(i) (ii)

1 No. NH-3s0'l 4/20/2020-H-(Part-ll) (E-1 96330)Government of lndiaMinistry of Road Transport and Highways(Highways Section)Transport Bhawan, l, Parliament Street, New : 22"d F ebruary,2077 Office MemorandumSubject: Reinstatement of provision of Earnest Money Deposit (Er{D) in bids for highwayprojects. - undersigned is directed to say that Department of Expenditure vide dated (copy enclosed) inter alia provided that(i) Notwithstanding anything contained in Rute '171 of GFRs 2017 or any other Rute orany provision contained in the procurement Manuats, no provisions regarding Bid securityshould be kept in the Bid Documents in future and only provisions for Bid SecurityDeclaration should be kept in the Bid Documents(iii)}

2 These instructions were applicable for a[[ the tenders issued titt Att the imptementing agencies of the MoRTH were directed to strictty comply with theaforesaid DoE's instructions vide this Ministry's OM c-20016/ 11 t 202-TF-ll dated 't7. 1 1 .2020(copy enclosed).3. ln this regard, it is stated that the effect of COVID pandemic in Highway sector hasneutratized. ln such improved scenario, it is noted that now there is trend in recent bids forsubmitting very low bids for important highway construction as welt as consultancycontracts. Since there is no EMD Deposit, bidders are quoting abnormally [ow prices for thebid and after winning the bid, they start searching for sub-contractor.]]]

3 This tendency willhave an adverse impact on quality and timety completion of important highway ln view of the above, it has been decided with the approval of Hon'ble Minister (RT&H)to revert to the provisions of GFR, 2017 retating to bid security, which existed before issueof aforesaid DoE dated 1 . Alt the imptementing agencies of the MoRTH are requested to take necessary actionaccordingly.(Sushant Sudan)Deputy Secretary to the Govt. of lndia(ii) Wherever, there are compelling circumstances to ask for Bid security, the sameshould be done only with the approvat of the next higher authority the authoritycompetent to finatise the particu[ar tender or the secretary of the Ministry/ Department,whichever is +-Enct: As aboveTo'1.]

4 AS&FA, MoRTH2. Chairperson, NHAI3. MD, NHIDCL4. ADG Zone-|, MoRTHCopy to: Deputy Secretary ( procurement Poticy Division), Department of Expenditure, LokNayak Bhavan, New Dethi dated 12.' on Bid security/Earnest Money atso to:1 . PS to Hon'bte Minister (RT&H)2. Sr. PPS to Secretary (RT&H)3. Sr. PPS to AS(H)4. NlC, MoRTH - for uptoading the above guidetines in MoRTH's (CMD) Office No. 6i 0 1 / zozo-r of lndiaMjntstry of Road Transport and HighwaysTransport BhawanNew Dethi the 17'i November, 2020 Subject:Latest instruction5 of Ministry of Finance, Department of Expenditure regarding(i) Performance Security, (ii) Additional Performance Security in case otAbnormally Low Bids (ALBs)and (iii) Bid Security/Earnest Money Deposit undersigned is directed to Forv/ard hereu,jth I nos.

5 Of Ministry of Finance, Departmentof Expenditure No. dated on the subjects mentioned above asper detaits given below:-i) Department of Expenditure vide OM No. dated 12,' has decided toreduce Performance Security from existing 5-10X to 3X of the vatue of the contract for atlexisting contracts. However, the benefit of the reduced Performance Security witt not begiven in the contracts under dispute wherein arbitration/court proceedings have alreadybeen started or are compteted. Alt tenders/contracts is5ued/conctuded titt atso have the provision of reduced Performance alI contracts, where Performance security has been reduced to ]% in vjew of the abovestiputations, the reduced percentage of Perlormance Security shatt continue for the entireduration of the contract and there shoutd be no subsequent increase ol Performancesecurity even beyond ) DOE vide OM No.

6 2020-PP0 dated has also decided that no provisionsshoutd be kept in the Bid Documents regardiirg Additional Security Deposit/8ank Guarantee(BG) in case oF Abnormatty Low Bids. It has been further mentioned that wherever, thereare compelling circumstances to asL for Additjonat Security Deposit/8ank Guarantee (BG)in case of ALBS, the same should be taken only \yith the approvat of the next higherauthority to the authority competent to finalise the particutar tender, or the Secretary ofthe Ministry Department, whichever is ) Department of Expenditure vide 0M No. dated 1.

7 2020 further decidedthat notwithstanding anything contained in Rute 171 of GFRs 2017 or any other Rule or anyprovision contained in the procurement Manuals, no Provisions regardjng Bid securityrhoutd be kept in the Bjd Documents in future and only provision for Bid SecurityDectaration shoutd be kept in the Bid Documents. It has also been specified by DOE thatthese instructions witl be apptrcabte for att the tenders issued trlt These instructions are being circutated herev/ith for information and strict compliancel. Action taken report on each of the items atong v/ith details of amount of PerformanceSecurity reteased for subsisting contracts may be sent on weekly basis to the w *'27^(Anup kumar ody,Under Secretary to the Government of lndiaEncl: As !)

8 US (Highways) 02655/2020/GM (CMD) Qfi4epo 6/01 dt. I 6. 1 )DG(RD) & 55 Chairman, NHAIl\AD, NHIDCLAIt ADGs/AtI CE5CE (Monitorinqi :With a request to send consotidated fjgures of Performance Securityreleased in case of PWDS on weekly basis againlt afi]ount o[ work avr'arded,Copy to:PPS to SecretaryPPS to AS&FAPS to DFACopy aLso to: Director, NIC - with a request to upload the OM on Ministry's Website atongwith enclosure of OMs of Ministry of Finance, Department of ,'c.*o-'tt7 -tt',.O)'A2\),1635251/2022/O/o US (Highways)1143No. of lndiaMinistry of FinanceDepartment of ExpenditureProcurement Policy DivisionoFFICE MEMORAND UM512.

9 Lok Nayak Bhawan, New DelhiDated the 12rh November 2020 Subject: Performance As per Rule 171 of General Frnanctal Rules (GFRS) 2017, performanceSecurity is to be obtained from the successfut bidder a*arO-JO tne contract for anamount of five to ten percent of lhe vatue of the contract Io ensure due performanceof tire contract. similar provisions also exist in the Manuai fo; procurement of works2019 and Manual for procurement of Consultancy & *,ces issued bythis The Government is in receipt of many representations that on accounl ofslowdown in economy due to the pandemic, there is acute rinanciar crunch amongmany commerciar entities and contractors, which in turn is affecting timery executioiof the contracts lt has also been represented thal this may uiect tne aUiiity ofconlractors to bid in tenders and hence reduce competition.

10 Requests are beingreceived for reduction in quantum or security Deposits in the Governmenr ln view of all above. it is decided to reduce pertormance Security fromexisting 5-10% to 3% of the value of the contract for all existing co; , the benefit of lhe reduced performance Security will not be given in thecontracts under dispute wherein arbitrationi court proceedings have bien aheadystarted or are Further, all tenders/ contracts issued/ concluded till 31 12 2021 should alsohave the provision of reduc d Pedormance ln all contracts where Perlormance Security has been reduced to 3% in viewof above stipulations, the reduced percentage of performance Security shaflconlinue for the entire duration of the contract and there should be no subsequenlincrease of Performance Security even beyond 31.