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  • For internal circulation of BSNL only


    Important BSNL Contract ClausesImportant BSNL Contract Clauses(Session(Session--2) 2)

  • WELCOME• This is a presentation for the E4-E5 Civil Technical

    Module for the Topic: Important BSNL Contract Clauses


    • Eligibility: Those who have got the Upgradation from E4

    to E5.

    • This presentation is last updated on 21-4-2011.

    • You can also visit the Digital library of BSNL to see this


    For internal circulation of BSNL only

  • For internal circulation of BSNL only


    Important BSNL Contract Clauses.

    Provisions under various Contract Clauses.

    Actions Thereof.

  • Clause 13

    Clause 13:-Foreclosure of Contract:-(1)Foreclosure of contract due to abandonment or reduction

    in scope of work.

    (2)The contractor shall have no claim for payment or

    compensation for reduction in scope of work; changes in

    drawings, specifications, designs or any alternations as desired

    by Engineer –in- Charge.

    (3)Even in case, work is abandoned, this clause is applicable

    thus no compensation payable.

    For internal circulation of BSNL only

  • CLAUSE 14 & 15

    Clause 14:- Suspension of work by


    It could be either due to default of contractor or due to

    for reasons other than this, then specific provisons

    exist in the clause for the same.

    CLAUSE 15:-Inspection and supervision of work:-

    Work open to inspection by QA/CTE etc & contractor

    to be present for receiving instructions.

    For internal circulation of BSNL only

  • CLAUSE 16

    Clause 16 Rectification of defects:-

    (1)If either E-in-C or the Sr. DDG(BW) or QA or CTE finds that

    any work has not been executed properly as per contract, the

    contractor shall (which shall be intimated to contractor within

    six months of the completion of the work not withstanding

    that the same may have been passed, certified and paid for)

    forthwith rectify the work.

    (2)If contractor fails, then get it done at his risk & cost &

    decision of E-in-C will be final & binding.

    (3) Provision of acceptance of item at Reduced rates is also

    there in this clause.

    For internal circulation of BSNL only

  • CLAUSE 17

    Clause 17:-Contractor liable for defects/

    damages during maintenance period:-

    (1)If any damage happens to the work while in progress

    from any cause or any faults appear in the work within 6

    months for the contract value up to Rs.15 Lakhs

    excluding road work and 12 months for the work more

    than Rs.15 Lakhs, from the date of completion of work,

    the contractor shall make the same good at his own


    (2)The S.D. shall not be refunded before the expiry of the

    above maintenance period, subject to the condition That

    final bill is prepared and passed whichever is later.For internal circulation of BSNL only

  • CLAUSE 19

    Clause 19 Labour Laws Compliance by Contractor:-

    (1)Contractor to hold valid Labour license till work is


    (2)Labour reports to be given on 4th & 19th of every month.

    Penalty at a rate of Rs 200 for each default may be levied.

    (3)Contractor to keep bldg. free from unauthorised occupancy

    till it is taken over by deptt. Failure to enusre means penalty

    upto 5% of tender value by SE.

    For internal circulation of BSNL only

  • CLAUSE-25

    Clause-25 Settlement of Disputes & Arbitration:-

    What is a Dispute ?

    (1) If the contractor considers that he is entitled to any extra

    payment over and above the amounts admitted to be paid by

    the BSNL.

    (2)If the contractor wants to dispute the validity of any

    recoveries made or proposed to be made from the contract.

    The disputes which can be referred to arbitrator?

    (1) The meaning of the specifications, design, drawings and


    For internal circulation of BSNL only

  • CLAUSE-25 Contd..

    (2)The quality of workmanship or materials used on the work.

    (3) Any other question, claim, right, matter or thing whatsoever

    in any way arising out of or relating to the contract,

    designs, drawings, specifications, estimates, instructions,

    orders. Arising during the progress of the work or after the

    cancellation, termination, completion or abandonment.

    Process of settlement of dispute:-

    (1)The contractor shall give notice in writing of his claim to the

    E-in-C within 30 days from the date of any disallowance.

    (2)The contractor shall be deemed to have extinguished all his

    For internal circulation of BSNL only

  • CLAUSE-25 Contd..

    rights in respect of any claims not notified to the E-in-C within

    30 days.

    (4)If the contractor is not satisfied with the decision of the

    E- in-C, he may within 15 days of the receipt of the

    decision of the E-in-C submit his claims to the conciliating

    authority along with all details.

    Conciliation Proceedings:-

    (1)Conciliatory Authority-CE for NIT’s of powers of CE(C). SE

    for NIT’s of powers of SE/EE/SDE.

