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Relevence of Notice Issuing Tender

Relevence of Notice Issuing Tender

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Published by Grishma Kothari

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Published by: Grishma Kothari on Jul 26, 2012
Copyright:Attribution Non-commercial


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Relevence of Notice issuing tender NIT is an offer inviting offers. 1. Reduces cost and time over run. 2.

Scope of job determined:- activities to be performed by the contractor are clearly defined reducing scope for any ambiguity. The contractor will have a clear idea of what the company expects from him and if can deliver he will accept the proposal otherwise decline it. 3. Reduces risk of RCF:- NIT ensures that RCF’s risk is at a bare minimum. EARNEST MONEY DEPOSIT (EMD), MUTUALLY ACCEPTED DAMAGES (MAD) and SECURITY CUM PERFORMANCE BANK GURANTEE are the tools used by RCF to reduce risk. EMD:- when the bidder accepts the proposal given by RCF he has to furnish Earnest money deposit which is a kind of a security given by the bidder to RCF in case of any deviation.EMD can be given in two ways either in form of BANK GURANTEE or CASH. EMD can be forfeited under the following conditions:
a) b)

c) d)

If a Bidder withdraws his Bid during the validity or agreed extension validity period duly agreed by the bidder If the bid is varied or modified in a manner not acceptable to RCF during the validity or agreed extension validity period duly agreed by the bidder Any effort by the bidder to influence RCF on bid evaluation, bid comparison or contract award decision. In the case of a successful Bidder, if the Bidder fails to sign the Contract in accordance with Signing of Contract OR

If the successful bidder is seeking modifications to the agreed terms and conditions after issue of Notice of Acceptance (NOA) and prior to signing of the Contract. OR

If the successful bidder fail to furnish performance guarantee within 2 weeks of signing of the Contract. This Bank Guarantee shall be an irrevocable Bank Guarantee 4.As a Contract Security. S curve…………………. The progress of the work and the payments should move simultaneously. . 6.. The Bank Guarantee amount shall be equal to ten per cent (10%) of the TOTAL CONTRACT PRICE and it shall guarantee the faithful performance of the CONTRACT in accordance with the terms and conditions specified in the contract. If the outflows are known then the company is in a better position to bargain for funds at a lower interest rates. Fund arrangement:. to whom the work is awarded is required to furnish a Security cum Performance Bank Guarantee. a successful Bidder. CRITICAL PATH METHOD is the operational acitivty………………………….advance loss of profit policy…………………….for arranging funds for the project the company requires an estimated cash outflow. MUTUALLY ACCEPTED DAMAGES:SECURITY CUM PERFORMANCE GUARANTEE:.the first type of activity control relates to operations and the second to finance. In case of breach of contract the guarantee amount shall be payable to the RCF without any conditions whatsoever. Insurance: . Activity control :. 5. The Bank Guarantee shall be valid for the entire period of the CONTRACT namely till the end of the guarantee period. The project report will include all expenditures the company is likely to incur till the completion of the project.

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