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Civil tenders and contracts spce
1. CIVIL TENDERS AND CONTRACTS
SS KALRA
Sr. Prof. (Civil Engineering)
National Academy of Indian Railways
August 17, 2015SPCE
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2. CIVIL TENDERS
Civil tenders usually refers to the process whereby
governments and other institutions invite bids for
Execution of projects/works that must be submitted
within a finite deadline.
August 17, 2015SPCE
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3. CONTRACT
A Defined Legal Relationship between tendering
authority and successful tenderer for execution of
work.
Works contract
Store contract
Service contract
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4. TENDERER AND CONTRACTOR
Tenderer is one who tenders bid in response
to invitation for tenders.
A contractor is anyone you get in to work for
you who is not an employee.
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5. WHY TENDERING ?
Fundamental Principle of Execution of Public
Works:
Efficiency
Economy
Transparency
Fair & Equitable treatment of tenderers
Promotion of Competition
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6. Open Tenders
Limited Tenders
Special Limited Tenders
Single tenders
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TYPES OF TENDERS
7. 1. LIMITED TENDERS FROM THE CONTRACTORS
BORNE ON THE APPROVED LIST ONLY.
2. NOTICE IN LOCAL NEWSPAPERS, DISPLAYED ON
NOTICE BOARDS AND PUT ON INTERNET.
3. RAILWAY MAY DECIDE CATEGORIES OF WORKS FOR
WHICH LIST OF APPROVED CONTRACTORS SHALL
BE MAINTAINED FOR EACH MONETARY SLAB.
LIMITED TENDER
(RB VIDE LETTER NO. 94/CEI/CI/4 DATED 17/10/2002)
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8. 1. SPECIAL LIMITED TENDER IN CONSULTATION WITH
FA & CAO IN FOLLOWING SITUATIONS:-
A WORKS OF SPECIALIZED NATURE (PHOD
APPROVAL)
B WORK OF URGENT NATURE (GM APPROVAL)
C CONSULTANCY WORKS (GM’S APPROVAL)
2. TENDERERS NEED NOT NECESSARILY TO BE BORNE
ON THE APPROVED LIST.
3. TO BE INVITED FROM SPECIALIZED AND REPUTED
CONTRACTORS
4. NO. OF TENDERERS MORE THAN SIX BUT NOT
(RB VIDE LETTER NO. 94/CEI/CT/4 DATED 17/10/2002)
SPECIAL LIMITED TENDER
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9. SPECIAL LIMITED TENDER
CAO(C) WITH THE CONCURRENCE OF FA & CAO(C)
MAY INVITE SPECIAL LIMITED TENDER NOT ONLY FOR
SPECIALISED NATURE OF WORK BUT FOR ALL TYPES
OF WORKS DEPENDING UPON THE MERIT OF THE
CASE
(Rly Bd letter No.2007/CEI/CT/18 Dt.28-09-07)
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10. GM is empowered to award contracts on single tender
basis at present, but now CAO(C ) is also empowered to
float and finalize single tenders of value not more than
Rs. 2.0 crore each with personal concurrence of
FA&CAO, only for purpose of early completion of works
related with doubling and traffic facility.
