CONTRACT SERVICES

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PROCESS ADOPTED FOR FINALISATION OF DOCUMENTS WPP of NTPC was being followed Need felt for updating to suit Transmission Sector requirements, based on experience gained over the years POWERGRID WPPP finalised
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Process For Document Finalisation. Services of Consultant taken Wide consultations were under-taken within POWERGRID A no. of drafts were prepared and comments were sought from all concerned Final draft was placed on

Process For Document Finalisation. Copy of document circulated to funding agencies (World Bank, ADB etc) , Ministry, CVC, CAG etc Comments received were deliberated and suitably incorporated
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The WPPP is organised into two Vols Volume I (Pre award)

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Volume- II(Post Award)

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WPPP is aimed at :
1 Transparency and consistency in decision making 2 Mapping of roles & responsibilities of different departments. 3 Benchmarking of time schedules for various activities. 4 Providing Methodology/ Guidelines to deal with real issues/ situations. Covering entire gamut of Activities from conception of the Project to Completion
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Review of WPPP envisaged after one year of implementation

Further, the procedure for modification/ addition in WPPP, which may be necessissated based on experience or other reasons, has been given in the document itself.

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Vol I (Pre-Award) Covers

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Project Conception and approval Internal Zero Date Package list -Corporate / Site MNW Finalisation of Cost Estimate Qualification Requirement of Bidders Selection of Bidding Process Finalisation of Bidding Documents Calling of Tenders
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Vol I Covers
Contd.. Bid Receipt and Opening Evaluation of Bids Post Bid Discussions Award of Contract Various Pre-award Issues
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AND

Salient Points of Vol I

Standardisation of :

Package list Qualification requirement Bidding Documents Approvals at higher level required only in case of deviation from standard

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Salient Points of Vol I .

Specifies decision methodology for selecting Bidding Process and mode of calling tenders. eg Two Stage Bidding for Packages which are: Technically Complex; specialised in nature; POWERGRID has limited experience; Specs fast changing (Price bids from Bidders conforming to an acceptable common technical standards & other conditions/ QR)
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Salient Points of Vol I ..

Spells out evaluation methodology in details including that for

Arithmetic corrections Cost compensation for commercial/ technical deviations Seeking post bid clarifications When to carry out negotiations

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Salient Points of Vol I ..

Specifies Methodology to deal with change in sub-vendors, if requested by recommended bidder during post bid discussions, taking care of financial implications

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Salient Points of Vol I ..

Defines Applicability of WPPP - not applicable in case of Restoration Works All activities to commence from Internal Zero Date, monitored through MNW Pre-Award actions and advance Expenditure on New Projects prior to approval - to avoid delay Late Bid, after bid opening, to be summarily rejected
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Salient Points of Vol I ..

Single response against Open Tender to be treated as Open Tender Change in BOQ, during bidding methodology to deal with is spelt out

Bid Evaluation Comparison with estimate on overall basis; No negotiation upto a variation of (+ve) 10%

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Salient Points of Vol I ..

Owner supplied materials in case of site packages - BG done away with CPG / Security Deposit for packages - deduction from RA bill allowed site

Works Contract Tax - to be included in bid price Octroi / Entry Tax reimbursable on bought-out items also Separate procedure for procurement of software solutions
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VOLUME II- POST AWARD

AREAS COVERED
Contract Signing Arranging CPG Release of Initial Advance (Supply) Finalisation of L2 Network Detailed Engineering, Drawing approval and Type Testing Sub-vendor/Sub-Contractors approval Inspection and Despatch Clearance

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VOLUME II- POST AWARD

AREAS COVERED..contd

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Project Monitoring Opening of LC, Processing of Bills and Release of Payment Technical Approval for variations Administrative approval for issue of amendment Time Extension and Liquidated Damages Commissioning and Taking Over Revised Cost Estimate Dispute Resolution and

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VOLUME II- POST AWARD (IMPORTANT AREAS) Time Extension And Liquidated Damage

Guidelines for decision making

No LD to be imposed if net delay is not attributable to the Contractor Token LD to be levied if net delay is attributable to Contractor & Loss not suffered by POWERGRID Methodology for calculating 19

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VOLUME II- POST AWARD

LD(Contd)
Methodology to find out delay attributable to the Contractor Total Delay= A Delay due to force majeure =B Delay attributable to POWERGRID =C Concurrent period in B & C = X Net period of delay on account of Force Majeure and POWERGRID= B+C-X Net period of delay on account

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VOLUME II- POST AWARD

LD(Contd)
Loss, if any, suffered by POWERGRID viz. Extra payment to other contractor Extra payment to other agencies Compensation to generating company towards deemed generation Delay in return on investment Exchange rate fluctuation in a foreign currency contract, 21 wherever applicable

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VOLUME II- POST AWARD

LD(Contd)
Methodology to work out LD Amount if the delay is attributable to contractor and loss suffered by POWERGRID Loss > Full LD Amount as per contract Leviable LD= Full LD Loss < Full LD Amount as per contract Leviable LD= Loss+ Token LD subject to
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VOLUME II- POST AWARD

LD(Contd)
Pending finalisation of LD, payment to the contractor shall continue in case of Corporate packages without deduction on this account on the consideration that the retention amount and BGs (against retention etc) are available. However deductions towards LD from progressive payment can be made only after approval of ED(Region), if23

