STAT TAT STAT ATRL RUT tr rmow:oasrecorsireco (age ofeer ote art sare) National Highways Authority of India (Ministry of Road Transport and Highways) is wii 6, Beezt0, area, af Pertt- 110.075 6-5 & 6, Secior-10, Dwarka, New Delhi-110075 NHAI/Policy Guidelines/Delegation of Power/2020 Policy circular No. 3.1.28 dated 29°" December, 2020 (Decision taken on e-office file Comp. No. 46547) Sub.: Delegation of Power to reduce the Performance Security Bank Guarantee (PSBG) to 3% of contract value, Ministry of Finance, Department of Expenditure vide OM No. F.9/4/2020-PPD dt. 12.11.2020 has issued some guidelines regarding reducing the Performance Security for the existing as well as future contracts. The same guidelines were circulated for strict compliance vide Ministry of Road Transport and Highways OM No. F.No. G- 20016/01/2020-TF-II dated 17.11.2020 and by National Highways Authority of India vide Policy Circular No. 3.1.27 dated 19.11.2020 (copies enclosed). 2, In view of above, many Contractors/Concessionaires/ Consultants are requesting NHAI for according approval for submission of amendment in earlier submitted Bank Guarantees for reducing Performance Security Bank Guarantees to 3% of contract value. It has been learnt that some of such requests have been recommended by NHAI-PIU to NHAI-RO and by NHAI-RO to NHAI-HQ thereby resulting delay in implementation of the Government guidelines. 3. __ It may be mentioned that NHAI had issued guidelines vide Policy Matters- Administration/Finance (97/2012) dt. 30.10.2012, 128/2013 dt. 27.11.2013, 135/2014 dt. 27.01.2014 and Policy Matter-Technical (172/2014) dt. 30.12.2014 (copies enclosed) vide which PDs, ROs and Officers at NHAI-HQ have been authorized for releasing the Bank Guarantees for the bids invited by RO/PD and by NHAI-HQ. 4, To avoid the delay and quicken the process for implementation of the Government guidelines circulated vide NHAI Policy Circular dt. 19.11.2020, it has been decided that the Officers who are authorized to release the Bank Guarantees vide circulars mentioned in para 3 above are hereby authorized to entertain the proposals and take necessary action for reducing the Performance Security Bank Guarantee to 3% of the contract value, wherever applicable. 5. This issues with the approval of Competent Authority. Encl.: As stated above. Whore (Sheo Shankar Jha) CGM (Coord.) To All officers of NHAI HQ/ROs/PIUs/CMUs/Site Offices Copy to: PS to Chairman PS to All Members/CVO Hindi Officer for translation in Hindi Library for hosting the circular on library site Web admin for circulation gaepearia aia arsrant orferncer IPhone: 0-1-2507 0075074 (ergs tat he cowar sa) National Highways Authority of India {Mirisry of Road Transport and Highways) wei 6, eeti0, aren, 5 feet - 10076 NHAI/Policy Guidelines/Standard DCA Document HAM/2020 Policy Circular No. 3,1.27 dated 19‘ November, 2020 (Decision taken on e-office file Comp. No. 46547) Sub.: Instruction of Ministry of Finance, Department of Expenditure regarding (i) Performance Security, (ii) Additional Security Deposit/Bank Guarantee(BG) in case of Abnormally Low Bids (ALBs) and (iii) Bid Security/ Earnest Money Deposit MORTH vide OM no. F.No. G-20016/01/2020-TF-II dated 17.11.2020 has forwarded 3 Nos. of Ministry of Finance, Department of Expenditure O.Ms. No. F.9/4/2020-PPD dated 12.11.2020 on subject mentioned above for immediate implementation by all concerned. A copy of the same is attached herewith for implementation with immediate effect: 3. This issues with the approval of Competent Authority, Encl. As stated above. wl (Digvijay Mishra) CGM (Coord) To, All Officers of NHAI HQ/ ROs/ PIUs/ CMUs/ Site Offices Copy to: 1. All Members/CVO 2. PS to Chairman 3. Hindi Officer for transiation in Hindi 4. Library for hosting the circular on library site 5. Web admin for circulation102655/2020/GM (CMD) Office yo, F.No.6-20016/01/2020-1E-11 Government af In Ministry of Road Transpart and Highways ‘ransport Bhawan New Delhi the 17" November, 2020 OFFICE MEMORANDUM Suidject Latest instructions of Ministry of Finance, Department of Expenditure regarding (i) Performance Security, (ii) Additional Performance Security in case of Abnormally Low Bids (ALBsjand (iil) Bid Security/Earest Money Deposit - regarding, ‘The undersigned is directed to forward herewith 3 nos. of Ministry of Finance, Department of Expenditure O.Ms. No.F.9/4/2020-PPD dated 17.11,7020 on the subjects mentioned above as per details evs i) i) iit) 2 3 + below: Department of Expenditure vide OM Ho. F.9/4/2070-PPD dated! 