance Programme that will be followed by them. It is essential that all engineers working in the group /section are familiar about the contents of this QA Manual. The Contractors/ suppliers shall submit their QA manuals/programme and the same shall be approved by the Project/Station QA Head and the Functional group Head before starting the work. This will form the 3rd Level QA document and shall be inline with the corporation QA documents. It shall be ensured that all the activities including verification activities are planned and systematic approach has been adopted in line with QA documents. 5.11.2 QA MANUAL FOR CONSTRUCTION QA manual for construction shall be prepared at Project site covering all aspects of Quality Management System in line with Corporate Management System and various guidelines issued by AERB. The topics which shall form part of this manual have been briefly discussed in Quality Management System during construction and the same is enclosed as Annexure 5.14. 5.11.3 QUALITY ASSURANCE SYSTEM This section deals with the salient aspects of the QA practices and procedures related to site construction, erection and maintenance activities. 102

QA during construction stage constitutes a key element in the overall management function. The main objective of the QA programme is to ensure that the above activities are carried out in a systematic and planned manner and that quality of work is according to approved specifications, drawings etc. This QA programme shall be applicable for all construction, erection and maintenance activities such as receipt & storage, construction, erection, installation, cleaning, inspection, testing, modifications, repair and maintenance. Also provision for verification, review and audit of activities affecting the quality of construction has been established. It is to be noted that QA efforts applicable to any items or services depend upon the factors such as safety classification, complexity, degree of standardization, quality, history, accessibility of items and retraceability of documents for maintenance, inspection & replacement and preservation of records. 5.11.4 QUALITY CONTROL SYSTEM The Quality Control System shall be evolved by EIC of the work in consultation with QA group of the site. EIC should ensure that relevant Quality Control measures have been taken to attain desired level of Quality while executing the works. The Contractor shall prepare all the required procedures and got approved by EIC and QA group at site before start of the work. The site QA group in general supervises the execution of works and functions as an audit team. The responsibility to meet the desired level of quality rests with the Contractor. The responsibility of EIC is to ensure that all the required quality / inspection checks are performed by the Contractor during the currency of the contract. 5.11.5 ORGANIZATIONAL SET UP FOR QUALITY CONTROL SYSTEM The implementation of Quality Control in the field will require close co-operation among the three agencies namely (a) the construction/maintenance staff of the EIC, (b) the execution Agency and (c) the Quality Assurance Group at Project/Station/HQ. The Construction/maintenance staff and the Quality Assurance group shall have distinctly different functions and inter-relationship so as to ensure quality. 5.11.5.1 RESPONSIBILITIES OF HEAD OF EACH GROUP / EIC The broad responsibilities of Head of each group / EIC are as under: i) To ensure that the material duly approved are used in work. In respect of locally available materials, the sources will be approved after conducting a survey of such available sources. ii) To ensure that all laboratory tests as laid down in the specification are carried out at appropriate time and materials failing to conform to the required specifications are promptly rejected. All tests on materials will be carried out in NPCIL approved laboratories. The testing shall be witnessed by authorized representative of NPCIL as per approved QA plan. iii) Setting up of/Identifying testing laboratories and their functioning. iv)Obtaining from Contractor a QA manual commensurate with the Corporate Management System Manual and Construction QA Manual of NPCIL. The QA manual of Contractor shall include all QA procedures of all the activities and the checks required by various agencies during the execution of work at well identified stages in 103

order to achieve desired Quality standards. The QA manual in general should cover but not limited to the following: a) The organization structure for the management and implementation of the proposed QA programme including interfaces. b) Documentation control system c) Qualification data for Contractors key personnel d) The procedure for purchase of materials, parts, components and selection of SubContractors services including vendor evaluation, source inspection, incoming raw material inspection, verification of materials purchased etc,., e) System for construction/fabrication and erection controls through QA plans. f) Control of non-conforming items and system for corrective and preventive actions. g) Inspection and test procedures for construction and erection h) Control of calibration of measuring and testing equipments. i) System of indication and appraisal of inspection status, i.e. monitoring and trending system. j) System of quality audits k) System of intimation by the Contractor and approval by the EIC of stages of completion. l) System for maintenance of records. m) System for handling, storage, preservation and delivery of items; and n) A quality plan detailing out the specific quality control procedure to be adopted for controlling the quality characteristics relevant to each item of work. v) Carrying out Quality Audit and Quality Surveillance of the systems and procedures of quality management and control activities of the Contractor/his vendor. vi) Obtaining and approving the QA history document within, three weeks of completion of work including relevant test reports connected with all engineering control adopted during construction. vii) To ensure that the agencies inspecting/verifying works are suitably trained and qualified to develop and maintain necessary proficiency in the areas of work assigned to them. viii) Carry out the activities as per approved documents/specifications. The entire site procedures, specifications and drawings shall be approved & registered and it shall be ensured that latest drawings are followed during construction.

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5.11.5.2 THE EXECUTION AGENCY (SITE ENGINEER AND CONTRACTOR) For proper implementation of Quality Control in the field, it is also imperative to associate the Execution agency closely. For this purpose, the Site Engineer and the Contractor shall be associated with the routine tests carried out at the site. They should also be fully conversant with the Quality Control procedure being followed in the Project/Station and shall adhere to duly approved QA manual, procedures and QA plans at all stages of the activity. In order to achieve this objective, it becomes necessary that staff & labour employed by the contractor are qualified and adequately experienced to perform their duties at various levels. Adequate training to be undertaken by the Contractor to update his Staff & labour for achieving better quality and safety at work. Specially skilled functionaries as well as QA personnel of contractor shall be assessed by the Corporation before commencement of the job in the field. 5.11.5.3 QUALITY ASSURANCE GROUP The Quality Assurance Group headed by CE/ACE/Superintendent at Project/Stations will comprise of duly trained and experienced technical manpower as per requirement. (i)In order that the role of the Head QA at Projects/Station is effective in ensuring implementation of quality assurance activities, the following points are essential: a) The periodicity of inspection of works should be such that the process control at various stages is possible in line with the approved QA plan. b) The inspection activities shall be well co-ordinated among the contractor, EIC and Corporation QA group for timely execution of inspection activities. c) The Head, QA should carry out his tasks as per duly approved QA programme. d) The data received during inspection/verifications should be analysed and organised to evaluate significant facts not only about the finished work out but also about the process leading to it. e) The analysed and organized data should be presented to concerned Group Heads in a form that enables them to see immediately its significance for control and necessary action. (ii)The functions of Quality Control Team at Project/Station level are as under: a) Preparation of QA manuals at Station/Site. b) Preparation of Organisation chart taking into account all interfaces c) Training and qualification of QA inspectors, quality control and quality surveillance personnel. d) Planning of activities of the various groups mainly Quality Assurance, Quality Control and Quality Surveillance. e) Preparation, review & concurrence, approval as necessary (including the procedure submitted by Contractors) of procedures for erection, inspection and testing. f) Qualification/Certification of contract personnel performing activities affecting quality. 105

g) Inspection including Pre-Service Inspection (PSI) of safety related items with a view of creating a data base for In- Service Inspection (ISI). h) Non-conformance control i) Audit and follow-up j) Construction Completion Certification Control k) Co-ordination with Corporate QA and Regulatory Inspection authorities 5.11.6 LABORATORIES A chain of properly equipped laboratories is an essential part of the Quality Assurance set up to carry out various tests and to ensure quality of works. These laboratories shall meet the requirements of works being executed by the Project/Station. Duly equipped outside laboratories carrying out required testing shall also be identified and approved wherever necessary. List of laboratories presently approved by NPCIL is enclosed as Annexure 5.15. 5.11.7 QA RECORDS Records shall be prepared and maintained to provide objective evidence of quality to meet the requirements of applicable codes, specifications and drawings. They shall generally include:i) Results of reviews, inspection, test and audits ii) Monitoring work performance iii) Non-Conformance Reports (NCR) and repairs iv) Training, qualification and certification of personnel v) Qualification of procedures vi) Information of as built condition Records of all mandatory tests and other routine tests should be suitably maintained. Records of rejected and repaired works shall also be maintained. The Construction Completion Certificates shall have two copies and one copy shall be kept in record file. It should be ensured that the record storage/maintenance facility should be controlled through procedures to access, ready retrieval, inspection and maintenance of records. 5.11.8 VERIFICATION FUNCTIONS A Comprehensive documented verification programme to assure conformance of design, process, items and services to specified requirements shall be developed. The verification procedure shall include the following : i) verification functions and procedures ii) Acceptance criteria iii) Calibration of measuring and testing equipments.

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5.11.9 AUDIT AND AUDIT TEAM QA Directorate has provided for the establishment and implementation of a comprehensive system of planned and documented audits to verify the implementation and effectiveness of the various elements of the QA programme. This includes evaluation of: i) QA manual, procedures & instructions and its implementation effectiveness. ii) Document and records. iii) Records of training and certification of personnel. iv) Non-conformances observed and corrective actions. v) Quality trends, incidents and failures. vi) QA records management. vii) Programme deficiencies and need for revision. viii) Auditors remarks on observation / recommendations in the previous audits. The audit shall include as appropriate both internal and external audits. The external audit is carried out for each contract, once in six months, by a team nominated by PD. Corporate QA audit is undertaken on the site construction works in accordance with the schedule intimated by Directorate of Quality Assurance (QAD), NPCIL, to verify the implementation of QA programme and its effectiveness. Atomic Energy Regulatory Board (AERB)s Regulatory Inspection is undertaken on the site construction work in accordance with schedule intimated by them / finalized in consultation with them. Audit is to be scheduled at regular intervals as indicated in the audit plan or at least once in every six months for the internal audit and once in a year for the Corporate QA audit. The audit of individual contractor shall be carried out at least once in six months. Regular audits are supplemented by the additional audits if the need arises. Audit Report: Audit report shall be prepared and signed by auditing team members bringing out the deficiencies, observations and recommendations for corrective actions for the attention of PD. Head of the concerned execution group shall take necessary steps on priority to rectify the reported deficiencies. Auditors shall be subsequently informed about the corrective actions taken. The concerned execution group shall do monitoring for the implementation of corrective actions. Copy of audit reports and subsequent check reports for the completed corrective actions shall be sent to the Directorate of Quality Assurance at NPC head quarters. 5.11.10 ACTION IN UNITS/STATIONS/PROJECTS ON THE REPORTS OF QA TEAM & AUDIT TEAM

As soon as the report is received from QA group or Audit Team the same should be immediately brought to the notice of the EIC of the work. The following further actions should be taken: 107

i) The various observations involving the Contractors work or any other obligation of the Contractor shall be brought to the notice of the Contractor through the site order book. In addition, some of the relatively more serious observations may be brought to the notice of the Contractor through letters. ii) The work should be checked up for defects similar to the ones observed at other locations and all such findings also brought to the notice of the Contractor suitably as above. iii) Wherever the defects are rectifiable, action should be taken for their rectification simultaneously ensuring that such works are not placed in a position beyond rectification. iv) For items of observations not involving the Contractors work/obligations, the EIC shall ensure that due actions are taken in time. v) Action taken or proposed on various observations by EIC should be invariably reported to the SD/PD/ED. 5.11.11 QUALITY CONTROL FOR WORKS WHERE QA SECTION IS NOT DIRECTLY INVOLVED For non plant structure where QA section is not directly involved on day to day basis a suitable QA plan shall be drawn up for work by the Contractor in consultation with EIC and, if felt necessary, with QA Group also and this approved QA plan shall be followed throughout the execution of work. The Site engineer shall also have proactive interaction with the Contractor to ensure that quality, safety and good house keeping practices are followed. In case of necessity the engineer shall guide the contractor to plan and execute the works in accordance with contract requirements. 5.11.12 SUBMISSION OF RETURNS

The EIC shall be responsible for timely submission of the returns of the works contract under his control to Vigilance officer at site / Vigilance Directorate, NPCIL Mumbai in accordance with the extent guidelines issued from time to time. Presently guidelines with regard to submission of returns are as follows: i) Rs. 1 crore for civil works. ii) Rs. 2 lakhs for Horticultural works. iii) Rs15 lakhs for Electrical works and iv) Other works as notified by CTE from time to time EIC is expected to have sufficient knowledge about the inspection of works by NPCIL Vigilance Directorate or by Chief Technical Examiner (CTE) appointed by Central Vigilance Commission (CVC). EIC should cooperate with Vigilance Inspection Team and produce all the documents pertaining to works on demand. The queries raised by Vigilance Inspection team shall be properly answered with due approval of Unit Head. Sub-standard work, if observed by Vigilance team during field inspection, shall be attended to on priority basis. EIC is also expected to be knowledgeable about preventive vigilance, Dos & Donts of Vigilance and the notifications issued form CVC / Vigilance Directorate of NPCIL from time to time.

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5.11.13

HEALTH AND INDUSTRIAL SAFETY

The Corporation has always emphasized on compliance to the provisions of health and industrial safety. In an attempt to re-instate the importance of these areas, the Corporation has included specific conditions on health and safety in the GCC with penalties against non-compliance. It is one of the prime responsibilities of the EIC to ensure that all the provisions with regards to the Health and industrial safety are complied with and penalties are levied wherever the provisions are ignored/deviated. Further, each unit has construction safety / station safety management system document that lays the roles and responsibilities of Contractor and Corporation for achieving high safety standards. The Contractors shall also prepare their safety manual in line with project safety manual that clearly defines the responsibility of officers, supervisors and task performers. It is essential that all engineers working at project / station are well aware about safety requirements and they shall ensure that all these conditions are strictly enforced during all stages of construction. For ready reference, the provisions as referred in the GCC are reproduced: The EIC shall ensure that the Contractor shall at all times take all reasonable precautions to maintain the health and safety of the Contractors Personnel. The Contractor is bound to ensure first-aid facilities available at all times at the work site. Other facilities in collaboration with local health authorities like medical staff, sick bay, ambulance, etc. shall be provided as required. The Contractor shall also make suitable arrangements for necessary welfare and hygiene requirements and for the prevention of epidemics. The Contractor shall comply, as statutory requirement, with the provisions of AERB (Atomic Energy Regulatory Board) Safety Guide for Works Contract i.e., Document No. AERB/SG/IS-1 amended from time to time and other safety requirements as applicable to specific site and prepare a safety manual for the works being executed. The Contractor shall at his own expense arrange & provide for the safety provisions of AERB Safety Guide and the facilities in respect of all labour directly or indirectly employed for execution of the works or as required by the EIC. In case, the Contractor fails to make arrangements and provide necessary facilities as per guidelines, the EIC shall be entitled to do so at the risk and cost of the contractor and recover the cost from the Contractor with penalty as defined in Schedule (A) of the GCC. The total amount of penalties for non-compliance under this Para shall be subject to a maximum of 2% of the contract value or the payment towards safety compliance shall be regulated as per the GCC applicable for work. The Contractor shall provide mandatory Industrial Safety Training to all workmen. In case, where it is specified in the schedule A of the GCC, the same shall be provided by the Corporation. The Contractor shall provide and maintain all lights, fencing, guards, warning signs and caution board and similar items as required ensuring safe working conditions at work site. The Contractor and his Sub-Contractor shall comply with the instructions given by departmental safety officer or his representative(s) regarding safety precautions, protection measures and housekeeping, etc. The Contractor shall provide proper access and working platforms for all place of work as per laid down standards or as advised by EIC.

