WEL COME

to session on
PCP 2020

Chandranan Jain
Manager (CC-NW)
Corporate Vigilance, New Delhi
 Contract Management
 Necessity of PCP
 Basics of Contract
 Formulation of Proposal & Tender Document
 Tendering Process
 Contract Agreement
 Execution Contract
 Closure of Contract

Corporate Vigilance, New Delhi

 Necessity ofPCPPCP
Necessity of

• To have uniformity of the Systems &

procedures through out the SAIL

• To aid in Fast decision making

• To ensure procurement of material/services at

right time, in right quantity/quality

with
• Economy
• Efficiency
• Fairness
• Transparency
 Necessity ofPCPPCP
Necessity of

Parliament

CVC Ministry of Steel CAG

SAIL Vigilance IA
Working of PSUs

Courts
RTI Media
 OUTSOURCING
OutsourcingADVANTAGES
Outsourcing Advantages
Advantages

 Focussing on Core competencies

 Engaging Business partner who can do better than us

 Gain technological advantages-

advantages-Services of expert
without directly employing them (E
(ERP)

 Opportunities to leverage scale : Increase Capability

 Opportunities to reduce risk/share risk.

(Technological
(Technological changes, demand fluctuation)

 Cost Reduction
(Manpower, Economic Batch Quantity).
 Outsourcing Disadvantages
Outsourcing Advantages

 Loss of in-house skills.

 Lack of suitable remedy in the event of failure

of the contractor.

 Lengthy resolution processes in case of disputes.

 Loss of data (company secrets )

 Purchase
Purchase & Contract
& Contract

 Purchase
 The Sale of Goods Act 1930

 Supply of Goods
 All activities are at Supplier’s premises
 Contract
 The Indian Contract Act 1872

 Pure Service or supply of goods along with Services.

 All/some/none of the activities at Employer’s Premises.
 Compliance to Labour Laws
 Contract & Agreement
 Contract is an agreement between two or more parties
(oral or in writing) to do certain things.

 Agreement : mutual understanding between the

parties, which creates obligations & consideration
between each other.
 Valid Contract
 Parties competent to Contract

 There must be free consent of the

parties Concerned

 An agreement enforceable in law

 There must be a lawful consideration

 Guidelines & Circulars

 PCP-2020
 O&M Circulars- Circulars issued at BSP level.
 Guidelines from Corporate Office/ CVC.
 DOP
 General Conditions of Contract-GCC
 Proposal Generation
Proposal (PR)

Tender Document
Justifications to (What, Where, How, When)
Management:-
A. NIT
• Why B. Instructions to the Bidder
C. Special Conditions of Contract
D. Drawings
E. GCC
F. Tender Schedule/ Price Bid
Proposal Generation
Justification to Management
 Background /detail justification for the job on contract/Status of
departmental resources.
 Details of similar jobs done earlier on Contract/existing Contracts.
 Job included in AAP, else approval of ED
(2.3.5, 3.2 / DOP P-1: 3; P-5:1.1/ 723-31.05.08)
 Budget availability
 Justification for job distribution, deviation to be approved by ED.
(10.3.1, 653-14.11.07)
 Number of parties, % share, Location
 Justification for not clubbing of proposals for similar nature of job.
(2.3.6, P-5:1.1)
 Details of free issue material: Quantity and its value
: Schedule of issue
Proposal Generation
Types of Contracts
Justification to Management

 Type of Contract
 Turnkey
 Lump sum
 Item Rate : Qty declared in TS
 Value based Rate Contract : Quantity zero in TS
 Cost Plus (Deposit Work)
 BOT. (Build, Operate, Transfer)

 Status of inter-linked jobs (Civil + Elect + AC)

Proposal
Proposal
Generation
Generation CONT…

Cost Estimate Sheet

Sl. UCS Item Unit Installed qty/ PR PO Stock PR qty LPP Details WPI as on https:// Budgetary Estimated Amount
No Code descript yearly dues dues at Site eaindustry.nic.in/ offer (Rs.) rate (Rs.) (Rs.)
: ion consumption / CPS
PO Qt PO current
No Date y Rate Month month
1
2
3

(1) Basis of Estimated Rate

(2) Basis of estimated Quantity
• Consumption Pattern
• Stock in hand
• Drawing,
• site inspection report
Proposal
Proposal
Generation
Generation CONT…