12.11.2020 has decided to reduce Parformance Security from existing §-10% to 3% of the value of the contract for all existing contracts. However, the benefit of the reduced Performance Security will not be given in the contracts under dispute vherein arbitration/court proceedings have already heen started or are completed. AI tenders/contracts issued/concluded till 31.12.2021 should also have the provision of reduced Performance Security In ail contracts, where Performance Security has been reduced to 3% in view of the above stipulations, the reduced percentage of Periormance Security shall continue for the entire duration of the contract and there should be no subsequent increase of Performance Security even beyond 31.12.2021 DOE vice OM No. F.9/4/2020:PPD dated 12.11.2020 has also decided that no provisions showid be kept in the Bid Documents regard'ag Additional Security Deposit/Bank Guarantee (8G) in case of Abnormally Low Bids. It has been further mentioned that wherever, there are compelling circumstances to ask for Additional Security Deposit/Bank Guarantee (8G) in case of ALES, the same should be taken only with the approval of the next higher authority (0 the authority competent to finalise the particular tender, or the Secretary of the Ministry Department, whichever is lower. Department of Expenditure vide OM No, F.9/4/2020-"PD dated 12.11.2020 further decided that notwithstanding anything contained in Rule 171 of GFRs 2017 or any other Rule or any provision contained in the Procurement éanuals, no Provisions regarding Bid Security Should be kept in the Gid Documents in future and only provision for Bid Security Declaration should be kept in the Bid Documents. 1t has also been specified by DOE that these instructions will be applicable for alt the tenders issued till 31.12.2021. These instructions are being circulated herewith for information and strict compliance. Action taken report on each of the items along with details of amount of Performance Security released for subsisting contracts may be sent on weekly basis to the undersigned. FAK Dw (Anup Kumar Dey) Uncler Secretary to the Government of India Encl: As above. Contd...102655/2020/GM (CMD) QEfIRENo. F.No.G-20016/01/2020-TF-l dt. 16.11.2010) 2 DG(RO) & $5 Chairman, NHAL MD, NHIDCL AMUADGS/All CEs CE (Monitoring) : a request to send consolidated figures of Performance Security released in case af PWOs on weekly basis against ammount of work awarded. Copy to: PPS to Secretary PPS to ASEFA PS to OFA Copy also to: Director, NIC - with a request to upload the OM cn Ministry's Website along, with enclosure of OMs of Ministry of Finance, Department of Expenditure Skee 17 -He ROD102655/2020/GM (CMD) Office No. F.9/4/2020-PPD Government of India Ministry of Finance Department of Expenditure Procurement Policy Division 512, Lok Nayak Bhawan, New Delhi Dated the 12" November 2020 ol FFICE MEMORANDUM Subject: Performance Security. As per Rule 171 of General Financial Rules (GFRs) 2017, Performance Security is to be obtained from the success‘u bidder awarded the contract for an amount of five fo ten percent of the weiue of the contract lo ensure due performance Of the contract. Similar provisions also exist in the Manual for Procurement of Works. 2018 and Manual for Procurement of Consultaney & other Services 2017 issued by this Department, 2. The Government is in receipt of many representations that on account of slowdown in economy due te the jiancemic, there is acute financial crunch among many commercial entities and contractors, which in turn is affecting timely execution of the contracts It has also been represented that this may affect the ability of Contractors to bid in tenders and herce reduce competition. Requests are being received for reduction in quantum of S=curily Deposits in the Government contracts. 