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works/contracts

- Manoj Kumar

V , KoPT

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CVCs circulars

Common irregularities/lapses observed instores/purchase contracts and guidelines forim rovement in rocurement s stem - CVC

Problem areas of corruption in construction- CVC

Common irregularities/lapses observed in award and,

and guidelines for improvement thereof- CVC

Shortcomings of general nature observed during

- Manual on policies & procedure for procurement of

works - MOF

GFR Chapter 5 to 8

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Competitive price - Value for money

Process to be fair and transparent

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appointment of consultant, Estimates of rates,Technical sanction, Administrative approval,Expenditure sanction

Tender stage - NIT, Invitation & opening oftender, pre-qualification, evaluation & award

Execution stage - Implementation of tender

con t ons, qua ty mon tor ng, post contractmonitoring

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Assessment of Need & viabilit No new work

without analysis of existing facilities/ availablealternatives

Modern techniques like pay back period,

discounted cash flow, NPV, IRR, technical &

Av. Life of equipment/spares to be considered.

higher authorities.

One time urchase of e ui ments to be decidedbased on actual intended use, rate of return etc.

Latest specifications & Technology

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Guidelines to be formulated

Only when absolutely essential, for specialized jobsonly Com etitive tenderin s stem Scope of work & Role to be well defined

Decision making not to be delegated to them GFR 168-175 - Work

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To be worked out in realistic and ob ective manner

Estimates on SOR, for non-scheduled items- properanalysis of rates, prefer products with standard

Basis- Prevailing market price, last purchase price,

economic indices for raw material / labour/equipment,, , ,obtained in similar tender etc.

Items - Should include basic price, fabrication

c arges, nspec on ee, u es, pac ng, an ng,transportation charges, VAT, Octroi, installation,erection, commissioning charges, licence fee,cont ngenc es.

Purpose of tech sanction - proposal is structurallysound, estimate is economical

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repairs), concurrence of competent authorityof Administrative Department needed.

Purpose - justification of work, realistic

estimate, adherence to yardstick of variousprovisions

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Open GFR/MOF- compulsory above 5 lakhs

Limited - small value, urgent & repetitive panel ofvenders in a transparent manner, to be periodicallyrevised

Single Tender Enquiry

Tender on nomination basis - SC held it to bevetting, audit committee to check 10% cases (officeorder 23/7/07 dt 05.07.07)

-declared by govt., single source, tender called onseveral occasions, but no bid or reasonable bid

-can be prescribed

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Advertised/ O en tender - ublication in ITJ &

national newspapers, Copies to registered/ past/likely suppliers.

o a en er - mpor o goo s nvo ve , cop es oIndian missions/Embassies of major trading

countries.

For construction - copy to building association.

Time - 4 to 6 weeks for advertised tender, 3-4 weeks

or m e en er To be put on website

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Standard tender form with conditions, BOQ, set of

drawings, specification of works All important clauses relating to earnest money,

, ,Warranty BG, Pre-dispatch inspection,

Comprehensive insurance cover, Contractors, , ,Arbitration, Liquidation Damages, risk-purchase,evaluation/exclusion criteria, quality standards etc

o e ncorpora e . Earnest money in two-bid system fixed

reasonable amount on the basis of estimated cost

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50 lakhs +1% for work above 25 cr Performance Guarantee - 5% of contract

value (GFR- 5-10%)

Securit De osit - 5% of contract value GFR-2-5%)

Bonus - 1% of contract value pm subject to

max 5% of contract value

LD - for repairs upto 10 lakhs- 1% per week

LD- Others- 0.5% per week subject to max10% of contract value

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Govt. olic on reservation of items to be incor orated.

No purchase preference to public Sector Enterprisesafter 31.3.08

performance parameters and technical evaluation

criteria. Particular brand to be avoided, BIS markedcan e men one . s o pre erre ma es o ma orequipments can be given.

No conditional discounts to be considered.

Price variation - MOF - no variation upto 18 months,above 18 months formulae for POL/Labour/Material

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PQ criteria neither too strin ent nor too lax

PQ criteria specific to requirement Evaluation criteria to be mentioned in PQ

document

Verification of PQ credentials to be done Experience certificate from pvt. organisations

to be verified with TDS certificate etc.