Cost Estimate Sheet – Estimated Rate (PCP 2.4.1 )

a) For frequently purchased items (i.e., items purchased at least twice
during last three years)
The estimate shall be based on the last purchase price obtained through normal tendering and
competitive bids with adjustment for variations in the prices of raw materials, wages and other
inputs including current market conditions based on relevant RBI indices or any other indices,
wherever appropriate.

b) For infrequently purchased items (i.e. items not purchased twice

last three years)/ new items
Scientific/ technical estimate, considerig the cost of raw material, casting/ machining, treatment/
testing, labour, overhead expenses, transportation and applicable statutory duties and levies etc. In
case, cost of making pattern/ engineering drawing/ development of the items are also included in
the estimate, all care should be taken to exclude this portion of cost in future while re-indenting/
re-ordering. If required, for guidelines, budgetary quotations may be obtained for infrequently
purchased items preferably from OEM/ OES/ authorized dealer / registered vendors/ last supplier,
for new items(s) or new technology efforts should be made by the indenter to get more than one
budgetary quotation. For preparing departmental estimate, the lowest of rate(s) of budgetary offers
or Last Purchase Price (LPP) or Cart Value on GeM, whichever is lower, is to be considered.
Proposal
Proposal
Generation
Generation CONT…

Cost Estimate Sheet – Estimated Rate (PCP 2.4.1 )

c) For procurement of proprietary items,

LPP, if available in the last 2 years, should be considered as estimate.

If LPP is more than two years old, Adjustment for variations in the
prices of raw materials, wages and other inputs including current
Market conditions may be done based on relevant RBI indices or other
indices wherever appropriate. In cases where LPP is not available,
the supplier’s price list / rates along with the applicable discounts
shall be obtained for preparing estimates. Such list should be directly
obtained from the manufacturer only and the list supplied by dealers /
authorized agents should not be considered unless authorized by
the manufacturers. For a product available on GeM, estimate may be
based on prevailing product price on GeM.
Proposal
Proposal
Generation
Generation CONT…

Cost Estimate Sheet – Estimated Rate (PCP 2.4.1 )

d) For Job/ Service contracts including manpower related
contract, conversion, handling, port related contracts,

fresh estimates shall be prepared for each Indent / contract. While preparing
estimate, last contract price / job order value should not be the sole consideration
for the basis of estimate. For the preparation of estimates, the following factors
may be considered:
i) Job elements
ii) Supplies to be made
iii) Mobile equipment / tools and tackles to be provided.
iv) Any other services, fee against statutory obligations,
overheads etc.
v) Green field / brown field job, completion period, shutdowns
involved.
VI) Cost of Labour + Cost of Material + Equipment + Taxes and duties
Proposal Generation
Justification to Management
 Suggested Mode of Tendering (3.2-e)
LTE-Registered Parties
(888 Dated:08-11-2010, 1016 Date 24/04/2012 )
OT-Eligibility criteria deviation, approval of ED (914-06.04.11).
-Beyond 50Lakhs OT, deviation approval by ED (P-4:1)
LTE-Provisionally registered Parties (1052 Date. 29/09/2012)
ST-Proprietary Certificate (P-4:10)
ST-Non proprietary- Essentiality Certificate (931-08-06-2011)
Proposal Generation
Justification to Management
 Suggested Mode of Tendering (3.2-e)

 Emergency contract-
contract-Criticality Certificate (863-
(863-28.06.2010)
Spot
Spot Tender (905-
(905-09.03.2011)
Repeat Order (5.5)
Rate Contract (1038
(1038--30/07/2012) /
Proposal Generation
Justification to Management
Repeat Order
 Original PO placed in normal process of LT/OT.
 Not more than 2 yrs have elapsed since placement of the original
order.
 No price escalation for firm price orders shall be given.
 There is no downward trend in the market.
 Not more than 2 RO should be placed. 3rd RO approval of CEO.
 Proposed Qty should not be more than 100% of original PO.
 Original PO was not placed on the basis of a higher price for
earlier delivery.
Proposal Generation
Justification to Management
Rate Contract
 O&M/Procedure/1038Date30/07/2012
The provision of commencing the job under RC by issuing LOI
shall be discontinued with immediate effect. (This will be other
than the sanctions accorded by DROs to CEO under power
delegated for approving emergency contracts as per clause 5.8 of
PCP-09, in such cases Provisional Orders will be issued).
 To avoid / minimize placement of Work-Orders on emergency
basis under RC :
- Possibility of addressing various jobs on VBRC basis.
- The jobs will be planned well in advance to avoid emergencies.
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Name of the Job (D’nt mention time period / urgency / MOT)
 Scope of work/location where job is to be carried out
 Functional /Technical requirement
 AMC - Labour
 CMC - Labour + Spares
 FMSA - Labour + Spares + Consumables
(Full Service & Maintenance Agreement)
 FMS - Software + Hardware
(FMS : Facility Management Services)