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The Contractor shall ensure all floor openings in his work are guarded / barricaded during the course of work and at the end of each days work. All Contractors, working at plant site, must meet statutory requirements as well as regulatory requirements applicable to the plant in general and NPCIL in particular, especially the requirements as per Factory Act, Atomic Energy Factories Rule-1996 (AEFR-1996), safety guidelines for Job Hazard Analysis (JHA) & AERB notifications on Industrial & Fire safety. All Contractors safety professionals must be well aware about provisions of Acts and Rules applicable for Industrial Safety and practices particularly applicable to the plant. In this regard it shall be ensured that they have undergone an assessment by appropriate authorities within 7 days of their placement. This will be at the cost of the Contractor. Only after successful assessment, they would be considered suitable for deployment as safety professional and regular entry card shall be issued. All Personal Protection Equipments (PPE) procured and provided to workers shall conform to relevant Indian Standards and should be maintained in good condition by suitable storage, maintenance and inspection. Contractor shall promote safe work practices at work in plant. The Contractor shall be held responsible for non-compliance of any of the safety measures, injuries, fatalities and compensation arising out of such situations or accidents. Contractor shall be responsible for safety of all his employees during execution of the Contract. As per Workmens Compensation Act, 1923 (amended in 2000), the Contractor will ensure the payment of compensation to his employees in case of an accident as early as possible within the time frame permitted by the law of land. The Contractor shall employ sufficient number of qualified safety professionals required for the safe execution of the job. The minimum number shall not be less than the minimum number that is specified in Schedule (A) of the GCC. The Contractor should deploy safety professionals as defined above, failing which the Corporation shall outsource or deploy such person at the cost and risk of the Contractor. Penalty, as defined in Schedule (A) of the GCC shall also be recovered in addition to the cost for non-deployment of safety professionals. The Contractor shall prepare industrial safety procedure for approval by Corporation and ensure the industrial safety requirements have been established prior to execution of whole or part of work. A typical safety manual applicable during construction stage of projects covering various aspects like safety management and roles & responsibilities of Contractors and Corporation personnel is attached as Annexure 5.16. The Contractor shall identify the Hazardous jobs like working in contained vessels, deep pits, batching plants, stone crushing plants, ice plants and confined areas, working near the openings, working at heights, working with injurious chemicals etc. and prepare Job Hazard Analysis (JHA) for each work. EIC shall be responsible that all industrial safety requirements are complied with by the Contractor. EIC shall also ensure that Safety Related Deficiency (SRD) reports raised by the safety group of units are promptly attended by the Contractor. The above mentioned are the general guidelines. EIC shall take appropriate action depending upon the nature of works being awarded. 110

5.11.14

HOUSE KEEPING AND CLEANING OF SYSTEMS

To preserve the required quality of component /material during storage/ construction / installation / commissioning, house keeping procedure shall be made and implemented in accordance with the specified requirements. The procedures shall include proper cleanliness requirements for various areas, tools and handling gear and equipment to be installed taking into account the control of environmental conditions and personnel access. Special attention shall be given for proper house keeping during pre assembly / installation and commissioning of nuclear components and during identified activities requiring special cleanliness. A well-documented approach, indicating various standards, shall be followed to control dust level in critical areas like F/M vaults during execution of such activities. For the cleaning of piping systems and associated components before installation and maintenance of cleanliness during installation, proper procedure shall be developed and implemented as per the requirement of specifications. The cleaning and cleanliness control procedure shall be prepared with the following factors being taken into consideration.
a) Identification and applicability of systems and sub-systems. b) Work practices, housekeeping, access control and methods for preventing

contamination and recontamination.

c) Effectiveness of cleaning procedures for removal of contaminates. d) Corrosiveness of cleaning solutions in contact with the material of an item. e) Chemical composition, concentration and temperature limits of any cleaning

solutions and inhibitors used.

f) Identification of prohibited materials. g) Solution and metal temperatures, solution concentrations and contact times during

cleaning.
h) Methods for monitoring the concentrations and temperatures of cleaning solutions

during cleaning operations.

i) Determination of construction operations that should be prohibited during cleaning

operations.
j) Restrictions on the usage and storage of potentially hazardous materials. k) Methods for rinsing and neutralizing and specifications of the number of rinses. l) Methods for verifying cleanliness. m)

Methods for drying and preservation of equipment pending its usage.

n) Methods for protecting of equipment installed in the cleaning area. o) Methods for disposal of cleaning solutions. p) Methods for maintaining cleanliness. q) Methods for isolation of area/system during cleaning operation e.g. by providing

isolating valves or blind flanges in the pipe lines to isolate the concerned section from the rest of the system. The guideline for housekeeping which are required to be followed at Projects is attached as Annexure 5.17. 111

5.11.15

COMPETENT PERSON FOR TESTING & CERTIFICATION AS PER ATOMIC ENERGY FACTORY RULES,1996

The competent person is a person who is having a degree in the discipline mentioned or equivalent followed by experience as specified, in responsible position in the field. The competent persons shall be designated by Project Director for each type of work. Sl.No. Rules made Type of Work under section of the Act requiring competency Section (6) Civil Construction & Structural work Discipline Experience

Section 21(2)

Section 28

Section 29

Section 31

Section 36

Section 41-C(b)

Section 87

Civil or Minimum 10 yrs in design, Structural construction, testing or Engineering repairs of structures, knowledge of various codes pertaining to the non destructive testing methods. Operation of Electrical or Minimum 7 years in design, maintenance, dangerous Mechanical operation, of relevant machines Engineering testing machinery, guards, safety Or devices etc. equivalent Lifts & Hoists -- do -Min. 7 years in design, erection, maintenance, inspection and testing of Lifts & Hoists. Min. 7 years in design, Lifting Electrical, maintenance, machinery, Mechanical erection, lifting tackles or Metallu- inspection, testing of lifting machinery or lifting tackle. rgical Min. 10 years experience in Pressure Plant Chemical, Electrical or design, erection, maintenaMechanical nce, testing & inspection of or Metalllu- pressure plants and having of nonrgical Engg. knowledge destructive testing and Or codes of safety equivalent requirement of pressure vessels. Min. 7 years in collection Dangerous Chemical analysis of Fumes Engg or and environmental samples and Masters degree in calibration of monitoring equipment. Chemistry Min. 7 years experience on Supervision of Chemical or the shop floor in handling & handling of Engg. disposal of hazardous Masters hazardous degree in chemicals. substances Chemistry Ventilation Electrical or Min. 7 years in design, system Mechanical fabrication, installation and testing of ventilation Engg. systems. 112

5.12

SUB STANDARD WORK

5.12.1 PROCEDURE FOR ACCEPTANCE OF SUB-STANDARD WORK The Contractors are required to execute all works satisfactorily and according to the specifications. If certain items of work are below the specifications, the Contractor should be asked to re-do them according to the specifications. During the progress of the work, defects/deficiencies in the items of works are to be noted in time, recorded in Site Order Book. It will be the duty of the field staff, to point out such defects in the work in time during the progress of the work. These defects should also be brought to the notice of the EIC immediately, so that he may take timely action to issue notices to the Contractor either to rectify the defects or to get the work dismantled and redone, if necessary. Form of letter to be given to the contractor in regard to the rectification of defective work and removal of substandard material is contained in Annexure 5.18. Every attempt should be made to issue such notices regarding the defective items during the progress of the work. Where, however, this is not found feasible, the same should be issued within the prescribed maintenance period. Timely action alone can prevent occurrence of defects which will be difficult or impossible to rectify later on like hollow vertical joints in brick masonry or similar defects in structural members. If the Contractor does not rectify the defect, the work should be got redone or rectified by the Corporation by employing skilled labours at the risk and cost of the Contractor. If any sub-standard work which is not affecting the service ability of the structure the same shall be accepted at a reduced rates as defined below. Such work shall however be brought to the notice of the design group and the head of the unit. 5.12.2 SANCTION OF RATES FOR SUB-STANDARD WORK Acceptance of work below specifications and payment at reduced rates should be resorted to with the approval of the competent authority only for those items where it is structurally impossible to get the work re-done. Full powers have been delegated to the SD/PD/ED for acceptance of sub-standard work and determination of rates thereof. Before sub-standard work is accepted by the Corporation, the EIC, after getting prior approval of competent authority, should write a letter (refer Annexure 5.19 for the format) to the Contractor for and on behalf of the Corporation regarding acceptance of the same at the provisional rates pending the decision of the competent authority with regard to final rates. In reply to this letter, the engineer should obtain contractors consent for acceptance of the terms specified by the Corporation. For this purpose, forms as per Annexure 5.20 and powers as per the DFP of works (HQI 2001) be used. The decision of SD/PD/ED regarding the quantum of reduction as well as justification thereof in respect of rates for sub-standard work will be final and would not be open to arbitration under Clause 17 of the GCC. In cases where sub-standard work has been accepted, the record of analysis of reduction in the rates together with a copy of the orders approving such reduction in the rates for acceptance of sub-standard work by the SD/PD/ED should be sent to the Accounts Section so that they are made available to Audit during the inspection when found necessary. The Engineer should invariably write down in the Measurement Book/output from WCMS the element of the items of work remaining unexecuted and the defects in the item of work for which part rate is allowed. Side by side, when preparing running bills, the Engineer should invariably write in Measurement Book the element of the items of work remaining unexecuted and the specific defects in the items of works for which part rates are proposed by them along with abstract of the bill in Measurement Book. Part rate statement attached with Running Account Bill should also clearly indicate defects/deficiencies for the substandard work. Payment of part rate will be taken to mean that work done and accepted for part payment for the 113

operations executed in according to specifications and without defects unless otherwise clearly stated. The EIC should clearly show below the form as well as in the abstract entry in the Measurement Book/ WCMS output that the reduced rates paid in running bill as part rates for work were only provisional so that the Contractor may not come with a plea later on before the Arbitrator, that a certain rate has already been paid for the work and hence agreed to by the EIC. While making such part rates payments, care should be taken that the amount withheld is commensurate with the nature of defects. The Manager (F&A) at the time of scrutiny of the running bills before payment shall ensure that proper reasons for payment at part rates are given in the abstract of cost entered in the Measurement Books / WCMS and bills. He should also ensure that prior approval of SD/PD/ED is available in respect of part rates for defective work and a proper notice to the Contractor is available on the record. It is also imperative that the SD/PD/ED examine the proposals for sanction of reduction in rates sent by the EIC properly and ensure that formalities which are required to be followed for acceptance of substandard work have been followed before acceptance of the proposals. It is essential that the approval of the SD/PD/ED should be obtained before the final bill for the work is paid. Reduced rate item arises out of specific non-performance of the provisions of contract by the Contractor, which, however has been condoned by the Corporation under certain circumstances. So the procedures and priorities mentioned under Clause 11 of GCC, for working out the rates for substituted/extra items do not ipso facto apply in these cases. The deduction in rate should be commensurate with the defect and should be in a position to be defended in the Arbitration court and shall be worked out evaluating the deficiency in the item as compared to the full specifications mentioned in the agreement, based on principles of reasonableness and equity but always remembering that such a defect has occurred due to specific non-performance of provisions of contract, on the part of the Contractor. These powers are outside the limits of powers given for approval of substituted/extra item. SD/PD/ED should take note of these guidelines before they sanction reduced rate for such sub-standard items of work which are accepted under special circumstances.

5.13

PROGRAM, RATE OF PROGRESS AND HINDRANCES

5.13.1 CONTRACT RISK MANAGEMENT The objective of the risk management during execution of works is to have a balanced approach for identifying potential variations from what is planned or desired and managing those to minimise disruption of work or to reduce unexpected large variations in bill of quantities on account of change in design. A dynamic approach in managing the risk would result in smooth execution of works by providing reasonable assurance that the organisational objective is achieved within a tolerable degree of risk. The advantage of implementing risk management policies are effective planning, better cost control, minimizing losses, increased knowledge and understanding of exposure to risk, a systematic, well-informed and thorough method of decision making, minimised disruptions, better utilization of resources and creating best practices. The risk management should contain the following activities: (a) Identifying risks (b) Assessment of risks 114

(c) Risk mitigation measures (d) Information and communications (e) Monitoring and review Overall project risk management frame work shall be developed at the project planning stage. There may be risks involved in design, estimation, tendering, execution, statutory and regulatory issues, monitoring the supply chain etc. There may be risk due to external forces beyond the control of project authorities such as strikes by locals or any other force majure. The identification of risk at an appropriate time and to take remedial action to mitigate the risk would result in smooth operation of work. Identification of risk must be a dynamic process and will require review on periodic intervals. The Identified risks are categorised under various categories, viz. Design, estimation and contracting, project execution, environmental, safety, security, availability of raw materials, financial, human resources etc. and populated in a project risk register. These risks are further prioritised based on likelihood of occurrence and impact on the project schedule. Each of these risks will be assigned to a risk owner, who will devise the mitigation plan for his risks. The Risk register is updated with mitigation plan. A MIS is generated from the risk register for reporting the actions taken against the mitigation plan. New risks identified during the execution phase are also recorded in the risk register with mitigation plan. On completion of each project all the risks are uploaded into a data base wherein it serves as a starting point for the new project. Within the project, risk related to each of the contract will be identifiable for future reference. In order to achieve the desired results through contracting the EIC should at the initial period prepare himself for timely follow-up and effective monitoring. Prior to preparing a Risk Management table he shall, Identify all major events and dates Decide in detail the deliverable tasks, and develop the network interdependencies Estimate the duration of each tasks

This would enable the EIC to set his objectives. He shall populate in the risk management table / risk register : Risks with respect to people, Material, transport, environmental, safety, security, IT, methodology etc. Prepare mitigation/ readiness / monitoring plan with dates for implementation / follow-up against each of the tasks/risks.

On a Monthly basis the same shall be updated till the end of the contract. The table should be reviewed periodically and constraints / risks should be updated along with mitigation/monitoring plan. 5.13.2 WORK PLANNING The Contractor shall submit a detailed resource based time program for physical & financial progress of the Works to the EIC for his approval, within 30 days after Commencement of Works. The Contractor shall also submit a revised program 115

whenever the previous program is inconsistent with actual progress or with the Contractors obligations. Each program shall include: (a) the order in which the Contractor intends to carry out the Works, including the anticipated timing of each stage or activity or milestone of design, submission of Contractors Documents, procurement, manufacture of Plant and equipments, delivery to Site, construction, erection and testing including resource mobilization details, Sub-contractor wise detailed break-up of the above stages of work, the sequence and timing of inspections and tests specified in the Contract, and a supporting report which includes: (i) a general description of the working methodology which the Contractor intends to adopt for the major stages / activities, in the execution of the Works, and Contractors resource mobilization details stating reasonable estimate of the number of each class of Contractors Personnel and of each type of Contractors Equipment, required on the Site for each major stage/ activity.

(b) (c) (d)

(ii)

The program shall define as mentioned above, intermediate milestones which will form the basis for, monitoring the progress and initiating such corrective measures as may be decided by the EIC which shall be final and binding. The EIC shall approve the program submitted by the contractor, considering but not limited to the following: Program has been planned in manner for timely completion of the contract within the stipulated period of the contract the resources (manpower, plant & equipment, etc. )deployed at various time period shall suffice to ensure timely completion of each of the milestones. movement of resources has been planned in manner for smooth progress without any interruption of the work program has both physical and financial progress of works in a timely manner

The EIC shall give notice of approval to the Contractor, or an notice stating the extent to which the program does not comply with the Contract, at the earliest but not later than 15 days of receipt of the program. In absence of the same, the Contractor shall proceed in accordance with the program, subject to his other obligations under the Contract. The EIC shall monitor the progress and may give notice to the Contractor that a program fails to comply with the actual progress and the Contractors stated intentions. The Contractor shall submit a revised program to the Engineer without any further delay without altering the completion date and including the additional resources. It is expected that e-governance will be largely adopted for submission of programs / reports during execution of work. 116

5.13.3 EARLY DETECTION OF HINDRANCES The Contractor shall intimate the EIC at the earliest opportunity, of specific likely future events or circumstances that may adversely affect the quality of the work, increase the Contract Price or delay the execution of works. The EIC may require the Contractor to provide an estimate of the expected effect of the event or circumstance on the Contract Price and Completion Date. The estimate is to be provided by the Contractor as soon as reasonably possible. The information provided by the Contractor can be used by the EIC for considering in the risk management table and prepare a mitigation/monitoring action plan to reduce the effect on execution and completion of work as per contract conditions. 5.13.4 RATE OF PROGRESS The Contractor shall submit a report on rate of progress of work at the desired frequency, as requested by engineer-in charge. If, at any time EIC notices that the: (a) (b) actual progress is too slow to complete within the Time for Completion, and/or progress has fallen or will fall behind the current program

then the EIC may instruct the Contractor to submit the revised program, along with supporting report describing the revised methods which the Contractor proposes to adopt in order to expedite progress and complete the interim milestones as per the given schedule as well as complete the whole work within the time stipulated in the contract. Unless the EIC notifies otherwise, the Contractor shall adopt these revised methods, which may require increases in the working hours and/or in the numbers of Contractors Personnel and/or Goods, at the risk and cost of the Contractor. 5.13.5 HINDRANCE REGISTER EIC shall maintain a hindrance register in the form prescribed at Annexure 5.21 for every work awarded under works contract. This is an important document to ensure proper monitoring of the work and timely resolution of hindrances experienced by the parties to the contract. Any hindrance observed by the site Engineer suo-moto or brought to his notice by the contractor shall be recorded in the hindrance register. This hindrance register shall be signed by both the parties at the time of periodical review meetings. The site Engineer should also report to his EIC within a week of the occurrence of such hindrance. The hindrance register in respect of contracts approved and accepted by the authorities higher than SD/PD/ED, shall be reviewed by SD/PD/ED once in every three months. Similarly hindrance register pertaining to works approved and accepted by the authority at the level of SD/PD/ED and below shall be reviewed once in every three months by next higher authority to EIC. The Contractor shall record hindrances if any, in the hindrance register as specified in the sub clause 7.4 of GCC [Hindrances]. Hindrances recorded and accepted by the EIC in the register shall be the basis for granting extension of time. The hindrance register shall be in the custody of the EIC. 5.13.6 INCENTIVES This clause shall be made applicable by the Engineer based on the type and urgency of the work, and the necessity for the incentive shall be decided by the contract 117

approving authority, with prior approval from the CMD, NPCIL. The time allowed for execution of the works as specified in the work order is the essence of the contract. However if the work is required to be completed in compressed period i.e. before the stipulated date of completion then the contractor may be eligible for the incentive. For applicability of the Incentive clause the Schedule A of the GCC may be referred. For early completion of the contract work before the stipulated date of completion, an incentive amount / percentage which shall be decided by the EIC will be paid. If the incentive is to be apportioned between the various milestones to complete the work the same shall be decided by the EIC while drawing the construction schedule. The EIC shall get approval of the contract approving authority before deciding the incentive rate/amount and apportionment of incentive amount to various milestones. The incentive amount shall be subject to a maximum percentage (as specified in Schedule A of the GCC) of the contract value. For this purpose the term `Contract Value' shall be the value at contract rates of the work as agreed upon in the contract.