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VOLUME II- POST AWARD

CONTRACT CLOSING

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Monitoring for Contract closing to commence on completion of 8090% of scope Contract Closing Certificates 13 in number, To be issued by not less than Manager A Contract to be treated as closed on Release of CPG/SD on successful completion of warranty period and on Issuance of CCP-13 Closing of a Contract to be formally declared by the concerned Contracts Deptt., acting as co-ordinator, after ascertaining receipt of all certificates All activities except release of CPG/SD of Contract closing to be24

VOLUME II- POST AWARD

CUSTODY AND RELEASE OF BGs

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Finance to be custodian Streamlined procedure for monitoring all BGs Advance BG will be released on adjustment of full advance. CPG to be reduced to 50% on taking over Quarterly review of status by ED(region) in respect of all critical BGs on the basis of MIS prepared by PESM

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VOLUME II- POST AWARD

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ADVANCEMENT OF SUPPLIES Advancement of supplies may be on account of the following - Requirement from POWERGRID - For timely completion of POWERGRIDs project Advancement to be normally allowed except for fund/storage constraints as it is positive step No approval required for advancement upto 30 days. Once advancement allowed, PV as per actuals

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VOLUME II- POST AWARD

QUANTITY VARIATION PROVISIONS (CONTD) Revised Procedure

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Uniform Quantity Variation Provisions in all types of contract Overall limit of +/- 15% of contract price No limit for individual items If overall contract price exceed 15% . Payment at unit rates upto quantities originally provided in the contract .unit rate for the quantities executed beyond (+15%) to be negotiated and finalised A token compensation @ 0.01% of Contract price for every 1% reduction 27

VOLUME II- POST AWARD

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Reference Contract Price For different purposes such as Quantity Variation, LD amount, CPG value, Advance amount. Contract price as originally awarded Amendment to Contract Price will not affect LD amount, CPG Value, advance amount resulting in simplified contract

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VOLUME II- POST AWARD

TURNKEY CONTRACT AND LUMPSUM PRICE Lumpsum price of items to remain unchanged irrespective of quantities actually executed Unless scope change is effected by POWERGRID.

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VOLUME II- POST AWARD

Change of sub-vendor as per WP policy(volume I) to be followed during post award stage.

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VOLUME II- POST AWARD

Acceptance of BG from a Bank other than specified in contract To be accepted in exceptional circumstances with the approval of ED (finance)

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VOLUME II- POST AWARD

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Procedure for taking up new work / quantum of work exceeding the contract item pending Contract Amendment Any new work / quantum of work exceeding the contract item shall be taken up only after technical clearance / technical approval. On receipt of technical clearance / technical approval communication to be sent to contractor and all concerned with the quantum of work to be taken up by the contractor so that progress of work continues pending issue of 32

VOLUME II- POST AWARD

PROJECT MANAGER For a more coordinated approach in major/important/ specialized projects Normally at a level of AGM & above

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VOLUME II- POST AWARD

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ARBITRATION / DRP Normally Arbitration / DRP shall be avoided to the extent possible Prior to reference of a dispute by contractor to Arbitration / DRP, at least one attempt shall be made for amicable settlement by a standing committee as follows. for Corporate awarded packages : ED(Fin), ED(CS), ED(Engg/LD&C/Telecom), ED(Region) headed by 34

VOLUME II- POST AWARD

Retention of documents All documents pertaining to award and implementation against a contract shall be retained for a period of eight financial years after the closing of the contract. Thereafter the same can be destroyed if not under examination / scrutiny by any investigating authorities)
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Thus the WPP formalises and consolidates the policies, procedures hitherto followed for contract administration and reengineers the processess, using the experience gained over the years and, provides benchmark time schedules for different activities
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Delegation of Powers
Contents

: - Delegation by Board to CMD - DOP for construction stage of approved projects - DOP for O&M

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Delegation of Powers
Contents -

(Contd): DOP for Personnel Powers in CC DOP for Admin Powers in CC DOP for P&A powers in Regions DOP for Consultancy DOP for Bond Cell

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Delegation of Powers
Salient -

Points Concurrence by Finance necessary unless otherwise specified Subject to observance of relevant policy guidelines, rules and regulations and instructions on system and procedure Full Powers not to exceed powers of CMD

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Delegation of Powers
Powers

of CMD - By Exception i.e., authorised to exercise all or any power rested in Board except as in Annexure-A of DOP - Award of Contracts upto Rs. 10 Cr; 10 to 20 Cr. By Sub-committee; beyond 20 Cr. By Board

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Delegation of Powers
Powers

excluded from Delegation to CMD - Feasibility Reports, Projects Reports and Estimates etc. costing more than 5 Cr. - Any deviation in estimate approved by Board/ GoI, which is more than 10% for any component part of project.

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Delegation of Powers
Powers

excluded from Delegation to CMD (contd..) - Consultancy Contracts beyond 50 lakh as against 10 Cr. For others - Write off of stores, plant and machinery more resulting in net loss of more than 10 lakhs

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Delegation of Powers
Canons -

of Financial Propriety Expenditure should not be prima facie more than occasion Demands Same vigilance to be exercised as of own money Allowances not to be source of profit Subject to approved budget

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Delegation of Powers
Powers

of Executives (some examples) (Construction Stage) - Technical & Administrative approval of Cost Estimates ED upto 500 lakhs Manager upto 10 lakhs

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Delegation of Powers
Approval

tender)

of Award of Contracts (open

ED upto 500 lakhs GM upto 150 lakhs Dy Manager upto 5 lakhs

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Thank You
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