CIVIL TENDERS AND CONTRACTS

SS KALRASr. Prof. (Civil Engineering)

National Academy of Indian Railways

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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.

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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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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.

WHY TENDERING ?

Fundamental Principle of Execution of Public Works: Efficiency Economy Transparency

Fair & Equitable treatment of tenderers Promotion of Competition

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Open Tenders

Limited Tenders

Special Limited Tenders

Single tenders

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TYPES OF TENDERS

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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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 LESS THAN FOUR

(RB VIDE LETTER NO. 94/CEI/CT/4 DATED 17/10/2002)

SPECIAL LIMITED TENDERApril 18, 2023SPCE

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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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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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TWO PACKET SYSTEMRly 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 VALUE

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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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Introduction of EPC Mode of Contracting In Railways

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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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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 too Delays in design and drawings by the Authorityo Variation in items and quantities

Considerable time of Project Engineers is consumed in processing of:o Variation in quantity of items which are quite frequento Introduction of NS itemso Variation in contract price

More susceptible from vigilance point of view

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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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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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PROJECT SCOPE NEEDS TO BE SPECIFIED VERY CAREFULLY AND SHOULD BE EXHAUSTIVE

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• 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

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.

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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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.

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

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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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

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 Kolkatta Metro)

General Manager

2. Tender accepting Authority (Rly. Board’s letter –2007/CE-1/CT/13 Dated 27/8/2013)

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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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.

ELIGIBILITY CRITERIAApril 18, 2023SPCE

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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)

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.

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

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

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

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CLUBBING OF WORKSRly 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

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)

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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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)

e) AFTER THE WORK IS PHYSICALLY COMPLETED, SD RECOVERED FROM THE R/BILLS CAN BE RETURNED IN LIEU OF FDR OF EQUIVALENT AMOUNT

f) IN CASE OF CONTRACTS > Rs.50 Cr – BG CAN ALSO BE ACCEPTED

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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

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

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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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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Thanks