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CIVIL TENDERS AND CONTRACTS

SS KALR
Sr. Prof. (Civil Engineerin
National Academy of Indian Railwa
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CIVIL TENDERS

Civil tenders usually refers to the process

whereby governments and other institutions
invite bids for Execution of projects/works
that must be submitted within a finite
deadline.

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CONTRACT

A Defined Legal Relationship between

tendering authority and successful tenderer
for execution of work.

Works contract
Store contract
Service contract

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TENDERER AND CONTRACTOR

Tenderer is one who tenders bid in

response to invitation for tenders.
A contractor is anyone you get in to
work for you who is not an employee.

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WHY TENDERING ?

Fundamental Principle of Execution of

Public Works:

Efficiency
Economy
Transparency

Fair & Equitable treatment of tenderers

Promotion of Competition

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TYPES OF TENDERS

Open Tenders

Limited Tenders

Special Limited Tenders

Single tenders

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LIMITED TENDER
(RB VIDE LETTER NO. 94/CEI/CI/4 DATED 17/10/2002)
1. LIMITED TENDERS FROM THE CONTRACTORS
BORNE ON THE APPROVED LIST ONLY.
2. NOTICE IN LOCAL NEWSPAPERS, DISPLAYED ON
NOTICE BOARDS AND PUT ON INTERNET.
3. RAILWAY MAY DECIDE CATEGORIES OF WORKS FOR
WHICH LIST OF APPROVED CONTRACTORS SHALL
BE MAINTAINED FOR EACH MONETARY SLAB.

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SPECIAL LIMITED TENDER

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(RB VIDE LETTER NO. 94/CEI/CT/4 DATED

17/10/2002)
1. SPECIAL LIMITED TENDER IN CONSULTATION WITH
FA & CAO IN FOLLOWING SITUATIONS:A WORKS OF SPECIALIZED NATURE (PHOD
APPROVAL)
B WORK OF URGENT NATURE (GM APPROVAL)
C CONSULTANCY WORKS (GMS APPROVAL)
2. TENDERERS NEED NOT NECESSARILY TO BE BORNE
ON THE APPROVED LIST.
3. TO BE INVITED FROM SPECIALIZED AND REPUTED
CONTRACTORS
4.

NO. OF TENDERERS

8
MORE THAN SIX BUT NOT

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SPECIAL LIMITED TENDER

(Rly Bd letter No.2007/CEI/CT/18 Dt.28-0907)
CAO(C) WITH THE CONCURRENCE OF FA & CAO(C)
MAY INVITE SPECIAL LIMITED TENDER NOT ONLY
FOR SPECIALISED NATURE OF WORK BUT FOR ALL
TYPES OF WORKS DEPENDING UPON THE MERIT OF
THE CASE

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SINGLE
(Rly. Boards letter 2007/CCI/CT/18 Dated 7/3/2008)
TENDER
GM is empowered to award contracts on single
tender basis at present, but now CAO(C ) is also
empowered to float and finalize single tenders of
value not more than Rs. 2.0 crore each with
personal concurrence of FA&CAO, only for purpose
of early completion of works related with doubling
and traffic facility.

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TWO PACKET SYSTEM

Rly Bd letter No. 94/CEI/CT/04 DATED 17/10/02

CAN BE ADOPTED FOR HIGHLY TECHNICAL WORKS WHERE

PARAMETERS NOT PRECISELY DEFINED OR SPECIALIZED IN
NATURE
Rly Bd letter No. 2007/CEI/CT/18 DATED 07/03/08

RAILWAY MAY FOLLOW TWO PACKET SYSTEM INSTEAD OF

RESORTING TO SINGLE PACKET/ OPEN TENDER FOR HIGH
VALUE TENDERS
Rly Bd letter No. 2008/CE.1/CT/Con/7(PCE/GM) DT 15.12.08

TWO-PACKET SYSTEM OF TENDERING MAY BE ADOPTED

WHEREVER CONSIDERED NECESSARY. THERE IS NO NEED TO
LINK THIS MODE OF TENDERING TO ANY FINANCIAL VALUE11

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R.B. LETTER NO. 94/CE-I/CT/4/PT. 17 DT. 13.8.12

1.

