Tele: 23015930 Engineer-in-Chief °s Branch Military Engineer Services Dte of Contract management Kashmir House, Rajaji Marg New Delhi-110011 No. 33445/Adm-13/ 4 9 /E8 Dp Mar 2019 All CE's Command ADG's (on MES website) CONFERENCE ON CONTRACT MATTERS 1. Reference this HQ letter No 66546/Manual/922/E8 dated 08 Feb 2019 2. Minutes of conference held in this HO/CE Delhi Zone on 08 & 09 March 2019 are forwarded herewith for your reference and needful action. vy () Rennmush (Bnavesn Kumar) Dir (Contracts) for Engineer-in-Chief Encls : As above (5 Sheets) Copy to - Dte of Utiities - For necessary action in respect of the matter pertaining (E-4) to Electrical Licence.Appx ‘A’ to letter No. 33445/Adm-13/ 49 repo Mar 2019 dt MINUTES OF CONFERENCE ON CONTRACT MATTERS: 08-09 MAR 2019 1. Aconference on contract matter was held at E-in-C’s Branch on 08 Mar 2019 which continued in HQ Delhi Zone on 09 Mar 2019. The conference was inaugurated by E-in-C and attended by following officers:- SI | FROM E-IN-C’S BRANCH | SI FROM CEs COMMANDIADGs t /1 | Ma) Gen Sk Khanna, DGW | 4 Sh N D Bhagtkar, Jt DG(C), CE South Western T _ | Command a |) | ShP Makhijani, Jt DG(C), CE Eastern “| Command i ‘Sh RP Singhal Jt DG(C), | eu Command ae ie Sh Mahesh Chander, Dir (C) | 4 | Sh NK Singh, Jt DG(C), CE Central Command | Sh J K Khurana, Dir (C), CE Western Command _ Sh A K Gupta, Dir (C), ADG (P) Chennai Sh S S Bansal, Jt DG(C) Sh Bhagirathi Pani, Dir(C) | 3 E Northern a | Sh Bhavesh Kumar, Dir(C) | 5 | Sh Reji Ashok, Dir (C) = 7 | Sh SK Jain, Dir (C), ADG (NEI) 8 ~~ | | Sh Akhilesh Shukla, Dir (C), CE Southern Command 2. _ E:in-C opened the conference and apprised the gathering about the rapid changes in the field of contract management and equitable conditions of contracts being adopted universally in line with FIDIC conditions. There is a need for prompt payment and speedy decision making to reduce the disputes during execution. MES officers must keep themselves abreast with structural change in taxation system in recent past and impending introduction of e-payment gateway. The dispute resolution and arbitration processes are increasingly becoming more legal which warrants the officials of Surveyor cadre to be abreast with latest developments in the field. This is also essential because the arbitration awards are being closely scrutinised & examined at Ministry level and investigations have been ordered in few cases in recent past. Awards should be critically analysed and challenged ‘only when sufficient technical and legal grounds exist. He directed all the representatives of CEs Command/ADGs to promptly forward their opinion on crucial issues like linking factor as these issues have large scale effect and delay in instructions may open up huge number of arbitration cases 3. DGW apprised the gathering about the major policies and instructions issued in last couple of years. He emphasised on transparency in functioning of MES Officials in general and executives in particular. He informed about EPC model of contracts which has been Contd.....2/2 approved in principle by MOD for which necessary exercise is being done by CE Delhi Zone as pilot project. He also conveyed about issues of MES BAI which came up during their annual meeting and which require deliberations. 4. — Jt DG (Contracts) of E-in-C’s Branch informed the gathering about the broad methodology being adopted before issue of any policy/instruction by this HO. He conveyed that the revised edition of Manual on Contract is under preparation for which all CEs Command should give needful inputs/suggestions. Data collection and collation has increased manifold in last couple of years as per requirements of MoD. Inflow of data to E- -C’s Branch should therefore be prompt and expeditious to ensure timely submission of information to MoD. He also apprised about large number of complaints being referred to this HQ and directed that such complaints should be disposed of promptly by the Competent Authority as well as lower formations be educated and sensitised on this important issue. 5. Major points, brief of deliberations and decisions given are summarised hereunder:- si | ISSUE | : 1. | Performance Security |(@) |BGB Monitoring: Policy on Performance | The existing policy already caters |_| Security and related issues has been issued. It | for validity of BGB till expiry of DLP was brought out that monitoring of BGB towards | The problem will arise only in case Performance Security —_will_~— increase | of extension of '—_contracts. tremendously, especially in GEs offices for | Notwithstanding this, ADG (NEI) which more manpower will be required will study the FR Provisions and explore possibility of developing irevocable BGB format or such provision, which transfers the onus of extending the BGB on the contractor/banker before expiry of validity, (b) | T&P_& Material Confiscation: The policy lays | All CEs Command & ADGs to fwd down that in the event of cancellation of | consolidated proposal covering all contracts, the material, T & P and machineries | such issues for taking up case for | lying at site at the time of cancellation shall be | modification in policy/amendment confiscated. Since Performance security is | to GCC. already to be encashed as firm liability, this provision may not be needed. Moreover many T&P & machineries may be on hire basis or hypothecated, in which case there may be unwanted litigation, } Contd...3/ISSUE DECISION Linking Factor: The anomaly in Linking Factor needs to be addressed. Interim instructions have already been issued. However firm instructions are to be issued for deciding the issue. Deptt of Economic Affairs has left it on the concemed