Manual On Contract 2020 06th July-1

MILITARY ENGINEER SERVICES
MANUAL ON CONTRACTS, 2020
CO RS
RP
SO EE
F ENGIN
FORMULATED UNDER THE ORDERS OF

LIEUTENANT GENERAL SK SHRIVASTAVA, PVSM, AVSM
ENGINEER-IN-CHIEF
MANUAL ON CONTRACTS, 2020
Published By :
Directorate of Contract Management
Military Engineer Services
New Delhi-110 011
ABBREVIATIONS USED IN THE MANUAL
AA : Administrative Approval
ADG : Additional Director General
AWHO : Army Welfare Housing Organisation
AGE : Assistant Garrison Engineer
AGE(I) : Assistant Garrison Engineer (Indep.)
AAO/RAO/LAO : Area Account Office / Regional Account Office
/Local Account Office
AC/DC : Alternating Current/ Direct Current
BOQ : Bill of Quantities
BOO : Board of Officer
BSO : Barrack & Store Officer
CE ZONE/CCE : Chief Engineer Zone/Chief Construction Engineer
CWE : Commander Works Engineer
CVC : Central Vigilance Commission
(C) : (Contracts)
CA : Contract Agreement
CEA : Competent Engineer Authority
CFEES : Centre for Fire, Explosive and Environment
CI : Cast Iron
CPM : Critical Path Method
CTE : Chief Technical Examiner
CCS : Central Civil Service
CPC : Civil Procedure Code
DGW : Director General Works
DG MAP : Director General Married Accommodation Project
DCWE : Deputy Commander Works Engineers
DCP : Deputy Commissioner of Police
DD : Demand Draft
DWP : Defence Works Procedure
DG Set : Diesel Generating Set
DEL : Departmentally Employed Labour
DO : Deviation Order
DGNP : Director General Navel Projects
DGS&D : Director General Supply & Disposal
D&V : Discipline & Vigilance
DAD : Defence Accounts Department
DMA : Department of Military Affairs
E-in-C’s Branch : Engineer in Chief’s Branch
EMD : Earnest Money Deposit
EPF : Employees Provident Fund
ESIC : Employee State Insurance Corporation
E/M : Electrical/Mechanical
E Tendering : Electronic Tendering
GE : Garrison Engineer
GCC : General Conditions of Contracts
GSTIN : Goods and Service Tax Identification Number
HVAC : Heat Ventilation & Air Conditioning
IAFW : Indian Army Form of Works
IAFA : Indian Army Form of Accounts
(I) : (Independent)
IFA : Integrated Financial Advisor
IIT : Indian Institute of Technology
IO/RO : Investigating Officer/ Reviewing Officer
JV : Joint Venture
Jt DG/Dir/Jt Dir : Joint Director General/Director/ Joint Director/
/DD/AD/AAD Deputy Director/Assistant Director/ Additional Assistant Director
JE : Junior Engineer
JtDG : Joint Director General
LA(Def) : Legal Advisor (Defence)
MES : Military Engineer Services
MRO : Military Receivable Order
MS : Mild Steel
MOL : Ministry of law
MOD : Ministry of Defence
NIT : Notice Inviting Tender
NABL : National Accreditation Board for Testing and Calibration
Laboratories
PAN : Permanent Account Number
PCDA/CDA : Principal Controller of Defence Accounts/
Controller of Defence Accounts
POA : Power of Attorney
PMG : Project Monitoring Group
QMG : Quarter Master General
QS&C : Quantity Survey & Contracts
RINL : Rashtriya Ispat Nigam Ltd
RMES : Regulations for Military Engineer Services
RAR : Running Account Receipt
SSR : Standard Schedule of Rates
SSW/SW : Superintending Surveyor of Works / Surveyor of Works
SEMT : Soil Engineering and Material Testing
SAIL : Steel Authority of India Ltd
T Bid : Technical Bid
TV : Transfer Voucher
T&P : Tools & Plants
TISCO : Tata Iron & Steel Company
TI : Technical Instruction
TMT : Thermo Mechanical Treatment
USR : Unstamped Store Receipt
UOI : Union of India
WBM : Water Bound Macadam
INDEX
Section Description Page No

No
PART-I: PRE-CONTRACT STAGE
Section-1: Enlistment of Contractors, Standing Security Deposit
Upgrading Removal and Down Grading of Contractors.
1.1 Classification of Contractors 1
1.2 Categories of works for Registration 1-2
1.3 General Guidelines 2-3
1.4 Criteria for Fresh Enlistment 3-7
1.5 Documents Required to be Submitted by the Contractor for 7-9
Enlistment in MES
1.6 Verification of Character and Antecedents of Contractors and their 10
Agents
1.7 Procedure for Enlistment of Contractors 11-12
1.8 Enlistment in Adjoining Command and Facility for Working for other 12
Services at Same Station
1.9 Transfer of Enlistment on Reorganization of MES Formations 12
1.10 Provisional Enlistment of Contractors 12-13
1.11 Enlistment of New /Sister Concern Firm/Company from Existing 13-14
Firm/Company by Partner(s)/Director(s)
1.12 Upgradation of Contractors 14-15
1.13 Renewal of Enlistment 15
1.14 Standing Security Bond 15-16
1.15 Suspension, Down-grading, Removal of Contractors from 16-18
Approved List
1.16 Refund of Standing Security Deposit 18
1.17 Procedure for Refund of Standing Security Deposit 18-20
1.18 Related Firms 20
1.19 Re-enlistment of Proprietorship Firm with Revised Constitution in 20
Favour of Legal Heirs of Contractors in case of Death of the
Proprietor
1.20 Change in Constitution of Enlisted Contractors 20-21
1.21 Joint Venture in MES Works 21-22
Appendices 1.1 to 1.9 23-51
Section 2: Earnest Money Deposit, Performance Security Deposit, Bank
Guarantee Bond for Performance Security Deposit
2.1 Earnest Money Deposit (EMD) 52-53
2.2 Performance Security Deposit 53-56
2.3 Tender Forwarding Letter 56-57
2.4 Provisions in MES Regulations 57
2.5 Contracts not having Provisions of Performance Security 57
2.6 Guidelines for exemption of EMD & reduction in performance 57-58
Security due to COVID
INDEX
Section Description Page No

No
Section 3 :E-Tendering
3.1 General 63
3.2 Digital Signature Certificate (DSC) 63-64
3.3 Infrastructure 64
3.4 Appointment of Nodal Officers/Users 64-65
3.5 Notice Inviting Tender 65-71
3.6 Cost of Tender 72
3.7 Instructions to Tenderers 72
3.8 Stages and number of Covers in E-Tender 73-74
3.9 Preparation of E-Tenders 74-75
3.10 Uploading of Tender 75-77
3.11 Tender Scrutiny and Issue of Amendments 77-78
3.12 Amendment to Tender Documents (Corrigendum) 78
3.13 Validity of Bids 78
3.14 Opening of Tender/Bids 78-82
3.15 Opening of Cover-2 (Financial Bid) 82
3.16 Financial Bid Evaluation and Acceptance of Tenders 82-84
3.17 Comparative Statement of Tender 84
3.18 CTC of Contract 85
3.19 Re-invitation of Tenders 85
3.20 Tie amongst two or more Lowest Tenders 85-86
3.21 Prevention of Cartelization 86
3.22 Miscellaneous 86-87
3.23 Single Tender Contracts 87-88
3.24 Financial Concurrence (FC) Cases 88
3.25 Delegation of Works 88
3.26 Acceptance of Tenders and Delegation of Works While Proceeding 88-89
on Posting/Retirement
3.27 Exercise of Powers in Executive Appointment Beyond Three Years 89
3.28 Physical Tendering 89
3.29 Integrity Pact 89
Section :4 Legal Requirements, Types of Contracts and Contract Forms
4.1 Introduction 132
4.2 Definition of Contract 132
4.3 Legal Requirements 132-133
4.4 Contractors and their Agents 134
4.5 Contract Voidable at Inception 134
4.6 Contract Voidable by Subsequent Default 134
4.7 Communication of Proposal, Acceptance and Revocation 134-135
4.8 Revocation of Proposal and Acceptance 135
4.9 Types of Contracts 136-140
4.10 Contract Forms, Indian Army Forms of works (IAFW) 140
Section: 5 Preparation of Tender Documents
5.1 General 146-147

5.2 Important Provisions in Tender Documents 147-148
5.3 Importance of Correct Pre-pricing : Contracts Based on Pre-priced 149
Schedule “A”
5.4 Importance of Correct Quantities in Item Rate Contracts 149-150
5.5 Issue of Stores 150
5.6 Issue of T & P on Hire to Contractors 150
5.7 Hire of Transport 150
5.8 Materials Obtained From Demolition of Buildings 150-151
5.9 Lump Sum Tender Documents 151-153
5.10 Pre-tender Conference/Pre Bid Meeting 154
Section : 6 ISSUE OF Stores to Contractors for incorporation in the
works under Schedule B
6.1 Stores to be Issued Under Schedule B 165
6.2 Items Having Small Quantity 165
6.3 Issue rate for Government Stores 165
6.4 Stores to be Issued Free for Fixing 165
6.5 Issue of Stores During Execution, which are not included in 166
Original Contract
6.6 Place of Issue 166
6.7 Recovery for Schedule “B” Stores for making good damage 166
caused to Buildings
6.8 Issue of Stores During Maintenance Period 167
6.9 Recovery of Stores Issued under Schedule “B” 167
6.10. Technical Check of Stores Statement attached to Final Bill 167
6.11 Over issue of Stores to Contractors 168-169
6.12 Under Issue of Stores of contractors 169-170
6.13 Over issue/Under issue of Bars, Flats 170
6.14 Cement Constants 170
Section : 7 Issue of T& P on Hire to Contractors under Schedule C
7.1 Issue of T&P 177

7.2 Particulars to be filled in log book 177
7.3 Entries in log book 177
7.4 Record of log book 177
7.5 USR 177
7.6 Receipt Voucher of T&P 177
7.7 Hire charges statement 178
7.8 Produce to be adopted 178
Appendix 7.1 179
Section : 8 Special Conditions and Other Provision for inclusion in
Tender Documents
8.1 Special Conditions 180
8.2 Other Provisions 180-186
8.3 Alteration of Standard Tender Documents 186
8.4 Approval of E-in-C for Alteration in Special Conditions 186
8.5 Dispute Resolution Board (DRB) 187
Section :9 Specifications
9.1 Art of Writing Specification 235-238
9.2 Decision on Specification 238
9.3 General Specifications and Particular Specifications 238
9.4 Materials 238-239
9.5 E-in-C’s Technical Instructions(TI) 239
9.6 Steel 239-241
9.7 Cement 242-243
9.8 Design Mix Concrete. 243-244
9.9 Check List/Guidelines 244
Section : 10 Terms Contracts and Contracts for Periodical Services
10.2 Procedure 250
10.3 Term Contracts(TC) 250-252
10.4 Periodical Services 252
Section :11 Procedure for Entering in to Agreement for Specialist
Consultancy Service
11.1 Authority 253-254

11.2 Capacity to plan 254
11.3 Advice of ADG(D&C) 254
11.4 Outside consultancy 254
11.5 SOP for consultants 254
11.6 Approved list of consultants 254
11.7 Bids from consultants 255
11.8 Govt agencies as consultants 255
11.9 Competitive tendering 255
11.10 Specific provisions in contract 255-256
11.11 Special conditions in consultancy tender 256
Appendix 11.1 to 11.2 257-267
Section :12 Contracts for Specialist works Based on T & Q Bids
12.1 General 268
12.2 Procedure 268-272
12.3 Validity Period for Acceptance 272
12.4 Tenders Based on Contractor’s Own Design 272
12.5 New Techniques or Materials 273
12.6 Boring of Tube-well –Special Conditions 273
12.7 Tax Provisions 273
12.8 Training of MES Personnel 273
12.9 Foreign Exchange 274
Appendices 12.1 to 12.4 275-277
Section : 13 Contracts for Supply of Stores and Materials
13.2 Acceptance of Tenders 278
13.3 Condition of Contract 278
13.4 Deviation (Condition 5) 278
13.5 Valuation of Deviation (Condition 31) 279
13.6 Time, Completion, Extension of Time and Compensation for 279
Delay(Conditions 6,7 and 254)
13.7 Stores (Condition 8) 280
13.8 Samples 280
13.9 Packages (Condition 9) 280
13.10 Duties and other Charges (Condition 10 ) 280
13.11 Assignment (Condition 13) 280
13.12 Performance (Conditions 16 and 20) 281
13.13 Space for Storage of Furniture 281
13.14 Cancellation and Termination 282
13.15 Valuation and payment (Condition33 and 34) 282-283
Section :14 Contracts for Handing and or conveyance of stores
14.2 Schedule “A” 284
14.3 Area of Applicability 284
14.4 Term 284
14.5 Procedure 284-285
14.6 Correct Application of Rates in Schedule “A” 285
14.7 Piece Work/Additional Work 285
14.8 Work Reserved 285
14.9 Refund of Security Deposit 286
14.10 Daily Return 286
14.11 Water 286
14.12 Breakages of Losses 286
14.13 Termination of Before Completion 286
14.14 Rates for Additional work 286
14.15 Auctioning 286
Section : 15 Engineering Procurement and Construction (EPC) Contracts
15.1 General 287

15.2 Selection of work 287-288
15.3 Approval and Enlistment 288
15.4 Sanction of works 288
15.5 Technical Sanction 289
15.6 Eligibility 289
15.7 Design & Drawings 289
15.8 Contract Management 289-291
15.9 Design Basis Report 291-292
15.10 Tendering 292
15.11 Sub Contracts 292
15.12 Bill of Quantities and Reasonability of Tenders 292
15.13 Monitoring and Execution of Works 292-293
15.14 Feedback 293
Part II CONTRACT STAGE
Section 16 Contract Administration, General Principles and Specimen

Letters/Formats
16.1 General 294-295
16.2 Passing and Inspection of Works 295-296
16.3 Precautions Against Risk and MES Safety Code 296
16.4 Visit to Site of Works by Surveyors 296-297
16.5 Assistance to Contractors 297
16.6 Clearance of Site on Completion of Works 297
16.7 Defect Liability Period (DLP) 297-298
16.8 Confidential Reports on the Performance of Contractor 298
Appendices 16.1 to 16.18 298-326
Section : 17 Time for Completion of Work, Extension of Time
Compensation For Delay ,Suspension of Work
17.1 Time for Completion of Work 327-328
17.2 Extension of Time 328-330
17.3 Compensation for Delay 330
17.4 Suspension of Work and Extension of Time 330-333
Appendix 17.1 334
Section : 18 Interim Payment (RARs), RAR under Compensation, BGBs in
Lieu of Retention Money/Performance Security, Measures to
Avoid Over Payment in RARs.
18.1 Interim Payment (RARs) Advance on Account-Procedure 335
18.2 Timeline for Payment of RAR and Final Bill 335
18.3 Assessment of Value of Work Executed 336
18.4 Material Brought at Site 336
18.5 Preparation of RAR 336-337
18.6 Running Account Payments to Contractors working under 337-338
Compensation, Claim of Compensation for Delay in Completion
of Works
18.7 Bank Guarantee Bond in the Lieu of Retention Money 339-340
18.8 Surprise Checking of RARs 341
18.9 Measures to Prevent Over Payment to Contractors in RARs 341-342
Appendix 18.1 to 18.5 343-350
Section :19 Deviation Orders, DO Limit, AIP, Amendment to Contract
19.1 Deviation Limit 351-353
19.2 Ordering Works against Lump Sums, Prime Cost Sums, 353-354
Provisional Sums and Provisional Quantities
19.3 Approval in Principle for Ordering DO 354-356
19.4 Pricing, Checking and Distribution of Work/DeviationOrders 356-357
19.5 Issue of one Combined Order for a Number ofDeviations 357
19.6 Orders for Extension of Time 357
19.7 Ordering Deviation on No Cost Basis 357-358
19.8 Deviation and Amendments to Contracts 358
19.9 Reimbursement of Increase in Price under Condition 63 of 358
IAFW-2249/Condition 32 of IAFW-1815 Z
Appendices 19.1 to 19.2 359-361
Section : 20 Final Bills, Measures to Avoid Delays, payment Omitted
Items, Refunds of Recovery, Star Rate/Special Rate
20.1 Measures to Avoid Delay in Preparation and Settlement of Final 362-368
Bills
20.2 Instructions on Approval of Special (Star) Rates 368-369
20.3 Payment of Bills to Contractor’s Bank 369
20.4 Claiming Payment for Items of Work Omitted from the Final Bill 370
20.5 Water Charges on Star Rates 370
20.6 Technical Check of Final Bills 370-371
20.7 Pre Audit of Final Bills by PCDA/CDA 371
Appendices 20.1 to 20.7 372-380
Section: 21 Miscellaneous Instructions Like Issue of Water,
Devaluation, Death, Revocation of Cancellation,
Deduction of I.T. at Source, Fair Wages, Labour
Laws etc
21.1 Issue of Water from MES Sources to Contractors 381
21.2 Devaluation of Works 381-382
21.3 Procedure to be Followed in the Event of Contractor's Death 382-383
21.4 Revocation of Cancellation of Contract 383
21.5 Deduction of Income Tax at Source 383
21.6 Fair Wages Clause and Contractor's Labour Regulations. 383-384
21.7 Contract Labour (Regulation and Abolition) Act 1970 384-385
21.8 Points to be taken care of Before Cancellation of Contracts 385-388
and Conclusion of Risk and Cost Contracts
Appendix 21.1 to 21.2 389-391
PART III
POST CONTRACT STAGE
Section : 22 Technical Examination Organization

Introduction, Organization, Command and Control and
Charter of Duties
22.2 Organization 392
22.3 Area Of Responsibility 392
22.4 Command and Control 393
22.5 Charter of duties 393
Appendix 22.1 394-396
Section : 23 Visits and Inspection, Technical Examination, Formulation of
Observations and Interaction with Staff
23.1 General 397
23.2 Guidelines for Inspections 397-398
23.3 Conduct of Inspection 398
23.4 Verification of Rectification of Defects 399
23.5 Scrutiny of Contract Agreements 399
23.6 Site Examination of Works 399-400
23.7 Vouchers/Test Certificates 400
23.8 Inspection of Works-Special Reports 401
23.9 Checking of Paid Final Bills/RARs 401
23.10 Formulation and Issue of Observation 401
23.11 Minor Observations 401
23.12 Major Observations 402
23.13 Observation on Scrutiny of Contract Agreements 402
23.14 Special Observation 402
23.15 STE Interaction with Station Commanders 402-403
23.16 STE Interaction with Station HQ after return to HQ 403
23.17 STE Presentation to Command HQ 403
23.18 Verification of Rectification of Defects 403
23.19 Progressing of Observations 403
23.20 Monitoring at Integrated Headquarters of Defence Level 403-404
23.21 Monitoring at Command Level 404
23.22 Periodical Meetings between STE, TE & CWE 405
23.23 Intimation of STE Recovery to contractor 405
23.24 Examination of View Points of Contractor 405-406
23.25 Limitation of Time for STE/TE Observations 406
23.26 Intimation to Contractor for Defective Work 406
23.27 Correspondence with Contractors 406
23.28 Agreement between GE and STE/TE/ATE with regard to 406
Factual Information
23.29 List of Common Defects 406
Appendix 23.1 407-411
Section24 Draft Para (DPs) and Serious Cases(SCs)
24.1 General 412
24.2 Serious cases 413
24.3 Procedures to deal with ADGTE’s Draft Paras(DPs) 413-414
24.4 Procedures to deal with ADGTE’s Serious Cases (SGs) 414-415
Section 25 Examination of MES Works by CVC (CTE's
Organization)
25.1 General 416
25.2 Works checked by CTE’s Organization not to be checked by 416
ADGTE
25.3 Procedure to deal with Inspection Report of CTE 416
25.4 Clarifications 416
Section 26 Recovery of Over Payments From Contractors
26.1 General 417

26.2 Demand Notice 417
26.3 Limitation of notification of Over payment to Contractor 417-418
26.4 Difference between Right of Adjustment and Right of Demand 418
26.5 Procedure to Realize Dues from the Contractors 418-421
26.6 Reconciliation of Recoveries 421
Section 27 Measures to Reduce Arbitration Cases & Common
Causes Leading to Arbitration in MES
27.1 General 422
27.2 Common Causes Leading to Arbitration Cases 422
27.3 Measures to Reduce Arbitration Cases 422
27.4 422-423
-
27.5
Appendices 27.1 to 27.2 424-430

Section 28 Procedure for Appointment of Arbitrator Including
Guidelines for Appointment of Arbitrator
28.1 Procedure for Appointment of Arbitrator Including Guidelines for 431-432
Appointment of Arbitrator
28.2 Pre-Condition for Appointment of Arbitrators 432-434
28.3 Guide lines for Appointment of Arbitrators by E-in-C in CE 434-435
Contracts
28.4 Guide lines for Appointment of Arbitrators by CE Zone 435
(Appointing authority) in CsWE & GE’s Contracts
28.5 Standard Form of Appointment Letter to be Issued by 435
Appointing Authority
28.6 Guidelines for appointment of arbitrator in cases where 435
contractor has not given consent for a serving officer to be
appointed as Arbitrator
Appendices 28.1 to 28.7 436-454
Section 29 Preparation and Defence of Arbitration Cases
29.1 Delay in Pleadings in Defence and Rejoinders 455
29.2 Delegation of Defence of Government case During Arbitration 455
Hearing to Lower Formation
29.3 Submission of Statement of Case, Pleading in Defence, 455
Rejoinders
29.4 Preparation of Defence of Government Case 455
29.5 CDA’s Cooperation in Defence 455
29.6 Govt Claim of Cost 456
29.7 Defence against Contractors Claim of Interest 456
29.8 Expected Matters falling under Final and Binding Decision 456
29.9 Causes of Delay in Arbitration 456
29.10 Supply of Documents to the Contractor 457
29.11 Engagement of Govt Counsel When Important Legal Principle is 457
involved
29.12 Engagement of Private lawyer 457
19.13 Retention of Records 457
29.14 Appointment of Arbitrator by Court 457
29.15 Venue of Hearing 457
29.16 Defending Team in Arbitration Hearing 457
29.17 Mock Hearing 458
29.18 Points to be noted during defence 458-459
Section 30 Actions to be Taken After Receipt of Award, Memorandum
of Award, Stamp Duty on Award, Miscellaneous Issues
Pertaining to Arbitration
30.1 Examination of Awards: (Correction and Interpretation of Award: 460
Additional Award) Cases Etc.
30.2 Implementation of Awards/Filing objections on awards after 460-463
obtaining advice of LA(Def)
30.3 Action on receipt of awards 463-468
30.4 to 30.9 Subsequent to trial court order 468-470
30.10 Awards in favour of UoI 470
30.11 Memorandum of award 470
30.12 Stamp duty on award 470-471
30.13 Regularization of excess payment 471
30.14 Disposal of original award 471
30.15 Settlement through PMA 471
30.16 Lapses while dealing with awards/ Court cases 471-472
Appendices 30.1 to 30.3 473-482
Section 31 Civil Proceedings : Court Cases
31.1 Initiation of Legal Action in Courts 483
31.2 Action to be taken by the CE Zone/Project on 483-484
receipt of Notice to Suit.
31.3 Action to be taken by the Dte/Branch Concerned at Integrated 484
HQ of MOD (Army) and Department of Military Affairs (MES
Section) on receipt of the Report from Lower Formation
31.4 Action to be taken when a Suit is filed in a Court. 484-485
31.5 Action to be taken when the Defence of the Suit is Sanctioned 485-486
31.6 Important Points for Continual Attention 486
31.7 Appeals 487
31.8 Appeal by the Opposite Party 487
Payment Relating to Court Decrees/Arbitration Awards 487
31.10 Writ Petitions in the High Courts 487
31.11 Conduct of Central Government Cases in Courts in Delhi District 487-488
Courts and Delhi High Court
31.12 Conduct of Government Cases in Supreme Court 488
31.13 Legal Notice u/s 80 CPC 488-489
31.14 Advice of Ministry of Law in Cases where Legal or Constitutional 489
Issues are Involved
31.15 Procedure Relating to Disposal of Court Prohibitory/Attachment 490-491
Orders
31.16 Conduct of Litigations : Delhi High Court, Instruction Regarding 491-492
31.17 SOP for Dealing Court Cases 492
Appendix 31.1 493
Section 32 Important court Judgments Which Can be Referred in
Preparation and Defence of Arbitration Cases
32.1 General 494
32.2 Defence of Contractor’s Claim for Compensation/Damages 494
32.3 Court Judgments submitted by Contractor’s Counsel 494
32.4 Need for awareness about latest Judgments and Court Orders 494
32.5 Court Judgments Pertaining to Contractor’s Claims 494
32.6 Monitoring of Court Judgments by CE Command/ADG 494
32.7 List of Court Judgments 495-500
32.8 Need for Defence Team to remain updated about Court 500
Judgments
32.9-32.23 Judgments to be referred in Arbitration Proceedings 500-513
PART IV: REPORTS AND RETURNS
Section 33 Report and Returns in respect of Dte of Contract 514-516
Management/E8 Section
Appendix 33.1 517-524
Part-I
PRE-CONTRACT STAGE
1
SECTION 1
ENLISTMENT OF CONTRACTORS, STANDING SECURITY DEPOSIT, UPGRADING,
REMOVAL AND DOWNGRADING OF CONTRACTORS
1.1 Classification of Contractors.
The Classification of contractors, value of Standing Security Deposit Competent
Registering Authority shall be as under:
Class Upper Tendering Value of Standing Authority Competent

Limit Security Deposit to enlist
(In Lakhs) (In Lakhs)
SS No Limit 15 E-in-C
S 1500 11
A 750 7
B 300 4 CE Command/ADG
C 100 1.75
D 50 1.00
E 25 0.50 CWE (CE Zone/ Project
in case there is no CWE
office)
1.2 Categories of Works for Registration.

Contractors will be enlisted for one or more of the following categories of work
considered suitable depending upon the nature of the works executed by them in the past.
(a) Civil Engineering Works.
(i) Building Works

(ii) Water Supply and Sewage Disposal
(iii) Runways and Pavements
(iv) Marine and Harbour Works
(v) Roads
(b) Electrical Engineering Works.
(i) Low Tension Electric Works (upto 1100 volts)

(ii) High Tension Electric Works (excluding 33 KV)
(iii) 33 KV and Extra High Voltage Installations
(c) Electrical/Mechanical Engineering Services.
(i) Air Conditioning and Refrigeration (HVAC)

(ii) Lifts & Escalators
(iii) Electrically Operated Cranes
(iv) Incinerators
2
(v) Mechanical Laundry

(vi) Fire Fighting and Fire Detection System
(vii) Water and Effluent Treatment
(d) Miscellaneous.
(i) Manufacture and Supply of Furniture
(ii) Handling of Engineer Stores and Transport
(iii) Horticulture and Landscaping
(iv) Information Technology Services
(v) Maintenance and Operation of E/M Installation
(vi) Repair of Transport Vehicles
(vii) Energy Audit Services
(viii) Auction Services
1.3 General Guidelines.
(a) Application for enlistment will be submitted by the contractors on IAFW-2190
(Revised 2020) (Appendix 1.1) to the appropriate Registering Authority.
(b) Fresh enlistment in MES is open for all classes in all categories presently, except in
‘C’, ‘D’ & ‘E’ class. The enlistment in ‘C’, ‘D’ & ‘E’ class is opened from time to time as per
separate notification by E-in-C’s Branch.
(c) Fresh enlistment shall be allowed in respect of the contractors who have already
satisfactorily completed individual work/works of requisite value in MES / DG MAP / any
Central Govt Deptt/State Govt Deptt/ Central or State/Public Sector Undertaking /AWHO/
AFNHB (Air Force Naval Housing Board) /CGEWHO (Central Govt Employer Welfare
Housing Orgn) during last 5 years upto last date of the month preceding the date of
application and fulfill the other criteria as laid down in this Manual. Contractor having
worked either on the basis of power of attorney or under any other capacity or on the basis
of job order etc, shall not be enlisted in any case.
(d) Fresh enlistment of contractor shall be valid till the end of the cyclic period in force
at the time of enlistment.
(e) No formation shall delay the enlistment unnecessarily after receipt of all documents
and necessary verification.
(f) Enlistment of contractors based on the engineering qualification shall be allowed as

per the instructions issued by E- in-C's Branch from time to time.
(g) Foreign firms/Companies shall neither be enlisted in MES nor shall be issued any
tender. However, Indian Firms having foreign nationals as Directors/Indian directors
staying abroad/having taken foreign nationality/citizenship shall be considered for
enlistment subject to fulfilment of other enlistment criteria given in this Manual. The security
clearance in all such cases shall be obtained by following procedure laid down by Ministry
of Home Affairs vide letter No II/20034/290/2013-IS-II dated 30 Jun 2015 and amendment
thereof vide OM No II/20034/290/2013-IS-II dt 09 Dec 2015(These letters being classified
3
are not being shared). The case for security clearance shall be processed to E-in-C's
Branch for taking up matter with concerned authorities.
1.4 Criteria for Fresh Enlistment
(a) Criteria for Fresh Enlistment in various classes shall be as under:-
Class Past Experience of Completed Financial Soundness (in Rs)
Works in Last 5 years & Average
Annual Turn Over (in Rs)
(1) (2) (3)
‘SS’ (a)Two works costing not less than (a) Solvent upto 8.00 crore
12.00 crore each. or
or
One work costing not less than 20 Financially sound for engagement upto
crore. 40.00 crore.
and
(b) Average annual turn over for two (b)Working capital not less than 75.00
consecutive years shall not be less lakh
than 20 crore
‘S’ (a)Two works costing not less than (a) Solvent upto 4.00 crore
7.50 crore each or
or
One work costing not less than Financially sound for engagement upto
12 crore 15.00 crore
and
(b) Average annual turn over for two (b)Working capital not less than 50.00
than 12 crore
‘A’ (a)Two works costing not less than (a) Solvent upto 2.00 crore
4.00 crore each. or
or
6.00 crore. Rs 7.50 crore.
and
(b)Average annual turnover for two (b)Working capital not less than Rs 30.00
than 6.00 crore
‘B’ (a)Two works costing not less than (a) Solvent upto 100.00 lakh
1.50 crore each. or
or
2.50 crore. 3.00 crore.
and
(b) Working capital not less than
(b) Average annual turn over for two 12.00 lakh
consecutive years shall not be less
than 300.00 lakh.
4
‘C’ (a)Two works costing not less than (a) Solvent upto 40.00 lakh
50.00 lakh each. or
or
80.00 lakh. 100.00 lakh
and
(b) Average annual turn over for two (b) Working capital not less than
consecutive years shall not be less 10.00 lakh
than Rs 100.00 lakh.
‘D’ (a) Two works costing not less than (a) Solvent upto 20.00 lakh
25.00 lakh each. or
or
40.00 lakh. 50.00 lakh.
and
(b) Average annual turn over for two (b) Working capital not less than
consecutive years shall not be less 7.50 lakh
than 50.00 lakh.
‘E’ (a) Three works costing not less than (a) Solvent upto Rs 10.00 lakh
Rs 7.50 lakh. or
or
Two work costing not less than Financially sound for engagement upto
Rs 10.00 lakh each Rs 25.00 lakh.
or
One work costing not less than (b) Working capital Rs 5.00 lakh
Rs 20.00 lakh.
and
(b) Average annual turn over for two
consecutive years shall not be less
than Rs 25.00 lakh.
(b) Criteria for upgradation in various classes shall be as under:-

Class Past experience of Financial soundness Limit of minimum
completed works reserves
in last 5 years (See Note 5 below)
(1) (2) (3) (4)
‘SS’ (a) Two works costing not (a) Solvent upto Rs.120.00 lakh
less than Rs 12.00 crore Rs 8.00 crore
each. or
or financially sound for
One work costing not less engagement upto
than Rs 20 crore. Rs 40.00 crore
and
(b) Average annual turn over (b) Working capital not less
for last two consecutive than Rs 75.00 lakh
years shall not be less than
Rs 20 crore
5
‘S’ (a)Two works costing not less (a) Solvent upto Rs 4.00 Rs 80.00 lakh
than Rs 7.50 crore each crore
or or
One work costing not less than financially sound for
Rs 12 crore engagement upto
and Rs 15.00 crore
(b) Average annual turn over
for last two consecutive years (b) Working capital not less
shall not be less than Rs 12 than Rs 50.00 lakh
crore
‘A’ (a) Two works costing not less (a) Solvent upto Rs 2.00 Rs 75.00 lakh
than Rs 4.00 crore each. crore
or or
One work costing not less than Financially sound for
Rs 6.00 crore. engagement upto
and Rs 7.50 crore.
(b)Average annual turn over
for last two consecutive years (b) Working capital not less
shall not be less than Rs 6.00 than Rs 30.00 lakh
crore
‘B’ (a) Two works costing not less (a) Solvent upto Rs 60.00 lakh
than Rs 1.50 crore each. Rs 100.00 lakh
or or
Rs 2.50 crore. engagement upto
or Rs 3.00 crore.
Average annual turn over for
last two consecutive years (b)Working capital not less
shall not be less than than Rs 12.00 lakh
Rs 300.00 lakh.
‘C’ (a)Two works costing not less (a) Solvent upto Rs 40.00 Rs 25.00 lakh
than Rs50.00 lakh each. lakh
or or
Rs 80.00 lakh. engagement upto
or Rs 100.00 lakh
shall not be less than than Rs. 10.00 lakh
Rs100.00 lakh.
‘D’ (a)Two works costing not less (a) Solvent upto Rs 12.50 lakh
than Rs 25.00 lakh each. Rs 20.00 lakh
or or
Rs 40.00 lakh. engagement upto
or Rs 50.00 lakh.
shall not be less than Rs 50.00 than Rs 7.50 lakh
lakh.
6
Notes:-
1. Authority competent to enlist shall be called Registering Authority.
2. The categories for enlistment shall be decided on the basis of nature of works
executed by Contractor. Contractors who have experience of executing of Prefab/Pre-
Engineered Structures and fulfil other criteria, shall also be eligible for enlistment in
category a(i). At the time of renewal, contractors already enlisted in Cat (a) (i) Building &
Roads, shall be enlisted in Cat (a) (i) Building works & (a) (v) Roads. In case of E class
contractors, Registering Authority shall issue suitable amendments to enlistment letters in
respect of separate categories for buildings works ie a(i) and roads i.e. a(v) without any
application from contractor.
3. For enlistment/upgradation/renewal/reclassification etc, in category (b) Electrical

Engineering Works (i) to (iii), a declaration/undertaking shall be obtained from the applicant
contractor in affidavit form whereby the contractor shall undertake to either obtain valid
Electrical Licence of required class in its name or engage an agency having valid Electrical
Licence of required class through MoU (Memorandum of Understanding) for execution of
all electrical works as well as works under category (c) [including its sub categories (i) to
(vii)] and the category (d)(v) to the extent Rule 29 under Part III of Central Electricity
Authority (Measures Relating to Safety and Electric Supply) Regulations, 2010 is applicable
either in full or part of the scope of work of contract awarded to him and that all such
electrical works shall be executed by him through such agency only (either self or other
agency) having valid Electrical Licence of required class from State /Union Territory
Authorities where works are to be executed.
4. Working capital with the Contractor shall be judged from balance sheet/bank’s
certificate as per Appendix 1.3 / bank statement for last 6 month/overdraft or cash credit
facility from bank/fixed deposit receipts with banks.
5. The requirements of minimum reserves are applicable for enlistment related process
of existing contractors i.e. Change in constitution/Renewal/Reclassification (Revision in
Monetary Limit) etc, if they have contracts in hand not having Performance Security
provisions, till their contracts are completed and their Final Bills do not become MINUS.
For this, these contractors will submit affidavit on non-judicial stamp paper of appropriate
value (minimum value Rs. 100) declaring that all their contracts without Performance
Security provisions are completed and the Final Bills are not MINUS. Immovable/movable
property (minimum reserve) shall be exclusively in the name of Contractor and not in the
name of family members/relatives/others. In case of Limited companies,
immovable/movable property (considered for minimum reserve) shall be exclusively in the
name of Company and should be reflected in the Balance Sheet of the Company.
6. “Last two consecutive years” shall mean immediate last two consecutive financial years
reckoned from the date of application for upgradation. Two consecutive years for the
purpose of fresh enlistment shall mean any of the two consecutive financial years in last
Five Financial Years preceding the date of application for enlistment. For documents in
support of works experience, TDS certificate for IT/Sales Tax/VAT/GST shall also be asked
from applicant firms. All documents related to works experience and turnover (except Form
26 AS and portal generated GST return) shall be got independently verified from the
client/issuing authority. Registering Authority may seek clarification from the Chartered
Accountant in case of any doubt. Annual turnover to be considered for enlistment purpose
shall mean the turnover from all businesses carried out by the applicant firm in relation to
7
construction work related to categories of works for which the enlistment is being sought.
It may be total turnover as shown in the audited balance sheet or part thereof. Necessary
clarification shall be obtained from the Chartered Accountant whose audited balance sheet
is submitted by the applicant firm in case considered necessary by the Registering
Authority.
7. Upgradation of enlisted contractor shall be done gradually in stages. Before a

contractor is considered for upgradation, he should have worked at least for two years in
the present tendering limit and should meet the criteria laid down. Normally upgradation
will be done only to one next higher class at a time. However, if performance of any
particular contractor is of very high order and Registering Authority considers upgradation
of such contractor by more than one class justified, the same shall be done only with prior
approval of E-in-C’s Branch. Following considerations shall be applied to ascertain whether
the performance of contractor is of very high order or otherwise:
(a) Contractor has completed works, value of which is more than 1.25 times the
requirement in which the upgradation is being considered.
(b) Average Annual Turnover of the contractor is more than 1.25 times the requirement
in which the upgradation is being considered.
Example: For a contractor enlisted in class ‘C’ having tendering limit of 100 lakh, proposed
to be upgraded to class ‘A’ having tendering limit of 7.50 crore, minimum value of works
completed and turn over shall be as under :
(i) Two works completed costing not less than 5.00 crore each (1.25 x 4.00)
Or
One work costing not less than 7.50 crore (1.25 x 6.00)
(ii) Average annual turnover 7.5 crore (1.25 x 6.00)
(c) Average marks secured in Performance Reports (Stage-II) for the works completed
in last five years shall not be less than 70%. Where report for any work is not available, it
will be deemed to contain only 60% average marks.
8. Contractors of ‘A’ class and above only shall be eligible for enlistment in categories
(a) (iii) Runways and Pavements and (a)(iv) Marine and Harbour Works subject to prior
approval of E-in-C.
9. The criteria laid down above for enlistment/ upgradation may be relaxed in the case
of contractors whose performance has been found to be of a very high order. Such
relaxation may, however be given only with the prior approval of E-in-C’s Branch.
1.5 Documents required to be submitted by the contractor for enlistment in MES.

(a) Application for enrolment as contractor on IAFW-2190 (Revised 2020). Coloured
Photographs affixed on application shall be self-attested.
(b) Affidavit for constitution of firm.
(c) List of works executed during last five years (As per Appendix 1.2) including copies
of Work Orders/Work allotment letters, Copies of completion certificates and Form 16
A/TDS certificate for GST (GSTR-7A).
8
(d) Annual turnover certificate duly supported with audited balance sheet. The turn over
certificate must bear the UDIN (Unique Document Identification Number). The turn over
certificate and audited balance sheet should be from same Chartered Accountant. In case
balance sheets are not audited, Form 26 AS and /or Annual GST return shall be forwarded
in support of turn over.
(e) Audited balance sheet of last five years in case of Limited companies
(f) Solvency certificate from scheduled bank as per specimen given in

Appendix-1.3
(g) Working Capital certificate from scheduled bank as per specimen given in
Appendix-1.3.
(h) Affidavit from contractor that there is no Government dues/ recovery outstanding
against him. If there is any Government dues/ recovery outstanding from the contractor,
enlistment/ upgradation shall not be carried out.
(j) Affidavit from contractor giving brief details of arbitration / litigation cases he was
involved in. Registering Authority will critically examine such details and if contractor is
considered habitual litigant, his enlistment/ upgradation shall not be carried out. Contractor
shall be deemed to be a habitual litigant if he moves the court more than once ignoring
arbitration clause and court does not uphold his view.
(k) Two self-attested photographs of Proprietor/Partners/ Directors of firm for

verification of character and antecedents from the police authorities. Places where online
police verification process is available, the contractor will carry out police verification of the
Proprietor/Partners/Directors and submit the verification reports for cross verification by the
Department. Alternatively the contractor may submit a copy of valid passport issued by
Govt of India.
(l) Copy of partnership deed in case of partnership firm.
(m) Memorandum and Articles of Association in case of Limited Companies.
(n) Copy of Registration Certificate of firm with Registrar of Companies/Register of

Firms.
(o) Affidavit that no near relative(s) of the contractor or his/their employees/agents is/are
working as Gazetted/ Commissioned Officer(s) in MES/ Corps of Engineers/Ministry of
Defence. If the near relative(s) is/are working in such capacity in any formation upto Zonal
CE/CCE, he/ they shall furnish details. The contractor shall not be entitled to tender for the
works in entire area of CE Zone/CCE.
(p) Affidavit that no near relative(s) of the contractor or his/their employees/agents is/are
working as Junior Engineer(s) in MES/Corps of Engineers. If his near relative(s) is/are
working in such capacity in any formation upto CWE/ GE(I) office, the contractor shall
furnish details. The contractor shall not be entitled to tender for the works in entire area of
that CWE/GE(I).
9
(q) Copy of power of attorney/Resolution of the Board in favour of any Partner/Director

of the firm.
(r) Copy of immediate last Income Tax Return.
(s) A separate sheet containing specimen signatures (signed in black ink) and affixed
with photographs of Proprietor/Partners/Directors (to be used as Appendix B of enlistment
letter).
(t) Self-attested copy of PAN Card of Proprietor, Partners, Directors and the firm/
Company.
(u) Self-attested copies of GST registration, EPFO registration and ESIC registration
certifcates.
Notes:-
(i) All the documents submitted by the contractor shall be signed by Proprietor/all
Partners/all Directors unless specifically authorised to a Partner/Director through POA or
Resolution of the Board.
(ii) Photocopies of documents shall be self-attested. Registering Authority shall ask

production of original documents to verify the photocopies.
(iii) All affidavits shall be given on non-judicial stamp paper of appropriate value duly
signed by the contractor and attested by the Magistrate/Notary public.
(iv) Registering Authority shall cross-verify the genuineness of financial documents at

Para (d) & (e) above from issuing Chartered Accountant (CA) and documents at Para (f) &
(g) from the concerned Bank branch by referring in writing to them alongwith copy of above
documents submitted by contractor. Registering Authority is also at liberty to verify the
genuineness of all the documents from other reliable/authentic sources.
(v) All documents related to work experience and turnover (except Form 26AS and
portal-generated GST return) shall be got independently verified from the client/issuing
Authority. For documents in support of works experience, TDS certificate for IT/Sales
Tax/VAT/GST shall also be asked from applicant firms. Registering Authorities may seek
clarifications from the Chartered Accountant in case of any doubt.
(vi) Documents mentioned at Para 1.5 (a) and 1.5 (s) shall not be applicable for the
purpose of documents to be uploaded for bidding purpose by unenlisted firms.
1.5.1 (a) On receipt of letter from Registering Authority asking Standing Security
Deposit (SSD) and Standing Security Bond (SSB) (Bond to secure performance of
agreement) and unless the contractor decides to deposit EMD/ individual security for each
work he secures, he shall furnish the Standing Security Deposit of appropriate value in
acceptable form as given in Chapter 2 of the Manual on Contracts except Bank Guarantee
Bonds.
(b) Standing Security Bond (Bond to secure performance) on non judicial stamp paper
of appropriate value shall be as per specimen given at Appendix 1.6 duly signed by
contractor and attested by Magistrate/ Notary Public.
10
1.6 Verification of Character and Antecedents of Contractors and their Agents.
(a) There have been cases where foreign nationals and other anti-social elements were
found associated with Defence works. In the interest of security, therefore, the following
action will be taken:-
(i) Character and antecedents of Proprietor/Partners/Directors shall be verified

through police authorities (not below the rank of Superintendent of Police/DCP)
before he is brought on approved list.
(ii) Character and antecedents of agents of contractors shall be verified

before they are associated with contract work.
(iii) Character and antecedents of the Power of Attorney holder shall be verified
before he is associated with contract work.
(iv) While applying for a tender the unenlisted firms shall upload copy of Police
Verification Report/Police Clearance Certificate/character certificate from the
concerned Police Authorities/Notarised copy of valid Passport of Proprietor/each
Partner/each Director. Police verification process shall be completed before opening
of finance bid. In case the police verification / copy of valid passport is not received
before the date of opening of finance bid, the tender of such contractor shall not be
opened.
(v) Foreign nationals shall be excluded from all contracts unless for reasons of
technical collaboration or some other consideration, their inclusion is unavoidable.
(b) Provision shall be made in all tender documents to the effect that contactors shall
employ only Indian nationals after verifying their character, antecedents and loyalty.
Attention of tenderers shall also be drawn to Condition 25 of IAFW-2249 ( or other similar
condition in the applicable Contract form).
(c) All possible steps shall be taken to ensure that person of doubtful character and
antecedents is not associated with Defence works. If in doubt, a reference shall be made
to police authorities for fresh verification.
(d) The verification of antecedents in case of Government Undertaking is not required.
(e) Verification of antecedents of Proprietor/Partners/Directors of firm in connection with

issue of tender and/or enlistment is a Government requirement and accordingly payment
to police authorities towards verification of antecedents shall be made by contractor.
(f) Verification of antecedents of contractor’s representative/labour deployed at site in

connection with execution of work under the contract, as per security requirements of user
unit / installation shall be the responsibility of the contractor and all expenses in connection
with verification of antecedents by police authorities/security agencies shall be borne by
the contractor. An appropriate clause to this effect shall be incorporated in the contract.
11
1.7 Procedure for Enlistment of Contractors.

To ensure uniformity of the procedure for enlistment, the various points to be
checked are enumerated in the ‘Check List’ given at Appendix 1.4. The points given in the
list should be checked while examining the case of enlistment and complied with. Following
procedure will be followed for enlistment of contractor:-
(a) For Class SS,S,A to D.
(i) For ‘SS’ Class. Application for enlistment as an approved contractor in ‘SS’
Class shall be submitted by the contractor to E-in-C, being the Registering
Authority.
(ii) ‘S’, ‘A’ to 'D' Class. Application for enlistment as an approved contractor in
any of the class 'S,' A to 'D' shall be submitted by the contractor to CE
Command/ADG, being the Registering Authority.
(iii) The Registering Authority will decide as to whether the applicant is to be
enlisted and if so, in what class and for which categories of work. Having taken a
decision, the Registering Authority will intimate the contractor of the class and
categories for which he proposes to enlist him as per his/their eligibility. The
contractor will also be asked to deposit Standing Security appropriate to that class
and to execute the Standing Security Bond, unless the contractor decides to deposit
EMD/ individual security deposit for each work he secures.
(iv) On receipt of the Standing Security Deposit and Standing Security Bond, the
Registering Authority will complete the bond by making the following endorsement
at the bottom of the last page:
“Accepted for and on behalf of the President of India.”
Signature and Designation of

Registering Authority
(v) Thereafter Registering Authority will issue a letter of enlistment to the

contractor and concerned PCDA/CDA and upload the same on the MES web site
for information of the environment. This letter will, inter-alia, indicate the index
number allotted to the contractor and the categories of works.
(vi) The documents pertaining to Standing Security Deposit in respect of

enlistment in ‘S’ and ‘A’ to ‘D’ classes will be forwarded by Chief Engineer
Command/ADG to the PCDA/CDA concerned for safe custody, periodical drawl of
interest and payment thereof to the contractor. However, in respect of SS class, the
documents shall be forwarded by E-in- C's Branch to PCDA Western Command for
safe custody.
(vii) Whenever Standing Security Deposit is required to be released in respect of

contractor, necessary action to obtain “Clearance” described in para 1.16 of Manual
concerned and to release it shall be taken by the Registering Authority.
12
(b) E’ Class
(i) Application for enlistment as an approved contractor in ‘E’ class shall be

submitted by the contractor to the concerned CWE/CE Zone (where there is no CWE
office) for suitable action on the matter.
(ii) Having taken a decision, CE Zone/ CWE will take appropriate action to
intimate the contractor of his decision regarding enlistment or otherwise and to
submit Standing Security Deposit and Standing Security Bond on similar lines as
described in Para 1.7 (a) (iii)above. After completing these formalities, CWE (CE
Zone where there is no CWE) will allot an Index number and issue enlistment letter
to the contractor under intimation to Command CE/ADG, Zonal CE/CCE, CsWE in
the Command, GEs and AGEs(I) in his Area. The letter shall also be uploaded on
MES web site for information of the environment.
(iii) Documents pertaining to security in respect of enlistment of Contractors of

class ‘E’ will be forwarded by the CWE/CE Zone to PCDA/CDA concerned for
safe custody, periodical withdrawal of interest and payment thereof to the
contractor.
(c) Specimen copy of enlistment letter to be issued by the Registering Authority is given
at Appendix 1.5.
1.8 Enlistment in Adjoining Command and Facility for Working for other Services
at same Station.
With the provision of Performance Security for each contract, these facilities have
become redundant and no more applicable. Henceforth the contractor will be recognized
by the Index No of his parent Registering Authority only and there will be no reference to
his enlistment under any Adjoining Command Facility/Parallel Enlistment Facility etc.
1.9 Transfer of Enlistment on Reorganization of MES Formation.
(a) In case of raising of any new MES formation : If any MES formation is
raised, the enlisted contractors, who are willing to work in area of new formation, may get
their enlistment transferred to new formation and will have to submit fresh standing security
bond. They will also have to submit fresh Standing Security if PCDA/CDA also changes
and his old Standing Security will be refunded. After enlistment in new formation, their
enlistment with old formation will cease to exist.
(b) In case of disbandment of any MES formation: If any MES formation is

disbanded, the contractors enlisted with that formation may get their enlistment transferred
to any similar adjoining MES Registering Authority at their option. In such case, the
contractor will have to submit fresh Standing Security Bond. They will also have to submit
fresh Standing Security if PCDA/CDA changes and his old Standing Security will be
refunded.
1.10 Provisional Enlistment of Contractors.
(a) Para 419 of the Regulations for the MES (RMES)-1968 states that tenders will
normally be issued to contractors borne on the approved list of the MES.
13
(b) Due to dearth of contractors in some areas and with a view to attract more
contractors to MES, NITs for MES tenders shall mention that contractors not borne on the
MES list may also participate in tendering process as unenlisted firm. They shall be asked
to submit particulars with regard to their financial and technical capabilities, various
documents and affidavits etc as described herein before. Simultaneously, action shall also
be taken to obtain police verification of the Proprietor/Partners/Directors.
(c) Provisional enlistment of the contractor shall be carried out by Accepting Officer.
The provisional enlistment shall be only for the particular work for which the contractor’s
bid is to be accepted. It will be ensured by the Accepting Officer prior to Technical bid
evaluation that the un-enlisted bidder selected for validation fulfils the criteria as per NIT.
Accepting Officer will be fully responsible for the correctness of validation of the Technical
bid of such un-enlisted bidder”.
1.11 Enlistment of New/Sister Concern Firm/Company from Existing Firm/

Company by Partners(s)/Directors(s).
(a) The Partners(s)/Directors(s) in the existing enlisted Partnership Firm/Limited

Company owned by family members and actively involved in the affairs of the firm can be
considered for enlistment as a new Firm/Company based on experiences and financial
capacity in the existing Firm/Company, but not necessarily in the same class, only with
prior approval as under:
Class 'E - Chief Engineer Zone

Class 'D' to A and 'S' - Engineer-in-Chief's Branch
Explanation:- Expression 'Actively involved' for the purpose of this Para means the
Partner/Director who has got execution of the works under his administrative/business
control, who has stake in the Firm/Company and who has been so associated in such
capacity for at least five years.
(b) Such enlistment shall be subject to fulfilment of criteria and compliance of

instructions as under :-
(i) Partnership Firm/Limited Company, which has been active for minimum 10 (Ten)
years shall only be considered for splitting.
(ii) Partnership Firm/ Limited Company should be owned only by family members as
Partners/Directors. The family members shall mean near relative(s) as defined in Note
under Para 12 of Appendix 1.1 of this Manual.
(iii) The Partner(s)/Director(s) seeking fresh enlistment should have been associated
with the parent Firm/Company in such capacity in both execution of projects as well as in
financial transactions for at least five years. Details of these associations in execution and
financial transaction shall be verified from the executives on ground and company’s
Bankers.
(iv) Other than the existing Partner(s)/Director(s), no other individual shall be the
Partner/Director of the new Firm/Company seeking enlistment.
14
(v) The class and category of new 'Firm' will be decided by the authority mentioned in
Para1.11 (a)here in before based on fulfilment of requisite criteria of fresh enlistment of
appropriate class as given in this Manual.
(vi) Reconstitution in the form of change in Partner(s)/Director(s) of new Firm/Company

shall not be permitted for 05 (five) years from the date of enlistment of the new Firm.
(vii) The parent Firm/Company as well as the new Firm/Company will be treated as sister
concern till such time the parent Firm/Company is reconstituted with the
Proprietor/Partner(s)/Director(s) of new Firm/Company having no stake in the parent
Firm/Company.
(viii) Proprietor/Partner(s)/Director(s) of the new Firm/Company shall individually furnish

affidavit that they do not have any financial dealings with any of the Partner(s)/Director(s)
in the parent Firm/Company before they can be stopped being treated as sister concerns.
(c) Work experience and turnover for fresh enlistment of the new Firm/Company shall
be considered in the same proportion as their share/stake in parent Firm/Company. For
illustration, if two Partner(s)/Director(s), A & B each having 20% share in a Firm having
completed one work of Rs 120 lakh and having an average turnover of Rs 200 lakh in the
last two years seek fresh enlistment, the value of works completed and turnover for the
proposed new Firm/Company will be calculated as follows:-
(i) Value of works completed = 40% (20% + 20%) of Rs 120 lakh = Rs 48 lakh
(ii) Turnover = 40% of Rs 200 lakh = Rs 80 lakh
1.12 Upgradation of Contractors.

(a) Criteria for upgradation of Contractors shall be as described in Para 1.4(b) here in
before. Documents required to be submitted by the contractor for upgradation shall be as
given in Para 1.5 here in before.
(b) For upgradation from ‘S’ Class to ‘SS’ Class, the contractor will apply to the E-in-C
through CE Command/ADG with whom he has been working. While forwarding the case
to E-in-C's Branch, a certificate duly signed by CE Command/ADG as follows shall be
forwarded:-
“I have scrutinized the documents of upgradation application in respect of..(name of

contractor) and am satisfied that the said firm meets all eligibility criteria and has performed
adequate number of works in the MES with good quality and adherence to the time
schedule”.
(c) For upgradation from class ‘E’ the contractor will apply to the concerned CE
Command/ADG through CWE where he is registered. The concerned CWE will furnish the
requisite documents for upgradation to Command CE/ADG directly with copy to Zonal CE
for information. For upgradation from class 'D' and above to higher classes upto class 'S',
the contractor will apply to the concerned CE Command/ADG, being the Registering
Authority. Before upgrading the contractor, concerned CE Command/ADG will ascertain
the views of the Zonal CEs/CCEs in the Command aas well as other CEs Zone/CCEs
where the contractor has worked. On upgradation, contractor will be accordingly intimated
allotment of fresh Index Number in the new class by the Command CE/ADG. The process
15
of obtaining Additional Standing Security Deposit and fresh Standing Security Bond shall
be completed by CE Command/ADG.
(d) The upgradation of contractors shall be subject to provisions contained in Note 7

and 9 under Para 1.4 herein before.
(e) While upgrading a contractor in higher class, Registering Authorities shall ascertain
the categories of work in which the contract is eligible in upgraded class. Categories of
work in which contractor has no past experience from the time of its enlistment in MES will
be deleted from the enlistment details. Similarly in case contractor has work experience of
additional categories of work, such categories may be added in the enlistment details after
due verification of credentials.
1.13 Renewal of Enlistment.

The enlistment must be renewed before expiry of the validity date mentioned in the
enlistment letter. Separate detailed guidelines and instructions will be issued for the
process of renewal of enlistment by E in C's Branch from time to time.
1.14 Standing Security Bond.

(a) The format for Standing Security Bond is given Appendix 1.6. The contractors who
have executed this bond will not be required to deposit Earnest Money for individual works.
(b) The Standing Security Bond must be stamped and may be registered in accordance
with the law of the State in which it is executed. Registration of bond however, is not
compulsory, but it should necessarily be stamped in accordance with the law of the State.
(c) Execution of Standing Security Bond will not be a condition of contracts. It will be
independent of any or all contracts. However, in the case of contractors who decide to
execute Standing Security Bond, the execution of the Bond will be a condition precedent
to their enlistment.
(d) In case of contractors who have executed Standing Security Bond, recovery of
amount(s) due from them will be regulated as per the terms of the Bond.
(e) Only one Bond will be required from each Contractor irrespective of the list of
categories in which he is registered.
(f) Contractors of ‘SS’ Class will be required to execute Bond with E-in-C.
Contractors of ‘S’&’A’ to ‘D’ Classes will be required to execute a Bond with the CE
Command/ADG. Contractors of 'E' Class will be required to execute Bond with CWE/CE
Zone concerned, where there is no CWE office.
(g) Should the value of the Bond be reduced by an enforceable claim, the contractor
will be required to make up the deficiency (or meet the claim without touching the Bond)
before contractor is invited to tender for further works.
(h) The value of a Bond will not limit the value of a claim by Government under the
conditions of the contract.
(j) In case of contractors of ‘S’ and ‘A’ to ‘D’ Classes, the jurisdiction to be indicated in
the blank space in the first sentence of Para 2 of the Bond shall be the Command/ADG in
16
which the contractor is enlisted and in Para 3 of the Bond, the CE Command/ADG will be
entered as the Registering Authority.
1.15 Suspension, Down-grading, Removal of Contractors From Approved List.

(a) (i) The Standardized Code is enclosed as Appendix 1.7. The decision
regarding demotion/suspension of business/removal from approved list shall be taken by
the Registering Authority after issue of show cause notice and consideration of
representation, if any, in reply thereto and shall be communicated to the firm concerned
alongwith reasons. The format for this communication is given in Appendix 1.8 This format
is for guidance only and shall be modified to suit specific case/requirements.
(ii) Copies of the orders of demotion/suspension of business/removal from the

approved list, with a memorandum of reasons therefore, shall be sent by the concerned
Department through its administrative Ministry, to other Ministries responsible for major
construction work for such action as they may deem necessary.
(iii) The Ministries of Defence, Railway, Urban Development, Water Resources, Surface
Transport, Information and Broadcasting are generally the Ministries concerned with the
major construction works. However the communication shall also be sent to other similar
Ministries.
(b) Suspension on Account of Minor Technical Offences on the Part of a

Contractor:-
(i) Suspension of a business with a contractor may be ordered by the Registering

Authority for an indefinite period, where pending full inquiry into the allegations, the
Registering Authority is prima facie of the view that the contractor is guilty of an offence
in relation to business dealings which once established would result in removal/demotion
or suspension and it is not considered desirable to entrust now or continue business with
the contractor.
(ii) Suspension of business with a contractor for a specified period may be ordered by
the Registering Authority when the contractor is responsible for some minor technical
offence (s) such as use of inferior material, inferior workmanship and the like. This action
need not be communicated to other Ministries.
(c) Demotion to a Lower Class. The Registering Authority may demote a

contractor to a lower class on account of any of the following reasons if he:-
(i) Fails to execute a contract or executes it unsatisfactorily or is proved to be

responsible for constructional defects.
(ii) Has no longer adequate equipment, technical personnel or financial resources.
(iii) is of litigious nature.
(iv) violates any important conditions of contracts.
(v) is responsible for a conduct which may justify his demotion to a lower class.
17
(d) Removal from Approval List. Action to remove a contractor normally falls in the
under mentioned categories :-
(i) Where a contractor himself desires his name to be removed. In this case the
communication to the contractor shall be on the lines indicated in Appendix1.7.
(ii) The Registering Authority may remove the name of a contractor from the list if the
contractor:-
(aa) on more than one occasion, failed to execute a contract or has executed it
unsatisfactorily.
(ab) is proved to be responsible for constructional defects in a number of cases.
(ac) persistently violates any important condition(s) of the contract.
(ad) fails to abide by the conditions for registration or is found to have given false
particulars at the time of registration.
(ae) is found to have given false information at the time of registration.
(af) is declared or is in the process of being declared bankrupt, insolvent , wound up ,

dissolved or portioned.
(ag) persistently violates the labour regulations and rules.
(e) Action with respect to suspension of business against any contractor shall be
applicable to its sister concerns also.
(f) In the cases mentioned above, where intimation to contractors regarding

suspension, demotion, and removal is given on the lines indicated above, reference to a
legal adviser with regard to the form of communication to be adopted is not necessary.
However, in special cases, where doubt arises about the form of communication to be
adopted, a reference should be made to a legal adviser.
(g) Before a final decision to demote, remove or suspend business with a contractor
borne on the list of approved contractors is taken, the Registering Authority shall withhold
issue of tender to the contractor whose case is under examination.
(h) Action on Cancellation of Contract: (Not applicable to contracts having

Performance Security provisions)
(i) As soon as a contract is cancelled on account of Contractor’s default, the Accepting

Officer of the contract shall immediately bring the same to the knowledge of the
Registering authority and all the MES formations through MES web site and the
quarterly work load return on Contractors shall carry a clear remark against further issue
of tenders to the said Contractor.
(ii) No tender shall be issued by any MES formation either to said contractor or to any
of his partners individually or to any of his allied firms/sister concerns, till clearance is
obtained from Registering Authority.
18
(j) Action to downgrade /suspend/removal of a contractor shall be taken by Registering

Authority and shall be applicable to all MES formations across India. If cause of action has
arisen in a formation not under the AOR of Registering Authority, the concerned formation
shall directly forward the case to Registering Authority for initiating action.
(k) Instructions for Issue of Show Cause Notice prior to Banning of Firm involved
in CBI Case:-
(aa) Immediately, after occurrence of CBI case, Inquiry in terms of E-in-C’s Branch
letter No 78650/Policy/98/E1D dated 15 Apr 2004 shall be ordered through E1D by
Zonal Chief Engineer or Command CE (depending on level of trap) in whose
jurisdiction the area falls. The enquiry report shall be submitted within 10 days.
(ab) Based on the report, show cause notice shall be framed and served upon the
firm.
(ac) After receipt of reply, the decision for imposing a ban or otherwise shall be
taken. In case of imposing of ban is contemplated, Registering Authority shall be
informed for wide circulation.
(ad) Command CE should ensure that entire process as laid down above shall be
completed within four weeks of the date of occurrence of CBI case.
1.16 Refund of Standing Security Deposit.

(a) The Standing Security deposited by a contractor will be refunded to him either on
removal of his name from the approved list or on from (a) to (b) of Para 497 of MES
Regulations on production of No Demand Certificate (IAFA-451) by the contractor.
(b) The refund of Standing Security Deposit will always be subject to the provisions that
there are no dues to be recovered from the Contractor by the Government, the prescribed
defects liability period of contracts has expired and that the other conditions for the release
of the Security Deposit have been fulfilled (also see Paras 512,513 and 514 of MES
Regulations, including amendments thereto).
1.17 Procedure for Refund of Standing Security Deposit.
The following procedure is to be followed for refund of Standing Security of contractors

enlisted in ‘S’ to ‘D’ class, who have deposited Standing Security.
1.17.1 Action by Executive Authorities.
(a) The contractor will be required to apply to the CE Command/ADG, with whom the
Standing Security is lodged, for its release alongwith ‘No Demand Certificate’. If he does
not send the ‘No Demand Certificate’ on IAFA-451(which should cover all contract sheld in
the entire area) alongwith his application or if the release is necessitated by the contractor
having been removed from the list, the CE Command/ADG will write to him to furnish a ‘No
Demand Certificate’ on IAFA-451.
19
(b) The Chief Engineer Command/ADG will write under advice to the PCDA, to all GEs
in his Command with copy to CsWE to render to him (under advice to CsWE) a ‘No Claim
Certificate’ to the effect that :
(i) there are no claims outstanding against the contractor.
(ii) defect liability period in respect of the last contract executed by the contractor has
passed.
(iii) guarantee periods in all contracts executed by the contractor are over.
(iv) final bills in respect of all contracts have been paid.
(v) requisite Performance Security is held against all contracts in hand.
(c) Simultaneously with the action at Sub Paras (a) and (b) above, the CE
Command/ADG will call for ‘No Claim Certificate’ in respect of the contractor from CEs of
other Commands/ADGs A copy of this communication will also be endorsed to
PCDAs/CDAs of these Commands. On receipt of this request, CEs of other
Commands/ADGs will take action similar to that at Sub Para (b) above. On receipt of 'No
Claim Certificate' from all the GEs in their Command, the CEs will forward ‘No Claim
Certificate’ in terms of Sub Para (b) above, to the CE Command/ADG initiating the case.
(d) Of receipt of the ‘No Demand Certificate’ on IAFA-451 from the contractor and ‘No
Claim Certificate’ from other CEs Command/ADGs and from the GEs of his own Command,
the CE Command/ADG initiating the case will send to his PCDA along with the contractor’s
‘No Demand Certificate’ and ‘No Claim Certificate’. It will be his responsibility to ensure that
'No Claim Certificate' has been rendered by all parties.
1.17.2 Actions in Offices of PCDAs.
(a) The PCDA of the Command in which the security is lodged will, on receipt
intimation from CE Command/ADG shall call for ‘No Claim Certificate’ from
AAOs/RAOs/LAOs etc of his own area of jurisdiction and also from other PCDA/CDA.
(b) The PCDA/CDA of other areas will also take similar action in respect of their areas
on receipt of the first communication of the subject.
(c) On receipt of (i) ‘No Demand and No Claim Certificate’ from the CE/ADG of his area,
(ii) ‘No Claim Certificates’ from his AAOs/RAOs/LAOs etc& (iii) ‘No Claim Certificate’ from
other PCDA/CDA the PCDA where the Contractor has lodged the Standing Security will
authorise the CE Command/ADG to release Standing Security to the Contractor.
1.17.3 In the case of E class contractors the procedure to be followed is the same as at
Paras 1.17.1 and 1.17.2 above.
1.17.4 In case of contractors of ‘SS’ Class who have deposited Standing Security to E-in-
C’s Branch, the procedure to be followed is same as per Paras 1.17.1 and 1.17.2 above
except that action is to be taken by E-in-C’s Branch who will write under advice to
PCDA/CDA and all CEs Command/ADGs.
20
1.17.5 In case of contractors whose Standing Security is lodged with an authority other
than the E-in-C’s Branch/CEs Command/ADG/CWE, the office with whom the standing
security is lodged shall follow, mutatis mutandis, the procedure set out in Paras 1.17.1 to
1.17.4 above.
1.18 Related Firms.

In case of contractors having blood/close relation with each other but not having any
business relation whatsoever, particulars of such related contractors need not be given
under Serial No7 of the enlistment form. In such cases, it would not be correct to deny issue
of tenders to these contractors if they otherwise fulfil all requirements in selection for issue
of tenders. A Contractor is termed to have “business relationship” with other Contractor(s)
when one or more Partners/Directors are common. The details of such firms shall be given
in the application while seeking enlistment. Tender to related firms shall not be issued
simultaneously. However, while deciding a tender in favour of one party, it shall be ensured
that fair competition has taken place. Necessary provision in the NIT shall be made.
1.19 Re-enlistment of Proprietorship Firm with Revised Constitution in Favour of

Legal Heirs of Contractors in case of Death of the Proprietor.
The legal heirs of a proprietorship firm shall be eligible for enlistment with revised
constitution in case of death of the proprietor provided they meet the following
conditions:-
(a) The newly constituted firm shall meet all the criteria as laid down for fresh enlistment
of the contractors except for Work experience criteria and Turnover criteria.
(b) One of the partners (in case the newly reconstituted firm seeking re-enlistment as
Partnership firm) or the legal heir seeking re-enlistment as Proprietorship firm was the
Power of Attorney holder of the original proprietorship firm and had executed work in the
original firm in such capacity to the satisfaction of the Department.
(c) Only one firm will be enlisted as reconstituted firm of the original proprietary concern
and all legal heirs other than those who are part of the reconstituted firms shall render
irrevocable under taking in the form of affidavit to the newly constituted firm in this regard.
(d) Reconstituted firm shall take over all liabilities and assets of the original
proprietary concern.
1.20 Change in Constitution of Enlisted Contractors.

1.20.1 Change in constitution of enlisted contractors shall be approved by the Registering
Authorities after proper scrutiny and verification that newly constituted firm meets the
enlistment criteria and is considered capable of executing the works. The Registering
Authority shall ensure that the incoming partner is capable of reasonably contributing to
execution as well as administration of work. In addition, the following shall be ensured to
avoid any proxy enlistment/transfer of enlistment.
(a) The share of incoming Partner(s) shall not be more than 49% individually as well as
collectively.
21
(b) The name and correspondence address of the firm shall not be allowed to be
changed (except in case of unavoidable reasons like selling of properties, Government
notification for closing/shifting of premises, damage to properties due to fire, flood,
earthquake or similar other natural calamities).
(c) The existing Proprietor/Partner(s) shall not be allowed to exit the firm before expiry
of a period of 5 (five) years from the date of approval of latest reconstitution, except in case
of death or extreme reasons like insanity /fatal accidents leading to full/partial handicap or
loss of limbs.
1.20.2 The contractors shall not be allowed for reconstitution for 5 (five) years from
date of fresh enlistment except Limited Companies and in case of death of any partner.
1.21 Joint Venture in MES Works.

1.21.1 Two firms are permitted to bid for the tender based on Joint Venture agreement
between them. Joint Venture (JV) shall not comprise more than two firms (called parties of
JV). The format of agreement is at Appendix 1.9. The JV shall be considered as un-
enlisted contractor. The JV shall submit Earnest Money Deposit for all tenders and
Performance Security Deposit as per instructions, if contract is awarded.
1.21.2 JV shall be allowed for following works:-

(a) Solar Power works of any value.
(b) PEB structure works of any value.
(c) Works for specialist E/M services with estimated cost more than
Rs 20 crore.
(d) Works other than the types at (a), (b) & (c) above with estimated cost more than
Rs 50 crore.
1.21.3 No JV shall be allowed for furniture works irrespective of estimated cost. No
JV shall be allowed to participate if either or both the parties are banned /adversely
remarked in Work Load Return of MES or debarred from tendering by any authority.
1.21.4 (a) Foreign Companies shall not be permitted to participate in JV.
(b) Indian Companies having Director(s) of foreign origin and Indian Companies having
Director(s) of Indian origin but residing abroad/ having foreign citizenship shall be permitted
to participate in JV However security clearance in such cases shall be processed as
brought out in Para 1.1(g) here in before.
(c) Case for security clearance shall be processed to E-in-C's Branch on PRIORITY
after opening 'T' bid (Cover-1).
1.21.5 A valid agreement shall exist between the parties of JV defining clearly the role,
responsibility and scope of work of each party, percentage share of each party alongwith
nomination of leader (Lead Party) for the purpose of this work and a confirmation that the
parties of the JV are jointly and severally responsible.
1.21.6 JV as a single unit or each party of the JV shall have Permanent Account Number
(PAN) and GSTIN. However if the contract is awarded to the JV, then PAN and GSTIN
shall be obtained by the JV as a single unit.
22
1.21.7 The lead party of the JV shall meet minimum 60% or the percentage of share in
the JV (whichever is higher) of the qualifying criteria pertaining to (a) past experience of
completed works, (b) Average Annual Turnover, (c) Bank Solvency/ Financially Sound for
engagement and (d) Working Capital. Both the parties combined shall meet minimum
120% of the above qualifying criteria. The party other than the lead party shall meet
minimum 30% of the above qualifying criteria.
1.21.8 Both the parties of JV shall jointly possess the required T&P, machinery and
engineering/supervisory staff. T&P can be either on ownership basis or leasehold as
stipulated in NIT/tender documents and documentary proof of the same shall be
submitted.(Other qualification criteria shall be met fully/jointly by both the parties of JV or
as a single unit of JV.)
1.21.9 JV concluded up to the date of bid submission are permitted to apply. Copy of JV
should be uploaded. The Department reserves the right to verify the particulars furnished
by the applicant JV independently. If any information furnished by the applicant JV is found
incorrect and/or misleading and / or false representation and/or deliberately suppressed
information, at a later stage, the JV and both the parties shall be liable to be debarred from
tendering/taking up of any work in MES. In case any partner of JV happens to be the
enlisted contractor of MES, disciplinary action shall also be initiated against the partner as
per instructions.
1.21.10 Party/ parties to the JV will not be allowed to bid for the same tender in their
independent capacity as well as under JV. Also no party will be allowed to bid for the same
tender under multiple JVs. In case of violation (party/parties bidding independently as well
as under JV for the same tender, party/parties bidding for the same tender under multiple
JVs), the bid of the party/parties concerned as well as the bid(s) of the related JV(s) shall
not be opened (ie shall not be qualified in 'T' bid Cover '1').
1.21.11 The lead party shall attend all progress review meetings and shall be answerable
to all issues relating to the project.
1.21.12 For any of the defaults as under of the JV, administrative action shall be taken
against both the parties of JV:-
(a) In case of non-submission of physical original documents towards cost of tender, EMD
- Barring from bidding for six months.
(b) Due to default in performance of contract etc Administrative actions as per existing
instructions.
1.21.13 Any unrealised recovery from JV shall be recovered proportionately from the
parties in proportion to their percentage share in the JV. If it is not possible to recover
proportionate share (partly/ fully) from one party, it shall be recovered from other party.
1.21.14 …The provisions of JV including its related stipulations shall be incorporated in the
NIT.
23
Appendix 1.1
I.A.F.W-2190 (Revised: 2020)
APPLICATION FOR ENROLMENT AS CONTRACTOR
I/We ………. am/are desirous of being registered on the MES List of Contractors
for the ……Area/ Command/ E-in-C’s Branch to undertake the following categories of
work (delete those inapplicable).
(a) Civil Engineering Works.
(i) Building Works

(ii) Water Supply and Sewage Disposal
(iii) Runway and Pavements
(iv) Marine and Harbour Works
(v) Roads
(b) Electrical Engineering Works.
(i) Low Tension Electric Works (upto 1100 Volts)

(ii) High Tension Electric Works (excluding 33 KV)
(iii) 33 KV and Extra High Voltage Installations
(c) Electrical /Mechanical Engineering Service.
(i) Air Conditioning and Refrigeration (HVAC)

(ii) Lifts & Escalators.
(iii) Electrically Operated Cranes
(iv) Incinerators
(v) Mechanical Laundry
(vi) Fire Fighting and Fire Detection System
(vii) Water and Effluent Treatment
(d) Miscellaneous
(i) Manufacture and Supply of Furniture

(ii) Handling of Engineer Stores and Transport
(iii) Horticulture and Land Scaping
(iv) Information Technology Services
(v) Maintenance and Operation of E/M Installation
(vi) Repair of transport Vehicles.
(vii) Energy Audit Services
24
(viii) Auction Services upto a value of Rs.…… and give below statement of
my/our capabilities and resource.
1. PARTICULARS OF CONTRACTOR.
(a) Name
(b) Proprietor/Partners/Directors
(c) Photographs (Please paste colour photograph of proprietor/all
Partners/all Directors with signature of each person across his/her
photographs)
2. CONSTITUTION DETAILS:
(a) Whether the firm is sole proprietorship concern/partnership

concern/Pvt Lt/Limited Liability partnership Company:
Enclose copy of partnership deed/Memorandum & Article of Association)
(b) Registration with Registrar of Firms:

(Enclose copy of registration certificate with Registrar of Firms /
Companies, in case of Firm being partnership/Limited Liability Partnership/Pvt Ltd
concern)
(c) For Limited Liability Partnership/Pvt Ltd Companies:
(Enclose copies of Balance Sheets of last five financial years duly audited
by Charted Accountant)
3. ADDRESS DETAILS.
(a) Address for Assessment of Income Tax (Enclose copy of Form 26 AS)
(b) Aadhar number of Proprietor/all Partners/all Directors (Enclose copy of
Aadhar Cards)
4. PARTICULARS OF EXPERIENCE/TURNOVER/FINANCIAL SOUNDNESS.
(a) Works carried out:

(Attach list showing the details of works executed during the last 05 years as per
proforma in Appendix 1.2).
(b) Turn over Achieved:

(Enclose original turn over certificates issued by Charted Accountant showing
turnover for the consecutive financial years along with self-attested copies of
Balance Sheets duly audited by the Chartered Accountant in support of claim of
eligibility)
25
(c) Limit of Solvency declared by Bank

(Enclose original solvency certificated issued by a Scheduled Bank declaring
solvency limit a containing name of signatory, his/her SS number and seal of the
Bank)
(d) Limit of Working Capital declared by Bank

(Enclose original Working Capital Certificated issued by a Scheduled Bank
declaring working capital limit and duly containing name of signatory, his/her SS
number and seal of the Bank)
5. PARTICULARS OF CONTRACTOR ORGANIZATION.
(a) Head/Registered Office……………………………………………..

With telephone &…………………………………………………….
Fax No………………………………………………………………...
…………………………………………………………………
(b) Branch Office………………………………………………………...

With telephone &…………………………………………………….
Fax No………………………………………………………………...
…………………………………………………………………
(c) Email & website Address…………………………………………...
(d) Workshop ………………………………………………………...

………………………………………………….……..
…………………………………………………….…..
(e) Particulars of persons holding power of

attorney…………………………………………………..
(f) Name of bankers………………………………………………………
(g) Particulars of all Companies or Firms or Associations of persons in which

applicant is substantially interested in his individual or fiduciary capacity
…………………………………..
(h) Whether enrolled as a member of any Builder's Association? If so, give the
name of the Association and the date of
enrolment…………………………………………………………………...
6. PARTICULARS OF SUPERVISORY STAFF:
(a) Do you supervise personally?

(b) Name and permanent address of Agents:…………………….
……………………..
……………………..
(c) Qualification: ………………………………………….....
(d) Function:………………………………………………………….
26
(e) Powers: ………………………………………………………….
7. INCOME-TAX PAN NO. (Attach copy of PAN Card of

Proprietor/Partners/Directors as well as the PAN Card of the firm/Company)
8. GST No:…………….(Attach self-attested copy of registration certificate).
9. EPF /Regn No:…(Attach self-attested copy of registration certificate).
10. ESIC Regn No…(Attach self-attested copy of registration certificate).
11. RELATIONSHIP WITH MES REGISTERED CONTRACTORS:

(a) Name of the related firm …………….………….…………………
(b) Name of the relationship …………….…………………………….
(c) Particular of his/ their registration………………………………….
12. OTHER INFORMATIONS
(a) If you are at present enlisted with any other Government Department/ Formation
etc., give-
(i) Name of formation.
(ii) Index No., Class& Category of enlistment, Tendering limit.
(iii) Locality or area for which enlisted/registered.
(iv) Letter No. and date of enlistment/registration.
(b) State whether after enlistment/registration you were ever:Removed from the list
or
Debarred from the trending
or
Black listed
(c) Contractor /firm wishing to be registered as an approved contractor shall submit a

list of those persons who are working with him/it in any capacity and who are near
relatives of any Gazetted / Commissioned Officers/Junior Engineer in the MES or Ministry
of Defence. He shall also intimate names of such person it they are subsequently
employed with him/it.
(d) Contractor shall intimate the name(s) of person(s) who are near relative(s) of the
Proprietor/Partner /Director and are working as Gazetted/Commissioned Officers/Junior
Engineers in MES or Ministry of Defence.
(e) Contractor shall not be eligible to tender for the works under following conditions:-
(aa) The works in the entire area of CE Zone where near relatives are working as
Gazetted/ Commissioned Officers.
(ab) The works in the entire area of CWE/GE (I) under whom near relatives of the
Proprietor/Partners /Directors are working as Junior Engineers.
27
(f) Any breach by the contractor/firm of the conditions at Para (c) to (e) above shall
be considered sufficient ground to debar him/it from registration or to remove him/it form
approval list.
Note: The term ‘near relative’ means children, wife, husband, parents, brother(s),
sister(s), first cousin(s), brother(s)/sister(s)-in-law, and son(s)/daughter(s)-in-law,
father/mother-in-law.
13. I/We understand that the firm once enlisted/registered shall not be permitted to
change the constitution prior to expiry of five years after enlistment, except in case of
death of Sole Proprietor or one of the Partners and that approval of such change in
constitution, whether prior to five years or after shall be subject to policies as existing at
that time. (Not applicable in case of Limited/Liability/ Partnership/ Pvt Ltd Companies.
14. I/We agree to notify the officer accepting this application and registering my/our
names on the MES list of contractors of any changes in the foregoing particulars as they
occur and to verify & confirm these particulars annually on 1st January.
15. I/We agree to execute a BOND in favour of the President of India in the form and
to the amount prescribed as security against proper performance of work entrusted to
me/us for execution in accordance with the applicable conditions of contract, as condition
precedent to my/our name being registered on the MES list of Contractors.
16. I/We understand and agree that the appropriate MES Authority has the right as he
may decide, not to issue tender form in any particular case and also to suspend, debar,
down grade, remove or black-list my /our name from the MES. List of Contractors in the
event of my /our submission of non-bonafide tender or for technical or other delinquency
in regard to which the decision of the appropriate MES Authority shall be final and
conclusive.
17. I/We certify that the above particulars are correct and that should it be found that
I/we have given a false Certificate, or that if I/we fail to notify the fact of my/our subsequent
amalgamation with another contractor or firm, my/our name will be removed from the
MES List of Contractors and any contract that I/We may be holding at that time is liable
to be rescinded.
18. I/We undertake not to employ directly or indirectly any *Army Personal dismissed
from the service in my/our business.
19. I/We note that registration as MES Contractor does not carry with it the right to
tender for MES work.
Notes:-
1. All partners/Director to sign on each page of the application form and also at the
end.
2. All copies of documents to be self attested by Proprietor/ Managing Partner or

Partner of the firm authorised for this purpose/Managing Director of the firm authorised
for this purpose.
28
3. All the declarations affidavits to be signed by Proprietor/Managing Partner or

Partner of the Firm authorised for this purpose/Managing Director or Director of the firm
authorised for this purposed on and non-judicial stamp paper of requited value.
4. Banker’s Certificate shall be submitted in original.
5. Turn Over Certificate by Chartered Accountant shall be submitted in original.
Signature of Contractor………….
(All partners/Directors to sign) Date……………...………………………
*The term “Army Personnel’’ is intended to include Government Servants also.
FOR MES USE ONLY

(To be appropriately completed by the MES Registering Authority)
Registered as a MES contractor for Category)…………………………………… In

(class)................................. with an upper financial notation
of Rs. ……………………………….for work in............................... Area /Command/Pan
India.
Signature…………….…………………
Designation…………………………….
Date……………….……………………
29
Appendix 1.2
LIST OF WORKS EXECUTED AND COMPLETED DURING THE PRECEDING FIVE

YEARS IN CENTRAL GOVT/STATE GOVT/PSU/AWHO/AFNHB/CGEWHO
SI CA No. & Amount Formation Date of Original/Sc Actual Date of Whether Remarks
No Name of of viz CE, Commence- heduled Completion invoked
Work Contract CWE, GE ment Date of Arbitration
or Office of Completion /Litigation.
other Deptt. If yes the
including outcome
their of the
Complete same
Postal
Address,
Fax No.
and email
ID
(1) (2) (3) (4) (5) (6) (7) (8) (9)
30
Appendix 1.3
Bank Address and Code No.
FORM OF SOLVENCY CERTIFICATE FROM THE NATIONALISED/ SCHEDULED

BANK
This is certified that to the best of our knowledge and information

Shri/Smt…………..having address……………., a customer of our bank are/is
respectable and can be considered solvent upto Rs…………………. (Rupees
………………..)/financially sound for any engagement upto Rs…………………. (Rupees
………………..). This certificate is issued without any guarantee or responsibility on the
bank or any of the officer(s).
(Signature)
Name, Designation and Personal
Code No of Signatory& Seal of bank
Complete Postal Address,
Telephone No, e-mail ID of Branch
FORM OF WORKING CAPITAL CERTIFICATE FROM NATIONALIZED/

SCHEDULED BANK
This is certified that Shri/Smt..…………………..having address…………………has

/have been maintaining a Saving Bank Account /Current Account/ Fixed Deposit Account
with this Branch of bank since…………………and the firm is having working capital of
approximately Rs ………………………… and/ or the firm is enjoying overdraft/credit
facilities upto limit of Rs …………………………. This certificate is issued without any
guarantee or responsibility on the bank of any or the officer(s).
(Signature)
Name, Designation and Personal
Code No of signatory& seal of bank
Note: In case of partnership firm, certificate shall include names of all partners as
recorded with the bank.
31
Appendix 1.4
CHECK LIST FOR ENLISTMENT/UPGRADATION OF CONTRACTOR
1.0 Categories of Work.

1.1 Check whether the contractor is having sufficient experience and expertise for the
categories of works applied for. It not, eliminate the categories of works not considered
fit.
1.2 Check whether the contractor is having adequate resources generally in all cases
and in respect categories of works in particular.
2.0 Particular of Experience and Enlistment in other Department and Class of

Contractor.
2.1 Check whether the list of works carried out indicates clearly the names of work,
approximate cost thereof, dates of commencement and completion, whether completed
or not, and percentage progress if work is incomplete, name (and designation) of the
officer /Agency/Department allotting the work together with full & correct postal address,
contact number including FAX number and email ID. Make a reference to the concerned
Department under a confidential letter to ascertain the performance, financial position,
adherence to time schedule and workmanship etc. Be on look out for any newspaper
report about the adverse criticism about any works included in the list by the contractor.
2.2 Verify correctness of particulars of enlistment with the other Departments through
a confidential letter and also ascertain the present work load in that Department.
2.3 Check whether the class for which contractor has applied for is commensurate
with the values of individual works carried out by the contractor.
3.0 Financial Soundness.
3.1 Check whether the contractor has given Solvency Certificate and Working Capital
Certificate from his Bankers on requisite format. This certificate should indicate the code
number of the Bank, Name, Designation and personal code number of the signatory to
certificate, complete postal address, telephone number & email ID of Branch.
4.0 Particulars of Contractors.

4.1 Check that the contractor has intimated whether it is a proprietorship concern or
partnership concern or a Private Limited Concern or a Limited Liability Partnership (LLP)
concern.
4.2 In case of proprietorship concern the contractor should give an affidavit stating that
he is the sole proprietor of the firm working in the name & style of “…...............................”
( Name the firm).
4.3 In the case of partnership concern check whether the partnership deed as well as a
certificate from the Registrar of Firms has been furnished.
4.4 In the case of Private Limited concern check whether the Memorandum and Article
of Association of the firm, certificate from the Registrar of Companies as well as latest
32
balance sheet duly audited, certified and signed by Chartered Accountant has been
furnished.
4.5 Check whether list of Partners, Directors, as applicable and their full postal
address is given for verifying the antecedents.
4.6 Check whether photographs of Proprietor, all Partners and all Directors as
applicable are given duly signed and attested.
4.7 Check whether full particulars of individuals/firms who are already enlisted in MES
and who are near related to the contractor are given.
4.8 Check whether the contractor has given a list of persons working with him in any
capacity and who are near relatives of any Gazetted/Commissioned Officer(s)/ Junior
Engineer(s) in MES or Ministry of Defence.
4.9 Check whether contractor has given list of persons who are near relatives of
Proprietor/Partners/Directors of the firm and are working as Gazetted/ Commissioned
Officer (s)/Junior Engineer(s) in MES or Ministry of Defence.
4.10 Check whether the Power of Attorney given to individuals/Partners/Directors

authorizing them to do all acts for and on behalf of the firm includes powers to refer
disputes to Arbitration as well as to bind the Proprietor /all the Partners /Directors etc to
all conditions including the Arbitration Clause.
5.0 Verification of Antecedents.

5.1 Before enlistment /provisional enlistment of the firm, check the character and
antecedents of Proprietors/ all Partners / all Directors of the firm through the Police
Authorities.
5.2 In case of foreign nationals and non resident Indians verify the character and
antecedents as per instructions on the issue.
6.0 Miscellaneous Points.
6.1 Check whether the particulars in Enlistment Form IAWF-2190 are properly
completed and signed.
6.2 Check that the firm is not debarred/black listed/ suspended for business.
7.0 Ensure that list of documents /requirements to be furnished by the applicant is

forwarded to the applicant alongwith the Enlistment Form.
33
Appendix1.5
SPECIMEN ENLISTMENT LETTER
Tele: ………………… Registered

(Office)
File No. Dated

M/s……………………
………………………..
………………………..
ENLISTMENT OF CONTRACTORS IN MES
Dear Sir (s),
1. Reference your letter Nos. ………………….
2. Enlistment of your firm has been approved by the Registering Authority in MES as
……………………. Class contractor for the following categories of works:-
(a)
(b)
3. Index No………………….. is allotted to you, which shall be quoted by you in all

future correspondence. The other details are as per Appendices A& B.
4. Please note that any change in name/style and constitution of the firm shall require
prior approval of Registering Authority. Also note that change in constitution shall not be
allowed in case of Proprietorship/Partnership firms ( except in case of death of the
Proprietor/ Partner or extreme reasons like insanity /fatal accidents leading to full/partial
handicap or loss of limbs) for a period of five years from the date of fresh enlistment/latest
change of constitution. Please also intimate any change in your permanent address.
5. Please note that you will be required to strictly ensure engagement of engineers and
deployment of 'T&P, Machinery and Transport' as stipulated in the contracts. Inadequate
engagement of engineers/deployment of 'T&P, Machinery and Transport' as per the
contract conditions shall be considered as serious lapse attracting ban/removal/
downgrading/suspension of the Firm/Company.
6. Please note that you will either obtain valid Electrical Licence of required class in your
name or engage an agency having valid Electrical Licence of required class through proper
agreement/ MoU (Memorandum of Understanding) for execution of all electrical works as
well as works under category (c) [including its sub categories (i) to (vii)] and the category
(d)(v) (as applicable) to the extent Rule 29 under Part III of Central Electricity Authority
(Measures Relating to Safety and Electric Supply) Regulations, 2010 is applicable either in
full or part of the scope of work of contract awarded to you. All such electrical works shall
be executed by you through such agency only (either yourself or other agency) having valid
Electrical Licence of required class. Such Electrical Licence shall be obtained from the
concerned authorities of State Government/Union Territory where the works are to be
34
executed. Any violation of this condition shall be sufficient reason for taking such
disciplinary action as deemed fit by the Registering Authority apart from other
recourse/remedy available to the Department under the conditions of contract for such
lapses.
7. Please ensure submission of your audited balance sheet and profit and loss
statement regularly as per your Memorandum and Article of Association of your firm
(Applicable for class SS contractors)
8. Please note that signatory of correspondence with the Department shall clearly
mention name and authority under which he/she is communicating. No cognisance of
letters without these details may be taken and you shall be solely responsible for
consequence of such correspondence.
9. (a) You will keep the Registering Authority informed about the persons working
with you, who are near relatives of any Gazetted/Commissioned officer or Junior Engineer
in MES/Corps of Engineer/Ministry of Defence. Similarly, you will also intimate the name of
the persons who are near relatives of the Proprietor/Partner/Directors and working as
Junior Engineers and /or Gazetted/ Commissioned Officer in the MES/Corps of
Engineer/Ministry of Defence.
Please note that you will not be entitled for issue of tender in certain areas, where you near
relative is working, after examining the information from the concerned officer. Decision of
the Registering Authority shall be final.
Note: The term “near relative” means husband, wife, parents, children, brothers, sisters,
first cousin, sisters/brothers in law, son/daughter in law, or father/mother in law.
(b) Any breach of above condition by you shall render your firm liable to be removed from
the approved list of contractors of the department.
10. Please note that upper tendering limit of 'Unlimited' does not construe or guarantee
eligibility for all works. Government reserves right to notify criteria for performance and
capacity parameters as prerequisite for eligibility in NIT for certain works (Applicable for
class SS contractors).
11. Please note that if you fail to secure any work in MES/DG MAP or any Govt Deptt
/PSU/AWHO/AFNHB/DGNP/CGEWHO or in any other Government Department within a
period of five years from the date of issue of this letter, your firm will be liable for removal
from the list of approved contractors.
12. Please note that MES authority has the right as it may decide, not to issue tender
form in any particular case and also to suspend, downgrade, remove or black list your name
from the MES list of contractors in the event of submission of non-bonafide tenders or for
technical or other delinquency in regard to which the decision of the appropriate MES
Authority shall be final and conclusive.
13. Please browse the site www.mes.gov.in periodically to gather various information and
instructions issued by the Department.
35
*14. Please note that your enlistment is valid upto 31 Dec………………. and the
application for renewal will be required to be submitted by the date as notified/ conveyed
through website during the process of renewal.
Yours Sincerely,
Encls: (Appendices ‘A’ &‘B’) For Registering Authority
Copy to:-
PCDA/CDA (Speed Post)
Other Formations by uploading the letter on MES website
Note: Letter shall be physically dispatched to contractor and CDA/PCDA only.
* This Para is not applicable for ‘E’ class contractor.

36
Appendix ‘A’
DETAIL OF ENLISTMENT OF CONTRACTORS
Sl Index Name of the Categories Particulars of SSD & SSB Name Consti
No No Contractor of Works Whether Whether For of the tution
&Address Standing SS Bond mati Related of
including Names Security Executed on Firm, Firm
of Proprietor Deposited if any
/Partners/Directo
rs E mail ID,
Fax, Contact No
1 2 3 4 5 6 7 8 9
For Registering Authority

37
Appendix ‘B’
SPECIMEN SIGNATURE & PHOTOGRAPHS OF

PROPRIETOR/PARTNERS/DIRECTORS
1. Specimen Signatures
2. Photographs attested by an officer of E8 Section:-
(a)
(b)
(c)
38
Appendix1.6
BOND TO SECURE PERFORMANCE OF AGREEMENT
Known all men by these present that I/we……………….of ……………….

(hereinafter referred to as the obligor(s) am /are held and firmly bound unto the President
of India (hereinafter called the Government) in the sum of Rupees to be paid to the
Government, for which payment well and truly to be made. I/we bind myself/ourselves /
our successors jointly and severally & my/our respective heirs, executors, administrators,
assigns and legal representatives firmly by these presents.
Signed this………..day of…………… Two thousand and……………
WHEREAS:
(a) The obligor (s) has /have entered into and /or is/are likely to enter into certain
contract with the Government, within………………..... Division/Area/Command/India/ (all
such contracts existing as well as future to be hereinafter collectively referred to as ‘the
said contracts’);
(b) In respect of each of the said contracts the obligor (s) is/are required to make a
certain security deposit for the due performance of that contract;
(c) The obligor(s) has /have a security deposit of Rs………………… (Rupees)

…………………………... in the form of Post Office (PO) savings certificates/PO Bank
Accounts/Bank Fixed Deposits /Approved Securities endorsed in favour of
PCDA/CDA…………. Command/in favour of the President, and of the market value of
Rs. ...............(Rupees..............................)
and delivered to ..........................(hereinafter referred to as the 'said security deposit')
and
(d) At the request of the obligor(s) the Government. has agreed to accept from
him/them a security deposit of rupees in the form of PO Savings Certificates/Approved
Securities in respect of all the said contracts on the condition of the obligor(s) executing
a bond on the term and condition appearing hereinafter which the obligor(s) has/have
agreed to do.
Now the condition of the above written bond is such that if the obligor(s) shall well
and truly execute the work or works described in the said contracts and well and truly
observe, perform and fulfil all the provisions, stipulations and conditions contained in the
said contracts to the satisfaction of the Garrison Engineer (I)/GE/AGE(I) for the time being
in charge of the said work or works and shall fully indemnify and save harmless the
Government and its officers from all and every loss and damage which shall or may at
any time or times hereafter happen to or be sustained by the Government and its officer
through any default of the obligor(s) in carrying out the said contracts or by, from or
through the neglect, failure, misconduct, disobedience, omission or insolvency of the
obligor(s) or any person or persons nominated, accepted by or serving under the
obligor(s) or by, firm, or through the consuming, wasting, embezzling, stealing,
misspending, losing, misapplying or otherwise dishonestly or negligently or through
oversight or violence, making away or parting with any Government property under the
control of the obligor(s) or advances made by Government to the obligor(s) or any part
39
or parts thereof by any person or persons whomsoever, then this obligations shall be void
and of no effect otherwise the same shall be and remain in full force and virtue.
(e) Provided always and it is hereby further agreed;
(i) That all compensations or other sums of money payable by the obligor(s) to the
Government under the terms of any of the said contract(s) or any other contracts made
with the Government in respect of Division /Area/Command other than Division/Area/
Command/PAN India may be deducted from or paid by the sale of a sufficient part of the
said security deposit or from the interest arising there from and in the event of the said
security deposit being reduced by any such deduction or sale as aforesaid the obligor(s)
shall within fourteen days thereafter make good the deficiency so caused by making
further deposit in the form or PO Saving Certificates or Approved Securities endorsed as
aforesaid.
(ii) That the Government shall not be responsible for any loss of PO Saving Certificate
/Securities or in the case of securities for any depreciation in their value while in the
charge of the Government nor for any loss of interest thereof.
(iii) That the said security deposit will be refunded to the obligor(s) on production of a
“No Demand Certificate” (IAFA-451) provided the following conditions are fulfilled:-
(aa) there are no claims outstanding against the contractor.
(ab) The defect liability period in respect of last contract executed by the contractor has
expired and there is no recovery outstanding on account of any defect/ distress in the
works.
(ac) Guarantee periods in all contracts executed by the contractor are over.
(ad) Final bills in respect of all contracts have been paid.
(ae) Requisite Performance Security is held against all contracts in hand.
(iv) That the obligor(s) shall bear the stamp duty payable on these presents. In witness
thereof these presents have been signed the day hereinabove mentioned by the
obligor(s).
In the presence of;
1. Sd/…………………………………….
Address……………………………….
2. Sd/…………………………………….
Address……………………………….
The above bond is accepted by the President of India.
For and on behalf of the President

Sd/- ……………………...………
(Name and Designation)..……….
(Registering Authority)
40
Notes:-
1. In case of sole Proprietorship firm, the bond shall be signed by the Proprietor.
2. In the case of a Partnership firm the name and address of all the Partners
constituting the firm shall appear in the obligatory parts of the bond and the bond should
be signed by all Partners or by a person (whether a partner or not) holding power of attorney
from all the Partners.
3. In case of a Company whether public or private, the bond shall be got executed in
the light of and in accordance with the Memorandum and Articles thereof.
Signature of Sole Proprietor/Partners/Directors

41
Appendix 1.7
STANDARDISED CODE FOR REGISTERATION, SUSPENSION, REMOVAL OF AND

BANNING OF BUSINESS ETC WITH BUILDING CONTRACTORS
1. A copy of the revised standardised Code on the subject quoted above as circulated
under ministry of Works and Housing (Works division office memorandum No 13011/1/72-
W.4 dated 20 Sep 1976 received under Ministry of Defence U.e. No. 1(i)/S/76-D (Coord)
dated 20 Oct 1976 is forwarded herewith as Appendix ‘A’. This Code shall supersede the
Code on the subject issued vide Ministry of Works and Housing office Memorandum No
13011/3/68-W dated 23 Apr 1968 and circulated under this HQ letter No 36461/P-1/E8
dated 18 Nov 1969 and shall be followed with immediate effect.
2. Additional copies of this letter are forwarded to each of list ‘B’ formation, to enable
them to distribute the same down to CsWE, GEs and AGEs(I)
(Name)
Rank
Designation
Encls : Appendix ‘A’
Copy to :-
Commandant CME Pune (06 copies)
HQ DGBR (E8) (17 copies)
(QMG’s Branch / CTE Dte)
Internal Distribution
E2 (WPC), E2 (Army), E2 (Navy), E2 (Air), E2 (DP), CPT, E2 (Plg), E4 & E6 : Works

Study & E3 (Gen)
42
Appendix ‘A’ to E-in-C’s

Letter No 86461/P-1/ES dated
24 Nov 76
Copy of office Memorandum No 13011/1/72-W.4 dated 20 Sep 1976 from Ministry of works
and Housing (Works Division) to all the Ministries / Departments of the Government of India
received vide Min of Def U.O No 1(1)/S/76-D (Coord) dated the 20th October 1976
STANDARDISED CODE FOR REGISTERATION SUSPENSION, REMOVAL OF AND

BANNING OF BUSINESS ETC. WITH BUILDING CONTRACTORS
1. The undersigned is directed to say that keeping in view of the recent supreme Court
judgement having bearing on the standardised Code a revised Code has since been
prepared in place of the circulated vide this Ministry OM No 13011/3/68-W dated 23 Apr
1968 and a copy thereof is enclosed for information and guidance.
2. In the Standardised Code no proforma of the show cause notice has been
prescribed. In order to have uniformity in similar situation as to how they should act while
initiation any action for removal from registration / suspension / banning for business etc.
With the contractors provided under clause 6.1 and 7.5 of the code certain guidelines have
been prescribed. These may please be seen in Appendix I of the code.
3. It is requested that this code may now be followed by all Ministries / Departments of
the office memo may please be acknowledge.
4. The receipt of this office memo may please be acknowledged.
(NAME)
Deputy Secretary to the Government of India
Standardised Code for registration, demotion, removal, suspension of business and

banning of business etc of Building Contractors.
1. Standardised Code for Building Contractors
1.1 This Code is for dealing with building contractors. All Ministries, Departments and
Officers of the Central Government shall follow this code and shall not maintain any
separate code to their own. This code enunciates the broad guiding principles governing
registration, promotion, demolition, removal, suspension of business and banning of
business of contractors.
1.2 No reference to this Code shall be made in any circumstances in any communication
to any party outside the Government of any pleading of affidavit filed in a court.
43
2. Registration
2.1 Every Engineering Department which is required to undertake construction work,

should maintain lists of approved contractors of various categories and classes, and
normally works for execution should be entrusted to contractors on approved lists only for
this purpose, every Engineering Department should have a system of registration of
contractors of different categories and classes based on the financial recourses, technical
capability past performance and dependability of each contractor.
2.2 It is also desirable that list of registered contractors in different categories and
classes should be periodically viewed by registering authorities for weeding out from the
approved lists such contractors who have not secured any work during a period of three
consecutive years.
3. Demotion to a Lower Class
The registering authority may demote a contractor to a lower class if he :-
(a) Fails to execute a contract or executes it unsatisfactorily or is proved to be

responsible for constructional defects : or
(b) Has no longer adequate equipment, technical personnel or financial recourses : or
(c) Litigious nature.
(d) Violates any important conditions of contracts : or
(e) is responsible for a conduct which may justify his demolition to a lower class.
4. Suspension of business
4.1 Suspension of business with a contractor may be ordered by the registering

authority for an indefinite period where pending full inquiry into the allegations, the
registering authority is prima facie of the view that the contractor is guilty of an offence in
relation to business dealing and it is not considered desirable to entrust now or continue
business with the contractor.
4.2 Where a contractor is suspected to be disloyal to the state, the Ministry of home
Affairs may pending investigation into the allegations require Government departments to
suspend business with the contractor for an indefinite period. In such a case the registering
authority will issue orders to suspend business with the contractor in so far as it is feasible
under the existing terms and conditions of the contract.
4.3 Suspension of business with a contractor for a specified period may be ordered by
the registering authority when the contractor is responsible for some minor technical
offence (s) or when he fails to furnish the required Income-tax Clearance Certificate. In
such a case, the fact of suspension should be communicated to the contractor giving
reasons for the same. This action need not be communicated to Ministry of Defence and
other ministries.
44
5. Removal from the Approved List

The registering authority may remove the name of a contractor from the list, if the
contractor:
(a) On more than one occasion, failed to execute a contractor or has executed it
unsatisfactorily : or
(b) Is proved to be responsible for constructional defects in a number of cases : or
(c) Persistently violates any important conditions of the contract : or
(d) Fails to abide by the conditions for registration or is found to have given false
particulars at the time of registration : or
(e) Is found to have given false information at the time of registration : or
(f) Is declared or is in the process of being declared bankrupt, insolvent, wound up,
dissolved or portioned : or
(g) Persistently violates the labour regulations and rules.
6.1 The decision regarding removal from registration / suspension of business / removal
from approved list taken after the issue of a show cause notices and consideration of
representation, if any, in reply there to should be communicated to the firm concerned
(kindly see Annexure-1).
6.2 Copies of the orders of demotion / suspension of business / removal from the
approved list, with a memorandum of reasons therefore shall be sent by the concerned
Department, through its administrative Ministry to the other Ministries response for major
construction works for such action as they may deem necessary.
6.3 In respect of a contractor registered for various categories of works viz building and
roads, furniture, electrical sanitary and water supply, order regarding removal would apply
only to one category unless otherwise specified.
6.4 The Ministries of Defence, railways, Works and housing, Irrigation and Power,
Shipping and Transport, information and broadcasting are the ministries concerned with
major construction works.
7. Banning
7.1 Banning of business dealing with a firm / contractor shall be of two types :-
(a) Banning by one Ministry including its attached and subordinates offices
(b) Banning of all Ministry of the Government of India including their attached and
subordinates offices.
7.2 The head of the Department may ban business with a firm / contractor where an
offence is not considered serious enough to merit a banning order of the second type, but
at the same time an order removing the name of the contractor from the approved list of
contractors is not considered adequate. It shall not be circulated to other Ministries /
Departments but shall cover all the attached / subordinates offices of the Ministry issuing
the order. It shall be extended to the allied firms and the partners also. No contract of any
45
kind whatsoever shall be placed with a banned firm including its allied firms or partners by
the Ministry / Department issuing the order and its attached and subordinates offices offer
the issue of a banning order. Contracts concluded before the issue of the banning order
shall however, not be affected by the banning order.
7.3 Banning by all Ministries

An order of the second type for banning business dealing with contractor implies
that all Ministries / Departments / offices of the Government of India are forbidden from
dealing with that contractor. Banning of this and revocation thereof shall be ordered with
the approval of the Ministry of Defence. It shall be extended to all the allied firms and
partners, and the banning order should specify the names of such allied firms and partners.
No contract of any kind whatsoever shall be placed with a banned firm including its allied
firms by any ministry/Department/Office of the Government of India after the issue of a
banning order.
7.4 Banning of business of all Ministries may be ordered where :-
(a) There are sufficient and strong evidence on record to believe that the contractor or
his employees have been guilty of malpractice (s) such as bribery, corruption, fraud
including substitution and interpolation in tenders, pilfering or unauthorised use of disposal
of Government materials issued for a specific work, obtaining income-tax Clearance
certificate by underhand means obtaining official information or copies of official documents
by adopting questionable methods etc : or
(b) A contractor continuously refuses to pay Government dues without showing

adequate reasons and where the Head of Department IS SATISFIED that no reasonable
dispute attracting reference to arbitration or Court of Law exists for the contractor’s action
: or
(c) A contractor or his partner or his representative has been convicted by a Court of
Law for offences involving moral turpitude in relation to business dealing : or
(d) Security considerations including suspected disloyalty to the state so warrant.
7.5 The decision regarding removal from registration suspension banning of business
dealing taken after the issue of a show cause notice and consideration of representation,
if any, in reply thereto should be communicated to the firm concerned, but reasons may not
be disclosed in such communications (Kindly see Annexure-1).
7.6 Fifty copies of such orders together with reasons for the action taken as also names
of partners and list of allied concerns coming within the effective influence of the contractor
will be forwarded by the administrative Ministry concerned to the Ministry of Defence for
transmission to other Ministries of Central Government responsible for major construction
to the department under their control for immediate cessation of all future business with the
contractor.
7.7 Action for banning business with contractor should be taken only where it is
established that the offence was committed in order to secure advantage to the contractor
and not where the object may be to secure advantage to any employee or representative
of the contractor personally.
46
7.8 Case should be taken to see that banned contractor dues not transact business with
Government under a different name of title or enough a benamdar.
7.9 Once the banning orders are issued, they should ordinarily not be revoked, unless :-
(a) On a review, the administrative Ministry concerned is of the opinion that the
punishment already undergone is adequate in the circumstances of the case : or
(b) in respect of the same offence the accused has been honourably acquitted by a
Court of law.
8. Maintenance of upto date list
The Registering Authority shall be responsible for keeping upto date list of
contractors with whom business has been banned and circulate the list periodically to all
the Ministries of the Govt of India concerned. The Registering Authority will also circulate
every quarter a list of additions and revocation during the previous quarters.
9. Registration
Upgrading demoted contractor, lifting the ban on business, restoring registrations,

withdrawal of business may be considered at an approximate time on the merits of each
case by the authority who had passed the original orders. Copies of restoration orders
should also be furnished by the administrative Ministry concerned to be Ministry of Defence.
47
Annexure-1
THE GUIDELINES ABOUT THE CONTENTS AND PROCEDURE TO SHOW CAUSE
NOTICE REFERRED TO BE CLAUSE 6.1 AND 7.5 OF THE STANDARDISED CODE
(a) Which officer should give - The registering authority is competent to

the show cause Notice issue show cause Notice.
(b) Period of Notice - The period of Notice should be 30 days.
(c) Manner of service - Notice should be served by Registered

post
(d) Persons to be served with - Notice to be served on the contractor
the Notice concerned
(e) Brief ground for giving the - To indicated enumerating instances of

show cause notice bad workmanship and other specific
allegation for action proposed.
(f) Manner of considering the - The registering authority should consider

reply the replies and take decision in
consultation with the authority mentioned
in the code.
(g) Law and to what extent - The decision be communicated to the

concerned party by the registering
authority by registered A.D
48
Appendix 1.8
SPECIMEN LETTER FOR REMOVAL OF CONTRACTOR
Case 1 : Where contractor himself desires that his name be removed.
To
________
________
________
REMOVAL FROM THE APPROVED LIST
Dear Sir(s)
1. As desired by you, your name is removed from the list of approved contractors of E-
in-C’s Branch/Command/Area.
2. Action to release your Security Deposit/Standing Security Bond is in hand.
Yours faithfully
………………..
Copy to :
All concerned
__________________________________________________________________
Case 2 : For any reason mentioned in the Standardised Code.
To
________
________
________
REMOVAL FROM THE APPROVED LIST
Dear Sir(s)
1. Reference show cause notice issued vide this office letter.........................
2. Your reply submitted vide letter No ______dated _____has been considered and
_______(to be suitably drafted as per facts and merit of the case)
3. In view of above, your name is hereby removed from the list of approved contractors
of E-in-C’s Branch/Command/Area.
Yours faithfully
………………..
Copy to :
All concerned
49
Appendix 1.9
Format for Joint Bidding Agreement for Joint Venture
(to be executed on stamp paper of appropriate value)
THIS JOINT BIDDING AGREEMENT is entered into on this the ............day of.............20
AMONGST
1.............................having its registered office at.......................(hereinafter referred to as

the 'First Part' which expression shall, unless repugnant to the context include its
successors and permitted assigns)
AND
2. ............................................., having its registered office at...................(hereinafter

referred to as the 'Second Part' which expression shall, unless repugnant to the context
include its successors and permitted assigns)
The above mentioned parties of the FIRST and SECOND PART are collectively referred to
as the "Parties" and each is individually referred to as a "Party"
WHEREAS,
(A) The Military Engineer Services, represented by its (Name of tendering office) and
having its office at.............................(hereinafter referred to as the "Authority" which
expression shall, unless repugnant to the context or meaning thereof, include its
administrators, successors and assigns) has invited bid by its
Tender ID No......................for......................(name of work).
(B) The Parties are interested in jointly bidding for the tender as member of a Joint
Venture and in accordance with the terms and conditions of the tender document in respect
of the work, and
(C) It is necessary condition under the pre-qualifying criteria (PQC) that the Parties of
the Joint Venture shall enter into a Joint Bidding Agreement and furnish a copy thereof with
the Application.
NOW IT IS HEREBY AGREED as follows:-
1. Definitions and Interpretations. In this Agreement, the capitalised terms shall,

unless the context otherwise requires, have the meaning ascribed thereto under the PQC
in the Notice Inviting Tender.
2. Joint Venture.
(a) The parties do hereby irrevocably constitute a Joint Venture for the purpose
of jointly participating in the Bidding Process for the project.
50
(b) The Parties hereby undertake to participate in the Bidding Process only through this
Joint Venture and not individually and/or through any other Joint Venture constituted for
this Project, either directly or indirectly.
3. Covenants. The Parties hereby undertake that in the event the Joint Venture is
declared the selected Bidder and awarded the contract, it shall perform all its obligations
as the Contractor in terms of the Contract.
4. Role of the Parties. The Parties hereby undertake to perform the roles and
responsibilities as described below:-
(a) Party of the First Part shall be the Lead member of the Joint Venture and
shall have the power of attorney from the other Party for conducting all business for
and on behalf of the Joint Venture during the Bidding Process and execution process
as well as post execution process.
(b) Party of the Second Part shall be the Member of the Joint Venture.
5. Joint and Several Liability. The Parties do hereby undertake to be jointly and
severally responsible for all obligations and liabilities relating to the Project and in
accordance with the terms and conditions given in the NIT and Tender Documents.
6. Field of Expertise. The Parties do hereby declare that the field of expertise of the
parties are as under:-
(a) First Party………………………………
(b) Second Party………………………….
7. Share of Work in the Project. The parties agree that the proportion of the Contract
to be allocated among the parties shall be as follows:-
(a) First Party……………………………..
(b) Second Party…………………………
8. Representation of the Parties. Each Party represents to the other Party as of the
date of this Agreement that:-
(a) Such Party is duly organised, validly existing all in good standing under the laws of
its incorporation and has all requisite power and authority to enter into this Agreement.
(b) The execution, delivery and performance by such Party of this Agreement has been
authorised by all necessary and appropriate corporate or Governmental action and a copy
of the extract of the charter documents and board resolution /power of attorney in favour of
the person executing this Agreement for the delegation of power and authority to execute
this Agreement on behalf of the Joint Venture party is annexed to this Agreement, and will
not, to the best of its knowledge: -
(i) Require any consent or approval not already obtained.
(ii) Violate any applicable law presently in effect and having applicability to it.
51
(iii) Violate the Memorandum and Articles of Association, by-laws or other

applicable organisational documents thereof.
(iv) Violate any clearance, permit, concession, grant, license or other

Governmental authorisation, approval, judgement, order or decree or any mortgage
agreement, indenture or any other instrument to which such Party is a Party or by
which such Party or any of its properties or assets are bound or that is otherwise
applicable to such Party; or.
(v) Create or impose any liens, mortgages, pledges, claims, security interest,
charges or encumbrances or obligations to create a lien, charge, pledge, security,
interest, encumbrances or, mortgage in or on the property of such Party, except for
encumbrances that would not, individually or in the aggregate, have a material
adverse effect on the financial condition or prospects or business of such Party so
as to prevent such Party from fulfilling its obligations under this Agreement.
(c) This Agreement is the legal and binding obligation of such Party, enforceable in
accordance with its terms against it; and
(d) There is no litigation pending or, to the best of such Party's knowledge, threatened
to which it or any of its Affiliates is a Party that presently affects or which would have a
material adverse effect on the financial condition or prospects or business of such Party in
the fulfilment of its obligations under this Agreement.
9. Termination. This Agreement shall be effective from the date hereof and shall
continue in full force and effect until completion of Defect Liability Period under and in
accordance with the Contract, in case the Project is awarded to the Joint Venture. However,
in case the Joint Venture does not pre-qualify for the Project or does not get selected for
award of the Project, the Agreement will stand terminated in case the Applicant does not
pre-qualify or upon return of the Bid Security by the Authority to the Bidder, as the case
may be.
10. Miscellaneous.
(a) This Joint Bidding Agreement shall be governed by Laws of India.

