159900627738tenders and Contracts

9/2/2020
Tenders and Contracts
G-3 Tenders and Contracts IRISET-SC 1

9/2/2020
Tenders and Contracts
Session-1
Tenders
Session-2
Contracts

9/2/2020
Session objectives
➢ Introduction to Tendering System

➢Tendering Process
➢EMD
➢Types of Tenders
➢Tendering Procedure
➢Contracts

9/2/2020
Introduction to Tendering System
Tender system is an efficient method adopted by

an organization by calling Tenders ( offer letters)
from contracting agencies for the purpose of
execution of works or
supply of materials or
providing services

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What is a TENDER?
A tender is a bid or offer made by a contractor in

response to a tender notice given by an
organization (like Railways) for the execution of a
work or supply of materials or for providing services.
It consists of an estimate of costs for the said

work or supply or service.

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Why Tendering
➢Best value for public money,

➢fair communication,
➢healthy competition,
➢ development of vendors / service providers etc

9/2/2020
Tender Process
• A Tender Process is a method by which

contractors/ suppliers are selected for the
execution of works or for supply of material
or providing services to an organization.

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Tendering Process
In order to obtain very economical and

competitive rates, the tender system is
adopted.
Therefore, very careful and serious

consideration shall be made while
adopting the tender system.
9/2/2020
Obligations of Railway before

commencement of work
➢ Once it is decided to execute the work through a
contracting agency by calling tenders, the
following conditions should be fulfilled.
➢ that the railway is in a position to handover the

site of work and plan to the contractor
➢ that the railway should be ready with full
knowledge of the nature and scope of work
➢ the railway is ready with design of work, detailed

drawings, schedule of quantities etc

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EMD-Earnest Money Deposit
➢The tenderer shall be required to deposit earnest

money with the tender for the due performance with
the stipulation to keep the offer open till such
date as specified in the tender, under the
conditions of tender.
➢If his tender is accepted this earnest money

mentioned in above clause will be retained as part
security for the due and faithful fulfilment of the
contract in terms of Clause 16 of the Standard
General Conditions of Contract.
9/2/2020
Value of the Work Earnest Money
Deposit (EMD)
➢The earnest money shall be rounded to the nearest ₹100. This earnest
money shall be applicable for all modes of tendering.
➢Any firm recognized by Department of Industrial Policy and Promotion

(DIPP) as ‘Startups’ shall be exempted from payment of earnest money
deposit detailed above.
In addition to EMD, SD, PBG are part of Contract agreement.

9/2/2020
Tender Procedure
➢Issue of Tender notice

➢Sale of Tender Forms
➢Receiving of sealed tender quotations/bids
➢Opening of Tenders
➢Recording details in Tender Register
➢Award of contract to the successful bidder
➢Letter of Acceptance from bidder
➢Collection of Performance/ Security deposit
➢Signing agreement by both parties

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Issue of Tender notice
➢The Tender notice should be issued

not be less than one month before in normal
conditions or
➢21 days before in case of emergency

- with prior finance concurrence & approval of
DRM / PHOD / HOD.

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Tender Documents
• The tender documents for sale through office

and on internet (e-tendering) should be ready
from the date notified.
• The tender forms supplied on the payment of
specified amount.
• These forms should contain details regarding -

9/2/2020
Essential informationTender
form/Notice
1) Description of work and its approximate value

2) Places from where tender forms & documents
can be obtained
3) The place where the filled up tender forms to
be submitted
4) The date, time and place for closing & opening
of tenders

Cost of Tender Forms
The following are general costs of TFs
S.No Value of Tender Rs.
1 for works costing upto 5 lakhs 1000
2 Above Rs.5lakhs & upto Rs.20 2000
lakhs
3 Above 20lakhs & upto 50 lakhs 3000
4 Above 50 lakhs & upto 2 Crores 5000
5 Above 2 Crores & upto 50 Crores 10000
6 Above 50 Crores 25000

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Precautions prior to invitation (NIT)
Have clarity about

(a)What exactly is to be done.
(b)Where it is to be done.
(c) Completion Period
(d)Extent of Assistance by Railways
(e)Realistic estimated cost, payment terms.
(f) Approved drawings.
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Opening of Tender
• Tender Opening Register;

• Serial Number;
• Date of Opening;
• Name of the Work;
• Tender Notice No. & Date;
• Name of Tenderer;
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➢ EMD details;
➢ Rate Quoted;
➢ Late or Delayed
➢ Number of forms issued
➢ Number of tenders received and opened
➢Signatures of Tender Opening Officials:
➢Signatures of Tenderers