TWO PACKETS SYSTEM FOR ALL WORKS REQUIRING

TECHNO-ECONOMIC EVALUATION

2.

MANDATORY FOR ALL WORKS VALUING MORE THAN

10 CR. EXCEPT WHERE DECIDED BY EXECUTIVE NOT
BELOW THE RANK OF HAG WITH RECORDED
REASONS AND CONCURRENCE OF FA&CAO

3.

FOR WORKS UPTO 10 CR. CAN BE ADOPTED BY

TENDER INVITING AUTHORITY WITH CONCURRENCE
OF ASSOCIATE FINANCE
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13

NEED FOR EPC CONTRACT

Conventional
item-rate
contracts
are
generally prone to time & cost overrun due
to:

Involvement of multiple agencies- generally a new

line/doubling project involves 15 to 20 different value
contracts

Failure of even one contract delays the project

Lack of flexibility in replacing failed agency on real

time basis
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NEED FOR EPC CONTRACT

In item-rate contract, allocation of

construction risks are largely to
Authority , particularly the onus of
design which many times lead to
o

Delays in design and drawings

Authority
Variation in items and quantities

by

the

Considerable
time
of
Project
Engineers is consumed in processing
of:
o

Variation in quantity of items which are quite

frequent
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Introduction of NS items

OBJECTIVE OF EPC
CONTRACT

Implementation of project to specified standards with a

fair degree of certainty relating to time & cost while
transferring the construction risk to contractor.
Awarding contract for a LS price ensures predictability
and financial discipline both for Government &
Contractor.
Well defined system of obligation associated with
damages
Assigning risk to the party who is in a better position to
mitigate it e.g. land, statutory clearances assigned to
Authority whereas design, site uncertainty, sub
contracting are assigned to contractor
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PERCEIVED ADVANTAGE OF
EPC

Detailed initial planning before tenderingAuthority is required to specify its requirement

only, without detailed design.
Effective project management- less no. of
contracts to mange.
Engagement
of
professionally managed
agencies.
Minimum variation orders.
Milestone based payments.

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PROJECT SCOPE NEEDS TO

BE SPECIFIED VERY
CAREFULLY AND SHOULD BE
EXHAUSTIVE

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TENDERING PROCESS

Approval of Competent Authority (CA) for

tendering
Issue of Tender Notice/NIT
Pre-bid conference, if any.
Preparation of Comparative Statement(CS)
and Briefing Note(BN)
Vetting of CS
Nomination of Tender Committee(TC)
Deliberation of tenders by TC and
Recommendations
Acceptance of Tender Accepting Authority
(TAA)
Issue of Acceptance Letter (LOA)
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Signing of Contract Agreement (CA)

NOTICE INVITING TENDERS (NIT)

Name of office inviting tenders

Name & scope of work.
Tender value
Time period of completion.
Details of earnest money.
Date of Commencement of sale of Tender
Documents.
Time and date for receipt of tenders
Time and date for opening of tenders.
Validity of the tenders.
Accessibility of full set of tender documents
including drawings.

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PUBLICATION OF TENDER
(Rly Bd letter no. 2008/RS(G)/779/2 Dt 07/11/08)

WHILE PUBLISHING THE TENDER IN NEWPAPER

FOR WIDE PUBLICATION, CPRO MUST ENSURE
THAT THE TENDER NOTICE HAS ALREADY BEEN
UPLOADED ON THE WEBSITE BY TAKING
CERTIFICATE FROM THE EXECUTIVE.

ANY OPEN TENDER NOT HAVING TOKEN OF

CONFIRMATION (IN THE FORM OF RECORD OF
INTERNET UPLOADING) WILL BE TREATED AS
INADEQUATELY ADVERTISED TENDER.
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COST OF TENDER FORMS.