(b) The Parties acknowledge and accept that this Agreement shall not be
amended by the Parties without the prior written consent of the Accepting Officer.
IN WITNESS WHEREOF THE PARTIES ABOVE NAMED HAVE EXECUTED AND

DELIVERED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN
SIGNED, SEALED AND DELIVERED SIGNED, SEALED AND DELIVERED
For and on behalf of
LEAD member by: SECOND PART
(Signature) (Signature)
(Name) (Name)
(Designation) (Designation)
(Address) (Address)
WITNESS - In the presence 1. ……………2. ……………

52
SECTION 2
EARNEST MONEY DEPOSIT, PERFORMANCE SECURITY DEPOSIT AND BANK

GUARANTEE BOND FOR PERFORMANCE SECURITY DEPOSIT
2.1 Earnest Money Deposit (EMD)
2.1.1 The scale for earnest money to be lodged by contractors will be as follows:-
SI. Estimated cost of works Earnest money

No
(i) Upto ` 50 lakh 2% of the amount subject to a
minimum of ` 5000/-
(ii) Over ` 50 lakh and upto ` 1,00,000/- + 1.5% of amount
` 100 lakh exceeding `.50 lakh

(iii) Over ` 100 lakhs and upto ` 1,75,000/- + 1% of amount exceeding
` 500 lakh `.100 lakh

(iv) Over ` 500 lakh and upto ` ` 5,75,000/- + 0.50% of amount
1500 lakh exceeding Rs.500 lakh
(v) Over ` 1500 lakh ` 10,75,000/- + 0.50% of amount
exceeding Rs.1500 lakh subject to
maximum of Rs. 15 lakh
2.1.2 A contractor, who is not enlisted with MES/who is enlisted but has not
executed the Standing Security Bond, while submitting a tender shall be
required to furnish Earnest Money along with the tender, as calculated in
accordance with the scale given in Para 2.1.1 above, A contractor who is
enlisted and who has lodged the “Standing Security Deposit” and executed
a Standing Security Bond shall not be required to furnish Earnest Money
Deposit alongwith the tender.
2.1.3 The Earnest Money will be refunded to the contractor after the Performance
Security Deposit (refers Para 2.2 hereinafter) is lodged by the contractor. As
an alternative, Earnest Money deposited along with the tender may be
converted into part of “Performance Security Deposit” wherever such a
transaction is feasible, in which event, the contractor shall lodge the balance
amount of “Performance Security Deposit”, with the Accepting Officer, within
twenty eight days of receipt by him of notification of acceptance of tender,
failing which action as in Para 2.2.2 here-in-after shall be taken.
2.1.4 Acceptable Forms of Earnest Money Deposit (EMD)
(a) Acceptable forms of EMD are as follows:-
(i) Government Securities At 5 percent below market

price or at face value, which
ever is less.
(ii) Deposit Receipts of the State Bank At market price
of India and its Subsidiaries or other
53
Nationalised banks and Scheduled

banks.
(iii) Post Office cash certificates At market price
(iv) Post Office Saving Bank Account At market price
pass book
(v) National Savings Certificates At market price
Notes:- (i) National Saving Certificate mentioned at a serial (v) above and
Post Office Saving Bank Account at Serial (iv) above when accepted by
Central government as deposit should be pledged in favour of the President
of India.
(b) Earnest Money can also be in the form of deposit at call receipt of a
Scheduled Bank or where facilities exist, it may be paid into a Government
Treasury, a branch of the Reserve Bank of India or the State Bank of India.
(c) As the procedure for depositing and encasing National Savings

Certificates is rather cumbersome, it would be in the interest of the contractor
himself to lodge Earnest Money in the form of treasury challan or deposit at
call receipt of Scheduled Bank because Earnest Money is generally required
by MES for a very short period.
2.1.5 In respect of “Piece Works” and “Specific Jobs” for which tenders are invited
on IAFW-1780 and IAFW-1780-A, contractors will not be required to deposit
any Earnest Money. Performance Security Deposit will however be obtained
from them.
2.1.6 In exceptional cases, Chief Engineers Zone are authorised to exempt

specialist firms from depositing earnest money as laid down above. Such
discretion will, however, be exercised with the prior concurrence of
E-in-C. As per present instructions of Government India, MSMEs are not
exempted from submission of EMD.
2.1.7 Earnest Money submitted by tenderers other than the lowest tenderer
shall be refunded immediately.
2.2 Performance Security Deposit
2.2.1 Performance Security Deposit for individual works shall be for an amount
equal to 5% of the contract amount. In case of term contracts, the amount of
contract shall be the amount mentioned in NIT, which should be related to
the anticipated maintenance grant for the period covered by the contract in
case of term contracts. In case work is foreclosed, the Performance Security
shall be recalculated as per cost of completed work. In case the Performance
Security already deposited is more than that required after foreclosure of
works, contractor shall have the option to submit the fresh Performance
Security and original Performance Security shall be released.
2.2.2 If the tender submitted by a contractor is accepted, he will be required to lodge

with the Accepting Officer concerned, Performance Security Deposit for the
specific work calculated as per Para 2.2.1 above, within twenty eight days of
the receipt by the contractor of notification of acceptance of the tender. Work
order No 1 shall be placed only after submission of Performance Security
54
Deposit. Failure of the successful contractor to deliver Performance Security

shall constitute sufficient grounds for cancellation of the award of work. In
addition to this, in case of MES enlisted contractor, amount equal to the
Earnest Money stipulated in the Notice Inviting Tender, shall be notified to the
tenderer for depositing the amount through MRO. Issue of tender to such
tenderers shall remain suspended till the aforesaid amount equal to the
Earnest Money is deposited in Government Treasury. In case of unenlisted
contractor, the Earnest Money deposited alongwith tender shall be forfeited.
If the contractor failed to deposit the Performance Security within 28 days,
Show Cause Notice shall be issued to the contractor prior to enforce this
provisions.
2.2.3 Performance Security shall be submitted in any of the forms given below:-
(a) Bank Guarantee Bond in the prescribed format (Appendix 2.1)

in favour of Accepting Officer from any Bank listed in 2nd schedule of RBI
Act 1934.
(b) Government Securities, Fixed Deposit Receipt or any other

Government Instruments in favour of Accepting Officer.
2.2.4 Acceptance of Bank Guarantee Bond in lieu of Performance Security

Deposit.
(a) The forms of Bank Guarantee Bonds to be executed by the Scheduled

banks are at Appendix 2.1
(b) The Bank Guarantee may be for part of security amount and the
balance i.e. the difference between the full amount of the security and Bank
Guarantee may be in shape of other form of securities.
(c) The Bank Guarantee may be furnished by contractor at any stage and
accepted by the Department. The amount lodged in any other form of security
shall be released on acceptance of the Bank Guarantee Bond.
(d One or more Bank Guarantees may be furnished by contractor to

cover the amount of security in part or in full.
(e) In case where at a later stage it is considered, on account of delay in

completion of work/delay in payment in final bill etc, that the validity date
stipulated in the Bank Guarantee should be extended, the concerned
contractor and the bank shall be directed to have the validity date extended
before the date expires. The standard format for getting extension of Bank
Guarantee is given at Appendix 2.2. If the contractor fails to do so, the Bank
Guarantee shall be encashed before its date of expiry. Standard format for
notices for encashment of Bank Guarantee is at Appendix 2.3.
(f) In case of nationalised Banks, the following modifications shall be

made:-
(i) The word ‘Limited’ is to be omitted

55
(ii) Similarly the word ‘The’ occurring in the names of the existing Banks
should also be omitted eg for “The Central Bank of India Limited” the title
shall be “Central Bank of India”.
(g) The blank space in Para 3, “............ Office/Dept” of the Bond forms
(Appendix 2.1 & 2.2) shall be filled to indicate the Accepting Officer
concerned who will accept the Guarantee on behalf of the President of India.
(h) In the Bond form at Appendix 2.2 the date in Para 3 in blank
“................................. the date referred” shall be the same as the date of
completion filled in the blank space, in Para 1 “and ending on
............................ the extended period” of the Bond form.
(j) No advice from Reserve Bank of India will be required to be obtained

in case of Bank Guarantees issued by Scheduled Banks.
(k) The Guarantee should be drawn on a non-judicial stamp paper of

appropriate value. It should be ensured that the signatory of the Guarantee
is competent to bind the Guarantor Bank. If guarantee by banks not operating
in India are offered, these should be accepted only after counter signature by
a Scheduled Bank.
(l) Procedure for acceptance of Bank Guarantee Bonds in lieu of

Performance Security Deposit/Retention Money :-
(i) Bank Guarantee Bond will be sent by the Manager of the Bank under
Registered post to the Accepting Officer of the contract under the covering
letter on his authorised printed letter head. Banks should also indicate that
copy of the letter has been endorsed to their superior office.
(ii) Accepting Officer shall get the confirmation about the BGB from the
bank through e mail and keep in record. Thereafter BGB may be accepted
by the competent authority if found otherwise in order. The office receiving
the bond from the Bank will acknowledge the same to the Bank concerned
and enclose a certificate or a Photostat copy of the Bond for their record.
A copy of this letter along with a copy of the Bond will also be endorsed
to the superior office of the Bank as aforesaid for their information and
record. Both the above communications to the Banks shall be sent under
Registered Post.
(iii) The above instructions will also be applicable to extension of

validity to Bank Guarantee Bonds.
2.2.5 In accordance with the General Conditions of Contract IAFW-2249 and

IAFW-1815Z, Performance Security is refundable to the contractor after the
expiry of the Defect Liability Period provided the Final Bill has been paid. It
shall be subject to other tender conditions in this regard. The date in Para 3
in blank space of BGB form for Performance Security shall be filled in as
decided by the Accepting Officer (while accepting the Bond), keeping in view
the magnitude and nature of work and the time likely to be taken in finalisation
and payment of the bill and the Defects Liability Period.
56
2.2.6. In order to enable the Accepting Officer to release Performance Security

Deposit, GE concerned shall certify that the terms and conditions of the contract
have been fulfilled and properly carried out before recommending discharging the
Performance Security. The following procedure shall be adopted to render the
certificate:-
(a) The contractor shall apply to Accepting Officer for release of

Performance Security with a No Claim Certificate on IAFA - 451 as per terms
& condition of the contract with a copy to concerned CWE and concerned
GE/GE(I)/AGE(I).
(b) In case of CE Zone/CWE’s contracts the GE/GE(I)/AGE(I) shall render

‘No Demand Certificate’ addressed to the Accepting Officer with a copy to
concerned CWE as under:-
(i) “Certified that the terms and conditions of Contract Agreement

No. ............ have been fully and properly carried out by Shri/S’
Shri/M/s.................”.
(ii) There are no demands outstanding against the contractor
(iii) Defects Liability Period as per contract conditions is over
(iv) Final Bill in respect of the work has been paid
(c) In case of contracts accepted by GE/GE(I)/AGE(I), the certificate shall

be rendered by the Accepting Officer and kept in record before releasing the
Performance Security.
2.2.7 At the request of a contractor, his Performance Security or any portion thereof
which has become due for refund as per rules, may be appropriated in whole
or in part towards the Performance Security Deposit for another contract
agreement that has just been or is about to be entered into with the contractor
(Para 517 of MES Regs-1968)
2.3 The “Tender Forwarding Letter” shall include the following points :
(a) Bidders Not Enlisted With MES/ Enlisted But Have Not Executed
The Standing Security Bond.
(i) The amount of “Earnest Money” for the work to be furnished

along with the tender.
(ii) The amount of “Performance Security Deposit” for the work, in

case the tender is accepted shall be of the amount as specified in NIT.
(b) Bidders Enlisted With MES And Have Lodged The SSD
The amount of “Performance Security Deposit” for the work, in case the
tender is accepted shall be of the amount as specified in NIT.
2.3 Refund Of Security Deposit When Contractor’s Claim Against Government is

Sub-judice :
57
2.3.1 As long as there are no outstanding dues from the Contractor to the
Government, the Security Deposit of the Contractor may be refunded to him on
production of a No Demand Certificate irrespective of the fact that the No Demand
Certificate is rendered without prejudice to any of his sub-judice claims.
2.3.2 It is not necessary to deduct the cost of the suit from the security Deposit. In
case the suit is dismissed with cost, necessary action may be taken to realise the
cost
2.4 Provisions in MES Regulations (1968) .
The relevant Paras in the MES Regulations are as under :-

(a) Para 509- Custody of Security Deposit documents.
(b) Para 515 and 516- Refund of portion of Security Deposit.
(c) Para 518- Procedure for refund of Security.
(d) Para 585- Maintenance of Register of Securities (IAFW-2286)
(e) Para 586- Filing of acknowledgement of depositors and certificate on
the Register.
2.5 In contracts not having provisions of Performance Security, the earlier

instructions for Individual Security Deposit (ISD) and Additional Security
Deposit (ASD) shall be applicable. This also includes contracts under forms
other than IAFW-2249 and IAFW 1815 Z. Accordingly for these contracts,
instructions for Security Deposit, ISD & ASD (Scales, procedure for
obtaining/release etc) shall be as per earlier instructions in Section 2 of MES
Manual on Contracts-2007 (Reprint 2012).
2.6 Guidelines for exemption of EMD & Reduction of Performance Security due to
COVID-19 The instruction of exemption of EMD Reduction of Performance
Security from 5% to 3% of the value of contract shall be applicable to all existing
contracts and tenders/contracts issued/concluded till 31 Dec 2021 and the
procedure as mentioned below Shall be strictly adopted.
2.6.1 Earnest Money Deposit (EMD)

(a) All bidders shall be exempted from submission of EMD in all tenders
except those who are ineligible from such exemption vide Para 2.1 (b) below.
(b) All bidders shall be required to sign the Bid Securing Declaration as
below:-
(i) I/We hereby understand and accept that if I/We withdraw or

modify my/our bids during the period of validity, or if I/We are awarded
the contracts and on being called upon to submit the Performance
Security/Security Deposit, fail to submit the Performance
Security/Security Deposit before the deadline defined in the request for
bid documents/Notice Inviting Tender, I/We shall be debarred from
exemption of submitting Bid Security/Earnest Money Deposit for a
58
period of 6 (six) months, from the date I/We are declared disqualified
from exemption from submission of Earnest Money Deposit/Security
Deposit, for all tenders issued by MES during this period.
(c) Wherever, there are compelling circumstances to ask for Earnest Money
Deposit/ Bid Security, the same shall be done only with the approval of the next
higher authority to the authority competent to finalize the particular tender or the
Secretary, whosoever is lower. However, in such cases, Earnest Money shall be
applicable as per the existing rules.
2.6.2 Security Deposit/ Performance security

(a) All tenders/ contracts issued / concluded till 31 Dec 2021 shall have
the provision of reduced Performance Security of 3% and there will be no
subsequent increase in Performance Security even beyond 31 Dec 2021.
(b) Wherever, there are compelling circumstances to ask for Performance
security in excess of 3%, the same should be done only with the approval of
the next higher authority to the authority competent to finalise the particular
tender or the Secretary, whosoever is lower. Specific reasons justifying the
exception shall be recorded. In such cases, Performance Security shall be
applicable as per existing rules.
(c) The benefit of the reduced Performance Security will not be given the
contracts under dispute, wherein arbitration/ court proceedings have already
been started or are contemplated.
(d) The benefit shall be given to contractors, where there are no outstanding
recoveries against the contractor and the contractor does not intend to
abandon the work after entertaining the relief. A certificate to this effect shall
be kept on record.
(e) Other instruction on the matter shall continue to apply. Tender condition
to be suitably amended by the Accepting Officer.
59
Appendix 2.1
GUARANTEE BOND FOR PERFORMANCE SECURITY DEPOIST
1. “In consideration of the President of India (hereinafter called “the Government”)
having agreed to exempt…………..(hereinafter called “the said Contractor(s)”) from the
demand, under the terms and conditions of an Agreement dated……………. made
between…………………….and…………………………………….for
………………………….(hereinafter called “the said Agreement”), of performance security
deposit for the due fulfillment by the said Contractor(s) of the terms and conditions
contained in the said Agreement ,on production of a Bank Guarantee for Rs……………..
(Rupees…...………… only), we, ….……………………..Bank Ltd.(hereinafter referred to as
“the Bank) do hereby undertake to pay to the Government an amount not exceeding
Rs …………………. against any loss or damage caused to or wound be caused to or
suffered by the Government by reason of any breach by the said Contractor(s) of any of
the terms or conditions contained in the said Agreement.
2. We ……………………. Bank Ltd. do hereby undertake to pay the amounts due and
payable under this guarantee without any demur, merely on a demand from the
Government stating that the amount claimed is due by way of loss or damage caused to or
would be caused to or suffered by the Government by reason of any breach by the said
Contractor(s) of any of the terms or conditions contained in the said Agreement or by
reason of the contractor’s (s) failure to perform the said Agreement. Any such demand
made on the Bank shall be conclusive as regards the amount due and payable by the Bank
under this guarantee. However, our liability under this guarantee shall be restricted to an
amount not exceeding Rs……………………….
3. We………………………. Bank Ltd. further agree that guarantee herein contained

shall remain in full force and effect during the period that would be taken for the
performance of the said Agreement and that it shall continue to be enforceable till all the
dues of the Government under or by virtue of the said Agreement have been fully paid and
its claims satisfied or discharged or till………………..(Office/Department), Ministry
of…………………………. certifies that the terms and conditions of the said Agreement
have been fully and properly carried out by the said Contractor(s) and accordingly
discharges the guarantee. Unless a demand or claim under this guarantee is made to us
in writing on or before the …………… ,we shall be discharged from all liabilities under this
guarantee thereafter.
4. We………………………..Bank Ltd. further agree with the Government that the

Government shall have the fullest liberty without affecting in any manner our obligations
hereunder to vary any of the terms and conditions of the said. Agreement or to extend time
of performance by the said Contractor(s) from time to time or to postpone for any time or
from time to time any of the powers exercisable by the Government against the said
Contractor (s) and to forbear or enforce any of the terms and conditions relating to the said
agreement and we shall not be relieved from our liability by reason of any such variation or
extension being granted to the said Contractor(s) or for any forbearance, act or omission
on the part of the Government or any indulgence by the Government to the said Contractor
(s) or any such matter or thing whatsoever which, under the law relating to sureties, would
but for this provision have effect of so relieving us.
5. We……………………………Bank Ltd. lastly undertake not to revoke this guarantee
during its currency except with the previous consent of the Government in writing.
Dated the …………………day of ……………….20
for…………………Bank Ltd
60
Appendix 2.2
EXTENSION DEED OF BGB
STAMP PAPER
To
………………………………………….
………………………………………….
…………………………………………..
Extension of validity date of our Bank Guarantee Bond No. …………… (In lieu of
Security Deposit/Performance Security/ Retention Money)dated………….for against CA
No ….Contractor……………………
We …………………… extend the validity period of above mentioned Bank Guarantee
Bond which was due to expire on ………………. upto ……………….
All other terms and conditions of the Bond shall remain unchanged.
This will form part of the original Bank Guarantee.
Manager
……….…
The above Guarantee Bond is accepted by the President of India.
(RANK)
(…………....)
For and on behalf of the President of India.
Dated:
61
Appendix 2.3
ENCASHMENT LETTER OF BGB
To
Address of Bank
Subject : Bank Guarantee Bond No…….dated ………. for Rs …………….
Dear Sirs,
WHEREAS you have furnished a Bank Guarantee Bond bearing No.
…………….… dated
……………for Rs ………….. (Rupees ………. only) in lieu of Performance Security Deposit
against Contract Agreement No.……………………………….. made between the President
of India and Shri/S’Shri/M/s
………………….. (Contractor(s*)), which is valid till …………………. (A)....................
AND WHEREAS it is expressly provided in the afore-said Guarantee Bond that you
undertake to pay the amount due and payable under the Guarantee without any
demur, merely on a demand from the Government stating that the amount claimed is
due by way of loss or damage caused to or suffered or would be caused to or suffered by
the Government by reason of any breach by the Contractor(s*) of any of the terms and
conditions contained in the said contained in the said Contract Agreement or by the reason
of the Contractor’s(s*) failure to perform the said Agreement;
*AND WHEREAS there has been a breach by the Contractor(s*) of the terms and
conditions of the Agreement;
*AND WHEREAS the Contractor(s*) has* / have failed to perform the Agreement,
I, on behalf of the President of India, hereby serve you with this notice of demand
against the aforesaid Bank Guarantee Bond for the sum of Rs …………… (B) (Rupees
………… only).
*on account of loss/damage caused to or suffered by the Government on account of
loss/damage which would be caused to or suffered by the Government.
It is requested that the aforesaid sum as demanded be paid immediately.
The amount may be remitted in the form of (C) in favour of …………. …………
Yours Sincerely,
Chief Engineer/CWE/GE
(for and on behalf of the President of India)
62
Copy to :-
S’ Shri/Shri/M/s
N.O.O.
PCDA/CDA
CWE
GE
AO/AAO
Notes : (for guidance of Accepting Officers)
1. In the blank space ‘A’ fill up the date upto which the Bank Guarantee Bond is
valid as per the Bond.
2. In the blank space ‘B’ indicate the amount demanded (This should be restricted to the
amount of loss/damage caused to/suffered by the Government or/and would be caused to
or suffered by the Government and in any case should not be more than the value of the
Bank Guarantee Bond amount).
3. In the blank space ‘C’ indicate the form in which the amount is desired to be remitted.
4. *Delete as necessary.
REGISTERED ACK DATE

63
SECTION 3
E-TENDERING
3.1 GENERAL
3.1.1 All the tenders shall be issued in the e-tendering mode, except in special
circumstances listed hereunder, using the e-Procurement portal www.defproc.gov.in
specifically created by NIC for MoD:-
(a) Tenders at stations where internet facility is not available subject to prior
permission of E in C’s Branch.
(b) Lump Sum Tender for the Strategic/Secret Works subject to approval of
CE Zone under intimation to the Next Higher Engineering Authority (NHEA).
(c) Tendering for works mentioned in para (a) and (b) above hall be done as
per old system of physical tendering.
3.1.2 Basic structure for e-tendering shall be as under :-
Nodal Officer Level-I

Jt DG(C)/Dir (C) of E-in-C's
Branch
Nodal Officer Level-II

CE Zone/CCE
Nodal Officer Level-III

CWE
3.2 DIGITAL SIGNATURE CERTIFICATE (DSC)

3.2.1 To carry out e-tendering there is a requirement of Digital Signature Certificate
(DSC). DSC shall be obtained from any of the authorized Certifying Authorities. At
present, the following agencies authorized by Controller of Certifying Agencies, Ministry
of Corporate Affairs, Govt of India are available for issue of DSC :-
(a) National Informatics Centre (NIC)
(b) Sify
(c) e-mudra
(d) N code
(e) TCS
3.2.1.1 If any new agency(ies) is/are authorized by the above Ministry, DSC can be
obtained from them also.
3.2.2 DSC shall be of class II, with the authorisation for 'signing' and 'encipherment'.
DSC shall be required for Nodal Officers, Officers/JEs of contract management i e
E8 Section (as per authorisation mentioned herein after in Para 3.4.2) and Bid Opener.
3.2.3 DSC are normally valid for two years after which it can be revalidated/procured
afresh. However for the individuals, who are not likely to continue in the Department for
more than one year, their DSC shall be made with validity for one year. Payment for
obtaining new DSC/ its revalidation after its expiry shall be made out of Project
Contingencies.
64
3.2.4 Safe custody of the DSC shall be the responsibility of the individual. The individual
moving on posting to other formation shall carry DSC along-with him/her.
Simultaneously, the Nodal Officer of the old formation shall immediately intimate Nodal
Officer of E-in-C's Branch through email for User transfer/mapping of the individual
(moved on posting) to the new formation. This request also can be sent by the Nodal
Officer of the new formation to E-in-C's Branch. In case the individual moved on posting
is not required to be nominated as a user in the new formation, he/she will deposit the
DSC in the new formation and the new formation shall intimate E-in-C's Branch to block
the individual from his/her role as User. The movement order of the individual while
being posted out shall carry specific mention as to whether the individual is carrying DSC
or not.
3.2.5 All correspondence related to creation of new user id associated with DSC or
transfer of existing user id on posting/transfer of the officials and other such
correspondence as referred in preceding Paragraph shall be made to the official email
id of the Nodal Officer apart from physical mode of correspondence.
3.3 INFRASTRUCTURE : Necessary infrastructure for e-tendering such as

standalone PC, printer, scanner, high speed internet connection and necessary
hardware shall be ensured by the Accepting Officer in E8 Sections of their respective
offices. The internet connection can be broadband or VSAT connection of any Service
provider.
3.4 APPOINTMENT OF NODAL OFFICERS/USERS
3.4.1 Nodal Officer Level I shall be created by NIC for which action shall be taken by
Dte of Contract Mgt in E in C’s Branch. Nodal Officer Level-I will create Nodal Officers
Level-II and Nodal Officer Level-II will create Nodal Officer Level-III. Nodal Officers
Level-II will also create users for his office as well as GEs(I) and AGE(I) under his AOR.
Nodal Officer Level-III will create users for his office as well as GEs and AGEs(I) under
his AOR.
3.4.2 To use the portal for E-tendering, there is a requirement of creating various types
of users to perform specific tasks keeping in view their charter of duties. Following are
the authorised users which shall be created by Nodal Officers:-
(a) Tender CE's/CCE's DIR(C)/SSW/Jt DIR(C)/Dy

Creator Office D(C)/SW/AD(C)/AAD(C)
CWE's/GE (I)'s DCWE(C)/ACWE(C)/SSW/SW/AGE(C)
Office
GE/AGE (I) AGE(C)/JE(QS&C)
Office
(b) Tender CE's/CCE's DIR(C)/SSW/Jt DIR(C)/Dy
Publisher Office D(C)/SW/AD(C)/AAD(C)
CWE's/GE (I)'s DCWE(C)/ACWE(C)/SSW/SW/AGE(C)
Office
GE/AGE (I) AGE (C)/JE(QS&C) (where no AGE(C) posted)
Office
(c) Tender CE's/CCE's CE/CCE/DIR(C)/SSW/Jt DIR(C)/Dy
Evaluator Office D(C)/SW/AD(C)
65
CWE's/GE (I)'s CWE/GE(I)/DCWE(C)/ACWE(C)/SSW/SW/AD(C)

Office / AAD(C)
GE/AGE (I) GE/AGE(I)/AGE(C)/JE(QS&C)
Office
(d) Opening (a) CE Zone to decide bid openers in his office as well as GEs (I)
Officers under his AOR. Similarly CWE will decide about the bid openers for
(Bid his office as well as GEs and AGEs (I) under his AOR. Only officers
Openers) will be nominated as bid openers in CE and CWE offices. In GE (I),
GE and AGE (I), JEs can also be nominated as bid openers.
(b) There is no embargo on nominating officers of contract

management ie E8 section for bid opening. The names of bid openers
to be selected for a particular tender shall be selected by the tender
creator from the list available in the system. Accepting officer can also
be nominated as opening officer due to shortage of officers in remote
areas.
3.4.3 The Nodal Officer shall create users after receipt of applications in the prescribed
format at Appendix 3.1.
3.4.4 On posting out of CE Zone/CCE i e Nodal Officer (Level-II), the incoming Chief
Engineer/CCE shall forward the application (Appendix 3.1) duly filled to the Nodal
Officer (Level-I) at E-in-C’s Branch for his nomination as Nodal Officer and mapping him
on organisational tree structure. Similarly, on posting out of CWE ie Nodal Officer
(Level-III), the incoming CWE shall forward the application (Appendix 3.1) duly filled to
the Nodal Officer (Level-II) at CE Zone for his nomination as Nodal Officer and mapping
him on organisational tree structure.
3.5 NOTICE INVITING TENDER
3.5.1 Keeping in view the present digital ecosystem available in the country, there is no
requirement of giving any separate advertisement for the tender in newspapers and
Indian Trade Journal (ITJ). Only NIT shall be prepared and uploaded along with the
tender on the portal. Even in case of projects which are of TOP SECRET nature (where
e tendering shall not be resorted to), the requirement of advertisement shall be
dispensed with and tenders will be issued to selected eligible contractors who are already
on approved list of MES and have got the capacity and experience to carry out the
proposed work. In such cases documents may be made available to audit for scrutiny
when demanded by them.
3.5.2 The following important points must be borne in mind while preparing NIT.
(a) NIT as well as the tender documents should not contain information of a
classified nature. Only such details as are required by tenderers for deciding to
apply for tenders and submit priced quotations should be included in the tender
document. For example work of the nature like magazines, ammunition depots,
ops rooms etc should be described as technical buildings and airfields/runways
as pavements. Similarly details which are required only at the time of execution
of the work should not be included in the tender.
66
(b) The NIT shall be worded carefully so that details of secret or classified
nature like the strength and name of the Unit, composition, role, location and the
like are not disclosed. Accepting Officer shall be responsible for framing the
advertisement of work.
(c) Estimated cost of work in the NIT shall be the net cost at market rates as
indicated in AE Part II of AA for the items going to be tendered. At the time of
uploading tender documents, if the detailed cost at market rates is found to differ
substantially from the cost originally mentioned in the NIT, an amendment will
be issued to indicate the cost at par market rates.
3.5.3 Notice Inviting Tenders (NIT) shall be prepared very carefully keeping in view the
nature of work, cost of work, requirement of specialised T & P, location of work etc. For
certain special/ specific works, following Pre Qualification Criteria (PQC) shall also be
specified in the NIT.
3.5.3.1 HIGH VALUE WORKS

(a) All works (except runway works) having estimated cost more than Rs 50 crores and
specialist E/M works like air conditioning, lifts etc costing more than Rs 5 crores shall
have the following PQC criteria based on CVC guidelines .
(i) Average Annual financial turnover during the last 3 years, ending 31st March of
the previous financial year, should be at least 30% of the estimated cost. (This
average annual turnover of 30% is for a work with period of completion as three
years and where the period of completion is less than 3 years, the requirement of
average turnover shall be proportionally increased and specified)
(ii) Experience of having successfully completed similar works during last

7 years, ending last day of month previous to the month of bid submission start
date, should be either of the following :
Three similar completed works costing not less than the amount equal to
40% of the estimated cost.
or
Two similar completed works costing not less than the amount equal to 50%
of the estimated cost.
or
One similar completed work costing not less than the amount equal to 80%
of the estimated cost.
(iii) Definition of “similar work” shall be clearly defined keeping in view the major
and critical portion of the work involved in the tender.
(iv) In addition to above, the criteria regarding satisfactory performance of works,
technical personnel, plant, equipment etc. shall also be incorporated according to
the requirement of the project.
(v) Cases for approval of PQC criteria shall be taken up with the E-in-C’s Branch
only in case of deviation from CVC guidelines and not otherwise.
(vi) For the purpose of value of completed works, the value of previously
completed works be enhanced @ 5% per year to bring them at par with present
cost.
67
(b) For other prestigious buildings/structures ,not fulfilling the criteria mentioned
in Para 3.5.3.1(a) above, where PQC for issue of tender is considered desirable
by the Accepting Officer to be included in the NIT, prior approval of the E-in-C
shall be obtained.
3.5.3.2 RUNWAY WORKS

Existing PQC criteria for Runway pavement works shall be as under. This shall be
deemed to be modified / amended suitably as per amendments / instructions /
clarifications issued from E-in-C’s Branch from time to time.
(a) Runway Works Involving Pavement Work Costing upto Rs 20 crore: For
runway works, involving pavement work costing up to Rs 20 crore, contractors
who have satisfactorily executed runway pavement work(s) of value as per Para
3.5.3.1(a)(ii) above involving similar pavement (rigid/ flexible as the case may be)
in the past seven years may be considered for issue of tender. Production and
vetting of satisfactory performance reports of the qualifying runway works will be
essential during scrutiny.
(b) Runway Works Involving Pavement Work Costing more than Rs 20 crore:
For all runway works, involving pavement work costing more than Rs 20 crore,
(i) The contractor should have satisfactory completed:-
Three runway pavement works involving similar pavement (rigid/flexible as the case may
be) in last 7 years ending last day of month, previous to the month of bid submission
start date, each costing not less than the amount equal to 40% of the estimated cost OR
each having quantity of runway pavement specific items of works not less than 40% of
the estimated quantities of the tender for which PQC is being given.
OR
Two runway pavement works involving similar pavement (rigid/flexible as the case may
start date,each costing not less than the amount equal to 50% of the estimated cost OR
OR
One runway pavement works involving similar pavement (rigid/flexible as the case may
start date,each costing not less than the amount equal to 80% of the estimated cost OR
Notes
(aa) In case the work for which tender is invited has only rigid pavement portion,
experience of only rigid type of pavement will be required. Similarly in case of work for
which tender is invited has only flexible pavement portion, experience of only flexible
type of pavement will be required. In case the work for which tender is invited has both
68
rigid pavement portion and flexible pavement portion, the work experience of both types
of pavements will be required.
(Explanation: Cost of qualifying works of similar nature/quantities of items in qualifying

works of similar nature shall be proportionately given in NIT segregating the rigid type
and flexible type of pavement surfaces.)
(ab) Runway Pavement works shall include flexible and / or rigid pavement works of
runway, dispersals, taxi tracks, links, turning pads, overrun areas, operational readiness
platforms and pavement quality concrete floors etc, to arrive at total cost as well as total
quantity of pavement works for framing experience criteria as given at Para 3.5.3.2(a)
and 3.5.3.2 (b) (i) above.
(ii) Average annual financial turnover during the last 3 years, ending 31st March of
the previous financial year, shall be at least 30% of the estimated cost. (This
average annual turnover of 30% is for a work with period of completion as three
years and where the period of completion is less than 3 years, the requirement of
average turnover shall be proportionally specified)
(iii) Wherein any particular tender for runway works, the value of other than
pavement works i.e buildings and services etc, is also substantial, the PQC criteria
for such works will include works experience for both runway pavement works and
building works as given below:-
(i) Works experience for runway pavement works shall be as per 3.5.3.2 above.
(ii) Works experience for buildings (excluding runway pavement quality concrete
floor) and services as per this Manual.
(c) T&P at the submission of bid:-The firm must have under its control a minimum
specified T&P on the date of submission of bid. To establish this fact, ownership/MoU
documents of the T&P will be asked for. The list of minimum T&P, to be available with
the firm (in possession/MoU) at the time of submission of bid shall be as follows:-
(i) Computerized batch type hot mix plant 60 to 90 TPH - 01 No

(ii) Mechanical paver with electronic sensor for flexible
pavement (minimum width 05 to 09 meter) - 01 No
(iii) Computerized concrete batching plant 60 Cum/hr - 01 No
(iv) Pneumatictyred roller 7.5 to 25 Ton capacity - 01 No
(v) Tandem vibratory rollers 8 to 10 Ton capacity -
02 Nos
(vi) Loader/excavator (6.5 to 16 Ton) - 01 No
(vii) Air Compressor 350 Cft - 01 No
In case work involves only one type of pavement, plants required for another type of
pavement shall be deleted from the list mentioned above.
(d) T&P during Execution :-Requirement of quantity of equipment during execution

should be based on the quantum of work, working days/hours available and operations
of aircrafts from the runway.
69
(e) Equipment mandatory for Runway works. These are given Appendix 3.2 for
works costing more than Rs 100 crore and Appendix 3.3 for works costing Rs 20 crore
to Rs 100 crore. These equipment must be placed on site during mobilization. Any delay
in bringing the T&P shall be penalised at the rate of 1% per fortnight of the contract cost
subject to maximum of 10% of contract amount.
(f) Plant/equipment shall be in sound working condition. The following will be

ensured for all plant and equipment to be incorporated in work :-
(i) The plant has a fitness certificate from the authorized service centre of
original manufacturer/OEM.
(ii) The plant has been calibrated by the OEM/authorized service centre, as
per recommended periodicity.
(iii) The original manufacturer's AMC is current and valid.
(iv) The operator of the plant to be certified by the OEM.
Note : The above mentioned aspects shall be inspected in the mobilization stage by
RRMT (E-in-C Branch and Air HQ representatives) and certified in writing.
(g) Supervisory Staff for Execution
For works more than Rs 20 crore, skilled, qualified and experienced supervisory staff
shall be available at site throughout the currency of work and replacement without similar
experience shall not be permitted. Work shall not be progressed in case this staff is
absent. Following staff must be made available by the firm for each runway project :-
Srl Appointment No Qualification Experience

No s
(i) Project Director 01 B. Tech (Civil) 10 years with Road Pavement including
minimum 03 years of runway pavement
execution.
(ii) Executive 01 B. Tech (Civil) 05 years including 02 years of runway
Engineer/ pavement execution.
Assistant Engineer
(iii) Executive 02 B. Tech (Civil) 05 years including 02 years of pavement
Engineer/ execution.
Assistant Engineer
(iv) JEs 02 Diploma (Civil 05 years including 02 years of runway
Engineering) pavement work.
(v) JEs 02 Diploma (Civil 05 years including 02 years of pavement
Engineering) work.
(vi) Lab Assistant 02 Diploma 05 years including 02 years of pavement
work and site lab.
(vii) Surveyor 02 Diploma/ITI 05 years experience in field survey.
Note : The above mentioned PQC criteria shall be suitably amended as per the policy
directions issued by E-in-C’s Branch from time to time.
70
(h) Defect liability for runway pavement works shall be three years. The same shall
be included in PQC and tender without ambiguity.
3.5.3.3 SOLAR POWER WORKS
Existing PQC criteria for Solar Power Projects shall be as under. This shall be
modified / amended suitably as per amendments / instructions / clarifications issued from
E-in-C’s Branch from time to time.
(a) For MES Enlisted Contractors (i) The contractor should be enlisted in class #
(ii) The contractor should have MoU with solar

power firms of rating 1A/1B/1C/2A/2B/2C given
by CRISIL/CARE/FITCH/ICRA/SMERA/Brick
Work Ratings India Pvt Ltd and having
experience as given at (c) (i) below.
(iii) Enlisted contractors who are either having

above mentioned solar rating themselves
fulfilling the criteria laid down here-in-below or
meeting the criteria laid down for unenlisted
contractors shall also be considered eligible
(b) For Unenlisted Contractors (i) The contractor should meet the enlistment
criteria of Class # with regard to annual
turnover, financial criteria (solvency, working
capital) satisfactory completion of similar works
and other requirements as per details given in
Para 1.4 & 1.5 of Section 1 of Manual on
Contracts 2020.
(ii) Contractor should have MoU with solar

power firms of rating 1A/1B/1C/2A/2B/2C given
by CRISIL/CARE/FITCH/ICRA/SMERA/Brick
Work Ratings India Pvt Ltd and having
experience as given at (c) (i) below. However
requirement of MoU is exempted for contractors
who themselves are having requisite rating by
rating agency mentioned here-in-before.
(c) For all Contractors (i) The contractor should have experience of
having successfully completed &
commissioned Solar Power Plants in
Government Department/ PSU during last
seven years ending last day of month previous
to the month of bid submission start date,
should be either of the following :-
(aa) One work of capacity not less than 80%

of capacity specified in the NIT
or
71
(ab) Two works of capacity not less than 50%

of capacity specified in the NIT
Or
(ac) Three works of capacity not less than
40% of capacity specified in the NIT
# Appropriate class to be mentioned based on the estimated cost of work.
Notes (a) In a tender, the eligible solar power firms can either bid as direct participant/
bidder or under MoU with MES enlisted /unenlisted contractors, but can not bid
simultaneously for the same tender as direct participant/ bidder as also under MoU with
MES enlisted/ unenlisted contractors.
(b) MoU will be permitted between one eligible solar power firm and one MES enlisted /
unenlisted contractor, bidding for the same tender.
(c) In case any violation of condition at (a) and (b) above is noticed, all such bids shall
be treated as invalid.
3.5.3.4 Consultancy Work : Notice inviting tender for consultancy works

shall be framed considering the instructions as covered in Section 11 of this Manual.
3.5.4 Category of Work to be Specified in NIT
(a) The category of enlistment to be specified in the NIT shall be against the
part of the work (trade) which constitutes 2/3 rd or more of the total value of work
(shall be generally called the major part). If no part of work (trade) has more than
2/3rd cost component, two categories having highest cost components shall be
specified in the NIT.
(b) In case specialist works of small magnitude are included in the work, no
separate category shall be mentioned in NIT but provision shall be made that the
specialist work shall be got executed (installed and commissioned) by the
authorised representative of the Manufacturer, else the specialist work be
tendered separately as per decision of the Accepting Officer.
(c) If there is any part of the work (trade) other than the major part/major two
parts, as the case may be, for which the Accepting Officer considers that category
of work against that part is also required to be specified, he will examine the
requirement to determine whether to tender that part as a separate tender by
stipulating its corresponding category. If such segregation is not found feasible
then such work will be merged with the main tender without specifying any
additional category for this minor part.
3.5.5 Notice Inviting Tender (NIT) shall be issued in the format as per Appendix 3.4.
However the NIT need not be circulated physically. Appendix 'A' to NIT shall be as per
Annexure 3.5 and 3.6 depending on the estimated cost and nature of the work.
3.5.6 Further stipulations shall be made in NIT and/or Appendix to NIT to incorporate
additional provisions such as Joint Venture, Integrity Pact, mobilization advance or any
other issue depending upon the nature and amount of work as per policy directions
issued by E in C’s Branch from time to time.
72
3.6 COST OF TENDER
(a) Each tenderer is required to submit a cost of tender as mentioned in the NIT.
Tender cost, based on estimated cost of work stipulated in notice of tender, shall be as
under :-
(i) Estimated cost of work at par Market Rates upto Rs 5 lakh Rs 300/-
(ii) Estimated cost of work at par Market Rates beyond Rs 5 lakhs but Rs 500/-
upto 50 lakh
(iii) Estimated cost of work at par Market Rates beyond Rs 50 lakhs but Rs
upto 200 lakh 1000/-
(iv) Estimated cost of work at par Market Rates beyond Rs 200 lakhs but Rs
upto 500 lakh 2000/-
(v) Estimated cost of work at par Market Rates beyond Rs 500 lakh Rs
3000/-
(b) The cost of tender form shall be in the form of Demand Draft/Pay
Order/Banker’s Cheque from any Nationalised Bank/Scheduled Bank in favour of
concerned GE(I)/GE/AGE(I) as notified in the NIT. The DD/Pay Order/Banker’s Cheque
shall be non-refundable if the applicant is qualified during technical evaluation of tender
in Cover 1. However, it shall be returned to the applicant by the Accepting Officer in
case the applicant is not qualified in technical evaluation of tender in Cover 1. In such
an eventuality, the contractor shall bear the cost of Bank Charges for procuring and
encashing the same and he shall not have any claim whatsoever on the govt on this
account .
(c) The amount so collected on account of cost of tender shall be credited to the
Miscellaneous Receipt.
(d) In case of re-issue of tenders, no additional cost of tender documents is
required from the contractor who had quoted in the previous call. Only the new
applicants shall pay the cost of tender documents . This shall be clearly brought out in
NIT.
(a) (
(e) Bank instruments, towards the cost of tender , on receipt by post shall be
entered in “Register of Bank Drafts” and shall be signed by the tender creator . This
register shall be put up to the Accepting Officer while doing technical evaluation of
Cover 1 for selecting the tenderers for opening of Cover 2. Office Superintendent of
E8 Section shall be responsible for dispatch of Bank Drafts to GE/GE(I)/AGE(I) within
a week after technical evaluation of Cover 1.
(f) Return of Bank draft to the contractor in case of disqualification during scrutiny
of Cover 1 shall be done by speed post.
(g) Format for “Register of Bank Drafts” shall be as given in Appendix 3.7
3.7 INSTRUCTIONS TO TENDERERS

3.7.1 Sample forwarding letter to form part of tender documents shall be as per
Appendix 3.8.
3.7.2 General Instructions on filling and submission of tenders shall be as per

Appendix 3.9
73
3.8 STAGES AND NUMBER OF COVERS IN E TENDER

Number of stages and numbers of covers to be used, while preparing the e-tender
shall be decided based on the type of works for which tender is to be issued as described
below:-
3.8.1 NORMAL WORKS
These types of tenders shall be issued in SINGLE STAGE TWO COVERS
SYSTEM. Bids to be uploaded by bidders shall be in the following manner.
(a) Cover 1 : Cover 1 shall contain documents as stipulated in NIT and
instructions to the tenderers . Hard copies of all documents uploaded in Cover 1 shall
reach the office of Accepting Officer within the number of days after Bid Submission End
Date as specified in the NIT.
(b) Cover 2 : Cover 2 shall contain the BOQ. In addition, Cover 2 will also
contain other details as asked for and mentioned in the tender documents. The BOQ
shall be validated and password protected before uploading by the bidder.
3.8.2 SPECIALIST WORKS LIKE AIR CONDITIONING/COLD

STORAGE/REFRIGERATION/WATER PURIFICATION PLANTS/SEWAGE
TREATMENT PLANTS/SEWAGE DISPOSAL SCHEMES/ FUEL STORAGE TANKS
ETC.
These types of tenders shall be done in TWO STAGES THREE COVERS

system. Bids to be uploaded by bidders shall be in the following manner.
(a) Stage 1 :
(i) In Stage 1, the complete tender document with BOQ and drawings
shall be uploaded for bidding with two covers. Cover 1 shall be the same
as mentioned in Para 3.8.1(a) here-in-before. Cover 2 shall contain the
technical details (design details proposed by bidder) alongwith commercial
terms and conditions offered by the bidders. Cover 2 of only those bidders
will be opened who qualify after tender evaluation of Cover 1.
(ii) Correspondence with Bidders : Correspondence shall be made with
bidders whose Cover 2 of Stage 1 are opened. This correspondence shall
be for bringing all the bidders at par technically (design details proposed
by bidders) and commercially. All such correspondence shall be made
online through e-mail.
(b) Stage 2 : In Stage 2, complete tender documents along with reference of

correspondence made with qualified tenderers in Stage 1 shall be uploaded.
Since the correspondence in Stage 1 was tenderer specific, only letters
exchanged with specific tenderers online shall be made part of the tender
document being uploaded in respect of that tenderer. Apart from this, BOQ in
standard format shall be uploaded. This BOQ shall be as per finalised design for
the items of the work subsequent to bringing at par the technical details and
commercial terms & conditions of all tenderers. In the bidding at this stage, there
will be only one cover consisting of BOQ. In addition, Cover 2 will also contain
other details as asked for and mentioned in the tender documents. The BOQ shall
be validated and password protected before uploading by the bidder.
74
(c) Accepting Officer will be the final authority to decide as to whether the work
falls in the category of special works or otherwise.
3.9 PREPARATION OF E-TENDERS
3.9.1 ITEM RATE TENDER
(a) The complete tender (except price bid/BOQ) shall be prepared in a normal manner
and complete contents shall be converted into pdf/rar format and stored as a separate
folder. The format prescribed in the portal for this purpose shall be followed.
(b) BOQ or Schedule of Work (viz Schedule A) shall be prepared using the BOQ template
for the same available on website www.defproc.gov.in. This template shall be
downloaded and BOQ shall be prepared offline for uploading after finalisation.
(c) Tenderer shall be required to quote for each item of BOQ in figures. Rate in words
shall be generated by the system automatically.
(d) Schedule of credit in an item rate tender shall be prepared duly priced and shall be
uploaded in pdf/rar format alongwith tender documents. However Sch A Note shall be
inserted to the effect that the contract sum shall be arrived at after deducting the amount
of schedule of credit from the total quoted amount in the manner as under.
(e) The Bidder will be required to prepare his own Schedule of Credit wherein he will
quote the credit rate for each item being offered from his side. The item and quantity as
fixed by the department in the Schedule of Credit of tender documents shall not be
altered by the bidder in his Schedule of Credit. The rate of credit for individual item shall
be taken as higher of the rates as given in departmental Schedule of Credit and that as
offered by the bidder. The total amount of Schedule of Credit shall be worked out
accordingly and the contract sum shall be arrived at by deducting the amount of
Schedule of Credit so worked out from the contract sum in the BOQ. Cover 2 of the bid
shall consist of BOQ (in excel form) and bidders Schedule of Credit (in pdf form).
3.9.2 LUMP SUM E-TENDER
(a) BOQ or Schedule of Work shall be prepared using the BOQ template for the same
available on the website www.defproc.gov.in. This template shall be downloaded and
BOQ shall be prepared offline for uploading after finalisation.
(b) If Schedule A Part I is pre priced based on SSR rates, this shall be prepared in a
normal way and converted to pdf/rar format and kept as part of tender documents. In
BOQ, total of Schedule 'A' pre-priced amount will be inserted as item No 1. Amount
quoted against this item by the tenderer shall be the lump sum for this Schedule A Part
I. The percentage above SSR pre-priced amount shall be derived in the excel sheet
automatically by the system.
(c) In case Schedule A part I is to be quoted by tenderer based on drawings and

specifications, all building items shall be listed as separate items in BOQ and the
contractor shall quote lump sum amount for each building separately.
75
(d) Pre-Priced Schedule A Parts for Internal/External Services : These Schedule A

parts shall be prepared and pre-priced in a normal way and shall be converted in pdf/rar
format and kept part of tender documents. In BOQ, respective Parts of Sch 'A' alongwith
their total pre-priced amount will be inserted as separate items. Amounts quoted against
these items by the bidder shall be the lump sum quote for the respective parts of
Schedule 'A'. The percentage above SSR pre-priced amount shall be derived in the excel
sheet automatically by the system.
(e) Miscellaneous Schedule (To be quoted item wise by tenderer) : All items shall be
included in BOQ similar to that as for the item rate tender as described above.
(f) Schedule of Credit : Schedule of credit shall be prepared duly priced and shall be
uploaded along with tender documents in pdf/rar format. However Sch A Note shall be
inserted to the effect that the contract sum shall be arrived at after deducting the amount
of schedule of credit from the total quoted amount in the manner as under.
(g) The Bidder will be required to prepare his own Schedule of Credit wherein he will
quote the credit rate for each item being offered from his side. The item and quantity as
fixed by the department in the Schedule of Credit of tender documents shall not be
altered by the bidder in his Schedule of Credit. The rate of credit for individual item shall
be taken as higher of the rates as given in departmental Schedule of Credit and that as
offered by the bidder. The total amount of Schedule of Credit shall be worked out
accordingly and the contract sum shall be arrived at by deducting the amount of
Schedule of Credit so worked out from the contract sum in the BOQ. Cover 2 of the bid
shall consist of BOQ (in excel form) and bidders Schedule of Credit (in pdf form).
(h) Provisional Lump Sum : Estimated total amount based on SSR rates will be inserted
as an item in the BOQ. The percentage shall be derived in the excel sheet automatically
by the system in the excel sheet BOQ based on the amount quoted against this item by
the tenderer. This Percentage (plus/minus) shall be applied on the SSR rates for the
items to be payable under Provisional Lump Sum. Suitable Schedule A Note to this
effect shall be inserted in the tender.
(j) Prime Cost Sum: Estimated total amount will be inserted as an item in the BOQ. The
percentage shall be derived automatically by the system in the excel sheet BOQ based
on the amount quoted against this item by the bidder. This percentage (plus/minus),
subject to a maximum of 15% (on plus side) shall be taken as the PC Sum percentage.
Suitable Schedule A Note to this effect shall be inserted in the tender.
3.9.3 Tenders for Outsourcing of Services For Manning and Operation/ Maintenance
and Operation Including Outsourcing of Married and Other than Married Accn: The
tenders of above types shall be prepared, analysed and accepted in accordance with the
instructions issued by E-in-C’s Branch issued from time to time.
3.10 UPLOADING OF TENDER
3.10.1 All the documents forming part of tender such as tender forwarding letter,
instructions to tenderers, Particular Specifications, Special Conditions, list of drawings,
tender schedules (pre priced), NIT including its Appendix and Annexures thereto,
Schedule ‘A’, tender page, other standards pages and drawings shall be converted in
pdf/rar format. After the tender documents (pdf/rar) and BOQ as described in Para 3.9
above are ready, the same shall be uploaded on the e-tendering portal
76
www.defproc.gov.in and shall be published using DSC of tender publisher. However, if

due to any reason it is not possible to upload the tender in one go, it can be done in a
number of sittings as the system has the provision to save any uploading done in earlier
sittings.
3.10.2 During uploading of tender, names of two bid/tender openers shall be selected.
List of individuals having DSC and who have been authorised in for the formation by
Nodal Officer, as prescribed in para 3.4.2, above shall be visible on the system. Tender
can be opened by opening officers while on leave, temporary duty, permanent posting
etc.
3.10.3 While uploading the tender, various critical dates such as Tender Publishing Date,
Bid Download Date, Bid Submission Start Date, Pre-bid Meeting Date, Bid Submission
Closing Time, Bid Submission End Date, Bid Opening Date, etc are to be fixed by the
tender creator. Following parameters shall be kept in view while deciding various dates.
(a) It is essential that time allowed to bidders/tenderers should be adequate to enable
them to correctly calculate and check their bids before uploading on the portal. Hurried
calculations on their part may involve an element of approximation or an error to be on
the safer side, which may not be in the interest of the State. Allowing a short period to
bidders for submitting their quotations may not save time in the long run because the
work may have to be put to retendering due to an unreasonable quotation received at
the first instance.
(b)The minimum period between tender publishing date and bid submission start date
shall be as under :
(i) Item rate tender not exceeding Rs 50 lakhs - 14 days
(ii) Item rate tender exceeding Rs 50 lakhs - 21 days
(iii) Lump sum tender - 28 days
(c) Period between bid submission end date and bid opening date shall be seven (07)
days to enable the bidder to forward DD towards cost of tender & EMD (if applicable)
physically before the bid opening date.
(d) The bid submission closing time for all tenders of all formations shall be 1800 hrs.
(e) In case of revision of BOQ, the period between uploading of revised BOQ and bid
submission start date shall be decided based on quantum and nature of revisions but in
no case shall it be less than three days excluding the date of publishing of corrigendum
containing revised BOQ.
(f) In case of retendering, minimum time period between the publishing date and Bid
Submission Start Date shall be as under :
(i) Item rate tender - 07 days
(ii) Lump sum tender - 14 days
(g) These dates may be suitably modified keeping in view the parameters mentioned
hereinafter :
(i) In case of small jobs or where circumstances otherwise warrant , a lesser

period may be allowed but the aim should be to make available a minimum period
of 21 days for lump sum tenders and 14 days for Item Rate tenders between the
date of publishing the tender and bid submission start date.
77
(ii) In urgent cases ie tenders for works sanctioned under Para 34, 35 and 36 of
the Defence Works Procedure 2020, periods less than those mentioned above
may be allowed to tenderers for submission of their bids. In such case
circumstances necessitating adoption of such a course shall invariably be placed
on record by the Accepting Officer himself. It must also be ensured that there is
no delay in scrutiny/evaluation and acceptance of tenders and also the delay does
not take place on the part of the GE in issuing Work Order to the Contractor for
the commencement of work after receipt of Performance Security as per NIT
provisions
(h) It is important that tender documents should be prepared carefully and checked
before uploading on the tender portal so as to avoid extension of time in bid submission
end date on account of amendments or alteration to the tender documents.
(j) Sufficient time should be allowed to the tenderer to study the amendments and allow
for these in their quotation. It is, therefore, essential that when an amendment to the
tender is issued which affects the quotation, the end date of bid submission of tender is
suitably extended.
(k) As soon as it is apparent that some amendments to tender documents have to be

issued, it is important that this fact is published on procurement portal immediately
through a corrigendum informing that amendments are under issue and the bid
submission dates shall be notified subsequently.
3.10.4 After uploading the tender, printout of the complete tender documents shall
be taken and kept in files duly signed by the tender creator and the concerned JE
(QS&C). Copy of this tender shall be forwarded to all internal Sections for their study and
comments. Alternatively the soft copy in pdf/rar format of the complete tender shall be
made available to all internal Sections for such purpose. CWE and GE shall be informed
that tender has been uploaded/published intimating the tender id so that they can
download, study and offer their comments.
3.11 TENDER SCRUTINY AND ISSUE OF AMENDMENTS
3.11.1 After uploading tenders, various concerned Sections, GE & CWE shall study the
tender documents carefully and offer their comments to the E8 section for issue of
amendments to the tender. In case of tenders issued by CE Zone office, GE shall give a
detailed tender presentation in CE Zone office which shall be attended by all the
concerned executives and internal Sections and user representatives (PMG). All
decisions taken during the presentation shall be properly recorded for issue of
amendments. Concerned Sections shall provide necessary inputs to E8 section for issue
of amendments to tender.
3.11.2 A certificate on the following lines shall be furnished by/ obtained from the GE
within 10 days of uploading the tender stating that :-
(a) Site free from all encumbrances is available for all works.
(b) Arrangement exists for issue of water to Contractor at the points marked on the
layout plan or water is not available.
78
(c) Arrangements have been made for the issue of electric energy to the Contractor upto
....... KW at the point(s) marked on the layout plan or electricity is not available.
(d) Stores procurement action in respect of Schedule ‘B’ stores (wherever applicable)
has progressed sufficiently and enough stores will be available for issue to the contractor
on acceptance of contract, as applicable.
(e) Layout and plinth level of building(s) can be supplied to contractor immediately on
acceptance of the tender, as applicable.
(f) Tender documents have been thoroughly studied by the GE, AGE(C) & Engineers-in-
Charge and they are fully conversant with the provisions of the tender documents, need
of the site & technical requirements of the work.
3.12 AMENDMENT TO TENDER DOCUMENTS (CORRIGENDUM)
3.12.1 In the e-tender portal, amendments to tender documents are issued as

corrigendum. The amendments (corrigendum) shall be prepared and uploaded in pdf
format.
3.12.2 The portal also allows various corrigenda like revision of critical dates, change of
bid openers, revision of any stage etc which shall be utilized as per the requirement.
3.12.3 No amendment to BOQ shall be issued. In case there is any amendment to BOQ,
the complete BOQ shall be revised and uploaded again. BOQ can not be revised if bid
submission start date has already commenced. Once revised BOQ is uploaded, the
same shall be visible to the tenderers for quoting.
3.12.4 No amendment shall be issued after the bid submission start date. In case some
amendments are inescapable, it shall be ensured that bidders get a minimum period of
three days from date of issue of last amendment to the bid submission starting date.
3.13 VALIDITY OF BIDS
Validity period of the bid shall commence from the next day subsequent to bid
submission end date. Suitable provision in Special Conditions shall be made to this effect
while drafting the tender. Validity period shall be normally 60 days for single stage two
cover system. Validity period of bid, in case of two stage three cover systems, shall be
90 days from the next day subsequent to bid submission end date of Stage 2 containing
finance bid.
3.14 OPENING OF TENDERS/BIDS
3.14.1 After the bid submission end date, if the number of bids received are less than
seven, the system will automatically extend the bid closing date for a period of 7 days.
After this extension of 7 days, the system does not show the number of bids till the
Technical bids (Cover 1) are opened. In case still the number of bids are assessed to be
less than seven and the Accepting Officer feels that chances of healthy competition are
less, he can take a call to postpone the bid submission end date or to re-invite the tender.
However, if the Accepting Officer decides to go ahead with opening of tender, then the
tender shall be opened in two steps. In the first step, Cover 1 (Technical Bid) shall be
opened. In the second step, Cover 2 (Financial Bid) of applicants, who have been found
eligible after technical evaluation of Cover 1, shall be opened.
79
3.14.2 COVER 1 OPENING

(a) Two opening officers mentioned in the e-tender portal shall be intimated by the tender
creator to open the Cover 1 on or after the bid opening date fixed for the tender by the
Accepting Officer. Opening Officers as selected during tender creations also get
intimation through system generated message and/or mail about dates of opening of
bids. Even if the bid opening officer is not available in the station, he can open the bid
from any place using his DSC.
(b) The opening officers shall download all the documents uploaded by the tenderers
and initial the same. The opening officers shall inform the outcome of Cover I opening to
the Accepting Officer and hand over all the documents to the E8 Section head. The
documents received from the opening officers shall be carefully kept in the file duly
paged/folio numbered and shall be kept in safe custody of the concerned officer in the
E8 Section.
3.14.3 TECHNICAL EVALUATION OF COVER I

After opening of Cover 1, technical evaluation shall be done offline keeping in view the
various parameters and PQC given in NIT, extant instructions in vogue as on date and
the following guidelines:-
(a) Unenlisted bidder shall be considered provided the bidder meets the criteria given in
NIT and is eligible for enlistment in the class required for the tendered work. All
documents required for enlistment as per checklist shall be checked from the documents
uploaded in Cover 1 by the bidder and kept in record for future reference.
(b) For consultancy works, the Selection Committee will evaluate the firms keeping in
view the detailed instructions given in Chapter 11 of Manual as well as the instructions
issued by E2 (Design ) Sub Dte of E in C’s Branch in respect of consultancy from time
to time.
3.14.4 Technical Evaluation of Cover I through Tender Selection Committee (TSC) :

(a) Technical evaluation of Cover 1 shall be through Tender Selection Committee in the
following types of works :
(i) All high value works whose estimated cost are more than Rs 25 crore,
(ii) Consultancy works whose estimated cost are more than Rs 50 lakhs
(iii) Specialist works such as runway and pavements, structural steel works,
marine and harbour works, high tension distribution systems, central air-
conditioning works, sewage and water treatment works, hospital services,
electrically operated cranes of large capacity, lifts etc whose estimated cost are
more than Rs 2 crores.
(b) The composition of the TSC shall be as under :
Chairman: ACE(Plg)/ACE(Wks)/Senior most Director in the Zone.

Members:-
(i) Director(Contracts)/SSW of the CE Zone/CCE if he is not senior to the
Chairman otherwise Jt Dir(C) or DD (C) of the CE zone.
(ii) Director/SO-1 of the CE Zone/CCE (depending on the nature of works
and availability of the officers).
80
(iii) One officer of the rank of Director/SO-1 from other CE Zone/CCE (to
be detailed by Command Chief Engineer/ADG).
(b) The basic data for the selection of tenderers shall be presented by the DIR(C)/
Jt Dir (c)/SSW of CE Zone as stipulated in Appendix 3.10. This data shall be prepared
from the documents received from opening of Cover I as stated above as well as
departmental records.
(c) The Committee shall submit its findings with detailed justification on the eligibility/in
eligibility of the bidders considering the various parameters given in the NIT and the
instructions in this Manual. The members of Tender Selection Committee shall give an
undertaking that none of them has any conflict of interest with any of the bidders
participating in the tender process. In case of any member having conflict of interest with
respect to any applicant bidder, he shall divulge the detail and recuse from participating
in the Tender Selection Committee.
(d) Selection made by the Committee would be recommendatory in nature. DIR(C) shall
put up the findings of the Tender Selection Committee to the Accepting Officer along
with his recommendations for selecting the bidders for opening of Cover 2. The
Accepting Officer shall record his orders personally in the statement (Appendix 3.10)
with dated initials in respect of each entry. Cases where the Accepting Officer deviates
from Committee’s recommendations and/or recommendations of DIR(C), specific
reasons must be placed on record for any future scrutiny and NHEA shall be apprised
accordingly.
3.14.5 Tender Evaluation Without Tender Selection Committee :
Tender evaluation in respect of works other than as stated in Para 3.14.4 above shall be
done as under :
(a) DIR(C) in CCE/CE Zone office, DCWE/ACWE(C) in CWE’s office and AGE(C)/
JE(QS & C) in GE(I)/GE’s office will complete the statement given in Appendix 3.10 from
the documents received after opening of Cover 1 as well as departmental records and
give his recommendations keeping in view the various criteria given in the NIT with
regard to the eligibility and instructions in vogue.
(b) The Accepting Officer shall record his orders personally in the statement (Appendix
3.10) with dated initials in respect of each entry. In case of disqualification of any bidder,
the reasons for the same will be recorded against the entry concerned.
3.14.6 The completed statement (Appendix 3.10) together with all applications shall be
filed and kept in safe custody for future reference. Accepting Officers may open a register
as per statement given in Appendix 3.10 for future ready reference.
3.14.7 No permission of NHEA (Next Higher Engineer Authority) is required for qualifying
an unenlisted contractor in technical evaluation. However, it shall be ensured by
Accepting Officer that the unenlisted bidder meets all the criteria for the unenlisted
contractor given in NIT. No report on acceptance and rejection of technical bids (Cover
1) is required to be submitted to the NHEA.
81
3.14.8 Action to be taken, when only One Single Eligible Bid qualifies in 'T' Bid
evaluation (in Single Stage Two Cover System) : In such cases, the Accepting Officer
will decide whether to proceed for opening of Cover 2 (Financial Bid) or to retender. If
he decides to proceed for opening of Cover 2 of the qualified bidder and after opening
of Cover 2, if the bid is considered reasonable, the Accepting Officer can accept the
tender after obtaining approval of NHEA in terms of Para 47(f) of DWP 2020.
3.14.9 Action to be taken, when after bid submission end date (In Single Stage
Two Cover System) only one Single Bid is received in Cover 1 : In such cases, the
Accepting Officer will take a call to re-invite the tender or otherwise. If the tender is
re-invited, the Accepting Officer shall make efforts to ensure more bidders participate in
the tendering. If after making all such efforts, the number of bidders participating remains
only one, then the Accepting Officer will decide as to whether to further re-tender or
proceed for opening the Cover 2. If he decides to open the Cover 2 and the bid is
considered reasonable, Accepting Officer can accept the tender after obtaining approval
of NHEA in terms of Para 47(f) of DWP 2020.
3.14.10 Action to be Taken, When Only One quoted Bid Received in Cover 2 out of
Several eligible Bids received and qualified in Cover 1 (in Single Stage Two Cover
System): In such cases, the Accepting Officer shall examine the reasonability and
decide whether to accept or re tender. Acceptance of such bid shall be with prior approval
of NHEA in terms of Para 47(f) of DWP 2020.
3.14.11 In all cases as discussed in Para 3.14.8 to 3.14 10 above, a report showing
reasons for acceptance of single priced tender shall be forwarded to CDA/PCDA as per
format given in Appendix 3.11.
3.14.12 Period between Cover 1 Bid Evaluation and Finance Bid Opening : After
decision of the Accepting Officer on the tender evaluation as brought out herein before,
a technical evaluation summary of Cover1 showing result of selection/rejection alongwith
reasons shall be prepared and uploaded on the e tender portal by Tender Evaluator
using his DSC. Date of opening of the Finance Bid ie Cover 2 shall also be fixed at this
stage in the e-tender portal keeping in view the following timeline:-
(a) If technical bids of all bidders are found to be qualifying for opening of financial bid,
financial bids (Cover 2) shall be opened at the earliest date, but not later than three
working days after uploading technical bid evaluation summary.
(b) If technical bids of one or more bidders are not found to be qualifying for opening of
finance bid, a period not less than seven days shall be kept between uploading of
technical bid evaluation summary and finance bid (Cover 2) opening. The disqualified
bidder may appeal to next higher Engineer Authority (NHEA) with a copy to the Accepting
Officer through email. On receipt of any such appeal from the bidder or query from NHEA
regarding such appeal, the date of opening of financial bid shall be postponed by
minimum seven clear days from the date of receipt of such appeal/query from NHEA
(whichever is later) to enable NHEA to dispose off the representation.
3.14.13 In case, after uploading the Technical Bid Evaluation Summary but before
financial bid opening time, adverse remarks come to notice in respect of a bidder who
has been declared qualified as per Technical Evaluation Summary, technical evaluation
shall be revised and uploaded through corrigendum accordingly and financial bid
(Cover 2) opening time & date shall be postponed at least for seven days to enable the
82
disqualified bidder to represent to NHEA and enable the NHEA to convey decision on
the representation. Similarly, if remarks in respect of a bidder are changed from adverse
to “Yes”, technical evaluation summary shall be revised accordingly through corrigendum
before financial bid opening date and time and concerned bidder's financial bid shall
be opened. In case tender evaluation has been done by the Tender Selection Committee
(TSC), the revision of technical evaluation in such cases shall be finalised by the
Accepting Officer on the recommendations of DIR (C) without involving the TSC.
3.14.14 In case even after considering one class below (two classes in case of remote
and difficult areas) and retendering, the required competition is not achieved for a
particular work, the Accepting Officer may take decision to issue the tender to bidders
who are two classes below after seeking the permission from NHEA ie CE Zone in case
of GE's, GE(I) & CWE's tender & CE Command in case of CE Zone/CCE tenders. In
case of delegated works, the term NHEA shall be with reference to authority delegating
the work. The list of remote and difficult areas shall be finalised by CE Command/ADG.
3.15 OPENING OF COVER-2 (FINANCIAL BID )
3.15.1 The same opening officers, who had opened Cover 1, shall open the Cover 2 ie
BOQ of all the bidders who have been qualified in the technical evaluation of Cover 1 as
per tender evaluation summary uploaded on the portal.
3.15.2 Printout of individual finance bids as well as comparative statement of rates

quoted by all the tenderers/bidders, as generated by the system automatically (called
BOQ Chart), shall be downloaded and signed by the bid openers and shall be handed
over to Section head of E8 section who will put up the same to the Accepting Officer .
3.15.3 In case the BOQ was revised by the Department through the corrigendum and
the bidder has failed to quote on revised BOQ (ie he has quoted on pre revised BOQ),
such bid shall be treated as willful negligence by the bidder and his quotation shall be
considered non-bonafide. In such cases the lowest tender shall be determined amongst
the valid/bonafide bids only. Accepting Officer may decide whether to re-tender or
consider the lowest bonafide tender for acceptance. The remark ‘non-bonafide finance
bid’ against such bidder and copy of comparative statement of rates along with Finance
Bid Opening Summary shall be uploaded on the portal. Suitable provisions shall be made
in the tender documents for this type of eventuality.
3.16 FINANCIAL BID EVALUATION AND ACCEPTANCE OF TENDERS
3.16.1 General principles to be followed in acceptance of tenders :

Following types of lapses in acceptance of tenders and violation of laid down procedure/
instructions have been observed which shall be avoided strictly :-
(a) Reduction in scope of work/tender after opening of tenders, so as to bring it within

available funds for acceptance of tender.
(b) Affecting major changes in scope of tendered work after opening of tenders.
(c) Negotiations with lowest tenderer, by referring items containing freak rates
amounting to the extent of more than 50% of tendered amount and then accepting lowest
tender after obtaining marginal reduction.
83
(d) Obtaining voluntary reduction from the lowest tenderer to bring the quotation within
available funds or to bring it to acceptable level to accept the tender.
(e) Acceptance of tender without properly analysing the lowest tender at market rate.
(f) Resorting to retendering without proper evaluation of quoted rates, resulting in a

higher quotation in the 2nd call. In such cases, if a tender is accepted, Accepting Officer
shall intimate the NHEA after acceptance of tender alongwith full justification.
(g) It must be clearly borne in mind that practice of negotiation even with the lowest
tenderer to obtain reduction in quoted rates to bring the quotation to acceptable level is
a serious violation of procedure. Such a quotation can neither be termed as competitive
nor reasonable. In case the rates quoted by the lowest tenderer are considered
unreasonable/high, the tender shall be reinvited, instead of obtaining reduction from
lowest tenderer. Similarly, practice of obtaining voluntary reduction from lowest tenderer
after opening of tenders just to bring it within available funds/acceptable level, is an
unethical practice and must not be resorted to. Contractors indulging in practice of
offering voluntary reduction after opening of tenders shall be liable for action as per Para
3.16.8 hereinafter.
(h) Affecting major changes in tendered scope of work after opening of tenders
with/without the consent of lowest tenderer is against the spirit of competitive tendering
because other tenderers are not given equal opportunity to consider and quote for
revised scope of work. It may be possible to get lower rates if retendering would have
been resorted to with revised scope of work. Acceptance of such a tender with
revised/changed scope of work can even be termed as acceptance of single tender to
that extent. Therefore whenever such an eventuality arises, where change in scope of
work comes to notice after opening of tenders, in all fairness such a tender shall be re-
invited with revised scope of work. However, if the changes are of minor nature, the same
may be regularised through deviation Order during execution of the work.
3.16.2 Accepting Officer is supposed to be conversant with the powers of acceptance

of tenders as laid down in Table ‘B’ of RMES and Para 428, 440 and 441 thereof. It is
the responsibility of the Accepting Officer to satisfy himself with regard to reasonability
of the quoted rates before the lowest tender is considered for acceptance. Therefore, he
must ensure that the rates quoted are competitive and reasonable. Bids must be
analysed carefully before considering the lowest bid for acceptance, by taking into
account the market rate of materials and labour and other relevant factors affecting the
quotations.
3.16.3 Market analysis shall be done before opening of Financial Bid based on rates of
materials and labour as received from the GE and/or based on independent market
inquiry and shall be kept in record duly signed by the concerned JE (QS&C) and
concerned dealing E8 Officer . Guidelines for analysis of lump sum tenders based on
SSR are given in Appendix 3.12.The Accepting Officer may also get rates of specialized
E/M items examined from E/M officers posted in E4 Section from the point of view of
reasonability as well as freakishly high/freakishly low rates.
3.16.4 Apart from comparing with the prevailing market variation, percentage on/below
MES SSR, plinth area rates based on tendered rates should be worked out taking into
account difference in cost of Schedule 'B' stores and compared with completion cost of
similar building executed/being executed by other agencies in the station.
84
3.16.5 No negotiations, even with the lowest tenderer, are permissible. Only when the
lowest tender after detailed analysis is found competitive, reasonable and most
acceptable as whole, but contains a few freakishly high rates having nominal financial
effect, then under such circumstances only the freakishly high rates shall be referred to
the lowest tenderer in writing for reconsideration and downward revision. If the lowest
tenderer offers reduction, the same shall be accounted for in acceptance and if lowest
tenderer declines to reduce the rates, tender may be accepted with freak high rates
considering the overall quotation. Such freakishly high rates as well as freakishly low
rates shall be dealt as per guidelines contained in Appendix 3.13.
3.16.6 Form of acceptance letter shall be as given in Appendix 3.14. Simultaneously

with the issue of acceptance letter, a separate letter shall be issued to the contractor on
the form given in Appendix 3.15.
3.16.7 Tender shall be accepted within the validity period of the bid. Copy of acceptance
letter shall be uploaded on the website /tender portal (under ‘AOC’ menu) using DSC of
the tender evaluator. Simultaneously copy of acceptance letter shall be sent to contractor
by e mail. Copy of Acceptance letter shall also be endorsed and forwarded by registered
letter to the following offices :-
(a) Registering Authority of Contractor
(b) Assistant Labour Commissioner
(c) Labour Enforcement Officer
(d) Regional Labour Commissioner (Central)
3.16.8 REVOCATION/ UPWARD REVISION OF OFFER/VOLUNTARY REDUCTION

BY THE LOWEST TENDERER AFTER OPENING OF COVER 2
Revoking the offer or revising the rates upward/offering voluntary reduction by the
lowest tenderer, after opening of Cover 2, shall be considered as a wilful default. For this
default a penalty of an amount equal to earnest money shall be levied. In case of an un-
enlisted tenderer, earnest money deposited by him shall be forfeited. In case of MES
enlisted tenderer, an amount equal to the earnest money stipulated in the NIT shall be
notified to the tenderer for depositing through MRO and consideration of such tenderer
in tender evaluation for future works shall remain suspended till the aforementioned
amount is deposited in the Government Treasury. No other disciplinary/administrative
action shall be taken against such tenderer. In such a situation, the next lowest offer
shall not be considered for acceptance. Instead retendering shall be resorted to in a
transparent and fair manner and the defaulting tenderer and his related firm if any, shall
not be eligible for the tender in second call or subsequent calls. Reduction offered by the
tenderer in respect of the freakishly high rates shall not be treated as voluntary reduction.
3.17 COMPARATIVE STATEMENT OF TENDER (CST)

Based on the comparative statement generated by the system, CST as per
standard format shall be prepared in triplicate and signed by bid openers.
Recommendations of concerned E8 officer ie Dir(C)/SSW/DCWE(C)/ACWE(C)/ AGE(C)
and order of Accepting Officer, as applicable shall be recorded on CST and kept on
record for onward submission of two copies to CDA.
85
3.18 CTC OF CONTRACT

After a tender has been accepted and acceptance letter uploaded on the website, a print
out of complete tender documents shall be taken for the purpose of making original copy
of contract documents and the same shall be signed by both the parties. Thereafter
photocopies of the original tender shall be made and distributed to all concerned
executives and contractor. Original copy along with CST (Two Copies) shall be
forwarded to PCDA/CDA till such time the procedure is evolved by Audit to keep e-record
or peruse e-record on website.
3.19 RE-INVITATION OF TENDERS
3.19.1 Re-invitation of tenders shall be normally resorted to in a transparent and fair

manner in the following circumstrances:-
(a) When the lowest tender obtained is unreasonable; or
(b) When the lowest tender obtained exceeds the amount available under the
Administrative Approval and it is proposed to modify the design or to review any
other tender condition/provision to bring down the cost without changing the
scope of work.
(c) When the lowest tender is revoked or revised upward or withdrawn for any
reasons by the tenderer.
(d) Any other reason as per instruction in vogue.
3.19.2 Re-tendering must not be resorted to as a matter of routine. Wherever the lowest
tender received is considered unreasonable or high, reasons for the same shall be fully
examined and kept on record before deciding to go for re tender. Before re-tendering, it
must be further ensured that suitable modifications are made in the design and
completion period and any other condition as considered necessary and efforts shall be
made to encourage new tenderers to quote in order to stimulate competition.
3.20 TIE AMONGST TWO OR MORE LOWEST TENDERS
3.20.1 In case of tie among several lowest tenderers, if the Accepting Officer is convinced
that quoted rates are reasonable, he may call for the tenderers and after explaining to
them that their tenders are on the same level, ask them to requote (on the lower side
only) on the spot confidentially. Care shall be exercised that tenderers are NOT allowed
to consult each other.
3.20.2 The revised quotations will be opened in presence of tenderers and the lower of
all such bids after requoting will be accepted immediately.
3.20.3 It shall be ensured that all necessary checks in connection with the tenders have
been completed prior to asking the two lowest tenderers to re quote.
3.20.4 If the lowest tenderers refused to requote on lower side, Accepting officer will
decide as to which bid is to be accepted. In this exercise he shall consider the past
performance (last three years) and present capacity to execute the work in respect of all
the bidders.
86
3.20.5 Where this procedure is adopted, the fact shall be recorded on the Comparative
Statement of Tenders under the signatures of the Accepting Officer.
3.21 PREVENTION OF CARTELIZATION
The Accepting Officer shall also examine the MIS report, which can be generated from
e Procurement portal ‘ defproc.gov in’ and ensure that there is no cartelization indicated
therein at each stage of opening of packets/covers. In case any cartelization is found,
action against contractors shall be initiated and action shall be taken to re-tender
immediately. The event of uploading the tender from the same IP address need not be
considered as cartelization unless other supporting reasons/ evidence exist. Probability
of uploading/ quoting the tenders through internet centers/cafes cannot be ruled out and
hence can not be objected.
3.22 MISCELLANEOUS
3.22.1 All correspondence in the tendering process after creation of tender ID( by e
Procurement portal) till AOC shall specifically mention the tender ID for ready reference.
3.22.2 Date of receipt of tender as referred to in tender documents at various

locations/for various purposes including that mentioned in the Special Condition for
reimbursement of variation in prices shall be the bid submission end date. Suitable
provision in Special Conditions shall be made to this effect while drafting the tender.
3.22.3 Normal method of contracting is by competitive tendering and only in special

cases, GEs/CWEs/CEs are authorised to conclude contracts on a single tender basis.
Separate instructions have been given on this subject in Para 3.23 hereinafter.
3.22.4 AWARD OF WORKS TO CONTRACTORS WHO HAVE CLOSE RELATIONS

IN MES AND MINISTRY OF DEFENCE
(a) Civilian Officers & Junior Engineers of the MES and Service Officers & Junior
Engineers of the Corps of Engineers serving in MES should declare if any of their near
relatives are working as contractors in the MES or as Directors, Senior Executives or
Employees with contractors/firms taking up contracts. It shall be the responsibility of the
officials concerned to notify the changes, if any, as and when they occur. Such
contractors or firms should not be permitted to tender for works which his near relative
will deal or with which he may be connected. If on transfer from one place to another, an
officer finds that his ‘near relative’ is concerned with any work which he may have to deal
with, he should immediately report the matter to his next higher officer for deciding future
course of action.
(b) Similarly every contractor and firm wishing to be registered as an approved

contractor should submit a list of those persons who are working with him/it in any
capacity (including themselves ie proprietor, partners, directors) and are ‘near relative’
of any gazetted civilian officer/commissioned officer / Junior Engineer employed in the
MES or Corps of Engineers. The contractor/firm should also intimate names of such
persons if they are subsequently employed by him/it. The contractor/firm should also be
informed that he/it is not entitled to tender for any work in the entire CE zone/CCE in
case of Gazetted officer and entire CWE in case of Junior Engineer and any breach of
this condition may be considered sufficient to debar the contractor/firm from registration
or to remove him/it from an approval list.
87
(c) By the term ‘near relative’ it means wife, husband, parents, children, brother, sister,
brother/sister-in-law, son/daughter-in-law, uncle, first cousin and father/mother-in-law.
3.22.5 DESPATCH OF CONTRACT DOCUMENTS TO PCDA/CDA

(a) The following periods are laid down for dispatch of original contract agreements
to the PCDA/CDA concerned, reckoned from the date of submission of performance
security.
Contracts Normal Contracts Specialist Contracts

accepted by
CE/CWE/GE 4 Weeks 8 Weeks
(b) The periods laid down above are the maximum periods. The contract documents
shall be sent to the PCDA/CDA concerned soon after these are signed by the contractor
and to achieve this, it is desirable that after intimating a suitable date to the contractor to
attend the office of Accepting Officer for signing the documents (a period of 10 to 15
days but not exceeding 15 days may be given to the contractor), the matter should be
persistently pursued with him. So far as the Department is concerned, it shall be ensured
that the documents complete in all respects are kept ready (including copies for
distribution) and are distributed to all concerned immediately after the contractor's
signatures/initials on the original.
(c) To enable PCDA/CDA to preserve the documents properly, it should be ensured

that drawings, copy of Administrative Approval and Technical Sanction are invariably
forwarded along with contract agreement neatly stitched. In case the documents are
bulky, these should be forwarded in separate folders neatly stitched with Contract
Agreement Number and year clearly endorsed on the cover of the folder.
(d) While forwarding original contract documents from one office to another, it should be
sent separately in a sealed envelope under an insured registered post. The
acknowledgement receipt should be watched for and duly recorded. Original agreement
should not be combined along with other dak/documents while dispatching the same to
another office.
3.22.6 SUPPLY OF CONTRACT DOCUMENTS TO USERS

There is no embargo on providing contract documents to users whenever required by
them. Provisions of the contract shall also be explained by executives as and when
requested by them. However there is no requirement of forwarding a copy of all contracts
concluded to the users as a matter of routine.
3.23 SINGLE TENDER CONTRACTS

(a) In pursuance of Para 432 of RMES 1968, the Accepting Officer is required to
report the circumstances for entering into a single tender contract upto his powers as
laid down in Table B to his NHEA.
(b) The report shall be submitted to NHEA with a copy to the PCDA/CDA as per
Appendix 3.16 as and when the contract is concluded.
(c) GE, CWE and CE shall exercise their powers to conclude contracts on single
tender in consultation with PCDA/CDA.
88
(d) The report on receipt by the NHEA shall be examined to establish that the
reasons for dispensing with competition are adequate and the rates accepted are
reasonable.
(e) E in C is authorised to conclude a contract on a single tender as per powers laid

down in Table B of RMES in consultation with Financial Advisor (Defence Services). The
reasons for dispensing with competition and method of determining the rates will be
placed on record in writing at that time.
3.24 FINANCIAL CONCURRENCE (FC) CASES

The following information/confirmation/documents shall be submitted by contract section
(E8) while initiating the case for financial concurrence:-
(a) Abstract in duplicate for the building/works for which market analysis is submitted.
(b) Comparative Statement of Rates/lump sum amounts.
(c) Confirmation that market rates for materials are those at which materials are being
actually procured by contractors on ongoing works or independently verified from
manufacturers or their authorised dealers whichever is less.
(d) Confirmation that market wages for labour are those actually being paid by
contractors presently on ongoing works and verified from contractor’s wage books and
wage sheets at the time of disbursement.
(e) Confirmation that take off and pricing is counter checked with respect to tender
provisions including drawings by AAD(C)/AD (C)/DD(C)/Jt. DIR(C).
(f) CTC of tender documents duly amended.
(g) 32 Point proforma as per format given at Appendix 3.17.
(h) Market rate analysis of building/works including services.

(a)
(j) Certificate under signature of CE/CCE that lowest tender is reasonable and
retendering is not likely to reduce the rates substantially.
3.25 DELEGATION OF WORKS : Delegation of powers to CWE/GE/GE(I)/AGE(I) for

conclusion of contract will not be made in respect of original & specialized works, except
with prior approval of Command CE/ADG in exceptional cases.
3.26 ACCEPTANCE OF TENDERS AND DELEGATION OF WORKS WHILE

PROCEEDING ON POSTING/RETIREMENT
Following procedure shall be followed for acceptance of tenders and placing Supply/Job
Orders at the time of transfer/retirement of Accepting Officer :-
(a) No tender, supply/job order shall be accepted/placed by any executive ie

CE/CCE/CWE/ GE (I)/GE/AGE (I) or their officiating incumbent during the period of last
20 days prior to the move date indicated in posting order/date of retirement.
89
(b) In case the officer is to move on relief, he shall not accept any tender/place
supply/job order, 20 days prior to the date of reporting by the new incumbent.
(c) In case the officer is to move on relief but relief is either not posted or date of mov
of relief is not indicated in the posting order, then he may accept tender/place supply/job
order with the prior written approval of NHEA till the date of move of relief is decided.
Once the date of move of relief is notified, then the time frame given in Para (b) above
shall be followed.
(d) In case the move date of the officer or his relief is extended due to any reason
whatsoever, he may accept tender/place supply/job order after obtaining prior written
approval of the NHEA. However, once the revised move date is fixed, he shall not accept
any tender/place and supply order/job order during the last 20 days as stipulated in Para
(a) & (b) above.
(e) In case the officer is to move out forthwith without relief, then he shall not
accept any tender/place any supply order/job order on receipt of posting order till
he relinquishes his charge.
(f) In case of tender for which FC case has already been initiated and concurrence
of competent financial authority is received any time before handing over the charge to
the relieving officer, then the tender may be accepted.
(g) Tenders for works of urgent nature like works sanctioned under Para 34, 35 and
36 of DWP 2020 and maintenance contracts, the validity period of which is expiring
during the period stated in Sub Para (a) above and the like, may be accepted with prior
permission of the NHEA. The complete documents including justification for urgency
shall be forwarded for scrutiny to the NHEA for according permission without any delay.
The scrutiny by the NHEA shall be done on priority and permission shall be given within
15 days if the tender documents are found in order.
(h) CE Zone shall not delegate any work to CWE/GE for conclusion of contracts three
(03) months prior to his move on posting/retirement.
(a)
3.27 EXERCISE OF POWERS IN EXECUTIVE APPOINTMENT BEYOND THREE
YEARS : Powers in terms of Table ‘B’ of RMES vested in such officials, who continue
in a particular executive appointment beyond three years, shall be exercised only with
the written prior concurrence of NHEA on case to case basis with full justification. NHEA
shall issue/convey approval or otherwise as the case may be from E2 (Plg) channel in
consultation with his E8 Section.
3.28 PHYSICAL TENDERING : In case of physical tendering, the instructions in

Chapter 3 of MES Manual on Contracts 2007 (Reprint 2012) with amendments issued
from time to time shall be applicable.
3.29 INTEGRITY PACT : Integrity Pact as per Appendix 3.18 shall be included in
the NITs for tenders of value more than Rs 2.00 crores.
90
Appendix 3.1
Military Engineer Services eProcurement Portal

https://defproc.gov.in/nicgep/app
Request Form for Tenders Administration Account
Personal Details :
1 Title*: Mr/Mrs/Ms/Dr/Shri
2 First Name*:
Last Name*:
3 Date of Birth*: (DD/MM/YY)
4 Login ID* say abc@gmail.com :
(Login ID should be individual's personal id not designation based id)
5 Organisation Name*:
6 Deptt/Circle*:
7 Division*: Designation*:
8 Address 1*:
9 Address 2*:
10 District:
11 City*: Pin Code:
12 Correspondence Email ID*:
(Correspondence Email ID can be the same as Login ID. All the email
correspondence will be sent only on the Correspondence Email ID)
13 Phone: +91: STD: No:
14 FAX: +91: STD: No:
15 Mobile:
(All the SMS correspondence will be sent only on this Mobile number)
16 User Roles: Nodal Officer/Tender Creator/Tender
Publisher/Bid Opener/Tender Evaluator
(select one or more as applicable)
17 Organisation Chain
Date : Signature of Tender Inviting Authority

Name : ________________________
Seal :
Note: The request for tender administration account details will be communicated by
email
Disclaimer : This account is meant for publishing and maintaining the tenders
information on Government eProcurement Portal. The sole responsibility of the
accuracy and validity of User information/contents in the tender documents shall rest
with the authorized user of the Account ie. the concerned Tender Inviting Authority who
is responsible for tender administration. NIC shall be responsible only for ensuring the
system performance and security.
91
Appendix 3.2
LIST OF MAJOR PLANT AND EQUIPMENT (MINIMUM ESSENTIAL) FOR RUNWAY

PAVEMENT PROJECTS COSTING MORE THAN Rs 100 CRORE
Srl T&P Items Minimu Vintag

No m e
Quantity (in
year)
1 Paver with electronic sensor (minimum width of paver finisher 01 No 05
09 meter) for laying bituminous layer with printing facility
2 Computerized hot mix plant (Batch mix) of 1x90 TPH and 02 Nos 05
1x120 TPH including printing facility for each (1x90
TPH
and
1x120
TPH)
3 Pneumatic tyre roller (07 to 25 ton capacity) 02 Nos 05
4 Dual mode tandem vibratory roller (08 to 10 ton capacity) 06 Nos 08
5 Bitumen sprayer 10 to 12 ton motorised 01 No 08
6 Insulated bitumen containers of suitable capacity near hot mix 02 Nos 08
plants
7 Computerized ready mix concrete plant of 2x90 Cum/hr and 03 Nos 05
1x30 to 60 Cum/hr with total combination of min 210 Cum/hr)
with printing facility for each
8 Slip form paver with electronic sensor (minimum 08 to 13 01 No 05
meter width) for laying concrete pavement
9 Hand held heavy duty needle vibrators (electronically 06 Nos 08
operated/diesel driven) for PQC
10 Machine for joint filling 01 No 08
11 Diamond cutter for joints (Diesel/electric driven) (Two full 02 Nos 08
depth concrete cutting machine)
12 WMM plant of 90 to 120 TPH capacity 01 No 08
13 Vibratory type sand screeners 01 No 08
14 Mechanised runway marking and painting equipment 01 No 08
15 Air compressors 350 cfm 01 No 08
16 Profilometer/Roughometer 01 No 08
17 Core cutting machine (150mm diameter &100mm diameter bit) 01 No 08
18 Field testing equipment to test 'K'value &CBR value 01 No 08
19 Lab testing equipments for site lab 08
20 Weigh bridge (Dharmkata) capacity 100 T 01 No 08
21 Total station survey equipment 01 No 08
Notes :
1. Above mentioned list is only minimum requirement. Additional requirement based

on volume of rigid/flexible pavement work, time available and scheduling may be decided
by the Accepting Officer and included in the tender. However, the minimum requirement
as laid down, will not be diluted.
92
2. The following is to be ensured :-
(a) The plant has fitness certificate from the authorised service centre of
original manufacture/OEM.
(b) The plant has been calibrated by the OEM/authorised service centre, as
(c) The original manufacture's AMC is current and valid.
(d) The operator of plant is certified by OEM.
3. Plants and equipment applicable to type of construction (Rigid/flexible) shall be

deployed.
93
Appendix 3.3
LIST OF MAJOR PLANT AND EQUIPMENT (MINIMUM ESSENTIAL)

FOR RUNWAY PAVEMENT PROJECTS COSTING MORE THAN
RS 20 CRORE AND LESS THAN Rs 100 CRORE
Srl T&P Items Minimum Vintage

No Quantity (in
year)
1 Paver with electronic sensor (minimum width of paver 01 No 05
finisher 7.5 to 09 meter) for laying bituminous layer with
printing facility
2 Computerized hot mix plant (Batch mix) of 90 TPH capacity 01 No 05
including printing facility
3 Pneumatic tyre roller (07 to 25 ton capacity) 02 Nos 05
4 Dual mode tandem vibratory roller (08 to 10 ton capacity) 04Nos 08
5 Bitumen sprayer 10 to 12 ton motorised 01 No 08
6 Insulated bitumen containers of suitable capacity near hot 02 Nos 08
mix plants
7 Computerized ready mix concrete plant of min 90 Cum/hr 01Nos 05
output with printing facility
8 Slip form paver with electronic sensor (minimum 05meter 01 No 05
and extendable with attachment to 08 meter width) for laying
concrete pavement
9 Hand held heavy duty needle vibrators (electronically 06 Nos 08
operated/diesel driven) for PQC
10 Machine for joint filling 01 No 08
11 Diamond cutter for joints (Diesel/electric driven) (Two full 02 Nos 08
depth concrete cutting machine)
12 WMM plant of 90 to 120 TPH capacity 01 No 08
13 Vibratory type sand screeners 01 No 08
14 Mechanised runway marking and painting equipment 01 No 08
15 Air compressors 350 cfm 01 No 08
16 Profilometer/Roughometer 01 No 08
17 Core cutting machine (150mm diameter &100mm diameter 01 No 08
bit)
18 Field testing equipment to test 'K'value &CBR value 01 No 08
19 Lab testing equipments for site lab 08
20 Total station survey equipment 01 No 08
94
Notes :
1. Above mentioned list is only minimum requirement. Additional requirement based

on volume of rigid/flexible pavement work, time available and scheduling may be decided
by the Accepting Officer and included in the tender. However, the minimum requirement
as laid down, will not be diluted.
2. The following is to be ensured :-
(a) The plant has fitness certificate from the authorised service centre of
original manufacture/OEM.
(b) The plant has been calibrated by the OEM/authorised service centre, as
(c) The original manufacture's AMC is current and valid.

(d) The operator of plant is certified by OEM.
3. Plants and equipment applicable to type of construction (Rigid/flexible) shall be

deployed.
95
Appendix 3.4

NOTICE INVITING TENDER (NIT)
1. A tender is invited for the work as mentioned in Appendix 'A' to this NOTICE INVITING
TENDER (NIT).
2. The work is estimated to cost as indicated in aforesaid Appendix 'A'. This estimate,
however, is not a guarantee and is merely given as a rough guide and if the work costs
more or less, a tenderer/bidder will have no claim on that account.
3. The work is to be completed within the period as indicated in aforesaid Appendix 'A'
in accordance with the phasing, if any, indicated in the tender from the date of handing
over site, which will be on or about two weeks after the date of acceptance of tender.
4. Contractors whose names are on the MES approved list and within whose financial
category the estimated amount would fall and unenlisted contractors may submit
tender/bid subject to other criteria mentioned in Appendix A. However in case of term
contracts, enlisted contractors of Class SS to E may submit tender. Not more than one
tender shall be submitted/uploaded by one contractor/ firm. Under no circumstances will
a father and his son(s) or other close relations who have business dealing with one
another be allowed to tender/bid for the same contract as separate competitors. Two
firms shall be deemed to have business dealing if any of the partners/proprietor/director
is common among both of them. A breach of this condition will render the tenders/bids
of both the parties liable for rejection.
5. The Office of _______________________ will be the Accepting Officer here-in-

after referred to as such for the purpose of this contract.
6. Not more than one tender/bid shall be submitted/uploaded by one bidder firm.
Under no circumstances will a father and his son(s) or other close relations who have
business dealing with one another be allowed to tender/bid for the same tender as
separate competitors. A breach of this condition will render the tenders/bids of both the
parties liable for rejection.
7. The Technical Bid and Financial Bid (Cover-1 and Cover-2) shall be uploaded by
the contractor on or before the date & time mentioned in NIT. A scanned copy of DD with
enlistment details and other documents as specified in Appendix A shall be uploaded as
Cover-1 (Technical bid) of the tender on e-tendering portal. DD is refundable in case the
contractor is not considered eligible in technical evaluation of Cover 1 resulting in non-
opening of Cover1. The applicant contractor shall bear the cost of bank charges for
procuring and encashing the DD including revalidation of DDs and shall not have any
claim from Government whatsoever on this account.
8. Tender form and conditions of contract and other necessary documents shall be
available on website defproc.gov.in for download and shall form part of contract
agreement in case the tender/bid is accepted.
9. In case of MES enlisted contractor who has not executed the Standing Security
Bond and un enlisted contractor, the Cover-I shall be accompanied by Earnest Money
96
for the amount mentioned in Appendix 'A' in the form of deposit at call receipt in favour
of concerned CCE/GE/GE (I)/AGE (I) (see Appendix 'A') by a Scheduled Bank or in
received treasury Challan the amount being credited to the revenue deposit of the
concerned CCE/GE/GE(I)/AGE(I) (see Appendix 'A'). The CCE/GE/GE (I)/AGE (I) will
return the Earnest Money, wherever applicable, to all unsuccessful tenderers/bidders by
endorsing an authority on the deposit at call receipt for it’s refund, on receipt of intimation
from the Accepting Officer to do that.
10. In case of successful contractor i e the lowest contractor having submitted EMD,
he shall have the option of converting the EMD instrument into part of the Performance
Security to be deposited by him within 28 days from the receipt of intimation of
acceptance of tender from Accepting Officer.
11. Sample of materials and stores to be supplied by the contractor will also be
available for inspection by the bidder at the office of concerned GE/GE (I)/AGE
(I)/Project Manager during working hours. The bidder is advised to visit the site of work
by making prior appointment with GE/GE (I)/AGE (I)/CCE/Project Manager, who is the
Executing Agency of the work (see Appendix 'A'). The bidder shall be deemed to have
full knowledge of all relevant documents, samples, site etc whether he has inspected
them or not.
12. Any bid which proposes any alteration to any of the conditions laid down or
proposes any other new condition whatsoever, is liable to be rejected.
13. The uploading of bid by a bidder implies that bidder has read this notice and the
conditions of contract and has made himself aware of the scope and specification of
work to be done and of the conditions and rates at which stores (as applicable) etc will
be issued to him and local conditions and other factors having bearing on the execution
of the work.
14. The bidder must be in possession of a copy of the MES Schedule (SSR) (Part-I
& Part-II of latest edition) including amendments and errata thereto.
15. Accepting Officer does not bind himself to accept the lowest or any tender/bid or
to give any reason for not doing so.
16. The Accepting Officer reserves the right to accept a tender submitted by a Public
Undertaking/Small & Medium Enterprises (SMEs), giving a price preference/purchase
preference over other tender(s)/bids which may be lower, as are admissible under the
Government Policy. No claim for any compensation or otherwise shall be admissible for
such tenderer/bidder whose tender/bid is rejected.
17. The Notice Inviting Tender (NIT) including Appendix 'A' and Annexures thereto,
if any, shall form part of the contract agreement.
_________________
Signature of Contractor For Accepting Officer
97
Appendix 3.5
APPENDIX 'A' TO NOTICE INVITING TENDER (NIT)

(For Works Costing Less Than ₹ 50 Crore and Specialist E/M Works Costing
Less Than ₹ 5 Crore)
1 Name of Work
2 Estimated Cost ₹_________________ (At Par Market)
3 Period of Completion ____________________ days
4 Cost of tender ₹ ____________ in the form of DD/Bankers cheque from any
documents Scheduled Bank in favour of CCE/GE/GE (I)/AGE (I)
___________ and payable at __________
(Note : In case of retendering, the contractor who had quoted in
the previous call is not required to submit the cost of tender.)
5 Website/portal address www.defproc.gov.in
6 Type of contract The tender shall be based on drawing and specifications (IAFW-
2159)/IAFW 1779A and GCC (IAFW-2249) with Schedule 'A'
(list of items of work) to be priced by contractor/ pre priced by
MES. The contractor is required to quote the lump sum amounts
for parts of Schedule 'A' and quote rates against items of other
parts of Schedule 'A'.
(Suitable modification shall be made depending upon the type

of tender)
7 Timeline details :
(a) Bid submission start Refer critical dates on the website.
date
(b) Bid submission end
date
(c) Date of bid opening
8 Eligibility Criteria
(a) For MES enlisted Contractor shall be enlisted with MES in Class '___' and above
contractors. and category '___' subject to satisfactory remarks wrt
performance in respect of works in hand as reflected in Work
Load return (WLR) or any other report circulated by competent
engineer authority .
(b) For contractors not (i) Contractor not enlisted with MES should meet the enlistment
enlisted with MES. criteria of '___' Class & ‘____’category contractor with regard to
satisfactorily completion of requisite value works with
Central/State Government/ Central/ State PSUs/ AWHO/
AFNHB/ CGEWHO / DGMAP, annual turnover, bank solvency,
working capital and other requirements given in Para 1.4 & 1.5
of Section 1 of MES Manual of Contracts 2020 as available in
all MES formations as well as MES website (www.mes.gov.in).
(ii) Not carrying adverse remarks in Work Load Report (WLR)

or any other similar report circulated by any competent
authority, if already working in MES.
98
(iii) Not suspended/debarred/blacklisted (either permanently or

temporarily) from participating in any bid or for business
dealings by any Central/State Government Department or any
Central/State Government PSU or any Autonomous Body
under Central/State Government or any Local Body as on the
bid submission end date.
(c)Technical PQC In case of Solar Power Works and Runway /Pavements,
criteria technical PQC criteria as stipulated in Manual on Contracts and
as per policy letters issued by E in C's Branch from time to time
shall be included suitably .
9 Tender issuing and Name :______________________________________
Accepting Officer Address : ______________________________________
Contact Detail (Phone no. & Email Id) of concerned officer :
________________
10 Executing agency GE __________AGE(I)___________/PM
_________________
11 Earnest Money ₹ _____________ in favour of CCE/GE/GE (I)/AGE (I)
__________in the form of Deposit at call receipt, FDR not
acceptable.
NOTES :
1. After opening of Cover 1, if the number of MES enlisted contractors of eligible
class as well as un-enlisted contractors, if any, fulfilling the other eligibility criteria given
in NIT are less than 7(Seven), applications in respect of contractors one class or two
classes (in case of remote and difficult areas to be decided as per list circulated by CE
command/ADG) below the eligible class shall also be considered subject to fulfilment of
other eligibility criteria given in the NIT. Therefore MES contractors one class below (two
classes below in case of remote and difficult areas) may also bid for this tender. However
contractors of one/two classes below the eligible class shall not be considered in case
their present residual work in hand is more than twice their present tendering limit. Such
bidders shall upload in their Cover-1 bid details of works in hand showing names of work,
names of Accepting Officers, Contract amounts, dates of commencement and
completion (stipulated) and progress as on bid submission date. These details shall be
verified by the Tender Issuing Authority from concerned formations in case bids of such
contractors are considered for evaluation.
2. In case after opening of Cover 1, the number of MES enlisted contractors of
eligible class as well as un-enlisted contractors, if any, fulfilling the other eligibility criteria
given in NIT, are 7 (Seven) or more, applications of only those one class below the
eligible class bidders shall be considered, who have previously completed similar works
satisfactorily and are meeting the criteria of upgradation in respect of past experience of
completed works (individual work experience and/or average annual turnover as
applicable) and financial soundness (solvency/financial soundness and working capital)
as per details given in Manual on Contracts. Therefore such contractors shall upload the
requisite information/documents in the Cover-1.
3. Unenlisted contractor shall be considered provided he meets the criteria. Foreign
firms shall not be eligible for this tender. However Indian Firms having foreign national /
Indian nationals staying abroad / Indian national having taken foreign citizenship, as
director(s) shall be considered subject to security clearance from the concerned
authorities.
99
4. Contractors enlisted with MES will upload following documents in Cover 1 for
checking eligibility :-
(a) Application for tender on Firm's letterhead.
(b) Enlistment letter issued by the Registering Authority duly renewed for the
cycle period in vogue.
(c) Scanned copy of DD /Bankers Cheque toward cost of tender and EMD
instrument in case SSD bond is not signed at the time of registration.
(d) Any other document required as described in this Appendix.
5. Contractors not enlisted with MES will be required to upload following documents
in Cover 1 for checking eligibility.
(b) Scanned copy of DD/ Bankers cheque toward cost of tender and Earnest
Money Deposit (EMD) instrument.
(c) Copy of Police Verification Report/Police Clearance Certificate/ Character

Certificate from the Police Authority of the area where the registered office of the
firm is located/notarized copy of valid passport of Proprietor/each Partner/each
Director.
(d) All documents required for enlistment in MES for the class mentioned in
Para 8(b) above as per Para 1.5 of Section 1of MES Manual on Contracts 2020.
(e) Details of works being executed in MES, if any.
(f) Any other document required as described in this Appendix.
6. Tenders not accompanied by scanned copies of requisite DD/Bankers Cheque

towards cost of tender and earnest money (as applicable) in Cover 1 shall not be
considered for validation of 'T' bid and their Financial Bids will not be opened.
7. Contractors should ensure that their original physical DDs and Earnest Money
Deposit (EMD) instruments (as applicable) reach the office of Accepting Officer within
_______*days of bid submission end date (*The number of days to be mentioned shall
be as decided by the Accepting Officers, but it shall not be less than 5 days) failing which
following action shall be taken.
(a) In case of tenders from an enlisted contractor of MES, where scanned

copies of requisite DD/ Bankers Cheque towards cost of tender have been
uploaded in Cover 1 but physical copies are not received within the stipulated
period, their financial bids (Cover 2) will be opened. However non-submission of
physical copies of cost of tender shall be considered as willful negligence of the
tenderer with ulterior motives and such tenderer shall be banned from bidding for
a period of six months commencing from the date of opening of Financial Bid
(Cover 2).
100
(b) In case of tenders from unenlisted contractor, where scanned copies of

requisite DD/Bankers Cheque towards cost of tender have been uploaded in
Cover 1 but physical copies are not received within the stipulated period, their
financial bids (Cover 2) will not be opened. Name of such contractors along with
complete address shall be circulated for not opening of their bids for a period of
six months commencing from the date of opening of Financial bid (Cover 2).
(c) In case of tenders from enlisted and unenlisted contractors, where scanned
copies of instruments for Earnest Money Deposit (as applicable) have been
uploaded in Cover 1 but the same are not received in physical form within
stipulated period, such tenders shall not qualify for opening of financial bid (Cover
2).
8. Contractor will not be allowed to execute the work by subletting or through power
of attorney to a third party/another firm on his behalf. However a contractor can execute
the work through power of attorney to sons/daughters/ spouse of
Proprietor/Partner/Director and firm's own employees, director, project manager
provided they are not having a separate enlisted firm in MES in their name as
Proprietor/Partner/Director.
9. After opening of Cover 1 and during its technical evaluation, in case any deficiency
is noticed in the documents required to be uploaded by the tenderers as per NIT, a
communication in the form of e-mail/SMS/Speed Post etc shall be sent to the contractor
to rectify the deficiency within a period of seven days from date of communication failing
which their financial bid (Cover 2) shall not be opened and contractor shall not have any
claim on the same.
10. Invitation for e-tender does not constitute any guarantee for validation of
Technical bid and subsequent opening of financial bid of any applicant/bidder merely by
virtue of enclosing DD. Accepting Officer reserves the right to reject the Technical bid
and not to open the financial bid of any applicant/bidder. Technical bid validation shall
be decided by the Accepting Officer based on eligibility of the firm as per criteria given
in this Appendix. Tenderer/bidder will be informed regarding non-validation of his
Technical bid assigning reasons therefore through tender evaluation report which shall
be uploaded on the website. Such tenderer, if desires, may appeal to the next higher
Engineer Authority (NHEA) viz _____________ on email id ___________mes@nic.in
with copy to the Accepting Officer on email before the scheduled date of opening of
Cover 2. NHEA shall decide the matter within a period of seven working days from the
date of receipt of appeal. The decision of the NHEA shall be final and binding. The
tenderer/bidder shall not be entitled for any compensation whatsoever for rejection of his
bid.
11. In case an unenlisted contractor is already executing works in MES, he shall not
be considered eligible for the subject tender if the total value of such works is more than
twice the tendering limit of the MES Class of contractor for which it is eligible. For this
purpose, details of the works being executed by such a contractor shall be uploaded in
the Cover -1 of the bid and shall be checked/verified by the Accepting Officer.
12. In case the BOQ is revised through the corrigendum and the bidder has failed to
quote on revised BOQ (ie he has quoted on pre revised BOQ), such bid shall be treated
as willful negligence by the bidder and his quotation shall be considered non-bonafide.
101
In such cases the lowest tender shall be determined from amongst the valid/bonafide
bids only. Accepting Officer may decide whether to re-tender or consider the lowest
bonafide tender for acceptance.
13. Revoking the offer or revising the rates upward or offering voluntary reduction by
the lowest tenderer after opening of Cover 2 shall be considered as a wilful default. For
this default a penalty of an amount equal to Earnest Money shall be levied. In case of an
unenlisted tenderer, Earnest Money deposited by him shall be forfeited. In case of MES
enlisted tenderer having deposited the Standing Security Bond, an amount equal to the
earnest money stipulated in the NIT, shall be notified to the tenderer for depositing
through MRO and consideration of such tenderer in tender evaluation for future works
shall remain suspended till the aforementioned amount is deposited in the Government
Treasury. No other disciplinary/administrative action shall be taken against such
tenderers. In such a situation, the next lowest offer shall not be considered for
acceptance. Instead, retendering shall be resorted to in a transparent and fair manner
and the defaulting tenderer and his related firm if any, shall not be eligible for this tender
in second call or subsequent calls.
14. Tender to related firms shall not be issued simultaneously. Firms shall be termed
as related if Proprietor/one or more Partners/Directors are common. Decision of
Accepting Officer on issue/deny the tender to any one of the related firms shall be final
and binding.
15. INTEGRITY PACT (to be included as per value of work)
16. JOINT VENTURE (to be included as per value/type of work)

File No ____________ Dated ____________
Address of Accepting Officer
Contact Details of the Concerned Officer

102
Appendix 3.6
APPENDIX 'A' TO NOTICE INVITING TENDER (NIT)

(For Works Costing More Than ₹ 50 Crore and Specialist E/M Works
Costing More Than ₹ 5 Crore)
1 Name of Work
2 Estimated Cost ₹ _________________ (At Par Market)
3 Period of Completion ____________________ days
4 Cost of tender ₹ ____________ in the form of DD/Bankers cheque from
documents any Scheduled Bank in favour of CCE/GE/GE (I)/AGE (I)
___________ and payable at __________
Note In case of retendering, the contractor who had quoted
in the previous call is not required to submit the cost of
tender.
5 Website/portal address www.defproc.gov.in
6 Type of contract The tender shall be based on drawing and specifications
(IAFW-2159)/IAFW 1779A and GCC (IAFW-2249) with
Schedule 'A' (list of items of work) to be priced by contractor/
pre-priced by MES. The tenderer is required to quote the
lump sum amounts for parts of Schedule 'A' and quote rates
against items of other parts of Schedule 'A'.
(Suitable modification shall be made depending upon the

type of tender)
7 Timeline details :
(a) Bid submission start Refer critical dates on the website.
date
(b) Bid submission end
date
(c) Date of bid opening
8 Eligibility Criteria
(a) For MES enlisted Contractor shall satisfy the following :-
contractors. (i) Enlistment in Class SS Category _______as per MES
enlistment rules.
(ii) Shall not carry adverse remarks in Work Load Return or
any similar report circulated by the competent engineer
authority.
(iii) Prequalification criteria as in Note no 1 below.
(b) For contractors not (i) Contractor shall meet the enlistment criteria of 'SS' Class
enlisted with MES. & ‘____’ Category contractor with regard to satisfactorily
completion of requisite value works with Central/State
Government/ Central/ State PSUs/ AWHO/ AFNHB/
CGEWHO / DGMAP, annual turnover, bank solvency,
working capital and other requirements given in Para 1.4 &
1.5 of Section 1 of MES Manual of Contracts 2020 as
available in all MES formations as well as MES website
(www.mes.gov.in).
103
(ii) Not carrying adverse remarks in Work Load Report

(WLR) or any other similar report circulated by any
competent authority, if already working in MES.
(iii) Not suspended/debarred/blacklisted (either

permanently or temporarily) from participating in any bid or
for business dealings by any Central/State Government
Department or any Central/State Government PSU or any
Autonomous Body under Central/State Government or any
Local Body as on the bid submission end date.
(iv) Prequalification criteria as in Note 1 below.

(c) Technical PQC In case of Solar Power Works and Runway /Pavements,
criteria technical PQC criteria as stipulated in Manual on Contracts
and as per policy letters issued by E in C's Branch from time
to time shall be included suitably .
9 Tender issuing and Name :______________________________________
Accepting Officer Address : ______________________________________
Contact Detail (Phone no. & Email Id) of concerned officer
:
________________
10 Executing agency GE __________AGE(I)___________/PM
_________________
11 Earnest Money ₹ _____________ in favour of CCE/GE/GE (I)/AGE (I)
__________in the form of Deposit at call receipt, FDR not
acceptable,
Notes :
1. PRE-QUALIFICATION CRITERIA (PQC) :
(a) Average Annual financial turnover during the last three years, ending 31 st March of
the previous financial year, should be at least 30% of the estimated cost. (This average
annual turnover of 30% is for a work with period of completion as three years and
where the period of completion is less than three years, the requirement of average
turnover shall be proportionately specified)
(b) Experience of having successfully completed similar works during last seven years,
ending last day of month previous to the month of bid submission start date, should be
either of the following :
Three similar completed works costing not less than the amount equal to 40% of
the estimated cost.
OR
Two similar completed works costing not less than the amount equal to 50% of
the estimated cost.
OR
One similar completed work costing not less than the amount equal to 80% of the
estimated cost
104
(c) Similar works mean “……. “ (Definition of “similar work” shall be clearly defined
keeping in view the critical portion of the work involved in the tender as per policies
issued from time to time).
(d) For the purpose of value of completed works, the value of previously completed
works shall be enhanced @ 5% per year to bring them at par with present cost.
2. After opening of Cover 1, if the number of MES enlisted contractors of ‘SS Class
as well as un-enlisted contractors, if any, fulfilling the other eligibility criteria given in NIT
are less than 7(Seven), applications in respect of contractors one class or two classes
(in case of remote and difficult areas to be decided as per list circulated by CE
command/ADG) below the eligible class shall also be considered subject to fulfilment of
PQC as per Note 1 above and other eligibility criteria given in the NIT. Therefore MES
contractors one class below (two classes below in case of remote and difficult areas)
may also bid for this tender. However contractors of one/two classes below the eligible
class shall not be considered in case their present residual work in hand is more than
twice their present tendering limit. Such bidders shall upload in their Cover-1 bid details
of works in hand showing names of work, names of Accepting Officers, Contract
amounts, dates of commencement and completion (stipulated) and progress as on bid
submission date. These details shall be verified by the Tender Issuing Authority from
concerned formations in case bids of such contractors are considered for evaluation.
3. In case after opening of Cover 1, the number of MES enlisted contractors of ‘SS’
Class as well as un-enlisted contractors, if any, fulfilling the other eligibility criteria given
in NIT, are 7 (Seven) or more, applications of only those one class below the eligible
class bidders shall be considered who fulfil the PQC as per Note 1 above and are
meeting the criteria of upgradation in ‘SS’ Class with respect of past experience of
completed works (individual work experience and average annual turnover as
applicable) and financial soundness (solvency/financial soundness and working capital)
as per details given in Manual on Contracts. Therefore such contractors shall upload the
requisite information/documents in the Cover-1.
4. Unenlisted contractor shall be considered provided he meets the criteria.

However foreign firms shall not be eligible for this tender. However Indian Firms having
foreign national / Indian nationals staying abroad / Indian national having taken foreign
citizenship, as director(s) shall be considered subject to security clearance from the
concerned authorities.
5. Contractors enlisted with MES will upload following documents in Cover 1 for
checking eligibility :-

(b) Enlistment letter issued by the Registering Authority duly renewed for the cycle
period in vogue.
(c) Scanned copy of DD /Bankers Cheque toward cost of tender and EMD
instrument in case SSD bond is not signed at the time of registration.
(d) Documents required in respect of PQC criteria.
(e) Any other document required as described in this Appendix.
105
6. Contractors not enlisted with MES will be required to upload following documents in
Cover1 for checking eligibility.
(b) Scanned copy of DD/ Bankers cheque toward cost of tender and EMD
instrument.
(c) Copy of Police Verification Report/Police Clearance Certificate/ Character
Certificate from the Police Authority of the area where the registered office of the
firm is located/notarized copy of valid passport of Proprietor/each Partner/each
Director.
(d) Documents required for enlistment in MES for SS class as per Para 1.5 of
Section 1 MES Manual on Contracts 2020.
(e) Documents required in respect of PQC criteria.
(f) Details of works being executed in MES, if any.
(g) Any other document required as described in this Appendix.
7. Tenders not accompanied by scanned copies of requisite DD/Bankers Cheque
towards cost of tender and earnest money (as applicable) in Cover 1 shall not be
considered for validation of 'T' bid and their Financial bids will not be opened.
8. Contractors should ensure that their original physical DDs and Earnest Money
Deposit (EMD) instruments (as applicable) reach the office of Accepting Officer within
_______*days of bid submission end date (*The number of days to be mentioned shall
be as decided by the Accepting Officers, but it shall not be less than 5 days) failing which
following action shall be taken :-
(a) In case of tenders from an enlisted contractor of MES, where scanned

copies of requisite DD/ Bankers Cheque towards cost of tender have been
uploaded in Cover 1 but physical copies are not received within the stipulated
period, their financial bids (Cover 2) will be opened. However non-submission of
physical copies of cost of tender shall be considered as willful negligence of the
tenderer with ulterior motives and such tenderer shall be banned from bidding for
a period of six months commencing from the date of opening of Financial Bid
(Cover 2).
(b) In case of tenders from unenlisted contractor, where scanned copies of

requisite DD/Bankers Cheque towards cost of tender have been uploaded in
Cover 1 but physical copies are not received within the stipulated period, their
financial bids (Cover 2) will not be opened. Name of such contractors along with
complete address shall be circulated for not opening of their bids for a period of
six months commencing from the date of opening of Financial bid (Cover 2).
(c) In case of tenders from enlisted and unenlisted contractors, where scanned
copies of instruments for Earnest Money Deposit (as applicable) have been
uploaded in Cover 1 but the same are not received in physical form within
stipulated period, such tenders shall not qualify for opening of financial bid (Cover
2).
9. Contractor will not be allowed to execute the work by subletting or through power
of attorney to a third party/another firm on his behalf. However a contractor can execute
the work through power of attorney to sons/daughters/ spouse of
106
Proprietor/Partner/Director and firm's own employees, director, project manager

provided they are not having a separate enlisted firm in MES in their name as
Proprietor/Partner/Director.
10. After opening of Cover 1 and during its technical evaluation, in case any deficiency
is noticed in the documents required to be uploaded by the tenderers as per NIT, a
communication in the form of e-mail/SMS/Speed Post etc shall be sent to the contractor
to rectify the deficiency within a period of seven days from date of communication failing
which their financial bid (Cover 2) shall not be opened and contractor shall not have any
claim on the same.
11. Invitation for e-tender does not constitute any guarantee for validation of
Technical bid and subsequent opening of financial bid of any applicant/bidder merely by
virtue of enclosing DD. Accepting Officer reserves the right to reject the Technical bid
and not to open the financial bid of any applicant/bidder. Technical bid validation shall
be decided by the Accepting Officer based on eligibility of the firm as per criteria given
in this Appendix. Tenderer/bidder will be informed regarding non-validation of his
Technical bid assigning reasons therefore through tender evaluation report which shall
be uploaded on the website. Such tenderer, if desires, may appeal to the next higher
Engineer Authority (NHEA) viz _____________ on email id ___________mes@nic.in
with copy to the Accepting Officer on email before the scheduled date of opening of
Cover 2. NHEA shall decide the matter within a period of seven working days from the
date of receipt of appeal. The decision of the NHEA shall be final and binding. The
tenderer/bidder shall not be entitled for any compensation whatsoever for rejection of his
bid.
12. In case the BOQ is revised through the corrigendum and the bidder has failed to
quote on revised BOQ (ie he has quoted on pre revised BOQ), such bid shall be treated
as willful negligence by the bidder and his quotation shall be considered non-bonafide.
In such cases the lowest tender shall be determined from amongst the valid/bonafide
bids only. Accepting Officer may decide whether to re-tender or consider the lowest
bonafide tender for acceptance.
13. Revoking the offer or revising the rates upward or offering voluntary reduction by
the lowest tenderer after opening of Cover 2 shall be considered as a wilful default. For
this default a penalty of an amount equal to Earnest Money shall be levied. In case of an
unenlisted tenderer, Earnest Money deposited by him shall be forfeited. In case of MES
enlisted tenderer having deposited the Standing Security Bond, an amount equal to the
earnest money stipulated in the NIT, shall be notified to the tenderer for depositing
through MRO and consideration of such tenderer in tender evaluation for future works
shall remain suspended till the aforementioned amount is deposited in the Government
Treasury. No other disciplinary/administrative action shall be taken against such
tenderers. In such a situation, the next lowest offer shall not be considered for
acceptance. Instead, retendering shall be resorted to in a transparent and fair manner
and the defaulting tenderer and his related firm if any, shall not be eligible for this tender
in second call or subsequent calls.
14. Tender to related firms shall not be issued simultaneously. Firms shall be termed
as related if Proprietor/one or more Partners/Directors are common. Decision of
Accepting Officer on issue/deny the tender to any one of the related firms shall be final
and binding.
107
15. INTEGRITY PACT: Appropriate provisions as per instructions to be included.
16. JOINT VENTURE: Appropriate provisions as per instructions to be included.

File No ____________ Dated ____________
Address of Accepting Officer
Contact Details of the Concerned Officer

108
Appendix 3.7
REGISTER OF BANK DRAFTS
Name of Work * : ___________________________
Date of publishing of tender ________________________
Sl Name Referenc DD/P Nam Vali Am Sig Letter Letter No & Sign Remar
N of e ay e of d t natu No & date under atur ks
o contract of order/ bank upto re date which sent e
or contracto banke and under to GE for
r’s rs bran which encashing
applicatio chequ ch returne (as
n/ e No d applicable)
date & date (as
applica
ble)
1 2 3 4 5 6 7 8 9 10 11 12
*Separate sheets to be maintained for each work/tender.

109
Appendix 3.8
Telephone : Military Engineer Services

__________________
_____________________
No _________/E8 Dated :
M/S __________________
______________________
Name of Work :
Dear Sir,
1. Tender documents in respect of above work are uploaded on the site

www.defproc.gov.in. The tender is based on single stage two cover/two stage three
cover e-tendering system. The contents of Cover I & Cover II are specified in NOTICE
OF TENDER.
2. Bids will be received online by ACCEPTING OFFICER upto the date and time
mentioned in the NOTICE INVITING TENDER (NIT). No tender/bid will be received in
physical form and any tender/bid received in such manner will be treated as non bona
fide .
3 Bid will be opened on line on a due date fixed for opening as per critical dates given
in the portal. Cover 1 will be opened first. Tenderers may see the result of the opening
of Cover 1 on the tender portal. Date of opening of Cover 2 shall be decided after
technical evaluation of Cover 1 keeping in view the various eligibility criteria given in the
NIT and the same will be intimated to the tenderers while uploading the technical
evaluation on the tender portal.
4. Your attention is also drawn to instruction on filling and submission of tender attached
herewith. You may forward your points on tender documents through e-mail and/or
depute your technical representative for discussion on tender/drawings and to clarify
doubts, if any, before the bid submission starts. You are requested not to write piece
meal points and forward your points duly consolidated in one go. You may also attend
the pre bid meeting on the date given in the tender.
5. Unenlisted contractors are required to submit the scanned copies (in pdf file) of
documents required as per eligibility criteria mentioned in instructions for filling the tender
documents and Appendix ‘A’ to NIT alongwith EARNEST MONEY DEPOSIT (EMD) and
tender fee on procurement portal mentioned above and submit the physical documents
in the office of Chief Engineer Delhi Zone within time limit specified in NIT. Inadequacy
/deficiency of documents shall make the bid liable for rejection resulting in disqualification
for opening of finance bid.
110
6. Enlisted contractors of MES shall submit the scanned copies (pdf file) of
enlistment letter, tender fee and such other documents as mentioned in Appx ‘A’ to NIT
on e-procurement portal and submit physical documents in the office of _____________
(Accepting Officer’s office name) before date & time fixed for this purpose.
7. The contractor must ensure that the tender/bid is uploaded on the tender portal using
the authorised DSC in time as the Accepting Officer will take no cognizance of any
quotations/offer received in any other electronic or physical form like email/fax/by
hand/through post from tenderer/bidder.
8. Keeping in view delays due to system failure or other communication related failures,
it is suggested that tender/bid may be uploaded sufficiently in advance of the last due
date and time fixed on the portal.
9. General Conditions of Contracts (IAFW-2249) (1989 Print) and errata and

amendments thereto, Schedule of Minimum Fair Wages and MES SSR (Part-I and Part-
II) are not enclosed with these documents. These are available for perusal in the Office
of GE/AGE concerned and this office. Tenderer is also requested to keep the copy of
these documents with him as same are available in the market.
10. PERFORMANCE SECURITY DEPOSIT
After acceptance of the Tender, the contractor will be required to lodge with the
Accepting Officer PERFORMANCE SECURITY DEPOSIT @ __% of contract amount. The
amount is required to be lodged within 28 (Twenty eight) days of the receipt by the
contractor of notification of acceptance of tender/bid, failing which action as stipulated in
Condition __ of GCC shall be taken.
11. ANY TENDERER, WHICH PROPOSES ALTERATIONS TO ANY OF THE

CONDITIONS, SPECIFICATIONS LAID DOWN IN THE TENDER DOCUMENTS OR
ANY NEW CONDITION, WHATSOEVER, IS LIABLE TO BE REJECTED.
Yours faithfully
(___________)
__________________
111
Appendix 3.9
INSTRUCTIONS ON FILLING AND SUBMISSION OF TENDER
1. EARNEST MONEY DEPOSIT (EMD)
Contractor(s) who are not enlisted with MES/who are enlisted but have not executed the
Standing Security Bond shall submit Earnest Money Deposit as detailed in Notice of
Tender in one of the following forms, along with their tender/bid:-
(a) Deposit at Call Receipt from a Scheduled Bank in favour of GE/AGE(I)
concerned.
(b) Receipted Treasury Challan, the amount being credited to the Revenue
Deposit of GE/AGE(I).
It is advisable that Earnest Money is deposited in the form of deposit call receipt from an
approved Schedule Bank for easy refund. In case the tenderer/bidder wants to lodge
‘Earnest Money Deposit’ in any other form allowed by MES, a confirmation about its
acceptability will be obtained from the Accepting Officer well in advance of the bid
submission end date and time. Earnest Money Deposit shall be submitted in the name
of concerned GE/AGE(I).
NOTES:- Earnest Money Deposit (EMD) in the form of cheque/Bank Guarantee

etc will not be accepted. Non-Submission of Earnest Money Deposit (EMD)
(scanned copy alongwith Technical Bid & hard copy before the date & time
fixed for opening of BOQ) will render the bid disqualified for opening of
Cover -II (finance bid).
2. GENERAL INSTRUCTIONS FOR COMPLIANCE
2.1 The bids received only in the electronic form will be considered. All bids shall be
submitted on defproc.gov.in portal. Documents should be scanned and forwarded in 'pdf'
format and 'xls' form as indicated. Bids shall be uploaded on ‘defproc.gov.in’ portal on or
before the bid closing date mentioned in the tender. No tender/bid in any other electronic
or physical form like date email/fax/by hand/through post will be considered.
2.2 The bid shall be DIGITALLY signed using authorised DSC. All pages of tender
documents, drawings, corrections/alterations shall be signed/initialed by the lowest
bidder after acceptance of tender for making original and CTC of the contract.
2.3 Digital signatory of the bid/tender shall ensure that he is competent to bind the
contractor (through partnership deed, general power of attorney or Memorandum and
Article of Association of the Company) in all the matters pertaining to the contract with
Union of India including arbitration clause. A scanned copy of the documents in
confirmation of such authority shall be attached with the tender/bid in 'pdf' form in Cover
1. It shall be ensured that power of attorney shall be executed in accordance with the
constitution of the company as laid down in its Memorandum & Article of Association.
2.4 Drawings, if issued in physical form, must be returned duly initialled by the
tenderer/bidder in separate envelope indicating his name and address.
112
2.5 The tender shall be signed, dated and witnessed at all places provided for in the
documents after acceptance. All corrections shall be initialled. The Contractor shall initial
every page of tender and shall sign all drawings forming part of the tender. Any
tender/bid, which proposes alterations to any of the conditions whatsoever, is liable to
be rejected.
3. BOQ :-
3.1 The tenderer shall quote his rates on the BOQ EXCEL FILE only as per guide line of
e-procure web portal. No alteration to the format will be accepted and such bid will be
disqualified.
3.2 In case any tenderer wishes to revise/modify the rates quoted in the BOQ file, he
can do so only in the BOQ files before uploading the tender through
https://defproc.gov.in site only before closing date & time.
3.3 After the uploading of tender, Department may upload the errata/ amendment
through corrigendum. The tenderer/bidder should submit their offer considering the
errata/amendment carried out through corrigendum issued from time to time.
3.4 While uploading the bid, the tenderers/bidders should specifically check whether any
revised BOQ has been uploaded by department through corrigendum prior to Bid
submission start date. Tenderers/bidders attention is specifically drawn to the fact that
they should submit their offer on revised BOQ only. In case any tenderer/bidder submits
offer on pre-revised BOQ in lieu of Revised BOQ, it will be considered as a willful
negligence by the tenderer/bidder and quotation shall be considered non-
bonafide.
4. Tenders/bidders who uploaded their priced tenders/bids and are desirous of being
present at the time of opening of the tenders/bids, may do so at the appointed time.
5. Hard copies of all above documents shall be sent by the contractor to the Tender
issuing authority well in advance to be received before the date & time fixed for the same.
6. The contractor shall employ Indian Nationals after verifying their antecedents and
loyalty. Attention is also drawn to relevant provisions in Special Condition referred here-
in-after and also Conditions 24 & 25 of IAFW-2249 (General Conditions of Contract).

113
Appendix 3.10
SELECTION OF CONTRACTORS FOR ISSUE OF TENDERS
Name of Works ……………………………………………………………………………….

Tender Inquiry No ……………………………. ………………………………………………
Estimated cost at market rate Rs………………..Date of publication of tenders
………………..
Time allowed for completion …………………. Date of bid opening
…………………………..
Eligible class and categories ……………………Cost of tender documents
……………………
Sl Name and Folio Index Whether Cost of Whether Work load Remar Recomme Remarks by Orders
N address of No No and standing tender EMD ks in ndation of Dir (C) or of
o contractor categor security document submitted Total Value work TSC (as DCWE/AC Accepting
(from y furnished s received (as value of of load applicable) WE (C) or Officer
application) and applicable contract balanc return AGE (C)
Bond ) s in e work /JE (QS&C)
executed hand (in in hand
lakh) (in
Quarter lakh)
ending Quarte
r
ending
1 2 3 4 5 6 7 8 9 10 11 12 13
114
Appendix 3.11
Report Showing Reasons for Acceptance of Tender when only One

Priced Tender is Received and Accepted
1. Name of work ...............

2. Date of acceptance …..............
3. Amount of contract …..............
4. Percentage above/below SSR …..............
5. No of bidders whose Cover 1 was opened …..............
6. No of bidders who found eligible for opening of Cover 2 ..............
7. Name of the bidder whose tender is accepted and Contract Agreement No….......
8. Reasons for lack of competition …..............
9. Why retendering with enlarged/altered list of competitors was not considered
proper ? ...............
10. Comments on reasonableness of tendered rates …..............
Signature of Accepting Officer
(…...........................................)
115
Appendix 3.12
ANALYSIS OF LUMP SUM TENDERS BASED ON SSR
1. The acceptance of a tender is a matter for judgement and not merely the selection
of the lowest tender without examining whether or not the quotation is reasonable.
2. Before considering the question of acceptance of tender it is essential that a

thorough scrutiny and analysis of the tender be carried out with a view to ascertaining the
reasonableness of the tender and the basis of tendering. The tender selected for scrutiny
should be checked for completeness in all respects considering various tender conditions.
Each one of the rates quoted shall be examined to verify its reasonableness with
reference to current market rates.
3. In lump sum contracts detailed working out of quantities and pricing of the items
included in the tender should be carried out and estimates at par on MES Schedule should
be prepared in all cases irrespective of the type of lump sum contract i.e. whether based
on drawings and specifications or pre-priced Schedule ‘A’.
4. Before the date of bid opening, the Accepting Officer should get prepared a fairly
accurate estimate of the cost of work included in the tender documents on the basis of
the following :-
(a) Lump sum prices of the items in the applicable Schedule to be worked out as
stated in Para 3 above.
(b) The actual cost of the work to be done by the contractor should be assessed
on the basis of current market rates for materials and labour rates and to this a
reasonable sum to cover overheads and profit shall be added.
(c) By relating (b) to (a) above, the percentage to be added to the prices at MES
Schedule rates can be ascertained and the reasonableness of the percentage
quoted determined.
5. The following information in preparing estimates will be useful :-
(a) The relationship between materials and labour in the makeup of the prices in
MES Schedule must be ascertained depending upon the nature of the work.
For normal building works this can be taken as 65% to 70% for materials and
35% to 30% for labour.
(b) A Schedule of stores required to be supplied by the contractor should be

prepared. The Accepting Officer should have fairly accurate information in his
office regarding the cost of contractor’s materials and labour at current market
rates and this information should be maintained up-to-date.
(c) On the basis of the above information the extra cost of the contractor’s
materials and labour over and above that worked out at par on the basis of
MES Schedule should be arrived at.
116
6. With the information available as above a fairly accurate estimate of the work
included in the tender documents can be prepared by the time the tenders are due to be
received. An illustration of the above suggestion is given below :-
Consider a contract having items of work priced at Rs 1 lakh net at par on
MES Schedule . The percentage over the MES Schedule may be worked out as under,
assuming that the total price comprises 70% for materials and 30% for labour.
Description Contract No
Estimate at Actual cost to the
par on MES Contractor
Schedule
1 2
Rs Rs
(a) Cost of materials to be supplied by the 70,000 87,500

contractor (Assuming that the cost at
market rate is 25% above MES Sch.)
(b) Labour (Assuming rates 25% above 30,000 37,500
MES Sch.)
Total (a) to (c) 1,00,000 125,000
(c) Add for overhead and profit on
items (a) and (b) above @ 17½% - 21,875
(10% profit5% overheads + 2½%
establishment)
-
Total 1,00,000 1,46,875
(d) Percentage addition above MES Sch. - 46.875%
Note : For the stores issued under Schedule ‘B’, Overhead & Profit shall be 10%.
7. While working out the cost of materials, all the prevailing taxes like GST etc shall be
taken in to account as per the prevailing rates at the time of tendering. In addition to the
above, the Accepting Officer may add a suitable percentage to cover the works contract
tax, labour welfare tax and like and overhead charges on account of special factors as
are applicable to the work in restricted areas, militancy affected areas, emergency works
and works involving necessity of involvement of specialist labour and the like to arrive at
actual cost to the contractor under Col 2.
8. When the tenders have been opened and scrutinized, the figures quoted by the
contractor whose tender has been selected for consideration for acceptance, should be
compared with the estimate prepared as indicated above and the tender accepted
provided it is otherwise in order in all other respects.
117
Appendix 3.13
RULES FOR DEALING WITH “FREAK RATES”
1. A freak rate will be a rate which exceeds or falls below the estimated market rate
by 50% or more.
2. The procedure for dealing with tenders in which Freak Rates are noticed during
scrutiny at pre-acceptance stage is detailed in the following paragraphs :-
(a) On receipt of tenders, all errors which can be corrected in accordance with
conditions of contract shall be so corrected legibly and initialed.
(b) After all tenders have been so corrected, the lowest bonafide and acceptable
tender shall be examined to see if there are any Freak Rates in it.
(c) Any upward revision of Freak Rates shall not be allowed in any case.
(d) In respect of Freak Rates requiring downward revision, such communication

will be addressed only to the tenderer whose tender has been examined, as
stated in Para (b) above.
(e) The contractor shall be informed that the lump sum amount quoted by him shall
be corrected on the basis of the revised rates offered by him.
(f) On receipt of the revised rates, the tender will be corrected on the basis of the
revised rates, if found acceptable.
(g) In case the tenderer does not agree to correct some or all of the Freak Rates
referred to him or the revised rates quoted by him are not considered
reasonable and the tender is otherwise still the most acceptable, the Accepting
Officer will decide whether to accept or reject the tender.
(h) Where the lowest acceptable tender is found to contain any Freak Rate, the
Accepting Officer shall, however, again verify that, in respect of items for which
the rates are Freak, the quantities mentioned in the tender documents on the
basis of known facts are reasonably estimated.
(i) Where the rates quoted are freakishly low, the Accepting Officer will check that
the quantities indicated in the tender are not substantially over-estimated;
similarly where the rates quoted are freakishly high, the Accepting Officer will
check that the quantities are not substantially under-estimated.
(j) Where re-verification of the quantities in respect of Freak Rates (both low and
high) reveals substantial variations, the Accepting Officer will normally resort to
retendering.
(k) Where retendering is not resorted to, in pursuance of Paras (g) and (j) above,
and the tender still contains freakishly low rates, the Accepting Officer will have
118
to take a decision whether the overall tendered cost of the work is so low as is
likely to jeopardize the execution of the work. In case he considers that the
overall tendered cost of the work is so low as to be beyond the capacity of the
contractor and is likely to jeopardize the execution of the work, he will consult
the PCDA/CDA on the question whether the contract be awarded to that
contractor or whether there should be retendering. The Accepting Officer will,
however, make a definite recommendation to the PCDA/CDA and after
obtaining the advice of the PCDA/CDA, take such final decision as he considers
appropriate.
(l) If in spite of the revision referred to above, some freakishly high/low rates are
unavoidable in the tender finally accepted, the Accepting Officer will ensure that
any increase/decrease in quantities by way of deviation is kept to the minimum.
A list of such Freak Rates shall be supplied by the Accepting Officer to the
GE/CWE and the PCDA/CDA to watch this aspect. In case increase in
quantities of freakishly high rate items is unavoidable, action to obtain reduced
rate from the contractor or to get the additional quantities beyond contract
quantities executed through other means shall be taken timely to avoid fait
accompli situation.
(m) Where it is found inescapably necessary to increase quantities beyond 25% of

the estimated quantities as included in the contract, for items for which rates
considered freakishly high or to decrease the quantities beyond 25% of the
estimated quantities as included in the contract for items for which rates are
freakishly low, such deviations shall have the prior approval of the CE / CCE.
(n) Normally no change in specification should be permitted in respect of items for

which the rates tendered were freakish. If the change is, however, inescapable,
sanction of the CE / CCE would be necessary.
(o) Where the lowest tender is rejected on the ground of being so low as to be
unworkable, the question of administrative action to be taken against the
contractor will also be considered by the Registering Authority.
3. Any corrections to Freak Rates have to be made before acceptance of the tenders
and not afterwards.
4. Any reference to tenderer for the purpose of obtaining clarifications in respect of

Freak Rates shall not be considered as negotiation and it should be made clear in such
correspondence that the reference is made without any intention or commitment to accept
his tender.
119
Appendix 3.14
FORM OF ACCEPTANCE LETTER
Telephone : REGISTERED ACK DUE

Office of the …..................
No …................../E8 Dated
…...........................
To
Shri/S'Shri/M/s ….............................................
Subject : CONSTRUCTION OF ……………………… AT ………...........……. AS

DETAILED IN THE TENDER ENQUIRY NO ….....................….……. DATED
…..................... AND AMENDED SUBSEQUENTLY VIDE LETTER NO
…………………..…… DATED …………....….
(TENDER ID NO ………………………….)
Dear Sir(s)
1. Reference
(i) Your tender for the above work opened on …........
(ii) Your letter No ………...................................…….
(iii) This office letter No …....…….............…………
(iv) Your letter No …...................................................
@2. On behalf of the President of India, I hereby accept your tender as amended
subsequently vide letters under reference for the work mentioned above for a lump sum
of Rs ….… (Rupees …………..)
OR
@On behalf of the President of India, I hereby accept your tender as amended
subsequently vide letters under reference for the work mentioned above, at the item rates
contained therein for the contract sum of Rs ……………. (Rupees ………………)
OR
@On behalf of the President of India, I hereby accept your tender as amended
subsequently vide letters under reference for the work mentioned above for the amended
lump sum (or amended contract sum) of Rs …………….. (Rupees …...........……..). The
details of the amended lump sum (or amended contract sum) are given in Appendix to
this letter.
3. This contract is allotted the number “…………..” which will be quoted by you in
all future correspondence in connection with this contract.
4. The tender enquiry, your tender, the letters referred to above and this letter shall
be the sole repository of the contract.
Encl : Appendix
(Where applicable)
Yours faithfully,
for and on behalf of the President of India
ACCEPTING OFFICER
120
Copy to :
PCDA/CDA ……………………
CWE …………………………... Fill in as applicable.
GE …………….……………….
Registering authority of Contractor as applicable
Regional Labour Commissioner (Central)
Internal Distribution : E2 Plg, E2W, E3, E4, E5

@Adopt wording as applicable suitable to the case
Notes :
1 In case of CWE/GE contracts, copy of acceptance letter be endorsed to concerned
PCDA/CDA and lower formations.
2 Another letter to be issued simultaneously in continuation of this letter is given in
Appendix 3.15
121
Appendix 3.15
FORM OF LETTER TO BE ISSUED SIMULTANEOUSLY IN

CONTINUATION OF ACCEPTANCE LETTER
Telephone : REGISTERED ACK DUE

Office of the …..................
No …................../E8 Dated …...........................
To
Shri/S'Shri/M/s ….............................................
Subject : CONSTRUCTION OF ……………………………… AT …………............…….
Dear Sir(s)
1. Reference our letter of Acceptance No ………………………….

dated……………….
2. Please contact GE …………. immediately on receipt of this letter who will

arrange to issue the order to you to start the work and also for handing over the
site to you.
3. Please deposit the sum of *Rs ……………………........

(**Rupees………………..…) as Performance Security within 28 days of the date
of this letter as mentioned in the terms and conditions of the contract.
4. Please attend this office or depute your accredited representative, empowered

to sign contract documents on your behalf, to attend this office, during working
hours by ….………. (Date) to enable us to deliver to him a certified true copy of the
contract for your use..
5. Any further correspondence in connection with this contract should be

addressed to GE mentioned in Para 2 above. ***In respect of matters where the
decision of the Accepting Officer is required, the communication shall be
addressed through the concerned GE with an advance copy to this office.
6. Please acknowledge receipt.
Yours faithfully
@ ACCEPTING OFFICER
Copy to :
PCDA/CDA - for information
CWE - for information
GE - for information and necessary action.
AO/AAO GE
I/D : E2 Plg, E2(W), E3 and E4
*In figures.
**In words.
***In case of contracts accepted by CE/CWE.
@This letter can be signed by any staff officer in E8 section on behalf of the Accepting
Officer.
122
Appendix 3.16
SINGLE TENDER REPORT
Single Tender Report will cover the following points :

(a) Name of work
(b) Contract No and year
(c) Date on which contract concluded.
(d) Contractor’s Name and reasons for his selection.
(e) CWE/GE.
(f) Estimated cost of the work at par with MES Standard Schedule of Rates (MES
Schedule)
(g) Percentage above or below the MES Schedule in respect of recent similar
comparable contract the locality (or the nearest locality in case of a new locality)
or Division accepted as a result of competition (Name of work, Contract No etc.
to be stated)
(h) Amount of Contract.