5.14

EXTENSION OF TIME AND COMPENSATION FOR DELAY

5.14.1 GENERAL PRINCIPLES At the time of issuing NIT for a particular work, the EIC should specify the time allowed for completion of the work consistent with the magnitude and overall schedule of the project / works. A Typical summary network of PHWR type Nuclear Power Plant is shown below :

The time allowed for carrying out the work as entered in the contract shall be strictly observed by the Contractor and shall be reckoned from the day as mentioned 118

specifically in Work Order for this purpose. The work shall, throughout the stipulated period of the Contract, be proceeded with all due diligence (time being deemed to be the essence of the contract) on the part of the contractor. In case negative float is observed at any moment of time, EIC shall take up the matter with higher authorities for remedial action. To ensure good progress of work during the execution, in which the time allowed for any work exceeds one month (say for special jobs), it is desired to complete 1/8th of the whole work value before 1/4th of the completion time has elapsed, 3/8th of the work before half of the time has elapsed and 3/4th of the work before 3/4th of such time has elapsed. However for jobs, where a time schedule has been submitted by the contractor and the same has been accepted by the EIC, the Contractor shall comply with such time schedule. 5.14.2 APPLICATION FOR EXTENSION OF TIME If the Contractor desires an extension of time for completion of work on the grounds of his having been unavoidably hindered in its execution or on any other ground, he shall apply in writing to the EIC within 15 days of the hindrance on account of which he desires such extension as aforesaid, and the EIC shall authorize such extension of time, if any, as in his opinion be necessary or proper and the decision of EIC shall be final. Monsoon, inclement weather and idle time shall not be considered as reasons for extension of time. Absence of any request or application from the contractor for extension of time shall not be a bar for giving a fair and reasonable extension by the EIC and this shall be binding on the contractor. 5.14.3 PROVISIONAL AND FINAL EXTENSION OF TIME Clause 7.6 of GCC empowers the EIC to grant extension of time for the completion of the work on certain conditions. He can exercise such powers if the following conditions are satisfied: i) The Contractor must apply to the EIC in writing for extension of time. ii) Such application must state the grounds which hindered the Contractor in the execution of the work within the stipulated time as per accepted construction schedule. iii) Such application must be made within 15 days of the date on which such hindrance arose. iv) After evaluation of all the circumstances the EIC finds that the grounds shown for the extension of time are reasonable. According to the terms of said clause 7.6 the EIC has powers to grant extension of time. Extension granted against the application for extensions received from the contractor shall be provisional extension only. The final extension shall be given at the time of completion of works after obtaining necessary approval from competent authority. EIC is expected to closely monitor the contract and appropriately apportion the period of hindrance i.e. force majeure, delay by Contractor and/or delays by Corporation. Format for recommendation note for approval to grant extension of time is given in Annexure 5.22. 5.14.4 POWERS TO AUTHORITIES FOR GRANT OF EXTENSION OF TIME The opinion of the EIC whether the grounds shown for the extension of time are reasonable or not is final. If the EIC is of the opinion that the grounds shown by the 119

Contractor are not reasonable and declines to grant extension of time, the Contractor cannot challenge the soundness of the opinion by reference as dispute for dispute resolution/arbitration under Clause 17 of the GCC. The opinion of the EIC that the period of extension granted by him is proper or necessary is not, however, final. If the Contractor feels that the period of extension granted is inadequate, he can refer to the dispute resolution / arbitration process under Clause 17 of the GCC on the question whether the period of extension is or is not proper or necessary. The powers for grant of extension of time have been delegated to the Corporation Officers as per DFP of works (HQI 2001) In deciding the authority which is competent to grant extension of time the value of individual contract should be the amount exclusive of the value of materials stipulated to be supplied by the Corporation free of cost. 5.14.5 GRANT OF EXTENSION OF TIME WITHOUT APPLICATION Where adequate and proper grounds exist, the Engineer in-Charge can grant extension of time even in the absence of application from the Contractor. EIC shall ensure that the currency of the contract is kept alive by granting extension of time well in advance. To keep the contract alive is a legal requirement. The extension, in order to be binding, will have to be with express or implied consent of the parties. It, therefore, follows that if the extension of time is granted by the Engineer and such extension of time is accepted by the Contractor, either expressly or impliedly by his action before and subsequent to the date of completion, the extension of time granted by the Engineer is valid. It is, therefore, necessary that the Engineer grants extension of time even when the Contractor does not apply for extension of time in order to keep the Contract alive. If the Contractor refuses to act upon the extension granted by the EIC, it will attract the provisions of Clauses 7.7 (Compensation of delay) and 13.2 (Determination / Cancellation of contract) of GCC. The levy of compensation for delayed performance on account of which extension of time is granted by the Engineer under Clause 7.7 would be distinct matter and would depend on: i) ii) Prior notice as contemplated by Section 55 of the Indian Contract Act, 1872; Fault/delay/hindrance being ascribable to the Contractor; and

iii) Proof of the loss occasioned thereby (in case it is challenged by the Contractor) 5.14.6 FORM OF APPLICATION FOR EXTENSION OF TIME The form of application for extension of time to be submitted by the Contractor has been standardized and is enclosed as Annexure 5.23. Part I of the Form is, on which the Contractor is required to apply for grant of extension of time. Part 2 of the Form is to be used by the Corporation officers for purposes of dealing with the application for extension of time. It is clarified that although the Contractor is required to seek extension within 15 days from the date of hindrance on which the extension is sought, it does not debar the grant of extension sought later as it is always competent to a promise to waive a delay and accept performance after the stipulated time. It is further clarified that the extraordinary concession should not be granted save in most exceptional circumstances for good causes shown for not seeking it within the period of 15 days and unless adequate explanation is furnished for asking the extension, it must be 120

refused. The Contractor has no right to have his request for extension considered where he has not applied for it in accordance with Clause 7.6 of GCC of the agreement. In case of force majeure the Contractor shall apply for extension of time on these grounds duly supported by the relevant documents. On receipt of application for grant of extension of time the EIC should grant necessary extension, if it is within his competence, otherwise he should forward his recommendations to the competent authority for grant of necessary extension of time. In cases where the sanction of the higher authority to the grant of extension of time is necessary, the EIC should apply for the same as soon as possible. If the orders of the competent authority are not received in time, EIC should extend the contract before the stipulated date actually expires so that the contract might remain in force but while communicating the extension of time, he must inform the contractor that this was without prejudice to the right of the Corporation to levy compensation under Clause 7.7 of the GCC. Sanction of extension of time will in all cases be issued by the EIC under Clause 7.6 (Extension of time for completion) of GCC of the Agreement in the proforma in Annexure 5.24. The form provides that the extension of time is granted without prejudice to right of Corporation to recover compensation for delay in terms of Clause 7.7 (Compensation of delay) of GCC of the agreement. However before issue for next extension of time it must be ensured by the EIC that approval of the Competent Authority is obtained with respect to delays attributable to earlier extension granted and the same to be communicated to the Contractor. In any case such a decision shall not be delayed by more than one week in case of authorities up to SD/PD/ED and one months time in case of authorities above SD/PD/ED. In all cases, a copy of letter granting extension of time will be endorsed to Manager (F&A). 5.14.7 CATEGORISATION OF EXTENSION OF TIME WITH FINANCIAL IMPLICATION 5.14.7.1 CATEGORISATION OF EXTENSION OF TIME Competent authority to whom powers have been delegated to grant extension of time shall classify the delay in the following sequential manner a) b) c) Delays attributable to NPCIL Delays attributable to Force Majeure. Delays attributable to Contractor.

5.14.7.2 REGULATION OF CONTRACT PRICE ADJUSTMENT PAYMENT DURING PROVISIONAL EXTENSION OF CONTRACT No provisional payment of contract price adjustment is payable where the original contract period is less than or equal to 12 Months. The contract if governed by contract price adjustment payment clause with accepted formula during its original schedule period and the period of contract is extended provisionally irrespective of the fact whether delay is attributable to NPCIL or Force Majeure or Contractor or a combination, the contract price adjustment on the work executed beyond the schedule date shall be paid based on value of indices as applicable to the stipulated schedule date of completion. In case the indices during extended period are lower than the indices applicable on the scheduled dates of completion, lower indices shall be applicable. Provisional contract price adjustment payment shall be regulated by 121

EIC in such a manner as to avoid as far as possible the recovery of over-payment of provisional contract price adjustment on final adjustment of contract price adjustment payment. Where the contract is operated with ceiling on contract price adjustment payment, it shall be ensured that payment of contract price adjustment including provisional contract price adjustment payment shall not exceed at any time percentage ceiling given in the contract multiplied by the value of the work completed at that instance of time. 5.14.7.3 REGULATION OF FINAL PAYMENT OF CONTRACT PRICE ADJUSTMENT ON FINAL EXTENSION OF CONTRACT: All the delays shall be taken after the original contract period in the sequence as given in Clause 5.14.7.1 above. It shall be ensured that the payment of contract price adjustment should be carefully assessed to avoid any unintended benefits to the Contractor. a) For contract(s) where completion period as stipulated in NIT or work order is less than and up to 12 (twelve) months and where there is a delay which is attributed to the Corporation, due to which the period of the contract exceeds 12 months, the contract price adjustments is applicable for the extended period. (For example, where the original contract period is 10 months and there is extension for 3 months, then adjustment is payable for one month i.e.13th month only). However the Subscript value of 0 defined in 11.3.4 of the GCC shall be the indices of the month in which the Mid period (50% in terms of days) of the original contract period falls on. b) For Contracts where completion period of contract is more than 12 months and the clause of contract price adjustment is applicable, if the reasons for extension of the contract is attributable to the force majeure and Contractor, the Contractor shall be paid the contract price adjustment for the extended period at the frozen indices applicable for the month preceding to the last date of stipulated completion period or extended completion period attributable to Corporation whichever is later. In case the prevailing price indices are lower than the frozen indices, as stated above, the lower shall be considered. c) In case the contract is operated with percentage ceiling on contract price adjustment payment, the contract price adjustment payment that would be calculated should not exceed the ceiling amount at any time i.e. percentage ceiling given in the contract multiplied with the value of work done at that moment of time. d) In on going contracts, if the extension is granted with the approval of authority competent to grant the final extension after proper ascertaining and classifying the delays, the contract price adjustment can be authorised as per guidelines given above. Adjustment between provisional payment of contract price adjustment and final payment of contract price adjustment shall be carried out on completion of work. When work is completed within the original stipulated period of contract, the payment of contract price adjustment shall be regulated as per prevailing price indices based on the value of the work actually carried out. However, in the case of contract where ceiling on contract price adjustment payment is applicable, the amount of contract price adjustment should not be more than the ceiling as prescribed. 122

5.14.8 DEFINITION OF FORCE MAJEURE Force Majeure means an exceptional event or circumstance: a) which is beyond a Partys control, b) which such Party could not reasonably have provided against before entering into the Contract, c) which, having arisen, such Party could not reasonably have avoided or overcome, and d) which is not substantially attributable to the other Party. Force Majeure may include, but is not limited to, exceptional events or circumstances of the kind listed below, so long as conditions (a) to (d) above are satisfied: i) war, hostilities (whether war be declared or not), invasion, act of foreign enemies, ii) rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war, iii} riot, commotion, disorder, strike or lockout by persons other than the Contractors Personnel, iv) munitions of war, explosive materials, ionizing radiation or contamination by radioactivity, except as may be attributable to the Contractors use of such munitions, explosives, radiation or radio-activity, and v) natural catastrophes such as earthquake, hurricane, typhoon, tsunami or volcanic activity. 5.14.9 COMPENSATION OF DELAY UNDER CLAUSE 7.7 OF GCC The word compensation should be used in relation to Clause 7.7 (Compensation of delay) of the General Conditions of Contracts instead of the word penalty. No compensation for delay to be levied for delays attributable to contractor where the contract value is Rs. 5 lakhs or less. Where contract value is more than Rs. 5 lakhs and the delay in completion of work is attributable to contractor, the compensation for delay to be levied on contractor as per following rates. Period of contract i) Compensation period (as originally stipulated) not Exceeding 1 year i ) Compensation period (as Originally stipulated) exceeding 1year but not exceeding 3 years iii)Compensation period (as originally stipulated) exceeding 3 years Compensation for delay @ 1.00% of contract value per week @ 0.5% of contract value per week @ 0.25% of contract value per week Maximum compensation For delay 5% of contract value

5% of contract value

5% of contract value

123

For this purpose the term contract value shall be the value at contract rates of the work as originally ordered. This shall exclude the value of the part of works which has been taken over and put in use by the Corporation. This means any part of work which has been taken over and certified fit for use but not put in use due to reasons not attributable to non-completion of the remaining works will also be excluded form the value of work while calculating the compensation for delay. The amount of compensation may be adjusted or set off against any sum payable to the contractor under this or any other contract with NPCIL. The recovery of compensation for delay at above rates shall be made irrespective of the fact whether NPCIL has suffered the loss or otherwise due to delay in completion of particular work. Waiver or reduction of compensation for delay can be granted by Officers as per power delegated in DFP of works (HQI 2001). They are required to exercise special and extra care while deciding levy of damages for delayed construction where higher rates have been paid for early construction. All letters of extension of time to be issued to the contractor and all letters intending to recover compensation for delay under Clause 7.7 of GCC of the agreement should be under the signature of EIC. 5.14.10 PERFORMA FOR INTIMATING COMPENSATION UNDER CLAUSE 7.6 The EIC shall obtain approval for levy of compensation for delay in the prescribed format (Pl. refer Annexure 5.25). The intimation to the contractor with regard to levy of compensation under Clause 7.6 of GCC of the contract shall be in the format provided in Annexure 5.26.

5.15

EXTRA, SUBSTITUTED AND DEVIATED ITEMS OF WORK

5.15.1 DEVIATIONS It is to be noted that quantities of works stipulated in SOR (Schedule of Quantities and rates) in Section VIII of the tender document are the estimated quantities. During execution of the works these quantities may alter. Similarly, new items or slightly modified items may also be introduced during execution of works which are essential to complete the work. Deviation in the contract would normally comprise of the following a) New items of work, i.e. items completely new and in addition to the items in contract. These are commonly known as Extra items. b) Substituted items, i.e., items which substitute the existing ones or are taken up in lieu of those already provided in the contract. These can be with modification or partially omitting items of work in the Contract. c) Deviation in quantities of items, i.e., where there is increase or decrease in the quantities of items of work in the agreement. In other words, the nomenclature of work remains the same but the, quantities vary with those provided in the agreement. In order to exercise effective control over deviations, the EIC shall take necessary actions to keep these deviations to the minimum and shall obtain approval of the competent authority, as required.

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5.15.2 DEVIATION TO BE AVOIDED EIC shall in general avoid from making or permitting any deviations, except trifling deviations from the quantities specified in the Schedule of Quantities, except under specific authority of the competent authority or in the case of absolute essentiality without which the work cannot be completed or in case of emergency. In the latter case the change should be forthwith reported to the next higher authority. To obviate large-scale deviations after call of tenders, the following instructions should be followed: i) Detailed estimates should be based on adequate plans and designs. Authority according technical sanction should satisfy himself that the proposals are structurally sound and estimates are based on adequate data. ii) Architectural working plans and elevations and other detailed drawing which are required to be mentioned in the nomenclature of various items in the detailed estimates should be ready before sanctioning the detailed estimate. Structural details of foundations and roof of ground floor should also be ready by then. Specifications incorporated in the detailed estimates should be precise and comprehensive and should be scrutinized carefully by the officer sanctioning the estimates. iii) Changes in the specifications from those indicated in the contract documents should be made with the specific orders of the authority technically sanctioning the detailed estimates for the project. 5.15.3 PRIOR SANCTION OF COMPETENT AUTHORITY NECESSARY FOR DEVIATIONS If deviations from the sanctioned plans and estimates become necessary, these should ordinarily be first discussed by the Site Engineer with the EIC and, if he agrees in principle, then the proposals should be formulated. The EIC shall be responsible to obtain the prior sanction of the competent authority to such deviations. The fact that the deviations are shown in the Designers plans should not be construed as having the sanction of the competent authority. ED(Engg.)/PD/SD shall estimate the cost of ECN/DCN/ revised procedure and proposal for estimate shall be submitted to Corporate Project Monitoring Group with a copy to Budget Section for obtaining the approval of appropriate Authority. A note, to the effect that estimate proposal has already been put up to Corporate Project Monitoring Group for obtaining competent authoritys approval, shall be recorded by ED(Engg.)/PD/SD on the above document before forwarding it to Unit/Site. Further in case where ECN/DCN is introduced at the Unit/Site by the field Engineering Cell stationed at unit, the estimate for ECN/DCN should be prepared by the concerned EIC of the work at unit and get it approved from competent authority at appropriate level. 5.15.4 POWERS TO SANCTION RATES FOR EXTRA/SUBSTITUTED ITEMS Authorities of NPCIL have been delegated with power to sanction rates of extra and substituted items of work in respect of each work as per DFP for works (HQI-2001) subject to the conditions laid down therein. Standard format for submitting proposal for extra / substituted items and additional quantities is given in Annexure 5.27. Reasonability & Justification of extra/substituted items sanctioned by various authorities should be properly formulated so as to reflect the exact necessity and mode of execution in the field.

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5.15.4.1 RIGHT TO ORDER VARIATIONS / DEVIATIONS As per the provisions / GCC, the EIC has powers to make any alterations in, omissions from, additions to or substitution for the original specifications drawings and instructions. The practice of changing the specifications after tenders have been invited and contract has been awarded is not advisable and hence this practice should, therefore, be discouraged as far as possible. In cases where it is considered essential to change the specifications etc., during the progress of the work, the officer authorizing such changes is required to record clearly the reasons for ordering such changes and also why these could not be foreseen and forward the same simultaneously to the accepting authority. This, however, does not mean that the Contractor would be entitled to ask for the reasons for ordering additions and alternations. According to this clause, the Contractor is bound to carry out such Items of work. The EIC is empowered under this clause to give the necessary instructions to the Contractor and the Contractor is bound to carry out the work in accordance with such instructions but the following three conditions should be satisfied in the issue of such instructions: i) ii) iii) Instructions must be given during the progress of the work and not after completion of the work. These must be given in writing. These must be signed by the EIC.