Sl
COST OF TENDER
COST
.
1. For works costing up to Rs.5 L
1000/2. For works costing above Rs.5 L and up to
2000/Rs.20 L
3. For works costing above Rs.20 L and up to
3000/Rs.50 L
4. For works costing above Rs.50 L and up to
5000/Rs.2 cr
(i) IF ANY PLAN/DRAWING IS ATTACHED WITH THE TENDER
5. For works costing above Rs. 2 cr. and up to 10000/
FORM, Rs.200/- PER PLAN/DRAWING WILL BE LEVIED
Rs.50 cr
EXTRA.
6. For works costing above Rs.50 cr.
25000/
(ii) IF ANY TENDER FORM SENT BY REGD. POST,
ADDITIONAL POSTAL EXPENSES @ Rs.500/- PER TENDER
FORM WILL BE CHARGED.

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ODES OF PAYMENT OF TENDER DOCUMEN

CASH IN FORM OF MONEY RECEIPT

DEMAND DRAFT

THE OFFER WILL BE REJECTED INCASE NOT

ATTACHED WITH DD FOR DOWNLOADED FORM - A
CLAUSE SHOULD BE MADE IN THE TENDER
DOCUMENTS

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DELAYED / LATE TENDERS

Delayed tenders i.e. Tenders received before the
time of opening but after the due date and time of
receipt of tenders should also be opened and dealt
with in the same manner as tenders received before
due date and time.

Late tenders i.e. tenders received after the

specified time of opening should be opened by the
concerned Branch officer and marked distinctly
preferably in red ink prominently on the envelope as
well as on the tender papers.
Suitable remark in regard to both delayed and late
tenders should be made both in the Tender Register as
well as in the comparative statements.
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DEALING WITH DELAYED / LATE

TENDERS DATED 06-02-04
(RBs LETTER No.2003/PS(G)/77/5
(I)

NORMALLY NOT TO
SUMMARILY REJECTED

BE

CONSIDERED

AND

(II)

HOWEVER, IF IT IS CONSIDERABLE ADVANTAGE

TO DEAL WITH IT, THE PROPOSAL IS SENT TO
RLY BD WITH FA & CAOS REMARKS AND GMs
PERSONAL APPROVAL

(III)

THE RAILWAY ADMINISTRATION SHOULD NOT

ENTER IN TO ANY DIALOGUE WITHOUT
OBTAINING RALWAY BOARDs PRIOR CLEARENCE
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1. Tender Committee (Rly. Boards letter 2007/CCI/CT/18

Dated
7/3/2008)

Two members tender committee for tenders of

value of
Rs. 20.0 Lakhs and less Two Members-one from
accounts
and other from executive.
Three member tender committee for tenders
valuing
more than
20.0 Lakhs.
Tender
accepting
Authority
(Rly. Boards letter 2007/CE-1/C

Dated 27/8/2013)

Sl
1
2
3
4
5

Power of acceptance
Up to Rs. 3 cr
Above Rs. 3 cr and up to Rs.
12 cr
Above Rs. 12 cr and up to
Rs. 75 cr
Above Rs. 75 cr and up to
Rs. 150 cr
Up to Rs. 300 cr

Accepting Authority
S. Grade/J.A. Grade
S.A. Grade
H.A. Grade
General Manager
General Manager26

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AN UNDERTAKING BY TC
(RLY BD letter No. 2004/C-1/CVC1/18/ dt 12.01.06)
THE MEMBERS OF THE TENDER COMMITTEE
SHOULD
GIVE
AN
UNDERTAKING
AT
THE
APPROPRIATE TIME, THAT
NONE OF THEM HAS ANY PERSONAL INTEREST IN
THE COMPANIES/AGENCIES PARTICIPATING IN THE
TENDER PROCESS
AND THAT ANY MEMBER HAVING INTEREST IN ANY
COMPANY
SHOULD
BE
REFRAINED
FROM
PARTICIPATING IN THE TENDER COMMITTEE.
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Earnest Money Deposit (EMD)

2007/CEI/CT/18 DATED 28/09/07

Value of the
work

EMD

For works
estimated to cost
up to Rs. 1 Cr.

2% of the estimated cost

of the work.

For works
estimated to cost
more than Rs. 1 Cr.

