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GO Ms No 1 Finace Dept Dated

25-02-2012
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GOVERNMENT OF ANDHRA PRADESH

 ABSTRACT

Finance (W&P) Department - Work contract management a

financial management – Strengthening the implementation f
Engineering Departments – Need for strict adherence to A.P.D.S.
Code and G.O.Ms.No.94 of I&CAD (PW-COD) Department, dat
Instructions – Issued.
------------------------------------------------------------------------------------------
FINANCE (WORKS & PROJECTS-F7) DEPARTMNE

G.O.Ms.No. 1

***
O R D E R:-

 A significant portion of State plan and non-plan budget is s

Such works include Irrigation Projects, buildings, roads, reservoir
water schemes. During Eleventh Plan period (2007-12) an amoun
Crores will be spent on works. Rs.48,100 Crores has already be
March, 2011 and an amount of Rs.17,854.00 Crores is estimate
during this financial year. The prime objective of this large capital in
create productive capital assets within a predetermined cost an
Such capital assets will then drive the economic growth and
standards of the people in the state. However, due to the delays/
implementation as well as poor project management, the state gov
cost and time over runs. Collateral benefits like enhanced
increased tax revenue and corresponding increased outlays for
programmes are not accruing to the Government to the e
envisaged.

2. The Chief Secretary chaired a meeting on 9.12.2011

options for resolving the above issues. All the Special Chief Secre
Secretaries/Secretaries of the Departments dealing with work
representatives from Finance Department attended. Based
discussions during the meeting as well as the suggestions receiv
Related titles following instructions are issued, namely:-

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cash management.
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(2)  Prioritising Works: All Departments should immediately review
the sanctioned works and prioritize and identify those w
Download now completed during of 4 2011-12 and   should b
2012-13. These works
completion / delivery of benefits quarter-wise and included in
budget to be prepared by each department for the ensuing bud
the Legislature. The contracts of remaining works which are no
for completion upto 31.3.2013 should be reviewed with referen
of contract for taking appropriate action.

(3) Poorly performing works: All poorly performing works should b

three categories as under, namely:-
(a) All works yet to be entrusted to an agency though t
elapsed from the date of Administrative Sanction.

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-2-

(b) Works entrusted to agencies at least two ye

expenditure incurred so far is less than 25%, and

(c) Works where expenditure is above 25% but no expe

in the past two years.

 A view has to be taken on continuation of these works or otherw

upon the sustainability of the project, departmental priorities, the o
of the expenditure not yet incurred and the terms of the ag
departments should follow the general thumb rule that for cap
maintenance works the work load should not be more than 20
respectively of the budget provision which will ensure adequat
budget provision for works in progress and their prompt completion

(4) Works not commenced: All the works sanctioned in the last two
to be entrusted should be taken up strictly as per G.O.Ms.N
Department, dated 1.7.2003,

(5) Ensuring uniformity of approach across different Departme

practices and interpretation of the existing codes and instructi
Engineering Departments over the entire gamut of project
from arriving at the Standard Schedule of Rates, preparatio
sanction of estimates, obtaining administrative sanctions, tend
procedures, and Extension Of Time (EOT) have resulte
signals being given to contractors. Varying approache
departments are observed for dealing with different aspec
management including giving Extension Of Time for contra
determining the essentiality of Quality Control Certificate for m
of bills and treatment of cost escalation. Bad practices are dr
ones. Therefore, it is necessary that all engineering departmen
approaches to contract management consistent with existin
instructions.