5.15.4.2 EXTENSION OF TIME DUE TO VARIATIONS / DEVIATIONS As regards time for completion of the work as altered, added or substituted, the EIC should determine the proportion that the altered, additional or substituted work bears to the original contract work and certify for such portion. He should extend the time for the completion of the work according to such proportion plus 25% thereof. The proportion so determined by the EIC is final and the Contractor cannot raise a dispute as to such proportion. However, if the Contractor feels that the period of extension given, having regard to the proportion so determined, is miscalculated it is open to him to request arbitration under the relevant clause about the propriety or otherwise of such period of extension. 5.15.4.3 WORKING OUT THE RATES It is to be noted that all communications with the contractor shall be carried out by EIC of works for and on behalf of the Corporation. The reference of having taken the necessary approvals, from the competent authorities shall be avoided while for warding the sanctions to the Contractor. It is also to be noted that under the terms of contract it is the EIC who is the competent authority for according such sanction and it should be so worded as to convey clearly to the other party that the rates have been sanctioned by him and not for or at the instance of the higher authority. It is only in accordance with the procedure that the EIC sometimes is required to take approval or sanction of the higher authority in determining the rates, as per the DFP for works. The copies of communications in connection with fixation of rates, etc., should not be endorsed to the Contractors or any other private party. In reply to the communications of the Contractors asking for early settlement of rates, where rates are required to be examined and sanctioned by higher authorities and the sanction is awaited, they should only be informed that the matter is under consideration and is receiving attention. 126

On receipt of the rates from the Contractor intimated by him under sub-clause 11.2.6 of the GCC, the EIC should consider whether the rates demanded are reasonable. If the EIC is of the opinion that they are reasonable, he may agree to the rates after consulting the competent authority. If, on the other hand, he is of the opinion that the rates demanded are not reasonable and he does not agree to them, he should work out the rates on the basis detailed in Section - 2 of this manual and settle with the Contractor the rates so worked out. The question then arises as to the rate at which the Contractor is to be paid for the work done prior to the date of determination of the rate in case that rate is not acceptable to the Contractor. In such case the payment should be made at the rate determined by the EIC. The deviation limits mention under the sub-clause 11.2 of GCC provided below: Particulars Excavation items All other items Deviation Limits + 100% + 50%

The provisions mentioned in the clauses 11.2.2 to 11.2.9 of the GCC shall be considered for determination of the rates for extra, additional or substituted items. In case the quantities to be executed is beyond the above variation limits or in case of extra, additional or substituted work, the contractor shall give notice to the corporation of his intention to claim a varied rate or price supported by proper analysis within 14 days of the date of instruction for executing varied work, extra, additional or substituted work, and before the commencement of such work. The Contractor on no account shall suspend the work on the plea of non-settlement of rates of item. Deletion of any item / any part of work of schedule of quantities shall also form part of the variation limit. There may be a case where the net value of the contract is less than 75% of the original stipulated value. Such cases shall be properly assessed and the reasons for the same shall be evaluated. All efforts shall be made to mutually discuss the issue and close the contract. However, in case the reasons are beyond the contract, then a suitable compensation shall be assessed mutually and paid to the Contractor based on case to case basis. In case the quoted rates are more than 25% of the estimated departmental rates corporation has got a right to negotiate such rates with prospective bidder execution of quantity beyond the tendered quantity before award of work. working out of rates under sub-clauses 11.2.1 to 11.2.9 of G.C.C., Contractor is required to submit his rates and these have to be worked out in accordance with provisions made therein. 5.15.5 PAYMENTS OF PROVISIONAL RATES FOR EXTRA/SUBSTITUTED ITEMS a) No payment more than the following limits against the extra/substituted item where rates are provisional shall be authorized unless the approval of the competent authority to sanction final rate for extra/ substituted item is received, i) 50 % when the rate has derived based on market rate. the for For not the

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ii) Rate of similar item with comparable specification if available in the same work order provided the rate of items with comparable specification is not abnormally high quoted. b) Payment towards additional quantity, extra or substituted items should be authorized only after approval of competent authority who has been delegated powers to approve the variation. 5.15.6 INSTRUCTIONS FOR FORWARDING EXTRA / SUBSTITUTED ITEMS While forwarding the proposal for extra or substituted items, or deviation in quantities to competent authority for approval, the Engineer should always explain whether the Contractor has asked for rate supported by the analysis and whether the Contractor has been informed according to the standing orders that the EIC shall determine the rates as per agreement conditions. Analysis of rates for the original non-schedule item should always be enclosed by the EIC. Following are the recommended practices: i) Remarks given by the recommending officer should be self-explanatory and nomenclature of the items should also be properly worded. ii) Copies of the agreement should be enclosed along with the statements. iii) Copy of analysis of rate; if any, given by the Contractor should also be enclosed. iv) Whether prior approval was obtained from the appropriate authority before exceeding the quantities in respect of abnormally high rated items beyond the permissible limits. If, not, reasons for the same may be given. The proposal should be supported by information regarding prevailing rates for items of work for which the quantities were increased at the time of actual execution of such items. It should also be indicated as to what efforts were made by the officers to get these excess quantities done by some other contractor at a rate lower than the rate negotiated with the contactor for the quantity beyond tendered quantity and the consequences there of are already approved and authorized. v) In cases where local Schedule of Rates is referred to in the agreement, relevant extracts of the schedule of rates should be enclosed with the case by the Engineer. vi) Adequate justification for consumption of labour and material for non-schedule items should be given with the case by the Engineer. vii) Drawings on which the analysis is based should also be enclosed by the engineer. 5.15.7 GOVERNING CONDITIONS OF APPROVING ADDITIONAL QUANTITIES EXTRA ITEMS / SUBSTITUTED ITEMS i) Variation approving authorities shall ensure that the negative variation is not on account of deletion / non execution of Abnormally Low Rated items (where quoted rate is more than 25% lower than estimated rate) with the intention to execute such items at a later date through other contractor at higher rate with the same specification or substituted specification. ii) The powers delegated for approval of variation to each authority shall be exercised cautiously within the ceiling percentage given to each authority. There may be cases when on earlier occasion the variation in a particular item was approved by higher authority due to variation being more than the powers delegated to the lower authority. It does not debar to exercise the powers which have been delegated to the 128

lower authority. In other words, each authority should exercise his delegation of financial powers as defined in DFP (HQI 2001) in absolute terms. iii) Variation approving authority shall ensure that the expenditure on account of Engineering Change Notice (ECN) / Design Change Notice (DCN) / revised procedure or otherwise is within the sanctioned cost estimate for the work. For exercising the above powers prior approval of competent authority for Technical Sanction as well as budget provision for additional expenditure against each work should be available. A specific indication to this effect regarding the availability of funds should invariably be incorporated in all sanctions issued for extra/substitute items. iv) Sanctions to extra/substituted items and additional quantities should not be resorted to as a matter of routine. The sanctioning authorities should exercise maximum restraints while according approval for such items/quantities. v) Variation in quantities should be as a result of construction drawings / ECN / DCN / Procedure only and not due to inclusion of different work unrelated to intent of original scope of work. A certificate to that effect shall be recorded by EIC of the work while obtaining the approval from competent authority. vi) For substituted items the net increase due to substitution, shall be taken for determining the sanctioning authority. In case the accepted rate for the AHR items are within 25% above the estimated rate of the item, the excess quantity beyond tendered quantity may be dealt as in case of normal items vii) In case the accepted rate for AHR items is high rated (where quoted rate is more than 25% above the estimated rate of the item) then for the execution of quantity beyond 25% of tendered quantity, the EIC should explore possibility of getting this increased quantity done by some other contractor at lesser rates. As regards increase in quantity of other normal items is concerned, the increase in quantity item wise (item of any individual trade) may be accepted up to the deviation percentage given in GCC of the respective contract but the total value of payments made till such increase should remain within contract value. In case no alternative is available with the EIC to get the increased quantity executed at lesser rates, the prior approval of competent authority shall be obtained before awarding additional quantity for execution against such items. viii) Due to increase in quantity or otherwise if the status of the lowest accepted tender is likely to change, all efforts shall be made by EIC of the work to negotiate the rate of all such items with contractor in order to avoid the change in the status of lowest tender before awarding additional quantities for execution. In spite of putting all efforts if the status is likely to change, the prior approval of next higher authority should be obtained before ordering additional quantities for execution. Next higher authority means the authority not below the rank of SD/PD/ED. ix) Superintendent/SME/CE/ACE of concerned section shall regularly monitor the details of extra items, substituted items and additional quantities sanctioned. A statement with these details shall be made available within section for each contract. The information as and when called for by higher authorities shall be furnished. While preparing the above statement to Corporate Office, the same may be done in 2 parts (i) design changes communicated by the Corporate Office wherever necessary indicating the AERB requirements which necessitated the design changes and the total cost implications and (ii) site changes with technical reasons for the same and full cost implications. 129

x) Payment for increased quantity beyond GCC limits can be approved by PD/SD/ED irrespective of variation percentage, provided increase does not result in payment beyond W.O. value. The above provision is only for additional quantities of BOQ but does not include the extra item and the increase in BOQ should be based on construction drawing approved by authority. However, a copy of this variation should invariably be sent to Designer immediately on execution of additional quantity. xi) In the case of Mega Package Contract approved by Board Sub-Committee / Board, the overall variation beyond 10% of contract value may be approved by CMD subject to ratification of Final Variation by the Contract Approving Authority. xii) Further in the case of Mega Package Contract the quantities are considered tentatively based on preliminary drawings and BOQs undergo lot of changes during execution, therefore the net variation shall be considered for the purpose of variation approval at respective level. 5.15.8 GUIDELINES AS PER GCC FOR FIXING RATES FOR EXTRA/SUBSTITUTED ITEMS & ADDITIONAL QUANTITIES In case of quantities beyond variation limits, the EIC shall determine the rates, after due consideration to the rate analysis submitted by the contractor. These provisions shall also be applicable for decrease in rates. For determining the rates for extra, altered or substituted item, where in such item with similar specification is available in the schedule of quantities then the same rate shall be applied. In case the item is not available within the same schedule of quantities but are available in other parts / modules of the contract, then the lowest rate among the rates in other part / module shall be considered. Incase the rates for extra, altered or substituted item are not available in any part or module of Schedule of quantities then the rate shall be determined based on Market rates, approved by the EIC. As per sub-clause 11.2.6 of GCC, Engineer within 30 days of the receipt of rates from the contractor, should take action to have the rates sanctioned by the appropriate authority. The rates should be approved by the sanctioning authority within the framework of as included in the agreement. While doing so, equity and reasonableness of the rates should be kept in view. In all these cases, action for the fixation of rates should be taken on the basis of estimated quantities. In case, after the completion of the work, the variation in the quantities is within limits specified in Clause 11.2.1 of GCC, no revision in the rate is called for. Similarly, in the case wherever there is likely to be decrease in the rates of items for quantities beyond the deviation limits mentioned in sub-Clause 11.2.1 of GCC the responsibility for initiating action for the revision of rates devolves on the engineer. Here also action should be initiated as soon as possibility of the excess comes to notice. In case of material issued by the Corporation, 2.5% may be added as profit and overheads over the issue rates of materials stipulated in the contract while analyzing the rates for extra items. The percentage does not include transport charges. In any case, no rate shall be derived from high rated / low rated items. 130

5.15.9 MEASUREMENT FOR INADMISSIBLE ITEMS In case of items which are claimed by the contractor but are not admissible according to the Corporation the measurements should be taken for record purposes only and without prejudice so that in case it is subsequently decided to admit the contractors claims, there should be no difficulty in determining the quantities of such work done. A suitable remark should, however, be made in red ink against such measurements to guard against payment in the ordinary way.

5.16

CONTRACT PRICE ADJUSTMENT

This clause provides for compensation in case of increase in price of materials and/or wages of labour required for execution of work (not for the materials supplied or services or services rendered at fixed price) subject to certain conditions and also downward adjustment in case of decrease in rates in the above items. The rates quoted by the tenderer shall be the Base Price, which will be subjected to price adjustments in accordance with the conditions and formula prescribed herein and further subject to satisfying the requirements specified in this clause only. This clause is applicable only to the contracts where stipulated completion period is more than 12 months. As mentioned earlier, For contract(s) where completion period as stipulated in NIT or work order is less than and up to 12 (twelve) months and where there is a delay which is attributed to the Corporation, due to which the period of the contract exceeds 12 months, the contract price adjustments is applicable for the extended period. (For example, where the original contract period is 10 months and there is extension for 3 months, then adjustment is payable for one month i.e.13th month only). However the Subscript value of 0 defined in 11.3.4 of GCC above shall be the indices of the month in which the mid period (50% in terms of days) of the original contract period falls on. The components of material, labour and POL for every work have to be predetermined and incorporated in the contract. For this purpose, the work shal1 be classified broadly as under: 1. Building works including sanitary and water supply. 2. Road works and pavement works 3. Development works. 4. Internal electrical installations. 5. External electrical works. 6. Supplying and installation of machinery, like lifts sub-stations, pump sets, etc. 7. Mechanical works/piping etc. 8. Control & Instrumentation etc. 9. Maintenance works 10. Miscellaneous works

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The EIC shall sanction the Contract price adjustment on account of escalation or deescalation in proforma enclosed at Annexure 5.28 and amounts thus sanctioned shal1 be mentioned in the next Running Account Bill or the Final Bill as the case may be. RECOMMENDED COMPONENTS OF MATERIALS, LABOUR AND POL FOR ABOVE CATEGORIES OF WORKS IS AS FOLLOWS: (FIXED COMPONENT CONTENT AT 15%) Material Labour 1) Building works including Sanitary & water Supply 2) Road works and pavements 3) Development works a) External Sewerage b) External Water Supply c) Land scaping 4) Internal electrical installations 5) External Electrical Works a)External overhead line electrical works b)External underground cable electrical works 6) Supply and Installation of machinery like lifts, substation, pump set etc. 7) mechanical Works / Piping 8) Control & Instrumentation 9) Maintenance and Misc. Labour intensive works 63% 77% 77% 81% 70% 64% 68% 51% 68% 68% 68% 20% 20% 4% 8% 4% 15% 21% 17% 34% 17% 17% 17% 65% POL 2% 4% Total 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85%

Note : Above Components are only indicative. Engineer shall assess these components for each work depending on Material / labour / POL components involved and specify the same in the tender document. However, fixed component shall be retained as 15%. Material component mentioned above should be further bifurcated into various materials (m,n,o,p & q) which has significant impact on the contract price. For e.g if cement and steel are major component of contract, say building works with a proportion of 8 % and 6% in the contract price. Then the material component as above 63% shall be defined as Cement 8%, Steel 6% and rest of materials 49%. The "Contract Price" as awarded shall be the Base Price, unless other wise specified. A certain fixed percentage of the base price shall not be subject to any price adjustment. The balance percentage to be specified shall be of Identified Components towards Labour, Material(s) (not being material supplied/or services rendered at fixed prices by the Corporation) and P.O.L. and shall be subjected to Price Adjustment. The fixed component shall be 15% of the contract value, and is not subjected to price adjustments. However other components shall vary from contract to contract depending upon the conditions laid down in the contract and this information is furnished by the Corporation. The actual amount of price adjustment shall be determined by satisfying the conditions specified herein. The price adjustment formula for the various components of the Contract Price shall be construed as stipulated hereinafter. The formula designed for governing and calculating the price adjustment to be applied to the contract price shall be as follows:

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ACV1 = CV (F + luLu1/Lu0 + lsLs1/Ls0 + mM1/M0 + nN1/N0 + oO1/O0 + pP1/P0 + qQ1/Q0 + dD1/D0) Where: ACV1 - Adjusted contract price i.e., value of work done after application of above price adjustment formula. CV - Base contract price, subject to price adjustment, i.e. the value of the work done in the given period for which the Price Adjustment is to be calculated excluding cost of material supplied or services rendered at fixed prices by the Corporation and the cost of extra items, rates for which have been worked out based on market rates. F Lu Fixed component i.e. 15% of contract value, which is not subjected to any adjustment under this formula or otherwise. Unskilled Labour component (to be defined in Schedule A of the GCC) expressed as percentage of the contract value which will be subjected to adjustment. Skilled labour component (to be defined in Schedule A of the GCC) expressed as percentage of the contract value which will be subject to adjustment.

Ls -

m,n,o,p -Various material component (bought by the contractor) expressed as percentage of the contract value(to be defined in Schedule A of the GCC), which will be subject to adjustment. The sum of m,n,o,p along with F, d , labour (lu and ls) and q should sum up to one. qdComponent for all the other materials (other than m, n, o, and p) expressed as percentage of contract value, to be defined in Schedule A of the GCC P. O. L. component expressed as percentage of the contract value, to be defined in Schedule A of the GCC, which will be subject to adjustment.

M, N, O, P - Corresponding published price indices of various materials based on All India Wholesale Price Index for Individual Commodities /Group Items for the period under consideration published by Economic advisor to Government of India, Ministry of Industry & Commerce. QWholesale price indices applicable to all commodities for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry & Commerce. Minimum wages in Rupees of a labour fixed under any law, statutory rule or order as applicable on the last date of the month under consideration (where in subscript u and s denotes the unskilled and skilled labour respectively). Petrol prices of the nearest petrol pump (to be defined in Schedule A) applicable as on the last date of the month under consideration.

L-

D-

SUBSCRIPT: 0 refers to the values of the above-mentioned Minimum Wages/ Material indices/ Petrol price applicable to previous month prior to the date of submission of tenders (In case of two part tender the date of submission of Part 1 shall be taken). 133

1 -

refers to the values of corresponding Minimum Wages, Material indices/ petrol price as applicable for the month prior to the month in which the work is executed for which adjustment is applicable, respectively.