(i) Level of accepted price/rates ie approximate percentage above/below the MES
Schedule.
(j) Period allowed for completion.
(k) Reasons/circumstances for dispensing with competition (also state if any
efforts were made to invite competitive tenders and the result thereof)
(l) Method determining the reasonableness of rates accepted

(m) Other remarks, if any.
Note : With reference to item (l), method of determining the reasonableness of rates
accepted should be given in sufficient detail to enable the higher authority to satisfy
himself that accepted rates are reasonable.
123
APPENDIX 3.17
32 POINT PROFORMA
Station ………………………………….
Name of work ……………………………
Name of Sub Item ……………………….
AA No & Date …………………………
Sl Name of Plinth Area Reason PA PA rate as per tender at par SSR 2010
No Bldg/ref of As As per for rate as Bldg Int. Int. Tot Bld
item of Sch per tender variation per Elect W/S al of g.
‘A’ A/A in Col 3 & A/A Col
in SM 4 7 to
9
1 2 3 4 5 6 7 8 9 10 11
Basic rate as per E-in-C’s letter/Admin Approval Basic rate as Reas Rea Contract Mark
per E-in-C’s ons son or’s et
letter/Admin for s for quoted analy
approval variati vari percenta sis
Del Add extn Add if Add if Add if Add if Total on in atio ge for perce
ete if any framed seismic fly heigh col 11 rates n in bldg ntage
for constn considerati proofi t to 17 of col rate work
Fdn on and ATT ng more 10 & s of
at than 18 col
stan 1.90 06 &
dard m for 18
rate Md
and accn
add for
actu every
al 100m
12 13 14 15 16 17 18 19 20 21 22
Ruling Percentage Contract accepted report Reaso Reason for Reason for
ns for variation in variation in rates
variatio %ages under of col 6,10 & 18
n in % cols 21,25 &
For In last In Curr Qtr 2nd Qtr and
ages 29
2nd qtr Qtr current ent prece qtr earlier
under
prece Endin qtr qtr ding prec report if
col 21
ding g ending endi this edin not
& 22
this ng Qtr g accept
qtr endin this ed in
Endin g qtr last 9
g endi months
ng
23 24 25 26 27 28 29 30 31 32
124
APPENDIX 3.18
INTEGRITY PACT
General
1. Whereas the President of India, represented by Chief Engineer (CE) / Chief

Construction Engineer (CCE) / Commander Works Engineer (CWE) / Garrison Engineer
(I) (GE (I)) / Garrison Engineer (GE) hereinafter referred to as Principal / Owner and the
first part, has floated the Tender (NIT No…………………) and intends to award, under
laid down organizational procedure, contract for
…………………………………………………………………………………..………………..
(Name of work)
hereinafter referred to as works / Services and M/s___________________ represented
by, ______________(which term unless expressly indicated by the contract, shall be
deemed to include its successors and its assignees), hereinafter referred to as the Bidder
/ Contractor and the second part is willing to carryout the works / services.
2. Whereas the Bidder is a Proprietorship Concern / Partnership Firm / Limited

Liability Partnership Firm / Private Limited Company / Limited Company / Joint Venture
constituted in accordance with the relevant law in the matter and the Principal / Owner is
Chief Engineer (CE) / Chief Construction Engineer (CCE) / Commander Works Engineer
(CWE) / Garrison Engineer (I) (GE (I)) / Garrison Engineer (GE) performing its functions
on behalf of the President of India.
Objectives
3. Now, therefore, the Principal / Owner and the Bidder agree to enter into this pre-
contract agreement, referred to as INTEGRITY PACT (IP), to avoid all forms of corruption
by following a system that is fair, transparent and free from any influence / prejudiced
dealings prior to, during and subsequent to the conclusion of the contract to be entered
into with a view to :-
3.1 Enabling the Principal / Owner to get the desired works / services at a
competitive price in conformity with the defined specifications of the Services by
avoiding high cost and the distortionary impact of corruption on public
procurement.
3.2 Enabling Bidders to abstain from bribing or any corrupt practice in order to
secure the contract by providing assurance to them that their competitors will also
refrain from bribing and other corrupt practices and the Principal / Owner will
commit to prevent corruption, in any form, by their officials by following transparent
procedures.
Commitments of the Principal / Owner
4. The Principal / Owner commits itself to the following :-
4.1 The Principal / Owner undertakes that, no official of the Principal / Owner,
connected directly or indirectly with the contract will demand, take a promise for or
accept, directly or through intermediaries, any bribe, consideration, gift, reward,
125
favour or any material or immaterial benefit or any other advantage from the
Bidder, either for themselves or for any person, organisation or third party related
to the contract, in exchange for an advantage in the bidding process, bid
evaluation, contracting or implementation process related to the Contract.
4.2 The Principal / Owner will, during the pre-contract stage, treat all Bidders
alike and will provide to all Bidders the same information and will not provide any
such information to any particular Bidder which could afford an advantage to that
particular Bidder in comparison to other Bidders.
4.3 All the officials of the Principal / Owner will report to the appropriate
Government office any attempted or completed breach(s) of the above
commitments as well as any substantial suspicion of such a breach.
5. In case of any such preceding misconduct on the part of such official(s) is reported
by the Bidder to the Principal / Owner with willful and verifiable facts and the same is
prima facie found to be correct by the Principal / Owner, necessary disciplinary
proceedings, or any other action as deemed fit, including criminal proceedings may be
initiated by the Principal / Owner and such a person shall be debarred from further dealing
related to the tender / contract process. In such a case while an Inquiry is being
conducted by the Principal / Owner, the tender process/ proceedings under the contract
would not be stalled.
Commitments of Bidders
6. The Bidder commits himself to take all measures necessary to prevent corrupt
practices, unfair means and illegal activities during any stage of his bid or during any pre-
contract or post-contract stage in order to secure the contract or in furtherance to secure
it and in particular commits himself to the following :-
6.1 Bidder will not offer, directly or through intermediaries, any bribe, gift,
consideration, reward, favour any material or non-material benefit or other
advantage, commission, fee, brokerage or inducement to any official of the
Principal / Owner, connected directly or indirectly with the bidding process, or to
any person, organisation or third party related to the contract in exchange for any
advantage in the bidding, evaluation, contracting and implementation of the
Contract.
6.2 The Bidder further undertakes that he has not given, offered or promised to
give, directly or indirectly any bribe, gift, consideration, reward, favour any material
or non-material benefits or other advantage, commission, fees, brokerage or
inducement to any official of the Principal / Owner or otherwise in procuring the
Contract or forbearing to do or having done any act in relation to the obtaining or
execution of the contract or any other Contract with the Government for showing
or forbearing to show favour or disfavor to any person in relation to the Contract or
any other Contract with the Government.
6.3 The Bidder will not collude with other parties interested in the contract to
impair the transparency, fairness and progress of the bidding process, bid
evaluation, contracting and implementation of the contract.
126
6.4 The Bidder will not accept any advantage in exchange for any corrupt
practice, unfair means and illegal activities.
6.5 The Bidder would not enter into conditional contract with any Agent(s),
broker(s) or any other intermediaries wherein payment is made or penalty is levied,
directly or indirectly, on success or failure of the award of the contract.
6.6 The Bidder commits to refrain from giving any complaint directly or through
any other manner without supporting it with full and verifiable facts. Complaint will
be processed as per Guidelines for Handling of Complaints in vogue. In case
the complaint is found to be vexatious, frivolous or malicious in nature, it would be
constructed as a violation of Integrity Pact.
7. Previous Transgression
7.1 The Bidder declares that no previous transgression occurred in the last
three years immediately before signing of this Integrity Pact with any other
company in respect of any corrupt practices envisaged hereunder or with any
Public Sector Enterprises in India or any Government Department in India.
7.2 If the Bidder makes incorrect statement on this subject, Bidder can be
disqualified from tender process or the contract and if already awarded, same can
be terminated for such reason.
8. Company Code of Conduct
8.1 Bidders are advised to have a company code of conduct (clearly rejecting
the use of bribes and other unethical behaviour) and a compliance program for the
implementation of the code of conduct throughout the country.
9. Sanction for Violation
9.1 Any breach of the aforesaid provisions by the Bidder or any one employed
by him or acting on his behalf (whether with or without the knowledge of the Bidder)
or the commission of any offence by the Bidder or any employed by him or acting
on his behalf, as defined in Chapter IX of the Indian Penal Code, 1860 or the
Prevention of Corruption Act 1988 or any other act enacted for the prevention of
corruption shall entitle the Principal / Owner to take all or any one of the following
actions, wherever required :-
(i) Technical bid of the Bidder will not be opened. Bidder will not be
entitled to or given any compensation. However, the proceedings with the
other Bidder(s) would continue.
(ii) Financial bid of the Bidder will not be opened. Bidder will not be
entitled to or given any compensation. However, the proceedings with the
other Bidder(s) would continue.
127
(iii) The Earnest Money Deposit shall stand forfeited either fully or
partially, as decided by the Principal / Owner, in case contract is not
awarded to the Bidder and the Principal / Owner shall not be required to
assign any reason therefor. For enlisted contractors an amount less than
or equal to Earnest Money Deposit as decided by the Principal / Owner shall
be deducted from any amount held with the Department / any payment due.
(iv) To immediately cancel the contract, if already concluded / awarded

without any compensation to the Bidder.
(v) To encash the Performance Security furnished by the Bidder.
(vi) To cancel all or any other Contract(s) with the Bidder.
(vii) To temporarily suspend or temporarily debar / permanently debar the

bidder as per the extant policy.
(viii) If adequate amount is not available in the present tender / contract,

the deficient amount can be recovered from any outstanding payment due
to the Bidder from the Principal / Owner in connection with any other
contract for any other works / services.
(ix) If the Bidder or any employee of the Bidder or any person acting on
behalf of the Bidder, either directly or indirectly, is closely related to any of
the officers of the Principal / Owner, or alternatively if any close relative of
an officer of the Principal / Owner has financial interest/stake in the Bidder’s
firm, the same shall be disclosed by the Bidder at the time of submission of
tender. Any failure to disclose the interest involved shall entitle the Principal
/ Owner to debar the Bidder from the bid process or rescind the contract
without payment of any compensation to the Bidder. The term ‘close
relative’ for this purpose would mean spouse whether residing with the
Government servant or not, but does not include a spouse separated from
the Government servant by a decree or order of a competent Court, son or
daughter or step son or step daughter and wholly dependent upon
Government servant, but does not include a child or step child who is no
longer in any way dependent upon the Government servant or of whose
custody the Government servant has been deprived of by or under any law,
any other person related, whether by blood or marriage, to the Govt servant
or to the Government servant’s wife or husband and wholly dependent upon
Government servant.
(x) The Bidder shall not lend to or borrow any money from or enter into
any monetary dealings or transactions, directly or indirectly, with any
employee of the Principal / Owner and if he does so, the Principal / Owner
shall be entitled forthwith to cancel the contract and all other contracts with
the Bidder.
9.2 The decision of the Principal / Owner to the effect that a breach of the provisions
of this Integrity Pact has been committed by the Bidder shall be final and binding on the
128
Bidder. However, the Bidder can approach the Independent External Monitor(s)
(IEMs) appointed for the purposes of this Pact.
10. Independent External Monitors (IEMs)
10.1 MoD has appointed the following Independent External Monitors for this pact in
consultation with the Central Vigilance Commission :-
Sl No Name of IEM e-mail id

1. * *
2. * *
10.2 Details of Nodal officer nominated by E-in-C’s Branch are as follows :-
Name :*
e-mail id :*
Mobile No :*
* Updated details to be filled
10.3 In case of any complaint with regard to violation of Integrity pact, either party can
approach IEMs with copy to the Nodal Officer and the other party. If any such complaint
from bidder is received by the Principal / Owner, the Principal / Owner shall refer the
complaint to the Independent External Monitors for their recommendations / Inquiry
report.
10.4 If the IEMs need to peruse the relevant records of the Principal / Owner and / or of
the Bidder / Contractor in connection with the complaint sent to them, the Principal /
Owner and / or the Bidder / Contractor shall make arrangement for such perusal of
records by the IEMs as demanded by them including unrestricted and unconditional
access to the project documentation and minutes of meeting. If records / documents of
Sub Contractor(s) are also required to be perused by the IEMs, the Bidder shall make
arrangement for such perusal of records by the IEMs, as demanded by them. IEMs are
under obligation to treat the information and documents of the Principal / Owner and
Bidder / Contractor / Sub-Contractors with confidentiality.
10.5 The task of the IEMs, is to review independently and objectively, any complaint
received with regard to violation of Integrity Pact and offer recommendations or carry out
inquiry as deemed fit. The IEMs are not subject to any instructions by the representatives
of the parties and shall perform their functions neutrally and independently. The report of
inquiry, if any, made by the IEMs shall be submitted to either of the following for a final
and appropriate decision in the matter keeping in view the provision of this Pact :-
(a) Engineer-in-Chief in normal cases
(b) CVO(MES & BRO) / DMA / Department of Defence (DoD) in cases involving
vigilance angle
129
11. Examination of Books of Accounts
In case of any allegation of violation of any provisions of this Integrity Pact or payment of
commission, the Principal / Owner or its agencies shall be entitled to examine the Books
of Account of the Bidder and the Bidder shall provide necessary information of the
relevant financial documents in English and shall extend all possible help for the purpose
of such examination.
12. Law and Place of Jurisdiction
This Pact is subject to Indian Law. The place of performance and jurisdiction is the seat
of the Principal / Owner.
13. Other Legal Actions
The actions stipulated in this Integrity Pact are without prejudice to any other legal action
that may follow in accordance with the provisions of the extant law in force relating to any
civil or criminal proceedings.
14. Signing of Integrity Pact on behalf of Bidder
(a) Proprietorship Concern - The Integrity Pact must be signed by the

proprietor or by an authorised signatory holding power of attorney signed by the
proprietor.
(b) Partnership firm - The Integrity Pact must be signed by all Partners or by
one or more Partner holding power of attorney signed by all the Partners.
(c) Limited Liability Partnership firm - The Integrity Pact must be signed by all
Partners or by one or more Partner holding power of attorney signed by all
Partners.
(d) Private Limited / Limited Company - The Integrity Pact must be signed by
representative duly authorised by Board resolution.
(e) Joint Venture - The Integrity Pact must be signed by all Partners and
members to Joint Venture or by one or more Partner holding power of attorney
signed by all Partners and all members to the Joint Venture.
15. Validity
15.1 The validity of this Integrity Pact shall be from date of its signing. It expires for the
Contractor after the final payment under the contract has been made or till the
continuation of Defect Liability Period, whichever is later and for all other bidders, till the
Contract has been awarded.
15.2 Should one or several provisions of this Pact turn out to be invalid, the remainder
of this Pact remains valid. In this case, the parties will strive to come to an agreement to
their original intentions.
130
INTEGRITY PACT
To
____________
____________
____________
Sub -Tender ID No_______________ for the work______________________
Dear Sir,
It is hereby declared that MES is committed to follow the principle of transparency, equity
and competitiveness in public procurement.
The subject Notice Inviting Tender (NIT) is an invitation to offer made on the condition
that the Bidder will sign the Integrity Pact, which is an integral part of tender/bid
documents, filing which the tender/bidder will stand disqualified from the tendering
process and the bid of the bidder be summarily rejected.
This declaration shall form part and parcel of the Integrity Pact and signing of the same
shall be deemed as acceptance and signing of the Integrity Pact on behalf of MES.
Yours faithfully
Chief Engineer (CE) / Chief Construction

Engineer (CCE) / Commander Works Engineer
(CWE) / Garrison Engineer (I)
(GE (I)) / Garrison Engineer (GE)
131
INTEGRITY PACT
To
Chief Engineer (CE)/

Chief Construction Engineer (CCE)/
Commander Works Engineer (CWE)/
Garrison Engineer (I) (GE (I)) /Garrison Engineer (GE)
Sub - Tender ID No_____________________________

Submission of Tender for the work of _________________
Dear Sir,
I/We acknowledge that MES is committed to follow the principles thereof as enumerated
in the Integrity Pact enclosed with the tender/bid document.
I/We agree that the Notice Inviting Tender (NIT) is an invitation to offer made on the
condition that I/We will sign the Integrity Pact, which is an integral part of tender
document, failing which I/We will stand disqualified from the tendering process. I/We
acknowledge that THE MAKING OF THE BID SHALL BE REGARDED AS AN
UNCONDITIONAL AND ABSOLUTE ACCEPTANCE of the conditions of the NIT
I/We confirm acceptance and compliance with the Integrity Pact in letter and spirit and
further agree that execution of the said Integrity Pact shall be separate and distinct from
the main contract, which will come into existence when tender/bid is finally accepted by
MES. I/We acknowledge and accept the validity of the Integrity Pact, which shall be in
line with Para 15 of the enclosed Integrity Pact.
I/We acknowledge that in the event of my/our failure to sign and accept the Integrity Pact,
while submitting the tender/bid, MES shall have unqualified, absolute and unfettered right
to disqualify the tender/bidder and reject the tender/bid in accordance with terms and
conditions of the tender/bid.
Yours faithfully
(Duly authorised signatory of the Bidder)

132
SECTION 4
LEGAL REQUIREMENTS, TYPE OF CONTRACTS AND CONTRACT FORMS
4.1 Introduction
4.1.1 For getting work services and jobs executed efficiently, economically and in the least
possible time, employing the agency of contract has always proved to be the best course
of action.
4.1.2 Various standard forms of contracts appropriate for different kinds of work
requirements and situations have been evolved and are in use in the MES department.
The choice of the most suitable type of contract for a particular kind of work to be executed
is of considerable importance.
4.1.3 Contracts concluded in India are governed by Indian Contract Act (1872).
4.2 Definition of Contract. Every set of promises forming consideration for each
other is an agreement. An agreement which is enforceable by law is called a contract. The
contract which is not enforceable by law is said to be a ‘void’ contract and that which is
enforceable by law at the option of one of the parties but not at the option of the other, is
called a ‘voidable’ contract.
4.3 Legal Requirements. In any contract generally, as also in a building contract,

the following requirements must be satisfied :
(a) Parties. The agreement implies the existence of two or more parties.
Such parties must be competent ie ,not disqualified either by infancy or insanity or
by other special qualification by personal law. They must be of sound mind at least
when the contract is made (Section 11 and 12 of the Indian Contract Act). Otherwise
the contract becomes unenforceable.
(b) Consideration. Consideration is a promise or a set of promises made by

one party to another and vice-versa. These promises form the consideration to each
other mutually in an agreement. In a legal contract it is necessary that there exist a
consideration although it need not necessarily be adequate to the promise. Total
absence of consideration will render it unenforceable. Consideration must not be
unlawful (Section 23 of the Indian Contract Act).
(c) Other Requirements. Other requirements to be fulfilled are that the

contract must not be:-
(i) In restraint of the marriage of any person other than a minor (Section
26 of the Indian Contract Act).
(ii) In restraint of trade (Section 27 of the Indian Contract Act) eg; A, a

tailor was employed by B on the terms that during his employment and six
months after its termination, A will not work as a tailor within one kilometer of
133
B’s shop. Here the restriction during employment is enforceable but not after
the termination of the employment.
(iii) In restraint of legal proceedings (Section 28 of the Indian Contract Act)

eg; if an agreement contains a provision that neither party shall have any right
to have recourse to a court of law in case of any disputes, such a provision is
void though both parties had agreed.
(iv) Of uncertain meaning (Section 29 of the Indian Contract Act) eg; A

agrees to sell to B “hundred tonnes of oil” and there is nothing whatsoever to
show what kind of oil was intended. The agreement is void due to uncertainty.
(v) By way of wager (Section 30 of the Indian Contract Act) eg; A agreed
to sell his horse to B for Rs 300/- if the horse should trot at a speed of 18 km
per hour but for one rupee if it failed to do so. The horse failed to do so. B
claimed the horse from A for one rupee. The transaction is really a bet and
hence void.
(vi) For an impossible act (Section 35,36 and 56 of the Indian Contract
Act) eg; A agrees to pay Rs 1000/- if B will marry A’s daughter C. C was dead
at the time of the agreement. The agreement is void.
(vii) Involving a mistake of both parties on the essential matters eg; matter
of fact (Section 20 of the Indian Contract Act) eg; A agrees to buy from B a
certain horse. It turns out that the horse was dead at the time of bargain,
though neither party was aware of the fact, the agreement is void.
(viii) Entered into due to a mistake of both parties as to foreign law (Section
21 of the Contract Act). Explanation: Mistakes based on ignorance of any
foreign law are treated as a mistake as a matter of fact (refer Section 20 of
the Indian Contract Act).
Note : In the contracts concluded in MES, items (iii) and (iv) above are important. Any
provision in the contract that has the effect of transgressing the jurisdiction of law is
objectionable. For example a provision that a dispute will not be referred to court for
settlement is illegal but a provision that the dispute shall be referred to arbitration for
settlement is not illegal as the latter is legislated as a method of settling the disputes.
134
4.4 Contractors and Their Agents.
(a) It must be noted that it is of no use contracting with a man who either has no
legal power to bind himself or no legal authority to bind those for whom he proposes
to act. If he proposes to contract on his own behalf it should be ascertained that the
person is a major, sound in mind and not disqualified from contracting by any law to
which he is subject to (Section 11 and 12 of the Indian Contract Act). If he proposes
to contract as someone else’s agent it should be ascertained whether the man has
received the authority that he claims and whether it has been given in the legal form.
The power of attorney should be verified by the Accepting Officer as to the exact
nature of the agent's powers ie whether the agent is entitled to manage the whole
work or merely to receive payments, sign bills or measurements. (Section 182, 190,
191, 196, 200 and 201 of the Indian Contract Act).
(b) Before a contract is concluded with any one acting in the capacity of an agent,
it should be verified whether the agent representing the party holds the power of
attorney as otherwise his action will not bind his principal.
(c) Also refer instructions with regard to Power of Attorney as given in section 3
of the Manual.
4.5 Contract Voidable at Inception. A contract is voidable at inception when the

consent is caused by any of the following sections of the Indian Contract Act referred to
against each:-
(a) Fraud (Section 14, 17 and 19).
(b) Coercion (Section 14, 15 and 19).
(c) Misrepresentation (Section 14, 18 and 19).
(d) Undue influences (Section 14, 16 and 19)
4.6 Contract Voidable by Subsequent Default. The contract is voidable by

subsequent default as per following sections of Indian Contract Act:-
(a) Where offer of performance is not accepted (Section 38).

(b) When one party prevents performance of reciprocal promise (Section 53).
(c) When a party fails to perform at the time fixed where time is of the essence
of the contract (Section 55).
4.7 Communication of Proposal, Acceptance and Revocation:
4.7.1 Section 7 of the Indian Contract Act makes it obligatory that the acceptance
must be absolute and unqualified. It also lays down the manner of acceptance.
4.7.2 Section 4 and 5 of the Indian Contract Act lay down the legal position as to
when the communication of the proposal (offer of tender) and that of acceptance is
complete and to when these could be revoked by either party.
135
(a) The communication of a proposal is complete when it comes to the knowledge
of the person to whom it is made.
(b) The communication of an acceptance is complete:-

(i) as against the proposer, when it is put into the course of transmission
to the proposer so as to be out of the power of the acceptor.
(ii) as against the acceptor when it comes to the knowledge of the
proposer.
(c) The communication of revocation is complete:-

(i) as against the person who makes it, when it is put into a course of
transmission to the person to whom it is made, so as to be out of the power
of the person who makes it.
(ii) as against the person to whom it is made, when it comes to his
knowledge.
(d) In e tendering the communication of acceptance shall be deemed to be

complete as against the proposer as well as the acceptor, the moment acceptance
letter by the Accepting Officer is uploaded on the e portal.
4.8 Revocation of Proposal and Acceptance:
(a) A proposal may be revoked at any time before the communication of its
acceptance is complete as against the proposer, but not afterwards.
(b) An acceptance may be revoked at any time before the communication of its
acceptance is complete as against the acceptor, but not afterwards.
(c) In case of physical tendering, acceptance letters should invariably be sent

through registered acknowledgement due post/Speed Post/E-mailed and the proof
of the time and date of dispatch secured, and kept on record. After dispatch of the
acceptance letters a contract situation is considered to have been established. Any
letter or intimation of revocation of the tender by the tenderer if received after the
dispatch of the acceptance letter is ineffective even in cases where letter revoking
the tender is dated prior to the date of the Acceptance letter. Revocation of a tender
is effective only if the letter of revocation is received before dispatch of the
Acceptance letter.
(d) In case of e-tendering, acceptance letters shall invariably be uploaded on e

portal. After uploading an acceptance letter on the e portal, a contract situation is
considered to have been established. Any letter or intimation of revocation of the
tender by the tenderer if received after the uploading of acceptance letter shall be
ineffective.
136
4.9 Types of Contracts. Building contracts can broadly be divided into two types
as follows:-
(a) Lump Sum contracts.
(b) Measurement contracts.
4.9.1 Lump Sum Contracts.
(a) In the lump sum type of contracts, as the name indicates, the contractor
undertakes to carry out the work to completion for a fixed sum.
(b) The complete, fully detailed and exact scope of work required to be carried
out under the lump sum contract is laid down by way of drawings and specifications
incorporated into tender documents, which when accepted become the contract.
Recording of detailed measurements at site is not necessary.
(c) In lump sum contracts, interim payments (termed as Running Account

Receipts-RARs) are made to contractors on the basis of assessment of the progress
of work actually done and this does not involve recording of detailed measurements.
The day to day supervision by MES, however ensures that the work being done is
in accordance with the dimensions etc, laid down in the drawings and specifications
laid down in contract.
4.9.2 Measurement Contracts.
(a) In measurement contracts, quantities involved in the scope of work are stated
approximately in Schedule ‘A’ of the contract. The exact amount payable to the
contractor for RARs and Final Bills is decided only after measurement of work done
at site priced at rates quoted for each item of work.
(b) In works to be let out through a lump sum contract, it often happens that the
exact final quantities for a comparatively small portion of the work cannot be worked
out accurately in advance, eg; electrification, water supply, sewage line etc, required
in a building. For such portions of the work the item wise description with
approximate quantities are kept separate as measurable, against which the
contractor quotes rates that he will charge. These measurable portions of work are
made part of the lump sum contract. By this procedure concluding contracts of small
amounts for the measurable portion of work is avoided.
4.9.3 Types of Lump Sum Contracts (IAFW-2159).
(a) Based on Bills of Quantities (BQ). In this type of contract the tenderer
is supplied with a complete set of drawings, specifications and quantities of each
item of work like excavation, brickwork, concrete etc. The correctness of the
137
quantities of work given in the bills of quantities (BQ) is guaranteed by the MES. The
tenderer quotes his rates for each item of work and arrived at the lump sum that he
will charge for the entire work.
Interim payments are made by assessment not involving measurement at site.

Variations, if any, from the original scope of work are measured in detail and the
contract price adjusted on the basis of rates quoted in the BQ.
This type of contract is suitable for large prestigious buildings and for works involving
construction of many units of a type design eg; married accommodation.
(b) Based on Pre-pricing by MES. In tenders for this type of contract, the cost
of each building, structure etc at par with the MES Standard Schedule of Rates
(SSR) is estimated in advance by the MES and inserted in the Schedule ‘A’ (List of
works and prices). Quantities of items of work like excavation, brickwork etc involved
in each building/structure are not supplied to the tenderer and the accuracy of the
pre-pricing done by MES is also not guaranteed. A complete set of drawings and
specifications is supplied to the tenderer. The tenderer is required to work out the
detailed quantities for each building/structure listed in Schedule ‘A’, apply his own
rates and quote the lump sum that he will charge for the work. The only purpose
served by the pre-pricing done by MES is to arrive at the percentage on/ off the SSR
rates for working out the adjustment to contract price on account of variations during
execution of work .A majority of lump sum contracts concluded in MES for any kind
of buildings or structures are of this type.
(c) Based on Drawings and Specification : In tenders for this type of contract,
the tenderer is neither supplied with detailed quantities nor with cost of work pre-
priced by MES at par with SSR. The tenderer is required to work out the quantities,
apply his own rates and quote lump sum against each building/structure etc listed in
Schedule ‘A’. The tenderer is supplied with a complete set of drawings and
specifications. A special condition is inserted in the tender documents laying down
a percentage on/off the SSR level of rates for the purpose of pricing variations, if
any, from the original scope of work. This percentage is pre-assessed by MES
before the uploading of tenders. This type of tendering is considered inferior to
tenders based on pre-pricing by MES, as the level of rates at which variations are
priced depends on the assessment of market rates by MES and not by the tenderer.
Use of this type of contract should, as far as possible, be restricted to technical
buildings of non-repetitive nature and when time is not available for pre-pricing.
(d) Sale of Buildings for Demolition, Removal and Clearance of Site (IAFW-
2352). When, for any reason existing buildings are required to be demolished, lump
sum contracts may be concluded. The tenderer quotes lump sum price for demolition
of buildings and removal of debris etc away from Government land. He also quotes
a credit which he will afford for salvaged materials. A special form is devised for
these types of contracts.
138
(e) Piece-Work for Specific Job (IAFW-1780-A). Small specific jobs like minor
works, repairs to plant and machinery etc not exceeding Rs 10,000 where the scope
of work is exactly known may be executed through lump sum contracts duly
stipulating the period of completion. The contractor quotes a lump sum for the
complete job. As the nature of work does not warrant elaborate conditions of contract
etc a simple and concise contract is devised for use in MES.
(f) Contracts for Specialist Consultancy Services. Due to excessive

planning load in a particular MES formation or due to the complexity or specialist
nature of a job it may be found
Expedient to employ the services of a professional consulting firm for working up a
scheme, design calculations, preparation of drawings, bill of quantities, drafting
specifications etc. A standard contract form has been devised for the purpose. MES
shall supply the consultant with data, information, parameters etc for use by the
consultant. The schedule of fees payable shall be so made out whereby the
consultants become entitled for payment of fees on satisfactory completion of the
entire consultancy service. Alternatively stipulation for item wise stage payments
may also be made. As this standard form is approved by the Ministry of Defence,
the consultancy agreements are not required to be vetted by legal authorities or by
concerned PCDA/CDA. Detailed instructions with regard to these types of contracts
have been given in section 11 of the Manual.
(g) Engineering Procurement Construction (EPC) Contracts. These types of

lump sum contracts are suitable for complex buildings where entire engineering,
procurement and execution is entrusted to the contractor. In these types of
contracts, contractors will carry out the detailed engineering design of the project,
procure all the equipment and materials necessary and then construct to deliver a
fully functional facility to the department. These types of contracts are in a
preliminary stage in MES and instructions as issued by E in C’s Branch from time to
time shall be followed.
Note : Use of the form for tender and lumpsum contract for the supply of stores and
materials (which includes furniture items)-IAFW 1815 is suspended.
4.9.4 Types of Measurement Contracts.
(a) Item Rate Contracts (IAFW-1779-A). This type of contract is ideally suitable
where large approximately estimated quantities of work involving a small number of items
have to be executed eg road work, runway works, external water supply, sewage, electrical
works, periodical services etc. The Schedule ‘A’ contains items with approximate
quantities. The description of the item covers specifications in brief. The tenderer quotes
his rates for each item of work to be measured in detail before payment. Detailed
specifications and drawings are also supplied to the tenderers. Though the quantities given
in Schedule A are stated to be approximate, care is to be taken to ensure that these
represent final requirements within 10% accuracy. This is to avoid the possibility of the
139
lowest tender accepted on the basis of approximate quantities turning out not to be the
lowest on the basis of quantities actually executed at site.
(b) Term Contract for Artificers Work (TC) (IAFW-1821). This is a contract for a
fixed term (or period-usually 12 months). The area within which work can be ordered, i.e
boundaries of a military cantonment or part of it clearly marked on a map, is laid down. The
contractor undertakes to carry out any number of works which may be ordered on him
during the fixed term within the specified area. The contract imposes certain restrictions on
the value of each individual work that can be ordered and also on the kind of work that can
be ordered. The tenderer quotes a percentage on/off the SSR. Works are ordered as and
when necessity arises. Work is measured against items listed in SSR, priced at rates given
in SSR and adjusted by the percentage quoted by the contractor. Term contracts are
suitable for carrying out minor works, repairs and maintenance of existing
buildings/structures etc and are of great importance and convenience to a GE’s division
where considerable maintenance work is involved.
(c) Percentage Rate Contract (IAFW-1779). In this type of contract, tenderer quotes
a percentage on/off the SSR for a specific work or group of works. Amounts payable under
RARs and final bills are decided on the basis of measurement of work done priced at rates
given in SSR adjusted by the quoted percentage. Tender documents contain information
on the nature and broad scope of work, estimated cost, period of completion, specifications
and a set of drawings, but neither the quantities, nor description of the items of works in
the form of Schedule ‘A’ are supplied. Use of this type of contract should be restricted as
far as possible to following cases with prior approval of NHEA:
(i) When there is difficulty in estimating and identifying the exact items of work
until the work has commenced eg extensive roof and floor repairs, renovation of
dilapidated structures etc.
(ii) For maintenance services falling beyond the limits of term contracts for a
single work.
(iii) As an alternative to lump sum contracts for original works when time
constraints do not permit complete planning, designing and production of working
drawings required for concluding lump sum contracts.
(iv) In urgent special cases when contractors capable of tendering on a lump sum
basis are neither available locally nor can be inducted from outside.
(d) Rate Contract for Supply of Stores, Materials and Furniture (IAFW-1815Z). This
type of contract is suitable for procurement of any specific kind(s) of materials, items of
furniture and stores for maintenance to be used by departmentally employed labour (DEL),
petty stores for office use etc. The tenderer quotes his rates for supply of each item listed
in Schedule ‘A’ during a fixed period of time of usually six months or one year. Orders for
supply can be placed as and when the requirement arises, in bulk or piece-meal. Items or
stores delivered are measured and payment made at rates quoted. Bill is prepared
140
separately for each supply order completed. At the time of inviting tenders, the items of
stores, furniture etc may be divided into groups and separate contracts concluded for each
group with the lowest tenderer for the particular group or groups. General Conditions of
Contracts (IAFW-1815Z) lay down a separate percentage for permissible variation in
quantities ordered as against those shown in the Schedule ‘A’ in contracts for “Supply of
Building Materials”, “Supply of Furniture” and “Supply of Bazar Materials”. In practice,
therefore, separate tenders are called for “Supply of Building Materials”, “Supply of
Furniture” and “Supply of Bazar Materials”. The term ‘Bazar Materials’ signifies
items/articles like broom, brushes, glass tumblers, earthen pots, durries, door-mats etc.
(e) Contract for Handling and Conveyance of Stores (IAFW-2320). This type of
contract is used for loading, unloading, removal, conveyance (transporting), stacking and
preservation of stores of any description. The tenderer is required to quote a percentage
on/off a priced schedule of rates attached to the tenders. This is a running contract, usually
concluded for twelve months. Work orders duly stipulating the period of completion are
placed as and when need arises. The contractor is required to keep vehicles and labour
gang available for deploying at a short notice. In this contract, when employed for use for
unloading of stores received by railway wagons, demurrage/wharf age charges levied by
railway authorities are recovered from the contractor if the delay has occurred due to his
fault.
(f) Piece-Work Contract (IAFW-1780). This type of contract caters for small items
of work of recurrent nature eg recanting of furniture, emptying of septic tanks, restringing of
charpoys and the like. Contracts are usually made for a single item of work, which can be
ordered in bulk or piecemeal as and when necessity arises during a stipulated period of
time. Total value of work ordered is not to exceed Rs 5000/- during the entire period of
contract. A short and concise contract form incorporating conditions of contract has been
devised considering the simple nature of work involved.
4.10 Contract Forms, Indian Army Forms of Works (IAFW). Various kinds of lump
sum and measurement contracts concluded in MES with the appropriate standard contract
forms and applicable set of General Conditions of Contracts to be used and the IAFWs
(Indian Army Forms of Works) number allotted to them are listed at Appendix 4.1. Para
403 of MES Regulations also refers. List of various contract forms used in MES is given at
Appendix 4.2
141
Appendix 4.1
TYPE OF CONTRACTS IN COMMON USE IN MES
Srl Type of contract Brief Tender General Remarks

No Description Form Conditi
IAFW ons of
No Contrac
t,
IAFW
No
(a) (b) (c) (d) (e) (f)
1 Lump Sum
Contracts
(a) Based on The contractor 2159 2249 Recommended for all
bills of quantities. prices the CE contracts where
detailed surveyor expertise is
quantities available. MES
furnished by provides the
MES and the contractor with bills of
total is accepted quantities. The
as a lump sum. contractor quotes his
lump sum by pricing
the bills of quantities.
(b) Based on The contractor 2159 2249 Unit cost of various
Schedule ‘A’ pre works out and items of work are
priced by MES quotes his own given in tenders as
lump sum and worked out by MES at
also quotes a par SSR.
percentage on/off
the MES
Schedule by
comparing his
lumpsum with the
prepricing
inserted by MES.
Same
percentage is
applicable for the
purpose of
pricing
deviations.
(C) Based on The contractor 2159 2249 The contractor
drawings and works out his submits a lump sum
specifications. own estimates quotation for the work
and quotes shown in the
142
lumpsum against drawings and
each item and specifications
the grand total is attached to the tender
accepted as a documents.
lump sum.
(d) Sale of The contractor 2352 2352 Used when
buildings for quotes lump sum reasonable bids are
demolitions, price for not secured for
removal and demolition work auction or reauction
clearance of site. and credit for for sale of surplus
salvaged buildings.
materials.
(e) Piece-work for The contractor 1780-A 1780-A Used when scope of
specific job. gives quotation work, quantity
for the whole and period for
work. completion are known
and the estimated
value does not
exceed Rs 10,000/-
Useful for minor
works, periodical
sevices and for
repairs to plant and
machinery.
(f) Contract for The consultant Refer section 11 of
specialist quotes for Manual and
consultancy supplying the instructions issued by
services. design, drawing, E-in-C's Branch on
specifications the subject from time
etc. to time shall be
followed.
(g) Engineering The contractor 2159 2249 These types of lump
Procurement quotes lump sum sum contracts
Construction for the entire are suitable for
(EPC) Contracts scope of complex projects and
engineering, shall be issued as per
designing, policy directions
procurement and issued by E in C’s
execution of the Branch from time to
work. time
2. Measurement
Contracts
(a) Item rate The contractor 1779-A 2249 Suitable where large
contract quotes rates for quantities of work
each item of involving a limited
work to be number of items have
143
measured on to be carried out but
completion. the exact quantities of
Schedule ‘A’ work required are not
contains items known. The quantities
with approximate of items inserted
quantities and should be within 10%
specifications for of the anticipated
each item. requirement during
execution.
(b) Term contract A running 1821 2249 Used for normal or
for artificers work. contract usually ordinary repairs
for 12 months and minor works.
duration where
the contractor
quotes a
percentage on or
off the MES
Schedule of
Rates.
(c) Percentage The contractor 1779 2249 Used under certain
rate contract. quotes a circumstances
percentage on or as an alternative to
off the MES lumpsum form of
schedule for a contract for original
certain work or works and
group of works to maintenance services
be measured on beyond the limits of
completion and the Term Contract : (i)
priced. (Auth : When there is
RMES 1968, difficulty in estimating
Para 414) the quantities
correctly until the
work has
commenced.
(ii) When it is
considered imperative
to commence work
without delay which
the preparation of a
lump sum contract
involves.
(iii) In other special
cases when
contractors capable
of tendering on lump
144
sum basis are not
available.
(iv) Use of this type of
contract by GE or
CWE requires prior
approval of Next
Higher Engineer
Authority.
(d) Rate contract The contractor 1815(R) 1815(Z) The items of supply
for supply of quotes rates for may be
materials or each item of divided into groups
furniture, stores stores or and a separate
for DEL, petty furniture contract concluded
stores for office for each group. May
use etc. be concluded for
divisions, sub-
divisions or stations
separately, or
collectively, and may
be of six months or
one year duration.
(e) Contract for The contractor 2320 2320 This form will be used
handing and/or quotes a for loading,
conveyance of percentage on or percentage on or off
stores of any off the rates the rates
description. given in the unloading, removal,
schedule stacking,
attached to the preservation,
tender conveyance etc of
documents. This stores of any
is a running description.
contract usually
for a duration of
twelve months.
(f) Piece-work Fixed duration. 1780 1780 To be used when the
Contractor exact
quotes rate for quantities of work are
each item. not known. Total value
of work not to exceed
Rs 5,000/-
145
Appendix 4.2
CONTRACT FORMS USED IN MES
IAFW (INDIAN ARMY FORM FOR WORKS)/IAFA (AUDIT FORMS)
Srl No IAFW No Particulars

1. 2249 General Conditions of Contracts
1 for Lump Sum, Term and
Measurement Contracts.
2. 1815 (Z) General Conditions of Contracts for Supply of Stores and Materials.
3. 2159 Lump Sum Tender and Contract for Works.
4. 1779 Tender and Contract for Works by Measurement (Percentage Rate).
5. 1779-A Item Rate Measurement Contract.
6. 1821 Tender and Contract for Artificer’s Work.
7. 1851-R Tender and Rate Contract for Supply of Stores and Materials.
8. 1815 Tender and Lump Sum Contract for Supply of Stores and Materials
(Use of this Contract Form is suspended).
9. 2320 Tender and Contract for Handling and/or Conveyance of Stores of
any description.
10. 1780 Tender and Contract for Piecework.
11. 1780-A Tender and Contract for Specific Jobs.
12. 2162 Notice of Tender.
13. 1810 Comparative Statement of Tenders.
14. 1810 Comparative Statement of Tenders (as modified for specialist
Tenders).
15. 2331 Form of Work Order for Handling and Conveyance Contracts.
16. 2352 Sale of Buildings for Demolition, Removal and Clearance of Site.
17. 2353 Agreement for the Appointment of Auctioneers for Disposal of
Surplus Building.
18 2347 Works Diary
19. 2261 Measurement Book.
20. 2264 Abstract of Quantities and Prices (outer Sheet).
21 2264-A Abstract of Quantities and Prices(Inner Sheet).
22. 2262 Final Contract Bill(Outer Sheet).
23 2262-A Final Contract Bill (Inner Sheet).
24. 2254 Bill Forwarding Certificate.
25. 2263 Running Account Receipt.
26. 2209 Taking off Sheet.
27. 2210 Abstract Sheet (for Bill of Quantities).
28. 2211-A Bill of Quantities.
29. 2212-A Bill of Quantities for details of Deviation Orders.
30. 1823 MES Contractor’s Order Sheet.
31 1823-A MES Contractor’s Order Slip.
32. 2190 Application for Enrolment as Contractor.
33. 1833 Ordinary Requisition (Outer Sheet).
34. 1817 Requisition for Urgent Repairs.
35. 2158 Requisition (Inner Sheet)
36. 2255 Muster Roll (Outer Sheet).
37. 2258 Industrial Personnel Bill.
38. 2297 Analysis of Rates.
39. 1826 Receipt for Stores (Unstamped) or USR.
40. 2253 Transfer Voucher.
41. 2201 Demolition Certificate.
42. 2286 Register of Securities.
43. IAFA-451 No Demand Certificate.
146
SECTION 5
PREPARATION OF TENDER DOCUMENTS
5.1 General :
(a) The points to be watched and observed in the preparation and issue of tender
documents are more or less the same for all types of contracts. Various tender and
contract forms as well as General Conditions of Contracts which are to be used for
different types of contracts are given in Appendix 4.1 and Para 403 of RMES.
(b) Guidelines for information to be collected before inviting tender with regard
to ground data/site factors and availability of materials are given in Appendix 5.1.
(i) Preliminary Information Performa ie (PIP) for preparation of tender

documents shall be furnished by the E2 Planning Section to Contract Section
as per format given in Appendix 5.2.
(ii) Costed schedule of works is to be prepared and technically sanctioned

by CEA before tender documents are issued. The Technical Sanction (TS)
allows for the contractor’s anticipated percentage. The only exception is in
case of works carried out by specialist firms on their own designs which is
finalised during scrutiny of T bid. In such cases, TS will be accorded on the
basis of final design on receipt of tender but before acceptance of tender.
(c) General factors to be taken into consideration while fixing the period for
completion of works are given in Appendix 5.3. Since a short completion period has
a direct bearing on the quoted rates, it becomes imperative on the Executives to
ensure that the works are completed within the stipulated period so that intended
results are obtained. Any extension of time granted in such cases would defeat the
purpose of concluding such a contract. Period of completion shall be fixed keeping
in consideration all factors affecting the progress of work particularly site conditions,
availability of site, availability of electricity/ water, tools and plants, availability of
labour, involvement of third party, requisite clearances like CRZ clearance, forest
clearance, CFEES etc, climatic conditions deciding extent of working/non working
season available for execution of work etc. It is also equally important to fix
workable periods of completion to avoid litigation on impracticality of execution in
the specified completion period.
(d) Para 408 of RMES stipulates that when contracts are concluded based on
drawings and specifications, special care is necessary that drawings and
specifications are complete in all respects. This type of contract should normally be
restricted to works involving complicated designs or elaborate architectural features.
It may also be used when there is insufficient time for preparation of bills of quantities
or Pre-Priced Schedule ‘A’.
(e) All contracts for married accommodation shall be based on pre-priced
Schedule ‘A’. Efforts must be made to conclude other lump sum contracts based on
pre- priced Scheduled ‘A’ so as to derive the following advantages:
(i) The drawings and specifications would be complete in all respects and
free from discrepancies and ambiguities because discrepancies and
ambiguities, if any, would come to light while taking off quantities and these
will get rectified before issue of tenders.
147
(ii) Contracts free from discrepancies and ambiguities can be
administered more effectively because disputes with contractors and any
consequent delay would be minimised. This would considerably reduce the
number of arbitration cases also.
(iii) Items of works for which rates are not available in the MES Schedule
of Rates, come to light at the time of pricing the quantities for Schedule ‘A’
and a list of supplementary rates for these can be included in tender
documents. This would obviate, to a considerable extent, preparation of
special rates at the time of ordering DOs, which is one of the causes of delay
in finalising bills and also cause of dispute with contractors.
(iv) Pricing of deviation orders is more realistic as DOs would be priced

based on the percentage quoted by tenderer, instead of a predetermined
percentage inserted by the department. The latter may be disadvantageous
to the Government or the contractor. Consequent disputes arising out of DOs
would also be reduced.
(v) Evaluation of tender and checking of reasonableness of rates is

simpler and faster. Possibility of freak rates creeping into tenders is altogether
eliminated.
(vi) Preparation of AEs based on the percentages quoted in tenders would

be more realistic.
(f) Where however, if it is not possible either due to inadequacy of time or staff,
to conclude the lump sum contracts with Pre-Priced Schedule ‘A’, detailed reasons
for the same shall be kept in record by the Accepting Officer and the same shall be
intimated to the Chief Engineer Zone in respect of GE & CWE contracts and CE
Command/ADG in respect of CE’s contracts.
(g) Rates in MES Standard Schedule of Rates will under no circumstances form
part of Item Rate Contract envisaged in Condition 62 of IAFW-2249.
(h) Sanction of the E-in-C prior to issue of tenders will be obtained in all cases
where it is proposed to include special conditions which constitute any alteration to
the printed General Conditions of Contracts except those covered under Para
47(e)(ii) of Defence Works Procedure 2020.
5.2 Important Provisions in Tender Documents.
(a) As per General Conditions of Contracts, a contractor has the option to take
the T&P provided by MES or use his own and he has a similar option either to utilise
water from Government sources or make his own arrangement for it. The Contractor
shall be asked to indicate in the forwarding letter if he does not want to take T&P
and water issued by MES failing which it shall be deemed that he has given his
option to use T&P and water.
(b) Deviation Limit. Limits to be included in contract shall be all as per

Section 19.
148
(c) Schedule of Minimum Fair Wages. All contracts should indicate Minimum
Fair Wages. Alternatively it may be specified that minimum fair wages shall be the
same as minimum wages fixed by Central/State Government/Union Territory
whichever is higher.
(d) Schedule of Supplementary Rates. Supplementary rates should be

included in tender after approval by the Accepting Officer to avoid special rates/star
rates.
(e) Appointing Authority for Appointing Arbitrators. Tenders should cater

for appointing authority for appointing arbitrator as given below:-
(i) For contracts conclude by Zonal CE/CCE

GEs/CsWE
(ii) For contracts concluded by Zonal E-in-C
CE/CCE
(f) Instructions to Tenderers. The instructions as under shall be included

in ‘Instructions to Tenderers’ forming part of tender documents in case of physical
tendering. In e-Tendering, corresponding instructions in Chapter on e-Tendering
Section 3 shall be referred:-
(i) The tenderer shall quote his rates on the Schedule ‘A’ and General
Summary pages only.
(ii) In case the tenderer has to revise/modify the rates quoted in the Schedule
‘A’ and/or General Summary, he may do so only in the Schedule ‘A’/General
Summary.
(iii) In case a tenderer has to revise his offer, after it is deposited in Tender
Box, he may do so on his letter head before the time fixed for opening of tenders
in sealed/properly closed cover only. Any revision/modification in offer in the form
of an open letter shall not be taken into account while considering his originally
quoted offer.
(iv) In the event of lowest revoking his offer or revising his rates upwards/offering
voluntary reduction after opening of tenders, the Earnest Money deposited by
him shall be forfeited. In case of MES enlisted contractors, the amount equal to
the Earnest Money stipulated in the Notice of Tender, shall be notified to the
tenderer of depositing the amount through MRO. Issue of tender to such
contractors shall remain suspended till the aforesaid amount equal to the Earnest
Money is deposited in the Government Treasury. In addition, such tenderer and
his related firm shall not be issued the tender in second call or subsequent calls.
Reduction offered by the tenderer on the freak high rates referred to the tenderer
for review shall not be treated as voluntary reduction.
149
5.3 Importance of Correct Pre-Pricing: Contracts Based on Pre-Priced Schedule
‘A’.
(a) A case is cited below which brings out the importance of correctly estimating
the unit rates based on MES Schedule of Rates for insertion in Schedule ‘A’ of lump
sum contracts based on pre-priced Schedule ‘A’. In this case the cost in Schedule
‘A’ was underestimated. Contractor’s lump sum, therefore, worked out at a much
higher percentage above MES Schedule of Rates than the reasonable percentage
for similar current works in the area. Whereas the percentage of the successful
tenderer in this case was 38%, the corresponding percentage on the basis of the
correctly worked out estimated cost at par on the MES Schedule of Rates was 24%.
In this type of contracts, deviations are priced on the basis of MES Schedule of
Rates subject to the percentage quoted by the contractor on Pre Priced Schedule
‘A’. Since, the percentage for pricing deviations could not have been amended at
the time of acceptance of the tender, additional work which became necessary
during the currency of the contract had to be priced on the basis of 38% above MES
SSR. This naturally resulted in an unintended benefit accruing to the contractor.
Extra expenditure in this case would have been avoided if:-
(i) No deviations had been ordered, particularly for the additional work.
(ii) A single tender contract could have been concluded with the
contractor on the basis of the correct and reasonable contract percentage in
respect of additional work that was found necessary during the currency of
the contract.
(iii) By carrying out amendment to contracts for pricing additional work at

24% above MES-SSR, where additional work is not separable from main
work.
(b) The importance of correctly estimating the costs based on MES Schedule of
Rates to be inserted in Schedule ‘A’ and getting the details cross-checked against
corresponding plinth area rates cannot be overstressed. Any hurry in issuing tenders
without proper estimation and planning must be avoided. In the case in point, it was
seen that the contractor had to be allowed extension of time due to delay in handing
over sites, changes in lay-out and the likeand the hurry in letting out the contract did
not really result in any saving of time.
5.4 Importance of Correct Quantities in Item Rate Contracts:
(a) There have been cases of Item Rate Contracts in which estimated quantities
shown against certain items were much lower than the quantities which were
ultimately found to be actually required. That resulted in the deviation percentage in
respect of the relevant trade items exceeding the limits stipulated in Condition 7
(Deviations) of General Conditions of Contracts (IAFW-2249).
(b) In one of the contracts the rate quoted against an item was low whereas in
another contract the rate was high. In neither of these cases action was taken to
make the contractor agree for a reasonable rate for the item of work involved with a
view to applying it to the quantity ordered in excess of the deviation limit. In the
former case, the explanation offered for not negotiating a reasonable rate with the
Contractor was that if the matter was taken up with the contractor, he would have
demanded a higher rate which would involve references to higher authorities and
consequent delay in execution of the work. In the latter case the Accepting Officer
150
refrained from asking the Contractor to reduce the rate because he apprehended
that the contractor would not only disagree to reduce the rate but might even stop
work. Although the fear of the executives is appreciated, lack of proper action at the
appropriate time results in disputes and arbitrations.
(c) The two cases referred to in Para 5.4(b) above bring out the importance and
the necessity of taking the following actions:-
(i) Adequate ground data must be collected before going for tender action
so that a reasonable estimate of requirement of different items is given in the
List of Works.
(ii) Whenever the deviation limit in respect of a trade item is likely to be

exceeded, the question of the rate to be allowed for that item should be taken
up with the contractor immediately instead of leaving it to be resolved at some
later date by reference to arbitration or otherwise so that an agreement is
arrived at with the contractor in respect of the rate to be allowed for the work
in excess of the deviation limit.
5.5 Issue of Stores. Guidelines are contained in Section 6.
5.6 Issue of T&P on Hire to Contractor. Guidelines are contained in Section 7.
5.7 Hire of Transport. No transport is to be issued to the contractor and Schedule

‘D’ will, therefore, normally be NIL. If in any special case issue of transport, tipper lorries or
water lorries is contemplated, prior sanction of the competent authority should be obtained.
Hire charges shall be fixed as Para 947 of RMES.
5.8 Materials obtained from Demolition of Buildings.
(a) Materials obtained from demolition may be divided into the following
categories:-
(i) Materials which are in good condition and are required for re-use in
the same job or in other jobs.
(ii) Materials which are not in good condition or are not required for re-use
in the same job or in other jobs.
(b) Materials referred to at Sub Para 5.8(a) (i) above should be taken on books
and then issued for re-use in the same job or in other jobs.
(c) With regard to materials referred to at Para 5.8(a) (ii) above, it is a matter for
the Accepting Officer of the contract to decide whether the salvaged materials
should remain with the Government or be sold to the contractor. In the former case,
the salvaged materials should be taken on books and subsequently auctioned. In
the latter case the procedure outlined under Para 5.8(d) hereinafter shall be
followed.
(d) The procedure to be followed, when it is intended that the salvaged materials
should become the property of the contractor, would depend on the type of contract
under which the materials are to be obtained from demolition as explained
hereunder.
151
(i) Lump Sum Contracts Based on Pre-Priced Schedule ‘A’ and
Percentage Rate Contract. The market price of materials obtainable from
demolition shall be assessed and inserted in the tender as the amount of
credit to be afforded by the tenderer. The credit shall be shown separately for
each building and the total amount mentioned in the tender as stipulated in
Section 3 of Manual. The percentage quoted by the tenderer above/below
MES Schedule of Rates for execution of the works shall not be applicable to
the amount of credit for materials inserted by the Department.
(ii) Lump sum contracts based on Bills of Quantities or on Drawings and

Specifications and Item Rate Contracts. The cost of materials
obtainable from demolition shall be assessed by the MES and shall be
indicated separately in the tender as brought out in section 3 of the manual.
(iii) It will be made clear in the tender that cost mentioned in Sub Paras (i)
and (ii) above is only a rough indication and contractor will have no claim
whatsoever against MES if the actual value of salvaged material turns out to
be different from the cost given by MES.
5.9 Lump Sum Tender Documents. A tender document for Lump Sum contract
comprises of the following:-
(a) Forwarding Letter to the Tender Documents. This inter-alia includes the
date and time of receipt and opening of tenders as also the designation and address
of the Accepting Officer of the contract. Some important points/special conditions
included in the tender may also be high-lighted to draw the attention of the tenderer
to such provisions.
(b) An ‘Index’ or a ‘Contents’ Page. A full sheet as ‘Index’ or ‘Contents’ which

clearly sets out documents forming part of the tender along with their respective
page numbers is attached.
(c) Notice Inviting Tender (IAFW-2162). This includes name of work,

estimated cost of work, various critical dates as per details given in Section 3 of
Manual, pre-qualifying conditions and certain other conditions pertaining to the
tender documents.
(d) Lump Sum Tender and Contract for Works (IAFW-2159). This form
includes the following:-
(i) Authorisation Page. On the first page of this form the issuing officer
authorises the tenderer to submit his tender. This page is to be signed in ink
(in case of physical tendering) by the issuing officer. To prevent misuse of
the tender by any contractor who is not issued tender by the Accepting
Officer, Photostat/stamped signature is not allowed on the authorisation
page.
(ii) Schedule ‘A’ (List of Works and prices). This embodies various
works/items which are required to be executed, the number of units required,
the unit rates, the extended amount in amount column and the time allowed
for completion of the work along with phasing, if any. Different categories of
work like building work, electrification, water supply, roadwork etc. are kept
as Parts I, II, III, IV etc of schedule ‘A’ for convenience of quoting and working
out different applicable percentages over the SSR.
152
Notes: (1) It should be ensured that reasonable time is stipulated for
completion of work. (Refer Appendix 5.3).
(2) In case of contracts for addition and alteration, where all the buildings
cannot be handed over to the contractor at the same time, indicate phasing
for handing over and completion of buildings in Schedule ‘A’.
(iii) Schedule ‘B’ (List of Stores to be Issued to Contractor). This

includes stores to be issued to the contractor on payment as well as those to
be issued free for fixing. Presently no store is being issued to the contractors
and therefore schedule B shall be nil. However if it is required as per the
instructions and under special circumstances, schedule B shall be
accordingly worded and included in the tender.
(iv) Schedule ‘C’ (List of T&P to be Hired to the Contractor). This

includes all the details of T&P which the MES will issue to the contractor on
hire at the rate specified therein. “Working day” charges and “Off day”
charges are to be separately shown. The details as aforesaid should include
number, capacity, crew of the T&P and the exact place from where the T&P
will be issued. If any alternative plant of same capacity but of different
nomenclature is to be issued under Schedule ‘C’ eg one 8 ton petrol driven
road roller or one 8 ton diesel driven road roller, in such cases same hire
charges (higher of the two rates) should be included in respect of both T&P.
This is essential to avoid any guess work on the part of the tenderers at the
time of submission of tenders and to avoid any dispute at a later date. If
considered desirable, a note may be inserted in Schedule ‘C’ to make it
compulsory and obligatory on the part of the contractor to hire any particular
item or items of T&P listed in Schedule ‘C’ for the execution of the work.
(v) Schedule ‘D’ (List of Transport to be Hired to the Contractor). This

includes details and conditions for hire of transport when it is available with
the MES for issue to the contractor. The present policy is not to issue
Government transport to the contractor and hence the Schedule ‘D’ is
normally to be marked ‘NIL’.
(vi) General Summary (applicable to Physical Tendering). Total

amount of various parts of Schedule ‘A’ are brought forward to the General
Summary. In case of tenders based on pre-pricing by MES, the percentages
over SSR applicable to the various parts of Schedule ‘A’ are worked out and
inserted by the contractor. The provision, if any, of amounts against prime-
cost items and provisional sums are also indicated. The total of amounts of
various parts of Schedule ‘A’, prime-cost items and provisional sums added
together are treated as the contract sum. In case of e-Tendering instructions
in section 3 shall be referred.
(vii) Tender Page. This embodies the total tendered sum, deviation limit,
the designation of the authority who will appoint an arbitrator in terms of the
arbitration clause, the rate of recovery for water, amount of earnest money to
be deposited etc, and the stamped, dated signature of the tenderer.
Appointing authority of arbitration for contracts concluded by GEs/CsWE
shall be Zonal CE/CCE and for contracts concluded by Zonal CE/CCE shall
be E-in-C.
153
(viii) Acceptance Page. The Accepting Officer signs on this page in ink
after acceptance of the tender but before distribution of copies of Contract
Agreement, authorising an officer by name to sign and initial (for the purpose
of identifying all documents forming part of the contract) and indicating the
amount and the date on which it was accepted.
(e) Schedule of Supplementary Rates (Attached Where Required). Includes

any rates not included in SSR but which may have been adopted in pricing the items
included in the estimates and are required for pricing deviations. These rates are
either derived from the available SSR rates or worked out at market rates and
brought to the level of SSR. A note to the effect that these supplementary rates are
subjected to contractor’s percentage should be included in this Schedule.
(f) General Conditions of Contracts (IAFW-2249). Including all amendments

and errata issued upto the date of issue of last amendment (in physical tendering)
and upto the date of uploading of last corrigendum (in e-Tendering) subject to
instructions issued on applicability of the amendment/errata to IAFW-2249.
(g) Special Conditions (Including Yardsticks). Special conditions peculiar to

the contract are included here eg; restricted working hours, issue of electricity etc.
A special condition in variance with the General Conditions of Contract
(IAFW-2249), if required, may be included at the pre-tender stage on approval from
E in C. CEs are empowered to alter standard special conditions at pre-tender stage
to suit urgent requirements particularly with reference to security deposits,
percentage payments, periodicity of payments, issue of stores, deviation limits and
the like. CEs will consult their PCDA where possible. Where, in the opinion of CE an
alteration involves a major departure from an existing procedure, he shall send a
copy thereof to the E-in-C/DGW and CDA/IFA for information. (Ref Para 47 (e)(ii) of
Defence Works Procedure 2020).
(h) Particular Specifications. This includes the scope of work to be carried

out, the Particular Specifications (as distinct from the General Specifications) and
any further particulars applicable to buildings or items of work included in the tender.
The SSR forms a part of the tender documents and therefore, repeating portions of
specifications given in SSR (termed as 'General Specifications') is not necessary.
Where specifications in SSR give alternatives, the Particular Specifications shall
indicate the particular alternative which is intended to be applicable to the work
included in the tender. A note shall be added at the beginning to the effect that the
Particular Specifications given in the tender, if at the variance, shall take precedence
over the General Specifications given in the SSR.
(a)
(j) List of Drawings. This includes the drawing numbers with their particulars
including dates (and latest date of revision if any) which are applicable.
(k) One Complete Set of Drawings. As indicated in the list of drawings.

154
5.10 Pre-tender Conference/Pre-bid Meeting. Pre-tender Conference with the

contractors to whom the tenders have been issued in physical tendering (Pre-bid Meeting
with bidders in e-Tendering) be encouraged. For tenders costing more than Rs 10 Crores,
pre-tender conference/pre-bid meeting is mandatory. It should be held preferably prior to
tender presentation by the executives and all suggestions/deficiencies pointed out by the
tenderers shall be thoroughly deliberated and recorded and shall be given due
consideration wherever feasible while issuing amendments to tender documents.
Tenderers should be encouraged to offer their comments on tender documents to avoid
disputes at a later stage after conclusion of contract. Users shall also be apprised of tender
presentation as brought out in section 3 of the Manual.
155
Appendix 5.1
GUIDELINES FOR INFORMATION TO BE COLLECTED BEFORE ISSUING TENDER

WITH REGARD TO GROUND DATA, SITE FACTORS AND AVAILABILITY OF
MATERIALS TO ENABLE DRAFTING OF TECHNICAL SANCTION, SPECIAL
CONDITIONS AND PARTICULAR SPECIFICATIONS
1. Nature of Site:-
(a) Whether approximately leveled or sloping or with any undulations.
(b) If black cotton soil or shrubs exist, whether topsoil is to be removed. If so, state
approximate depth for surface digging and distance for disposal of soil.
(c) If such surface digging is anticipated for only part of the site, state the amount of
Provisional Lump Sum to be mentioned in tender so as to order the same on the
contractor where necessary.
(d) Nature of soil likely to be encountered in excavation (soft or rock-ordinary/hard).
(e) If rock, is blasting permitted?
(f) Level of sub-soil water.
(g) Lead involved for depositing surplus soil from excavation.
(h) Lead involved for obtaining approved earth for filling from borrow pits.
(i)
(j) Lead involved for clayey earth or puddle clay (mud Phuska).
(k) Do approach roads exist? If not, state an approximate distance from existing road
to site of work for which the contractor will have to make his own approach
roads/diversions.
2. Availability of Local Materials:
(a) Approximate distance of source for aggregate suitable for cement concrete work.
State whether graded shingle/gravel or crushed or hand broken stone are available.
(b) Approximate distance of quarries for stone suitable for walling (if stone for facing
is to be of a different species and from a different quarry, state accordingly).
(c) Approximate distance of quarries for stone bottoming and metal suitable for WBM
(road work).
Note : If the source of stone metal used for WBM and chipping used for wearing
coats (surface dressing and premix concrete) is different, state so clearly.
(d) Whether quarries are approachable throughout the year.
(e) Are any of the quarries for stone, gravel or moorum situated on Government
land? If so, state whether the contractor is exempted from royalty charges.
156
(f) Local practice with regard to binding material used for final consolidation of WBM,
hardcore and the like (ie red bajri, laterite, moorum, kankar nodules, lime stone, quarry
dust, etc). State approximate distance of the sources from the site of work and who
controls quarries for these materials.
(g) Where stone is not available, what materials are used by local bodies like State
PWD and Municipal Corporation and the like for road soling and WBM.
(h) Site and approximate lead for surplus earth required for filling under roads,
runways, traverses and the like.
(j) Availability of small boulders from excavation, in trenches and around buildings
and their reuse for hard core or road metal after breaking it to required gauge.
(k) Availability of moorum out of excavation in trenches and around buildings and
recommendation for its re-use depending upon quality.
3. Availability of Lime:
(a) State approximate distance of nearest source of supply.

(b) Quality of lime-Whether fat or mildly hydraulic.
(c) If lime is available locally (within 40/50 km radius) local practice with regard to
mortar for masonry ie whether lime mortar 1:3 or lime surkhi mortar 1:1:2 or 1:1:1.
4. Availability of Sand:
(a) State quality, local name and source of sand suitable for cement concrete work.
(b) State quality, local name and source of sand suitable for masonry mortar.
(c) State quality, local name and source of sand suitable for plaster work.
Note : In each case state whether grading approximate to Zone I, II, III or IV of the
relevant latest Table of IS. Also state whether:-
(i) Sand would be required to be washed at the site of work before use in the work.
(ii) Mixing of local sand and sand brought from outside to obtain the required
grading will be permitted.
5. Availability of Bricks/Fly Ash Bricks:
(a) State size of local kiln burnt bricks/ fly ash bricks and crushing strength.
(b) Normal brick burning season and availability of bricks in monsoon.
(c) Average approximate distance of kilns from site of work.
(d) If kilns are situated away, would contractors be allowed to burn bricks on
Government land near the site of the work.
157
6. Availability of Species of Timber:-
(a) Suitable for door and window frames.

(b) Suitable for joinery.
(c) Suitable for roof members.
(d) Suitable for shelves, eaves and barge boards and the like.
7. Additional Information:-
(a) Copy of administrative Approval.

(b) Accommodation Statement covered by Adm Approval.
8. List of Works:-
(a) Block arrangement of buildings indicating references to items of Adm Approval.

(b) Length and width of roads/paths.
(c) Information with regard to surface drainage.
(d) Length and sizes of fencing.
(e) Length and sizes of drainage lines and connected items.
(f) Disposal works.
9. Provisional Quantities:-
(a) Water supply and plumbing.

(b) Internal electrification.
(c) Other items not covered in (a) and (b) above.
10. Site Plan. (as approved by siting board) indicating inter alia:-
(a) Layout of all buildings/works to be included in the contract.

(b) Road/paths/fencing.
(c) Location of electric poles and electric points.
(d) Location of water points.
11. Drawings. Detailed plans, sections and elevations and other details for all buildings
and other items to be included in the tender.
12. Specifications. Outline specifications to be followed giving references to the Standard

Specifications drawn out by each Zonal CE.
Note : Quality of Builders’ hardware and quality of sanitary fittings to be made clear.
13. Government Stores to be Issued to Contractors under Schedule ‘B’:-
(a) List of items.

(b) Places of issue.
(c) Where existing surplus stock is intended to be consumed give particulars about:-
(i) Quantity available.
(ii) Condition of store.
(iii) Disposal of empty cement bags and containers.
14. Tools and Plant ot be Issued under Schedule ‘C’:-

158
(a) Particulars of items (full description of plant and its crew to be clarified).
(b) Place of issue.
(c) Condition, if any, on its use.
15. Availability of Water for Works and Workmen:-
(a) Source and whether supply is available in adequate quantity.
(b) If wells exist at site, whether contractors would be permitted to use well water,
free of charge.
(c) Availability of water for drinking purpose for workmen.
(d) If issued to the contractor whether it will be metered supply and if so, rate to be
charged, confirm whether meters will be provided by the department.
(e) Number of water points proposed for issue of water (indicate these on site plan).
(f) Whether the contractor would be permitted to dig temporary wells or install his own
hand pumps etc. for drawing out water and remove them on completion of work.
16. Availability of electric energy for issue to contractors. State source, type of
current viz AC/DC, rates to be charged and maximum KW available for issue for the
purpose of:-
(a) Power.
(b) Lighting.
17. Availability of Land:-
(a) Whether proposed construction is located at one site or at different sites (attach
site plan demarcating sites).
Note : If land or portion of land at one of the sites is not available, indicate this clearly and
state probable date by which this portion would be available.
(b) Confirm that the site plan has been approved by local authorities/users.
(c) Demolition of buildings, if any, already existing at site of work and disposal of
materials obtained from demolition.
18. Availability of Buildings:

In case of additions, alterations and special repairs, give phased programme of handing
over buildings as accepted by users.
19. Admission to site. Is admission to site for contractor’s work-people restricted? If

so, a clause to be included about working hours, passes for labour, searching of labour at
entry/exit, police verification, requirement of Adhar Card etc.
20. Hindrances at site:-
(a) Presence of trees at site. If so, is it proposed to get them removed under
departmental arrangements or through building contractor.
(b) Presence of a large number of tree trunks. If any to be removed by contractor and
159
making good of pits by moorum filling or hard core.
(c) Presence of old underground water mains, electric cables and the like. If so, whether
these would be removed under departmental arrangement or to be removed by
contractor. If former, probable date by which site would be cleared of these.
(d) Presence of any electric or telephone poles. If so, whether these would be removed
under departmental arrangements or by the authorities concerned and the probable date
by which these would be cleared from site.
21. Miscellaneous:-
(a) Open space for contractor’s workshop and labour.
(b) Vacant Buildings for use of specialist contractors for their stores, materials, labour
and supervisors.
(c) Protection of existing buildings, roads, paths, installations etc.
(d) Security of contractor’s men and materials.

160
Appendix 5.2
PARTICULARS TO BE FURNISHED BY PLANNING SECTION TO CONTRACT

SECTION FOR PREPARATION OF TENDER DOCUMENTS
PRELIMINARY INFORMATION PROFORMA (PIP)
Subject: PREPARATION OF TENDER DOCUMENTS FOR …....................……….....

…..............………………………………………………............................................…………
…….. Will you please arrange to prepare tender documents and invite tenders for the
above work. The following particulars required in this connection are given :
1. Copy of Administrative Approval (A/A) ......…

2. Accommodation Statement as per A/A covered by this contract …...
3. The amount of A/A relating to the work under this contract ......…
4. Site plan showing layout of all building to be included in the contract …...
(as approved in the BOO). ......…
5. Copy of draft Technical Section. …...
6. Detailed plans, sections and elevations etc for all buildings and other
items to be included in the contract (List attached as per Appendix ‘A’) ......…
7. Plans and schedule for internal electrification …...
8. Ditto for internal water-supply and sanitary fittings. ......…
9. Brief outline specifications (attached as per Appendix ‘B’.). …...
10 Data with regard to local site factors is given in Appendix ‘C’.
11 (a) Draft Schedule ‘A’-List of works with reference to corresponding ......…
items in A/A …...
(b) Approximate quantities for provisional items (roads, paths, fencing, ......…
external drains and so on). …...
12 List of stores to be issued by Govt (Schedule ‘B’) and place (s) of issue. ......…
Particulars of T&P to be issued to the contractors (Schedule ‘C’) and …...
place (s) of issue. ......…
13 Particulars of transport, if any to be issued to the contractor (Schedule …...
‘D’) and place (s) of issue. ......…
14 Provisional Lump Sums and PC sums that should be included in the …...
15 General Summary (for uncertain foundations, specialist jobs etc) are as ......…
follows : …...
(a) For work in foundations.
(b) Water supply and sanitary fittings not covered by Srl No 8 above as a ......…
PC sum. …...
(c ) PC sum for specialist items. ......…
(d) Provisional Lump Sum for ……….. …...
16 Time allowed for construction (Indicate phasing where so intended). In ......…
case of Special Repairs indicate phasing according to which buildings …...
will be handed over
17 Water will be supplied by MES on payment. The water point (s) is/are ......…
shown in the site plan. The supply will be metered/unmetered. The …...
161
quantity available is restricted to………..litres per day.
OR
Contractor shall make his own arrangement for water for works and for Rs
his workmen /Litre….
OR ..
MES will not be able to supply water but contractor will be allowed to ......…
utilize the existing wells in the vicinity and in the contract area. …...
18 NOTE : Delete the alternatives not applicable ......…
Electric energy will be supplied at : Rs/Kwh
OR ......…
Electric energy will not be supplied …...
19 Availability of land for storage of materials (including temporary sheds)
20 Availability of land for accommodation of labour, canteen, fabricating ......…
workshop and the like. Also state whether land will be allotted free or …...
whether rent will be charged and, if so, the scale of rent.
21 Availability of quarries for extracting stones, moorum, sand and the like ......…
on Defence land. (If quarries are situated on Defence land and are …...
available, also state whether any royalty will be charged, and if so the
scale of royalty) ......…
22 The following special features applicable to this contract are brought to …...
your notice : (Under this heading include the following and similar other
features)
(a) Whether site levelling is intended ......…
(b) Whether removal of shrubs or trees is to be included …...
(c) Whether surface excavation is intended and, if so, state average
thickness
(d) If black cotton soil exists, whether its top layer is to be removed ......…
and, if so state thickness and also lead for disposal of soil …...
(e) If the nature of such strata is uncertain, whether work in ......…
foundation is to be catered for as ‘provisional lump sum’ or …...
‘provisional quantities’. ......…
(f) Approaches to site : state whether approaches exist or contractor …...
is to provide his own approaches
(g) Working hours : State whether normal working hours may be ......…
expected or work lies in a restricted area, if in a restricted area …...
what would be the working hours?
(h) If work is in a restricted area, whether contractor has to arrange
passes and his labour is liable to be searched at the entrance and ......…
exit. …...
(i) Demolition of buildings, if any, with a plan and section of
buildings to be demolished.
(j) Whether work is required to be executed in water, mud, foul, tidal ......…
etc conditions. …...
23 List of Engineering Staff to be deployed by the contractor for supervision ......…
of works. …...
24 List of T&P, Machinery & Transport to be deployed by the contractor ......…
162
during execution. …...
25 Whether escalation clause as per standard formula to be included in the
tender or not. ......…
…...
......…
…...
......…
…...
......…
…...
......…
…...
......…
…...
......…
…...
......…
…...
......…
…...
No …………. /………….. E2 Plg. Dir (Plg)/SO-I

Plg/DCWE
Chief Engineer /CWE
To,
Dir (C) /Jt Dir (C) /DCWE (C) /ACWE (C) /AGE (C)
163
Appendix 5.3
SOME GENERAL FACTORS TO BE TAKEN INTO CONSIDERATION WHILE

FIXING PERIOD OF COMPLETION FOR WORKS
1. Availability of the following :

(i) Material.
(ii) Skilled (and unskilled) labour.
(iii) Water for construction.
(iv) Electric energy for lighting and welding etc.
2. Period lost due to rainy days, cold climate, harvesting /festival seasons etc.
3. For new sites where approach roads do not exist, period of completion should be
more than that for developed sites.
4. For work scattered over two or three sites---completion period should be more as
compared to that required for work of the same magnitude concentrated at one site.
5. Existence of hard rock in foundation and over site.
6. Officers quarters, Institutes, Messes, Hospitals and the like where internal finishes
and fittings need more attention, a more liberal provision is necessary.
7. For work pertaining to addition /alteration to existing buildings---completion period

should be on a more liberal scale as compared to new work of the value because in case
of work involving addition/alteration, site restrictions hamper progress.
8. Double storey or multi- storeyed buildings with considerable amount of RCC work.
9. Where separate contracts are being arranged for specialised work, such as air-
conditioning or water-proofing, proper coordination between the work of the building and
that of the specialist is essential.
10. For sewerage work in areas in which sub-soil water level is high, a comparatively
longer period is necessary and cost alone should not be the criterion.
11. Time required in procuring stores to be issued by the Government.
12 . Where piling work in foundations is contemplated, period of completion will depend

upon the availability of the equipment with specialist contractor and phasing of work by
blocks may be necessary.
13. Period involved in planning and period required for completion of external and other
specialist services like external electrification, sewerage, lifts, machine foundations for
technical buildings.
164
14. Period of Physical Execution in Weeks For Guidance:
Type of Accommodations CE CWE GE

Contract Contract Contract
s s s
(a) Married Accommodations 78 52 26
(b) Other than Married 84 56 28
(c ) External Electric/Water Supply 60* 40 25
(d) Air-Conditioning 40* -- --
(e) Other Externa Services like 50* 35 22
Roads/Paths/Area/Drainage 60* -- --
(f) Central Sewage Disposal Scheme
NOTE
1. For Multi-storeyed Construction, add 25% extra.
2. For high value building contracts (say over Rs 40 Crores at SSR 2020 prices), add
prorate extra.
3.* Add 50% to 100% in the complex/high value scheme, but see note 5 below.
4. No time durations have been laid down in these tables for Projects for works of a nature
peculiar to a service such as wharves and jetties for the Navy and runways for AF. In such
cases, a detailed analysis will be carried out by E-in-C’s Branch and time Schedule evolved
and included in the engineer appreciation except in cases of time-bound projects where
the completion dates will be as stipulated by the Service HQ/MoD with the necessary
assured finances.
5. The actual date of commencing of the planning of external services, furniture,

air-conditioning and the like will have to be dovetailed into the planning programme for
construction of buildings in order to ensure that the completion date of the services match
with the completion date of the buildings.
6. For high altitude/high rainfall locations and stations having limited working seasons due
to climatic conditions, the completion period shall be proportionality increased.
165
SECTION 6
ISSUE OF STORES TO CONTRACTORS FOR INCORPORATION

IN THE WORKS UNDER SCHEDULE B
6.1 Stores to be Issued Under Schedule B.
(a) As per the present policy, all fitments, items required in a contract for original
works shall be catered as 'supply and fix' by the contractor. For contracts other than
original works, the stores/materials will be issued to contractors for incorporation in
works under Schedule B as per policy issued from time to time & keeping in view
the availability of such items on GeM and urgency of work.
Notes : (1) As far as possible only ISI marked brands available on GeM are
procured. In case ISI marked brands are not available on GeM, Brands conforming
to IS can be procured and if ISI marked / conforming to IS brands are not available,
reputed brands on GeM can be procured.
(2) Serviceable stores obtained from dismantling / demolition shall be

issued.
(3) Serviceable stores held by GEs shall also be issued.
6.2 In cases where the total quantity in respect of any one item is small, the Accepting
may at his discretion make a suitable provision in the contract whereby the
contractor will be required to provide such items under his own arrangement.
6.3 Issue Rate for Government Stores.

Issue rates for Government stores referred to in Para 6.1 above will be the net rates
of “Materials Supplied Only” as contained in MES Standard Schedule of Rates or
rates pro rata thereto. If no rate is available in the MES Standard Schedule of Rates,
the issue rate shall be fixed by the Accepting Officer at the local market level
prevailing on the date of issue of tender in accordance with Para 445 of RMES.
6.4 Stores to be Issued Free for Fixing.

6.4.1 Stores which do not involve wastage and do not lose their identity when
incorporated in the work and which can be easily accounted for (for example: water
tanks, electric fans, meters, etc.) should be issued free for fixing only. Other
considerations which govern occasional free issue of Government stores are :
(a) When “fixing only” price of an article is very small as compared to the cost of
the article, which, if issued on payment, would normally result in a large element of
profit being allowed to the contractor on the cost of the article.
(b) Absence of readily available data for framing a special rate when “Supplied
& Fixed” rate of articles is not available in the MES Schedule of Rates and issue of
tenders cannot be delayed.
6.4.2 To safeguard Government’s interest where free issue of stores is included in

Schedule ‘B’ of the contracts, suitable provision should invariably be made for
recovery of such stores at penal rates which should be at double the prevailing
market rate, in the event of any loss, breakage or damage to such stores while in
the custody of the contractor.
166
6.5 Issue of Stores During Execution, which are not Included in Original Contract
Cases may arise during execution of the work wherein the contractor is unable to
procure certain stores from the market and the Department has a ready stock which
can be released to the contractor. The issue rate of such stores will have to be fixed
bearing in mind that neither the Department loses in the transaction nor the
contractor makes a profit not contemplated in the contract. Whenever, therefore, the
Accepting Officer decides to issue Government stores which are not included in the
original contract, the issue rate fixed shall be the highest of the following rates:-
(a) Stock book rates as on the date of issue of stores.
(b) Market rate as on the date of issue of stores.
(c) Rate deduced from the tendered rates, in case of contract is based on Bills
of Quantities and Item rate contracts;
(d) Rate in the MES Schedule adjusted by the contractor’s percentage in case
of contracts based on MES Schedule of Rates.
6.6 Place of Issue. As far as possible stores to be supplied under Schedule ‘B’
should be issued from the MES store yards in the normal manner.
6.7 Recovery for Schedule ‘B’ Stores for making good damage caused to
Buildings
6.7.1 Condition 48 of General Conditions of Contracts (IAFW-2249) provides that
the works and all materials including those provided by the Government on the site
shall stand at the risk of the Contractor and Contractor shall be responsible for
making good any loss or damage thereto arising from any cause whatsoever other
than the accepted risks. Sometimes due to severe storm, an incomplete building
gets damaged and the Contractor has to make good the damage at his own cost
because damage by storm does not come within the purview of accepted risks as
defined vide Condition 1 (p) of IAFW-2249.
6.7.2 The cost of procurement of Schedule ‘B’ stores is generally higher than the
issue rates shown in Schedule ‘B’ and the difference between the procurement cost
and the issue rate is debited direct to the concerned work. If, therefore, stores listed
in Schedule ‘B’ are issued to the Contractor for making good damage to buildings at
the rates stipulated in Schedule ‘B’, a further difference in cost of stores will have to
be debited to the works. This will be contrary to the intention of Condition 48 of
IAFW-2249 because according to this Condition, the entire cost of making good
damage to buildings has to be borne by the Contractor. Therefore, recovery for the
stores listed in Schedule ‘B’ issued to the Contractor for making good damage to
buildings must be made on the basis of stock book rates or market rates whichever
are higher.
6.7.3 A note as given below will be included in Schedule ‘B’ of all tenders so as to
make the above intention binding on the contractor.
“NOTE FOR INCLUSION IN SCHEDULE ‘B’
If the contractor requires any of the items of stores listed above issued to him for
making good any loss or damage to Works arising from any cause whatsoever other
than the accepted risks and the Government issues the same to him, the rate of
issue of such items of stores shall be MES Stock Book rate or market rate on the
date of issue of stores or the issue rate mentioned in this Schedule, whichever is
higher.”
167
6.8 Issue of Stores During Maintenance Period
Government stores included in Schedule ‘B’ and issued to Contractor for rectification
of defects during the maintenance period should be charged to the contractor at the
rates shown in Schedule ‘B’ in the absence of stipulation to the contrary in the
contract agreement.
6.9 Recovery of Stores Issued under Schedule B
Issue of all the stores to contractors shall be regulated through Unstamped Receipt
Book (IAFW-1826 ) ie USRs.
(i) AO/AAO will keep a record of all blank USRs and issue of these books will be
made through him in the same manner as is done in case of Measurement Books.
(ii) Only one USR Book will be issued to Incharge Sub-Division. In the case of a
large project an additional book may (at the discretion of the GE/GE(I)) be issued
for use in that project only.
(iii) The USR will be in triplicate and duly priced. It will be signed by the MES
Representative and the contractor’s duly authorised agent and all corrections will be
initiated by both the parties.
(iv) The original will be sent to the AO/AAO immediately after transactions. One
copy will be handed over to the contractor and the other will remain intact in the USR
Book. Where old books are still in use, as receipts are printed in duplicate, a loose
sheet will be inserted for an additional copy. This copy will be given the same serial
number as the original and the duplicate and will be the one to be handed over to
contractor. In case any USR is cancelled, the cancelled Receipt(s) (original)
endorsed with reasons for the cancellation and signed by the Engineer-in-Charge
will also be sent to AO/AAO.
(v) When on account payment is made to a contractor, all USRs prior to that date
will be adjusted and a statement showing the adjustment in respect of all USRs will
be attached for check by AO/AAO with the original USRs in his possession. When
the final bill is prepared, a consolidated statement showing the adjustment in respect
of all USRs will be attached to it for check by AO/AAO with the original USRs.
6.10 Technical check of Stores Statement attached to Final Bill
6.10.1 The form of Statement of Stores to be attached to the final bill is at Appendix
6.1. Form IAFW-2264 may be used for collecting the details in support of Col.5 of
the Stores Statement. It will be noted that in contracts where accounting for empty
containers is involved, a separate statement showing the particulars (Appendix
6.2) will be attached to the Stores Statement. Containers returned in an
unserviceable condition will not be taken back. In case of bitumen drums, which
have necessarily to be cut open before heating and using the bitumen, the rate of
issue for same should be fixed as inclusive of the cost of containers.
6.10.2 In the case of bills selected for Technical Check by DCWE/ACWE(C) in
CWE’s office and Director(Contracts) in CE’s office , the Stores statement will
invariably be checked and Cage IV of the bill signed by the officer technically
checking the bill in CWE/CE office without deleting certificate (d) therein.
168
6.11 Over Issue of Stores to Contractors
6.11.1 Over-issue upto 5% of the estimated requirements for a whole contract (for
the particular item of stores) may be condoned by a GE, if satisfied that the over-
issue material was actually incorporated in the work.
6.11.2 Similar over-issue above 5% and upto and including 10% may be condoned
by a CWE if satisfied with the GE’s explanation.
6.11.3 Reference should be made to Para 451 of RMES.
6.11.4 With respect of items of Schedule ‘B’ stores which are issued “free for fixing
only”, if any such stores are lost or damaged while in the custody of the Contractor,
the cost thereof should be recovered at a penal rate of recovery stated in the
tender documents under a Note to Schedule ‘B’. The penal rate at which such
recoveries should be effected should be double the market rate. For the sake of
uniformity Zonal CEs/CCEs should lay down market rates for items which are
normally issued “free for fixing only” for adoption by all CsWE/ CEs under them.
These rates should be reviewed by the CE once a year.
6.11.5 In case of over-issues exceeding 10% and any cases under 6.11.1 and 6.11.2
above where the GE/CWE is not satisfied, following procedure shall be followed:
(i) Since the stores were issued for a specific purpose ie for incorporation in works,
the Contractor is under a contractual liability to return the surplus to the place of
issue and to claim credit at the rate he paid for them subject to the stores being in
good condition. If he does not return these stores but retains them for his own use
or disposes of them for his personal gain, he becomes liable to be prosecuted for
misappropriation.
(ii) In the first place the MES should send the Contractor (by registered and A/D
post) a letter asking him to return the over-issued stores in good condition by a given
date (say within two weeks) and inform him that if he fails to do so, it is proposed to
either suspend him from further tendering or to strike him off the list of approved
contractors without prejudice to any other remedies open to the government.
(iii) Failing compliance by the contractor with the above, no further warning is to
be given, but the matter shall be referred to the Chief Engineer for orders.
(iv) The Chief Engineer, if satisfied that the over-issue has actually occurred, may
at his discretion send a final registered letter to the contractor demanding return of
the stores by a given date. If the contractor still does not comply or if such a final
warning is considered unnecessary, Chief Engineer after complying with the
instructions regarding show cause notice etc, will order that the Contractor be either
suspended from further tendering for a specific period or refer the matter to the
Registering Authority to strike off the contractor's name from the list of approved
contractors. In deciding as to whether action to suspend or remove from the
approved list is to be resorted to, CE will be guided by the following factors :
(aa) Whether the instance reported is the first of its kind as far as the
Contractor is concerned in the Zone/ Project.
(bb) Whether, the Contractor had not willfully misappropriated the stores for
his personal gain.
169
(cc) whether misappropriation of stores was willful with personal gain as the
sole motive.
(v) The Chief Engineer will also enquire into the circumstances in which the MES
made the excess issue to the Contractor and will take suitable disciplinary action
against any officer or subordinate found guilty of gross slackness or neglect of
duty. Should the investigation disclose a possible case of fraud, a Court of Inquiry
will be convened which will recommend what action is considered desirable to
safeguard Government interests and to punish any offenders.
(vi) For the over-issued stores issued beyond the limit stipulated in Paras 6.11.1
and 6.11.2 (stores issued on payment under Schedule ‘B’) in addition to the
disciplinary action taken, recovery will be effected at double the issue rates stated
in Schedule ‘B’ in accordance with Condition 10 of General Conditions of Contracts
(IAFW-2249).
6.11.6 The limits of 5% and 10% given above refer to over-issue after making
reasonable allowance for unavoidable waste, laps, joints and other technical
requirements. The Statement of stores attached to a final bill will show requirements,
thus calculated and the actual issues. Officers and others responsible for technical
checks ie JE(QS&C) and AGE(C)/DCWE(C)/DD(C) /AD(C) will sign each statement
of stores checked by them in token of the correctness of the quantities shown as
actual requirements. Should they consider that any quantities are incorrect and that
an over-issue has occurred they will bring the matter to the notice of their immediate
superiors for a decision in accordance with the aforementioned provisions of Para
6.11. It must be realised that the percentage to be allowed for waste, laps, joints, etc
may vary owing to such circumstances as the condition of the stores when issued,
the nature and types of the constructional details etc. Estimating data given in
textbooks etc are for guidance only and such factors should be applied judiciously
according to the circumstances of each case. Any instance presenting difficulty can
be settled by experiments at site under the supervision of an officer and careful
record being kept of the details and results. Issued lengths of reinforcement bars
should be noted on the back sheet of USRs.
6.11.7 Should any doubt arise as to whether a particular over issue exceeds or
does not exceed 10% of actual requirements, the Chief Engineer’s decision shall be
final.
6.11.8 The Chief Engineer will, when necessary, consult the PCDA on any
financial implications of these orders and will inform the PCDA of his decision in any
case under 6.11.4 above.
6.12 Under Issue of Stores of Contractors
Cases of under-issue of stores noticed as a result of technical check of Final bills
will be dealt with as follows :
(a) Where GE is satisfied that the work has been carried out according to
specifications, under issue upto 2-1/2% may be condoned by him under a personal
certificate.
(b) Where under-issue works out to more than 2-1/2% but GE is satisfied that
the work has been carried out according to specifications, the matter will be referred
to the CWE with the GE’s recommendations and under issue upto a maximum of
5% may be condoned by the CWE under a personal certificate.
170
(c) Cases of under-issue exceeding 5% will be referred to the CE with specific

recommendations of CWE in the light of explanation offered by the contractor so
that the CE may decide each case on its merits, ie whether the work accepted by
the MES be devalued and suitable action be taken against the contractor concerned
or the work accepted without any adjustment in price.
6.13 In regards to Paras 6.11 and 6.12 above, keeping in view practice followed in
indenting and accounting of stores, it has been decided that for the purpose of assessing
over issue/under issue, bars, flats, and structural of different diameters/ sizes shall be
treated as separate items.
6.14 Cement Constants
6.14.1 Cement constants based on experiments carried out by CEs, the Central
Building Research Institute Roorkee, and the Concrete Association of India are at
Appendix 6.3. These constants include an allowance of 2-1/2% for wastage which
may occur due to dropping of cement mortar and cement concrete during the
execution of works and as such no additional allowance for wastage should be
allowed for purpose of assessment of estimated quantities of cement required for
the work. As some contractors may minimise wastage and small variation in
requirement of cement is also possible depending on the percentage of voids in
aggregates available locally, no adjustment need be made if the actual issue of
cement is less than the estimated quantities upto 2-1/2%.
6.14.2 CEs Zone/ CCEs may supplement or modify these constants to suit local
factor peculiar to any station depending upon the type of RR masonry adopted in a
locality, type and quality of stone, bricks etc available locally under intimation to E-
in-C Branch.
171
Appendix 6.1
STATEMENT OF STORES REQUIRED UNDER CAGE III (c) OF IAFW-2262
CA No …………................………..........….…….. of
….…...………..…..………………………….
Name of Work
…...................................…………………....………………………………...……….
Name of Contractor …..........…………….…. No & Date of Final Bil
…....…………………………
Sr Descripti Referen Estimat Actuall Incorpora Rate Unit Total Remarks

l on ce ed y ted in of for Recov (such as
N of stores to sch. quantit Issued the work Recov Recov ery in accountin
o (as in ‘B’ y (Details including ery ery respec g
schedule (sl) item (allowin Attache wastage Rate t of of
‘B’ or g for d Stores differenc
or subsequ wastag vide e
subsequ ent e) on Annexu in Col 5 &
ent authorit whole re 6,
authority y contrac ‘A’) reasons
t WOs for
and wastage
DOs. above
normal
limits
etc.)
1 2 3 4 5 6 7 8 9 10
Total of Col. 9
Recovery on account of containers vide Appendix 6.2 …
Grand Total Rs. …
In words say Rs. ………………..
Signature of Contractor Engineer-in-Charge

Date Date
172
Annexure A to Appendix6.1
SPECIMEN
DETAILS IN SUPPORT OF COL. 5 OF STORES STATEMENT
Total Quantity of stores issued to Contractor M/s …........… under CA No …............. (Rs
…............. Col. 5 of Statement of Stores).
USR & Date Cement 12 mm dia A.C. Rooting A.C. Ridges 10 mm dia
Bags bars Kgs. sheets Sq. M R.M. bars Kgs.
1 2 3 4 5 6
1 12257 15 - 150 12 -
15.7.19
2 12259 - 50 - 5 10
19.7.19
3 12280 10 - 20 - 5
10.8.19
Total 25 50 170 17 15
Returned to MES
1 T.V. No 2 - 15 - 5
201/5
Dated
12.9.19
2 T.V. No - 5 - 3 -
211/6
Dated
15.9.19
Total Returned 2 5 15 3 5
Net Issue 23 45 155 14 10

Date Date
173
Appendix 6.2
DETAILS OF RECOVERIES FOR EMPTY CONTAINERS

Name of Work …….…………………………... CA No .............………………………………
Name of Contractor ……………....…. No and date of Final Bill…....…..…......………..
Srl Particular Ref to No of No of Empty containers retained Remark

No s of USR No Empty Empty by the contractor s
stores & Date container containers Qty Unit Rate Amou
with s actually nt
which returnable returned
container by the by
s were contractor contractor
issued s s
Certified that the Empty containers returned by the contractor are in a serviceable
condition.

Date Date
174
Appendix 6.3
CEMENT CONSTANTS
Sr Description of Item Mix by Unit Cement

l volum Constant in Kg
N e
o
1 2 3 4 5
Cement Concrete
1 Mixed cement concrete delivered on bunker 1:1- 402.83
1/2:3
1:2:4 308.53
1:2:5 268.55
1:2- Cubi 253.18
1/2:5 c
Metr
1:3:6 e 213.20
1:4:8 161.95
1:5:10 129.15
1:7:12 104.55
2 Mixed cement concrete using all in aggregate 1:5 312.63
delivered on bunker 1:6 264.45
Cubi
1:8 c 206.03
1:12 Metr 138.38
e
Mortars
3 Cement and Sand mortar 1:1 1058.83
1:2 699.05
1:3 Cubi 493.03
1:4 c 382.33
Metr
1:6 e 254.20
1:8 192.70
4 Gauged mortar (Cement Lime and Sand mortar) 1:1:6 244.98
1:1:8 189.63
Cubi
1:2:9 c 164.00
1:5:10 Metr 147.60
e
1:7:12 120.95
Brick Work Old Modula
size r bricks
bricks
5 Brick work in well burnt bricks straight on plan or to 1:3 123.00 113.3
175
curve exc. 6 metre mean inner radius, built in 1:4 Cubi 95.84 87.9
cement and sand mortar. 1:6 c 64.06 58.4
1:8 Metr 47.93 44.3
e
6 Brick work in well burnt bricks, straight on plan or 1:1:6 Cubi 60.48 56.8
to a curve exc. 6 metre mean inner radius, built in 1:1:8 c 47.93 43.6
gauged mortar. 1:2:9 Metr 40.49 37.7
e
Stone Masonry
7 Walling of random or polygonal rubble uncoursed 1:3 Cubi 147.60
or brought upto courses, well bonded,bedded and 1:4 c 114.80
solidly hearted in cement mortar. 1:6 Metr 75.34
1:8 e 58.94
8 Walling of random or polygonal rubble uncoursed 1:1:6 Cubi 73.80
or brought upto courses, well bonded,bedded and 1:1:8 c 56.89
solidly hearted in gauged mortar. 1:2:9 Metr 49.71
e
Plastering
9 10mm (1/2 inch) thick rendering or screeding on 1:2 Squa 11.79
brick or concrete surfaces in cement and sand 1:3 re 8.41
mortar 1:4 Metr 6.77
1:6 e 4.46
10 10mm (1/2 inch) thick rendering or screeding on 1:1:8 Squa 3.38
brick or concrete surfaces in gauged mortar 1:2:9 re 2.82
Metr
e
11 10mm (1/2 inch) thick rendering or screeding on 1:2 Squa 15.68
stone masonry 1:3 re 11.17
1:4 Metr 8.41
surfaces on lathing in cement and sand mortar 1:6 e 5.64
12 10mm (1/2 inch) thick rendering or screeding on 1:1:8 Squa 4.20

stone masonry surfaces or lathing in gauged 1:2:9 re 3.64
mortar. Metr
e
13 Add to or deduct from serial No 9 & 11 for each 1:2 Squa 4.77
5mm (1/4 inch) thickness in cement mortar over or 1:3 re 3.38
under 10mm (1/2 inch) on concrete,brick,lathing or 1:4 Metr 2.51
stone masonry surfaces 1:6 e 1.69
14 Ditto-Item No 10 & 12 in gauged mortar 1:1:8 Squa 1.38
1:2:9 re 1.13
Metr
e
Pointing
15 Raking out joints to a depth of 10 mm and flush, 1:2 Squa 2.51
keyed or struck pointing on brickwork,in cement 1:3 re 1.69
176
mortar 1:4 Metr 1.39

e
16 Raking out joints to a depth of 10mm and flush, 1:2 Squa 5.02
keyed or struck pointing on random rubble 1:3 re 3.95
masonry uncoursed or brought to courses with 1:4 Metr 2.83
20mm thick joints, in cement mortar. e
17 Struck, keyed or flush pointing to block in course or 1:2 Squa 1.39
ashlar or concrete walling in cement mortar. 1:3 re 1.13
1:4 Metr 0.85
e
18 Struck, keyed or flush pointing to squared rubble 1:2 Squa 3.95
coursed or uncoursed walling in cement mortar. 1:3 re 2.82
1:4 Metr 2.26
e
19 Bustard tuck or mason’s V-joint pointing to squared 1:2 Squa 5.02
rubble coursed or uncoursed masonry, in cement 1:3 re 3.64
mortar. 1:4 Metr 2.82
e
20 Bustard tuck or mason’s V-joint pointing to random 1:2 Squa 6.15
rubble masonry, uncoursed or brought to courses 1:3 re 4.46
in cement mortar. 1:4 Metr 3.64
e
Brick Flooring
21 Hard burnt brick floors, laid flat, jointed and pointed 1:3 Squa 11.17
flush in cement and sand mortar. 1:6 re 5.64
Metr
e
22 Ditto-but bricks laid on edge ditto. 1:3 Squa 15.68
1:6 re 8.41
Metr
e
Surface Finishing to Concrete Floors
23 Floating with wood or steel hand float as ordered, Squa 1.38
cement concrete surface to a fair and even surface re
using extra cement. Metr
e
Granolithic Flooring
24 30mm thick granolithic concrete floor topping 1:1:2 Squa 16.09
spread over ordinary concrete floor etc. including re
floating or trowelling to an even and fair surface Metr
e
25 10mm (3/8 inch) thick layer of terrazzo (consisting 1:1:5 Squa 8.71
of 1 part of mixture of cement and marble powder to re
1.5 parts of approved crushed stone chipping,4 to Metr
7mm size ) laid level or to falls including cut and e
polished finish.
177
SECTION 7
ISSUE OF TOOLS & PLANTS (T&P) ON HIRE TO CONTRACTORS UNDER

SCHEDULE C
7.1 T&P shall be issued to a contractor only on receipt of a demand in writing from him.
The demand shall be forwarded by the Engineer-in-Charge to the E/M Officer-in-Charge of
T&P who will prepare a “Loan Issue Voucher” on IAFW-2096. The voucher shall be signed
by the E/M Officer-in-Charge of T&P, the Engineer-in-Charge and the contractor before
T&P is issued to the contractor. A copy of voucher signed by all parties shall be endorsed
to the AO/AAO attached to the GE’s office.
7.2 The Engineer-in-Charge shall ensure that the following particulars pertaining to each
item of the T&P are shown in the relevant Log Book:
Number of working hours each day .......................................................................
Breakdown periods ….........................................................................
Overtime working ….........................................................................
Maintenance days ….........................................................................
Authorised holidays ….........................................................................
Fuel issued ….........................................................................
Each entry shall be signed by both the Engineer-in-Charge and the contractor and
shall be dated.
7.3 During examination of certain claims of a contractor it was noticed that the Log Book
for the constructional plant hired to the contractor had not been properly maintained.
Though the printed Log Books provided separate pages for recording the plant data,
accessories, tools and spares, plant staff, issue and transfers, stores issued, operating
hours or record of work done, lubricants and maintenance, repairs and spare parts fitted,
inspections/remarks by inspecting officers etc, the entries were not made in the appropriate
places. This created difficulties in establishing the break down periods and classification of
certain plants for purpose of recovery from contractor.
7.4 Log Book of constructional plant is an important document which is of great help in
sorting out disputes with contractors at the time of preparation of Final Bills and in deciding
on recoveries in respect of T & P. It is, therefore, essential that entries therein should be
clear and in the appropriate place so that a complete record of the working of the plant,
breakages, maintenance etc are available from it.
7.5 The Engineer-in-Charge shall prepare once a week a USR showing hire charges of
T&P issued to the contractor. A copy of the USR signed by the Engineer-in-Charge and the
contractor shall be forwarded to the AO/AAO.
7.6 On return of the T&P by the contractor, the E/M Officer-in-Charge T&P shall prepare
a “Receipt Voucher” on IAFW-2096. This voucher shall be signed by the E/M Officer-in-
Charge, the Engineer-in-Charge and the contractor. The receipt Voucher and the Log Book
shall be forwarded to the AAO to enable him to cross-check entries in the Log Book with
those contained in USRs.
178
7.7 On completion of the work, a Statement of Hire Charges for T&P issued to the
Contractor shall be prepared by the Engineer-in-Charge as per Appendix 7.1. This
statement is to be attached as an enclosure to the Final Bill.
7.8 In order to have uniformity, the following procedure will be adopted in working out
hire/stand-by charges for T&P issued to contractors under Schedule ‘C’.
(a) At Tender Stage. The hire/stand-by charges worked out in terms of Para
943 of RMES should be used for including in Schedule ‘C’ at the tender stage.
Various items of T&P and the number of each proposed to be issued under Schedule
‘C’ should be decided after reviewing their availability. If only one type of T&P of a
given capacity is available for issue to the contractor, only the hire rate for this type
of T&P should be inserted in Schedule ‘C’ eg 8 ton road roller (petrol). If, however,
T&P of the same capacity but in different type using different fuel is available for
issue eg; road roller 8 ton (petrol)/8 ton (diesel) then all the types should be
stipulated in Schedule 'C' but the hire rate inserted shall be the highest of all the
types worked out in terms of Para 943 of RMES. Where T&P of different capacities
are intended to be issued under Schedule ‘C’ the rate shall be worked out in
accordance with Para 943 of RMES and inserted in Schedule ‘C’ as separate items.
(b) During Currency of Contract. As far as possible, hiring of T&P should be

restricted to that stipulated in Schedule ‘C’. If, however, it is decided in the interest
of work, to hire T&P other than that in Schedule ‘C’ the following procedure shall be
adopted :
(i) When on a Request from the Contractor. The additional items of

T&P either other than those stipulated in Schedule ‘C’ or more in number of
the items already included in Schedule ‘C’ or of higher capacity, should be
issued at hire rates which should be the hire rates worked out in terms of Para
943 of RMES normally inserted in Schedule ‘C’ in the tender stage, but
enhanced by 20%.
(ii) Alternative Type of T&P to be Issued Consequent on the Failure on

the Part of Department in not Being Able to Issue the Type of T&P
Included in Schedule ‘C’. When an alternative type of T&P of the same
capacity/equal performance to that included in Schedule ‘C’ is issued to the
contractor, no adjustment in the rates stipulated in Schedule ‘C’ shall be
made. However, where T&P of a much higher or lower capacity/performance
is issued in lieu of that included in Schedule ‘C’, the rates of recovery shall
be those which would have been adopted at the tender stage for such types
of plants. The 20% addition referred to in Sub Para 7.8(b)(i) above will not
apply in such cases.
(iii) Before it is decided to issue an alternative type of T&P to the contractor,

in such cases, approval of the authority next higher to the accepting officer
should be obtained. In the case of contracts concluded by CEs Zone,
however, they will be the deciding authority. Suitable amendment to contract
agreement shall be made to cover hiring of T&P cases mentioned in Sub Para
7.8 (b) (i) & (ii) above.
179
Appendix 7.1
STATEMENT OF HIRE CHARGES FOR T&P
Name of work .......………………………….............……………………....……………...

C. A. No .……………………….............……………………………………………...
Contractor ……....………............….............………………………………………………
Final Bill No …………...…………………….............…………………………................…
Srl Description Date Ref of Ref to Ref to Date Details of Works Rate of Total Remarks
No of T&P of Loan Log U.S.R. Hire Recovery (Date of
Issue Issue Book Hours Worked Charge for the Return &
Voucher & From To Total s Work Maintenance
Page Hours Days to be
No Shown in this
Col)
1 2 3 4 5 6 7 8 9 10 11 12 13
Signature of Contractor Technically checked AGE B/R

JE (QS & C)
180
SECTION 8
SPECIAL CONDITIONS AND OTHER PROVISIONS FOR

INCLUSION IN TENDER DOCUMENTS
8.1 Special Conditions .
Various special conditions circulated from time to time for incorporation in tender
documents are listed in Appendix 8.1. These special conditions will be incorporated
in tenders as and where applicable.
8.2 Other Provisions.
In addition to the specimen special conditions at Appendix 8.1, provisions shall

also be made in tender documents on various other issues as per specimen
conditions as given in Appendix 8.2 and shall be suitably modified to suit local
requirements. Certain important issues are highlighted in following paragraphs.
8.2.1 Employment of Personnel.
Provision shall be made in all tender documents to the effect that the contractor shall
employ only Indian nationals after verifying their antecedents and loyalty. Attention
of the contractor shall also be drawn to condition 25 General Conditions of Contracts
(IAFW-2249) or similar conditions in the applicable contract form.
8.2.2 Approval of Sample of Workmanship in Buildings.
Wherein a sizeable number of buildings are included in the scope, a clause shall
be included in the tender requiring the contractor to carry out samples of
workmanship of various trades in one selected building, preferably with a sanitary
annexe, to be passed initially by the GE which will serve as guiding sample for the
Engineer-in-Charge and JE to get the balance work executed accordingly. In case
of tenders for repetitive type of buildings such as married accommodation, a sample
building/quarter shall be included with a separate period of completion to serve as a
guiding sample for execution of balance work.
8.2.3 Supply of Water .
(a) Refer Condition 31 of IAFW-2249.
(b) Where water is contemplated to be issued to the contractor, a specific provision

will be made in Special Conditions forming part of the tender documents. The
following provisions shall be clearly brought out in the tender documents besides
other normal provisions :-
(i) Number of points, from where the water is proposed to be supplied to

be mentioned and clearly indicated on site plan.
(ii) Size of ferrule at each point of supply.
(iii) Average duration of water supply during the day.
181
(c) In case where piped water supply system does not exist at the site of works,
tender documents will contain a specific provision that water will not be supplied by
MES and that the contractor shall make his own arrangement for water from sources
outside MoD (Ministry of Defence) land. In case shallow wells exist on MoD land or
nallahs/rivulets flow through MoD land, the contractor can be permitted to draw
water from such sources. Further if a contractor is permitted to dig shallow/deep
wells on MoD land, specific provisions in this regard will be made in the tender. In
either case the provision shall be made that no charge will be levied on the
contractor but he should make the ground good on completion of work as directed
by GE. In any case water used shall be subject to prior written approval of the
Engineer in Charge.
(d) If the supply of water is metered, the All-in-Cost rate as worked out by GE for
recovery for water shall be included in tenders. If however, the supply of water is not
metered, this will be so stated in the Special Condition and rate of recovery shall be
as per Condition 31 of IAFW-2249. Accepting officer may also modify standard
conditions to provide for free issue of water in terms of Para 454 of RMES for works
in which there may be very few items of works requiring use of water.
8.2.4 Guarantee of Water Proofing Treatment to Buildings in Contracts including

Special Water Proofing Treatment . Provision shall be made in tenders under
Special Condition to cater for the following:-
(a) The period of guarantee.
(b) The contractor shall furnish guarantee in favour of the Garrison Engineer for
the efficacy of the water-proofing treatment during the guarantee period where the
work is got executed through a specialist firm ; the contractor shall obtain guarantee
from such specialist firm in his favour. The contractor in turn shall furnish guarantee
to GE duly endorsing therewith a copy of guarantee secured by him from specialist
firm.
(c) An appropriate sum equal to amount of security deposit calculated as per

scales laid down for Earnest Money enhanced by 25% on the amount of water
proofing treatment at the contract rates shall be retained out of the final bill amount
as security deposit toward the guarantee for the water-proofing work and it shall be
released to the contractor only after the expiry of the guarantee period. The facility
of furnishing fixed deposit receipt/ BGB in lieu of the sum to be retained as security,
shall also be acceptable.
8.2.5 Valuation of DOs for Lump Sum Contracts Based on Drawings and
Specifications. In terms of Condition 62 (C) of (IAFW-2249), applicable to lump
sum contracts based on drawings and specifications, the rates in MES Schedule
referred to in Sub Paras (c) and (d) of the condition are subject to percentage
inserted in tenders. A percentage shall, therefore, be provided through a special
condition in tenders.
8.2.6 Refund of Security Deposit to Contractors . Refer to Condition 68 (as amended

vide amendment no 45) of IAFW-2249/Condition 35 (as amended vide amendment
no 39) of IAFW-1815Z regarding refund of Security Deposit (Performance Security)
to Contractors. For contracts not having Performance Security Provisions,
stipulations in unamended Condition 68 of IAFW-2249 (ie prior to amendment no 45
of IAFW-2249)/unamended Condition 35 of IAFW-1815Z (ie prior to amendment no
39 of IAFW-1815Z), shall be applicable.
182
8.2.7 Advance on Account against Materials . The condition is given in Annexure XIV
to Appendix 8.1. The Bank Guarantee Bond (in lieu of Retention Money) may be
used after suitably amending the opening sentences as under :
“In consideration of the President of India (hereinafter called “the Government”)
having agreed not to retain Rs ..... (Rupees .....) out of the reserve of (*) ....... % (......
percent) of the value of certain items of materials brought on the site as provided
under the terms and conditions of Contract Agreement No ....... (here-in-after called
“the said agreement”) made between the President of India and Shri/M/s ......... from
the claims of the said Contractor(s) for the due fulfilment by the said contractor(s) of
the terms and conditions contained .......... in the said Agreement.
(*) insert 25% or 15% as applicable.
8.2.8 Mobilisation Advance. Payment of mobilisation advance upto maximum of 10%

of contract value can be given to the contractor for work costing Rs 10 crore or more
for works to be carried out in remote/difficult location and/or requiring mobilisation of
special equipment(s), tools or plants or/and works to be completed in stringent time
frame or/and specialised and/or capital intensive work such as marine work, large
air field, hospital complex etc. CE Zone/CCE shall decide to include or otherwise the
provisions of mobilisation advance on a case to case basis as per Defence Works
Procedure to encourage competition and participation of more bidders and include
the same in NIT. The provision shall not be included as a routine. Present rate of
interest 10% PA (Simple Interest) which will be applicable for tenders to be issued
till 31 Dec 2021, unless revised earlier Mobilisation advance would be operated
through ESCRO account. The special condition is as per Annexure XVII to
Appendix 8.1.
(a)
8.2.9 Mobilisation Advance for Work at Andaman and Nicobar Islands. CE Andaman
and Nicobar Zone, Port Blair has been authorised to include at pre-tender stage
Clause as per Annexure XVII to Appendix 8.1 for payment of interest free
Mobilisation Advance for all work of Army, Navy and Air Force upto 10% of contract
value against Bank Guarantees. The above amount shall be recovered in a suitable
number of equal monthly/fortnightly instalments.
8.2.10 Project Information. Provision shall invariably be made in the tender documents
for providing a stone/plaster engraving informations in respect of the project work as
under :-
(a) Job No.

(b) CA No.
(c) Name of work.
(d) Name of contractor.
(e) Name of GE.
(f) Name of Engineer-in-Charge.
(g) Date of commencement.
(h) Detail of completion phase wise.
(i) Date of expiry of defects liability period.
(j) Date of expiry of warranty period given against ATT, water proofing etc.
183
8.2.11 Inclusion of YardStick in Tender Documents.
(a) Yardstick will be included in tender documents in all lump sum tenders for
common and standard buildings. Yardstick shall be prepared based on estimates
(at market rates) done at tender stage. The yardsticks shall be prepared by JE
(QS&C) (by AAD(C) if JE (QS&C) is not posted) of the office of Accepting Officer
and shall be technically checked by AD (C)/ AD/Dy Dir/Jt Dir (C) of the office of
Accepting Officer at the tender stage itself. GE shall also forward his comments on
yardsticks in respect of CWE’s/CE’s contracts at tender stage itself alongwith other
comments. Comments received from GE as well as from tenderers (if any) shall be
duly considered and wherever required necessary corrections shall be made to
yardstick while issuing other amendments to tender documents. Yardstick shall be
approved by the Accepting Officer at tender stage.
(b) In case of complicated and unusual buildings, where inclusion of yardstick at

tender stage is not considered feasible, the Accepting officer shall record the
reasons for the same. The yardstick in such cases shall be prepared by JE (Civil) &
AGE of concerned Sub Division immediately on conclusion of contract and shall be
technically checked by JE (QS&C)/AGE (C) of GE office. In respect of GE’s
contracts, yardstick shall be approved by GE. In respect of CWE’s/CE’s contracts,
these shall be submitted to the office of CWE for further technical check by
DCWE(C)/ACWE (C) of CWE office and shall be approved by the CWE. Copy of
approved yardstick in respect of CE’s contracts shall be forwarded to the office of
Accepting Officer for his record and comments. Where there is no CWE office,
yardstick in respect of CE’s contracts shall be submitted to the office of CE for further
technical check by the AD (C)/Dy Dir(C)/Jt Dir (C)/DIR(C) of CE office and shall be
approved by the CE.
(c) The yardstick shall be finalised well in time so that the payment of RARs is
not held up on this account. The 3rd RAR will be paid by the GE only after technical
check and approval of yardstick. CE/CWE/GE shall personally monitor this aspect.
(d) While preparing and approving yardstick, it shall be ensured that sufficient
funds are available towards internal and external finishes of the project. It shall also
be ensured that there is no overpayment to the contractor at any stage particularly
at the initial stage. This assumes importance for the items for which rates are not
available in SSR. In case of contracts progressing slowly towards final completion
stages, the Accepting Officer may order for technical check of RAR by
ACWE(C)/DCWE (C) of CWE’s office. However, there should not be any
unreasonable delay on this account and the Accepting Officer shall closely monitor
such contracts.
8.2.12 Setting of Site Laboratory by Contractors and Testing of Materials .
(a) Site laboratory for all contracts of Rs 1 crore and above shall be set up by the
contractor and a suitable clause for the same shall be included in the tenders. The
contractor may be permitted to set up a site lab for the works costing less than Rs 1
crore at his option. The type of tests and frequency of tests to be carried out in such
site lab (A-level tests), in MES (CE/CWE/GE) lab (B-level tests) and in NABL
Accredited Labs / IITs (C-level tests) are given in Annexure-I to Appendix 8.2 for
guidance. The Accepting Officer, if required depending on the nature of work, may
add additional test checks to this list. List of tests shall be included in the tender
documents depending upon the actual requirement and nature of work and shall be
modified accordingly.
184
(b) The contractor shall be responsible for tests to be carried out in the site lab
established by him and for that he will employ a competent technical representative
as approved by the GE and all such tests shall be carried out in the presence of
Engineer-in-Charge. The charges for the tests carried out in the on- site laboratory
of the contractor shall not be recovered. The charges for ‘A’ level tests shall be
recovered if they are not done in the site lab established by the contractor and in
turn are done in MES lab (CE/CWE/GE) /Command Test Lab. Certain random tests
of ‘A’ level tests, as decided by the Accepting Officer, shall be done independently
in the Zonal/Command/NABL Accredited Lab / IITs and expenditure for such tests
shall be borne by the department.
(c) Recovery of ‘B’ level tests shall be made from the contractor’s RAR/final bill.
Wherever it is convenient to get ‘B’ level tests done at NABL Accredited Lab / IITs,
the same be done at the cost of the contractor and no separate recoveries shall be
made by the Department for such tests.
(d) Charges of ‘C’ level tests shall be borne by the contractor as per actual
charges of NABL Accredited Lab / IITs, irrespective of rates indicated in Annexure-
I to Appendix 8.2. The rates of ‘C’ level tests have been indicated for the purpose
of recovery if these tests are done in MES laboratories, if facilities are available.
(e) Testing Facilities Available in SEMT Wing, CME Pune . SEMT Wing CME,
Pune has secured ISO/IEC 17025 : 1999 Certificate by National Accreditation Board
for Testing and Calibration of Labs (NABL), Deptt. of Science & Technology. A list
of 25 civil engineering materials for which SEMT Wing CME has been accredited to
conduct the tests is given here under. The list shall be revised/updated by accepting
officers from time to time after getting necessary inputs from SEMT Wing Pune.
These facilities may be used in MES works.
Civil Engineering Materials for Which NABL Accreditation Obtained by SEMT

Wing, CME Pune:
1. Cement
2. Sand/Fine Aggregate
3. Soil
4. Fly Ash
5. Lime
6. Water Proofing Compound
7. Acid Resistant Tiles
8. Paving Bitumen/Industrial Bitumen
9. Hot Applied Joint Sealing Compound (Grade A & B)
10. Bricks
11. Terrazzo Tiles
12. Timber
13. MS Bars
14. AC Sheets (Corrugated and Non Corrugated)
15. Bitumen Felt
16. Wooden Particle Board
17. Clay Roofing Tile
18. Wooden Door and Window Shutter
19. Cement paint
20. SWG Pipes
21. Block Board
22. AC Building Boards
23. Fresh Concrete
24. Hardened Concrete
25. Flush Door
185
8.2.13 Materials to be Procured by Contractors .
(a) Condition 10 of IAFW-2249 General Conditions of Contracts lays down

detailed requirements of materials to be procured by the contractor.
(b) Vouchers in respect of cement, steel, major E/M equipment like transformers,
DG Sets, pumps, motors, AC and lift equipment will be submitted invariably. For all
original works, keeping in view specific provisions and circumstances for each
contract, it may be necessary that certain additional items require verification of
vouchers. GE shall list out all such items after issue of tender and submit the same
in his comments on the tender documents. The list of such items shall be put up by
E8 section (through E4 if required) to the Accepting Officer for his approval. The list
should be work specific and not general in nature.
(c) Original purchase vouchers shall be defaced by the Engineer-in-Charge and

photocopies shall be kept in record. Genuineness of purchase voucher shall be
verified by the Engineer in Charge before considering the same for making payment.
Initially JE may verify the vouchers after taking confirmation on phone or through e
mail.
(d) These instructions shall also be applicable in case of contracts based on

IAFW- 1815Z.
8.2.14 Makes of Materials to be Procured by Contractors .
(a) As per existing policy following categories of products are approved by

E-in-C's Branch
(i) New materials, products and techniques for which IS code does not
exist or which are being introduced for the first time in MES.
(ii) Civil Construction Products:-

(aa) Cement and steel.
(ab) All runway related products.
(ac) Construction chemicals, additives (including fibre) and
waterproofing.
(ad) PEB and all roofing sheets/ systems.
(iii) Electrical Products:-
(aa) Solar/wind general equipment and storage excluding

independent lighting/ heating equipment.
(ab) STPs/ WTPs/ water treatment products/ food grade
chemicals/ additives to water supply.
(ac) Lifts and cranes.
(ad) Hospital incinerators.
(iv) Architectural Products.
(aa) Modular Qtrs.

(ab) Structural glazing/ curtain walls, structural balustrades.
186
(b) All other products will be approved by Commands as per the procedure laid down
by E-in-C's Branch. The CEs Command / ADGs will decide through a Board of Officers,
the range of brands/makes of all major fitments to be included in the contracts in their area
of jurisdiction based on quality, durability, customer satisfaction, easy availability and cost
compatibility. The original list of makes will be promulgated to all CEs Zones, with
information to E-in-C's Branch. The Formation Commanders will be apprised of the list of
approved brands/makes and their inputs factored in while finalizing the same. This list will
be updated on a yearly basis and any changes will be intimated to E in C’s Branch.
(c) Accepting Officers will incorporate the schedule of makes in the tenders only as per
the latest list circulated by E in C’s Branch/ CEs Command. In order to bring transparency,
concurrence of PMG/Station Commander shall also be obtained for these 'makes/brands'
during tender presentation. A record of such concurrence will be maintained by the
Accepting Officer.
8.3 Alteration of Standard Tender Documents. Chief Engineers are empowered to

alter standard contract documents at pre-tender stage to suit urgent requirements
particularly with reference to security deposit, percentage payments, periodicity of
payment, issue of stores, deviation limits and similar matters in consultation with the PCDA,
where ever possible, as per para 47(e)(ii) of Defence Works Procedure 2020 and as
amended.
8.4 Approval of E-in-C for Alteration in Special Conditions.
8.4.1 The procedure which should be adopted when applying for E-in-C’s approval for
inclusion of a special condition in tenders in terms of Para 393 of RMES is outlined
below :-
(a) The application must invariably be forwarded to E-in-C’s Branch through the
PCDA/CDA concerned, enclosing a copy of the special condition proposed to be
included in tender documents.
(b) The financial effect of the condition shall be assessed (approximate amount
calculated where firm amount cannot be assessed).
(c) Reasons for recommending inclusion of the condition and also stating
whether approval to a similar condition had been given by the E-in-C in the past.
8.4.2 Should the PCDA/CDA raises any queries which require further clarification by the
CE, the same should be forwarded to E-in-C’s Branch with a copy to the PCDA/CDA, as
early as possible.
8.4.3 As such matters have to be referred to MoD and they prefer to see PCDA/CDA’s
comments thereon, it should be ensured that the PCDA/CDA concerned forwards his
comments to E-in-C’s Branch without delay.
8.4.4 Para 394 of the Regulations for MES in this connection shall also be referred.
187
8.5 Dispute Resolution Board (DRB) .
(a) Due to the rising number of arbitration cases which ultimately lead to
litigations in courts resulting in wastage of time and money, alternate dispute
resolution methods such as Conciliation and Dispute Resolution Board (DRB) were
felt necessary before resorting to arbitration. Accordingly provision of conciliation
has been included in Special Conditions vide Annexure XX of Appendix 8.1 of
Manual on Contracts 2007 (Reprint 2012). The provision of Dispute Resolution
Board (DRB) has been inserted as Condition 71 of IAFW-2249 through Amendment
No 40 to IAFW 2249 in 2015. It is made mandatory for contracts more than Rs 10
Crore.
(b) The said Condition 71 of IAFW-2249 specifies that procedure for

constitution/appointment of DRB/Conciliator shall be as laid down in the Contract
Agreement. While standard clause for conciliation was already approved and
included in Manual on Contracts 2007 (Reprint 2012) at Annexure XX of Appendix
8.1, the standard clause for DRB has now been formulated and approved by MoD
and the same shall be inserted as special condition enclosed as Annexure XXI of
Appendix 8.1
(c) It shall be ensured by CEs Command/ADG that where Jt DG (Contracts) is

Chairman, the Cols/Directors, nominated as members shall be from the sections
other than contract Section. A panel/list of such officers at Command level, who
have proficiency and experience in dealing with arbitration cases, shall be prepared
for nomination as members to DRB as per their orders in the list serially and their
nomination should be assigned in a cyclic manner so that load is equally distributed.
The panel shall be regularly revised keeping in view the moving in/out of Col/Director
level officers in the Command.
(d) For ongoing contracts where amended Condition 71 of IAFW-2249 is

applicable with provision for DRB but where constitution/procedure for DRB has not
been included in the contracts, this standard DRB clause may be included through
an amendment to the contract.
(e) The payment becoming due to the contractor on account of the findings of
DRB which have become final, ie those which have not been objected to by either
party within 30 days of such decisions, shall be paid out of funds available for the
project only.
(f) The Department’s case before the DRB shall be presented by Accepting
Officer himself and/or Dir (Contracts) of CE Zone assisted by CWE and his DCWE
(Contracts), GE and his AGE (Contracts) and any other officer and legal counsel
nominated by the Accepting Officer. The contractor may present his case by himself
and/or by his nominated reps and authorized legal/technical counsel.
188
Appendix 8.1
List of Special Conditions
Ann Particulars of special conditions Remarks

ex
No
I Security of classified documents Generally applicable to all types of
tenders.
II Tenderers to keep their offers open Generally applicable to all tenders.
for a specified period.
III Time and Progress Chart using To be included in tenders for works costing
Critical Path Method Rs. 25 Lakhs and above.
IV Supply of Electric Energy To be included in tenders where it is
proposed to supply electric energy.
V Facilities to contractors Applicable to tenders where such facilities
A-Allotment of quarries situated on are proposed to be given.
defence land
B-Allotment of land for storage of
materials
C-Allotment of land for
accommodation of labour, canteen,
fabricating workshop etc.
VI Guarantee in respect of anti termite Applicable to tenders where anti termite
treatment treatment specified.
VII Output of road rollers Applicable to tenders for road work.
VIII Employment of female labour in For inclusion in tenders for works in
Factories/Depots/Parks etc. Factories/Depots/Parks etc where labour
is subject to search.
IX Works inside Military Farms use of For inclusion in tenders for works in
animal transport Military Farms.
X Contractor’s plant/equipment at site To be included only in tenders for works in
and loss or damage on account of operational /border areas where enemy
enemy action applicable to action is apprehended.
operational/border areas.
XI Reimbursement/refund on variation For all tenders where period of completion
in prices (job PDC) as per Administrative Approval
is 2 years or more. It shall not be included
in tender for Term Contract irrespective of
value/period
XII Special Condition for inclusion in Applicable to specialist tenders for lifts.
tender for work of Electric Lift
installation.
XIII Reimbursement/Refund on variation For all tender where period of completion
in prices labour wages (job PDC) as per administrative approval is
2 years or more. This condition shall not
be included in Term Contracts irrespective
of value/period.
XIV Advance on account against Applicable for works costing more than Rs
material-Special Condition for 50 Lakh.
inclusion in tender.
XV Attaching copy of General In absence of a printed copy of General
Conditions of Contracts with original Conditions of Contracts to be attached
and copies of Contract Agreement. with Contract Agreement, a statement as
189
per Annexure XV can be attached.

