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VID-19 Updates Procurement Guidelines
Last Updated On: 16-Apr-2014
- Advance Payment & Bank Guarantees [OM No. 4CC-1-CTE-2 dated 10-4-0]
- Decision to provide mobilization advance should rest at the level of Board (with concurrence of Finance).
- The Commission does not encourage interest free advance, but, if the Management feels its necessity in specific cases, then it should be clearly stipulated in the tender document and its recovery should be time based and linked to progress of work.
- Part Bank Guarantee against the advance should be taken in as many numbers as the proposed recovery instalments and should be equivalent to the amount of each instalment.
- There should be a clear stipulation of interest to be charged on delayed recoveries either due to late submission of bills by the contractor or any other reason.
- The amount of advance, interest to be charged, if any, its recovery schedule and any other relevant details should be explicitly stipulated in the tender document upfront.
- The advance should preferably be given in instalments and subsequent instalments should be released after getting satisfactory utilization certificate.
- Performance Bank Guarantee
In order to safeguard the Govt. interest, it would be appropriate to take reasonable amount of Performance Bank Guarantee valid upto warranty period for due performance of the contract. The validity of the Bank Guarantees needs to be carefully monitored and whenever extension in the delivery period is granted, the validity of Bank Guarantee should also be appropriately extended so as to protect the Govt. interest. The genuineness of the BGs should be checked from the issuing bank. - Stipulation of delivery period in the contract
The specific delivery period for supply as per the terms of delivery such as FOR station of despatch / destination and for completion of installation with the necessary provision for Liquidated damages / Penalty clause in the event of delay in supplies/ installation needs to be incorporated in the contract. - Guarantee / Warranty Terms
Detailed guarantee/warranty clause embodying all the safeguards be incorporated in the tender enquiry and the resultant contract. It also needs to be ensured that in installation/commissioning contracts, the guarantee/ warranty should reckon only from the date of installation/commissioning. - Modification of contract terms / specifications
After conclusion of the contract, any relaxation in the contract terms / specifications should be severely discouraged. However, in exceptional cases where the modifications/amendments are considered to be absolutely essential, the same should be allowed after taking into account the financial implications for the same. - Post-contract Monitoring
It is essential to accord priority to the post contract follow up. The delivery period should be extended on bonafide request and not in a routine and casual manner. After expiry of delivery period, the consignees should be refrained from exchanging correspondence with the supplier. In case of delay in supplies by the supplier, the liquidated damages to the extent possible need to be recovered. Also in case of delay attributable on the part of the supplier, the L/ C extension charges should be to supplier’s account. In nutshell, there is a need to discipline the suppliers so that the non-performers could be weeded out and the suppliers which can be relied upon with consistent performance, in terms of quality and delivery schedule are encouraged.
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