ABSTRACT OF IMPORTANT CIRCULARS - NPCC Ltd.npcc.gov.in/pdf/cvoimportantcirculars.pdf ·...

ABSTRACT OF IMPORTANT CIRCULARS

RELATED TO CONSTRUCTION

PREPARED BY NPCC VIGILANCE

National Projects Construction Corporation Ltd.

(A GOVERNMENT OF INDIA ENTERPRISE)

(AN ISO 9001:2000 COMPANY)

TABLE OF CONTENTS

Sl. No.

Particulars Office Orders/ Circulars referred in the booklet

Page No.

1 Necessities and justification of work

Notes from Vigilance 01

2 Preparation of DPR/ Estimates


a) Use of products with standard specifications

CVC Circular No. 14/4/07 dated 26.04.07

02

b) Alternative Item - rate only items


3 Appointment of Consultants

Notes from Vigilance

03

a) Participation of Consultants in tender- guidelines regarding

CVC Office Order No. 75/12/04 dated 24.12.04

03

TENDER STAGE


4 Tender/ Bid documents


5 Tender sample clause CVC Office Memo dated 15.10.03

05

6 Notice inviting tenders Notes from Vigilance

06

a) Rejection of tender without any reasons


07

7 Improving Vigilance Administration Increasing transparency in procurement / sales etc.

CVC Directives vide 98/ORD/ 1dated 18.12.03 & Office orders dated 09.02.04 and 11.02.04

07

8 Pre-Qualification Criteria (PQ)


a) Fixing of Pre-qualification criteria in clear terms (PQ)

CVC Office Memo dated 07.05.04

09

b) Fixing of Pre-qualification criteria (PQ)


09

c) Transparency in Tendering System- Acceptability of the firm in qualifying criteria-guidelines regarding


11

9 Postponement of Tender Opening


11

10 Receipt of Tenders CVC Office Memo dated 08.06.04

12

11 Opening of Tenders CVC Office Memo dated 08.06.04 &Office Order No. 71/12/05 dated 09.12.05

12

a) Tender evaluation and award of work


12 Techno Commercial Evaluation of Tender open/ advertised tenders


a) Limited Tender Notes from Vigilance

14

13 Post tender negotiations- Negotiation with L-1

CVC Circular No. 4/3/07 dated 03.03.07 & No. 01/01/10 dated 20.01.10

15

14 Reasonableness of Price/ Market

rate justification


15 Time Bound processing of tenders

CVC Circular No. 31/ 11/08 dated 06.11.08

17

16 Qualified acceptance of offer


17

EXECUTION STAGE


17 Award of work and signing of contract agreement


a) Transparency in works/ Purchase/ Consultancy contracts awarded on nomination basis

CVC Circular No. 15/5/ 06 dated 09.05.06, Office Order Nos. 23/7/07 dated 05.07.07 & 19/5/10 dated 19.05.10

18

18 Advance payment & Bank Guarantees


a) Mobilization Advance CVC Circular Nos. 10/4/07 dated 10.04.07, 5/2/08 dated 05.02.08 & 02/02/11 dated 17.02.11

21

b) Performance Bank Guarantee


23

c) Acceptance of Bank Guarantee

CVC Circular No. 01/01/ 08 dated 31.12.07

23

19 Insurance Notes from Vigilance

24

20 Completion schedule of contract


24

a) Time & cost over runs Notes from Vigilance

25

21 Defect liability period clause


25

22 Control & adequate supervision


26

23 Payment terms and applicability of taxes and duties.


a) Payments for the work done/ supply made/ services provided by the contractor/vendors etc.

CVC Office Order Nos. 20/4/04 dated 06.04.04 & 68/10/04 dated 20.10.04

26

24 POST CONTRACT MANAGEMENT Modification of Contract Conditions / specifications


25 Post contract monitoring Notes from Vigilance 28

a) Appointment of Arbitrator as per contract

NPCC letter ref. No. 000735/97 dated 12.05.05

28

b) Excess payment to the Agency

CVC Circular No. 21/ 05/ 10 dated 02.06.10

29

c) Banning of business dealings with firms/contractors-clarification reg.


29

26 Back to back tie up by PSUs -Instruction regarding

CVC Office Memo dated 20.10.2003

29

27 Procedure/Guidelines for Pre- tender/ post tender tie up etc. for construction works.

NPCC/circular No. DF/ 301/ dated 16.07.03

31

28 Observation & Remedial action to allotment of works and payment made

NPCC Circular No. 400782/ Misc /IA/35 dated 23/24.05.07

31

29 Improving Vigilance administration by leveraging technology -Increasing transparency through use of website.

CVC Office Order Nos. 13/3/05 dated 16.03.05 & 13/4/07 dated 18.04.07 and circular No.17/7/09 dated 14.07.09

33

30 Implementation of E-tendering solutions

CVC Office Order No. 01/ 01/09 dated 13.01.09 &Circular No. 29.09.09 dated 17.12.09 & No. 18/04/2010 dated 26.04.10

33

31 Menace of counterfeit and refurbished IT products


34

32 Introduction to the Integrity Pact

CVC Office Order Nos. 41/12/07 dated 04.12.07, 43/12/07 dated 28.12.07 & Circular No.18/05/08 dated 19.05.08 & 24/08/ 08 dated 05.08.08

35

33 Adoption of the Integrity Pact

CVC Circular No. 10/5/ 09 dated 18.05.09 & 22/08/09 dated 11.08.09 & 17/04/10 dated 19.04.10

38

34 Corporate Social Responsibility (CSR)


35 Initiative to improve Transparency

39

1. Right to Information Act, 2005

39

2. Information Technology Act, 2000

39

3. Introduction to E- Governance

40

a) Leveraging of Technology for Improving Vigilance Administration in the National E-Governance plan


40

4. Integrity Pact

41

5. Corporate Governance and Ethics -Challenges and Imperatives


41

36 Examination of Public procurement (Works/ Purchases/ services) contracts by CVOs


41

a) Check list of procurement contracts

Annexure-I 42

37 The Chief Technical Exami-ners’ Organization(CTEO)

CVC web site http/www.cvc.nic.in

43

a) Submission of Quarterly Progress Report (QPR) to Commission

CVC Office Memo date 20.10.98,20.07.01,16.05.05,10.11.05 & Office Order No. 37/11/2010 dated 22.11.10

43

b) Common deficiencies observed in QPRs

CVC Office Memo No. 98 VGL 25 dated 28.05.09

44

c) Conduction of Independent Technical Examination of Works

44

d) Collection of Data prior to Inspection

44

(i) Annexure – I , II & III For CTE inspection 46-48 (ii) Performa A, B, C & D For CTE inspection 49-51 38 Design mix concrete &

other deficiencies CVC Circular No. 34/10/ 10 dated 07.10.10

45

39 Annual Property Returns

Note from Vigilance 52

a) Performa for APR In English & Hindi 53-54 40 Transparency in tendering

for complex nature procurement


55

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1. NECESSITIES AND JUSTIFICATION OF WORK

Proposals are initiated by organizations for execution of Project after considering all

aspects including requirement of the Project/Work after establishing the need or justification of such works and anticipating infrastructure inputs to execute the work.

Before according administrative approval for the execution of any project, it is

necessary to establish techno-commercial viability of the project in terms of rate of return and related benefits as also to evaluate the available alternatives to ensure an optimum utilization of public funds. One time purchase of capital plant and machinery should be justified with reference to the actual intended use.The equipment must confirm to the latest specification and technology available in the market. The state of art technology and the life of the equipment along with availability of spares, etc. should be kept in view while deciding the procurement. Gross over-designing cannot be justified on the basis of unpredictable long-term futuristic demands.

2. PREPARATION OF DPR /ESTIMATES

Successful contracts performance depends on the quality of detailed project report. The detailed project report prepared on ad-hoc basis based on some old project and not according to the present site requirements results in delays, deviations resulting in time and cost overrun. The detailed project report prepared in a hurried manner without checking the conformity/consistency among various schedule of items, drawings, specifications and contract conditions etc. further adds to time and cost overrun of the Project. The poor DPR leaves opportunity for the contractor to exploit and gain profits out of ambiguity in the contract.

Thus estimate of rates is a vital element in establishing the reasonableness of prices

and therefore preparation of estimates for contracts is an area, which needs special emphasis. A well-defined scope of work and a realistic market rate estimate can prove to be a vital input for successful execution of a contract with high standards of quality. The estimate should not be prepared only on the basis of last accepted rates though accepted rates do help in the preparation of the estimates. The estimates should take into consideration all relevant factors based on the prevailing market price of various inputs at the concerned locations and should be based on the actual site conditions. The estimates inter-alia should include the basic price, fabrication charges, inspection fees, duties, packing, handling and transportation charges, sales tax on works (WCT), octroi or any other statutory levies and installation, erection, testing and commissioning charges, license fees, contingencies etc as applicable at the time of conception of the project.

Do prepare DPR as per actual site requirement in consultation with the field staff otherwise it may lead to deviations and delay.

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Do ensure conformity among nomenclature of the items, drawings and specifications to avoid ambiguities at a later stage.

Do take care to prepare estimates on the basis of detailed analysis of rates considering rates prevailing at the project site to arrive at realistic cost.

Don’t prepare estimates solely on the basis of last accepted rates of similar tender.

a) Use of products with standard specifications

Ambiguous and vague specifications permit the contractor to do sub standard work. Necessary care should be taken for drafting tender documents particularly while preparing specification for special items.

The items with standard specifications only should be stipulated in the bid

documents. In case, items with out standard specifications are to be procured, reasons for procuring such items may be recorded and reasonability of rates must be checked before placing order. (For further details: -CVC Circular No. 14/4/07 dated 26.04.07 on “Use of Products with standard specification”)

• Do prepare detailed estimates from drawings /sketches fully supported by

calculations as far as practicable.

• Do try to include items with standard specifications only. However, if inclusion of some items without standard specification becomes unavoidable, reasons for procuring such items must be recorded.

• Do prepare cost estimate based on CPWD/State PWD norms only and wherever the norms are not available, market rates with proper verification be taken

• Do include in the estimate the basic price, fabrication charges, inspection fees, duties, packing, handling and transport charges, erection, testing and commissioning charges, contingency charges etc as applicable at the time of conception of the project for preparing estimate based on realistic market rates and include all commercial clauses including taxes, duties of all types and other statutory charges.

• Do clearly mention various conditions of contract such as General conditions of contract, Technical specifications and Special conditions of contract. Don’t mention conflicting conditions.

• Don’t make vague estimates without adequate details, which may lead to huge quantity variations and creation of extra and substituted items. Don’t include such items or scope of work which are not needed in the work.

b) Alternative items- rate only items

These items are provided without any quantities in tender documents. Contractors invariably quote exorbitant rates for such items as the amounts corresponding to such rates are not reflected in the comparative statements. No

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alternative items should be provided in the tender document.If any extra item becomes necessary to be executed, then it is always safer to work out a rate for such an item according to laid out procedure in agreement for extra & substituted items.

3. APPOINTMENT OF CONSULTANTS

Consultants are appointed due to lack of in-house expertise in technical matters. The appointment should be need based and for specialized jobs only and should not be done in an ad-hoc and non-transparent manner without inviting tenders and without collecting adequate data about their performance, capability and experience.Their selection should be made in a transparent manner through competitive bidding. The scope of work entrusted to the consultant and their role should be clearly defined and the contract should incorporate the clauses having adequate provision for penalizing the consultants defaulting by them at any stage of the project including delays attributable to them. Schedule indicating maximum permissible time for each activity should be prepared with a view to arrest time over runs of the project. The consultants should be appointed with clearly established job-content and consultation fee payable to them. The role of the consultant should be advisory and recommendatory and final authority and responsibility should be with the departmental officers only.

a) Participation of Consultants in tender – guidelines regarding

Consultants are appointed by the organization for preparation of project report.

These appointments are made for any project, expansion, modernization/modification of the existing projects etc. The selection should be made with maximum attention to the suitably, competence and proven track record.

CVC directed that the Consultants/firm hired to provide consulting services for the preparation or implementation of a project and any of its affiliates will be disqualified from subsequently providing goods or works or services related to the initial assignment for the same project. (For further details: -CVC Office Order No. 75/12/04 dated 24th Dec 2004 on “Participation of consultants in tender-guidelines regarding”)

• Do appoint consultant in a fair and transparent way.

• Do provide advisory role only to the Consultant keeping the decision making to rest with executives.

• Do provide safeguards against consultant’s failure such as performance guarantee professional liability insurance etc.

• Don’t give decision making to the consultants which should rest with the executives. Their role should be advisory.

4

TENDER STAGE Tender stage is bifurcated into following stages

Preparation of tender documents.