The value of fixed component `F' will remain unchanged and fixed and shall not be disputed. Price Adjustment(s) shall be calculated for the quantum of works executed during the month of the bill. Additional, altered or substituted items of work, derived from the agreed Bill of quantities and rates attached in work order will also attract price adjustment as per this clause. No price adjustment for the cost of material issued and/or services provided by the Corporation shall be applicable, which are issued at fixed rates to the Contractor. Extra, altered or substituted item, for which the rate has been derived from the market rate, shall not be subject to price adjustment within 12 months from the actual commencement of execution or date of its communication to the contractor whichever is earlier. In the case of materials brought to site for which any secured advance is included in the bill, the full assessed value of such advance shall be added to the cost of work shown in the bill for operation of this Clause. Similarly, when such materials are incorporated in the work and secured advance is deducted from the bill, the full assessed value should be deducted from the cost of the work shown in the bill, running or final. In case of advance payment is given for the work done but not measured the full value of such unmeasured work shall be added to the cost of work shown in the bill for operation of this Clause. When such work is measured and paid the full value of such work shall be deducted from the cost of work shown in the bill, running or final. Every month after the award of Contract, the Contractor shall submit to the EIC, a written notice of the changes, if any, that have occurred in the specified indices of Material/petrol prices and in minimum wages for labour during the previous month containing the effective date of such change, the extent of change etc. with authenticated documentary evidence (as described above) of the relevant published indices/petrol price/minimum wages to substantiate the price adjustment claim. Provided further that such payment/refund shall not be operative and payable after the Schedule expiry of the contract period including authorized extended contract period. In case where the reasons for extension of the contract is attributable to the force majeure and Contractor, the Contractor shall be paid the contract price adjustment for the extended period at the frozen indices applicable for the month preceding to the last date of stipulated completion period or extended completion period attributable to Corporation whichever is later. In case the prevailing price indices are lower than the frozen indices, as stated above, the lower shall be considered. For this purpose, the total delayed period shall be apportioned between delays due to the Corporation, force majeure events and / or to the Contractor in the following order: 1. Delay caused by the Corporation will be allowed considering as if this delay due to the Corporation happened first, immediately after stipulated contract completion period, irrespective of actual point in time in which such delay by Corporation occurs. 2. Followed by delay due to Force Majeure, 134

3. Delay due to Contractor The total adjusted contract price shall be: (Sigma) ACV1 + Other elements of Contract Price, if any Except as provided herein, no other expenditure incurred by the Contractor, under any Clause(s) / item(s) due to any reason whatsoever, shall be payable to the Contractor. Bids specifying provisions other than those specified above run the risk of rejection. The following principles will be followed while working out the price adjustment for labour: (a) The minimum wage of an skilled and unskilled male mazdoor mentioned above, shall be the higher of the following two figures viz. those notified by Government of India/Ministry of Labour and those notified by the Local Administration, both relevant to the place of work and the period of reckoning. (b) The escalation for labour also shall be paid at the same monthly intervals when escalation due to increase in cost of materials and/or POL is paid under this clause. If such revision of minimum wages takes place during any such intervals the escalation compensation shall be payable for work done in all periods subsequent to the period in which the revision of minimum wages takes place. (c) Irrespective of variations in minimum wages of any category of labour, for the purpose of this clause, the variation in the rates for skilled and unskilled adult male mazdoor respectively shall form the basis for working out the escalation compensation payable on the labour component. (d) In the event the price/indices of materials and/or wages of labour required for execution of the work decreases, there shall be downward adjustment of the cost of work so that such price of materials and/or wages of labour shall be deductible from the cost of work under this contract and in this regard the formula herein before stated under this Clause 11.3 of GCC shall mutatis mutandis apply, provided that the EIC shall otherwise be entitled to lay down the principles on which the provision of this subclause shall be implemented from time to time and the decision of the EIC in this behalf shall be final and binding. A sample calculation for contract price adjustment is provided in Annexure 5.29.

5.17

COMPLETION CERTIFICATE
A completion certificate (format provided in Annexure 5.30) is to be given by the EIC to a Contractor on completion of work by Contractors. The idea is that no final bill will be accepted from a Contractor unless such a bill is supported by a completion certificate. On completion of work, the user should be informed of the same and formal handing over effected. Completion report of each work should be prepared with final expenditure statement and with As Built drawings. Before a work is declared as completed in all respect and final payment is released to the Contractor, in respect of the following, it should be inspected by Head of Discipline of the project/station and necessary certificate recorded. Contract Value i) Civil, Mechanical, Electrical, Instrumentation, Piping, etc. 135 Rs. 25 Lakhs and above

ii)

Horticulture Works

Rs. 2 lakhs and above

He shall also record the following certificate:I have inspected work of ............................ contract value of which is Rs...................... vide Agreement No...... today. As a result of this inspection any my previous inspections, I find that the work has been carried out generally to specification, and has been completed satisfactorily. There are no noticeable defects except for the following.. The above certificate is required to be recorded within a period of 1 month from the date of intimation by the contractor on completion of the work, or before submission of final bill whichever is earlier. In the case of works where contract value is less than the above, Section Heads (SO/F and above) have to record similar certificate, as the case may be. These defects should be rectified by the contractor or by the Corporation at risk and cost of Contractor, action for which should be taken in terms of the contract. This certificate will be attached with the office copy of the final bill of the Contractor and remain on the record of the Corporation units. The Engineer shall not make final payment till this certificate is recorded and attached to the office copy. This certificate, however, will in no way reduce the responsibility of the EIC and the Manager (F&A) for due check of the work and the bill as required by the rules and code of practice of the Corporation. In order to keep record of inspections carried out by Engineer, Inspection notes shall invariably be issued by them, so that both the Engineer and the Contractor are kept appraised of the nature and character of works and defects, if any. This completion Certificate shall be invariably recorded in WCMS while forwarding the final bill in addition to issue of certificate in prescribed Performa attached with the final bill. The date of completion of work is the date on which it is finished and not the date on which the final measurements are recorded by the EIC or his subordinates. It will, therefore, be necessary to enable the Audit/Accounts to satisfy itself that the work was completed within the time prescribed in the contract, to note the date of its actual completion both in the bill of the Contractor as well as in the Measurement Book in which the last measurements are recorded. Further, the date of completion certificate will determine the date up to which a Contractor can be held responsible for making damages good under relevant clauses of the agreement. It has been observed that generally no certificate is given and only the date of completion is noted in the measurement book. Since this practice is not in conformity with the provisions of the GCC, completion certificate should be recorded as underCertified that the work has been physically completed within the due date/extended date according to the contract, i.e. ...... (date) and that no defects are apparent and the Contractor has removed from the premises on which the work was being executed all scaffolding, surplus material and rubbish and cleaned all the dirt from all woodwork, doors, windows, walls, floors or other parts of the building, in, upon or about which the work was to be executed or of which he had possession for the purpose of execution

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thereof. This is, however, subject to the measurements being recorded and quality being checked by the competent authority. If the Contractor fails to remove scaffolding, surplus material and rubbish and does not clean up the dirt from the woodwork, doors, windows, walls, floors and other parts of the building etc., it should be got removed at the cost of the Contractor as laid down in this clause. The completion certificate should not be given till the site is cleared of all debris, rubbish etc. Further, the certificate of completion shall not be issued until the work is measured by the EIC. The intention behind the provision is that all the measurements for works shall be recorded in time. The measurements for works are the most vital details, which get measured and accepted by both the parties. Only delaying the taking of measurements, by the EIC, cannot of course delay the date of completion. Since shelter under this provision cannot be resorted to for the lapse by the party taking advantage of it. Anyhow, if the Contractor delays/avoids finalising of measurements, application of this provision will be reasonable.

5.18

SUSPENSION OF WORK
The EIC may instruct the Contractor to suspend the progress of part or all of works. During the period of suspension, the contractor shall protect, store and secure such part or all of the works against any deterioration, loss or damage. No compensation shall be paid for suspension up to the period of 30 days. In case the suspension of work is ordered not on account of any fault of the Contractor, the Contractor shall be entitled to an extension of time equal to the period of each suspension plus 25% for completion of the item or group of items of work for which a separate period of completion is specified in the contract and of which the suspended work forms a part, and if the cumulative period of all suspension(s) exceeds 30 days, the contractor shall, in addition, be entitled to compensation for the period of suspension beyond initial 30 days, in respect of wages for the employees and workers and the idling charges for plants, machineries and equipments etc. physically available at the site. However, the Contractor shall, at the earliest, within a maximum period of 15 days, from the date of suspension, submit its claim to the EIC, for every 15 days of Suspension, over and above the initial 30 days period of suspension, along with all documentary evidence available in respect of the employees, workmen, plants, machineries and equipments remaining idle during such period of suspension. In this regard, the EIC shall, after giving an opportunity of being heard to the Contractor, assess, calculate, decide and settle the claims so submitted by the Contractor after getting necessary approvals from the Competent Authority. In order to avoid disputes, the EIC shall maintain record of period of suspensions and when cumulative period exceeds 30 days, shall also maintain a record of employees, workmen, plants, machineries and equipments on a day to day basis actually remaining idle during such period and that the resources are not being utilised for other works.

5.19

PROVISIONS FOR TERMINATION / CANCELLATION OF CONTRACT

This clause, as per the General conditions of the contract deals with determination and/or rescission of contract, forfeiture of security deposit and execution of work through other agencies. This clause is very important and is of vital importance. 137

According to this clause when the Contractor has rendered himself liable to action under relevant clause, the EIC on behalf of the Corporation shall have powers (a) to determine or rescind the contract; Upon such determination or rescission, the security deposit of the Contractor shall be liable to be forfeited and shall be absolutely at the disposal of the Corporation; to employ labour paid by the NPCIL and to supply material to carry out the work for and on behalf of the Contractor; to measure up the work of the Contractor and to take such part thereof as shall be unexecuted out of his hand and to give it to another Contractor at the risk and cost of the original Contractor,

(b) (c)

A question was raised whether this clause entitles the Corporation to exercise the power under any one or more than one of the sub-clauses (a),b)&(c) above. It is clarified that the Corporation is entitled to forfeit the security deposit under sub clause (a) and also to recover the extra cost involved in getting the work done departmentally and/or through another Contractor. In other words, recourse can be had to one or more alternatives according to the requirements of each sub-clause. It may, however, be added that extra expenditure under Sub Clauses (b) and (c) cannot be recovered in addition to the forfeiture of the security deposit but if the extra expenditure exceeds the forfeited security deposit, the difference between the extra expenditure and the security deposit only can be recovered. Furthermore, whenever action is taken under (a) to rescind the contract and forfeit the security deposit, it should be explicitly stated that this was without prejudice to Corporations right to recover losses under Sub Clauses (b) and (c). This would preserve Corporations right under these two sub-clauses. Clause 13.2 of GCC of the agreement inter alias provides that if contract is rescinded the security deposit of the Contractor shall stand forfeited and be absolutely at the disposal of the Corporation. In a case of this type it has been held that the full security deposit recoverable under the contract stand forfeited to the Corporation and not merely security deposit standing at his credit. Further, if any portion of the security money has not been paid or realized, it would be called and forfeited. The provision of Clause 13.2 of the GCC can be applied even after recovery of compensation equal to the amount of the security deposit under sub-clause 7.7 of GCC as the two clauses are independently enforceable to the full extent. A question was raised whether any credit is to be allowed to the original Contractor in case the amount spent by the Corporation is less than the amount payable to the original Contractor if the work had been done by him. It is clarified that where in a case dealt with under sub-clause (c) or sub-clause (b), there is no extra expenditure. but, on the other hand, the unfinished work is executed at a lesser cost, that the Contractor has no right to claim the amount saved. Further, the question of giving the Contractor any benefit cannot at all arise since he cannot make any profit out of his own default. They have further observed that subclauses (b) and (c) define the extent of damages recoverable and if the work is executed cheaper, the only consequence is that no damages are recoverable under these two sub-clauses. The principle objective of terminating the contract is to ensure that no undue benefit to the Contractor has been passed on due to any reason. All the circumstances are required to be taken into consideration while terminating the 138

contract. The various options as an alternative shall also be recorded before taking up any such action. Two model forms of letters to be issued by the EIC for and on behalf of the Corporation while serving show cause notice as wel1 as notice on final action to the Contractor under Clause 13.2 of the GCC in respect of works undertaken in the Corporation have been introduced. Copies of these model forms are given in Annexure 5.31 & 5.32. While making use of these forms, the following points should be kept in view: (a) Alternatives wherever not applicable should be deleted and suitable additions made wherever considered necessary. (b) While determining the contract under any of the sub-clauses of Clause 13.2 of GCC for causes other than the causes as mentioned in the standard form for show-cause notice (viz., wrongful delay or suspension of work or slow progress) suitable modifications may be made, where necessary, according to the requirements of the case. (c) Final notice under Clause 13.2 of the GCC may, thereafter, be drafted and approval of the competent authority who accepted the tender be obtained. This acceptance is with reference to financial limit. (d) Draft final notice may be got vetted by the Chief Law Officer, wherever necessary, before serving the same on the Contractor. Failure to commence work does not attract action under sub-clauses 7.7 &13.2 of GCC. Sometimes cases arise in the Corporation where contractors fail to commence the works awarded to them after call of tenders. In such cases, it is decided to forfeit to the Corporation the bid security deposited by the Contractor and also to take appropriate action against him, such as suspension of business, removal from the approved list of Contractors, etc. whenever necessary.

5.20

RECORD MANAGEMENT
Preservation of documents is an essential part of project management. No work is said to be complete unless all the documents are complete. Documents can be classified as temporary and permanent documents. Temporary documents are preserved till completion of work and final bill is paid. Permanent documents shall be preserved for the time period as defined in the record management system of NPCIL. After completion of work, the completion report along with all measurement books, agreement Copies, as built drawings, important correspondence files and all other relevant documents shall be transferred to centralized record section.

KEY PERFORMANCE MEASURES

Measure Unit 1. Variations of completion period from scheduled ___ months completion period

139

2. Deviations due to extra / quantity variation along with Financial Impact 3. Deviations observed during Quality and Technical Audit 4. Cases of suspension of work along with financial implication to the corporation

Rs._ Number of Instances Number, Reason financial implication and

MIS
Variations of the actual completion period to the scheduled completion period. Deviations / Variations along with the Financial Impact for each works EIC wise. Deviations in Audit (Quality and Technical) Along with Justifications provided by Engineer- in Charge Work / Part of work under suspension, along with reason and status and the financial compensation paid/ expected to pay till the end of the suspension period.

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SECTION-6 MEASUREMENTS & PAYMENTS

PROCESS OBJECTIVES
Ensure proper recording and verification of measurements Ensure timely passing and payments of interim and final bills Ensure proper treatment of Advances (mobilization, secured etc)

6.1
6.1.1

MEASUREMENT BOOK (MANUAL)

GENERAL The Measurement Book (MB) is the basis of all accounts of quantities, whether of works done by Contractors or materials received. It should be so written that the transactions are readily traceable. These books should be considered as very important account records and be maintained very carefully and accurately as these may have to be produced as evidence in a Court of Law, if and when required. Normally all MBs shall be preserved for a minimum period of 10 years from the date of completion of the works unless any MB is under consideration by Vigilance, enquiry committee, arbitration or any such matter. Relevant survey books/leveling books, alignment records, fit up data, process sheets, QA reports etc. pertaining to measurements shall be preserved till the completion of the work concerned. All the MBs belonging to a Project/ Station should be numbered serially and the pages of each book should also be serially machine numbered. A register should be maintained in Accounts Section showing serial number of each book, the section to which it is issued, and the date of issue. Section-In-Charge in turn, shall issue these MBs to Engineers handling the work. When an Engineer is transferred, he should hand over the MBs issued to him to his successor and these should be shown as received back from him and re-issued to the relieving officer. The transfer should also be recorded in the MB after the last entry in each book under dated signature of the relieving officer and the relieved officer. The MB shall be kept under the safe custody of the Engineer/Official to whom that is issued and he will keep a track of movement of MBs issued to him. A movement register of MB is to be maintained.

6.1.2

RECORDING OF MEASUREMENTS Each running account / final bill measurements to be recorded should commence with entries statingi) Full name of work as given in the agreement/estimate, and bill No. ii) Location of work, iii) Name of Contractor. iv) Number and date of work order/agreement 141

v) Date of recording of measurement. vi) Reference to previous measurements if any vii) Date of commencement of work as mentioned in work order} To be recorded Viii) Date of stipulated/actual completion of work }in abstract only

A suitable abstract should then be prepared which should cover the total quantities of each distinct item of work relating to each sanctioned sub-head. Complete nomenclature of the items as given in the agreement need not be reproduced in the MB for recording measurements. For preparing an abstract for Final Bills, complete nomenclature of the items as provided in SOQ should be used. In case of extra/substituted item of work that is not covered in the agreement, the full nomenclature shall be reproduced in the MB and the bill form. a) If the measurements are taken in connection with a running contract, a reference to the last set of measurements, if any, should be recorded. If the entire job or contract has been completed, the date of completion should be duly noted in the prescribed place. If the measurements taken are the first set of measurements, on a running account, or the first and final measurements, this fact should be suitably noted against the entries in the MB and in the latter case, the actual date of completion should be noted in the prescribed place. All measurements should be recorded neatly in the MB at the site of work. The signature of the contractor or his authorized representative should be obtained at the site of work and at the time the measurements are recorded in the MB. b) Before taking measurement of any work, the EIC or a subordinate deputed by him shall give reasonable notice to the Contractor. If the Contractor fails to attend at the measurements after such notice or fails to countersign or to record the deviations under dispute within a week from the date of measurement, then in any such event the measurements taken by the EIC or by the subordinate deputed by him, as the case may be, shall be final and binding on the Contractor and the Contractor shall have no right to dispute the same. c) Whenever the competent authority has permitted the use of a material of better / inferior specification and/or use of bigger/smaller size of material than that stipulated in the agreement in any item of work, the description and the sizes in the nomenclature of the item recorded in the MB should depict correctly the work done at site, irrespective of the fact whether such permission was accorded with or without a change in the rate of the item concerned. In such cases, recording of the nomenclature of the item in the MB as given in the agreement will not be in order. d) If a mistake is made, it should be corrected by crossing out the incorrect words or figures and inserting the correction. The correction thus made shall be initialed and dated by a responsible officer. The person recording the measurements should record a certificate Measured by me over his full signature in the MB. Similarly, the Contractor or his authorized representative shall certify Accepted by me and affix his signature in full with stamp. Number of corrections made in a particular page of MB shall be noted