3. In view of all abave, it is decided to reduce Performance Security from existing 5-10% to 3% of the valuc of the contract for all existing contracts. However, the benefit of the reduced Performance Security will not be given in the contracts under dispute wherein arbitration’ court proceedings have been already started or are contemplated 4. Further, all tenders/ contracts issued! concluded till 31.12 2021 should also have the provision of reduced Performance Security, 5. _Inall contracts where Performerice Security has been reduced to 9% in view of above stipulations, the reduced percentage of Performance Security shall continue for the entire duration of the contract and there should be no subsequent increase of Performance Security even beyond 31.12 2021 Similarly, in all contracts entered into with the reduced percentage of Performance Security of 3%, there will be no subsequent increase in Performance ‘Security even beyond 31.12.2021 6. Wherever. there is compelling circumstances to ask for Performance Security in excess of three percent as stipulaied above, the same should be done only with the approval of the next higher authosty to the authonty competent to finalise the102655!2020/GM (CMD) Office particular tender, or the Secretary of the Ministry’ Department, whichever is lower Specific reasons justifying the exception shall be recardod 7. __ These instructions will be applicable for all kinds of procurements viz, Goods, Consultancy, Works, non-consulting Services ete and are issued uncer Sule Ott) of the GFRs 2017, Eraaterlen ‘Kotlurd Narayana Ray) Deputy Secretary to the Govt. of India Tek: 24621305 Email: kn reddy@gov.in To, All the Secretaries and Financial Advisers to Government of india Copy to: Secretary, Department of Public Enterprises with a request to issue the same instructions to Central Public Sector Undertakings (C| PSU102655/2020/GM (CMD) Office No. F 9/4/2020-PPD Government of India Ministry of Finance Department of Expenditure Procurement Policy Division 512, Lok Nayak Bhawan, New Delhi Dated the 12” November 2020 JORANDUM, Subject: Additional Performance Security in case of Abnormally Low Bids {ALBs), The Government is in receipt of many representations that on account of slowdown in economy due to the pandemic. there is acule financial crunch among many commercic! entities and contractors, which in tum is affecting timely execution of the contracts. it has also been represented that this may affect the abilty of contractors to bid in tenders and hence reduce competition. Requests are being Tecaived for reduction in quantum of Security Deposits in the Government contracts, 2. In this context, it is noted that Additione! Pe ce Security in case of Abnormally Low Bids (ALBs) is berg taken from the contractors by various Minisines/ Departments though there is no provision for the same in General Financial Rules (GFRs) 2017 or the Manuals for Procurement issued by this Depariment 3.___As per para 7.5.7 of the Manual for Procurement of Goods 2017 issued by this Department, an Abnormally Low Bid is one in which the bid price, in combination with other elements of the Bid, anpers so low that it raises matenal concems as to the capability of the bidder to perfor the contract at the offered price Procuring Entity may in such cases seek ysitten clarficatons fram the bidder, including detailed price analyses of its bit pnce in relation to scope. schedule, allocation of risks and responsibilities, anct any other requirements of the bids document, If, afler evaluating the price analyses, Procuring Entity determines thal the bidder has substantially failed to demonstrate its capabtity lo deliver the contract at the offered price, the Procuring Entity may reject the bid/ proposal. However, it would not be edvisable (0 fix @ normative percentage below the estimated cost, which would be automatically be considered as an atmonmally low bid. Due care should be taken while formufating the specifications at the time of preparation of bid document so as to have a safeguard against the submission of abnormally low bid from the bidder. 