Rs. 2 lacs plus % ( half

percent) of the excess of
estimated cost of work
beyond Rs. 1 Cr. subject
to a maximum of Rs. 1.0
Cr.

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ELIGIBILITY CRITERIA

( Rly. Board vide letter No. 94/CEI/CI/4 dated 23/11/2006)

1 SHOULD HAVE PHYSICALLY

COMPLETED WITH IN THE
QUALIFYING PERIOD i.e.
LAST THREE FINANCIAL AND
CURRENT FINANCIAL YEAR

AT LEAST ONE
SIMILAR NATURE OF
WORK FOR A MIN.
VALUE OF 35% OF
NIT COST

2 TOTAL AMOUNT RECEIVED

DURING THE LAST THREE
AND CURRENT FINANCIAL
YEAR

SHOULD BE OF
AMOUNT OF 150%
OF NIT COST.

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RLY. BOARD VIDE LETTER NO. 94/CEI/CI/4 DT. 23/11/2006

i.

ii.

SIMILAR NATURE OF WORK PHYSICALLY

COMPLETED WITH IN THE QUALIFYING
PERIOD i.e. LAST THREE FINANCIAL AND
CURRENT FINANCIAL YEAR (EVEN THOUGH
THE WORK MIGHT HAVE COMMENCED
BEFORE THE QUALIFYING PERIOD) SHOULD
ONLY BE CONSIDERED.
THE TOTAL VALUE OF SIMILAR NATURE OF
WORK
COMPLETED
DURING
THE
QUALIFYING PERIOD AND NOT THE
PAYMENTS RECEIVED WITHIN THE PERIOD
ALONE, SHOULD BE CONSIDERED.

iii.

a)

IN CASE, FINAL BILL NOT PASSED AND

FINAL MEASUREMENT NOT RECORDED PAID AMOUNT INCLUDING STATUTORY
DEDUCTION TO BE CONSIDERED
b) IF FINAL MEASUREMENT RECORDED AND
COMPLETED WITH NEGATIVE VARIATION PAID AMOUNT INCLUDING STATUTORY
DEDUCTION TO BE CONSIDERED.
c) IF FINAL MEASUREMENT RECORDED AND
WORK COMPLETED WITH POSITIVE
VARIATION BUT VARIATION NOT
SANCTIONED ORIGINAL CONTRACT
VALUE OR LAST SANCTIONED AGREEMENT
VALUE WHICHEVER IS LOWER TO BE
CONSIDERED

iv

IN CASE OF COMPOSITE WORKS SEPARATE

COMPLETED WORKS OF REQD VALUE TO BE
CONSIDERED
SIMILAR NATURE OF WORKS TO BE DEFINED
BY PHOD ON OPEN LINE AND NOMINATED
CE/CSTE/CEE
ON
CONSTRUCTION
ORGANISATION AND TO BE INDICATED IN NIT
IN CASE OF ANY DEVIATION/MODIFICATION,
PRIOR
APPROVAL
OF
COMPETENT
AUTHORITY SHOULD BE OBTAINED

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RLY BD LETTER NO.2008/CE1/CT/CON/7/PCE/GM DT

15.12.08

THE EXISTING MIN TENDER VALUE LIMIT OF Rs. 10

LAKH FOR INCORPORATING ELIGIBITY CRITERIA IS
INCREASED TO Rs. 20 LAKH

RLY BD LETTER NO.2007/CE1/CT/18 Pt.XII DT 31.12.10

IT HAS BEEN FURTHER INCREASED TO Rs. 50

LAKH

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CLUBBING OF WORKS

Rly Bds L. No. 2013/CE-I/CT/O/34/SI dt. 18-03-2014

While clubbing various works to enable proper contract
monitoring/management; two aspects i.e. type of
works to be clubbed together in one tender and
optimum value of the big tender to attract reasonable
competitiveness, should be taken into account.
Accordingly, zonal works and sanctioned works shall
normally not be clubbed in a tender so as to affect
reasonable competition in tendering. Also
miscellaneous and varying nature of works should not
be clubbed together which may affect booking of
expenditure and drawl of completion reports
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NEGOTIATION
Rly Bd LETTER 90/CEI/07/I/P/dt. 10-07-2002)
1.