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at the end of the page. These numbers of corrections shall also be verified by next higher authority. e) Entries should be recorded continuously and no blank page left or torn out. Any pages or space left blank inadvertently should be cancelled by diagonal lines, the cancellation being attested and dated. f) When any measurements are cancelled or disallowed, these must be endorsed by the dated initials of the officer ordering the cancellation or by a reference to his orders, initialed by the officer who made the measurements, the reasons for disallowing / cancellation being also recorded. g) On completion of the abstract, the MB should be submitted to the EIC for test checking. After due check, the EIC should sign the bill and the MB at the end of the abstract. The bill along with supporting MBs is then sent to accounts section for necessary checking and forwarding the same to the EIC for passing the bill. From the MB all quantities should be clearly traceable into the documents on which payments are made. When a bill is prepared for a work or supplies every page containing the detailed measurement must be invariably scored out by a diagonal red ink line. When the payment is made, an endorsement must be made in red ink on the abstract of measurements, giving a reference to the number and date of the voucher of payment. h) Any corrections to calculations or rates made in the Accounts Section should be made in red ink and brought to notice of the EIC, and of the person recording the original measurements. In the case of final bills, payments should be deferred until the corrections have been accepted by the person making measurements. i) MB should be sent only by Registered post or by special Messenger. All items of work in a Unit irrespective of their cost shall be measured and recorded by an Official of grade SA /B or equivalent and above. It is, however, open to the EIC to record measurements for any particular item of work himself. j) In case of works of repetitive type, detailed measurements can be recorded in conventional way for first block/units. For the rest of the blocks / units /systems, abstract of these standardized measurements only can be recorded. In such cases detailed measurement need be taken only up to the plinth level / foundation work for civil works. k) In case of works involving supply of manpower, attendance registers shall also be maintained. 6.1.2.1 RECORDING MEASUREMENTS FOR EARTH LEVELLING WORKS: In case of leveling operations and earthwork, measurements are required to be recorded in level books in addition to MB. The level books should be numbered accounted for and handled like MB. Before starting the earth work, the following steps should be taken:(i) Original ground levels should be recorded in the level book in the presence of the contractor, (ii) A suitable baseline should be fixed with permanent masonry pillars @ 150 meters to provide a permanent reference line, 143

(iii) Circuit should be closed by taking final levels of the starting point or any other point, the R.L. of which was previously determined (iv) Plans showing initial levels, location of bench marks and reduced levels should be prepared and signed by both the parties. Work should be done according to the specification. 6.1.3 TEST CHECKING OF MEASUREMENTS For the purpose of test check, "measurements" means the "corresponding monetary value of measurements of work done." Engineer one grade higher than that of the official recording the measurement shall check a minimum 50% of the measurements and engineer two grades higher than that of official recording the measurements shall test check a minimum 10% of the measurements. However, where the organization structure of the execution group does not provide for Engineers in different grades for test check, the Engineer recording and the officer accepting the measurements shall be responsible for the entire quantity. The individual items checked should be clearly shown in the MB and the result recorded by the officer concerned. The items thus checked should be attested by the dated initials of the checking officer. Test check statement shall be furnished in the abstract of each bill. 6.1.4 REVIEW OF MEASUREMENT BOOKS All the MBs in use in a section should be collected once in a particular month of each year for review by the Section-In-Charge in the following respect. i) Availability of MBs as per record in the register. ii) Proper use of MBs. The review report shall be submitted to Unit head and Head (F&A) in order to verify the number of MBs issued. 6.1.5 LOSS OF MEASUREMENT BOOKS When a MB is lost, an immediate report of the facts of the case together with an explanation of all parties concerned responsible for the loss should be made promptly to the competent authority empowered (Section-In-Charge) to sanction the write-off of the lost Measurement Books. Such losses for write-off should be reported in the proforma as at Annexure 6.1. It is also necessary that the measurements in lost MB should be reconstructed at the earliest. 6.1.6 NON RETURN OF MB BY INSPECTION, VIGILANCE, COURT, ARBITRATION ETC. Recorded MB should not be passed on to any agencies except to the concerned viz. contractor at the time of measurement & acceptance of bills and accounts section during checking and payments. However for Inspection, Auditing, Vigilance, Court, Arbitration and Departmental requirements, the MB can be routed through the officials concerned of NPCIL after getting approval from the concerned Group Head in writing. For issue to other specific case approval is required from SD/PD/ED. It should be ensured that a track is kept for the MB till its return to the concerned agencies. 144

Sometimes, it becomes necessary as a court directive to deposit the MB to the concerned court, which cannot be refused. In similar circumstances, it is advised that a photo copy of the MB is made and kept with the Engineer for his records. However, such a photo copy of MB shall not be used for release of payment of previous period. 6.1.7 STAGE PAYMENT For repetitive type of work i.e. construction of different types and Nos. of quarters, supply and erection of towers etc where execution of work may be based on firm tender specifications and drawings, the payment for different stages can be made if the same has been indicated in the tender. The tender can be framed in two parts one for foundations and the other for superstructure. The detailed measurement is to be recorded for the foundation items. Since the superstructure items and quantities will be the same for all the buildings, while floating of tenders, stage wise payments in percentages can be introduced in the document for various items like RCC, lintel and sunshade, brickwork, partitions, doors and windows, internal plasters, external plaster, PH items, finishing items etc. for each floor/flat so that the total percentage works out to 100%. While taking measurement it should be ensured that the completed percentage of work for each item is only measured and payment made accordingly. If any material is supplied by the corporation and is to be accounted for, the detailed measurements for those items shall be made during the progress of work and accounted for as specified in tender. However, the variation between the quantity given in SOQ and the quantity worked out as above will not have any bearing on payment for the work executed. The stage payment for EPC contracts like IDCT, NDCT etc. shall be as per the agreed conditions of the contract. It should be ensured that at no occasion excess payments are made beyond the percentage of work completed. Provision for stage payment could be made for similar works pertaining to all disciplines. Any item, executed in addition to the items specified in tender specifications and drawings shall be measured and paid for as per rates quoted for the relevant item in SOQ. Similarly, any item deleted/less executed from the items specified in the tender specification and drawings shall be measured and cost deducted as per rates quoted for relevant item in SOQ.

6.2

DOCUMENT GENERATION THROUGH WORK CONTRACT MANAGEMENT SYSTEM

i) The basic data of detailed measurements such as Length x Breadth x Depth (L x B x D), running meter, weight, number etc. for various items are only to be fed to system and a computerized output to be generated through the system by running the programme. The records so generated will be termed as Computerized Measurement Records (CMR). In this process the arithmetical calculations of the dimensions so fed to the system will be carried out by computer and hence no need to check the computer generated arithmetical calculations by Accounts Section. The module carries built in controls for quantity variation which will prevent from authorizing the over payment for erroneous quantity generated by computer. All the measurements shall be in the form required in WCMS, and no way the software used by the contractor shall be used in the computer of the Corporation, as these would cause serious security breach in the systems. The Contractor shall submit their bills in electronic form which can be fed into the Work Contract Management System (WCMS) by EIC. Wherever additional quantities are anticipated, a suitable modification in the quantity control parameters in 145

the programme to be carried out by authorized official before processing the bill. The safety & security of the software should be ensured by the EIC. Operating instructions with Security / Control measures as issued by responsible officer in this context shall be followed scrupulously. ii) The documents generated through Computer System under (i) above shall be considered as base detailed measurement records of the concerned section which shall be bound for each bill and the continuous serial number for a particular work order shall be assigned to Computerized Measurement Book (CMB) so prepared. The serial number to CMB shall be prefixed with work order No. i.e. say work order No. is 125 then CMB shall have the numbers 125/1, 125/2 and so on. There should be fresh serial number for each work order. These CMBs shall not be sent to Accounts section along with Abstract bill for check but retained by the EIC of the work for future reference / verification / documentary evidence. There shall be another register in which the registration of CMB and also Computerized Abstract (to be bound) which has been allotted the serial number and date shall be recorded before the abstract bill is sent to Accounts for payment. A certificate to this effect shall be furnished to Accounts section along with the bill. EIC while forwarding the abstract of the bill to Accounts shall record the reasons in the abstract against the item, if the quantity of the particular item is abnormally high or exceeding the work order quantity, in order to ensure that such instances have been brought to his notice and corrective action if required can be initiated by him. iii) Abstract shall also be generated by running the software programme as indicated above. The detailed measurement records as well as Computer Generated Abstract shall be signed by the official who has recorded / fed the detailed measurements and the official who has been designated to carry out the test check of detailed measurements in addition to EIC of the work. Test check shall be made manually in the computer output of the detailed measurements by the respective Engineer. The EIC of the work shall be fully responsible for authenticity and accuracy of detailed measurements. The Computerized Abstract Bill (CAB) duly signed by EIC shall only be sent to Accounts in duplicate for processing the payment. These abstracts shall also be bound to every bill and numbered as done in the case of CMB. On receipt of the CAB along with secured advance account, material issue / recovery account and other certificates as detailed in this section, the Accounts shall scrutinize the bill with respect to the terms of Work Order, rates, rebates if any, and shall check the quantity item wise of previous bill, added with the quantity of this bill as given by EIC based on his detailed measurement records and total quantity of the item so arrived should be compared with the total quantity given in the Work Order before releasing the payment. In case the quantity appears to be abnormally high in the particular bill of a particular item or it exceeds the work order quantity and no reasons have been assigned by EIC in the abstract against the particular item about such increase the Accounts Section may call for the reasons for such abnormal increase. The second bound copy of Abstract shall be returned to EIC by Accounts with corrections, if any. iv) Further the abstract should bear the following certificate under the signature of EIC of work before it is sent to Accounts for payment. "Certified that the quantity shown against each item in the above abstract, has actually been executed / erected as per the design and specifications of the contract. The detailed measurements of the above abstract as well as other back-up data are recorded and available in the Section's record kept by respective system in-charge and the same have been test checked by me". 146

(Engineer in Charge) v) This procedure can be modified during the course of project/work execution depending upon the up gradation of the WCMS software with approval of PD/SD/ED. As a part of e-governance, all the endeavors shall be made to adapt WCMS for passing on the bills as a part of uniform policy of Corporation. For more details on utilization of computerized recording of measurements instead of manual writing and preparation of RA/Final bills in respect of works / service contracts HQI 8004 can be referred.

6.3
6.3.1

PREPARATION, VERIFICATION AND PASSING OF BILLS

PREPARATION OF BILLS (MANUAL) Before the bill of a Contractor is prepared, the entries in the MB relating to the description and quantities of works should be scrutinized by the EIC. The bill should then be prepared from the MB entries in one of the forms prescribed, as applicable in each case. Full rates as per agreement order should be allowed only if the quality of work done or supplies made conforms to specifications of that standard and under the agreement it is permissible to make final payment, if the Contract is determined, or an on-account payment, if the Contract is to run, on a part rate as considered reasonable should be allowed with due regard to the work remaining to be done and general terms of agreement, after getting part rate statement (as given below)approved from the bill passing authority. Part rates allowed in this bill commensurate with the value of work done and the interest of the Corporation has been safeguarded If the Contract is for a completed item of work and the Contractor is required to obtain materials of any description from the Corporation on chargeable basis, necessary recoveries on account of the cost of the material supplied to him should be affected from each bill at recovery rates fixed for the purpose.

6.3.2

FORMS OF BILL FOR PAYMENTS AND VOUCHERS The authorized forms of bills to be used for payment to Contractors and their utility are described below:a) First and Final Bill: - This form should be used for making payments to Contractors for works, when a single payment is made for a Contract on its completion. b) Running Account Bill:- This form is used for all running and final payments to Contractors (other than those relating to lump sum contracts for which separate forms are prescribed), including cases where advance payments are proposed to be made or are already outstanding in respect of the same work against the Contractor. In cases where secured advances are to be made or are already outstanding in respect of the same work against the Contractor, account of secured advances form should be attached to the bill. Bills shall be prepared in triplicate and sent to Manager (F&A) for checking along with MBs and other relevant documents. Each of the running account bill shall be 147

accompanied by the certificate of the EIC (refer Annexure 6.2 for the format of the certificate). In case of final bill a checklist as provided in Annexure 6.3 shall be attached by the EIC. After checking the bill by Accounts section the corrected copies of bill along with the abstract MBs shall be sent to the EIC for accepting the changes. After acceptance of the bill by the EIC, he shall send the same to the Manager (F&A) for releasing the payment. After releasing the payment the relevant pages of MBs containing the measurements for the bill shall be crossed in Red Ink. These MBs along with one copy of the bill shall be returned to the EIC immediately. 6.3.3 AUTHORITY TO PASS THE BILLS Normally for all the works, bills will be prepared by the official of Grade SA/B or equivalent and above and same will be examined or verified by the Engineer of Grade SO/C and above and passed by the EIC of work. The EIC shall be of grade SO/D or equivalent. 6.3.4 PAYMENT FOR WORK DONE Normally payment for work done or supplies made on a running account are to be made monthly or as agreed between both the parties in the Contract agreement. Both Quantities and Amount of each distinct item of work or supplies should be shown separately in the bill, except in the case of advance payments when quantities need not be specified.

6.4
6.4.1

PAYMENTS TO CONTRACTORS
REQUIREMENT OF CLAUSE 12.2 OF G.C.C Clause 12.2 of the GCC provides that the Contractor shall, on submitting the bill, be entitled to receive a monthly payment proportionate to the part of he the work done thereof then executed and passed by the EIC. The Contractor shall submit his bills to EIC by a fixed date in accordance with the terms of the Contract, and only in such cases where a Contractor fails to submit the bill inordinately which otherwise may affect payment to contract labour or breach in any statutory law, the EIC should depute a subordinate to measure the work in the presence of the Contractor and prepare a bill from such measurements. Running payments must be made monthly as per terms of the contract though the amount involved may be small. When, for any reason, monthly payments cannot be made on the basis of recorded measurements, advance payments for alternate running bills are made to Contractors after obtaining approval of the next higher authority. In this regard if no payment is to be made, this fact should be recorded in the MB. The EIC should maintain register to keep a record of the monthly running payments made to the Contractors in respect of contracts costing above Rs.1, 00,000 in the proforma prescribed in Annexure 6.4. The register should remain with the EIC to enable him to monitor that payments are being made to the contractors every 30 days. In case of any objection by the Accounts section, for payment of a particular item or rate in any bill, all efforts shall be made to discuss and resolve the issue on priority basis, but in no circumstances the payment shall be delayed. In case of difference of opinion, only the item or rate may be deferred for next RA bill or till the issue is resolved.

148

6.4.2

TIME-SCHEDULE FOR PAYMENT OF BILLS The payment to the Contractor for the work carried out is an important activity and this must be done at the earliest and in any case as per the schedule indicated below. It shall be borne in mind that the progress of work and quality depends to a great extent upon the timely payment received by the Contractor. The EIC being responsible for the progress as well as quality, it is essential that he is kept informed of the payment of the bills to the Contractors by the Manager (F&A). Taking all the aspects into account, the following time schedule, shall be maintained for payment of bills. In all cases, the bills shall be passed for payment by the EIC and the Manager (F&A) shall make the Pay Order. Sr No. 1 Stage Payment of running bills (Refer clause 12.2 of GCC) Time limit (i)If the Contractor is not receiving 75% advance payment, then 100% payment shall be released to him by Accounts within 25 calendar days from the date of presenting the bill along with all supporting documents to EIC. Time allotted for the EIC and the accounts department are 15 and 10 days respectively. (ii) If in the opinion of the EIC, it is likely to take more time for payment, then an advance payment of 75% of the net bill amount shall be paid to the contractor within 3 working days (2 days for the EIC and one day for the accounts department) of submission of bills along with the supporting documents to the EIC. This payment is subject to the approval of EIC. Balance 25% shall be paid within 30 days (20 days for EIC and 10 days for Accounts) from the date of submission of bill. As soon as the work is completed. Within 30 days of receipt of notice from the contractor for completion of work unless it is rejected in writing due to noncompletion of work by the EIC. within 90 days of completion of works

2 3

Contractors notice of Completion of works Issue of completion certificate (refer clause no 8 of GCC)

Submission of final bills(Refer clause no 12.4 of GCC) by the contractor Payment of final bills for works up to Rs. 5 crores for works over Rs.5 crores

Within 3 months from the date of submission of bill by the contractor. Within 6 months from the date of submission of bill by the contractor. 149