Inviting & opening of tenders

Prequalification

Tender evaluation and award of work

4. TENDER/ BID DOCUMENTS Preparation of bid documents is also an important part of tendering as the tender after acceptance and signing because the contract which is a legal document. An ambiguous agreement leads to poor contract performance and litigations as well and gives an opportunity to a contractor to make profit out of ambiguous conditions. Tender documents should be prepared after checking the conformity among the schedule of items, drawings, specifications and contract conditions etc., as different part of the tenders are prepared by different people which should be compiled properly after correlating them. Care should be thus taken to ensure that the technical specifications do not contradict with items in bills of quantity or the working drawings. Tender documents containing instructions to bidders, the general and the special condition of contract should be updated to suit the contract requirements. All the important clauses pertaining to earnest money deposit, completion schedule, factory testing of equipments, performance bank guarantee, payment terms, penalty for delayed completion, comprehensive insurance cover, contractors liability, safety arrangements, statutory arrangements for labour welfare, arbitration etc. should be incorporated in the bid documents in a proper and explicit manner so as to fully safeguard the interest of the organization and to avoid disputes. These clauses also have an indirect financial bearing on the evaluation of offers on equitable and fair basis and in a transparent manner and execution of the contracts. The bidders are required to be made aware of what is expected to be done by them after award of the contract so that all factors may be considered by them while submitting their bids. Rate only items should not be provided in the tender documents as Contractors invariably quote exorbitant rates for such items as amount of these items are not reflected in the comparative statements. If any such item becomes necessary, then rates for such item should be calculated as per contract conditions. The primary objective of submission of Earnest Money Deposit is to establish the earnestness of the bidder so that he does not withdraw, impair or modify the offer within the validity of the bid. It also helps in restricting, if not eliminating ‘speculative’, frivolous’ or ‘waits and see bids’. Since any relaxation regarding submission of EMD has financial implication besides giving encouragement to the bidders to submit frivolous bids therefore the terms and conditions should clearly stipulate that the offers without EMD would be considered as unresponsive and rejected. The form in which EMD is acceptable should also be clearly mentioned in the tender documents.

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The amount of earnest money deposit particularly in the two-bid system needs to be incorporated as a fixed and reasonable amount on the basis of estimated value of the proposed work. The evaluation/ loading criteria on account of acceptable range of deviation in the commercial terms and conditions viz. payment terms, request for advance, security deposit, completion schedule, performance bank guarantee, etc. should be incorporated in the bidding documents. The evaluation of tenders should not be based on conditional discounts and suitable clauses regarding this should be included in the bidding documents. The detailed generic technical specifications along with a list of preferred makes of major equipments should be incorporated in the bid documents. In addition, the performance parameters and the technical evaluation criteria, if any, need to be specified in the bidding documents in unequivocal terms. However, despite all precautions, there may be some contradicting and conflicting specifications and conditions. In order to overcome such crises, an order of preference should also be mentioned in the tender document.

• Do update tender documents to suit the present contract requirements containing instructions to bidder,the general and the special conditions of contract.

• Do fix reasonable amount of EMD on the basis of an estimated value of the proposed work particularly in the two bid system. The amount and the form in which EMD is acceptable should be clearly mentioned in the tender document.

• Do incorporate in the bid document, detailed generic technical specifications along with a list of preferred makes of major equipments.

• Do mention the order of precedence in the tender document to overcome some contradicting and conflicting specifications/conditions.

• Do specify the performance parameters and the technical evaluation criterion, if any, in unequivocal terms in the bidding document.

• Don’t forget to mention important clauses pertaining to earnest money deposit, completion schedule, testing of equipments, performance bank guarantee, payment terms, penalty for delayed completion, comprehensive insurance cover, contractor’s liability, safety arrangements, statutory requirements for labour welfare, arbitration clause etc. in a proper and explicit manner.

5. TENDER SAMPLE CLAUSE While procuring clothing and other textile items, the tender inviting authority insists on submission of a tender sample by the bidders, though detailed specifications for such items exist. The offers are rejected on the basis of tender sample not conforming to the requirements of feel, finish and workmanship as per the master sample. This is in spite of the fact that the bidders confirm in their bids that supply shall be made as per the tender specifications as stipulated in the bid document.

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CVC advises that Government departments /organizations should consider procurements of such items on the basis of detailed specifications. If required, provision may be stipulated for submission of an advance sample by successful bidder(s) for indeterminable, parameters such as shade/ tone, size, make-up, feel, finish and workmanship before giving clearance for bulk production of the supply. Such a system would not only avoid subjectivity at the tender decision stage but would also ensure healthy competition among bidders and thus take care of quality aspect as well as reasonableness of prices. (For further details: -CVC Office Memorandum dated 15th October 2003 on “Tender Sample Clause”)

• Do ensure that the PQ criteria are exhaustive, yet specific and there is fair competition and clearly stipulated in unambiguous terms in the bid document.

• Do fix in advance the minimum qualification, experience and number of similar works of a minimum magnitude satisfactorily executed in terms of quality and period of execution.

• Do incorporate the criteria regarding satisfactory performance of works, personnel, establishment, plant, equipment etc. according to the requirement of the project.

• Don’t deny participation to any bidder during pre qualification / post qualification for the reasons unrelated to its capability and resources to successfully perform the contract unless such parties are black listed.

6. NOTICE INVITING TENDERS The most competitive and transparent mode of tendering is open tendering. In order to generate wide publicity for better competition and to avoid cartel formation and favoritism to selected firms, it is imperative that the advertised/global tender notice should be published in selected ‘National’ and ‘Local’ dailies with large circulation. Tender notice may also be displayed on the notice board of other organizations. In addition to the paper advertisements, the tender notices should also be put on the website indicating all the details of the tender. Limited tender should also be put on the website. The Notice Inviting Tender (NIT) should contain all the relevant information in an explicit and categorical manner like estimated value, EMD, tender sale and tender opening dates. In order to generate fair and adequate competition, it is important that sufficient time depending upon the magnitude and complexity of the project should be given to the bidders to submit their bids. The tender sale should preferably be kept open till the date of tender opening or just one day prior to the date of tender opening. For big projects, extension, if asked by a majority of the bidders, may be considered in the larger interest of the project. Any corrigendum issued in support of extension of dates or any other information should be individually intimated to the bidders who had purchased the tender and also be published in the media for wider publicity.

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a) Rejection of tender without any reasons Some of the notice inviting tenders (NITs) has a clause that the tender applications could be rejected without assigning any reason. The above clause in the bid document does not mean that the tender accepting authority is free to take decision in an arbitrary manner. The Authority is bound to record clear, logical reason for any such action of rejection /recall of tender on the file. (For further details: -CVC Office Order No. 15/3/05 dated 24th March 2005 on “Notice inviting tenders-regarding”). The acceptance/rejection of any bid should not be arbitrary but on justified grounds as per laid down specifications as the bidders spent lot of time and energy initially in preparing the bid besides financial costs. 7. IMPROVING VIGILANCE ADMINISTRATION: INCREASING TRANSPARENCY IN PROCURE-

MENT /SALES ETC. The organization must ensure publication of the information pertaining to tenders on its website. Details of website address where the said publication has been made/ proposed to be made, must be given wide publicity to ensure maximum participation of the parties. After the publication of complete and up-to-date bid documents, application forms etc. in the web site, information must be sent immediately to the respective Vigilance Officers/CVO, in order to monitor the system of publicity of open tenders. Further, for short term tenders pertaining to the works below a specific value, notice may be put up on the respective website of the organization as the same saves time and costs involved in the newspaper advertisements. In order to bring about greater transparency in the procurement and tendering processes, there is need for widest possible publicity through well circulated national and local news papers besides loading the NIT and also tender documents in a down loadable form on the web site. The web site publicity is to be given even in the case of limited tenders. Improving vigilance administration is possible only when system improvement is made to prevent the possibilities of corruption. The Central Vigilance Commission issued following instructions for compliance with regard to all cases where open tender system is resorted to for procurement or for auction /sale etc. of goods and services in order to bring about greater transparency. 1. In addition to the existing rules and practices regarding issue of publicity of tenders through newspaper, trade journals and providing tender documents manually and through post etc., the complete bid documents along with application form shall be published on the web site. It should be ensured that the parties making use of this facility of website are not asked to again obtain some other related documents from the department manually for purpose of participating in the tender process i.e. all up to date documents should remain available and shall be equally legally valid for

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participation in the tender process as manual documents obtained from the departments through manual process. 2. The complete application should be available on the website for purposes of downloading and application made on such a form should be considered valid for participation in the tender process. 3. The organization must give its website address in the advertisement/ NIT published in the newspaper. 4. If the organization wishes to charge for the application form downloaded from the computer then they may ask the bidding party to pay the amount by draft / cheque etc. at the time of submission of the application form and bid documents. While the above directions must be fully complied with, efforts should be made to eventually switch over to the process of e-procurement /e-sale wherever it is found to be feasible and practical. (For further details:- CVC directives vide 98/ORD/1 dated 18th December 2003 and Office Orders dated 9th February 2004 and 11th February 2004).

• Do float press advertisements for open tenders in Local & National newspapers for wide circulation and provide all the relevant information regarding estimated cost, Earnest Money Deposit, period of sale of tender, place and time of sale, submission and opening of tender and organization website address in the advertisement /NIT published in the newspapers.

• Do display the NIT including all necessary details of the tender (be it limited or open tender) on the website of the organization.

• Do try to follow two-bid system.

• Do provide sufficient time to bidder for preparation and submission of the bid.

• Don’t reject any tender without assigning any reason as tender accepting authority is bound to record clear and logical reasons for all actions of rejection.

• Don’t forget to intimate any corrigendum issued in support of extension of date or any other information individually to the parties by various means. It should also be published in the media and displayed on organization website and notice boards for wider publicity.

8. PRE-QUALIFICATION CRITERIA (PQ) The prequalification criteria which the Organization wants to adopt should be made explicit at the time of inviting tenders. The pre-qualification criterion is a yardstick to allow or disallow the firms to participate in the bids. The purpose of any selection procedure is to attract the participation of reputed and capable firms with proven track records. Vaguely defined PQ criteria results in either stalling the process of finalizing the contract or the contract is awarded in a non-transparent manner.

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The most important aspect of the PQ criteria is the nature of work for which the experience is required. While framing the pre-qualification conditions, the end purpose of doing so should be kept in view and the PQ criteria should be prepared specific to the requirement of the contract and in clear terms. The cut off dates regarding work experience should be clearly indicated. For bigger and new projects, as far as possible, a preliminary survey may be conducted to collect relevant data from the market about the firms of repute in the field .The factors that may be kept in view while framing the PQ criteria are: - a) The nature of the work;

b) The scope of work involved in the project;

c) Likelihood of availability/ experience of firms for such works;

d) Volume/amount of the work;

e) Financial status.

In addition to above, the cut off dates for the period of work experience, the volume in terms of minimum capacity of equipments as well as in terms of monetary amount should be clearly indicated in the pre-qualification criteria so as to avoid any ambiguity at the time of evaluating the bids. Timely completion of works is an important attribute while evaluating the credentials of the firms. a) Fixing of Pre-qualification criteria in clear terms (PQ) Pre-qualification criteria specified in the tender document should neither be made very stringent nor very lax to restrict/facilitate the entry of bidders. It is clarified that the guidelines issued are illustrative and these may be suitably modified for specialized jobs/works, if considered necessary. However, it should be ensured that the PQ criteria are exhaustive, yet specific and clearly stipulated in unambiguous terms in the bid document so that there is fair competition among the bidders. (For further details: - CVC Office Memorandum dated 7th May 2004 on “Prequalification Criteria (PQ)”) b) Fixing of Pre-qualification criteria (PQ) The pre-qualification criteria are yardstick to allow or disallow the firms to participate in the bids. It is therefore necessary to fix in advance, the minimum qualification, experience and number of similar works of a minimum magnitude satisfactorily executed in terms of quality and period of execution. While framing the pre qualification criteria, the end purpose of doing so should be kept in view. The purpose of any selection procedure is to attract the participation of reputed and capable firms with proper track records. The PQ condition should be exhaustive, yet specific. The factors that may be kept in view while framing the PQ criteria includes the scope and nature of work, experience of firms in the same field and financial soundness of work. The following points must be kept in view while fixing the eligibility criteria: -

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A) For Civil/ Electrical Works 1) Average annual financial turnover during last 3 years, ending 31st March of the

previous financial year, should be at least 30% of the estimated cost. 2) Experience of having successfully completed similar works during last 7 years

ending last day of month previous to the one in which applications are invited should be either of the following: -

a. Three similar completed works costing not less then the amount equal to 40%

of the estimated cost. Or

b. Two similar completed works costing not less then the amount equal to 50% of the estimated cost.

Or c. One similar completed work costing not less than the amount equal to 80% of

the estimated cost.

3) Definition of “similar works” should be clearly defined. In addition to above, the criteria regarding satisfactory performance of works, personnel, establishment, plant, equipment etc. may be incorporated according to the requirement of the project. B) For Store/Purchase Contracts Pre qualification / post qualification shall be based entirely upon the capability and resources of prospective bidders to perform the particular contract satisfactorily, taking into account their: (1) Experience and past performance on similar contracts for last 2 years; (2) Capabilities with respect to personnel, equipment and manufacturing facilities; (3) Financial standing through latest I.T.C.C., Annual report (Balance Sheet and Profit

and Loss Account) of last 3 years, the quantity, delivery and value requirement shall be kept in view, while fixing the PQ criteria.

No bidder should be denied pre qualification / post qualification for the reasons unrelated to its capability and resources to successfully perform the contract. (For further details: -CVC Office Memorandum dated 17th December 2002 on “Pre-qualification Criteria (PQ)”) Whatever pre-qualification, evaluation/ exclusion criteria etc. which organization wants to adopt should be made explicit at the time of inviting tenders so that basic concept of transparency and interests of equity and fairness are satisfied. The acceptance / rejection of any bid should be arbitrary but on the justified grounds as per the laid down specifications, evaluation/exclusion criterion leaving no room for complaints as all the bidders spent a lot of time and energy in preparing the bids besides incurring financial costs.