XVI Reimbursement/refund on variation Applicable for all tenders wef 01 June
in taxes directly related to the 2007.
contract value.
XVII Mobilisation Advance–Special Applicable for cases where the estimated
A&B Condition cost of work is Rs 10 crore or more.
XVIII Mobilisation Advance-Works at Only applicable to works in Andaman and
Andaman and Nicobar Islands. Nicobar islands (Army, Navy and Air Force
Works only) and the contracts to be
accepted by Chief Engineer.
XIX Qualified Tradesmen Applicable for works costing Rs 1 crore or
more.
XX Conciliation Applicable in contracts concluded by Zonal
CE/CCE of value upto Rs 10 Crores.
XXI Dispute Resolution Board (DRB) Applicable in all contracts of value above
Rs 10 crores.
Annexure I
Specimen Special Condition on Security of Classified Documents
“SECURITY OF CLASSIFIED DOCUMENTS
Contractor’s special attention is drawn to Conditions 2A and 3 of General Conditions of

Contracts (IAFW-2249). The Contractor shall not communicate any classified information
regarding works either to sub-contractors or others without prior approval of the Engineer-
in-Charge. The Contractor shall also not make copies of the design/drawings and other
documents furnished to him in respect of works and he shall return all documents on
completion of the works or on earlier determination of the Contract. The Contractor shall
along with final bill attach a receipt from the Engineer-in-Charge in respect of his having
returned the classified documents as per Condition 3 of General Conditions of Contracts
(IAFW-2249).’’
190
Annexure II
Specimen Special Condition requiring Tenderers to Keep Their Offer Open for a
Specified Period
‘The tender shall remain open for acceptance for a period of ……… days from the next day
subsequent to the bid submission end date’.
Notes : (i) Keeping in view the time required to follow the procedure from bid submission
end date to opening of Cover 2, a period of 90 days shall be specified in all the tenders.
(ii) However in the case of tenders for specialists works ie air conditioning, cold
storage/refrigeration, water purification plants, sewage treatment plants, sewage
disposal schemes, provision of lifts, cranes, fuel storage tanks etc where tendering
is done in two stage three bid system, period of 60 days shall be specified from the
next day subsequent to bid submission end date of Stage 2.
(iii) If as a result of the scrutiny of tenders received, it is found that a decision is

not likely to be taken within the validity period initially specified in the tender
documents, tenderer shall be approached to give their consent in writing to keep
their offers open for a further period in accordance with the requirements of the case.
(iv) In case any tenderer does not agree to extend the validity period, no penal
action shall be taken against him.
(v) Notwithstanding the above validity period of tender, Accepting Officer shall
take decision on acceptance of tender or otherwise without any loss of time from the
date of opening of cover 2.
Annexure III
Specimen Special Condition for Adoption of Time and Progress using Critical
Path Method
(a) The Time and Progress Chart to be prepared as per condition 11 of General
Conditions of Contracts (IAFW-2249) shall consist of detailed network analysis and a time
schedule. The critical path network will be drawn jointly by the GE and the contractor soon
after acceptance of the tender. The time scheduling of the activities will be done by the
contractor so as to finish the work within the stipulated time. On completion, a firm calendar
date schedule will be prepared and submitted by the contractor to the GE who will approve
it after due scrutiny. Four copies of the schedule will be submitted within two weeks from
the date of handing over the site.
(b) During the currency of the work the contractor is expected to adhere to the time
schedule and this adherence will be a part of the contractor's performance under the
contract. During the execution of the work the contractor is expected to participate in the
reviews and updating of the net work undertaken by the GE. These reviews may be
undertaken at the discretion of the GE either as a periodic appraisal measure or when the
quantum of work ordered on the contractor is substantially changed through deviation
orders or amendments. Any revision of the schedule as a result of the review will be
submitted by the contractor to the GE within a week who will approve it after due scrutiny.
The contractor will adhere to the revised schedule thereafter. In case of a contractor
disagreeing with the revised schedule, the same will be referred to the Accepting Officer
whose decision will be final, conclusive and binding. GE’s approval to the revised schedule
resulting in a completion date beyond the stipulated date of completion shall not
191
automatically amount to a grant of extension of time. Extension of time shall be considered

and decided by the appropriate authority mentioned in condition 11 of IAFW-2249 and
separately regulated
(c) The contractor shall mobilise and employ sufficient resources to achieve the detailed
schedule within the broad framework of the accepted methods of working and safety.
(d) No additional payment will be made to the contractor for any multiple shift work or
other incentive methods contemplated by him in his work schedule even though the time
schedule is approved by the Department.
Notes: In addition, the following facts shall be highlighted in the forwarding letter of the
tender :
(1) The tender is based on CPM.
(2) The tenderer is expected to be fully conversant with this technique and employ
technical staff who can use this technique in sufficient detail. Sufficient books and other
literature on the subject are widely available which the tenderer may take use of.
(3) The time allowed for the completion of the work shall be worked out through CPM
after dividing the work in broad stages.
(4) The tenderer’s attention is drawn to the Special Condition of the tender regarding
preparation of the detailed network and time schedule/CPM and his liability for employing
sufficient resources to adhere to his schedule. Any inability on the part of the tenderer in
using the technique will be taken as his technical insufficiency and will affect his class of
enlistment and further prospects of receiving tenders for works.
(5) The contractor shall also deploy Engineer having experience in use of
Primavera/MS Project tools for project monitoring on day to day basis for works costing Rs
15 Crore or more. The dated project time schedule shall be jointly prepared by GE and
contractor using these tools within four weeks of conclusion of contracts. The project time
schedule shall be updated weekly with all necessary details and work done report shall be
signed by the contractor and included as part of the Works Diary by the JE, which will be
checked by the Engineer-in-Charge.
192
Annexure IV
Specimen Special Condition on Supply of Electrical Energy
It has been agreed in consultation with administrative and financial authorities at

IHQ of MoD (Army) that electric supply may be made available by MES in all contracts
wherein it is required to be used by contractors. The following special condition will be
included in such cases :-
Electric Supply
In case the Contractor desires to buy electricity from the MES, he shall be charged
for the electric energy consumed at the following rates :
(i) At *per unit for lighting purposes.
(ii) At *per unit for power purposes.
(*These will be as per latest instructions).
Electric supply upto maximum of …….. KVA shall be made available by the MES at
the incoming terminal of the main switch marked on the site plan. The main switch and
KWH meters to register electric energy supplied shall be provided and installed by the MES.
The Contractor shall provide all necessary cables, fitting, etc. from the main switch in order
to ensure a proper and suitable supply of electricity for the execution of work.
MES do not guarantee continuity of supply and no compensation whatsoever shall

be allowed for supply becoming intermittent or for breakdown in the system.
GE or his representative shall be free to inspect all the power consuming devices or
any electric lines provided by the contractor. Any device or electric lines provided by the
contractor, which is not to the satisfaction of the GE, shall be discontinued from the supply
if so desired by him.
193
Annexure V
Facilities to Contractors-Special Condition for Allotment of Land and/or Allotment

of Quarries Situated on Defence Land
1. Condition 14 Royalties-of General Conditions of Contracts (IAFW-2249) stipulates as

under :-
“No royalty will be recovered for materials, which the contractor may be allowed to remove
from quarries situated on land which is in charge of the MES Authorities or from land in
cantonments in charge of the Defence Estate Officer.”
2. Condition-24 (ibid) includes, inter-alia, the following provision :

“The portions of the site to be occupied by the contractor will be clearly defined and/or
marked on the site plan and the contractor will on no account be allowed to extend his
operations beyond these areas. In the event of the area of land so allotted for the purpose
of accommodation of labour, erection of temporary workshops, stores, storage of materials
and the like, being other than Class A-1 land, (which fact shall be ascertained by the
contractor from the GE) the contractor shall pay a nominal rent of Rs 1/- per year or a part
of a year in respect of each and every separate area of land allotted to him.”
3. It will be noted from above that both the conditions are in the nature of permissive
clauses. The contractor has to obtain permission from the concerned Authority and the
permission has to be granted to him by that Authority in writing.
4. From the various rules in the Military Land’s Manual it is further seen that whereas
some categories of lands are under the administrative control of the Military Authorities,
some categories are under the administrative control of Military Lands and Cantonments
Directorate. For example, land allotted for carrying out military works is reclassified as A-1,
the administrative control for which rests in the Officer Commanding of the Unit, whereas
land classified as A-2 or B-4 is in the administrative control of the Defence Estate Officer.
Similarly, whereas the Military Land’s Manual provides that permission may be granted by
GE (MES Officer-in charge of works) for storage of contractor’s materials on class A-1 land
being for temporary use, GE has no such powers in regard to other categories of land, such
as A-2 or B-4.
5. In the light of the position explained above it is obvious that it will not be possible for
any contractor to know the correct position with regard to availability of quarries on
Government land or availability of Government land for his use and the royalty/licence fee
he may have to pay. The above mentioned permissive conditions in the contract are,
therefore, vague so far as the contractor is concerned.
6. The correct position with regard to the following shall be ascertained at pre-tender
stage and the position thereof specifically stated under Special Conditions to be included
at the beginning of the Particular Specifications. Condition 14 pertaining to Royalty and the
portion of Condition 24 of IAFW 2249 (reproduced in para 2 above) shall be deleted while
issuing tenders .
(a) Quarries on Defence Land:-
(i) State whether or not any quarries situated on Defence land are available for use
by the contractor to remove materials for use in the works.
194
(ii) If any quarries are available, it should be made clear in the tender documents
under a special condition on the lines indicated at Specimen ‘A’ hereunder whether
or not the contractor would be permitted to remove materials from these quarries. If
it is decided to allow the contractor to remove materials from the quarries it shall be
stated whether royalty shall be charged for removal of materials from the quarries
allotted to the contractor or not.
(b) Availability of Land for Storage of Materials (including Temporary Sheds).
State whether land will be allotted free or whether licence fee shall be charged. Special
Condition to be included in the tenders is given at Specimen ‘B’ hereunder.
Notes : (i) Normally free use of some portion of class A-1 land adjoining the proposed
works shall be possible. In the interest of work, this shall always be arranged and
earmarked by the GE and specifically shown on the site plan attached to tender.
(ii) Where class A-1 land is proposed to be allotted to the contractor no licence fee
is to be charged from the contractor. In other types of land a nominal licence fee of
Re1/- (Rupees one only) shall be charged and inserted in the Special Condition.
(c) Availability of Land for Accommodation of Labour, Canteen, Fabricating

Workshop, etc.
State whether land will be allotted free or whether licence fee shall be charged. Special
Condition to be included in the tender is given at specimen ‘C’ hereunder.
Notes : (i) Land for accommodation of labour, canteen, fabricating workshop etc, where
considered necessary in the interest of the State, will have to be arranged at the pre-
tender stage and clear indication in this regard stipulated in the Special Conditions.
(ii) Where class A-1 land is proposed to be allotted to the contractor no licence fee
is to be charged from the contractor. In other types of land a nominal licence fee of
Rs 1/- (Rupee one only) shall be charged and inserted in the Special Conditions.
A. Specimen Special Condition on Allotment of Quarry on Defence Land to

Contractor for Extracting Stone, Sand etc for Works [see Para 6a (ii)] .
“(Reference Condition 14 of IAFW—2249)

(a) The location and exact boundary of the quarry proposed to be allotted has been
marked on the site plan bearing drawing No ……… forming part of the tender documents.
(b) The contractor is required to develop the face of the quarry by removing any
overburden and make the preliminary arrangements such as approach road (s) to the
quarry at his own cost.
(c) The materials* extracted from the quarry will be used solely for the purposes of
execution of the work under the contract and that the contractor will not be allowed to
remove any extra material from the quarry for any other purpose.
(d) In the event of the contractor quarrying materials in excess of his requirements for
the work under the contract he shall have no claim to payment of any compensation on
account of any expenditure incurred in quarrying such excessive materials and the excess
materials brought at site (s) shall become the property of the Government.
195
(e) £(i) Royalty shall be charged from the contractor for extracting stone/sand @ Rs
………cubic metre.
£(ii) No royalty shall be charged from the contractor for extracting materials.
(f) On completion of the works, the quarry site and approach road (s) shall be left clean
and tidy to the entire satisfaction of the Engineer-in-Charge and at the contractor’s
expense.”
*Materials to be named.
£Delete whichever is not applicable.
Note : The executive must ensure that the contractor strictly complies with the Special
Condition and does not misappropriate the material extracted from the quarry for purposes
other than those for the contract in question.
B. Specimen Special Condition for Allotment of Land for Storage of Materials

(including Temporary Sheds) [see Para 6 (b)] .
“(Reference Condition 24 of IAFW—2249)

The contractor shall be permitted to store his materials including erecting temporary
sheds therefore at the areas of land marked on the site plan and he shall pay a licence fee
of Rs………. Per year or part thereof in respect of each and every separate area of land
allotted to him.”
C. Specimen Special Condition for Allotment of Land for Accommodation of Labour,

Canteen, Fabricating Workshop etc [see Para 6(c) ] .
“(Reference Conditions 24 of IAFW—2249)

The contractor shall be permitted to erect his labour camp, temporary workshops
and the like at the area of land marked for this purpose on the site plan and he shall pay a
licence fee Rs…….. per year of part thereof in respect of each and every separate area of
land allotted to him.”
196
Annexure VI
Specimen Special Condition for Guarantee in Respect of Anti-termite

Treatment
1. Should the GE, any time during construction or reconstruction or prior to the
expiration of period of ten years after the anti-termite treatment has been completed as
per contract, finds that the buildings have been infested with termite, the contractor shall
on demand in writing by the GE specifying the building(s) complained of, notwithstanding
that the same may have been inadvertently passed, certified and paid for, forthwith
undertake to carry out such treatment as may be necessary to render the said building(s)
free from termite infestation at his own expense for a period of ten years from the certified
date of completion and in the event of his failing to do so within a period to be specified
by the GE in his demand aforesaid, the GE may undertake such treatment at the risk
and expense in all respects of the contractor. The liability of the contractor under this
condition shall not extend beyond the period of ten years from the certified date of
completion unless the GE had previously given notice to the contractor.
2. The Security Deposit referred to be held from the contractor against the guarantee
period for anti-termite treatment shall be calculated as per the scale laid down for
calculating Earnest Money Deposit enhanced by 25% on the amount of ant equal to 10
% of the cost of anti termite treatment at contract rates for the buildings for which
treatment is to be done and may be refunded to the contractor after the expiration of the
period of ten years from the certified date of completion by the GE provided always that
the contractor shall first have been paid the final bill and have rendered a No Demand
Certificate (IAFA-451). The facility of furnishing fixed deposit receipt in lieu of the sum to
be retained as security may be accepted.
3. Condition 10, 46 & 68 of the General Conditions of Contracts (IAFW-2249) shall be

deemed to be amended to the extent mentioned above.
4. In addition to the above special conditions, following points shall also be highlighted
while framing the special condition/particular specifications:-
(a) It shall be ensured that the agency executing the work procures the chemicals
only from the manufacturers or their authorised agents/dealers.
(b) Chemicals brought to site only in sealed container bearing ISI certification
marks shall be permitted to be used.
(c) Chemicals shall be stored carefully at site. Seals of containers shall be broken
only in the presence of the Engineer-in-Charge .Empty containers shall be removed
off the site promptly. If on any particular day the contents of one full container could
not be used in the work, the container shall be sealed at the end of the day in the
presence of the Engineer-in-Charge and opened when required in the presence of
the Engineer -in -Charge.
(d) The Engineer-in-Charge shall ensure that paid vouchers are produced by the
agency executing the work for the full quantity of the chemical required and brought
to the site and a record of such vouchers, dully defaced, shall be kept by the
Engineer-in- Charge.
197
(e) Tests of the chemical brought by the agency executing the work may be
carried out in a recognised laboratory or test house at the discretion of the GE to
satisfy that spurious materials are not being used.
(f) The EIC shall work out, on his own, the total requirements of chemicals
required for the work as per specifications and ensure that full quantity is brought to
site and used in the work. For this purpose, entries shall be made in the
Measurement Book (not for payment-not to be abstracted) indicating the brand
name, quantity brought etc and signed by EIC as well as representative of the
agency executing the work.
(g) Work of anti termite treatment shall be done through an approved specialized
agency holding valid licence as per clause 13 of Insecticides Act 1968 as amended
from time to time. Persons employed to carry out anti termite treatment shall be
qualified as per Rule 10 promulgated under Insecticides Rules 1971 as amended
from time to time.
(h) GEs/CsWE during their inspection of the work shall specifically examine the
Anti-termite treatment.
(j) A copy of IS 6313 (Part-II) shall be available at site with every Engineer-in-
Charge who gets anti-termite treatment works executed.
198
Annexure VII
Specimen Special Condition on Output of Road Rollers
Notes :
1. It has been observed during technical check of final bills that the output of road
rollers varies very widely and in some cases recovery effected was much less than that
worked out of the basis of reasonable output per day of 8 hours work of the road rollers.
The output of road rollers may vary depending on various factors such as the size and type
of roller, quantity and grading of metal, and the like but it is considered that variation in the
output of road rollers due to various factors cannot be very large. With a view to ensuring
that consolidation is done properly and adequately by contractors, Special Conditions as
given below will be provided in tenders where use of road roller is involved.
2. It will be observed from Para 1 of Condition 15 of General Conditions of Contracts

(IAFW-2249) that the option to hire T&P from the Department rests with the contractor. It
is therefore necessary that the market rate for hire of road roller is inserted in the tender
documents by the officer issuing the tender. The rate of hire shall be ascertained carefully.
3. In para 3 of the Special Condition given hereunder a number of items which need
rolling are included. While incorporating this condition in tenders, only the items involved in
the work will be retained. Any additional item of work not covered may be included subject
to prior approval of the Zonal Chief Engineer as to the output per day of road roller.
4. It is considered that provision of this Special Condition will curb the tendency on the
part of contractors to economise on the use of rollers with the object of reducing recovery
of hire charges and will improve the quantity of work considerably.
(Refer Condition 15 of IAFW -2249)
1. Where road rollers are hired by the Department to contractors, a log book for each
road roller shall be maintained by the Department recording hours of working of the road
roller. However, when the contractor procures road rollers from sources other than the
Department, a log book for each road roller shall be maintained by him for recording hours
of working of the road roller. Entries in the log book shall be signed by the contractor or his
authorised representative and the Engineer-in-Charge.
2. To ensure proper consolidation, roller must work for at least the number of days
assessed on the basis of output given hereunder. If the roller has not worked for the number
of days so assessed, recovery shall be effected from the contractor for the number of days
falling short of the days so assessed on the basis of output stipulated. The recovery shall
be effected as under:-
(a) Where a road roller is hired out only by the Department to the contractor, at
rates given in Schedule ‘C’.
(b) Where a road roller is hired by the Contractor from sources other than the
department at Rs …... (Rate to be inserted as stated in Note 2 above) per working
day of 8 hours.
(c) Where a road roller is hired by the contractor from the Department as also
from sources other than the Department, at higher of the two rates given in Schedule
‘C’ of contract and Para 2 (b) above.
199
3. The above provision shall, however, not absolve the contractor of his responsibility of
properly consolidating surfaces as required under the provisions of the Contract.
Output per Day

of 8 Hour
Work(Square
Metres)
(i) Consolidation of formation surfaces/subgrade 1850
(ii) Consolidation of stone soling 23cm thick with 8 to 10 Tonne 518
Roller
(iii) --Ditto—15cm thick –Ditto--- 800
(iv) Consolidation of water bound macadam (stone metal) 11cm 248
spread thickness including spreading and consolidation with
binding materials
(v) --Ditto-7.5 Cm—Ditto-- 372
(vi) Consolidation of single coat surface dressing 774
(vii) --Ditto—two coat surface dressing 558
(viii) Consolidation of 2.50 cm thick premix carpet including seal coat. 600
(ix) Consolidation of 2 cm thick premix carpet including seal coat. 744
(x) Consolidation of bituminous mixture 2 parts of broken stone 372
metal and one part of sand and bitumen, consolidated thickness
4 cm.
200
Annexure VIII
Specimen Special Condition on Employment of Female Labour in
Factories/Depot/Park etc
Female Labour. If the contractor desires to employ female labour on works to be carried
out inside the area of a Factory, Depot, Park, etc and a Female Searcher is not borne on
the authorised strength of the Factory, Depot, Park etc. at the time of submission of the
tender, he shall be deemed to have allowed in his tender for pay and allowances etc for a
Female Searcher (Group D) calculated for the period female labour is employed by him
inside that area. If more than one contractor employs female labour during any month and
Female Searcher (s) has/have to be employed in addition to the authorised strength of the
Factory, Depot, Park etc the salary and allowances paid to the additional Female Searcher
(s) shall be distributed on an equitable basis among the contractors employing female
labour taking into consideration the values and periods of completion of their contracts. The
GE’s decision in regard to the amount recoverable on this account from any contractor shall
be final and binding.
Annexure IX
Specimen Special Condition for Works inside Military Farms

The contractor will not make use of bullock/animal transport for the transport of building
materials etc and shall employ solely mechanical transport for this purpose.
Annexure X
Specimen Special Condition for Works to be Executed in Operational/Border Areas

1. Contractor's plant(s)/equipment(s) at site:-
The Contractor shall furnish to the Engineer-in-Charge every morning a distribution return
of his plant(s)/equipment(s) on the site of work stating the following particulars :-
(a) Particulars of plant(s)/equipment(s), its make, manufacture No, Model No,

registration No, if any, capacity, year of manufacture, year of purchase etc.
(b) Total No (quantity) on site of works.
(c) Location, indicating No (quantity) at each location on the site of works.
(d) Purchase value on the date of purchase. For the purpose of this condition,
plant/equipment shall include vehicles i e trucks and lorries but neither the
workmen’s tools nor any manually operated tools/equipment. The Engineer-in-
Charge shall record the particulars supplied by the contractor in the Works Diary
and send the return to the GE for record in his office.
2 Loss or damage on account of enemy action

If as a result of enemy action, the contractor suffers any loss or damage, the
Government shall reimburse to the contractor such loss or damage to the extent and
in the manner provided hereinafter :
(a) The loss suffered by him on account of any damage or destruction of his
201
plant/equipment (as defined in Special Condition (1) above) or materials or any part
of parts thereof. (The amount of loss assessed by the Accepting Officer or the CWE
in case of contracts by GE, on this account shall be final and binding).
(b) The compensation paid by him under any law for the time being in force, to
any workmen employed by him for any injury caused to him or to the workmen’s
legal successors for loss of the workmen’s life.
(c) Payment of compensation for loss or damage to any work or part of work
carried out. The amount of compensation shall be determined in accordance with
Condition 48 of General Conditions of Contracts (IAFW-2249).
(d) No reimbursement shall be made nor shall any compensation be payable

under the above provision unless the contractor had taken Air Defence precautions
ordered in writing by the GE/OC concerned or in absence of such orders, reasonable
precautions. Neither reimbursement shall be payable nor any compensation be
payable for any plant/equipment or materials not lying on site of work at the time of
enemy action.
202
Annexure XI
Special Condition for Reimbursement/Refund on Variation in Prices
1 The following points shall be noted particularly :-
(a) The periodicity for working out the variations will be three months. The first
variation would be for the period of three months reckoned from the bid submission
end date.
(b) Wholesale Price Index for all commodities are published every month. Thus
the Index applicable for any day shall be the one applicable for the preceding month.
(c) As the adjustments are to be made on a quarterly basis commencing from

the bid submission end date, RARs shall be timed in such a manner that the gross
value of work done upto the corresponding date is readily available.
(d) The monthly Index numbers of wholesale prices for all commodities published
by the Economic Advisor to the Government of India, in the first instance, are
generally termed ‘Provisional’. Final Index Numbers for the corresponding month
are published subsequently, say after an interval of 6 to 8 weeks or so. It shall be
ensured that the variations are worked out based on the ‘Final’ Index numbers.
These are available on the website http://eaindustry.nic.in.
(e) Latest base years of indices shall be specified in these conditions as

applicable at the time of tendering.
(f) The term “fresh law or statutory rule or order” used in the conditions stated
hereinafter includes not only Central law or Central rule or order but also the State
law or State rule or order.
(g) Refer Condition 63 of the General Conditions of Contracts (IAFW-2249)/

Reimbursement/Refund on Variation of Prices. The Condition 63 of the General
Conditions of Contracts shall be deemed to be modified to the extent mentioned
hereinafter. Increase or decrease in prices of materials and fuel shall be adjusted
on the basis stipulated hereinafter irrespective of the actual variation in prices (to
the contractor).
Reimbursement/Refund on Variation in Prices of Materials and Fuel
(a) Materials . The materials cost component including the cost of materials issued
under Schedule ‘B’ in accordance with Condition 10 (B) of IAFW-2249, for the contract as
a whole shall be taken as KM % of the value of works executed under the contract .
Variation in prices of materials shall be worked out by applying the following formula :
W1 – W0
EM = (VM2 – VM1) X –––––––
W0
Wherein,
(KM X VG)
VM = –––––––– + (VS – VB)
100
203
EM = Variation in price of material to be adjusted.
KM = Constant representing the percentage cost of materials including schedule ‘B’

materials as compared to the total value of work under the contract as a whole. The value
of KM for his work shall be ………… (……..in words) only. [Refer to the table given below
in this connection].
VG = Gross value of work done at contract rates upto the last date of period of reckoning.
VS = Value of all materials lying at site for incorporation in the work including materials
issued under Schedule ‘B' and including materials brought and paid or payable to
contractor under Prime Cost Sum and /or Star Rate (s).
VB = Value of all materials (out of VG and VS) issued under Schedule ‘B’ plus value of all
materials brought and paid or payable to the contractor under Prime Cost Sum and/or Star
Rate (s).
W1 = Wholesale price index for all commodities (Base year 2011-12=100) published by
Economic Advisor to the Government of India, as on the date of commencement of the
period of reckoning. In case the original contract period is extended under Condition 11 of
IAFW-2249, the price index as applicable on the date of commencement of the last period
of reckoning before the original completion date(s) (phase wise except where phasing has
been done only for sample quarter/block) shall only be applicable during the extended
period. If phasing has been done for only sample quarter/sample block, the price
index as applicable on the date of commencement of the last reckoning period before the
original completion date of the project as a whole shall only be applicable during the
extended period.
W0 = As for W1 but the index as on the bid submission end date.
VM2 = Value of material upto the last due date of the period of reckoning for which price
variation adjustable as worked out as per formula for VM .
VM1 = do but as on date of the immediate preceding period of reckoning.
(b) Fuel :- Fuel cost component for the contract as a whole shall be taken as KP% of the
value of work.
(KP X VG1) F1 – F0
EP = ––––––––– X ––––––
100 F0
Where, EP = Variation in price of fuel to be adjusted.
KP = Constant representing the percentage cost of fuel compared to the total value of
work under the contract as a whole. The value of KP for this work shall be ……….(………in
words ) only.[Refer to the table given below].
VG1 = Gross value of work done during the period of reckoning using values of VG for
calculating VM1 and VM2 under para (a) above.
F1 = wholesale price index for sub group for fuel, power, light & lubricants (Base year
2011-12 =100) published by Economic Adviser to Government of India as on the date of
commencement of the period of reckoning.
F0 = As for F1 but the index as on the bid submission end date.

204
Notes:
1. No adjustment, whatsoever, due to variation in prices of materials and fuel on
account of coming into force of any fresh law or statutory rule or order as provided in
Condition 63 of IAFW-2249 or otherwise than provided in this condition shall be made.
2. Material. No adjustment in prices shall be made for any work done with
materials brought at site after the stipulated date of completion of the work under contract
except as contemplated under definition of W1.
3. Fuel. No adjustment in prices shall be made for any work done with material brought
at site after the due date of completion or extended date of completion on account of
extension of time granted under Condition 11 of IAFW-2249 for the work under the contract.
4. Periodicity of working out the variations will be three months. The last calculation
shall however be done for the value of work at contract rates and materials lying at site for
incorporation in the work as on date of completion or extension thereof as mentioned in
note 2 and 3 above. Valuation of RARs is to be timed in such a manner that the relevant
date required for quarterly calculation under this condition is available from RARs. Amount
payable relevant to work done and materials collected in any quarter will be worked out
after firm wholesale price indices for the relevant quarter are available. Once the amount
adjustable for any quarter is worked out, the same shall be adjusted as and along with
advance on account payment under Condition 64 of IAFW-2249 in the subsequent RAR(s).
5. Any dispute arising out of interpretation or application of this Special Condition shall
be referred to the Accepting Officer whose decision shall be final and binding.
6. For purposes of calculation of retention money, liquidated damages, GST on works

contracts, deduction of income tax at source and recovery of water charges (in case of
unmetered supply) the value of contract as revised by the above price variation will be
taken into account.
7. In cases, where value of VM2–VM1 works out to minus on account of higher utilization
of schedule B stores (ie value of Schedule B stores under contract as a whole is higher
than KM value) and the reimbursement on account of variation in prices of materials works
out to be negative in spite of the Wholesale Price Index for all commodities published by
Economic Adviser to Government of India going up from W0, reimbursement on account of
variation in prices of materials shall be treated as “Nil”.
Table for values of KM, KL and KP .
Sr Type of Work Material Labou Fue T&P

l (KM) r (KL) l and Tpt
N (KP) at Site
o
1. Married Accommodation 60% 20% 1.5 3.5%
%
2. OTM Accommodation 60% 20% 1.5 3.5%
%
3. Married Accommodation Multi Storeyed 58% 21% 2% 4%
4. Factory type buildings involving steel 58% 22% 1% 4%
superstructure
5. Adm Blocks, Officers Messes, Institutes, 60% 20% 1.5 3.5%
Auditorium, Hospital Buildings etc. %
205
6. RCC OH Reservoir 51% 29% 2% 3%

7. Piling Works 51% 25% 3% 6%
8. Airfield Pavements 59% 17% 3% 6%
9. Road Work not involving substantial earth 57% 21% 2% 5%
work
10 Central Sewage Disposal plants, Water 65% 18% 0.5 1.5%
. purification plants etc. %
11 Electrification Works. 70% 13.5% 0.5 1%
. %
12 Central Air-conditioning Works 70% 13.5% 0.5 1%
. %
Note : While indicating values of KM, KL, & KP in Special Conditions, the values shall be
indicated without “%” as a suffix since 100 has already been indicated as divisor in the
escalation formula.
206
Annexure XII
Special Condition for Work of Lift Installation
1 Price Variation. The price quoted shall be deemed to be based on the cost of raw
materials, components and labour as on the bid submission end date of tender and the
same shall be deemed to be related to Whole Sale Price Index for Metal Products and all
India Average Consumer Price Index Number for Industrial Workers (General Index) as
specified below. In case of any variation in these index numbers, the price shall be subject
to adjustment up or down in accordance with the following formula:-
P0 55MP 15 W0(D) 15 W0(I)

P = ––– 15 + –––– + –––––––– + –––––––
100 MP0 W0 W0
Wherein,
P = Total amount payable i.e. amount of contract as adjusted including variation in prices
in according to the above price variation formula.
P0 = Amount of Contract as accepted.
MP0 = Wholesale Price Index Number for Metal Products as published by the Office of the
Economic Advisor, Ministry of Industry, Government of India (base year 2011-12=100) as
on Bid Submission End Date.
W0 = All India Average Consumer Price Index Number for industrial Workers (Base Year
2001=100) (General Index ), as published by the Labour Bureau, Ministry of Labour,
Govt. of India. The above index numbers ie MP0 and W0 are those published by
Government as prevailing on the first working day of the calendar month three months prior
to the bid submission end date e.g. if the bid submission end date of tenders is in June
2019, then the applicable index MP0, will be as prevailing on the first Saturday of March
2019 and W0 All India Average Consumer Price Index Number would be that for the month
of March 2019.
MP = Wholesale Price Index Number for Metal products as published by the office of
Economic Advisor, Ministry of Industry, Government of India, (base year 2011-12=100).
The applicable Wholesale Price Index Number for Metal Products would be that prevailing
on the 1st Saturday of the month covering the date three months prior to the date of delivery,
of the first lot of manufactured materials for each elevator separately.
W0 (D) = All India Average Consumer Price Index Number for industrial workers (Base Year
2001=100) (General Index) as published by the Labour Bureau, Ministry of Labour,
Government of India. Applicable all India Average Consumer Price Index Number for
Industrial Workers as published by the Labour Bureau, Ministry of Labour, Government of
India, would be for the month, three months prior to the date of delivery of the first lot of
manufactured materials.
207
W0 (I) = All India Average Consumer Price index Number for industrial Workers (Base
2001=100) (General Index) as published by the Labour Bureau, Ministry of Labour,
Government of India. The applicable All India, Average Consumer Price Index number for
Industrial Workers as published by Labour Bureau Ministry of Labour, Government of India,
would be for the month, three months prior to the date of completion of installation eg if the
date of delivery in terms of clause given below falls in December 2019 the applicable index
‘MP’ would be as prevailing on the week ending 1st Saturday of September, 2019, and 'W0
(D)' will be for the month of September 2019. If the date of completion of each
elevator/installation is June 2020 the applicable 'W0 (I)' will be for the month of March 2020.
(a) The date of delivery shall be the date on which the first lot of manufactured
materials for each elevator is notified as being ready for inspection, dispatch (in the
absence of such notification, the date of manufacturer’s dispatch note shall be
considered as the date of delivery).
(b) The date of completion of each elevator installation shall be the date on which
the work is certified as completed and is available for inspection (in the absence of
such notification the date of manufacturer’s note intimating such completion shall be
considered as the crucial date) or the contracted completion date for such installation
or part of installation (including any agreed extension thereto), whichever shall be
earlier.
(c) The Index number for metal products is published weekly, but if there are any
changes, the same are incorporated in the issue appearing in the following week. For
the purpose of this Price Variation Clause the final Index figures shall apply.?
(d) No adjustment, whatsoever, due to variation in prices on account of coming

into force of any fresh law or statutory rule or order as provided in Condition 63 of
IAFW-2249 or otherwise than provided in this condition shall be made.
208
Annexure XIII
Reimbursement/Refund on Variation in Prices–Wages of Labour
Refer Condition 63 of the General Conditions of Contracts (IAFW-2249)/

Reimbursement/Refund on Variation of Prices. The Condition 63 of the General Conditions
of Contracts shall be deemed to be modified to the extent mentioned hereinafter. Increase
or decrease in prices consequent on variation in wages of labour shall be adjusted on the
basis stipulated hereinafter irrespective of the actual variation in prices- wages of labour to
the contractor.
Labour
The labour component for the work under the contract as whole shall be taken as
KL of the value of the work executed under the contract. Variation in labour wages shall be
worked out by applying the following formula :
KL L1 – L0
EL = ––– x VG1 x ––––––
100 L0
Wherein,
EL = Variation in wages of Labour reimbursement to be made to the Contractor or refund
to be made by the Contractor.
KL = Constant representing the percentage cost of labour element as compared to the

total value of the work under the contract as a whole. The value of KL for the work shall be
………..(in words………)
VG1 = Gross value of work done at contract rates during the period of reckoning less value
of work paid or payable to the Contractor based on actual cost (eg star rate(s), work
executed under prime cost sum etc ) during the period of reckoning.
L1 = Minimum wage in rupees of an unskilled adult male mazdoor as fixed under any law,
Statutory rule or order as on the date of commencement of the period of reckoning.
L0 = As for L1 but the minimum wage in rupees of an unskilled adult male mazdoor as on
the bid submission end date. If labour wage on the bid submission end date is increased
afterward with retrospective effect, value of L0 shall be fixed keeping in view the following
aspects:-
(a) If the increase/decrease in wages of labour are made known to the public
by any means of media before the bid submission end date but the same is officially
notified thereafter giving retrospective effect, the value of “L0” shall be as per
notification though made subsequently.
(b) If a net-wage comprises a fixed basic wage and the living allowance
revised from time to time based on Consumer Price Index (CPI) and increased CPI
is made known to the public by any means before the bid submission end date, the
“L0” will be revised wage corresponding to revised CPI, though the formal
notification for the net-wage (considering the revised living allowance corresponding
to revised CPI) is made subsequent to bid submission end date.
209
(c) In case the labour enforcement officer makes the announcement before the
bid submission end date but Gazette Notification is made subsequently making
wages applicable with retrospective effect, the value of “L0” shall be as per Gazette
Notification though subsequently made.
(d) If the increase/decrease in wages of labour is notified/announced subsequent
to the bid submission end date with retrospective effect without making the same
publicly known by means of publicity/media prior to the bid submission end date,
then the value of “L0” shall be as per wage known at the time of bid submission end
date.
Notes
1. The contractor shall within a reasonable time of his becoming aware of any alteration
to the payment of wages of labour consequent on fixation of minimum wages under any
law, statutory rule or order, give written notice thereof to the GE stating that the same is
given pursuant to this Special Condition together with all information relating thereto which
he may be in a position to supply.
2. Irrespective of the variation in minimum wages for any category of labour, for the
purpose of adjustment under this Special Condition, the variation in minimum wage fixed
under any law, statutory rule or order for an unskilled adult male mazdoor, if any, shall only
form the basis.
3. Periodicity of working out the variation in wages of labour will be three months
commencing from the bid submission end date. The last adjustment for variation in wages
of labour shall however, be done for the period upto the date of completion or extended
date of completion. Valuation of price adjustment due to increase/decrease in minimum
wages under any law, statutory rule or order for the purpose of making
reimbursement/refund in RARs, will be timed in such manner that relevant data required
for quarterly calculation under this Special Condition is available from the RARs. The first
price adjustment in respect of variation in wages of labour will be worked out for the relevant
quarter during which alteration to the wages of labour took place. For implementing this
provision, the period of reckoning in such quarters will have to be divided into two periods
ie the first period up to the RAR payable immediately after the date of variation and the
other up to the end of the quarter. Value of L1 at the beginning of the other period shall be
the altered wage. If there is more than one change in wages in a quarter, there will be more
than two periods of reckoning on a similar basis. Amount payable relevant to work done for
any quarter will be worked out after the minimum wage of an unskilled adult male mazdoor
as fixed under any law, statutory rule or order for the relevant quarter is available. Once
the amount adjustable for any quarter is worked out, the same shall be adjusted in
subsequent RAR as “advance on account” adjustments along with adjustment for
‘Materials’ and ‘Fuel’.
4. No adjustment in prices shall be made for any work done after the due date of
completion or extended date of completion on account of extension of time granted under
Condition 11 of IAFW-2249 (whichever is later) for the work under the contract.
5. No adjustment, whatsoever due to variation in wages of labour on account of coming
into force of any fresh law or statutory rule or order as provided in Condition 63 of IAFW-
2249 or otherwise, than provided in this Special Condition shall be made.
6. Any dispute arising out of interpretation or application of this Special condition shall
be referred to the Accepting Officer whose decision shall be final and binding.
7. For purposes of calculation of retention money, liquidated damages, GST on works
contract, deduction of income tax at source and recovery of water charges (in case of
unmetered supply) the value of contract as revised by the above price variation will be
taken into account.
210
Annexure XIV
Advances on Account against Materials
1. Government of India, has accorded sanction for inclusion of a Special Condition

providing for payment of full value of materials (fittings and fixtures and other manufactured
items brought to site which do not lose their identity after incorporation in the work) as
advance on account against Bank Guarantee. This Special Condition is to be incorporated
only in tenders for works whose estimated cost at market rates exceeds Rs 50 Lakhs.
2. Accepting officers are required to list out such items applicable in each tender before
issue. The intention is that contractors should be able to procure in advance, fittings and
fixtures and such manufactured items, though those may be required for incorporation in
the work only at a late stage, thus relieving Government of the liability of reimbursement
due to escalation of prices in terms of the Contract. Materials like bricks, precast concrete
articles etc., though might come under the category of manufactured items shall not be
included in the list, since they lose their identity after incorporation in the work.
Special Condition for Inclusion in Tenders whose Estimated Cost at Market Rate
exceeds Rs 50 Lakhs
Refer Condition 64 of IAFW-2249 Advances on Account. Add the following in continuation

of Para 8.
1. Provided further, the Contractor may be paid advance on account to the full value
of the under mentioned materials*only, brought on the site, on his furnishing Guarantee
Bond (s) from a Schedule Bank for the amount of the retention money which should
otherwise be recoverable from him under contract :
*Accepting officer to list out the materials before the issue of tenders. The materials
shall be confined to “fittings and fixtures'' and other manufactured items which do not lose
their identity.
(a)
(b)
(c)
(d)
2. The Bank Guarantee Bond (s) shall be executed for a period and on a form as
directed by the Accepting Officer. The Contractor shall further arrange to extend the period
of Guarantee Bond(s) if and when necessary, as directed by the Accepting Officer or shall
furnish fresh Guarantee Bond(s) of similar value in lieu”.
211
Annexure XV
General Conditions of Contracts (IAFW-2249-1989 print)
For
* Lump Sum Contracts (IAFW-2159)
* Term Contracts for Artificers Works (IAFW -1821)
* Measurement Contracts (IAFW-1779 and 1779-A)
* Retain as applicable.
A copy of the General Conditions of Contracts) (IAFW-2249-1989 Print) with Errata 1 to

………… and Amendments No 1 to …………. has been supplied to me/us and is in my/our
possession. I/we have read and understood the provisions contained in the aforesaid
General Conditions of Contracts before submission of this tender and I/We agree that I/We
shall abide by the terms and conditions therefore, as modified, if any, elsewhere in these
tender documents.
It is hereby further agreed and declared by me/us that the General Conditions of
Contracts (IAFW-2249-1989 Print) including Condition 70 thereof pertaining to settlement
of disputes by arbitration, containing 33 Pages (Serial Page No. …………to ………….),
with Errata 1 to …………..and Amendments No 1 to ………………. forms part of these
tender documents.
(for Accepting Officer) (Signature of Contractor)
Dated …………….... Dated ………………….

212
Annexure XVI
Reimbursement / Refund on Variation in Taxes Directly Related to Contract Value
(a) The rates quoted by the Contractor shall be deemed to be inclusive of all taxes
(including GST on materials, GST on Works Contracts, Labour welfare cess/tax etc.),
duties, Royalties, Octroi & other levies payable under the respective statutes. No
reimbursement/refund for variation in rates of taxes, duties, Royalties, Octroi & other levies
and/or imposition/abolition of any new/existing taxes, duties, Royalties, Octroi & other
levies shall be made except as provided in sub para (b)(i) here-in-below.
(b) (i) The taxes which are levied by Government at certain percentage rates of
Contract Sum/Amount shall be termed as “taxes directly related to Contract value”
such as GST on materials, GST on Works Contracts, Labour welfare cess/tax and
the like but excluding Income tax. The tendered rates shall be deemed to be
inclusive of all “taxes directly related to Contract value” with existing percentage
rates prevailing on the bid submission end date. Any increase in percentage rates
of “taxes directly related to Contract value’ with reference to prevailing rates on the
bid submission end date shall be reimbursed to the Contractor and any decrease in
percentage rates of “taxes directly related to Contract value” with reference to
prevailing rates on the bid submission end date shall be refunded by the Contractor
to the Govt/deducted by the Government from any payments due to the Contractor.
Similarly imposition of any new “taxes directly related to Contract value” after the bid
submission end date shall be reimbursed to the contractor and abolition of any
“taxes directly related to Contract value” prevailing on the bid submission end date
shall be refunded by the Contractor to the Govt/deducted by the Government from
the payments due to the Contractor.
(ii) The Contractor shall within a reasonable time of his becoming aware of
variation in percentage rates and/or imposition of any further “taxes directly related
to Contract value” give written notice thereof to the GE stating that the same is given
pursuant to this Special Condition, together with all information relating thereto
which he may be in a position to supply. The Contractors shall also submit
documentary proof/information as the GE may require.
(iii) The Contractor shall, for the purpose of this condition, keep such books of
account and other documents as are necessary and shall allow inspection of the
same by a duly authorized representative of Government, and shall further, at the
request of the GE furnish, verified in such a manner as the GE may require any
documents so kept and such other information as the GE may require.
(iv) Reimbursement for increase in percentage rates/imposition of “taxes directly

related to contract value” shall be made only if Contractor necessarily and properly
pays additional “taxes directly related to contract value” to the Government, without
getting the same adjusted against any other tax liability or without getting the same
refunded from the concerned Government Authority and submits documentary proof
for the same as the GE may require.
213
Annexure XVII
Mobilisation Advance Against Non-revocable Bank Guarantee
(a) Interest bearing mobilisation advance of Rs….* (in figures)………(Rs..* (in
words)……….), shall be given to the Contractor if he so desires and on his specific written
request , in two instalment, on production of a non-revocable Bank Guarantee(s), for
amount at least 110% of the advance on an approved form from a Nationalized/Scheduled
Bank. The Bank Guarantee(s) shall indemnify the Government against non-refund of
mobilisation advance and also against default on Contractor’s part in performance of the
Contract. The rate of interest shall be …….*……. % per annum, simple interest.
* to be inserted by the Accepting Officer depending upon the prevailing rate at the time of
issue of tender.
(b) The first instalment of mobilisation advance shall be 50% of advance and shall be
paid to Contractor within 30 days of acceptance of Bank Guarantee (s) of 110% of the same
amount furnished by him, by the Accepting Officer. The second instalment of the balance
amount shall be paid to the Contractor after 6 month of payment of the first instalment
provided Bank Guarantee(s) for corresponding amount increased by 10% has/have been
furnished by the Contractor at least one month in advance and accepted by the Accepting
Officer.
(c) The total amount of mobilisation advance, together with interest shall be recovered
from the payments made to the contractor against 'Advance on Account', under condition
64 of IAFW-2249, MES General Conditions of Contracts.
(d) The amount of mobilization advance shall be recovered in monthly**fortnightly
instalments as stipulated hereinafter.
**Delete whichever is inapplicable.
(i) Against the first instalment of mobilisation advance, the first instalment of
recovery shall be effected from the ‘Advance on Account’ payment made
immediately following the payment of mobilisation advance and the last instalment
of recovery shall be effected during the third/fourth month***preceding the month in
which the due date of completion stipulated in the first Work Order falls. The various
instalments of recovery shall be of equal amounts.
(ii) Against the second instalment of mobilisation advance of Rs.……..Lakhs, the
first instalment of recovery shall be effected from the ‘Advance on Account’ payment
made immediately following the payment of mobilization advance of Rs……..Lakhs
and the last instalment of recovery shall be effected during the third/fourth month***
preceding the month in which the due date of completion stipulated in the first work
Order falls. The various instalments of recovery shall be of equal amounts. The
recovery in instalments of this mobilization advance of Rs…..Lakhs shall be in
addition to the recovery in instalments of the mobilization advance vide sub para d
(i) above (first instalment).
***Specify third month in respect of contract having a period of completion of 24
months or less and fourth month in respect of contract having a period of completion
exceeding 24 months.).
(e) The Contractor may furnish one Bank Guarantee or a number of Bank Guarantees
equal to number of instalments for recovery, each to match the quantum of recovery to be
effected from the ‘Advance on Account’. In case recovery is not possible to be effected
from any particular ‘ Advance on Account’ for reasons of non-submission of claim for
payment of ‘Advance on Account’ or for any other reasons whatsoever, the recovery due
shall be made by encasing the Bank Guarantee.
214
Annexure XVIII
Mobilisation Advance against Non-revocable Bank Guarantee in Works at
Andaman & Nicobar Group of Islands
(a) An interest free advance of 10% of contract amount shall be paid to contractor by
the department on production of Bank Guarantees vide (e) below on approved form from a
Nationalized/Scheduled Bank for the amount equal to 110% of the advance. The Bank
Guarantee(s) shall indemnify the Government against non-refund of Advance and also
against default on contractor's part in performance of contract.
(b) The first instalment of mobilisation advance shall be 50% of advance and shall be
paid to Contractor within 30 days of acceptance of Bank Guarantee (s) of 110% of the same
amount furnished by him, by the Accepting Officer. The second instalment of the balance
amount shall be paid to the Contractor after 6 month of payment of the first instalment
provided bank Guarantee (s) for corresponding amount increased by 10% has /have been
furnished by the Contractor, at least one month in advance and accepted by the Accepting
Officer.
(c) The total amount of mobilisation advance, together with interest shall be recovered
from the payments made to the contractor against “Advance on Account”, under condition
64 of IAFW-2249, MES General Conditions of Contracts.
(d) The amount of mobilisation advance shall be recovered in monthly**fortnightly
instalments as stipulated hereinafter.
**Delete whichever is inapplicable.
(i) Against the first instalment of mobilisation advance, the first instalment of
recovery shall be effected from the ‘Advance on Account’ payment made
immediately following the payment of mobilisation advance and the last instalment
of recovery shall be effected during the third/fourth month***preceding the month in
which the due date of completion stipulated in the first Work Order falls. The various
instalments of recovery shall be of equal amounts.
(ii) Against the second instalment of mobilisation advance of Rs……..Lakhs, the first
instalment of recovery shall be effected from the ‘Advance on Account’ payment
made immediately following the payment of mobilisation advance of Rs……..Lakhs
and the last instalment of recovery shall be effected during the third/fourth month***
preceding the month in which the due date of completion stipulated in the first Work
Order falls. The various instalments of recovery shall be of equal amounts. The
recovery in instalments of this mobilisation advance of Rs…..Lakhs shall be in
addition to the recovery in instalments of the mobilization advance (first instalment)
vide sub para d (i) above.
***Specify third month in respect of contract having a period of completion of 24

months or less and fourth month in respect of contract having a period of completion
exceeding 24 months.
(e) The Contractor may furnish one Bank Guarantee or a number of Bank Guarantees
equal to number of instalments for recovery, each to match the quantum of recovery to be
effected from the ‘Advance on Account’ . In case recovery is not possible to be effected
from any particular ‘ Advance on Account’ for reasons of non-submission of claim for
payment of ‘Advance on Account’ or for any other reasons whatsoever, the recovery due
shall be made by encashing the Bank Guarantee.
215
(f) Although interest fee advance shall be paid to the contractor by the department, but
if contract is terminated due to default of the contractor, the mobilisation advance shall be
deemed as interest bearing advance at an interest rate of ……….****………….% to be
compounded quarterly.
****To be stipulated depending upon prevailing rate at the time of issue of tender.
Annexure XIX
Qualified Tradesmen (Applicable for Works Costing Rupees One Crore or More)
In compliance with Condition 26 of IAFW-2249 (General Conditions of Contracts), the

contractor shall employ skilled /semi skilled tradesmen who are qualified and possessing
certificate in particular trade from Industrial Training Institute (ITI)/National Institute Of
Construction Management and Research (NICMAR)/National Academy of Construction
(NAC) Hyderabad and similar reputed and recognized Institutes by State/Central
Government, to execute the works of their respective trades. The number of such qualified
tradesmen shall not be less than 25% of total skilled/semi skilled tradesmen required in
each trade. The contractor shall submit a list of such tradesmen along with requisite
certificates to GE for verification and approval. Notwithstanding the approval of such
tradesmen by GE, if the tradesmen are found to have inadequate skill to execute the work
of their trades leading to unsatisfactory workmanship, the contractor shall remove such
tradesmen within a week after written notice to this effect by the GE and shall engage
other qualified tradesmen after prior approval of GE. GE’s decision whether a particular
tradesman possesses requisite qualification, skill and expertise commensurate with the
nature of work, shall be final and binding. No compensation whatsoever on this account
shall be admissible.
216
Annexure XX
Special Condition for Conciliation
(a) Refer condition 71 IAFW-2249. Consequent to enactment of the Arbitration and

Conciliation Act 1996 and with an objective to encourage settlement of disputes through
Conciliation, Special Condition for Conciliation in the MES contracts is to be included in the
contracts of value less than Rs 10 Crore.
(b) On finalization of conciliation proceedings, the settlement agreement shall be signed

by the Accepting Officer on behalf of Union of India after ascertaining the availability of
funds.
(c) In case the net total amount of payment involved in the settlement agreement
exceeds Rs 2.00 Lakhs, the Accepting Officer will consult the next higher authority and
obtain clearance before conclusion of conciliation proceedings.
(d) The amount of settlement agreement shall be treated as an agreed amount payable
under the contract and such payment shall be processed through a hand receipt.
(e) This provision is applicable to contracts of value less than Rs 10 Crores concluded
by Zonal CEs/CCEs.
(f) The following special condition shall be inserted in the tender documents
1. Scope of Conciliation. The scope of conciliation shall be restricted to the

following types of disputes with financial limits as indicated therein:-
(a) Disputes relating to levy of compensation for delay in completion-actual

amount of compensation.
(b) Disputes relating to technical examination of works.
(c) Disputes relating to interpretation of the provisions of the contract with

reference to their application to parties.
(d) Disputes relating to non return of Schedule ‘B’ stores over-issued to the
contractor.
(e) Any other dispute having fair chances of being resolved by conciliation and
considered fit to be referred to conciliation by the parties.
For item (b), (c), (d) and (e) as stated above, the financial limit shall be rupees two Lakhs
or one percent of the contract amount whichever is less for each item.
2. Commencement of Conciliation Proceedings .
(a) The party initiating conciliation shall send to the other party a written invitation
to conciliate, briefly identifying the subject of the dispute.
(b) Conciliation proceedings shall commence when the other party accepts in
writing the invitation to conciliate.
217
(c) If the other party rejects the invitation, there will be no conciliation
proceedings. If the party initiating conciliation does not receive a reply within 30 days
from the date on which he sends or within such other periods of time as specified in
the invitation, he may elect to treat this as a rejection of the invitation to conciliate
and if he so elects, he shall inform in writing the other party accordingly.
3. Number of Conciliators. There shall be a Sole Conciliator.
4. Appointment of Conciliator. All disputes brought out in Para 1 (a) to (e) above
shall be referred to the Sole Conciliator viz. Serving officer not below the rank of
Superintending Engineer/Superintending Engineer (QS&C) having degree in engineering
or equivalent or having passed final/direct final examination of Sub Division II of Institution
of Surveyors (India) to be appointed by the Engineer-in-Chief, Army Headquarters, New
Delhi or in his absence the officer officiating as Engineer-in-Chief or Director General of
Works if specifically delegated by the Engineer-in-Chief in writing.
5. Status of Effect of Settlement Agreement. The settlement agreement signed

by the parties as a result of conciliation proceedings shall have the same status and effect
as an arbitral award on agreed terms.
218
Annexure XXI
Dispute Resolution Board (DRB)
(Condition 71 of IAFW-2249 General Conditions of Contracts Refers)
(Applicable for all contracts of value equal to or more than Rs 10 Crores)
1. The Condition 71 of IAFW-2249 (as per Amdt No 40 of 2015) specifies that

procedure for constitution/appointment of DRB/Conciliator shall be as laid down in the
Contract Agreement. While standard clause for conciliation was already approved and
included in Manual on Contracts 2007 (Reprint 2012) at Annexure XX of Appendix 8.1, the
standard clause for DRB has now been formulated and approved by MoD and the same
shall be inserted as Special Condition in the tenders.
2. It shall be ensured by CEs Command that where Jt DG (Contracts) is the Chairman,

the Cols/Directors, nominated as members shall be from the sections other than contract
Section. A panel/list of such officers at Command level, who have proficiency and
experience in dealing with arbitration cases, should be prepared for nomination as
members to DRB as per their orders in the list serially and their nomination should be
assigned in a cyclic manner so that load is equally distributed. The panel should be
regularly revised keeping in view the moving in/out of Col/Director level officers in the
Command.
3. For ongoing contracts where amended Condition 71 of IAFW-2249 is applicable with

provision for DRB but where constitution/procedure for DRB has not been included in the
contracts, this standard DRB clause may be included through an amendment to the
contract.
4. The payment becoming due to the contractor on account of the findings of DRB
which have become final ie those which have not been objected to by either party within
30 days of such decisions, shall be paid out of funds available for the project only.
5. Special Condition shall be as under:-
DISPUTE RESOLUTION BOARD (DRB)
1. During execution of the works or after completion or after

determination/cancellation/termination of the contract, all disputes between the parties to
contract arising out of the contract (except those for which decision of Accepting Officer or
any other officer (CWE and/or GE) is expressed to be final and binding), including any
disagreement by either party with any action, inaction, opinion, instruction, certificate or
valuation by the Accepting Officer or his nominee, the matter in dispute shall, in the first
place be referred to the Dispute Resolution Board (DRB). In case of disagreement with the
decision of such DRB, any party may invoke arbitration as per contract conditions.
2. The constitution of the DRB shall be a three member body as under :-
(i) Chairman: Jt DG (C) of the concerned Command Chief Engineer/ADG. Where

Jt DG (C) is not posted in the Command/ADG office, any other Chief Engineer/ Brig
level Officer posted in CE Command/ADG shall be nominated by Command CE at
his sole discretion.
219
(ii) Member 1 : Col/Director level officers of command/ADG office or any other

Zonal CE to be nominated by Command CE/ADG.
(iii) Member 2 : Col/Director level officers of command/ADG office or any other

Zonal CE to be nominated by Command CE/ADG.
3. The name of chairman and members shall be notified by the Accepting Officer within
one month of the date of acceptance of contract.
4. Once the DRB is constituted the members and chairman shall disclose in writing
their neutrality and impartiality about any personal interest in the work.
5. The dispute shall be referred to the chairman of the DRB by the concerned party
after giving notice to the other party for invoking of this clause.
6. The DRB shall decide the dispute in accordance with the terms of the contract,
principle of natural justice, equity and fair play.
7. The DRB may fix oral hearing at a place, date and time as decided by the Chairman.
8. The requisite administrative support to the DRB shall be provided by the Accepting
Officer.
9. All the contract documents pertaining to the case shall be provided by the Accepting
Officer for reference by the DRB.
10. DRB shall give its decision on the disputes within three months of notice from any
party invoking the DRB clause. This period can be extended by one month with the consent
of the parties.
11. All the decisions given by the DRB shall be by majority and such decisions shall be
communicated in writing by the Chairman to the parties.
12. If the decision of the DRB is not to the satisfaction of either party or if the DRB fails
to give decision within the laid down time, either party shall indicate his reservations to the
other party within 30 days of such decision and to refer that dispute for arbitration within
the provisions of Condition 70 of IAFW-2249 General Conditions of Contract.
13. It shall be mandatory for the party invoking arbitration on any particular dispute to
have first exhausted the remedy provided under the DRB clause for that particular dispute.
14. The mandate of the DRB shall terminate on completion of one year from the date of
completion/ determination/cancellation/termination of the contract.
15. If any member or Chairman of the DRB is unable to function due to any reason
whatsoever, or he resigns his appointment, Chief Engineer Command/ADG as the case
may be, shall fill the vacancy so caused within 15 days of the occurrence of such vacancy.
16. Any dispute referred to the DRB and having been decided by the DRB and not
objected to by either party within 30 days shall attain finality and shall not be referable to
arbitration.
220
17. Accepting Officer shall ensure implementation of the decisions of the DRB which
attain finality, ie except those which are objected to by him or by contractor within 30 days
as per Para 12 above. The amount so decided shall be processed as per AIP and the
authority be mentioned as ‘decision of DRB’.
18. Findings and decision of DRB shall be admissible as evidence, to the extent
permissible as per law, in the subsequent arbitration and/or litigation.
19. DRB Chairman/members shall not, in any case, be liable to be called as witness or
to produce any evidence in any Arbitration or departmental proceedings of any kind.
20. During execution of work the disputes may be referred to the DRB as per the
requirement of each party after having exhausted the decision making process provided in
the contract. In case of completion of work or after determination/cancellation/termination
of the contract all the disputes including payment/ nonpayment/delay in final bill shall be
simultaneously referred to the DRB within six months of completion/determination/
cancellation/termination of the contract.
221
Appendix 8.2
Specimen Conditions/Other Provisions to be Included in Tender Documents
1. Employment of Personnel
(a) Contractor shall employ only Indian Nationals as his representatives,

servants and workmen after verifying their antecedents and loyalty. He shall ensure
that no person of doubtful antecedents and nationally is, in any way, associated with
the work. As a proof that the contractor has employed only Indian Nationals, he shall
render a certificate to GE within one month from the date of acceptance of tender to
this effect. In case the GE desires, the contractor will have the police verification
done of personnel employed by him. If for reasons of technical collaboration or other
considerations the employment of foreign national(s) is unavoidable, the contractor
shall furnish full particulars to this effect to the Accepting Officer at the time of
submission of the tender.
(b) The GE shall have full powers and without giving any reason to order the
contractor immediately to cease to employ, in connection with his contract, any
agent, servant or employee whose continued employment is, in his opinion,
undesirable. The contractor shall not be allowed any compensation on this account.
(c) The contractor’s attention is also drawn to condition 25 of IAFW-2249 in this

connection.
2. Approval of Sample of Workmanship in Building
(a) To determine the acceptable standard of workmanship, one quarter/block

preferably with sanitary annexe (to be decided by the GE) shall be completed by the
contractor well in advance as directed by GE under close supervision of the
Engineer-in-Charge and shall be approved by the GE. The workmanship of various
trades and finishes of this quarter/block shall serve as guiding samples for work in
the remaining quarters/blocks/buildings.
(b) The sample quarter/block/building shall be completed in all respects as per

time of completion specified for the same in Schedule ‘A’.
3. Water .
(A) Condition 31 of IAFW-2249:-
(a) Water will be supplied by MES to the contractor at points shown on site plan
from piped system and shall be paid by the contractor @ Rs. 3.75 per Rs 1000/-
worth of work done priced at contract rates in case of unmetered supply (where it is
not possible to meter the supply of water viz works of repairs, addition/alteration etc
involving number of locations) and at All-in-Cost rate of preceding year (to be
decided by CE Zone/CCE) in case of metered supply. The contractor shall arrange
at his own expense for storage of water and lifting, pumping, carrying or conveying
water to the site of work as required. In case water points are not marked on the site
plan, the water shall be supplied at one point as decided by GE.
222
(b) The supply of water may not be continuous. The contractor shall be deemed
to have ascertained the hours of availability of water before submitting his tender.
MES does not guarantee continuity of water supply and no compensation shall be
allowed for intermittent or inadequate water supply and break down in the system.
If the supply is not sufficient the contractor shall make his own arrangement to
supplement the water supply at his own cost. For this purpose the contractor shall
be allowed to install hand pumps, tubewells at the site of work at places as directed
by the Engineer-in-Charge without any charges from the contractor on this account.
The contractor shall remove the hand pumps, tubewells as and when asked to do
so by Engineer-in-Charge or GE and in any case on completion of work unless GE
desires that these hand pumps, tube wells be left in position and the contractor
agrees to do so without claiming cost thereof from the Department. No
compensation whatsoever shall be admissible to the contractor if the GE requires
him to remove the pumps before completion of work. Use of water from such sources
shall be permitted only if found potable after testing, and fit for use in the work. The
water from such sources shall be got tested by the contractor from a laboratory
approved by the GE, who shall, after satisfying himself, permit the contractor to use
the water from such sources. Testing charges shall be borne by the contractor.
OR
(B) Condition 31 of IAFW-2249.
Water will not be supplied by the MES. The tenderers are advised to visit the site of
works to ascertain availability of water from civil sources or from nearby natural
sources outside MoD land. The contractor shall be allowed, if he so desires, to install
hand pumps, tube wells at site of work at places as approved by Engineer-in-Charge
and nothing shall be charged from the contractor. The contractor shall remove the
hand pumps, tube wells as and when asked to do so by Engineer-in-Charge/GE and
in any case on completion of the work and before issue of completion certificate,
unless GE desires that these hand pumps, tube wells be left in position and the
contractor agrees to do so without claiming cost thereof from department. No
compensation whatsoever shall be admissible to the contractor, if he is required to
remove the pumps(s), tubewells before completion of work. Use of water from such
sources shall be permitted only if found potable after testing and fit for use in the
work. The water from such sources shall be got tested by the contractor from a
laboratory approved by the GE, who shall, after satisfying himself, permit the
contractor to use the water from such sources. Testing charges shall be borne by
the contractor. GE shall also carry out the independent testing of water.
4. Testing of Materials.
(a) 'A' Level Tests for Works Costing 100 Lakhs and Above . The contractor
shall set up a site laboratory for testing of materials (except Schedule ‘B’ materials)
for ‘A’ level tests as listed in Annexure-I hereto. The contractor shall arrange all
equipment/machines for the tests specified in Annexure-I as 'A' level tests at his own
cost with prior approval of GE. This cost shall be included in the lump-sum cost
quoted by the contractor. The contractor shall employ a competent technical
representative as approved by the GE for the purpose of testing and all such tests
shall be carried out in the presence of Engineer-in-Charge. The successful tests
results thereof shall be recorded and signed jointly by the contractor and the
Engineer-in-Charge. The charges for these tests ie 'A' level tests carried out in the
site laboratory of the contractor shall not be recovered. In case, the contractor has
not set up the site laboratory and the tests are carried out in Zonal lab or any other
laboratory setup/approved by GE, the recovery shall be made at rates applicable ie
as given in Annexure I.
223
(b) 'A' Level Tests for Works Costing upto 100 Lakhs. The contractor may
set up a site laboratory at his option for works costing upto 100 lakhs. Other
stipulations will be the same as specified in preceding para (a). However in case the
contractor has not set up the site laboratory and tests are carried out in Zonal or any
other laboratory approved/setup by GE, the recovery shall be made at rates
applicable ie as given in Annexure –I.
(c) 'B' & 'C' Level Tests. For tests of ‘B’ and ‘C’ level as indicated in
Annexure-I, the contractor shall provide all facilities for testing of materials at Zonal
laboratory/NABL Accredited laboratories /IITs at his own cost. The lump sum/rates
quoted by the contractor shall be deemed to be inclusive of these tests. The rates
of various tests conducted in the laboratory of MES are indicated in Annexure –I.
The contractor shall bear the actual charges of ‘C’ level tests (to be done in labs
other than MES labs) irrespective of rates indicated in Annexure-I. Wherever it is
convenient to get ‘B’ level tests done at NABL Accredited laboratory, the same can
be done at the cost of the contractor and no separate recoveries will be made by the
Department for the same.
(d) The recoveries on account of testing charges wherever applicable shall be

effected from the Running Account payments due to the contractor payable after
completion of the respective tests or whenever the test is due whichever is earlier.
5. Inspection of Site by the Tenderer.
(a) The tenderer is advised to contact the Garrison Engineer for the purpose of
inspection of site(s) and relevant documents other than those sent herewith, who
will give reasonable facilities for the purpose. The tenderer shall also make himself
familiar with the working conditions, accessibility of site(s), availability of materials
and other cogent conditions which may affect the entire completion of work
under this contract.
(b) The tenderers shall be deemed to have inspected the site(s) and made
themselves familiar with the working conditions, whether they have actually
inspected the site(s) or not.
224
Annexure-I
Srl Materia Tests Method Frequency of Tests Level Rat Rema

No l of of e rks
Testing Test (Rs)
1 2 3 4 5 6 7 8
1 Bricks (i) Compressive IS 3495 As per (IS-5454) as given ‘A’ 180 Check
Strength (Part –II) under : s for
visual
(ii) Water --do-- Lot ‘A’ 150 and
Absorption SamplePermissible dimen
size size Nos of sional
(iii) --do-- 180 charac
Efflorescence (Part-I) Defective ‘A’ To teristic
Bricks be s shall
1001 to 10000 5 incr also
0 eas be
10001 to 35000 10 ed? carrie
0 d out
35001 to 50000 15 as per
1 IS-
5454.
2 Coarse (i) Sieve IS:2386 One test for every 15 cu. m ‘A’ 120
Aggreg Analysis (Part-I) of aggregates or part thereof
ate brought to site
--do-- --do-- ‘A’ 90
(ii) Flakiness IS:2386 One test for every 100 cu. m ‘A’ 120
Index (Part-I) of or part thereof
(iii) Estimation --do-- One test per source of supply ‘C’ 120
of deleterious
materials --do-- Regularly as required ‘A’ 120
(iv) Organic (Part-II)
impurities IS:2386 One test for each source of ‘B’ 120
(v) Moisture (Part-II) supply
content
(vi) Specific
Gravity
3 Fine (i) Sieve IS:2386 One test for every 15cu.m of ‘A’ 180
Aggreg analysis (Part-I) FA or part when brought to
ate --do-- site. ‘A’ 90
(ii) Test for (Part-II) --do--
clay, silt and --do-- ‘B’ 180
impurities (Part-II) One for each source of
(iii) Specific supply
gravity. --do--
(Part-II) ‘A’ 180
--do-- Regularly as required subject
(iv) Moisture (Part-II) to 2 tests/day when being ‘C’ 180
content used.
(v) Test for One test for each source of

225
organic supply.
impurities
4 Cement (i) Setting time IS:4031- Once for each consignment ‘B’ 180
63 or as and when required
affirmed
(ii) Soundness 1980 --do-- ‘B’ 120
(iii) --do-- --do-- ‘B’ 360
Compressive --do--
strength --do-- ‘B’ 120
(iv) Fineness --do--
5 Structur (i) Slump test IS : 1199 The minimum frequency of ‘A’ 180 (i)
al (OR) sampling of concrete of each Rando
concret Compacting grade shall be as under: m
e (M-15 factor Test sampli
grade (OR) Vee-Bee Qty of Concrete ng
and Time. IS : 516 No. of ‘A’ 120 shall
above) in the work (cu. m) samples be
(ii) 1-5 carrie
Compressive 1 d out
strength 6-15 to
2 cover
16-30 all mix
3 units.
31-50 (ii)
4 Refer
51 & Above IS
4+1 for 456-
Each addl 2000
50 cu. m or clause
part thereof 14 for
freque
ncy of
sampli
ng.
6 (a) PCC (i) Compressive IS:2156- 8 Blocks out of 14 ‘A’ 60 Sampl
Blocks strength 1984 es : 14
for (Appx blocks
walling (ii) Water ‘B’) 3 Blocks out of 14 ‘B’ 120 from
(Hollow absorption --do-- consig
Block) (Appx 3 Blocks out of 14 ‘B’ 90 nment
(ii) Density ‘E’) of
--do-- every
(Appx 5000
‘A’) blocks
or part
thereo
f.
(b) PCC (i) Compressive IS:2185 12 Blocks out of 18 ‘A’ 60 Sampl
solid strength es : 18
Block blocks
for (ii) Water --do-- 3 blocks out of 18 ‘B’ 120 from
walling absorption consig
--do-- 3 blocks out of 18 ‘B’ 120 nment
226
(iii) Density of
every
1000
blocks
or part
thereo
f.
These
blocks
to be
check
ed for
dimen
sion
and
weight
.
7. Cement (i) Water IS-1237. 6 tiles out of 18 ‘B’ 180 Sampl
flooring absorption (Appx es : 18
tiles/Ter ‘D’) --do-- ‘B’ 144 tiles
razzo (ii) Wet --do-- from
tiles transverse (Appx each
strength ‘E’) --do-- ‘C’ 540 source
of
(iii) Resistance --do-- supply
to wear (Appx select
‘F’) ed at
rando
m.
8. Burnt (i) Water IS : 3495 6 tiles out of 12 ‘B’ 216 Sampl
clay absorption (Part-II) e : 12
roofing tiles
tiles --do-- --do-- ‘A’ 180 from
(handm (ii) (Part-I) each
ade) As Compressive source
per IS : strength of
2690 supply
(Part-II) select
Length ed at
150 mm rando
to 250 m.
mm,
width
100mm
to
200mm,
thickne
ss
35mm
to
50mm
9. Mangal (i) Water IS:654 6 tiles out of 32 ‘B’ 180 Sampl
ore absorption (Appx e :32
227
pattern ‘A’) tiles

roofing --do-- ‘B’ 120 from
tiles (ii) Breaking --do-- each
load (Appx consig
‘C’) nment
of
3000
tiles or
part
thereo
f.
These
tiles
shall
be
check
ed for
dimen
sion.
10. Timber (i) Specific IS : 1708 Minimum 3 samples from a ‘B’ 120
gravity and lot of 4 cu. m or 250 pieces
weight of seasoned timber.
--do-- --do-- ‘A’ 120

(ii) Moisture
content
11. Water (i) Test for IS : 456 Once at the stage of ‘B’ 240 Also
for acidity & 3015 approval of source of water refer
constru clause
cti-on --do-- --do-- ‘B’ 240 4.3 of
purpose (ii) Test for IS
s alkalinity :456
--do-- --do-- ‘C’ 300 and its
(iii) Test for subse
solid content quent
sub
clause
s
regard
ing
suitabi
lity of
water.
12. Welding Visual IS : 822 100% by visual inspection Work 360 Speci
of steel Inspection test Clause site alised
work 7.1 tests,
their
metho
d and
freque
ncy to
be
decide
228
d on
consid
eratio
n of
their
import
ance
by the
Accep
ting
Officer
.
13. Timber (a) Dimensions, IS:1003 Frequency of sampling from ‘A’ 180
panelle sizes, (Part-I) each lot shall be as under :
d and Workmanship Lot Size Sample
glazed and finish Size
Door/Wi 26 to 50 5
ndow 51 to 100 8
shutters 101 to 150 13
(includi 151 to 300 20
ng 301 to 500 32
factory 501 to 1000 50
made 1001 and above 80
shutters (b) strength From each lot 5% of the
) test IS:1003 factory made shutters shall
(i) Slamming --do-- be manufacturer tested for
(ii) Impact strength tests
Indentation --do--
(iii) Shock
Resistance --do--
(iv) Edge
Loading
14 Plywoo Moisture IS:1734 Six test pieces cut from each ‘C’ 240 Sampl
d content (Part-I) of the boards selected as per ing
(IS:303) table shall be subjected to shall
tests. beas
per
IS:783
5table
s.
15 Wood (a) Density IS:2360 Three test specimen from ‘A’ 60 Sampl
particle (Part-III) each sample (Size 150mm ing
board (b) Moisture --do-- x75mm) ‘A’ &’B’ 60 shall
(Mediu content --do-- --do-- ‘A’ 60 be as
m (c) Water Part-16) --do- per
density absorption --do-- (Size 300mm x300mm) ‘A’ 60 IS:348
IS:3097 Part-17 --do-- 7- with
) (d) Swelling --do-- (Size 125mm x100mm) ‘A’ 60 moistu
due to surface --do-- re
absorption ---do-- (Size 200 mm x ‘B’ 90 metre.
(e) Swelling in Part-4 100mm)
water --do-- Three test specimens as per ‘C’
(f) Modulus of Part-4 IS:2380 120
229
rupture
(g) Screw --do--
withdrawal As per IS:2385
strength
Legend
A : Site Lab.
B :MES Lab/Zonal Lab/Command Test Lab.
C : NABL Accredited Lab.
6. Condition for Working in Unrestricted/Restricted Area.
(A) Condition for Working in Unrestricted Area. All works lie in Unrestricted Area.
The restrictions for entry to work site and conditions of working in unrestricted area shall
be as under:-
(a) The work lies in an Unrestricted Area. However, the contractor, his agents,
servants, workmen and vehicles may pass through the unit lines, in which case, the
Engineer-in-Charge at his discretion has the right to issue the passes, control their
admission to the site of work or any part thereof. The contractor shall, on demand
by the Engineer-in-Charge, shall submit a list of personnel etc concerned and any
other information called for by the Engineer-in-Charge and shall satisfy the
Engineer-in-Charge as regards the bonafide of such people. Passes shall be
returned at any time on demand by the Engineer-in-Charge and in any case on
completion of work.
(b) The contractor and his work people shall observe all the rules promulgated
from time to time by authority controlling the area where the work is to be carried out
eg prohibition of smoking etc. Any person found violating the security rules laid
down by the authority shall be immediately expelled from the area without assigning
any reasons whatsoever and the contractor shall have no claim on this account.
Nothing shall be admissible for any man hours lost on this account.
OR
(B) Conditions for Working in Restricted Area. All works lie in Restricted Area.
The restrictions for entry to work site and conditions of working in restricted area shall be
as under:-
(a) Entry and Exit. The contractor/his agents/representatives/workmen etc.

and his materials, carts, trucks or other means of transport etc will be allowed to
enter through and leave from only such gate or gates and at such times as the GE
or authorities in charge of the restricted area may at their sole discretion permit to
be used. Contractor’s authorised representative is required to be present at the
places of entry and exit for the purpose of identifying his carts, trucks etc to the
person in charge of the security of the restricted area.
(b) Identity of Workmen:-
(i) Every workman shall be in possession of an identity card. The identity

card shall be issued after a thorough investigation of antecedents of the
labourers by the contractor and attested by Officer-in- charge of the unit
concerned in accordance with the standing rules and regulations of the unit.
Contractor shall be responsible for the conduct of his workmen, agents or
representatives.
230
(ii) Identity Card or Passes. The contractor, his agents and

representatives are required individually to be in possession of an identity
card or pass which will be examined by the security staff at the time of entry
into or exit from the restricted area and at any time or number of times inside
a restricted area.
(c) Search. Thorough search of all persons and transport shall be carried
out at each gate and for as many times the gate is used for entry or exit and may
also be carried out any number of times at the site within the restricted area.
(d) Working Hours. The units controlling restricted areas usually work during
six days in a week and remain closed on the 7th day. The working hours available to
the contractor's labour and staff are however appreciably reduced because of the
time of entry and exit during working hours. The exact working hours, working days
and number of working days observed for these restricted area(s) where works are
to be carried out shall be deemed to have been ascertained by the contractor before
submitting his tender. The tenderer's attention is invited to the fact that the number
of working hours for a unit are prescribed in regulations and that these cannot be
increased by the Garrison Engineer or authorities controlling the restricted area. The
definition of “working days” as given under Condition 1(t) of IAFW-2249 does not
apply in cases where the works are carried out in restricted areas.
(e) Working on Holidays. The contractor shall not carry out any work on
gazette holidays, weekly holidays and other non working days except when he is
specially authorised in writing to do so by the Garrison Engineer. The GE may at his
sole discretion declare any day as holiday or non working day without assigning any
reasons for such declaration.
(f) Fire Precautions. The contractor, his agents, representatives, workmen
etc shall strictly observe the order pertaining to fire precautions prevailing within the
restricted area. Motor transport vehicles, if allowed by the authorities to enter the
restricted area, must be fitted with a fire extinguisher in working condition.
(g) Female Searcher. If the contractor desires to employ female labour for
works to be carried out inside the area of factory, depot, park etc and a female
searcher is not borne on the authorised strength of the factory, depot, park etc. at
the time of submission of tender, he shall be deemed to have allowed in his tender
for pay and allowances etc. for a female searcher (Group D employee) calculated
for the period female labour is employed by him inside that area. If more than one
contractor employs female labour during any month and female searcher (s)
has/have to be employed in addition to the authorised strength of the factory, depot,
park etc, the salary and allowances paid to the additional female searcher(s) shall
be distributed on equitable basis among the contractors employing female labour
taking into consideration the values and periods of completion of their contracts. The
GE’s decision in regard to the amount payable on this account by any contractor
shall be final and binding.
7. Damage to Existing Structures. Any damage to the existing structures, any
existing road etc., during the execution of work shall be made good by the contractor at his
own expense. Rectification, replacement ,making good and touching up etc shall be carried
out, conforming to the materials and workmanship originally provided and to the satisfaction
of the Engineer-in-Charge. In case of any dispute on this account the decision of the GE
shall be final, binding and conclusive.
231
8. Approaches. The contractor shall make arrangements for and provide at his
own cost all temporary approaches, if required to the site (s), after obtaining approval in
writing of the GE to the layout of such approaches.
9. Location of Buildings and Works. There may be some changes in

location/siting of buildings shown in the site (layout) plan(s) to suit local conditions and/or
departmental requirements. The contractor shall have no claim what-so-ever consequent
to such changes in the location/siting of works.
10. Coordination with Other Agencies. The contractor shall permit free access
and afford normal facilities and usual convenience to other agencies or Departmental
workmen to carry out connected works or services under separate arrangements. The
contractor will not be allowed any extra payment on this account and no compensation
shall be admissible to the contractor on this account..
11. Record of Materials and Purchase Vouchers .
(a) The quantity of materials such as cement, steel, paints, water proofing
compound, chemicals for anti-termite treatment and the like, as directed by the
Engineer-in-Charge (the quantity of which cannot be checked after incorporation in
works) shall be recorded in measurement books and signed by the contractor and
the Engineer-in-Charge as a check to ensure that the required quantity has been
brought to site for incorporation in the work.
(b) Materials brought to site shall be stored as directed by the Engineer-in-
Charge and those already recorded in Measurement Book shall be suitably marked
for identification.
(c) Materials to be Procured by Contractors:-

(i) Vouchers in respect of cement, steel, major E/M equipment like
transformers, DG Sets, pumps, motors, AC and lift equipment will be
submitted invariably. For all original works, keeping in view specific provisions
and circumstances for each contract, it may be necessary that certain
additional items require verification of vouchers. GE shall list out all such
items after issue of tender and submit the same in his comments on the
tender documents. The list of such items shall be put up by E8 section
(through E4 if required) to the Accepting Officer for his approval. The list
should be work specific and not general in nature.
(ii) Original purchase vouchers shall be defaced by the Engineer-in-
Charge and photocopies shall be kept in record. Genuineness of purchase
voucher shall be verified by the Engineer in Charge before considering the
same for making payment. Initially JE may verify the vouchers after taking
confirmation on phone or through e mail. The contractor shall ensure that the
materials are brought to site in original sealed containers/ packing, bearing
manufacturer’s marking except in the cases of the requirement of materials
being less than smallest packing.
(iii) These instructions shall also be applicable in case of contracts

based on IAFW - 1815Z.
232
(d) Bitumen shall be purchased directly from main manufacturers only. In case of
small quantity, the Accepting Officer may allow procurement of Bitumen from
authorised dealers of main manufacturers. Purchase vouchers for the same shall
be defaced by the Engineer-in-Charge, indicating reference to the Contract number
under his dated signature and photocopies thereof shall be kept on record so as to
avoid their being used again.
(e) The vouchers will clearly indicate the Contract number and the IS No and
specific alternative to which the material conforms in case of various alternatives in
IS. In case the contractor procures the Bitumen mix from Hot Mix Plant, the copy of
voucher of Bitumen provided by the main manufacturer to the Hot Mix Plant shall be
submitted by the contractor.
12. Watch/Lighting. The contractor shall, at his own cost, take all possible
precautions to ensure safety of life and property by providing necessary fencing, barrier,
light, watchmen etc during the progress of work and as directed by the Engineer-in-Charge.
13. Cleaning Down. Refer Condition 49 of IAFW-2249. The contractor shall clean all
floors, remove cement, lime or paint drops, clean joinery, glass panels etc, touch up all
paint work and carry out all necessary items of work in connection therewith and have the
whole premises clean and tidy to the entire satisfaction of Engineer-in-Charge before
handing over the items/works. No extra payment shall be admissible to the contractor for
his operation.
14. Minimum Wages Payable:-
(a) Refer Condition 58 of IAFW-2249. The contractor shall not pay wages lower
than minimum wages for labour as fixed by the Government of India/State
Govt/Union territory, whichever is higher.
(b) Contractor’s attention is also drawn, amongst other things, to the

‘explanations’ to the schedule of minimum wages referred to above.
(c) The fair wages referred to in Condition 58 of IAFW-2249 will be deemed to be

the same as the minimum wages referred to above as updated from time to time.
(d) Schedule of minimum wages are not enclosed along with tender documents.
However, the contractor shall be deemed to have verified the minimum fair wages
payable as on the bid submission end date.
(e) The contractor shall have no claim whatsoever, if on account of local factors and/
or regulations, he is required to pay the wages in excess of minimum wages as
described above during the execution of work.
15. Materials and Samples:-
(a) Refer to Condition of 10 of IAFW-2249.
(b) The materials and articles, which have been specified from certain
makers/manufacturers, shall be of makes/manufactures as specified. If the
manufacturers specified in tender documents make both ISI marked and conforming
to ISI, the materials/articles shall be ISI marked.
233
(c) The materials and articles, which have not been specified in tender
documents by makes/manufacturers, shall be as under :
(i) If ISI marked materials are being manufactured, the same shall be ISI marked.
For a list of ISI marked manufacturers refer to the website of BIS ie www.bis.org.in.
(ii) If ISI marked materials are not being manufactured, the same shall be conforming
to IS Specifications.
(d) Materials of local origin shall be as specified and conforming to samples kept
in GE’s office. The tenderer is advised to inspect samples of materials which are
displayed in the office of GE before submitting his tender. The tenderer shall be
deemed to have inspected the samples and satisfy himself as to the nature and
quality of materials he is required to incorporate in the work irrespective of whether
he has actually inspected them or not.
(e) The contractor shall not procure materials and articles unless the samples are
first got approved by the GE.
16. Handing Over of Site . Site for execution of work will be available as soon as the
work is awarded. In case it is not possible to make the entire site available on the award of
work, the contractor will have to arrange his working programme accordingly. No claim
whatsoever, for not giving the entire site on award of work and for giving site gradually, will
be tenable. However Work Order No 1 shall specifically indicate phased handing over of
site as proposed in consultation with users.
234
Appendix 8.3
Special Condition to be Incorporated in Tenders for Boring Tube Wells wherein

Payment is to be Made on the Basis of the Depth of Boring
The depth of boring of the tube well at the site indicated by the GE is anticipated to be
…….. metres below ground level. The depth may, however, be ordered in writing to be
varied by the GE upto a maximum of …………. metres (plus or minus). If the GE decides
that suitable water bearing strata is not available in the aforesaid bore or the boring cannot
be continued further on account of the type of strata met with, he may order the contractor
to bore at other site(s) selected by the GE, until suitable water bearing strata is met with or
boring cannot continue further on account of the type of strata met with provided the total
number of bores (including the first bore) do not exceed………. The decision of the GE
shall be final and binding as to whether or not the bore can be continued further in the strata
met with.
(Blanks shall be filled in before issuing tenders.)

235
SECTION 9
SPECIFICATIONS
9.1 Art of Writing Specifications .

(a) One of the main causes leading to dispute is faulty and ambiguous provisions in
tender documents. The correct drafting of specifications for inclusion in tender documents
is, therefore, of supreme importance. The instructions in succeeding paragraphs would
help in drafting correct specifications.
(b) Specifications are written instructions which supplement the drawings. They
describe the quality of materials and workmanship desired by the Department and serve
as a standard for tenderers to quote. These specifications guide the personnel on the site
in physical performance of the contract. Generally, the drawings represent “what” is to be
done whereas the specifications state “how” it is to be accomplished. The specifications,
being the written instructions, are given greater legal strength than the drawings. The
General Conditions of Contracts forming part of MES contracts stipulate that the particular
specifications shall take precedence over drawings in case of discrepancies. It is, therefore,
imperative that the combination of drawings and specifications should define completely
the physical, technical and operating characteristics of the finished work, adopting a logical
and systematic method whereby repetition, omissions and conflicting statements are
eliminated.
(c) Essentials in Writing . The essential requirements of specification writing can
be summed up as under:-
(i) Sufficient knowledge and understanding of the work and the materials
and method available to accomplish it.
(ii) Sufficient thought and expression in a manner readily understandable
by those responsible for the execution of the work.
(d) The technique of specification writing depends on the application of a few basic
principles of grammar, word usage, subject matter, composition and punctuation. Judged
from the technical requirements associated with building contracts, legal phraseology in
specifications is not necessary if other contract documents are properly prepared. Legal
requirements of the contract are embodied in standard contract forms and the General
Conditions of Contracts (IAFW-2249/IAFW-1815Z).
(e) Style. Specification should be written in short, concise sentences, in the simplest
style possible. The style and tense should be the same throughout. Unfamiliar words,
having more than one meaning and unusual technical expressions should be avoided. All
sentences should be complete, definite and unambiguous. Punctuation needs special
attention because lack of proper care in its use may completely change the meaning of a
sentence and misrepresent the intentions of the contract. Tabulations are often
advantageous in preference to lengthy descriptions and should be resorted to, where
feasible.
(f) Precision. Difficulties and disputes frequently arise in the form of varying
interpretations of the intentions of the specification writer on the use of words susceptible
to more than one meaning. For this reason, it is necessary to use words in their exact
meaning. The following is a list of typical words which are frequently used incorrectly in
specifications:-
236
(i) Any, all : “He shall make good any defect”, should read, “He shall make
good all defects.”
(ii) Either, both : “Either side of the wall shall be plastered” should read, “Both
sides of the wall shall be plastered”.
(iii) And, or : “It shall be free from defects of workmanship and material which
would impair its strength or durability”. Interchanging the two words in this sentence
result in an entirely different meaning. Use of “and/or”, though common in legal
documents, is not desirable in specifications because of lack of certainty.
(iv) Will, shall : Use “Will” in connection with the acts of the Department and
“Shall” with reference to the contractor. This is not based on considerations of
grammar but is a helpful and customary distinction between the commitments of the
Government and the obligations of the contractor. Do not use apparent synonyms
eg; 'must' and 'shall', as different degrees of their mandatory nature may be inferred.
Adopt one or the other, and use it consistently.
(v) Amount, quantity : Amount should be used in connection with money and
quantity when referring to volume, number of objects and the like.
(vi) Same, said : Use of the word ‘Same’ as a pronoun is a poor style and should
be avoided as in, “if bracing is required the contractor shall provide the same at no
additional coat”. Similarly, ‘Said’ should not be used as an adjective, as in “said
bracing shall be provided at no additional cost”. “it” can be used instead.
(vii) Refix, Renew, Replace : “Refix” or “Replace” means use of the old materials
and does not imply new. ‘Renew’ must be used if new materials are required.
(viii) Etc : This expression is vague in meaning and should be avoided, if possible.
(g) Subject Matter. The subject matter of the specifications should be confined to the
information and directions necessary for construction work and should be sufficient so that
tenderers can price their work completely.
(h) The specifications are intended to amplify, but not to repeat the information shown
on drawings.
(j) The specification writer should have definite reasons in mind for every requirement
specified, but these reasons or explanations should not be given in the specifications.
(k) Cross references should be avoided but where inevitable reference should not be
made to paragraph numbers alone but also to its title and number and section under which
it is to be found.
(l) Balanced Composition. Requirements in the specifications should be

commensurate with the size and importance of the work. Careless application of broad
standard requirements may result in refinement unnecessary for small size works.
Requirements and details in specifications have a direct influence on the character and
construction cost of the works. A satisfactory specification is one which contains a minimum
of requirements consistent with the results.
(m) Definite Requirements. The instructions in specifications should be in the manner

of specific directions and not as suggestions or explanations or in the alternatives.
237
(n) Expressions, “reasonable, best quality, and the like” commonly observed in
specifications should be avoided. These have been the cause of many disputes because
no fixed definitions could be assigned to these terms. Similarly, the “or equivalent”
expression used frequently in connection with specifications for proprietary materials is
indefinite.
(o) The expression ‘as directed by the Engineer-in-Charge’, is also indefinite because
the contractor cannot predict in advance what the Engineer-in-Charge will direct.
Nevertheless, it may be necessary to specify some items to the discretion of the Engineer-
in-charge such as shades of finishes or exact location where contractor may dump
excavated material. Care, in such cases, should be taken that the arbitrary action of the
Engineer-in-Charge does not involve a change in cost.
(p) Inaccurate wording and vague clauses invariably result in increased construction
cost because contractors increase their offer to cover the possibility of arbitrary decisions
during constructions.
(q) Accuracy. Information rendered in the specifications should be accurate and

complete as the inaccuracy may lead to claims for extra by the contractor. Repetition is a
common source of error and discrepancies in specifications. A requirement should
therefore, not be repeated after it has once been stated in the specifications or in other
documents forming part of the contract.
(r) Errors also may creep in from the use of symbols such as “%” for percent, “-“ for
minus, “+” for plus, “x” sq metre for ten square metre etc. Writing out the meaning of the
term in full is advisable.
(s) Practicability. Specifications should be practicable giving due regard to the

limitations of materials and workmanship. Standard of tolerance and finishes should be
consistent with functional, architectural and structural requirements of the completed work.
Constructional requirements should conform to standard sizes and patterns available in the
market. Special sizes are expensive and require extra time for manufacture and delivery.
It is also important to visualize an article which is being specified lest on actual execution
it is found completely off proportion with the type of construction.
(t) Conflicting Requirement. Conflicting requirements may result from typographical

errors, mistakes, lack of coordination between the drawings and specifications and the like.
Such faults can be obviated by thoroughly checking the specifications before issue.
(u) Fairness. Although the first responsibility for the specification writer is to safeguard
Government's interest but it should not be done by imposing harsh and unfair conditions
on the Contractor. All available and relevant information relating to any specific difficulty or
hazard existing in connection with the work should be furnished to the Contractor.
(v) Brevity. The provisions in specifications should be brief and to the point.
Expressions such as “as indicated on the drawings”, “in accordance with these
specifications”, “to the satisfaction of Engineer-in-Charge”, “in an approved manner” and
“Contractor would make good all defects” need not be repeated. It would be preferable for
brevity to provide a general clause or note once and for all to allow for such requirements.
238
(w) Consistency. The order of writing dimensions viz. length, width and height and
sizes by either the ‘finished’ or ‘nominal’ sizes should be as laid down in the MES Schedule
of Rates. There should, however, be consistency in whatever form adopted over the entire
specifications.
(x) Clause Headings and Numbering. Clauses in specifications should have marginal
headings to indicate their contents and preferably be given sectional numbering, eg; 4.12
(clause 12 of section 4). If the set of specifications is extensive, it will be desirable to
provide an index to the specifications containing clause headings and clause numbers.
(y) Standardisation of Specifications. Standardisation of specifications by keeping

spare sets to be attached to a number of similar contracts is fraught with great risk of absurd
provisions going into contracts. This practice should therefore be avoided. adopted only
where it is to be restricted to a particular type of building based on the same drawings.
(z) Certain common errors in drafting specifications in contracts are brought out in
ADGTE’s Quarterly Reports and in various instructions issued from E-in-C’s Branch from
time to time. These should be studied carefully by all concerned with the drafting of tender
documents so as to ensure that these do not recur in future.
9.2 Decision on Specifications. The decision on specifications to be adopted for a

particular work is that of the Engineers (ie; E2 Plg) and the job of the Surveyor cadre is
restricted to presenting the specifications in the proper form and language/style suitable for
contract documentation. Before embarking on the job of drafting specifications the
Surveyor cadre personnel must go through the relevant drawings, Technical Sanction and
Approximate Estimate(AE). Zonal specifications prescribed by the CE Zone/CCE should
also be kept in view. Specifications followed by other Zones for the common stations shall
be taken into consideration after joint discussions.
9.3 General Specifications and Particular Specifications. Specifications contained

in Part I of MES Standard Schedule of Rates (SSR) cater for all items of work and different
variations of each item of work likely to be encountered in the works services. Though the
MES Schedule (SSR) forms part of contracts, all the items of work for which specifications
are given in the MES Schedule will not be relevant to a particular contract. For example the
MES Schedule contains complete and elaborate specifications for plastering using all
different kinds of mortar and various finishes that can be obtained in plaster work like
smooth/sand faced/roughcast/pebbledash etc. The particular finish required and the
proportion of mortar mix to be used in a particular work is required to be stipulated in the
tender. Specifications contained in the MES Standard Schedule of Rates Part I are termed
as ‘General Specifications’. The particular kind of materials/workmanship (out of the
various alternatives in the MES Schedule) applicable for a work being tendered are
stipulated in the ‘Particular Specifications’ applicable for that tender. As detailed and
elaborate specifications are available in the ‘General Specifications’, the ‘Particular
Specifications’ are by their nature, very brief.
9.4 Materials:-
(a) Now a days most of the items are being manufactured ISI marked. List of
BIS/ISI Licence holders/manufacturers is available on the web site (www.bis.org.in)
of Bureau of Indian Standards.
239
(b) The materials/items, which are being manufactured as ISI marked and are
readily available in market, such materials shall be specified as ISI marked only
without mentioning makes/brands except certai
n products such as paints, tiles, electrical goods of reputed firms etc for which
makes/brands with models/quality are approved by E in C’s Branch/CE Command
keeping in view their superior performance.
(c) The materials/items which are not being manufactured as ISI marked or ISI
marked are not readily available, such materials shall be specified as conforming to
ISI specifications.
(d) It shall be ensured that makes/brands specified in tender are readily available
in market and there should not be more than 15% price difference between cheapest
and costliest makes/brands being mentioned in the tender documents. All the makes
approved by competent authority shall be mentioned in the tender documents. The
word “equivalent” in makes should be avoided. The “equivalent” makes may be
specified only under unavoidable circumstances and the approval for equivalent
makes will only be accorded after ascertaining non-availability from manufactures
specified in contract and not otherwise.
(e) With regard to materials of local origin like bricks, sand, stone and the like,
the GE’s should display representative samples (duly sealed and signed to avoid
tampering) to indicate the quality/shape/grading etc as would be acceptable. Such
samples before display should be approved by the CWE and should be referred to
in the tender documents. While approving and displaying samples, it should be
remembered that there is no point in having samples which are ideal and cannot be
procured in quantities that are required. Approved sources of local origin materials
may also be specified for guidance to the tenderer.
9.5 E-in-C’s Technical Instructions (TI). Materials, workmanship, architectural

norms, tests, acceptance criteria, methods for mix design, quality control and such aspects
preferred for Defence Works Services are circulated by E-in-C’s Branch from time to time
in the form of E-in-C’s Technical Instructions. These can be suitably incorporated in tenders
by repeating the provisions in the Particular Specifications. Reference to E-in-C’s Technical
Instructions should not, however, be made in the Particular Specifications as the TIs are
not available to the contractor and he is not concerned with them. When repeating
provisions of E-in-C’s TIs, the type, nature and importance of the job in question should be
kept in mind to avoid specifying unnecessary rigid and sophisticated requirements
for comparatively simple work. Special attentions should be paid to the TIs circulated by E-
in-C’s Branch from time to time (in so far as these are applicable) when drafting
specifications.
9.6 Steel:-
9.6.1 Following types of steel are in use in MES works:-
(a) Reinforcement Steel. High strength deformed steel bars produced by
Thermo Mechanical Treatment Process (TMT steel bars of grade Fe 500/Fe 500 D/Fe
550/Fe 500 D) meeting all other requirements of IS: 1786.
(b) Structural Steel:-
(i) Standard Quality-Conforming to IS: 2062.

(ii) Ordinary Quality-Conforming to IS: 1977.
240
Confirming to IS: 2062 – 2006 as amended till date (in SSR Part-II only IS: 2062 with
grades Fe 410-W (Gde-E-250) Quality-A, Fe 290 (Gde-E-165), Fe 410-W (Gde-E-250)
Quality-B).
(c) Galvanised Steel Sheet :( Plain & Corrugated) Conforming to IS: 277.
(d) Fabric Reinforcement for Concrete: Conforming to IS: 1566.
9.6.2 Materials.
(a) Reinforcement Steel. TMT Steel bars manufactured by SAIL/RINL/TISCO/other
primary producers approved by E-in-C’s Branch from time to time. If any primary producer
is approved by E in C’s Branch after conclusion of the contract, that make shall also be
eligible for inclusion in the tender at the request of contractor through amendment to
contract. Steel shall be procured directly from manufacturers and not through their agents.
(b) Structural Steel. Structural Steel shall also be procured from primary producers
as approved by E-in-C’s Branch. In case of non availability with primary producers, the
structural steel can be procured from approved secondary producers with a reduction of
5% (five percent) of the accepted rate of structural steel. In case the desired section of
structural steel is not rolled/manufactured by primary producers, there shall be no price
adjustment in use of structural steel procured from approved secondary producers.
Secondary producers for structural steel are approved by E-in-C’s Branch from time to time.
(c) Galvanised Steel Sheet & Fabric Reinforcement for Concrete : These shall be
procured directly from main producers as approved by E-in-C’s Branch and shall be ISI
marked.
(d) Steel sections for railing, gates, fencing, guards bars, grills, steel chowkhat, holdfasts
etc, which do not constitute structural members, can be procured from main
producers/secondary producers/BIS marked manufacturers or their authorised dealers at
the option of Contractor without any minus price adjustment. Tests will not be insisted upon
for such steel sections. However steel sections for large size gates of ammunition sheds
shall be treated as structural members and conditions (b) above shall be applicable.
9.6.3 Procurement:-
(a) The GE for every lot of steel shall obtain the particulars of the manufacturer
/supplier of steel from the contractor separately. The form given at Appendix 9.1
will be used for this purpose.
(b) The site staff and GE shall verify the original documents in support of the
purchase of steel and will retain a certified true copy of the results in GE’s office.
(c) The CEs will ensure that contractors place their demand/requisition of steel
with adequate lead-time. The steel will be procured from the storage depots of the
main producers/approved secondary producers (as applicable) and not from their
authorised agents/dealers as the authorised agents deal with the steel
manufactured by more than one manufacturer.
(d) Reinforcement steel, Structural steel and Galvanised Steel sheets and Fabric
reinforcement for concrete may be permitted from authorised dealers of main
producers in case of small contracts of value not exceeding Rs 7.5 Lakhs.
241
9.6.4 Testing of Steel. The manufacturer is to carry out inspections and testing of steel
in accordance with relevant BIS provisions. The contractor shall submit the manufacturer’s
test Certificate in original along with the Test Sheet giving the results of each mechanical
test as applicable and the chemical composition of the steel or authenticated copy thereof,
duly signed by the manufacturer with each consignment. The Engineer-in-Charge shall
record these details in Steel Acceptance Register, as given at Appendix 9.1 after due
verification and send certified true copy of test sheet to GE for his records. GE/CWE shall
also organise independent test of random samples of steel drawn from various lots from
National Test House, SEMT Wing CME, IITs, NABL approved labs, as per the
recommended minimum frequency shown in Table at Appendix 9.2. Sample from each lot
should be tested for quality and elongation. The elongation shall not be less than 18%.
Cost of samples, transportation and testing shall be borne by the contractor. The records
of such checks shall be maintained in the steel test register.
9.6.5 Documentation. The Contractor shall submit original purchase voucher

from the manufacturer for the total quantity of steel supplied under each consignment
to be incorporated in the work . the GE shall inspect all consignments received at the
work site along with relevant documents before acceptance. The original vouchers
and the Test Certificates shall be defaced by the Engineer-in-Charge and kept on
record in the office of the GE duly authenticated and with cross reference to the control
number recorded in the Steel Acceptance Register. The Steel Acceptance Register
will be signed by JE, Engineer-in-Charge, GE and Contractor. The entire quantity of
all steel items shall be suitably recorded in the Measurement Book as not to be
abstracted, before incorporation in the work and shall be signed by the Engineer-in-
Charge and the Contractor.
9.6.6 Contract Specifications. Particular Specifications for supply of steel by the

Contractor shall be carefully framed so that no ambiguity is left with regard to its
quality, testing and source of procurement. Specification should cover all relevant
requirements specific for the particular work and should not become general
specification covering all types of works and grades of steel. For details on delivery,
inspection, testing facilities, identification and marking of Steel by the manufacturers,
reference be made to the relevant BIS Codes. Instructions issued by E in C’s Branch
from time to time with regard to steel shall also be considered while drafting the
contract specifications.
9.6.7 Following point’s inter-alia shall be covered in the Contract Specifications:-
(a) Type of Steel: Refer Para 9.6.1 here-in-before.

(b) Source of procurements: Refer Para 9.6.3 here-in-before. Contractors
can quote for steel produced by any producers (main or approved).
(c) Testing of Steel: Refer Para 9.6.4 here-in-before.
(d) Documentation: Refer Para 9.6.5 here-in-before.
(e) Storage, accounting and preservation of steel by the Contractor till
consumed in the work.
(f) Schedule of Supply.
(g) Procedure for making payments for steel including measurements,
conversion weight etc.
9.6.8 The steel directly procured by the department for issue under Schedule ‘B’
required under exceptional circumstances, if any, will also be procured from main
producers/primary producers only.
242
9.7 Cement. Specifications shall be drafted keeping in view the following
guidelines and the instructions issued by E in C’s Branch from time to time.
9.7.1 Types of Cement. The details of various types and grades of cement are
enumerated below:-
(i) Ordinary Portland cement Grade 43 (IS: 8112-1989).
(ii) Ordinary Portland cement Grade 53 (IS: 12269-1987).
(iii) Rapid Hardening Portland Cement (IS: 8041-1990).
(iv) Portland Pozzolana Cement (IS: 1489-1991 Part I).
(v) High Alumina Cement (IS: 6452-1989).
(vi) Sulphate Resisting Portland Cement (IS: 12230-1988).
The type of cement to be selected will invariably depend upon the specific
usage in the works(s). 33 grade OPC will not be used in work.
9.7.2 Procurement. The Cement supplied by the Contractor will be procured from
main producers of cement. However where estimated requirements of cement is less
than 1200 bags and in all term contracts, the contractor can procure cement from the
authorised distributors/dealers of the approved firms but the contractor will have to
submit test certificates of the batch issued by the main producers. The particulars of
the manufacturer of cement along with the date of manufacture shall be obtained from
the contractor for every lot of cement separately. The documents in support of the
purchases of cement shall be verified by the site staff and GE and kept as a record in
the office of GE.
9.7.3 Manufacturers. The main producers of OPC & PPC shall be stipulated as
approved by Design Dte of E-in-C Branch from time to time.
9.7.4 Use of PPC. Use of PPC (Portland Pozzolana Cement) of required strength
with fly ash content as per IS 1489-1999 Part-I is also permitted. While using PPC,
the following conditions will generally be met:-
(i) Strength criteria for PPC will be as per IS-8112-1989.
(ii) Stripping time shall be 14 days.
(iii) Both OPC and PPC shall not be permitted for use in the same building
expect for plaster and mortar.
(iv) Mandatory certificates of testing and quality assurance will continue to be
submitted as hither-to-fore with fly ash content as per IS-1489-1999 Part-I.
(v) Specifications for use of PPC would be compiled and incorporated suitably
by Accepting Officer for inclusion in tender documents.
(vi) The Accepting Officers are required to ensure that PPC meets the strength
criteria of 43 Grade OPC as laid down in IS-8112-1989.
9.7.5 Testing of Cement. The manufacturer is to carry out inspections and testing of
cement in accordance with relevant BIS provisions. The contractor shall submit the
Manufacturer's Test Certificate in original along with the Test Sheet giving the result of
each physical test as applicable and chemical composition of the cement or authenticated
copy thereof, duly signed by the manufacturer with each consignment. The Engineer-in-
Charge shall record these details in the Cement Acceptance Register, as given at
Appendix 9.3 after due verification. The GE shall also organise independent physical tests
of random samples of cement drawn from various lots from NABL, National Test House,
SEMT CME, IITs, MES Zonal Laboratories, Command Test Laboratories (CTL), as per IS
3535 (Method of sampling Hydraulic Cement), IS-4031 (Methods of Physical Test for
Hydraulic Cement) and IS 4032 (Method of Chemical Analysis of Hydraulic Cement). In
order to undertake departmental testing, requisite facilities shall be organised by the
contractor.
243
9.7.6 Storage. Cement shall be stored over dry platforms at least 20 cm high in such
a manner as to prevent deterioration due to moisture or intrusion of foreign matters. In case
of store rooms, the stack should be at least 20 cm away from floors and walls. The stacking
of cement shall not be more than 10 bags high. It shall be ensured that tested and untested
cement are segregated and stored separately with distinct identification.
9.7.7 Documentation. Contractor shall submit original voucher from the manufacturer
for the total quantity of cement supplied under each consignment to be incorporated in the
work. All consignments received at the work site shall be inspected by the GE along with
relevant documents before acceptance. The original vouchers and the Test Certificates
shall be defaced by the Engineer-in –Charge and kept on record in the Office of GE duly
authenticated and with cross reference to the Control Number recorded in the Cement
Acceptance Register. This register will be signed by JE, Engineer-in-Charge, GE and the
Contractor. The Accepting Officer may order a Board of Officers for random check of
cement and verification of connected documents. The entire quantity of cement shall also
be suitably recorded in the Measurement Book for record purpose “not to be abstracted”
before incorporation in the work and shall be signed by the Engineer-in-Charge and
Contractor.
9.7.8 Contract Specifications. Particular specifications for supply of cement by the

Contractor shall be carefully framed so that no ambiguity is left with regard to its quality,
testing, storage and source of procurement in the contract. Specifications should cover the
entire relevant requirements specific for the particular work and should not have general
specifications covering all types of works and grades of cement. For details on Delivery,
Inspection, Testing Facilities, Identification and Marking of Cement bags by the
Manufacturers, reference be made to the relevant BIS Codes.
Following points, inter-alia, shall be suitably covered in the Contract Specifications:-
(i) Source of Procurement.
(ii) Testing and Test Certificates including procedure to be adopted if test results
on samples are not within the acceptable limits.
(iii) The cost of test, samples etc. shall be governed as per condition 10A of
IAFW- 2249.
(iv) Schedule of supply shall be so ensured and specified so as to match with the
progress contemplated in the CPM prepared for that project.
(v) Procedure for making payments for cement including accounting, weighing, etc.
9.8 Design Mix Concrete:-
(a) Only the grade of concrete required for each location will be given in the
tender, while providing all other basic data required for design mix like exposure
conditions all as per IS-456-2000. Contractor shall be required to quote his offer
keeping in view the given parameters and other relevant provisions of design mix
concrete. Accepting Officers shall however specify minimum cement contents for
each grade of design mix concrete for various stations on the basis of trial mix design
to be carried out in reputed Labs/Zonal Lab to arrive at optimum cement contents to
be specified in tender documents along with exposure conditions.
244
(b) There shall be no provision for price adjustment on account of variation in
cement contents of design mix approved and minimum cement indicated in tender.
However it shall be made clear that even if cement contents as per actual mix design
are working out lower than minimum cement contents indicated in tender, the
contractor shall provide minimum cement contents indicated in tender and nothing
extra shall be payable on this account. Accepting Officer shall also list out names of
reputed test labs for the purpose of design of concrete mix in the tender itself.
9.9 Checklist/Guidelines as per Appendix 9.4 shall be kept handy in each office while
drafting specifications. All the disputed points observed during performance of various
contracts, lessons learnt during arbitrations, suggestions of ADGTE etc shall be kept on
adding in this list in each office for ready reference in drafting future tenders. Important
points shall also be circulated to other CE/CCE offices by the CE Zone/CCE for guidance
with copy to E-in-C’s Branch.
245
Appendix 9.1
STEEL SUPPLY AND ACCEPTANCE REGISTER
1. CA No and name of work : ….........................................……………………

2. Contract No. : …..........................................…………………
3. Name of Manufacturer’s T.C. No. : …..........................................……………………
4. Manufacturer : …........................................................…………
5. Random Test details : a) Physical test report from …………….vide letter No. ….....
(Name of NABL approved Lab/Govt. Engg. College)
b) Chemical test report from ………………..vide letter No. …....
(Name of NABL approved Lab/Govt. Engg. College)
6. Types of Steel, Dia & Qty :
(a) Type : TMT/CRS
(b) Dia : mm
(c) Actual Wt : MT
(d) Conversion Wt : MT
Chemical Test Mechanical Test

Ca Sul Pho Sulp Man Sili Corr Wt Yiel Ten Perce Be Reb Re
rb phu sph hur gan- con osio per d sile nt nd end mar
on r % o- + ese % n metr Stre Stre Elon Te Test ks
% rous Pho % Resi e ss ngth gatio st
% sph stant (Kg) (N/ (N/ n
o- Elem mm2 mm2 (min.
ous ent ) ) 18%)
%
As per
IS
1786-
2008
As per
manuf
act-
urer’s
test
certific
ates
As per
indepe
nd-ent
test
Remarks with Signature

Accepted/Rejected
Contractor Junior Engineer Engineer-in-Charge GE

Remarks of BOO/Inspecting Officer/CWE
246
Appendix 9.2
FREQUENCY FOR NORMAL MASS, TENSILE , BEND AND REBEND TEST OF

STEEL
Nominal Size Quantity

Steel for Concrete
1 Bars size less than 1 Samples (3 specimens) for each test for every 25 tonnes or
10mm part thereof.
2 Bars size 10mm to 1 Samples (3 specimens) for each test for every 35 tonnes or
16mm part thereof.
3 Bars size over 16mm 1 Samples (3 specimens) for each test for every 45 tonnes or
part thereof.
Structural Steel
4 Tensile Test 1 test for every 25 tonnes of steel or part thereof.
5 Bend Test 1 test for every 25 tonnes of steel or part thereof.
NOTE : For various tests, acceptance criteria, tolerance etc. refer to Appendix 9.1 and
relevant BIS codes.
247
Appendix 9.3
CEMENT SUPPLY AND ACCEPTANCE REGISTER
1. CA No & Name of Work : …...............................................................………

2. Control No* : ………………............................................................……………
3. Name of Manufacturer/Brand Name/Gde of Cement :
(a) Manufacturer …………….....….... (b) Brand ……..…..……………. (c ) Grade …….
4. Qty of Cement & Lot No/Week No : (a) Qty ….............… (in Bags) (b) Lot No/Week No
5. Manufacturers test Certificates No. …........................................................……………
6. Random Test Details :
(a) Physical test report from …......…...………….. vide their letter No …....….....…………
(Name of approved Lab/Engg College)
(b) Chemical test report from ……...………......… vide their letter No ……….........………
(Name of approved Lab/Engg College)
7. Details of Physical & Chemical properties :
Physical Requirements Chemical Requirements

(As per IS 4031) (As per IS 4032)
Compressive
Final Setting Time (Minutes)
Le Chatellar
Temp during testing 20O C

Standard Consistency (%)
Soundness by Auto Clave
Ratio (Ratio)
Strengths
Sulphuric Anhydride (%)

Lime Saturation Factor
Insoluble Residue (%)

Specific Surface Area
Loss on Ignition (%)

(Mpa)
Initial Setting Time
Magnesium (%)
Chlorides (%)
Alkalies (%)
03 07 28
(Minutes)
2/Kg)
(Ratio)
Da Da Da
(Mby
ys ys ys
Alumina Iron
Soundness
As per relevant
IS
As per
manufacturer's
test certificate
As per random
test certificate
Remarks with Signature Accepted/Rejected
Contractor Junior Engineer Engineer-in-Charge Garrison

Engineer
Remarks Of BOO/Inspecting Office/CWE
*To be allotted serially by GE consignment wise.

248
Appendix 9.4
CHECKLIST/ GUIDELINES FOR DRAFTING SPECIFICATIONS
Generally :
1. Verify that the specifications are in accordance with the latest issue of Indian
Standards/Codes.
Notes: (a) Any variation in the specification contained in the MES schedule and that in
the IS should be brought to the notice of E-in-C.
(b) Where the variation, is however, intended to be adopted to suit local conditions or
nature of the work, such variation will be catered for in the particular specification.
2. Verify that the samples of materials of local origin are available with the GE.
Notes : Remember that samples need to be replenished occasionally and ensure that
they are in line with the quality readily available in the local market.
3. Ensure that the particular specification is in brief and avoid repetition of the General
Specifications already contained in the MES Schedule.
4. Ensure that there is no vagueness or ambiguity in the Particular Specification.

Peruse through the specification as if you were the contractor’s engineer/surveyor who
has to price the tender so as to appreciate what further clarifications are necessary.
Remember that ambiguities or inaccuracies arise because:-
(a) Provisions contained in the MES Schedule are either not in line with local
practice or materials likely to be available in that locality or materials manufactured
in the country.
(b) Indian Standards and Codes of Practice are included without verifying the
quality of materials likely to be readily available in that locality.
(c) New Materials and new construction techniques are specified without
explaining these in detail.
Based on the previous experience and observations of technical Examiners, ensure

that a check list to avoid above types of ambiguities or irregularities has been
prepared trade wise (as applicable to your Zone/area) and the Particular
Specifications, when drafted, are rechecked against this checklist.
5. While specifying items other than those of local origin, make sure that the articles
conform to requirements of relevant Indian Standards. Moreover ensure that these are
being actually manufactured and are available in the State or at least in the
neighbouring State (eg; for a work in Chennai or Thiruvananthapuram, do not specify
something likely to be available only in Kolkata). This particularly applies to items of
hardware (ironmongery), pipes, fittings and electrical fittings.
6. In case of certain imported materials, which are known to be imported but are
shown on drawings, make sure that there are no import restrictions.
7. Study the plans and sections carefully and if they show any details not intended
to be executed by the contractor, ensure that in the “scope of work” a clear stipulation
is made on the following lines: “The undermentioned items, though shown on drawings,
are excluded from the scope of this contract.”
249
8. Remember that the Particular Specification takes precedence over the General
Specification and notes on drawings. Therefore, carefully examine the various notes on
drawings and either get the discrepancies in the notes on drawings corrected on the
original tracing or cover these in the Particular Specification.
9. Make a critical check of drawings pertaining to Schedule of Finishes and ensure

that all rooms, passages, corridors, verandahs shown in the main plan are covered in
the Schedule of Finishes. Ensure that ground floor and first floor/terrace finishes are
separately shown. Similarly make a critical examination of the entire specification with
regard to mix for concrete and for finishes.
10 Also make a critical examination of the entire specification with regard to concrete
mixes and finishes before generalizing the specification. Make sure that the designer or
the architect has not in some cases intentionally adopted a different mix of finish.
250
SECTION 10
TERM CONTRACTS AND CONTRACTS FOR PERIODICAL SERVICES
10.1 Introduction.
MES is responsible for maintaining all the buildings and other allied services. This
involves constant occurrence of small repair works. Sometimes small new works
(Minor Works) are also required to be carried out.
10.2 Procedure.
(a) The necessity of repairs is ascertained from scrutiny of Unit Repair Book
(IAFW-1805), monthly inspection by AGEs incharge of Sub Division, quarterly
inspection by GEs and other inspections.
(b) One of the methods for carrying out repair works is through Term Contracts
(TC).
10.3 Term Contracts(TC).
(a) Normally, TC are for a specific term (period) without reference to cost as
stated in the Notice of Tender IAFW-2162 (Revised 1960). Contractors of ‘SS’ to ‘E’
Class are eligible to tender for TC irrespective of the value of work that may be
ordered during the period of the contract. If the value of TC contract is enhanced
beyond 10 percent, additional Performance Security shall be taken for the enhanced
contract value beyond 10 percent.
(b) TC, as far as possible, should be for a period of one year from 01 April to
31 March of next year. Action for concluding contracts should, therefore, be initiated
in Jan/Feb so that the new TC can be concluded in Feb/March and the same can be
operative from 01 April. TC for urgent nature E/M works may also be concluded to
reduce dependence on job orders.
(c) Work orders should, as far as possible, be placed once a month so that the
contractor can plan and organise his labour and resources. In this connection
attention is also invited to Para 362 of MES RMES which provides for placing of
orders on TC in phased programme of work so that the same number of men are
employed throughout the year.
(d) The Accepting Officer of the contract shall be the officer within whose powers
of acceptance the anticipated expenditure under the contract lies. In case where
expenditure under the contract exceeds the powers of the officer who accepted the
contract, the higher competent authority shall be informed of the anticipated total
expenditure and his prior concurrence obtained.
(e) To maintain uniformity of procedure, copies of all work orders on TC and

deviation orders for extension of time in respect thereof will be forwarded to the
AO/AAO concerned simultaneously when these are issued to the contractor.
Deviation orders for extension of time will also be issued on contractor’s order slip
form IAFW 1823 A numbered with suffix “Dev”.
251
(f) Condition 4 (A) of IAFW-2249 will also be referred for various restrictions on
placing orders in TC
(g) Conditions. The documents forming part of TC (except the use of IAFW-
1821-Tender and Contract Form) are the same as Lump Sum Contracts. However,
it is to be noted that there are certain conditions in IAFW-2249 applicable to TCs
only.
(h) Stores. As in Lump Sum contracts, Schedule ‘B’ indicates the materials to
be issued free and on payment by the Government. The rates of recovery for the
materials issued on payment will be those given in SSR for materials “Supplied
only”.
(j) Materials salvaged from dismantling and refixed in the same building or
another building situated within a radius of 200 metre will be issued for ‘fixing only’.
Old serviceable materials not included in Schedule ‘B’ may be issued by GE at SSR
rates plus/minus contractor’s percentage or at market rates for new materials,
whichever is higher. Materials such as sanitary fitting for which rates for ‘fixing only’
exist and not for ‘supply and fix’ in SSR, can be issued ‘free for fixing only’ even
though such materials are not in Schedule ‘B’ without amending the contract.
(k) Transport. No motor transport is hired to the contractor under TC.
(l) Tools and Plant. Normally no T & P is included at the tender stage at the
same rate of hire charges as in the Lump Sum contracts. T&P not shown in
Schedule ‘C’ can be hired at rates 20% higher than normal rates after amending the
contract to include the items concerned. It would be noted that once the T&P is
included in Schedule ‘C’ by an amendment it becomes incumbent on the MES to
supply T&P for all future works in that contract in absence of any stipulation in the
amendment to the contrary.
(m) Water. The contractor is permitted to draw water from the nearest MES
source and recovery is made at the rate of Rs 3.75 for every Rs 1,000/- value of
work carried out by the contractor where the water supplied is unmetered. In case
the supply of water is metered, the recovery shall be effected at the ‘All-in-Cost’
rates intimated by GE/GE (Utility)/CWE.
(n) Delay. Time is of the essence of the contract and due dates of completion
are shown on each work order. If the contractor fails to complete the work,
compensation shall be claimed by the Government at the rate given in Condition 50
of IAFW-2249 against the estimated value of the requisition or work order. Proper
notices must be issued as in the case of Lump Sum contracts.
252
(o) Cancellation/Termination. As in the case of Lump Sum contracts, the

Government can cancel the Term Contract for insolvency, default, death and corrupt
acts. Further this contract can be terminated by either party by giving a six weeks
notice to the other provided the contract remains in force for a period of not less than
six months. Any work order issued by the MES during the period of notice must be
carried out by the contractor within the time shown, even if the period of completion
extends beyond the date of termination.
(p) Payments. Advance payments can be made under a TC against each

individual work order at an interval of not less than thirty days provided the estimated
value of work performed is not less than as given in Condition 64 of IAFW-2249.
(q) A final bill can be paid for one or more works orders of TC if found
convenient.
10.4 Periodical Services
(a) Though the allotment of funds for periodical services and repair works are given
together, the periodical services are carried out through a separate contract [See
restrictions in Condition 4 (A) of IAFW-2249].
(b) Only measurement contract (based on IAFW-1779-A) shall be prepared for

periodical services and the following footnote will be inserted in Schedule ‘A’ :
“For measurement purpose in respect of those buildings for which audited periodical
services measurement books (PSMBs) are available; quantities shall be taken from
PSMBs direct and entered in Measurement Book (IAFW-2261) and in respect of those
buildings for which audited PSMBs are not available, detailed measurement of works
shall be taken and entered in Measurement Book (IAFW-2261) in the usual manner.”
(c) Provision is to be made in the contract for a phased programme for carrying out
these works.
253
SECTION -11
PROCEDURE FOR ENTERING INTO AGREEMENT

FOR SPECIALIST CONSULTANCY SERVICES
11.1 (a) CEs Zone/ CCEs & CsWE are authorized to enter into agreements with
private consultants for the purpose of obtaining consultancy services on specialist
items of work, after settling the terms and conditions through competitive tendering.
(b) The authority for approval of Consultancy out of project contingency through
specialist consultants rests with E-in-C. However authority of consultancy has been
delegated to CEs Zone and CsWE as under vide E-in-C's Branch letter No
A/00157/23-I/Pol/E2W (PPC) dated 12 No2015 with following stipulations :-
“Total expenditure on Consultancy should be as under:-
(a) Consultancy when included in AEs :- upto the amount included in AEs for
consultancy.
(b) Consultancy amount not included in AEs:- CEs Zone/ CsWE are
permitted to use funds available in project contingency. However in this
particular case the upper ceiling be restricted to 2% of the project cost.”
Instructions issued from E-in-C's Branch from time to time on various aspects of
consultancy shall be followed.
Utilization of Savings from Consultancy:-
Savings from Consultancy charges (if specifically sanctioned by CFA) shall not be
utilized for acceptance of tender or any other purpose, apart from that of
Consultancy.
E-in-C's Branch letter No A/95533/22-34/POL/E2W (PPC) dated 28 Oct 2013 refers.
(c) After taking decision/ after obtaining approval (as the case may be) to go for
consultancy by the CE Zone/ CCE/ CWE, offers shall be invited through competitive
tendering.
(d) Govt of India, Min of Def has approved a standard consultancy agreement
form as per Appendix 11.1. Other documents like, Forwarding letter, Content page,
Notice of tender, Authorization page, Acceptance page, arbitration agreement
(Appointing authority shall be E-in-C in respect of consultancy contracts concluded
by CEs and appointing authority shall be CE Command/ ADG in respect of
Consultancy agreements concluded by CWE) as applicable shall also form part of
tender documents.
With reference to Clause 11 of the Standard Form and Annexure 'C' thereto, the
schedule of fees should be so made out that, either :-
(i) The consultant becomes entitled for payment of fees only on

satisfactory completion of the entire consultancy services covered by the
Agreement,
254
OR
(ii) if payment in stages is contemplated, the consultant becomes entitled

for stage-wise payment only on satisfactory completion of distinct stage. This
will ensure that if the consultant ultimately fails to complete the entire
consultancy service in terms of the Agreement, the fees already paid,
does not become infructuous. (Note- the part service rendered which is
complete in itself shall be made use of by the Department).
11.2 The department has the capacity to take on design load to some extent unless
revised subsequently by E-in-C's Branch :
(a) E-in-C's Branch has the capacity for handling design for airfield pavements
and roads, in addition to the design of hospitals of more than 600 beds and other
selected structures.
(b) ADG Design and Consultancy, Pune is capable of handling design load in
respect of marine structure, architectural and structural design of buildings, central
sewage disposal scheme and sound proofing.
11.3 For any advice on design, specifications and allied matters (not involving detailed
design/ drawings) as well as checking designs considered essential by the CEs, they may
refer the matter directly to ADG Design and Consultancy.
11.4 In respect of consultancy for other types of specialist works as well as consultancy
for investigation of collapses/ distresses of structures, CEs may resort to consultancy with
specialist, whenever necessary.
11.5 E-in-C's Branch E2(D) has circulated Standard Operating Procedure for
empanelment of Consultants who are specialized in different disciplines. Their letter No
93348/Misc/Consult/50/E2 Des-1 dated 06 Mar 2013 including various amendments thereto
issued on this from time to time refers. As per this Consultants are empaneled for various
Groups (Group-I E-in-C Level, Group -II CE Command Level, Group-III CE Zone Level) with
corresponding limit of Max Project Cost (Group I– No limit, Group II- upto Rs 25.00 crores,
Group III – upto Rs. 15.00 crores) and specific categories ( architectural, structural etc).
The empaneling authorities are required to upload list of consultants empaneled by them
periodically giving their full address, email ID, contact details and Group & Categories of
their empanelment. In addition a quarterly report on performance of the Consultants shall
also be circulated by the corresponding empaneling authorities about the consultants
empaneled by them. This report will include details of consultants who have been awarded
consultancy through contracts, job orders or any other permissible mode.
11.6 Certain salient issues contained in these institutions are given here under:-
A list of approved consultants who are specialized in different disciplines is circulated by

the E-in-C's Branch from time to time. Consultants shall be selected based on their past
performance, track records, establishment etc. CVC guidelines circulated by E-in-C's
Branch letter No 93345/Misc/consult/07/E2(Design) dated 05 Feb 2003 as amended up to
date shall also be kept in view.
255
11.7 Existing instructions on inviting competitive bids from empaneled consultants as well
as non-empaneled consultants enumerated in E-in-C's Branch letter No
93348/MISC/Consult/386 /E2 Des-1 dated 26 Oct 2018 are as under :-
(a) Bids may be preferably invited from the enlisted (i.e. empaneled) consultants
in order to cut down the time required for processing the bids.
(b) In case of unenlisted (i.e. un-empanelled) consultants participating in tender,

a BOO will be ordered by the Accepting Officer to verify that the consultant meeting
the PQC is also meeting the enlistment (i.e. empanelment) QR as specified in E-in-
C's Branch letter No 93348/ Misc/Consult/50/ E2 Des-1 dated 06 Mar 2013
including various amendments thereto issued on this from time
to time as referred in Para 11.5 hereinbefore. Board proceedings including
verification of facilities will be completed before provisionally enlisting the
consultants.
(c) The Accepting Officer CE Zone/CCE/CWE may enlist such un-enlisted

consultant provisionally for specific work irrespective of its cost. However, such
enlistment of the consultant will be provisional and one time. The
provisional enlistment shall be vaild only for the concerned project and
shall automatically cease to be operative on completion / closure of the
concerned project.
(d) The provisional enlistment of a consultant in a particular CE Zone will not

qualify the firm for getting provisional enlistment from other Zones till such time the
project for which consultancy has been awarded is not fully completed in all
respect. A certificate in this regard shall be obtained from the consultant during
the process of provisional enlistment.
(e) The performance of such firms shall be strictly monitored and the same shall
be reflected in the QPR submitted by CE Zone/CCE to E-in-C's Branch.
11.8 Whenever Govt/ Semi Govt agencies like CBRI Roorkee, Structural Engineering
Research Centre, Roorkee and Chennai, Indian Institute of Technology/ NIT etc. or other
local bodies are in a position to provide consultancy services, preference should be given
to such agencies without inviting tenders for competitive tendering.
11.9 Procedure of competitive tendering shall be followed as given in Section 3. However

requirement of solvency certificate and working capital certificate shall not be insisted upon
for provisional enlistment. Security Deposit shall be released alongwith final bill to the
consultant. No risk and cost action shall be taken.
11.10 Specific provisions in Consultancy Contract :-
(a) Joint Venture/ Consortium. The Joint Venture provisions as for Works
Contracts shall be applicable with following modifications:-
(i) In JV for consultancy both the parties can have experience/

empanelment for independent parts/ aspects of the skill requirement
i.e.one party for architectural, the other party for structural etc.
256
(ii) If a Firm participates in more than on bid i.e. as individual or as
a party to JV/ Consortium, all such proposals shall be disqualified.
(iii) JV in Consultancy contracts shall be allowed for estimated cost

more than Rs 50.00 lakhs.
(b) Integrity Pact. Integrity Pact shall form part of all consultancy tenders with
Estimated Cost more than Rs 25.00 lakhs.
(c) Conflict of interest. The consultant will submit details / situation of actual
or potential conflict of interest including conflicting relationship. For this purpose
the instructions in Para 3.19 shall be applicable with clarification that the term
“Contractor” in this Para including Para 3.19.1 & 3.19.2 shall mean the Proprietor/
Partner/ Director including Engineer(s)/Architect(s)engaged by the Consultant for the
consultancy Contract.
11.11 SPECIAL CONDITIONS IN CONSULTANCY TENDERS
At present there is no MES Conditions of consultancy tenders available. Till these

conditions are finalized, approved and implemented, the conditions as in Appendix
11.2 shall be incorporated.
257
APPENDIX 11.1
CONSULTANCY AGREEMENT
This Agreement made this day of ………………………………………………..
BETWEEN ……………………………….. (On behalf of the President of India) hereinafter

referred to as “the Client” and ………………… having its registered office at
………………………………………. hereinafter referred to as “the Consultant”.
WHEREAS the Client proposes to construct ……………………………. hereinafter referred

to as ‘the Project’ and intends to obtain consultancy services as listed in clause 1
hereinafter and the Consultant is agreeable to render the said consultancy services on the
terms and conditions hereinafter stipulated, it is hereby agreed to by both the Parties as
under :
1. Consultancy Services as listed in Annexure ‘A’ shall be provided by the

Consultant.
2. The Client shall provide data/information as specified in Annexure ‘B’, to the

Consultant within ………………… days of conclusion of this Agreement.
3. The Consultant shall provide and complete the Consultancy Services in

accordance with the phasing ………………… stipulated hereinafter, to the
satisfaction of the Client or his authorized representative, within a period of
………………..months of conclusion of this Consultancy Agreement.
4. Extension of time may be granted for delays caused, which in the opinion of
the Client, were beyond the Consultant’s control, provided the Consultant
applies for such extension of time in writing, within seven days of the
occurrence of any event which caused delay.
5. The Consultant shall carry out the services required in terms of this
Consultancy Agreement, according to accepted norms of sound engineering
practice and conforming to Indian Standard Codes. The Consultant shall be
responsible for the technical soundness and accuracy of the services
rendered.
6. The Consultant shall supply to the client the following documents :
(a) Design calculations in CD and hard copy duly signed ….........Copies.
(b) Detailed working drawings in CD and hard Copies size ………………..

copies and quality of drawing paper as mutually agreed between the
Client and the consultant. Modify suitably to meet the requirements. If
necessary stipulate the sizes/ quality.
(c) Bills of Quantities in respect …………. in CD and hard copies of

…………duly typed (Quantities to be taken off from drawings, as per IS 1200
, as amended upto date).
258
7. Design paper by Consultant in respect of ………………………., shall be got
checked by Indian Institute of Technology …………Central Building Research
Institute , Roorkee /Structural Engineering Research Centre, Chennai/
…………………. (Retain as necessary), under the Consultant’s own arrangements ,
before finalization of drawings. A certificate to the effect that the designs have been
so checked, shall be furnished to the client by the Consultant. The fees stipulated in
Annexure ‘C’ shall inter-alia be inclusive of getting the designs checked as
aforestated. This clause may be inserted when design for unconventional structures
are involved, at the discretion of CE/ CWE.
8. The calculation sheets, drawings, reports and similar documents provided by
the Consultant in terms of this Agreement to the client,shall remain the property of
the Client and Client shall have full right to use them in any manner for the Project or
for any other purpose, at the Client’s sole discretion. This clause would not be
applicable when the Agreement is concluded with Govt/ Semi –Govt. Agencies.
9. The Consultant shall use the data and other information supplied by the Client
solely for the purpose of performing and carrying out his obligations under this
Consultancy Agreement and shall not disclose the same to any other person,
except to the extent required in performance of the work of the Project, and
shall maintain utmost secrecy.
10. The Consultant shall not, without the consent in writing of the Client, publish
any article or photographs relating to the Project.
11. For providing the Consultancy Services as stipulated in this Agreement in

accordance with the provisions of clauses 1 and 3 to 7, the Client shall pay fees
to the Consultant as specified in Annexure ‘C’.
12. If the Client requires that the Consultant should provide additional
Consultancy Services other than listed in Annexure ‘A’, the consultant shall provide
the same at fees mutually agreed.
13. If any time after conclusion of this Agreement, the Client decides to postpone
or abandon the Project, he may, by giving seven day’s notice in writing to the
Consultant, terminate this Agreement, provided that if the Project or any part
thereof is postponed, the Client, may, in lieu of terminating this Agreement
require the Consultant in writing to suspend the carrying out of his Services
under this Agreement, for the time being. If the Client does not require the
Consultant to resume performance of Services in respect of any postponed work
within a period of three months from the date of the Client’s requirements in
writing to the consultant to suspend the carrying out of his services, such work
shall be considered to have been abandoned and this agreement
shall be deemed to be terminated.
14. If this Agreement is terminated in pursuance of Clause 13, the Consultant
shall be eligible for payment of proportionate fees for the portion of Consultancy
Services already rendered, as assessed by the Client. The Client’s decision in
this respect shall be final and binding; the other compensation whatsoever shall
be paid.
259
15. If the Consultant commits any breach of any the provisions of this Agreement,
the Client shall be entitled to cancel this Agreement and on such cancellation the
fees payable shall be proportionate to the Services if any, already rendered by
the Consultant as assessed by Client, less ten percent.
16. All payments to the Consultant shall be made online Payee. In WITNESS
WHEREOF the Parties aforesaid have set hands as shown below.
(The Consultant) (The Client)
Signature of Witness
(On behalf of the President of India)
…………………………………………………..
…………………………………………………..
………………………………………………….. ANNEXURE A
Consultancy Services to be provided by the Consultant (Refer to Clause I of the