Departments to decide. During deliberations, reps of almost all CEs Command/ADGs suggested for the method adopted by Railways. The concept evolved at this HQ (‘Transpose Method’) was explained. The matter also came up during session with MESBAI Single Authority (Registering as well_as Enlisting Authority) for ‘A’ to ‘D’ Class Contractors: MES BAI has requested to streamline and cut short the procedural formalities for enlistmentregistration of ‘A’ to ‘D’ class contractors in two offices. One suggestion was to provide for prior concurrence of CE Command /ADG before enlistment by CE Zone. Issue of Tender to One Class Lower Contractors in All Cases: This point was referred by MES BAl during their annual meeting with E-in-C. The existing instruction provides for opening of bids of one class lower contractors only in case of less than seven bids from eligible class contractor. It was requested that irrespective of the response from eligible contractors, bids of one class below contractor be opened in all cases. The matter was | deliberated and it was unanimously opined that existing instructions are appropriate and no change is required Divergent views were expressed. | It was directed that all CEs Command/ADGs should forward calculations in one case based on their suggested method, interim instructions and ‘Transpose Method’ by 31 Mar 2019. Reps of MESBAI were also asked to forward case calculation in one running contract based on their proposal All CEs Command/ADGs. to | examine views of CEs Zone under their AOR and fwd recommendation by 31 Mar 2019. No modification in existing instruction is needed Revised Authority for Implementation _ of Awards. A draft proposal for revision in authority to decide on implementation of awards was circulated in Oct 2018. The proposal was deliberated and various views emerged All CEs Command/ADGs to fwd their suggestions by 31 Mar 2019 Contd...4/SI (a) at length during which following officers of Dte of Utility were also present (b) Mr S K Gupta, CEI (c) Mr K B Goyal, Jt DG (U) (d) Mr Jaya Prakash, Dir(U) Issue of Electrical Licence was deliberated (b) Everybody was of the opinion that Elect license is mandatory during execution for any type of electric work. However there were contradictory opinions on other issues, firstly whether the licence is mandatory for enlistment purpose and secondly whether it should be mandatory document for tech bids (Cover-1). The point was again discussed with representatives of MES BAI on 09 Mar 2019. It was brought out by them that MES officials working as IE, SEI & CEI are competent to issue licence to enlisted contractors having corresponding categories of works in their enlistment details. Non Performing Arbitrators The instruction as contained in this HQ letter dt 22 Oct 2018 was discussed and progress on action taken by CEs Zone was reviewed, ‘Taxation Related Matters | Service Tax Refund: The quarterly report on status of Service Tax refund availed by contractors and deposited with MES are not being recd. All the representatives of CEs Command/ADGs expressed that the issue is being monitored at their level [CEs Command/ADGs should DECISION (2) Dte of Utilities to study the case afresh in view of the points put forth by MES BAI. Necessary inputs also to be obtained from other Deptts as well as Central Electricity Authority. Legal opinion on the subject matter shall also be taken by E-4 Section to resolve the issue. (b) Meanwhile the relaxation for not uploading the Elect Licence at bidding stage itself shall be extended till 31 Dec 2019. All CEs Command/ADGs to forward consolidated report on | action taken within their AOR by 31 Mar 2019, obtain confirmation from lower formations that all such refunds obtained by contractors have been deposited by them in Govt Treasury. Qtrly report showing feedback/status to be forwarded by 15" day of succeeding month Contd....5/[st i i (b) ~ ISSUE DECISION GST: Recovery in Pre-GST Contracts Which Continued in Post-GST Regime. The instructions were issued in Nov 2017 for | working out the savings to contractors in contracts concluded in the Pre-GST period | but continued in Post-GST period. Progress achieved on this front were deliberated. It was expressed that no clear-cut method can be adopted to work out such savings for recovery. Itwas directed that CE Western Command should liaise with CPWD authorities in this matter and send feedback by 15 Apr 2019. Similar exercise to be done by CE Eastern Command and CE Southern Command with NBCC and Railways respectively. List of Makes to be Followed for Tendering Purpose: This point was referred by MES BAI in which it was requested that makes approved in one Command should also be followed in other Commands. This is due to delay in process of product approval in some Commands. MES BAI also requested for restoration of old policy whereby all product approval were done in E-in-C's Branch. The matter was deliberated at length. All CEs Command/ADGs to forward their suggestion by 30 April 2019, CE Western Command was asked to carry out analysis of makes approved by them, comparing them with those in adjoining Command and forward feedback by 30 Apr 2019 Instructions on Preparation & Defence of Arbitration Cases : Modification in existing instructions were issued by this HQ on defence of arbitration cases in which CE zone and CWE were discontinued in the defence team of arbitration in ro CE and CWE contracts respectively. Request was made to review the instruction due to likelinood of lesser interest and inadequate contribution from executives All CEs Command/ADGs to forward their suggestion by 30 April 2019 Mannvah (Bhavesh Kuma Dir (Contracts) For E-in-C