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(For further details: -CVC Office Order No. 33/7/03 dated 9th July 2003 on “Short-coming in bid documents.”) It should be ensured that pre-qualification, performance and evaluation criteria are incorporated in the bid documents in clear and unambiguous terms as these criterions are very important to evaluate bids in a transparent manner. Whenever required, the departments/ organizations should have follow two-bid system i.e. technical and price bids. The price bid should be opened only of those vendors who were technically qualified by the Departments/ Organization. (For further details: -CVC Office Order No. 44/9/03 dated 4th September 2003 on “Irregularities in award of contracts.”) c) Transparency in Tendering System -Acceptability of the firm in qualifying criteria-guidelines regarding In order to maintain transparency and fairness, organization should evolve a practice of finalizing the acceptability of the building firms in respect of the qualifying criteria before or during holding technical negotiations with them. Obtaining revised price bids from the firms, which do not meet the qualification criteria, would be incorrect. Therefore, the exercise of short listing of the qualifying firms must be completed prior to seeking the revised price bids. Moreover, the intimation of rejection to the firms whose bids have been evaluated but found not to meet the qualification criteria, along with the return of the un-opened price bid will enhance transparency and plug the loopholes in the tendering system. (For further details: - CVC Office Order No. 72/12/04 dated 10th December 2004 on “Transparency in tendering system-Guidelines regarding”). 9. POSTPONEMENT OF TENDER OPENING

In order to give equal opportunity to all the bidders and to maintain sanctity of tendering system, it is of paramount interest that any change in the tender terms and conditions, specifications and tender opening date, etc. should be notified to all the bidders, sufficiently in advance of the revised tender opening date. In case of the open tenders through media, notifications should invariably be through the publication of corrigenda in the media and also through individual intimation of those firms who had purchased the tender documents within the original tender sale date. However in case, the extension is regarding submission of first bid like pre-qualification documents in case of single bid system and techno-commercial bid in case of two-bid system, the tender sale date should also be extended suitably so as to allow new participants in the bid to increase the competition.

• Do notify to all the bidders any change in the tender terms and conditions, specification and tender opening date etc., sufficiently in advance of the revised tender opening date.

• Do notify through the publication of corrigendum in the media and web site.

• Do extend tender sale date suitably so as to allow new participants in the bid in order to increase the competition, if technically possible.

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• Don’t extend date of submission or opening of tender without any genuine reason

10. RECEIPT OF TENDERS In receipt and opening of the tenders, the emphasis should be given to maintain transparency. Suitable arrangement need to be ensured for receipt of sealed tenders at the scheduled date and time through conspicuously located tenders boxes. The tender notice should categorically contain the information regarding receipt of bids, viz. designation and address of officer to whom the tender should be addressed, the superscription/ reference number to be indicated on the envelopes and the due date of opening of tenders to be written on the envelope containing tenders. In cases, where the tenders are required to be submitted by hand, it may be ensured that the names and designation of at least two officers are mentioned in the bid documents and information about these officers should also be displayed at the entrance/ reception of the premises where tenders are to be deposited so as to ensure convenient approach for the bidders. The tenders after receipt should be opened on the stipulated date and time in the presence of intending bidders. (For further details: -CVC Office Memorandum dated 8th June 2004 on “Receipts and Opening of Tenders”).

• Do ensure suitable arrangements for receipt of sealed tenders at the scheduled date, time and location through conspicuously located tender boxes.

• Do ensure that the tender notice should categorically contain the information regarding receipt of bids, viz. designation and address of officer to whom the tender should be addressed and due date and time of opening of tender.

• Do ensure that in case where the tenders are required to be submitted by hand, the names and designation of at least two officers are mentioned in the bid documents.

• Do display information about these officers at the entrance/ reception of the premises where tenders are to be deposited so as to ensure convenient approach for the bidders.

11. OPENING OF TENDERS The price bids should be opened only of those vendors who were technically qualified by the Organization and should be done in presence of the bidders ‘representatives’ who chose to be present. While opening the tenders by the tender opening officer/committee, each tender should be numbered serially, initialed and dated on the first page. It needs to be ensured that each page of tender should be encircled and initialed with the date, particularly the price and important terms and conditions. Alterations in tenders, if any, made by the firms should be initialed legibly to make it perfectly clear that such alterations were present on the tenders at the time of opening. Whenever any erasing , cutting or overwriting is observed, the substituted words should be encircled and initialed in red ink by the tender opening officer/ committee to make it perfectly clear that such alterations were present on the tenders

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at the time of opening. The tender opening officer/committee should also prepare an ‘ on the spot statement’ giving details of the quotations received and other particulars like the prices, taxes/ duties, EMD, any rebates etc. as read out during the opening of tenders. A proper tender opening register in a printed format should be maintained containing information viz. date of opening including extension, if any, names and signature of all the persons present to witness the tender opening including the bidders’ representatives also.

In cases involving the two bid systems, it needs to be insured that the tender opening committee should sign on the envelopes containing the price bids and the due date of opening the price bids should be clearly mentioned on the envelopes and should again be placed in the tender box or the envelopes containing the price bids should be put in a bigger envelope / box and the same should be properly sealed duly signed by the tender opening officer /committee and bidders representative. (For further details: -CVC Office Memorandum dated 8th June 2004 on “Receipt and Opening of Tenders”). The members of the tender committee should give an undertaking at the appropriate time that none of them has any personal interest in the Companies/ Agencies participating in the tender process. Any member having interest in any Company/Agency should refrain from participating in the Tender Committee. (For further details: -CVC Office Order No. 71/12/05 dated 9th December 2005 on “Undertaking by the Members of Tender Committee/Agency”).

• Don’t accept bids that are received after scheduled due date and time of receipt of bid.

• Do open tenders in presence of the bidder’s representatives who chose to be present and don’t entertain any unauthorized person during tender opening.

• Don’t consider bids without earnest money.

• Do ensure that each page of tender, particularly the price and important terms and conditions, should be encircled and initialed with the date and any cutting/ overwriting should be encircled and initialed in red ink by all the tender opening committee members.

• Do prepare a statement giving details of the quotations received and other particulars like the prices, taxes/ duties, EMD, any rebates etc. as read out during the opening of tenders.

• Do maintain a proper tender opening register containing information viz. date of opening including extension, if any, names and signatures of all the persons present to witness the tender opening which should include the bidder’s representatives also.

• Do ensure in cases involving the two bid system that the tender opening committee members should sign on the envelopes containing the price bid mentioning clearly the due date of opening the price bids. These envelops should again be placed in the tender box for safe custody.

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a) TENDER EVALUATION AND AWARD OF WORK This is the most sensitive area and to insure that evaluation is done in most

transparent and fair and open manner, following points should be taken care of : • Evaluation of tenders exactly as per the notified criteria.

• Timely decision within validity period.

• Complying with commission’s circular regarding negotiation.

• Ensuring that conditions/specifications are not relaxed in favour of contractor to whom the work is being awarded.

• Ensuring that L1 is not ignored on flimsy grounds.

• Compliance with the purchase preference policy of the Govt.

• Ensuring that work order/supply order is placed within justified rates.

12. TECHNO-COMMERCIAL EVALUATION OF TENDERS OPEN / ADVERTISED TENDERS

The single bid system is normally resorted to when the specification are adequately defined and also the items being procured are standard equipments, designed and manufactured as per general industry standards. However, even for such items, there may be certain deviation in tender specification vis-à-vis bidders offers. In order to compensate for such deviation loading criteria, to be adopted for evaluation purpose, should invariably be indicated in the bid documents.

In cases of the two-bid system, the makes and technical specification offered by various bidders should not be accepted without properly analyzing the techno-commercial equivalence of such offers so that bidders offering inferior specification/ makes do not get undue advantage. Techno-commercial negotiations may be conducted with all the bidders to clarify the deviation vis-à-vis tender specifications/ requirements. After bringing the acceptable offers on the common platform, all the commercial terms/ conditions and technical specifications should be frozen. In case some changes are made in terms/ conditions or technical specifications, the bidders may be given a fair chance to revise their price bids accordingly. Evaluation of tenders should not be based on conditional discounts. Once it has been established that the offers meet the laid down specifications, the question of grading as well as any pick and choose should not arise. The conditions having financial implications should be loaded properly in the tender evaluation and in the comparative statement. The contract needs to be awarded to the lowest bidder meeting the laid down specifications. The distribution of work, if considered necessary, should be done in a fair and transparent manner. a) LIMITED TENDER In cases where firms are short-listed for issuing of tenders on limited basis, the techno-commercial competence and other credentials are required to be scrutinized thoroughly. After the offers from such short-listed firms are received, there should normally be no occasion to reject them on technical grounds. Further, since limited tenders are issued to the empanelled firms dealing in a specific item/job on the basis of their capacity and performance, it is imperative to up-date the panel periodically.

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• Do conduct techno-commercial negotiations with all the bidders, if required, to

clarify the deviation vis-à-vis tender specification/ requirements for bringing the acceptable offers on the common platform and all the commercial terms/ conditions and technical specifications should be frozen.

• Do give a fair chance to revise the price bids by the bidders if some changes are made in terms/ conditions or technical specifications.

13. POST TENDER NEGOTIATIONS -NEGOTIATION WITH L-1

There should be no post-tender negotiations with L-1 except in certain exceptional situations like procurement of proprietary items, items with limited source of supply and items where there is suspicion of a cartel formation. The justification and details of such negotiation should be duly recorded and documented without any loss of time. If due to the unreasonableness of the quoted rates, a decision is taken to go for re-tendering but the requirement are urgent and a re-tender for the entire requirement would delay the availability of the item thus jeopardizing the essential operations, maintenance and safety, negotiation would be permitted with L-1 bidder[s] for the supply of a bare minimum quantity. But the balance should be procured expeditiously through a re-tender following the normal tendering process. Negotiations should not be allowed to be misused as a tool for bargaining with L-1 with dubious intentions. This leads to delays in decision-making. If negotiation is allowed, then the authority recommending negotiations must record convincing reasons. Competent authority should exercise due diligence while accepting a tender or ordering negotiations or calling for a re- tender and a definite timeframe should be indicated so that the time taken for according requisite approval for the entire process of award of tenders does not exceed one month from the date of submission of recommendation. In cases where the proposal is to be approved at higher levels, a maximum of 15 days should be assigned for clearance at each level. It should be ensured that tenders are invariably finalized with in their validity period. As regards the splitting of quantities, it may be stated that if after due processing, it is discovered that the quantity to be ordered is far more than what L-1 alone is capable of supplying and there was no prior decision to spilt the quantities, then the quantity being finally ordered should be distributed among the other bidders in a manner that is fair, transparent and equitable. It is essentially in cases where the organization decides in advance to have more then one source of supply (due to critical or vital nature of the item) that the Commission insists on pre-disclosing the ratio of splitting the supply in the tender itself. This must be followed scrupulously. Counter-offers to L-1, in order to arrive at an acceptable price, shall amount to negotiation. However, any counter-offer thereafter to L-2, L-3 etc., (at the rates accepted by L-1) in case of splitting of quantities, as pre-disclosed in the tender, shall not be deemed to be a negotiation. In case L-1 backs-out, there should be a re-tender.

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(For further details: -CVC Circular No 4/3/07 dated 3rd March 2007 on “Tendering process-negotiations with L-1”) It is clarified by the commission that there should normally be no post-tender negotiations. If at all negotiations are warranted under exceptional circumstances, then it can be with L-1(Lowest Tenderer) only if the tender pertains to the award of work/supply orders etc. where the Government or the Government Company has to make payment. However if the tender is for sale of material by the Government or the Govt. company, the post tender negotiations are not to be held except with H1(i.e. with Highest tenderer) if required. (For further details: -CVC Circular No. 01/01/10 dated 20th January 2010 on “Tendering process -negotiations with L-1”)

• Do avoid post-tender negotiations with L-1 except in certain exceptional situations like procurement of proprietary items, items with limited source of supply and items where there is suspicion of a cartel formation.

• Do record and document without any loss of time, the justification and details of such negotiations, if any.

• Do negotiate with L-1 bidder[s] for the supply of a bare minimum quantity for the urgent requirements if the re-tendering is unavoidable but balance should be procured expeditiously through a re-tender following the normal tendering process.

• Do negotiations with L-1only if it is warranted under exceptional circumstances in case where Government or the Government Company has to make payment and with H1, if required, if the tender is for sale of material by the Government or the Govt. Company.

• Do indicate a definite timeframe so that the time taken for according requisite approval for the entire process of award of tenders does not exceed one month from the date of submission of recommendation .In cases where the proposal is to be approved at higher levels, a maximum of 15 days should be assigned for clearance at each level.

• Do ensure that tenders are invariably finalized within their validity period.

• Do go for a re-tender in case L-1 backs out.

• Do pre-disclose the ratio of splitting the supply in the tender itself in cases where the organization decides in advance to have more than one source of supply (due to vital or critical nature of the item).

• Do make counter-offer to L-2, L-3 etc., (at the accepted rates of L-1) in case of splitting of quantities, as pre-disclosed in the tender. This shall not be deemed to be a negotiation. Counter- offers to L-1 in order to arrive at an acceptable price, shall amount to negotiation.

• Do distribute the quantity being finally ordered among the other bidders in a manner that is fair, transparent and equitable if after due processing, it is discovered that the quantity to be ordered is far more than what L-1 alone is capable of supplying and there was no prior decision to split the quantities.

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14. REASONABLENESS OF PRICES/ MARKET RATE JUSTIFICATION

Before acceptance of the offer, it is very important to establish the reasonableness of rates in relation to the estimated rates and the prevailing market rates. The AHR (Abnormally High Rated) and ALR (Abnormally Low Rated) items should be duly identified and the officials/ agencies responsible for execution of work should exercise appropriate control on such identified items.