Agreement)
ANNEXURE B
Data /Information to be supplied by the Client (Refer to Clause 2 of the Agreement)
ANNEXURE C
Schedule of fees to be paid to the Consultant (Refer to Clause 11 of the Agreement)

260
Appx 11.2
SPECIAL CONDITION
1 DEFINITIONS
1.1 For the purpose of this CONTRACT, unless otherwise specified or repugnant to or
inconsistent with subject, context or meaning thereof, the following terms shall be deemed
to have the following meanings:
1.2 “CONTRACT” shall mean this CONTRACT including all sections, annexures and
appendices hereto and all documents herein attached and amendments to be made to this
CONTRACT, if any, which the PARTIES may hereafter mutually agree in writing.
1.3 “CLIENT” shall mean President of India represented
by ………………………………………...
1.4 “CONSULTANT” or “CONTRACTOR” shall mean M/s

…...………………………………, having its registered office at
……………………………………………………
……………………………………………………………………………………(Address)
and shall include all other known offices of M/s ………………………………………………..
1.5 “ACCEPTING OFFICER” shall mean ………………………………………... (name &

address) and for all purposes shall also be referred as “CLIENT”.
1.6 “PARTIES” shall mean CLIENT and CONSULTANT, one individually referred to as
PARTY.
1.7 “SERVICES” shall mean all the responsibilities to be discharged by consultant for
fulfilling its obligations under this contract.
1.8 “AUTHORISED REPRESENTATIVE(S)” shall mean the representatives of “CLIENT”
and/or “CONSULTANT” as the case may be, who are duly empowered and authorized by
their respective organization to act for and on their behalf.
1.9 “DATE OF ACCEPTANCE” shall mean the date on which CLIENT confirms written
acceptance of consultants SERVICES.
1.10 “PROJECT” shall mean the Structures/ Building at location (s) for which consultant
is to provide SERVICES under this CONTRACT.
1.11 “PROJECT COST” shall mean summation of costs of contracts concluded with
lowest tenderers adjusted with cost of variations/deviations during execution or DPR cost
(retain as applicable) of work contracted, whichever is less.
(Note: - It is expressly mentioned that Project Cost shall not include cost of land
and escalation, if any and percentage quoted by consultant of project cost shall not
be paid on cost of land, escalation, if any.)
1.12 “CONSULTANCY CHARGES” shall mean the amount as quoted by Consultant in

261
1.13 “CDA” shall mean Controller of Defence Accounts.
1.14 “PCDA” shall mean Principal Controller of Defence Accounts.
2. LANGUAGES
This Contract has been executed in English, which shall be the binding and controlling
language for all matters relating to the meaning or interpretation of this Contract.
3. HEADINGS
The headings shall not limit, alter or affect the meaning of this Contract.
4. OFFICIAL SECRETS ACT AND SECURITY OF CLASSIFIED INFORMATION

AND DOCUMENTS
The Consultant shall not disclose to any third person or party any information, data, tender
documents and contents thereof, design, drawings, plans, specifications etc. received from
the client or collected during their site visits to various military stations at any time either in
whole or in part and shall ensure to preserve the secrecy of the above information and shall
not use the same for any purpose other than construction, maintenance and operation of
the resultant Project/Plant. Officers, staff, employees of the Consultant handling all such
information shall be subject to the provisions of the OFFICAL SECRETS ACT and
violations, if any, shall be dealt with accordingly.
5. CLIENTSHIP OF INFORMATION / DATA/DESIGNS / DRAWINGS/ DEVELOPED

BY THE CONSULTANT UNDER THE CONTRACT.
Clientship of all data, documents, drawing, designs developed by the Consultant at

client cost under this contract shall rest with the client. The consultant shall hand over all
such materials (in print as well as in electronic media) to ……………….. before the payment
of that material/document is claimed. Authority for future use of these materials shall
solely rest with the client. Accordingly a certificate to this effect that these documents will
not be utilized by them for any other project without the permission of …………….. shall be
rendered at the time of submission of tender.
6. INDEMNITY
6.1 The consultant shall hold harmless and indemnify the client, against any claims or
liability because of personal injury including death of any employees of consultant arising
out of or in consequence of the performance of this CONTRACT.
6.2 CLIENT shall not be responsible for any loss or damage to property of any kind
belonging to consultant or his employees, servants or agents during execution of the
contract.
7. ASSIGNABILITY
The contract and benefits and obligations thereof shall be strictly personal to the parties.
262
8. GOVERNMENT LEVIES
The Consultant remuneration shall be inclusive of all statutory taxes and levies imposed by
Government of India for the time being in force, such as Income Tax, Education Cess,
Labour welfare cess, GST etc. as applicable from time–to-time. Any change in such
levies/taxes after the date of opening of Priced Tender shall be adjustable.
9. PERFORMANCE SECURITY
9.1 The consultant shall furnish within 28 days of issue of the letter of acceptance by
client, a bank Guarantee from any nationalized blank on the prescribed format (as
applicable for other contracts) for an amount equivalent to 5% (Five percent) of the total
consultancy fee to be received by him towards performance Security valid for a period till
payment of final bill or completion of defect liability period of the project. Any amount as and
when due against consultant on account of liquidated damages, unsatisfactory performance
and failure of buildings / schemes or any part of buildings / schemes be recovered form his
dues and by encashing the bank guarantee.
9.2 The total consultancy fee for this purpose shall be as quoted by the Consultant.
10. NOTICES
Any notice, request or consent required or permitted to be given or made pursuant to this
Contract shall be in writing. Any such notice, request or consent shall be deemed to have
been given or made when delivered in person to an authorized representative of the
Party to whom the communication is addressed, or when sent by registered mail, telex,
telegram or facsimile to such Party at the address specified below:-
Client :- ______________________
Consultant :- M/s ______________________
11. EFFECTIVENESS OF CONTRACT
This Contract shall come into force and effect on the date (the “Effective Date”) of
Acceptance.
12. COMMENCEMENT OF SERVICES
The Consultants shall begin carrying out the Services immediately after submission of
performance security.
13. SUSPENSION
The client may, by written notice of suspension to the Consultant, suspend all
payments to the Consultant hereunder if the Consultant fails to perform any of their
obligations under this Contract, including the carrying out of the Services; provided that
such notice of suspension :
263
(a) Shall specify the nature of the failure and
(b) Shall request the Consultants to remedy such failure within the period not
exceeding fourteen (14) days after receipt by the Consultants of such notice of
suspension.
14. TERMINATION
If at any time in spite of reasonable notices, the client considers that the consultant
is making default or is not progressing diligently or that the quality of services
rendered by the consultant is not satisfactory, or that the consultant is not effectively
cooperative in achieving the targets of the scheme in one way or other or that the
consultant is lacking in professional ethics or misconducts himself, then client may
at his discretion terminate this contract in whole or in part as he deems fit without
assigning any reason. In the event of such termination, the consultant shall be
entitled to be paid only for those stages of work/services which have been fully
completed by the consultant less 10 % (ten percent) . In addition, the performance
security as lodged by the consultant shall be encashed. No compensation
whatsoever shall be admissible to the consultant for any incomplete stage or on any
other account. Drawings, design data etc for any incomplete stage(s) received by
the client however shall become the property of the client.
15. FORECLOSURE
At any time before his services and obligations under the contract is completed by
the consultant, the client shall have right to foreclose this agreement without
assigning any reason to the consultant. In case of such foreclosure, the consultant
shall be entitled to be paid for the stages of work already completed by him at
applicable rates and a reasonable compensation as decided by Employer (which
shall be final and binding) for any part or any stage of services of the consultant
already completed by the consultant before he was served with the notice of
foreclosure.
16. FAIRNESS AND GOOD FAITH
16.1 The Parties undertake to act in good faith with respect to each other’s rights
under this Contract and to adopt all reasonable measures to ensure the realization
of the objectives of this Contract.
16.2 Operation of the Contract
The Parties recognize that it is impractical in this Contract to provide for every
contingency which may arise during the life of the Contract, and the Parties hereby
agree that it is their intention that this Contract shall operate fairly as between them,
and without detriment to the interest of either of them, and that, if during the term of
this Contract either Party believes that this Contract is operating unfairly, the Parties
will use their best efforts to agree on such action as may be necessary to remove
the cause or causes of such unfairness, but on failure to agree on any action
pursuant to this clause shall give rise to a dispute subject to arbitration in accordance
with Clause thereof.
264
17. SETTLEMENTS OF DISPUTES
17.1 All disputes, between the parties to the contract (other than those for which
the decision of the …………. or any other person is by the contract expressed to be
final and binding) shall, after written notice by either party to the Contract to the other
of item, be referred to the sole arbitration of serving officer having degree in
Engineering recognized by the Government of India to be appointed by the Engineer-
in-Chief, E-in-C’s Branch, Kashmir House, New Delhi-11 or Director General of
Works, if specifically delegated in writing by Engineer-in-Chief, Army Headquarters,
New Delhi whose decision shall be final, conclusive and binding. The Arbitration shall
be governed by Arbitration and Conciliation Act, 1996 including its Amendment Acts.
However for consultancy contracts concluded by CsWE, arbitrator shall be appointed
by CE Command/ ADG.
17.2 Unless both parties agree in writing, such reference shall not take place until
after the completion or alleged completion of the Works or termination or
determination of the Contract under conditions of this contract. Provided that in the
event of abandonment of the works or cancellation/termination of the Contract under
conditions of this contract, such reference shall not take place until alternative
arrangements have been finalized by the client to get the works completed by
or through any other consultant or consultants or Agency or agencies.
17.3 Provided always that commencement or continuance of any arbitration

proceeding hereunder or otherwise shall not in any manner militate against the
client’s right of recovery and from the consultant forefeiture of performance security
as provided in conditions of this contract.
17.4 The award of the Arbitrator shall be final and binding on both the parties to
the contract.
17.5 Notwithstanding the fact that the stations of work are anywhere in India, only
the courts at …….. shall have the jurisdiction as court of first cause, to adjudicate
and settle any disputes between client and the consultant. No other court outside
……… shall have any jurisdiction on any matter requiring reference to Civil Court as
first cause court.
18. CONSULTANTS NOT TO BENEFIT FROM COMMISSIONS, DISCOUNTS ETC
The remuneration of the Consultant pursuant to ‘Consultant Price’ hereof shall

constitute the Consultant’s sole remuneration in connection with this Contract or the
Services and, the Consultant shall not accept for own benefit any trade commission,
discount or similar payment in connection with activities pursuant to this Contract or
to the Service or in the discharge of their obligations hereunder, and the Consultant
shall use their best efforts to ensure that any sub-consultants, as well as the
Personnel and agents of either of them, similarly shall not receive any such additional
remuneration.
265
19. CONSULTANTS AND AFFILIATES NOT TO ENGAGE IN CERTAIN ACTIVITES
The Consultant agree that, during the term of this Contract and after its termination,
the Consultant and any entity affiliated with the Consultant, as well as any sub-
consultant and any entity affiliated with such sub-consultant shall not indulge in any
type of unlawful, illegal or other activities detrimental to the interest of the Govt and
in the event of failure to comply with such instructions, they shall be disqualified from
providing goods, works or services (other than the Services and any continuation
thereof for any project resulting from or closely related to the Services).
20. PROHIBITIONS OF CONFLICTING ACTIVITIES
Neither the Consultant nor their sub-consultants or the Personnel of either of them
shall engage, either directly or indirectly, in any of the following activities:-
(a) During the terms of this Contract, any business or professional

activities in the Government’s country which would conflict with the activities
assigned to them under this Contractor.
(b) After the termination of this Contract, such other activities as may be
specified in the contract.
21. LIABILITY OF THE CONSULTANT
Subject to additional provisions, if any, set forth in the contract, the Consultant’s
liability under this Contract shall be as provided by the Applicable Law.
22. FORCE MAJEURE
22.1 Definition : For the purpose of this contract, “Force Majeure” means an event
which is beyond the reasonable control of a party, and which makes a Party’s
performance of its obligations under this contract impossible or so impractical as
reasonably to be considered impossible in the circumstances , and includes but not
limited to, war, riots, civil disorder, earthquake, fire explosion, storm, flood, pandemic,
strikes, lockouts, or other industrial action (except where such strikes, lockouts or
other industrial action are within the power of the Party invoking Force Majeure to
prevent), confiscation or any other action by government agencies.
22.2 Force Majeure shall not include:-
(a) Any event which is caused by the negligence or intentional

action/inaction of a Party
(b) Any event, which a diligent Party could reasonably have been expected
to both:-
(i) Take into account at the time of conclusion of this contract and;
(ii) Avoid or overcome in the carrying out of its obligations under

this contract.
266
22.3 The failure of a Party to fulfill any of its obligations under this contract shall
not be considered to be a breach of, or default under, this contract in so far as such
inability arises form an event of Force Majeure; provided that the party affected by
such an event has taken all reasonable precautions, due care and reasonable
alternative measures with the objective of carrying out the work under the terms and
conditions of this contract.
22.4 Measures to be taken
(a) A Party affected by an event of Force Majeure shall take all reasonable
measures to remove such Party’s inability to fulfill its obligations under this
contract with minimum of delay.
(b) A Party affected by an event of Force Majeure shall notify the other
Party of such events as soon as possible, and in any event not later than
fourteen (14) days following the occurrence of such event, providing
evidence of the nature and cause of such event, and shall similarly give notice
of the restoration of normal conditions as soon as possible.
(c) The Parties shall take all reasonable measures to minimize the
consequences of any event of Force Majeure.
22.5 Extension of Time
The Consultant shall keep a record of the circumstances referred to above

information, which are responsible for causing delays in the execution of the project
and shall intimate to …………….. (name of Accepting Officer) within seven days of
the happening causing delay requesting for extension of time for entire completion
of his services. Such extension of time shall be granted by …………….. (name of
Accepting Officer) after due consideration of circumstances intimated by the
consultant. In case of any difference of opinion, the decision of client shall be final
and binding.
23. COMPENSATION:- If the Consultant fails to complete the work on or before

the stipulated time as mentioned in Appendix ‘A’ , he shall, without prejudice to any
other right or remedy of Client on account of such breach, become liable for
compensation calculated at 0.5% (HALF percent) per week of the Consultant's fee
stipulated or part thereof worked out for the specific item of works. However the
same shall not exceed 10% (TEN) of the Consultant’s total fee. If the delay is on
account of reasons apparently not attributable to the Consultant or emanating due
to a situation which could not have been foreseen by an experienced Consultant
resulting in his failure to meet the agreed time schedule, the Consultant shall in
writing inform the Client within one week of happening of such event and seek
extension of time based on which the Client may grant extension at his sole
discretion. Decision of Client shall be final and binding on the Consultant in this
respect.
267
24. PATENTS
The consultant shall indemnify and hold client harmless from all costs, damages, and
expenses arising out of any claim, action or suit brought against client by third parties in
respect of any infringement of any patent or registered design or similar rights resulting from
the use of any technical information, data or process or design belonging to the Consultant
and furnished to CLIENT.
25. The consultant shall render a certificate for adequacy of structural design of the
buildings catered under scope of work against seismic and other design loads like wind load
as per latest IS provisions and in accordance with the following format :
CERTIFICATE
1. It is certified that the structural design as provided and furnished to the client for the
buildings included in the consultancy services of this agreement have been prepared after
considering all codal provisions of Indian Standards (of BIS), as amended till date of design,
on the matters and issues of structural safety; that these designs are structurally safe
including safety considerations from natural hazards of the accepted level and that all local
factors including those based on soil conditions have been duly incorporated and accounted
for in the design of buildings/ structures.
2. It is further certified that the structural drawings are based on structural design
calculations and that the design/ specification included in drawings are in accordance with
the current Govt. Policy, IS specifications, Technical Instructions (issued from time to time)
and sound engineering practice including earthquake resistant design as catered for for
Seismic Zone ________.
Signature of Consultant
268
SECTION 12
CONTRACTS FOR SPECIALIST WORKS BASED ON T&Q BIDS
12.1 General.
As per condition laid down in Notice Inviting Tender (IAFW-2162), any tender which
proposes any alteration in any of the conditions laid down or proposes any other
condition, is liable to be rejected. Inspite of such a stipulation, it had been observed
that contractors while submitting tenders for specialist works like air conditioning,
cold storage/refrigeration, water purification plants, sewage treatment plants,
sewage disposal schemes, provision of lifts, cranes etc, often submitted conditional
tenders. As result of tender opening was known to all the tenderers, there was a
tendency on the part of the some of the tenderers to take advantage of their
knowledge regarding the amounts quoted by others and to modify their quotations,
when they were asked to withdraw the condition(s) stipulated by them. To obviate
such an unhealthy practice, tenderers were informed in the tender forwarding letter
that if any of the condition(s) stipulated in the tender documents was desired to be
modified by them, the financial effect involved in the event of Government insisting
on retention of the original condition(s) should be indicated in the tender and that
any tender which does not comply with this requirement is liable to be considered
as non-bonafide. Past experience shows that such a stipulation in the tenders did
not have the desired effect. Specialist tenderers continue to quote with conditions
(both technical and financial). If such tenders are rejected outright, treating them as
non-bonafide, the same may result in accepting tenders containing higher rates or
delay in commencement of work.
12.2 Procedure.
Considering the foregoing, it has been decided that the following procedure will
henceforth be followed with regard to tenders for specialist works:-
12.2.1 In Case of E Tendering. In case of e tendering, tender shall be issued in

two stages and three covers system as under:-
(a) Stage 1.
(i) In Stage 1, the complete tender document with BOQ and drawings shall
be uploaded for bidding with two covers. BOQ shall be loaded in PDF
format so as to ensure that the contractor is not able to quote his rates. As a
matter of extra precaution and to avoid any confusion in the mind of the
contractor, a note shall be added in the BOQ that rates are not required to
be quoted at Stage 1. Cover 1 shall be the same as mentioned in Para
3.8.1(a) of Section 3 of the Manual. Cover 2 shall contain the technical
details (design details proposed by tenderer) alongwith commercial terms
and conditions. Cover 2 of only those tenderers will be opened who qualify
after tender evaluation of Cover 1.
(ii) Correspondence with Bidders . Correspondence shall be made with

tenderers whose Cover 2 of Stage 1 are opened. This correspondence shall
be for bringing all the tenderers at par technically (design details proposed
by bidders) and commercially. All such correspondence shall be made
online through e-mail.
269
(b) Stage 2. In Stage 2, complete tender documents along with reference of

correspondence made with qualified tenderers in Stage 1 shall be uploaded. Since
the correspondence in Stage 1 was tenderer specific, only letters exchanged with
specific tenderers online shall be made part of the tender document being
uploaded in respect of that tenderer. Apart from this, BOQ in standard format shall
be uploaded. This BOQ shall be as per finalised design for the items of the work
subsequent to bringing at par the technical details, commercial terms and
conditions of all tenderers. In the bidding at this stage, there will be only one
cover(called the third cover) consisting of complete tender documents including
BOQ. The date of opening of this third cover shall be finalised while uploading of
tender in this stage. Thereafter action shall be taken as described in Section 3 of
Manual. The bid submission end date in this Stage 2 shall be the ‘bid submission
end’ date for working out escalation as applicable. The escalation clause shall be
suitably modified.
12.2.2 In Case of Physical Tendering:-
(a) For specialist works, tender will continue to be prepared and issued as per
the existing procedure, except for the modifications explained here-in-after. While
forwarding tender documents, tenderer’s attention will be invited to relevant para of
the NIT and he will be informed that if any of the condition(s) stipulated by
Government in the tender documents is sought to be modified by him, the financial
effect involved in the event of the Accepting Officer insisting on retention of the
original condition, should be indicated by the tenderer in his tender.
(b) Departmental tender documents will be prepared in two parts. Schedule ‘A’
and “General Summary” will constitute one part (Part I) and the remaining will
constitute the second part (Part II). Serial page numbering etc will be retained as
per the existing practice so that both the parts could be merged into one document
later on.
(c) (i) At the time of issue of tenders, tenderers will be specifically directed to
submit their tenders in two parts, each in a different sealed envelope duly marked.
For this purpose, the Accepting Officer will forward (along with the departmental
tender documents) two self-addressed cloth lined envelopes one marked “(T)”---
Tender for ................ (name of work) ............ due on …....... at .......... hrs” and the
other marked “Q”-----Prices/Rates on respect of tender for …......... (name of work)
............ due on .............. at .......... hrs”. Another large size self-addressed cover will
also be forwarded by the Accepting Officer to enable the tenderer to submit his
tender, comprising both the parts (separately sealed) together with an outer cover.
The name of the work and the last date and time of receipt of tenders will be
indicated by the Accepting Officer on the outer cover also.
(ii) The documents to be submitted by the tenderers in sealed envelope “T” will
comprise Part-II of the Departmental tender documents, the tenderer’s tender
forwarding letter and its enclosures and any other documents proposed to be
submitted by him including modified Schedule ‘A’ (unpriced), if any. (Note—In
some cases, especially Air Conditioning works, specialist contractors prepare and
submit their own Schedule ‘A’ i.e. List of works, which are at slight variance with the
Departmental Schedule ‘A’ but at the same time such modified Schedule ‘A’ turns
out to be technically more suitable).
270
(iii) The documents to be submitted by the tenderer in the sealed envelope ‘Q’
will include Part I of the Departmental tender documents (priced Schedule
‘A’/priced modified Schedule ‘A’ (if any) and General Summary). Tenderers will be
directed not to give any indication with regard to their tendered rates or amounts in
any of the documents submitted in the sealed envelope “(T)” as such details are to
be given in the documents submitted in the sealed envelope ‘(Q)’ only. If by
chance, a tenderer indicates any rate/rates for items of works in tender documents
submitted in envelope ‘(T)’, the tender need not be treated as non-bonafide.
(d) The Comparative Statement of Tenders (CST) will be in two parts ie Part ‘A’
and Part ‘B’. (Appendices 12.1 and 12.2)
(e) Immediately after the date and the time fixed for receipt of tenders, all
tenders received will be opened by two tender opening officers nominated by the
Accepting Officer (outer cover as well as sealed envelope marked ‘T’) in the
presence of tenderers who choose to be present and scheduled in the CST, in the
normal manner. Except that the sealed envelope marked ‘Q’ containing the
tenderer’s quotation shall NOT be opened on that date. However, the opening
officers shall sign and date the sealed envelopes marked ‘Q’. Each page of the
tenderer’s tender forwarding letter (received in envelope ‘T’) will be initialled and
dated by the tender opening officers. Part ‘A’ of the CST will then be completed by
the tender opening officers. Against each tenderer’s name, a remark will be
endorsed “tender received with forwarding letter” or “No tender” (suitable modified
remarks to suit the circumstances of each particular case may be endorsed by the
opening officers). If the sealed envelope ‘T’ only has been received a remark to that
effect should be made in the CST Part ‘A’ and the tender received not considered,
being incomplete. If on the other hand, the sealed envelope ‘Q’ has only been
received, after making a suitable remark to the effect in CST Part ‘A’, the sealed
envelope ‘Q’ shall be returned to the tenderer unopened.
(f) All sealed envelopes marked ‘Q’ received from the tenderers will be put
together [unopened in a large cover (LC)] in the presence of tenderers, sealed and
signed by both the tender opening officers, with suitable remarks endorsed on the
cover, indicating the contents of the cover.
(g) After opening of tenders in envelope marked ‘T’ and completion of Part ‘A’ of
CST, the documents including the sealed LC containing the envelope marked ‘Q’
will be handed over by the tender opening officers to DIR(C)/
Jt DIR(C)/DCWE(C)/AGE(C) or to any other officer as authorised by the Accepting
Officer. The sealed LC containing the envelope marked ‘Q’ will be kept in safe
custody separately by the head of E8 section.
(h) Scrutiny of Technical Bid .
(i) E8 section will scrutinise all the tenders received (documents
received in sealed envelope ‘T’) from the contractual angle and later get all
the tenders technically scrutinised by the E2 Section (Plg)/E4 Section (E/M)
as the case may be.
(ii) Clarifications on the tenderer’s proposals, if any needed, shall be
sought in writing, from the respective tenderers. Tenderers will also be
asked to withdraw conditions, if any, which are not in conformity with the
Departmental tender conditions. If the tenderers indicate any financial effect
consequent on withdrawal of the conditions, the same will be taken note of.
271
(iii) The Accepting Officer may take a decision to totally ignore the offer of
any particular tenderer.
(aa) If the tenderer does not respond to the letter issued by the
Accepting Officer or delays furnishing the replies without any
convincing reasons;
(bb) If tenderer’s offer is unable to comply with the stipulation made

by the Department;
(cc) If the tenderer is unwilling to withdraw his stipulations which

are notacceptable to the Department. In all such events, the sealed
envelope marked ‘Q’ of such a tenderer will not be opened but shall
be returned to the tenderer in due course. Such tenderers shall,
however, be informed of this position well before the date fixed for
opening of the envelopes marked ‘Q’. Reasons for not opening and
returning the envelope marked ‘Q’ shall be kept on record by the
“Accepting Officer”.
(iv) If any condition has already been stipulated with financial effect as
per Para (a) above, no reference back to the tenderer on such condition will
be made.
(v) Discussions with tenderers with regard to the conditions and other
technical aspects, by the Accepting Officer or by any officer on his behalf, if
any needed, may be held.
(vi) During scrutiny of tenders, if any particular condition made by a

tenderer is considered acceptable to the Department (eg issue of electric
power from Departmental source, though not originally stipulated) then all
the other tenderers will be informed of the same and asked to intimate the
reduction in tendered amount, if any, they are prepared to offer, if such a
condition is incorporated in their tenders.
(j) After receipt of written replies from all the tenderers, a Summary Sheet
containing brief details of the points referred alongwith financial effect, if any,
indicated by the tenderers (withdrawal/ settlement of conditions) will be prepared
and signed/dated by the DIR(C)/DCWE(C)/AD(C)/AGE(C). Due care shall be
exercised to ensure that the “financial effect” aforesaid is worked out accurately. All
correspondence exchanged between the Accepting Officer’s office and the
tenderers will be properly kept on record.
(k) All the tenderers shall then be given a written notice of not less than ten
clear days, to be present if they so desire, for opening of the sealed envelope ‘Q’
and the date/time of opening of the sealed envelope ‘Q’ will also be intimated. On
the appointed date/time, the sealed LC containing the envelopes marked ‘Q’ shall
be opened by two officers nominated by the Accepting Officer, who may be the
same two officers who had earlier opened the tender and sealed envelope “T” in
the presence of tenderers who choose to be present and the amounts quoted by
the tenderers as well as the enhancement in the tendered amount, if any sought
(vide Summary Sheet refer Sub Para (j) above) shall be read out by the opening
officers to the tenderers. CST Part ‘B’ will then be completed by the opening
officers. Each and every page of the documents received vide envelope ‘Q’ shall be
272
initialled and dated by both the opening officers. The date of opening ‘Q’ bid as
stated above shall be the ‘date of receipt’ of tender for the purpose of calculation of
escalation as applicable and accordingly necessary modification shall be carried in
the escalation formula.
(l) Discrepancies and adjustment of errors, if any, in the documents received

vide envelope ‘Q’ shall be set right in accordance with Condition 6A of IAFW-2249.
The lowest acceptable tender, after taking into account the enhancement, if any,
(vide Summary Sheet), may then be considered for acceptance if reasonable and
otherwise in order. Reference to the lowest tenderer (acceptable tender) in respect
of ‘freak’ high rates may be made as per existing instructions.
(m) After opening of the sealed envelope ‘Q’, no reference shall be made to any
tenderer other than the one whose tender is being considered for acceptance.
Similarly, any revision in the offer by any tenderer, subsequent to opening of the
sealed envelope ‘Q’ shall also not be considered and the same shall tantamount to
revocation of the offer and shall be treated as per instructions given in Section 3.
(n) The procedure for opening of tenders will be intimated to the tenderers in the
tender forwarding letter (ie tender documents in two separate sealed envelopes to
be submitted by the specified date/time, only the envelope marked ‘T’ to be opened
on the said date and the envelope marked ‘Q’ to be opened on a date/time to be
intimated later etc).
(o) “Late tenders”, if any, received shall not be considered. After opening the
outer cover of such late tenders, the envelope marked ‘Q’ containing the tenderer’s
quotation shall be returned to the tenderer immediately intimating him the fact that
his tender was received late and hence is not being considered.
12.3 Validity Period for Acceptance .

The validity period for which tenders shall remain open for acceptance, (which is
generally stipulated at the time of uploading / issue of tenders) commences from
bid submission end date/the date specified for receipt of tenders (in physical
tendering), irrespective of the fact that the Cover 3 in Stage 2/ sealed envelopes
marked ‘Q’ are opened at a later date. In order to cater for the time taken for
technical and financial scrutiny of tenders, settlement of conditions etc validity
period shall be 60 days from the bid submission end date for Cover 3 in Stage 2 of
e-tendering and from the date fixed for opening of Q bid in case of physical
tendering. The contractors shall be asked to modify their quotations (in case of
physical tendering, if desired by them.)
12.4 Tenders Based on Contractor's own Design .

Tenders based on contractor’s own design shall normally be restricted to specialist
works, such as:-
(a) Air conditioning, Cold Storage/Refrigeration (HVAC),
(b) Sewage Disposal Schemes,
(c) Water Purification Plants,
(d) Sewage Treatment Plants,
(e) Cranes,
(f) Other specialist work certified as such by the CE concerned.
273
12.5 New Techniques or Materials .

Where any new technique or material is specified in the tender, a technical
appreciation on use of the new technique or material will be rendered to the Jt
DG(Design) at E-in-C’s Branch before the tender is issued.
12.6 Boring of Tube-Well-Special Conditions .
(a) The special condition as given in Appendix 8.3 is suggested for inclusion in
all tenders for tube well so as to obviate the necessity of prior sanction of the
Government in each case. The special condition does not in any way restrict
Accepting Officers to make suitable provision in the tender documents for
payments for unsuccessful borings or for transportation of rig, etc from the site of
abandoned bore to another. It only stresses that the number of bores and the
maximum depth of each bore should be specifically stated in tender documents so
as to define and restrict the commitments of both the parties under the contract. It
also obviates the element of uncertain liability which is not permissible in terms of
Para 394 of RMES viz a contract involving an uncertain liability or any condition of
unusual character requires prior sanction of Government.
(b) Where the entire contract or entire boring of the well/wells is decided to be
given up due to successive trials of bores proving unsuccessful, the expenditure
incurred thereon is to be viewed as infructuous and regularised in terms of Para
607 of RMES. Where, however, any trial/bore is successful out of successive
trials/bores, the expenditure on unsuccessful trials/bores will not be treated
infructuous.
12.7 Tax Provisions:-
(a) In contracts for air conditioning, lifts and the like, the contractor's quotation
shall be composite rate for supply, installation, testing and commissioning including
all taxes, duties, levies, GST etc prevailing at the time of submitting the quotation.
(b) A special condition as in Appendix 12.3 will be included in lump sum or Item
Rate contracts for specialist works like external electrification and specialised
supply contracts like supply of prefabricated parts for sheds etc to avoid disputes
with regard to payment of taxes by contractors. Reference to this condition should
be highlighted in the forwarding letter to tenderers.
(c) Appendix 12.4 gives the special condition to be included in specialist

contracts that may be concluded on forms IAFsW-1779-A/2159/2249 and
1815(R)/1815Z. Reference to this special condition should be highlighted in the
forwarding letter to tenderers.
12.8 Training of MES Personnel.

It is very necessary that in respect of specialist works eg air-conditioning, cold
storage/refrigeration, water purification plants, sewage treatment plants, sewage
disposal schemes, provision of lifts, cranes and other specialist works that MES
personnel who shall eventually run and maintain the equipment are properly trained
for this purpose by the specialist firms. A suitable clause should, therefore, be
inserted in the tender documents for training of MES personnel by the Contractor.
For proper training of such personnel, it is advisable that they are associated with
the work during installation and testing of the equipment.
274
12.9 Foreign Exchange .

Endeavour should be made to use indigenous materials to the maximum extent
possible and in rare cases where the contractors demand foreign exchange, the
special condition will have to be sent for approval of the Government.
275
Appendix 12.1
Comparative Statement of Tenders (Part-A)

(See Para 422 of RMES)
(a) Numbers of eligible contractors who applied for tenders :

(b) Number of applications rejected :
(c) Number of additional contractors selected for issue of tender form (In case of
physical tendering) :
(d) Number of tenders issued ……………………........…………… on
..……...........…….20.…. Tenders received for
…..............................................................................................................
Division/District
..................................................................................................Command.
Administrative Approval
…....................................................................................................... Estimated Cost
of work Rs …........................................................................... (at par market)
Technical Sanction
….................................................................................................................
Srl Name of Tenderer Amount of Earnest Deposi Whether quoted
No Money ted or not
1 2 3 4 5
We certify that we above ………………. Tenders and no others were received at

…....…….. hours on ………..…. 20…… opened in our presence and scheduled by us, on
the …...…….20 …… and that no departure from the authorised course has occurred in
the manner of receipt of tenders.
Signature …............................................. Signature
….............................................
Designation …......................................... Designation
….........................................
Date …........................................ 20 …... Date …................................
20 …...
276
Appendix 12.2
Comparative Statement of Tenders (Part B)(Applicable for Physical Tendering)

(See Para 422 of RMES)
Tenders issued on ………….......….….. for

…………..............................…………………………… and received on
…………………………....………………………………….. as recorded in Part A.
Sr Name of Amount Total Financial Total of Col Name,

l Tenderer Originally Effect Consequent 3 and 4 or Designation
N Quoted on Settlement of Revised and Dated
o Rs Condition/ Amount Signature of
Stipulations Rs Officer
Rs Completing
Col 4
1 2 3 4 5 6
We clarify that the above ……..........…….. tenders (sealed envelopes containing

quotations) which were received on ……….…...…..…..as recorded in PART ‘A’ of this
Comparative Statement of Tenders, were opened in our presence and Scheduled by us
on ……...........….20 ….…
Signature …............................................. Signature…………………...

….............................................................
Designation …......................................... Designation ............................
Date …........................20 …... Date …......................... 20 …...
Note : Col 4 Shall be filled in by the DIR(C)/Jt DIR (C)/DCWE(C )/AGE(C )/AD(C) or an
officer authorised by the Accepting Officer prior to opening of sealed envelopes containing
quotations.
(a) The tender of Shri/S’Shri .............… (Serial No ……...) is recommended for
acceptance.
Date ….................. 20 ….... *DIR(C)
*DCWE(C)/JtDIR(C)/AD(C)
(b) Orders of the Officer competent to accept the tenders :
The tender of Shri/S’Shri/M/s ….…. (Serial No ….....) has been accepted by me on
…..........
Note : Any reason for accepting other than lowest tender and any remarks are to be
stated hereon.
*CE/CWE/GE…..........................................
Date ….................... 20 …....
*Delete whichever is inapplicable.
277
Appendix 12.3
Special Condition for Specialist Works Contracts
The contractor shall quote all-in rates for various items of equipment inclusive of
cost of supply and installation and inclusive of all taxes including GST, levies/duties and
the like payable by him. Even if the contractor shows his rates separately for supply of
equipment and installation, the contract being a lump sum contract, will be treated as a
composite and indivisible works contract and the contractor shall not be entitled to any
reimbursement of any other tax/levies/duties etc he may pay or may have paid to
authorities concerned. Any tender not complying with this condition will be treated as non-
bonafide.
Appendix 12.4
1. Special Condition for Specialist Works Contracts on IAFW 1779A and 2249 .
The contractor shall quote all-in rates for various items in Schedule ‘A’ inclusive of
cost of supply, fabrication, fixing/installation and inclusive of all taxes including
GST, levies/ duties and the like, which are to be borne by him as stipulated in
Condition 13 of the General Conditions of Contracts (IAFW-2249). Any tender not
complying with this condition is liable to be treated as non-bonafide.
2. Special Condition for Specialist Works Contracts [eg Fabricated Stores and
The Like on IAFW-1815 (R ) and 1815 (Z)] .
The contractor shall quote all-in rates for various items of supply in Schedule ‘A’
inclusive of cost of supply and fabrication and inclusive of all taxes including GST,
levies/duties and the like, which are to be borne by him as stipulated in Condition 8
of General Conditions of Contracts (IAFW-1815Z). Any tender not complying with
this condition is liable to be treated as non-bonafide.
278
SECTION 13
CONTRACTS FOR SUPPLY OF STORES AND MATERIALS
13.1 Introduction.
Work involved in supply of stores and materials is different in nature than that
involved in construction of buildings. Normally requirements cannot be fully known
at the tender stage and hence a “measurement contract based on IAFW 1815(R)
and IAFW 1815Z is concluded for this type of work. IAFW-1815(R) is the form for
tender and IAFW-1815Z is the form for General Conditions of Contracts.
13.2 Acceptance of Tender.

Tender form IAFW-1815(R) provides for acceptance of tender as a whole or in
parts. The Accepting Officer can divide the items in Schedule ‘A’ in groups,
considering the nature of materials to be supplied and convenience of work. Even
one item can form one group. The intention to so divide the items in groups is to be
made clear to the contractors in the tender itself and the Accepting Officer will then
use his discretion to conclude contracts(s) for each group separately or for a few
groups together or for all the groups combined. If the Schedule ‘A’ is not divided
into groups at tender stage, then only the overall lowest tender can be accepted.
13.3 Conditions of Contract.

Due to difference in nature of work involved, conditions for this type of contractdiffer
in a few important details from those for construction of buildings.
Importantconditions are brought out in the succeeding paragraphs.
13.4 Deviation (Condition 5).

Only the officer, who has concluded the contract (and not the contractor) can make
changes in the provisions of the contract. His decision shall be communicated to
the contractor by the GE through an order in writing. Such changes are divided in
two types as detailed below:
(a) Changes by Way of Modification of Design of Furniture Items

etc: These can be ordered provided the value of each supply order is not
thereby varied on the whole by more than ten percent.
(b) Changes in Quantities Originally Included: These can be ordered

up to the following limits:
(i) In contracts for supply of building materials or furniture, the

quantity of any item shall not vary by more than 50%.
(ii) In contracts for supply of bazaar materials, the quantities may

be varied to any extent at the discretion of the GE provided the total
value of the supplies given in a group in the contract does not vary by
more than 25%.
(c) Overall deviation shall not exceed as specified in the contract.

279
13.5 Valuation of Deviations (Condition 31).
13.5.1 Deviation orders are issued on form IAFW-1823 and IAFW-2212-A. Every
Deviation Order must mention:-
(a) Details of work
(b) Financial effect
(c) Effect on period of completion and
(d) Mode of payment (whether ‘lump sum’ or ‘measurable’).
13.5.2 The value of deviation shall be ascertained as follows:
(a) Based upon rates/prices for similar supplies in Schedule ‘A’ in so far
as such rates/prices apply.
(b) Based upon rates/prices deduced from those in Schedule ‘A’ (as far
as it practicable to do so) failing method (a) above.
(c) Based on rates/prices agreed upon between GE and the contractor

failing method (a) and (b) above.
If a contractor disagrees with the GE about pricing of DO, he is required to give

notice within seven days of his receiving the Deviation Order and the decision of
the CWE shall be final and conclusive.
13.6 Time, Completion, Extension of Time and Compensation for Delay Conditions
6,7 and 24.
(a) Time is of the essence of contract and the contractor is required to complete
the work on or before the date of completion mentioned in the work order.
(b) Extension of time can be granted by the Accepting Officer in the following
circumstances:-
(i) When the delay is caused by any reason beyond the control of
contractor(many possible happenings of this nature have been given in
Condition 7).
(ii) When alterations have been ordered.
(c) The decision of the Accepting Officer will be communicated to the contractor
by the GE.
(d) The GE himself can give extension of time if he orders suspension of work
under Condition 6.
(e) If the contractor fails to complete the work in time he is liable to pay
compensation as per Condition 24.
(f) Close watch is kept on the progress of the work and if the progress is slow,
the contractor is given notice drawing his attention to the slow progress and
warning him of his liability to pay compensation.
280
13.7 Stores (Condition 8).
(a) Stores intended to be issued to the contractor are included in Schedule ‘B’. It
is the responsibility of the Government to issue such stores to the contractor and
the contractor is also required to receive such stores from the Government. It shall
be noted that IAFW-1815Z does not cater for payment of advances on account
of materials collected at site, whether arranged from market or issued under
Schedule ‘B’.
(b) During execution, the issue of Schedule ‘B’ stores is checked with the actual
requirements. All surplus stores are to be returned by the contractor. Full recovery
against materials issued under Schedule ‘B’ is to be made when paying advances
on account (RAR) as well as Final Bills.
(c) If during execution, stores not included in Schedule ‘B’ are required to be
issued to contractors, Schedule ‘B’ will be amended to include these stores. Rates
of recovery for such stores will be the stock book rates on the date of issue of the
stores or market rates whichever are higher.
13.8 Samples.
(a) Contractor is required to submit samples for approval before commencing

supplies. Approved samples can be counted against supplies or can be returned to
the contractor after supplies are completed.
(b) Where supplies are required to confirm to the MES samples, such samples
can be loaned to the contractor for his general guidance and the cost of carriage,
both ways, shall be borne by the contractor.
13.9 Package (Condition 9).
(a) Generally all packages supplied by a contractor along with his supplies are
considered as non-returnable.
(b) If Schedule ‘A’ specially mentions that the packages are returnable, GE may
return them subject to the requirement of Government, at the contractor’s expense,
but no claim will be entertained by Government in respect of containers not so
returned to the contractor.
(c) If Schedule ‘A’ provides for returnable containers to be separately priced, the
contractor shall afford full credit for those returned.
13.10 Duties and Other Charges (Condition 10).

Contractor is exempted from paying any tax including GST, levies/duties etc on
materials issued under Schedule ‘B’. All such charges are required to be paid by
the contractor for materials obtained from other sources.
13.11 Assignment (Condition 13).

Contractor is not allowed to sublet or assign the contract wholly or in part without
the prior written approval of the Accepting Officer.
281
13.12 Performance (Condition 16 and 20).
(a) Only written orders are valid. GE is the final authority to decide whether
materials and workmanship are according to the contract and whether to accept or
reject the supplies. The contractor shall afford all facilities as may be required for
inspection and examination by the concerned MES officers of any of the supplies
under the contract. The Engineer-in-Charge is entitled to have tests made of any of
the supplies delivered by the contractor who shall provide at his own expense all
facilities which the Engineer-in-Charge may require. If during the contract period or
prior to the expiry of the Defects Liability Period (ie six calendar months after the
supplies have been accepted by the Government), GE considers any portion of
supplies unsatisfactory or unsound or of quality inferior to that contracted for or not
in accordance with the contract (GE's decision being final and conclusive), the
contractor shall on demand in writing from the GE, rectify the defects or remove the
supplies complained of and replace by proper and suitable supplies at his own
expense. In the event of the contractor failing to do so within a period specified by
the GE in his demand, the GE shall be at liberty either to:-
(i) Rectify the defects at the contractor’s risk and expense or

(ii) Return rejected supplies at the contractor’s risk and expense or
(iii) Sell all or any of the rejected supplies by public auction or private
contract on the contractor’s behalf and to retain such portion of the proceeds
as may be necessary (to cover any loss or expense incurred by Government
in connection with such sale) and to replace the rejected supplies at the risk
and expense of the contractor. The Accepting Officer may at his discretion
decide to accept supplies below specification at such reduced rates as the
GE may consider fair and reasonable (GE’s decision is final and binding.)
(b) The GE shall convene a board of officers to check furniture items before
accepting the articles delivered by the contractor to assist and help the GE in
determining the quality/standard of materials and workmanship before he issues
the certificate of acceptance. Convening a board of officers for such checking shall
not, however, in any way, absolve either the Engineer-in-Charge or the GE of their
respective responsibilities in terms of the General Conditions of Contracts(IAFW-
1815Z).
(c) Furniture work with opened out/loose joints or warped/ cracked joinery
members, substandard block board with ply facing peeling off/blistered, wooden
planks of lesser width/thickness and other serious defects which by their nature
would affect usability/life of furniture must be rectified/replaced instead of resorting
to devaluation.
13.13 Space for Storage of Furniture.

No supplies will be considered as accepted without GE’s certificate of acceptance.
To avoid delay in accepting and taking over supplies/articles of furniture by MES
due to non availability of storage space etc and resultant hardship to contractor, it
should be ensured that contract for supply of stores and furniture are concluded
only when the department is in a position to accept the deliveries and take over the
supply as and when ready.
282
13.14 Cancellation and Termination.

(a) Accepting Officer may cancel the contract if:-
(i) Contractor assigns, transfers or sublets the contract without approval

of the Accepting Officer (Condition 27).
(ii) Contractor is adjudged bankrupt (Condition 27);
(iii) Contractor defaults (Condition 28).
(b) In case of such cancellation, the Accepting Officer may complete the
delivery of the supplies at the risk and cost of the contractor in case of contracts
without having Performance Security provisions. In case of contracts having
Performance Security provisions the stipulations given in Conditions 27 and 28
amended vide Amendment No 36 & 37 to IAFW 1815 Z shall be followed.
(c) CWE shall cancel the contract for corrupt acts of the Contractor and any loss
or damage resulting from any such cancellation (Condition 26) shall be recovered
from the contractor.
(d) Accepting Officer has an option of terminating the contract (without

compensation to the contractor) if the contractor dies (Condition 29).
(e) Either party (Government or contractor) can terminate the contract by giving
six weeks notice to the other party provided the contract has remained in force for
six months or half the contract period whichever is less. This is applicable only to
Rate Contracts (Condition 30-A).
13.15 Valuation and Payment (Condition 33 and 34).
(a) On demand from the contractor, advance payment can be made to him to
the extent of 90% of the value of accepted supplies (priced at contract rates)
provided the net amount, after deducting all recoveries is not less than that
indicated in conditions. There is no restriction on the time interval between two
consecutive advance payments. Every advance payment is to be supported by
signed delivery notes and certificates of acceptance.
(b) Final bill is to be prepared by the contractor after acceptance of all supplies
by the Government and is supported by signed delivery notes and certificates of
acceptance. No claims are to be entertained after receipt of the signed final
bill.(Condition 33)
(c) Government has the right to carry out a post-payment audit and technical
check and to recover from the contractor any overpayment detected in such a
check. Government also has a right to adjust overpayments and underpayments
detected in such checks against any amounts due to the contractor. This right of
Government extends only for a period of two years from the date of payment of the
final sum (Condition 34).The Government can sue the contractor for recovery of
overpaid amount upto a period of thirty years as per the provision of Article 112 of
the Limitation Act 1963, if the contractor fails to deposit the amount on demand.
283
(d) All disputes (between the parties) on contractual matters for which no
Engineer officer has been empowered in the contract conditions to give a final and
conclusive decision can be referred to a sole arbitrator. In case of GE’s and CWE’s
contracts, CE Zone/CCE shall be the appointing authority for an arbitrator and in
case of Chief Engineer’s contracts, E-in-C shall be the appointing authority.
Note : If conditions of IAFW-1815Z are amended, the above provision shall also be
deemed amended accordingly. Therefore IAFW-1815Z shall be referred before
applying above provisions.
284
SECTION 14
CONTRACTS FOR HANDLING AND/OR CONVEYANCE OF STORES

AND AUCTIONING
14.1 Introduction.
Tender and contract form IAFW-2320 is used for concluding contracts for handling
and conveyance of stores.
There are two methods for handling and/or conveyance of engineer stores :
(a) By Contract
(b) By DEL
This Section deals with the important points connected with the method (a) above.
14.2 Schedule ‘A’.

In the tenders for handling and conveyance of stores by contract, the Schedule ‘A’
is the most important part. It contains a comprehensive list of items of work which
the contractor is likely to be called upon to execute during the contract period. The
standard form in use contains rates per unit of work. The contractor, when he
submits his tender, has to quote a uniform percentage over the rates applicable to
all items in Schedule ‘A’ to cater for his actual costs, overheads and profits. The
estimated cost of work likely to be ordered against each item is also mentioned, but
without guarantee of its accuracy.
14.3 Area of Applicability.

The area of operation (like whole or part of the cantonment etc) and the important
nodal points like the applicable railway station(s) (from which stores will be required
to be loaded/unloaded), the various MES stores yard(s)/Engineer Parks/Depots to
(or from) which the stores will have to be transported/handled (or other items of
work listed in Schedule 'A) are indicated in the tender. The indication of area of
applicability is either shown on a site plan attached to the tender or clearly
described.
14.4 Term .
The period, during which the work can be ordered on the contractor ‘as and when
required’ basis, is mentioned in the tender. This term or period is usually 12
months.
14.5 Procedure .
(a) Orders for Work. All orders are given in writing to the contractor signed
by the MES official (usually the BSO) authorized to do so by the GE. Work orders
are given on IAFW-2331 specially devised for ordering work on handling and
conveyance to contractor, in which the date (and time where relevant) for starting
and completing the work (ordered through the particular work order) are laid down.
No claims in respect of verbal orders can be entertained.
(b) Payment for Work Done. Work done is measured and entered in
measurement books (MB) and paid for, on claims for payment being submitted by
the contractor, usually on completion of work against each work order.
285
(c) Hours of Work. The contractor is required to carry out work at any time by
day or by night as ordered. Sundays and holidays are considered as working days.
(d) Compensation. Charges levied by the Railways from MES towards

demurrage (ie delay caused in unloading railway wagons beyond time allocated as
per Railway rules) and wharf age (ie delay caused in removing and clearing goods
from the Railway platforms/sidings/goods shed beyond time allotted) are recovered
from the payment due to the contractor if the delay is caused due to contractor’s
default. In respect of other work not involving any question of demurrage/wharf
age, compensation for delay is recovered from the contractor if no extension in time
for completion of work is considered due to the contractor by the GE. Maximum
compensation for delay that can be recovered is 10 percent of the estimated value
of the particular work order.
(e) Distance Boards. The distances between various points over which the
contractor is likely to be ordered to transport and convey goods are measured and
fixed by a Board of Officers ordered by the GE. Payment for transportation is done
on the basis of the distances as fixed by the Board of Officers.
14.6 Correct Application of Rates in Schedule ‘A’.

Wherever a composite item of work is available covering all activities involved,
such an item shall be used for payment of work. Splitting the work and paying for it
under different items (in case of transfer of cement to different divisions from
consignee) leads to overpayment.
14.7 Piece Work/Additional Work.

Piece work or any additional work in connection with the handling and conveyance
of stores as may be required from time to time during the period of the contract,
can be ordered on the same contractor at the rates as determined in accordance
with Clause 32 of the Conditions of Contract.
14.8 Work Reserved.

Work included in the scope of this contract may be carried out through
Departmental Labour or other agency at the discretion of the GE in the following
cases:-
(a) When the work involves use of mechanical appliances such as

cranes etc.
(b) In special circumstances.
(a) In any emergency.
However, work involving use of a crane or other mechanical appliances may be

ordered on the contractor in which case he will be allowed the use of Government
crane or other mechanical appliance (including crew) without any charge and he
will be paid the cost of labour plus ten percent to cover his overhead and profit. In
such cases work order should specifically say that the payment shall be made on
“Non-Schedule” rate sanctioned in terms of Condition 32.
286
14.9 Refund of Security Deposit.
Security Deposit may be refunded three months after the due completion of the
contract provided that:-
(a) Bills against all work orders have been paid.
(b) A No Demand Certificate (IAFA-451) has been rendered by the

contractor.
14.10 Daily Return.

The contractor must submit the following two returns (in duplicate) by 1000 hours
every day to the GE:-
(a) All labour employed on the contract.
(b) All mechanical transport engaged, showing recorded weight capacity

of each vehicle.
14.11 Water.
No special arrangement shall be made to afford drinking water facilities to
contractor and his men but the normal facilities available in the area shall be made
available to them without any charge.
14.12 Breakage and Losses.

The contractor shall be responsible for all breakage and loss sustained in transit
except when the loss is within permissible limits stipulated in Condition 17. It is the
responsibility of GE to include these limits in the tender before going out to tender.
14.13 Termination of Contract Before Completion.

Contract may be terminated by either party after a period of three months from the
date of commencement provided that six weeks notice in writing to that effect has
previously been given to the other party.
14.14 Rates for Additional Work.

The rate to be paid to the contractor for any additional work not specified in the
Schedule ‘A’ shall be fixed by the Accepting Officer within thirty days of receipt of
Work Order by the contractor.
Note : If conditions of IAFW-2320 are amended, the above provisions shall also be
deemed amended accordingly. Therefore IAFW-2320 shall be referred before
applying above provisions.
14.15 Auctioning. With the introduction of e-auctioning through a public sector

undertaking Metal Scrap Trade Corporation Ltd (MSTC), the old system of
auctioning through auctioneers appointed through contracts is not applicable.
Therefore all the formations shall take necessary action for e-auction through
MSTC.
287
SECTION 15
ENGINEERING PROCUREMENT CONSTRUCTION (EPC) CONTRACTS

15.1 General:-
15.1.1 Adoption of EPC methodology in MES has been approved by GOI , MoD
vide letter No. A/37696/PEPC/E2W(PPC)/380/DO-II/D(W-I)/2019 dated 14 Mar
2019. These types of lump sum contracts are suitable for complex buildings where
entire engineering, procurement and execution is entrusted to the contractor. In
these types of contracts, contractors carry out the detailed engineering design of
the project, procure all the equipments and materials necessary and then construct
to deliver a fully functional facility to the department. These types of contracts are in
a preliminary stage in MES and instructions as issued by E in-C’s Branch from time
to time shall be followed.
15.1.2 The Engineering, Procurement and construction (EPC) concept is one of

the project delivery methods that provides an effective alternative to the traditional
‘Design-bid-Build’ delivery method. The collection of detailed site data/surveys,
design and construction services including supply of all materials are by a single
entity known as the ‘EPC’ Contractor.
15.1.3 The agency/Contractor takes single point responsibility of coordination with

Architect, Structural Engineer, Mechanical, Electrical, Plumbing, Landscaping, and
Geotechnical consultants, material procurement/stores management team and the
construction team. The method specifies the required design and performance
standards and allows the contractor to design and construct the project using best
practices and innovate to optimize on efficiency and economy as compared to
rigidity of contracts that relies on a rigid design & construction methodology
provided by the project authorities. The Contractor plans the construction schedule
for efficient use of his manpower, equipment, material and other resources.
15.2 Selection of Works
15.2.1 Size and Type of Projects. The method can be used for conventional
type of RCC framed structures with partition walls, Pre-Engineered Buildings, Pre-
Fabricated structures and/ or other type of New Construction Technologies.
Concept of ‘EPC’ shall be used selectively for works of following categories: -
(a) Specialized/ complex projects which require specialist design and

supervision and same are not available with the MES, irrespective of the
cost.
(b) Large infrastructure works and turnkey projects of strategic

importance, costing over ₹ 50 crore.
15.2.2 Proposal for ‘EPC’. The CE Zone/ CCE will forward separate
proposal with detailed justification for recommending ‘EPC’ method in each case,
where contemplated. CEs Zone may use this provision for considering adoption of
suitable new technologies. The E-in-C will select (from the list of proposals
received) the works/ projects for execution by this method and accordingly
recommend for inclusion in AMWP/ Special Projects List. The EPC methodology
may be proposed for the entire project as a whole or for a part (distinct entity) of the
project (e.g. Main Building Complex or water treatment plant etc).
288
15.2.3 Selection of Technology. The right technology (Conventional or

New Technology) depending on local conditions, technical and user requirements
and based on best engineering practices which is proven and widely practiced in
the construction industry will be adopted. It would also be ensured that for any of
the technology selected, a minimum of three vendors are presently available in the
market. CE Zone/ CCE shall be the competent authority to select and propose
suitable technology.
15.3 Approval and Enlistment
15.3.1 Consultants for Conventional Technologies. For architectural designs,

mechanical, electrical, plumbing design/ drawings and projects adopting
conventional RCC framed structures, the contractor will be permitted to source his
designs and drawings from:-
(a) Suitable professionals employed in his own organisation*.
(b) Consultants approved by E-in-C’s Branch/ CE Command.
(c) Consultant nominated by contractor for subject contract*.
* Note. Professional/ consultant shall satisfy QR as laid down in the tender by

CE Zone/ CCE depending upon nature/ complexity of each project.
15.3.2 Manufacturers/ Vendors for PEB/ Pre-Fabricated/ New Technologies.

CE Zone/ CCE shall include in the tenders/ works those manufacturers/ vendors
who are already in the approved list issued by E-in-C’s Branch/ CE Command. CE
Zone/ CCE may also lay down the QR in the tender depending upon nature/
complexity of each project.
15.4 Sanction of Works
15.4.1 BPs and AEs/ RIC. The basic data like scope of work, scales, plinth
areas, line plans, specifications, finishes, external services, any other relevant data/
details etc will be made part of BPs. The pricing for the portion of works selected
for EPC will be based on Plinth Area rates for conventional construction and the
market cost for New Technology and would be included in the AEs/ RIC
accordingly. The pricing of other components and items of work like external
services etc will be priced in the normal manner. Consultancy charges up to 3% will
be added to RIC towards cost of drawings and designs as part of the overall
project. Administrative Approval would be issued based on AEs/ RIC. The projects
will have a Defect Liability Period (DLP) of two years after completion.
15.4.2 Where specialist technology is adopted, maintenance of infrastructure by

original contractor/ OEM for the initial period of two years and a further period of
three years after expiry of DLP will also be recommended as part of Board
Proceedings.
15.4.3 Provisions for implementation of Green Building Norms in the project in

accordance to E-in-C’s Branch letters No A/39398/GRIHA/Pol/E2W (PPC) dated
19 Dec 17 (Policy No 23/2017) and dated 05 Oct 18 (Policy No 13/2018) will also
be suitably considered by the Board of Officers and recommended as part of Board
Proceedings.
289
15.5 Technical Sanction
15.5.1 The overall aspects of technical control like designs, specifications,

materials and technology rests with CE Zone/ CCE within overall sanctioned AA
amount and permitted tolerances. As per Para 43(d) (ii) of DWP 2020, the initial TS
will be issued based on line plan and specifications given in the tender. After
acceptance of tender, detailed design will be submitted by the firm duly vetted by
an IIT/ approved Government agency. The TS will be revised on the basis of
accepted design before commencement of works on ground.
15.6 Eligibility and Experience
15.6.1 Tenderers for Works. The firms selected for such works would be
based on technical and design capabilities given in a well-defined PQC. The PQC
criteria for selection of tenderers shall be as per CVC guidelines. Stringent PQC
would be laid down for shortlisting of eligible contractors/ firms. Adequate time and
access to site shall be given to tenderers to enable them to assess all parameters
and quote rates.
15.6.2 PQC Criteria. In case of projects which require specific pre-

qualification criteria with respect to the specialist component of works included
therein, the CE Zone will lay down suitable Pre-Qualification Criteria in accordance
to CVC guidelines. The PQC criteria proposed by CE Zone/ CCE shall be approved
by concerned CE Command/ ADG.
15.7 Designs and Drawings
15.7.1 Third Party Vetting. The third party vetting of designs and drawings
shall be from reputed Institute (IIT/ NIT) on letter-pad of the Institute and not in
individual capacity of professor/ designer. Liability for accuracy of designs,
drawings and penalties for default shall lie with the Manufacturer/ Contractor and
clearly stated in the contract. The consultant liability shall be guided as per
instruction contained in E-in-C’s branch letter No A/00157/23-1/Pol/E2W (PPC)
dated 02 Jun 17.
15.7.2 Statutory Approvals. Provisions will be included in the tender

documents so that EPC contractor will obtain all statutory clearances and
mandatory approval like environmental clearance, pollution clearance, coastal
regulations, fire safety etc or any other mandatory/ statutory clearance certificates
for the project from respective bodies. The certification for Green Building Norms ie
GRIHA rating will also be obtained by the EPC contractor from the GRIHA and
suitable clause will be included in the contract accordingly. A minimum GRIHA 3
star rating or as per Administrative Approval will be targeted.
15.8 Contract Management
15.8.1 Tender Documents. The tenders will be based on the general

conditions of contract given in IAFW 2249 and Manual on Contracts 2020. A Model
Tender on EPC contracts has been issued. Certain amendments to GCC as per
requirement of EPC tendering have been included in Model Tender and the same
shall be adopted.
290
15.8.2 The following details/data shall be supplied to the EPC contractor for
working out/developing the architectural drawings, structural drawings and the
services essentially required the completion of a work to be used for its intended
purpose:-
(a) Tentative soil bearing capacity (SBC).
(b) Line Plan of Buildings and Site Plan.
(c) Scope of work.
(d) Brief scope of services.
(e) Design Basis Report.
(f) Specifications alongwith makes.
15.8.3 Certain clauses/details/data as under included in the model EPC tender

shall be appropriately modified and amended by the Accepting Officer based on
scope of work involved, types of services required, applicability of Codal provisions
in view of location & climate conditions of the Station, local factors, site conditions,
class of structure, etc :
(a) PQC criteria.

(b) Plinth height, ceiling height etc. of buildings.
(c) Timeline for various stages.
(d) Respective clauses of Design Basis Report.
(e) Schedule of Finishes.
(f) Schedule of Credit.
(g) Design life of various buildings to be constructed.
(h) Special Conditions on water supply & electricity supply for execution
of work.
(j) Site conditions, Weather conditions
(k) Escalation Clause for Job PDC more than two years.
(l) Mobilization advance where required.
(m) Additional materials for which original PVs to be submitted by the
contractor (in Special Condition).
(n) Corrosion Resistance Steel (CRS) in coastal areas and other areas
warranting provision of CRS.
(o) Appropriate specifications for items of works involved as per Zonal
Specifications.
(p) Provisions of M-Sand.
291
(q) Names of approved lab for testing of Design Mix.
(r) Specifications for items of work specific to the area, location or scope
of the particular work considering Zonal Specification or other standard
specifications.
(s) Other clauses warranting modification to suit the specific requirement.
15.8.4 The above clauses/ provisions made in the model EPC tender shall be
accorded special attention by the Accepting Officer to incorporate the clauses
according to the requirements of the project to enable the EPC contractor to quote
his rates accurately and execute the EPC work smoothly to avoid contractual
complications afterwards.
15.9 Design Basis Report. The Design Basis Report (DBR) forms key component
of the EPC tender. It contains details, parameters and considerations based on
which the EPC contractor is to develop architectural drawings, carry out structural
analysis and design, develop detailed structural drawings and prepare itemised
schedule of various items of work pertaining to services (internal as well as
external services). A nodal officer will be earmarked for integration and monitoring
of various aspects of DBR from different sections in office of the CE Zone/ CCE in
a time bound manner.
15.9.1 The basic data (scope, scales, plinth areas, line plans, specification, basic
geotechnical data, external services and all other inputs required for design,
construction and operation that have a bearing on the quality and safety of the
project) required for estimation is provided while calling tenders. Based on the
basic data, the vendor can work out the cost for bidding. Parameters of internal and
external architecture, makes and brands etc to be clearly specified. The tenders will
include schedules (as applicable for each project) for site surveys, soil
investigations (where required), prep of detailed architectural, structural, MEP and
internal and external services designs and drawings, site development and
complete construction activities including procurement of all materials and
equipment, installing, testing and commissioning of the entire works/ infrastructure
and all connected facilities. Details of site survey, soil investigation where available
may be made part of technical documents to save time and effort. Provision for soil
investigation by Bidder at his own cost to verify the input report as given in tender
may be provided.
15.9.2 Suitable clauses for Defect Liability Period for two years will be included.
Where specialist technology is adopted, maintenance of infrastructure by original
contractor/ OEM for the DLP period of two years and a further period of three years
after expiry of DLP will also be included in the tender. Imparting maintenance skills
and training departmental staff will also have to be made part of the contract so that
subsequent maintenance can be carried out by in-house staff or outsourced under
the supervision of departmental staff.
292
15.9.3 CEs Zone/ CCEs shall prepare their tender documents in accordance to
the Model Tender Document issued by E-in-C’s Branch by suitably incorporating
project specific details and requirements. Suitable mechanism and clauses for
addressing variations in scope, quotation, pricing shall be built in the tenders.
15.10 Tendering. The selection of Bidders shall be based on open tendering

(e-tendering). Work Order would be issued to the lowest bidder (L1 for the entire
scope of work) to develop detailed designs and drawings based on parameters
specified in the tender documents. These would be validated by premier
Government Institutes like IIT/ NIT, before it is accepted by MES. These designs
and drawings would finally be accepted by MES before commencement of works
on ground.
15.11 Sub Contracts. It shall be governed as per Condition 18 of IAFW 2249. The
agency/ contractor executing the works will be permitted to enter into a MoU (for
each project) and engage only with the consultants/ manufacturers/ vendors as per
conditions included in the tenders.
15.12 Bill of Quantities and Reasonability of Tenders. These tenders are based on
RIC/ AE costs and not on pre-priced BoQ. Therefore reasonability of quoted rates
shall be worked out on detailed analysis of market rates for items of similar tenders
which otherwise would have been tendered as per normal bidding procedure. The
processing of case for availability of funds and acceptance of contracts shall be as
per normal procedure given in Manual on Contracts 2020. Cases for obtaining
Financial Concurrence, Revised Administrative Approval etc shall be dealt as per
provision of DWP 2020.
15.13 Monitoring and Execution of Works. The role of Authority’s Engineer will be
performed by the MES. After acceptance of tenders, detailed architectural designs/
drawings shall be submitted by contractor and vetted by E6 (Architect) section of
Zone. Subsequently detailed structural design/ major E/M schemes designs, and
their connected drawings will be submitted by firm duly vetted by IIT/ NIT. These
designs and drawings will be duly approved by Design/ E/M sections of Zone
respectively. The department responsibility shall be guided as per instructions
contained in E-in-C’s branch letter No A/00157/23-1/Pol/E2W (PPC) dated 02 Jun
2017 amended vide letter of even No dated 23 Jul 2020. The contract
administration/ management will be done by E8 section of the CE Zone/ CCE. The
GE will be the nodal officer/ single point contact for integration and monitoring of
various aspects and ensure that requisite approvals from different sections of CE
Zone/ CCE are processed in a time bound manner.
15.13.1 The quality assurance, quality checks, payments, monitoring and

supervision of construction will be carried out by the MES Engineer executives as
per existing instructions in vogue. In case of special purpose lean organisation like
CCEs, the procedure as applicable to their functioning shall be adopted. Where
pre-fabricated/ pre-engineered components manufactured from factories are used,
their Quality Assurance plan, test reports and other relevant data/ documents will
be submitted by the contractor to the department. The GE/ PM will coordinate all
the concerned issues and project bottlenecks for resolution. As the EPC contract
transfers a considerable part of risk management to contractor, users shall be
sensitised that changes shall not be insisted upon after finalisation of drawings and
designs. Any change during execution is likely to delay progress as well impact on
cost and/ or lead to unwarranted contractual complications/ arbitration/ court issues
at a later date. All other instructions on project monitoring and reporting, quality
293
control, project management, contract management will be duly complied by the
CEs Zone/ CCEs as well as the ground executives.
15.14 Feedback. Feedback on the rates quoted for ‘EPC’ contracts and their
performance assessment report shall be forwarded to E-in-C’s Branch by 31 Dec
2021 for formulation and refinement of PA rates. The concept will be reviewed from
time to time and process will be suitably modified to address shortcomings, if any.
Part-II
CONTRACT STAGE
294
SECTION 16
CONTRACT ADMINISTRATION-GENERAL
PRINCIPLES AND SPECIMEN LETTERS/FORMATS
16.1 General.
(a) The contract stage includes day to day correspondence with the
contractors and decisions on contract matters. For an effective contract
administration a thorough knowledge of IAFW-2249, IAFW-1815Z (General
Conditions of Contracts), preambles of SSR and relevant contract provisions is
must. In addition to this, the officers and staff dealing with contracts are
expected to have working knowledge of law particularly of Indian Contract Act-
1872, Arbitration and Conciliation Act-1996 (ACA-1996) including Amendment
Act 2015 and 2019, Right to Information Act-2005, Limitation Act, Labour Act,
Acts relating to labour wages, labour safety and GST etc including amendments
to the Acts/Regulations apart from latest orders of vigilance machinery of
Government of India and other statutory rules and regulations. These are easily
available on the internet on Government websites.
(b) During contract administration, officers have to have a just and fair
approach to the problems and convey their decisions in a transparent manner
leaving little chance for review at a late date. Disposal of cases in a time bound
and expeditious manner is always beneficial to the Government. As such every
effort should be made to cut bureaucratic delays and too many channels of
recommendations. The language used in communication with the contractor
shall be polite and official.
(c) The contract administration means fulfilment of contractual obligations

which generally involves following actions:-
(i) Obtaining Performance Security from contractor after acceptance of

tender.
(ii) Nomination of Engineer-in-Charge, issue of Work Order No 1 and

handing over of site within two weeks of issue of Work Order No.1.
(iii) To keep a watch on deviations from contract provisions.
(iv) Issue necessary notices to the contractor as and when required.
(v) Processing of running account payments (RAR) including checking of

escalation claims.
(vi) Finalization of deviation orders, amendments to contracts, decision of

competent authority on disputed matters, keeping watch on Bank
Guarantee Bonds (BGB) and issue of completion certificate. As the process
of omission DOs for all provisional items, provisional lump sum and prime
cost sums and then adding them back through Add Back DOs has been
discontinued vide Amendment No 20 to IAFW 2249, the exercise to
ascertain the exact quantities of provisional items shall be done as soon as
possible after commencement of work to ensure that statement for variation
in quantities, addition of new item(s) or deletion of existing item(s) is
approved before commencement of relevant items of works at site. In case
295
of abnormal variation in respective parts of Schedule of work (BOQ)

exceeding the limits given in condition 7 of IAFW-2249, the matter shall be
referred to the Accepting Officer for his decision which shall include
decision on implementation of variation as well as payable rates.
(vii) Reconciliation of issue and receipt of stores under Schedule ‘B’ (as
applicable), forwarding of abstracts of work done and recovery statement,
processing of final bill and initiation of performance reports of contractors.
(viii) Monitoring of defects observed during defects liability period and

issue of certificate of defect rectification by the GE.
(ix) Recording periods of hindrance to execution in Hindrance Register.
(x) Carrying out periodic performance evaluation as per policy directions

issued by E in C’s Branch.
(d) During currency of work and during defects liability period, a number of
letters/ notices are required to be issued. Depending on progress/ hold ups at
various stages of the contract, the formats for these notices are given in
Appendix 16.1 to 16.17.
(e) Guidelines on some of the topics of contract administration are given in

succeeding paragraphs of this section and the balance points are covered in
subsequent sections.
16.2 Passing and Inspection of Works.
(a) Para 267 of the RMES enjoins upon CEs and CsWE to inspect works in
progress from time to time to ensure that:-
(i) Works are executed in accordance with approved designs and without
unauthorized deviations or additions.
(ii) Supervision is efficiently directed in ensuring that the quality of

materials and workmanship is in accordance with the specifications and
the work is proceeding satisfactorily.
(b) With a view to improve the quality of work, passing and inspection of works
by Engineers at all levels should be intensified.
(c) CEs would, therefore, lay down the periodicity of inspection by GEs/CsWE.
During inspections, CEs/ CsWE should satisfy themselves that GEs and
Engineers-in-Charge do not shirk their responsibility with regard to passing of
work at important stages and sign the required columns of the works passing
register after each inspection.
(d) It is desirable and necessary that during inspections CsWE and GEs have
with them a comprehensive checklist to go through various connected aspects
with proper administration of contracts and to ensure that follow up action is
taken promptly by all concerned.
296
(e) In order to improve the quality of work, CE must ensure that samples of
workmanship of various trades for approval of the GE, are executed in a
selected building included in the contract and passed by the GE and kept as a
guide for the contractor, as also for the supervisory staff.
(f) Attention will also be paid to the common defects noticed during technical
examination of works. These observations reveal that adequate steps have not
been taken to overcome defects/irregularities of repetitive nature already
pointed out by the ADGTE in his half yearly reports. CEs are, therefore,
requested to take deterrent action against the defaulters.
(g) To ensure effective supervision and control of works, it is suggested that

the supervisory staff should work out their own list of defects and errors from
ADGTE’s reports and based on their own experience according to the nature of
works entrusted to them as aide memoire and check the works accordingly
before passing/measuring the same. CEs and CsWE should also make it a point
during their inspection to check such lists, which should be available with the
supervisory staff and satisfy themselves in this regard.
16.3 Precautions Against Risk and MES Safety Code.
(a) Condition 36 of IAFW-2249 provides that the contractor shall be

responsible for taking precautions to prevent loss or damage from any and all
risks and for the provision of all protective works etc required for the purpose
until the works have been handed over complete to the Engineer-in-Charge.
The MES safety code included in IAFW-2249 vide Annexure ‘B’ lists some of
the precautions and steps which the contractor is required to take with a view
to prevent chances of any loss or damage to the works or the workmen
employed thereon. It therefore becomes incumbent upon the administrative and
the supervisory staff incharge of the works to ensure that the contractor takes
suitable precautionary measures to ensure that neither the works are
endangered at any stage during execution nor are workmen exposed to risk of
accident.
(b) It is essential that contractor’s attention is drawn to the provisions in

IAFW-2249 for taking suitable precautionary measures for safety of structure
especially when construction reaches critical stages. If a contractor does not
pay heed to the instructions given to him, his work should be suspended in full
or in part till such time he takes satisfactory measures for ensuring safety of the
structures/works under construction and workmen.
16.4 Visit to Site of Works by Surveyors.
(a) Cases are being reported (including CTE's reports) wherein specifications
included in contracts provide for materials/ workmanship which are not in
conformity with the quality of materials manufactured in the country or
available in the locality.
(b) In order that the specifications are realistic, it is essential that officers of
Surveyor Cadre visit works in progress so that they are fully conversant with the
quality of materials/ workmanship available in every locality. Where Indian
Standard specifications contain alternative specifications or indicate
permissible tolerances, the particular specification of contract should
categorically indicate the particular material and tolerances out of the
alternatives mentioned in the Indian Standards.
297
(c) Defects similar to those pointed out by STEs/ TEs, when noticed by
Surveyors during their visit to site, will be immediately brought to the notice of
the CWE to enable him to instruct the GE to either get these rectified or to issue
minus DO where rectification is not possible.
16.5 Assistance to Contractors.
(a) On being awarded a contract, a contractor may sometimes request the

MES authorities that his application for supply of materials in short supply due
to market conditions such as steel, RMC from manufacturers, steel windows,
wooden doors, electric items/equipment etc be recommended and forwarded to
the appropriate authorities. Such application may be forwarded by the MES
authorities to the appropriate authorities for their consideration. While doing so,
a certificate shall be given stating that the material for which the contractor has
made a request, is required for executing defence works.
(b) In order to safeguard Government interest and before arranging any

concession for a contractor, it shall be ascertained whether it will result in an
unintended benefit to him. If so, it will be evaluated and adjustment in contract
rates/recovery shall be made from the contractor before allowing him to make
actual use of the concession and in such a situation the contract shall be
suitably amended before the contractor is permitted to use the concession.
16.6 Clearance of Site on Completion of Works.
Temporary workshops, stores, offices and other structures which are

constructed by a contractor in connection with execution of works are
sometimes left standing at the time works are completed and taken over from
him. This practice encourages unauthorized encroachments and is also
otherwise undesirable. It must therefore be ensured that all such structures are
cleared away and the site reinstated and left clean and tidy to the entire
satisfaction of the Engineer-in-Charge at contractor’s expense. This is
obligatory under Condition 32 of IAFW-2249.
16.7 Defects Liability Period (DLP).
(a) Numerous demands for minor repairs like easing of doors and windows,
stopping leakages/seepage in walls/roofs, stopping of leaks in water taps,
easing of switches, clearance of drains, adjusting flushing tanks and the like,
are normally received from the users on occupation of newly constructed
buildings. Though the contractor is required to rectify all defects that come to
light within the defect liability period of the contract, it may not always be
possible to allow the repairs of the nature stated above to wait till such time the
formalities of giving notice to the contractor are gone through and he attends to
such minor repairs. In order to attend such defects immediately in newly
constructed buildings, which though may be minor but still irksome to the users,
CWE/GE should direct the contractor to deploy a team of suitable tradesmen
under the administration of the GE so that the users could conveniently and
expeditiously avail of the services of this team. This arrangement is very
essential particularly in case of residential/office accommodation and for the
first few months after completion of the work when some of the teething troubles
are likely to be brought to the notice of GE by the users.
298
(b) Condition 49 of IAFW-2249 requires that the GE shall certify to the

contractor the state of the item or group of the items of the works at the end of
the defects liability period. This certificate is important as it is essential to enable
the contractor to claim refund of his Performance Security. It will therefore be
issued on the expiry of the defect liability period. Attention is also invited to the
provision of Para 375 of RMES.
(c) Whether any particular defect is due to unsound, imperfect or unskillful

workmanship or due to normal wear and tear or user’s negligence, should
always be kept in consideration before giving notice to the contractor for
rectification under defect liability period.
(d) To make fullest use of Defects Liability Period, it becomes mandatory for
the Accepting Officers (CsWE in case of CE’s Contracts) to order a BOO to
identify the defects developed in the work due to unsound, imperfect or unskillful
workmanship or due to inferior materials used in the work at least two months
before expiry of defects liability period. The defects observed should be duly
notified to the Contractor for rectification under condition 46 of IAFW-2249. No
such BOO shall be ordered in respect of GE(I) /GE Contracts.
16.8 Confidential Reports on the Performance of Contractors.
(a) Performance Report (PR) of contractors shall be initiated as under:-

Stage-I: 50% of the contract period in respect of following:-
(i) All ‘S’ and ‘SS’ class contractors irrespective of the work and period of
contract.
(ii) All un-enlisted contractors where either value of work is more than Rs. 7.5
crore or period of contract is more than 18 months.
Stage-II: Within one month of completion of work for all works.
(b) Format of PR Stages I/II is given in Appendix-16.18. PR shall be reviewed
upto level of Accepting Officer except GEs contracts which will be reviewed up
to CWE/CE level (where there is no CWE office).
(c) In case of ‘S’ and ‘SS’ Class contractors, CE Command shall be the final
level of review.
(d) PR shall be processed to the Registering Authorities by final reviewing
authority.
(e) The Registering Authorities will maintain the records of the contractors
and review their performance from time to time. If a contractor consistently
scores below 60 marks, he will be issued proper diligence notice(s) for
improvement in performance by the Registering Authority and action will also
be taken against him as per Standardized Code of Registration, demotion,
removal and suspension/banning of business etc of contractors as brought out
in Section 1.
299
Appendix 16.1
FORM OF LETTER TO BE ADDRESSED TO THE CONTRACTOR BY THE GE

SOON AFTER THE CONCLUSION OF A CONTRACT ALONG WITH THE FIRST
WORK ORDER
Registered Ack Due

Office of The
Garrison Engineer
Dated…………………….
No………………………. /E8
To,
Shri/S’Shri/M/s…………………………..
………………………………………
………………………………………
………………………………………
Subject:CA No. …………………………………

Name of Work: ……………………………………
Dear Sir (s)
Reference letter No. ……… dated……… accepting your tender for the above
work and letter No ….......dated.......... directing you to report to me.
The following information is passed on to you for necessary action.
1. Engineer –in-Charge
In connection with the contract quoted above, please note that Shri (Rank in case of a
Service Officer) …….. of this office has been appointed by me as Engineer-in-Charge
to supervise the building and Road works* pertaining to the contract and that Shri
(Rank in case of a Service Officer)………of this office has been appointed by me as
Engineer-in-Charge to supervise the Electrification and Water Supply
Works*pertaining to the contract. You are, therefore, requested to contact them
immediately during working hours for taking over the site (s) and commencement of
the work under the contract.
2. Time and Progress Chart/CPM Chart

With the reference to Condition 11 of General Conditions of Contract (IAFW-2249)
forming part of the contract, you are hereby called upon to submit for my approval a
“TIME AND PROGRESS CHART/CPM CHART” before commencement of the work.
The Time and Progress Chart should indicate the forecast of the dates of
commencement and completion of the various trades, processes or sections of the
works to be done by you under the contract.
3. Contractor's Supervision and Organisation
(a) Supervision.
(i) Your attention is invited to Condition 25 of the General Condition of
Contracts (IAFW-2249) according to which, you shall either supervise
the execution of the contract personally or shall appoint a competent
agent(s) who shall be qualified engineer(s). Please intimate immediately
whether you are technically capable and you will personally supervise
the execution of the contract or you propose to appoint an agent(s)
therefore.
300
(ii) In the latter case, you are requested to employ at an early date at
your own expense your accredited agent(s) to supervise the execution
of the contract. Please note that the agent(s) you intend to employ shall
possess engineering qualifications and experience of the type of work
to be done by you and shall be approved by me. Names and address of
agent(s) along with his/ their specimen signature(s) in triplicate duly
attested shall also be furnished.
(b) Organization. Let me know which of your accredited agents are

authorized on your behalf to:-
(i) Receive instructions from the Engineer-in-Charge or from the

undersigned, in respect of execution of the works generally and to sign
the Works Site Order Book.
(ii) Sign Measurement Books, unstamped receipts for Schedule ‘B’

stores, Schedule ‘C’ Tools and Plants etc and to submit your indent and
demand for stores and tools and plants (Amend as applicable).
(iii) sign receipts and receive payments against advances on account

and sign final bill.
Note: Power of attorney issued by you to your Agent(s) shall be in a proper

legal form and be furnished to me in original along with a certified true copy
thereof.
4. Communication. Please intimate the address to which communications

intended for you in connection with the contract will be forwarded to you.
5. Stores Site and Labour Camp (amend as applicable). Please intimate

within 10 days of the date of this letter whether:-
(a) You wish to draw water for the works from the Government sources.
Please however note that once the work commences you will not be permitted
to change your option in this respect.
(b) You wish to obtain electrical energy under your own arrangement or
through Government as indicated in Clause ………………..of the contract.
(c) The area allotted for your workshop/stores, go down and offices is indicated
on the site plan.
Please note that the site and erection of these buildings shall have the prior
written approval of the Engineer-in-Charge.
6. Tools and Plants. In addition to making your own arrangements for adequate
tools and plants and equipment required for the execution of the contract, please
ensure that the following item are provided at the site of the works:-
301
(a) Steel/metallic tapes for laying out and for checking measurement as and
when necessary.
(b)Measuring boxes for sand, coarse aggregate for concrete and the like;
(c)Screen for sand and coarse aggregate;
(d)Impervious platform for mixing mortar, concrete, and the like;
(e)Arrangement for storing water required for the work;
(f)…………………..………………………………………
(g)………………………………………………….…………….
7. Stores and Materials.
(a) With reference to Condition 10 of the General Conditions of Contracts

(IAFW-2249),please supply within 15 days of the date of this letter, samples of
following materials of appropriate quantity and /or size to be used by you in the
works for my inspection and approval:-
(i) Sand for concrete works and mortar;

(ii) Sand for plastering works;
(iii) Coarse aggregate for concrete works;
(iv) Burnt bricks;
(v) Timber for door and window frame;
(vi)………………………………….
(b) Appropriate quantity of samples of the following items /materials shall
also be furnished for my inspection and approval within the period mentioned
below:-
(i) Tiles
(ii) Door shutters
(iii) Plywood within ….... week (s)
(iv) Iron mongery of the date of this letter
(v) Water supply pipes
(vi) Soil/drain pipes
(vii) SWG/drain pipes
(viii) Sanitary fitting
(ix) Soil/vent pipes
(x) Electrical wiring, switches
(xi) …………
(c) Please note that all the samples approved be me shall be sealed and
under no circumstances items/material of quality inferior to those sealed shall
be brought by you to the site of works for use in the works.
(d) In accordance with the Notes to Schedule ‘B’ of this contract, please note
that you are required to submit your demands for Schedule ‘B’ stores at
least…...…. days in advance of your requirements. Delay in submitting the
demand shall be to your account.
8. Labour.
Form III for obtaining the Labour Licence for adequate No of labour as per scope
of work is enclosed herewith. Your attention is invited to the MES contractors
Labour Regulations and Conditions 26 to 30 and 58 of the General Conditions
of Contract (IAFW-2249). Please ensure that a Labour Distribution Return (in
duplicate), indicating the number and description by trades of labour is
submitted by you to the Engineer-in-Charge every day latest by 1100 hrs. You
302
are also requested to ensure that all the documents required to be maintained
by you under Law or Regulations such as Wage Books, Wage slips, Register
of fines, Wage Cards, ESIC, EPF etc are properly maintained by you and are
made available by you for inspection when demanded by the Engineer-in-
Charge.
9. Holdups in the Work .

Your attention is invited particularly to Condition 11 of the General Conditions
of Contracts (IAFW-2249) according to which you are required to immediately
notify to the undersigned any event causing delay in completion of the work due
to any reason enumerated therein duly supported by detailed reason and
documentary proof, if any, therefore and the period of delay anticipated and the
action being taken by you to remedy the same.
Yours faithfully,
Garrison Engineer
Explanatory Notes
1. Generally, this letter should be modified suitably depending upon the nature
of the work and particularly in case of contracts for furniture, electrical works, air
conditioning works or other works of special nature.
2. Modify Para 1 suitably depending on the nature and scope of the work
included in the contract.
3. Modify or add items as necessary depending on the scope of work under the
contract in Para 6.
4. List out the materials in Para 7 (a) which are required to be used in the initial
stages of the work.
5. List out the materials in Para7(b) which are required to be used subsequently.
It shall, however, be ensured that the samples of all important items/ materials are
approved and sealed at a very early date but in no case later than one to two months
from the date of commencement of the contract (depending on the overall period of
completion) so that there is no delay in their procurement by the contractor.
303
APPENDIX 16.2
FORM OF DILIGENCE NOTICE TO BE ISSUED BY GE TO THE CONTRACTOR

WHEN THERE IS UNDUE DELAY IN THE COMMENCEMENT OF WORKS AFTER
DATE OF HANDING OVER THE SITE
Telephone: Registered
Ack Due
Office of The
Garrison Engineer
No………………………. /E8
Date…………
To
………………………………………
………………………………………
Subject:CA No. …………………………….
Name of Work:……………………………
Dear Sir (s),
1. Reference Work Order No. 1 dated………………………….
2. Site for the work to be executed under the above contract was handed over to you
on ………….. (date). The undersigned has noticed that inspite of the fact that
considerable time has elapsed since the site was handed over to you, no work has so far
been commenced by you at site.
3. It is accordingly felt that you are not in a position to discharge your obligations
under the contract. I therefore hereby give you notice that if the said work is not
commenced by you within ………… days of the date of this letter, [I the undersigned shall
be obliged to recommend to the competent authority for cancellation of the contract on
account of your default in the discharge of your contractual obligations and for the
completion of the work through other agency/ agencies at your risk and cost in terms of
Condition 54 of the General Conditions of Contracts (IAFW-2249) and without prejudice
to the other remedies available to the Government under the terms of the contract or
under law]1
Yours faithfully,
Garrison Engineer
Copy to:-
CE ……………………..
CWE……………….......
Engineer-in-charge….....
Internal distribution: E2
304
1. In case of contracts concluded by GEs, this should be amended to read as follows:
“I will be constrained to consider cancellation of the contract on account of your default in

discharge of your contractual obligations and {the completion of the work through other
agency/agencies at your risk and cost in terms of Condition 54 of the General Conditions
of Contracts (IAFW-2249)}2 and without prejudice to the other remedies available to the
Government under the terms of the contract or under law.”
2. In case of contracts accepted by CWE/GE, this letter need not be endorsed to CE

unless work was delegated by CE.
3. For contracts concluded with amendments No 41 to 48 of IAFW-2249, the words

in Para 3 “ at your risk and cost in terms of Condition 54 of the General Conditions of
Contracts (IAFW-2249) and without prejudice to the other remedies available to the
Government under the terms of the contract or under law” shall be replaced by “and the
performance security & retention money upto the last paid RAR shall be forfeited. In
addition all Tools & Plants and your material lying at site shall be confiscated by
Government and shall be absolutely at the disposal of the President of India and no
compensation whatsoever shall be allowed to you by the Government. Also your
firm/Company including firm(s)/Company/Companies where proprietor/Partner(s)/
Director(s) of your firm/Company is/are working as a Partner(s)/Director(s) shall also be
debarred from participating in the tender for the balance work of above contract. The
above is without prejudice to the other remedies Available to the Government under the
terms of contract or under the law.
305
Appendix 16.3
FORM OF LETTER TO BE ISSUED BY GE TO WARN CONTRACTOR ABOUT

INADEQUACY OF LABOUR AND MATERIALS AT SITE
Ack Due
Office of The
Garrison Engineer
No………………………. /E8
Date…………
To
………………………………………
………………………………………
Subject: CA No………………………
Name of Work……………………….
Dear Sir (s)

1. It has come to my notice that the rate of procurement of materials required for the
work especially sand/ aggregates, bricks, (give list of relevant materials) etc is extremely
slow and you have not made any arrangements or placed orders for flush shutters, steel
windows (give list of relevant materials) etc.
2. It is also noted that the labour employed by you in the following categories is not
in sufficient numbers to have the required rate of progress:
(a) Masons
(b) Carpenters
(c) Welder
(d) …………..
3. The inadequacy of the labour and materials pointed out above has resulted in the
progress of the work being not commensurate with that shown in the Time and Progress
Chart of the contract.
4. You are, therefore, hereby called upon to accelerate the progress of the work by
procuring the requisite quantity of materials and increasing the existing number of
labourers as necessary to bring the progress upto the requirement in the above chart.
5. I hereby draw your attention to the face that time is of the essence of the contract
and unless you proceed with the work with greater diligence and ensure compliance with
the Time and Progress Chart within the next 30 days thereof, I will be constrained* to
report the matter to the competent authority for such action as may be deemed necessary
by him under the terms of the contract.
306
6. Please acknowledge.
Yours faithfully,
Garrison Engineer
Copy to:
CE....................
CWE…………
Engineer-in-Charge…………….
Internal Distribution E2
_____________________
*In case of contracts concluded by GEs, this should be amended to read as follows:
“I will be constrained to consider cancellation of the contract”.
In case of contracts accepted by CWE/GE this letter need not be endorsed to CE unless
work is delegated by CE.
307
Appendix 16.4
FORM OF NOTICE TO BE ISSUED BY GE WARNING THE CONTRACTOR ABOUT

HIS LIABILITY TO PAY COMPENSATION FOR DELAY TO BE ISSUED 15 DAYS
PRIOR TO DUE DATE OF COMPLETION
Telephone: Registered Ack Due

Office of The
Garrison Engineer
No………………………. /E8
Date…………
To
………………………………………
………………………………………
Subject:CA No ……………………………..
Name of the Work…………………………….
Dear Sir (s),
1. The date (s) for completion of work under the above mentioned contract is /are ……
and I notice that the progress of the work has been very slow and unless you proceed
with due diligence and accelerate the progress of the work, you are not likely to comply
with the time agreed upon for completion of the work.
2. I hereby draw your attention to the fact that the time is of the essence of this contract
and if you fail to complete the work by the stipulated date, you shall be liable to pay
compensation for delay in completion. This notice is without any prejudice to any other
right or remedy open to the Government as provided for in Condition 50 of General
Conditions of Contracts (IAFW-2249) forming part of the Contract or under law.
Yours Faithfully,
Garrison Engineer
Copy to:
CE………………………………
CWE……………………………
Engineer-in-charge……….for information and necessary action.

In case of contracts accepted by CWE/GE this letter need not be endorsed to CE

unless work is delegated by CE
308
APPENDIX 16.5
FORM OF LETTER TO BE ISSUED BY THE GE TO THE CONTRACTOR TO CLAIM

COMPENSATION FOR NOT COMPLETING THE WORK ON THE DUE DATE-
TO BE ISSUED IMMEDIATELY AFTER THE DUE DATE OF COMPLETION HAS
ELAPSED

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA NO……………………………
Dear Sir(s).
1. Reference further to my notice under letter

No…………………..dated………………..
2. Time being of the essence of the contract quoted above and you having failed to
perform your obligation by the time agreed upon, notice is hereby given to you, that in
deciding to accept the performance after the said time, Government shall claim from you
compensation for delay in completion of the work in terms of Condition 50 of the General
Conditions of Contracts (IAFW-2249) on account of your non-performance of your
contractual obligations by the time agreed upon.
Yours faithfully,
Garrison Engineer
Copy to:-
CE…………………………………
CWE………………………………. for information
Engineer-in-Charge………………...
PCDA/CDA ……………………….
309
Appendix 16.6
FORM OF LETTER TO BE ISSUED TO THE CONTRACTOR BY GE FOR

SUSPENDING WORK

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………………………………………………
Subject:CA No……………………….
Name of Work…………………………………
Dear Sir (s),
1. Under condition ……… of General Conditions of Contracts (IAFW-2249) I hereby
call upon you to suspend the execution of the work on the following items under the above
mentioned contract:-
(a) ………………………
(b) ……………………………
(c) …………………………………
(d)
2. Anticipated period of suspension shall be ………. (days/months) with effect from
……@................. (date).
3. Financial effect on account suspension of the Work and subsequent resumption
thereof shall be NIL on either side.
4. The enclosed duplicate copy of this letter shall be signed and returned for our
record within ……. days of the date of this letter.
Yours faithfully,
Garrison Engineer
We accept……………………………..
Signature of Contractor
Date:
Copy to:
CE…………………………….
CWE…………………………..
Engineer-in-Charge……………
…………………………………
@ A minimum of 15 days time shall be given from the expected date of receipt of the
letter
310
Note:
1. This letter shall be sent to the contractor in duplicate.
2. In case of substantial delay in resumption of the work beyond the period
stipulated in Para 2, the contractor shall be suitably informed in due course amending
Para 2 of the letter of suspension.
311
Appendix 16.7
FORM OF LETTER TO THE CONTRACTOR TO BE ISSUED BY GE FOR

RESUMPTION OF WORK AFTER SUSPENSION
Ack Due
Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No………………………….
Name of Work………………………..
Dear Sir(s),
1. Under condition…………. of General Conditions of Contracts (IAFW-2249) I
hereby call upon you to resume execution of the work on the following items with effect
from…..@......... which were suspended under my letter No………………… dated…… :-
(a) …………………………
(b) ………………………….
(c) ……………………….
2. Consequent upon the suspension and subsequent resumption of the work
necessary extension of time is being granted separately.
3. Financial effect on the contract resulting from the suspension of the work and then
resumption thereof shall be NIL on either side.
4. The enclosed duplicate copy of the letter shall be signed and returned for our
record within…………days of the date of this letter.
Yours faithfully,
Garrison Engineer
We accept………………………….
Sign of contractor
Date:
Copy to
CE……………………………
CWE…………………………
Engineer -in-Charge--- for information and necessary action.
@ A minimum of 15 days time shall be given from the date of the receipt of the letter.
312
Appendix 16.8
FORM OF THE LETTER TO THE CONTRACTOR TO BE ISSUED BY GE

REGARDING CONTINUED NEGLIGENCE IN RECTIFICATION OF DEFECTS/BAD
WORKMANSHIP POINTED OUT TO HIS SITE REPRESENTATIVE AND IN WORKS
SITE ORDER BOOK

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA NO……………………….
Name of Work…………………………
Dear Sir(s),
1. During my inspection of the work on………along with your representative

Shri…………it was noticed by me that the following defects in respect of the materials
being used and the workmanship are persisting:-
(a) Framework for ceiling is not treated;
(b) Exposed faces of rafters are not wrought;
(c) Chowkhats are not in plumb;
(d) …........................
(e)
2. The above defects have already been brought to your notice by the Engineer-in-
Charge through Site order No………..dated……………..and you were required to rectify
the same.
3. You have not so far rectified the same and your continued negligence in
rectification of these defects in spite of a notice is viewed with concern by me. You are,
therefore, once again and finally called upon to make arrangements to rectify the above
defects immediately but not later than…………
4. Please also note that in case these defects are not rectified by you by the said
date, action will be taken by me without any further notice to you, to rectify these through
another agency at your risk and cost in terms of Condition 46 of the General Conditions
of Contracts (IAFW- 2249) and you shall be liable therefor.
313
Yours faithfully,
Garrison Engineer
Copy to:-
Engineer-in-charge for information and necessary action. Please forward

your report on the progress of the rectification not later
than…….(date).
314
Appendix 16.9
FORM OF COMPLETION CERTIFICATE TO BE ISSUED BY THE GE TO THE

CONTRACTOR
(This Completion Certificate shall be issued to the Contractor in duplicate
to enable him to attach one copy along with his final bill.)

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No …………………………..
Name of Work:……………………………………..
Dear Sir(s),
1. In pursuance of Condition 49 of the General Conditions of Contracts (IAFW-2249), I

hereby certify that the work under CA No.......…..for “……………...” has been satisfactorily
completed by Shri/S’Shri/M/s…………on…….(date) and taken over by MES subject to
rectification of the defects listed in the statement attached as Appendix.
2. Please ensure that the defects listed in Appendix are rectified to my satisfaction not
later than……………………..at your Risk & cost and under your own arrangements.
Yours faithfully,
Garrison Engineer
Encls: (Appendix)
Copy to:-
PCDA/CDA………………… for information
AO/AAO GE…………………
Not on Original
CE…………………………….
CWE………………………….
Engineer-in-Charge
Internal Distribution:E2
315
Appendix 16.10
FORM OF NOTICE TO THE CONTRACTOR TO BE ISSUED BY THE GE TO WARN

THE CONTRACTOR OF SLOW PROGRESS AND WHICH IS NECESSARY PRIOR
TO REPORTING THE MATTER TO ACCEPTING OFFICER FOR CANCELLATION
OF THE CONTRACT.
Ack Due
Office of The
[
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No ……………………..
Name of Work………………………
Dear Sir(s),
1. Reference Work Order No. 1 dated………………
2. Site for the work to be executed under the above contract was handed over to you
on…… (Date). The undersigned has noticed that you are not proceeding with the work
with due diligence and the progress of the work is far from satisfactory.
3. I hereby draw your attention to the fact that time is of the essence of your contract
and unless you proceed with the work with more diligence and accelerate your progress
you are not likely to complete the work by the stipulated date and you will thus become
liable to the payments of the damages provided for in the contract in this respect and /or
any other remedy available to the Government under the said contract.
4. You are hereby accordingly called upon to put in your best efforts to accelerate the
progress of the work so as to complete it by the stipulated date of completion.
5. *If the present state of affairs continues for a further period of…... weeks in spite
of this notice, I shall be constrained to report the matter to the competent authority for
such action as he may deem fit under the terms of the contract.
316

Yours faithfully,
Garrison Engineer
Copy to:-
CE………………..
CWE……………..
Engineer-in Charge.........
Internal Distribution E2.
*In case of contracts concluded by GEs this should be amended to read as follows:
“I shall be constrained to consider cancellation of the contract.”
317
Appendix 16.11
FORM OF FINAL NOTICE TO BE SERVED BY ACCEPTING OFFICER PRIOR TO

CANCELLATION OF CONTRACT
Ack Due
Office of The
Accepting Officer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No. ……………………
Name of Work: …………………….
Dear Sir,
1. Reference GE ………………letter No. …………………. dated……………
2. In spite of notice by the GE asking you to put in your best efforts to accelerate the
progress of work, no activity is reported on the site of work in the last two weeks. You
have also not brought out any reason for not proceeding with the work.
3. In view of above, I hereby give you this FINAL NOTICE to accelerate the progress
of work and amend the CPM chart in consultation with GE. Please note that if the present
state of affairs continues for a period of 15 days from this notice, I shall cancel the contract
on your default in terms of powers vested in me vide Condition 54 of General Conditions
of Contract (IAFW -2249).
4. This is without prejudice.
Yours faithfully,
Accepting Officer
Copy to:-
1. E-in-C's Branch
In case of CE contracts
2. CE……….Command/ADG
3. CE Zone
4. CWE In respect of GE/CWE
Contracts
5. GE/AGE
318
Appendix 16.12
FORM OF THE LETTER TO BE ADDRESSED TO THE CONTRACTOR BY THE
ACCEPTING OFFICER FOR CANCELLATION OF THE CONTRACT ON ACCOUNT
OF THE CONTRACTOR’S DEFAULT
Ack Due
Office of The
Accepting Officer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No……………………
Name of Work…………………….
Dear Sir(s),
1. Reference this office letter No…………………..dated …………….
2. In spite of notice issued to you under the above mentioned reference in connection
with the work to be executed under the above mentioned contract, you have failed to:-
*(a) Commence/ resume work.
*(b) Proceed with the work due diligence.
*(c) Comply with condition………of General Conditions of Contracts (IAFW-2249).
*(d) Complete the work by due date.
3. Therefore, I Accepting Officer of the contract, on behalf of the Government, acting

under the powers vested in me in terms of Condition 54 of the General Condition of
Contracts (IAFW-2249) and without prejudice to any other right or remedy which shall
have accrued or shall accrue hereinafter to the Government under the terms of the above
said contract, hereby cancel your contract on account of your default and the said contract
shall stand cancelled with effect from ……………… (date).
4. Please note that the works as defined in the contract condition 1(c) of the General
Conditions of Contracts will be completed by me through another agency at your risk and
cost.
5. You are accordingly requested to report to GE at his office in person or through an

accredited representative at……….on…………when an inventory of complete/
incomplete items of work and materials, if any, left by you at site will be made and
recorded jointly. In the event of your failure to keep this appointment, inventory will
nevertheless be prepared notwithstanding your absence and the same shall be fully
binding on you.
319
6. This is without prejudice to any other right or remedy which shall have accrued or
shall accrue hereinafter to the Government.
Yours faithfully,
ACCEPTING OFFICER
Copy to:-
CE……….. ……… In case of CWE’s/ GE’s Contracts.
CWE………………….
GE …………………… In case of CE’s contracts.
Engineer-in-Charge
PCDA/CDA …………………………..
Registering Authority
*Delete whichever is inapplicable.

Note:
1 For contracts concluded with amendments No 41 to 48 of GCC (IAFW-2249) having
been included, the words in Para 4 “ at your risk and cost ” shall be replaced by “and the
performance security & retention money upto the last paid RAR shall be forfeited. In
addition all Tools & Plants and your material lying at site shall be confiscated by
Government and shall be absolutely at the disposal of the President of India and no
compensation whatsoever shall be allowed to you by the Government. Also your
firm/Company including firm(s)/Company/Companies where
Proprietor/Partner(s)/Director(s) of your firm/Company is/are working as Proprietor
/Partner(s)/Director(s) shall also be debarred from participating in the tender for the
balance work of above contract
320
Appendix 16.13
FROM OF LETTER TO BE ADDRESSED TO THE CONTRACTOR BY THE

COMMANDER WORKS ENGINEER FOR FORECLOSING A CONTRACT BY THE
GOVERNMENT
Ack Due
Office of The
Commander Works Engineer
No………………………. /E8
Date…………...
TO
………………………………………
………………………………………
Subject:CA No………………………………
Name of Work:…………………………………..
Dear Sir(s),
1. Work in respect of the above mentioned contract/part of the work as per details
………..included in the above contract, is not required to be done by the Government.
According to Condition 57 of IAFW-2249 (General Conditions of Contracts), forming part
of the contract, the Government is competent to put an end to the above mentioned
contract by giving you notice in writing.
2. In terms of the aforesaid condition, I hereby determine the aforesaid contract in
full/ in part as listed in Schedule “A” hereto with effect from…………………………
3. You are accordingly requested to report to the GE…. at his office in person or
through an accredited representative at……….on…………when an inventory of
complete/incomplete items of the work and the materials, if any, left by you at site will be
made and recorded jointly. In the event of your failure to keep this appointment, inventory
will nevertheless be prepared notwithstanding your absence and the same shall be fully
binding on you.
4. This is without prejudice to any other right or remedy which shall have accrued or
accrue to the Government under the terms of this contract.
Yours faithfully
Commander Works Engineer

Copy to:-
CE…………………………………
GE…………………………………
Engineer-in-Charge………………..
321
Appendix 16.14
FORM OF THE LETTER TO THE CONTRACTOR FROM GE/CWE/ CE TO GUARD

AGAINST SECTION 18 AND 19 OF THE LIMITATION ACT 1963
Ack Due
Office of The
Garrison Engineer/CWE/CE
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject: CA No……………………….
Dear Sir(s),
1. Reference your letter No……………..dated…………..addressed to

………………………copy to……………………………………..
2. In replying to your said communication, it is hereby made absolutely clear to you

by me that I make no acknowledgement of any liability on Government’s part what-so-
ever towards you and that this letter is WITHOUT PREJUDICE.
Yours faithfully,
Signature and designation of Officer

Copy to:-
CE………………………….
CWE……………………….
GE…………………………
322
Appendix 16.15
FORM OF THE LETTER TO BE ISSUED BY THE GE TO THE CONTRACTOR FOR
RECTIFICATION OF DEFECTS DURING DEFECTS LIABILITY PERIOD

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA No…………………………
Name of Work………………………………
Dear Sir(s),
1. The following defects in work completed by you under the above mentioned
contract have developed since……………..
(a)……………………………….
(b)……………………………….
2. Under Condition 46 of the General Conditions of Contracts (IAFW-2249), forming

part of the contract, you are liable to rectify the defects observed during the currency of
the defect liability period. You are accordingly hereby called upon to rectify the said
defects by...… (date) failing which the same shall be rectified by the Government by or
through another agency at your risk and cost without any further notice to you and you
shall solely be liable therefor.
3. Please acknowledge the receipt

Yours faithfully,
Garrison Engineer
Copy to:-
Engineer-in-charge……….. Please forward your report about progress on rectification
by………
CE……………………..
CWE…………………..
323
Appendix 16.16
FORM OF THE LETTER TO BE ISSUED TO THE CONTRACTOR ON THE
COMPLETION OF RECTIFICATION OF ALL DEFECTS NOTIFIED DURING THE
DEFECTS LIABILITY PERIOD UNDER PARA 4 OF THE CONDITION 49 OF IAFW -
2249

Office of The
Garrison Engineer
No………………………. /E8
Date…………...
To
………………………………………
………………………………………
Subject:CA NO………………………….
Name of Work: ………………………….
Dear Sir(s),
In pursuance of Condition 49 of IAFW-2249, I certify that the defects liability period
of the work executed by you under Contract No…………of …….expired on……………and
that rectification of all defects notified during this period has been carried out satisfactorily
and the Government has no claim against you in this respect.
Yours faithfully,
Garrison Engineer
Copy to:-
PCDA/CDA……………………….
AO/AAO GE……………………….
CE and /or CWE…………………...
Note: In case the contractor has not rectified certain defects previously notified, the letter
shall be suitably modified and such defects shall be precisely enumerated and the
contractor shall be asked to complete rectification by a definite date
324
Appendix 16.17
FORM OF AMENDMENT TO THE CONTRACT
ContractNo.……………………… Amendment No.………………

Serial Page No……………...
WHEREAS on the ………………….day of…………. 20………, an Agreement was

entered into between the President of India represented
by…………………(hereinafter referred to as the “Government”) and
Shri/S’Shri/M/s……… (hereinafter referred to as the “Contractor”) under which the
said contractor among other conditions contracted to provide…………..
(Name of Work).
AND WHEREAS the said parties are now mutually desirous of amending the said
Agreement in certain respects.
It is therefore hereby agreed by and between the parties thereto as follow:-
Firstly
Secondly
*Thirdly
*Fourthly- That this amendment shall be numbered as Serial Page No. ……. of
the contract Agreement and that the total number of pages on the INDEX shall be
amended to read as ……in lieu of………….
*Fifthly- That all other terms of the contract shall hold good in all other respects
and be in full force and effect.
In witness thereof the said parties have hereto set their respective hands as
shown below.
Signature of Accepting Officer
(for and on behalf of the President of India)
Signature of the Contractor
Signature and address of witness
Amend number to suit each case depending upon the items involved in the
amendment
325
Appendix 16.18
PERFORMANCE REPORT OF CONTRACTORS STAGE- I/II

CONFIDENTIAL
1. Periodicity of Report.
Stage-I: 50% of the contract period in respect of following:
(i) All “S” and “SS” Class contractors irrespective of the value of contract
and period of contract.
(ii) All un-enlisted contractors where either value of contract is more than
Rs 7.5 crore or period of contract is more than 18 months.
Stage-II: Within one month of completion of contract irrespective of class of
enlisted/ unenlisted contractor, value of contract or period of contract.
2. Contract Particulars.
(a) Contractor
(i) Index no :
(ii) Name :
(b) Detail of work
(i) Name of work :
(ii) Contract Agreement No/Year
(iii) Value
(c) Dates of
(i) Commencement :
(ii) Original Completion :
(iii) Extended Completion :
(iv) Actual Completion
(d) Date of initiation of Performance Report :
(i) Due Date :
(ii) Actual Date :
(e) Reasons for delayed initiation, it any
(f) Physical progress :
(i) Planned :
(ii) Actual
(g) Engineers Engaged : Fully/Partly
(h) T&P, Machinery & Transport deployed : Fully/Partly
326
3. Performance Evaluation
The performance of the contractor to be evaluated on a scale of 1 to 10. For
Sl No 1(e), (-) 1 to(-) 10 marks can be given in case of tendency to create
disputes, unreasonable attitude towards settlement of DO’s/ Star Rates
/Bills/Arbitration/Court Case etc
Sl. Performance Parameters Marks
No
1(a) Adherence to specification, workmanship and overall standard of finishes
(b) Financial, managerial capabilities and adherence to time
(c) Use of modern construction techniques including weigh batching plants,
quality of shuttering material etc.
(d) Site Management ie resources deployed, timely procurement of stores,
testing of materials, rectification of defects noticed during construction
including observation by STE branch, visiting officers etc
(e) Capabilities and co-operation to adhere to procedural requirements,
finalization of DOs, Star Rates, RAR preparations ,final bill and reaction of
users.
(f) Negative marking in case of tendency to create disputes, court cases, (-)
arbitration and unreasonable attitude towards settlement of DO’s/ Star Rates
/Bill, engagement of engineers/deployment of Tools & Plants, Machinery &
Transport on a scale of (-) 1 to (-) 10
2 Marks by CWE (out of 30 in CE Contract) and (out of 50 in case of GE/CWE
contracts)
3 Marks by CE Zone (out of 20 in case CE contracts) and (out of 50 in case
of GE(I) contracts)
4 Total out of 100 Marks
5 Remark of Command CE/ADG (in case of CE contracts being executed by

‘S’/’SS’ class contractors) as Very Good, Good, Satisfactory, Poor, Very
Poor.
Signature of CE…………………………… Date…………………………….

Signature of CWE………………………… Date…………………………….
Signature of CE Zone…………………… Date…………………………….
Signature of Command CE/ADG……………. Date…………………………….
327
SECTION 17
TIME FOR COMPLETION OF WORK, EXTENSION OF TIME,

COMPENSATION FOR DELAY, SUSPENSION OF WORK
17.1 Time for Completion of Work .

17.1.1 Condition 11& 50 of General Conditions of Contracts (IAFW-2249) stipulate
that:-
(a) Time is of the essence of the contract and in the event of delay in
completion of a work, the Government is entitled to recover compensation
from the contractor.
(b) Accepting Officer has authority to extend the period of completion

under certain circumstances, if extension is justified.
17.1.2 Cases continue to be brought to the notice of E-in-C’s Branch which reveal
that extensions of time granted have not been commensurate with completion period
initially allowed. It appears that it has not been appreciated that the completion period
allowed in a contract has direct bearing on rates quoted and that more competitive
quotations are received if a reasonable and adequate period of completion is
allowed. The same shall be in the interest of both, the Government as well as the
contractor.
17.1.3 Scrutiny of completion periods in several contracts and extensions granted

reveal that if proper attention had been paid to the following aspects, extensions
could have been minimized :-
(a) Collection of correct ground data initially and devoting more time to
proper planning.
(b) Giving more time to GEs to comment on provisions made in tender

documents to enable them to suggest modifications to suit site factors/local
conditions.
(c) Checking of layout and grouping of buildings to fit them on ground in

consultation with users and obtain their approval.
(d) Finalising in writing with users, a well thought out programme for
handing over sites/buildings before going for tendering.
(c) Keeping changes initiated by users or improvements considered

desirable by engineers during the course of construction to the absolute
minimum and earmarking the same for implementation in future construction.
17.1.4 The relevant factors must be taken into account by the Accepting Officer
before laying down an adequate completion period for a work.
17.1.5 In case of important or urgent works, Accepting Officers are advised to consult
contractors who have experience of working in the particular area and ascertain their
views with regard to completion period considered reasonable.
328
17.1.6 A careful analysis shall be made of extensions granted in respect of works

during the course of the previous two to three years. This shall be of great assistance
in fixing the completion period.
17.1.7 Although it is appreciated that in certain cases local staff authorities may exert
pressure for reducing completion period, but engineers must be careful to ensure
that the minimum period required for completing a work to an acceptable standard is
not reduced.
17.2 Extension of Time.
17.2.1 Condition 11 of General Condition of Contracts (IAFW-2249) provides for

extension of time for completion of work for causes beyond contractor’s control as
mentioned therein. This condition also provides that the Contractor shall give notice
in writing to the GE of the happening of any event causing delay immediately but not
later than 30 days of the happening of the event and if he fails to do so, he shall
forfeit his right to claim extension of time for the delay. It will, therefore, be impressed
upon contractor's that they must apply immediately after the need for extension
arises.
17.2.2 Condition 11(c) of IAFW-2249 also stipulates that “Extension of time, if due,
shall be granted within 45 days of receipt of request from the contractor along with
supporting documents, but before expiry of original/extended period of completion.”
These stipulations are legal requirements which shall be complied. To adhere to
these time guidelines, correspondence related to extension of time shall be done
through electronic means. GE will forward extension of time proforma (ETP) to CWE
with his recommendations within one week of receipt of request from the contractor
(in respect of CE and CWE contracts) and CWE will also forward the same to CE
with his recommendations within one week of receipt from the GE (in respect of CE
contracts).
17.2.3 Contractor shall always be advised to forward his application well in time
through GE but at the same time, he shall always be asked to forward an advance
copy to the Accepting Officer so that latter could ensure expeditious action in the
matter.
17.2.4 The practice of granting piecemeal, interim and provisional extension in the
past has weakened government cases in arbitration as the contractors have taken a
stand that they were unable to plan their resources due to uncertainty about grant of
extension of time. Therefore, contractors request for extension of time shall be
analysed in detail & extension of time shall be granted in terms of Condition 11 of
IAFW-2249 and words like provisional, interim etc shall not be used while
communicating extension of time to the contractor. It is therefore desirable to assess
the time required for completion of balance work and grant extension of time in a
manner as if the period of completion had been revoked and refixed.
17.2.5 Extension may also become necessary where additional work has been
ordered on a contractor through a deviation order. In such cases, the extension shall
be decided by the competent authority while approving the deviation order and
should be covered in the DO itself without waiting for an application from the
contractor.
329
17.2.6 There may be some occasions where delay is mainly attributed to non-
availability of Government stores/non availability or breakdown of Government Tools
& Plants or such other causes attributable to Government. In such cases the
Accepting Officer may himself consider the matter and grant extension as necessary
to the contractor without waiting for application from him.
17.2.7 On receipt of the comments/information from the GE/CWE, the Accepting

Officer will take prompt decision on the extension of time to be granted. Extension of
time granted by the Accepting Officer shall be communicated to the contractor by the
Accepting Officer in writing with copies to GE/CWE and PCDA/CDA . On CDA’s
copy, reasons for the extension shall be indicated in brief.
17.2.8 Extension of time by Accepting Officer(s) shall be regulated as under:-
(a) CWE/GE’s Contracts. 25% of the original period of contract or three

months, whichever is more.
(b) CE’s Contracts. 25% of the original period of the contract or nine
months, whichever is more.
(c) All cases of extension of time beyond the period specified above, shall
be reported to the higher authorities ie CE Zone/CCE and CE Command/ADG
respectively. CEs Command/ADGs/CEs Zone/CCEs are also advised to
identify projects from the QPR (Quarterly Progress Report) which are not
progressing as per schedule and investigate the causes for delays.
Cognizance needs to be taken of lapses and disciplinary/administrative action
initiated both against the executive(s) and the contractor(s) as warranted.
Failures on the part of contractors to meet the contractual obligations shall
also be reflected in their Performance Report(s).
(d) Extension beyond the limits specified above shall therefore be granted
by the Accepting Officers only after submitting the report (as per format given
in Apeendix-17.1) to higher authorities and after carefully weighing all the
pros and cons of the issues mentioned above including possibility of
disciplinary/administrative action for granting extension on invalid/unjustified
grounds or more than that justified. However, no prior approval of next
higher authority is required for grant of extension of time by the
Accepting Officer.
17.2.9 On receipt of a copy of letter granting extension of time, GE will immediately

prepare and issue a deviation order for extension of time also showing the financial
effect as ‘NIL’. Such deviation orders for extension of time should be endorsed as
“technically checked” by JE(QS & C)/AGE(C) of GE, but there is no necessity for
further technical check or signature of DCWE/ACWE (contracts) of CWE or the CWE
since the letter of the Accepting Officer is already quoted on the deviation order and
there is no further technical check involved in such deviation orders.
17.2.10 It is important that deviation orders for extension of time are signed by both
the parties well in time i.e. soon after the decision of the Accepting Officer to extend
time has been received by the GE. This shall be before the expiry of the date(s) of
completion prescribed in the contract/phase of the contract. Also refer Para 17.2.2
here-in before.
330
17.2.11 GE shall ensure that immediately on expiry of the prescribed date, notice of
Government’s intention to claim compensation on standard format is issued to the
contractor in order to make the Department's claim legally strong in arbitration.
17.2.12 The cases of extension of time shall be dealt with utmost promptitude. The
Accepting Officer shall ensure that the decision in this regard is conveyed to
the contractor before the expiry of the date(s) of completion prescribed in the
contract/phase of the contract. Once a final decision has been conveyed to
the contractor, it shall not be reviewed normally either by the Accepting Officer or
his successor in office unless there are justifiable new inputs in the case.
17.3 Compensation for Delay.

17.3.1 According to Condition 50 of IAFW-2249, the compensation for delay is
leviable on the value of work as actually ordered including all deviation orders. The
following points are to be noted:-
(a) Notice in terms of Section 55 of Indian Contract Act 1872 immediately

after expiry of contract period is mandatory to sustain Government claims of
compensation in arbitration.
(b) In case of cancellation of contract after date of completion of work,

Government is entitled to claim compensation as per Condition 50 in addition
to recovery of extra expenditure incurred in risk and cost contract in case of
contracts with no provision for Performance Security. However in case of
contracts with Performance Security provisions, Government is entitled to
claim compensation as per Condition 50 in addition to forfeiture of
Performance Security and Retention Money etc.
(c) In case of cancellation of contract, Government is not entitled to claim

compensation if the contract is cancelled before date of completion of work.
(d)Attention is invited to Supreme Court judgment of liquidated damages in
case of Fateh Chand Vs Balkishan (AIR 1963 SC 1045). This judgment
needs to be kept in view while deciding the cases of compensation. Extract of
judgment is given in Section 32.
17.3.2 Wherever possible, documentary evidence of losses incurred by Government

on account of delay in completion of work should be preserved and produced during
arbitration. For this purpose, suitable letters from users may be obtained and kept on
record.
17.3.3 Para 494 of RMES empowers CE and CWE to reduce the compensation for
delay. CE may waive or reduce compensation in the case of contracts concluded by
him or by CWE. Similarly a CWE may waive or reduce compensation in case of
contracts concluded by GE. The concurrence of the PCDA/CDA for waival or
reduction of compensation is not necessary, but reasons will be communicated to
PCDA/CDA as soon as a compensation is waived or reduced.
17.4 Suspension of Work and Extension of Time.
17.4.1 Refer Condition 9 of IAFW-2249.

331
17.4.2 Suspension of work under Condition 9 of IAFW-2249 can be ordered for any
of the following reasons:-
(a) On account of any default on the part of the contractor or
(b) For proper execution of works or part thereof for reasons other than
default of the contractor or
(c) For safety of the works or part thereof.
17.4.3 Following are some examples which fall under categories 17.4.2 (b) and (c)
above.
(a) Under 17.4.2 (b).
(i) When there is doubt whether the works would be required to be

executed at all.
(ii) When accommodation requirements and lay-outs are to be

revised for administrative reasons.
(iii) When changes in designs or specifications have become

unavoidable and these cannot be ordered within a reasonable time.
(iv) When work is almost stalled/stopped due to non availability of

hindrance free site and shortage of funds.
Notes
(1) It is brought out that GE has the power to suspend the work under
Condition 9 of IAFW-2249 for reasons not attributable to the contractor. This
option may be exercised in case work is not progressing due to reasons such
as delay in handing over of site, delay in handing over of building(s) for
demolition/shifting of services etc. The suspension will be revoked as and
when the causes for no progress of work are resolved.”
(2) For the running works where payments are held up due to non-
availability of funds and the contractor is not in a position to progress the work,
the work shall be put under suspension in terms of Condition 9 (a)(ii) of
General Conditions of Contracts IAFW-2249. The suspension shall be
revoked after the funds position is improved. A copy of such suspension order
shall be endorsed to respective CE Command/ADG and user formation.
Priority in release of payments shall be given to the contracts in progress as
against conclusion of fresh contracts.”
[b] Under 17.4.2 (c) .

(i) When the works or part thereof are in danger due to anticipated natural
calamities, enemy action, civil war etc.
17.4.4 Suspension order for the work shall be issued with the prior approval of the
Accepting Officer.
17.4.5 Suspension order for reasons at Para 17.4.2 (b) and (c) shall be restricted to
the absolute minimum.
332
17.4.6 If works are suspended on account of default on the part of the contractor vide
Para 17.4.2 (a) above, the contractor is not entitled for any extension of time on
resumption of works. This must be made clear to the contractor at the time of issue
of suspension/resumption orders.
17.4.7 When works are suspended due to reasons other than default of the
Contractor vide Para 17.4.2 (b) and (c) above, various provisions given in Condition
9 of IAFW 2249 with regard to extension of time and the compensation to contractor
shall be strictly followed.
17.4.8 In view of above, all possible steps should be taken to assess the probable
period of suspension realistically taking into consideration all the aspects and to
restrict the period of suspension to the minimum.
17.4.9 Whenever it is decided to suspend execution of work, the anticipated period

of suspension shall be given in the order of suspension. If this anticipated period of
suspension is expected to be exceeded, the revised anticipated period of suspension
shall be intimated to the contractor as soon as possible but not later than the date of
expiry of the anticipated period of suspension previously mentioned in the
suspension order. If the suspension is ordered on account of any default on the part
of the contractor, this fact shall be indicated in the suspension order.
17.4.10 Every suspension and resumption order shall be sent in duplicate in the form
of a letter to the contractor who will be requested to return one copy for record after
signing it. However, when the works are suspended on account of any default on the
part of the contractor, obtaining the contractor's signature may be dispensed with. A
copy of every suspension and resumption order shall be endorsed to the Accepting
Officer immediately after it is issued quoting authority for the order. Copies of
suspension and resumption orders shall be filed with relevant contract documents.
17.4.11 When the works are suspended for reasons stated in Para 17.4.2 (b) & (c)
above, a deviation order shall be issued immediately after resumption of works,
indicating the changes in date(s) of completion. If the total period of all suspensions
is more than 60 days, the deviation order shall also indicate the financial effect in
respect of salaries and/or wages paid by the contractor to his employees and labour
at site which has actually remained idle during the period of suspension.
17.4.12 In order to avoid disputes at a later date, GEs must keep a record of
contractor’s employees, labour, tools & plants etc at site actually remaining idle
during the period of suspension. This record shall be signed by GE and the contractor
with the date. Similar records of materials collected but which could not be utilized in
the work, shall also be maintained by the GE.
17.4.13 When the contractor gives notice to treat the suspension as an omission of
such part by the Government under condition 7 of IAFW-2249 or as abandonment
where it affects the whole of work, the contractor shall be paid at contract rates for
the full amount of the works executed. The contractor will be permitted to take back
at his expense the materials collected which could not be utilized on the works,
provided advances, if any, in respect of any such materials are fully adjusted. Such
materials shall be removed by the contractor with the written approval of the Garrison
Engineer. The contractor shall intimate the GE in writing, supported by documentary
evidence, if he has incurred any loss on such materials, in order to enable the GE to
assess the loss to the contractor on such materials.
333
17.4.14 Proper planning is essential to ensure that delays in execution of works do

not occur as a result of default on the part of MES. When delays occur in spite of
proper planning, vigorous action must be taken to reduce such delays to the absolute
minimum.
334
Appendix 17.1
Report for Grant of Extension of Time Exceeding 25% of the Original Contract
Period or Exceeding 3/9 Months Whichever is More
(a) CA No and amount of contract. :
(b) Name of work. :
(c) Period for completion stipulated in the contract :
(d) 25% of original contract period (in months). :
(e) Date of commencement of work as per W.O. No 1 :
(f) Date of completion of work as per W.O No 1 :
(g) Amount of escalation that would have been payable to contractor
if work was completed within the original contract period. : Rs.
(h) Extended date of completion (period of extension already granted).
Details of extension granted.
1st extension upto including granted under CE letter No…..Dated …. :
2nd extension upto including :
(i) Amount of escalation
(i) Paid in RARs upto and including Original date of completion : Rs
(ii) Paid/payable in extended period : Rs
(j) Date upto which further extension of time is considered due/requested/
under consideration. :
(k) Anticipated amount of escalation that would become payable after expiry
of previously extended date of completion and upto and including the date
upto which further extension is considered due :
(l) Total period of extension considering (k) :
(m)Reasons/causes for (k) :
(n) Give the following information in respect of all causes listed in (n)
(i) Cause :
(ii) Affected activities with dates of commencement and completion as per original
CPM :
(iii) Dates on which cause arose and date on which cause was removed:
(iv) Individual(s) responsible for the cause :
(v) Why the cause could not be prevented :
(vi) Was the CPM network and dated Schedule reviewed and revised to
reschedule affected activities referred in para (ii) within the overall
completion period. :
(vii) if reply to (vi) is an affirmative, what were the rescheduled dates for
commencement and completion of the affected activities (ref (vi)
here-in-before) :
(viii) What action was taken to remove the cause before the
re-scheduled date mentioned in (vii) :
(o) Confirmation that all reasons/causes necessitating extension of time are
listed in (n) and there are no other causes/reasons for which extension of
time is due. :
(p) Confirmation that all prerequisites for timely commencement and completion
of balance work other than those listed in (n) have been met with by the
department and there shall be no other reasons/causes requiring
further extension. :
(q) Considered reasoned recommendation for disciplinary action on account of
each cause listed in (n). :
Note : Considered reasons leading to these recommendations are enclosed in signed
Appendix (Action taken/proposed to be taken to prevent repetition of similar lapses also is
stated in a separate para in the enclosed Appendix).
(Accepting Officer)
335
SECTION 18
INTERIM PAYMENT (RARs), RAR UNDER COMPENSATION, BGBs IN LIEU OF

RETENTION MONEY/ PERFORMANCE SECURITY, MEASURES TO AVOID
OVERPAYMENT IN RARs
18.1 Interim Payments (RAR) Advances on Account - Procedure.
(a) The General Condition of Contracts (IAFW-2249) applicable to Lump Sum,

Term and Measurement Contracts and those applicable to other types of contracts
provide for claim by contractors for payment of advances on account. These
conditions lay down, interalia, the intervals at which such payments become due
and the percentage of advance payment on the value of work done and of
materials collected at site.
(b) Advances on materials issued under Schedule „B‟ lying at site, but not
incorporated in works, are payable after the cost of such materials is recovered
from the contractor, in a manner similar to advance on materials directly arranged
by him.
(c) Payment on account is admissible to a contractor even in a case where value of

stores issued to him under Schedule „B‟ of the contract exceeds the value of work
actually done.
(d) Advances of fabricated materials such as trusses, joinery, reinforcement etc

brought to site but not incorporated in the work are also payable at 85% of the
amount worked out as under :-
(i) Cost of materials at site (supplied only)
plus
(ii) Cost of fabrication.
18.2 Timeline for Payment of RAR & Final Bill.
(a) Timeline for payment of final bills is laid down in Condition 66 of IAFW-
2249/Condition 33 of IAFW-1815Z, as applicable.
(b) Efforts shall be made to pay the RAR at the earliest on receipt from contractor
complete in all respects but not exceeding the number of days as under :-
(i) For contracts of value less than Rs 50 Lakh20 days

(ii) For contracts of value more than Rs 50 Lakh10 days
(c) In order to adhere to the above mentioned time limits, contractor shall be
responsible to submit RAR/final bill complete in all respects as per contract
conditions supported by all the relevant documents such as vouchers, test
certificates, measurement book etc to avoid delay in processing.
(d) Executives shall also ensure speedy checking and clearance of RAR/Final Bill.
Any deficiency noticed in the RAR/Final Bill shall be brought to the knowledge of
the contractor by FAX/SMS/Whatsapp/E-mail or any other digital communication to
avoid any delay.
(e) RAR/Final Bill shall be processed along with movement slips duly signed by
JE/AGE/GE/AO/Cashier to check the delay, if any, and take corrective action for
future.
336
18.3 Assessment of Value of Work Executed.

In case of Lump Sum contracts, assessment of value of work executed shall be done
based on the yardstick included in the contract. Detailed instructions with regard to yard
sticks are given in section 8 of the Manual.The format for preparing the yardsticks shall be
followed as per Appendix 18.1.
18.4 Materials Brought at Site.