    (2)The party initiating conciliation shall send to the other party

    a written invitation to conciliate.

    For internal circulation of BSNL only

  • CLAUSE-25 Contd..

    (3)Conciliation proceedings shall commence when the other party

    accepts in writing the invitation to conciliate.

    (4)If the other party rejects the invitation, or does not reply within

    30 days, there will be no Conciliation Proceedings.

    (5)Settlement agreement [ it has same effect as of arbitral award]

    shall be drawn, if both parties are agreeing to settle the

    dispute as per formulated terms of Conciliator.

    (6)If a settlement does not appear possible, the Conciliator, after

    consultation with the parties shall terminate the Proceedings .

    (7) On failure of Conciliation Proceeding, the party, which initiated

    the Conciliation shall, within a 30 days of termination

    For internal circulation of BSNL only

  • CLAUSE-25 Contd..

    give a notice to the Chief Engineer for appointment of


    Arbitration Proceedings:-

    (1)The party invoking arbitration shall give a list of disputes

    with amounts claimed in respect of each dispute along-

    with the notice for appointment of arbitrator.

    (2)The CE shall appoint a sole arbitrator within 30 days of

    receipt of notice.

    (3)The arbitration shall be conducted in accordance with the

    provisions of the A & C Act 1996.

    (4)The arbitrator shall adjudicate on only such disputes which

    are referred to him by the appointing authority.

    For internal circulation of BSNL only

  • CLAUSE-25 Contd..

    (5) Arbitrator shall give separate award against each claim

    referred to him.

    (6) The arbitrator shall give reasons for the award for each dispute

    referred to him.

    (7) If any fees are payable to the arbitrator these shall be paid

    equally by both the parties.

    (8) Arbitrator shall be deemed to have entered on the reference

    on the date he issues notice to both parties, calling

    statement of claims and counter statement of claims.

    (9) The venue of arbitration shall be fixed by arbitrator.

    (10) The cost of reference and the award shall be as per the

    discretion of the arbitrator.

    For internal circulation of BSNL only

  • CLAUSE 28

    CLAUSE 28:-Action where no specifications are


    Action in works, where specifications are not

    specified Then Follow This Sequence:-

    (1)BIS specifications.

    (2)Manufacturer’s specifications.

    (3)District specifications.

    (4)As per directions of E-IN-C.

    For internal circulation of BSNL only

  • Clause 29

    Clause 29 :-Lien/Withholding sum due

    from contractor:-

    (1) Lien and withholding of contractor’s payments in

    respect of sum due from the contractor as per this


    (2) Engineer – in - Charge is Competent to withhold

    contractor ’s Payment/S.D.--- for payments/claims due

    from him subject to final decision of arbitrator/courts.

    Clause 29A :-Lien in respect of claims in other

    contracts Payments can be withheld (lien kept) in

    respect of claims, in other contracts also.

    For internal circulation of BSNL only

  • Clause 31

    Clause 31 Water and Power Supply :-

    (1)Contractors shall make his own arrangement for water

    and power supply and nothing extra shall be paid.

    (2) He will submit No-dues certificate in the last.

    Clause 31 A Departmental water/power supply:-

    (1) If Departmental water supply is given for work:-1%

    water charges on gross amount of work done shall be


    (2) Similarly contractor to install sub meter and extend

    power supply from tapping point & cost will be recovered

    from his bills.

    For internal circulation of BSNL only

  • CLAUSE 36

    CLAUSE 36 Employment of Technical Staff and


    (1) The technical representative and/or the contractor shall be

    actually available at site on at least 2 working days,

    every week.

    (2)There shall be no objection if the representative/agent

    looks after more than one work and not more than three

    works at the same station.

    (3)Further if the contractor fails to appoint a suitable

    technical representative, the E-in-C shall have full powers

    to suspend the execution of the work until such


    For internal circulation of BSNL only

  • CLAUSE 36 Contd..

    (4) Contractor to submit Certificates with every bill.

    (5) If the contractor who himself has such qualifications,

    it will not be necessary for the said contractor to appoint

    such a principal technical representative but the

    contractor shall designate and appoint a responsible

    agent to represent him and to be present at the work

    whenever the contractor is not in a position to be


    All the provisions applicable to the principal

    technical representative under the Clause will also

    be applicable in such a case to contractor or his

    responsible agent.For internal circulation of BSNL only

  • CLAUSE 36 Contd..

    Employment of Technical staff by contractor shall be as

    per following:-

    Works costing Technical Staff

    (1)More than Rs. 5.0 lacks but less--- Diploma in Civil Engg.

    than Rs. 10.00 lacks.

