Tenders and Contracts

For Signal and Telecom Supervisors

Way to tenders
● Works proposals
● Abstract estimate
● Approval of work
● Survey
● Detailed estimate
● Sanction of estimate
● Tender process to start
● IRPSM (Indian Railways Projects Sanctions & Management)
Stages before tender award
● Tender schedule preparation after survey
● Eligibility criteria
● NIT (Notice Inviting Tender)
● Corrigendum
● Tender opening
● EMD (Earnest Money Deposit)
● Briefing note and comparative statement
Stages before tender award contd..

● Nomination of Tender Committee (TC)

● Tender Committee Proceedings
● Negotiations
● Acceptance of TC recommendations
● Issue of Letter of Acceptance (LOA)
● Return of EMD to unsuccessful tenderers
● IREPS (Indian Railways E-Procurement System)
Stages after award of tender
● Submission of Performance Guarantee (PG)
● Signing of Contract Agreement (CA) after vetting
● Authorisation for material transactions
● Issue of RDSO and RITES inspection call letters
● Supply of material
● Commencement of execution
● Payment of Security Deposit (SD)
● Record of measurements
● Preparation of material reconciliation statements
Stages after award of tender contd..

● Payment of on account bills

● Extension of currency of agreements
● Processing of variations for sanction
● Negotiations and signing of subsidiary agreement
● Completion of work
● Payment of final bill
● Issue of credential certificate
● Release of PG
Stages after award of tender contd..

● Completion of maintenance period

● Release of SD
● Termination of non-performing contract after issuing 7
days and 48 hours notices and invitation of fresh tender
● Settlement of claims through arbitration and legal means
EMD
● To safeguard against withdrawing or altering offer
● Held as Security deposit for successful tenderer
● Forfeited if the tenderer:
○ withdraws or amends his tender
○ fails to furnish PG
● Waiver for Startup firms
● Value of EMD
○ 2% for value upto Rs 1 Cr
○ Rs 2 lakhs + ½% (Excess over Rs 1 Cr) {Max Rs 1 Cr}
Eligibility Criteria
● Successful completion of similar work during last 07 years
costing each 30% (3 Works) or 40%(2 Works) or 60% (1
work)
○ Similar nature of work to be defined by PCSTE
● Receipt of Total contract amount during the last three
years and in the current financial year, minimum of 150%
of advertised tender value of work
● Non Submission leads to rejection
● Self declaration (notarised affidavit)
● No criteria for works upto Rs 50 lakhs
Tender committee
Direct Acceptance

● e-tenders upto Rs 50 lakhs by JAG/SS (independent)

