Compendium of Instructions on TENDERS & …

1 Compendium of Instructions on works Contracts Northern Railway 1 Foreword This Compendium of Instructions on Works Contract Policy is issued for guidance of officials dealing with the subject matter. It contains relevant administrative orders/circulars/letters issued by Railway Board and Northern Railway from time to time. Some of the old orders/circulars have been included because of being relevant, even today, as far as policy guidelines are concerned though the financial powers/limits in connection with various matters have been revised substantially. The Compendium consists of 11 chapters and 130 annexures under various headings related to works contract policy except issues concerning arbitration for which it is planned to issue a separate Compendium . All the annexures have been typed for sake of clarity instead of xeroxing the old circulars.

2 Though every effort has been made to avoid typographical mistakes, it is quite possible that some such errors might have crept in. It is advised that the officials using this Compendium do not quote it and refer to the original letter/circular for such purposes. The documentation has been painstakingly done by Sh. , and Sh. Rajeev Saxena, AXEN/G and their staff. The draft has been initially compiled by Kapur, the then CE/G ( 07 to 07) and , CE/G. Their efforts are praise worthy. It is hoped that the officials dealing with the works contract matters will find the Compendium useful and any discrepancy found may be brought to the notice immediately for correction. Deepak Krishan Principal Chief Engineer, Northern Railway, Sept. 2007 Baroda House, New Delhi.

3 Compendium of Instructions on works Contracts Northern Railway 2 I N D E X General Classes of TENDERS Calling of TENDERS Earnest Money and Security Deposit for Works Contracts Opening of Tender and Scrutiny Formation of Tender Committee Consideration of Tender Zonal Contracts and Pre-Qualification Price Variation Clause Termination of Contracts Risk and Cost TENDERS Compendium of Instructions on works Contracts Northern Railway 3 Compendium OF Instructions ON WORKS CONTRACTS General SN Instructions Title of letter and letter no Dated Annexure No. (Page No.) 1 Every Government servant should exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence. Canons of Financial Property (Item 2713 of Way and Works Manual) - A 1-1 (32) 2 Recommendations of committee appointed to examining improving the administration of contracts and quality of works executed through the agency of contractors together with Board s orders thereon on- a) Pre-qualification of tenderers; b) Engagement of consultancy services; c) Approved list of contractors; d) Two packet system of tendering and e) Advance to contractors.

4 Pre-qualification of contracts and consultancy of contracts etc. Letter no. 85/W1/CT/23-GCC A 1- 2 (32) 3 Time limits laid down for processing contractor s bills for payments at various levels Time limit for processing bills of works and Contracts. Letter no. 74-W/0/Part XVIII(Policy) A1-3 (41) 4 Accepted recommendations of the committee of Shri Chandra Appointment of works contractors-Finalisation of TENDERS . Letter no. 94/CE-I/CT A 1- 4 (43) 5 Proposed modifications in tendering procedures, duly accepted by Railway Board Accepted items of Sudhir Chandra 94/CE-I/ CT/4 Committee s Report A 1-5 (48) 6 Contractor shall comply with the provisions of the contract labour (regulation and Abolition) Central Rules 1971 as modified from time to time wherever applicable and shall also indemnify the Railway from and against any claims under the aforesaid Act.

5 Provision of contract labour (Regulation and Abolition) Act 1970- Observance in Railway Works Contract. Letter no. 99 Labour/1 Pt. A1-6 (56) 7 In several instances, large works are being split up into small value works. It would be desirable that this practice is avoided. Splitting up of the large work into small value work 2004/CEI/Misc/MR s/ Instructions A 1-7 (57) 8 Personnel Branch should invariably be consulted before giving out a Labor Off loading and privatisation of perennial nature activities in the Railways in violation of the A1-8 (58) Compendium of Instructions on works Contracts Northern Railway 4 Contract in terms of Labour Contract Act 1970. provisions under Section 10 of Contract Labour (R&A) Act, 1970. Letter no. E(LL) 205 AT CNR/16 9 Approval for engagement of PMCs for supervision of projects being executed by the Railways.

6 The PMC contract should be treated as Works Contract. Engagement of Project Management Consultants (PMCs). Letter no. 2006/W-I/ A1-9 (60) 10 Board (ME & FC) have approved to award two contracts to Labour Cooperatives for earthwork each costing not more than lakhs on a trial basis in Railway with Instructions to formulate detailed guidelines keeping the following broad guidelines in view:- (1) Labour Cooperative Societies should be registered under the Cooperative Society s Registration Act in proof of these societies being legal entities before they are allowed to participate in the Railway tender. A certificate to this effect should be submitted alongwith the tender. (2) Earnest Money/Security Deposit is realized as per the existing norms; (3) Eligibility Criteria It may be relaxed to suit local conditions so that Cooperative Societies are able to participate in the tender.

7 (4) A special condition may be provided in the TENDERS of all works valuing up to an estimated cost of lakhs that in case of Labour Cooperative Societies tendering for the work, they will be given the first opportunity to execute the work subject to the provision that they agree to take up the work at the rates as offered in the lowest acceptable tender. Awarding earthwork TENDERS to Labour Cooperatives. Letter no. 2002/CE-I/CA-iii/CT/10 dated 28 A1-10 (61) Compendium of Instructions on works Contracts Northern Railway 5 (5) Only one contract should be given to one Cooperative Society. 11 Advance Correction Slip may be treated as cancelled and additions/corrections as indicated in the enclosed Correction Slip in the relevant paras on Indian Railways Engineering Code 1993 Edition may be made.

8 Advances to contractors. Letter no. 90 A1-11 (62) 12 Board have taken a serious view of the matter on recording of measurement of steel in separate register in place of measurement book and desired that measurement of steel should be recorded in Measurement Book to avoid any irregularities conducted in recording of measurement of steel. Recording of measurements of steel in Measurement Book. Letter no. 2000 A1-12 (63) 13 In the Two Packet system, essentially the same process of pre-qualifications is expected to be done through the scrutiny of the contents of the first packet comprising evidence and technical capability, possession of appropriate machinery and equipment financial strength, experience, etc. It would, therefore, be apparent that whenever such a system is followed, there is no need for the railways, etc.

9 To seek the Board s approval before opening the financial bids. The General Manager is competent to act on the recommendations of the Tender Committee relating to the first packet. While forwarding the financial recommendation of the Tender Committee (after negotiations have been held if necessary, on the financial part of the TENDERS ), the General Manager should give his personal comments on both the technical and the financial aspects of the case. Two Packet System of TENDERS . Letter no. 90/CE-I/CT/27 A1-13 (64) Compendium of Instructions on works Contracts Northern Railway 6 Classes of TENDERS & Eligibility Criteria SN Instructions Title of letter and letter no Dated Annexure No. (Page No.) 1 Consultancy contracts can be awarded for works involving.

10 Pre-investment studies, Preparation service, Implementation service and Traffic assistance and council service, Specialized works, Important and prestigious buildings and structures, Special type of roof structures and coverings, basements and similar constructions, subways, underpasses, insulation of buildings, Design and construction of structures involving Long span pre-stressed concrete bridges, Continuous girder bridges, Cable stayed bridges, Long span arch bridges, Shells and folded plate construction, Earthquake resistant structures, foundation problems, Auditoriums involving satisfactory acoustics, Architectural and aesthetic features in design, aeration techniques, and layout of manufacturing and repair shops. Pre-qualification of contracts and consultancy of contracts etc.