 Drawings/sketches
 Specifications/Makes/Quality parameters
 Job distribution (10.3.1)
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Item Specification
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Item Specification
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Item Specification
 Based on Drawing
 Generic Specification based on IS/ISO/DIN Standard
 Proprietary Items based on Part Number of Manufacturer
In case the tenderers are required to submit samples along with the quotation, the same
should be clearly mentioned in the Indent itself. However, no sample should be called for the
items for which detailed/ standard specifications are available. For procurement of clothing
and textile items detailed specifications may be mentioned & no sample shall be called.
However, if required, provision for submission of an advance sample by successful bidder(s)
may be stipulated for indeterminable parameters such as, shade / tone, size, make-up, feel,
finish and workmanship, before giving clearance for bulk production of the supply (PCP
2.1.5).
Proposal
Proposal
Generation
Generation CONT…
Special Conditions
Item Specification
Proposal
Proposal
Generation
Generation CONT…
Special Conditions
Item Specification
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Duration of Contract :-
 Time of completion (Realistic )
 Date of commencement (mobilization time)
 Maintenance/Guarantee /Warranty Period (effective date)
 Project / Contract Schedule.
 Major milestones
 Resources to be deployed by Contractor
 Manpower: Number & qualification
 Material
 Machine: Type, Capacity , No:, Ownership, Age
Schedule of deployment of resources
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Operating Authority
 Legal compliance -
 Labour laws
 Environment law/ Conditions/ Food license
 Electrical license/ supervisory permit
 Authorized Service Provider
 Commercial registration of Vehicles
 Insurance
 Safety conditions (838-A-14/11/2013)
 Employee of Contractor:
 Uniform / dress code/Identity Card for Labour
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Inspection Clause / Frequency of Measurement
 Clause related to Material/facility provided by BSP
 Water /Electricity/Space/Steel/Cable
 Schedule of issue of material:
 Min. /max. qty in one batch, considering transportation.
 Submission of BG, if material taken outside BSP premises.
 Accounting of material, consideration for waste
 Recovery rate, if failed to deposit surplus material
 Return of BG
 Taxes and duties- Service Tax (1201-06.06.2016).
 Evaluation of Price Bid: Factors to be considered (2.7)
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Liquidated Damages (LD)/ Penalty:-
 Towards time delay & shortfall in performance.
 When reasons for delay not attributable to SAIL or Force Majeure
 Objective terms
 Formula for calculation
 Proportionate to delay
• 1% of total contract value for one day/week/month of delay
• 95% uptime of equipment
 Maximum limit (eg. 10% of total contract value)
 Hard enough to motivate bidder to complete job well in time &
Soft enough to be imposed
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

Price Variation Clause:
 Major cost element effecting rate: Wages, Diesel, Copper

 Reference data/date.
 Validity during the extended period of Contract.
 Objective : Formula for calculation
Variation in Awarded Rate =
(f) X Awarded Rate X Change Rate of Diesel
Rate of Diesel on reference date
f= weight-age of cost element on awarded rate
Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

 Security Deposit (943-26.07.11)
 Deduction towards S.D. from the bills @ 5%
 Payment Terms:
 Documents to be submitted
 Frequency of Payment (Matching with acc. Unit).
 X% on Activity-A, Y% on Activity B, Z% on Activity C.
 Deduction towards SD (943-26.07.11), TDS, Penalty etc.
 Risk Purchase action

 Limitation of Liability / Indemnity

 Sub contracting/sub-letting: Permitted or not Permitted

 Privacy /Confidentiality Condition

 Avoid repetition of same conditions

Proposal
Proposal
Generation
Generation CONT…

Special Conditions of Contract

ELIGIBILITY CRITERIA FOR OT

(O&M Circular:No.O&M/Procedure/914Dt06-04-11)

 The reference value (RV)= Estimate Value X P /N

P= Percentage share of L-1 Bidder
N= Duration of Contract in years.
 3yrs Average annual financial turnover : 30% RV

Exempted where turnover requirement <Rs.25L

Proposal
Proposal
Generation
Generation CONT…
ELIGIBILITY CRITERIA FOR OT
 Experience of having successfully completed similar works
during last 07years, either of the following :-
a) 03 similar completed works each costing > 40% RV OR
b) 02 similar completed works each costing > 50% RV OR
c) 01 similar completed work costing > 80% RV
 Definition of "similar work" should be clearly defined.