• Do establish the reasonableness of rates on the basis of estimated rates and the prevailing market rates before accepting the offer.

• Do identify the abnormally high rate (AHR) and abnormally low rate (ALR) items and the officials/ agencies responsible for execution of work should exercise appropriate control on such identified items.

15. TIME BOUND PROCESSING OF TENDERS

When ever the processing of tenders is inordinately delayed, it results in time and cost overruns and may cause litigation. In order to avoid any criticism, it should invariably be ensured that tenders are finalized and contracts are awarded in time bound manner within original validity of tender and without seeking further extension of validity. While ,a short validity period calls for prompt finalization by observing specific time period for processing, a longer validity period has the disadvantage of vendors loading their offers in anticipation of likely increase in costs during the period. Hence it is important to fix the period of validity with utmost care. The commission therefore advises the concerned organizations to fix a reasonable time for bids to remain valid while issuing tender enquiries, keeping in view the complexity of tender, time required for processing the tender and seeking the approval of the Competent Authority and to ensure the finalization of the tender within the stipulated original validity. Any delay, which is not due to unforeseen circumstances, should be viewed seriously and prompt action should be taken against those found responsible for non performance. Cases requiring extension of validity should be in exceptional situations and it is imperative that the valid and logical grounds justifying the said validity should be brought on record. (For further details: -CVC Circular No 31/11/08 dated 6th November 2008 on “Time bound processing of procurement”) 16. QUALIFIED ACCEPTANCE OF OFFERS The acceptance of contract should be clear for a contract to be valid. If the acceptance is qualified and additional conditions are stipulated, this may not be acceptable to the contractor. Thus there is no agreement & no contract. Thus offer should be taken in complete shape & in acceptable form.

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EXECUTION STAGE Important items in the execution stage are:

o Issue of letter of Indent/Award, Work/Supply order and signing of agreement.

o Implementation of various contract provisions such as obtaining Labour Licenses, Insurance Policies, CAR Policy, Workmen Compensation Policy etc.) employing technical staff etc.

o Various advance payments like Mobilization T&P, Secured advance etc.

o Checking quality of work, ensuring mandatory tendering and visual inspections.

o Payments for the work done/supply made/services provided by the contractor/vender etc.

o Watching time and cost overseen.

o Submission of various returns required to be sent for the project. 17. AWARD OF WORK AND SIGNING OF CONTRACT AGREEMENT

In order to avoid any potential source of corruption, it should invariably be ensured that once the offer is found techno-financially acceptable, the work is awarded without any loss of time. All the necessary documents should be kept ready beforehand. A formal contract agreement containing all the requisite documents forming part of the agreement should be signed within a reasonable time for providing legal sanctity to the contract. a) Transparency in works/ Purchase/ Consultancy contracts awarded on nomination basis

Tendering process or public auction is a basic requirement for the award of contract by any Government agency as any other method. In cases, where award of work on nomination basis by PSU becomes inevitable ,there is need to bring greater transparency and accountability in award of work on the nomination basis and especially in the preparation of panel of contractor In such cases ,Commission strongly feels that the following points should be strictly observed. (i) All works awarded on nomination basis should be brought to the notice of the Board

of the respective PSUs for scrutiny and vetting post facto. (ii) The reports relating to award of such works should be submitted to the Board every

quarter. (iii) The audit committee may be required to check at least 10% of such cases. (For further details: -CVC Circular No. 15/5/06 dated 9th May2006 on “Transparency in Works/Purchase/Consultancy contracts awarded on nomination basis”).

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In one of the recent judgments of the Hon’ble Supreme Court, it has been emphasized that all the public tenders should be in an open and transparent manner with adequate publicity. In this judgment, the Hon’ble Supreme Court has stressed that award of contract on nomination basis should be resorted to in rare and exceptional cases only. It should be noted that the award of contract on nomination basis, would amount to breach of Article 14 of the Constitution guaranteeing right to equality to all interested parties. A relevant extract from Supreme Court of India (arising out of SLP (civil) No. 10174 of 2006) is given below to reinforce this point.

“The law is well settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction/ public tender by inviting tenders from eligible persons and the notification of the public auction or inviting tenders should be advertised in well known dailies having wide circulations in the locality with all relevant details such as date, time and place of auction, subject matter of auction technical specifications, estimated cost, earnest money deposit etc. The award of Government contracts through public auction/public tender is to ensure transparency in the public procurement, to maximize economy and efficiency in Government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution. However, in rare and exceptional cases, for instance, during natural calamities and emergencies declared by the Government; where the procurement is possible from a single source only; where the supplier or the contractor has exclusive rights in respect of the goods or services and no reasonable alternative or substitute exits; where the auction was held on several dates but there was no bidders or the bids offered were too low, etc, this normal rule may be departed from and such contracts may be awarded through ‘private negotiations’.”

(Copy of the full judgment is available on the website of the Hon’ble Supreme Court of India, i.e., www. supremecourtofindia.nic.in) Further, all nominations/single tender contracts should be posted on the web site ex post – facto. (For further details :-CVC Office Order No. 23/7/07 dated 5th July 2007 on Transparency in Works/Purchase/Consultancy contracts awarded on Nomination basis”). Commission vide Circular No. 15/5/06 dated 09/05/06 had prescribed certain measures to be followed on the works/purchase/consultancy contracts awarded on nomination basis by PSUs. These have been reviewed and Commission is of the view that the Board of the PSU is not required to scrutinize or and post facto vet the actions of the operational managers and their decisions to award work on nomination basis.

Therefore the following amendment is made in sub-Para (i) of Para 2 of

Commission’s above circular:- All works awarded on nomination basis should be brought to the notice of the Board of the respective PSUs for scrutiny and vetting post facto.

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Read as

All works awarded on nomination basis should be brought to the notice of the Board of the respective PSUs for information. (For further details: -CVC Office Order No.19/05/10 dtd 19th May 2010 on Transparency in Works/Purchase/Consultancy contracts awarded on Nomination basis”).

• Do ensure that once the offer is found techno-financially acceptable, the work is awarded without any loss of time.

• Do keep all the necessary documents ready before hand and a formal contract agreement containing all the requisite documents forming part of the agreement should be signed within a reasonable time.

• Do post all the details of awarded contracts on the web site.

• Do bring to the notice, of the Board of the PSU, all works awarded on nomination basis for information.

• Do make the contractors sign the detailed agreement within the time frame to avoid any complication in the contract at later date.

• Don’t keep a file pending for decision by the approving authority after the recommendation of the tender committee has been received.

• Don’t award any contract on nomination basis as it would amount to breach of Article 14 (guarantying right to equality to all interested parties) of the Constitution except in rare and exceptional cases.

18. ADVANCE PAYMENT & BANK GUARANTEES

The advance payments need to be generally discouraged except in specific

cases. Whenever the payment of advance is considered unavoidable, the same should be interest bearing as per CVC guidelines and should be allowed after getting an acceptable Bank Guarantee for an equivalent amount with sufficient validity. Bank Guarantee needs to be properly examined with respect to the acceptable format. Timely action for revalidation/ encashment of the bank guarantee also needs to be taken so as to protect the organization interest.

• Advance payments needs to be generally discouraged.

• Do make advance payment, if unavoidable, but the same should be interest bearing as per CVC guidelines. Advance payment should be allowed after getting an acceptable bank guarantee for an equivalent amount with sufficient validity.

• Do take timely action for revalidation/ encashment of the bank guarantee.

• Don’t give Bank Guarantee in the hands of the agency for obtaining time extension/ revalidation from the bank.

•

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a) Mobilization Advance The basic purpose of Mobilization Advance is to extend financial assistance within the terms of contract to mobilize the man and material resources for timely and smooth take off of the project. Necessary safeguards should be provided in the contract to stop its misuse. More importantly, the BGs taken in lieu of Mobilization Advance need to be properly examined within respect to the acceptable format and any condition deterrent to the Govt.’s interest should be got withdrawn before acceptance besides verifying the genuineness of the Bank Guarantees from the bankers. Timely action for revalidation/encashment of BGs also needs to be taken so as to protect the company’s interest. The Commission has issued the following guidelines on Mobilization Advance:

1. Provision of mobilization advance should essentially be need-based. Decision to provide interest free mobilization advance in the tender document should rest at the level of Board (with concurrence of Finance) in the organization. However in case of interest bearing mobilization advance, Organizations may delegate powers at appropriate levels such as CMD or Functional Directors.

2. Through the Commission does not encourage interest free mobilization 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 not linked with progress of work. This would ensure that even if the contractors is not executing the work or executing it at a slow pace, the recovery of advance could commence and scope for misuse of such advances could be reduced.

3. Part ‘Bank Guarantees’ (BGs) against the mobilization advance should be taken in as many numbers as the proposed recovery instalments and should be equivalent to the amount of each installment.

4. There should be a clear stipulation of interest to be changed on delayed recoveries either due to the late submission of bill by the contractor or any other reason besides the reason giving rise to the encashment of BG, as stated above.

5. The amount of mobilization advance; interest to be changed, if any; its recovery schedule and any other relevant detail should be explicitly stipulated in the tendered document upfront.

6. Relevant format for BG should be provided in the tender document, which should be enforced strictly, and authenticity of such BGs should also be invariably verified from the issuing bank, confidentiality and independently by the organization.

7. In case of ‘Machinery and Equipment advance’, insurance and hypothecation to the employer should be ensured.

8. Utilization certificate from the contractor for the mobilization advance should be obtained. Preferably, mobilization advance should be given in instalments and subsequent instalments should be released after getting satisfactory utilization certificate from the contractor for the earlier instalments.

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(For further details :-CVC Office Memorandum/ Circular No. 10/4/07 dated 10th April 2007 on “Mobilization Advance” and Circular No. 5/2/08 dated 5th February 2008) Commission had decided that following additional guidelines may be followed in case of grant of Mobilization Advance.

The Bank Guarantee etc., taken towards security of Mobilization Advance should be at least 110% of the advance so as to enable recovery of not only principal amount but also the interest portion, if so required.

The mobilization advance should not be paid in less than two installments, except in special circumstances for the reasons to be recorded for keeping check on contractor misutilizing the full utilization advance when the work is delayed considerably.

A clause in the tender enquiry and the contract of cases providing for interest free mobilization advances may be stipulated that if the contract is terminated due to default of the contractor, the ‘Mobilization Advance’ would be deemed as interest bearing advance at an interest rate of ______ % (to be stipulated depending on the prevailing rate at the time of issue of NIT) to be compounded quarterly. (For further details:-CVC Circular No. 02/02/11 dated 17th February 2011)

• Provision of mobilization advance should essentially be need-based.

• Do clearly stipulate in the tender document if the management feels the necessity of interest free mobilization advance in specific cases. However, recovery of all such advances should be time-based and not linked with progress of work.

• Do take ‘Bank Guarantees’ (BGs) towards security of the mobilization advance for at least 110% of the advance to enable recovery of Principal and interest portion, if required.

• Do take part ‘Bank Guarantees’ (BGs) against the mobilization advance in as many numbers as the proposed recovery instalments. Such guarantees should be equivalent to the amount of each instalment.

• Do clear stipulate rate of interest to be charged on delayed recoveries either due to late submission of bill by the contractor or any other reason besides the reason giving rise to the encashment of BG, as stated above.

• Do clearly stipulate in the tender document; the amount of mobilization advance; interest to be charged, if any; its recovery schedule and any other relevant detail.

• Do provide relevant format for BG in the tender document.

• Do verify the authenticity of such BGs from the issuing bank, confidentiality and independently from the organization side.

• Do ensure in case of ‘Machinery and Equipment advance’, insurance and hypothecation certificates are taken from the contractor.

• Do pay mobilization advance in atleast two instalments except in special circumstances the reasons of which should be recorded.

• Do obtain Utilization certificate from the contractor for the mobilization advance should not be less than 2.

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• Do provide preferably, mobilization advance in instalments (should not be less than two) and subsequent installments should be released after getting satisfactory utilization certificate from the contractor for the earlier instalments. In exceptional circumstances reasons should be recorded.

• Do stipulate a clause in the tender enquiry and the contract of cases providing for interest free mobilization advance that if the contract is terminated due to the default of the contract, the mobilization advance would be deemed as interest bearing advances at an interest rate of ____ % (to be stipulated depending on the prevailing rate at the time of issue of NIT) to be compound quarterly.

b) Performance bank guarantee In order to safeguard the organization interest, it would be appropriate to take reasonable amount of Performance Bank Guarantee valid up to Defect Liability period for due performance of the contract. The date of submission for the BG should be clearly spelt out and adhered to at the time of the execution of the contract. The genuineness of the BGs should be checked from the issuing bank. The validity of the BG needs to be carefully monitored and whenever the time extension for contract is granted, the validity of BG should also be appropriately extended. c) Acceptance of bank guarantees The Bank Guarantees should be accepted in the prescribed format only. All the cuttings, additions and alterations should be initialized by the Banker along with the seal of the Bank who has executed the Bank Guarantee. Bank guarantee should be kept in safe custody. The validity of Bank Guarantee needs to be properly monitored. The extension letter should be strictly in accordance with the original BGs and there should not be any change in the terms & conditions from the original guarantee. The extension of the Bank Guarantee should be taken on the same value of the stamp paper on which the original BG is executed. To eliminate the possibility of acceptance of any forged /fake bank guarantees, the Commission advices the organization to evolve the procedure for acceptance of BGs which is compatible with the guidelines of Banks/ Reserve Bank of India and frame their own detailed guidelines to ensure that BGs are genuine and encashable. The steps to be ensured should include:- (i) Copy of acceptable BG formats should be enclosed with the tender documents

and it should be verified verbatim on receipt with original documents.