Materials proposed to be included in “on account” payment shall be those which have
been brought by the Contractor to the site for incorporation in works and of quality and
specifications stipulated in the contract and approved by the GE. The rate allowed in “on
account” payment for such materials shall be the market rate or the rate derived from the
contract, whichever is lower. The quantity of such materials shall also be checked
carefully to ensure that materials in excess of requirements for the work in question are
not paid for. The form for statement of stores to be attached to RAR (Form IAFW-2263)
shall be as per Appendix 18.2.
18.5 Preparation of RAR.
(a) With a view to ensure that contractor‟s claim for interim payment allows for all
recoveries due from him in respect of Government stores, tools and plants, water
and electricity charges, rent for accommodation or any other recovery
agreed/withholding of outstanding amounts, (in particular against STE‟s
observations) against the contractor from RAR under Condition 67 of IAFW-2249
up to the date of the bill, the GE shall forward to the contractor a statement of
transactions of all debits and credits up to date in duplicate out of which the
contractor will retain a copy for his office use and the original signed by him (the
contractor) and attached to his interim bill in support of the recovery on account of
debits raised against him by the MES. All previous “on account” payments made to
the contractor shall also be taken into account before making a further “on account”
payment.
(b) All deviation orders shall be initiated, finalized and distributed within six weeks
from the date of ordering these on the contractor through a letter from the GE.
Minus DOs in respect of completed stages of works will also be taken into account
and payment restricted accordingly. Star rates for proprietary materials shall be
finalized before allowing payment therefor. Major items like Cement & Steel being
non Sch. „B‟ now, it shall be ensured by the executives and technically checked by
AGE (Contract)/JE(QS & C) in GE‟s office that estimated quantities of major items
viz. Cement & Steel have been incorporated in the work to avoid any chance of
under-consumption of the items into the works at each stage till final completion of
the work. This aspect shall be checked by DCWE/ACWE (C) in CWE‟s
office/Contract Management Officer in GE‟s office (where there is no CWE Office)
while exercising technical check of Final Bills pertaining CWE and GE Contracts. In
case of CE Contracts, this aspect shall be checked and certified during technical
check of Final Bill by the officer of CE office who carries out the technical check of
Final Bill. Necessary statement in this regard shall form part of RARs/Final Bill.
(c) After completion of work, if the contractor processes RAR(s) before the final bill
is processed to AO of GE office, RAR(s) shall continue to be paid to the contractor,
the payment being governed by the terms of the contract ie restricted to
percentages stipulated in the condition for Advance on Account.
337
(d) In case of any dispute, undisputed part of the bill can be considered for interim
payment and disputes be referred to arbitration. In case during arbitration
proceedings any agreed payment becomes due, this payment shall be released
and the Arbitrator informed accordingly.
(e) To ensure that the correct procedure is followed, every Interim bill shall be
accompanied by the following certificates signed by the GE :
“CERTIFIED THAT :
(i) No work has been ordered on the contractor without a proper Deviation
Order duly approved by the officer authorized to do so under existing orders
and without settlement of rates with the contractor.
(ii) All special rates involved in the deviation orders have been checked and
approved by competent authority.
(iii) No Government stores and T&P have been issued without prior settlement
of the issue rates.
(iv) All amendments including those necessitated by the issue of stores and
T&P not included in Schedules „B‟ & „C‟ have been approved by the competent
authority.
(v) All recoveries in respect of stores and T&P issued to the Contractor under
Schedules „B‟ & „C‟ and in respect of water, electricity and other miscellaneous
charges, Mobilisation Advance have been made to date.
(vi) All unresolved disputes have been referred to proper authorities for
decision.
(vii) All transactions with the contractor have been recorded on regular official
forms at the correct time.
(viii) The contractor has/has not submitted his final bill”.
18.6 Running Account Payments to Contractor Working under Compensation,

Claim of Compensation for Delay in Completion of Works.
(a) When a contractor has failed to execute the work within the stipulated period,
he may be permitted to complete the work subject to the Government reserving the
right to claim compensation for delay under the relevant condition of the General
Conditions of Contracts.
(b) In such situations the claim of RAR shall be checked by Contract Management
Officer of CWE (or of CE where there is no CWE in the chain of command). In
making payment on account to the contractor, the following procedure will be
adopted :-
(i) The value of work actually executed by the contractor will be carefully
worked out by the Garrison Engineer and checked at the CWE‟s level. The
value of defective work carried out by the contractor will not be taken into
account.
338
(ii) The value of materials brought by the contractor to the site for
incorporation in the work and properly stored to the approval of the
Engineer-in-Charge will be accurately worked out and checked by the GE.
These materials shall become the property of the Government and shall not
be allowed to be removed from the site.
(iii) All recoveries due from the contractor in respect of Government stores,
T&P, water and electricity charges, rent of accommodation or on any other
account will be fully determined and checked by the Garrison Engineer.
(iv) All previous payments made on account will be added up.
(v) If the total of (i) plus 85% of (ii) minus the sum of (iii) and (iv) exceeds
maximum compensation recoverable under the contract, the same may be
paid to the contractor as RAR. However, if the compensation amount is
lower than applicable retention money, the retention money in lieu of
compensation is to be deducted from the total of (i) plus 85% of (ii) minus
the sum of (iii) and (iv).
(c) With regard to the quantum of retention money/compensation to be withheld

from RARs in respect of contracts of which one phase has been completed after
the stipulated date of completion but the completion periods of remaining phases
are not yet over, even in such cases RAR payments may be made to the contractor
after withholding the sum as intended in Para (b). However, the maximum
compensation amount shall be worked out with reference to only those phases in
which the work could not be completed within stipulated time.
(d) In case a contractor objects to method of payment indicated in Paras (b) and (c)
above, the payment shall the regulated in accordance with the existing procedure
i.e. recovery on account of compensation for delay shall be effected from RAR
payments on the basis that compensation for delay has become due to contractor‟s
default and that Government is entitled to recover the amounts as soon as notice
to claim compensation has been served on him immediately on expiry of the
stipulated period of completion.
(e) Instruction in Para‟s (b) and (c) above do not apply after the work has been
completed. In accordance with Condition 65 of IAFW-2249, the contractor has to
forward a certified final account on IAFW-2267 as soon as possible after the
completion of work to the satisfaction of the Engineer- in-Charge.However, where
payment is due to the contractor on completion of work after retaining amount as
stipulated in Condition 64 of IAFW-2249 and the contractor processes payment of
RAR beforethe final bill is processed to AO of the GE office, the amount in excess
of the retention money shall be paid to the contractor after effecting recoveries,
compensation, if any.
(f) It may be added that whereas 15% of the value of stores brought on site by the
contractor remain as retention money with the Government in case of RAR
payments during the progress of the work, the same is not the case after the
completion of work as all stores brought on site are by that time incorporated in
the work. In view of this, the procedure outlined in Para (e) above is to be followed
to safeguard Government interest.
339
18.7 Bank Guarantee Bond in the Lieu of Retention Money.
(a) Condition 64 of IAFW-2249 provides for payment of advances on account, to

the full value of work executed on contractor‟s furnishing Guarantee Bonds or Fixed
Deposit Receipts from Scheduled Banks.
(b) Format for Bank Guarantee Bond forms in lieu of Retention Money is at
Appendix 18.3. Format for extension of Bank Guarantee will be used as given in
Appendix 18.4.
(c) Bank Guarantee Bond may be for part of the amount of retention money,
balance being recovered from account payments (RARs).Bank Guarantee Bond be
furnished by a contractor at any stage and accepted by the Department.One or
more Bank Guarantee Bonds may be furnished by the contractor to cover the
amount of retention money in part or in full.
(d) The date of validity of Bank Guarantee Bond mentioned in Para 3 of the form
shall be filled in by the Accepting Officer of the contract keeping in view the
magnitude and nature of work, the time likely to be taken in finalization and
payment of the final bill. In respect of works of large magnitude, the date of validity
shall be about 12 months beyond the original stipulated date of completion.
Accepting Officers are at liberty to fix the validity date of Bank Guarantee Bond
short of 12 months beyond the stipulated date of completion, provided the validity
date covers the period till anticipated date of payment of final bill.
(e) The Bank Guarantee Bond in lieu of retention money shall be kept in the
custody of the E8 officer in the office of Accepting Officer. This is mainly because
extension of time, if any, in a contract has to be approved by theAccepting Officer
and he would, therefore be in a better position to decide regarding extension, if
any, required of the validity of Bond or initiate action for encashment of the Bond in
the event of the contractor not extending its validity.
(f) The original Bank Guarantee Bond along with necessary certified copies shall be
sent to the PCDA/CDA by the Accepting Officer for verification and then
returning the original to the Accepting Officer and the certified true copies to the
CWE, GE & AAO.
(g) The Accepting Officer shall evolve a procedure to ensure that timely action is
initiated to have the validity date of the Bond extended by the contractor or to have
it encashed before the same expires. For this purpose, a suitable register shall be
maintained by the concerned officer of E8 section in the office of Accepting Officer.
(h) In case at a later stage, on account of delay in completion of work or delay in

payment of final bill, it is considered that the validity date stipulated in the Bank
Guarantee should be extended, then the contractor shall be directed by the
Accepting Officer of the contract to have the validity extended before the date
expires. If the contractor fails to do so, the Bank Guarantee shall be encashed
before expiry. Refer encashment notice at Appendix 18.5.
(j) In case the BGB in not encashed by the concerned Bank, the matter shall be
referred to the central office of RBI in Delhi and Mumbai at the following address or
any latest address which can be found from internet :
340
(aa) Jt. Chief Officer (ab) Reserve Bank of India

Department of Banking and Operations Central Office
Reserve Bank of India Department of Banking Operations
Parliament Street, New Delhi-110011 & Development
Centre-1, World Trade Centre
Cuffe Parade, Colaba
Mumbai-400005
(k) Immediately on completion of work, BGB exceeding Rs 1.5 Lakhs or 1% of the
contract amount as executed (which ever is more) shall be released in terms of
Condition 64 of IAFW-2249.
(l) BGB in lieu of Retention Money is due for discharge as soon as the final bill is
paid. In accordance with General Conditions of Contracts (IAFW-2249) and IAFW-
1815, no amount is therefore to be retained when the final bill is paid. Immediately
after the final bill is paid, GE shall intimate this fact to the Accepting Officer who
shall release the BGB duly discharged to the contractor. In the case of a contract
concluded by CE, GE should send intimation in respect of payment of final bill
direct to CE with a copy endorsed to CWE. Accepting Officers shall ensure that no
delay occurs in releasing the BGB.
(m) When a work under a contract is not completed by the stipulated date and
when compensation for delay has become payable under the conditions of the
contract, running payment is to be regulated as stipulated in Para 18.6 above. Any
Bank Guarantee Bond executed by the Contractor to cover normal retention
money would not be adequate in case of works exceeding Rs 5 Lakhs, to cover the
maximum retention money mentioned in Para 18.5 above. In such cases where the
value of BGBs does not fully meet the total amount for compensation for delay, one
of the following procedures needs to be adopted to safeguard Government interest
:
(i) The Contractor may furnish BGB for the maximum amount of
compensation.
Or
(ii) In addition to the value of the BGB already furnished by him (in lieu of
retention money),the difference of compensation payable less the value of
the Bond shall be recovered from RAR payments.
(n) Bank Guarantee Bond against Performance Security
(i) Details in respect of Performance Security Deposit have been given in Section 2
of the Manual.The original Bank Guarantee Bond against Performance Security
along with necessary certified copies shall be sent to the PCDA/CDA by the
Accepting Officer for verification and then returning the original to the Accepting
Officer and the certified true copies to the CWE/GE(I), GE/AGE(I) & AAO. The
original BGB shall be kept in the custody of the concerned E8 officer in the office of
Accepting Officer.
(ii) The Accepting Officer shall evolve a procedure to ensure that timely action is
initiated to have the validity date of the Bond extended by the contractor or to have
it encashed before the same expires. For this purpose, a suitable register shall be
maintained by the contract section with details of Performance Securities and dates
of validity of these instruments and the same shall be an auditable document.In
case the BGB is not encashed by the concerned Bank, the matter shall be referred
to the Central Office of RBI as mentioned in Para 18.6(j) above.
341
18.8 Surprise Checking of RARs.
(a) In accordance with Para 479 of MES Regulations, RARs are not to be checked
by DCWE/ACWE (C) in CWE‟s office as a matter of routine even in case of
important work. This was as a result of recommendation of the Departmental
Committee to streamline the procedure in MES and to ensure prompt payment of
contractors and to avoid a likely source of corruption. The provision in Para 479 of
MES Regulations is to enable CWE, CE or his nominee to undertake a surprise
check of any RAR on the spot with reference to value of work done and cost of
stores collected in respect of any contract. This spot check is meant to be carried
out in exceptional cases where the CWE/CE has reasons to believe (either on the
basis of information received by him about certain malpractices or on account of
previous reputation of contractor or suspected integrity of the executive staff) that
there is a likelihood of overpayment made to the contractor.
(b) RARs will, however, be checked by DCWE/ACWE (C) of CWE where there has
been delayin completion of the work and the contractor has become liable to pay
compensation for delay. This is necessary as per procedure laid down in Para 18.5
above and to ensure that RAR is correctly prepared, various recoveries have been
affected and that there is no chance of overpayment to the contractor at any stage.
18.9 Measures to Prevent Overpayment to Contractor in RARs.
(a) Causes leading to over payment to contractors through advances on account

are :-
(i) Incorrect assessment of the value of work executed.
(ii) Incorrect assessment, both qualitative and quantitative of the
materials brought by the contractor to the site for incorporation in works.
(iii) Short recovery of materials and tools and plants issued to the
contractor under Schedule „B‟ and „C‟, water and electricity charges and
rental for Government accommodation for storage purposes etc.
(iv) Payment allowed in RAR for defective/substandard work.
(iv) Delay in finalization of minus deviation orders, star rates etc.
(v) Not making recovery for an Additional Security Deposit, where
applicable.
(vi) Not having a valid Bank Guarantee Bond for retention money.
(vii) Not accounting for recoveries in particular on account of settled STEs
observations in the same contract or in respect of other contracts in terms of
Condition 67 of IAFW-2249.
(b) Careful observance of the steps described in Paras 18.2 to 18.8 will
undoubtedly obviate the possibility of overpayment to contractors through RAR.
Following further steps shall also be taken in this connection :-
(i) Requirement of Schedule „B‟ stores shall be carefully worked out to avoid
over issue resulting in excess recoveries from contractors at the final bill
stages.
342
(ii) Recovery for any Additional Security Deposit (where applicable) shall be
made from the first payment “on account” in terms of Condition 22 of
General Conditions of Contracts (IAFW-2249). The Bank Guarantee Bonds
for retention money shall be accepted by the Accepting Officer before
payment is allowed to the contractor against the same through “on account”
payment.
(iii) Recovery towards 'Mobilisation Advance' shall be carefully monitored as
per contract conditions.
(c) The precautions listed hereinbefore are for general guidance. The GE,
however, remains personally responsible for the correctness of the “on account”
payment made to contractors. In this connection reference is invited to Para 468
RMES which states that the GE will verify the claims for advance payment
preferred by the contractor by personal general inspection. Para 479 RMES
provides that such payment shall be made on the personal certificate of the GE.
Para 481 RMES provides that GE will sign the following certificate on the statement
of stores attached to the Running Account Receipt.
“Certified that the quantities of materials detailed above have actually been
brought by the contractor and are lying at the site of work on the date of
issue of this certificate, that any previous advance made on them have
been accounted for in this bill and that these materials are of an
imperishable nature and are all required by the contractor for use in the
work under the contract”.
343
Appendix 18.1
FORM OF YARDSTICK
Srl Description of Work Item 1 of Sch ‘A’ Item 2 of Sch ‘A’

No Block of Two Block of 4 Servant
Married Officers Qtrs.
Qtrs.
Percentage of Cost Percentage of Cost
of Building of Building
1 Excavation and concrete in foundations. 3% 4%
2 Brick work upto and including DPC. 8% 8%
3 Brick work from top of DPC level upto top of 6% 8%
window cill and door frames fixed in
position.
4 Brick work from top of window cills to top of 12% 15%
door lintels and lintels.
5 Brick work from top of door lintels upto 4% 10%
under side of roof and CSW/vent frames
fixed in position.
6 Roof work 24% 20%
7 Internal finishes 7% 5%
8 Floors 5% 5%
9 External finishes 4% 4%
10 Doors, Windows & CSWs (excluding 12% 12%
frames) and Cupboards, etc.
11 Sanitary work 9% 5%
12 Miscellaneous 6% 4%
344
Appendix 18.1
345
Appendix 18.2
STATEMENT OF STORES
(To be Attached to IAFW-2263)
Part 'A' :Amount to be included against item (ii) Estimated value of materials in cage 3, of
the current RAR.
I. Value of materials collected by the contractor from outside MES and lying at site of work
(unincorporated in the job) at market rate or pro rata to contract rate, whichever is less.
Srl Description of Quantity Rate (Rs) Unit Amount (Rs)

No Materials
(i) Bricks
(ii) Surkhi, lime
(iii) Timber
(iv)
II. Value of Schedule 'B' materials lying at the site of work (unincorporated in the job) at
Schedule „B‟ rates.

No Materials
(i)
(ii)
(iii)
(iv)
(v)
Total Rs................................
Amount under 'A(I)' Rs................................
Amount under 'A' (II) Rs................................
Total amount (carried to Cage 3) Rs…………………..
Certified that the quantities of materials detailed above have actually been brought
by the contractor and are lying at site of work on the date of issue of this certificate; that
any previous advanced made on them have been accounted for in this bill and that
materials are adequately stored and/or protected against damage by weather or other
causes, are of an imperishable nature and are all required for the work.
346
Part B : Recovery to be effected from the contractor.

Total value of materials issued to the contractor by MES under schedule 'B' rates.

No Materials
(i)
(ii)
(iii)
(iv)
Total amount (carried to Cage 3) Rs…………………..
Certified that all Government stores issued to the contractor up to………have been
included in the above statement.
Date : Garrison Engineer


347
 Appendix 18.3
BANK GUARANTEE BOND

(IN LIEU OF RETENTION MONEY)
(To be used by Scheduled Banks)
Place of execution ………………………. Name of

State……………………..….
Stamp Paper for Rs…………………….…
1. “In consideration of the President of India (hereinafter called “The Government”)
having agreed not to retain Rs. ……(Rupees…….) out of the reserve or the retention
money as provided under the terms and conditions of Contract Agreement No
…………..(hereinafter called “the said Agreement”) made between the President of India
and Shri/S‟Shri/M/s @.......... from the claims of the said contractor(s) in respect of the
work done by the said Contractor(s) for the due fulfillment by the said Contractor(s) of the
terms and conditions contained in the said Agreement, on production of Bank Guarantee
for Rs……(Rupees…. only) we, ……. Bank* (hereinafter referred to as “the Bank”), do
hereby undertake to pay the Government, an amount, not exceeding Rs. ….
(Rupees……only) against any loss or damage caused to or would be caused to or
suffered by the Government, by reason of any breach by the said contractor(s) of any of
the terms or conditions contained in the said Agreement.
2. We, …………Bank*, do at the request of the said Contractor(s) hereby
undertake to pay the amount due and payable under this Guarantee without any demur,
merely on a demand from the Government, stating that the amount claimed is due by way
of loss or damage caused to or suffered or would be caused to or suffered by the
Government by, reason of any breach by the said contractor(s) of any of the terms or
conditions contained in the said Agreement or by reasons of the said Contractor's(s')
failure to perform the said Agreement. Any such demand made on the Bank shall be
conclusive as regards the amount due and payable by and the liability of the Bank, under
this Guarantee and we ………. Bank* do hereby undertake to pay the Government the
amount demanded notwithstanding any dispute or disputes raised by the said
contractor(s) on any ground whatsoever and notwithstanding any proceeding pending in
any Court or Tribunal relating to the said agreement or this Guarantee, the liability of the
Bank under this Guarantee being absolute and unconditional. However our liability under
this Guarantee shall be restricted to an amount not exceeding Rs
………(Rupees…………..only).
3. We, …………Bank*, further agree that the Guarantee herein contained shall
remain in full force and effect during the period that would be taken for the performance of
the said Agreement and that it shall continue to be enforceable till all the dues of the
Government under or by virtue of the said Agreement have been fully paid and its claims
satisfied or discharged or till………(Office/Department), certifies that the terms and
conditions of the said Agreement have been fully and properly carried out by the said
contractor(s) and accordingly discharges this Guarantee. Unless a demand or claim under
this Guarantee is made on us in writing on or before the ………we shall be discharged
from all liability under this Guarantee thereafter.
4. We, ……………Bank*, further agree with the Government, that the Government
shall have the fullest liberty without our consent and without affecting in any manner our
obligation hereunder or to vary any of the forms and conditions of the said agreement or
to extend the time of performance by the said contractor(s)from time to time or to
postpone for any time or form time to time, any of the powers exercisable by the
Government against the said contractor(s) and to forbear or enforce any of the terms and
conditions relating to the said Agreement and we shall not be relieved from our liability by
reason of any such variation or extension being granted to the said contractor(s) or for any
348
forbearance, act or omission on the part of the Government or any indulgence by the
Government to the said contractor(s) or by any such matter or thing whatsoever, which
under the law relating to sureties would, but for him provision, have effect of so relieving
us.
5. We, ……Bank*, lastly undertake not to revoke this Guarantee during its currency
except with the previous consent of the Government in writing and that our liability under
this Guarantee shall not be impaired or extinguished on account of any change in the
Constitution of the said contractor(s).
6. Notwithstanding what is stated here-in-above, our liability under this guarantee is
restricted to Rs………[Rupees …….. only] and shall be valid upto ……. Unless a
demand/claim is made to us in writing on or before that date we shall be discharged from
all liabilities under this guarantee.
Dated the ……… day of……..…20 …….
for……………………… Bank*
Manager
Branch Code, Personal Code
Seal of Bank
The above guarantee is accepted by the President of India.
Signature…………….. Dated…………………….
For and on behalf of the President of India.
Name and designation
* In the case of Banks, other than the Nationalized Banks the word “Ltd‟‟ will be added
after the word „Bank‟, where the asterisk mark is indicated.
@
For Proprietorship concern
Shri………………………. Son of………………………… resident
of………………………. carrying on business under the name and styles of
………….………….. at………………......……………...
(hereinafter called „the said contractor‟ which expression shall unless the context requires
include his heirs, executors, administrators and legal representatives).
For Partnership concerns
(i) Shri………………. son of………………..…..resident of
…………………………….and
(ii) Shri………………… son of………..….…….resident of………………….., carrying on
business in co-partnership under the name and the style of ……at…… (hereinafter
collectively called “the said Contractor's which expression shall unless the context
requires otherwise include each of them and their respective heirs, executors,
administrators and legal representatives).
For Companies
……………… Ltd. an existing Company within the meaning of the Companies Act
2013 and having its registered office at…………… in the State of ……………..(hereinafter
called “the said Contractor” which expression shall unless the context requires otherwise
include their successors and assigns).
** To be accepted by the Accepting Officer of the Contract and the blank space in Para 3,
line 5, shall be filled to indicate the said “Accepting Officer”.
349
Appendix 18.4
FORMAT FOR EXTENSION OF BANK GUARANTEE

STAMP PAPER
To,
………………...............
………………………...
Extension of validity of our Bank Guarantee Bond No…………………………….. (In

lieu of Security Deposit/Retention Money) dated ……….. for…………. CA No ………..
Contractor…..……...
We……………………..extend the validity period of above mentioned Bank

Guarantee Bond which was due to expire on……………… upto ……………. All other
terms and conditions of the Bond shall remain unchanged.
This will form part of the Original Bank Guarantee.
Manager
Branch Code, Personal Code
Seal of Bank
The above Guarantee Bond is accepted by the President of India
(RANK)
……………………
For and on behalf of The President of India
Dated :
350
Appendix 18.5
ENCASHMENT NOTICE FOR BGB

REGD A/D
Office of The Accepting
Officer
Date……..……………..
File No …………….. /E8
The Manager……………….………...
…………………………….…………
Subject : CA No……………………..
Name of Work ……………………...
Dear Sir(s),
1. Whereas you have furnished a Bank Guarantee Bond bearing No. ……....……. dated
.….……. for Rs ……………../- (Rupees…………..only) in lieu of Retention Money against
Contract Agreement No ………………. made between the President of India and M/s
…………., which is valid upto………......
2. And whereas it is expressly provided in the aforesaid Guarantee Bond that you
undertake to pay the amount due and payable under the Guarantee without any demur
merely on a demand from the Government stating that the amount claimed is due by way
of loss or damage caused to or suffered or would be caused to or suffered by the
Government by reasons of any breach by the contractor of any of the terms and
conditions contained in the said contract agreement or by reason of contractor‟s failure to
perform the said agreement.
3. And whereas there has been a breach by the contractor of the terms and conditions of
the agreement.
4. I on behalf of the President of India, hereby serve you with notice of demand against
the aforesaid Bank Guarantee Bond for the sum Rs………………..../-
(Rupees………….…….…only) on account of loss/damage caused to or suffered by the
Government.
5. It is requested that the aforesaid sum as demanded be paid immediately.
6. The amount may be remitted in the form of treasury challan in favour of GE …………. .
Yours faithfully
Accepting officer
FOR AND ON BEHALF OF THE PRESIDENT OF INDIA
Copy to:
REGD A/D
REGD. A/D The Zonal Manager
M/s……………………..
……………………..
………………………….
……………………..
………………………….
PCDA/CDA
CWE
GE ………… In case the amount is not received by ………….. , please inform this HQ
immediately by email/phone.
AO/AAO/GE……………
351
SECTION 19
DEVIATION ORDERS, DO LIMIT, AIP, AMENDMENT TO CONTRACT
19.1 Deviation Limit.

19.1.1 Under existing instructions deviations may be ordered in various types of
contracts and are not to exceed the following percentages:-
(a) Lump Sum contracts based on drawings and specifications - 10%
(b) All other types of contracts :
(i) Contracts estimated to cost not more than Rs 10 Lakhs - 20%(ii)
(ii) Contracts exceeding Rs 10 Lakhs - 10%
19.1.2 Condition 7 of General Conditions of Contracts (IAFW-2249) lays down

certain further restrictions with regard to the deviation limit included in the contract.
Important restrictions mentioned in Condition 7 are :-
(a) In no case shall additions/deductions (arithmetic sum) exceed twice the
deviation limit.
(b) Deviations ordered on items of any individual trade included in the
contract shall not exceed plus/minus 25% of the value of that trade in the
contract as a whole or half the deviation limit, whichever is less, except in
the case of Prime Cost and Provisional Sum where the parties to the
contract may agree to a different percentage for any particular item.
(c) The value of additions of items of any individual trade not already
included in the contract shall not exceed 10% of the deviation limit.
19.1.3 The percentages indicated in Para 19.1.2 above are the upper limits. Each
contract shall be considered on its merits and deviation limit fixed as low as
practicable. Cases are frequently referred where sanction is sought for a higher
deviation percentage than that mentioned in Para 19.1.2 above. To avoid such
cases, adequate ground data must be collected before going out to tender so that a
reasonable estimate of requirement of different items is initially included in
Schedule ‘A’- the list of works/items.
19.1.4 Deviations executed under and within the original terms of Condition 7 of
IAFW-2249 shall not have the effect of increasing the value of the work beyond the
powers of acceptance of the Authority of the contract.
19.1.5 To illustrate, a CWE may conclude a contract which at the time of

concluding does not exceed his powers of acceptance, but may execute deviations
up to the full limits allowed in the deviation condition referred to above even though
the final value of the contract as deviated exceeds his financial powers. In such
cases the fact shall however be brought to the notice of the Higher Engineer
Authority within whose powers of acceptance the total expenditure lies and his
sanction obtained. No amendment to the contract is necessary as the contract has
in no way been vitiated.
19.1.6 The question of ordering work in excess of deviation limit should arise only
if such a course is considered unavoidable eg; when the additional work is closely
connected with the original work and it is necessary and in the Government interest
to order the same on the original contractor instead of concluding a fresh contract
for it.
352
19.1.7 When work in excess of the permissible deviation limit is required to be

executed by the contractor, it is obvious that action to arrive at a settlement with
him with regard to price adjustment, if any, has to be taken at a suitable stage as
soon as it becomes evident that the permissible deviation limit is going to be
exceeded. This is necessary so that work does not have to be suspended for want
of such settlement.
19.1.8 When the Accepting Officer is convinced that bringing in a new agency to
carry out the additional work is not feasible and it is necessary to get the work
executed through the same contractor, he must take the initiative to come to an
agreement with the contractor with regard to the rates payable for the proposed
additional work. It shall be borne in mind that for work in excess of the deviation
limit, the contractor is entitled to a reasonable rate. Following type of cases may
arise in such a situation :-
(a) Where the existing contract rate is considered reasonable ie at par with
current market price level.
(b) Where the existing contract rate is beneficial to the Government.
(c) Where the existing contract rate is beneficial to the contractor.
19.1.9 In case of Para 19.1.8 (a) and 19.1.8 (b) above, it would naturally be
advisable for the Government to take initiative and come to an agreement with the
contractor to make an amendment to the contract to include the additional work.
19.1.10 In case of Para 19.1.8 (b),a situation may arise where the contractor may
demand a higher rate and it may be necessary for the Accepting Officer to
ascertain the prevailing conditions and then come to a settlement with the
contractor with regard to the reasonable rate payable for extra work.
19.1.11 In case of Para 19.1.8 (c), it shall be necessary to enter into negotiation
with the contractor to agree to a reasonable rate based on the prevailing market
rate or rates for similar work on other comparable current contracts.
19.1.12 In the negotiations with the contractor referred to above, it is important to

obtain the contractor's proposals in writing. In case where the additional work is
inseparable from the original work and cannot be got completed by other means
but contractor demands a high rate which is not acceptable to the Accepting
Officer, he should be informed that the rate is exorbitant and not acceptable. Effort
shall however be made to ensure that the contractor still proceeds with the work on
the understanding that the question with regard to settlement of rate, if necessary,
would be referred to Dispute Resolution Board(DRB)/arbitration(as applicable). In
all cases, the NHEA must be kept informed.
19.1.13 Work ordered in excess of deviation limit will not be viewed as a single
tender and no report is to be rendered to the next higher engineer authority as it
amounts to duplication and does not serve any useful purpose. However the
Accepting Officer shall submit a detailed report to the competent authority
mentioned below, through the concerned PCDA/CDA for sanction of increase in
deviation limit beyond the limits laid down in the contract ie those mentioned in
Para 19.1.2 above, giving inter alia, particulars about the rate decided, if any.
Necessary approval will be accorded by the competent authority after taking into
consideration the comments of the PCDA/CDA.
(a) Zonal CE/CCE is authorized to approve excess over the deviation
353
limits mentioned in Para 19.1.1 above to the extent of 10% on contracts

concluded by CWE and GE in consultation with PCDA/CDA. Cases
involving excess of deviation limit over 10% shall be regularized by the
Command CE/ADG in consultation with PCDA/CDA.
(b) Command CE/ADG is also authorized to approve any excess over
the deviation limits mentioned in Para 19.1.1 above to the extent of 10% on
contracts concluded by Zonal CE/CCE in consultation with PCDA/CDA.
Cases involving excess of deviation limit over 10% shall be regularized
under orders of the E-in-C in consultation with the Ministry of Defence
(Finance).
(c) In case of variation of DO limit on minus side, no consultation with
PCDA/CDA shall be necessary and the Accepting Officer may issue
necessary amendment to contract with intimation to the NHEA.
(d) Proforma for seeking approval of DO limit case from competent
authority is given in Appendix 19.1.
19.1.14 Cases may occur where the actual expenditure under the contract
exceeds because of the deviation limit provided under the contract having been
exceeded. In these cases not only the prior concurrence of the Engineer Authority,
within whose powers of acceptance of contract the actual expenditure lies, is
necessary but also an amendment to the contract agreement to suitably increase
the Deviation percentage shall be approved by that authority.
19.2 Ordering Works against Lump Sums, Prime Cost Sums, Provisional sums
and Provisional Quantities .
19.2.1 The following procedure shall be followed in ordering works against lump
sums, prime cost sums, provisional sums, and provisional quantities :-
(a) The work as included in the contract shall be ordered through Work
Order No.1.
(b) Simultaneously with Work Order No.1, the following deviation orders
shall be issued
(i) Deviation Order No. 2 : Omitting all Prime Cost sums.
Note : With reference to 19.2.1 (b) (i) above, it is not necessary to reproduce the
complete relevant portion of Schedule ‘A’ or General Summary pertaining to these
items as an Annexure to the DO and it will be sufficient if the DO is worded on the
following lines :-
OMIT : Prime Cost Sums all as per General Summary on Serial page No .… of the
Contract Agreement.
(c) The extent of work actually required to be executed against Prime Cost
Sums shall be ascertained as early as possible and added back through
separate DOs for the following :-
(i) Prime Cost Sums;
Where necessary, the work on c (i), may be ordered in piecemeal. While

ordering back the work omitted against Prime Cost Sums, the work actually
required to be carried out should only be ordered. It may not always be
possible to include firm quantities in such deviation orders and when such
be the case, the quantities shall be as near as possible to the actual
requirements. To achieve this objective the Engineer-in-Charge shall work
out the quantities based on the final layout of the buildings and other site
conditions. An endorsement will be made on DOs concerned that the
354
quantities given are approximate and the work will be measured and paid for
as actually executed. Since working out approximate quantities based on the
final layout may require a few days from the date of start of work, while
framing Time and Progress Chart/CPM, the stages at which such items
occur will be indicated separately.
(d) Deviations pertaining to firm items in the contract, Provisional Lump

Sums and Provisional Quantities shall be ordered separately.
The Engineer-in-Charge and Contractor shall set out the works covered
under provisional items and provisional lump sum based on the description
of items, drawings forming part of the Contract Agreement and considering
the ground conditions as encountered at the site of works. The statement of
variation in quantities, new items or deletion of items from the Contract
Agreement as required will be worked out for approval of Engineer-in-
Charge who will convey approval of such changes through the site order
book. For the purpose of payment, the variation in value of work executed
under these items shall be ascertained by measurement or valuation as for
deviation. The variations shall be regularized as per Condition 7.The extent
of quantities or items described as “provisional” shall not be varied beyond
the limits laid down in Condition 7.No addition or deduction shall be made
by the contractor to the amount of the provisional lump sums as included in
the tender documents.
19.2.2 In nominating firm for Prime Cost sum, Accepting Officer shall issue
guidelines to CWE/GE to get users requirement, identify sources of procurement
and call for quotations up to certain financial limit. The contractor shall be asked to
arrange the supply or execution of work by nominated firms at rates not exceeding
the rates obtained and reasonability assessed by Government.
19.2.3 Separate abstracts shall be prepared for the categories of works covered
under Para 19.2.1 above and deviation order (except the lump sum deviation
orders to be billed direct for which no abstract is required) with a view to facilitate
carrying over the totals of these items to the bill and to ensure that no deviation
order is covered more than once.
19.3 Approval in Principle (AIP) for Ordering DO.
19.3.1 Condition 7 of General Conditions of Contracts (IAFW-2249), interalia,
provides that the Accepting Officer (AO) or persons authorized by him on his
behalf, may order deviation either by way of addition or deduction from works so
prescribed, provided that the contract sum will not thereby be varied on the whole
by more than the percentages set out in the tender documents. Types of deviations
which CWE/GE is specifically authorized to approve on behalf of CEs shall be laid
down by every CE in writing. Condition 7 further provides as under :-
Whenever the Accepting Officer intends to exercise such right, his intention shall
be communicated to the contractor by the GE whose order in writing shall specify :-
(i) Deviations which are to be made.
(ii) Lump sum assessment or the proposed basis of payment and
(iii) Change, if any, in the date of completion of the relevant phase.
19.3.2 It will thus be seen from Paras 19.3.1 above that the basic requirement of
conditions of Contract is prior approval in principle to a DO to be obtained from the
Accepting Officer or from the officer who is specifically authorized by him as
aforesaid.
355
19.3.3 The Accepting Officer or the officer specifically authorized by him, while
conveying his approval in principle to the DO, shall also decide whether the
deviation in question shall be a lump sum DO (ie details to be priced and attached
to the DO itself) or whether it will be a measurable DO in which case the DO will
state that the work will be measured in Measurement Books and abstracted. A
copy of the letter according Approval in Principle to the deviation shall, as and
when issued, be endorsed to the PCDA/CDA and AO/AAO concerned. Brief
reasons for the deviation eg for technical reason, due to site conditions, due to
user’s requirements, due to non-availability of specified materials and the like and
approximate financial effect shall invariably be stated in the copies of letter
endorsed to PCDA/CDA/AO/AAO. If the PCDA/CDA wishes to raise any
observations with regard to the deviation being ordered, it will then enable him to
address a letter directly to the Accepting Officer instead of waiting for the copy of
the formal deviation order on IAFW-1823 from the GE. This will enable expeditious
settlement of observation, if any, raised by the PCDA/CDA with regard to the
subject matter of DO.
19.3.4 On receipt of the letter approving the deviation in principle, GE will address
a letter to the contractor with copy to the CWE, the Accepting Officer and the
Engineer-in-Charge clearly bringing out in that letter the following aspects viz:-
(a) Details of deviation i.e. addition to or omission from or alterations in the
work.
(b) Proposed method of payment (this should be indicated in clear terms so
that there can be no doubt about it in the mind of the contractor) and
(c) Effect of the deviation order on the date of completion of the relevant
phase and/or the entire contract.
(d) This letter will also include a Para on the following lines in pursuance of
Condition 7 of IAFW-2249
“Please note that objection, if any, to the deviation shall be notified by you in writing
to me within 15 days of receipt of this, but in no circumstances the progress of the
work shall be stopped on the plea of any objection. If no such objection is received
from you within this period, you will be deemed to have accepted the order and the
conditions stated therein without in any way affecting the right of the parties to
rectify any mistake in the basis of payment, only to the extent it differs from
Condition 62 of IAFW-2249”.
19.3.5 Within about one week of the receipt of copy of the GE’s letter addressed to
the contractor intimating the deviation, the Engineer-in-Charge shall, in consultation
with AGE(C)/ JE(QS&C) where possible, prepare a draft deviation order in the
proper form (IAFW-1823). In case of contracts concluded by CE/CWE, the GE shall
ensure that within about two weeks of the issue of the above mentioned letter to
the contractor, the draft DO with supporting details and duly checked by his
AGE(C) is forwarded for technical check of the DCWE(C)/ACWE(C)/SSW in CWE
office. CWE shall similarly ensure that the draft DO and fair copies of the draft DO,
duly endorsed as “Technically Checked” by his surveyor are returned to the GE for
signature by GE, his surveyor and the contractor for distribution to all concerned.
The aim should be that as for as possible, distribution of fair copies of the DO to all
concerned is not delayed by more than six weeks from the date the deviation
was ordered on the contractor through the letter of GE mentioned above.
19.3.6 When a proposal for deviation is initiated at GEs level, he will, however,
356
forward the proposal together with a draft DO in proper form supported by details,
as necessary, to the CWE. Subsequent action will be taken as indicated in Paras
19.3.4 and 19.3.5 above.
19.3.7 Details of measurements in case of measurable deviation order are not

necessary at the time of requesting approval in principle for the DO but the GE
shall send details prepared by Engineer-in-Charge in support of the DO in
manuscript to CWE so that the financial effect can then be worked out and
checked. These manuscript details shall indicate approximate quantities of all
major items and method of pricing. This would also enable the surveyor to check
the method of pricing adopted and to verify whether any special rates are
involved. It is, however, not necessary to attach all these details of measurement
with the DO and only an abstract of quantities and rates need be attached.
19.3.8 The following types of DOs will be issued by GE on the proper form without
it being necessary to be checked by CWE’s surveyor. In these cases a check by
GE’s surveyor is considered sufficient.
(a) DOs for omission of PC sums.
(b) DOs for variation in work against provisional items, provisional quantities
where quantities involved are within the limits laid down by CE.
(c) DOs in respect of grant of extension of time.
19.4 Pricing, Checking and Distribution of Work Orders/Deviation Orders.

19.4.1 All work/deviation orders in contracts concluded by GE and all works orders
on contract concluded by CWE and CE shall be technically checked by AGE(C) in
GE’s office prior to issue to contractors. Deviation orders in contracts concluded by
CWE and CE shall be technically checked by DCWE(C)/ACWE(C) of CWE’s Office
(except those mentioned in Para 19.3.8 above) in addition to check by AGE(C) in
GE’s office. It is clarified that works orders placed on the form IAFW 1823-A (TC
Contracts) need not be technically checked by the AGE(C) in GE’s office.
19.4.2 All work/deviation orders shall be got signed from the contractor before
distribution but should not be withheld or delayed on account of contractor’s non-
availability or unwillingness to sign. If a works/deviation order cannot be got signed
from the contractor within a reasonable time (ie 3 to 4 days), the same shall be sent
to the contractor under Registered Ack Due cover (refer Condition 23 of IAFW-
2249) and the postal receipt/acknowledgement retained in safe custody. With
reference to Para 19.3.4 above, where the contractor raises an objection within 7
days, it must be dealt with expeditiously and if a dispute arises, steps shall be
taken to resolve the dispute as early as possible by referring the matter to the
NHEA.
19.4.3 Copies of works/deviation orders for all contracts except in respect of

running contracts such as handling and conveyance contract (IAFW-2320), supply
of materials contracts (IAFW-1815Z), term contracts and the like will be distributed
to all concerned, endorsing two copies to the PCDA/CDA through the AO/AAO.
With regard to term contracts, handling and conveyance contracts, supply of
materials contracts and the like, copies of works orders and deviation orders will be
distributed to all concerned endorsing copies to the PCDA/CDA through the
AO/AAO, who will retain one copy and send the other to the principal CDA/CDA for
his record. AOs/AAOs will not wait for receipt of attested copies of Works
Orders/Deviation Orders pertaining to term contracts, handling and conveyance
contracts and supply of materials contracts and the like for passing of final bills
357
except for the following :-

(a) Work orders and deviation orders for new works (Costing up to Rs
1,50,000/- ordered on term contracts).
(b) Deviation orders (i) containing star/prorate rates (unless such rates had
received the prior approval of PCDA/CDA) and (ii) involving changes in
specifications.
19.5 Issue of One Combined Order for a Number of Deviations.

19.5.1 It is not advisable to include a number of deviations in one DO. This is likely
to lead to unnecessary delays at the billing stage, particularly when any item is
disputed by the contractor. It is simpler and always desirable to issue a separate
deviation order for each variation.
19.5.2 As already stated in Para 19.3.4 above, a written order must be given to the
contractor by the GE for every deviation. Even though a deviation order on the
proper form (IAFW-1823) may have been issued subsequent to the issue of the
letter by the GE, such deviation order shall not be treated as “Covering Deviation
Order”. Cases may, however arise when during technical check of works by an
Engineer Authority (including CE, CWE, ADGTE, STE and TE) or during the
technical check of bills before payment, discrepancies may come to light which
may require regularization/adjustment by further deviation order. Any such
deviation order after expiry of the contract (which include the extended period) will
be treated as “Covering Deviation Order”
19.6 Orders for Extension of Time.

19.6.1 Deviation order for extension of time will be issued on contractor’s Order Slip
Form (IAFW-1823) and numbered with suffix (Dev.).
19.6.2 When, as stated above, the question of extension admissible is being
examined by the Accepting Officer after completion of work, preparation and
progress of final bill shall not however be held up since it is only the quantum of
compensation, if any, to be deducted from the final bill, that is dependent on the
extension finally approved by the Accepting Officer. Preparation and checking of
final bill by all concerned will continue without waiting for the approval by the
Accepting Officer to the extension of time applied for by the contractor.
19.7 Ordering Deviations on No Cost Basis.

19.7.1 Deviations on ‘No Cost Basis’ for providing work for a superior specification
shall be discouraged because contractors are likely to take advantage of this for
concession in other spheres.
19.7.2 The following procedure will be adopted while resorting to use of superior
specification than that catered for in the contract:-
(a) An authorized superior work not originally catered for in the contract shall
be ordered by a proper DO with financial effect.
(b) An authorized superior work not originally catered for in the contract but
agreed to be executed by the contractor on his own initiative on ‘No Cost
basis’ eg provision of better class of door and window fitting or sanitary
fitting and the like, when those specified in contract are not readily
available in the market, shall be ordered on ‘No Cost Basis’.
(c) When an unauthorized work is required to be done on the request of the

users who agree to pay for the extra cost involved, the same shall be
ordered through a proper DO with financial effect, provided :-
358
(i) Users obtain approval of the CFA.

And
(ii) Users agree to deposit the extra cost involved in the treasury before
the work is taken in hand and the money is credited to the work.
As far as possible, deviations coming under category (c) above shall be
discouraged.
19.8 Deviations and Amendments to Contracts.

19.8.1 Condition 7 of General Conditions of Contracts, IAFW-2249 inter-alia
includes that, “No work that radically changes the original nature and scope of the
contract shall be ordered as a deviation and in the event of disagreement between
the contractor and the Accepting Officer, the decision of the next NHEA (or of the
Chief Engineer in case of contract accepted by him) shall be final and binding on
the contractor”.
19.8.2 The dividing line between a deviation and amendment to contract is one for
judgment. The point for decision is whether the basis for the existing contract will not be
materially affected by the alternation in design, scope or circumstances for which it is
proposed to introduce. If it will, then an amendment to contract will be required to effect
the desired alteration in agreement with the contractor.
19.8.3 It is essential on grounds of equity, that the aforesaid principle is adhered to the
maximum extent possible and that anything that tends to a violation of this principle is
discouraged.
19.8.4 All Accepting Officers are advised to bear the above principle in mind and to ensure
that alterations that materially or radically affect the basis and the scope of the contract
are avoided.
19.9 Reimbursement of Increase in Prices under Condition 63 of IAFW-

2249/Condition 32 of IAFW-1815Z.
19.9.1 In one furniture (Steel Racks) contract of CE (FY) Hyderabad, the contractor had
raised claim pertaining to reimbursement of increase in price of steel. During arbitration
hearing the contractor filed a judgment of Allahabad High Court which states that SAIL is
considered a “STATE” and contended that his claim for reimbursement of escalation due
to rise of prices by SAIL should be reimbursed as per Condition 32 of General Conditions
of Contracts IAFW-1815Z, since SAIL being a “STATE” comes within the provisions for
the said condition.
19.9.2 CE (FY) Hyderabad sought clarification/opinion from the Ministry of Steel. Ministry
of Steel has clearly stated that in a liberalized and deregulated environment, the
Government does not interfere to influence the prices. Prices are determined by free
interplay of market forces of demand and supply and fixed by the company without any
intervention of the Government. Clarification of the Ministry of Steel is given at Appendix
19.2.
19.9.3 In view of the above, an increase in prices of steel by SAIL is not to be treated as
‘statutory order’. The meaning of “statutory order” is a “law expressly enacted by the
Legislature”.
19.9.4 Similarly increase in prices of petroleum products, bitumen etc due to free interplay
of market forces of “demand & supply” shall be refuted on above lines, if the contractor so
demands.
359
Appendix 19.1
CHECK LIST OF DOCUMENTS/DETAILS TO BE INITIATED WHILE SEEKING

APPROVAL FOR ENHANCEMENT IN DO LIMIT
1. Information regarding particulars of the contract as per Annexure I enclosed.

2. Statement of case bringing out brief of the contract, circumstances leading to
change in DO limit & lapses, if any, including names of concerned officers for the
lapses, status of extra work ie whether extra work beyond DO limit executed at site
or awaits approval, duly signed by all concerned.
3. Copy of Admin Approval & Technical Sanction
4. Legible CTC of CA
5. Comparative statement of units rates and amounts quoted by all participating
bidders at the time of tender (duly checked and signed by all concerned).
6. Comparative statement of Ist, IInd and IIIrd lowest tenderer with finally executed
quantities/revised scope of work to ensure that lowest tenderer remains lowest
(duly checked and signed by all concerned).
7. Copy of FSTR of job to check availability of funds for proposed extra work.
8. Contractor’s willingness in writing for revised DO limit including draft amendment to
contract signed by the contractor and witness incorporating revised DO limit.
9. Correspondence exchanged with the contractor for reduction in rates (where extra
work is being proposed) & contractor’s response thereto to be indicated in the
statement of case.
10. Calculation details of revised DO limit for which approval sought.
11. It has also been certified :
(a) That there is no variation in quantities of items of work where freakishly high/low
rates were observed at the time of acceptance of tender.
(b) That with revised DO limit as proposed, no unintended benefit shall accrue to
the contractor.
(c) That with revised DO limit, the lowest tenderer remains the lowest.
(d) That there exists no lapse in planning of the work and in framing of the contract
resulting in increase in DO limit.
Accepting Officer
360
Annexure I TO Appendix 19.1
PROFORMA FURNISHING BRIEF PARTICULARS OF THE CONTRACT

INVOLVING REVISED DO LIMIT
(a) Name of work, CA No and name of the Contractor.

(b) Contract accepted on & amount of the contract.
(c) Dates of commencement, original date of completion & extended date of
completion, if any.
(d) Present progress of the work.
(e) DO limit mentioned in the contract.
(f) Revised DO limit for which sanction sought for.
(g) Reasons for revised DO limit & lapses, if any, and all other relevant information &
certificates as per checklist.
(h) The date when the necessity of revised DO limit was felt by the Accepting Officer.
(i) Is there any delay in initiating the cases for revised DO limit. If yes, reasons for the
same and persons responsible,
(j) Whether there is any variation in quantities/scope of work where freakishly high/low
rates are involved.If yes, give details.
Accepting Officer
361
Appendix 19.2
GOVERNMENT OF INDIA, MINISTRY OF STEEL (SAIL-PC SECTION)

LETTER NO -16(9)/2004-SAIL (PC) DATED 9TH JULY, 2004
To
The Chief Engineer (FY) Hyderabad,
Opp. Parade Grounds,
Secunderabad-500003.
Subject : CA No. CE(FY)/HYD/SEC/25 of 2001-02 Provision of steel racks for EME

records at Secunderabad—Ref. received from Chief Engineer (FY) Secunderabad
Sir,
I am directed to refer to your letter No. 830203/SEC/ARB/35/E8 dated 5 th June,
2004 on the subject mentioned above and to state that Steel Authority of India Ltd. (SAIL)
is Public Sector Undertaking of the Government of India (GoI shareholding 85.82%),
under the administrative control of the Ministry of Steel. However, regarding price fixation,
it may be mentioned that in a liberalized and deregulated environment, the Government
does not intervene to influence prices. Prices are determined by free interplay of market
forces of demand and supply and fixed by the Company without any intervention of the
Government.
Yours faithfully,
Sd/-
(G.L. Dogra)
Section Officer
23012601
362
SECTION 20
FINAL BILLS, MEASURES TO AVOID DELAYS, PAYMENT OF OMITTED ITEMS,

REFUND OF RECOVERY, STAR RATE/SPECIAL RATE
20.1 Measure to Avoid Delay in Preparation and Settlement of Final Bills.

20.1.1 Delay in settlement of final bills are mainly due to:-
(a) Settlement of store transactions.
(b) Settlement of transactions pertaining to T&P.
(c) Delay in issue of DOs and settlement of special rates for works ordered as
deviation.
(d) Delay in completion of measurements and preparations of abstracts.
(e) Delay in settlement of contractor’s claims for extra work, the matter having not
been referred to proper authority as soon as it was first raised by the contractor.
(f) Contractors coming forward for grant of extension of time after completion of
work ,pending decisions, not submitting or signing their bills.
(g) Delay in PCDA/CDA’s office in forwarding certified true copies of DOs to
AO/AAO and this in turn resulting in delay in submission of bills by AO/AAO to the
PCDA/CDA.
20.1.2 To avoid the above delays, the following remedial measures shall be
exercised at various stages:-
(a) During Administration of Contract.

(i) To ensure that all transaction are updated once a month and GE shall
render a certificate on every RAR that relevant points have been checked.
(ii) A periodical review is made by GE and CWE as technical
administration of contract viz progress made on finalization of deviation
orders, rates, amendments, recovery rates for non-Schedule ‘B’ stores and
non-Schedule ‘C’ T&P and the like. This review is recommended at regular
intervals.
(iii) Since delay in finalization of DOs is the main cause, it is necessary to
curtail the number of deviations to the absolute inescapable minimum.
(iv) No deviation shall, as for as possible, be initiated during the last two
months of the contract period.
(v) A DO Register shall be maintained by the Engineer-in-Charge at the
site of work and the GE must examine this register periodically at site to
ensure that the Engineer-in-Charge has been taking all steps necessary for
speedy preparation of DOs and where delay is attributed to the contractor to
warn him that the financial effect of the DO will not be taken into account while
paying him the RAR if he does not co-operate in producing vouchers etc. It
must also be remembered that once the work is completed, the contractor
may not be readily agreeable to settle the rates or resolve disputes.
(vi) GE shall hold periodical discussions with concerned subordinates and
the AO/AAO. AGE(C) of GE shall also maintain a record of DOs approved,
issued and to be issued and GE shall go through this Register during these
discussions in his office.
363
(vii) CWE shall hold regular and frequent conference between him and his
GEs and also look into the DO Register maintained by the Engineer-in-Charge
during his visit to works.
(viii) The PCDA/CDA are expected to complete certification of
DOs/amendments within two weeks of their receipt in their office and after this
period the PCDA/CDA shall allow a bill to be submitted to his office by the
AO/AAO even if some DOs/amendments remain uncertified by that time.
(ix) GE/DCWE(C) (ACWE (C), if DCWE (C) not posted) shall settle CDA’s
observations through personal contact by periodical visits to CDA’s office with
prior intimation to the PCDA/CDA. Such visits shall not take place only in the
months of January or February.
(x) Immediately on completion of work, the Engineer-in-Charge will ensure
that items of work still left to be measured including deviations, are measured
jointly with the contractor and measurements recorded in Measurement
Books (MBs). In case of measurements pertaining to deviations not yet
authorized by competent authority, it shall be made clear in the Measurement
Book that the recorded measurements do not imply acceptance of work not
covered by proper deviation orders. Contractors shall be encouraged to keep
copy of measurements in their own Measurement Books having pages
numbered and ruled similar to MES MBs.
(xi) Two weeks after completion of work, technical review shall be made by
the GE to ensure that all transactions still requiring regularisation are
expeditiously completed.
(b) At the Stage of Completion Certificate.
(i) Within 24 hours of completion of work, the contractor shall report this
fact to the GE. Soon after completion of work to the satisfaction of GE, but in
no case later than 7 days, a completion certification shall be issued by GE to
the contractor (CE may authorize period of 15 days in case of outstations).
Copies of this certificate shall be sent to the Accepting Officer and on that
copy GE will further certify as under:-
“There are no deviation orders or settlement of rates either for materials
issued or for T&P and the like outstanding in this work”.
(ii) If any items are outstanding, they shall be clearly stated in this
certificate.
(iii) The accuracy or otherwise of these certificates shall be checked by the
CWE every time a completion certificate is received and suitable action
taken to ensure expeditious disposal of pending DOs and special rates.
(c) At the Stage of Preparation of Final Bill.
(i) Within 15 days of completion of work, GE must ensure that a
consolidated statement to cover all debits and credits including all details of
previous RARs as well as abstracts of measurements (as prescribed vide
Para 465 of MES Regulations) are furnished to the contractor to enable him
to prepare and submit the final bill.
(ii) On submission of the final bill, Engineer-in-Charge must ensure that all
requisite documents are attached to it. The details of the documents, which
are required to be attached to the final bill & check list are given in Appendix
20.1. The certificate to be rendered by the contractor shall be as under :
364
CA No :
Name of Work :
Name of Contractor :
AGREED PART
It is certified that I have prepared this final bill for claiming the entire payment due to
me from this contract agreement. This final bill includes all claims raised by me from
time to time irrespective of the fact whether they are admitted/accepted by the
department or not. I now categorically certify that I have no more claims in respect
of this contract beyond those already included in this final bill by me and this amount
so claimed by me shall be in full and final satisfaction of all my claims under this
contract agreement. I shall however reserve my right to raise a claim to the extent
disallowed to me from this final bill.
DISPUTED PART
--NIL--
or
Priced details to be given by the Contractor
Sd/- XXX Sd/- XXX
Engineer-in-Charge
(Contractor)
Dated : ….............. Dated : …...
(iii) Disputed and Delayed Cases .
In disputed/delayed cases, a further on account payment to the extent of agreed
portion of the final bill may be allowed to the contractor after scrutiny/audit of the final
bill by the PCDA/CDA by retention of Rs 20,000/- or 5% of the agreed portion of the
bill (whichever is less). In such cases where the Engineer Officer at the request of
the contractor, agrees to do so, he will convey his intention to the PCDA/CDA at the
time of submission of the final bill or, at a later date, and at the same time, indicate
reasons for the desirability of such an authorization by the PCDA/CDA. Consequent
to this the Bank Guarantee Bonds accepted in lieu of retention money shall be
released to the contractor after payment of the items of the final bill in respect of
which there is no dispute.
(iv) In cases where the contractor needs assistance of MES in completing the final
bill, GE shall render him necessary assistance. Similarly where the contractor has
unduly delayed submission of final bill, GE shall take initiative to expedite the
preparation of the final bill. It shall however, be made clear to the contractor that if
he fails to submit the final bill for any reason whatsoever, delay in payment will be
entirely his responsibility.
(v) Every endeavour shall be made to complete the final bill within one month of
completion of work and, as a rule, all checks by the MES and Audit should be
completed as early as possible but not later than four months in respect of contracts
of value not exceeding Rs 5 Lakhs. For contracts of value exceeding Rs 5 Lakhs it
should be within six months of completion of work and payment made to be a
contractor within the time limit prescribed in Condition 66 of IAFW-2249. For
contracts under IAFW-1815Z the timelines given in IAFW-1815z shall be complied.
In case of small jobs, it shall be possible to reduce this period and the period of four
months mentioned above which should be treated as the maximum. The technical
check of bills by AGE(C) in GE’s office and DCWE(C)/ACWE(C)/SSW in CWE’s
office must be completed within six weeks of the date of contractor’s signature on
365
final bill, thereby leaving not less than one clear month for the Audit check by the
AO/AAO and the PCDA/CDA.
(vi) Bills under Reservation .

A final bill with contractor’s reservations shall not be accepted as a final bill. Disputes
of the contractor shall be recorded in Part ‘B’ ‘Disputed Part’ of final bill. Contractor’s
reservations may fall under following categories :-
(aa) Vague reservations without any financial effect; OR vague remarks
such as “signed under protest or subject to claims submitted separately” and
so on.
(bb) When a bill is signed by the contractor with vague reservations and
inspite of pressing him to specify the financial effects he does not cooperate
but demands settlement of disputes through arbitration.
(cc) Claims specifically defined, priced and valued and included in the final
bill.In case of (cc) above, bills shall be checked and an ‘on account
payment’ allowed and disputes settled by dispute resolution/arbitration as
applicable.
(vii) In all cases where it becomes necessary to settle disputes by arbitration, final
bills will be progressed in the normal manner ie by carrying out checks by QS&C
staff and AO/AAO/PCDA/ CDA so that a duly audited final bill is available for
reference to the Arbitrator during hearing of the case. Where a contract has been
cancelled at contractor’s default and work completed through another agency, it is
important that the work completed by the contractor up to the date of default is
measured, billed and audited. This will facilitate arriving at the final cost of completion
as soon as balance of work has been completed through another agency.
(viii) In accordance with Para 475 of MES Regulations, if the contractor
refuses/neglects to submit his final bill for a contract or to sign the bill prepared by
the MES, as a result of such refusal or neglect, a note will be entered to this effect
on the bill and the sum due to the contractor debited to the work concerned and
credited to Head(s) Deposits.
(d) During Technical Check.
(i) Final bills shall be technically checked as per Para 470 of RMES. AGE(C)
in GE’s office is responsible for checking the final bills before payment. He
shall ensure that documentation is complete. He must not raise observations
piecemeal and where possible, settle them by personal contact with the
Engineer-in-Charge concerned. Where necessary GE shall arrange such
meetings to resolve difficulties.
(ii) The same applies to checks by DCWE(C)/ACWE(C)/SSW in CWE’s
office/CE’s office (where there is no CWE office) who shall as far as possible
clear all observations by personal discussion instead through
correspondence. He should endeavour to visit each outstation Division once
a month and GEs stationed at the same station once a fortnight. During these
visits he shall check the Bill Register and bring delays in preparation and
check of bills to GE's notice. Where there is no CWE office, percentage of
final bills shall be selected by DIR(C) in CE’s office for check and will be
technically checked by EE(QS&C)/ AEE(QS&C)/ AE(QS&C) in CE’s Office.
JE(QS&C) and E8 Officers checking the bill will sign on escalation summary
also.
366
(iii) Notings/minute sheets/observations in writing in connection with

technical check of bills between QS&C Staff and the Executives and between
QS&C officials shall be kept to the absolute minimum and shall be treated as
internal notings only, not liable to be supplied for perusal by
AO/AAO/PCDA/CDA or audit.
(iv) Checking of Bills by QS&C officials in CWE office/CE office (where there
is no CWE office).
(aa) QS&C staff in CWE’s office/CE’s office shall check every bill the
gross value of which is Rs 15 Lakhs or above.
(bb) The bills selected for check by QS&C officer shall not be
confined merely to those for Lump Sum Contracts.
(cc) Bills for supply of materials will not be routed through CWE’s
office/CE’s office because such bills normally involve little technical
check.
(dd) wherever possible QS&C official in CWE’s office/CE’s office
shall check at site at least one bill per sub-division per quarter.
(v) Statement of stores to be attached with Final Bills.
(aa) Form for Stores Statement to be attached with final bills along
with form to be used for giving details in support of column 5 of Stores
Statement are attached as Appendix-6.1 & 6.2
(bb) In case of bills selected for technical check in CWE’s office/ CE’s
office, stores statement shall invariably be checked and cage IV of the
Final Bill shall be signed by QS&C official without deleting certificate
(d).
(cc) It will be ensured that as soon as the last issue of Government
stores is made to the contractor, the Engineer-in-Charge shall prepare
the statement of stores in the prescribed form and after his initial check
forward it to the GE’s office for technical check. If any over issues are
noticed, the contractor shall be simultaneously asked is writing to
return the stores issued in excess. AGE(C) in GE’s office and
DCWE(C)/ACWE(C)/ SSW in CWE’s office/CE’s office shall technically
check the stores statement without waiting for completion of work or
preparation of the final bill. Observations if any, should be sorted out
immediately. Minor changes that may be necessary due to return of
over issued stores and the like, can be made later on so that the time
required for checking of final stores statement when the final bill is
ready is reduced to the absolute minimum.
(vi) QS&C officials and GE shall be encouraged to visit PCDA’s/CDA’s office
periodically with prior intimation to the PCDA/CDA to clear bottle-necks and
resolve points of difference. Advantage shall also be taken of periodical visit
of the PCDA/CDA and his staff to MES office to settle controversial issue.
(e) During Audit Check.
(i) It shall be ensured that the AO/AAO also raises all observations at one
time and not in piecemeal. GE shall arrange frequent meetings with the
AO/AAO, so that, as far as possible the observations are settled by personal
discussion. If the AO/AAO fails to do so, his attention shall be drawn to the
instructions contained in Para 119 of the Manual of Instructions relating to
Procedure of Works in the Account Section of MES Formations (popularly
known as Unit Accountant Manual) issued by the CGDA.
367
(ii) The AO/AAO shall commence checking of final bills on the basis of true
copies of amendments and deviation orders furnished to him by the GE, and
not wait for audited copies to be received from the PCDA/CDA. On receipt of
audited copies from the PCDA/CDA, he shall finalize his check and forward
the bill to the PCDA/CDA. The AO/AAO shall not insist upon production of
original vouchers in support of special rates, PC sums etc so long as GE has
certified that the details have been verified by him against the original
vouchers.
(iii) Payment to contractor need not be held up merely because of
objections by audit which pertain to administrative or procedural matters and
involve merely departmental formalities where no financial effect is involved.
Payment to contractor shall also not be held up on account of observations
which are entirely within the discretion of Engineers. A few examples of these
are given in Appendix 20.2.
(iv) Where the AO/AAO exercises weekly/fortnightly check of attested
statements pertaining to T&P with reference to log books, a fresh check of log
books shall not be necessary on receipt of final bill.
(v) Any amendment to the Final Bill necessitated on account of technical
and audit check shall be intimated to the contractor and his concurrence
obtained. The bill shall be supported by corrections, showing financial effect
due to such amendments. Any alterations to the net amount of the Final Bill,
as signed by the contractor under the “No Further Claim Certificate” must be
attested by the contractor when the bill is received from the PCDA/CDA and
before payment is made to the contractor. This is necessary to arrive at finality
and to avoid the contractor reopening the case.
(vi) Duplicate Copies of Final Bills. Duplicate copy of the final bill shall
be identical with the original. Whenever the original copy of the final bill is
amended, the duplicate copy must be corrected simultaneously. All
corrections shall be signed/initialled and dated.
(vii) Amendment to Contract after Payment of the Final Bills.
(aa) Terms and issue rates for stores or T&P and such other minor
matters not originally included in the contract may be agreed to by the
contractor either through correspondence or by signing relevant
deviation orders. These shall be simultaneously regularized by
concluding an amendment to the contract to cover the changes.
(bb) Cases may, however, arise where final bills prepared based on
contracts as modified by such agreement conveyed through
correspondence or deviation orders (but for which formal amendment
to contract has not been concluded) are accepted in audit and final
payment made to contractors. In such cases (ie where final bill has
been passed and payment made) it is not necessary to insist upon
formal amendment to the contract.
(viii) Where disputes exist and cannot be resolved except by reference to
arbitration, a statement of points in disputes indicating amount involved shall
be prepared and kept ready for submission to the Dispute Resolution Board
(DRB)/arbitrator as applicable. In such cases, DRB/arbitration as applicable
shall be invoked without delay as otherwise there is a chance of valuable
evidence of Government case being lost. Pending DRB/arbitration
proceedings, all connected documents shall be carefully guarded.
368
(f) Monitoring of Minus Final Bills . All minus final bills, where the
recovery is due from the contractor, shall be monitored at CE Command/ADG
level. Such bills need to be finalized on priority and properly investigated to
establish reasons for the final bills becoming minus and official(s) responsible
therefore. Once the amount recoverable is finalized, steps need to be taken
towards realization of Government dues from the contractor in terms of
guidelines contained in Section 26.
20.2 Instructions on Approval of Special (Star) Rates.
20.2.1 Delay in approval of Star Rates has been one of the major grey areas in
administration of contracts in MES. This is one of the main reasons for delay in
payment of final bills leading to Arbitration. Based on the experience and data
available, it is observed that reasons for delay are attributable to both the parties to
the contract.
20.2.2 In addition, on perusal of arbitration awards being received in E in C's Branch
for seeking advice of LA(Def)/decision of DGW based on legal opinion rendered by
MOL Branch Sectt, it has observed that claims of contractors based on draft star
rates initiated by GEs have been upheld by Arbitrators under Condition 62 (G) of
IAFW-2249, ignoring the star rates duly technically checked & approved by
competent authority. In certain cases arbitrators have awarded huge amounts in
favour of contractors based on star rates initiated by GE's office which were highly
exaggerated and reduced substantially during technical check.
20.2.3 The following note shall be included in Sch 'A' Notes of tender:-
(a) In case of any deviation, mode of pricing shall be decided by Accepting Officer
in terms of Condition 62 of IAFW-2249.
(b) In the event of a deviation order involving fixation of Special (Star) Rate, Draft
Rate shall be prepared by GE (within a maximum period of 30 days) while initiating
the proposal for deviation seeking approval of the Accepting Officer and notified to
contractor. While notifying the Draft Rate, it will be clearly stipulated that the same is
merely an estimated rate and firm rate shall be fixed based on actuals and receipt of
supporting documents from contractor such as vouchers/literature of product/test
certificates etc (as applicable) on completion of the work involving Star Rate. Any
objection to the method of fixing Star Rate will be dealt as per Condition 7 of IAFW-
2249.
(c) Draft Star Rate shall be made based on market enquiry through telephonic
enquiry/quotations/email/rate lists/internet based sources, material & labour
constants available in various publications and record available in respect of Star
Rates approved in the past for similar items of work etc. Contractor may also assist
GEs office in preparation of draft Star Rate.
(d) The Draft Star Rate shall be purely a draft rate and shall not be used for
claiming final payment during execution of work. However GE shall allow part
payment to the tune of 80% during execution to avoid any financial hardship to the
contractor.
369
(e) After completion of the item of work involving Star Rate, the contractor shall
submit the vouchers/literature of product/test certificates (as applicable, decision of
GE being final in case of any disagreement) for finalisation of Star Rate. The Star
Rate shall be technically checked by DCWE (C)/Director (C) depending upon the
financial effect & approved by competent authority within a period of one month from
submission of the relevant documents by contractor as mentioned above.
(f) The star rate as approved by competent authority after technical check by
DCWE (C)/Director (C) depending upon the financial effect shall be referred as “the
rate decided by GE” under Para 62 (G) of IAFW-2249.
20.2.4 The formats of Star Rates to be followed shall be as under:-
(a) Form for Approval of Draft Special (Star) Rate Appendix 20.4
(b) Form for Analysis of Draft Special (Star) Rate Appendix 20.5
(c) Form for Approval of Special (Star) Rate Appendix 20.6
(d) Form for Analysis of Special (Star) Rate Appendix 20.7
20.3 Payment of Bills to Contractor's Bank.

Condition 66 (payment of bills) of MES General Condition of Contract (IAFW-2249)
stipulates that all payments/dues under the contract shall be made by means of
crossed cheque to the contractor ‘A/C payee only/RTGS’. Cases may, however,
arise where a bill may have been endorsed by a contractor in favour of his bank and
may have been lodged by the bank concerned for collection. In such cases the
procedure stipulated in Para 258 of Financial Regulations Part I (Appendix 20.3)
shall be observed. Normally, in such cases, cheques drawn in the following manner
shall meet the case:
“……………………….*Bank
A/C Sarvashri……………………**&Co (Pvt) Ltd.”
*Name of the Bank **Name of the firm.
370
20.4 Claiming Payment for Items of Work Omitted from The Final Bill.
(a) Where an item of work has actually been carried out in terms of the contract,
but not recorded in the measurement book and the contractor has given a clear ‘No
Claim Certificate’ in cage VIII of the Final Bill Form (IAFW-2262), prior sanction of
the Government is necessary before admitting liability for payment of such claim for
the item of work overlooked.
(b) Where, however, such claim is to be referred for adjudication to an
DRB/arbitrator as applicable, it is not necessary to obtain Government sanction
either for referring the disputed claim to DRB/arbitration or for making any payment
as a result of the DRB's decision/arbitrator’s award.
(c) Where a certain amount is withheld from the final bill in anticipation of
overpayment due to pending observations of TE etc and where the contractor
accepts payment of reduced amount giving a clear ‘No Further Claim’ certificate, in
such cases if the observation is dropped, the amount held against the observation
may be paid without referring the same for Government sanction. This also applies
to cases where payment of the amount was clearly and admittedly due to a contractor
and which had also been claimed by him initially.
20.5 Water Charges on Star Rates.
Wherever metering is not feasible and the contractor is charged for water at the flat
rate of the ₹ 3.75 for every ₹ 1,000/- worth of work done at contract rates, the cost
of water shall also be included in star rates on the same basis regardless of the fact
whether or not water is required for the item of work involved in the star rate.
20.6 Technical Check of Final Bills.
20.6.1 Procedure of technical check of Final Bills shall be as under:-
(a) All bills will be technically checked by the JE(QS&C)/AGE(C) in the
AGE(I)'s/GE’s/ GE(I)’s office. After technical check in the AGE(I)’s/GE’s
office, the following procedure show be followed :-
(i) Where technical check is exercised by AGE(C) in GE’s/GE(I)’s
office, “the bills of rate contracts for supply of materials”, “the bills of
work orders of Term Contracts, Handling Contracts, the gross value of
which does not exceed Rs Twenty Five Thousand” and “other bills, the
gross value of which does not exceed Rs Two Lakhs & Fifty Thousand”
will not be sent to the office of the CWE/CE for further technical check.
These bills will first be technically checked by the JE(QS&C) of the
GE’s/GE(I)’s office and then will be technically checked by the
AGE(Contracts) of the GE’s/GE(I)’s office as a second check.
(ii) All bills in respect of CE’s Contracts (except as stated in sub Para
(i) above) will be forwarded by AGE(I)/GE/GE(I) under bill forwarding
certificate (IAFW-2254) directly to office of the CE for further technical
check by the AD(C)/DD(C)/Jt DIR(C) posted in CE’s office.
(iii) All bills other than as stated in sub Para (i) & (ii) above, will be
forwarded by AGE(I)/GE/ GE(I) under bill forwarding certificate (IAFW-
2254) to the office of the CWE (or to the office of the CE where there
is no CWE office in the hierarchy) for further technical check by the
ACWE(C)/DCWE(C) posted in CWE’s office (or by the AD(C)/DD(C)/Jt
DIR(C) posted in CE’s office where there is no CWE office in the
hierarchy).
371
(b) The ACWE(C)/DCWE(C) in the CWE’s office (or Director(C) in the CE’s office
where there is no CWE office in the hierarchy) will select from the bills, a percentage
for check which should generally cover work of every sub division and embrace every
class of work. The percentage of bills to be checked in the CWE’s/CE’s office shall
not be less than 20 percent in case of bills of work orders of Term Contracts and
Handling Contracts. The percentage of other bills to be checked shall be 100 percent
for “bills the gross value of which is Rs Fifteen Lakhs or above” and shall not be less
than 25 percent for “bills less than Rs Fifteen Lakhs gross value”.
(c) The bills which are to be 100 percent technically checked in the office of
CWE/CE, will be sent to the office of CWE/CE complete in every respect and
accompanied by all the documents as stated in Para 469 of RMES. In respect of
other bills, where GEs are located at distant places, only Final Bill form IAFW-2262
(in duplicate) complete in every respect, may be sent to the office of CWE/CE and
documents as stated in Para 469 of RMES may be sent later on in respect of those
bills only which are selected for technical check.
(d) JE(QS&C)/AGE(C) in the AGE(I)’s/GE’s/GE(I)’s office and/or the
ACWE(C)/DCWE(C) in CWE’s office and/or AD(C)/DD(C)/Jt DIR(C) in CE’s office
will also sign the following documents/statements as technically checked:-
(i) Statement of reimbursement/refund on variation in prices of materials,
fuel and labour.
(ii) Statement of Sch B stores and T&P.
(iii) Demolition certificate(IAFW-2201)
(iv) Statement of requisite tests as provided in the CA that all tests have
been carried out satisfactorily.
(e) The changes/corrections along with financial effect made during technical
check shall be highlighted in the bill forwarding letters/correction Sheets, while
returning the bills to the AGE(I)’s/GE’s/GE(I)’s office.
20.6.2 The Para 470 of RMES shall be deemed amended accordingly.
20.7 Final bills in respect of contracts with gross value exceeding ₹ 10 Lakhs are to be
pre audited by PCDA/CDA and contracts with gross value less than ₹ 10 Lakhs, the
final bill are to be audited and passed by AO/AAO without pre audit by PCDA/CDA.
However, where the office of AAO in GE has been upgraded to AO, the pre audit of
the final bill for contracts, the gross value of which does not exceed Rs 10 Lakhs
shall be audited and passed by AO, without pre audit by PCDA/CDA. This provision
shall be deemed amended as per instructions on the subject issued from time to
time.
372
Appendix 20.1
CHECK LIST FOR ENGINEER-IN-CHARGE AND JE(QS&C) TO VERIFY THAT ALL

DOCUMENTS COMPRISING AND ACCOMPANYING FINAL BILL ARE COMPLETE.
The documents comprising and accompanying the final bill are :-

(a) Bill forwarding certificate in IAFW-2254.
(b) Final Contact Bill Form in IAFW-2262.
(c) Statement of stores issued and recoveries to be affected including statement of
USRs.
(d) Statement of recoveries in respect of T&P including of USRs.
(e) Statement of recoveries in respect of water.
(f) Statement of other recoveries (rent, electricity, compensation for delay, work
completed by DEL or through other agencies etc.).
(g) Certified true copies of work and deviation orders (including DOs for extension of
time) accompanied with copies of approval of special rates where involved.
(h) Requisitions (IAFW-1833/2158) and/or abstracts (IAFW-2264).
(j) Measurement Books mentioned on page 1 of the Bill (IAFW-2262).
(k) Demolition certificate with details (where applicable).
(l) Copy of completion certificate issued by the GE.
(m) Correction sheet showing financial effect due to amendments during technical and
audit check to be signed by the person amending the amount and also by the contractor.
(n) Properly machine numbered receipts for return of empty cement bags from
authorized bag collecting agents (where applicable).
(o) Inventory of fittings and fixtures in buildings before dismantling/demolition.
(p) Test report on proper from for electrical work, air-conditioning and the like (where
applicable).
(q) No demand certificate by the contractor.
(r) Details of recovery of Mobilisation Advance, if applicable.
Notes :
1. Any other documents specifically mentioned in the contract necessary for technical
check and audit may also be attached.
2. It is also important that all signatures on bills and other connected document are
dated.
3. In view of the number of enclosures to final bills, it is suggested that a thick cover
sheet is adopted similar to a file cover for both the original and duplicate copy of the bill and
an index sheet showing the annexures and pages of each enclosure attached inside of
the cover and signed by the Engineer-in-Charge/JE and the contractor.
373
CHECK LIST
Questionnaire/checklist to be used by the Engineer-in-Charge and the JE(QS&C) as an

aide memoire to ensure that the bill is complete in every respect and it has been correctly
prepared is given herein below :
1. Check that the following supporting documents are attached and necessary cross
references given on pages 1 and 2 of the final bill form:-
(a) Measurement Books.
(b) Original requisitions/original abstracts accepted by the contractor.
(c) Certified true copies of work and deviation order (including orders for
extension of time) alongwith true copies of approval of special rates, where
involved.
(d) Statement for recoveries of stores.
(e) Statement for recoveries of T&P.
(f) Statement for recoveries for water.
(g) Statement for recoveries of other miscellaneous items (such as rent,
electricity, compensation for delay, default, etc.)
(h) Statement of recovery of mobilisation advance, if applicable.
Note : The specific item of recovery will be indicated.

(j) Copy of completion certificate signed by the GE.
(k) Demolition certificate (where applicable) showing on the reverse, details of
disposal of materials obtained from demolition and page No. of the demolition
register on which materials were taken on charge.
2. Has the bill (IAFW-2262) and the above enclosures been signed and dated by the
contractor's accredited representative?
Note : Remember that the contractor is not to sign at page IX of the Bill Form till the
bills is audited be PCDA/CDA)
3. Have all the blanks on page 1 of the bill been completed?
4. Has the bill been prepared in accordance with appendix “I” of the RMES and the
abstract number shown accordingly on page 1 of the bill?
Note : This applies to Lump Sum Contracts)
5. Have all the RARs been taken into account and shown in the summary of the bill?
6. Check and confirm that the “No Demand” certificate at the end of the summary of the
Bill has been signed by the contractor's accredited agent without any reservations.
Note : Remember that a bill with reservations which are vague (ie with endorsement
such as ‘signed under protest’ or ‘subject to our claim which will follow’ or any other
similar endorsement) will NOT be accepted from contractors. Contractor shall be
askedto clarify these reservations by submitting priced claims.
7. Stores Statement.
(a) Have the stores in Sch “B” been issued and accounted for? If not,give
reasons. Where a store shown in Sch “B” has not been issued because it was not
required for the work, has the GE attached a certificate accordingly?
374
(b) Have the stores other than those mentioned in Sch “B” been issued (either in
lieu of or additional to). If so, have necessary amendment to the contract been made?
Have all the USRs been reconciled with the statement of stores and transfer
vouchers, if any, attached?
(c) Have all over-issued stores been returned or accounted for, as per the
contract conditions or E-in-C’s instructions.
(d) Have all empty containers been returned or accounted for as per the contract
conditions?
8. Statement of Recoveries for T&P.
(a) Are all items of T&P shown in Sch “C” included? (If the contractor was allowed
to use his own, it should be so stated)
(b) If T&P other than that shown in Sch “C” have been issued (in lieu of or
additional to), have necessary amendments to the contract been accepted?
(c) Have the relevant Log Book been checked by the AO/AAO at the stage of
every RAR? If not, have the Log Book been now forwarded to the AO/AAO?
9. Recovery of Water.
(a) Has the recovery for water issued been accounted for as per the conditions
of the contract?
(b) In the event of the contractor having to make his own arrangement for water,
have you attached the necessary certificate? (This refers to contracts where water
is not to be issued by MES).
10. Recovery for Electric Energy (If Applicable).
Has recovery for electric energy issued to contractor been accounted for as per the
conditions of the contract or as per the subsequent amendment to the contract?
11. If the work was not completed within the contract period or the extended period, has
the amount of compensation due from the contractor been included in the bill under
“other recoveries”?
12. Has the deviation limit been exceeded? If exceeded, has an amendment to the
contract been issued? (Give reference).
13. Are there any other recoveries from the contractor to be taken into consideration
(viz. recovery for default or overpayment on other contracts)?
The following actions are to be completed before the bill is sent to the
PCDA/CDA.
14. Have the deviation order/amendments sent to the PCDA/CDA soon after these have
been approved and accepted by the parties concerned?
15. Has the final bill been checked by JE(QS&C) and ACWE(C)/DCWE(C)/SSW in
GE(I)/CWE/CE and Cage IV of the bill completed?
The following will be completed by the Engineer-in-Charge/AO/AAO after the
bill has been audited by the PCDA/CDA and before the original Bill is returned
to PCDA/CDA for record :
16. Confirm that payment is made through a crossed cheque in the name of the
contractor. (Give reference).
17. Was the contractor informed of the amendments to the bill at every stage and his
concurrence to the amendments obtained?
18. Has the duplicate copy of the bill and enclosures been amended to agree with the
original?
375
Appendix 20.2
EXAMPLES OF OBJECTIONS PERTAINING TO ADMINISTRATIVE OR

PROCEDURAL MATTERS AND MATTERS ENTIRELY WITHIN THE DISCRETION OF
ENGINEERS
ADMINISTRATIVE.
(a) Payment involves excess over Administrative Approval or allotment.
(b) Regulation of infructuous expenditure.
(c) Objections pertaining to specification adopted in deviation order on the ground
that the specification adopted was not authorized.
(d) When work ordered on a contractor as a deviation is not considered by audit
as being contingent upon the work included in the contract and they hold that a single
tender report to NHEA is necessary.
PROCEDURAL.
(a) Some blanks in the final bill form (IAFW-2262) not complete, eg date of
completion of work not shown but completion certificate attached to the bill.
(b) Date of completion shown on final bill but completion certificate not attached
to it.
(c) Whether a particular item of expenditure should be allocated to maintenance
grant or to a project and whether a particular item of work should have been ordered
on the contractor or carried out through a Term Contract.
Note: In such cases instead of returning the bill, the Executive should be asked to
forward the necessary information but audit of the bill should continue.
MATTER ENTIRELY WITHIN THE DISCRETION OF ENGINEERS.
(a) The decision on extension of time will be communicated by the Accepting
Officer to CWE/GE with copy to the PCDA/CDA amongst others and reason for
grants of extension will be indicated in brief on the PCDA’s/CDA’s copy. Audit shall
not call for further details regarding grant of extension of time as a matter of routine
this matter being within the purview of engineer authority. Should however they wish
to know further details in a particular case in which grant of extension appears to
them to be unjustified, they may ask the Accepting Officer for further details. Should
they wish to pursue the matter further thereafter, they should bring it to the notice of
CWE in contracts concluded by GE and to CE in contracts concluded by them and
by CsWE for any action which the engineer authority may wish to take. Payment of
bills shall not, however be held up on this accounts.
(b) Asking for reasons for deviations ordered for engineering reasons eg ordering
a small quantity of painting work in large contract to some item of joinery, painting of
which was not originally included in contract.
(c) Questioning devaluation of items of furniture through authorized under
Condition 20 of IAFW-1815Z. A copy of the devaluation statement shall, however,
be furnished to AO/AAO/PCDA/CDA for checking of calculations.
(d) Questioning as to why the contractor was allowed to return T&P twice or thrice
during the period of the contract.
(e) In the event of a deviation being ordered on account of non-availability of
Government store, PCDA/CDA wanting AO/AAO to again verify that particular store
was not in fact available for issue.
376
Appendix 20.3
PARA 258 OF FINANCIAL REGULATION PART-I
Payment of Contractor’s Bills to Their Bankers.

The following procedure shall be observed with regard to the payment of contractor’s
bills to their banks.
All bills must be receipted by the contractor under the works ‘received payment’ and be
endorsed by him in favour of the bank under a separate signature. If the bank is a collecting
agency and is not included in the second Schedule to the Reserve Bank of India Act, the
contractor will be required, in addition, to execute a power of attorney in favour of the Bank.
If the collecting bank is a Scheduled Bank, payment can be made without a power of
attorney or deed of assignment in favour of that bank, provided that if a deed of assignment
is executed, it shall specify the debit and be stamped under the Indian Stamp Act or bear
certificate of exemption from stamp duty from a competent authority. The power of attorney
or deed of assignment will be subjected to the approval of the Government.
In such cases the Government will not, as a rule, make any payment to the
contractor, without the knowledge of the bank. If, however, the contractor presents a bill for
payment directly and does not endorse it in favour of the bank,while every effort will be
made to secure payment to the bank, a payment to the contractor will constitute a full
acquaintance so far as the Government is concerned. The bank shall be required to give a
written acknowledgement of this condition as part of the arrangement under which the
government recognizes the power of attorney or the deed of assignment.
Note: The above procedure will not, in anyway, affect rights of Government to deduct form
bills (whether endorsed in favour of the bank or not) any sums due to them from the
contractors on account of penalties, overpayment etc on the contract to which the bills
pertain or on any other contract with the Government of India.
Instructional Letter from contractors forwarding powers of attorney/deeds of assignment

shall indicate whether the bank in whose favour a document has been executed will function
as financing bank or a collecting agency.
377
Appendix 20.4
FORM FOR APPROVAL OF DRAFT SPECIAL (STAR) RATE
SPECIAL RATE (*STAR RATE/PROPORTIONAL RATE) No

…......................................................
Contract No :
Contractor :
Srl Description Unit Rate Remarks

No Rs P
Details as per
analysis enclosed.
Recommended………………………. GE …………..........................................……
Date………...…..
Checked………………..................…. DCWE (C) of CWE Office ………………....

Date……………
Checked…………………………...… Dir (C) of CE Office ….........................…….

Date……………
Approved………………………………....................…………......................……....
Date……………
(Officer competent to approve star rate GE/CWE as the case may be & CE in case there
is no CWE)
Accepted …….........................……… Signature of Contractor…….… Date……………

378
Appendix 20.5
FORM FOR APPROVAL OF SPECIAL (STAR) RATE

…......................................................
Contract No :
Contractor :
Srl Description Unit Rate Remarks

No Rs P
Details as per
analysis enclosed.
Recommended………………………. GE …………..........................................……
Date………...…..
Checked………………..................…. DCWE (C) of CWE Office ………………....

Date……………
Checked…………………………...… Dir (C) of CE Zone Office …................…….

Date……………
Approved………………………………....................…………......................……....
Date……………
(Officer competent to approve star rate GE/CWE as the case may be & CE in case there
is no CWE)
Accepted …….........................……… Signature of Contractor…….… Date……………

379
Appendix 20.6
FORM FOR ANALYSIS OF DRAFT SPECIAL (STAR) RATE

….................................................
Contract No :
Contractor :
Description :
Unit :
Details
Rate per unit : Rs _____________ per _____________

No of units : ________________
Total Cost : Rs _____________
Prepared by me : *JE (QS&C)
*AGE (Contracts)
Notes :
1. This rate has been worked out as per provisions of Schedule 'A' Notes.
(Source of information used to be mentioned here)
Engineer in Charge
Accepted subject to approval by Contractor
Competent authority _________ Date ____________
*Delete whichever is not applicable.

380
Appendix 20.7
FORM FOR ANALYSIS OF SPECIAL (STAR) RATE
SPECIAL RATE (*STAR RATE/ PROPORTIONAL RATE) No

….................................................
Contract No :
Contractor :
Description :
Unit :
Details
Rate per unit : Rs _____________ per _____________

No of units : ________________
Total Cost : Rs _____________
Prepared by me : *JE (QS&C)
*AGE (Contracts)
Notes :
1. This rate has been worked out based on details in Draft Star rate and documentary
evidence submitted by the contractor and material & labour constants actually consumed
at site.
2. Certified that vouchers submitted by the contractor have been verified from the
source.
Accepted subject to approval by competent authority Engineer in Charge
Contractor Date......
Date.......
*Delete whichever is not applicable.

381
SECTION 21
MISCELLANEOUS INSTRUCTIONS LIKE ISSUE OF WATER, DEVALUATION,

DEATH, REVOCATION OF CANCELLATION, DEDUCTION OF I.T. AT SOURCE, FAIR
WAGES, LABOUR LAWS ETC.
21.1 Issue of Water from MES Sources to Contractors.
In contracts which stipulate that water will not be supplied by MES, cases may
sometimes arise, where due to unforeseen circumstances, contractors are unable
to make their own arrangements for water and at the same time, MES is in a position
to supply water from its existing sources. In such cases, if the Accepting Officer
considers that water can be supplied by MES in the interest of work, suitable
amendments to the Contract Agreement shall be made before issuing water.
Recovery rate for water supplied by MES in such cases shall be fixed bearing in
mind that neither the contractors derive any benefit nor the Government suffers any
loss. Preferably metered water supply shall be provided charged at All-in-Cost rate.
In no case, the recovery rate shall be less than Rs 5.00 (Rupees five only) for every
Rs 1000/- (Rupees one thousand) worth of work done priced at contract rates.
Further, the amendments to the Contract Agreement issued, shall, interalia clearly
provide that in the event of breakdown of supply of water by MES or in the event of
the said supply becoming intermittent, the contractor shall have no claim on this
account.
21.2 Devaluation of Works.
21.2.1 General Conditions of Contracts (IAFW-2249) provide that work shall be

approved by Engineer-in-Charge at all stages of construction and in case of
disagreement with the contractor in regard to the quality of work, the decision of the
Garrison Engineer shall be final and binding.
21.2.2 In order to discourage and prevent execution of works in non-conformity with

contract specifications, it is essential that the GE/Engineer-in-Charge carry out
regular inspection of works at all stages of construction and insists on rectification
of below specification work as soon as it is discovered.
21.2.3 Engineer-in-Charge must take care to ensure that, as far as possible,

situations where devaluation of work is the only remedy left, are not permitted to
arise. Devaluation of work will be considered only in unavoidable cases and when
all the following conditions exist concurrently :
(a) Departure from contract drawings and specifications has come to

light at a fairly late stage.
(b) Rectification or replacement of work below specification is likely to

cause delay in completion of the work or will put it out of use and cause
inconvenience to the users.
(c) The work is structurally sound and acceptable although it does not
strictly conform to the contract drawings and specifications.
382
21.2.4 Devaluation of work will be permitted by the following officers :-

(a) CWE-in respect of contracts concluded by himself and GEs.
(b) Chief Engineer-in respect of contracts concluded by him.
21.2.5 Prior approval-in-principle to devaluation will, however, be obtained from the

authority competent to accord technical sanction to the whole project.
21.2.6 Devaluation will be effected through a priced Devaluation Statement which

will be technically checked by the DCWE(C)/ACWE(C) of the CWE’s office/GE’s
office (where there is no CWE office) accepted and signed by the Accepting Officer
of the contract. The Devaluation Statement shall form part of the final bill and
submitted alongwith it.
21.2.7 In cases where devaluation has been decided upon and the contractor does
not accept or sign the Devaluation Statement, it shall be technically checked as
aforesaid and signed by the Accepting Officer of the contract and the bill prepared,
progressed and finalised on the basis of this statement. As the bill would not be
acceptable to the contractor, it would have to be treated as a disputed bill.
21.2.8 These instructions do not apply to recoveries which are proposed to be

effected on account of devaluation of work consequent on observations made after
expiry of the defects liability period.
21.2.9 Devaluation in respect of items of works for which rates can not be worked
out in terms of IAFW -2249 Condition 62 (A) to (F), shall be worked out on the basis
of what it would have cost to the contractor at the site of work enhanced by 17.5%
to cover overheads and profits. It may be borne in mind that such rates are not to
be termed as Star Rates which are applicable for pricing deviations specifically
ordered by Accepting Officer.
21.3 Procedure to be Followed in the Event of Contractor’s Death.
21.3.1 Advice from the Ministry of Law was obtained with regard to the correct
procedure to be followed when a contractor (who was the sole proprietor of the firm)
to whom a certain contract was awarded, died during the currency of the contract.
Attention of Ministry of Law was specifically drawn on the under-mentioned three
conditions of General Conditions of Contracts (IAFW-2249):-
(a) Condition 1(e) under ‘Definitions’ which stipulates that the contractor
means the individual or firm or company, whether incorporated or not,
undertaking the works and shall include the legal personal representative of
such individual or the persons composing such firm or company or the
successors of such firm or company and the permitted assigns of such
individual or firm or company.
(b) Condition 54-Cancellation of Contract in part or in full for contractor’s

default.
(c) Condition 55-Termination of Contract for death which stipulates :-

“Without prejudice to any of the rights or remedies under this contract, if the
contractor dies, the Accepting Officer shall have the option of terminating
the contract without compensation to the contractor.”
383
21.3.2 Ministry of Law was particularly requested to give their advice on the
following two questions :-
(a) Would it be in order to terminate the contract in accordance with

Condition 55 reproduced in para (c) above, and if so, what factors should be
examined before taking this action?
(b) How should names and addresses of legal successors be ascertained

and to whom should contractual correspondence and notices be addressed?
21.3.3 A gist of the advice of the Ministry of Law is given in Appendix 21.1. In the
light of the legal position explained therein, the Accepting Officer, instead of
proceeding to terminate the contract under Condition 55, is well advised to properly
weigh all factors and then decide whether there are good and valid reasons not to
get the work completed through the legal representative of the deceased contractor.
The distinction to be noted between Conditions 54 and 55 is that having recourse to
termination under Condition 54 is desirable because by doing so the Government
would be keeping alive their right to claim extra risk and cost amount that they may
have incurred in getting the remaining work executed through another
agency.(Applicable where there is no Performance Guarantee Provisions).
21.4 Revocation of Cancellation of Contract.
Condition 54 of General Conditions of Contracts (IAFW-2249) empowers the

Accepting Officer of the contract to cancel a contract in full or in part on contractor’s
default under the circumstances stated therein and to get the work completed by
other means at contractor’s risk and cost or invoke the Performance Security
provision clause in the contract. Cases have occurred where Accepting Officers
have revived the contract after cancelling it. While there may not be any legal
objections to the revival of cancellation of a contract for valid reasons with the
consent of both the parties, a detailed report explaining the circumstances under
which cancellation letter is withdrawn, will be rendered to the NHEA in future with a
copy endorsed to the concerned PCDA/CDA.
21.5 Deduction of Income Tax at Source.
21.5.1 GE is required to peruse the website of the Income Tax Department and keep
themselves abreast with the latest instructions on deduction of income tax at source.
GE will be responsible for issuing a certificate of tax deduction at source to the
Contractor.
21.5.2 Similarly procedure for recovery of GST/any other tax at source will be
followed by GE in accordance with the instructions of the concerned department(s)
in their website as well as instructions issued by MES. For this purpose the website
of the concerned department(s) shall be perused periodically.
21.6 Fair Wages Clause and Contractor’s Labour Regulations.
21.6.1 Fair Wage Clause. The proper enforcement of the fair wage clause and the
MES Contractors Labour Regulations will be done by Asstt. Labour Commissioner
(Central) and Labour Enforcement Officer (Central) of different regions under the
Chief Labour Commissioner. Copies of letters of acceptance of tenders shall be sent
384
to the Regional Labour Commissioner (Central) concerned. For this purpose, it

would be necessary to maintain a complete up-to-date list of Regional Labour
Commissioners with addresses and jurisdictions.
21.6.2 The Garrison Engineer shall take prompt action in rectification of

irregularities notified by the Inspecting Officers. A list of common types of
irregularities is given in Appendix 21.2. In cases of non payment or short payment
of fair wages to the workers by contractors, GEs shall take prompt action in
rectification of the irregularities by recovering the amount notified by the Labour
Officer and paying it to the workers. GEs also shall cooperate with the Inspecting
Officers and keep a constant watch with regard to proper maintenance of registers
and records and display of notices by contractors and ensure enforcement of MES
Contractors Labour Regulations forming part of the contract.
21.6.3 Copies of work orders (indicating the time limit during which the contractor
is supposed to execute the work) shall be sent to the Regional Labour
Commissioner (Central) and Labour Enforcement officer/Asst. Labour
Commissioner concerned.
21.6.4 Amount of unpaid wages withheld from contractor’s bills under the existing
MES Contractors Labour Regulations shall be paid to the labourers concerned
within 60 days from the receipt of the report from the Labour Welfare Officer or the
Regional Labour Commissioner (Appellate Authority) as the case may be.
21.6.5 MES Model Rules for protection of health and sanitary arrangements for
workers employed by the contractors have been specified in Annexure ‘C’ to IAFW-
2249. As per Condition 26 of IAFW 2249, the contractor during the progress of the
work shall comply with all the rules and provisions contained in various Acts and the
MES Model Rules and shall also arrange for the safety provisions as per the MES
Safety Code specified in Annexure 'B' to IAFW-2249. Attention is also drawn to
Condition 58 of IAFW-2249 stipulating the requirement of the contractor’s
compliance to the provisions of Labour Laws as may be applicable (appended as
Annexure ‘B’ to IAFW-2249).
21.6.6 GE being the principal employer, is responsible to ensure that the contractors
fully comply with the provisions contained in the above regulations. However, it has
been observed that there has been laxity on the part of many executives in
implementation of provisions. It shall be ensured that the principal employer during
his visit to the sites shall specifically check that the contractor is complying with the
labour laws and rules and if there are any shortcomings, action is to be taken to
rectify the same. The CWE also shall examine this aspect during inspections of
works and satisfy himself about the compliance of the Labour Laws by the
Contractors.
21.7 Contract Labour (Regulation and Abolition) Act 1970.

21.7.1 The Contract Labour (Regulation and Abolition) Act 1970 is applicable to
MES and MES contractors except that the MES will not have to take a license in
respect of labor directly employed by it. Each Garrison Engineer/Asst. Garrison
Engineer (Independent) under whom any work is being carried out through contract
has to register himself as the principal employer under the Act by payment of
necessary registration fee for registering as “Principal Employer”. With regard to the
payment of registration fee for registering as “Principal Employer”, CGDA has issued
necessary instructions to PCsDA/CsDA.
385
21.7.2 Contractors carrying out MES works shall be advised to take steps to get
their establishment registered under the Act and obtain license.
21.8 Points to be Taken Care of Before Cancellation of Contracts and

Conclusion of Risk & Cost Contracts .
21.8.1 Contracts not Having Provisions of Performance Security.

It has been experienced in the past that in number of cases where contracts were
cancelled on account of contractor’s default under pre-revised condition 54 of IAFW-
2249, the cancellation of contract was termed “illegal” or “bad in law” by the
arbitrators/courts which ultimately jeopardized Government stakes with regard to
realization of extra expenditure from defaulting contractors which the department
had to incur in getting the balance work completed at the risk and cost of the
contractors. In order to avoid such situations and other anomalies in these
eventualities, the following points shall be taken :-
(a) Before Cancellation of Contract .
(i) The cancellation of contract shall always be a last resort and not as a
matter of routine. The cancellation of a contract shall not be in “haste” or with
a prejudiced mind.
(ii) Proper and sufficient notice(s) shall be served upon the contractor as
per this Manual. Final notice before cancellation shall be served upon the
contractor by the Accepting Officer only after giving a minimum two week time
to improve existing state of affairs failing which action to cancel the contract
shall be taken immediately on expiry of notified period. For breaking open
any premises/contractors store room etc at site of cancelled contract, civil
police shall be associated along with departmental BOO.
(iii) GE shall check and ensure that there is no overpayment to the

contractor due to wrong yardstick or due to incorrect assessment of executed
work at site.
(iv) Works executed till then shall be carefully examined so that all the
defective works are notified to the contractor for rectification before cancelling
that contract.
(v) Actual scope of work required at site in respect of Provisional

schedules and items with provisional quantities shall be reassessed at site
and shall be ordered upon the contractor before cancellation since it has got
direct bearing in determining risk & cost amount from the defaulting
contractor.
(vi) A caveat shall be filed in appropriate court before cancellation of

contract through Government pleader so that contractor does not obtain any
ex-parte stay against the department either to cancel the contract or against
conclusion of risk and cost contract.
386
(vii) Wherever a contract is not progressing satisfactorily and a

cancellation is contemplated (which shall be last resort only), the Accepting
Officer shall make a presentation to the NHEA with full details before taking
final decision in the matter. Users may also be kept informed about the
developments in the matter including all pros and cons as a consequence of
cancellation.
(viii) The NHEA shall evaluate the case as a whole including the details of
lapses on the part of the department which are likely to be exploited by the
contractor during the arbitration proceedings against the Govt. If it is
considered that the contractor is entitled to an extension of time, he shall
advise the Accepting Officer to enter into a supplementary agreement
through an amendment to the contract where the contract period shall be re-
fixed after taking into account all aspects of the case and it shall be made
clear in the supplementary agreement that time is the essence of the contract.
After expiry of revised completion period, if the contractor fails to complete
the work, the same should be cancelled due to contractor’s default
immediately after expiry of due date as per notice.
(b) Immediately after Cancellation of Contract.
(i) BOO ordered to identify details of complete/incomplete items of work

shall be finalized within one month after cancellation. As far as possible, the
defaulting contractor shall be associated with preparation of above inventory.
Where contractor neglects to sign Board Proceedings or does not involve
himself in preparation of inventory/Board proceedings in respect of
complete/incomplete items of work and materials and T&P lying at site, a
copy of approved Board Proceedings based upon which risk and cost tender
is to be framed, shall be sent to the contractor under Registered AD post with
request to submit his objections, if any, on the Board Proceedings within a
period of fifteen days.
(ii) Cases of overpayment/other irregularities, if any, shall be

simultaneously progressed without delaying risk and cost tender action.
(iii) Risk and cost tender framed must be a true replica of the original
contract with reference to terms & conditions.
(iv) Proper watch and ward of executed works/materials lying at

site/contractor’s T&P etc has to be ensured by the GE. In case of any theft
etc action to lodge FIR with Civil Police has to be initiated by the GE.
(v) Period of completion for left over work shall commensurate with the
period of completion originally given in the contract.
(vi) Extra works which are not covered in the original scope of contract
shall be excluded in the scope of risk and cost tender.
(vii) Risk and cost tender shall be concluded on priority after cancellation
of the original contract.
(viii) Selection of contractors for risk and cost tender and justification of
accepted rates in respect of risk and cost tender shall be kept on record after
due and proper analysis.
387
(ix) Action for recoveries for the risk and cost amount from the defaulting
contractors and particulars for appointment of arbitrator to settle disputes with
the defaulting contractor (in case he refuses Government’s recovery towards
risk and cost) shall be initiated immediately after conclusion of risk and cost
tender.
(x) Final bill of cancelled contract including detailed working of risk and
cost amount recoverable from the defaulting contractor shall be finalised on
priority for production during arbitration proceeding.
(xi) After cancellation of contract, the Accepting Officer shall contact the
manufacturer of plants and machinery left over by the contractor/or reputed
valuers to ascertain its residual value in a very transparent manner. This
action shall be taken concurrently while Board of Officers are preparing the
inventory for complete and incomplete items of work. After ascertaining the
value of T&P and machinery as suggested above, the Accepting Officer shall
ask the defaulting contractor to furnish irrevocable Bank Guarantee Bond of
equal amount in favour of Government and take away the machinery failing
which the Government shall not be responsible for any deterioration of T&P
and machinery. In case the defaulting contractor does not respond to the
Government’s proposal to furnish the BGB, action shall be taken to properly
secure/protect the T&P till the risk and cost contract is concluded.
(xii) In addition to written documentary records, the Board of Officers shall

also prepare photographic records of work as well as materials, T&P and
other machinery at site. In case of specialist works like Runways etc where
use of T&P and machinery is huge, efforts shall be made to ascertain details
of T&P and machinery viz. make, model number, residual value etc at the
time of initial stage of the work itself.
(xiii) Immediately after conclusion of risk and cost contract, (without waiting
for completion of left over work) the amount recoverable from the defaulting
contractor towards completion of left over work shall be worked out and
consequently the following actions shall be taken :-
(aa) The risk and cost amount shall be notified to the contractor,
asking him to deposit the same in Government treasury through MRO
failing which the Government shall proceed further in the matter as per
the terms and conditions of the contract.
(ab) Another notice shall be served on the contractor, asking him to

furnish the BGB of the equal amount of the residual value of T&P and
machinery by a specified date failing which Government shall dispose of
the T&P and credit the proceeds in the account of the contractor. If the
contractor again fails or neglects to respond, the Accepting Officer shall
give an open advertisement in the newspaper for disposal of the T&P and
machinery through auctioning and the same shall be sold to the highest
bidder and proceeds of the auction shall be credited to the contractor’s
account. Specific notice will also be given to the defaulting contractor to
participate in open auctioning if he so desires.
388
(ac) In case Contractor disputes the Govt claim for risk and cost or
neglects to respond, immediate action shall be taken to establish the
Government claim by invoking the arbitration.
21.8.2 Contracts Having Provisions of Performance Security.

All above instructions/guidelines shall generally be applicable in letter and spirit in
this case also except the following :
(a) The tender for the balance work shall not be at Risk & Cost of the
original contractor.
(b) There is no requirement of notifying recovery due to the Risk & Cost
contract, to the original contractor. The provisions of forfeiture of
Performance Security, Retention Money and confiscation of T&P and
materials of the defaulting contractor lying at site shall be applicable as
stipulated in revised condition 54 of IAFW-2249/revised condition of IAFW-
1815Z (as applicable for the type of contract).
389
Appendix 21.1
ADVICE OF MINISTRY OF LAW WITH REGARD TO
A) Applicability of Conditions 54 & 55 of MES General Conditions of Contracts

(IAFW-2249) in the Event of Contractor’s Death
AND
B) Procedure to be Followed for Obtaining Names and Addresses of Legal
Successors of the Deceased.
1. Under Section 37 of Indian Contract Act, the parties to contract must either perform
or offer to perform the respective promises, unless such performance is dispensed with
or excused under the provisions of law. The section goes on to make it clear that
promises bind the representatives of the promisor in case of death of such promisor
before performance unless a contrary intention appears from the contract. The terms of
the Act have given two illustrations to this section. The first illustration is in respect of a
contract to deliver goods to a party on a certain day on payment of a fixed price. It has
been explained in the illustration that the representatives of a contractor are bound to
deliver the goods upon payment. The second illustration relates to the promise to paint
a picture which from the very contract is predicative of the personal skill and abilities of
the contractor. In the event of the death of the painter, it is obvious that the legal
representatives of the painter cannot be required to perform the completion of the work
which the deceased painter had promised to do.
2. The terms of the contract in question (which is for construction of buildings with
connected services) have to be examined in the light of the above two illustrations read
with section 40 of the Indian Contract Act which say that it appears from the nature of
the case that it was the intention of the parties to any contract that any promise
contained in it should be performed by the promisor himself and such promise must be
performed by the promisor. In other cases, the promisor or his representative may
employ a competent person to perform it.
3. The term “Contractor” had been defined in Condition 1 (e) of IAFW-2249 which
specifically includes the legal representative of the contractor.
4. The contract in question is a building construction contract and the execution of the
work does not involve any specialised equipment or training which could not ordinarily
be expected of an average building contractor. The work does not involve special skill
as in the case of murals or paintings. Thus it can be said that the builder's executors
would be bound to perform the contract or complete the work because they have only
to procure workmen of ordinary competence and, as such, the legal representatives of
the deceased contractor would be liable to perform the contract.
5. In view of the above, the answer to question (A) is that it will not be in order to
terminate the contract in accordance with Condition 55 of IAFW-2249.
6. With regard to (B), the following procedure may be adopted :
(a) Inquiries may be made from the sons and daughters, as known, as to
whether their father has left any widow or other legal representative. (The
competitors of the deceased contractor in the field may provide a good source of
information on this issue). If anyone claims to be the legal representative, he should
be asked to obtain a succession certificate from the court. No payment shall be
390
made to any creditor till he brings a court attachment order. If one of the sons claims
to speak on behalf of all legal representatives, he shall be questioned as to the
authority. Such a legal representative must hold a power of attorney on behalf of the
other legal representatives on whose behalf he intends to negotiate financial
transactions.
(b) Alternatively, in order to ascertain the correct legal representatives of the

deceased contractor, an advertisement on the following lines may be inserted in the
papers:
“Whereas Shri …......……...........…….………. s/o ……….…......……............………………

residing at
………………………..............................................................................................................
...……who was engaged as a contractor for carrying out certain work of the Military
Engineer Services by the President of India is reported to have died on ……………………
And whereas the Department is aware only of existence of the following legal
representatives of the deceased :
1. …………………………………
2. …………………………………
3. …………………………………
And whereas the Department is interested in knowing the names of all the legal
representatives of the deceased with a view to decide the further course of action relating
to the aforementioned contracts, NOTICE is hereby given to all persons claiming to be the
legal representatives of the deceased contractor that they should indicate their names and
addresses to …............….. by ….......…”
391
Appendix 21.2
COMMON TYPES OF IRREGULARITIES IN LABOUR

REGULATION IMPLEMENTATION
1. Non display of notice regarding wages and hours of work.
2. Non-maintenance of wages register.
3. Non-maintenance of wages slip/card.
4. Non-maintenance of fines register.
5. Non- maintenance of deductions register.
6. Non-display of acts and concessions for which fines can be imposed.
7. Delay in payment of wages.
8. Non-payment of wages.
9. Irregular imposition of fines.
10. Irregular deduction of wages.
LIST OF COMMON IRREGULARITIES OBSERVED BY

CHIEF LABOUR COMMISSIONER (CENTRAL)
1. Notices showing the rates of wages, hours of work, wage periods, dates of payments
of wages, names and addresses of inspectors having jurisdiction and details of payment
of unpaid wages required to be displayed in English and Hindi and local language
understood by the majority of the workers in conspicuous place at the establishment
were not displayed–Rule 81 (1) and copy of this notice is not sent to Inspector–Rule
81(2).
2. Date of commencement and completion of each contract work is not intimated to

the Inspector-Rule 81(3).
3. Register of contracts is not maintained in Form XII.
4. Change in the particulars specified in the certificate of registration is not intimated

to registering officer- Rule 18 (4).
5. Principal Employer’s representative has not been nominated/not ensured presence

of authorised representative to witness payment of contract worker/has not endorsed
requisite certificate in the register of wages.
6. Drinking water facility/canteen not provided at the workplace.
7. Annual Return in duplicate not submitted in Form XXV within the prescribed time as
per Rule 82 (2).
8. Copy of registration certificate not displayed.
9. Principal Employer’s failure to make an application for registration of the

establishment.
Note : The above list is not exhaustive, only common irregularities are listed. All
instructions and labour laws/rules shall be complied with.
Part-III
POST CONTRACT STAGE
392
SECTION 22
TECHNICAL EXAMINATION ORGANISATION

INTRODUCTION, ORGANISATION, COMMAND AND CONTROL & CHARTER OF
DUTIES
22.1 Introduction.
The Controller of Technical Examination Organisation was created in the year 1935 for
carrying out test checks for the works executed for MoD which was upgraded to Additional
Director General Technical Examination (ADGTE) in 1949 and functions under the QMG
Branch. The object of this organisation is to ensure that the works executed for MoD (Army,
Navy, Air Force) including DGNP, Coast Guard, DRDO, CCE (Project), Naval Projects
and Deposit Works executed by MES etc are of specified quality as given in the contract,
adhering to the relevant IS Codes and Sound Engineering Practice. The purpose of this
organisation is to suggest corrective measures for the deficiencies and short
comings observed during the inspections. Emphasis of the inspections is to ensure
good quality work and where poor quality is observed, suggest measures to rectify the bad
work.
22.2 Organisation.
22.2.1 ADGTE heads the organisation with its HQ situated at Kashmir House, New
Delhi and works under QMG. ADGTE is assisted by a team of officers comprising of
the following;-
(a) Jt DG TE
(b) Dir TE
(c) Jt Dir TE
(d) TE
22.2.2 The Command STE formations are co-located with respective Command HQ
except Southern Command which has one additional STE formation at Chennai due
to larger Area of Responsibility (AOR). Each STE Command has TEs with one
officer from B/R, E/M, and Surveyor cadre.The location and break up of each STE
Command is as under:-
Command Location STE

Northern Jammu Colonel
Western Chandigarh Colonel
South Western Jaipur SE (QS & C)
Central Lucknow SE
Eastern Kolkata Colonel
Southern Pune SE
Southern Chennai Colonel
22.3 Area of Responsibility.
The area of responsibility of each STE Command is almost same as of

respectiveCommand HQ (Army) except for few stations due to proximity of MES
formations. The MES formations supporting Navy, Air force and DRDO have been
distributed considering geographical location and travel time by maintaining unity of
Command.
393
22.4 Command and Control.
The ADGTE organisation functions under the direct command and control of QMG
for all purposes except for postings and transfers of the officers and staff which is
done by E-in-C’s Branch/MS-12.
22.5 Charter of Duties.
22.5.1 The Charter Of ADGTE & STE is given Appendix 22.1, the brief Charter is as
under :-
(a) ADGTE.
(i) Perform the functions of Head of TE organisation.
(ii) Site examination of works with the team of STE during progress and
after completion.
(iii) Submit periodical report to QMG on inspection of works.
(iv) Liaise with three Service HQs, E-in-C’s Branch, DRDO, DG Coast
Guard.
(v) Initiate Draft Para (DP) and Serious Case (SC).
(vi) Scrutinize selected contracts concluded by the CEs Zone/CCEs.
(vii) Tech check of percentage of final bills.
(b) STE/TE.
(i) Site examination of works with team of officers.
(ii) Scrutinize selected contracts.
(iii) Raise observations based on team inspection reports.
(iv) Obtain user feedback on observations rectified by MES.
(v) Settle observations based on replies of CE Zones.
(vi) Interact with PMG, Command CEs and staff of Command HQs.
394
Appendix 22.1
Copy of MOD Letter PCIF No 98/46/Q/CTE/1312/D (W-II) dated 08 April 85
CHARTER FOR ADDITIONAL DIRECTORATE GENERAL OF TECHNICAL

EXAMINATION REVISION REGARDING
1. Kindly refer to the revised charter for the Technical Examination Branch (now
redesignated as Additional Directorate General Technical Examination) issued under
Government of India, Ministry of Defence Letter No 9 (2) 58/PC 79/OSD (Works) /11105/D
(W-II) dated the 24th November 1965. As a result of recommendation No 58 of the Estimates
Committee (1981-82) of the 7thLokSabha and experience gained from the working of this
charter during the last few years, it has been found necessary to enlarge the scope of the
charter and to amend it so as to define clearly the duties and responsibilities of the
Additional Directorate General Technical Examination with regard to MES works and
contracts.
2. The President has given the sanction to the revised charter of the Additional
Directorate General Technical Examination as shown in Appendix “A” to this letter. This will
take immediate effect.
3. This issues with the concurrence of the Ministry of Defence (Finance) vide their U.O.
No 452/ WI of 1985.
APP. 'A' TO MOD LETTER DATED 08 APRIL 85
CHARTER FOR THE TECHNICAL EXAMINATION BRANCH
1. General.
The Technical Examination Branch under the Additional Director General of

Technical Examination (Defence) at Army HQ is responsible for:-
(a) Site examination of works after completion as also during their

progress.
(b) Checking a percentage of concluded contracts and amendment

thereto.
(c) Examination of percentage of bills after payment.
(d) Checking a percentage of supply orders for stores procured for works and
maintenance services other than those through DGS&D sources.
2. Site Examination of Works.
The AddlDte Gen TE/STEs (Defence) will site examine some of the works during
their progress as also after completion, but preferably before the expiry of Defects
Liability Period to see that the works have been executed in accordance with the
terms of contract and the quantity and quality of various classes of works set forth in
the agreement on which payment is claimed, do in fact represent the quantity and
395
quality of works actually executed. They will also watch whether wide deviations from
agreements resulting in large undue benefit to the contractors have been ordered.
They will further see whether time of completion of works is in accordance with terms
of contract and extensions of time, if granted, have proper justification.
3. Contracts.
Technical Examination Branch will check a percentage of concluded contracts and

amendments thereto with the object of detecting any ambiguity in description of any
item or specification which is likely to lead to extra claims form contractors. This
check should, if possible, be exercised as soon as possible after receipt of contract
in CDA’s office so that any remedial action necessary, can be taken in time. The
Technical Examination Branch will also scrutinize contracts and amendments to see
if excessive rates have been allowed.
4. Final Bills.
Technical Examination Branch will examine a percentage of bills after payment.

Check of final bills will be completed generally within 3 months of their receipt by the
Technical Examination Branch so that objections raised may be dealt with the staff
who carried out the work. This check will be from bills, measurement books,
deviations and other documents. If necessary, the Technical Examination Branch
staff may also visit site of work for an on-the-spot check.
5. Supply Order for Stores.
The Technical Examination Branch will check a percentage of supply orders for
stores procured for works and maintenance services other than those through
DGS&D sources to see whether there is any ambiguity in the description which may
lead to supply of substandard stores and to see if excessive rates have been allowed.
6. Method of Working.
(a) The Technical Examination Branch will work in close liaison with Controller of
Defence Accounts.
(b) The Addl. DGTE (Defence) will bring to notice of E-in-C serious irregularities
observed during technical examination of works and similarly STEs (Defence) at
Commands will bring such irregularities to the notice of Chief Engineers.
(c) The Branch will be supplied with full information and its visiting Examiners
afforded every assistance by complying with their demands for pertinent documents
and any other information which they may require.
(d) The Addl. DGTE/STEs (Defence) will forward draft para of their report to the
concerned CWE with copy to the GE in respect of observations accepted by the
MES. The CsWE will forward their comments to the Addl. DGTE. The Addl DGTE
will modify the draft paras to incorporate the comments/views of the CWE as may be
warranted before inclusion of such paras in his report, submitted to the QMG. Copies
of the report will be sent to E-in-C, CGDA, DADs and Ministries of Defence and
Finance (Defence).
396
(e) Observations as a result of examination of works/contracts/final bills/supply

orders will be forwarded by STEs (Defence) to the MES. It will be the joint
responsibility of the MES and the Technical Examination Branch to progress and
finalise the observations expeditiously. MES will take follow-up actions including
recovery arising out of the observations settled.
(f) In case of disagreements at lower levels, the STEs (Defence) will take up the
cases upto the level of CE. If disagreement persists, the Addl. DGTE (Defence) will
take up such cases with E-in-C. Decision of the E-in-C will be accepted by all
concerned.
Notes.
(i) The operations of the Technical Examination Branch are in the nature of the
test check only and do not reduce the responsibility of officers of the MES.
(ii) The functions of this Branch do not include enquiry into the suitability of
designs, specifications or conditions of contract. However Addl. DG TE/STEs
(Defence) will give suggestions to MES for improvement in planning, designing and
specifications of works for ensuring speedier and more economic execution of works.
These will be given by Addl. DG TE (Defence) to E-in-C and the STEs (Defence) to
Chief Engineers. MES will analyse the suggestions and take suitable further action
where necessary.
(iii) This Branch will not deal with the contractors either in person or through
correspondence. No reference should be made to the Addl. DG TE’s organisation by
the MES in their correspondence with the contractors or inarbitration cases.
397
SECTION 23
VISITS AND INSPECTIONS, TECHNICAL EXAMINATION, FORMULATION OF

OBSERVATIONS & INTERACTION WITH STAFF
23.1 General.
23.1.1 It is not possible for the TE organisation to check each and every work
executed by the construction agency. Further, MES has a system in place to
carry out periodic checks by next higher formations. However, the officers of TE
organisation inspecting the works will also be responsible to the extent applicable for
any shortcomings observed at a later date. Therefore, emphasis of inspection is on
quality inspections rather than quantity. Intensive inspections are to be carried out of
selected works covering all aspectsby entire team of STE formation.
23.1.2 It will be the responsibility of Zonal CE to ensure that all points observed by
the TE organization during inspections are applied to all other ongoing works in their
AOR.
23.2 Guidelines for Inspections.
(a) Inspections shall be carried out periodically by entire team of STE office
comprising B/R, E/M, Contract and Arch officers.
(b) The criteria for selection of proposed works for inspection will be :
(i) Amount of contract and magnitude of work.

(ii) Based on available input from environment.
(iii) % progress of work:-
(aa) Minimum 30% to 50% physical progress for first inspection.
(ab) Minimum 70% physical progress but within Defect Liability
Period (DLP) for review inspection.
(c) In every inspection, only one work each of CE, CWE, GE shall be inspected.
(d) Additional work may be inspected by STE team on specific request from
Station Commander.
(e) STE team will carry out review inspection of previously inspected work while
visiting nearby Station.
(f) March and August will be kept for settlement of observations and during this
period no inspection will be undertaken by STE team.
(g) At least one contract apart from building works i.e. furniture, road,
electrification, water supply and periodical services in a station will be selected for
check.
(h) No work shall be checked more than twice. In exceptional and specific cases,
prior approval of ADGTE shall be sought before carrying out further check.
398
(j) Before and after the inspection, STE shall meet the Station Commander.
(k) Good quality work, innovative practices & adherence to PDC/timely

completion will be appreciated and highlighted in the inspection report.
(l) Advisory on shortcomings and hindrance on account of user and PMG will
also be factually reported in the factual notes.
(m) No work will be inspected by less than three officers.
(n) Whenever ADGTE or any other officer is detailed for inspections, he will be
accompanied by the complete team of STE.
23.3 Conduct of Inspection.
23.3.1 On arrival at the Station for inspection, STE Team will meet the Station
Commander along with GE and apprise him about the works proposed to be
inspected. The purpose of this meeting is to obtain the users point of view for the
works and in case any additional feedback is required from the users, it may be
obtained prior to the inspection.
23.3.2 After obtaining the feedback from the users, the STE team will go the
selected site and the GE will give a presentation to the team bringing out the salient
points of the work and the points of the users and the contractor. This
presentation will be attended by the PMG, site executives, and the contractor.
Intensive site inspection will be carried out by the team of officers with special
emphasis on the specialization of each officers viz the Contract Officer will thoroughly
scrutinize the contract agreement, E/M officer will check the works pertaining to the
trade and so on. However, if during inspection, any point is noticed by any officer
outside his trade, the same shall be reflected/discussed during the site inspection.
23.3.3 All suggestions/recommendations of Station Commander/users/PMG will be

reflected in factual notes prepared after the inspection which will be signed by the
site executives, CWE’s/CE’s representative, contractor and the team members of the
inspecting officers. After the inspection, STE along with his team will meet the users
rep/Station Commander and hand over a copy of the factual notes to ensure that all
points projected by the users are covered in the inspection.
23.3.4 On written request of Station Commander, additional works may be inspected

by the team of STE. In no case more than two additional works will be undertaken
for inspection by the team in one station.
23.3.5 GE and the contractor shall be given an opportunity to show good quality
work when the inspection team points at bad work. These will also be clearly
reflected in the factual notes.
23.3.6 GE and the contractor will be given an opportunity be indicate hindrances

from user and lack of support from the PMG/Station HQ, if any. The same will be
verified by STE Team and clearly reflected in the factual notes.
399
23.4 Verification of Rectification of Defects.
23.4.1 Observations must be supported with digital photographic record for

reference in next visit. This will facilitate confirmation of defect rectification. If
verification reveals that the rectifications as confirmed have not been carried out,
then a Serious Case should be published in the Quarterly Report.
23.5 Scrutiny of Contract Agreements.
23.5.1 STEs will ask soft copy of accepted CA with all amendments directly from
Accepting Officer and carry out scrutiny of CA. Only ambiguities having substantial
financial implications in the contract and impacting quality of work shall be raised.
23.5.2 STEs will not ask MES authorities for details in support of reasonability of the
rates/ amounts accepted. Observations on unreasonability of rates will be taken only
if STEs are sure in their mind, with the information available with them, that the rates
accepted are unreasonable and are in a position to give their reasonable rates.
23.6 Site Examination of Works.
23.6.1 The aim of site examination of works is to detect poor quality material or poor
quality work carried out at site. The effectiveness of site examination of works will, to
a large extent, depend on meticulous and systematic preparatory work which
entails:-
(a) Going through contract agreements in detail.
(b) Closely studying relevant provisions in SSR, Indian Standard

Specifications/Codes etc.
(c) Listing out points to be verified and checked at site taking into account
anticipated progress at site.
23.6.2 Serious cases will be brought to the notice of the CE, CWE and also reported
to ADGTE HQ specifically in a separate communication in respect of works which
have not been accepted by users due to major defects or works in which construction
failures/serious defects have occurred.
23.6.3 Once a work has been selected for inspection, it will be checked thoroughly
so that no defects and irregularities are left out. Inspecting team shall be also held
accountable if defects are noticed subsequently.
23.6.4 The factual site inspection notes shall be elaborate and indicate the quantum
of defective work. Report of site test conducted by inspection team will also be
endorsed along with digital photographic record in a CD.
23.6.5 The observations in factual notes shall be divided into Minor, Major, Special
Observation, Contractual and Advisory. The factual notes will be signed by
Inspection team, GE, Rep of CWE, Rep of CE and contractor.One copy of the signed
factual site notes will be kept by each of the signatory. Once the statement of facts
as per the site notes is agreed upon between the team of STE, MES executives and
contractor, the same will constitute a firm basis for subsequent formulation and
finalization of observations.
400
23.6.6 The factual notes are, therefore, very important documents and must be
prepared with utmost care. These must be:-
(a) Strictly factual indication as to what exists at site.
(b) Indicating exact location and extent of defects.
(c) The defects shall be defined with respect to qualitative parameters like
strength, shape, size, grading, make, thickness etc as per site to frame the
observation precisely.
23.6.7 The actual quantity of defective work involved in an observation shall be

ascertained before leaving the station, which shall be the basis of assessment by
checking number of places selected by the STE as well as by MES before
incorporating in the factual notes.
23.6.8 If it is intended to make a particular defect applicable to the entire work under
the contract, GE and the contractor shall be given opportunity to show similar work
executed under the same contract conforming to the standards laid down in the
contract.
23.6.9 All site information required for arriving at facts must be collected before
leaving the station instead of asking for such particulars on return to the STE’s HQ.
23.6.10 During visit to site, deviation orders, amendments particularly regarding

relaxation of original provisions in the contract, changes in the scope of work etc,
which are likely to bebeneficial to contractors must be looked into for the reasons &
method of pricing and discussed as related to the site conditions. Measurement
books etc. may also be looked into for inconsistencies.
23.6.11 STE and his team while visiting a work shall inspect site documents such
as Works Diary, Works Passing Register, Test Register, Works Site Order Book and
the like, and the GE/ Engineer-in-Charge can be asked to show the same at the site
of work. When the work has been completed, STE can have a look at the site
documents, if he so desires at the GE’s office. It shall be checked whether the work
was inspected by CE/CWE and nature of remark to confirm whether adequate
opportunity has been given to contractor for the rectification of the defects.
23.7 Vouchers/Test Certificates.
23.7.1 Vouchers, test certificate etc will not be called for once the inspection is
completed. These shall be reflected in the observations as vouchers/test certificates
are not held with executive.
23.7.2 At times it transpires that products, although bearing ISI certification mark,
are not actually found conforming to the IS and are of sub-standard quality. Where
STE has good reasons to doubt the quality of any item, samples thereof may be
selected and sealed jointly with the MES Rep and contractor for getting the same
tested from reputed NABL accredited labs/IITs.
401
23.8 Inspection of Works-Special Reports.
23.8.1 ADGTE's organisation is at times asked by Ministry/Service

Headquarters/users/E-in-C to site examine specific works and submit report. Such
requirement generally originates from users dissatisfaction with the quality of works
executed.
23.8.2 In such cases, STE shall study the contract agreement thoroughly before
going for site examination. The staff authorities and senior users shall also be
contacted to ascertain their specific complaints, if any, and if possible, they shall be
requested to accompany the team of officers at the time of site inspection.
23.8.3 The complaint may be either in respect of materials and workmanship and /
or in respect of planning and design. All such points shall be examined by the
inspecting team apart from other defects and lapses that may be detected by them.
Exact causes of the defects shall be found out including those originating from
planning and design. Remedial measures being taken by the MES with regards to
all such defects shall also be ascertained.
23.9 Checking of Paid Final Bills/RARs.
23.9.1 A minimum of one paid bill under each CE Zone per quarter and one bill each
of CWE and any one GE under the CE will be checked by the STE/TE. The check
will be from bills, measurement books, deviation orders, and other documents. The
check shall be carried out soon after the paid bills are received from Principal
CDA/CDA office and observations progressed expeditiously. All efforts shall be
made to finalize the observations expeditiously so that adjustment can be made by
MES within two years of payment of final bills.
23.10 Formulation and Issue of Observations.
(a) Each observation will have a serial number. Grouping of several observations
for different items of trade as sub item of the same serial number such as 2(a), 2(b),
2(c), 2(d), 2(e) etc shall not be done.
(b) Minor observations shall be included under separate Para in factual notes and
shall not be monitored by STE.
23.11 Minor Observations.
All single observations likely to have financial effect less than Rs 10,000/- in CE
contracts, Rs 5000/- in CWE contracts and Rs 3000/- in GE contracts will be treated
as minor observations. These will be pointed out to GE and CWE, leaving it to the
CWE to take further action on the same as he deems fit. These shall be included in
factual notes under separate Para. Apart from the first intimation of the observations,
no further correspondence or monitoring progress will be done by STEs in respect
of such minor observations. Once the observation is declared as minor by the GE
based on the financial effect, STE shall no way be responsible for the settlement of
the observation. Minor observations will not be considered by the STE in his list of
pending observations. The amount at which the minor observations are settled by
the GE/CWE/CE shall not be considered by the STE in deciding the overpayment for
inclusion in Draft Para.
402
23.12 Major Observations.
23.12.1 The observations having financial effect beyond the limits laid down for
minor observations are Major Observations. These shall be monitored by STE. The
observation letter consequent to site check of works will be issued within one week
of carrying out the inspection. The observations arising from site check must be
based on factual site notes.
23.12.2 The observation letters will be signed by STEs. Similarly the settlement of
the observations will be decided and letter signed by the STE only and not by TE.
Letters signed by TEs and countersigned by STEs are not acceptable.
23.12.3 Framing of observations must be precise, clear, and quantified, bringing out
the lapses and defects of the defective work. As far as possible, emphasis shall be
on rectification of defects rather than the recoveries. The cases where rectification
is not feasible but the work is able to meet safety requirement and functional
requirement, devaluations or price adjustment may be accepted. Extent of
devaluation shall be finalized at site based on factual assessment.
23.13 Observations on Scrutiny of Contract Agreements.
23.13.1 Observations on drafting of Contract Agreements, amendments to contracts,

approval to deviation orders or other decisions will be addressed directly to the
Accepting Officer, because a GE may not be in a position to offer a clarification in
respect of actions of the Accepting Officers.
23.13.2 Where more than one contract is involved in respect of a particular

observation, the Accepting Officer shall be apprised of it so that the finalized action
is made applicable to the other contracts also. This will avoid repetition in
correspondence.
23.13.3 If the lapse noticed is of recurring nature, the concerned formation may be
requested to take suitable steps for preventing the recurrence.
23.14 Special Observations.
The factual statement will be scrutinized and the observations likely to have an
overpayment of more than five percent of the contract amount or Rs 75,000/-
whichever is less, on a particular observation under one contract will beside lined
and marked on the office copy as ‘Special’ and initialed by the STE. Thereafter draft
of a separate detailed and self-explanatory letter will be addressed to the ADG TE.
The special observation will be issued by the ADGTE to the Accepting Officer after
due scrutiny. The copy of special observation shall be given to CE Command and
DGW. An effective watch must be maintained on the progress of the special
observations.
23.15 STE Interaction with Station Commanders.
23.15.1 A copy of tour programme of STE and his team will also be sent to Station
HQ in addition to the concerned MES executives. The GE/CWE would ensure that
meeting is fixed between the Station Commander and the visiting STE/TE.
403
23.15.2 After inspection, STE shall inform Station Commander about major defects
in quality of work and serious lapses if any, observed during the current inspection.
STE will also bring out discrepancies in BPs, lack of co-operation from user and
highlight the cases where Station Commander’s intervention may be necessary for
expediting completion of the work (eg delay in handing over of the sites by the users).
The additional support required by MES/Contractor to expedite the work and clear
bottlenecks shall be brought to the notice of Station Commander.
23.16 STE Interaction with Station HQ after Return to HQ.
23.16.1 After return of STE to his HQ, the STE will formulate observations based on
factual site notes and address the same to the GE with copies to CWE/CE Zone and
ADG TE HQ as per the existing instructions. In addition, a contract wise list will be
compiled listing out the defects observed requiring rectification/replacement of sub-
standard materials and workmanship. These lists will be forwarded by STE to the
Station HQ with copies to all addressees. The defects shall be described in a clear
manner which can be understood by staff.
23.16.2 While forwarding the list of rectifications, the STE will request the Station
HQ to monitor the progress of rectifications and to ensure that the defects are
rectified within two months and intimation of completion/progress is sent to the STE.
23.17 STE Presentation to Command HQ.
STEs shall brief CE Command and COS of Command HQ about state of

infrastructure in Command AOR in every quarter. STE will also apprise the staff at
Command HQ about details of inspection carried out in recent past and apprise them
about:-
(a) Serious lapses/defects observed during technical examinations.