 Experience should be from Govt. Organization, PSU or Public

Limited Company.
 In addition to above, the criteria regarding :
Manpower / Establishments/Plant /Equipment/ Statutory
Licenses
Proposal
Proposal
Generation
Generation CONT…
ELIGIBILITY CRITERIA
 Submission of copies of PO & completion certificate or RA bills
paid or any other document(s) evidencing value of completed
portion of work.
 Deviation to O&M Circular with the approval of ED.

 Avoid subjective terms:

Sound financial position, good running condition, good business
location, qualified Engineers, Certificate from Public
representative, Self declaration, Sound Knowledge
 Eligibility Criteria Should be:

 Tight enough to get genuine bidders

 Loose enough to generate competition

 Precise enough to evaluate.

Proposal
Proposal
Generation
Generation CONT…

Tender Schedule (TS)

 Different Types :-
(1) Quoting Item wise Rate: Quantity mentioned in TS
(2) Quoting % above/below declared rates in TS
(A) VBRC: Quantity zero in TS
(B) Quantity & Rate both in TS

Sl. Item Description Acc. Qty. Rate (Rs.)

No Unit
Figure Word
 Formulation of Contract Proposal - SCC

Justification for proposed changes in PR w.r.t previous/existing Contract.

Heading Existing / previous Proposed changes Justifica
Contract tion
Clause Provision Clause Provision
No: No:
Item description
Scope of work
Material/facility to be provided
by BSP
Completion period &
Maintenance Period
Job distribution
Mode of tendering / eligibility
criteria
PVC
Security Deposit
Payment Terms
Penalty / LD Clause
Any other clause
Proposal
Proposal
Generation
Generation CONT…

Service Codes Search : E-string

Screen Shots.docx

Service Code creation request Module

Service Code Creation Request Screen Shots.docx
 Processing of Contract Proposal (Tender Cases)

Proposal (Purchase Requisition-PR ) generation

by Operating Authority (OA) in ERP using T Code ME51N

Editing of Proposal by Operating Authority

using T Code ME52N

Release of PR by OA, T Code ME54N

Release of PR by HOD of OA, T Code ME54N

Release of PR by CCNW, T Code ME54N

Release of PR using T Code ME54N by

1. IED: For all case of Mines
2. O&M: For all cases of Stores where CSC required
3. IED: For new jobs only for rest of Non Works Area.
 Processing of Contract Proposal (Tender Cases)

Release of PR by CSC Chairman, T Code ME54N

Preparation of CSC Minutes of the meeting (along with

draft NIT, ITB & SC) by CCNW (offline)

Obtaining approval of CSC recommendation from

OA’s hierarchy by OA (offline)

Generation of Enquiry Proposal (EP) by CCNW in ERP

Using T Code ZMM024AS.
Taking Printout of Tender Schedule using T Code ZMM015A

Approval of EP using T Code ZMM024BS &

draft Tender document (NIT, ITB & SC, Tender Schedule)
by hierarchy of MM Organization (offline)
 Processing of Contract Proposal (Tender Cases)

Issue of Tender by CCNW (offline)

OT : Advertisement in Newspaper
: Uploading Tender on SAIL Website www.sailtenders.co.in
: Uploading NIT on Govt. Website www.tenders.gov.in
: Display of NIT on Notice Boards
(CCW/CCNW/TAD/ CC–Projects NTK)

LT-Registered: Uploading Tender on SAIL Website

: Display of NIT on Notice Boards
: NIT through Email to Parties
: NIT through Post, if eligible Parties <15.

LT-Provisionally registered /ST/EC :

: Tender document through Post
: NIT through Email
 Processing of Contract Proposal (Tender Cases)

Receipt of Offers through Tender Box & Post/Courier

(offline)

If No: of offers <X+2, deviation approval or extension of dates

Forwarding of EMD documents to Finance

using T Code ZMM EMD

Techno- commercial scrutiny of offers by Indenter /

Tender Committee & correspondence with the Bidders
through Post & Email (offline)

Approval of Competent Authority to approve x+2 deviation,

if any (offline)

Reverse auction (RA) for OT/LT Cases valuing > Rs.15Lakhs &
number of eligible offers => 2, else opening of Price Bid (offline)
 Processing of Contract Proposal (Tender Cases)

RA report from M/s. Metal Junction or preparation of

Comparative statement of price bid by CCNW (offline)

Tender Committee Meeting for all RA cases &

Negotiation with L-1 if beyond direct awardable range,
after approval of Competent Authority –CA (offline)
.
Generation of PO by CCNW in ERP using T Code ME21N/ME31K

Release of PO online using T Code ME29N/ME35K by Finance & CA.