(ii) It should be insisted upon the Contractors that BGs to be submitted by them should be sent to the organization by the issuing bank directly under registered post (A/D).

(iii) In exceptional cases, where the BGs are received through the contractor, the issuing branch should be requested to send an unstamped duplicate copy of the guarantee directly to the organization with the covering letter by registered post (A/D). This BG should be compared with the original BG for confirming the genuineness of the BG submitted by the contractor.

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(iv) All BGs should be independently verified by the organization.

(v) In the Organization/Unit, one officer should be specifically designated with responsibility for verification / timely renewal and encashment of BGs.

(For further details: -CVC Office Memorandum/ Circular No.01/01/08 dated 31st December 2007 on “Acceptance of Bank Guarantees”) 19. INSURANCE Comprehensive insurance cover for men and material, apart from being a statutory obligation, has to be provided in the contract to safeguard the interest of the organization. Avoiding insurance cover may jeopardize the safety of men and materials and may result in serious legal complications in case of any mishap. Therefore, a comprehensive all risk insurance clause needs to be incorporated and implemented.

• Do also incorporate and implement a comprehensive all risks insurance clause for men and material so as to meet any contingency arising on account of fire/earthquake, mishap during execution.

20. COMPLETION SCHEDULE OF CONTRACT The specific schedule of completion of contract should be stipulated in the contract in an unambiguous manner. Completion of contract should imply overall completion of all the events of the contract, in case of big projects. If the work is broken into small contracts; each and every contract should have its specific schedule of completion which inter alia should be within the overall completion schedule of the main contract. The overall progress of work is also related and highly dependent on the deployment of necessary tools plant and machinery. The contractors should be asked to submit the list of necessary equipment and completion schedule of various activities in advance and the progress should be monitored in accordance with such schedule. The rules for recording timely measurements of hidden items should be strictly enforced. The adequate supervision and control over the quality of works and the execution speed is very important for successful completion of the project. The timely completion of the project can be achieved by proper planning and taking timely decisions. The project cost should be kept to a minimum value by better technical and managerial inputs and efficient construction methodology.

• Do stipulate milestone in the contract for the specific schedule of completion of contract in an unambiguous manner and monitor progress in accordance with such schedule.

• Do ensure that each and every contract, in case of big projects, should have its specific schedule of completion of intermediate milestone activities which inter-alia should be within the overall completion schedule of various activities in advance, if the work is broken into small contracts.

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a) Time and cost over runs Due to time and cost over runs, the project becomes uneconomical, resources are not available to support other projects & economic development is adversely effected. It further gives rise to disputes & litigations. Thus it is important to adhere to the originally contemplated time schedule for its completion. It can be achieved by proper planning & taking prompt decisions. Time over runs should be avoided and also, the project cost be kept down to the minimum extent possible. The time & cost over runs can be minimized to improve the prospects of successful completion of the project by taking care of (i) Adequate project formulation (ii) Sound project organization with experienced and expert manpower (iiI) Proper implementation planning (iv) Advance action for procurement of scarce materials (v) Timely availability of funds (vi) Judiciously and timely tendering of contracts (vii) Better contract management & effective monitoring. 21. DEFECT LIABILITY PERIOD CLAUSE Detailed Defect Liability Period clause embodying all the safeguards needs to be incorporated in the bid documents and in the resultant contract in case of delay in completion of contract & should imply overall completion of all the events of the contract. It should be invoked in case of delay in completion of work as incorporated in the agreement. In the contract involving installations /commissioning of equipments, the defect–liability period should be reckoned only from the date of installation / commissioning. In case supply and installations have to be executed through separate contract due to some compelling reasons, both the contracts should be processed in such a manner that the time-gap between supply and commissioning is minimal.

• Do incorporate in the bid documents and in the resultant contract detailed Defect Liability Period clause embodying all the safeguards.

• Do reckon defect liability period only from the date of taking over of work viz. in the contract involving installations /commissioning of equipments, the defect liability period should be reckoned only from the date of installation/commissioning of equipments.

• Do proceed in such a manner that the time gap between supply and commissioning is minimal in case supply and installations have to be executed through separate contract due to some compelling reasons.

• Do maintain a proper record of hindrance.

• Don’t fail to record date of completion.

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22. CONTROL & ADEQUATE SUPERVISION Adequate supervision & control over the quality of the work and speed of the execution plays an important part in construction work. Site inspection book should be used for recording all observations and defects. The compliance of the observations should also be taken care. The senor officers should test- check the measurement to the required extent. The rules for recording the timely measurements of hidden items & entering the measurements simultaneously while observing at site should be strictly enforced.

23. PAYMENT TERMS AND APPLICABILITY OF TAXES AND DUTIES The payment terms should be defined unequivocally and should not be changed after award of the contract. An appropriate control on the flow of funds should be exercised while making the payments. As far as possible the payment terms should be so structured that the payments made to the contractors are linked and commensurate with the actual progress of the work. Incase of contracts where a price break is required for payment purposes, the break up should be realistic and should be approved by the competent authority. The rates so approved should be deemed the tendered rates as if the rates were called for item rate contracts. These rates should be considered for making any proportionate recoveries or withholding of payments or for working out any taxes duties etc. In the case of a composite contract for supply and erection, the applicability of various taxes/duties should be made clear at the outset in the Instruction to the bidder’s part of the bid document.

• Do make clear the applicability of various taxes/duties at the outset in the Instruction to the bidder’s part of the bid document in case of a composite contract for supply and erection.

• Do define payment terms unequivocally and do not change it after award of the contract.

a) Payments for the work done/supply made/services provided by the contractor/ vendors etc. Payments should be released with a valid extension of time period only, in case, the work is extended. In such cases, the timely extensions of the contract and bank guarantees, if any, should be ensured. There is a direction from CVC regarding switching over to E-payments to have transparency in issues relating to payments and to reduce the time involved in the payment process so as to help the beneficiaries to realize their payments on time. E-payment means making payments electronically without physical transfer of money or instrument of money. When the organization makes e-payment, the payee is

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paid by directly crediting to its bank account without issuing any cheque or DD either to the payee or to the bank. With tremendous progress in computerization including networking of branches it is possible to do e-banking by making use of facilities like electronic clearing system(ECS) and electronic fund transfer (EFT) etc. This significantly not only reduces processing costs in preparation and dispatch of cheques but also reduces the risk of frauds by providing speed, efficiency and easier reconciliation of accounts. CVC had issued the following instructions for compliance by all Govt. Departments, PSUs, Banks and other agencies: 1. To pay to all suppliers / vendors, refunds of various nature and other routine payments through electronic payment mechanism at all centers where such facilities are available in the banks clearing system. 2. Salary and other payments to the employees of the organizations shall also be made through electronic clearing system (ECS) wherever such facilities exist. (For further details :-CVC Office Order No. 20/4/04 dated 6th April 2004 on “Increasing Transparency and cutting delays by e-payments and e-receipts by Govt. Organization”)

CVC had urged all the departments/Organizations to provide an enabling environ-ment and facilities to make e-payment and e-receipt initiatives successful and were asked to forward the details regarding the implementation of e-payment mechanism enclosing the format vide their order no. 68/10/04. (For further details: -CVC Office Order No. 68/10/04 dated 20th October 2004 on “Leveraging Technology - e-payment & e-receipt”)

• Do make the payment to the contractors as per the actual progress of the work.

• Do exercise appropriate check and control on the flow of funds while making the payments.

• Do pay the executed quantities beyond the stipulated time after deducting the LD as provided under the contract unless the valid extension for the contract is given.

• Do implement e-payment mechanism immediately, if not initiated earlier.

• Do make all payments to suppliers / vendors, refunds of various nature and other routine payments through electronic payment mechanisms where such facilities are available in the banks.

• Do make salary and other payments of the employees through electronic clearing system (ECS) where such facilities exist.

24. POST CONTRACT MANAGEMENT Modifications of Contract Conditions / Specifications After conclusions of the contract, any relaxation in the contract terms/specifications should be severely discouraged. However in exceptional cases, where the modifications/ amendments are considered absolutely essential, the same should be allowed only after taking into account the financial implications for the

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same. Further, sufficient amount should be withheld against the items received in an unfinished /incomplete condition so as to ensure that no extra payments are made against such items/ services later on. Reconciliation of material issued by Department, if any, should be reconciled at various stages of work.

• Do discourage any relaxation in the contract terms/specifications after conclusions of the contract.

• Do allow modifications/ amendments only in exceptional cases which are considered absolutely essential but only after taking into account the financial implications.

• Do withhold a sufficient amount against the items received in an unfinished/ incomplete condition so as to ensure that no extra payments are made against such items/ services.

25. POST CONTRACT MONITORING It is essential to accord priority to the post contract follow up for execution of works. The time extension should be granted only on bonafide requests and not in a routine and casual manner. After expiry of the contract period, the contractee should refrain from exchanging correspondence with the contractor. For any delays on part of the contractor in completing the contract, the liquidity damage clause should be invoked. In case, if more than one contractor is engaged on a project and delay occurs, the case should be analyzed in a total perspective and the agencies responsible for the delay, including the consultant should be penalized. There is a dire need to inculcate a transparent and professional contracting culture so that the non-performers are weeded out and only reliable contractors, who can prove their credentials by consistent performance in terms of quality and timely completion of contracts, are encouraged. a.) Appointment of Arbitrator as per contract The concerned Project Manager/ Zonal Manager should process the case for appointment of the Arbitrator immediately as per the contract so that Arbitrator is appointed in the scheduled time by the appointing authority and litigation is settled expeditiously. (Refer for further details NPCC letter ref. no: 000735/97 dated 12th May 2005)

• Do process the case for appointment of the arbitrator, if so provided in the tender documents, well before its stipulated time so that the arbitrator is appointed within the time schedule and litigation is settled expeditiously.

• Do remember that once a case is under arbitration, the correspondence with the agency should be done with corporation legal expert.

• Do always keep in mind that a contractor always read in between the lines of the contract clause. Hence one should be careful in dealing with the contract and the contractor.

• Do remember to consider all claims /receivables etc. beforehand so that claim/ counter claim are comprehensive.

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• Don’t delay the rightful payment of executed works as per contract to the agency to as it is most critical for successful and timely execution of works to avoid unnecessary litigation.

• Don’t forget to take action on arbitration award under 1996 Arbitration Act. b) Excess payment to the Agency

During examination/complaints, it has been observed that excess payments to the contractors have been observed which may be due to ambiguity in the contract or misinterpretation of various clauses of the contract. Sometimes variations in the contract clauses or specifications are allowed without financial adjustments, thus, giving undue benefit to the contractor. It is normally recommended by CVC to recover such excess payments from the contractors.

In number of cases, contractors invoke arbitration to avoid such recoveries and in addition submit huge claims to deter the authorities from making recoveries. Organizations fail to affect the recoveries citing reference to arbitration by the contractor.

In view of the above, CVC has issued the following directions that whenever any excess payment is detected, it should be recovered from the contractor from the available amount at the first opportunity following due procedure prescribed in the contract, unless any stay has been granted by the court. (For further details: -CVC Circular No. 21/05/10 dated 2nd June 2010 on “Delay in initiating Disciplinary Proceedings”). c) Banning of business dealings with firms/contractors-clarification regarding Business dealings with the firms/contractors may be banned, whenever necessary. Advice of the Central Vigilance Commission need not be sought for banning of the business with such firms/contractors or for withdrawal of banning orders. Banning of business is an administration matter to be decided by the management of the organization and the Central Vigilance Commission does not give its advice in such matters. (For further details: -CVC Office Order No.18/3/05 dated 24th March 2005 on “Banning of business dealings with firms/contractors-clarification regarding”). 26. BACK TO BACK TIE UP BY PSUS-INSTRUCTION REGARDING It has been decided by the CVC that the procedure to be followed for award of the work by construction PSUs shall be finalized taking into account the following points:

1. PSUs (when bag the contract from the client Department) as a contractor, has to execute the work by functioning like a contractor instead of sub-letting the 100% work on back-to-back basis.

2. Open tenders should be invited for selection of sub- contractors as far as possible.

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3. In case, it is not possible to invite open tenders, selection should be carried out by inviting limiting tenders from the approved panel. Commission has been insisting upon transparency in the preparation of panels of contractors. This approved panel of contractors is to be prepared for different categories, monetary limits, and regions, in a transparent manner clearly publishing the eligibility criteria etc. which is to be updated every year. Selection of the contractor should be carried out by inviting limited tenders from this approved panel of contractors.

4. Tenders should be opened confidentially by a high level committee to maintain the secrecy of rates, if required. Tender opening register should be maintained in this regard duly signed by the officer/committee opening the tender and kept confidentially. This should be available for perusal when required by audit/vigilance.

5. The terms and conditions of the contract of the client especially those pertaining to subletting of the works should be strictly adhered by the PSUs.

6. Adequate staff to be deployed by the PSUs to ensure quality in construction etc.

7. The record of enlistment/ updating of contractor and tender opening register shall be produced to the CTEO as well as audit officials when demanded for scrutiny.

(For further details: -CVC Office Memorandum dated 20.10.2003 on “Back to back tie up by PSUs-Instructions regarding”).

• Do invite open tenders for selection of sub- contractor as far as possible.

• Do select the contractors by inviting limited tenders from the approved panel of contractors, in case; it is not possible to invite open tenders.