L1 IS DEFINED AS THE LOWEST WHICH IS VALID,

ELIGIBLE
AND
TECHNICALLY
ACCEPTABLE
TENDERER

2.

NEGOTIATION SHOULD BE HELD WITH L1 ONLY

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COUNTER OFFER

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RLY BOARD LETTER NO. 94/CEI/CT/4 DT

17.10.2002
IN CASES WHERE THE OVERALL VALUE OF L1 IS NOT
UNREASONABLY HIGH BUT RATES OF CERTAIN ITEMS
OR TOTAL VALUE FOR A SCHEDULE HAPPEN TO BE
HIGHER THAN THOSE QUOTED BY OTHER TENDERERS
OR HIGHER THAN LARs, METHOD OF COUTER OFFER
MAY BE ADOPTED
BUT IT IS NOT SUBSTITUE/ IN LIEU OF NEGOTIATION

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SECURITY DEPOSIT

(RLY.BD LETTER No.2003/CEI/CT/4/PtI Dt.12/16-052005)

a) S.D. SHOULD BE 5% OF THE CONTRACT VALUE
b) RATE OF RECOVERY SHOULD BE @ 10% OF BILL
AMOUNT
c) S.D. TO BE RECOVERED FROM RUNNING BILLS OF
THE CONTRACT ONLY
d) S.D. WILL BE RETURNED WITH THE APPROVAL OF CA,
AFTER THE MAINTENANCE PERIOD OF THE WORKS IS
OVER,
(RLY BOARD LETTER NO. 2007/CEI/CT/18 DT 07.03.08)
e) AFTER THE WORK IS PHYSICALLY COMPLETED, SD
RECOVERED FROM THE R/BILLS CAN BE RETURNED
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IN LIEU OF FDR OF EQUIVALENT AMOUNT

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PERFORMANCE GUARANTEE (PG)

2003/CEI/CT/4/PT DATED 16/05/06 MODIFIED VIDE
LETTER 200/CEI/CT/18 DATED 28/09/07
THE SUCCESSFUL BIDDER TO GIVE PG @ 5% OF
CONTRCT VALUE
SHALL BE SUBMITTED BEFORE SIGNING CONTRACT
AGREEMENT

SHALL BE IN FORM OF BG, FDR ETC.

CAN BE RELEASED AFTER SUCCESSFUL COMPLETION

OF WORK
NO ADDITIONAL PG FOR VARIATION UPTO 25%
FAILED CONTRACTOR/ ALL PARTENERS OF JV ARE
DEBARRED IN RETENDER FOR BALANCE WORK
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QUOTATIONS
(Rly Bd letter No. 2007/CEI/13/PT Dt 05/03/09)
AUTHORITY

FINANCIAL
LIMIT

ANNUAL
CEILING

Sr. Scale
1.0 lakhs
5.0 lakhs
JAG
2.0 lakhs
20.0 lakhs
SAG
4.0 lakhs
40.0 lakhs
Invited from well experienced contractors, not
necessarily borne on approved list.
A register showing the full details to be maintained
and sent to Associate Finance while seeking
concurrence.
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NORMALLY THE POWERS TO

DISPENSE WITH CALLING OF
TENDERS SHOULD BE EXCERCISED
SPARINGLY. THE CIRCUMSTANCES
UNDER WHICH QUOTATIONS HAVE
TO BE CALLED SHOULD BE SPELT
OUT

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REVIVAL OF TERMINATED CONTRACT

(BOARD LETTER NO 9/CEI/CT/C1/7 Dt.
24/05/01)

IT IS STIPULATED THAT ONCE THE FORMAL

NOTICE OF TERMINATION HAS BEEN ISSUED,
REVIVAL OF THE CONTRACT EVEN IF ON THE
SAME TERMS AND CONDITIONS, IS POSSIBLE
ONLY AS A SINGLE TENDER REQUIRING THE
GMS PRIOR APPROVAL

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Thanks

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