Finance Concurrence (if required) & approval of CA
in hard copy (offline)

Review of PO by Competent Authority (offline)

Issue of PO by CCNW to Contractor (offline)

(Schedule of Work & Rate from ERP, all other documents manual)
 Processing of Contract Proposal (RC Cases)

Proposal (Purchase Requisition-PR ) generation

by Operating Authority (OA) in ERP using T Code ME51N

Editing of Proposal by Operating Authority

using T Code ME52N

Release of PR by OA, T Code ME54N

Release of PR by HOD of OA, T Code ME54N

Release of PR by CCNW, T Code ME54N

Release of PR using T Code ME54N by

1. IED: For all case of Mines
2. O&M: For all cases of Stores where CSC required
3. IED: For new jobs only for rest of Non Works Area.
 Processing of Contract Proposal (RC Cases)

Release of PR by CSC Chairman, T Code ME54N

Obtaining approval of CSC recommendation from

OA’s hierarchy by OA (offline)

Generation of PO by CCNW in ERP using T Code ME21N/ME31K

Release of PO online using T Code ME29N/ME35K

by Finance (if required) & CA

Review of PO by Competent Authority (offline)

Taking Print out of PO by CCNW

(Schedule of Work & Rate from ERP, all other documents manual)

Signing of Work Order by OA & Contractor in CCNW

Issue of PO to Contractor
Proposal
Proposal
Processing
Generation CONT…

Proposal generation by Operating Authority in ERP

Tender Value
HOD of OA <25Lakhs, LT/OT
IED EP /
for
Draft Tender HOD CCNW
CCNW
New
jobs Finance
Tender Value >25Lakhs, ST

CSC-Chairman HOD CCNW

CCNW HOD of OA
R
C
HOD CCNW Finance Concurrence

Approving Authority Approving Authority

Tender
Proposal
Processing
Generation CONT…

Issue of NIT by CC-NW Opening of Techno-commercial

Bid by CCNW & F&A
OT-Newspaper, Website, NB
LTR- Website, NB Techno-commercial
LTP/ST- Sending of Document scrutiny of documents by
Tender Committee (TC) or OA
Receipt of offers by CCNW
Clarifications from Bidders,
>=X+2 Verification from originals
No of offers
Recommendation for
<X+2 RA or opening of Price Bid
App for X+2 dev

Approval RA if Tender Opening of Price Bid

of CA Value (TV) TV <15Lakhs or
>15Lakhs, RA fails
Extension of dates, Vendors LT/OT
Tender Processing – Reverse Auction
CCNW: Mandate to Mjunction for conducting 1st Stage RA

Mj: Enhancing Bidder awareness & providing Login

Mj: 1st Stage RA-Calling of Online Seal Bid Price (SBP)

Tender Committee : Setting of Start Bid Price

(Considering LPP, Estimate, SBP)
: Elimination of Top few Bidders.

CCNW: Mandate to Mjunction for conducting 2nd Stage RA

(1st and 2nd Stage RA on same day to avoid Cartel formation)

Mj: 2nd Stage RA- Decrement over Start Bid price by Bidders.
Tender Processing – Reverse Auction
Yes
Bid received

No Tender committee to
Check reasonability of Price
Tender
Revision Committee
of Approval of CA for issue of
PO
Start Approval of
Bid CA for Opening of
Return of Sealed hard price
Hard price bid
Price to Bidders
Calling sealed decrement from Bidders
Preparation of CS of Price bid