• Do prepare the panel of contractors for different categories, monetary limits, and working regions in a transparent manner which should be updated every year.

• Do submit pre-tender tie up tenders confidentially to client through a high level committee to maintain the secrecy of rates, if required.

• Do maintain tender opening register confidentially duly signed by the officer/committee opening the tenders.

• Do make available the register of enlistment of contractors and tender opening register when demanded for scrutiny by CTEO as well as audit officials.

• Do strictly adhere to the terms and conditions of the contract of the client and all tender formalities before selecting the contractor especially those pertaining to subletting of the works.

• Deploy adequate qualified and experienced staff to ensure quality in construction.

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27. PROCEDURES/GUIDELINES FOR PRE-TENDER /POST TENDER TIE UP ETC. FOR CONSTRUCTION WORKS

With reference to minutes of 185th Board Meeting of NPCC [Item No. 185.3 (Part III)] and procedures for Contract & Marketing at page 9 of 12 of ISO 9001:2000 Manual, the procedures/guidelines issued for compliance on certain points requiring further additions in MOUs while framing the same and awarding the works to the contractors on pre-tender//post tender tie up basis are as follows: - 1. MOUs should contain the clause that some part of the work will be executed

departmentally.

2. A register should be maintained as per the manual, which will contain the names, addresses and other pre-qualified listed contractors. All the procedures as per the NPCC Manual or CPWD Manual should be strictly adhered to. Periodical review at least once a year should be made to re-evaluate the listed contractors as per ISO 9001: 2000 Manual.

3. Rs. 5000/- should be collected from each listed contractor at the time of registration.

4. All the tender formalities shall be adhered to before selecting the contractors.

5. Without statutory registration like EPF, Sales tax, Income Tax and others, the contractors shall not be listed for registration and work should not be awarded and pre or post tender tie-up should not be considered. There should be minimum three registered parties submitting the rates.

6. Cost estimates should be based on CPWD/State PWD norms only. Wherever the norms are not there, market rates should be taken to evaluate the cost estimates. The concerned executive in engineering side and accounts side should certify the compliance so that bidding should be made on workable economic rates so that the company can make reasonable profit in each contract.

(Refer for further details NPCC Circular No. DF/301 dated 16th July 2003 on “Procedures/Guidelines for Pre-tender/Post tender tie-up etc. for construction of works”).

• Do maintain a register containing the names, addresses and other relevant

details of pre- qualified contractors. The above panel should be updated every year.

• Do strictly adhere to all tender formalities before selecting the contractors.

28. OBSERVATION & REMEDIAL ACTION TO ALLOTMENT OF WORKS AND PAYMENT MADE

The remedial measures for common noticed discrepancies, as approved by the competent authorities, are given below for taking care in future.

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1. Offers accepted with corrections either by cutting or by applying whitener /eraser in price bid.

To avoid cutting / doubt and to bring transparency, it is desired that the following insertion in the tender document be incorporated:

i) Offered percentage________ (Fill either below or above) the estimated rates in Ist call________ %( -------------------percentage only).

ii) Offered percentage________ (Fill either below or above) the estimated rates in IInd call________ %( -------------------percentage only).

iii) Offered percentage________ (Fill either below or above) the estimated

rates in IIIrd call________ %( -------------------percentage only).

In this case, if the agency wants to quote the rates in different calls by varying the % margin, NPCC will accept the higher margin only if the rates are quoted below and lowest margin if the rates are quoted above the estimated rates. 2. Delay in issuance of Work- Orders It is advised that contractors are invariably made to sign the detailed agreement within the time frame to avoid any complication in the contract at later date. 3. Payments made under the contract No variation of the quantities /amount under the contract shall be made /paid without approval of Competent Authority. Until, unless the valid extension for the contract is given, the executed quantities beyond the stipulated time shall be paid after deducting the LD as provided under the contract. 4. Competency of approval for variations or new items-regarding The nature viz. item rate, lump sum, % etc. of the contract as approved by the Competent Authority shall in no case (except specifically allowed by the Competent Authority) be changed without bringing it to appropriate Competent Authority. The contract approved on % basis shall not be changed to item rate or vice versa and similarly lump sum approval shall not be changed to item rate / % basis or vice versa. 5. Responsible of answering queries regarding contract

The present incumbent (Project Manager/Zonal Manager) shall be responsible for replies to queries asked by Internal/Statutory/Govt. Auditors based on available records even though the matter may pertain to previous incumbent. While furnishing the replies, the present incumbent may seek the information, if required, from the previous incumbent. (Refer for further details NPCC Circular No. 400782/Misc/IA/35 dated 23rd /24th May 2007).

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29. IMPROVING VIGILANCE ADMINISTRATION BY LEVERAGING TECHNOLOGY - INCREASING TRANSPARENCY THROUGH USE OF WEBSITE.

The Commission, while emphasizing the need of leverage technology as an effective tool in vigilance administration in discharge of regulatory, enforcement and other functions, directed all organizations to post on their websites, information in respect of the rules and procedures governing the issue of licenses/permissions etc. and to make available all the application forms on the websites in a downloaded form besides, making available the status of individual application on the organization’s website. The Commission also directed the organizations to post on their web site monthly, a summary of all the contracts/purchases made above the threshold value. (This threshold value has to be decided by the organizations which should be such that at least 60% of the transactions are covered.)

For improving vigilance administration by leveraging technology by increasing

transparency through effective use of website, it is directed by the Commission that:- (i) All application forms and information in respect of rules and procedures should

be uploaded on the website. (ii) All the application forms should be available in the downloadable form in the

website and status of the individual application should also be available in the organization website.

(iii) Details of awarded tenders above the threshold value should be posted on the

website. (For further details: -CVC Office Order No.13/3/05 dated 16th March 05 and Circular No.

13/4/07 dated 18th April 2007)

It was observed by the Commission that some organizations have not adhered to the instructions and implemented the same. Some organizations information published are disjointed and not as per the prescribed format laid by the commission while in some cases, the information is not being updated. Some organizations have placed information on restricted access which defeats the basic purpose of increasing transparency. While reiterating its aforementioned instructions, it is therefore directed by the Commission that:- (i) All organizations/ departments to strictly adhere and post summary of details of

contracts/purchases awarded so as to cover 75% of the value of the transactions without any further delay. Any failure on the part of the organizations on this account would be viewed seriously by the Commission.

(For further details: -CVC Circular No.17/7/09 dated 14th July 09) 30. IMPLEMENTATION OF E-TENDERING SOLUTIONS Regarding the methodology for selection of sole application service provider for implementing the e-tendering solutions in various organizations, the commission is of the view that the organizations should follow a fair, transparent and open tendering

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procedure to select the application service provider. The standard guidelines on tendering procedures should hold good for the procurement of these services as well. The organizations must take due care to see that the effective security provisions are made in the system to prevent any misuse. In this regard, the guidelines on security related issues in e tendering have been circulated by CVC by its circular no. 29/9/09 dated 17.09.09. Organizations concerned may follow these guidelines while implementing e-tendering solutions to contain the security related loop holes.

CTEO during security audit of e-procurement solutions found shortcomings/ deficiencies of repetitive nature. CVC by its circular no. 18/04/2010 dated 26th April 2010 had formed a check list to achieve safety considerations in e-procurement solutions so that Organizations concerned may follow the same while implementing e-tendering solutions to address the security related concerns. (For further details: CVC Office Order No. 01/01/09 dated 13th January 2009, Circular No. 29/9/09 dated 17th Sept 2009 and No. 18/04/2010 dated 26th April 2010 on “Implementation of e-tendering solutions”) 31. MENACE OF COUNTERFEIT AND REFURBISHED IT PRODUCTS It is often difficult to know the difference between PC made of genuine parts and that made of counterfeit parts due to ignorance or having little or no technical knowledge in the matter. Counterfeiting is designed to cheat nave consumers/organizations. To help/inform and enable due diligence as well as for curbing the menace of counterfeit and refurbished IT products disguised as new, CVC had come out with the Circular No.07/02/08 dated 15.02.08.

As a first step, the buyer PSU should insist on signed undertaking from some authority (not lower than the Company Secretary of the system OEM) that would certify that all the components/parts/assembly/software used in the desktops and servers were original/new and no refurbished/duplicate/second hand components were being used/ would be used. Model Undertaking of Authenticity form is enclosed with the circular. The organization should ask for ‘Factory Sealed Boxes’ with System OEM seal to ensure that the contents have not been changed en-route. The Commission had suggested advisory check points to help identify the fraudulent practices that have come to notice for the following:- (i) CPU (ii) Hard Disk (iii) Monitors (iv) Operating System (v) Mechanical Key Boards (vi) Low Quality Memory Module (vii) Fraudulently Marked SMPS (viii) Counterfeited Consumables. (For further details: CVC Circular No.07/02/08 dated 15th February 2008 for details on “Measures to curb the menace of counterfeit and refurbished IT products-regarding”).

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32. INTRODUCTION TO THE INTEGRITY PACT (IP)

Integrity Pact programme is a tool developed by Transparency International to create islands of integrity through a voluntary contract between the buyer and seller to eliminate corrupt practices and to help Governments, Public Sector Undertakings, Business and Civil society to fight corruption in the field of public contracting. Integrity Pact has been implemented in more than fourteen countries and has been very successful everywhere. The global over view of experience indicates that the IP concept is sound and workable. Integrity Pact concept is suitable both for construction and supply contracts. It covers all the activities related to the contract from the pre-selection of bidders, the bidding & contracting implementation to its completion and operation.

It is flexible enough to adapt to many local legal structures and requirements as well as to the different degrees in which government are willing to proceed along the lines set forth here.

Transparency International (TI) is a non profit organization, with headquarters in

Berlin, with an objective to fight against corruption and encourages governments to implement effective anti -corruption policies and measures and to raise public awareness. This effort of TI helps in increasing the development process by curtailing wastage and irregularities and building the moral health of the society.

In India, TI was set up in Delhi in 1999 and now it has state chapters in nine states

with eminent citizens as the Board of Directors. ONGC was the first Central Public Sector Undertaking to adopt IP in July 05. Vizag Steel Plant, HPCL, GAIL, Coal India Limited and Airports Authority of India have also adopted the Integrity Pact. It is claimed that the pact ensures timely completion of projects with reduced cost of execution and ensures a healthy environment of mutual trust and respect between the client and the executors.

IP program consists of a process that includes an agreement for a public sector

contract between a government or a government department and all bidders. All the involved agencies sign the Integrity Pact which establishes mutual contractual rights and obligations to the effect that neither side will pay, offer, demand or accept bribes or collude with competitors either to obtain the contract or during execution. Also, bidders will disclose all commissions and similar expenses paid by them to anybody in connection with the contract and that sanctions will apply when violations occur. These sanction range from loss or denial of contract, forfeiture of the bid or performance bond and liability for damages, to blacklisting for future contacts on the side of the bidders and criminal or disciplinary action against concerned employees of the government. The pact enables Companies to ensure total integrity by providing assurances to associated agencies that they will follow transparent procedures and their competitors will also refrain from any type of manipulations or bribery.

The company will undertake steps to prevent corruption, including extortion by

their officials and will follow transparent procedures which will enable the company to reduce the high cost and the distortion impact of corruption in public procurement and works.

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The integrity pact programme provides for appointment of an Independent External Monitor(s) by the authority to oversee the Integrity Pact Program implementation and effectiveness. The Independent External Monitor reviews the situation and offers the advice as and when required.

If a counter party commits any violation of the Integrity pact, it may loose bid

security and performance bond. In addition, the Principal will terminate any current contract and business relationships with such counter party and its associates and may initiate criminal proceedings against violating counter party. The Principal would black list and exclude the counter party from future dealings until the External independent Monitor is satisfied that the counter party will not commit any violation in future.

If violation is committed by Principal or Contractee party, the counter parties will

be liable to damages as determined by the External Independent Monitor.

Application of Integrity Pact

Integrity Pact can function only if all bidders submit to it. It is, therefore, highly desirable to make signing of the IP mandatory.

Internet is a highly relevant development facility for total transparency. The

high degree of transparency achieved through this real time access to public decision making clearly reduces the opportunity for manipulation and should enhance the willingness of officials and bidders alike to commit to a corruption free contracting procedure.

The political will to reduce corruption and to revive honesty and integrity in

government contacting is a sine-qua-non for success.

IP enables the compliance of laws by leveling the playing field and assuring the contenders that all will behave under the same pattern.

It helps in considerable saving in cost of the project and develops a mutual

trust among the bidders and the authority. It can save unnecessary judicial claims and create trust in authority action.

Companies can be black listed for violating the pact.

It is expected that the Integrity Pact would enhance credibility of the

Companies implementing projects and would place them at a prestigious position by creating an environment of mutual trust and respect. Once this is implemented, the prestige, reputation and credibility of the Company will increase manifold. Integrity Pact can be treated as a vigilance tool. Transparency, fairness and accountability will help in increasing the image of any PSU in the eyes of the client and the citizens.

CVC recommends the Integrity Pact concept and emphasize the need for its

adoption and implementation in respect of major procurement activities. As the role of the Independent External Monitors is very important in ensuring implementation of the

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IP, it is necessary that the person so appointed have adequate experience in the relevant fields and are persons of high integrity and reputation. The Commission therefore directs that the organizations may forward the panel of names of eminent persons for appointment and consideration as Independent external Monitors directly to the Commission for approval along with a detailed bio-data in respect of each of the person so proposed. The bio-data should also include the postings during the last ten years before the superannuation of the person proposed in case the person has worked in the government sector. The bio data should also include details regarding experience older than ten years before superannuation of the proposed person, if they have relevant domain experience in the activities of PSUs where they are considered as IEMs.