9/2/2020
Late and Delayed Tender
(610-F/1251-E)
Late Tender :
Receipt after the specified time of opening.
Open by concerned branch officer.
Envelope marked in red ink.
Remarks in Tender opening Register and comparative stmt.
Delayed Tenders:
Received before the time of opening but after due date and
time of receipt of tender.
Opened and dealt like other tenders
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Opening of Tender
Tender Opening Register:

• Serial Number;
• Date of Opening;
• Name of the Work;
• Tender Notice No. & Date;
• Name of Tenderer;

9/2/2020
Comparative Statement and Briefing
Notes
Comparative Statement :
➢Prepared by concerned executive
➢Verified by the Accounts Department
➢Put up to TC
Briefing Note :
➢Latest LAR
➢Credential of the Tenderer
➢Earnest Money
➢Comments of validity of the offer
➢Special condition if any
➢Vetted by the associate finance.
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Tender Committee(TC)
Tender Committees should be generally constituted by the
authority competent to accept the tenders.
A Tender Committee (TC): is a team of two or three

officers, specially constituted to consider the
tender offers and to make recommendations to
the Tender Accepting Authority (TAA) to enable
him to take a decision.
The level of TC and number of members in it
depends on the value of the L1 OFFER
(a) Technical Member-Convener.
(b) Finance Member
(c) Third Member above 10 Lakhs
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Acceptance of tender
and Issue of LOA(E-1256)
➢An unqualified acceptance of a tender constitutes

a binding contract until a formal agreement is
constituted.
➢To ensure this fact the acceptance letter should be

suitably worded. However,
➢If the acceptance of the tender by the Railway is a

conditional acceptance, it requires the consent of
the tenderer before the binding contract takes place.
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Classes of Tenders
1) Open tender:- Invitation to all by

public advertisement
2) Limited Tender:- Direct invitation to
a Limited no. of firms
3) Single Tender:- Invitation to one firm
only

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Open Tenders:
As a general rule, the invitation (Issue

of Tender Notice) for open tenders should
be given through advertisements in the
most open & most public manner
possible to maintain transparency and
fair play.
(Note: In limited tenders & single tender the
tender notice is not issued)
9/2/2020
Open Tenders contd…
➢Open Tender system is chosen if estimated

cost is more than Rs.3 Lakhs .
➢To be advertised in regional/national news
papers.
➢Minimum Notice period is 30 days
➢NP can be reduced to 21 days if necessary.

9/2/2020
Open Tenders
Common Irregularities
➢ Inadequate tender notice

➢ Inadequate time for participation
➢ Inadequate publicity
➢ Late availability of tender documents
➢ Tender box not available in advance
➢ Deviations in eligibility criteria
9/2/2020
Limited Tenders
In the public interest, when it is considered not

practical or advantageous to call for an open
tender, limited tender may be invited with the
concurrence of associate finance and with the
approval of competent authority.
• The reasons for inviting LT should be kept on
record while approaching finance for concurrence.
• Limited tenders should be invited from the
contractors borne on the approved list only, which
must registered by each zonal Railway.
9/2/2020
Limited Tenders contd..
➢ Some percentage of the tenders which would normally be

finalised by calling limited tenders, be finalised by calling
open tenders so as to test the market rates periodically.
➢Notice for `Limited Tenders be sent to all eligible
contractors borne on the approved list.
The Railways may invite open tenders in place of Limited
tenders in the following circumstances.
➢ (a) In the event of insufficient response to the tender
from the contractors borne on the approved list;
➢ (b) When the work is of special nature and
contractors with requisite experience are not available on the
approved list; and
➢ (c) When ring formation is suspected."
APPROVED LIST OF
CONTRACTORS
A list of approved contractors is maintained in

the Headquarters/Divisional offices of a Railway
after satisfying about the eligibility of the
contractors based on their financial capacity and
previous experience. Empanneled contractors
are classified as A,B,C & D according to the
monitory limits
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Limited Tenders
➢ Arbitrary selection of firms.

➢ Firms with better experience ignored and firms with
dubious credential selected.
➢ Inadequate time given for participation in tender.
➢ Tender notice not sent to all the firms.
➢ Bogus firms selected to inflate the number.
➢ Rates can be reasonably higher since the
competition is restricted.