Approval of CA for issue of PO if L-1within

Direct awardable range or conducting negotiation
Tender Processing – Negotiation
PRICE NEGOTIATION
 Negotiations with L-1 only, in certain exceptional situations
 Single Tender or items with limited source of supply
 where there is suspicion of a cartel formation.
 L-1 beyond direct awardable range (985-17-12-11).
 Negotiation by Committee with approval of CA
 If L-1 backs out, re-tendering without considering L-1 .
 Upto Rs. 10 lac negotiation through correspondence permitted
(11.5).
 No changes in techno-commercial terms and increase in price,
 Negotiation & decision for placing order within validity period of
the offer, else extension of validity period .
 In case, L-1 less than (-30%) of the estimate, justification to be
submitted by Contractor. If required submission of PGB
(BG/DD).
 Amount and validity of BG.
Contract Agreement
Contract Agreement
 Letter of Acceptance / Award Letter / Purchase Order
 Duplicate copy of PO including its enclosures: Each page duly
signed, in token of your agreement on its content,
 For PO value >Rs.50 Lakhs & upto 10 crores
crores:: Acceptance on
Non--Judicial Stamp Paper.
Non
 For PO value >Rs.10 Crores
Crores:: Signing Non-
Non-Judicial Stamp
Paper in CCNW
 Self attested copy of documents in respect of status of Contractor.
 Power of attorney/supporting documents in favour of a person
who will be handling contract on behalf of Contractor.
 Copy of contract schedule approved by OA
 Performance Guarantee Bond (DD or BG), if any.
Execution Execution
of Contract
of Contract
 Ensure following during execution of job:
 Contract Agreement
 Labour license (Number and validity) : Issue of Form
Form--V
 Character & Antecedents Verification of Contract Labour by
Police. OA to CSP, Bhilai for Police verification, under
intimation to Contract Labour Cell (737-13-08-2008).
 Contractor’s registration under ESI Act & BOCW Act
 PF No
No:: of Labour (1117 Date 19/03/2014)
 Safety::
Safety
 Labour
Labour:: Safety Training (838-A 14/11/2013)
 General Public (Road, Trenches, Pit)
 Material & Equipment
 Electrical license/ Supervisory permit: Validity
Execution Execution
of Contract
of Contract
Ensure following during execution of job:-
 Monitoring of Project Schedule
 Periodic Meetings with Contractor(s) & other agencies

 Material Test Certificates

 Manufacturers

 Sample collection from site

 Free issue material

 Submission of BG

 Material Accounting & Return of BG

 Regular inspection
 Safety

 Quality of job executed

 Measurement of Work done

Execution Execution
of Contract
of Contract
 Ensure following during execution of job:-
 Payment of Bills (795-11-4-2009)
 After completion of part/full job, OA shall complete the
measurement within a week and forward bill to Finance
within 15 days
 Clearance of CLC required for first and last bill
 Along with Bill Contractor has to submit: Muster Roll along
with payment of PF, EPS, ESIS, EDLI.
OA has to forward above document to CLC for obtaining
“Statutory Due Clearance”.
 Bill shall be forwarded to Finance along with IR Clearance
from CLC for the previous Bill.
 Break-up of Taxes/duties/levies etc. by Contractor
Execution of Contract
Interim Deviation Statement (IDS)
 IDS: Due to site conditions
Variation in consumption pattern
 IDS: Quantity deviation w.r.t. awarded quantity
: Execution of new/extra Item

 Consent letter of Party.

 Prior in-principle approval of CA for use of extra item/quantity (820
- 04-07-2009)
 Rates for extra Items: Derived from Awarded rates, HSCL/CPWD
Norms (61.4 of GCC) or Rate analysis.
 If change of Rank, occurs at IDS/FDS stage,
 Resolve through Negotiation by Tender Committee,

 otherwise approval of CEO (392-18-02-2005).

Execution of Contract
Interim Deviation Statement (IDS)
PO Number: Name of the job:
Contract Period from……to…….. Extended upto
SN Item Original Qty exe. Additional required
Code Upto
Rate Qty Amt Qty Amount
(1) (2) (3) (4) (5) (6) = 5x1

Total revised % dev. of qty Justification

Qty Amount
(7) =2+5 (8) =7x1 (9) = (7-2)*100/2 (10)
Execution of Contract
Rank Changing

Item Ten- P-1 P-2 P-1 P-2 Exe. P-1 P-2

No der Rate Rate Amt Amt Qty Amt Amt
(Ten) Ten Ten Exe. Exe.
Qty
Qty Qty Qty Qty

1 10 10 12 100 120 6 60 72
2 12 11 10 132 120 15 165 150
Total 232 240 225 222
Rank L-1 L-2 L-2 L-1
Execution of Contract
Extension of Contract Period (EOT)
 EOT: (1) Due to non-execution of ordered quantity.
(2) Due to execution of additional quantity.

 EOT : (A)with penalty if reasons are attributable to Contractor

(B)without penalty if reasons are not attributable to Contractor

 No escalation of price in extended period despite PVC but reduction

if any shall be availed .
The rates as prevailing on the last day of the scheduled delivery
period may be paid with approval of next higher Authority (14.2.1iii)

 Submission of revised project schedule.