The commission, again stressing that all organizations must make sustained efforts

to realize the spirit and objective of the Integrity Pact, had suggested the following guidelines:-

a. Adoption of Integrity Pact in an organization is voluntary, but once

adopted it should cover all tenders/ documents above a specified threshold value (to be set by the organization itself).

b. IP should cover all phases of the contract i.e. from the stage of Notice

Inviting Tender / pre bid stage to the stage of last payment or a still later stage, covered through warranty, guarantee etc.

c. The name of one IEM should be invariably be cited in the NIT. However, for

ensuring the desired transparency and objectivity in dealing with the complaints arising out of any tendering process, the matter should be referred to the full panel of IEMs, who would examine the records, conduct the investigation and submit a report to the management, giving joint findings.

d. A maximum of three IEMs would be appointed in Navratna PSUs and up

to two in other Public Sector Undertakings. For the PSUs having a large territorial spread or having several subsidiaries, the Commission may consider approving a large no of IEMs but not more than two IEMs would be assigned to any one subsidy.

e. Remuneration payable to the IEMs may be similar to the Independent

Directors in the Organization. For more information you may visit TII web site: http://www.transparency.org.

(For further details :-CVC Office Order No. 41/12/07 dated 4th December 2007, Office Order No 43/12 /07dated 28th December 2007, Circular No 18/05/08 dated 19th May 2008 and No 24/08/08 dated 05th August 2008 on “Adoption of Integrity Pact in major Govt. Procurement Activities”)

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33. ADOPTION OF THE INTEGRITY PACT The Commission has formulated “Standard Operating Procedure “ for adoption of Integrity Pact in major Govt. Department /Organizations and circulated vide Circular Number . 10/5/09 dated 18.05.09. The Commission has emphasized the necessity to adopt Integrity Pact in Govt. Organizations in their major procurement activities and to nominate Independent External Monitor (IEMs) out of a panel of names proposed by an Organization with the approval of the commission. Commission has clarified that the review system for the CVOs wherein and internal assessment of the impact of Integrity Pact are to be carried out annually and report to the commission. The Organization which has adopted Integrity Pact may report compliance of review system through monthly report. Organizations desirous of implementing Integrity Pact are required to forward at most three names of Independent External Monitor (IEMs) along with the proposal to the Commission for approval which should be selected after due diligence and scrutiny. The names for appointment of IEM considered should be officers of Govt. of India departments or Public Sector Undertakings retiring from Top Management positions. Eminent persons, executives of private sector of considerable eminence could also be considered and names recommended for approval. The serving officers or officer/executive retiring from the same organization to be an IEM in the same organization will not be considered. The appointment of IEM would be for an initial period of three years which could be extended for another term of two years on the request of the organization appointing the IEM. An Independent External Monitor can have a maximum tenure of five years in an organization. (For further details:-CVC Circular No. 10/05/09 dated 18th May 2009 on “Adoption of Integrity Pact-Standard Operating Procedure-reg.”, Circular No 22/08/09 dated 11th August 2009 on “Adoption of Integrity Pact –Periodical regarding ” and Circular No 17/04/10 dated 19th April 2010 on “Integrity Pact-Selection and recommendation of Independent External Monitor (IEMs)”)

34. CORPORATE SOCIAL RESPONSIBILITY (CSR)

It is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.

Corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. More than goodwill, corporate community involvement or strategic corporate philanthropy, corporate responsibility is a genuine attempt by a company to build meaningful relationships between the corporate sector and the rest of society. Corporate responsibility is achieved when a business adapts all of its practices to ensure that it operates in ways that meet, or

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exceeds, the ethical, legal, commercial and public expectations that society has of business.

Corporate responsibility must be an integrated part of day-to-day business, engaging all stakeholders and including strategies to support individual managers to make socially responsible decisions, conform to ethical behavior and obey the law to be effective.

35. INITIATIVE TO IMPROVE TRANSPARENCY

1. Right to Information Act - 2005

The Right to Information Act 2005 which has come into force in Oct., 2005 is basically meant to promote transparency and openness.

It is an important weapon in the hands of Indian Citizen to access almost any information from a public authority. The objectivity of the RTI Act 2005 is to promote transparency and accountability in the functioning of every public authority.

2. Information Technology Act - 2000

The aims and objective of IT ACT 2000 include facilitating the use of commerce and providing equal treatment to users of paper-based documentation and to user of computer-based information.

The IT Act 2000 deals with the following issues:

i. Secure electronic transaction –these enables parties to enter into electronic contracts.

ii. Attribution of electronic messages.

iii. Electronic signatures and electronic records given legal status.

iv. Contraventions regarding electronic records, viz, hacking, theft of electronic records, manipulation of records and spreading viruses etc.

v. Information technology offences.

vi. Facilitates e-commerce as well as electronic filing and maintenance of records as against the government.

vii. Tempering with computer source documents.

viii. Hacking with computer system.

ix. Publishing of information which is obscene in electronic form.

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x. Liabilities of internet service provider for content on the internet is limited in so far as the provider exercises all due diligence etc.

The Act offers the much needed legal frame work so that information is not denied legal effect, validity or enforceability, on the ground that it is in the form of electronic records.

The Act seeks to empower departments to accept filling, creating and retention of official documents in the digital format. The Act has proposed a legal framework for the authentication and origin of electronic records/ communications through digital signature

Under the Act, e-mail would now be a valid and legal form of communication in our country and can be duly produced and approved in a court of Law and allows Government to issue notification on the web thus heralding e-governance.

3. Introduction to E- Governance

E-Governance is the use of Information & Technology by the Government for discharge of their social responsibilities in a more organized and efficient manner. The government is promoting E- Governance to improve transparency in government functioning But it must be noted that the use of Computers in Government operations cannot be referred to as E-Governance. It is more appropriately defined as the use of Information technology for the governance of the people of the society like maintaining of digital records, issue of electronic notification, providing for filing of online returns, etc.

The concept of E-Governance in India was given recognition for the first time under chapter III of Information Technology Act, 2000, where section 6 provides for use of electronic records and digital signatures by the Government and its agencies.

In the last five years, the things have improved and have become easier for Citizens. Now we can file various forms online like TDS Returns, Shopping Bills, Sales tax, Service Tax returns and also forms with ROC.

The modern IT tools can be leveraged in enhancing transparency in the form of E-Tendering, E-Procurements, E-Payments and uploading of post tender details on the web site. a) Leveraging of Technology for Improving Vigilance Administration in the National E-Governance Plan

E-Procurement provides a platform for the collaborative procurements of goods, works and services using electronic methods at every stage of the procurement process. The E-Procurement platform transacts confidential procurement data and is exposed to several security threats. To ensure proper security of E-Procurement system, Commission advises all Departments/Organizations to get their systems certified by Department of Information Technology. (For details: - CVC Circular No. 23/06/0107 dated 23rd June 2010)

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4. Integrity Pact

Transparency International developed this tool to help fight corruption in the field

of public tendering. It is a binding voluntary agreement between the procurement agency and all bidders for a project. Both agree not to accept / give bribe to obtain or retain the particular contract. The implementation of integrity pact is to be monitored by independent monitors, selected by the organizations with the approval of CVC. 5. Corporate Governance and Ethics – Challenges and Imperatives

CVC had circulated the note on Corporate Governess and Ethics –Challenges

and Imperatives by former Vigilance Commissioner, Smt. Ranjana Kumar for information of all employees in the organization vide circular no. 38/10/07 dated 29th Oct 2007 which deals with various issues relating to Principles of Corporate Governance. For download the note, visit CVC web site: http://www.cvc.nic.in. (For details: - CVC Circular No. 38/10/07 dated 29th October 2007) 36. EXAMINATION OF PUBLIC PROCUREMENT (WORKS/PURCHASES / SERVICES)

CONTRACTS BY CVOS. The field staff should be well conversant with the provision of the manuals and the guidelines issued by the commission/ CVOs from time to time. A number of booklets have been issued by Chief Technical Examiner Organization of the Commission bringing about the common irregularities/ lapses noticed in different contract. A manual for intensive Examination of Works/Purchase Contracts and guidelines on tendering have also been issued which are available in the Commission’s web site. For download the manuals, visit CVC web site: http://www.cvc.nic.in.

The commission emphasis the need for close scrutiny of the public procurement

(Works/Purchases/Services) contracts to ensure that the laid down systems and procedures are followed, there is total transparency in the award of contract and there is no misuse of power in decision making.

On the basis of lapses noticed by the Chief Technical Examiners Organization over

the years, a checklist has been prepared for examining procurement contracts. It should be ensured that the lapses previous noted are not repeated. The check list is placed for the benefit of the field staff and special care should be taken in the issues. (For details: - CVC Circular No. 21/05/06 dated 1st May 2006)

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Check list for examination of Procurement (Works/ Purchases/ Services) Contract. A. Pre-Award Stage

1. Financial and Technical sanction of competent authority is available. 2. Adequate and wide publicity is given. Advertisement is posted on website

and tender documents are available for downloading. 3. Convenient tender receiving/ opening time and address of the tender

receiving officials/tender box are properly notified. 4. In the case of limited tender, panel is prepared in a transparent manner

clearly publishing the eligibility criteria. The panel is undated regularly. 5. Pre-qualification criteria are properly defined/ notified. 6. Short listed firms/consultants are fulfilling the eligibility criteria. There is no

deviation from notified criteria during evaluation. 7. Experience certificates submitted have been duly verified. 8. Tenders/ bids are opened in the presence of bidders. 9. Corrections/omissions/additions etc., in price bid are properly numbered and

attested and accounted page-wise. Tender summary note/ Tender opening register is scrupulously maintained

10. Conditions having financial implications are not altered after opening of the price bids.

11. In case of consultancy contracts (a) Upper ceiling limit is fixed for consultancy free (b) Separate rates for repetitive works are fixed

B. Post-award stage. a) General

1. Agreement is complete with all relevant papers such as pre-bid conference minutes, etc.

2. Agreement is page numbered, signed and sealed properly. 3. Bank Guarantee is verified from issuing Bank. 4. Insurance policies, labour licence, performance guarantee are taken as

per contract. 5. Technical personnel are deployed as per contract. 6. Plant and equipment are deployed as per contract. 7 Action for levy of liquidated damages is taken in case of delay/ default.

(b) Payments to contractors. 1. Price escalation is paid only as per contract. 2 Retention Money/ Security Deposit is deducted as per contract.

3. Recovery of Mobilization & Equipment advance is made as per the provisions in the contract.

4. Recovery of I. Tax & Works Contract tax is made as per provisions in the contract.

5. Glaring deviations are supported with adequate justification and are not advantageous to the contractor.

(c ) Site Records 1. Proper system of recording and compliance of the instructions issued to

the contractors is maintained. 2. Proper record of hindrances is maintained for the purpose of timely

removal of the hindrance and action for levy of liquidated damages. 3. Mandatory tests are carried out as per the frequency prescribed in the

Agreement.

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37. THE CHIEF TECHNICAL EXAMINERS’ ORGANIZATION (CTEO) The Chief Technical Examiners’ Organization (CTEO) in the Central Vigilance

Commission is the technical wing of the Commission and it assists the latter in formulating its advice involving different technical /contract matters.

CVC has been laying stress on Preventive Vigilance and in pursuance of this

objective; CTE’s Organization emphasized creating awareness for Quality Control, Economy and adherence to rules and procedures. CTE’s Organization has been functioning more like a vigilance audit wing where serious irregularities/lapses noticed during the inspections were sent for detailed investigations to the concerned Organization. It helps to improve the system in the organizations so that a recurrence of lapses /irregularities is prevented in the contracts and there is better technical and financial control that results in efficiency and transparency outcomes.

The wing comprises of two Chief Technical Examiners (of the rank of Chief

Engineer) which are assisted by eight Technical Examiners (of the rank of Executive Engineer), six Assistant Technical Examiners (of the rank of Assistant Engineer) and other subordinate staff. a) Submission of Quarterly Progress Report (QPR) to Commission

Every Unit and Zone has to submit the quarterly report in the Proforma enclosed

at S. No. one to Chief Vigilance Officer in hard and soft copy which is required to be sent by 10th day of the month following the quarter positively.

Separate reports have to be submitted for Civil Works (costing Rs one crore and

above) Electrical Works (Costing Rs thirty lakhs and above Horticulture Works costing Rs.2 lacs). It has been noticed by the Commission that some Departments/ Organizations are either not submitting the QPR at all or incomplete shape. Non – submission of the QPR may be treated as suppression of facts. Therefore it is enjoined upon all the Zonal Managers to arrange for the submission of QPR duly completed and endorsed by Project Manager and Zonal Managers only.

Statement showing the Quarterly Progress of Original Works for Quarter ending March/June /September/December

Civil Works costing Rs. One crore and above Electrical Works costing Rs. Thirty lakhs and above Horticulture Works costing Rs. Two lakhs and above

S. No.

Name of work and location

Estima-ted cost

Tendered cost

% Margin to Org.

Agree- ment no.

Agency Date of start

Time of comp.

Phy- sical Prog- ress

Name of E-in-c with add-ress

Remarks

1 2 3 4 5 6 7 8 9 10 11 12

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b) Common deficiencies observed in QPRs Common deficiencies observed in QPRs as noted by CTE has been circulated

vide O.M. No.98VGL 25 dated 28.05.2009.