4. _ In view of above, it is reiterated that no provisions should be kept in the Bid Documents regarding Additional Security Deposit/ Bank Guarantee (BG) in case of Abnormally Low Bids. 5. Wherever, there are compelling circumstances to ask for Additonal Security Deposit! Bank Guarantee (BG) in case of ALBs, the same should be taken only with,102685/2020/GM (CMD) Office pe abproval of the next higher authority to the authority competent to finalise the Particular tender, or the Secretary of the Ministry! Department, whichover i lover 8. These instructions will be applicable for all kinds of procurements viz. Goods, Consultancy, Works, non-consulting Services ote vane be he, (Kotluru Narayana Réddy) Deputy Secretary to the Govt. of India Tel 24621305 Email: kn reddy@gou.in To, All the Secretaries and Financial Advisers 19 nt of Inctia Copy to: Secretary, Department ef Public Enterprises with a request to issue the ‘same instructions to Central Public Sector Unde takings (CPSUs). &192655/2020/GM (CMD) Office No F $ia/2020-PPD Government of India Ministry of Finance Depariment of Expenditure Procurement Policy Division 512, Lok Nayak Bhawan, New Delhi Dated the 12" November 2020 OFFICE MEMORANDUM Subject: Bid Security! Earnest Money Deposit, The Government is in receipt of many representation slowdown in economy due to the pandemic, thers is acute financial crunch among many commercie! entities and contractors, which in turn is affecting timely execution of the contracts. It has also been represented that this may affect the ability of contractors to bid in tenders and hence reduce competition Requests are being received for reduction in quantum of Security Deposits in the Government contracts. that on account of 2 As per Rule 170 of Genera! Financial Rules (GFRs) 2017, Micro and Small Enterprises (MSEs) and the firms registered with concemed Ministries? Deparlments are exempted from subrission of curity. Further, in heu of Bid Security, Ministies/ Departments may ask bicders to sign "Bid Security Dectaration” accepting that if they withdraw or modify their bids during period of valdity elc.. they will be suspended for the time specifies in the tender documents, Similar provisions also exist in the Manuals for Procurement of Works 2079 and Manual for Procurement of Consultancy & other Services 2017 3. in this context it is noted that Sid Security (also known as Eamest Money Deposit) is stil being taken fram the contractors by the various Ministries/ Departments, though the relaxations have already been provided m General Financial Rules (GFRs) 2017 4. In view of above, it is reiterated that notwithstanding anything contained in Rule 171 of GFRs 2017 or any other Rule or any provision contained in the Procurement Manuals, no provisions regarding Bid Security should be kept in the Bid Documents in future and only provision for Bid Security Declaration should be kept in the Bid Documents 5. Wherever, there are compelling circumstances to ask for Bid Security, the same should be done only with the approval of the next higher authority to the authority competent to finalise the particular tender or the Secretary of the Ministry! Department, whichever is lower. 6. _ The above instructions will be applicable for all the tenders issued tll 34.12.2021102655/2020/GM (CMD) Office C nsun res? instructions will be zpplicable for all Kinds of procurements viz. Goods. pereultancy, Works, non-consulting Services etc and are issued under Rule 6(1) of the GFRs 2017. Berna ali (Kolluru Narayana Réddy) Mary to the Govt. of India Tel 24621305 Email: kn seddy@gov.in Deputy Sect To, All the Secretaries and Financial Advisers to Government of India Copy to: Secretary, Department of Public Er same instructions to Gentrai Public Sector Ui Iplises wiih a request to issue the kings (CPSUs} )weet Teer STATE TAO, gereimnnes seer noxnne (ae after atte re sear) Bae Fax; 9f-11-25099607 1 zen03si National Highways Authority of India"! 