9/2/2020
Single Tender
Tender is invited from single pre- selected bidder of

proven capacity
Used in emergencies and exceptional cases,

Where other tender routes can not be followed due
to exigencies of given situation
When item is propriety item or only one firm is

capable of doing the work

9/2/2020
Single Tender
➢ Projecting undue/artificial urgency

➢ Selecting unsuitable tenderer based on
exaggerated credential ignoring his past failures.
➢ Accepting exorbitant rates on the grounds of
urgency then merrily giving extensions with token
penalty or without penalty

9/2/2020
Contracts
When two or more people have a common intention
communicated to each other to create some
obligation between them there is said to be an
agreement.
An agreement that is enforceable by Law is a
Contract.
Which made by free consent of the parties. Who
are competent to contract.
For a lawful consideration and with a lawful object.
9/2/2020
CONDITIONS
Standard general conditions of contract are uniform.

Special conditions have serious financial
implications therefore should be carefully drafted.
In case of a conflict between GCC and special
conditions the special conditions will prevail.

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General Principles for contracts
Terms of contract must be precise and definite &

include the following essentials.
(a) What the contractor is to do, when, where and
whose satisfaction.
(b) What the Railway Administration is to do.
(c) What amount of payment is to be made.
(d) The responsibility of the contractor.
(e) Terms of variations and modifications.
(f) Measures to be adopted in event of breach of
contract by either party.
9/2/2020
(g) Methods of settling disputes. ( aribitration)

(h) Legal and financial advise. (very important)
(i) Terms of contracts once entered should not be
varied.
(j) Conditions of unusual character.
(k) Provision for safeguarding railway/public
property.
9/2/2020
And In addition to above must also include

➢How to deal variations
➢Special conditions part of contract
➢Rates in words and figures
➢Quantities in words and figures

9/2/2020
Types of Railway contracts
➢Works contracts
➢Supply contracts
➢Service contracts
➢Sale through Auction

9/2/2020
How to deal variations

Special conditions part of contract
Rates in words and figures
Quantities in words and figures

9/2/2020
Works Contracts
These are mostly civil engineering works like,

construction of
Bridges,Buildings,Railway Lines etc.
S & T works of PI, RRI, Yard remodelling works
OFC and 6 quad with SDH and PD mux, in New
lines, doubling & RE etc.
These are governed by standardised General
Conditions of Contract (GCC)
9/2/2020
Classification of works- Zone works
Zone Works: - Works of ordinary Repairs & maintenance

and others of petty nature in a zone or area.
Special Works:- Construction of Bridges, Formation of an
embankment etc.
Supplies of Building/ Track Materials:- Bricks, Tiles, Lime,
doors, Windows, Ballast, Boulders, Moorum, Stone chips
etc.

9/2/2020
Works Contracts - Types
➢Lumpsum contract.
➢Schedule contract
➢Piece-work contracts.

9/2/2020
Lumpsum Contract
The Lumpsum Contract is a contract under which

the contractor engages to carry out a work or effect
supply as specified and within a given period for a
fixed total sum.

9/2/2020
Schedule Contract
The schedule contract is a contract under which the

contractor engages to carry out a work or effect
supply as specified and within a given period, at
fixed unit rates or prices for each of the various
items comprising such work or supply, the sum he is
to receive depending on the actual quantities and
kinds of work done or materials supplied in
completing the work or supply to specification and
time.

9/2/2020
Piece Work Contract
This means a contract under which only unit rates or

prices for various kinds of work or materials are
agreed upon, without reference either to the total
quantity of work to be done or material supplied.

9/2/2020
Supply Contracts
Railways procure lot of material for laying and

upkeep of track, manufacture & maintenance of
Rolling Stock i.e. Locomotives , Coaches &
Wagons.
These procurements are channelised through
Stores Dept., headed by COS. The supply
contracts are:
Rate Contract
Running Contract
One-Delivery Contract
9/2/2020
Rate Contracts
Rate Contract is a contract under which,

during the period of its currency, the
contractor engages to supply materials as
demanded , irrespective of quantity, at fixed
unit rates or prices, within a given period of
receipt of such demand.
9/2/2020
Rate Contracts
Rate Contract is a contract under which,

during the period of its currency, the
contractor engages to supply materials as
demanded , irrespective of quantity, at fixed
unit rates or prices, within a given period of
receipt of such demand.

9/2/2020
Running Contracts
The Running Contract is one under which, during

the period of its currency, the contractor engages to
supply, a specified quantity of materials, as and
when ordered, at fixed unit rates or prices, within a
given period of receipt of such order.