 Request / Consent letter of Contractor.
 Extension of BG against Material issue or PGB (if required)
Final Deviation Statement
Final Deviation Statement (FDS)

 FDS (795-11-4-2009)
 After completion of full job, FDS within 10 day
 If Contractor doesn’t turn up for signing FDS, the
same may be processed on ex-party basis giving
15days notice period.
 No approval of FDS, if
• Within +/-10% or Rs.50000,
• No rank changing
Execution of Contract
Final Deviation Statement (FDS)
PO Number: Name of the job:
Contract Period from……to…….. Extended upto

S Item Original Approved upto last IDS

N Code
Rate Qty Amt Qty. Amount
(1) (2) (3) (4) (5)

Total executed % dev. of qty. Justification

Qty. Amount
(6) (7) = 6X1 (8) = (6-4)*100/4 (9)

Signature of Contractor Signature of OA

 Final Bill
 Final Bill
 FDS (approval if required)
 Accounting/ Reconciliation of the materials
 Clearance from CLC
 Settlement of Penalty
 No demand Certificate from various Department
 Return of BG (against issue of material)
 Closure of Contract
 After successful completion of Maintenance period.
 Release of Security Deposit
 No claim Certificate from Contractor
 Issue of Performance Certificate
 Return of Performance Bank Guarantee (if any)
 Sending Performance Evaluation Report of
contractors by the OA within 7 days from the date
of completion of execution of the job to I/c, O&M
through respective HOD. (007-04/04/12)
 Proposal
COMMON
Generation
PITFALLS
CONT…
ELIGIBILITY
FDS Calculation
CRITERIA

Whenever a contract is extended within the

framework of the contract by the competent
authority, the sum of the original award value
of the contract (+) value of extension(s) shall
be taken as the base value for calculation of
final deviation.
 Proposal
COMMON
Generation
PITFALLS
CONT…
ELIGIBILITY CRITERIA FOR OT
Name of the job: Supply and laying of MS Pipe of Diameter
600MM in Bhilai Township on urgent basis
through OT for one year w.e.f. 01.01.2017
 Experience of having successfully completed similar works
during last 07years, either of the following :-
:-
a) 03 similar completed works each costing > Rs.40 Lakhs OR
b) 02 similar completed works each costing > Rs. 50 Lakhs OR
c) 01 similar completed work costing > Rs. 80 Lakhs
 Definition of "similar work“ laying of pipeline

 Experience should be from Govt. Organization, PSU or Public

Limited Company.
 Average Financial turnover of the Bidder during last 03 years
ending 31.03.2016 should be more than Rs. 30Lakhs
 Proposal
COMMON
Generation
PITFALLS
CONT…
ELIGIBILITY
ITEM DESCRIPTION
CRITERIA

 Supply & fixing following material with all

accessories, as per the details mentioned in Special
Conditions of Contract:
BAJAJ BCSC 2 18 CFL WEB2 OR EQUIVALENT
(LIGHT FIXTURE with all accessories)

(Special Conditions of Contract includes following)

Items with Catalogue Number are to be supplied with
Fixtures/ fittings/Glass/accessories etc. complete in all
respect, as directed by Operating Authority.
 COMMON
Proposal PITFALLS
Generation CONT…

Tender Schedule (TS)

Sl. Item Description Acc. Qty. Rate (Rs.)
No Unit
1 Maintenance Per 06 Figure Word
charges for 3 Air Year
Conditioners

 Contract period 2 years, hence quantity=3X2=6

 Payment Terms: Monthly Payment
 COMMON
Proposal PITFALLS
Generation CONT…

Tender Schedule (TS)

Sl. Item Acc. Unit Qty. Rate (Rs.)
No Description

1 Maintenance Per 72 Figure Word

charges for Air Equipment
Conditioner per month

 Quantity: Nos. of equipment X No: of months.

3 A/c. X 24 Months = 72
 Item Specification: Self-sufficient without misinterpretation
: For one Quantity
 COMMON
Proposal PITFALLS
Generation CONT…

Penalty / LD Clause

In case the uptime of a equipment falls below 95% on

annual basis, LD @ 1% of the Total CMC Value will be
imposed on Contractor for each 1% fall in uptime
beyond 95%.

The maximum LD for a equipment will not exceed 10%

Total CMC Value.

Note: There are 5 different equipment, Contract period 2

years extendable by one year
 COMMON
Proposal PITFALLS
Generation CONT…

Penalty / LD Clause

In case the uptime of a equipment (including all

peripheral components) falls below 95% on annual
basis, LD @ 1% of the applicable annual CMC rate
(including all taxes and duties) for that particular
equipment will be imposed on Contractor for each 1%
fall in uptime beyond 95%.