(b) Anomalies observed in the board proceeding stage.
(c) The specific station issues creating bottlenecks and delaying progress of
work.
23.18 Verification of Rectification of Defects.
During subsequent visits to the Station by STE/TE, confirmation about rectification

of defects shall be verified on test check basis and results recorded jointly with the
MES representative accompanying the STE/TE. Where verification reveals that the
rectifications have not been carried out the same will be informed to the Station
Commander, Zonal CE and serious case shall be initiated for approval of ADG TE.
23.19 Progressing of Observations.
GE is fully responsible for progressing, finalization and settlement of observations.

The minor observations will be settled within 3 months. The major observations must
be settled within a maximum period of six months of raising them.
23.20 Monitoring at Integrated Headquarter of Defence Level.
Necessity for expeditious follow up action on the case being reported by ADGTE and
on the suggestions for improvement is of prime importance. Targets for disposal of
cases shall be as under:-
404
(a) All efforts will be made to finally dispose of cases referred by ADGTE
to E-in-C’s Branch within a period of four months. However, in case where the
responsibility for lapse on the part of executives and contractor has to be fixed
through investigation, this time may be extended up to six months.
(b) Action required, if any, against staff and contractors shall commence
immediately after the investigations. Cases requiring action against service
personnel and regularization of losses shall be reported to the staff at the
appropriate level and for all MES CGO the same will be undertaken by E-in-
C’s Branch (D&V) with MoD.
(c) Feedback on recommendation / suggestions of ADGTE for

improvement in specifications, contract administration etc. shall be forwarded
by E-in-C’s Branch to ADGTE within period of two months. However, where
inputs are required to be obtained from lower formations, this period may be
extended up to three months.
(d) To monitor the above action, a meeting between DGW and ADGTE will
be held once in three months.
23.21 Monitoring at Command Level.
STE should liaise with Staff at Command HQ and evolve suitable monitoring system
with a view to achieve the desired results. Bi-Monthly/Quarterly meetings (as may
be decided by Command HQs) with Brig Q, ACE (Wks), Jt DG
(Contract)/Dir(Contract) and STE would be useful to monitor and expedite the
following issues:-
(a) No of observations outstanding for more than one year.
(b) Follow up action on special observations, serious cases and draft

paras.
(c) Draft Para (DP) and Serious cases observed during current
inspections.
(d) Cases in which no replies are forthcoming from Zonal CEs/CsWE/GEs.
(e) Progress on implementation of suggestions/recommendations being

made in ADGTE Quarterly Reports.
(e) Response from Station HQs to reports being sent to them after
inspection.
(f) STE shall maintain detailed record of discussions and issue minutes of
the meeting and copies of the minutes shall be sent to ADGTE’s HQ as well.
405
23.22 Periodical Meetings between STE/TE and CWE.
CWE and STE/TE shall arrange meetings once in six months. At least six weeks
before such meetings, the STE will furnish a list of outstanding observations to the
concerned CWE. STE/TE will discuss these observations to arrive at settlement and
cater for the time required for this purpose in tour programme. Such meetings will
preferably be attended by all concerned staff required for discussions and settlement
of observations. The purpose is to liquidate as many outstanding observations as
possible during such meetings. After such meetings, the CWE will render a report to
the Zonal CE indicating the position of observations as follows:-
(a) No of observations outstanding before the discussions.
(b) No of observations settled during discussions.
(c) No of observations outstanding after discussion.
(d) No of outstanding observations where replies have been sent to STE and
number where replies have not yet been given with reasons for delay in
replying.
23.23 On receipt of details from the STE/TE/ATE, the recoveries in respect of items agreed
to by the GE shall be finalized in consultation with the CWE, where necessary
(CWE’s concurrence shall be obtained where the financial effect of the observation
in respect of an individual item exceed Rs 5,000/- and where the total of all
observations exceed Rs 25,000/-) and the correct financial effect intimated to the
contractor. At the same time it shall be got confirmed from the STE/TE/ATE that he
has covered all the points noted during his visit.
23.24 Before finally agreeing to any recovery suggested by the ADGTE/STE/TE, it is
necessary that the matter is taken up with the contractor concerned and his point of
view carefully examined. In order to bring the matter to a finality, the following line of
action shall be adopted:-
(a) Address a letter to the contractor, with a provision that unless his reply
is received by (date), it will be assumed that he has no objection to the
recovery.
(b) If the contractor fails to reply by the specified date, the recovery shall
be deemed to be agreed by the contractor and action for its realization
initiated, with intimation to the Contractor.
(c) In case the contractor replies and disagrees with the recovery, his
reasoning shall be examined and if found convincing, the matter shall be taken
up again with the STE/ADGTE.
(d) If Contractor’s reasoning is not acceptable, before or after referring to the

ADGTE/STE, a final letter shall be issued to the contractor intimating that
Government does not agree to his contention and that he shall pay the amount
by….. (date), failing which it would be realized by other means (such as “from
other dues” or from Security Deposit, etc as applicable).
406
Note: It is important that letters to the contractor are sent under Registered
Ack Due, cover and postal acknowledgments retained in safe custody.
23.25 STE's/TE’s/ATE’s observations must be received during the currency of the contract
or before payment of the final bills, so that the GE/CWE obtain contractor’s reaction
by personal contact after issue of the letter as suggested above. In terms of Para (g)
of Condition 67 of General Conditions of Contracts (IAFW-2249),the right of the
Government to adjust over and under payment in respect of audit and technical
examination of works and final bills is limited to a period of two years from the date
of payment of the Final Bill. This provision shall be borne in mind while dealing with
TE’s observations and an all-out efforts made to settle TE’s observations
expeditiously.
23.26 It shall be ensured that intimation to the contractor with regard to defective work is
sent before the expiry of the defect liability period. STEs/TEs/ATEs shall check the
work well within the defect liability period so that the question of recovery could be
taken up with the contractor before the expiry of the defect liability period. To enable
STE/TEs/ATEs to visit works as early as possible after completion, GEs shall forward
a copy of the completion certificate to the concerned STE.
23.27 In the correspondence with contractors, mention may be made of visit and
observations by officers of Technical Examination Branch. However, the
correspondence shall be worded in such a way that the claims are as agreed by the
MES. Furthermore, no reference of ADGTE’s organisation shall be made in the
Government statement of case submitted to an Arbitrator or during the course of
hearing before him. The MES formation concerned shall deal with the case as if the
recovery claimed from the contractor is based on their own observations.
23.28 Sometimes after an agreement is reached between a GE and the STE/TE/ATE with
regard to specific factual information based on which STE/TE/ATE frames
observations, the agreement is revoked resulting in protracted correspondence
between MES and STE/TE/ATE thereby delaying settlement of observations. To
avoid such cases and to achieve speedy settlement of observations it is decided that
after the first Site examination of works, once the statement of facts with regard to
the work is agreed upon between STE/TE/ATE and MES executives on the
basis of a thorough check of the correctness of the factual information on the ground,
that statement shall be accepted as firm for subsequent discussions and finalization
of observations. Where, however, an observation relates to interpretation of
provisions in the contract documents and where no agreement is reached between
a GE and the STE/TE/ATE in the first instance, the matter shall be immediately
referred to the Accepting Officer for decision.
23.29 List of Common defects observed during STE check is enclosed as Appendix 23.1
407
Appendix 23.1
COMMON DEFECTS NOTICED DURING INSPECTION OF WORKS BY TECHNICAL
EXAMINERS INCLUDING ERRORS IN RECORDING MEASUREMENTS
1. Excavation & Earthwork.
(a) Earthwork in filling in finished measurements not reduced to solid measure in
terms of SSR provisions.
(b) Earth filling in floors and in trenches over pipes not done by
spreading/ramming/watering in 20 cm layers as specified.
2. Concrete.
(a) Sand used contained silt and clay in excess of the specified limit.
(b) External angles of concrete beams, lintels, cills, etc not rounded as specified.
(c) Concrete cills for windows did not project beyond the faces of walls as shown
on drawings.
(d) Throating to PCC cill was not provided while casting the concrete.
(e) Top surface of concrete chajjas were not weathered.
(f) Throating/Drip course at edges was not provided.

3. Bricks Works and Store Masonry.
(a) No deduction made from brickwork and stone masonry for the volume
occupied by PCC bed blocks exceeding 0.1square metre.
(b) Face beds and joints of quoins and jamb stones masonry not squared back
to the required depth as specified. Exposed edges at beds and joints left rough and
uneven.
(c) Requisite number of bond stones not provided in stone masonry walls as
specified in SSR.
(d) Curved brickwork with radius not exceeding 6 metres was built in English bond
instead of header bond with bricks cut to required radius.
(e) Jambs of doors and windows not in plumb.
(f) Roofing sheets not bedded solidly on walls.
(g) Thickness of joints in brick/stone masonry more than specified.
(h) Hammer dressing to face of stone work not done.
(j) The actual sizes of bricks were not as per contract.
(k) Sub class 'B' bricks used and accepted against sub class 'A' bricks specified
in the contract.
408
4. Wood Work and Joinery.

(a) Exposed edges of wooden shelves not rounded although specified.
(b) Surfaces of wood work in contact with concrete/masonry not tarred.
(c) Eaves boards not fixed properly.
(d) Timber not sanded papered as specified.

(e) Framed joints not pinned.
(f) Legs of charpoys under sized.
(g) Formwork of RCC slabs/beams, etc not wrought with the result that the
surfaces of concrete cast were rough.
(h) Joints of joinery were treated with white lead.
(j) Top and bottom edges of shutters of joinery not planed.
(k) Backs, bottoms and all inside surfaces including shelves of almirahs and
dressing chests not sand papered to smooth finish though specified.
(l) Fillets for fixing louvers in ventilators fixed with nails instead of screws as
specified.
(m) Surface of cover fillets in contact with AC sheets in ceiling not wrought and
edges of cover fillets not chamfered.
(n) Styles in panelled and glazed joinery found to be of lesser width than
specified.
(o) Thickness of shutters less than specified.
(p) Lap joints provided in battened doors in lieu of tongued and grooved joints
specified.
(q) Surface of timber door/window frames coming in contact with brick/stones

masonry not wrought.
(r) Quality of timber used in various items of work as well as joinery was far from
satisfactory and the timber was heavily warped and cracked.
(s) Factory made shutters provided were not strictly as per ISI requirement as
specified and differed in the following aspects:-
(i) Two tenons in lock & bottom rails were not provided.
(ii) Glue not applied at joints.
(iii) Chemical treatment to timber not properly given.

409
5. Steel and Iron Work.

Single seal manhole covers provided instead of double seal.
6. Roofing and Ceiling.
(a) AC sheets in ceiling fixed with nails instead of screws as specified.
(b) Holder bats/clamps not provided for some of the AC vent pipes.
(c) Cranked hook bolts used for fixing sheets were undersized.
(d) 1.00 to 1.25 mm thick GI washers used with hook/cranked bolts for fixing AC
sheet roofing instead of 1.6 mm thick GI washer specified.
(e) Steel tubular poles were manufactured out of steel with tensile strength of 42
kgs/sq. mm as against the strength of 55 kgs/sq mm specified.
(f) GI and bitumen washers of proper diameter and thickness for AC sheet works
were not provided.
7. Flooring.
(a) Measurements of concrete floor recorded inclusive of the width of expansion
joints instead of measuring net.
(b) Dressing top edges and sides up to half the depth of stone slab flooring not
executed as specified.
8. Plastering and Pointing.
(a) Joints of stone work not raked out before plastering.
(b) External angles of plaster not rounded to the radius specified.
(c) Pargetting internal faces of chimneys with mud plaster not done as specified.
(d) Keyed pointing to vertical joints not finished properly.
(e) Thickness of finishing coat of lime putty and sand applied over backing coat
was less than specified.
(f) Thickness of setting/finishing coat of skirting/dado in cement mortar (1:1) was

found to be 1.5 mm against 3 mm thick as specified.
(g) 12 mm radius coving provided at the junction of skirting/dados and floors,

against 25mm radius coving specified.
9. Iron Mongery.
(a) Barrel bolts provided were shorter in length.
(b) Bow handles were of smaller size.
(c) Shoots of aldrop bolts provided were lesser in diameter than specified.
(d) Mortice plates/metal sockets were not provided where shoots of aldrop bolts
entered wood/ brick work.
(e) Tower bolts with 10 mm shoots provided against 12 mm diameter specified.

410
10. Glazing and Painting.

(a) Hidden surfaces of MS gusset plates and straps not painted.
(b) Glazing beads not screwed though specified.
(c) Top and bottom edges of joinery not painted.
(d) Surfaces of steel members not properly prepared by scrapping, wire brushing
etc before painting.
(e) Surface of timber cover fillets in contact with AC sheets in ceiling not treated
with a priming coat of paint though so specified.
(f) 7/32'' thick sheet glass provided instead of 6 mm plate glass.
(g) Flushing cisterns and CI brackets not painted.
(h) Ends of wooden purlins not treated with creosote oil as specified.
11. Water Supply, Plumbing, Drains and Sanitary Fittings.

(a) Quantity of lead used in joining CI Pipes was less than specified.
(b) GI water tubing provided was underweight.
(c) GI soil pipes were underweight/not according to IS.
(d) Proper wiped soldered joints to lead pipe connection of wash hand basins not
provided.
(e) Shower roses not provided with swiveling device, where specified.
(f) Quantity of solder used in wiped soldered joints was less.
(g) CI soil/vent pipes jointed with cement instead of run lead joints specified.
(h) Flush pipes not jointed to nozzle of WC pans with India rubber cones.
(j) Nahani traps were of smaller size than specified.
(k) Mosquito proof device was not provided to water waste preventer.
(l) Telescopic flush pipes provided were smaller in diameter.
(m) Glazed sinks were not provided with plug and chain though specified.
(n) CI pipes as per BS were extensively used in the works against ISI specified
pipes. If both specifications are acceptable, there should be no reason for not making
a provision in the contract accordingly.
(o) Bib tap and stop valves were accepted with cast brass components although
in accordance with the IS the crutch handle, spindle and washer plate shall be of
extruded/rolled brass.
411
12. Road Work.

(a) Size of soling stones provided at site was not according to specifications.
(b) Stone metal for WBM did not conform to the requirements for abrasion value,
flakiness index and grading as described in Para 20A.3.1 SSR Part-I.
13. Electrical Work.
(a) Conduit boxes were of ordinary cast iron and not malleable cast iron as
specified.
(b) Spacing of saddles for surface conduit wiring was more than 60 cm and no
saddles were provided near fittings as specified.
(c) Ceiling rose was fixed approximately 90 cm away from the point where fan
was fixed. This should have been 8 to 15 cm away from the point.
14. Miscellaneous.
(a) Quantity of coir incorporated in charpoys was less than that specified.
(b) Although for some fittings/materials only ISI certified ones were specified in
the contract, fittings/materials without ISI marking were permitted in the work.
(c) Standard of supervision and acceptance criteria requires tuning up; or,
(d) Specifications laid down in contract documents call for examinations with a
view to suitably modify the same to permit acceptance of different
workmanship/material as per local practice, where acceptable.
412
SECTION 24
DRAFT PARAS (DPs) AND SERIOUS CASES (SCs)
24.1 General.
The Draft Para shall be raised by ADGTE and settled by CE Command/ADG. Once
all observations on account of technical examination are finalized and total financial
effect (without considering the financial effect of minor observations) of
recovery/rectification/minus DOs agreed to by MES in a contract exceeds the limit
given below, a Draft Para shall be raised by ADGTE HQ.
Value of Work Limit of Financial Effect for Draft

Para
Upto ₹ 15 Lac ₹ 25,000 or 5% of CA Amount
Over ₹ 15 Lac and upto ₹ 50 whichever is less
Lac ₹ 50,000 or 5% of CA Amount
Over ₹ 50 Lac and upto ₹1 whichever is less
Crore ₹ 1,00,000 or 5% of CA Amount
Over ₹1 Crore and upto ₹ 5 whichever is less
Over ₹5 Crore and upto ₹ 15 whichever is less
Over ₹ 15 Crore whichever is less
₹ 6,00,000 or 5% of CA Amount
whichever is less
24.1.1 All Draft Paragraphs will be forwarded to Accepting Officer for offering his
comments on wording of the draft paragraphs with copies to CE and ADGTE.
Comments, if any, may be offered by Accepting officer. Non receipt of comments
within one month will be treated as NIL comments.
24.1.2 If Accepting Officer in his comments does not agree or suggests any
modifications, the STE will immediately furnish the correct factual position and
forward his views/recommendations to ADG TE HQ together with relevant jacket for
deciding further action by ADG TE.
24.1.3 Immediately, after the draft Para is issued, a letter indicating the
shortcomings along with the recovery/rectification cost will be forwarded to
respective Command CE /ADG with a copy to DGW.
24.1.4 Further action for investigation on DP will be taken by CE Command/ADG.

After taking all corrective actions final outcome will be communicated by CE
Command/ADG to ADGTE, STE office, CE Zone, CWE and GE for closure of case.
24.1.5 The monitoring of Draft Para cases shall be carried out by CE

Command/ADG. The details of DP shall be included in the Quarterly report published
by ADGTE.
413
24.2 Serious Cases.
24.2.1 The serious cases shall be raised on concerned CE Zone and settled by E-
in-C’s Branch. The observations of serious/fraudulent nature irrespective of financial
effect shall be marked on the office copy of factual statement as ‘Serious’ and shall
be raised by ADGTE. The following types of observations will be considered for
Serious Case;
(a) Intension to fraud.
(b) Negligence in execution.
(c) Faulty planning and inadequacies in CA with negligence/doubtful

intention.
(d) Any action causing undue benefit to contractor.
(e) Rectification confirmed by executives but not executed on ground.
(f) Fake test certificates, vouchers.
24.2.2 All serious observations of one work will be clubbed by STE and a detailed
letter shall be forwarded to ADGTE for approval. ADGTE will ask comments directly
from CE Zone/CCE. Non receipt of comments within two months will be treated as
NIL comments. CE Zone/CCE shall forward para wise comments with all supporting
documents to establish his comments. ADGTE shall evaluate the reply and if found
appropriate, Serious Case shall be published.
24.2.3 The Serious Case shall be included in the Quarterly Report. E-in-C’s Branch
will direct CE Command/ADG to order BOO to pinpoint the responsibly and initiate
disciplinary action/administrative action against responsible executives and
contractor.
24.2.4 Based on findings of investigation suitable amendment/policy shall be issued

related to framing of contracts and other related issues. DGW shall forward closure
letter in respect of Serious Case to ADGTE, CE Command/ADG, CE Zone and STE.
24.2.5 The monitoring of Serious Cases shall be carried out by E-in-C's Branch.
The detail of Serious Cases shall be included in the Quarterly report published by
ADGTE Dte. CE Command/ADG shall submit quarterly report on progress of ADGTE
Serious Cases to E- in-C’s Branch with a copy to ADGTE Branch.
24.3 Procedure to Deal with ADGTE’s Draft Paras(DPs).
24.3.1 DPs are to be progressed for investigation and action against erring
individuals at Command/ADG Level. However DPs in case of contracts pertaining to
DG MAP and DGNPs, shall be progressed to E-in-C’s Branch for action against
erring individuals.
24.3.2 The CE Command/ADG shall bring the DPs to a logical conclusion within six
months of their raising by the STE.
414
24.3.3 CE Command/ADG shall submit a quarterly report on the progress of DPs

to E-in-C’s Branch with a copy to ADGTE. The reports for QE Sep, Dec, March &
June shall be submitted to reach E-in-C’s Branch and ADGTE by end of next month
to the quarter.
24.4 Procedure to deal with ADGTE’s Serious Cases (SCs).
24.4.1 On receipt of a copy of the ADGTE’s note containing a serious case from E-
in-C’s Branch, the Command CE/ADG will order or get ordered a Technical BOO
within a period of not exceeding one month from the date of letter of E-in-C’s Branch
for investigating the lapses noticed by ADGTE. In case the ADGTE serious case is
in respect of contract pertaining to DGNP, concerned DGNP (DGNP Mumbai or
DGNP Vizag) shall be the convening authority for Technical BOO. One member will
be detailed by CE Eastern Command/CE Southern Command in r/o DGNP Vizag/
DGNP Mumbai cases.. In case of ADGTE serious case pertaining to DG MAP,
concerned CE Command/ADG, based on geographical location of the site of the
work, shall be the convening authority for the Technical BOO. One member of the
BOO will be detailed by DG MAP in r/o cases pertaining to DG MAP. Member in
attendance will be PM MAP (in DG MAP cases) or concerned GE (in DGNP
cases).Similarly additional/ reserve member(s) will be decided by the convening
authority.
24.4.2 The BOO shall be given time not exceeding two months for submission of its
proceedings containing findings and recommendations.
24.4.3 The CE Zone/CCE shall examine the findings of BOO in r/o cases pertaining
to him and submit his recommendation to his CE Command/ADG in a period not
exceeding one month from the date of submission of proceedings by the BOO.
Similarly in case of DGNP cases, Sr DDG/CE of DGNP shall examine the findings of
the board and submit his recommendation to DGNP.
24.4.4 The CE Command/ADG/DGNP after examining the findings of the Board

along with the recommendations of CE Zone/CCE/Sr DDG & CE of DGNP will submit
his recommendations regarding disciplinary/administrative action against the erring
officials, if any, to E-in-C’s Branch within a month of submission by CE Zone/CCE/Sr
DDG & CE of DGNP. In respect of cases pertaining to DG MAP, CE Command shall
examine the findings of the BOO & will submit his recommendations regarding
disciplinary/administrative action against the erring officials, if any, to E-in-C’s Branch
within a period not exceeding one month from the date of submission of proceedings
of BOO.
24.4.5 Thus even after considering few days for transits at various levels, the final
recommendations of CE Command/ADG/DGNP MUST reach E-in-C’s Branch within
SIX months of referring the serious case to them along with present address of the
individuals responsible for the lapses as well as details of I.O. and R.O.
24.4.6 The cases will then be examined in Contract Management Dte of E-in-C’s
Branch and further course of action will be decided by E-in-C based on the degree
of lapses and the recommendations from the lower formations. The decisions shall
be of the following three types:-
415
(i) Closure of The Case Without any Disciplinary Action. If no merit or

substance has been found in the case raised by the ADGTE or if the lapses
are of minor nature not warranting action on individuals.
(ii) Issue of Performance Counselling. Depending on the degree of the

lapses and if it is considered that the lapses committed do not call for
disciplinary action, issue of performance counselling may be decided upon in
respect of serving individuals.
(iii) Disciplinary Action. Initiation of disciplinary action as per laid down

procedure and CCS Conduct Rules, if the lapses are found to be very serious
and appear to be intentional.
Notes.
1. The necessity to strictly comply with the time frame and procedure laid down in the
preceding paragraphs needs no emphasis. Any case delayed beyond the time frame laid
down will be accompanied with a ‘Delay Report’ and with recommendation of CE
Command/ADG/DGNP on who is to be blamed for the delay.
2. The performance counselling shall be issued by concerned Chief Engineer Zone /DG
MAP/DGNP to which the case pertains through D&V/E1D channel of the formations where
the officials are currently serving. The CE Command/ADG/DG MAP/DGNP shall ensure
issue of the letters of performance counselling within one month of receipt of decision of E-
in-C in their HQ and simultaneously send two sets of such letters along with
acknowledgment receipt to E-in-C’s Branch (Dte of Contract Management (E8 Section)) for
forwarding one set to ADGTE for his reference and record.
416
SECTION 25
EXAMINATION OF MES WORKS / PROCUREMENT BY CVC

(CTE's ORGANISATION) OR BY CVO (MES & BRO) (CTE CELL)
25.1 CTE’s organization of Central Vigilance Commission (CVC) or CTE Cell of CVO
(MES & BRO) (CTE Cell) can carry out Intensive Examination of any Work/Contract/
Procurement as per instructions & procedures contained in Vigilance Manual-2017 (or
latest version) &/or guidelines on Intensive Examination of Procurement & other contracts-
2014 (or latest version) issued by CVC.
25.2 The works which are selected for check by CTE’s organization of CVC or CVO
(MES & BRO) (CTE Cell) shall not be checked by ADGTE’s Branch unless specifically
ordered in writing by DGW/E-in-C, on the recommendation of staff authority.
25.3 Consequent upon the inspection/visit of CTEO/CTE Cell officers to MES work site,
the inspection report alongwith the observations shall be forwarded by CVC or CTE Cell
of CVO (MES & BRO) to E-in-C’s Branch. As per the instructions of CVC or CVO (MES
& BRO) (CTE Cell), the reply to all the queries and action thereon, are to be submitted to
CTEO through CVO (MES & BRO) (CTE Cell) or to CTE Cell of CVO (MES & BRO)
through E-in-C’s Branch in a time bound manner, within 60 days of issue of inspection
report by CVC or CVO (MES & BRO) (CTE Cell). Henceforth to ensure timely submission
of “action taken reports” to CVC/CVO (MES & BRO) (CTE Cell), following procedure shall
be followed :-
(a) All the correspondence with CTE Cell of CVO (MES & BRO) and CVC
(CTEO) on subject matter shall be made through Jt DG (D&V)/E1D of E-in-C’s
Branch subject to succeeding paras.
(b) The inspection report received from CTE’s organization of CVC or CVO (MES &
BRO) (CTE Cell) shall be forwarded to DGW Dte of E-in-C’s Branch, with a copy to
respective CE Command / ADG and CE Zone, for time bound action by all concerned.
(c) DGW Dte (through Contract Management Dte) shall be the “Nodal Section”
coordinating with CEs Command / ADGs / CEs Zone for timely action in this regard. CE
Command / ADG shall ensure submission of the action taken report to DGW Dte within 03
weeks of receipt of the inspection report by hand / through a special courier.
(d) The action taken report received from CE Command / ADG shall be examined by
DGW Dte (through Contract Management Dte) and shall be forwarded alongwith the
recommendations of DGW to E1D Sec within one week.
(e) Jt DG (D&V) shall submit the final report / reply to CTE cell of CVO (MES & BRO)
after obtaining the approval of E-in-C within one week after receipt from DGW Dte.
(f) Any disciplinary action (if required) shall be taken by E1D Sec of the E-in-C’s
Branch, in consultation with CVO (MES & BRO) and CVC.
25.4 If there are any clarifications or further instructions / guidelines from CVC (CTEO) or CVO
(MES & BRO) (CTE Cell) on above aspects, then these clarifications/instructions/guidelines shall
take precedence over above mentioned provisions.
417
SECTION 26
RECOVERY OF OVER PAYMENTS FROM CONTRACTORS
26.1 General Condition 67 of IAFW-2249 provides that whenever any claim for
payment of a sum of money arises under a contract, the contractor shall on demand make
payment of the same or agree for effecting adjustment from any amount due to him by the
Government. If he refuses or neglects to do so on demand, Government shall be entitled to
withhold the amount from any sum then due or which at any time thereafter may become
due to the contractor under the same contract or any other contract with the Government
or from the Performance Security amount (or from Contractor’s Standing Security Deposit
amount or Standing Bond, If Performance security amount is not adequate) and to retain
the same by way of lien till the contractor pays the amount or till the claim is settled or
adjudicated upon or till the contractor furnishes a fixed deposit receipt endorsed as directed
by the Accepting Officer or a guarantee bond from a Scheduled Bank for the same amount
is furnished, as directed by the Accepting Officer. The rights conferred under Condition 67
will not extend beyond a period of 2 years from the date of payment of Final Bill (or the date
when net payment of the minus Final Bill is communicated to the contractor).
26.2 A demand notice (duly enclosing MRO) shall be served by the GE on the contractor
asking for making the payment or to agree for adjustment thereof from any other due or to
furnish FDR/BGB in lieu of amount due. A period of 02 weeks shall be given to the contractor
from the date of receipt of demand notice by him. In case contractor does not comply with
any of the alternatives given above up to 30 days of date of demand notice, it will be
presumed that a dispute has arisen and Government, as a claimant for realizing recovery
will invoke arbitration and submit particulars to Competent Authority for appointment of
arbitrator, after serving notice on the contractor. Thereafter action to withhold the amount
pending adjudication shall be taken as specified in succeeding paragraphs.
26.3 All overpayments detected must be notified to contractor within 2 years from date of
payment of final bill. Practice of circulating recoveries to all MES formations results into
multiple recoveries which leads to disputes/litigation. To overcome above situations, the
following actions shall be taken:-
(a) The TE’s observations must be got settled within a maximum period of 12
months failing which disciplinary aspect for the delay will be considered against the
defaulters by the Zonal CEs/CCEs concerned.
(b) The contractor shall be notified by the GE by registered post about the defects
detected during technical examination within two weeks of TE’s visit, without waiting
for formal observations.
(c) The demand for the recovery due to the contractor will be notified not later
than 02 Years after the payment of Final Bill (or notification of the amount of minus
bills) by a registered post, along with reasons and details in support of the amount of
the demand. In this notice of demand, contractor will be asked to deposit the amount
within a date to be specified, allowing a period of one month, adding that if the
contractor fails to deposit the amount by the specified date, action will be taken to
recover/withhold the amount from his dues and assets.
(d) Where a contractor fails to deposit the amount by the specified date,
immediate action will be taken for recovery/withholding the amount from his dues as
mentioned in sub para (c) above.
418
(e) If in any special circumstances, it is not possible to finalise TE’s observations

and/or the amount of recovery, a fair assessment will be made by the GE and a
demand made on the contractor within 15 months of the payment of Final Bills (or in
the case of minus bill, 15 months from the date the net amount of minus Final Bill is
communicated to the contractor) and follow-up actions will be taken as aforesaid.
Such cases will be simultaneously reported by the GE to his CWE and CE with
reasons for delay. The amount of recovery will be so assessed that it would be
sufficient for the purpose of recoveries when finalised but not far in excess. As and
when the final recovery figures are known, action will be taken to refund the
difference between the firm amount and the amount realized/withheld.
26.4 Difference between Right of Adjustment and Right of Demand.

26.4.1 Para (g) of Condition 67 states that the right of Government to adjust any
over and under payments shall not extend beyond a period of two years from the
date of payment of the undisputed portion of the final bill or in case of a minus bill,
from the date, the net amount of the final bill is communicated to the contractor. A
case arose when the Government raised a claim for recovery after a period of two
years from the date of payment of the Final Bill. The contractor objected to this on
the plea that under the above Condition, Government could not raise any claim if the
period of two years had elapsed from the date of payment of the Final Bill. Advice
was obtained from the Ministry of Law in the matter. The implications of the
provisions of Conditions 67 are that it gives the Government two distinct rights
against the contractor viz:-
(a) The right to adjust the claim against some other money due to the
contractor or from his security deposit or security bond amount already in
possession with the Government.
and
(b) The right to demand the payment of the Government’s claim from
him.
26.4.2 Under Article 149 of the Limitation Act, the right of Government to demand
payment of Government’s claim against the contractor is 30 years.
26.4.3 It is only the right of adjustment of money claimed, mentioned at (a) above,
which is limited to two years under Para (g) of the above condition 67 and it does not
in any way restrict the right of the Government to demand payment and recover
overpayments otherwise than by adjustment ie by suing the contractor if he fails to
deposit the amount of claim on demand.
26.4.4 In order to avoid litigation and further expenses connected with the same, it
shall be ensured that all adjustments of money claimed from the contractor are made
well within the period of two years mentioned in the above condition when sufficient
amount may be available with the Government against which the claim could be
adjusted.
26.5 Procedure to Realize Dues from the Contractors.

26.5.1 According to Condition 67 of IAFW-2249, which forms part of most of our
contracts, recovery of outstanding amount can be effected from such sources as the
following:-
419
(a) Any amount available under the contract in which overpayment has
been made.
(b) Amount which is expected to be due to the contractor in the same

contract in the near future.
(c) Security Bond deposited for the contract.
(d) Security Bond amount available with the Government.
(e) Amount available with the Department against any other current or past
contracts.
(f) Amount due to the contractor in any other Government department

provided a provision similar to that in Condition 67 exists in the agreement
entered into between that Government department and the contractor.
26.5.2 If GE finds that no money of the contractor (including security) is available

in his Division to meet/adjust the recovery or the money available is inadequate, the
following procedure will be followed:-
(a) He will send a letter direct to all GEs in the Zone, intimating the
recovery and requesting them to withhold the amount to the extent of the
recovery.
(b) GEs, on receipt of such a letter, will take priority action thereon,
including verifying if any security of the contractor is held and also consulting
their AAOs and intimate the position to the concerned GE.
(c) At the time of intimating other GEs about the amount of recovery, the
concerned GE will simultaneously enquire from all CsWE in the Zone about
the security deposit, if any, lodged by the contractor with them and which may
be available for effecting recovery from the contractor.
(d) If more than one GE/CWE intimate the amount available/withheld, GE

concerned will, without delay, select one of the CsWE/GEs (preferably with
whom the entire amount is available) and ask him/them to transfer the amount
to him. A copy of this communication will be sent to AOs/AAOs concerned to
arrange/effect transfer of the amount and also to the PCDA/CDA concerned.
Simultaneously, GE concerned must inform all other GEs/CsWE(who also
may have withheld some amount) that it is no longer necessary for them to
withhold any amount.
(e) If sufficient amount is not available with the GEs/CsWE in the Zone,
the GE concerned will report the matter to his Zonal CE.
Note: Action for the recovery of the amount stipulated in the above paras will be
taken by GE only in respect of all classes of contractors.
26.5.3 In respect of contractors of ‘E’ Class, CWE concerned on receipt of

information, vide 26.5.2 (c) above will take action for realization of recoveries as laid
down in this letter. No further reference to any formation in other Command need be
made as it is unlikely that contractors of ‘E’ Class in one Command would also be
enlisted in other Commands.
420
26.5.4 In respect of contractors of class ‘SS’ & ‘S’ to ‘D’, the Zonal CE concerned
on receipt of information vide 26.4.2 (e) above, will send a letter to all Command CEs
intimating the recovery and request them to withhold the amount to the extent of the
recovery. The Zonal CEs (in Commands) on receipt of such a letter will take priority
action thereon, collect the information from CsWE and GEs under them (who will
also verify if any security of the contractor is held and consult their AOs/AAOs) and
supply same to the Zonal CE concerned with endorsement to the CsWE/GEs with
whom the amount is available. CEs/CsWE will supply the information direct to the
Zonal CE concerned. The Command CEs will verify if any security of the contractor
is held and intimate about it to the Zonal CE concerned. The Zonal CE concerned
will thereafter communicate the information to the GE concerned who will take further
action as given in Para 26.4.2 (d) above.
26.5.5 Simultaneously on receipt of GE’s letter, CE/CWE on whose list the

contractor is borne, will take suitable steps to collect particulars about the property
of the contractor from civil sources so that action for realisation of Government dues
may be taken in case no amount is found to be due to the contractor.
26.5.6 If no amount is due to the contractor from any MES formation or if amount
due is inadequate to meet recovery amount, the matter will be referred to the E-in-
C’s Branch in respect of contractors of ‘SS’, ‘S’, ‘A’ & ‘B’ Classes and also in respect
of other classes of contractors where the amount of recovery is substantial. E-in-C’s
Branch will take suitable steps for ascertaining if any amount is due to the contractor
from other Central Government departments like CPWD and Railways etc.
26.5.7 All correspondence regarding realisation of recoveries from contractors will

be dealt with on priority basis.
26.5.8 Letters to contractors intimating adjustment of overpaid amounts under

Condition 67 of General Conditions of Contracts (IAFW-2249) shall be worded
carefully. In all such cases, GE shall not only quote reference to condition 67 but also
intimate to the contractor the name of the work and the contract number against
which over-payment has occurred and how it is intended to adjust the Government
claims i.e. from payment due against running accounts or final bill of the contract or
any other bill of the contractor with the department or from any amount due to the
contractor from the Government or Performance Securities held with the department.
While recovering the amount from any other bill of the contractor with the department
or with Government department, a reference to the original letter of the GE who
initiated the recovery and the relevant condition of the contract on the basis of which
it is intended to recover the amount shall be specifically stated in the letter addressed
to the contractor.
26.5.9 Whenever a letter is addressed simultaneously to various formations to

withhold payment of a certain amount to a contractor, a watch must necessarily be
kept of the amounts being withheld by various formations so that it does not exceed
the total Government claim. As soon as the Government claim is recovered by some
formation(s), instruction shall be issued within a week to others not to withhold further
amounts.
421
26.5.10 Cases may, however, arise where it may not be possible to adjust the
Government claim. Every endeavor shall be made to get such cases settled in
arbitration at the earliest. If delay is noticed on the part of the other party, the
arbitrator shall be pressed to proceed with the case ex-parte. If there is delay on the
part of the arbitrator, all legitimate action shall be taken with the object of getting the
matter expedited so that the arbitrator issues his award in the shortest possible time.
26.5.11 Once an overpayment is established after receipt of arbitration award, action

should be taken for attachment of Contractor’s assets, where necessary. To
safeguard Government’s interest prior action in such cases should be taken to
ascertain the assets of the contractor against which it is intended to offset the decree
and the court, in consultation with the District Government Counsel, should be
requested to issue interim injunction to prevent the Contractor from disposing off his
assets. This precaution is necessary because it has been experienced that by the
time court cases are finalised and orders are obtained to off-set the decreed amount
against assets of the contractor, he has in the meantime disposed of his assets and
the whole process then becomes infructuous.
26.5.12 There may be cases where recovery cannot be effected and the loss has
to the regularized. Loss statements must be progressed expeditiously and pursued
vigorously.
26.6 Reconciliation of Recoveries GE shall reconcile the outstanding recoveries

against the contractors as per records in his office with records held by AO of GE
Office and concerned section of CDA. A certificate of reconciliation will be sent by
GE to CWE and Zonal CE with copy to AO and CDA annually by 15 th April every
year.
422
SECTION 27
MEASURES TO REDUCE ARBITRATION CASES

&
COMMON CAUSES LEADING TO ARBITRATION IN MES
27.1 General. Arbitration in MES contracts is governed by Arbitration & Conciliation

Act-1996 (ACA) including Amendment Act 2015 and Amendment Act 2019 and Arbitration
& Conciliation Amendments Ordinance 2020 (notified on 04 Nov 2020). (The cases where
notices for invoking arbitration was served by the contractor prior to 25th Jan 96, such cases
shall continue to be governed by The Arbitration Act-1940. However, in such cases also,
both parties may agree to followACA-1996). Erstwhile J&K Arbitration & Conciliation Act
1997 is no more applicable post abrogation of Article 370. However in the old cases, prior
to abrogation of Article 370, J&K Arbitration & Conciliation Act shall be applicable.
27.2 Common Causes Leading to Arbitration cases. Detailed instructions on

measures to reduce arbitration cases and preparation and defence of Arbitration cases
have been issued by E-in-C’s Branch from time to time. Inspite of these instructions, it is
observed from the analysis of awards published by various arbitrators that sincere efforts
are not being made right from the sanction, planning, tendering and execution stages of the
work to avoid disputes leading to increase in arbitration cases. Poor planning, ineffective
contract administration and poor execution have been explicitly commented upon by
arbitrators in the awards. In certain cases, the lackadaisical approach adopted by all
concerned right from sanctioning of work till completion of arbitration proceedings has
resulted into awards in favour of contractors. This has also been viewed seriously by
MoD/MoL Branch Sectt while dealing with cases sent for legal opinion on the awards. The
list of common causes leading to arbitration is at Appendix 27.1.
27.3 Measures to Reduce Arbitration Cases. It is further brought out that GE has
the power to suspend the work under Condition 9 of IAFW-2249 for the reasons not
attributable to contractor. This option may be exercised in case work is not progressing due
to reasons such as delay in handing over of site, handing over of building(s) for
demolition/shifting of services etc. In addition, instructions issued vide this HQ letter No
36073/MESBAI/GEN/827/E8 dated 24 Oct 18 shall also be referred. The suspension will be
revoked as and when the causes for no progress of work are resolved.
27.4 (a) On analysis of various arbitration awards, it has been observed that abnormal
delay in execution of works on the grounds such as late handing over of site, non-
cutting of trees, late handing over of buildings for demolition, delay in giving decisions
on matters related to execution of work, non-completion of work by other agencies
etc have been considered as case of deemed suspension by arbitrators. Arbitrators
in their awards have concluded that extension of time on these grounds should have
been granted under Condition 9 of IAFW-2249 instead of Condition 11 and
accordingly bypassed Condition 11 while deciding claims of damages. Such type of
reasons for delay ought to be covered under Condition 9(a) (ii) of IAFW-2249 and
works suspended on these grounds and extension of time granted as per Para 9(b)
(i) of IAFW-2249. Simultaneously Condition 9(a) (i) of IAFW-2249 provides for
suspension of works on account of any default on the part of contractor. These
provisions have been observed to have been rarely exercised.
(b) It may therefore be seen that due to non-invoking of Condition 9 of IAFW-

2249 by executives on account of reasons discussed in Para (a) above, arbitrators
have awarded huge amounts in favour of contractors in respect of claims pertaining
423
to damages for prolongation of contracts. Hence there is need to invoke Condition

9 by GE depending upon the circumstances and when the progress of work is at
standstill for a period of seven days. While imposing this Condition, contractor’s
claims on account of labour, workmen, employees, tools & plant actually remaining
idle during the period of suspension shall be disposed off promptly and genuinely in
terms of Condition 9(b) (ii) & 9 (c) of IAFW-2249. Relevant record/details submitted
by contractor during period of suspension as per this condition shall be verified and
maintained by GE duly signed by the contractor and same shall be presented before
arbitrator during arbitration proceedings. This will definitely restrict the arbitrator from
having a free hand to award huge sums in favour of contractor and safeguard
Government interest.
27.5 Certain measures to reduce arbitration cases are given in Appendix 27.2
424
Appendix 27.1
ARBITRATION : COMMON CAUSES AND REMEDIES
1 Causes During Pre-Tender Stage.

(a) Incorrect Ground Data
(i) Bldgs planned do not fit into the marked site in site plan.
(ii) Quantities.
(iii) Levels
(iv) Sub soil strata
(v) Phasing of work
(b) Incorrect specifications, makes of items not available in market/discontinued

by manufacturers included in the tender.
(c) Sourcing of construction material not confirmed on ground leading to non-

availability at locations mentioned in tender during execution.
(d) Bad drafting of contract clauses – careless cut & paste job, mismatch in
various drgs etc.
(e) Apparent hurry to conclude contract without regard to the ground/site

situation.
(f) Conclusion of contract without availability of hindrance free site(s).
(g) Causes attributable to contractors:-
(i) Low quotes to grab contracts/make inroads into MES.
(ii) Shaky financial position of contractors and securing works beyond their
financial and technical capacity.
(iii) Prolongation of contract period due to mismanagement and at times

deliberately, leading to less profitable/unworkable rates.
2 Causes During Execution Stage.

(a) Site problems – delay in handing over of site due to following reasons:-
(i) Site not clear due to existing trees – lack of co-ordination with users.
(ii) Shifting of existing services – inaction of ground executives.
(iii) Vacation of old buildings – lack of co-ordination with users.
(iv) Work of other contractor/project incomplete.
(b) Changes in siting of buildings, ordering changes at site without AIP (Approval
in Principle).
425
(c) Delay in giving decisions on various contractual matters and delay in payment
of RARs.
(d) Too many deviations or radical changes from original contract scope due to
reasons other than site requirement.
(e) Inadequate supervision of work at lower level. Work stages are passed as fait
accompli leading to subsequent disputes.
(f) Improper measurements/delay in taking measurements of work, site

documents (MB,works diary etc) not regularly updated/maintained. These are filled
up and got signed after gap of many days/months or on the last day or even after
completion of work.
(g) Amendments in site documents like MB without authentication by contractor.
(h) DOs especially plus DOs finalized very late, at times much after completion
of work.
(j) Extreme delay in finalizing star rates, rates reduced subsequently at CE Zone
level much against the spirit of Condition 62 of IAFW-2249 leading to disputes.
(k) All extensions of time period invariably given under Condition 11 (A) (vii)/11
A(iv) (as applicable) of IAFW-2249 without exception, whatever may be the cause of
delay including causes which are attributable to Department. There is reluctance in
giving suspension order under Condition 9 of IAFW-2249 with the sole reason to
avoid giving compensation to contractor. The period of delay due to stoppage of work
for reasons attributable to Department is attempted to be covered under Condition
11 (a) (vii) of IAFW-2249 leading to disputes. This is one of the largest cause of
disputes.
(l) Grant of peace meal extensions.
(m) Non Payment to contractor for work done on the plea of AIP awaited.
(n) Ordering work beyond DO limit.
(o) Levy of compensation without following due process.
(p) Inadequate attention to defect rectification during defect liability period (DLP).
In case of failure to rectify defects by contractors, rectification of defects at risk and
cost of contractor during DLP seldom resorted to.
(q) Delay in foreclosing of work under Condition 57 of IAFW-2249 when work not
required or work is at stand still for a considerable period of time. In some cases,
executives fail to give suspension order and then to avoid paying compensation to
contractor, foreclose work under Condition 57 and thereafter the same work is re-
tendered again which violates General Conditions of Contract, leading to dispute
regarding wrong foreclosure of work.
(r) Issues related to cancellation of contract which the contractor often takes
advantage of during arbitration:-
(i) Inordinate delay in taking decision about cancellation of contract.
426
(ii) Cancelling contract without complying with the legal requirement such
as:-
(aa) Not making the time as essence of contract.
(ab) Not fixing reasonable time for completion of work through notice.
(ac) Not cancelling contract immediately on expiry of revised date of

completion.
(ad) Delay in conclusion of risk & cost contract.
(ae) Accepting risk & cost contract at exorbitant rates.
3. Post Completion Stage.

(a) Delay in payment of Final Bills due to delay in obtaining Revised AEs,
enhancement of DO limit and finalization of DOs/Star Rates.
(b) Changing mode of pricing during technical check of Final Bill.
(c) Insisting on payment as normal deviation for radical changes.
(d) PCDA/CDA reducing escalation payment without giving justification and

making duplicate recoveries during pre-audit of final bills.
(e) Executives disallowing payments in respect of executed work for fear of

exceeding DO limit, deleting/cancelling recorded measurements in MB.
4. Suggested Remedies.
(a) Suspension of work.
(b) All officials to resolve the issues at hand rather than passing buck to next
incumbent/treating it as low priority legacy inherited from previous incumbent.
(c) Cancellation of contract not to be revoked as a matter of routine.
(d) The Accepting Officer to utilize powers to waive off compensation and at the
same time also take timely decisions to prevent dispute.
(e) Need to inject vigour into the process of defending arbitration/court cases.
(f) While defending arbitration cases, the previous executives/staff to be called

as witness on case to case basis, if required, depending upon the nature of claim in
order to substantiate Department's stand.
427
Appendix 27.2
MEASURES TO REDUCE ARBITRATION CASES
1. Main causes of disputes leading to arbitration are:-
(a) Incorrect ground data;

(b) Contracts containing faulty and ambiguous provisions;
(c) Faulty administration of contracts;
(d) Deviations;
(e) Suspension of Works;
(f) Changes in Siting;
(g) Hindrance due to other contractors working on the site;
(h) Users not handing over buildings on dates agreed;
(j) Contractor possessing inadequate resources;
(k) Default by contractor;
(l) Unreasonable attitude adopted by contractor;
(m) Overpayments;
(n) Levy of compensation for delay;
(o) Delays in payment of RAR/Final bills;
(p) Observations arising out of Technical Examination of works.
2. Following measures are outlined to obviate/reduce arbitrations:-
(a) Incorrect Ground Data.Correct ground data is collected initially and more time
is devoted to proper planning. It shall be ensured that the specifications and
conditions incorporated in the tenders are realistic. For this purpose it is necessary
to collect detailed basic information pertaining to each site before going for tendering.
Guidelines for information to be collected before going for tendering with regard to
ground data, site factors and availability of materials are detailed in Appendix 5.1.
These requirements shall be strictly complied with in framing tender documents.
(b) Contracts Containing Faulty and Ambiguous Provisions.
(i) While drafting particular specifications care shall be taken to ensure

that all the general provisions applicable to the contract are properly and
unambiguously worded.
(ii) Remember, no ambiguity evident on the face of it can afterwards be

filled up. The agreement must be speak for itself. Follow two principles:-
(aa) Omit nothing material and avoid repetition.
(bb) Whatever you include, express it clearly so as to be beyond the

reach of perversion or multiple meaning.
It may, however, occur that even in the absence of any verbal ambiguity, there
is a bonafide mistake on one side or the other as to the legal import of the
words used or even as to the very existence of a binding agreement at all. It
cannot be too emphatically expressed on all officers that mistakes of this kind
by no means suffice necessarily to invalidate a contract. The mistake shall be
rectified immediately when it comes to the notice by exchange of proper letters
between the parties to the agreement.
428
(iii) Prevention is always better than cure. It is obviously wise in setting the
terms of the contract to leave no stone unturned in order to ensure that the
opposite party does really understands distinctly from the outset, the legal
liabilities to which the words of the contract commit him. Clearance and
precision of language are of far higher consequence than elegance of diction.
It is necessary to use same word as often as the same sense is intended than
to change the style and express the same in varying terms. You will do well
to remember the general rule that no agreement shall be entered into unless
it is as certain as human affairs can well be, that its terms are or ought to be
understood by the other party in the same sense in which you understand
these .
Check list/guidelines for drafting specifications is given at Appendix 9.4 of
these manual. These must kept in view by all concerned while drafting
specifications.
(c) Faulty Administration of Contracts. Attention is drawn to Section 16

to 21 of this Manual dealing with various aspects on the subject. These must be
strictly followed.
(d) Deviations. Comprehensive instructions on the subject are detailed in

Section 19 of this manual.
(e) Suspension of Works. It shall be remembered that suspension of work

under Condition 9 of IAFW-2249 is not to be ordered for reasons given in Condition
11 ibid nor for any temporary stoppages due to inclement weather eg temporary
stoppage of concreting in frosty weather.
(f) Changes in Siting. Occasions for changes in siting should not arise if
buildings are laid out and checked on the ground at the “Siting Board” stage and
correct siting plan is prepared and approved by all members of the Board. Availability
of land and hindrances on the site shall be considered at the appropriate stage in
planning of works along with collection and study of basic information about sites as
laid down in Appendix 5.1 to this Manual.
(g) Hindrance Due to Other Contractors Working on Site. Such problems can
be eliminated by GEs by tactfully and intelligently co-coordinating the works of
various agencies/contractors and thus smoothening the execution of work.
(h) Users not Handing over Buildings. Phased programme for handing over of
buildings shall be pre-planned with the users and their agreement obtained in writing.
This exercise shall be completed before the opening of Cover 1 of the tender. In case
of users disagreeing with the programme later on, the matter shall be reported to
their Administrative Head.
(j) Contractors Possessing Inadequate Resources. Choice and selection of

contractors shall be strictly governed by the instructions contained in Section 1 and
3 of this Manual as well as per policy directions issued by E-in-C’s Branch from time
to time.
429
(k) Default by Contractors and Unreasonable Attitude Adopted by Them.

Acquiescence to contractor's default is absolutely fatal. Immediate action shall be
taken as per guidelines laid down hereunder:-
(i) It is pertinent to point out the great importance of not losing a moment
in calling a contractor to account when he is seen to be deviating from his
contractual obligations. Acquiescence or delayed action in case of any
violation of the terms of the contract by the contractor is absolutely fatal. He,
who remains silent, seems to consent. This maxim is sound sense and its
scope is realized by contractors who make full use of it when an opportunity
is offered to them. It is therefore, essential that whatever concession of any
kind is asked for or is made, it shall be categorically denied or limited in clear
written terms to its true extent and be clearly specified as without prejudice to
the right of the Government to enforce the other terms of the contract.
Moreover, the contractor shall be made to understand clearly that unless the
concession is accepted by him on those conditions, it shall be deemed to be
withdrawn altogether. Any concessions granted with price reduction shall be
clearly so specified and express consent of the contractor obtained thereto.
(ii) It is necessary for officers to know what to do in the event of a

contractor abandoning the work or committing any other breach of the
contract. The first principle to bear in mind is that when a contract has been
broken by one party, it is not necessarily an end. The breach entitles the other
party to put an end to contract but he is not obliged to do so (and in the case
of any particular kind of contract the law of 'specific relief' allows him to sue
the defaulter for a decree compelling him to perform the contract) and,
therefore, he can either take this course ie he can either put an end to a
contract or else signify by his words or conduct, acquiescence in its
continuance (Section 39 of the Contract Act refers) so far as the remaining
part is concerned or agree to the revised terms if considered necessary.
•
(l) Overpayments. Instructions contained in Section 18 of the Manual shall be
strictly followed to avoid cases of over payment.
(m) Levy of Compensation for Delay. This includes instructions to examine

cases to waive or reduce compensations under Para 494 of RMES (1968) as
amended. It must be ensured that period allowed for completion is realistic. The
factors which shall be borne in mind while fixing a realistic period of completion are
given in Appendix 5.3. Sufficient thought must be given to draw out network and
time Schedule where tenders are based on CPM.
(n) Delays in Payment of Bills. Speedy finalisation of bills results in reduction

of disputes. In this connection provisions contained in Section 20 of the Manual shall
be strictly observed.
(o) Observation Arising out of Technical Examination of Works and Final

Bills. Instructions outlining the procedure dealing with such observations has been
explained herein before in Section 23 of the Manual. Compliance of these
instructions is vital in eliminating disputes arising out of ADGTEs/STEs/TEs
observations and these shall, therefore, be strictly observed.
430
Proper use shall also be made of the power given to CEs by the Government vide
Para 495 of RMES (1968) to settle contractor’s claims not exceeding ` 10,000/- on
the basis of equity with the concurrence of the PCDA/CDA. It has, however,
been observed that hardly any cases have been taken up with the PCDA/CDA in the
past on the basis of this provision as brought out by the CGDA. Chief Engineers are,
therefore, again advised to exercise their powers with a view to settling disputes in
equity.
431
SECTION 28
PROCEDURE FOR APPOINTMENT OF ARBITRATOR INCLUDING

GUIDELINES FOR APPOINTMENT OF ARBITRATOR
28.1 Procedure to Deal With Contractor’s Request for Appointment of Arbitrator.

28.1.1 In cases where the contractor has signed the final bill without any protest or
reservation and has also received the payment without any protest, no appointment
of Arbitrator shall be done as the accord and satisfaction, as per Section 63 of the
Indian Contract Act 1872, has been fulfilled and the subsequent claims raised by the
contractor are deemed to be waived and extinguished in accordance with Condition
65 of IAFW-2249, General Conditions of Contracts and there are many court
judgments to support the above action of the Department. In such cases, if a request
is received from the contractor to appoint arbitrator, it shall be replied through a letter
as per the format given in Appendix 28.1.
28.1.2 In a case where the contractor has signed final bill with certain specific
claims and later on at the time approaching appointing authority for appointment of
arbitrator brings out certain other claims over and above those listed while signing
the final bill,form of letter to be sent to the contractor shall be as per at Appendix
28.2. This letter shall be signed by the Accepting Officer of the contract and copies
of this letter shall be enclosed to all concerned.
28.1.3 In the past MoL Branch Secretariat Mumbai has observed in cases sent
to them for their advice on arbitration awards that appointment of arbitrator
itself by the Department was not in order as the request for appointment of
arbitrator was time barred ie made after three years from the date of
completion of the work. In such cases where contractor has not given a notice
for commencement of arbitral proceedings within the limitation period of three
years from the date of cause of action, appointment of arbitrator shall not be
done without seeking the legal opinion of MoL Branch Secretariat/LA(Def)
keeping in view the provisions of Limitation Act 1963.
28.1.4 Appointment of Arbitrator During Currency of Contract (For Contracts

up to ₹ 10 crore).
(a) Condition 70 of IAFW-2249 stipulates that unless both parties agree in writing,
reference to arbitration shall not take place until after the completion of works or
alleged completion of works or termination of the contract; but in the event of
cancellation of the contract due to contractor’s default, reference to arbitration shall
not take place until alternative arrangements have been finalized to get the works
completed by other Agency.
(b) Disputes often arise between the Department and the contractor during
currency of the contract on matters concerning interpretation of provisions of
contracts. If these are referred to arbitration during currency of contract, it is quite
likely that some more disputes may have to be referred to arbitrationafter either
completion of the work or finalization of the bill. This would obviously necessitate a
second reference to arbitration. This may encourage unnecessary claims by some
contractors.It may also result in extra work and expenditure involved in preparing
and defending cases in arbitration twice. It would, therefore, be advisable that
normally we may agree to refer such disputes to arbitration only after completion of
the work, as provided under Condition 70 of IAFW-2249.
432
(c) Some disputes arising out of interpretation of the provisions in a contract,

however, may go to the very root of the contract and involve a substantial financial
effect, which if not settled expeditiously may be cited by the contractor as a reason
for his inability to progress the work as scheduled. In such cases, which should be
exceptional, in the interest of timely completion of the work, Accepting Officers may
agree to refer the disputes to arbitration during currency of the contract, if so
requested for by the contractor. However, before agreeing for reference to arbitration
during currency of a contract, as aforestated, a specific written undertaking shall be
obtained from the contractor to the effect that such reference to arbitration during
currency of the contract ie prior to completion of work, is without prejudice to any or
all the rights of the Government under the contract.
(d) With a view to keeping such cases to the minimum, it is, however, suggested
that the cases selected shall be those in which the sum in dispute is over 25% of the
contract amount.
28.1.5 For Disputes During Currency of Contract (For Contracts More Than
₹10 Crore. In such cases, the disputes shall be referred to Disputes Resolution
Board (DRB) as per conditions laid down in the contract.
28.2 Appointment of Arbitrators.
28.2.1 As per Condition 70 of IAFW-2249, a precondition to the appointment of

arbitrator is that:-
(a) There shall be disputes between the parties to the contract, and
(b) The party who wishes to refer the disputes to arbitration shall serve a written
notice to the other party conveying their intention of approaching the Appointing
Authority mentioned in the contract for appointment of sole arbitrator for adjudication
of disputes as per terms and conditions of the contract.
28.2.2 Whenever the Department takes the initiative of referring claims against the
contractor to arbitration, a copy of the request made by the Accepting Officer to the
appointing authority for appointment of an arbitrator must, therefore, invariably be
endorsed, under Registered A/D post to the concerned contractor, by way of notice
to him in terms of Condition 70 of IAFW-2249.
28.2.3 Condition 70 of IAFW-2249 stipulates that unless both parties agree in

writing, reference to arbitration shall not take place until after completion of works or
alleged completion of works or termination or determination of the contract under
Conditions No 55, 56 and 57 of IAFW-2249. It shall be ensured before appointment
of arbitrator during currency of the contract that both the parties have agreed in
writing for the appointment of arbitrator.
28.2.4 It has been observed that some of the Chief Engineers address their letters,
giving concurrence or otherwise to the reference to arbitration, to Directorate of
Contract Management (E-8), Engineer-in- Chief’s Branch. Since Engineer-in-Chief
is the appointing authority as per terms of the contracts, such letters shall be
addressed to Engineer-in-Chief (with copy endorsed to contractor) and not to
Directorate of Contract Management (E-8), Engineer-in-Chief’s Branch. Similarly
letter forwarding the particulars for appointment of arbitrator shall also be addressed
to Engineer-in-Chief but the copy of this letter is not to be endorsed to contractor.
433
28.2.5 The arbitrator appointed by E-in-C is required to acknowledge the receipt of

the letter of his appointment and forward a copy of award published by him. No other
correspondence need be endorsed to E-in-C and CE Zones (Where CE Zone is the
appointing authority in respect of CWE/GE’s Contracts)
28.2.6 While requesting the E-in-C for appointment of an arbitrator, the contractor
is required to notify CE Zone/CCE. On receipt of contractor’s letter requesting the E-
in-C for appointment of an arbitrator, CEs Zone/CCEs shall forward complete
particulars for appointment of an arbitrator immediately but in any case not later than
seven days from the date of receipt of contractor’s letter. This period of seven days
is the maximum period for forwarding of particulars for appointment of an arbitrator.
If any details are to be collected from lower formations, these shall be collected by
CE Zone/CCE on Priority basis by evolving their own system to obtain these
particulars. In no case the particulars shall be delayed. In case the particulars are
delayed beyond the stipulated period of seven days, the personal explanation of the
CE for information of the E-in-C will accompany the particulars. Avoidable delay will
be viewed seriously. Zonal CEs/CCEs may issue similar instructions in regard to
CWE’s and GE’s contracts where they have to appoint the arbitrator. The particulars
for appointment of Arbitrators shall be sent by Fax/e mail to the Appointing authority
as per Performa in Appendix 28.3.
28.2.7 The Procedure to appoint an arbitrator is laid down in Section 11 of ACA-

1996. As per the provisions of Section 11 of the Act, the appointment of arbitrator
has to be made by the appointing authority within 30 days from the date of receipt of
notice invoking arbitration failing which contractor has got right to file an application
in the court for appointment of arbitrator. As such, it is in the interest of the
department that concerned Officers/Staff dealing with such important matters
interact with one another by all means so as to secure appointment of arbitrator
within 30 days. Any case where contractor has moved to the court for appointment
of arbitrator after expiry of stipulated period of 30 days (from the date of notice),
Accepting Officer(s) should defend all such cases as per Supreme Court of India
Judgment in SBP &Co. Vs. Patel Engineering Ltd. and Anr. 2005 (3) Arb LR 285
(SC) delivered on 26 Oct 2005 or any other recent relevant judgments in consultation
with government advocate.
28.2.8 In respect of contracts where arbitration proceedings are governed

byArbitration & Conciliation Act (ACA) 1996 with its Amendment Act 2015, as per
sub section 5 of Section 12 of ACA 1996 inserted through Arbitration & Conciliation
(Amendment) Act 2015, any person who has past or present relation with either of
the parties shall be ineligible to be appointment as an arbitrator. However parties
may waive the applicability of this sub section of this by an express agreement in
writing. A sample of written agreement is at Appendix 28.4. For contracts in which
the Arbitration & Conciliation (Amendment) Act 2015 is applicable, either of parties
can initiate this agreement and forward to the other party. The second party shall
forward this to the appointing authority duly signed, if agreed. This agreement gives
waives only to Sub Section 5 of Section 12 of Arbitration & Conciliation Act 1996
amended through Arbitration & Conciliation (Amendment) Act 2015. However all
other sections of the Arbitration & Conciliation (Amendment) Act 2015 shall be
applicable.
434
28.2.9 The Arbitration and Conciliation Act 1996 confers powers on Arbitrator to
decide on his own jurisdiction under Section 16 thereof. All objections regarding
jurisdiction and arbitrability of the claims shall be raised before arbitrator U/S 16 of
the ACA-1996.
28.2.10 The appointment of Arbitrator shall be done without any reference to the
list of claims, with a request to arbitrator to decide the jurisdiction and arbitrability of
claims of both the parties, which will be submitted before the Arbitrator by the
respective parties in their Statements of Claims. Accordingly, the operative Para of
the specimen appointment letter shall be worded as under:-
“NOW THEREFORE, by virtue of the aforesaid and provisions contained in Condition

70 of IAFW-2249, I hereby appoint you as Sole Arbitrator to adjudicate upon the
disputes pertaining to the above contract and request you to enter upon the reference
and publish your findings and award in respect of disputes between the parties.
However as regards claims which are covered under the final and binding powers of
CWE or any other Officer mentioned in the contract and those which have been
raised by the contractor after signing the final bill with some specific claims, as also
the claims, for which there is specific prohibition in the contract, I request you to first
decide on the jurisdiction and arbitrability of those claims as per terms and conditions
of the contract and Section 16 of Arbitration and Conciliation Act 1996 (including
Amendment Act 2015 as applicable) and only thereafter take up these for
adjudication on merit”.
28.3 Guidelines for Appointment of Arbitrator by E-in-C in CE/CCE’s Contracts.

28.3.1 (a) There shall be a Standing Panel of Arbitrators (SPA) consisting of
following officers from which arbitrator shall be appointed by E-in-C in respect of
CE/CCE contracts.
(i) ADG (Arbitration) - Two
(ii) CE (IDSE Officer) - One
(iii) Brigadier - One
(b) The above officers shall be kept posted at all the times. If number of arbitration
cases are more than the limit up to which SPA can be loaded, there shall be an
Additional Panel of Arbitrators to adjudicate the cases.
28.3.2 Since finalization of an arbitration case generally takes six to twelve months,
following guidelines shall be followed for appointment of officers [Except
ADG(Arbitration)] as Arbitrators in SPA as well as Additional Panel.
(a) Standing Panel of Arbitrators(SPA).
(i) QR –Must have done as Zonal CE for Brig/CE.
(ii) Residual service – Minimum two years.
(iii) No of cases to be allotted –30 to 40 cases for officers having

service up to two years and 50 to 60 cases for officers having service
more than 3 years
435
(iv) Replacement to officers on Standing Panel of Arbitrators shall

be identified three-four months in advance, so that such officers start
getting appointment letters and they can enter into reference. By the
time these officers physically move to standing panel, they would have
received written submission from the parties in most of the cases and
could start conducting hearing on joining the SPA. This step will ensure
maximum output from Arbitrators.
(v) Officers shall be selected for appointment in SPA in consultation

with Jt Dg (Contracts) in E-in-C’s Branch with regard to suitability of
officer for the job.
(vi) No fresh cases shall be given to Arbitrators during the last six
months before retirement.
(b) Additional Panel of Arbitrators. Under normal circumstances, no

officers other than SPA shall be appointed as Arbitrator to maintain
professional approach and expertise. However, if the cases are more than the
capacity of SPA as stated above , then following guidelines shall be followed:-
(i) Officers of rank of Additional CEs Command, who have already
done a tenure in MES as Zonal CE, and having more than two years
of residual service, may be assigned up to 5 cases.
(ii) Officers serving as Jt DG (Contracts) in Command HQs, having
more than two years residual service may be assigned up to 10 cases.
The officers having residual service between one to two years may be
assigned upto 5 cases.
(iii) Officers of the rank of DDG/ Jt DG posted in E-in-C’s Branch
who have already done a tenure of CE Zone and having more than two
years residual service, may be assigned up to maximum of 05 cases
(in case of having service between 2 to 2 ½ years) and 10 cases (in
case of having service between 2 ½ years to 4 years)
(iv) Zonal CEs may be given two to three cases, but shall be the last
priority.
28.4 Guidelines for appointment of arbitrators by CE Command/ADG (Appointing

Authority) in CsWE & GE’s/AGEs Contracts.
28.4.1 Guidelines given in para 10 of Appendix 28.7 shall be followed for
appointment of officers as Arbitrators in respect of CWE/ GE and AGE (I) contracts.
28.4.2 Cases where contractual complications are involved, CE Command/ADG
shall appoint DIR (Contracts) of nearby Zone within the same Command.
28.5 Standard Form of Appointment Letter to be Issued by Appointing Authority.
Sample form of appointment letter to be issued by appointing authority is at
Appendix 28.5. This standard form of appointment letter shall be suitably modified
when it is being issued consequent to court orders (as per sample form at Appendix
28.6).
28.6 Guidelines for appointment of arbitrator in cases where contractor has not
given consent for a serving officer to be appointed as Arbitrator The guidelines of
procedure for appointment of arbitrators is at Appendix 28.7
436
Appendix 28.1
LETTER BY ACCEPTING OFFICERS WHERE REFERENCE

TO ARBITRATION IS NOT CONCURRED
REGISTERED ACK DUE

Office of the ….................
Dated …...........................
No …................/E8
To
Shri/S' Shri/M/s …........................................................................
CONTRACT AGREEMENT No …..................... FOR …..........
Dear Sir(s)
1. Reference your letter No ………………. date ………
2. The Final Bill against the contract quoted above was signed by you with a clear “No
Further Claim” certificate on…..… and payment of the same has been received by you
on……….. without any protest. Therefore the accord & satisfaction has been fulfilled as per
Section 63 of the Indian Contract Act.
3. As per Condition 65 of IAFW-2249-General Conditions of Contracts forming part of

the Contract, no further claims shall be made by the contractor after submission of the Final
Bill and these shall be deemed to have been waived and extinguished.
4. In view of the foregoing your claim is/claims are not entertainable and is/are totally
denied. Please note that in case you take any further action in the matter, you would be
doing so at your risk and cost.
Yours faithfully
CE/CWE/GE
Copy to :
(Appointing Authority) - In view of the position brought out in Paras 2&3 above,
reference to arbitration is not concurred.
437
Appendix 28.2
FORM OF LETTER TO CONTRACTOR WHEN HE INCLUDES OTHER CLAIMS OVER

AND ABOVE LISTED WHILE SIGNING THE FINAL BILL
REGISTERED ACK DUE

Office of the ….................
Dated …...........
No………………/E8
To,
Shri/S' Shri/ M/s ….................................................................
CONTRACT AGREEMENT No …........... FOR …..............
Dear Sir(s)
1. Reference your letter No …................... Dated …..............
2. The Final Bill against the contract quoted above was signed by you with certain
specific claims and “No Further Claim” certificate on …………. and the same was paid to
you on …………../is under audit.
3. As per Condition 65 of IAFW-2249 General Conditions of Contracts forming part of

the contract, no further claims shall be made by the contractor after submission of the Final
Bill and these shall be deemed to have been waived and extinguished.
4. It is noticed from your letter No …………………. quoted above that you have listed
certain claims over and above those listed while signing the Final Bill, which are not
entertainable and are totally denied. Please note that in case you take any further action in
the matter, you would be doing so as at your risk and cost.
Yours faithfully,
CE/CWE/GE
Copy to :
(Appointing Authority) – For information.
438
Appendix 28.3
PARTICULARS FOR APPOINTMENT OF ARBITRATOR
1. Name of the work : .....................................................
2. (a) Contract No : ......................................................
(b) Amount of CA : ......................................................
(c) Contract accepted by : CE …...... Zone/CWE …....../GE...
(d) Contract Administered by : CE …....... Zone/CWE …..../GE…
(e) Date of commencement as per

Work Order No 1 : .........................................................
(f) Date of completion as per Work

Order No 1 : .........................................................
(g) Certified date of completion : .........................................................
3. Name of contractor and his present address

and Index No : ..........................................................
4. Appointing authority mentioned in CA : ..........................................................
5. Total value of claims

(a) Contractor from MES : ₹.........................................................
(b) MES from Contractor : ₹.........................................................
6. Final Bill
(a) Whether final bill signed by the
contractor under protest and date of signing : ............................................................
(b) Whether payment received by the

contractor under protest and date of receipt : ............................................................
7. Confirm that the person requesting for appointment of arbitrator is authorized to bind the firm
to arbitration agreement ie:-
(a) In case of sole proprietorship firm, the request for appointment of arbitrator has been
signed by the proprietor.
(b) In case of partnership firm, the request has been signed by a partner holding power of
attorney empowering him to bind other partners to the arbitration agreement.
(c) In case of limited concern the request for appointment of arbitrator has been signed by
person properly authorized by Memorandum and Articles of Association of the limited
concern.
8. Recommendation of Accepting Officer :………………………………….
(Signature of Accepting Officer)

439
Appendix 28.4
AGREEMENT
FOR APPOINTMENT OF ARBITRATOR
1. A contract was concluded between CE/CWE/GE ___________________ and M/s

____________________ on ___________ for provision of
___________________________ bearing CA No ________________.
2. WHEREAS certain disputes have arisen in the above contract and both the parties
are desirous for appointment of arbitrator to adjudicate upon the disputes.
3. AN WHEREAS as per para 8 of the Arbitration and Conciliation (Amendment) Act

2015 of Arbitration and Conciliation Act 1996, the parties may agree for waiver of the
applicability of the sub Section 5 of Section 12 of Arbitration and Conciliation Act 1996 by
an express agreement in writing.
4. We both parties to the agreement, hereby agree for appointment of a serving officer
as arbitrator by the Engineer-in-Chief (Appointing authority) having degree in engineering
or equivalent.
Signature of Contractor Signature of Accepting Officer

Designation Designation
Name Name
Date: Date :
Signature of Witness
1. _________________
_________________
_________________
2. _________________
_________________
_________________
440
Appendix 28.5
APPOINTMENT OF ARBITRATOR
REGISTERED ACK DUE

Integrated HQ OF MOD (Army)
Engineer-in-Chief’s Branch
Telephone No Kashmir House
New Delhi-110011
No …................../E8 Dated …................
To,
APPOINTMENT OF ARBITRATOR: CA NO ……………………….
Dear Sir,
1. WHEREAS the above mentioned Contract Agreement was entered between the
President of India, represented by CE/CCE/CWE/GE ………… and M/s ………………….
2. AND WHEREAS the said contract includes an arbitration agreement vide Condition
70 of IAFW-2249 (Condition 37 of IAFW 1815Z as applicable) forming part of the contract
which, interalia, provides that all disputes between the parties to the contract (other than
those for which the decision of the CWE or any other person is by the contract expressed
to be final and binding) shall, after written notice by either party to the contract to the other
of them, be referred to the sole arbitration of a Serving Officer to be appointed by the
Engineer-in –Chief/ Chief Engineer…Zone.
3. AND WHEREAS certain disputes have arisen and request has been made to me for
appointment of an arbitrator for adjudication of the disputes.
4. NOW THEREFORE, by virtue of the aforesaid and provisions contained in condition
70 of IAFW-2249, I hereby appoint you as sole arbitrator to adjudicate upon the disputes
pertaining to the above contract and request you to enter upon the reference and publish
your findings and award in respect of disputes between the parties. However, as regards
claims which are covered under the final and binding powers of CWE or any other officer
mentioned in the contract and those which have been raised by the contractor after signing
the final bill with some specific claims, as also the claims, for which there is specific
prohibition in the contract, I request you to first decide on the jurisdiction and arbitrability of
these claims as per terms & conditions of the contract and Section 16* of the Arbitration &
Conciliation Act 1996 and only thereafter take up these for adjudication on merit.
(In cases where arbitration proceedings are governed by Arbitration and
Conciliation Act 1996 with its Amendment Act 2015, the reference to “Arbitration and
Conciliation Act 1996” shall be amended to read as “Arbitration and Conciliation Act
1996 including amendments thereto.”)
5. This letter shall be treated as authority for move sanction for temporary duty (TD) of
the Arbitrator in connection with this arbitration case.
6. Please acknowledge.
Yours faithfully,
Engineer-in-Chief/CE
Copy to
By Registered Post
1. M/s (Contractor)
2. Chief Engineer Zone
3. CWE (In case of CWE contract)
4. GE (In case of GE’s contract)
441
Appendix 28.6
APPOINTMENT OF ARBITRATOR IN COMPLIANCE OF COURT ORDER
REGISTERED ACK DUE

Integrated HQ of MOD (Army)
Telephone No Engineer-in-Chief's Branch
Kashmir House
New Delhi-110001
No ….................../E8 Dated …................
To,
M/S…............................................
…............................................
APPOINTMENT OF ARBITRATOR: CA NO ……………………….
Dear Sir,
1. WHEREAS the above mentioned Contract Agreement was entered into between the
President of India, represented by CE/CCE/CWE/GE……… and M/s …............……………
2. AND WHEREAS the said contract includes an arbitration agreement vide Condition
70 of IAFW-2249 (Condition 37 of IAFW 1815Z as applicable) forming part of the Contract
which, interalia, provides that all disputes between the parties to the contract (other than
those for which the decision of the CWE or any other person is by the contract expressed
to be final and binding) shall, after written notice by either party to the contract to the other
of them, be referred to the sole arbitration of a Serving Officer to be appointed by the
Engineer-in-Chief /Chief Engineer ..Zone.
3. AND WHEREAS M/s …….. had ………… filed applications under Section 11 of the
Arbitration and Conciliation Act 1996 in the Hon’ble High Court ………………….
4. *AND WHEREAS the Hon’ble High Court of …..…… in its order dated .….… (copy
enclosed) has ordered that the disputes of both the parties be referred to the arbitrator to
be appointed be me/has directed to appoint the arbitrator;
5. NOW THEREFORE by virtue of the aforesaid Court order and provisions contained
in Condition 70 of IAFW-2249, I hereby appoint you as sole arbitrator to adjudicate upon
the disputes pertaining to the above contract and request you to enter upon the reference
and publish your findings and award in respect of disputes so far as these are referable to
arbitration in accordance with the said agreement and Court order.
6. This letter shall be treated as authority for move sanction for temporary duty (TD) of
the Arbitrator in connection with this arbitration case.
7. Please acknowledge
Yours faithfully,
Engineer-in-Chief/CE
Encls. Copy of Court order dated …
Copy with enclosures to:-
By Registered Post
1. M/s (Contractor)
2. Chief Engineer Zone
3. CWE (In case of CWE contract)
4. GE (In case of GE’s contract)
*To be suitably worded as per the contents of Court order.

442
Appendix 28.7
GUIDELINES FOR CONSTITUTION OF

MoD PANEL OF ARBITRATORS
1. In view of the approved guidelines for arbitration, empanelment of arbitrator,

assignment of cases and considering the amendments to the Arbitration & Conciliation Act,
an amendment to arbitration agreement shall be carried out in existing contracts in which
there are disputes so that appointment of arbitrator in accordance with the existing legal
provisions can be done. The amendment through which relevant conditions of contract
(Condition 70 of IAFW-2249 / Condition 37 of IAFW-1815Z) shall be amended/substituted
are enclosed at Annexure ‘A’.
2. Following points must also be complied with and disseminated to the concerned
formations as well as the officers to be empanelled as arbitrator at CE Command/ADG
level:-
(a) An officer appointed as Sole Arbitrator shall not resign his appointment on
posting/transfer. He/she shall continue with his /her appointment and publish the
award within the time as laid down under the Act.
(b) Arbitrators who have been appointed and finalised multiple awards shall
periodically give feedback to the Appointing Authority on various aspect of contract
administration, contract execution and preparation & defence of the case by officers
on behalf of UOI for improvement in system.
(c) Appointing Authority shall keep record of officers who could not publish award
within time limit despite co-operation from both the parties during proceedings and
shall periodically forward the list of such officers to E-in-C’s Branch.
(d) Arbitrators shall make use of all available electronic & online means of
communication as well as conferencing for expeditious resolution of disputes and
ensuring timely publication of award.
3. Apart from above, all CEs Command/ADGs should examine the issue of
performance parameters for Arbitrators and forward a list of such parameters to E-in-C’s Br
for reference & further directions.
4. The guidelines enumerated in the succeeding paragraphs are for constituting a

common Panel of Arbitrators for Military Engineer Services (MES) and other Departments
under Ministry of Defence (MoD) henceforth called the MoD Panel of Arbitrators (MoD
PoA).
443
Definitions
5. Governing Committee means the Committee comprising of:-
(a) Engineer-in-Chief (Chairperson)

(b) Rep of MoD/DMA-JS (Works)
(c) Jt DG (Contracts) of E-in-C’s Branch (in his/her absence, Senior Most Jt DG
(Contracts) of MES)
6. Appointing Authority means the authority mentioned in the contract agreement for
appointment of Arbitrator(s).
7. ACA means the ‘The Arbitration and Conciliation Act 1996’ including its
amendments made through ‘The Arbitration and Conciliation (Amendment) Act 2015’ and
‘The Arbitration and Conciliation (Amendment) Act 2019’ and any statutory enactments/
amendments thereof as issued from time to time.
Scope of MoD PoA
8. The list of empanelled arbitrators will be available for nomination as member/

Presiding Officer of Arbitral Tribunal or Sole Arbitrator as the case may be for disputes
arising in the works contracts of Military Engineer Services under Ministry of Defence. Other
Services and Departments under Ministry of Defence desirous of utilising the services of
the Panel of Arbitrators may do so after getting approval from DMA/MoD.
Procedure for Empanelment
9. Following procedure will be followed for empanelment of Arbitrators in the MoD PoA:-
(a) Empanelment will be carried out by inviting applications through open

advertisement in leading national dailies and websites of the concerned department.
The advertisement will be initiated by MES under DMA/MoD and shall specify,
amongst others, the eligibility criteria, conditions of empanelment including period of
empanelment and fee structure. The form for application for empanelment is
enclosed at Annexure 'B'.
(b) Persons who wish to get empanelled as arbitrators shall submit their
application in the prescribed format to the addressee as mentioned in the notification
with all relevant documents attached as Annexures duly marked. One set of the
application alongwith complete enclosures shall also be sent on the email.
(c) The applicants will be shortlisted based on fulfilment of the essential eligibility
criteria given in succeeding Para(s). The Governing Committee will have sole
discretion over basis and criteria for shortlisting of eligible applicants.
444
(d) The Governing Committee will approve the MoD PoA comprising maximum of
25 arbitrators from amongst the shortlisted applicants who qualify the eligibility
criteria.
Eligibility Criteria
10. A person with minimum Bachelor’s degree in Engineering (preferably in

Civil/Electrical/Mechanical Branch of Engineering) with following qualifications shall be
eligible for applying for empanelment:-
(a) Retired MES/Army Officer (retired not below the functional rank of CE
(QS&C)/Chief Engineer/equivalent rank of SAG (corresponding to Level 14 of Pay
Matrix as per VII CPC) /Brig) having done appointment of Zonal CE/CCE/ in MES or
should have at least two years’ experience in handling technical matters of major /
infrastructure works in MES in the functional rank not below CE (QS&C)/Chief
Engineer /equivalent rank of SAG (corresponding to Level 14 of Pay Matrix as per
VII CPC) /Brig.
OR
Retired Officer of Central Government Organisation of core engineering sector

having held the functional post not below the rank of Chief Engineer (SAG)
(corresponding to Level 14 of Pay Matrix as per VII CPC) and having held the field
appointment of project execution in that rank (corresponding to Level 14 of Pay
Matrix as per VII CPC).
OR
Retired officer of Central PSU of core engineering sector having held the post not
below the rank of Chairman/Chief Executive Officer/Chief General Manager.
(b) Retired Army Officer should have preferably served in DGNP/MES/BRO.

(c) Should not have been under disability affecting discharge of duty by virtue of
statutory provision or by reason of public policy or dismissal or removal from service
as a result of any disciplinary proceeding or offence involving moral turpitude.
(d) Should not have been convicted or facing criminal prosecution.
(e) Should not be more than 72 years of age as on date of empanelment. No

renewal of empanelment shall be done after 75 years of age.
(f) Should preferably have experience of conducting or associated with at least one
adhoc or institutional Arbitration.
(g) Should be physically and mentally fit to act as arbitrator. For this purpose,
appropriate Medical Certificate from Authorized Medical Attendant (AMA) not below
the rank of CMO or from any CGHS/ECHS empanelled Hospital shall be submitted
by the applicant.
445
11. In case large number of applications are received, preference may be given to the
applicants having more experience of conducting adhoc or institutional arbitration.
Separate Standing Panel Of Department
12. MES has Standing Panel of Arbitrators, who are serving officers, sanctioned by MoD.
They will automatically form part of MoD PoA. These serving officers of MES on the
Standing Panel of Arbitrators will be assigned arbitration cases only on the receipt of written
consent from both the parties in terms of the provision under Section 12(5) of the ACA. If
either party does not furnish such written consent, then the arbitrators will be appointed
from the MoD PoA so created.
13. For MES Contracts concluded by CWE/GE(I)/AGE(I), a Panel of serving officers of

MES not below the rank of Director/Col/Director (Contracts) (having done at least one
executive tenure of minimum two years or having at least one executive tenure of minimum
two years or having at least two years’ experience of handling contract matters) may be
finalized by CEs Command/ADGs. This Panel will be published by the CEs
Command/ADGs on the MES website to be updated every six months. They will be
appointed as arbitrators by CEs Command/ADGs as per the guidelines in MES Manual on
Contracts subject to receipt of written consent from both the parties in terms of the provision
under Section 12 (5) of the ACA. If either party does not give written consent, arbitrator will
be appointed from the MoD PoA being created now.
Conditions of Engagement/Empanelment
14. Conditions for engagement of the MoD PoA are as follows:-
(a) The initial empanelment will be for three years with effect from date of issue
of letter of empanelment by the Governing Committee. After the expiry of three
years of empanelment, the empanelled persons shall apply for renewal of
empanelment by submitting fresh application. The period of empanelment may be
extended one time for a period of two years thereafter solely at the discretion of
Governing Committee on the terms and conditions as decide by the Committee at
the time of renewal. Renewal of empanelment shall however be subject to
conditions laid down in Para 7 above.
(b) An arbitrator must not delegate his duties to any person.
(c) The ACA including all amendments thereto as issued from time to time by
the Government of India shall be the governing Law.
(d) The disclosure of Conflict of Interest (potential of actual) is mandatory before

acceptance of every reference. The appointee/nominee will disclose if there is any
conflict of interest direct or remote in the subject matter of the dispute or in the parties
before each such reference.
446
(e) Principles of strict confidentiality shall be applicable except for the disclosure
as per law.
(f) The Governing Committee shall be kept informed of any development that
may affect any prospective or present references of arbitration.
(g) All payments to the arbitrator(s) will be online/cheque.
(h) The Governing Committee reserves the right to add or delete the name of
any person to and from the Panel of Arbitrators.
Allocation of Arbitration Cases
15. For contracts of value upto and including Rs 100 crore, the Appointing Authority
shall appoint a Sole Arbitrator from the MoD PoA, including the serving offices of MES
who are on Standing Panel of Arbitrators, in accordance with the terms and conditions of
the contract and subject to conditions stated in Para 9 hereinbefore. However, a Serving
Officer of MES may not ordinarily be assigned arbitration case in respect of contracts having
value more than Rs 50 crore.
16. For contracts of value more than Rs 100 crore, the disputes shall be adjudicated
through an Arbitration Tribunal consisting of three arbitrators. For this, the Appointing
Authority will nominate one arbitrator from the MoD PoA and one arbitrator will be
nominated by the other party from the same MoD PoA. Both the nominated arbitrators shall
then select the presiding arbitrator from the respective Panel.
17. The Appointing Authority shall consider nature of disputes and expertise/
experience of the empanelled arbitrators while nominating them to conduct arbitration
proceedings.
18. Generally not more than seven cases shall be allocated to the empanelled persons
of MoD PoA in one calendar year except for the four Arbitrators in the existing Standing
Panel of E-in-C's Branch and the Panel of Serving Officers of MES, who shall be allocated
number of cases as in the MES Manual on Contracts.
19. The Appointing Authority shall also have the right to terminate the mandate of
arbitrator and transfer the case to any other Arbitrator from the Standing Panel and/or forfeit
the remaining fee if at any stage it is revealed that the applicant has knowingly submitted
a false declaration in his/her application for empanelment. In such cases, the Governing
Committee shall have the right to remove such Arbitrator(s) from the Standing Panel and
to initiate criminal proceedings against such person under the relevant provisions of Indian
Penal Code and/ or Prevention of Corruption Act.
20. In cases covered under Para 19 above, the Arbitrator shall be liable to return to the
Appointing Authority all records pertaining to arbitration proceedings before him.
447
Fee Structure
21. Fees for Arbitration Tribunal shall be as laid down in accordance with Section 11(14)
of ACA including amendments thereto from time to time. The fee structure is enclosed
herewith as Annexure ‘C’. However less fees can be paid if both the parties and the
Arbitration Tribunal agree for the same. Fees prescribed or as agreed will be for the entire
Tribunal irrespective of number of Arbitrators and shall be shared equally amongst the
Arbitrators.
22. Payment of fee will be made in four instalments as under:-

(a) 25% of fee after exchange of statements of claims and pleadings-in-defence
of both the parties.
(b) 25% of the fee after first effective hearing after exchange of documents as
mentioned in Para 22 (a) above.
(c) 25% of the fee after conclusion of hearing.
(d) 25% of the fee after making of arbitral award and issue of notice thereof but
prior to publishing of award.
23. Expenses other than fees of the Arbitration Tribunal shall be as per Annexure ‘D’.
24. The Governing Committee may frame such rules as may be necessary after taking
into consideration the fees in the Fourth Schedule of ACA 1996 as amended through
Arbitration & Conciliation (Amendment) Act 2015, Arbitration & Conciliation (Amendment)
Act 2019 or thereafter from time to time.
25. The fees and other expenses as mentioned vide Para 21 to 23 hereinbefore shall
be borne equally by the parties unless the Arbitrator/Arbitration Tribunal or the Arbitration
Award provides for a different apportionment.
26. No fees shall be paid to the arbitrator(s) who are in service. Such arbitrators may
proceed with arbitration hearing after superannuation with the express agreement of both
the parties. However no fee will be payable in such case even if the complete arbitral
proceedings is concluded and award is published after superannuation. The agreement of
both the parties for continuation of mandate of arbitrator after his/her superannuation shall
be subject to this condition.
Duties and Responsibilities of Arbitral Tribunal
27. The empanelled Arbitrators will have to settle the referred arbitration cases in a time
bound manner in accordance with the provision of the Arbitration & Conciliation Act, 1996
as amended by the Arbitration & Conciliation (Amendment) Act, 2015 (No. 3 of 2016) and
the Arbitration & Conciliation (Amendment) Act, 2019 (No. 33 of 2019) including upto date
amendments.
448
28. An arbitrator should be fair and absolutely impartial. He should have no bias and
should decide the dispute referred to him in a judicious manner and not in capricious or
whimsical manner. The terms of reference under the arbitration agreement should be
strictly followed.
29. The Arbitrator/Arbitral Tribunal shall act and decide the case in accordance with the
provision of the Arbitration & Conciliation Act, 1996, the Arbitration & Conciliation (Amendment)
Act, 2015 (No. 3 of 2016) and the Arbitration & Conciliation (Amendment) Act, 2019 (No. 33 of
2019) including further amendments issued by the Government of India as issued upto date of
reference to arbitration.
449
Annexure ‘A’
The existing descriptions of Condition 70 of IAFW-2249 shall be substituted by the revised
description as under through amendment:
70. Arbitration.
(a) Arbitration Where Applicability of Section 12 (5) of the Arbitration and Conciliation
Act Has Been Waived Off:-
All disputes, between the parties to the Contract (other than those for which the decision of
the CWE or any other person is by the Contract expressed to be final and binding) shall, after written
notice by either party to the Contract to the other of them, be referred to the Arbitral Tribunal of a
Sole Arbitrator (in case of contract sum less than or equal to Rs 100 Crore) or to Arbitral Tribunal of
three Arbitrators (in case of contract sum exceeding Rs 100 Crore) from MoD Panel of Arbitrators.
The officers so considered for appointment of Arbitrator, either as sole Arbitrator or for Arbitral
Tribunal, shall be having degree in Engineering or equivalent or having passed Final/Direct Final
Examination of Sub-Division II of Institution of Surveyor (India) or similar other Institutes recognised
by the Government of India.
In case of arbitration by Sole Arbitrator, the Arbitrator shall be appointed by the Authority
mentioned in the contract document within a period of thirty days of having received the notice from
any of the parties to Contract, out of MoD Panel of Arbitrators. In case of Arbitral Tribunal consisting
of panel of three Arbitrators, both the parties will be asked by the Appointing Authority to suggest at
least two names out of MoD Panel of Arbitrators within thirty days. The Appointing Authority will
appoint two Arbitrators, one Arbitrator each out of the suggested names. The two Arbitrators so
appointed will select one Arbitrator from the MoD Panel of Arbitrators who will be the ‘Presiding
Arbitrator’. The Serving Officer(s) so appointed as Arbitrator(s), either as Sole Arbitrator or as one
of the three Arbitrators in the Arbitral Tribunal, can continue as Arbitrator even after retirement,
provided both the parties to the Contract give written consent to this effect. In such case, however,
the Arbitrator shall not be entitled for any fee even after retirement.
(b) Arbitration Where Applicability of Section 12 (5) of Arbitration & Conciliation Act Has
Not Been Waived Off.
All disputes, between the parties to the Contract (other than those for which the decision of
the CWE or any other person is by the Contract expressed to be final and binding) shall, after written
notice by either party to the Contract to the other of them, be referred to the Arbitral Tribunal of a
Sole Arbitrator (in case of contract sum less than or equal to Rs 100 Crore) or to Arbitral Tribunal of
three Arbitrators (in case of contract sum exceeding Rs 100 Crore). The Officers so considered for
appointment as Arbitrator, either as Sole Arbitrator or for Arbitral Tribunal, shall be having degree
in Engineering or equivalent or having passed Final/Direct Final Examination of Sub Division II of
Institution of Surveyor (India) or similar other Institutes recognised by the Government of India.
In case of arbitration by sole Arbitrator, the Arbitrator shall be appointed by the authority
mentioned in the contract document from the MoD Panel of Arbitrators within a period of thirty days
of having received the notice from any of the parties to Contract. In case of Arbitral Tribunal
consisting of panel of three Arbitrators, both the parties shall be asked by the Appointing Authority
to suggest at least two names out of MoD Panel of Arbitrators within thirty days. The Appointing
Authority will appoint two Arbitrators, one Arbitrator each out of the suggested names. The two
Arbitrators so appointed shall select one Arbitrator from the MoD Panel of Arbitrators who will be
the ‘Presiding Arbitrator’.
450
(c) Common For All Arbitration.

Unless both parties agree in writing, such reference shall not take place until after the
completion or alleged completion of the works or termination or determination of the contract under
Condition Nos 55, 56 and 57 hereof.
Provided that in the event of abandonment of the works or cancellation of the Contract under
Condition No 52,53 or 54 hereof, such reference shall not take place until alternative arrangements
have been finalised by the Government to get the works completed by or through any other
Contractor or Contractors or Agency or Agencies.
Provided always that commencement or continuance of any arbitration proceeding
hereunder or otherwise shall not in any manner militate against the Government’s right of recovery
from the Contractor as provided in Condition 67 hereof.
If the sole Arbitrator or one or more Arbitrators of the Arbitral Tribunal so appointed resign(s)
from his/her appointment or vacate(s) his/her office or in unable or unwilling to act due to any reason
whatsoever, the Authority appointing him/her will appoint a substitute Arbitrator to act in his/her
place in the manner specified hereinabove. In case the Arbitrator resigning in this manner is the
Presiding Arbitrator, the other two Arbitrators of the Arbitral Tribunal shall appoint the substitute
Presiding Arbitrator.
The Arbitral Tribunal may proceed with the arbitration, exparte, if either party, inspite of a
notice from the arbitrator fails to take part in the proceedings.
The Arbitral Tribunal may from time to time with the consent of the parties, enlarge the time
for making and publishing the award subject to the limit laid down in the Arbitration & Conciliation
Act 1996 as amended upto the date on which arbitration proceedings commence.
The Arbitral Tribunal shall make the award within the period as provided in the Arbitration &
Conciliation Act 1996 (as amended upto the date on which arbitration proceedings commence) from
the date of entering on the reference or within the extended period as the case may be on all matters
referred to it and shall indicate findings alongwith sums awarded separately on each individual item
of dispute. The Arbitral Tribunal shall give reason for the award in each and every case irrespective
of the value of claims or counter claims.
The venue of Arbitration shall be such place or place or places as may by fixed by the Arbitral
Tribunal in its sole discretion.
The Award of the Arbitral Tribunal shall be final and binding on both parties to the Contract.
451
Annexure ‘B’
APPLICATION FORM FOR EMPANELMENT OF ARBITRATOR

IN STANDING PANEL OF ARBITRATION UNDER MoD
1 Name (in block letters)

Please affix
2. Address passport size
colour
3. Date of Birth photograph and
sign across it.
4. Contact No, Fax & E-mail
5. Professional Qualifications
Qualification Institution/ University Year of Passing Remarks
6. Professional Experience
(Last 15 yrs)
Organisation Position Held Nature of Duties Remarks
7. (a) Date of Superannuation
(b) Pay Scale/Grade at the time of Retirement/Superannuation (attach copy of

retirement order.
8. Membership of Other Institutions, if any, with Grade/Type of membership
Name of Grade of membership Year Remarks/

Institution Validity
9. Arbitration/DRB/DAB Experience (Domestic)*
TYPE Number
Number of Cases as a Sole Arbitrator/DRB/DAB
Number of Cases as Tribunal Member
10. Arbitration/DRB/DAB Experience (International)*
TYPE Number
Number of Cases as a Sole Arbitrator/DRB/DAB
Number of Cases as Tribunal Member
452
*Copies of first and last page of the Arbitration Award/DRB/DAB recommendation shall be
attached
11. Details of disputes handled

Ser Project Amount of Name of dispute Amount of Claims
No Contract
(attach separate sheet if required)
12. Arbitration Training/Workshop/Seminar etc attended

Name of the Period Year Organizer’s Name Total Duration
Programme
13. I hereby declare that:-
(a) I have retired on superannuation from the Department/service of _______ from the
Office of _______ on _______ .
(b) There was no vigilance/disciplinary case pending against me at the time of my

retirement.
(c) After retirement no vigilance/criminal case has been contemplated against me.
(d) I hereby express to abide by the fee structure and other terms and condition of the
guidelines for empanelment of Arbitrators in MES, Ministry of Defence and appointment of
Arbitrators including amendments thereto as issued from time to time.
(e) I understand that my name will cease to exist on the panel of Arbitrators either on
completion of term of three years or on attaining 72 years of age whichever occurs earlier
and I shall ensure that all arbitration cases referred to me will be concluded within three
months of my attaining the age of 72 years.
(f) I declare that the information given above is true to the best of my knowledge and
belief.
Date : Name and Signature of Applicant

Place :
453
Annexure ‘C’
FEE STRUCTURE
Sum in Dispute Fee structure
Upto ₹ 5,00,000 ₹ 45,000
Above ₹ 5,00,000 and upto ₹ ₹ 45,000 plus 2 percent of the claim amount over and
20,00,000 above ₹ 5,00,000
Above ₹ 20,00,000 and upto ₹ ₹ 75,000 plus 1.5 percent of the claim amount over and
1,00,00,000 above ₹ 20,00,000
Above ₹ 1,00,00,000 ₹ 1,95,000 plus 0.50 percent of the claim amount over
and above ₹ 1,00,00,000 subject to maximum ceiling of ₹
5,00,000
Note:- In the event, the arbitral tribunal is consisting of a sole arbitrator, he/she shall be
entitled to an additional amount of Twenty Five percent on the fee payable as per the table set
out above. Maximum ceiling shall also be enhanced accordingly.
454
Appendix ‘D’
EXPENSES OTHER THAN FEES OF THE ARBITRATION TRIBUNAL
Expenses other than fees for the Arbitration Tribunal which shall be paid are as follows:-
S. Particulars Amount payable per Arbitrator per case

No
(a) Secretarial assistance and ₹ 10,000

incidental charges, telephone,
fax, postage etc. including
charges for publishing/
declaration of award/ settlement
agreement
(c) Other expenses (actuals against bills subject to the prescribed ceiling)
(i) Travelling Expenses for Economy class Air

outstationed Arbitrators
(ii) Lodging and Boarding for As admissible to SAG level officer/as per last
outstationed Arbitrators entitlement, whichever is less.
(d) Local Travel (Taxi/Train) As admissible to SAG level officer/ as per last
entitlement, whichever is less.
(e) Providing facilities of hearing To be arranged by Claimant & Respondent for

rooms alternate hearings / on equal sharing basis.
455
SECTION 29
PREPARATION AND DEFENCE OF ARBITRATION CASES
29.1 Exhaustive and elaborate instructions exist for defending the arbitration cases
effectively by timely filing the written submissions/documents before Arbitral
Tribunal. However, it has been observed that the instructions are not being followed
by the Accepting Officers in letter and spirit resulting into delays in conclusion of
arbitration proceedings and eventual resignation by Sole Arbitrator in large number
of cases without publishing the award thereby also causing duplicity of efforts at all
levels. Keeping in view the strict timelines as per ACA 1996 with latest amendments,
it becomes imperative that there is no delay on the part of Union of India in submitting
the Statement of Claims, Pleadings in Defence and Rejoinders thereto, if any, to Sole
Arbitrator.
29.2 It has also been observed that in certain cases the defence of Government case
during arbitration hearing had been delegated to lower formations which resulted
into in-effective defence of the case and the issues, which could be forcefully
emphasized by the team headed by Accepting Officer himself, could not be brought
home. It is also observed that in majority of cases, where Government is the claimant
(In respect of cancelled contracts), the arbitration proceedings have not been
finalized for years together, resulting into repetitive resignation by successive
arbitrators and appointment of fresh arbitrators one after another. In few cases even
the action for getting the arbitrator appointed was not initiated for four to five years
after the cancellation of the contract. Also there appears to be lack of dedicated
efforts on the part of officials of UOI dealing with such cases so as to bring the
cases to logical conclusion. This type of approach is not appreciated and needs to
be changed.
29.3. The Statement of Case, Pleadings in Defence, Rejoinders thereto and any
correspondence addressed to Sole Arbitrator shall be signed by Accepting Officer
only to meet the legal requirement. However, in respect of GE/AGE(I) contracts, the
above documents shall be vetted by CWE or CE Zone in case of GE (Indep). The
Statement of Cases, Pleadings in Defence& Rejoinders shall be submitted to Sole
Arbitrator within the time frame given by him. All required actions for preparation of
arbitration cases shall be taken well in advance and shall be telescoped to avoid any
delay in submitting the documents to Sole Arbitrator. The Accepting Officer in this
regard shall suitably deal with any negligence.
29.4 In complicated cases, where it is necessary to collect vital data pertaining to

transactions during execution of work and the disputes related to both the design
and contractual aspects, it may become necessary for the Accepting Officer to
appoint a team of officers conversant with all these aspects to jointly help in
preparation and also in defence of the Government case.
29.5 CDA's active cooperation shall be sought at all stages ie in drawing up the Defence
Statement and in advising the MES representative defending the case, particularly
on accounts aspects.
456
29.6 In preparation of the defence of a case before the arbitrator, the Government’s
Defence Statement/ Statement of claim shall include a claim for costs including
estimated costs. The “costs” mean the costs of reference and shall include all the
expenditure involved in the entire case based on the TA/DA payable to officers and
staff who prepare the defence, appear and conduct the proceedings and fees
payable to legal counsels, if any.
29.7 Defence against Contractor’s Claim of Interest.

(a) It is observed that arbitrators have awarded widely varying rates of interest on
the awarded amount for the similar periods. Attention is drawn to Section 31 (7) (b)
of amended ACA 1996 which reads as under:-
“A sum directed to be paid by an arbitral award shall, unless the award
otherwise directs, carry interest at the rate of two per cent higher than the current
rate of interest prevalent on the date of award, from the date of award to the date of
payment.”
The above guidelines of the ACA Act shall be highlighted in the pleading in
defence of UOI asking the arbitrator to consider these guidelines while fixing the rate
of future interest. The current rate of interest shall be as per Section 2(b) of Interest
Act 1978.
(b) There have been cases of multiple interpretation of arbitration award on the
applicability of future interest to the awarded amounts as to whether the future
interest shall be applicable on the amount with or without past and pendent lite
interest. During arbitration the arbitrator should be specifically requested to mention
this with clear stipulation in the award.
29.8 In certain conditions of contracts, GE or CWE or the Accepting Officer is mentioned
as the authority whose decision is final and binding or conclusive on a particular
issue e.g. GE for quality of materials and workmanship in terms of Condition 46 of
IAFW-2249, CWE in respect of Star Rates in terms of Condition 62 of IAFW-2249.
Such cases shall be well defended before the arbitrator stating that all such cases
fall under ‘Excepted matters’ and are as such outside the jurisdiction of learned
arbitrator. Section 16 of ACA-1996 empowers the Arbitral Tribunal to decide/rule on
its own jurisdiction. Similarly in cases where claims are raised by the contractor after
Limitation period is over , the application will be filed before the Arbitrator (before
filing SOC or SOD) asking for rejection of such claims for lack of jurisdiction due to
lapse of Limitation period.
29.9 Causes of delay in settling case through arbitration are:-
(a) Parties to disputes do not submit their statement of case as claimant and
respondent within the dates prescribed by the arbitrator in his notice.
(b) Frequent extensions on one pretext or the other are sought from the arbitrator
for submitting statement of case to him. Even after the statement of case has been
submitted to the arbitrator and dates has been fixed by him for the hearing, further
extensions are sought for postponement of the hearing on some pretext or the other.
(c) Futile arguments are given by the Department for not making available to the
contractor certain documents in their possession for contractor’s inspection.
Documents such as site order book, works diary, measurement books, DOs, cement
consumption register, work stage passing register etc have necessarily to be shown
to the contractor for making notes, if he so desires.
457
29.10 Whenever the Government is the claimant, all cooperation need be afforded to the
contractor by making available copies of all necessary documents to him so that he
could submit his Statement & Pleading to Sole Arbitrator expeditiously. However, if
the contractor still does not cooperate and keeps on asking for extension on one
pretext or the other in spite of ample opportunity afforded by Sole Arbitrator, the UOI
must object to such requests and Sole Arbitrator must be requested to proceed ex-
parte in terms of Section 25 of Arbitration and Conciliation Act 1996 so that the
proceedings are finalized within stipulated period.
29.11 In cases where an important legal principle is involved and the amount in dispute is
large and where the contractor is known to engage a counsel of repute, Government
would be well advised to consider engaging a counsel in addition to the Technical
Officers from the approved Standing Panel of MoL/ Br Sectt.
29.12 Engagement of Private Lawyer.

It shall be ensured that no private counsel is engaged to defend Government cases
in the Court of Law without prior approval of Ministry of Defence & Ministry of Law.
29.13 Retention of Records.

Instances occur when the original documents (Contract Agreement, drawings, final
bills etc.) could not be produced by the PCDA/CDA as the same had been destroyed
by his office in the normal course. No doubt connected documents in such contracts
should not be destroyed by the PCDA/ CDA in normal course. However, if disputes
are subsisting in contracts which are even old and arbitration/court cases are likely,
the Accepting Officer or the GE concerned shall forewarn the PCDA/CDA so that he
preserves the original documents which are in his custody.
29.14 Wherever appointment of outside Arbitrator by Court has to be accepted with or

without recourse to further appeal, UOI shall take all necessary steps to effectively
defend the case before appointed Arbitrator, including engaging a legal counsel, in
case opposite party is represented by an advocate. Accepting Officer will inform E-
in-C’s Branch with full details immediately whenever outside Arbitrator is appointed
by Court.
29.15 Venue of Hearing.

Condition 70 of IAFW-2249, General Conditions of Contract regarding arbitration
provides that the venue of arbitration shall be such place or places as may be fixed
by the arbitrator in his sole discretion. Further as per Section 20 of ACA-1996, the
parties are free to agree on the place of arbitration. Failure to any agreement referred
above, the place of arbitration shall be determined by the Arbitral Tribunal having
regard to the convenience of the case including the convenience of the parties.
29.16 Defending Team in Arbitration Hearing.

Accepting Officer is a party to the arbitration. Prime responsibility of effective defence
of arbitration rests on the Accepting Officer. Thus, he shall be part of the defending
team and shall be given liberty to select his own team without any restrictions. As
such the defence team of UOI shall invariably include Accepting Officer and head of
his contract section and others as decided by them. The final team of defence on
behalf of UOI shall be mix of Contract officers as well as Engineer cadre officers
and site executives. The Accepting Officer will not delegate responsibility of defence
of arbitration cases to lower formations.
458
29.17 Mock Hearing

Mock hearing shall be held for all cases under the chairmanship of the Accepting
Officer before actual hearing. Confirmation of holding mock hearing shall be
submitted by the Accepting Officer to the NHEA as and when it is held.
29.18 The following points shall be noted during defence of cases:-
(a) If as a result of the observations made by the ADGTE’s Directorate disputes

arise and the matter has to be referred to arbitration, the MES formation concerned
shall defend the case as if the claims were based on their own observations and no
reference will be made to the ADGTE’s Directorate either in the statement of case or
during the course of the hearing before the arbitrator.
(b) In order that the amount of the final bill when mentioned by an arbitrator in his
award may not prejudice Government’s claim to recover overpayment under Clause
67 of IAFW-2249 on account of subsequent examination etc, Government pleadings
should always emphasize that the arbitrator shall state the amount of the final bill
separately and further the arbitrator shall also be requested to state in the awards
that this is “without prejudice to any subsequent technical examination as envisaged
in Clause 67 of IAFW-2249”.
(c) After conclusion of each hearing, written brief of the arguments including
copies of additional evidence/exhibits relied/submitted/or proposed to be relied upon
during the hearing shall be submitted to the arbitrator with copy to the other party
under signature of Accepting Officer within 7 days of such hearing.
(d) Towards the closing stages of the arbitration proceedings, total expenditure
incurred by the Government will be brought to the notice of the arbitrator, under
intimation to the opposite party, for taking the same into consideration by him before
arriving at a final decision on costs. The following items will be taken into
consideration in making out a claim for costs:-
(i) Travelling and Daily Allowances payable to officers and staff (including
Defence Accounts Department Officers and Staff) who have to prepare the
defence.
(ii) Travelling and Daily Allowances payable to Officers and staff (including
Accounts Department Officers and staff) who conduct the proceedings or
appear as witness before the arbitrator.
(iii) Fees payable to Legal Counsel, if any.
(e) Statement of claims and pleadings in defence will be prepared by MES

Officers and Government advocate engaged, if any, for defence of the arbitration
case.
(f) Engagement of a counsel or lawyer to help the MES in defending/arguing its

case in an arbitration hearing, shall be resorted to by the Accepting Officer only
when important legal principles are involved and the amount in dispute is large . In
such cases the matter shall be referred to the Min of Law or its Branch Secretariat
who will nominate a suitable counsel or lawyer and fees paid to him as authorized
by the Ministry of Law/Branch Secretariat.
459
(g) Since as per Arbitration and Conciliation Act-1996 as amended, very limited
grounds exist to file objections in the Court u/s 34 of the Act, the officers defending
the cases shall be fully conversant with the provisions of various Sections of ACA-
1996 and shall file/raise objections before arbitrator under relevant Sections viz.
Section 16, 13 etc at appropriate stages so that objections against the award can be
filed in the court for setting aside the award u/s 34 & 37 of Arbitration and Conciliation
Act-1996.
(h) When large sums of money become recoverable from contractors, the course
open to the Department is to establish the claim of the Government in arbitration. It
is seen that in such cases, the contractors sometimes dispose of their properties
before the conclusion of these proceedings thereby preventing the Government from
realizing its dues. The question of safeguarding the interest of the Government in
such cases was referred to Ministry of Law Justice & Company Affairs for their
advice. The advice given by the Ministry is as under:-
“After the contractor has failed to perform the contract, the same may be cancelled
and earnest money forfeited. Thereafter, as soon as the arbitrator is appointed to
adjudicate claims against the contractor, an application may be made to the court
under second schedule to the Arbitration Act for interim injunction restraining the
contractor from dealing with or disposing off his properties without securing the
claims made against him, or for appointment of Receiver over his properties, where
there are facts that the contractor is not solvent and he attempts to mortgage or
encumber or sell his properties or assets.
In between the cancellation of the contract and obtaining injunction/appointment of

Receiver, if any action is taken by the contractor to avoid realization of the
Government dues, which may be awarded, the only practical course is to award
contracts only to financially sound contractors.
If the interim transfer by the contractor can be proved fraudulent or voluntary without
consideration, steps may be taken to set aside such transfers in appropriate cases”.
Note:- The above advice shall be applicable for contracts not having Performance
Security provisions.
460
SECTION 30
ACTIONS TO BE TAKEN AFTER RECEIPT OF AWARD, MEMORANDUM OF AWARD,

STAMP DUTY ON AWARD, MISCELLANEOUS ISSUES PERTAINING TO
ARBITRATION CASES ETC.
30.1 Examination of Awards.

After receipt of the award from Arbitrator, the award shall be carefully examined by
Accepting Officer and Head of the Contract Section to find out if there is any
computational error, clerical error, typographical error or any error of similar nature
or any interpretation of a specific point or part of the award required from Arbitrator.
In case of any such eventuality, the matter shall be referred to the Arbitrator for
necessary action under Section 33 of the ACA 1996. On perusal of the awards
received in E-in-C’s Branch, it has been observed that cases of computational errors
were not referred back to Arbitrator for correction resulting in payment of more
amounts to contractors. This has been viewed seriously by the higher authorities.
30.2 Implementation of Awards/Filing Objections on Awards after Obtaining Advice

of LA(Def)/MoL Branch Secretariat.
30.2.1 Based on the amount of award, following actions shall be taken:-
(a) In respect of award, where the total amount awarded in favour of the
contractor (excluding the agreed part of final bill amount, Security Deposit,
interest etc due to the contractor) does not exceed ` 2,00,000/-, the Accepting
Officer (CWE in respect of GE’s contract), may himself take a decision as
regards implementation/contesting of the award in consultation with
concerned Government Counsel/CGSC.
(b) In respect of award, where the total amount awarded in favour of the
interest etc due to the contractor) is in excess of ` 2,00,000/-but does not
exceed `10,00,000/-, the Accepting Officer (CWE in respect of GE’s contracts)
will seek the advice of LA (Def)/ Min of Law Branch Sectt, as applicable.
Cases where advice of LA (Def) is required, CE Zone/CCE shall submit the
case to E-in-C’s Branch alongwith his recommendations. CE Zone/CCE
(CWE in respect of CWE & GE’s contracts ) shall take a decision regarding
implementation/contesting of the award based on the advice of LA (Def)/ Min
of Law Branch Sectt.
(c) In respect of award, where the total amount awarded in favour of the
interest etc due to the contractor) is in excess of ` 10,00,000/-, the Accepting
Officer (CWE in respect of GE’s contracts) will seek the advice of LA
(Def)/Branch Sectt, as applicable. Cases where advice of LA (Def) is required,
CE Zone/CCE shall submit the case to E-in-C’s Branch alongwith his
recommendations. If the advice of LA(Def)/Branch Sectt is to contest the
award, CE/CCE will take immediate action to contest the award. In case the
advice is to implement the award, DGW shall take a decision regarding
implementation based on advice of LA (Def)/ Branch Sectt. The cases
461
involving advice of Branch Sectt to implement the award shall be forwarded

to E-in-C’s Branch by CE/CCE within 45 days of publication of award for
decision of the DGW with regard to its implementation.
(d) While referring the case to LA (Def)/Branch Sectt, all relevant

documents pertaining to the arbitration such as certified copy of CA including
General Conditions of Contract, statements of the claims and defence
submitted to the arbitrator by both the parties, copy of the arbitration award
etc shall be forwarded to them. The salient points as well as any matter of
special significance or interest, which has a direct bearing on the arbitration,
shall be highlighted in the forwarding letter. The relevant Paras in statement
of claims/defence and the award shall also be highlighted for easy reference.
If any counsel had been engaged to represent the Union of India during the
arbitration hearing, his comments shall also be obtained (without payment of
any fees) and furnished to LA (Def)/Branch Sectt. The LA (Def)/Branch Sectt
shall be requested to offer the advice/opinion on the awards. They shall also
be requested to indicate the specific grounds u/s 34 of Arbitration and
Conciliation Act, 1996 on which the award shall be contested, if their advice
is to contest the award.
30.2.2 Action to contest or implement the award shall be taken as per advice given
by the LA(Def)/Branch Sectt. If the Accepting Officer (or CWE in case of contract
accepted by GE) feels that the facts of the case are not fully appreciated by
LA(Def)/Branch Sectt or fresh facts/consideration have come to light and hence
reconsideration of advice rendered by LA(Def)/Branch Sectt is required, in such
cases, the following actions shall be taken:-
(a) LA (Def)/Branch Sectt shall be re-approached with new facts for

reconsideration of advice and further action shall be taken as per the final
advice.
(b) The case shall be sent to E-in-C’s Branch through CE Zone/CCE, by

hand through an officer well conversant with case, where advice of LA (Def)
is required.
30.2.3 Application for setting aside award u/s 34 of ACA-1996 has to be filed within
three months from the date on which the party making that application had received
the award or if a request has been made under Section 33, from the date on which
that request had been disposed of by the Arbitral Tribunal. Therefore, it is necessary
that the advice of LA (Def)/Branch Sectt is obtained expeditiously so that wherever
required, the objections to the award can be filed within limitation period and
Government interest is safeguarded. However it has been observed that some
formations are forwarding the cases for seeking advice of LA(Def)/ Branch Sectt after
a period of three months and in certain cases after filing objections in the court. Such
cases have resulted into severe criticism from LA (Def) /Min of Defence and LA (Def)
has declined to render legal advice in such cases stating that since the objections to
the award have already been filed without their advice, seeking advice at this stage
will serve no purpose. In few cases, the objections to the award were filed without
advice of LA (Def) and subsequently LA (Def) advised to implement the award
rendering the entire exercise of filing objections futile.
462
30.2.4 In order to avoid the embarrassing situations as mentioned above, it will be

ensured that the complete case for obtaining advice of LA (Def)/Branch Sectt is
forwarded within one month from the date of receipt of the award so that the legal
advice is available at the time of filing of objections to the award within the limitation
period of three months laid down in Section 34(3) of Arbitration and Conciliation Act,
1996. In case, the documents for obtaining legal advice are not received in E-in-C
HQ within one month from the date of receipt of the award, concerned DIR (C) shall
bring the documents personally to E-in-C HQ alongwith explanation for delay under
the signature of CE Zone/CCE.
30.2.5 Whether to contest or accept an award depends upon the circumstances and
facts of each case. No exhaustive catalogue and strait jacket formula can be
formulated laying down some rigid rules/grounds to challenge or implement the
award. However, some of the grounds to challenge the award are listed below for
guidance:-
(a) All grounds provisioned in Section 34 of Arbitration and Conciliation

Act, 1996. In case of Arbitration Act, 1940, all ground provided in Section 30.
(b) Award in violation of contract conditions.
(c) Award against the law.
(d) Award disproportionate to the amount of contract.
(e) Award where huge public money is involved.
(f) Award where adequate opportunity has not been afforded to the
Department to present and defend the case.
(g) Duplicity of claims awarded.
(h) Award showing great element of bias against the Department such as
disallowing or reducing Government claims on untenable grounds.
(j) Arbitration award allowing past, pendent lite interest on claims of

damages.
(k) Time barred amendments to award or amendment amending substance

of award.
30.2.6 Grounds such as arbitrator allowing contractor’s claims in full, arbitrator

allowing interest on claims, claims allowed against pleadings of Department and the
like, are no valid grounds to challenge the award. Unless thorough analysis and
scrutiny of award is carried out, Department will not able to take a reasonable
decision on the award and resultantly may land up in long drawn litigating or paying
interest on those awards, where there are reasonable chances of success of getting
the award set aside. Supreme Court in “Oil and Natural Gas Corporation Ltd. vs. Saw
Pipes Ltd; 2003 ( 2) Arb LR 5 (SC)” while dealing with ambit and scope of court’s
jurisdiction where award is challenged under Section-34 of Arbitration and
Conciliation Act, 1996 has called out grounds in Para 74 of Judgement on which
award can be set aside. The Para 74 is reproduced in sub-section 32.11 of this
Manual.
463
30.2.7 The recommendations of CE Zone/CCE, which shall be given invariably in all

cases, shall include the grounds on which award is proposed to be challenged. It is
needless to emphasize that the legal opinion of local Government Counsel shall
accompany the case, as LA (Def) does not entertain the cases devoid of legal opinion
of Government counsel. It has also been observed that in certain cases legal opinion
given by the CGSC is sketchy without giving any specific grounds for challenge under
section 34 of ACA 1996. Therefore CGSC shall be invariably requested to highlight
specific grounds, in case his advice is to contest the award.
30.3 Action on Receipt of Award.

The following procedure shall be strictly followed on the receipt of award:-
30.3.1 Awards in Respect of CE/CCE Contracts Where Opinion of LA(Def)/MOL

Branch Sectt is warranted:-
(a) On receipt of copy of award by CWE/GE(I) office, summary of award

showing claims preferred and awarded/rejected and comments on each claim
shall be prepared by DCWE/ ACWE(C).
(b) Award shall be examined jointly by CWE and DCWE/ACWE (C) with
reference to guidelines mentioned hereinbefore and conclusion arrived
whether to contest or implement the award carving out the broad grounds for
doing so and clearly bringing out salient points of award.
(c) The conclusion arrived alongwith the grounds for doing so shall be
reflected as recommendation of CWE in Statement of Case, as per Appendix
30.1 attached hereinafter and forwarded to the CE Zone alongwith other
documents as required for seeking the advice of LA (Def)/Branch Sectt.
(d) If the Government counsel has been engaged to present/defend the

case in arbitration hearing, his advice will be mandatory to be obtained in
writing by CWE’s office by personal liaison and discussion by
DCWE/ACWE(C). Before discussion with Government counsel, discussion
may also be held with DIR (C) by DCWE/ACWE(C) so as to frame the issue
briefly to facilitate discussion with the Government counsel. The legal opinion
of Govt counsel shall be obtained through personal liaison by DCWE(C).
However, submission of cases to LA(Def) shall not be delayed on this
account.
(e) The legal opinion of Government counsel shall form part of documents
sent by CWE’s office to CE Zone. However, the conclusion arrived by CWE’s
office whether to contest the award or implement it, shall not solely be based
on the opinon given by Government counsel. In case, CWE’s conclusion is
different than the opinion given by the Government counsel, the reasons to
differ with shall be clearly brought out in the statement of case.
(f) The above exercise shall be completed by CWE’s office as early as

possible to ensure that complete case reaches CE Zone within 15 days of
receipt of award.
464
(g) CWE’s office shall not wait for the case to be submitted by GE’s office.
Any documents or assistance required from GE will be obtained on phone or
by personal liaison.
(h) On receipt of case from CWE’s office, the award will be analyzed by
DIR (C)/SSW in CE’S/CCE’S Office. Each and every aspect of award, CWE’s
recommendation and opinion of Government counsel shall be scrutinized and
analyzed thoroughly by him. Opinion will be formed by DIR(C) whether it is
prudent to implement the award or contest it and grounds to do so will be
culled out. Since DIR(C)/SSW is expected to be conversant much more than
any other officers associated with the case, he is in a position to form better
opinion and his opinion may not necessarily be solely based on
recommendation of CWE and/or opinion of Government counsel.
(j) CE Zone shall form his opinion in consultation with DIR(C)/SSW and
reflect the same in Statement of case alongwith grounds on which it is
proposed to implement or contest the award. Thereafter, complete
case/documents shall then be forwarded to E-in-C’s Branch through CE
Command/ADG for obtaining the advice of LA (Def) or to Branch Sectt as the
case may be, briefly mentioning the following for quick and easy
comprehension of the case:-
(i) Gist of grounds to contest/or implement the award.
(ii) List of documents being forwarded. Each document be properly

marked and flagged.
(iii) The date of expiry of limitation period.
(k) Simultaneously one set of documents shall be forwarded to CE

Command/ADG for opinion of his Jt DG (C)/DIR. In order to avoid any delay,
CE shall detail his DIR(C)/SSW/Jt DIR(C) to discuss the matter with Jt DG
(C)/DIR(C) of CE Command/ADG. Opinion of Jt DG (C)/Dir (C) of CE
Command /ADG shall be forwarded promptly.
(l) Following documents shall be enclosed with the case:-
(i) Statement of Case alongwith summary of awards and

comments on claims awarded.
(ii) Brief history of case.
(iii) Opinion of Government counsel if required as per Para (d)

above.
(iv) Copy of Statement of claims of both the parties.
(v) Copy of pleadings in defence of both the parties.
(vi) Rejoinder, if any, submitted by both the parties.
(vii) CA folder, relevant provisions duly flagged.

465
(m) The above exercise is to be completed by CE Zone/CCE expeditiously

to ensure that the complete case reaches E-in-C Branch/Branch Sectt within
one month of receipt of award.
(n) The period of limitation as per Arbitration and Conciliation Act, 1996 is
only 3 months extendable by 30 days on sufficient reasons shown to the
satisfaction of court and fully at discretion of court. In case advice of LA
(Def)/Branch Sectt is not received within two months after publication of award
despite submission of all documents to LA (Def) for advice through E-in-C’s
Branch or to Branch Sectt (as the case may be), an officer conversant with
the case shall be detailed by Zonal CE to meet LA (Def)/Branch Sectt to obtain
further advice/direction in the matter. Any lapse on this account shall be
viewed seriously. It would be pertinent on the part of Accepting Officer to
ensure filing of objections to award in consultation with Government counsel
within original limitation period of 3 months pending advice of LA (Def)/Branch
Sectt. Please note that limitation period of 3 months and extension of 30 days,
if court is satisfied on sufficiency of reason, is only available and nothing more
than this prescribed period is available under the law. In case objections are
not filed within this limitation period, the same would be time barred, not
extendable under any circumstance.
(o) The cases where there is no disagreement between the advice of MoL
Br Sectt and CE Zone/CCE regarding contesting of award, need not be
forwarded for the approval of DGW and such cases shall be contested within
the limitation period.
30.3.2 Awards in Respect of CWE’s and GE’s Contracts where Opinion of LA

(Def)/Branch Sectt is warranted:-
(a) On receipt of award by GE, Summary of award (showing the claims

preferred and awarded) and comments on each claim shall be prepared by
AGE(C)/JE (QS&C) posted in GE’s office.
(b) Award will be examined jointly by GE & AGE(C)/JE (QS&C) with

reference to guidelines mentioned herein before and conclusion arrived
whether to contest or implement the award culling out the broad ground for
doing so.
(c) The conclusion arrived alongwith grounds for doing so shall be

reflected as recommendation of GE in statement of case, as per Appendix
30.1 attached here-in-after forwarded to CWE’s office alongwith other
documents as required for seeking advice of LA (Def)/Branch Sectt.
(d) The above exercise is to be completed by GE’s office as early as

possible to ensure that the complete case reaches CWE’s office within 10
working days of receipt of award. If the government counsel had been
engaged to present/defend the Government case in arbitration hearing, his
opinion will be mandatory to be obtained in writing by CWE’s office by
personal liaison. Matter shall be discussed with Government counsel by
DCWE(C)/ACWE(C) so as to frame the issues briefly to facilitate Government
counsel to apply his mind and give his fair opinion. The legal opinion of Govt
counsel shall be obtained through personal liaison by DCWE(C). However,
submission of cases to LA(Def) shall not be delayed on this account.
466
(e) The advice of Government Counsel shall form part of documents to

be sent to obtain the advice of LA (Def)/Branch Sectt.
(f) On receipt of case from GE’s office, the award will be analyzed by
DCWE(C)/ACWE(C) of CWE’s office. Each and every aspect of award, GE’s
recommendation and opinion of Government counsel shall be scrutinized and
analyzed thoroughly by him. Opinion will be formed by DCWE(C)/ACWE(C)
whether it is prudent to implement the award or contest it and grounds to do
so will be culled out. Since DCWE(C)/ACWE(C) is expected to be well
conversant with the case as compared to other officers associated with the
case, he is in a position to form better opinion and his opinion may not
necessarily be solely based on GE’s recommendations and/or opinion of
Government counsel.
(g) CWE shall form his opinion in consultation with his DCWE/ACWE(C)
and reflect the same in Statement of Case alongwith grounds on which it is
proposed to implement or contest the award.
(h) The complete documents shall then be forwarded to CE Zone under

the forwarding letter signed by DCWE(C)/ACWE(C) briefly mentioning the
following for quick and easy comprehension of the case:-
(i) Gist of grounds to contest/implement the award.

marked and flagged.
(iii) The date of expiry of limitation.
• (j) The above exercise is to be completed by CWE’s office expeditiously

to ensure that the complete case reaches CE’s office within three weeks of
receipt of award.
(k) On receipt of case from CWE’s office, DIR(C) in CE’s office shall
examine the case. If some deficiency is noticed by him, the same shall be
rectified by personal discussion with CWE/GE. Recommendation of CE in
GE’s and CWE’s contracts is not necessary. The complete case shall then
be forwarded to E-in-C’s Branch/Branch Sectt by DIR(C) briefly mentioning
the following for quick and easy comprehension of the case:-
(i) Gist of grounds to contest/implement the award.

marked and flagged.
(iii) The date of expiry of limitation.