(Rly. Board’s letter –2007/CCI/CT/18 Dated 7/3/2008)
SINGLE TENDER
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11. TWO PACKET SYSTEM
Rly Bd letter No. 94/CEI/CT/04 DATED 17/10/02
CAN BE ADOPTED FOR HIGHLY TECHNICAL WORKS WHERE
PARAMETERS NOT PRECISELY DEFINED OR SPECIALIZED
IN NATURE
Rly Bd letter No. 2007/CEI/CT/18 DATED 07/03/08
RAILWAY MAY FOLLOW TWO PACKET SYSTEM INSTEAD OF
RESORTING TO SINGLE PACKET/ OPEN TENDER FOR HIGH
VALUE TENDERS
Rly Bd letter No. 2008/CE.1/CT/Con/7(PCE/GM) DT 15.12.08
TWO-PACKET SYSTEM OF TENDERING MAY BE ADOPTED
WHEREVER CONSIDERED NECESSARY. THERE IS NO NEED
TO LINK THIS MODE OF TENDERING TO ANY FINANCIAL
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12. R.B. LETTER NO. 94/CE-I/CT/4/PT. 17 DT. 13.8.12
1. TWO PACKETS SYSTEM FOR ALL WORKS REQUIRING
TECHNO-ECONOMIC EVALUATION
2. MANDATORY FOR ALL WORKS VALUING MORE THAN
10 CR. EXCEPT WHERE DECIDED BY EXECUTIVE NOT
BELOW THE RANK OF HAG WITH RECORDED
REASONS AND CONCURRENCE OF FA&CAO
3. FOR WORKS UPTO 10 CR. CAN BE ADOPTED BY
TENDER INVITING AUTHORITY WITH CONCURRENCE
OF ASSOCIATE FINANCE
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14. NEED FOR EPC CONTRACT
Conventional item-rate contracts are
generally prone to time & cost overrun due
to:
o Involvement of multiple agencies- generally a new
line/doubling project involves 15 to 20 different value
contracts
o Failure of even one contract delays the project
o Lack of flexibility in replacing failed agency on real
time basis
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15. NEED FOR EPC CONTRACT
In item-rate contract, allocation of construction
risks are largely to Authority , particularly the onus
of design which many times lead to
o Delays in design and drawings by the Authority
o Variation in items and quantities
Considerable time of Project Engineers is
consumed in processing of:
o Variation in quantity of items which are quite frequent
o Introduction of NS items
o Variation in contract price
More susceptible from vigilance point of view
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16. OBJECTIVE OF EPC CONTRACT
Implementation of project to specified standards with a
fair degree of certainty relating to time & cost while
transferring the construction risk to contractor.
Awarding contract for a LS price ensures predictability
and financial discipline both for Government &
Contractor.
Well defined system of obligation associated with
damages
Assigning risk to the party who is in a better position to
mitigate it e.g. land, statutory clearances assigned to
Authority whereas design, site uncertainty, sub
contracting are assigned to contractor
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17. PERCEIVED ADVANTAGE OF EPC
Detailed initial planning before tendering-
Authority is required to specify its requirement
only, without detailed design.
Effective project management- less no. of
contracts to mange.
Engagement of professionally managed
agencies.
Minimum variation orders.
Milestone based payments.
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18. PROJECT SCOPE NEEDS TO BE
SPECIFIED VERY CAREFULLY
AND SHOULD BE EXHAUSTIVE
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19. • Approval of Competent Authority (CA) for tendering
• Issue of Tender Notice/NIT
• Pre-bid conference, if any.
• Preparation of Comparative Statement(CS) and
Briefing Note(BN)
• Vetting of CS
• Nomination of Tender Committee(TC)
• Deliberation of tenders by TC and
Recommendations
• Acceptance of Tender Accepting Authority (TAA)
• Issue of Acceptance Letter (LOA)
• Signing of Contract Agreement (CA)
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TENDERING PROCESS
20. NOTICE INVITING TENDERS (NIT)
Name of office inviting tenders
Name & scope of work.
Tender value
Time period of completion.
Details of earnest money.
Date of Commencement of sale of Tender Documents.
Time and date for receipt of tenders
Time and date for opening of tenders.
Validity of the tenders.
Accessibility of full set of tender documents including
drawings.
21. PUBLICATION OF TENDER
(Rly Bd letter no. 2008/RS(G)/779/2 Dt 07/11/08)
WHILE PUBLISHING THE TENDER IN NEWPAPER
FOR WIDE PUBLICATION, CPRO MUST ENSURE
THAT THE TENDER NOTICE HAS ALREADY BEEN
UPLOADED ON THE WEBSITE BY TAKING
CERTIFICATE FROM THE EXECUTIVE.
ANY OPEN TENDER NOT HAVING TOKEN OF
CONFIRMATION (IN THE FORM OF RECORD OF
INTERNET UPLOADING) WILL BE TREATED AS
INADEQUATELY ADVERTISED TENDER.
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22. Sl
.