220 2018 | 2160/2353 (Ministry of Road Transport and Highways) HO provisions of the | of the Contract’ Concession Contract? Concession | Agreement for the works being Agreement. ‘executed at NHAI HQ. Concerned | Full Power in all other eases with the eoseurrence of Finance Division MemberTI, Custody and Maintenance of Bank Guarantees ‘Authority “Maintenance of Bank Guarantees for Remarks / Mobilization] Bid Security| Performance Other / ‘Advance / Security Retention Money 7 Project PiUs. PiUs for the | PIUs Tor the bide "| PIUs Tt shall the Implementation bids invited by. | invited by PIU, responsibilty of Unit PIU, the concerned officer ‘maintaining the BGs. to monitor the validity of the BGs (a registor shall be | ‘maintained for this purpose) ond ensure extension of the validity of the BGs in terms of the contract. Regional Office | ~ RO for the bids | RO for the bids | invited by RO. | invited by RO and NHALHQ.* NHATHO 7 Concerned ‘Concerned Concemed General General Manager| General Manager at | at NHAI HQ for | Manager at ager NHAL HO for | the works being | NHAT HQ the bids invited | executed by | for the byNHATHQ. | NHATHO. works: executed by NHALHO. ‘Performance Security received in NHTAT HO shall be transferred o RO ofter declaration of appowied date cave @f BOT nal! other cases, BG shall be wansferred immediately afer signing of ogrezment. 2. Thisissues with the approval of Competent Authority. amen Chief General Manager (Coord./LA) To, a ani 10, essaree reer USAT TTPO, rer rtene (ase GR site cron stare) ‘AT / Fax: 91-11-25009607 / 25089514 National Highways Authority of India (Ministy of Road Transport and Highways) FES We 6, daet-10, rem, TE Rec-110075 65.86, Secor-10, Dwar, Now Dehit10075 No.11041/217/2007-Admn. 27.11.2013 POLICY MATTERS ~ ADMINISTRATION / FINANCE 128/201: [Decision taken in File No. NHAI/11033/CGM(FA)/1/2013] Sub: Changes in BG operation and holding guidelines. In supersession to the eariier circulars in the matter, the following,is conveyed: 1) All bank guarantees (BG) submitted by contractors, consultants, concessionaires etc, except where such BG's are submitted with regard to O&M and maintenance contracts, shall be held at headquarters and all matters connected with such BG's, such as renewal, extension, invocation etc. as required under the relevant contract/ agreement will be henceforth dealt with at HQ. For O&M contracts, the BG's will be held and managed ot the PIU level. 2) For enabling smoother interaction with BG issuing banks for BG's held at H@, such 8G's will be made operational at a New Delhi branch of such BG issuing banks. To document/ enable this feature, in all BG's submitted/ extended/ renewed henceforth, a clause as follows shall be ensured for incorporation into the body of the BG/ BG extension letter/ BG renewal letter, “This guarantee shail also be operatable at our _ branch at New Delhi, from whom, confirmation regarding the issue of this guarantee or extension/ renewal thereof shall be made available on demand. in the contingency of this guarantee being invoked and payment thereunder claimed, the said branch shall accept such invocation letter and make payment of amounts so demanded under the said invocation.” The above para will be added in the BG formats in all draft contracts/ Ggreements/RFQ/RFP's etc being issued, and also in all demand notices issued henceforth for extension/ renewal of BG's sought. 