9/2/2020
CONTRACT MANAGEMNT/OPERATION
All notices, communications, references and

complaints made by the Railway or the Engineer or
the Engineer’s Representative or the Contractor
commencing the work shall be in writing and no
Notice, communication, reference or complain not in
writing shall be recognized

9/2/2020
SERVICE OF NOTICES ON
CONTRACTORS
The contractor shall furnish to the Engineer, the

name, designation and address of his authorized
agent and all complaints, notices, communications
and references shall be deemed to have been duly
given to the contractor if delivered to the contractor
or his authorized agent or left at or posted to the
address so given and shall be deemed to have been
so given…….

9/2/2020
Execution of works – Accepted
programme of works
The contractor who has been awarded the works

shall as soon as possible but not later than 30 days
after the date of receipt of the acceptance letter in
respect of contract with initial completion period of
two years or less or not later than 90 days for other
contracts have to submit the detailed programme of
work indicating the time schedule of various items of
works in the form of Bar Chart/PERT/CPM. He shall
also submit the details of organization (in terms of
labour and supervisors) plant and machinery that he
intends to utilize (from time to time) for execution
9/2/2020
of the work within stipulated date of completion. The

programme of work ammended as necessary by discussions
with the Engineer, shall be treated as the agreed programme
of the work of the purpose of this contract and the contractor
shall endeavour to fulfill this programme of the work. The
progress of work will be watched accordingly. However, the
liquidated damages will be with reference to the overall
completion date. Nothing stated herein shall preclude the
contractor in achieving earlier completion of item or whole of
the works than indicated in the programme

9/2/2020
PROVISION OF COMPETENT STAFF
Contractor shall place and keep on the works at all

times efficient and competent staff to give necessary
directions to his workmen and see that they execute
their work in sound and proper manner and shall
employ only such supervisors, workmen and
labourers in or about the execution of any of these
works as are careful and skilled in the various
trades and callings. The contractor shall at once
remove from work any agents, permitted sub-
contractor, supervisor, workmen or labourer…..

9/2/2020
Responsibility of Executives
➢Propoer Execution
➢Frequent Inspection
➢Issue of Instructions and compliance
➢Plan & Monitor Progress of works
➢Avoid employment of both contract & departmental Labour
simultaneously (unless it is highly essential)
➢TC observations to be communicated to all concerned
➢Site Order Books
➢Material at Site Account & material reconcilement
9/2/2020
Measurements & Payments
➢Measurement book preserved for 10 years

➢Recording & Test check authorities
➢No delays in payments
➢Payment as per agreement conditions
➢Copy of bill can be given to contractor on payment
➢On account payments subject to final
measurements
➢Final bill within 21 days of work completion
➢If contractor delays more than one month record
bill and kept under deposit
9/2/2020
EXTENSIONS due to contractor 17B
The time for the execution of the work or part of the

works specified in the contract shall be deemed to
be the essence of the contract and the works must
be completed not later than the date(s) as specified
in the contract.

9/2/2020
EXTENSIONS due to contractor 17B
If the contractor fails to complete the works within the time as

specified in the contract for the reasons other than the
reasons specified in clause 17 and 17-A, the Railway may, if
satisfied that the works can be completed by the contractor
within reasonable short time thereafter, allow the contractor
such further extension of time (proforma Annexure.I IR GCC-
2018) as the engineer may decide.

9/2/2020
On such extension, the Railway will be entitled without

prejudice to any other right and remedy available on that
behalf, to recover from the contractor as agreed damages
and not by way of penalty as sum equivalent to ½ or 1% of
the contract value of the works for each week or part of the
week. For the purpose of this clause, the contract value of
the works shall be taken as value of work as per contract
agreement including any supplementary work order/contract
agreement issued..
9/2/2020
Provided also, that the total amount of liquidated

damages under this condition, shall not exceed the
following percentage value or of the total value of
the item or groups of items of work for which a
separate distinct completion period is specified in
the contract.

9/2/2020
Extensions under 17A Due to Railway
➢17A(i) If modifications ordered have materially

increased the magnitude of work
➢17A(ii) If progress affected due to neglect of
Railway Employees, for want of instructions
➢17A(iii) Failure to handover site, approved
drawings, instructions etc.