● Reasoned note on evaluation and acceptance
● No splitting has been done
● Sanctioned detailed estimate is available
● Items, rates & quantities of LOA to be vetted before issue
● Not allowed, if
○ Tender notice period is less than 21 days, or
○ Offer other than lowest financial offer to be accepted
PG
● To ensure due performance of contract by successful
bidder
● @5% of contract value
● To be deposited within 21 days of issue of LOA
● Beyond 21 days upto 60 days with penal interest
● Before signing of agreement
● After 60 days, contract is liable to be terminated duly
forfeiting EMD
● Contractor is debarred from participating in re-tender
● Released after successful completion of work
SD
● In token for the due fulfilment of a contract
● 5% of contract value
● By deduction from running bills of the contractor @10%
● Deposit either in cash or in other accepted forms of
payment.
● EMD to be converted into SD
● Returned to the contractor after
○ Final payment is made
○ Issue of No Claims certificate
○ Issue of Maintenance certificate duly completing maintenance
period
Material management
● Indemnity bond
● Inspection agency
● Genuineness of certificate
● Quality of material supplied
● DMTR particulars in MB
● Material issue as per progress
● Reconciliation
● Stock verification
Recording measurements
● Machine Numbered
● Entries directly in measurement books at the site of work
● By supervising authority
● Continuous recording
● No blank pages nor should any page be torn out
● Corrections only by crossing & initialed
● Evidence in a Court of Law
● Test check
● On account and final bills
● eMeasurement
Extension of currency
● 17 A (i) - Due to increase in scope of work
● 17 A (ii) - Delay not due to Railways or contractor
● 17 A (iii) - Delay due to Railways
● 17 B - Delay due to contractor - imposition of LD
○ Upto 20% original period - 0.01% to 0.1% of contract value
per week
○ 20% to 30% period - 0.2% of contract value
○ 30% to 40% period - 0.3% of contract value
○ Above 40% period - 0.5% of contract value
● Provision of Bonus for early completion - upto 3% @1%
per month
Variations
● Minor value items (<1% original contract value) and others
● Others - variation in quantities
○ Upto 125% at same rates
○ 125% to 140% at 98% rates
○ 140% to 150% at 96% rates
○ Beyond 150% at 96% rates
● Minor value items - variation in quantities
○ 100% to 200% at 98% rates
○ Beyond 200% at 96% rates
Variations contd..
● Introduction of new NS item
○ Upto Rs 5 lakhs per item or 10% contract value whichever is less,
without finance concurrence
○ Otherwise with finance concurrence
● Sanction of variation from competent authority
● Operation of items less than 75% require approval of SAG
● Variation in existing contract if new agency can not be
brought in
● Not to change original character, scope and purpose
● No vitiation
 Types of tenders
● Based on mode of invitation
○ Open Tender - Default, open advt, large competition
○ Limited Tender - Approved list, limited competition
○ Special Limited Tender - Specialized, Eligibility
○ Single Tender - Emergency, to be avoided
● Based on bidding system
○ Single packet system
○ Two packet system
■ Technical bid
■ Financial bid
● Two packet system for tenders > Rs 10 Cr
Quotations dispensing open tenders
● JAG and SS (Independent )
○ Directly related to safety works - Rs 2 lakhs /case without
concurrence with Rs 10 lakhs limit per year
○ Others including safety works - Rs 5 lakhs/case with concurrence
with Rs 60 lakhs limit per year
● SAG and PHoD
○ Rs 10 lakhs/ case, annual ceiling Rs 1.2 Cr, with concurrence
● Minimum 3 quotations from reputed agencies
● Reasonability of rates to be seen by Accepting authority
● Only works of urgent nature
Tips for effective contract management
● Your success lies in the success of contractor.
● Big favour - Early completion and prompt payments
● Own the project. Take pride in it.
● Thorough survey
● Meticulous planning
● Continuous monitoring of project progress and mid-course
corrections, as warranted
● Watchful eye on critical activities from day 1
● Timely involvement in interdepartmental coordination
● Timely alert to top administration on bottlenecks
Tips for effective contract management contd..
● Be part of solution.
● Create conducive environment for all stakeholders.
● Paper works and sanctions always precede execution.
● Involve customer from survey stage. Put yourself in their
shoes.
● Start seeing things in integrated fashion.
● Take chances to innovate.
● Grab opportunity to enhance skills.
● Keep observing the happenings around you.
Tips for effective contract management contd..

● Bring in standardisation.
● Quality in work
○ Marking
○ Hidden measurement related jobs
○ Regular site visits
○ Joint inspections with end user
○ Documentation
○ Field book
○ Site order book
Tips for effective contract management contd.

● Quality in work
○ Material inspection as per laid down protocol
○ Awareness about consignee inspection
○ Proper storage of material at site
○ Pre-commissioning checklists involving OEMs
○ Battery retentivity test
○ Interlocking test and mandatory tests at all levels
○ Test checks on measurements
○ Control on important decisions
Tips for effective contract management contd.

● Possess all contract related documents. Contract

agreement is like a bible.
● Issue material to site only as per requirement.
● Submit material statement along with each on account bill.
● Keep a watch on currency, requirement for variation and
funds availability. Initiate proposals accordingly.
● Seek clarification from higher ups in case of doubts.
● Make regular payments for the work done.
● Complete sub works completely before measurements.
Tips for effective contract management contd.
● Report poor progress to officers.
● Liaise with all agencies for early completion and handing
over.
● Provide training to user.
● Strive to handover final documentation on the day of
commissioning.
● Rectify the defects of joint inspection early.
● Conduct joint inventory. Complete DS -8. Return left over
material.
● NI is your show. Mobilise adequate resources and give
your best.
Tips for effective contract management contd.
● Estimates and tenders with current rates
● Feedback to Officers on the improvements to be made in
contract conditions including rates
● Built in scope for phase work and known causes of
deviation & delay
● Look for latest policy of open line for adaption
● Keep abreast with latest policies on technical subjects and
tendering
● Learn from previous mistakes, experience, colleagues and
other departments’ good practices
Thanks for your attention !!!
C. Neelakanta Reddy
sptrng@iriset.railnet.gov.in
9392949801