COST OF TENDER COST
1. For works costing up to Rs.5 L 1000/-
2. For works costing above Rs.5 L and up to Rs.20
L
2000/-
3. For works costing above Rs.20 L and up to Rs.50
L
3000/-
4. For works costing above Rs.50 L and up to Rs.2
cr
5000/-
5. For works costing above Rs. 2 cr. and up to
Rs.50 cr
10000/-
6. For works costing above Rs.50 cr. 25000/-
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COST OF TENDER FORMS.
(i) IF ANY PLAN/DRAWING IS ATTACHED WITH THE TENDER
FORM, Rs.200/- PER PLAN/DRAWING WILL BE LEVIED
EXTRA.
(ii) IF ANY TENDER FORM SENT BY REGD. POST, ADDITIONAL
POSTAL EXPENSES @ Rs.500/- PER TENDER FORM WILL
BE CHARGED.
23. CASH IN FORM OF MONEY RECEIPT
DEMAND DRAFT
THE OFFER WILL BE REJECTED INCASE NOT
ATTACHED WITH DD FOR DOWNLOADED FORM - A
CLAUSE SHOULD BE MADE IN THE TENDER
DOCUMENTS
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MODES OF PAYMENT OF TENDER DOCUMENTS
24. DELAYED / LATE TENDERS
Delayed tenders i.e. Tenders received before the time of
opening but after the due date and time of receipt of tenders
should also be opened and dealt with in the same manner as
tenders received before due date and time.
Late tenders i.e. tenders received after the specified time of
opening should be opened by the concerned Branch officer
and marked distinctly preferably in red ink prominently on the
envelope as well as on the tender papers.
Suitable remark in regard to both delayed and late tenders
should be made both in the Tender Register as well as in the
comparative statements.
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25. DEALING WITH DELAYED / LATE TENDERS
(I) NORMALLY NOT TO BE CONSIDERED AND
SUMMARILY REJECTED
(II) HOWEVER, IF IT IS CONSIDERABLE ADVANTAGE
TO DEAL WITH IT, THE PROPOSAL IS SENT TO RLY
BD WITH FA & CAO’S REMARKS AND GM’s
PERSONAL APPROVAL
(III) THE RAILWAY ADMINISTRATION SHOULD NOT
ENTER IN TO ANY DIALOGUE WITHOUT
OBTAINING RALWAY BOARD’s PRIOR CLEARENCE
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(RB’s LETTER No.2003/PS(G)/77/5 DATED 06-02-04
26. 1. Tender Committee (Rly. Board’s letter –2007/CCI/CT/18 Dated
7/3/2008)
• Two members tender committee for tenders of value of
Rs. 20.0 Lakhs and less – Two Members-one from
accounts and other from executive.
• Three member tender committee for tenders valuing more
than 20.0 Lakhs.
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Sl Power of acceptance Accepting Authority
1 Up to Rs. 3 cr S. Grade/J.A. Grade
2 Above Rs. 3 cr and up to Rs. 12 cr S.A. Grade
3 Above Rs. 12 cr and up to Rs. 75
cr
H.A. Grade
4 Above Rs. 75 cr and up to Rs. 150
cr
General Manager
5 Up to Rs. 300 cr
( For National Projects of NE Region and
General Manager
2. Tender accepting Authority (Rly. Board’s letter –2007/CE-1/CT/13
Dated 27/8/2013)
27. AN UNDERTAKING BY TC
(RLY BD letter No. 2004/C-1/CVC1/18/ dt 12.01.06)
THE MEMBERS OF THE TENDER COMMITTEE SHOULD
GIVE AN UNDERTAKING AT THE APPROPRIATE TIME,
THAT
NONE OF THEM HAS ANY PERSONAL INTEREST IN
THE COMPANIES/AGENCIES PARTICIPATING IN THE
TENDER PROCESS
AND THAT ANY MEMBER HAVING INTEREST IN ANY
COMPANY SHOULD BE REFRAINED FROM
PARTICIPATING IN THE TENDER COMMITTEE.
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28. August 17, 2015SPCE
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Earnest Money Deposit (EMD)
2007/CEI/CT/18 DATED 28/09/07
Value of the work EMD
For works estimated to
cost up to Rs. 1 Cr.
2% of the estimated cost of
the work.