Central Vigilance Commission, New Delhi has observed following deficiencies in quarterly progress report which is required to be taken care of while sending the report so that the Quarterly Progress Report may be sent to CTE accordingly. 1. Estimated cost/ tendered value of work is not being indicated in lacs uniformly.

For some works in the same QPR, Estimated cost/Tendered Value is being indicated in Rupees, Lacs and Crores which creates confusion.

2. In case the work in progress is less than the prescribed value, only two highest value works are to be reported.

3. Clear name of works including locations is not being provided in a number of cases.

4. Full designation and location of the Engineer in charge is not being indicated in the QPRs.

5. Date of start and date of completion are not being indicated in dd-mm-yy format, rather unwanted information such as number of days allowed to the agency to start the work after issue of LOI etc. are being given.

6. Against the requirement of indicating the physical progress of the work in % terms, the quantities of various items of work are being given, which are not required.

7. The required certificate from the Zonal Manager that all the qualifying works have been reported is not being given in the QPRs.

c) Conduction of Independent Technical Examination of Works One of the important functions of the CTEO is to conduct an independent

technical examination of Civil, Electrical Works including Air-conditioning, Horticulture Works and Store Purchase Contracts, reported by the CVOs. Such examination /inspections lead to introducing number of systematic improvements and other remedial measures which help to prevent recurrence of such instances. It also has resulted in modifications in the procedure to bring about more transparency.

d) Collection of Data prior to Inspection

The Chief Technical Examiners’ Organization (CTEO) requests CVOs to arrange to

collect and make the following documents mentioned at Annexure I and II available to Chief Technical Examiner/ Technical Examiner/ Asstt. Technical Examiner to enable the inspection to be carried out properly as mentioned below:-

1. General Information in Annexure –I :- Proforma at Annexure I for items under

paras 1 to 1.3 are required to be filled in and returned immediately duly signed. In case administrative set up is different in the organization than that indicated in paras 1.2 and 1.3, the same may be incorporated accordingly.

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2. Technical Information in Annexure II : The proforma at Annexure II is to be filled in, signed and forwarded immediately along with copies against item No. 2,7,8,9 and 17.

The information in proforma at Annexure I & II is to be furnished on factual basis

as per record already available. It is to be ensured that the requisite information is forwarded immediately so as to reach the office of CTEO within 15 days after issue of the letter. If one or two items are not readily available, the entire information may not be delayed and may be sent immediately. The remaining may follow shortly afterwards.

e) Documents for inspection at site office Annexure III:

All the original documents as mentioned may be kept ready after inspection

programme is intimated which are examined at site/site office. After intimation of the inspection programme, arrangements are to be made at

site for the inspection of different works along with the required tools, plants and workmen. It has to be ensured that all parts of the building work are made available for inspection. The inspection reports are forwarded by CTEO to the concerned CVO or the CBI for conducting detailed investigation from vigilance angle, if required, on the basis of the seriousness of the lapses/irregularities noticed during the inspection process.

38. DESIGN MIX CONCRETE AND OTHER DEFECIENCIES NOTED BY CTEO

On the basis of observations made by the Chief Technical Examiners Organization during inspection, it was noted that provisions of IS 456:2000 are not been followed for designing of concrete mix & for accepting criteria. The concrete was accepted on the basis of false certification and without actually testing of cubs for 28 days strength in some cases. The deficiencies are brought to the notice of all organization for immediate corrective action.

All organization are directed to ensure that provisions of IS 456:2000 read with

amendment no.3 should be followed scrupulously for cement concrete and reinforced cement concrete. (For details: - CVC Circular No. 34/10/10 dated 7th Oct. 2010 on “Design Mix Concrete”. Copy enclosed). 1. Minimum cement content, maximum water cement ratio and minimum grade of

concrete for different exposures are not adopted as per the details given in Table 5 of above code.

2. Value of standard deviation is not being established on the basis of results of 30 samples as provided in table 11 of the above code even for works where more than 30 samples have been tested.

3. For acceptance criteria means of a group of 4 Non overlapping consecutive test results is not being calculated.

4. The samples where individual variations are more than + 15% of average of three specimens are not declared invalid as per the provision of clause 15.4 of the code.

5. The concrete is being declared meeting the acceptance criteria which is not in conformity of codal provisions.

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Annexure-1

1.0 Particulars of Work 1.1 Name of Work

Agreement No

Name of Contractor

Estimated cost

Tendered cost

Date of start

Due date of completion

Present progress

1.2 Departmental Authorities

Zone/GM Office

Circle/Dy, GM Office

Division/Sr. Manager Office

Sub Division/Field Unit

1.3 Official- in-charge of Work

Chief Engineer/GM/ED

Superintending Engineer/Dy. GM

Executive Engineer/Mgr/Sr. Mgr

Asstt. Engineer / Dy. Mgr / Asstt. Mgr

Jr Engineer/Supervisor

Divisional Accountant/Finance Officer

Asstt. Surveyor of Work in Division/

Planning Officer in Field Unit

Surveyor of Work in Circle/Planning

Officer in GM/ED Office

Surveyor of Works in SSW’s Office/

Planning Officers in Corporate Office Name Signatures

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Annexure-II Technical Information

1. Name of work

2. Agreement Number (Please supply copy of Agreement)

3. Name of contractor

4. Estimated cost

5. Tendered cost

6. a) Date of commencement

b) Stipulated date of completion

c) % progress

7. Ref. Memo and date of sanction of Project (Please supply copy of memo.)

8. Ref and date of technical sanction (Please supply copy of Sanction )

9. Date of approval of NIT (Please supply copy of letter of approval)

10. Date of publication of NIT in press

11. Date of receipt of tenders

12. No. of tenders sold

13. No. of tenders received

14. Whether work awarded to lowest tenderer

15. Whether market rate justification available on record

16. Works manual adopted

17. S. No. and date of last bill paid (Please supply copy of bill with enclosures)

18. Whether AHR/LHR items identified

19. No of items Extra items Substituted items Deduction items

Sanctioned Proposed

20. Test check carried out up to last bill Prescribed Actual % Test check by AE / Dy. Mgr /Asstt. Mgr % Test check by EE/ Sr. Mgr

% Test check by SE/Dy. GM Name

Signatures

48

Annexure-III Documents for Inspection at Site Office

1 a) Press cuttings including extended dates, if any

i) For pre-qualifications of Architects/Consultants

ii) For pre-qualifications of Contractors

iii) Call of tenders

b) Register of sale of tenders

c) Register of opening of tenders

2. File giving reference to final sanction and approval of competent

administrative authority- Preliminary Estimate

3. Copy of detailed estimate and its Technical Sanction by competent technical

authority

4. Approval of NIT (Notice inviting tenders ) in original

5. Rejected tenders and comparative statements for

a) Selection of Architects/Consultants

b) Short listing of pre-qualifications of tender

c) Other tenders

6. Justification statement and corresponding noting in support of tenders/offers

accepted

7. Details of negotiations ,if any ,made before acceptance of tender

8. Original contract with Consultant /Contractor

9. Guarantee Bond etc. towards security for work machinery/mobilization

advance etc. including extension of validity

10. Insurance policy for work , materials equipment ,men etc. including extension

of validity

11. Guarantee for water tightness ,termite proofing etc

12. Standard specifications

13. Standard schedule of rates

14. Drawings-Architectural, Structural, and Services

15. All connected measurement books, level books and lead charts.

16. All running account bills with all connected statements/ vouchers

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17. Statement showing details of check of measurements by superior officers-

Copies of order laying down such requirements.

18. Materials of site accounts/cement, steel, bitumen, paints, water proofing

compound, pig lead, anti termite chemicals etc.

19. Site order book/test records/log books.

20. Details of extra/ substituted items and of deviated quantities being

.executed/ considered for execution in the work along with analysis of rates.

21. Hindrance register

22. Office, correspondence files and inspection notes, if any, issued by inspecting

officer

23. Complaint records, if any

24. Any other document related to the work

25. Details of payments in Proforma ‘A’

26. Cement consumption statement in Proforma ‘B’

27. Steel consumption statement in Proforma ‘C’

28. Statement of tests of Materials in Proforma ‘D’

Proforma ‘A’

Details of Payments

Account Payable Details of disbursement and recoveries

S.No. of bill

CR No. Date On A/c

Pay-ment

Adv. Pay-ment

Secu-red Adva-nce

Mobilis-ation Adva-nce

Total Cheque amount Adv.

I/Tax Cost of Mat.

Sec-ured adv.

Mob. adv

Depo-sit

Name

Signatures

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Proforma B

Cement Consumption Statement for last bill paid (S. No. )

Last date of measurements

Theoretically required

Actually consumed

Recovered Remarks

Name

Signatures

Proforma ‘C’

DETAILS OF STEEL REINFORCEMENT FOR LAST (S. No. ) BILL PAID

Tor Steel dia in mm

8

10

12

16

20

22

25

28

32

36

40

42

Qty. iss0ued by Deptt (MT)

Qty. measured for payment MT)

Qty. recovered from bill (MT)

Notes :-

1. If Mild steel reinforcement is used, information may be furnished in same

proforma as for Tor steel. 2. If Structural steel is used, information may be furnished in similar proforma for

various sections instead of various diameters. Name

Signatures

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Proforma ‘D’ STATEMENT OF TESTS OF MATERIALS

S. No.

Disc. of Mats.

Qty. consumed till date

Disc. of tests as per BIS/ Agree. provn.

Freq. of tests as per BIS/ Agreeprovn.

No. of Tests Lab where test is conducted

Whether lab is appd. by Govt.

Status of Test results (pass)/ fail

If failed what action taken

Whether testing charges borne by Deptt./ Agency (Ref. To Agree.)

Recovery proposed for shortfall in tests/ failed results

Reqd. Cond- ucted

1 2 3 4 5 6 7 8 9 10 11 12 13

Engineer- in - charge Chief Vigilance Officer

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39. SUBMISSION OF ANNUAL PROPERTY RETURN Every employee holding a post included in Group A & Group B is required to submit annual returns in the prescribed Performa in respect of the immovable property inherited by him or owned or acquired by him or held by him on lease or mortgage either in his own name or in the name of any member of his family or in the name of any other person as on 31st December so as to reach to the Vigilance Section latest by 31st Jan of the succeeding year. Please note the following points while filling the APR. Note I If the Property is not wholly owned the extent of share may also be indicated. Note II For purpose of Col. 6, the term 'lease' would mean a lease of immovable

property from year to year or for any term exceeding one year of reserve yearly rent. When, however, the lease of immovable property is obtained from a person having official dealings with the employee, such a lease should in this column irrespective of the term of the lease whether it is short / long term & the periodically of the payment of rent.

Note III In col. 4 should be shown: a) Where the property has been acquired by purchase, mortgage or lease, the

price or premium paid for each acquisition. b) Where it has been acquired by lease the total annual rent thereof also and c) Where it has been acquired is by inheritance, or exchange the approximate

value of the property so acquired. Note IV The annual immovable property return is to be submitted as on 31st December

and should reach by 31st Jan of the succeeding month. Note V Name of District, Division, Taluka & Village in which the property is situated

and also its distinctive number etc. be given in Col.1. Note VI Whether by purchase, mortgage, lease inheritance, gift or otherwise & name

with details of person/ persons from whom acquired. Address & connection, if any, with the person/ persons concerned are also to be given in column.

1. Name of the Officer : ___________________________ 4. Present Pay & Scale of Pay : _____________________________2. Office/Unit of NPCC Ltd : ___________________________ 5. If on deputation :3. Present post held : ___________________________ i) Name of the parent department: ______________________

ii) Post held in the parent department: ______________________

Source of Finance

Remarks

Housing and other building

Lands Amount Source

Dt. Amt. To

1 2 3 4 5 6 7 8 9 10 11 12

STATEMENT SHOWISNG OF IMMOVEABLE PROPERTY AS ON 31st DECEMBER______________

Name and details of property

Name of disttrict/sub divn. /Taluk and village in which property is situated

Present Value

If not in own name state in whose name held and his/her relation to the employee

How acquired whether by purchases, lease, mortagage inheritance, gift or otherwise with date of acquisition and name with details of per;sons from whom acquired.

Annual income from the property

Whether sold if details

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40. TRANSPARENCY IN TENDERING SYSTEM FOR COMPLEX NATURE PROCUREMENT

Where the equipments/ plant to be procured is of complex nature, the C V C advises that two stages tendering process may be preferred. During the first stage, it would be prudent to invite expression of interest giving the broad objectives, constraints etc from the leading experienced and knowledgeable manufactures/ suppliers in the field of the proposed procurement and the technical discussion/ presentations may be held with the short-listed manufactures/ suppliers. During these technical discussions stage, other stake holders in the discussions who could add value to the decision making on the various technical aspects and evaluation criteria may be called. Thus based on technical discussion/ presentation with the experienced manufactures/ suppliers specifications are to be finalized in a transparent manner laying down detailed technical specifications for each acceptable technical solution, quality bench marks, warranty requirements, delivery milestone consistent with the objectives of the transparent procurement. Care should also be taken to make the specification generic in nature so as to provide equitable opportunities to the prospective bidders & proper record of discussions/ presentations and the process of decision making should be kept. On finalization of technical specifications and evaluation criteria, the second stage of tendering could consist of calling for techno commercial bids as per the usual tendering system under single bid or two bid system, as per the requirement of each case. Final selection at this stage would depend upon the quoted financial bids and the evaluation matrix decided upon. Central Vigilance Commission desires that organizations formulate specific guidelines and circulate the same to all concerned before going ahead with such procurements. (For details: - CVC Circular No. 01/02/11 dated 1st February 2011)

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