Note: Every effort should be made to improve the time limits given above, wherever feasible. The Manager (F&A) shall inform the EIC regarding clearance of 75% advance and 25% payment to the Contractor on the same day the payment takes place, through a suitable communication. 6.4.3 PAYMENT THROUGH BANK Payment due to the Contractor, if so desired by him, is made to his bank instead of direct to him, provided the Contractor furnishes to the EIC: i) an authorization in the form of a legally valid document such as a power of attorney conferring authority on the bank to receive payment. ii) his own acceptance of the correctness of the accounts made out as being due to him by the Corporation or his signature on the bill or other claim preferred against the Corporation before settlement by the EIC of the account or claim by payment to the Bank. While receipt given by such bank shall constitute full and sufficient discharge for the payment, the Contractor should, wherever possible, present his bill duly receipted and discharged through his bankers. 6.4.4 INCOME TAX DEDUCTIONS FOR PAYMENTS MADE Under Section 194-C of the Income Tax Act, 1961, introduced by Finance Act, 1972,deduction of income tax is required to be made at source by disbursing officer from payments made to Contractors in certain cases. Before signing the first and final bill/the running accounts bill/ the final bill, the EIC should see thati. the statutory deduction on account of income tax, wherever due, has been made from the bill of the Contractors; and

ii. the same is specifically shown in the memorandum of payments thereof under the item by recovery of amounts creditable to other works or heads of accounts. 6.4.4.1 DEDUCTION OF INCOME TAX AT SOURCE UNDER SECTION 194-C OF THE INCOME TAX ACT 1961 FROM PAYMENTS MADE TO CONTRACTORS/SUB-CONTRACTORS: 1. Sub-section (1) of Section 194-C of the Income Tax Act, 1961, lays down that any person responsible for paying any sum to any resident (hereafter referred to as Contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the bodies mentioned therein shall, at the time of credit of such sum to the account of the Contractor or payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income tax at prevailing rate on the income comprised therein. 2. Sub-section (2) of Section 194-C of the Income Tax Act, 1961, lays down that when a Contractor makes payment of any sum to a resident sub-Contractor in pursuance of a contract made with him for carrying out the whole or any part of work undertaken by the Contractor, or, for supplying any labour, the Contractor shall deduct tax at 150

prevailing rates on the income comprised therein. For other matters the provisions of Section 194 (C) of IT may be referred to from time to time. 6.4.4.2 DEDUCTION OF IT UNDER SECTION 194-C NOT PERMISSIBLE ON THE PAYMENT MADE ON ARBITRATION AWARD: Section 194-C of the Income Tax Act, 1961, contemplates deduction from payments to be made to resident contractors in pursuance of a contract between the Contractor and the Corporation. The underlined portion is important in as much as the section covers amount payable pursuant to a contract. Where a dispute has arisen between the Contractor and the Corporation and that dispute has gone before the arbitration and the arbitrator makes an award wherein, the payment which the arbitrator directs the Corporation to pay the Contractor by the award is not a payment made pursuant to a contract, but one made pursuant to an award. Secondly, when the award directs that a certain amount shall be payable by the Corporation to the Contractor and that the award has not been challenged by NPClL. the Corporation shall have no alternative but to pay the whole amount. They will not be within their rights in making any deduction unless the statutory provision expressly authorizes the corporation to do so even in such cases. 6.4.4.3. MISCELLANEOUS: Where however, the Contractor undertakes to supply goods, even fabricated goods, according to the specification given by the Corporation or any other specified person and the property of which pass to the Corporation or such person only after the same are delivered, the contract will be a contract for sale and will be outside the purview of this provision. Contracts for rendering professional services by lawyers, physicians, surgeons, engineers, accountants, architects, consultants, Commission agents, etc. , and the carriage contracts where element of labour for loading and unloading is negligible, payments made for hiring of equipments, rental, etc., payments made to banks for discounting bills, collecting/receiving payments through cheques, etc., can also not be regarded as contracts for carrying out any work. a) The deduction of income tax will be made at the time of credit of the sum to the account of the Contractor, or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. b) The question whether deduction under the new provision will be made with reference to gross payment to the contractor or the net payment, i.e., gross payment minus deductions, if any, on account of materials supplied by Corporation or other specified persons will have to be decided in the light of the terms of the particular contract and the conduct to the parties thereto. Where the Contractor has undertaken to construct a building or a dam, and the Corporation or other specified person has undertaken to supply all or any of the materials necessary for the work at stipulated prices, deduction will have to relate to the gross payment without excluding any adjustments on account of cost of materials. Where, however, the Contractor has undertaken only to provide the labour for the work, the ownership of the materials supplied remaining at all times with the Corporation or other specified person, the sum payable to the Contractor in respect of the contract will only be the amount paid for such labour or services and will thus not include the price of the materials supplied by the Corporation or other specified persons. 151

c) The deduction of income tax from payments made by the Corporation or other specified persons to any Contractor will be at prevailing rate of the gross payment or, as the case may be, the net payment, depending on the terms of the contract, as explained in para above. d) Where a Contractor not being an individual or a Hindu undivided family, engaged for carrying out any work for supply labour for carrying such work by the Central Government or a State Government, a local authority. a corporation established under a Central, State or Provincial Actor a company has, in turn engaged any subcontractor (a) for carrying out the whole or any part of the work undertaken by the Contractor, or (b) for the supply of labour to carry out such work, or (c) for supplying any labour which the Contractor had undertaken to supply, he will be required to deduct income tax at source from payment made to the sub-contractor at the prevailing rate of such payment. e) It is open to the Contractor or the Sub-Contractor as the case may be, to make an application to the Income Tax Officer concerned and obtain from him a certificate authorizing the payer to deduct tax at such lower rate or deduct no tax as may be appropriate to his case. Such certificate will be valid for the period specified therein unless it is cancelled by the Income Tax Officer earlier f) In view of the existing provision of Section 288-B of the Income Tax Act, 1961 the amount of tax to be deducted at source should be rounded off to the nearest rupee by ignoring amount less than fifty paisa and increasing amounts of fifty paisa or more to one rupee. g) The tax deducted on behalf of the Government should be paid to the credit to the Central Government within one week from the last day of the month in which the deduction is made. Challans for paying tax into the Government account are obtainable from the Income Tax Officer concerned. h) The persons responsible for making any payment to a Contractor or a SubContractor, as the case may be, should issue a certificate showing therein particulars of the payment, the amount of tax deducted at source and the date of credit, in IncomeTax -TDS Form NO.16-A. i) No deduction of Income-Tax will be required to be made if the gross sum paid to the Contractor is less than the limit prescribed by Income Tax law from time to time.

6.5
6.5.1

ADVANCE PAYMENTS TO CONTRACTOR

GRANT OF MOBILISATION ADVANCE TO THE CONTRACTORS For works where the estimated cost of works put to tender is Rs. 10 crore or more, mobilization advance limited to a maximum of 15% of the estimated cost put to tender shall be sanctioned to the Contractors under following twp categories:a) Lump sum Advance against a non-revocable Bank guarantee acceptable to the Corporation which shall be 10% of the contract value. b) over and above (a) an Advance at 90% of the purchase price of New Plant and Equipment acquired for the work and brought to site, against production of documents in support thereof and that such plant and 152

equipment are hypothecated in favour of the Corporation in the form required by the Corporation. The sanction of advance shall be further subjected to the condition that this new plant and equipment for which mobilisation advance applied for are not in excess of requirement and price there of considered to be reasonable by the EIC. Similar advance against hypothecation of old plant and equipment brought to site may also be considered only to the extent of the cost incurred on the transportation, installation and commissioning of such equipment by the contractor. Total advance under this para (b) shall be subject to maximum of 5% of the contract value. 6.5.2 OTHER CONDITIONS FOR PAYMENT OF MOBILISATION ADVANCE & ITS RECOVERY. In case the amount of mobilisation advance is more than Rs.2 crores, the advance should be released in two or more equal instalments as deemed necessary. The subsequent instalments shall be released only on establishment of the facilities like office, workshop, stores, open storage, fabrication and assembly area, labour colony, water supply, power supply, testing facilities etc and any other similar facility which has relevance to the commencement of work and submission of proof of bonafide utilisation of earlier instalments by the Contractor and to the satisfaction of EIC. i. ii. iii. The recovery of advance should be made in suitable instalments commencing from 2nd RA bill or after 10% of the work is completed whichever is earlier. The payment of mobilisation advance by itself shall not be considered as RA bill for this purpose. The entire amount shall be recovered before 80% of the work is completed.

iv. The advance shall be interest bearing and simple interest shall be charged on mobilisation advance. Rate of interest chargeable on advance shall be as declared in Schedule A of GCC of the tender. The rate of interest for this purpose shall be notified every year by Corporate Finance group of NPCIL and shall be accordingly incorporated in tender document. v. Interest to be calculated on each instalment of recovery from the date of its payment as Mobilisation Advance till the preceding day of recovery from Bill.

vi. Where advance payment to Contractor against On Account Bill is to be made after effecting the recovery of Mobilisation advance instalment from the bill, the interest shall be calculated till the preceding day of passing the bill for advance payment. Note: The payment of Mobilisation Advance along with its terms & conditions shall be specified in the work order and in line with these provisions, the release of payment of Mobilisation Advance can be approved by EIC of work. 6.5.3 ADVANCE PAYMENT OF ON ACCOUNT BILLS Advance payments to the Contractors against on account bills may be made by EIC. When an on account bill has been received and there is likely to be delay in authorizing payment, the EIC can make a lump sum advance payment on Hand Receipt, subject to the following conditions:

153

The bills in respect of which the advance is proposed to be made should actually be under check in the office. The amount of advance should not exceed 75 percent of the net amount of the bill under check. The payment should be suitably endorsed both on the running bill against which the part payment is made and the connected abstract of measurements in the Measurement Book/CMB. The Hand Receipt voucher on which payment is made should bear reference to the number, date and amount of the bill against which the payment is made and also to the page number of MB, and the number, date and amount of the voucher, if any, on which the previous on account payment was made. The payment should be treated in the accounts as an advance and the following certificate be recorded on the Hand Receipt voucher over the signature of the EIC. Certified that the payment made against the Contractors bill is to the best of my knowledge, less than the amount billed for, after allowing for deductions on account of security deposit, Income Tax, value of materials issued and other recoveries, if any, and that the payment made will be adjusted against the bill which is being checked An undertaking should be obtained from the Contractor before the payment is actually made that, should the amount of advance paid to him subsequently found to be more than the amount of the running account bill in respect of which the advance was paid, he will refund to the Corporation forthwith, the amount overpaid. The EIC will be held responsible to see that advance is adjusted when payment is made in running account bill in respect of which it was made and for any over payment which may occur. 6.5.4 ADVANCE PAYMENT FOR WORK DONE BUT NOT MEASURED The following rules shall be observed with regard to advance payments to Contractors for work done but not measured: Advances to Contractors are, as a rule, prohibited and payments to Contractors should not be made until detailed measurements of the work have been taken and recorded. Advance payments may, however, be made in exceptional cases, when it is absolutely essential to do so, and in such cases previous sanction of officer not below the level of ACE concerned should invariably be obtained. An advance payment for work actually executed may be made on the certificate of a responsible officer (not below the rank SO/D) to the effect that not less than the quantity of work paid for has actually been done, and the officer granting such a certificate will be held responsible for any over payment which may occur on the work in consequence. Certificate printed on the Running Account Bill must be signed by the Engineer and the lump sum amount paid on account of the several items should be specified in the bill. If a secured advance has been previously allowed to a Contractor on the security of any materials and such materials have been used in the construction of an item, the amount of the advance payment for that item should not exceed a sum equivalent to the value of work done less the proportionate amount of secured advance ultimately recoverable on account of the materials used. When in any exceptional case an advance payment has been authorized by the competent authority, it should be followed by detailed measurement within 30 days at 154

the most with a view that advance being adjusted from the next bill or within sixty days from the date on which it was made, whichever is earlier. Any extension of the period of adjustment beyond the above specified period will require the previous sanction of the Director. The grant of a second advance before the first one has been recovered should not be permitted except in very exceptional circumstances. Where such circumstances exist and it becomes necessary to grant more than one advance in succession, the total amount of such advance including previous outstanding should not exceed Rs. 10 lakhs against a particular work at any time and sanction to the extension of the period of their adjustment should also have the approval of Director. Manager (F&A) should submit a monthly statement in the form prescribed in Annexure 6.5 for the information of the SD/PD/ED concerned giving details of advances made to contractors for work done but not measured so that clearance may be watched. Advance payment in question should be made in bill form. No such payment shall be made on a hand receipt. 6.5.5 ADVANCE PAYMENT FOR CHEMICAL ANALYSIS, TESTING AND CALIBERATION OF MATERIALS. Ordinarily, the payments of services rendered should be made only after the report of the chemical analysis or testing of materials etc., are received. However, where the firms insist on advance payments, there remains no alternative but to comply with the demand of the firm. Such payments for chemical analysis or testing of materials are to be made out of the contingencies of the work. The SD/PD/ED may authorize advance payments up to the limit specified in DFP in each case of the work contingencies subject to the fulfillment of the following conditions:Advance payments are made only in cases where it is considered necessary. absolutely

The advance payment is made on the basis of a valid expenditure sanction issued with the concurrence of finance and approval of the competent authority. The firm should be well established OR duly approved by NPCIL / G.O.I and has reputation for fair dealing. The Officer, drawing the money for making advance payment shall be responsible for its adjustment, shall send the detailed bill to the Manager (F&A) within a period of one month from the date of the withdrawal of the advance. If an advance cannot be adjusted within one month of the withdrawal of the advance, a detailed report should be sent to the competent authority concerned. The amount of advance shall be drawn on a simple Hand Receipt and accounted for under the final head to which the expenditure on services in question would be debited. 6.5.6 SECURED ADVANCES Secured advances on the security of materials brought to site may be made to the contractors whose contract is for finished item of work. 155

The EIC can sanction the secured advance up to an amount not exceeding 75% of the value of the materials as assessed by the EIC or an amount not exceeding 75% of the material element cost in the tendered rate of the finished item of work, whichever is lower. For sanction of secured advance more than 75% but less than 90% of the estimated cost approval of competent authority as per DFP for works (HQI 2001) to be obtained. In case of perishable materials secured advance shall be given only after proper insurance cover is provided by the contractor and after obtaining approval from the competent authority as per DFP for works. Note: A formal agreement should be drawn up with the Contractor under which the Corporation secures a lien on the materials and is safeguarded against losses due to the Contractor postponing the execution of the work or to the shortage or misuse of the materials, and against the expense entailed for their proper watch and safe custody. Payment of such advances should be made only on the certificate of EIC not below the rank of SO/D, that the quantities of materials upon which the advances are made have actually been brought to site, that the Contractor has not previously received any advance on that security and that all the materials are required by the Contractor for use on items of work for which rates for finished items of work have been agreed upon. Recoveries of advances so made should not be postponed until the whole of the work entrusted to the Contractor is completed. They should be made from his bills for work done as the materials are used, the necessary deductions being made whenever the items of work in which they are used are billed for. In order to ensure correct and uniform application of these provisions, a list of items (illustrative) for civil and electrical goods is given in Annexure 6.6 for the guidance of field officers. Secured advance for materials listed may be granted based on the assessment of the EIC. 6.5.7 SUBMISSION / WAIVAL OF BANK GUARANTEE(BG) AGAINST ADVANCE PAYMENT: The following procedure henceforth will be followed for submission / waival of BG against advance payment, (other than secured, unmeasured and advance payment against bill). As a matter of safeguarding the interest of Corporation, the Irrevocable Bank Guarantee towards advance payments, wherever demanded by party, should be insisted upon in all contracts (Works, Maintenance & Service, Consultancy, Miscellaneous and office Contingency Contracts). However, in the case where order is placed on Central/State Govt. departments, the waival for submission of BG may be approved by contract approving authority. Even in case of PSUs / Autonomous Bodies, Bank Guarantee should be insisted upon as a matter of procedure. However, where waival for submission of BG against advance payment is requested by Central/State Govt. PSUs & Autonomous bodies of Central Govt., the same may be considered on the merits of the individual PSU/Autonomous body particularly on the financial health (past 3 years balance sheet and prevailing market condition of the firm to be kept in mind) of the PSU / Autonomous body and not as a matter of routine. In case where waival for submission of BG against advance payment is requested by the party other than Central/State Govt. Departments, including its PSUs / Autonomous bodies, the same may be considered on the merits of the individual party as per the 156

following delegation. The approving authority for waival of BG is to be followed as per DFP.

KEY PERFORMANCE MEASURES

Measure 1.List of Payments beyond Due date and interest paid Unit Number of cases / details

MIS
List of payments with bill submission date and date of payments with interest paid and justification.

157

SECTION-7 DISPUTE RESOLUTION, ARBITRATION & LITIGATION

PROCESS OBJECTIVES
Process of formation of Dispute Resolution Board (DRB). Settlement of disputes through DRB. Process of appointment of Arbitrator and settlement of disputes through arbitration. Process of implementation of the award/decision.

7.1

APPLICATION OF ARBITRATION CLAUSE 17 OF GCC

Clause 17 of the General Conditions of Contract provides for appointment of an Arbitrator, in case of questions or disputes relating to certain matters, specified therein arises at any stage, whatsoever, between the parties. This clause, however, shall not be applicable where the decision of the EIC or the specified Officer shall be final and binding. The details and the extent to which the decision of the EIC can be referred to the Arbitration, has also been described in detail in the General Conditions of Contract, which may be carefully read by the EIC. In view of the Arbitration agreement between the parties to a contract, the Contractor cannot have recourse to a Court of Law to address its grievances, unless the Contractor has exhausted the channel of Arbitration as envisaged in the Arbitration Clause. In a case, where the Contractor has approached the Court of Law, the NPCIL need to take a plea that the Contractor, being a party to an Arbitration agreement, is stopped in law from approaching the Courts.

7.2

DISPUTE RESOLUTION
For contracts having total value of more than Rs. 100 crores, a dispute resolution board, shall be constituted at the time of entering into contract agreement in accordance to the para 7.3.1. If a dispute arises between the Parties in connection with, or arising out of, the Contract or the execution thereof, including any dispute as to any certificate, determination, instruction, opinion or valuation by the EIC, which is not resolved at the level of EIC, it shall be referred to a committee appointed by the CMD, NPCIL. During the course of resolution of disputes, the EIC shall act within the terms and conditions of the contract and take necessary approvals as may be required. If the matter is not resolved in the committee, either of the parties may refer it in writing to the Dispute Resolution Board / arbitration as the case may be. For contracts, having total value less than Rs.100 Crores at the time of award shall be referred to Arbitration and no Dispute resolution Board shall be constituted.