3] For BG's obtained in connection with O&M and maintenance contracts and for which bids are received at field level , the PIU’s shall ensure that the BG's (and extensions/ renewals thereof) are issued or are made operatable from the branch of an (eligible) bank near the PIU. On the lines prescribed in para 2) above, an appropriate provision to enable operatability shall be incorporated in the draft BG (and extension/ renewal demand notices seni) by the PlU's. 1-250741001280742004) Consequent to the above changes, all BG's, if they are to be held at HG under these revised norms, shall be immediately sent to HQ's, addressed by name fo the concerned GM(Tech} under intimation to concemed CGM . Wherever a demand for invocation (or renewal/ extension) of the BG has already fallen due in accordance with the timelines so specified under the relevant policy guidelines, it shall be ensured by the PIU's and RO’s that the invocation/ extension/ renewal is complete in all respects before submitting the BG's to HQ. 2. This issues with the approval of Chairman. ‘as (V.K. Shanta) CGM (Coord.) To, : All officers and employees of HQ/ROs/PIUs/CMUs/Site OfficesSTRATA TEST UTSTAT TTPETERTOT eee enon vnasoresconsrena (as aftret afte corard siererer) ‘am | Fax: 91-11-25093507 / 25003614 National Highways Authority of India (tinistry of Road Transport and Highways) aft-5 wd 6, Qaet-10, area, -7E Re-110075 6-5 88, Secior-t0, Dwar, New Dodi-1H0078 No.11041/217/2007-Admn. 24.01.14 B POLICY MATTERS - ADMINISTRATION / FINANCE (135/204) (Pecision taken in 177" Executive Committee meeting held on 09.01.2014 vide Agenda Item No.Vil} Sub: Changes in operation and maintenance of Bank Guarantees, Further to clarification in Policy Matters-Administration/Finance 128/2013 issued vide Administration letter No. 11041/217/2007-Admn. Dated 27.11.2013, the following is conveyed- “Bank Guarantees for Bid Security and Performance Security in respect of PPP Projects only, are required to be maintained by Technical Divisions at NHAI HQ. Rest all the Bank Guarantees in respect of EPC projects, Consultancy Agreements etc. may be continued to be maintained as per prevailing practice before issue of Policy Matter- Administrative/Finance No:128/2013 issued vide No. 11041/217/2007-Admn, dated 27.11.2013 which is modified to this extent” 2. This issues with the approval of Competent Authority. 27 9) (V.K.Shai ) Chief General Manager (LA & Coord.) To, Allofficers and employees of HQ/ROs/PIUs/CMUs/Site Officesee vfters ste csrert waren) Bae) Fox 91-01.25009507 ) 25099514 National Highways Authority of India (Ministry of Road Transport and Highways) ‘h-s U0, Seet-10, area, 7 Reet-s10075 6-546, Sector-10, Dwar, New Demy. 11007 No. 11041/218/2007-Acmn, Dated: 30.12.2014 Policy Matters: Technical (172/2014 Chief General Managers (Tech) at HQ have been asked to visit the respective States which they are looking after to sort out all bottlenecks to expedite the Construction and award of projects. With a view to finalize the issues at site itself, CGMs (Tech) are delegated following Powers Shitting of utiities: ESS reer eee eereer cree cere ‘S.No. Particular To whom Extent of Delegation | i Sanaa delegated __|_____ (Cumulative) (0) Transmission CGM (Tech) jointly) Rs. 40 crores foreach | linelelectric line | with concerned | concemed Division of User -—.., shifting Regional Officer__| Agency | ti) Water pipelines and | CGM (Tech) jointly | Rs. 5 crores for each other utlities other | with concerned [Fes division of User | than electric ines | Regional Offi Agency _ ii) Extension of Time in Consultancy Contracts CGM (Tech) may approve the extension of time of consultancy contracts in all such cases where the extension of consultancy contract is as a consequence of extension of Civil Works contractiConcession Agreement. CGM (Tech.)/Regional Officer may however, ensure that personnel deployed during the extended period of consultancy Contracts are the bare minimum as per actual site requirements, iii) Encashment/Release of BGs: CGMs (Tech) may approve all proposals relating to encashment of BGs wherever Tequired and release of BGs where applicable. All complaints regarding withholding of BGs should be examined & concessionaire/contractor will be informed of the reasons for withholding BGs._A mention of the same shall be made specifically in the report to be furnished by CGM at the end of the visit. 3. This issues with the approval of Competent Authority, NHAI Belp (V.K.Sharmpa) Chief General Manager (Coord.) To All officers ancl employees of H@/ROs/PIUs/CMUs/Site Offices,