    (2)Rs. 10 lacks and above but ----B.E. Or Retired A.E( with

    less than Rs. 60.00 lacks D.C.E.)

    (3)Rs. 60.00 lacks and above ----Pr. Tech. Representative of

    organization should be minimum Graduate Civil Engineer

    with ________ Years minimum experience or Retired E.E.

    (at least with D.C.E.).Experience should be decided by NIT

    issuing authority.

    For internal circulation of BSNL only

  • CLAUSE 36 Contd..

    Contractor before commencement of work shall give the Name,

    Age, Experience, Qualification, Address, and Certificates for

    Engineers/Technical staff employed for the work. If contractor

    himself is a qualified engineer-not necessary to employ site


    Recovery for not employing --a) Rs.4000/- month

    Site Engineer for Graduate Engineer.

    b) Rs. 2000/- month

    for Diploma holder.

    For internal circulation of BSNL only

  • CLAUSE 36 Contd..

    CLAUSE 42:-Recovery for inadequate consumption of


    As per Schedule ´F´

    Return of Material & for Excess Materials.

    Store materials issued to contractor (cement, steel etc. )

    have to be returned by the contractor after completion of work.

    For theoretical calculations of materials - Variation in

    quantities allowed as per Schedule F.

    Cement :

    For works not more than Rs. 5.0 lacs - 3% minus

    For works more than Rs.5.0 lacs - 2% minus

    For internal circulation of BSNL only

  • CLAUSE 36 Contd..

    Steel reinforcement & Sections:- 2% minus.

    (1)In case of steel 3% wastage due to cutting into

    pieces is (on plus side) allowed for calculating

    theoretical quantities.

    (2)For the balance materials, if not returned by

    the contractor, recovery at the rate specified in

    schedule F is made.

    For internal circulation of BSNL only

  • CLAUSE 45

    CLAUSE 45:- Release of S.D. After Labour Clearance:-

    (1)Contractor produces a clearance certificate from the

    Labour Officer.

    (2) If no complaint is pending, on record till after 3

    months after the completion of the work and/or no

    communication is received from the Labour Officer to

    this effect till six months after the date of

    completion, it will be deemed to have received the

    clearance certificate and the Security Deposit will be

    released, if otherwise due.

    For internal circulation of BSNL only

  • CLAUSE-46

    CLAUSE-46 Insurance:-

    Main Provisions:-(1)The Contractor shall at his own cost

    take insurance in the joint names of the BSNL and

    the contractor.

    (2)With any of the subsidiary of the GIC of India.

    (3)To cover for all time during contract i.e. Stipulated,

    extended and the defect liability period.

    (4)The contractor shall submit the insurance policies to the

    E in-C within 1 week of signing of the agreement along

    with the receipt of premium.

    For internal circulation of BSNL only

  • CLAUSE-46 Contd..

    (1)Contractor’s All Risks:-

    The contractor shall insure the work for a sum of

    Contract value against ALL RISKS claims,

    proceedings, loss or damages, costs, charges and

    expenses from whatsoever cause arising out of or

    in consequence of the execution and maintenance

    of the work for which the contractor is responsible

    under the contract.

    For internal circulation of BSNL only

  • CLAUSE-46 Contd..

    (2)Workman Compensation & Employers Liability


    (1)This insurance shall be effected for all the

    contractor’s employees engaged in the

    performance of the contract

    (2)The BSNL shall not be liable in respect of any

    damages or compensation payable at law in

    respect of or in consequence of any accident or

    injury to any workman or any other person in the

    employment of the contractor .

    For internal circulation of BSNL only

  • CLAUSE-46 Contd..

    (3)Third Party Insurance.:-

    (1)Against damages or injuries of BSNL Property and

    Employees where he is working.

    (2)Against damages to BSNL Properties, or any third party

    occurred during movement of T&P and Materials.

    (3)Contractor should indemnify the BSNL against all

    claims, compensations under the provisions of

    Payment of Wages act, Minimum wages act,

    Employer’s Liability act, The Workman’s

    Compensation act, Industrial Dispute act and Maternity

    Benefit act.

    For internal circulation of BSNL only

  • CLAUSE-46 Contd..

    (4)Remedy on the contractor’s failure to insure:-

    If the contractor fails to keep in force the insurance

    referred, E-in-C may keep in force any such

    insurance and pay such premiums and deduct the

    amount so paid from the contractor.

    For internal circulation of BSNL only

  • For internal circulation of BSNL only

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