The maximum LD for a equipment will not exceed

10% applicable annual CMC rate (including all taxes
and duties).
 COMMON
Proposal PITFALLS
Generation CONT…

PRICE VARIATION CLAUSE

The fuel rates shall be subject to the following PVC:

F1 = F0 x (1+ 0.4 (D1-D0) / D0 )

F1 = Revised Fuel Rate Payable

F0 = Awarded Fuel Rate
D0 = Base Retail Price Of Fuel
D1 = Revised Retail Price Of Fuel

Base Retail Price of Fuel shall be rate applicable on last date of

Tender Submission .
 COMMON
Proposal PITFALLS
Generation CONT…

PRICE VARIATION CLAUSE

The fuel rates shall be subject to the following PVC:

F1 = F0 x (1+ 0.4 (D1-D0) / D0 )

F1 = Revised Fuel Rate Payable

F0 = Awarded Fuel Rate
D0 = Base Retail Price Of Fuel
D1 = Revised Retail Price Of Fuel

Base Retail Price of Fuel shall be rate applicable on last date of

Tender Submission / Extended last date of Tender Submission
/RA.
 COMMON
Proposal PITFALLS
Generation CONT…

AMENDMENT TO CONTRACT

CHECK
 Provision in Contract
 Cost
 Duration
 Performance
 Statutory provisions
 Competition
 Approval as per DOP
 Termination
Proposal of Contract
Generation CONT…

 Convenience

 Breach

 Insolvency

 Force Majeure
Rules of Contract
Proposal Interpretation
Generation CONT…

 Missing terms are filled in by the courts.

 Ambiguities are construed against the contract drafter.
 Parol Evidence Rule - Courts will not allow introduction
of evidence other than written contract. (oral promises
of are generally non-enforceable)
 Order of precedence clauses respected
 Exact terms prevail over Boilerplate Language (typed or
written vs. printed).
 Words prevail over figures
 Dispute
Proposal Resolution:
Generation CONT…

OA Level
Negotiation

From
Senior Management Level
least
Negotiation
to
most
complex Mediation

Arbitration

Court of Law
 Responsibility of Safety of Contract Labour

Safety : Whose responsibility ?

SOPs, Periodic Inspection

Contractor
BSP
Bridging
the Gap
to Success Progress
Profit With
Max. Joint records, Coordination
with Multiple Agencies
Safety

Execution ofNewjob
Corporate Vigilance, Delhi
 Responsibility of Safety of Contract Labour

LIABILITY OF PRINCIPAL EMPLOYER-

- To Provide Canteen Facility

- To Provide Rest Rooms

- To Supply Wholesome Drinking Water

- To Provide And Maintain Latrines, Urinals

- To Provide And Maintain First Aid Facility

- In Case Contractor Fails To Make Payment Of

Wages Within Prescribed Period, Then Principal
Employer Shall Be Liable To Make Payment
And Recover The Amount From The Contractor
 Responsibility of Safety of Contract Labour
 Safety instruction training must for all Labour.
 Ensure availability of all necessary personal safety equipment /
appliances.
 Before starting the day’s job, ensure that safety briefing has been
done to Labour and also maintain records to this effect.
 SOPs for working at height, hazardous places/chemicals/gases
need to be made and circulated to the contractor & his supervisors
and educating Labour
 Fire fighting training and demonstration.
 Near miss / minor accidents should also be recorded and
corrective action should be planned
 In case of injury to persons, first take the injured person to plant
Medical Unit with the I.O.W. Forms.
 Responsibility of Safety of Contract Labour
 Obtain shutdown/clearance wherever there are hazards of gases,
electricity, moving machinery etc. Ensure the presence of
supervisor at site during the execution of the job.
 Obtain passes from Safety department for those persons who will
be required to work at height of above 2 meters.
 Jobs @ Height Exceeding 10 Meters: Labour age group of 20
years to 50 years with doctor’s certificate about fitness to work at
height in the format prescribed by BSP.
 Ensure Electrical license
 Fitness certificate of cranes / heavy vehicles
 SWL Certificates of lifting machines
 Validity of Driving license, Eye examination records

"If it cannot be done Safely,

It need not be done in Unsafe Way"
 Contract Management- Getting Value for Money

Provide a self explanatory, binding contractual document.

Provide a control mechanism to ensure performance:-
 Project Schedule
 Each Party's roles and responsibilities
 Measures for performance
 Consequences for failure
 Remedy in case of failure

Develop Contractor as Business partner.

Thank you