467
(l) Following documents shall be enclosed with the case:-
(i) Statement of Case alongwith summary of awards and

comments on claims awarded.
(ii) Brief history of case.
(iii) Opinion of Government counsel if required as per Para (d)

above.
(iv) Copy of Statement of claims of both the parties.
(v) Copy of pleadings in defence of both the parties.
(vi) Rejoinder, if any, submitted by both the parties.
(vii) CA folder, relevant provisions duly flagged.
(m) The above exercise will be completed in CE’s office expeditiously to

ensure that case reaches E-in-C Branch/Branch Sectt within one month of
receipt of award. If the case is delayed beyond four weeks,
DCWE(C)/ACWE(C) shall bring case personally to E-in-C’s Branch or Branch
Sectt, as the case may be.
(n) As regards limitation for filing the objection, please refer Para 30.3.1(n)
above.
30.3.3 Action after Dispatch of Case from CE Zone’s Office:-
(a) After dispatch of case from CE Zone, DIR(C) of Zone will contact on
phone concerned DIR(C) of E-in-C Branch and apprise him of the case. He
will remain in constant touch regularly on phone till receipt of LA (Def) advice.
(b) In case where the advice of Branch Sectt is sought, DIR(C) in case of
CE’s contracts and DCWE(C)/ACWE(C)/GE as the case may be in CWE’s
and GE's contract, will remain in constant touch on telephone with the Law
Officer concerned of MOL Branch Sectt till the receipt of advice.
(c) It shall be the responsibility of DIR(C) of the Zone in case of CE’s

contracts and DCWE(C)/ACWE(C) of CWE’s office in case of CWE/GE’s
contracts, to ensure that cases of LA(Def)/Branch Sectt are progressed
expeditiously. Any hold up anywhere shall be brought to the notice of CE/CWE
as the case may be in writing and will take action as directed by CE/CWE to
obtain the advice.
30.3.4 Action on Receipt of Case in E-in-C’s Branch:-
(a) The case shall be analysed with reference to award, CE/CWE’s

recommendations and opinion of Government counsel, if any. Case will then
be sent to LA (Def) through DMA(D Wks II) duly recommended to implement
or contest the award.
468
(b) If any deficiency is noticed in the case, the same shall be

communicated through email/ fax/Speed Post/telephonically. CE/CWE shall
ensure that deficiency is rectified within three days of receipt of
communication.
(c) Case in E-in-C’s Branch shall normally be processed within 10 days of

receipt of case from the Zone after rectifying the deficiency, if any.
(d) Where advice of LA (Def) is given to implement the award, the decision
of DGW to implement the award shall be conveyed to CE/CCE by E-in-C’s
Branch simultaneously alongwith the advice of LA (Def).
30.3.5 Where the advice of Branch Sectt is to implement the award, CE Zone shall
forward the case to E-in-C’s Branch for the decision of DGW for implementation or
otherwise, where applicable. The documents required shall be the same as being
submitted to obtain advice of LA (Def) accompanied by the advice of Branch Sectt.
In case CE strongly feels that award should be implemented/contested contrary to
the advice of Branch Sectt, the case shall be forwarded to E-in-C’s Branch alongwith
all such grounds to take up the case with LA (Def), but such cases should really be
meritorious and special. In no other cases the advice of LA (Def) is required when
the advice has been rendered by Branch Sectt except where Branch Sectt. has
advised to file the SLP in the Supreme Court of India. Where it is advised to file the
SLP in Supreme Court of India, the case shall be sent promptly as processing the
case for SLP takes considerable time as Central Agency Section of Ministry of Law
accepts cases for SLP only through LA (Def).
30.3.6 Case of charged expenditure shall be initiated through E5 channel within one
week of receipt of decision to implement the award. Communication of legal
advice/decision shall be made through email/fax and on phone so that expeditious
action can be taken by GE to initiate the charged expenditure case.
30.4 Subsequent to Trial Court Order.
In case advice of LA(Def)/Branch Sectt is to contest the award under section 34,
necessary action shall be taken by the Accepting Officer in consultation with
government counsel to file the objections in the trial court. Once the decision by the
trial court is pronounced, following action shall be taken:-
30.4.1 Advice of LA (Def)/MOL Branch Sectt shall be taken whether court

pronounces the order in favour of award or against it. It may be noted that the advice
is mandatory to be obtained at each stage. In case of appeal/revision/SLP, the
limitation period is very short and prompt action needs to be taken at all levels.
Pending advice, appeal/revision be filed in consultation with Government counsel to
take care of the limitation. In case LA (Def)/Branch Sectt advises to implement the
court order and decision is taken to implement the award, appeal/revision filed in the
court may be withdrawn with the leave of court. In case it is advised to contest, the
appeal shall be continued with full vigour.
469
30.4.2 The trial court order shall be properly examined by Department. Though
advice of Government counsel/Branch Sectt would be mainly helpful but again the
decision to file the appeal may not be taken in a routine mechanical manner. It may
be appreciated that award gets scrutinized at Trial Court stage to a great extent and
unless there exist substantial law points which have not been appreciated by the
Trial Court, chances of success in appeal are remote. Cases going to Supreme
Court to file SLP shall be limited to very deserving ones as by that time award gets
filtered twice initially at Trial Court stage and again at the stage of High Court.
30.4.3 After pronouncement of judgement by High Court, the advice of LA (Def) is

necessary whether to file the SLP in Supreme Court or not. In case LA (Def) advises
to file the SLP, the file is routed through Ministry of Law to Central Agency Section
who organizes further activities pertaining to filing of SLP. This process takes
considerable time period and limitation period is only 90 days. It is, therefore,
expedient to forward the case within 3 weeks of pronouncement of judgement to
E-in-C Branch.
30.4.4 Following documents are required to be forwarded alongwith the case while
seeking advice of LA(Def)/Branch Sectt:-
(i) Copy of Judgement by Trial Court.
(ii) Advice of Government Counsel/Branch Sectt.
(iii) Copy of reply to petition/appeal filed by both parties.
(iv) Copy of award.
(v) Copy of earlier advice rendered by LA (Def)/MOL Branch Sectt.
(vi) Statement of Case alongwith summary of award and comments on

claims upheld or set aside by the court with recommendation of CE/CWE as
the case may be.
30.5 Where there is no CWE and GE is functioning as GE Independent ie GE (I), all duties
and responsibilities entrusted to CWE and his DCWE(C)/ACWE(C) shall be
performed by GE (I) and his AGE(C) respectively.
30.6 In every correspondence, the file No of E-in-C Branch shall be quoted to locate the
record quickly.
30.7 It has been noticed that few Accepting Officers send reminders to E-in-C’s Branch
seeking the present position of LA (Def) cases which is improper. It needs to be
understood that the entire case file is sent by E-in-C’s Branch to DMA for advice of
LA (Def) and there is no system of sending reminders to DMA. Moreover a special
report is already introduced for this purpose and details shall be forwarded to E-in-
C’s Branch by CEs Zone/CCEs in respect of pending LA (Def) cases. As such there
shall be no requirement of separate reminder to E-in-C HQ. However in urgent cases,
involving execution of Court decree etc, an Officer fully conversant with the case
shall be detailed to E-in-C HQ to liaise with MOD and LA (Def).
470
30.8 After having received the decision to implement the award from the competent
authority, GE shall take prompt action for payment of awarded amount in favour of
contractor through hand receipt under Section T-Deposits & Advances-Part IV-
Suspense-Suspense Account in the Public Account of India to safeguard
Government from accumulation of interests/realization of awarded amount in favour
of Govt. The cases for allotment of Charged Expenditure shall also be progressed
simultaneously through E-5 channel as brought out in para 30.3.6 above.
30.9 Where the award has been published under the Arbitration Act 1940, the case for
legal advice shall be sent to E-in-C HQ by hand within two weeks from the date of
receipt of the award.
30.10 Arbitration Awards in Favour of Union of India.
(a) The instructions contained in above mentioned Paras are for arbitration
awards in favour of contractor. These instructions shall also be applicable in respect
of awards in favour of department. But these Instruction shall be followed only when
the arbitrator has awarded full amount with reasonable interest (reasonableness of
the rate of interest shall be decided by the authority competent to implement the
award) to UOI as claimed and amount in favour of contractor only to the extent
agreed by UOI. In such cases there is no requirement of obtaining any legal
opinion/ advice of the Govt counsel/CGSC/LA (Def)/Branch Sectt.
(b) In cases where the arbitrator has not awarded the full amount as claimed by
UOI or UOI claim on account of Risk and Cost Contract has been disallowed or
reduced by the arbitrator, the award shall be processed to the competent authority
as mentioned in para 30.2 with reference to amount of UOI claim and not with
reference to amount of award and legal opinion/ advice shall be obtained as
mentioned in para 30.2 above.
30.11 Memorandum of Award.

Once the decision is taken to implement/contest the award, the memorandum of
award in given format in this Manual shall be published by the Accepting Officer
(CWE in case of GE’s contract) as per format given in Appendix 30.2.
30.12 Stamp Duty on Award

30.12.1 Award not stamped or under stamped according to the scale applicable to
the State in which the award is published (signed) are subject to levy of penalty in
addition to the stamp duty. Similarly awards presented for filing in a court, if not
stamped or under stamped according to scale applicable to the State in which the
court is situated, are liable to penalty in addition to the stamp duty. As the stamp duty
on an instrument is levied by the State in which the instrument is executed, the stamp
paper should be purchased in the State in which the arbitrator executes (signs) his
award. If on the request of any of the parties the award is to be filed in a different
state from the state in which it was executed, the stamp duty applicable in that state
(where award is to be filed) shall be ascertained and if any increased duty is payable,
the difference shall be made good in the form of non-judicial stamp paper of the
required value purchased from that state and it shall be added to the award before
presenting it for filing in the court.
471
30.12.2 If this action is taken before filing the award, no penalty would be levied.
However if such action is not taken before filing the award, in addition to the
difference in the stamp duty, penalty may also have to be paid by the arbitrator as
directed by the court.
30.12.3 Arbitrator shall indicate on the duplicate and other copies of the award, which
he sends to both the parties, at the right hand top corner, the value of the stamp
paper on which the original award has been published (typed).
30.13 Regularisation of Excess Payments Arising Out of Awards.

In regard to the question as to whether or not the excess payment arising out of
arbitrator’s award, shall be viewed as infructuous expenditure and regularised under
orders of the competent financial authority, it has been decided that normally the
arbitrator’s award shall be taken as the correct payment due under the contract and
the question of any regularisation should not arise, except where the excess payment
ordered under the awards arose out of irregular or faulty conclusion or operation of
the contract. Cases of payment arising out of arbitration awards shall accordingly be
examined and regularisation watched, wherever necessary, depending on the merits
of each case.
30.14 Disposal of Original Awards by Arbitrators alongwith Arbitration Proceedings.

Officers acting as arbitrators should normally hold on to the files and papers
pertaining to the arbitration till about four months from the date of publication of the
award. After four months, if no request for filing the award is received during that
period, these should be forwarded to the Appointing Authority, in sealed covers
indicating thereon brief particulars of the contents for record.
30.15 Settlement of Commercial Disputes between Public Sector Enterprises and

Govt. Deptt. through Permanent Machinery Of Arbitration (PMA).
Detailed instructions regarding settlement of commercial disputes between MES
(Government Department) & PSUs are contained in Ministry of Heavy Industries
&Public Enterprises, Department of Public Enterprises letter dated 22nd Jan 04 and
amended vide letter dated 12 June 2013 placed at Appendix 30.3 hereto.
30.16 Irregularities/Lapses While Dealing With Awards/Court Cases.

30.16.1 On perusal of various cases received in this HQ for advice of LA (Def),
following irregularities/lapses have been observed:-
(a) Objections on the arbitration award are filed in the court not having
jurisdiction to deal with the case.
(b) Objections against the awards are not filed within the limitation period
given in the ACA 1996.
(c) Appeals against the orders of lower courts are not filed within the
limitation period.
(d) Arbitrators are made as respondents in the Arbitration Application filed

in the courts which leads to the issue of summons to Arbitrators by the courts,
which is undesirable.
472
(e) Copies of documents like court judgements, site documents, petitions

filed in court cases etc are not readable leading to delay in processing the
cases.
30.16.2 MoD/LA(Def) have taken serious note of lapses mentioned in Sub Para (a)
to (c) above and in a few cases, disciplinary action against the individuals responsible
has been invoked.
30.16.3 In view of above, all the formations are sensitized to be careful and vigilant
while dealing with the court cases pertaining to arbitration awards and ensure that
timely action is taken in consultation with Government advocate to safe guard
government interest. Regarding arbitrators as respondents, it is advised that
arbitrator shall be made as PRO FORMA RESPONDENT.
30.16.4 It is also observed that in certain cases Appeals against the orders of trial
Courts in respect of arbitration awards are being filed by ground formations without
seeking advice of LA (Def)/Branch Sectt. In addition to this, cases for seeking advice
of LA (Def) are not being forwarded within time limits specified in Para 30.3 above.
This curtails time available for its processing. MoD has taken a serious view of the
issue. In order to avoid recurrence of the lapses, following directions are issued:-
(a) Monthly report as per format shall be forwarded by CE Zone/CCE.

Jt DG(C) of CE Command/ADG shall monitor & ensure that monthly report is
uploaded on LIMBS by 7th of succeeding month by the concerned CE Zone.
(b) In the monthly DO letter by CE Zone to E-in-C, CE Zone shall include

details of awards/court orders (pertaining to arbitration cases) along with
action taken report for obtaining legal advice of LA (Def)/ Branch Sectt.
(c) It shall be ensured by CE Zone that all the instructions given in Manual
on Contracts pertaining to arbitration awards/court cases are strictly followed.
Lapse, if any, will invite departmental action against the erring officials.
473
Appendix 30.1
STATEMENT OF CASE SEEKING ADVICE OF LA (DEF)/MOL BRANCH SECTT
1. CA No & Name of Work :

2. Name of contractor :
3. Amount of contract :
4. Date of appointment of arbitrator :
5. Name of arbitrator :
6. Date of publication of award/ receipt of award in
the office of Accepting Officer :
7. Date when application under Section 33 of ACA, if any
by either party has been disposed of by the Arbitral
Tribunal :
8. Limitation period to challenge the award expires on :
9. Details of amount claimed and awarded (see Annexure) :
10. Interest if any, awarded by the arbitrator and period of
its payment specified :
11. Detailed comments on each claim which will include :
(a) Specific covenants against which the claims is
allowed. Reference to condition of contract and
pleadings in Defence submitted to arbitrator will
be highlighted.
:
(b) Specific comment by the Chief Engineer on the
rate of interest awarded
:
(c) Specific recommendation of the Chief Engineer
regarding implementation or to contest the
award together with reasons thereof citing
reference to specific Section of Arbitration Act. :
CE/CCE/CWE
(Signature)
474
Annexure to Appendix 30.1
DETAILS OF AMOUNT CLAIMED & AWARDED
Srl No Brief Description of Claim Amount Amount

Claimed Awarded
(A) Contractors Claims

____________________________
_____________________________
Total =
(B) Government Claims ______________________________

______________________________
Total =
CE/CCE/CWE
(Signature)
475
Appendix 30.2
MEMORANDUM OF AWARD
1. Name of work :
2. Contract No and year :
3. Name of contractor :
4. Amount of contract :
5. Accepting Officer :
6. Brief summary of dispute(s) and details of claims and
offer by contractor/Government and amounts awarded :(see Annexure I hereto)
7. Arbitrator appointed by : ……………. vide

letter No …................ dated
8. Name of Arbitrator :
9. Date of entering on the reference by the Arbitrator and
extension of time (if any) granted by court. :
10. Arbitration Court held on : * .......... at …..................
11. Whether Government case defended by MES Officers
or Lawyer : ** (a) Lawyer .....................
(b)MESOfficer.........
12. Whether contractor's case conducted by the contractor
himself or through a lawyer. :
13. Award Published on :
14. Amount awarded in favour of : C ₹...........................
(C-Contractor; G-Govt.) G ₹..........................
15. @ Decision with regard to the implementation or
otherwise of the award.
(a) It has been decided that the award should be
implemented for the following reasons :
% …......................................................................................
or
(b) It is proposed to contest the award in the Court or
request Court to remit the award to arbitrator for the
following reasons:-
%% …...................................................................................
£ CWE/CE Zone
Signature
Copy to :
££ PCDA/CDA …............................................................................
Your comments, if any, may please be forwarded not later than …...............
Not to be reproduced on the memorandum of award
* If two or three hearings held, state accordingly
** Give names with designations. State 'Nil' against (a) if no lawyer is engaged.
476
@ To be completed by CWE in case of contracts concluded by him or by GE/AGE (I),

and by CE Zone in case of contracts concluded by him.
% Here add remarks on the following lines:-
(i) The award is in favour of Govt.
(ii) The award, as a whole, is acceptable to Government and there is no valid grounds
to contest it.
(iii) Though the award is not fully to the liking of Government, there are no valid grounds
to contest the award.
%% Here state reasons on the following lines:-
(i) As per legal advice received, there is an error apparent on the face of the award. Copy
of the legal opinion is enclosed as Annexure II.
(ii) As per legal advice received, the arbitrator has exceeded his jurisdiction and there are
good grounds to challenge its validity. Copy of the legal opinion is enclosed as Annexure II.
(iii) As per legal advice received, there is an obvious error/clerical error and it is proposed
to request the Court to remit the award to the arbitrator for correcting it. Copy of the legal
opinion is enclosed as Annexure II.
£ To be signed by the CWE/CE Zone as applicable.
££ Copy not to be sent to CDA in case of contracts concluded by GE/AGE (I).
477
Annexure-I to Appendix 30.2
Summary of Dispute(s)
CA No/Name of Work :
Name of Contractor :
Srl Brief particulars of Amount Revised Amount Remarks

No dispute claimed amount of awarded
claim
1 2 3 4 5 6
Note:- The information to be furnished in Annexure I shall be shown separately and clearly
both with regard to contractor's claims as well as Government claims under two separate
headings as below:-
(a) Government claims.
(b) Contractor’s claims.
CE/CCE/CWE
(Signature)
478
Appendix 30.3
NEW DISPENSATION FOR SETTLEMENT OF COMMERCIAL DISPUTES BETWEEN
PUBLIC SECTOR ENTERPRISES INTER-SE AND PUBLIC SECTOR
ENTERPRISES(S) AND GOVERNMENT DEPARTMENT (S) THROUGH PERMANENT
MACHINERY OF ARBITRATORS (PMA) IN THE DEPARTMENT OF PUBLIC
ENTERPRISES.
I. Creation of Permanent Machinery of Arbitrators (PMA).
With a view to expedite the settlement of disputes relating to commercial contract(s)
between Central Public Sector Enterprises (CPSEs) per se, and also between
CPSEs and Government Departments, the Government of India created a
Permanent Machinery of Arbitrators (PMA) in the Department of Public Enterprises
in 1989. One Legal Advisor-cum-Joint Secretary in the Department of Legal Affairs,
nominated by the Law Secretary to function in the PMA is appointed by the
Secretary-in-Charge of Department of Public Enterprises as sole Arbitrator in
each case.
II. Need for PMA.
There had been growing number of litigations with the Courts/Tribunals relating to
commercial transactions between the Central Public Sector Enterprise (CPSEs) inter
se, or CPSEs and Government Departments. The practice of disposal of these cases
was not only expensive due to high fees charged by the advocates/lawyers for
pleading the cases and other expenses incurred in this regard, but also time
consuming. The other prevailing practices of conciliation, arbitration etc were also ad
hoc arrangement and not delivering the goods upto the expectations. With a view to
expedite settlement of disputes and reduce avoidable expenditure in this regard, a
need was felt to institutionalize the prevailing system of arbitration.
Commissions/Committees like Law Commission, Central Vigilance Commission, and
Committee of Secretaries etc. had also examined this aspect and made certain
recommendations/suggestions which were carefully examined in consultation with
the Ministry of Law. The Government after due consideration of all aspects, decided
to set up the PMA in the Department of Public Enterprises.
III. Entitlement.
(a) In the event of any dispute or difference relating to the interpretation and
application of the provisions of commercial contract(s) between CPSEs, Banks, Port
Trusts etc inter se, or CPSE and the Government Department(s) hereto (except a
dispute or difference concerning the Railways, Income-tax, Customs and Excise
duties), such dispute or difference shall be referred by either party for arbitration to
the PMA in the Department of Public Enterprises through the Secretary to the
Government of India in-charge of the DPE.
(b) The mechanism of PMA is primarily meant for Central Government
Departments/organizations/enterprises. Therefore, the disputes between State
Government Departments/ organizations will not be entertained by the PMA.
However if in a commercial contract between a CPSE and a SLPE, they agree for
arbitration by the PMA for settling their disputes, the PMA guidelines will be
applicable on same terms as applicable to CPSEs.
479
IV. Monetary Limit.

There is no monetary limit as such for making reference of disputes to the PMA.
However, it would be advisable if the parties exercise their own discretion in this
regard as both the parties are to equally pay an initial cost of Rs 20,000 each for
making reference of dispute to the PMA which is non-refundable in any case but will
be adjusted with final cost to be fixed by the Arbitrator as per the rates stipulated in
a subsequent paragraph. There shall not be much advantage in referring disputes of
a small amount of the value or less than Rs 50,000to PMA and such disputes may
be settled by the parties by mutual consultation.
V Reference.
(a) As far as possible parties should try to resolve as many points of dispute as
they could amicably by mutual consultation and only those points stating the amount
involved be referred to the PMA that could not be settled mutually despite best efforts
from both sides. To ensure prompt disposal of disputes(s) by the PMA, both the
PSEs and the Government Departments shall refer the existing dispute(s) to the
PMA at the earliest and not later than two months of arising of dispute. If any
arbitrator has already been appointed in any dispute that should immediately be
cancelled. Both the parties will also ensure the inclusion of an Arbitration Clause (if
not already done so) in favour of PMA (as given in Annexure) in all the existing and
the future contracts/supply orders between the parties. PMA shall not entertain the
disputes referred to it without the proper Arbitration Clause.
(b) After entering upon the reference, the Arbitrator will call for the papers,
comments/statements from the parties and will hear the parties in persons as and
when he deems necessary. The Arbitrator shall ordinarily fix the meeting in Delhi
unless, for reasons to be recorded in writing, he decides otherwise. No outside
lawyers shall be allowed to appear on behalf of the parties to argue their case before
the Arbitrator but the parties can take the help of their own full time Law officers.
(Subject to the aforesaid, the Arbitrator, and the Law Secretary will determine the
procedure as the case may be).
(c) The Arbitrator will also submit a quarterly report to the Secretary (DPE) on the
number of cases registered, awards published, fee received and general progress of
cases.
VI Fees.
(a) The Arbitration cost in respect of a commercial dispute settled through the
PMA is required to be shared equally by the concerned disputing parties. In this
connection each of the parties to a dispute will be required to make an initial deposit
of ₹ 20,000/- when a prima-facie case of dispute is established and the same is
approved for referring to the Arbitrator of PMA for settlement. This initial cost will be
adjusted in the final cost of Arbitration. The Arbitrator will work out the final cost of
Arbitration based on the amount of dispute as per the following formula:-
(i) ` ₹ 40,000/- or 1% of the disputed amount up to `₹ 50,00,000/- whichever
is higher, to be equally shared by the parties.
480
(ii) `₹ 50,000/- + ½% of the disputed amount of above `₹ 50,00,000/- but up to

₹ 5 crore to be equally shared by the parties.
(iii) `₹ 2.75 lakh + 1/4% of the disputed amount beyond `₹ 5 crore to be equally
shared by the parties.
(b) The Arbitrator in the PMA will intimate the parties the estimated amount of
Arbitration fee to be borne equally by them and paid within a month of intimation to
the parties or within such time as may be allowed by the Arbitrator. All payments
shall be made to the Government of India through Demand Draft in favour of DDO
Department of Public Enterprises, payable at New Delhi.
(c) The Secretary, DPE, if he/she considers appropriate, may allow fee
concession up to 25% of the total fee worked out for the sick and continuously loss
making CPSEs based on the laid down formula, subject to arranging payment within
one month of the order of the Arbitrator in the PMA.
(d) In case any of the parties has made full payment of the fee and another has
failed despite continuous follow up and as a result of which publication of award is
cancelled, the fee in addition to the initial deposit may be refunded to the party
concerned. However, Government will not pay any interest on such amount.
(e) If one of the party fails to pay the arbitration fee and other party is willing, they
may pay the entire arbitration fee. If one party pays the estimated cost of arbitration
fee (to be borne equally by both the parties) of the other defaulting party, this amount
will be shown (along with the interest @ 1% per month/12% per annum) in the
cost/expenses of arbitration against the defaulting party in the final award.
VII Compromise.
In case both the parties decide to settle the dispute mutually before the Award is
published, they can be allowed to do so. In such case, the initial cost (` 20,000/- paid
as deposit by each of the parties) shall be forfeited and the case will be finally closed
on receipt of details of the settlement arrived at by the parties in writing. In case the
parties do not provide requisite details, the Arbitrator may decide to publish the
Award and in such a situation the parties will be required to pay the arbitration fee
worked out by the Arbitrator.
VIII Nature of Award.

The Arbitrator shall make his award within the time period as mentioned in the
arbitration agreement and in accordance to the applicable Arbitration Act after
entering upon the reference or after having been called upon to act by notice in
writing from any party to the arbitration agreement. The Arbitrator shall make a
speaking award. The Award may be published on plain paper. The Arbitrator may
also, if he thinks fit, make an interim award.
481
IX Ex-parte Award.
The Arbitrator may make his award ex-parte when a party(ies) fail to furnish the
particulars required from them, and/or do not appear in person in spite of being given
two chances to do so. Even in that case, the parties shall be bound to meet the cost
of arbitration equally.
X Appeal.
The Award of the sole Arbitrator under the PMA shall be binding upon the parties to
the dispute. The aggrieved party may file an appeal before the Law Secretary, within
the period as recorded by the Arbitrator in the award for implementation. This time
limit may be kept in view while filing an appeal before the Law Secretary. The Law
Secretary or Special Secretary/Additional Secretary, when so authorized by the Law
Secretary, may decide the appeal/revision on merits and set aside or revise the
award. The matter cannot be remitted back to the Arbitrator for reconsideration. The
Appellate Authority will have the power to revise his/her own decision for rectification
of any error or for editorial corrections. The Law Secretary, or as the case may be,
Special Secretary/Additional Secretary, after giving an award on the appeal, will
return the records of the case to the PMA. The Arbitrator may also, if thinks fit, make
an interim award. However, there shall be no appeal to the Law Secretary against
the interim award and both the parties are to await the final award by the Arbitrator.
XI Change of Arbitrator.
In the event of the sole Arbitrator dying, neglecting or refusing to act or being unable
to act for any reason, it shall be lawful for the Secretary to the Government of India
in-charge of the DPE, to appoint another person in place of the outgoing Arbitrator
to act as sole Arbitrator. The new Arbitrator so appointed shall, as far as practicable,
proceed from the stage where it was left by the outgoing arbitrator.
XII Bank Guarantee.
In commercial transaction sometimes a PSE has to stand bank guarantee. All CPSEs
should effect encashment of bank guarantee only as a last resort when efforts to
resolve the differences/dispute fail and that too, after giving due notice/information
to the concerned public sector enterprise. In such situations, all the CPSEs should
refer the dispute to Department of Public Enterprises and cooperate with the
Arbitrator of PMA for early settlement.
482
Annexure to Appendix 30.3
Arbitration Clause to be Included in All The Commercial Contracts Entered into By

The Public Enterprises/Government Department etc.
In exercise of the power conferred by Article……. of the Article of Association of the

(name of the CPSE/Bank/Port Trust etc.) /Section ………….of the ………………Act of
setting up of the (name to the CPSE/Bank/Port Trust etc.), the President of India is pleased
to direct that all dispute relating to all commercial agreements (except income tax, customs,
excise duty and also concerning Railways) between (name of the Company/Corporation
Bank/Port Trust)and (name of another Public Sector Undertaking/Government
Department/Bank/Port Trust etc) shall be referred to the Permanent Machinery of
Arbitrators (PMA) set up in the Department of Public Enterprises. The President is further
pleased to direct that the following Arbitration Clause shall be included in all current and
future contract agreement etc and that in respect of ongoing contracts they should be
suitably amended to include such a clause :-
“In the event of any dispute or difference relating to the interpretation and application
of the provisions of the contracts, such dispute or difference shall be referred by either party
for Arbitration to the Sole Arbitrator in the Department of Public Enterprises to be nominated
by the Secretary to the Government of India in-Charge of the Department of Public
Enterprises. The Arbitration and Conciliation Act, 1996 shall not be applicable to arbitration
under this clause. The award of the Arbitrator shall be binding upon the parties to the
dispute, provided, however, any party aggrieved by such award may make a further
reference for setting aside or revision of the award to the Law Secretary Department of
Legal Affairs, Ministry of Law & Justice, Government of India. Upon such reference the
dispute shall be decided by the Law Secretary or the Special Secretary/Additional
Secretary, when so authorized by the Law Secretary, whose decision shall bind the parties
finally and conclusivelyThe parties to the disputes will share equally the cost of arbitration
as intimated by the arbitrator”.
483
SECTION 31
CIVIL PROCEEDINGS: COURT CASES
31.1 Initiation of Legal Action in Courts.
31.1.1 Section 80 of the Civil Procedure Code provides that no suit shall be instituted
against the Central Government or against a public officer in respect of any act
purporting to be done by such a public officer in his official capacity, until the
expiration of a period of two months after a notice in writing has been delivered to or
left at the office of Secretary to the Central Government or of the public officer, stating
the cause of action, the name, description and place of residence of the plaintiff and
the relief which he claims, and the plaint shall contain a statement that such notice
has been so delivered or left.
31.1.2 This requirement of a notice does not apply to proceedings instituted under
Article 226 and 227 of the Constitution. In those cases, action would have to be taken
on receipt of the notice from the court.
31.1.3 Under the administrative arrangements, when a notice of this kind relating to
any matter concerning the MES is received by the Ministry of Defence, it will be
immediately forwarded to the Dte/Branch concerned at Integrated HQ of MOD
(Army). The Dte/Branch concerned will send the original to the Command
Headquarters concerned, one copy each to the concerned CE Zone/CCE, and retain
a copy for their record. In case a legal notice is received direct at the Dte/Branch
concerned at Integrated HQ of MOD (Army), action will be taken by them to send the
original to the Command Headquarters with a copy thereof to the concerned CE
Zone/CCE. Headquarters Commands will take action as indicated in Para 31.2.1 if
notice of suit is received by them direct from the plaintiff.
31.1.4 If a suit is filed against the Union of India either without first giving a notice
as required by Section 80 CPC or on a notice which is defective, Ministry of Law may
be consulted by the Dte/Branch concerned regarding defence of the suit through
concerned Integrated HQ of MOD and Department of Military Affairs(DMA)(Works
Section)
31.2 Action to be Taken by the CE Zone/CCE on Receipt of Notice to Suit.
31.2.1 On receipt of a notice of suit, the CE Zone/CCE will give it immediate and
careful attention and will submit a report to his Dte/Branch at Integrated HQ of MOD
(Army) with a copy to Command Headquarters for orders as to whether the suit, if
filed, should be defended. Every effort shall be made to submit the report in time to
reach the concerned Dte/Branch a month before the statutory period of notice
expires.
31.2.2 The report will include a full and detailed statement for the following:-
(a) The circumstances that led to the suit.
(b) The course proposed to be adopted, namely whether to admit,

compromise or defend the suit and the reasons for the same.
484
(c) Parawise comments on the legal notice.
(d) If it is proposed to defend the suit, the grounds on which it is proposed

to base the defence and the evidence to be adduced.
(e) If the suit turns on documentary evidence, the originals (or true copies)
of the documents relied on by the notice given (if procurable) and the defence.
(f) Local legal opinion in the case shall invariably be obtained. For this
purpose, units may consult the local Government Pleader. In Kolkata,
Mumbai, Bengaluru and Chennai, the Branch Secretariat of the Ministry of
Law can be consulted. For this purpose, the prior sanction of the Area
Commander is not necessary. The reasoned opinion of the Legal Advisor
shall be included in the report.
31.2.3 If the threat of action is plainly groundless or frivolous, an elaborate report

will not be required but it shall be sufficiently comprehensive to enable Ministry of
Defence to form a conclusion in the matter.
31.3 Action to be Taken by the Dte/Branch Concerned at Integrated HQ of MOD and

Department of Military Affairs(DMA)(Works Section) on Receipt of Report from
Lower Formation.
31.3.1 Dte/Branch concerned at Integrated HQ of MOD will submit the report with
their comments, if any, to the DMA who will take action as under:-
(a) Examining the claims made in the suit notice and deciding the future
action on each of them (eg whether a particular claim should be conceded or
a compromise attempted or rejected finally with a view to face the legal
consequence); and
(b) Sending an interim reply to the notice of the suit in consultation with the
Ministry of Law. This will, however, not prevent the local MES authorities from
obtaining, through the Dte/Branch concerned, advice of DMA on any point
concerning the said section at any time after the admission of the suit.
31.3.2 Dte/Branch at Integrated HQ of MOD will communicate the final decision as

to the defence or otherwise of the case to Command Headquarters with a copy to
the concerned CE Zone/CCE.
31.4 Action to be Taken When a Suit is Filed in Court.

31.4.1 The summons received from the court will be forwarded by the DMA to
Dte/Branch concerned at Integrated HQ of MOD which will in turn forward them to
the concerned CE Zone/CCE. The CE Zone/CCE will forward the summons to the
LA(Def)/concerned Branch Sectt of Ministry of Law requesting them to direct the
Government Pleader to acknowledge the summons on behalf of Government and
conduct the defence of the suit in consultation with CE Zone/CCE concerned. A copy
of this communication will be endorsed to the Government Pleader. In respect of
cases outside the area of responsibility (AoR) of Ministry of Law, Branch Sectt, CE
Zone/CCE will forward the summons to local Government Pleader to defend the suit
in consultation with concerned authority of MES.
485
31.4.2 In the case of summons received from a court in Delhi, the reference of the
Government Pleader should be made through the Litigation Section of the Ministry
of Law at Delhi. Similarly, in the cities of Mumbai, Kolkata, Bengaluru and Chennai,
the solicitors attached to the Branch Secretariat of the Ministry of Law or the Central
Government Pleader in City Civil Court shall be contacted.
31.4.3 Information regarding the institution of the suit containing the following
particulars will be furnished to CE Zone/CCE by the Dte/Branch concerned:-
(a) The number of the suit.
(b) The court in which (and if available, the date on which) the suit has
been filed.
(c) The names of the parties.
(d) The value of the claim or other relief claimed if indicated in the
summons.
(e) The date fixed for the first hearing.
(f) Whether or not suit notice was received and its disposal.
31.4.4 Vakalatnama or Power of Attorney on behalf of the President of India will be

executed for and on behalf of the President of India and shall be authenticated by
the signature of Secretary, Special Secretary, Additional Secretary, Joint Secretary,
Deputy Secretary or Under Secretary to Government of India.
31.4.5 A Vakalatnama would, however, not be necessary for Government Pleaders

who are appearing on behalf of the Union of India. Except in proceedings in the High
Courts and District Courts wherein Central Government Pleaders have been
appointed, all State Government Pleaders have been notified as Central
Government Pleaders.
31.5 Action to be Taken When the Defence of the Suit is Sanctioned.

31.5.1 When the defence of the suit is sanctioned by the CE Zone/CCE, the
documents relating to it will be returned to the officer detailed for assisting the
Government Pleader in the defence of the suit. The officer handling the case will
then liaise with the local Government Pleader to prepare the defence and give him
such assistance as may be required. The defence thus prepared will be.submitted
for the approval of CE Zone/CCE and will then be signed and verified by the
competent authority (vide AO 75/65) and presented in the court through the
Government Pleader. Copies of any additional statement filed by the plaintiff and the
issues framed will be obtained from the Government Pleader by the officer who in
turn will forward copies of the same without delay to the CE Zone/CCE and the
Dte/Branch concerned at Integrated HQ of MOD for information. As regards cases
involving policy or intricate questions of law, the Branch concerned will submit a brief
to the DMA which will take the advice of the LA (Defence), if necessary, before
forwarding it to the Government Pleader.
486
31.5.2 It is the duty of the officer detailed under sub-para 31.5.1 to ensure that the
Government Pleader is thoroughly acquainted with the facts of the case and with the
evidence to be adduced.
31.5.3 Periodical progress reports on all cases filed against or on behalf of the
Government will be submitted to the Dte/Branch concerned at Integrated HQ of
MOD and intermediate formations as per Section 33 of the Manual on Contracts.
31.6 Important Points for Continual Attention.

31.6.1 The following important points relate to the conduct of the suits:-
(a) The averments in a written statement shall generally be based on every

material point on the evidence which can be adduced in support of them.
(b) The evidence, whether oral or documentary on which it is intended to

rely, shall be carefully scrutinized by the Government Pleader before it is
adduced and he shall advise as to its admissibility and probable importance
or otherwise for the purpose of the suit and suggest that other evidence, if it
be forthcoming, may with advantages be substituted for any, which in his
opinion, would be weak or inadmissible.
(c) All the evidence shall be assiduously collected and made ready for the
day fixed for hearing. The necessity of making applications for adjournments
shall be avoided. Such applications on behalf of the opposite party will, unless
they are made for sufficient reasons, be resisted as tending to prolong the
litigation and may invite adverse comments from court or cost or both.
(d) All documentary evidence shall be ready and produced at the first
hearing of the suit (i.e. the day fixed for the settlement of issues), as required
by Order XIII Rule 1 (i) of the Civil Procedure Code. Applications to the court
to accept any documents in evidence at any subsequent stage of the trial shall
be avoided except in special circumstances, because a similar concession
may be claimed by and granted to the opposite party, which may place
Government at a disadvantage. The grant of such a concession to the
opposite party shall be resisted as providing occasion for fraud.
(e) Documents filed by the opposite party shall be carefully examined at

the earliest opportunity and compared with originals in Government records
or with other papers which may tend to establish or subvert their authenticity.
(f) Any information or documents required for the defence of the cases
will be obtained direct from the Dte/Branch concerned at integrated HQ of
MOD.
31.6.2 As soon as the court has given its decision on the case, the officer detailed to
assist the Government Pleader in the defence of the suit will communicate the
findings of the court to the CE Zone/CCE who in turn will communicate the same to
the Dte/Branch concerned at integrated HQ of MOD . The officer detailed will also
take prompt steps to obtain a certified copy of the Court’s judgment and decree on
payment of the necessary charges and forward it to integrated HQ of MOD through
proper channel, which will decide future course of action without any loss of time.
487
31.7 Appeals.
31.7.1 Should a judgment be adverse to the Government, the officer detailed for the
defence of the suit will, without causing delay obtain the views of the Government
Pleader, who shall be requested to give reasons for his views and submit them along
with his own views to CE Zone/CCE concerned indicating also the last date of filing
an appeal. In case CE Zone/CCE does not approve an appeal and his decision is
against the advice of the Government Pleader, the opinion of the Government
Counsel together with the views of the CE Zone/CCE and copy of the judgment
against which appeal is desired to be preferred may be sent to the Branch Sectt or
to E-in-C's Branch for advice of LA (Defence). Government Pleader shall be asked
to obtain a copy of the judgmentat the earliest after making inspection of the record
so that sufficient time is available for deliberation and consultations on the issue of
advisability of filing an appeal or otherwise.
31.7.2 In cases where appeals are intended to be filed in the Supreme Court, all
the relevant papers will be forwarded to the Dte/Branch concerned at integrated HQ
of MOD for obtaining the advice of LA (Def) and Ministry of Law. Further action with
regard to the filing of an appeal etc will be taken by the Dte/Branch concerned in
consultation with DMA in the Ministry of Defence and Ministry of Law (Central Agency
Section).
31.7.3 These instructions will be brought to the notice of all the officers at the lower
formations emphasizing that serious notice will be taken of any lapses.
31.8 Appeal by the Opposite Party.

If an appeal is lodged by the opposite party against a decision either entirely or party
in favour of Government, the officer detailed for the defence of the suit, in
consultation with the Government Pleader, will immediately obtain an uncertified
copy of the Memorandum of Appeal and submit to CE Zone/CCE with his own
opinion and that of the Pleader as to whether the appeal should be defended or not.
CE Zone/CCE will adopt the procedure laid down in Para 31.7.1 above.
31.9 Payment Relating to Court Decrees/Arbitration Awards.

As and when a decree or award is passed against the Government by the
competent court/tribunal requiring payment of an amount, the case will be referred
to the Dte/Branch concerned at E-in-C’s Branch for necessary action.
31.10 Writ Petitions in the High Courts.

As soon as notice of writ petition is received, the Central Government Standing
Counsel at the High Courts shall be immediately contacted and requested to obtain
time. Simultaneously a copy of the petition and supporting affidavit, if any, if it has
not been received from the courts shall be obtained and the para wise comments
furnished. This shall be accompanied by a report of the nature set out in Para 31.2.1.
Since writ petitions are heard with expedition and the courts are reluctant to grant
adjournment, in such cases, notice of writ petitions shall be dealt with on an
immediate basis.
31.11 Conduct of Central Government Cases in Courts in Delhi : District Courts and
Delhi High Court.
The procedure for dealing with civil suit cases through Litigation Section of the
Ministry of Law will be as follows :-
488
(a) As far as civil writs are concerned, as soon as a court notice is received
alongwith a copy of the writ petition alongwith annexures, two copies of the parawise
comments thereon with the brief history of the case will be forwarded immediately to
the Litigation Section with the request that the arrangement to defend the writ may
be made.
(b) In case copies of the writ petitions are not served with court notice, the same
shall be returned to the Registrar, High Court of Delhi with the request that a copy of
the writ petition be supplied to them with the notice according to the rules. Service of
such notices in respect of new writs shall in no case be accepted, otherwise the
Ministry becomes responsible to collect copies of the writ petitions from the High
Court.
(c) As far as cases other than civil writs are concerned, concerned CE Zone/CCE
will detail an officer conversant with the case and contact the Litigation Section of
Ministry of Law direct for furnishing the necessary material for conduct of the civil
suit. They will also obtain the details of the case from the lower formation concerned,
if not available with them and transmit the material to the Litigation Section of the
Ministry of Law. As regards the cases involving policy or intricate questions of law,
E-in-C’s Branch will submit a brief to the administrative section in the Ministry of
Defence which will take the advice of the LA (Defence) if necessary, before
forwarding it to the Litigation Section for further action. Cases for instituting civil suits
by the Government will also follow the same channel.
(d) As regards appeals to be filed in Delhi District Courts and High Courts, the
necessary papers shall be sent to the Litigation Section at least a week before the
expiry of the period of limitation. In case papers are not sent sufficiently in advance
and are sent just on the eve of the expiry of the period of limitation, the Government
Pleaders do not get sufficient time to study the papers with the result that
Government interests are prejudicially affected. Complete papers shall therefore be
sent sufficiently in advance.
(e) Mobile No and name of the Officer-in-Charge of the case shall invariably be
mentioned in all communications intended for the Litigation Section.
(f) The fee bills of the Government Pleader, Delhi sent by the Litigation Section
duly verified will be received by the CE Zone concerned and passed on to the lower
formation for payment.
31.12 Conduct of Government Cases in Supreme Court.
The procedure for conduct of cases in Supreme Court will be the same as in Para
13.11 expect that such cases will be conducted through the Central Agency Section,
Ministry of Law and not through the Litigation Section.
31.13 Legal Notice U/S 80 CPC.
31.13.1 Receipt of notice under Section 80 of Civil Procedure Code issued by an

advocate on behalf of a contractor and addressed to Secretary, Ministry of Defence
with copy to MES formations is of common occurrence, particularly where there has
been delay in either settlement of contractor's bill/claim or appointment of an
arbitrator. In all such cases when the notice is received in E-in-C’s Branch from the
Ministry, Headquarters of the particular area are addressed by E- in-C’s Branch on
the following lines:-
489
“Copy of legal notice dated …..…… served by Shri ….....… on behalf of the
contractor M/s ………..….. for payment of security deposit/final bill amount of ₹
…..………… is forwarded herewith in original for disposal in accordance with the
instructions contained in MES Manual on Contracts.”
31.13.2 Copy of this letter is always sent to CE/CWE and GE concerned and they
are instructed to forward a report to the relevant office with a copy to E-in-C’s Branch
as laid down in the aforesaid instructions.
31.13.3 It has been observed that in such cases, a report is generally submitted by
the CE/CWE concerned to E-in-C’s Branch and in that report it is stated that the
contract provides for referring the dispute to arbitration and hence the threatened
suit would not be in order, but it is not made clear whether the contractor is
simultaneously addressed by the Accepting Officer or CWE to draw his attention to
the arbitration clause. It is important that as soon as a copy of the notice is received
by the Accepting Officer, he shall immediately address a letter to the contractor’s
counsel with copy to the contractor, E-in-C’s Branch and other concerned formations
on the format given in Appendix 31.1.
31.13.4 CE/CWE shall ensure that such a notice is sent promptly in all future cases.
Where arbitration is inescapable, particulars to enable the appointing authority to
appoint an arbitrator shall also be forwarded without delay.
31.13.5 All notices or communications having legal implications shall be replied only
after obtaining the legal opinion in the matter and examining all the aspects of the
case. Report submitted in accordance with Para 31.13.2 above shall clearly
indicate that legal opinion has been obtained and copy thereof shall be enclosed. A
self-contained statement of case together with parawise comments on the legal
notice shall also be sent E-in-C’s Branch along with the copy of the report.
31.13.6 As copy of the legal notice is generally received direct by the CE/CWE/GE,
the Accepting Officer shall initiate report in accordance with Para 31.13.2 above soon
after the receipt of the notice ie without awaiting a communication from E-in-C’s
Branch so that the report to Ministry of Defence is expedited and Ministry of Law’s
advice, if required, obtained for the disposal of the legal notice.
31.14 Advice of Ministry of Law in Cases Where Legal or Constitutional Issues are
Involved.
31.14.1 In a number of cases advice is being obtained from Ministry of Law on legal
or constitutional issues.It is important to remember that once an advice has been
obtained, it is necessary that advice is honoured/implemented.
31.14.2 In cases where an advice has been obtained from Ministry of Law/ Branch
Sectt and Chief Engineer holds different views on the advice, the case shall be
referred to E-in-C’s Branch for taking up the matter with LA (Defence) or if need be,
with Ministry of Law or the Central Government Solicitor.
31.14.3 Cases will be submitted to E-in-C’s Branch in the form of a self-contained

note together with all annexures duly flagged in duplicate accompanied by relevant
documents.
490
31.15 Procedure Relating to Disposal of Court Prohibitory/Attachment Orders.

31.15.1 On receipt of prohibitory/attachment order from the court, the following
procedure will be observed:-
(a) If any amount is readily available on which Government has no further

claim, the payment to the contractor shall be with-held and/or amount
deposited in the court, according to the nature of order from the court.
Simultaneously the contractor shall be informed regarding the receipt of the
prohibitory/attachment order from the court and the action taken thereon.
(b) When no amount whatsoever is due to the contractor, the court shall
be informed accordingly.
(c) Where amount less than that attached by the court is readily available,
action be taken as indicated at sub-para (a) above intimating the amount with-
held.
(d) If no amount is readily available, and if the check on the accounts of

the contractor has not been completed, the receipt of the
prohibitory/attachment order shall be acknowledged and the court informed:-
(i) That no amount has been found to be actually payable to the

judgment debtor on the date of receipt of the attachment order.
(ii) That it remains unascertained whether any, and if so, what

amount will be payable to him and this can be ascertained only on a
future date after going into the accounts and verifying several facts.
(iii) That no debt payable to the judgment debtor, therefore, exists

so as to be attached under Sec 60 and Order 21, Rule 46 of the Code
of Civil Procedure.
(iv) That the claims of the Government will first have to be adjusted
against the credits of the contractor (judgment debtor). And
(v) That it cannot, therefore, be stated with any degree of accuracy,

what amount, if any, will be finally available for release to the court.
31.15.2 Simultaneously the contractor will be informed regarding the receipt of the
prohibitory/attachment order from the court advising him that he should get it vacated
or otherwise the amount to the extent mentioned in order shall be with-held/paid to
the court form any payment becoming due to him under the jurisdiction of the
particular office.
31.15.3 With reference to Para 31.15.1 (d) (iii) above, following questions arise:-
(a) Whether in case, where payment on account is due to the contractor

or expected to become due shortly, would it be in order to reply the court
that no debt payable to judgment debtor exists which can be attached under
Sec. 60 and Order 21, Rule 46 of the Code of Civil Procedure; and
491
(b) Whether after replying the court as in (a) above would it be in order to
make payment on account to the contractor in spite of the receipt of an order
from the court prohibiting and restraining the department from making
payment of certain amount to the contractor.
31.15.4 The clarification against questions in Para 31.15.3 above is as under:-
(a) Para 31.15.3 (a)-The course regarding informing the court that no debt
payable to the judgment Debtor existed, need be followed only in those
cases where either no advance payment under Condition 64 of IAFW-2249
was made to the contractor or if any advance payment was made, it was
before the receipt of the prohibitory/attachment order.
(b) Para 31.17.3 (b)-The answer is 'NO'. The appropriate course would be
to bring such order of attachment to the notice of the contractor advising
him to take adequate steps to get the attachment order in question set aside
or modified as otherwise the amount attached or stated in the prohibitory
order will be withheld from any payment becoming due to him. It shall be
left to the contractor to approach the court to get the relief. It is not
necessary or even advisable for the department to fight the contractor’s
battle in the execution court and the amount attached or stated in the
prohibitory order shall not be paid to the contractor until he gets the
impugned order of attachment withdrawn/vacated.
31.15.5 However, in such cases, Para 31.15.1 (d) (iii) above shall be reworded as
under to clarify the position to the court:
“That at present no debt payable to the judgment Debtor exists so as to be attached

under Sec. 60 and Order 21, Rule 46 of the Code of Civil Procedure. The contractor
is, however, entitled to advances on account for the performance of the contract
which are adjusted in his final account after completion of the contract. These
advances are in the nature of assistance to the contractor for progressing the
particular contract only and have to be allowed for ensuring completion of defence
works by the scheduled date. It is presumed that prohibitory/attachment order does
not apply to afore-stated advances on account and applies only to the amount that
may ultimately become due to the contractor on completion of the contract and
finalisation of his account. May this be kindly confirmed.”
31.15.6 In spite of the above reply to the court, the amount attached by the court
shall be withheld from the advance payment becoming due to contractor and
released only if the court confirms the above or vacates/withdraws the attachment or
prohibitory order.
31.16 Conduct of Litigations: Delhi High Court-Instruction Regarding.

31.16.1 Delhi High Court often directs that notices to be issued to the Government
with advice to afford opportunity to the Government to represent its case to the High
Court, before admitting the writ petitions/appeals or before granting ad interim
injunctions/stay orders. Thus, Government by appropriate representation may not
only resist the adverse interim orders but also avoid the protracted litigations.
492
31.16.2 It has been observed that the concerned formation does neither take
immediate and effective steps in the matter nor arrange for engagement of counsel
for the purpose. Consequently despite the notice, the Government’s case goes by
default and adverse orders are made by the High Court ex-parte. In view of the
inability of the concerned formation to contact E-in-C’s Branch, it is also not possible
for E-in-C's Branch to act promptly in the matter as, at that stage, the E-in-C's Branch
is not even aware of the fact of issuance of the notice by the High Court or the issues
involved. Accordingly, no counsel could be engaged or deputed to appear at the
hearings as notified.
31.16.3 This results in the High Court taking serious view of the default on the part
of the Government, granting ex-parte interim orders and even making uncharitable
comments as regards the unsatisfactory conduct of the Government cases.
31.16.4 As a matter of fact, once such ex-parte interim orders are passed, the High
Court is reluctant to vacate them in the course of subsequent proceedings causing
serious prejudice to implement the policy of the Government or to its executive
functions, apart from the financial loss incurred by the Government due to
prolongation of the proceedings which could otherwise have been avoided.
31.16.5 There is no doubt that it is in the interest of the Government and public that
every endeavour shall be made to put an end to the present state of affairs in this
regard.
31.16.6 All concerned officers are, therefore, advised to note that as soon as they
receive notices from the Delhi High Court, they shall immediately contact E-in-C’s
Branch and effectively brief the Additional Legal Adviser, in charge of Litigation (High
Court) Section, so that suitable action may be taken on such notices with minimum
loss of time and arrangement could be made for appropriate representation of the
Government at the time of hearing before the High Court, as notified, otherwise the
concerned officers may suffer the consequences of default of unwarranted delay in
this regard.
31.17 SOP for Dealing Court Cases.

31.17.1All court cases shall be attended/defended by the reps of GE/GE(I) office.
Hearing of important cases (to be decided by the CWE ) shall also be personally
attended by the DCWE (C)/ACWE (C)/SSW/SW of CWE office. Reps of CE Zones
shall also attend the courts during crucial stages of important cases (to be decided
by the CE Zone).
31.17.2 Progress in respect of court cases shall be monitored by the Accepting

Officer. Draft petition/draft defence/draft replies to be filed in the courts shall be
vetted by the Accepting Officer.
31.17.3 Overall monitoring in respect of progress of all Court cases shall be done
by the Accepting Officer also he will ensure timely updation on LIMBS Portal.
493
Appendix 31.1
SPECIMEN REPLY TO NOTICE FROM CONTRACTOR’S COUNSEL NOTICE UNDER

SECTION 80 CPC IN THE EVENT OF THE CONTRACTOR IGNORING THE
ARBITRATION CLAUSE AND THREATENING TO INITIATE COURT ACTION
AGAINST GOVERNMENT
No …....................../E8 WITHOUT PREJUDICE

Registered Ack Due
Office of the ….................
Dated …...........................
To,
(Counsel for M/s …)
Subject :Alleged Claims in respect of Contract No ………… In the matter of differences

between the Union of India and the Contractor …………………….
1.With reference to the notice dated ….......... served by you on the Government on behalf
of your client M/S…..........…… of your intention to initiate legal proceedings in respect of
dispute arising out of the above mentioned contract, your attention is drawn to the
arbitration clause in the said contract where under all dispute arising between the parties
are referable to arbitration as provided therein. The Government has always been and is
still ready and willing to have the said matter referred to arbitration in accordance with the
provisions of the said contract and to do all things necessary for the proper conclusion of
such reference.
2. Please note that if you persist in filing a suit, you would be doing so at your risk and cost.
CE/CWE/GE
On behalf of the Union of India
494
SECTION 32
IMPORTANT COURT JUDGEMENTS WHICH CAN BE REFERRED IN

PREPARATION AND DEFENCE OF ARBITRATION CASES
32.1. In large number of arbitration cases, the awards are going in favour of contractors.
Although the awards are being challenged in many cases, some awards are implemented
due to virtually no scope or reasons for their challenge. Even the awards which are
challenged, majority of the court cases finally end up with applications/appeals of the
Department getting dismissed.
32.2. During the scrutiny of cases forwarded to this HQ for obtaining the advice of LA (Def),
it has been observed that many times pleadings/defence of UOI do not effectively counter
the claims of contractors. In defence against the claims related to various types of
compensation/damages, reliance and citation of updated/latest favorable court orders are
lacking. Inadequate awareness towards latest developments/trends in the relevant field
and/or inadequate attention towards in-house discussion and not conducting mock hearing
among team members prior to hearing may be the reasons behind this.
32.3. In many cases, contractor's counsels tend to submit court judgements in support of
their claims at the fag end of the hearing, aimed at providing inadequate opportunity for
effective defence by UOI. Team of UOI must object to such unscrupulous method adopted
by contractors and must request the arbitrator for extending adequate opportunity to UOI to
counter such pleas of contractors before the hearing is formally concluded.
32.4. With the advent of various search engines and availability of several on-line portals
rendering information and documents relevant to the field, it is easy to be technically and
legally abreast with latest judgements & court orders which may be helpful in countering
legal points raised by contractors and present an effective defence of arbitration cases.
Moreover, constructive discussion & fruitful liaison with Government Counsel also helps a
lot in gaining further edge in this field.
32.5 A gist of court judgements on various types of issues commonly raised in support of
claims of contractors have been gleaned and given in para 32.7 below. The Officers
associated with the preparation and defence of arbitration cases should study these
judgements which will give insight to appreciate the cases. It is also advised that efforts
shall be made to search & compile similar other favorable judgements at each CE Zone
level, which shall be referred for preparation & defence of cases.
32.6 Jt DG (Contracts) of CE Command/Head of Contract Section of ADG offices shall

monitor and periodically suggest to CEs Zone/CCEs under their AOR on this matter. List of
such favorable court judgements shall also be compiled by the Jt DG (Contracts) of CE
Command/Heads of Contract Section of ADG offices from time-to-time and circulated to all
CEs Zone and preferably uploaded on the website for reference by other MES formations.
As after publication of award, the matter is referred by CE Zone to CE Command for
comments of Jt DG(C), CE Command/ADG must also analyse the documents and shall
periodically forward his opinion/report on the assessments of preparation & defence of
arbitration cases by CEs Zone/CCEs in his AOR.
495
32.7 Gist of Judgements.
Judgements on Claims for Damages Page

No
1 KailashNath& Associates Supreme 2 09 Section 74 emphasizes that in case of 9-27
Vs. DDA Court Judge Jan breach of contract, the party
Bench 2015 complaining of the breach is entitled to
receive reasonable compensation. If
the compensation named in the
contract is by way of penalty,
consideration would be different and the
party is only entitled to reasonable
compensation for the loss suffered. But
if the compensation named in the
contract for such breach is genuine pre-
estimate of loss which the parties knew
when they made the contract to be likely
to result from the breach of it, there is no
question of proving such loss or such
party is not required to lead evidence to
prove actual loss suffered by him.
Judgements on Claims for Labour Cess
2 M/s SAM (India) Vs. UOI Delhi Single 03 Stay granted on deduction of labourcess 28
High Bench Mar under the building and other construction
Court 2006 workers welfare cess Act 1996.
3 Builders Association of Delhi 2 28 The impugned order dated 09 Jan 2006 29-54
India Vs. UOI WP (C) High Judge Feb issued by DMRC, order dated 16 Aug
3620/2003 Court Bench 2007 2005 by the office of labour
commissioner, GNCTED, 12 Dec 2005
issued by the Superintendent Engineer,
Circular dated 13 Sep 2006 issued by the
Delhi Jal Board (DJB), Notice dated 23
Feb 2006 issued by the Married
Accommodation Project (MAP) and any
other similar circular are upheld and the
challenge to same is hereby negative.
4 Deewan Chand Builders Supreme 2 18 The vecy by the impugned Act is in effect 55-65
and Contractor Vs. UOI Court Judge Nov a 'fee' and not a 'tax'.
Bench 2011
5 DMRC Vs. Simplex Delhi 2 26 The Arbitral Awards and the impugned 66-83
Infrastructure FAO (OS) High Judge Aug Orders are erroneous for the reason that
674/2010 Court Bench 2011 they failed to take into consideration the
aspect that the Appellant was liable to
deduct at source cess at the notified rate
from the bills for building and other
construction works of the Respondent
contractors from the date the Cess Act
came into force i.e. 3rd November 1995.
6 MES Builders Association Madras Single 30 It cannot be said that the Act is violative 84-94
Vs. UOI WP (C) 6174 of High Bench Mar of any of the fundamental Rights
2010 Court 2011 guaranteed by the Constitution. On the
contrary, the Act implements the
Constitutional mandates of Articles 41
and 43 of the Constitution. The Cess
being only 2% of the cost of construction,
it cannot be said to be an unreasonable
restriction depriving the petitioner's right
to carry on trade.
7 Prabhakara Reddy Vs. Supreme 2 24 There can be no estoppel against statute 95-100
State of MP Court Judge Aug and hence, even if a contract or work
Bench 2015 order does not provide for payment of
recovery of cess by the contractor or the
496
principal, the statute providing for cess

cannot become ineffective.
Judgements on Claim for Interest on Late Payment of RAR's
8 State of Manipur Vs. Supreme 2 27 That the nature of payment is an 101-
ShangreihanMuivah Court Judge Mar advance, such advance, therefore, is not 103
Bench 2001 a debt under the Interest Act. We are,
therefore, of the opinion that no interest
was payable on such delayed advance.
Judgements on Interpretation of Terms of Contract. No Claim Admissible if Parties
understood the Clauses from their Conduct during Currency of Contract.
9 Larsen and Toubro Ltd Vs. Bombay Single 30 When there is a controversy between the 104-
Sunfield Resources Pvt Ltd High Bench Jun two parties regarding the real meaning to 117
Arb P No 35 of 2004 Court 2005 be attached to the clause in the contract,
the safest method to find out what is the
correct meaning of the clause is to find
out as to how the parties understood the
clause from their conduct during the
currency of the contract.
10 R.N. Gosain Vs. Supreme 2 1993 Law does not permit a person to both 118-
YashpalDhir (AIR 1993 SC Court Judge approbate and reprobate. This principle 124
352) Bench is based on the doctrine of election which
postulates that no party can accept and
reject the same instrument and that a
person cannot say at one time that a
transaction is valid and thereby obtain
some advantage to which he could only
be entitled on the footing that it is valid
and then turn around and say it is void for
the purpose of securing some other
advantage.
11 M/s Cauvery Coffee Vs. Supreme 2 13 A pary cannot be permitted to 'blow hot 125-
Hornor Resources Court Judge May & cold' 'fast and loose' or 'approbate and 134
Bench 2011 reprobate'. Where one knowingly
accepts the benefits of a contract or
conveyance or an order is estopped to
deny the validity or binding effect on him
of such contract or conveyance or order.
This rule is applied to do equity,
however, it must not be applied in a
manner as to violate the principles of
right and good conscience.
Judgement on Estoppel and Acquiescence (Consent/Agreement)

12 Deewan Singh Vs. Supreme 2 04 The doctrine of estoppel by 135-
RajendraPd Court Judge Jan acquiescence was not restricted to cases 147
Bench 2007 where the representor was aware both of
what his strict rights were and that the
representee was acting on the belief that
those rights would not be enforced
against him. Instead, the court was
required to ascertain whether in the
particular circumstances, it would be
unconscionable for a party to be
permitted to deny that which, knowingly
or unknowingly, he had allowed or
encouraged another to assume to his
detriment. Accordingly, the principle
would apply if at the time the expectation
was encouraged.
497
Judgement on Labour Escalation (PROHIBITED by Specific Bar)

13 UOI Vs. Varindera Supreme 2 19 Clause 19 cannot be read in the light of 148-
Construction Court Judge Apr second Part of Clause 25 as both stand 159
Bench 2018 on different footing i.e. deal with separate
issues. Hence the respondent contractor
is in the present case is not entitled to is
claim any escalation in minimum wages
as it would be against the condition of
Clause 19 read with Clause 6.3
14 N.J. Devani Builders Pvt Delhi 2 05 Arbitration Act 1940 – Section 30 – 160-
Ltd Vs. Indian Farmers High Judge Dec Arbitration Award – Claim on account of 168
Fertilizer Cooperative Ltd Court Bench 2012 increase in minimum wages – Escalation
clause limiting the increase to 5% of the
amount of contract – Ceiling of 5% on
escalation is not opposed to public policy
– Contractor who entered into contract
with open eyes is bound by such clause
– Award rejecting the claim, affirmed.
15 Rajasthan State Mines & Supreme 2 20 21 The rates agreed were fixed firm and 169-
Mineral Ltd Vs. Eastern Court Judge Sep binding irrespective of any fall or rise in 187
Engineering Enterprises Court 1999 the cost of the work covered by the
contract or any other reason or any
ground whatsoever. It is specifically
agreed that the contractor will not be
entitled or justified in raising any claim or
dispute because of increase in cost of
expense on any ground whatsoever.”
16 State of Odisha Vs. Supreme 3 23 It is not disputed that arbitration 188-

Sudhakar Das Court Judge Feb agreement contained no escalation 189
Bench 2000 clause. In the absence of any escalation
clause, an arbitrator cannot assume any
jurisdiction to award any amount towards
escalation. That part of award which
grants escalation charges is not
sustainable and suffers from a patent
error. The decree, insofar as the award
of escalation charges is concerned
cannot be sustained.
17 Jai Singh Vs. DDA Delhi Single 04 The Tribunal has a duty to decide a 190-
High Bench Sep dispute in accordance with the legal 197
Court 2008 rights of the parties rather than in what
the tribunal considers a fair and
reasonable way, unless there is specific
agreement between the parties to the
contrary.
Judgement of one Case cannot be applied on other blindly as in each Case, Facts & Circumstances
are different
18 Haryana Financial Supreme 3 28 “Each case depends on its own facts and 198-
Corporation Vs. Jagdamba Court Judge Jan a close similarity between one case and 204
Oil Mils Civil Appeal No Bench 2002 another is not enough because even a
607 of 2002 single significant detail may alter the
entire aspect. In deciding such cases,
one should avoid the temptation to
decide cases (as said by Cordozo) by
matching the colour of one case against
the colour of another. To decide,
therefore, on which side of the line a case
498
falls, the broad resemblance to another

case is not at all decisive.”
Judgement on Cancellation of Contract
19 Moni Traders Vs. Govt of Delhi Single 05 The ratio of the above said authority is 205-
NCT of Delhi High Bench Apr that in case of breach of integrity pact by 208
Court 2017 bidder or the contractor, Principal had
the power to disqualify the bidder for
future contract award process, decides
forfeiture of entire amount of earnest
money deposit, performance & security
deposit of the bidder/contractor. Work
having been abandoned by the
petitioner/contractor itself, the
respondent was well within its right to
rescind the work and to forfeit the
security deposit of peritioner in terms of
CA between parties.
20 S Rajan Vs. State of Supreme 2 29 Jul In case where the agreement does not 209-
Kerala and another Court Judge 1992 specify the arbitrator and the parties 215
Bench cannot also agree upon an arbitrator
does the court get the jurisdiction to
appointment an arbitrator. It must
accordingly, be said that in the present
case, there was no occasion or warrant
for the learned Subordinate Judge to call
upon the parties to submit panels of
arbitrators. He was bound to refer the
dispute only to the arbitrator named and
specified in the agreement. The aspect
however, has become academic now in
view of the fact that the very application
under Section 20 has been held by us to
be barred by limitation. Even so we
thought it necessary to emphasize this
aspect in view of the numerous instances
noticed by us where courts ignore the
arbitrator specified in the agreement and
appoint a different person as the
arbitrator.
21 DSIIDC Vs. Bawana Infra Delhi Single 15 “Sum in dispute” shall include both claim 216-
Development (P) Ltd OMP High Bench May & counter claim amount. Proviso to Sec 221
(Misc) 5/2018 Court 2018 38 (1) of the Act can apply only the
Arbitral Tribunal is not to fix its fee in
terms of the IV Sch of the Act. It would
not have any bearing on the
interpretation to be put to the IVth Sch.
The Proviso to Section 38 (1) of the Act
would not have bearing on the
interpretation being put to the IVthSch
and phrase “Sum in dispute” therein.
22 H.M. Kamaluddin Ansari & Supreme 3 12 Regarding any sum of money 222-
Co Vs. UOI Civil Appeal Court Judge Aug recoverable from contractor towards a 229
No 2853 & 2063 of 1982 Bench 1983 claim, UOI cannot be injucted from
withholding the amount under other bills
of the contractor, but it can certainly be
injucted from recovering or appropriating
it to the damages claimed.
23 Sant Ram & Company Vs. Supreme 2 20 An injunction order restraining 230-
State of Rajasthan Civil Court Judge Nov respondents from withholding the 232
Appeal No 76/1991 Bench 1996 amount due under other pending bills to
the contractor virtually amounts to a
direction to pay amounts to the
contractor. UOI has no objection to the
499
grant of an injunction restraining it from

recovering or appropriating the amount
lying with it in respect of other claims of
the contractor towards its claim for
damages.
24 Dwarikesh Sugar Supreme 3 07 In the absence of established fraud and 233-
Industries Ltd Vs. Prem Court Judge May not a mere allegation of fraud and that 239
Heavy Engineering Works Bench 1997 also having been made only in the
(P) Ltd Civil Appeal No injunction application, the court could not
8876 of 1997 in the present case, have granted an
injunction relating to encashment of the
bank guarantees. In encashment of bank
guarantees the applicability of the
principle of undue enrichment has no
application.
25 Omaxe Infrastructure & Delhi Single 24 If the intention of and the agreement of 240-
Construction Ltd Vs. High Bench Dec the parties was that the respondent, to 245
Director General MAP Court 2014 be entitled to invoke the BG, must
(UOI) specify the breach on part of the
petitioner of the agreement and/or the
clause of the agreement which the
petitioner had breached, nothing
prevented the parties to specify so. If it is
not so specified, not in the BG and even
therein. The petitioner cannot be allowed
to now, when the respondent has already
invoked the BG, contend so and have the
invocation by the respondent of the bank
guarantees defeated, by springing a
surprise of such plea on the respondent.
26 Mohan MeakinsBrewries Supreme 3 09 The respondents (UOI) are directed not 246-
Ltd Vs. UOI Court Judge May to adjust or recover in any manner their 259
Bench 1975 claim from out of the security deposit
amount and pending or future bills of the
petitioner company in its other contracts
until the said claim of the respondents
has been adjudicated forum in
accordance with the law.
27 SvenskaHandelsbanken Supreme 3 15 A confirmed bank guarantee/irrevocable 260-
Vs. Indian Charges Court Judge Oct letter of credit cannot be interfered with 275
Chrome Lttd Bench 1993 unless there is established fraud or
irretrievable injustice involved in the
case. Irretrievable injury has to be of the
nature noticed in the case of Itek Corp
Vs. First National Bank of Boston. On the
question of fraud this court confirmed the
observations made in the case of UP
Cooperative Federation Ltd and stated
that the fraud must be that of the
beneficiary, and not the fraud of anyone
else.
28 GattaRattaiahVs Food High Single 07 Ratio Decided - “When there is 276-
Corporation of India Court Bench Feb abandonment of a contract, forfeiture of 281
Andhra 2011 security deposit as per clause of the
Pradesh contract is not illegal.”
“It is not the absolute right to forfeit the
entire amount without proof of total
damages. On the other hand, when the
material on record shows that the extent
of the damages or loss suffered by the
party is less, no one can be allowed to
enrich by taking undue advantage of the
forfeiture clause.”
500
Judgement on Cancellation of Contract

29 State of Gujarat Vs. Supreme 2 24 “Forfeiture of the security deposit on 282-
Dayabhai Zaverbhai Court Judge Feb account of abandonment of the work by 284
Bench 1997 appellant was perfectly valid. The High
Ratio of Hind Construction Court was therefore not right in directing
case will not be applicable the appellant to refund the security
in case the work site is deposit. Respondent contends that time
abandoned by Contractor was not the essence of the contract so
recession of the contract was not for the
valid reason. We are however not on the
ground of time being the essence of the
contract but on the question whether the
respondent (contractor) had abandoned
the work or not. The question in that
backdrop arises; Whether the recession
of the contract was correct in law. In view
of above facts, the action was legal.”
Judgement/Orders where Supply of Documents is to be denied for Fishing Expedition
30 Chief Officer, Karnata- Single 11 It is for the plaintiff to prove his case and 285-
BagepallimandalPanchayat ka High Judge Oct not for the defendant to supply the 290
Vs. Major Bagepalli Town Court 1999 materials to them to establish the plaintiff
case.
32.8 Judgements mentioned in para 32.7 are for easy reference and guidance. The Team
defending the arbitration shall not restrict themselves to the same. The process of arbitration
and court cases is a very dynamic process and judgements with a divergent view are being
issued by courts on a day to day basis. Therefore, the defending team shall keep them
updated with regard to the court judgements related to arbitration matters through various
sources as cited above.
32.9 In addition to above, following judgements may also be referred in the arbitration
proceedings depending upon the merits of the case:-
(a)Supreme Court of India Judgement in SBP & Co. Vs. Patel Engineering Ltd
and Anr. 2005 (3) Arb. LR 285 (SC) delivered on 26 Oct 2005.
(i) 32.1.1Section 11 (6) of the Arbitration and Conciliation Act, 1996
requires the Chief Justice of the High Court or any person or institution
designated by him to take necessary measures for securing the appointment
of arbitrator on receipt of request from a party. Till the judgement in above
case, the Chief Justices of the High Court or the Distt. Courts designated by
him were passing orders for appointment of arbitrator under Section 11 (6) in
an administrative manner without going into merits of the case and without
following the judicial procedure of giving an opportunity to the opposite party
of being heard. Some Chief Justices had also delegated the power contained
in Section 11 (6) of the Arbitration and Conciliation Act 1996, to Distt. And
Subordinate Courts.
(ii) Hon’ble Supreme Court in this important Judgement given by a Seven
Judges Constitution Bench has overruled the Judgement given by Five
Judges Constitution Bench in Konkan Railway Corporation Ltd. and another
Vs. Rani Construction Pvt. Ltd. 2000 (3) Arb. LR 435 (SC) and has resolved
many contentious issues and has laid down the following guiding principles
for exercising the power by Chief Justice for appointment of arbitrator under
Section 11 (6) of the Act of 1996.
501
(iii) A Chief Justice or the person or institution designated by him is bound

to decide whether he has jurisdiction, whether there is an arbitration
agreement, whether the applicant before him is a party, whether the
conditions for exercise of the power have been fulfilled and if an arbitrator is
to be appointed, who is the fit person in terms of the provisions of the contract.
(iv) The power exercised by Chief Justice of High Court or Chief Justice of
India under Section 11 (6) is judicial power and adjudication is involved in
constitution of arbitral tribunal. Therefore, an order under Section 11 did not
relate to administrative functions of Chief Justice of High Court or Chief
Justice of India and is not an administrative order. The Apex Court has held
that “thus going by the general principles of law and the scheme of Section
11, it is difficult to call the order of the Chief Justice merely an administrative
order and to say that the opposite side need not even be heard before the
Chief Justice exercises his power of appointing an arbitrator”. Supreme Court
has further held that the power under Section 11 (6) of the Act is not conferred
on the Supreme Court or on the High Court, but it is conferred on the Chief
Justice of India or the Chief Justice of the High Court. Therefore, the fact that
the power is conferred on the Chief Justice and not on the Court presided over
by him is not sufficient to hold that the power thus conferred is merely an
administrative power and is not a judicial power. It has been held that an
opportunity of hearing to both the parties is a must and notice must be issued
to opposite party to give him an opportunity of being heard before appointing
an arbitrator.
(v) No person other than a Judge and no non judicial body can be
designated for entertaining application for appointing arbitrator under Section
11 (6). The judicial powers are to be exercised by the judicial authorities and
not by non judicial authorities. The Chief Justice cannot designate a District
Judge to perform functions under Section 11 (6). Chief Justice of High Court
can delegate function under Section 11 (6) to a judge of that Court and Chief
Justice of India can delegate the function to another Judge of Supreme Court.
This restriction on the powers of the Chief Justice on designating a District
Judge or a non-judicial authority flows from the scheme of the Act.
(vi) The order passed under Section 11 (6) of the Act being a judicial order,
the only avenue open to the party feeling aggrieved by order of Chief Justice
of High Court would be to approach the Supreme Court under Article 136.
The order of Chief Justice of India would be final on matters which are within
his purview. There can be no appeal against the order of Chief Justice of India
or a Judge of Supreme Court designated by him while entertaining the
application under Section 11 (6) of the Act.
(vii) The order passed by arbitral tribunal during arbitration is not capable
of being corrected by High Court under Article 226 or 227 of Constitution of
India. Such an intervention by the High Court is not permissible. The parties
can approach the Court only in terms of Section 34 or Section 37 of the Act.
(viii) Hon’ble Supreme Court has clarified that appointment of arbitrators or
arbitral tribunals thus far made are to be treated as valid. As and from the date
of this judgement, the position as adopted in this judgement will govern even
the pending applications under Section 11 (6) of the Act. Where Distt. Judge
had been designated by the Chief Justice of the High Court under Section 11
(6) of the Act, the appointment orders thus far by them will be treated as valid,
but the applications if any pending before them as on the date of judgement
will stand transferred, to be dealt with the Chief Justice of the concerned High
Court or a Judge of that Court designated by the Chief Justice.
502
(b) Supreme Court of India Judgement in UOI and another Vs MP Gupta

(Civil Appeal No 2053 of 1999) Arb. LR 368 (SC) decided on 5 Feb 2004.
Hon’ble Supreme Court has held that the appointment of a retired Judge as Sole
Arbitrator by the High Court was wrong as the arbitration clause of the contract
provided for appointment of two arbitrators who shall be Gazetted Railway Officers
of equal status. Supreme Court has set aside the judgement of High Court appointing
a retired Judge as Sole Arbitrator and directed the appellant UOI to appoint two
arbitrators as per the arbitration clause. Even though the judgement has been given
under Sec 8 and 20 of Arbitration Act 1940, but it is squarely applicable to
appointment of Arbitrator in MES contracts under Arbitration and Conciliation Act
1996 as the essence of the judgement is that when there is express provision
contained in the contract for appointment of Arbitrator, any other person not
contemplated in the contract cannot be appointed as Arbitrator by the Court. This
Judgement can be very helpful in defending the cases filed in courts for appointment
of Arbitrator by the contractors.
(c) Supreme Court of India Judgement in General Manager Northern

Railway and AnrVsSarvesh Chopra JT 2002 (2) SC 445 decided on 1 March
2002.
Hon’ble Supreme Court has held that while deciding a petition under Section 20 of
the Arbitration Act 1940, the court is obliged to examine whether a dispute, which is
sought to be referred to arbitrator, is one to which the arbitration agreement applies.
If it is a matter excepted from the arbitration agreement, the court shall be justified in
withholding the reference. It has been further held that to be an excepted matter, it
is not necessary that a departmental or 'in house' remedy for settlement of claims
must be provided by the contract. Merely for the absence of provision for in-house
settlement of claim, the claim does not cease to be an excepted matter. An important
ruling of the Apex Court in this judgement is that an issue as to arbitrability of claim
is available for determination at all the three stages-while making reference to
arbitration, in the course of arbitral proceedings and while making the award a
rule of the court. This judgement can be made use of during the arbitration
proceedings and while challenging the award wherein the claim pertaining to the
“Excepted matter” has been awarded in favour of the contractor.
(d) Supreme Court of India Judgement of Union of India Vs Momin

Construction Co (AIR 1995 SC 1927) decided on 10 Jan 1995.
Hon’ble Supreme Court held that application made after expiry of three years from
the date of “No Claim Certificate” is barred by limitation contained in Article 137 of
Limitation Act 1963. In this case, the Apex Court has ruled that the claim arose to
the respondents before 11 Aug 1965 when they issued “No Claim Certificate” and
the final bill was passed. Therefore, the right to apply for appointment of arbitrator
under Section 20 of the Arbitration Act 1940 arose to the respondents before 11 Aug
1965. As such the application made by them under Section 20 of Arbitration Act
much after the expiry of three years therefrom is plainly barred by limitation.
(e) Supreme Court of India Judgement in M/s PK Ramaiah & Company Vs

Chairman and Managing Director National Thermal Power Corporation (1994
Suppl 31 Supreme Court Cases 126) decided on 01 Oct 1993.
503
(i) Hon’ble Supreme Court has held that when accord and satisfaction is
complete, subsequent claims are not arbitrable. In this case, the full and final
satisfaction was acknowledged by the contractor by a receipt in writing and
the amount was received unconditionally. Thus there is accord and
satisfaction by final settlement of the claims. The subsequent allegation of
coercion is an afterthought and a device to get over the settlement of disputes,
acceptance of the payment and receipt voluntarily given. Supreme Court
further held that the applicant having acknowledged the settlement and also
accepted the measurements, and having received the amount in full and final
settlement of the claim, there is accord and satisfaction and there is no
existing arbitrable dispute for reference to the arbitration.
(ii) This case will be very helpful in defending the court cases where a
contractor seeks arbitration even after signing the final bill without protest
and/or receiving the payment without protest. Such cases to be defended in
court drawing attention to the provisions of Condition 65 of IAFW-2249 and
the theory of Accord and Satisfaction contained in Section 63 of Indian
Contract Act.
(f) Supreme Court on India Judgement in Datar Switchgears Ltd. Vs Tata

Finance Ltd. 2000(3) ALR 447.
Supreme Court has held that in a case arising under Section 11 (6) of Arbitration and
Conciliation Act 1996, if the opposite party has not made any appointment within 30
days of demand, the right to make appointment is not forfeited but continues.
However, an appointment has to be made before the former files an application in
court under Section 11 seeking appointment of an arbitrator. Only then the right of
opposite party ceases.
(g) Delhi High Court Judgement in Vaish Brother and Co. Vs. UOI and
Another 2004(3) Arb. LR 225 (Delhi) decided on 06 Sept 2004.
Hon’ble High Court of Delhi has held that since the petitioner has proceeded on a
admission of the learned counsel for the petitioner that the final bill was submitted
and Clause for excepted matters and barring raising of any claim after submission of
the final bills clearly comes into play and the petitioner is not entitled to seek the
reference of dispute and even the issue of existence of a dispute cannot be referred
to the arbitrator.
(h) High Court of Kerala at Ernakulam Judgement in Engineer-in-Chief and

CE (Navy) Cochin Vs M/S Bharath Builders, WP (C) No 10520 of 2004(R)
decided on 19 Jan 2005.
Hon’ble High Court of Kerala has held that the learned Single Judge has committed
error in appointing a person, which is not contemplated in the arbitration clause,
before taking appropriate measures contemplated under Section 11 (6) of the
Arbitration and Conciliation Act 1996. The High Court set aside the judgement of
Single Judge whereby a retired Chief Engineer, who was nominee of the contractor,
was appointed as Arbitrator.
(j) Madras High Court Judgement in M/s Kamala Solvent VsManipal Finance
Corporation Ltd. and others, AIR 2001 Madras 440, decided on 19 June 2001.
Hon’ble Madras High Court has held that it is very clear as seen from the sub section
(6) of Section 11 of the Arbitration and Conciliation Act 1996 that where the
agreement formulated a procedure for appointment of an arbitrator referable to sub
504
section 2 of Section 11, it is open to the parties to take necessary measures for
enforcing the procedure laid down in the arbitration agreement. Further held that it is
crystal clear that under sub section (6) of Section 11, the Chief Justice or his
designate is not to make any appointment but to enforce or direct the party to appoint
in terms of the agreement entered into between them. While delivering the above
Judgement, the High Court has relied upon the Judgement of Supreme Court in
Konkan Railway Corporation Ltd. Vs M/s Mehul Construction Co. (AIR 2000 SC
2821) in which the Apex Court held that when the parties agreed upon for
appointment of the arbitrator and the procedure, the court must implement the
procedure.
(k) Supreme Court of India Judgement in Steel Authority of India Limited Vs

JC Budharaja Government and Mining Contractor (1999 Arb. W.L.J. 714)
decided on 1 Sep 1999.
Hon’ble Supreme Court has held that the award awarding damages to the contractor
against terms of the contract is arbitrary, capricious, illegal and without jurisdiction.
In this case, it was noticed by the Apex Court that clause of the agreement
specifically stipulated that no claim whatsoever for not giving the entire site or for
giving the site gradually, would be tenable and the contractor was required to arrange
his working programme accordingly. Another clause of the contract further stipulated
that failure or omission to carry out the provisions of the contract would not give rise
to a claim for compensation, if the said failure or omission arose from the compliance
with any statute or regulation of Government. The relevant clause of General
Condition of the Contract also provided that failure or delay by the employer to hand
over to the contractor possession of land necessary for execution of the work or any
other delay on the part of the employer due to any other cause would not entitle the
contractor to damages or compensation and in such cases, the only duty of the
employer was to extend the time for the completion of the work by such period as it
might think necessary and proper. In view of these conditions of the contract, it was
held by the Apex Court that the award of damages by the arbitrator with interest was
against the terms of the contract.
(l) Supreme Court of India Judgement in Oil and Natural Gas Corporation
Ltd. Vs. SAW Pipes Ltd., 2003(2) Arb LR 5 (SC), decided on 17 April 2003
(i) Hon’ble Supreme Court has held that reading Section 34 conjointly with
other provisions of the Act, it appears that the legislative intent could not be
that if the award is in contravention of the provisions of the Act, still however,
it couldn’t be set aside by the Court. If it is held that such award could not be
interfered, it would be contrary to basic concept of justice. If the Arbitral
Tribunal has not followed the mandatory procedure prescribed under the Act,
it would mean that it has acted beyond its jurisdiction and thereby the award
would be patently illegal which could be set aside under Section 34.
(ii) Further held that the phrase ‘Public Policy of India’ used in Section 34
in context is required to be given a wider meaning. It can be stated that the
concept of public policy connotes some matter which concerns public good
and in the public interest. What is for public good or in public interest or what
would be injurious or harmful to the public good or public interest has varied
from time to time. However, the award which is, on the face of it, patently in
violation of statutory provisions cannot be said to be in public interest. Such
award/judgement/decision is likely to adversely affect the administration of
justice.
505
(iii) Further held that the award could be set aside if it is contrary to:-
(aa) Fundamental policy of Indian law; or

(ab) The interest of India; or
(ac) Justice or morality; or
(ad) In addition, if it is patently illegal.
(iv) Further held:–
(aa) Terms of the contract are required to be taken into consideration

before arriving at the conclusion whether the party claiming damages
is entitled to the same.
(ab) If the terms are clear and unambiguous stipulating the liquidated
damages in case of the breach of the contract unless it is held that such
estimate of damages/compensation is unreasonable or is by way of
penalty, party who has committed the breach is required to pay such
compensation and that is what is provided in Section 73 of the Contract
Act.
(ac) Section 74 is to be read along with Section 73 and, therefore, in

every case of breach of contract, the person aggrieved by the breach
is not required to prove actual loss or damage suffered by him before
he can claim a decree. The Court is competent to award reasonable
compensation in case of breach even if no actual damage is proved to
have been suffered in consequences of the breach of contract.
(ad) In some contracts, it would be impossible for the court to assess

the compensation arising from breach and if the compensation
contemplated is not by way of penalty or unreasonable, court can
award the same if it is genuine pre-estimate by the parties as the
measure of reasonable compensation.
(v) Further held:-

(aa) The Court can set aside the arbitral award under Section 34 (2) of
the Act if the party making the application furnishes proof that:-
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon,
under the law for the time being in force; or
(iii) the party making the application was not given proper notice
of the appointment of an arbitrator or of the arbitral proceedings
or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by

or not falling within the terms of the submission to arbitration, or
it contain decisions on matters beyond the scope of the
submission to arbitration.
506
(ab) The Court may set aside the award:-

(i) if the composition of the Arbitral Tribunal was not in
accordance with the agreement of the parties;
(ii) failing such agreement, the composition of the Arbitral

Tribunal was not in accordance with Part-I of the Act.
(ac) If the arbitral procedure was not in accordance with:-
(i)the agreement of the parties, or
(ii)failing such agreement, the arbitral procedure was not in

accordance with Part-I of the Act.
However, exception for setting aside the award on the ground

of composition of Arbitral Tribunal or illegality of arbitral
procedure is that the agreement should not be in conflict with
the provisions of Part-I of the Act from which parties cannot
derogate.
(iii)If the award passed by the Arbitral Tribunal is in

contravention of provisions of the Act or any other substantive
law governing the parties or is against the terms of the contract.
(3) The award could be set aside if it is against the public policy of India, that is
to say, if it is contrary to:-
• fundamental policy of Indian law;
• the interest of India; or
• justice or morality; or
• if it is patently illegal
•
(4) It could be challenged :
• as provided under Section 13 (5); and
• Section 16 (6) of the Act.
B. (1) The impugned award requires to be set aside mainly on the grounds:-
(i) There is specific stipulation in the agreement that the time and date of
delivery of the goods was the essence of the contract.
(ii) In case of failure to deliver the goods within the period fixed for such
delivery in the schedule, ONGC was entitled to recover from the contractor
liquidated damages as agreed.
(iii) It was also explicitly understood that the agreed liquidated damages
were genuine pre- estimate of damages.
(iv) on the request of the respondent to extend the time limit for supply of
goods, ONGC informed specifically that time was extended but stipulated
liquidated damages as agreed would be recovered.
507
(v) Liquidated damages for delay in supply of goods were to be recovered

by paying authorities from the bills for payment of cost of material supplied by
the contractor.
(vi) There is nothing on record to suggest that stipulation for recovering

liquidated damages was by way of penalty or that the said sum was in any
way unreasonable.
(vii) In certain contracts, it is impossible to assess the damages or prove

the same. Such situation is taken care by Sections 73 and 74 of the Contract
Act and in the present case by specific terms of the contract.
32.10 Blank
32.11. In the above judgement, the Supreme Court has laid down the various grounds on
which the award can be set aside under Section 34 of the Arbitration and Conciliation Act
1996. Of the particular importance is the ruling of the Apex Court that in a case, where the
validity of the award is challenged, there is no necessity of giving a narrower meaning to the
term “Public Policy of India”. On the contrary, wider meaning is required to be given so that
the “patently illegal award” passed by the arbitral tribunal could be set aside. Accordingly, it
has been laid down by the Apex Court that the court may set aside the award if the award
passed by the Arbitral Tribunal is against the terms of the contract.
32.12 Punjab and Haryana High Court order in UOI Vs. Pavani Civil Contractors (P)
Ltd. And another in CR No 1989 of 2002 delivered on 16 Nov 2002
32.12.1 Hon’ble High Court has held that there is no question of interpretation of Clause 11
of IAFW - 2249 General Conditions of Contract, forming part of Contract Agreement by the
arbitrator but mere looking into it, one can say that the amount of compensation for
prolongation of the contract cannot be awarded and the award given by the arbitrator is
beyond the terms of the contract and thus beyond the jurisdiction. High Court set aside the
judgement of the Addl. Distt. Judge with respect to the award for damages due to
prolongation of contract amounting to Rs 23.73 lakhs terming it as illegal and has held that
the contractor is not entitled to the sum of Rs 23.73 lakhs on account of prolongation of
contract.
32.13 Calcutta High Court Judgement in KC Boul alias Kajoj Chandra Roy Vs. Union
of India in WP No 1077, 2001 decided on 13 Aug 2001
32.13.1 In this case, the petitioner challenged his renewal of enlistment and reclassification
in ‘D’ Class from ‘C’ Class. Hon’ble High Court held that the enlistment of the petitioner
was valid upto 31 Dec 2000, and the petitioner could seek renewal in ‘C’ Class any time
before that date. By a change of policy, the reclassification of contractor was given effect
to. The revised policy enhanced the upper tendering limit and also consequently fixed higher
sums towards Standing Security for ‘C’ Class. The petitioner failed to give the required
security inspite of reminders. Based upon Petitioner's Standing Security Deposit, the
respondent had placed him in the revised ‘D’ class. It was optional for the petitioner to
continue in ‘D’ Class or seek return of Security Deposit. However, the petitioner has not
fulfilled the condition prescribed for being placed in revised ‘C’ Class within the time that
was prescribed. The petition was dismissed.
32.14 Allahabad High Court Judgement in UOI Vs. M/s Kohli Construction Company
in FAFO No 671 of 1997 decided on 11 Nov 1998
508
32.14.1 In this case, Hon’ble High Court has struck down suomoto the compound interest
awarded by the arbitrator in exercise of powers under Article 226 and 227 of the
Constitution of India. Hon’ble High Court has refreed to the judgement in Executive
Engineer, Rural Engineering Division, Dhenkanal Vs. Biswanath Agarwalla (AIR 1982
Orissa 263) where in it has been held that the arbitrator has the power to award interest
under Section 29 of Interest Act 1978, but he can not award the interest on total amount
which includes interest. In other words, the arbitrator has no power to award compound
interest. It may also be mentioned in this connection that Section 3 of Interest Act 1978
which authorises the courts (including a Tribunal and an Arbitrator) to allow interest, itself
prohibits the award of compound interest. Section 3 (3) of the Act says that nothing in this
section shall empower the court to award interest upon interest.
32.15 Supreme Court Judgement in United India Insurance Co. Ltd. Vs. JA Infra
Structure Pvt. Ltd., 2006 (3) Arbitration LR 369 (SC) decided on 30 Aug 2006
32.15.1 In this case, the appellant United India Insurance Co. Ltd. filed arbitration petition
under Section 34 of the Arbitration and Conciliation Act 1996 in the High Court at Bombay.
However, the petition was dismissed by learned Single Judge for want of jurisdiction. The
appellant insurance company thereafter filed a fresh petition under Section 34 of the Act
before the Distt. Court Nagpur alongwith application under Section 14 of the Limitation Act
on 17th January 2005. The Distt. Court Nagpur dismissed the application filed by the
appellant company under Section 14 of the Limitation Act and consequently, the application
filed under Section 34 of the A&C Act of 1996 also stood dismissed. Aggrieved against the
order passed by the Distt. Court, the appellant filed a Writ Petition before the Bombay High
Court at Nagpur Bench which was also dismissed on 21st December 2005. Aggrieved by
the said judgement, the appellant preferred the SLP in the Apex Court.
32.15.2 Hon’ble Supreme Court while deciding the SLP, has referred its judgement in State
of Goa Vs M/s Western Builders, 2006 (3) Arbitration LR SC 1 (SC) wherein it has
considered the question as to what extent Section 14 of the Limitation Act 1963, which deals
with exclusion of time spent in prosecuting the remedy before wrong forum is applicable to
the Arbitration and Conciliation Act, 1996. The Apex court in Para 13 of the said judgement
has observed that Section 14 of the Limitation Act has not been excluded by this special
enactment, i.e. the Arbitration and Conciliation Act 1996 and the Section 43 of the Act of
1996 clearly says that the Limitation Act 1963 shall apply to arbitration as it applies to the
proceedings in court. In the result, the Apex Court held that the view taken by the courts
below excluding the applicability of Section 14 on the proceedings was not correct. Further
held that Section 14 of the Limitation Act 1963 was applicable in the Arbitration and
Conciliation Act 1996 and accordingly, the Apex Court set aside the judgements and orders
and remanded the matter back to the Distt. Court for deciding the application under Section
14 of the Limitation Act on merits.
32.15.3 In view of the judgement in State of Goa Vs M/s Western Builders, the counsel for
the respondents has not seriously opposed to the applicability of Section 14 of the Limitation
Act which deals with exclusion of time spent in prosecuting the remedy before the wrong
forum bonafide. The Supreme Court has set aside the order dated 21 Dec 2005 passed by
Bombay High Court at Nagpur Bench and has remitted the matter back to the Distt. Court
Nagpur to decide the objections raised by the appellant Insurance Company under Section
34 (3) of the Act of 1996 and decide the same on merits after affording opportunity to the
respondent.
509
32.16 Supreme Court Judgement in the matter of M/s Shring Construction Pvt Ltd
Vs. UOI (Civil Appeal No 4516 of 2006) : Whether Section 14 of the Limitation Act is
applicable to the Arbitration and Conciliation Act 1996
32.16.1 Hon’ble Supreme Court in this judgement has interpreted the applicability of
Section 14 of the Limitation Act to the Arbitration and Conciliation Act 1996. In this case the
UOI having aggrieved with the award, filed a Writ Petition challenging the award before the
High Court of Uttaranchal at Nainital under a bonafide belief that since the arbitrator has
been appointed by the High Court, the award could be challenged in the High Court.
However the Writ Petition was dismissed by Hon’ble High Court in limine being not
maintainable on the ground that the award ought to have been challenged under Section
34 of the Act by filing objections in the court of Distt. Judge.
32.16.2 An objection under 34 of the Act was filled before the District Judge, Dehradun
along with an application for condonation of delay. However as per sub section (3) of
Section 34 of the Act an application may be made within 3 months from the date on which
the party making application had received the arbitral award, or if a request has been made
under Section 33 to set aside the arbitral award. There is further provision to Sub Section
(3) of Section 34 that the period for filing the application can be extended if the applicant
could show that he was prevented by sufficient cause from making the application within
the said period of three months by further thirty days but not thereafter.
32.16.3 The application was filed beyond the extended period of 30 days, hence
District Judge dismissed the application for condonation of delay as well as application for
setting aside the award being barred by time. UOI filed the first appeal in the High Court
against the Judgement of District Judge, but the appeal was dismissed. Aggrieved by the
order of the High Court, UOI filed SLP and the Judgement was pronounced in the matter.
32.16.4 Hon’ble Supreme Court has held that the question with the regard to
applicability of Section 14 of the Limitation Act was not examined by the High Court as well
as the District Judge. In fact, it was bonafide error on the part of the UOI to have approached
the High Court. It was a misplaced impression that since the High Court has appointed the
arbitrator, therefore, its award can be challenged before the High Court only. This Court
recently in the case of State of Goa V/s Western Builders reported in (2006) 6 SCC 239 has
taken a view that applicability of Section 14 of the Limitation Act is not excluded from the
Act of 1996. This Court in Western Builders (supra) has observed as follows:
“By virtue of Section 43 of the Act of 1996, the Limitation Act applies to the proceeding
sunder the Act of 1996 and the provisions of the Limitation Act can only stand excluded to
the extent wherever different period has been prescribed under the act of 1996. Since there
is no prohibition provided under Section 34, there is no reason why Section 14 of the
Limitation Act should not be read in the Act of 1996, which will advance the cause the
justice.”
32.16.5 Apex Court has remitted the matter back to the trial court to decide whether the
application for setting aside the award under Section 34 of the Act filed by appealer could
be considered to be within the period of limitation i.e. after deducting the period spent by
the applicant in prosecuting the remedy before the High Court. The order of High Court and
that the of the Distt. Judge has been set aside.
32.16.6 The above judgement will be very useful in defending Govt. case where the award
has been erroneously challenged in the court other than the designated one under Section
34 of the Act.
510
32.17 Hon’ble Supreme Court Judgement in the matter of Ramnath International

Construction Pvt. Ltd Vs. UOI and ANR 2006 (4) ARB R 385 (SC) decided on 11th Dec
2006 (Civil appeal Nos 3167- 3168 of 2005): Contractor not entitled for Compensation
of any nature on account of delays attributable to employer due to prohibition
contained in condition 11 (C) of IAFW-2249
32.17.1 Hon’ble Supreme Court in the subject landmark Judgement has interpreted
Condition 11 (C) of IAWF-2249; General Conditions of Contract as per which no claim in
respect of compensation or otherwise, howsoever arising as result of extensions granted
under condition 11 (A) and (B) shall be admitted.
32.17.2 UOI filed application before Single Judge of Madras High Court for setting aside
the awards in two contracts.
Hon’ble Single Judge vide order dt 24 Aug 94 and 22 Sep 95 rejected the
applications and made award rule of the court in each case. Aggrieved by Signal Judge
Order, UOI filled appeals before the Division Bench of Madras High Court. The same were
partly allowed and Hon’ble High Court concluded that the arbitrator has exceeded his
jurisdiction in making an award towards claims which were made in derogation of Clause
11 (C) of the contract which prohibited the contractor from making any claim for
compensation or otherwise howsoever arising as a result of extension of time granted under
the contract. Under the circumstance, the contractor filed appeal before Hon’ble Supreme
Court. The Apex Court has dismissed the appeal of contractor and has upheld the High
Court order on the ground that the arbitrator had acted in excess of his jurisdiction.
32.17.3 Hon’ble Supreme Court in the subject judgements has held that:
• “After enumerating certain delays, sub-clause (vii) of Clause (A) specifically

mentions delay on account of any other cause beyond the control of the
contractor. The causes for delays specified in Clause (A), thus encompass all
delays over which the contractor has no control. This will necessarily include any
delay attributable to the employer or any delay for which both the employer and
the contractor are responsible. The contract thus, provides that if there is any
delay, attributable either to the contractor or the employer or to both, and the
contractor seeks and obtains extension of time for execution on that account, he
will not be entitled to claim compensation of any nature, on the ground of such
delay, in addition to the extension of time obtained by him.”
• “Clause 11 (C) of the General Conditions of Contract is a clear bar to any claim
for compensation for delays, in respect of which extensions have been sought
and obtained. Clause 11 (C) amounts to a specific consent by the contractor to
accept extension of time alone in satisfaction of his claim for delay and not claim
by compensation. In view of the clear bar against award of damages on account
of delay, the arbitrator clearly exceeded his jurisdiction, in awarding damages,
ignoring Clause 11 (C).”
32.17.4 The above judgemnent will be very useful in defending Govt. case against
contractor’s claim for damages or compensation for prolongation of contract period in
proceedings where award is being challenged on this ground.
511
32.18 No Claim Certificate leading to full and final settlement of all the claims: ARB
appeal 3/2000 in Sikkim High Court : Sagarmull Agarwala Vs. UOI
32.18.1 In the above case, the award given by Sole Arbitrator in violation of Condition 65
of IAFW- 2249, was made rule of the court by Addl Distt. Judge. Appeal filed by UOI in High
Court was also dismissed whereupon the UOI filed SLP in Supreme Court which was
allowed by Hon’ble Supreme Court and the orders of Addl. Distt. Judge as also that passed
by Hon’ble High Court were set aside and the matter was remanded to the Distt. Judge to
decide the matter afresh in accordance with law. Accordingly, the Distt. Judge considered
the matter again and the award given by the sole Arbitrator was set aside.
32.18.2 In view of Condition 65 of IAFW-2249, Hon’ble High Court of Sikkim has dismissed
the appeal of the contractor filed against the Distt. Court Order wherein the Distt. Court has
set aside the award of the Sole Arbitrator on the ground that “No Claim Certificate” indicated
that there was full and final settlement of all the claim and nothing remained to be done
under the contract. While dismissing the appeal of the contractor, Hon’ble High Court has
referred the judgement of Hon’ble Supreme Court in M/s PK Ramaiah & Company Vs.
Chairman & Managing Director, National Thermal Power Corporation (1944 Supp 93 SCC
126) and Condition 65 of IAFW- 2249, General Conditions of Contracts and held that “In
present case there is accord and satisfaction of the final settlement of the claims by the
Appellant. The plea about accord and satisfaction goes to the root of the matter and has to
be dealt with by the Court even where the arbitrator has made the award in favour of the
contractor after final settlement of the claim of the contractor.”
32.18.3 The allegation of pressure levelled by the Petitioner Contractor also has been
dismissed by the Hon’ble High Court stating that “if a contracting party gives no claim
certificate in order to get early payment, the contractor can not turn around and say that No
Claim Certificate was issued because he needed the money early. The allegation about
pressure is in the nature of an after thought and even if there remained any claims, they
stood waived in view of the specific provision made in clause 65 of the General Conditions
of Contracts. After the contractor received payment in full and final settlement of his claim,
the contract did not survive any longer with the result that the terms of the contract
providing for arbitration also ceased to survive”.
32.18.4 The above judgement even though given under Arbitration Act 1940, reiterates and
uphelds the theory of accord and satisfaction emphasized by Condition 65 of IAFW-2249
and will be helpful in defending the similar claims and award during arbitration and court
cases.
32.19 Hon’ble Supreme Court Judgement in the Matter of RL Kalathia & Co. Vs. State
of Gujrat in Civil Appeal No 3245 of 2003 decided on 14 Jan 2011
(Para 9 refers). The following principles emerge:-
(i) Merely because the contractor has issued “No Due Certificate”, if there is
acceptable claim, the court cannot reject the same on the ground of issuance of “No
Due Certificate”.
(ii) In as much as it is common that unless a discharge certificate is given in

advance by the contractor, payment of bills are generally delayed, hence such a
clause in the contract would not be an absolute bar to a contractor raising claims
which are genuine at a later date even after submission of such “No Claim Certificate”
512
(iii) Even after execution of full and final discharge voucher/receipt by one of the
parties, if the said party able to establish that he is entitled to further amount for
which he is having adequate materials, is not barred from claiming such amount
merely because of acceptance of the final bill by mentioning “without prejudice” or
by issuing “No Due Certificate”.
32.20 Hon’ble Supreme Court Judgement in the matter of JG Engineers Pvt. Ltd. Vs.
Union of India & ANR in Civil Appeal No 3349 of 2005 decided on 28 Apr 2011
The Supreme Court has set aside the judgement of the Gauhati High Court and
upheld the award of the arbitrator in the dispute over the delay in the construction of the
extension of the Guwahati airport terminal. The contracted period for completion of the
project was 21 months, but it was extended twice. The contractor and the Government
blamed each other for the delay, and ultimately the Government cancelled the contract. The
dispute was referred to arbitrator and the award was in favour of the construction firm.
However, the High Court set aside the award, leading to the appeal in the Supreme Court
(JG Engineers Ltd. Vs. Union of India). The court held that the contractor was entitled to
extension of the period for completion of the work, as the delay was caused by the
Government. The firm was also entitled to escalation costs for the work done during the
extended period. It cannot be imposed penalty for the delay. Moreover, since the delay
was caused by the Government, it cannot make counter-claims against the firm, the
judgement said.
32.21 Extract from the Supreme Court’s Decision in Fateh Chand Vs. Balkrishan (Air
1963 SC Page 1045)
….. Section 74 of the Indian Contract Act is clearly an attempt to eliminate the
somewhat elaborate refinements made under English common law in distinguishing
between stipulation providing for payment of liquidated damages and stipulations in the
nature of penalty. Under the English common law, a genuine pre-estimate of damages by
mutual agreement is regarded as a stipulation naming liquidated damages and binding
between the parties; a stipulation in a contract in terrorem is a penalty and the Court refuses
to enforce it, awarding to the aggrieved party only reasonable compensation. The Indian
Legislature has sought to cut across the web of rules and presumptions under the English
common law, by enacting a uniform principle applicable to all stipulations naming amounts
to be paid in case of breach, and stipulations by way of penalty.
32.22 Their Lordship further observed that provision of damages in the case of breach of
stipulation by way of penalty is by Sec. 74 reasonable compensation not exceeding the
penalty stipulated for. In assessing damages the court, has subject to the penalty stipulated,
jurisdiction to award such compensation as it deems reasonable having regard to all the
circumstances of the case Jurisdiction of the award to compensation in the case of breach
of contract is unqualified except as to the maximum stipulated; but compensation has to be
reasonable, and that imposes upon the court duty to award compensation according to
settled principles. The Section undoubtedly says the aggrieved party is entitled to receive
compensation from the party who has broken the contract whether or not actual damage or
loss is proved to have been caused by the breach. Thereby it merely dispenses with proof
of 'actual loss or damage': it does not justify the award of compensation when in
consequence of the breach no legal =injury at all has resulted because compensation for
breach of contract can be awarded to make good loss or damage which naturally arose in
the usual course of things or which the parties knew when they made the contract, to be
likely to result from the breach. Duty not to enforce the penalty clause but only to award
reasonable compensation is statutorily imposed upon courts by Sec. 74. In all cases,
therefore, where there is a stipulation for payment of a fixed sum of money by way of
513
compensation i.e. where the damages have been pre-estimated and considered to be
genuine as well as in cases where a graded scale of levy of compensation has been
provided for under the contract, the court has jurisdiction to award such sum only as it
considers reasonable, but not exceeding the amount specified in the contract. In the
circumstances where we make a pre- estimate of damages or otherwise, it would always
be open to the court to fix and award such compensation as it considers reasonable under
the facts and circumstances of the case.
32.23 The estimates of the damages made by the parties can never be considered to be
the final word. The court has always the power to examine the reasonableness of the
amount and award such sum as it considers to be reasonable. This would appear to be so
even in cases where the pre estimated damages have been stipulated for in the contract,
after calling the other party’s specific attention to the same.
514
SECTION 33
REPORTS & RETURNS IN RESPECT OF DIRECTORATE OF CONTRACT

MANAGEMENT/E8 SECTION
33.1 The list of reports and returns pertaining to Dte of Contract Management/E8 Section
is given in Appendix 33.1. For reports and returns, the Proformas as per annexure P-1 to
P-12 to Appendix 33.1 shall be used.
33.2 Monitoring and preparation of reports & returns shall be done as under:
 Quarterly review of pending court cases (Annexure P-1) :
(i) All court cases shall continue to be attended/ defended by the representatives of
GEs/GEs (I). Hearing of important cases (to be decided by the CWE) shall also be
personally attended by the ACWE (Contracts)/DCWE (Contracts) of CWE office.
Reps of CE Zones shall also attend the courts during crucial stages of important
cases (to be decided by the CE Zone).
(ii) Progress in respect of court cases shall be monitored by the Accepting Officers.
Draft petition/draft defence/draft replies to be filed in the courts shall be vetted by the
Accepting Officer.
(iii) Overall monitoring in respect of progress of all cases pending in High Courts
shall be done at CE Command level and in respect of cases in Distt. Courts/Lower
Courts by CE Zone.
(iv) Quarterly report in respect of Cases in Supreme Court only shall be forwarded
to E-in-C’s Branch by CE Commands.
 Quarterly workload returns (WLR) (Annexure P-2, Part I & II) :
(i) WLR shall be initiated/circulated in two parts as under:
Part-I : List of Contractors having workload
Part-II : List of Contractors having no workload but banned for issue of
tenders.
(ii) It shall be circulated as under
(aa) Work Load Return in respect of 'E' class Contractors and Contractors though
not enlisted but having total work load up to Rs 50 lakhs shall be issued by the
CE Zone/ CCE.
(ab) Work Load Return in respect of 'A' to 'D' & 'S' class Contractors and
Contractors though not enlisted but having work load more than Rs 50 lakhs and
upto Rs 15 crores, shall be issued by CE Command/ADG.
(ac) Work Load Returns in respect of ‘SS’ class Contractors and Contractors
though not enlisted but having work load more than Rs 15.00 crores shall be
issued by E-in-C’s Branch.
(iii) CsWE while forwarding consolidated reports to CE Zones, will not endorse copy
to GEs.
(iv) Zonal CEs while forwarding reports to CE Commands in respect of Contractors
having work load more than Rs 50 lakhs will not endorse copy to CsWE and E
in-C’s Branch.
(v) Zonal CE will compile and forward his report to CE Command for uploading in
MES website.
(vi) Commands CE will compile and circulate his report and get it uploaded in MES
website.
(vii) Show cause notices for proposed adverse remarks in work load returns shall be
served by the Accepting Officer of Contracts latest by 10th of the last month of the
quarter and copy of the same alongwith reply of Contractors shall be enclosed
with WLR by GE/CWE, while forwarding report to CE Zone, and by CE Zone to
CE Command.
515
(viii) In the forwarding letter of the WLR to higher formation, there shall be specific
mention that against the contractor who have then adversely remarked, necessary
Show Cause Notices (SCNs) have been issued to the contractors, replies received
from contractors and replies analysed before putting the adverse remark.
 Half yearly report for Market rates of materials & labour (Annexure P-3) :
Market rates of materials & labour will be got finalised by the GEs through board
of officers and proceedings shall be kept in his records. Confirmation to this effect
shall be given in forwarding letters of the report.
 Quarterly Return for fore-cast percentages over SSR for preparation of AEs
(Annexure P-4) : It shall be prepared based on market trend, quotations being
received (neglecting freak quotations) and adding factor or inflation/escalation for
future period (Appx 1 year). Monitoring of reports shall be done by the CE
Commands for realistic forecast percentages and any abnormal variations
(without justification) noticed, shall be got corrected by the concerned CE Zone.
For common stations, Director (Contracts) of different zones shall consult with
each other to arrive at uniform percentage.
 Quarterly reports of contracts accepted during the quarter (Annexure P-5)
: GEs, CsWE and CEs will send report in respect of their own accepted contracts
to next higher Engineer authorities i.e. to CWE, CE Zone and CE Command
respectively.
 Quarterly Report Monitoring delay in payment of final bills (Annexure P-6):
(i) GE will initiate report in five parts as under :
Part-I : Final bills outstanding between 6 to 9 months from the date of
completion.
Part-II : Final bills outstanding between 9 to 15 months from the date of
completion.
Part-III : Final bills outstanding between 15 months to 3 years from date of
completion.
Part-IV : Final bills outstanding more than 3 years from date of completion.
Part-V : Details of Final bills paid during the Quarter out of Part I.to IV.
(ii) Monitoring of final bills shall be done as under :
Part-I : CWE
Part-II : CE Zone
Part-III : CE Command
Part-IV: E-in-C’s Branch
 Half yearly report in respect of Progress of Arbitration cases (Annexure P-
7) :
(i) Report shall be prepared in two parts as under :
Part-I : In respect of GE’s and CWE’s contracts, by CWE.
Part-II : In respect of CE’s contracts, by CE Zone.
(ii) Part I report in respect of GE’s and CWE’s contracts shall be submitted to CE
Zone.
(iii) Part II report in respect of CE’s contracts shall be submitted to CE Command and
E-in-C.
 Quarterly return of overpayment to Contractors/recovery due from
Contractors (Annexure P-8) :
(i) This report shall be complied under following groups :
(aa) Recovery on account of Risk and Cost.
(ab) Recovery on account of over payment.
(ac) Recovery on account of STEs observations.
(ad) Miscellaneous recoveries.
(ae) Recoveries already established in Arbitration/Court decree.
(af) Recoveries effected during the Quarter.
516
(ii) It shall be prepared in three parts as under :

Part-I : Cases in which amount of recoveries is less than Rs 50,000/-
Part II : Cases in which amount of recoveries is between Rs 50,000/- and
Rs 5 lakhs
Part III : Cases in which amount of recoveries is more than Rs 5 lakhs
(iii) Part I report shall be forwarded up to CWE level and monitoring shall be done by
the CWE office.
(iv) Part II report shall be forwarded up to CE Zone level and monitoring shall be
done by the CE Zone office.
(v) Part III report shall be forwarded up to CE Command level and monitoring shall
be done by CE Command office.
 Quarterly report in respect of cases more than 30 days old, in which

arbitrators are yet to be appointed (Annexure P-9) :
(i) Two months period shall be reckoned from the date of receipt of Contractor’s
request for appointment of arbitrator and/or date of notice under Condition 70 served
on Contractors in respect of Government recoveries and date of resignation of
previous arbitrator in case of resignation cases. It shall be prepared in two parts as
under :
Part I : In respect of GE’s and CWE’s contracts
Part II : In respect of CE’s contracts.
(ii) Part I shall be forwarded up to CE Zone (Appointing Authority).
(iii) Part II shall be forwarded by CE Zone directly to E-in-C’s Branch.
 Monthly return of cases involving decision of MOL Branch Sectt/LA (Def)
with respect to implementation or contesting of awards (Annexure P-10) :
Monthly period shall be reckoned from the date of award/date of court order. This
report shall include cases in which LA (Defence) and/or MOD decisions on
implementation/ contesting of awards have not yet been received. Report shall
be submitted directly by CE Zone to E-in-C’s Branch.
 Quarterly report in respect of STE’s Observation (Annexure P-11) :
It shall be prepared in two parts as under and will be sent by GE’s to CsWE with
copy to CE Zone and CE Command for monitoring.
Part I : In respect of Observation other then Minor Observations.
Part II : In respect on Minor Observations.
 Quarterly progress report in respect of CWE’s and CE’s Contracts
(Annexure P-12) : It shall be sent by GE’s to CsWE with copy to CE Zone for
monitoring.
 Quarterly report on progress of ADGTE serious cases and Draft Para cases
: It shall be sent by CE Command to E-in-C’s Branch with copy to ADGTE Branch.
 Report on issue of Show Cause Notice prior to banning of firm involved in
CBI case: It shall be processed as per Para 1.14 (k) of Section 1.
517
APPENDIX 33.1
LIST OF REPORTS AND RETURNS (CONTRACT MANAGEMENT/E8 SECTION)
Srl Title/ Period Indicating Initiation Intermediate Final level of reporting Remarks
No Description of icity Position level and levels and
report return on latest date latest dates
of initiation of initiation
1 2 3 4 5 6 7 8
1 Quarterly st
Quart 31 Marc GE - CWE : (a) CE Zone in Annexure
review of erly h 10thof 20thof next respect of cases P-1
pending court 30thJune next month pending in Lower/
cases 30thSep. month CE : 30thof District Courts
31stDec. next month (b) CE Comd in
CE Comd : respect of High
20thof Court cases
2ndMonth (c) E-in-C's Br in
respect of Supreme
Court cases
2 Quarterly Quart 31stMarc GE - 5thof CWE : (a) Work Load Annexure
Workload erly h next 10thof next Return in respect of P-2 (Part I
returns 30thJune month month 'E'class Contractors &II)
30thSep. CE : 20thof and Contractors
31stDec. next month though not enlisted
CE Comd : but having total work
05thof load up to Rs 50
2ndmonth lakhs shall be
circulated by 20thof
next month by CE
Zones
(b) Work Load
Return in respect of
'A'to 'D'&'S'class
Contractors and
Contractors though
not enlisted but
having work load
more than Rs 50
lakhs and upto Rs 15
crores shall be
2ndmonth by CE
Commands.
(c) Work Load
Returns in respect of
‘SS’ class
Contractors and
Contractors though
not enlisted but
having work load
more than Rs 15.00
croresshall be
518
2ndmonth by E-in-C's
Branch.
3 Market rates Half 30thApril GE - CWE : CE Zones Annexure
of material Yearl 31stOct. 15thof 25thof next P-3 (CE
&labour y next month Zones will
month standardiz
e the list of
materials
&labour for
his Zone)
4 Quarterly Quart 31stMarc GE - 5thof CWE : CE Command with Annexure
Return for erly h next 10thof next copy to E-in-C's P-4
forecast 30thJune month month Branch (E8&E2), DG
percentages 30thSep. CE : 20thof MAP,
over SSR for 31stDec. next month MOD/D(Works-I)
preparation of Sena Bhawan New
AEs to be Delhi, CGDA RK
initiated during Puram New Delhi
the
succeeding
quarter
5 Quarterly Quart 31stJanu GE - - (a) CWE in respect Annexure
return of erly ary 10thof of GE's contracts P-5
contracts 30thApril next (b) CE Zones in
accepted 31stJuly month respect of CWE's
31stOct. CWE - contracts
10thof (c) CE Command in
next respect of CE's
month contract
CE -
10thof
next
month
6 Quarterly st
Quart 31 Janu GE - CWE : Part-I upto CWE Annexure
Monitoring erly ary 10thof 20thof next Part-II upto CE Zone P-6
delay in 30thApril next month Part-III upto CE
payment of 31stJuly month CE : 30thof Command
final bills 31stOct. next month Part-IV upto E-in-C's
CE Comd : Branch
10thof
2ndmonth
7 Half Yearly Half 31stJanu CWE - - Part-I in respect of Annexure
report in Yearl ary 10thof GE's and CWE's P-7
respect of y st
31 July next contracts to CE Zone
arbitration month Part-II in respect of
cases CE - CE's contracts to CE
10thof Command with copy
next to E-in-C's Branch
month
8 Quarterly Quart 28thFeb. GE - CWE : Part-I upto CWE Annexure
return of erly 31stMay 10thof th
20 of next level P-8
overpayment 31stAugu next month Part-II upto CE Zone
to contractors/ st month level
519
recoveries 30thNov. CE : 30thof Part-III upto CE

due from next month Command level
contractors
9 Quarterly Quart 28thFeb. CWE - - Part-I in respect of Annexure
report in erly 31stMay 10thof GE's and CWE's P-9
respect of 30 31stAugu next contracts to CE Zone
days old st month Part-II in respect of
cases, in 30thNov. CE - CE's contracts
which 10thnext directly by CE Zone
arbitrators are month to E-in-C's Branch
yet to be
appointed
10 Monthly return Mont End of CE - - E-in-C's Br in Annexure
of cases hly month 10thof respect of LA P-10
involving next (Defence) advice
decision of month and/or MOD
MOL Branch decisions on
Sectt/LA (Def) implementation/cont
with respect to esting the awards
implementat-
ion or
contesting of
awards
11 Quarterly Quart 28thFeb. GE – - CWE with copy to Annexure
return in erly 31stMay 10thof CE Zone and CE P-11
respect of 31stAugu next Command
STE's obsn st month
30thNov.
12 Quarterly Quart 28thFeb. GE - - CWE with copy to Annexure
progress erly 31stMay 10thof CE Zone P-12
report in 31stAugu next
respect of st month
CWE's and 30thNov.
CE's
Contracts
13 Quarterly Quart 28thFeb. CE Comd/ - E-in-C's Br/ADGTE Annexure
report on erly 31stMay ADG - P-13
progress of 31stAugu 20thof
ADGTE st next
Serious Cases 30thNov. month
&Draft Para
cases
14 Monthly report Mont End of Ist of next CE E-in-C's Br – 10th of Annexure
on Disposal hly month month Command/ next month P-14
Of Cases ADG - 5 th
Referred To of next
Independent month
External
Monitors
(IEMS)
520
ANNEXURE TO APPENDIX 33.1
Annexure P-1
Quarterly Review of Pending Courts Cases
(Quarter ending ….............)
Formation :
Srl CA No, Case No, Brief If case pertains to Progress Next date of Remark
No Name of Name of Descriptio arbitration award, amount so far hearing and s
Work and Court n of Case awarded in favour of achieved action
Name of where Contractor Government in the proposed to
Contracto pending case be taken in the
r case
1 2 3 4 5 6 7 8 9
Annexure P-2
Quarterly Work Load Returm
(Quarter ending …..........)
Formation :
Part-I List of Contractors having work load
Srl Name of Class/Index Total Value of Approx value Whether considered Remarks
No Contractor No the work in hand of works capable handling more /
completed load Reasons
1 2 3 4 5 6 7
Part-II List of Contractors having no work load, but banned for issue of tenders
Srl Name of Contractor Class/Index No Present status of firm Remarks/Reason

No
1 2 3 4 5
Annexure P-3
Market Rates of Materials and Labour
(Half Yearly ending …...........)
Formation :
Srl Station Description of Unit Prevailing market Remark

No materials/labour rate s
1 2 3 4 5 6
521
Annexure P-4
Quarterly Return for forecast percentages over SSR for preparation of AEs to be
initiated during the succeeding quarter (Quarter ending …................)
Formation :
Srl Station Bldg Runways &Taxi Road, Ext Ext Drainage Compound Remarks
No Track Path Water Electric &Sewage Wall/Fencing
Rigid Flexible &Culver Supply Supply &Gate
t
1 2 3 4 5 6 7 8 9 10 11
Notes :
1. Report will be issued by Zonal CEs. However, wherin abnormal variation between same
stations of various Zones occurs, correction will be issued by CE Command within 15 days.
2. 5% extra to be added for works in restricted areas.
3. 10% extra to be added for works inside Factory areas/Ordnance/Amn Depot/Air
Force/Navy Tech Area/Remote locations etc.
4. Percentage indicated above are assessed percentage based on market trend and are
not exclusively based on concluded contracts, excluding freakishly high/low accepted
contracts.
5. Difference in cost of stores will be shown separately under respective cols, only for
stations wherever applicable.
6. Percentage indicated are for normal specifications including internal services as catered
for in Zonal Specifications. Any additional effect of superior specifications to be taken
separately.
7. Percentage are for AEs purpose only and not for acceptance of contracts.
Annexure P-5
Quarterly report of Contracts accepted during the quarter
(Quarter ending …...........)
Formation :
Srl CA No, No of Amoun Type Lump Item rate Contracts Remark

No Name of Tenders t of CA of CA Sum s
Work and Issue Read Contract SSR portion Non-SSR portion
Name of d % above/ Quoted % Quoted Market
Contractor below amount worked amount analyse
SSR of SSR out of Non- d
amount items above/ SSR amount
(Schedule below items of Non-
'A'section SSR SSR
wise) amount items
1 2 3 4 5 6 7 8 9 10 11 12
522
Annexure P-6
Monitoring delay in payment of final bills
(Quarter ending …...........)
Formation :
Srl CA No, Date of Movement of final bills (Dates) Progres Final

No Name of completi Date of From From From From From From s Bill
Work and on of submiss- Sub GE to CWE to GE to AAO to PCDA/ made amoun
Name of works ion of Div CWE GE AAO PCDA/ CDA to during t
Contract Final bill to GE CDA AAO the Qtr
or by
Contrac-
tor/
Prepare-d
by MES
1 2 3 4 5 6 7 8 9 10 11 12
Annexure P-7
Half Yearly report in respect of Arbitration cases in progress
(Half year ending …...........)
Formation :
Srl CA No, Name of Amount of Due dates/Dates of receipt from Dates of Date up
No Name of Arbitrator Claims involved Contractor/submission to arbitrator hearing to which
Work Contrac Govt. Contractor' Govt's Contract Govt's &next award is
and tor s statement stateme -or's pleading date of to be
Name of of claims nt pleading in hearing publish-
Contrac of in defence ed
-tor claims defence
1 2 3 4 5 6 7 8 9 10 11
Annexure P-8
Quarterly return of overpayment to Contractors/recovery due from Contractors
Formation :
Srl CA No, Name of Name of Recovery due Amount of Progress Remark

No work Contractor and on account of recovery towards s
Index No realisation
1 2 3 4 5 6 7
523
Annexure P-9
Quarterly report in respect of 30 days old cases, in which arbitrators are yet to be
appointed
Formation :
Srl CA No, Name Contractor's letter Letter No &date of Letter No &date under Remarks/File
No of No &date notice under which particulars No
Work and requesting condition 70 submitted to Appointing of E-in-C's
Name appointment of served on authority i.e. CE Zone/E- Branch, if any
of Contractor arbitrator Contractor in-C's Branch
1 2 3 4 5 6
Note : In respect of resignation cases, letter no. and date of resignation letter shall only be
indicated under cols 3 to 5.
Annexure P-10
1Monthly return of cases involving decision of MOL Branch Sectt/LA (Def) with
respect to implementation or contesting of awards
(Month ending …..........)
Formation :
Srl CA No Name of Award Limitation Period for Case Initiated for Present Reason for
No &Name of Arbitrator Published on Filing Objection Advice of MoL Status Delay if Case
Work &Name Award Recd against Award upto Branch Sectt/LA Received at E-
of Contractor by Office of (A-1) + 3 months (Def) vide Letter in-C's Branch
Accepting No &Date after 30 Days
from Receipt
Officer on
of Award
(A)
1 2 3 4 5 6 7 8
Annexure P-11
Quarterly report in respect of STE's observations
Formation :
Srl Nos of outstanding observations Break up details of outstanding Remark

No observations s
At beginning Added Settled At end of Less 6 months 12 More
of quarter during during quarter than 6 to 12 months than 24
quarter quarter months months to 24 months
months
1 2 3 4 5 6 7 8 9 10
Note : Brief details of observations outstanding for more than 24 months shall be intimated
in separate appendix with reasons of pendency.
524
Annexure P-12
Quarterly progress report in respect of CWE's and CE's Contracts
(Quarter ending …...............)
Formation :
Srl CA No, CA Date of Date of Extend- % progress Details of DOs for Issues Remarks/
No Name of amount comme- Compl- ed Date At At end Add back other referred to hold ups in
Work ncement etion of beginning of DOs changes AO for progress in
and complet- of quarter quarter which which which work
Name of ion are yet to are yet to decisions
Contra- be be are
ctor placed placed awaited
1 2 3 4 5 6 7 8 9 10 11 12
Annexure P-13
Quarterly report on progress of ADGTE Serious Cases and Draft Para Cases
(Quarter ending …...............)
Srl No Case No Formation Present Remarks

position
Annexure P-14
Disposal of cases referred to independent external monitors (IEMS) Month ending
Year No of No of No of contracts No of contracts No of contracts

contracts contracts signed for value signed for value signed for value
signed for signed for between between above Rs. 20
value upto value between Rs. 5-10 crores Rs. 10-20 crores
Rs. 2 crores Rs. 2-5 crores crores
2017-18
2018-19
2019-20
2020-21
(upto
______
_
(Month)
Year No of cases referred to No. of cases disposed by No. of cases referred to

IEMs based on IEMs the Vigilance Division for
complaints by bidders examination
2017-18
2018-19
2019-20
2020-21
(upto
_______
(Month)

Manual On Contract 2020 06th July-1

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Manual On Contract 2020 06th July-1

Uploaded by

Copyright:

Available Formats

MILITARY ENGINEER SERVICES

MANUAL ON CONTRACTS, 2020

FORMULATED UNDER THE ORDERS OF

MANUAL ON CONTRACTS, 2020

Section Description Page No

Section Description Page No

5.1 General 146-147

7.1 Issue of T&P 177

11.1 Authority 253-254

15.1 General 287

Section 16 Contract Administration, General Principles and Specimen

Section : 22 Technical Examination Organization

26.1 General 417

Appendices 27.1 to 27.2 424-430

Class Upper Tendering Value of Standing Authority Competent

1.2 Categories of Works for Registration.

(a) Civil Engineering Works.

(i) Building Works

(i) Low Tension Electric Works (upto 1100 volts)

(i) Air Conditioning and Refrigeration (HVAC)

(v) Mechanical Laundry

(f) Enlistment of contractors based on the engineering qualification shall be allowed as

(b) Criteria for upgradation in various classes shall be as under:-

1. Authority competent to enlist shall be called Registering Authority.

3. For enlistment/upgradation/renewal/reclassification etc, in category (b) Electrical

7. Upgradation of enlisted contractor shall be done gradually in stages. Before a

1.5 Documents required to be submitted by the contractor for enlistment in MES.

(b) Affidavit for constitution of firm.

(f) Solvency certificate from scheduled bank as per specimen given in

(k) Two self-attested photographs of Proprietor/Partners/ Directors of firm for

(l) Copy of partnership deed in case of partnership firm.

(m) Memorandum and Articles of Association in case of Limited Companies.

(n) Copy of Registration Certificate of firm with Registrar of Companies/Register of

(q) Copy of power of attorney/Resolution of the Board in favour of any Partner/Director

(r) Copy of immediate last Income Tax Return.

(ii) Photocopies of documents shall be self-attested. Registering Authority shall ask

(iv) Registering Authority shall cross-verify the genuineness of financial documents at

1.6 Verification of Character and Antecedents of Contractors and their Agents.

(i) Character and antecedents of Proprietor/Partners/Directors shall be verified

(ii) Character and antecedents of agents of contractors shall be verified

(d) The verification of antecedents in case of Government Undertaking is not required.

(e) Verification of antecedents of Proprietor/Partners/Directors of firm in connection with

(f) Verification of antecedents of contractor’s representative/labour deployed at site in

1.7 Procedure for Enlistment of Contractors.

(a) For Class SS,S,A to D.

“Accepted for and on behalf of the President of India.”

Signature and Designation of

(v) Thereafter Registering Authority will issue a letter of enlistment to the

(vi) The documents pertaining to Standing Security Deposit in respect of

(vii) Whenever Standing Security Deposit is required to be released in respect of

(i) Application for enlistment as an approved contractor in ‘E’ class shall be

(iii) Documents pertaining to security in respect of enlistment of Contractors of

1.9 Transfer of Enlistment on Reorganization of MES Formation.

(b) In case of disbandment of any MES formation: If any MES formation is

1.10 Provisional Enlistment of Contractors.

1.11 Enlistment of New/Sister Concern Firm/Company from Existing Firm/

(a) The Partners(s)/Directors(s) in the existing enlisted Partnership Firm/Limited

Class 'E - Chief Engineer Zone

(b) Such enlistment shall be subject to fulfilment of criteria and compliance of

(vi) Reconstitution in the form of change in Partner(s)/Director(s) of new Firm/Company

(viii) Proprietor/Partner(s)/Director(s) of the new Firm/Company shall individually furnish

(ii) Turnover = 40% of Rs 200 lakh = Rs 80 lakh