7.3
7.3.1

DISPUTE RESOLUTION BOARD (DRB)

CONSTITUTION OF DISPUTE RESOLUTION BOARD The Dispute Resolution Board (DRB) shall be constituted by signing and executing a 159

Dispute Resolution Board Agreement (the Board Agreement) which shall be made effective from the time when the Contract Agreement is signed between the parties. The Board shall comprise three Members experienced in the type of work involved and the interpretation of document. One Member shall be selected by each of the Corporation and the Contractor and agreed by the other. The third Member shall be selected by the other two and agreed by the parties. The third Member shall serve as Chairman of the Board. The terms of the remuneration of each of the three members, including the remuneration of any expert whom the Dispute Resolution Board may consult, shall be mutually agreed upon by the Parties while agreeing the terms of appointment of the member or such expert as the case may be. Each Party shall be responsible for paying one-half of this remuneration. In the event of death, disability, or resignation of any Member, such Member shall be replaced in the same manner as the Member being replaced was selected. If for whatever reason, a Member shall fail or be unable to serve, the Chairman (or failing the action of the Chairman then either of the Members) shall inform the parties and such non- serving Member shall be replaced in the same manner as the Member being replaced was selected. Replacement shall be considered complete when the new Member signs the Board Agreement. Throughout any replacement process the Members not being replaced shall continue to serve and the Board shall continue to function and its activities shall have the same force and effects as if the vacancy had not occurred. 7.3.2 GIVING INFORMATION TO DISPUTE RESOLUTION BOARD DRB members are provided with the contract documents, become familiar with the project procedures and the participants, and are kept abreast of job progress and developments. The DRB meets with owner/principal and contractor representatives during regular site visits and encourages the resolution of disputes at the job level. The DRB process helps the parties head off problems before they escalate into major disputes. When a dispute flowing from the contract or the work cannot be resolved by the parties, it can be referred to the DRB. The Board review includes a hearing at which each party explains its position and answers questions in arriving at a recommendation, the DRB considers the relevant contract documents, correspondence, other documentation, and the particular circumstances of the dispute. The Boards output consists of a written, non-binding recommendation for resolution of the dispute. The report includes an explanation of the Boards evaluation of the facts, contract provisions and the reasoning which led to its conclusion. Acceptance by the parties is facilitated by their confidence in the DRB, in its members technical expertise, first-hand understanding of the project conditions, and practical judgement; as well as by the parties opportunity to be heard. 160

While the DRB recommendation for resolution of a dispute is non-binding, the DRB process is most effective if the contract language includes a provision for the admissibility of a DRB recommendation into any subsequent arbitration or legal proceeding. It is noteworthy that the DRB concepts have recently been expanded by the International Chamber of Commerce (ICC) to commercial contracts generally. 7.3.3 OBTAINING DISPUTE RESOLUTION BOARDS DECISION Any dispute which is not resolved by the committee mentioned in para 7.2 above, either party may refer the dispute, in writing, to the dispute resolution board for its decision, with copies to the other party. The DRB shall be deemed to have received any reference on the date when it is received by the Chairman of the DRB. Both Parties shall promptly make available to the DRB all such additional information, further access to the Site, and appropriate facilities, as the DRB may require for the purposes of making a decision on such dispute. The DRB shall not be deemed to be acting as Arbitrator(s). If the Dispute Resolution Board has given its decision and no notice of dissatisfaction has been given by either of the Parties, within 30 days after the receipt of the DRBs decision, then the decision shall become final. Any dispute on which the Board has not issued a Recommendation within 45 days of its final hearing, or regarding which the Recommendation (s) are not accepted, may be referred, in writing, by either of the parties, to the arbitration, by a written notice to the other party with copies to the Board, in accordance with clause 17.4 of GCC. Such reference shall be made within 15 days of receipt of the Boards recommendation (s), or within 15 days of the day on which said period of 45 days expired, as the case may be, failing which any recommendation (s) previously rejected or not accepted shall be deemed accepted despite such previous rejection or non-acceptance and shall be final between the parties. All recommendations, which have become final shall be implemented by the parties forthwith and such implementation shall include any relevant action of the EIC. Whether or not accepted or deemed accepted, all of the Recommendations shall be admissible in any subsequent dispute resolution procedure, including any arbitration or any litigation having any relation to the dispute or disputes to which the Recommendation(s) relate. Unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Corporation shall give effect forthwith to every decision of the EIC unless and until the same shall be revised. 7.3.4 AMICABLE SETTLEMENT Where notice of dissatisfaction has been given, both Parties shall attempt to settle the 161

dispute amicably before the commencement of arbitration. However, unless both Parties agree otherwise, arbitration may be commenced on or after the 60th day after the day on which a notice of dissatisfaction and intention to commence arbitration was given, even if no attempt at amicable settlement has been made. 7.3.5 FAILURE TO COMPLY WITH DISPUTE RESOLUTION BOARDS DECISION In the event that a Party fails to comply with the final DRB decision, then the other Party may, without prejudice to any other rights, may refer the failure itself to arbitration. 7.3.6 EXPIRY OF DISPUTE RESOLUTION BOARDS APPOINTMENT If a dispute arises between the Parties in connection with or arising out of the Contract or the execution of the Works and there is no DRB in place, whether by reason of the expiry of the DRBs appointment or otherwise: (a) The provisions under Clause 17.4 (Obtaining Dispute Resolution Boards Decision) and Clause 17.5 (Amicable Settlement) of the GCC shall not apply, and the dispute may be referred directly to arbitration under sub-Clause 17.8 (Arbitration) of the GCC.

(b)

7.4

ARBITRATION
Any dispute not settled amicably and in respect of which the DRBs decision has not become final shall be finally settled through arbitration. Unless otherwise agreed by both Parties: i) For contracts with foreign contractors: a) International arbitration with proceedings administered by the international arbitration institution appointed by the corporation, in accordance with the rules of arbitration of the appointed institution; b) the place of arbitration shall be the city where the headquarters of the appointed arbitration institution is located or such other place selected in accordance with the applicable arbitration rules; and c) the arbitration shall be conducted in the language for communications defined in Sub-Clause 1.3 of the GCC ; and ii) For contracts with domestic contractors, arbitration with proceedings conducted in accordance with the Indian Arbitration and Conciliation Act, 1996: a) All questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before contained in this Contract or as to the quality of the workmanship or materials used on the work or arising out of the terms and conditions of the Contract whether during the progress of the work or after the completion or abandonment thereof, at the request of the 162

aggrieved party in writing, shall be referred to the sole arbitration of the person and appointed by the Chairman & Managing Director, Nuclear Power Corporation of India Ltd, in respect of the contracts entered for and on behalf of the Corporation, by any Officer / Authority of the Corporation. b) When it appears to the person that there exists an element of a settlement which may be acceptable to the parties, he shall submit them to parties for their observation. He may reformulate the terms of a possible settlement in the light of their observations. c) If the parties reach agreement of the dispute, they may draw up and sign a written settlement agreement. They may request the person to draw up or assist them in drawing up the settlement agreement. d)If settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30 of the Act. e) If a settlement does not appear possible, the person, after consultation with the parties, will give a written declaration that further efforts at Conciliation are no longer justified and the person proceedings are terminated. f) When Conciliation proceedings have become infructious or have been terminated, the party, which initiated the Conciliation, shall refer the disputes for Arbitration. The reference to Arbitration should be made preferably within 30 days of the termination of Conciliation Proceedings. g) The Arbitration shall be conducted in accordance with the Indian Arbitration and Conciliation Act, 1996. For Contracts costing up to Rs. 10 Crores, a Sole Arbitrator shall be appointed. For Contracts costing over Rs. 10 Crores, a Committee of Arbitrators shall be appointed composed of one Arbitrator to be by the Contractor, one to be by the Owner and the third Arbitrator, who will act as a Chairman, to be chosen jointly by the two nominees. The decision of majority of Arbitrators shall be final and binding on both parties. 7.4.1 APPLICATION FOR APPOINTMENT OF ARBITRATOR A standard application form seeking appointment of Arbitrator has been evolved. Contractors seeking arbitration should apply in this form (Annexure 7.1). The application form, duly filled in shall be submitted by the Contractor to the PD/SD/ED with two copies thereof to the concerned EIC. All the three copies of the application form shall be accompanied by a statement of claims in the matter indicated in the application form. 7.4.2 PREPARATION FOR ARBITRATION CASES The following steps should be taken by the EIC with a view to properly defend the arbitration cases: 163

i.

As soon as a Contractor applies for arbitration, EIC should prepare a detailed history sheet containing the data regarding estimates, designs and drawings, NITs agreements, extra and substituted items, reduction statements, extension of time/notices issued under Clauses 7.6, 13.2 etc., and send a copy to ACE/CE.

ii. List out important letters in respect of the issues raised by the Contractor or the important notices issued to the Contractor and place these originals in a separate file. In the routine file, true copies of these documents may be placed. iii. Keep original agreements, plans, designs including the calculations for these if available, details of measurements and analysis of rates attached to the technically sanctioned estimates, all the Measurement Books connected with the work, cash Book, Site-Order Book, Cement Register in Safe custody of the Engineer along with the originals listed in para (ii). iv. The Measurement Books should be closed. v. All the files connected with the work should be properly page-numbered, stitched and sealed and kept by the Engineer along with the above record. vi. If there are important situations or circumstances which are not available on the file but are only known to the executive staff, their signed statements regarding the factual information should be obtained and kept on record, as after a lapse of time, they may not be available for personal discussions or they may be unable to recall past events. vii. The Engineer may call the executive staff in charge of the work for any information that he may need to collect by personal discussions, viii. The final bill should be prepared as early as possible in any case before the disputes are referred to arbitration. The ACE/CE should ensure that the bills are finalized immediately, if not already done. ix. A detailed note on the facts of the case dealing with each and every item of the claims and/or counter claims should be prepared by the Engineer along with reference to various relevant documents supporting the Corporation case or negotiating the Contractors claim. 7.4.3 PROCESSING OF CONTRACTORS APPLICATIONS FOR APPOINTMENT OF ARBITRATOR The Engineer shall send copy of the application of the Contractor to the PD/SD/ED with the under noted information immediately. a) An attested copy of relevant arbitration clause. b) A note regarding verification of the factual data furnished by the Contractor in the application form.

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c) Brief comments on each claim of the Contractor. While giving such comments, the admissibility of the claims in the light of arbitration clause and Limitation Act, will be kept in view and commented upon. d) Statement of counter-claims of the Corporation, if any. However, if counter-claims are not readily enlisted or available, comments on the Contractors claims should not be delayed. 7.4.4 APPOINTMENT OF ARBITRATOR On receipt of the application from the Contractor for appointment of an Arbitrator, the Engineer should examine the facts of the case and also whether the points of dispute fall within the purview of Clause 17.8 of GCC and send his report to the PD/SD/ED for consideration. The CMD shall appoint an Arbitrator under Clause 17.8 of GCC. Whenever a request for appointment of an Arbitrator is received from a Contractor in terms of Clause 17.8 of the General Conditions of Contract, the PD/SD/ED shall process the cases so as to appoint an arbitrator at the earliest. The PD/SD/ED should obtain report of the Engineer concerned immediately. It must, however, be ensured that time-limit of 30 days for appointment of arbitrator is strictly adhered to. 7.4.5 APPOINTMENT OFARBITRATOR IN THE ABSENCE OF AGREEMENTORARBITRATION CLAUSE a. In cases, where no agreement exists or where no clause exists in an agreement for referring the matter of dispute to the Sole Arbitrator of a person to be appointed by the CMD, the disputes should not be referred to arbitration by mutual consent and no agreement should be drawn up for this purpose without obtaining the prior written approval of the Competent Authority. b. If the Arbitrator, to whom the matter is originally referred to for arbitration resigns or vacates his office due to transfer, retirement, death or due to any other reasons or is unable to act as an Arbitrator for any reasons, another Arbitrator may be appointed to proceed with the case from the stage at which it was left by his predecessor. 7.4.6 ACTION SUBSEQUENT TO APPOINTMENT OF ARBITRATOR i. The EIC shall be responsible for providing all information and other relevant documents to the Corporate Legal Group at Mumbai, who shall be the nodal agency to deal with all the arbitration cases. No submission shall be made and no documents shall be produced before the Arbitrator, by the EIC. All such submissions shall be made and documents shall be produced before the Arbitrator, by the Authorised Representative of Corporate Legal Group, NPCIL, Mumbai. ii. On receipt of a Notice from the Arbitrator, the EIC should take prompt action to prepare the defence duly supported by adequate documentary evidence and witnesses and submit the same to the Corporate Legal Group for further necessary action.

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iii. Engineer should deal with submission of counter-statement with utmost urgency and priority. The Engineer should submit the counter-statement of facts within time specified from the date of receipt of the statement of the facts. 7.4.7 ARBITRATION PROCEEDINGS Corporate Legal Group, Mumbai, in accordance with the extent HQI-9004 shall be responsible for presenting the case on behalf of the Corporation before the Arbitrator either through one of its Law Officer or an Advocate or Legal Counsel as may be deemed fit and necessary by the Corporate Legal Group. 7.4.8 PUBLICATION OF AWARD After the award is received, it should be examined if it is acceptable to the Corporation. Once it is decided to accept the award, immediate further action to release the payment or to recover the dues, as the case may be, should be taken. 7.4.9 ACCEPTANCE OF ARBITRATION AWARD Chairman and Managing Director (CMD) is empowered to approve, in consultation with Corporate Legal Group of NPCIL, acceptance of arbitration awards subject to the provisions contained in HQI-9004 (R-0). While reviewing the Arbitration award, the important issues relating to (a) Procedural defects, if any, leading to such arbitration defects being rectified, and (b) Responsibility for negligence etc., leading to such arbitration claims being fixed and appropriate action taken there for, shall be examined, assessed and a final decision shall be taken by the CMD, NPCIL. 7.4.10 SETTING ASIDE OF THE AWARDS Corporate Legal Group, Mumbai, in consultation with the concerned Unit shall take further necessary action and shall submit a note to the Competent Authority for a decision as to if the award should be challenged by filing application before the appropriate Court of Law. 7.4.11 PAYMENT OF AWARD MONEY Payments against the arbitration award should be made after the same have been accepted by the Corporation. All the proposals for initiating action against the arbitration awards irrespective of the value of award should be referred to the CMD for final decision. 7.4.12 COURT PROCEEDINGS In accordance with HQI-9004, the role, function and responsibility of Legal Group for handling legal matters have been identified. Accordingly, all the litigations in respect of the issues relating to Arbitration and settlement of disputes shall be handled and dealt with by the Law Officer posted at the Site. However, the background information and other details shall be provided by the EIC or any other Officer as may be authorized. 166

MIS
Cases referred to the committee along with the status of resolution and status of cases referred to DRB / arbitration with dispute and resolved amount. Cases in arbitration and status.

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SECTION-8 MANPOWER REQUIREMENTS AND PROJECT ORGANISATION CHART

PROCESS OBJECTIVES To help in planning the manpower requirements at various stages of construction.

8.1

GENERAL
The Nuclear Power Corporation of India Ltd. (NPCIL) is responsible for design, construction, commissioning and operation of all Nuclear Power Stations. NPCIL has a Board of Directors vested with full powers in respect of the sanctioned projects. For construction project there will be a Project Director who will be the overall incharge of the project. A Chief Construction Engineer will also be posted at the site and he will be responsible for all the construction activities at site and will report to Project Director. Typical project organization chart is shown as below :

TYPICAL PROJECT ORGANISATION CHART

Director - HQs
AERB

HPD BARC/ NPC

Project Director

ED (SAFETY)

ED (QA)

ED (Engg.) STATION DIRECTOR

HEAD P&IR HEAD F& A HEAD CMM

Chief Construction Engineer

CE/ACE (QA)

CE/ACE (FE) Dy.CE & SEEs OS

CHIEF SUPTD

MS TSS TS SUPD QA

CE/ACE (Civil)

SPE

CE/ACE (Piping)

CE/ACE (RE & V)

CE/ACE (M)

CE/ACE (E & I)

PE (C 1)

PE ( CP)

PE (R)

PE (M)

PE (E)

SCEs SMEs

PE (C 2) HEAD (F & IS)

PE (NP)

PE (V)

PE (TG)

PE (I) STE STN CHEM STN PHY STN Health PHY

___________ Line of authority - - - - - - - - - - Channel of Communication

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8.2

TYPICAL MANPOWER REQUIREMENT FOR VARIOUS SECTIONS OF NPP DURING CONSTRUCTION STAGE
Manpower requirements for various Sections are detailed below. Designation Project Director Chief Construction Engineer 1. Civil Section : 45 Nos. Designation CE / ACE SO/G PE (NB) SO/F PE (Conv.) SO/F PE (Infrastructure) SO/F Engineer SO/F,SO/E Engineer SO/D, SO/C, SO/B Supervisors SA/B, SA/C, SA/D 2. Electrical Section : 18 Nos. No. 1 2 4 5 6 No. 1 1 1 1 10 16 15 No. 1 1

Designation ACE/PE SO/G, SO/F SO/F SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D 3. C&I Section : 18 Nos. Designation ACE/PE SO/G, SO/F SO/F SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D, 4. Mechanical Section : 20 Nos.

No. 1 2 4 5 6

Designation ACE SO/G PE(TG) SO/F PE (Secondary Cycle) SO/F SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D,

No. 1 1 1 4 7 6

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5. Piping Section :

20 Nos. Designation ACE SO/G PE(Nuclear) SO/F PE (Conventional Piping)-SO/F SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D, No. 1 1 1 4 7 6

6. RE (including Vent) Section :

20 Nos. No. 1 1 1 4 8 5

Designation ACE SO/G PE(RE) SO/F PE (Ventilation) - SO/F SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D, 7. QA & CTL Section : 26 Nos.

Designation ACE (QA) SO/G PE(QA Civil) SO/F PE (QA - Mechanical) - SO/F PE (QA E&I) SO /F SO/F + SO/E Engineer SO/D + SO/C Supervisors SA/B, SA/C, SA/D, 8. Planning & IT Section : 6 Nos.

No. 1 1 1 1 4 12 6

Designation ACE / PE (Planning) SO/G or SO/F SO/E + SO/D Draftsman 9. Safety Section : 6 Nos. Designation PE (I&FS) SO/F SO/E + SO/D Supervisors SA/B, SA/C, SA/D,

No. 1 3 2

No. 1 2 3

8.3

DEPLOYMENT OF MANPOWER AT VARIOUS STAGES OF CONSTRUCTION Details of year wise manpower proposed during the various stages of construction of NPP is detailed in the following page. 171

Deployment of Manpower (Progressive) Group Scientific Officers (A) 2 30 12 12 14 14 15 4 20 3 126 Category Scientific Assistant / Supervisors (B) 15 6 6 6 6 5 6 3 53 Total -1 To 0 Deployment of Manpower ( 0 as FPC) 0 To 1 1 To 2 2 To 3

PD& CCE Civil including Township Electrical Instrumentation Mechanical Piping RE Planning, IT & Library QA / CTL Safety Total Strength

(A+B) 2 45 18 18 20 20 20 4 26 6 179

O 1 10 2 1 2 2 2 2 22

S 5 1 1 1 1 1 10

T 1 15 3 1 3 1 2 3 3 32

O 2 20 6 3 6 3 10 4 9 3 66

S 10 3 3 3 2 3 2 3 29

T 2 30 9 6 9 5 13 4 11 6 95

O 2 30 10 6 10 8 15 4 20 3 108

S 15 6 4 6 5 5 6 3 50

T 2 45 16 10 16 13 20 4 26 6 158

O 2 30 12 12 14 14 15 4 20 3 126

S 15 6 6 6 6 5 6 3 53

T 2 45 18 18 20 20 20 4 26 6 179

Note : The construction manpower will remain same from fourth year onwards and reduces after commissioning of Unit-1.

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