(6)  Adhering to the Implementation Framework: Consolidating on

the past, Engineering Departments have built up an effective
framework of standard operating procedures in the fo
Related titles
Unfortunately, these instructions are not being implemented, l

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such an approach will ensure that projects are completed

committed funds are not blocked Read freedue to delayed clearan
for 30 days
contract management and associated financial manageme
ensured by strict adherence to Andhra Pradesh Deta
Download now Specifications of(A.P.D.S.S.),
4 
Andhra Pradesh Public Work
(A.P.P.W.D.) Code and G.O.Ms.No.94 of I&CAD (PW-COD
dated 1.7.2003. In this connection, the following instructio
should be scrupulously followed by all engineering departments

(a)  Estimates should be prepared only after detailed survey

and finalization of design. Further lump sum provisions
included in estimates without a strong justification;

-3-

(b) Two-stage administrative sanction should invariably

applicable cases. This will ensure that proposals
 Administrative Sanctions with significant increases
estimate are minimized;
(c)  Works should be executed only upto the limit granted by
sanctions. No excess work should be undertaken without
competent authority;
Related titles (d)  Additional works which are to be independently executed
entrusted to the existing agency. Nomination of any kind
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utilized for executing additional works. These savings sh

the Government, and,
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(f)  Works should not be sanctioned beyond 200%/1
capital/maintenance budget allocated to the Department to
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works are completed duringthe contract period.
(7)  Notification of Nodal Department: Irrigation & Command Area
Department (I & CAD) being the largest and oldest of th
departments is hereby declared the nodal department to
view on all cross cutting engineering related issues after co
concerned departments.
(8) Three Issues: Three important issues where the Governm
immediately take a comprehensive and holistic view ap
engineering departments as well as engineering parastatals l
Metro Water Supply and Sewerage Board, Andhra Pradesh P
Corporation and Andhra Pradesh Health and Medical
Development Corporation are listed below.
(9) Treatment of Price adjustment: It is observed that Department
diverse interpretations of the existing G.Os relating to trea
adjustment from 0 to 5%. After careful consideration, it
that hence forth all the Departments should operate variation i
the extent where it is above 5% over the estimated rates. Th
excess is 10%, payment will be made only to the extent
since the contractor factors into his original bid his risk of abs
5% increase.
(10)   A dominant view is that the following approach
 
uniformly across all departments in the matter of treatm
adjustment.

(a)  Should be applicable only for items for which admin

are in place.
(b)  Related to Works estimated at more than Rs.2.00
(c)  Related to Works having completion period of
Months.
-4-
(d)  The revision of rates should be on a quarterly
(f)  Tender premium should not be operated on the vari
monthly.
revised rates by the Board of Chief Engineers wi
(e)  estimated
Differencerates.
in rates over the estimated rates to
the invoice rate or to Board of Chief Engineers appr
The above viewwhichever
should beis examined
less, and, in detail to take necessary
the relevant GOs/instructions of all the Engineering Departments.

(11)   Work Contract Insurance Premium: The Government

Related titles amounts towards work contract insurance premium. The risk

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above risks.
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(12)   Standard Bid Documents: An instance has come
Government where the bid documents for a very large proje
number of deficiencies and inaccuracies and contradictory
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document provided for reimbursement for escalation for all item
Government approval. Such documents weaken the
position making it liable to claims made against them.
are no standard bid documents which are applied un
departments which fully protect the Government’s interest. The
prepare such standard bid documents for works above a critic
bid documents are not already mandated (like in the ca
financed by external funding agencies). The Government
that a set of standard bid documents should be prepared
departments for projects above a threshold value. Such
documents could, if necessary be subsequently modified to s
individual projects in different departments with prior Governme

3. The I&CAD Department as nodal Department should

identified in Para 2, sub paras (10), (11) and (12) above, consult
departments including Finance Department and issue compre
applicable across all the Engineering Departments addressing eac
issues. The orders in respect of the three issues identified above
by 31st March, 2012.

4. All the Special Chief Secretaries/Principal Secretaries/Secr

with the Engineering Departments are requested to ensure strict i
of the above instructions.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHR

Share this document
PANKAJ DWI
     CHIEF SECRETARY TO G
To
 All the Departments in Secretariat.
You might also like
Copy to:-
 All the Prl. Secretaries / Secretaries in Finance Department.
 All the District Collectors in the State.
Escalation
SF/SC.etc for AP Irrigation Projects G.O. Ms No.13 Dt.07-02-2014
with Necessary Enclosers.pdf
//FORWARDED :: BY ORDER//
Ravi Kumar

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