For works estimated to
cost more than Rs. 1
Cr.
Rs. 2 lacs plus ½% ( half
percent) of the excess of
estimated cost of work beyond
Rs. 1 Cr. subject to a maximum
of Rs. 1.0 Cr.
29. ELIGIBILITY CRITERIA
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1 SHOULD HAVE PHYSICALLY
COMPLETED WITH IN THE
QUALIFYING PERIOD i.e. LAST
THREE FINANCIAL AND
CURRENT FINANCIAL YEAR
AT LEAST ONE
SIMILAR NATURE OF
WORK FOR A MIN.
VALUE OF 35% OF NIT
COST
2 TOTAL AMOUNT RECEIVED
DURING THE LAST THREE
AND CURRENT FINANCIAL
YEAR
SHOULD BE OF
AMOUNT OF 150% OF
NIT COST.
( Rly. Board vide letter No. 94/CEI/CI/4 dated 23/11/2006)
30. RLY. BOARD VIDE LETTER NO. 94/CEI/CI/4 DT. 23/11/2006
i. SIMILAR NATURE OF WORK PHYSICALLY
COMPLETED WITH IN THE QUALIFYING
PERIOD i.e. LAST THREE FINANCIAL AND
CURRENT FINANCIAL YEAR (EVEN THOUGH
THE WORK MIGHT HAVE COMMENCED
BEFORE THE QUALIFYING PERIOD) SHOULD
ONLY BE CONSIDERED.
ii. THE TOTAL VALUE OF SIMILAR NATURE OF
WORK COMPLETED DURING THE
QUALIFYING PERIOD AND NOT THE
PAYMENTS RECEIVED WITHIN THE PERIOD
ALONE, SHOULD BE CONSIDERED.
31. iii. a) IN CASE, FINAL BILL NOT PASSED AND
FINAL MEASUREMENT NOT RECORDED -
PAID AMOUNT INCLUDING STATUTORY
DEDUCTION TO BE CONSIDERED
b) IF FINAL MEASUREMENT RECORDED AND
COMPLETED WITH NEGATIVE VARIATION -
PAID AMOUNT INCLUDING STATUTORY
DEDUCTION TO BE CONSIDERED.
c) IF FINAL MEASUREMENT RECORDED AND
WORK COMPLETED WITH POSITIVE
VARIATION BUT VARIATION NOT
SANCTIONED – ORIGINAL CONTRACT
VALUE OR LAST SANCTIONED AGREEMENT
VALUE WHICHEVER IS LOWER TO BE
CONSIDERED
32. iv IN CASE OF COMPOSITE WORKS – SEPARATE
COMPLETED WORKS OF REQD VALUE TO BE
CONSIDERED
v SIMILAR NATURE OF WORKS TO BE DEFINED
BY PHOD ON OPEN LINE AND NOMINATED
CE/CSTE/CEE ON CONSTRUCTION
ORGANISATION AND TO BE INDICATED IN NIT
IN CASE OF ANY DEVIATION/MODIFICATION,
PRIOR APPROVAL OF COMPETENT
AUTHORITY SHOULD BE OBTAINED
33. RLY BD’ LETTER NO.2008/CE1/CT/CON/7/PCE/GM DT 15.12.08
THE EXISTING MIN TENDER VALUE LIMIT OF Rs. 10
LAKH FOR INCORPORATING ELIGIBITY CRITERIA IS
INCREASED TO Rs. 20 LAKH
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• IT HAS BEEN FURTHER INCREASED TO Rs. 50 LAKH
RLY BD’ LETTER NO.2007/CE1/CT/18 Pt.XII DT 31.12.10
34. August 17, 2015SPCE
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CLUBBING OF WORKS
Rly Bd’s L. No. 2013/CE-I/CT/O/34/SI dt. 18-03-2014
While clubbing various works to enable proper contract
monitoring/management; two aspects i.e. type of works to be
clubbed together in one tender and optimum value of the big
tender to attract reasonable competitiveness, should be taken
into account.