-necessary.

- - - - - . .

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Sin le bid s stem when s ecifications are ade uatel

defined, item being procured are standardequipments designed as per general industry norms.

- ,negotiations may be conducted to clarify deviations.

After bringing acceptable offers on a common,specifications should be frozen. In case, changes aremade in terms/ conditions/specifications, bidders may

.

Revised bids - Bidding firms meeting qualifyingcriteria may be finalised before or during technical

.taken from bidders not meeting qualifying criteria.Rejection to be intimated with unopened price bid.

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Clarification of ros ective bidders submitted rior to

submission deadline to be responded promptly Any time prior to deadline, tender documents can be

mo e y a en um

Pre-bid meeting to clarify provisions of tender., .

of agreement

Minutes of meeting to be issued promptly

Deadline for submission of tender to be extended ifnecessary to afford contractors time to take

.

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Tender sale and o ening registers to be

maintained. Any change in tender terms & conditions,

, .to all bidders well in advance of revised

opening date in addition to paper and website. Opening in presence of representative of

bidders

orrec on, om ss ons, over-wr ng e c o eattested and numbered On the s ot summar Price bid to be signed by govt. official & 2 reps,

put in a bigger box/envelope & signed

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After technical evaluation, no grading

Indian Agent - genuineness of quoted price, nature ofservice by agent, tax compliance, foreign exchangeleakage to be considered

Conditions of tenders are not to be altered after price bids.

Reasonableness of price to be established before awardof contract- based on estimate market rice market ratejustification statement), last purchase price, input / labourcosts, intrinsic value, rate quoted for similar/identicalworks etc Justification statement

AHR and ALR items to be identified and control exercised. Single tender - detailed justification, approval of

com etent authorit and Finance.

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Negotiation with L-1(Circular 4/3/07 dt 03.03.07)

No Ne otiation with L-1

Exception - proprietary items, items of limitedsources of supply, suspicion of formation ofcarte

Reasons for negotiations to be recorded me rame - mon , ays a eac g er

level, within tender period

- -,after negotiation

S lit- ratio to be indicated in tender

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- Bidding document to be self contained &

comprehensive Provision for bidder to question bidding condition,

bidding process & rejection Provision for settlement of dispute

Specifications to be unambiguous Criteria for responsiveness to be clearly indicated Evaluation only as per laid down conditions

Bidders not to be allowed to modify bids afterdeadline of receipt of bids

Successful bidders name on notice board andwebsite

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Advance & BG(Circular 10/4/07 dt 01.4.07)

To be decided b Board with a roval of Finance

Interest free advance- Not encouraged by CVC If advance considered necessary, to be mentioned in

Recovery time based & not linked to progress of work

BG as per recovery installments Interest on delayed recovery, U.C. to be taken

BG to be verified with bank

ecure a vance - up o o ma er a s a us wintermediate bills for items to be used in work

Mobilisation advance - upto 10% of est. @interest

Plant, Machinery Adv - 50% of dep cost @interest

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Agreement

Implementation of contract provisions insurance,deployment of technical persons, licences etc

ualit of work/ Ins ection - Check measurement-including hidden & high rate items to be checked by seniorofficers Inspection note by senior officers.

SITE RECORDS Test record, site instructions &compliance, MAS A/c register for issue of items,hindrance register etc.

TIME AND COST OVERRUN - Completion Schedule of

act v t es to e ta en n a vance an progress to emonitored with schedule.

REPORT - Authority granting administrative approval,s ou e ep n orme o e progress o e wor .

TIMELY PAYMENTS - first come first serve basis

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System of monitoring to be prepared beforestart. uarterl /monthl monitorin

Large project - Monthly progress report by

contractor indicatin construction schedule,progress chart, plant & Machinery statement,man-power statement, Financial statement,

tatement o extra an su st tute tems,progress photographs, quality control tests,

.

Commissioning & documentation

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Performance BG u to warrant eriod

Guarantee/warranty/DL from date of installation/commissioning

implications should be severely discouraged.

Clauses of insurance, workmen compensation,a our cence, e c o e proper y mp emen e

Liquidation damage for delayed completion unlessbonafide extension, L/C extension charges on

suppliers account Completion of contract should imply completion of all

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