9/2/2020
Completion & Maintenance
Hand over work to the satisfaction of Engineer

Maintenance as per contract
Defects to be attended during maintenance period
Contract is complete only when maintenance
certificate is signed

9/2/2020
Completion Certificate
As soon as in the opinion of the Engineer the works

shall have been substantially completed and shall
have satisfactorily passed an final test or tests that
may be prescribed, the Engineer shall issue a
Certificate of Completion in respect of the work and
the period of maintenance of the works shall
commence from the date of such certificate
provided that the Engineer may issue such a
certificate with respect to any part of the works…..

9/2/2020
before the completion of the whole of the work or

with respect to any substantial part of the works
which have been completed to the satisfaction of
the Engineer and occupied or used by the Railway
and when any such certificate is given in respect of
part of the works such part shall be considered as
completed and the period of maintenance of such
part shall commence from the date of such
certificate

9/2/2020
Maintenance Certificate
The contract shall not be considered as completed

until a Maintenance Certificate shall have been
signed by the Engineer stating that the works have
been completed and maintained to his satisfaction.
The maintenance certificate shall be given by the
Engineer upon the expiration of the period of
maintenance.
9/2/2020
TERMINATION
➢Determine Rescind Termination

➢ Apply Clause 61 of GCC
➢For Paucity of Funds
➢Any other cause
➢No claim admissible in anticipation of completing
the whole work

9/2/2020
TERMINATION 7 Days Notice
In case of default on the part of contractor when

Railways has decided to terminate the contract, a
notice of 7 days will be issued. Acknowledgement of
the notice shall be obtained from the contractor.
Before actual termination of contract, another notice
of 48hours in advance will have to be issued to the
contractor intimating the decision of Railways.
9/2/2020
TERMINATION 48 Hr Notice
Railways shall also intimate about forfeiture of

EMD,Security Deposit, Liquidated Damages to get
the work done by another contractor and penalty to
be imposed Disputes or differences of any kind in
connection with the contract shall be dealt with the
Railway with in reasonable time.

9/2/2020

G-3 Tenders and Contracts 9/2/2020
IRISET-SC
72

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9/2/2020

Tenders and Contracts

G-3 Tenders and Contracts IRISET-SC 1

Tenders and Contracts

G-3 Tenders and Contracts IRISET-SC 2

➢ Introduction to Tendering System

G-3 Tenders and Contracts IRISET-SC 3

Introduction to Tendering System

Tender system is an efficient method adopted by

G-3 Tenders and Contracts IRISET-SC 4

A tender is a bid or offer made by a contractor in

It consists of an estimate of costs for the said

G-3 Tenders and Contracts IRISET-SC 5

➢Best value for public money,

G-3 Tenders and Contracts IRISET-SC 6

• A Tender Process is a method by which

G-3 Tenders and Contracts IRISET-SC 7

In order to obtain very economical and

Therefore, very careful and serious

Obligations of Railway before

➢ that the railway is in a position to handover the

➢ the railway is ready with design of work, detailed

G-3 Tenders and Contracts IRISET-SC 9

EMD-Earnest Money Deposit

➢The tenderer shall be required to deposit earnest

➢If his tender is accepted this earnest money

➢Any firm recognized by Department of Industrial Policy and Promotion

G-3 Tenders and Contracts IRISET-SC 11

➢Issue of Tender notice

G-3 Tenders and Contracts IRISET-SC 12

Issue of Tender notice

➢The Tender notice should be issued

➢21 days before in case of emergency

G-3 Tenders and Contracts IRISET-SC 13

• The tender documents for sale through office

G-3 Tenders and Contracts IRISET-SC 14

1) Description of work and its approximate value

G-3 Tenders and Contracts IRISET-SC 15

4 Above 50 lakhs & upto 2 Crores 5000

5 Above 2 Crores & upto 50 Crores 10000

6 Above 50 Crores 25000

Precautions prior to invitation (NIT)

Have clarity about

• Tender Opening Register;

G-3 Tenders and Contracts IRISET-SC 19

Tender Opening Register:

G-3 Tenders and Contracts IRISET-SC 21

A Tender Committee (TC): is a team of two or three

➢An unqualified acceptance of a tender constitutes

➢To ensure this fact the acceptance letter should be

➢If the acceptance of the tender by the Railway is a

1) Open tender:- Invitation to all by

G-3 Tenders and Contracts IRISET-SC 25

As a general rule, the invitation (Issue

Open Tenders contd…

➢Open Tender system is chosen if estimated

G-3 Tenders and Contracts IRISET-SC 27

➢ Inadequate tender notice

In the public interest, when it is considered not

Limited Tenders contd..

➢ Some percentage of the tenders which would normally be

A list of approved contractors is maintained in