Accordingly, zonal works and sanctioned works shall normally
not be clubbed in a tender so as to affect reasonable
competition in tendering. Also miscellaneous and varying
nature of works should not be clubbed together which may
affect booking of expenditure and drawl of completion reports
35. NEGOTIATION
1. L1 IS DEFINED AS THE LOWEST WHICH IS VALID,
ELIGIBLE AND TECHNICALLY ACCEPTABLE
TENDERER
2. NEGOTIATION SHOULD BE HELD WITH L1 ONLY
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Rly Bd LETTER 90/CEI/07/I/P/dt. 10-07-2002)
36. COUNTER OFFER
RLY BOARD LETTER NO. 94/CEI/CT/4 DT 17.10.2002
IN CASES WHERE THE OVERALL VALUE OF L1 IS NOT
UNREASONABLY HIGH BUT RATES OF CERTAIN ITEMS
OR TOTAL VALUE FOR A SCHEDULE HAPPEN TO BE
HIGHER THAN THOSE QUOTED BY OTHER TENDERERS
OR HIGHER THAN LARs, METHOD OF COUTER OFFER
MAY BE ADOPTED
BUT IT IS NOT SUBSTITUE/ IN LIEU OF NEGOTIATION
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37. SECURITY DEPOSIT
(RLY.BD LETTER No.2003/CEI/CT/4/PtI Dt.12/16-05-2005)
a) S.D. SHOULD BE 5% OF THE CONTRACT VALUE
b) RATE OF RECOVERY SHOULD BE @ 10% OF BILL
AMOUNT
c) S.D. TO BE RECOVERED FROM RUNNING BILLS OF THE
CONTRACT ONLY
d) S.D. WILL BE RETURNED WITH THE APPROVAL OF CA,
AFTER THE MAINTENANCE PERIOD OF THE WORKS IS
OVER,
(RLY BOARD LETTER NO. 2007/CEI/CT/18 DT 07.03.08)
a) AFTER THE WORK IS PHYSICALLY COMPLETED, SD
RECOVERED FROM THE R/BILLS CAN BE RETURNED IN
LIEU OF FDR OF EQUIVALENT AMOUNT
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38. August 17, 2015SPCE
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PERFORMANCE GUARANTEE (PG)
2003/CEI/CT/4/PT DATED 16/05/06 MODIFIED VIDE LETTER
200/CEI/CT/18 DATED 28/09/07
THE SUCCESSFUL BIDDER TO GIVE PG @ 5% OF
CONTRCT VALUE
SHALL BE SUBMITTED BEFORE SIGNING CONTRACT
AGREEMENT
SHALL BE IN FORM OF BG, FDR ETC.
CAN BE RELEASED AFTER SUCCESSFUL COMPLETION
OF WORK
NO ADDITIONAL PG FOR VARIATION UPTO 25%
FAILED CONTRACTOR/ ALL PARTENERS OF JV ARE
DEBARRED IN RETENDER FOR BALANCE WORK
39. QUOTATIONS
(Rly Bd letter No. 2007/CEI/13/PT Dt 05/03/09)
Invited from well experienced contractors, not necessarily
borne on approved list.
A register showing the full details to be maintained and sent to
Associate Finance while seeking concurrence.
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AUTHORITY FINANCIAL LIMIT ANNUAL CEILING
Sr. Scale 1.0 lakhs 5.0 lakhs
JAG 2.0 lakhs 20.0 lakhs
SAG 4.0 lakhs 40.0 lakhs
40. NORMALLY THE POWERS TO
DISPENSE WITH CALLING OF
TENDERS SHOULD BE EXCERCISED
SPARINGLY. THE CIRCUMSTANCES
UNDER WHICH QUOTATIONS HAVE TO
BE CALLED SHOULD BE SPELT OUT
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41. REVIVAL OF TERMINATED CONTRACT
(BOARD LETTER NO 9/CEI/CT/C1/7 Dt. 24/05/01)
IT IS STIPULATED THAT ONCE THE FORMAL
NOTICE OF TERMINATION HAS BEEN ISSUED,
REVIVAL OF THE CONTRACT EVEN IF ON THE
SAME TERMS AND CONDITIONS, IS POSSIBLE
ONLY AS A SINGLE TENDER REQUIRING THE
GM’S PRIOR APPROVAL
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