Contract Management PDF

7. A railway user is not an obstruction in our working but he is the important part of our function. Each passenger has right to get the co-operation from the railway employees, hence he should be provided proper guidance and information. 8. Railway passengers are always in hurry hence...

7. A railway user is not an obstruction in our working but he is the important part of our function. Each passenger has right to get the co-operation from the railway employees, hence he should be provided proper guidance and information. 8. Railway passengers are always in hurry hence their problem/difficulty must be listened carefully and solved accordingly. 9. One sweet and soft word can minimize the anger. This sentence should always be remembered. 10. The majority of travellers on Indian Railway is of second class, to whom railway administration is unable to provide all the required facilities and that it’s why this class is always unsatisfied. Hence the travellers of this class should always be handled with courteous and helpful manners. Courtesy is the foundation of Public goodwill. Courteous person always behave with courtesy in all circumstances. Railway customer is our guest from the time he enters Railway premises, till he leaves Railway premises. Hence all facilities and services provided by Railway Administration should be given to him. With the courteous behaviour the employee can increase the Goodwill as well as name of Zonal Railway and Indian Railway. Courtesy week is organized by Railway in every year from 10th to 16th April. CI/CP-2/1.23 Contract Management, Parcel Cargo Express Train. CONTRACT MANAGEMENT What is Contract:-- A contract is an agreement between two or more parties.An agreement is a promise or a set of the reciprocal promises. Section 10 of Indian Contract Act, 1872 defines a contract as an agreement enforceable by law. An agreement not enforceable by law is not a valid contract, it is void. Essence of Contract :-- The legal source of the contract system are various laws and act such as Indian Contract Act 1872,Indian Arbitration Act 1996,Indian Railway Standard conditions of contract, Goods and Service Tax 2017 and various other labour related acts. The Railway officials dealing with the contracts should acquaint themselves with the basic content of these acts. Section 10 the Indian contract Act defines the essentials of the contract as “ All agreements are contracts if they are made by the free consent of parties competent to contract ,for a lawful consideration and with a lawful object and are not hearby expressly declared to be void”. A contract must have a promisor, a promisee and a consideration.The promisor is the one who makes the proposal, the promisee is one who accepts the proposal, consideration is usually money. Thus the requirements of a contract can be summarised as below:-- 163 1. There must be an agreement 2. The agreement must be between the parties competent to contract. 3. The parties must give their free consent.Two or more persons are said to consent when they agree upon the thing in the same sense. Here free consent is necessary.The consent is said to be free when it is not caused by coercion (compulsion), undue influence.fraud, misrepresentation or mistake. 4. The agreement must be supported by the considerations, which must be lawful. 5. The subject matter of the agreement must be definite and lawful. 6. The agreement must not be the result of the mutual mistake of fact. Any agreement, which does not fulfil the above requirements is not a valid contract, it is void. Components of Contracts:- The contract management includes inviting tenders, opening of tenders, briefing notes, consideration of tenders and award of contract. After the award, various changes, variations, extras are to be sorted till completion of work. The payments are also to be for the successful completion of work. Various components of contract are clearly and unambiguously spelt out such as terms and conditions, tender schedule, taxes, GST, Price variation etc. In the government contracts another important element is the propriety. The government must be fair and seen to be fair to all. The government financial interest must be safeguarded.Thus the contract should be so drafted /framed that the contractor, is not in a position to easily take advantage of any provision in the contract and extract unintended benefits. Types Of Contracts :- Depending upon financial implication, contracts are mainly two types: (i) Earning contract , and (ii) Expenditure contracts. Depending on the size of project, local conditions ,availability of resources, nature of contracts and technology there are many types of Contracts. Following are the types of Contracts. (i) Store contracts. (ii) Work Contract (iii) Service contracts i) Stores Contracts : 164 The legal agreement between two parties to comply /supply fixed quantity at a fixed rate within fixed time is known as contract. Contract is placed on acceptance of technically suitable tender for timely supply of material at fixed rate. Stores Contracts can be classified as - (a) Rate Contracts (b) Running Contracts (c) Fixed delivery Contracts ii) Works Contracts : (a) Lump -sum Contract (b) Schedule Contract (c) Piece work Contract (a) Rate Contracts: The contract during currency of which (contract period) the supplier has to supply material on demand at a fixed time within the fixed unit rate irrespective of quantity is known as Rate contract. These are generalized contracts entered into with suppliers for a specified period of time (normally 1 or 2 years) for specific items identifying all terms & conditions including the price, but quantity and consignee are not fixed. The contracts authorize supply orders being placed by nominated officers for specific quantities to be supplied to specific consignees on the rate contract terms and conditions and price without the need to go through the whole procurement procedure. If supplier can not supply within the time then Liquidated Damages is imposed. During the currency of contract if supplier sell the material below the price offered to the Railways ,then it has also supply the material at lower rate to the Railways. Thus, the rate contracts save lot of time in routine purchase work. As specific quantities to be drawn are not advised in the contract , supplier has to take a definite amount of risk because if he gets orders for lesser quantities than anticipated by him, he cannot claim any damages. However the purchaser has to obtain an acceptance of his supply order, by the supplier. (b) Running Contract : The contract during currency of which the fixed quantity is supplied at a fixed unit rate & within fixed period is known as running contract. Though time, rate and quantity are fixed under running contract still +/- 30% quantity may be demanded on either side. Running contract is placed by Railway Board & individual unit must place indent for obtaining such item.In Running contract LD cannot be imposed but in case of inconvenience information may be given to Railway Board. 165  In rate contracts, suppliers are not sure of order quantities and therefore they do not want to take risk by making Investments in Machinery & Plant and Raw materials required for Manufacture of goods. They, therefore, insist that some estimate of Quantity to be purchased should be provided in the contract. Therefore, if in a contract entered for a specific period of time, like Rate Contract, if we give an indication of minimum quantities to be purchased, the Contract is known as running contract. Generally running contracts have liberal quantity tolerance clauses according to which quantities can be increased or decreased by 30%.For running contracts also separate supply orders for actual drawl of the materials are required. (c)Fixed Quantity Contracts : In these contracts all the terms and conditions including quantity in definite terms, consignee and delivery period is specified at the contract stage itself. The contract is generally not spanning over a long period like Rate/Running Contract and no subsequent supply order is required to be placed. These contracts lack the flexibility of Rate & Running Contract but contract administration is easy. In Railways, most of our contracts fall in this category only. (d )Lumpsum Contract :- In these contracts, the contractor is engaged to carry out a work or effect supply as specified, within a given period for a fixed total sum. The payment will depend on the completion of work, irrespective.The payment in between can be made on completion of the various stages as mutually agreed.In the case such contracts a scale of rates or prices may be agreed upon by which enhancement of or reduction from the Lumpsum may be regulated in the event of any departures from the work or supply as specified. Example: - Overhead water tank in engineering department. The merits of such contracts are that these are easy to finalise, these do not result in the tender vitiation,do not need of the detailed measurements ,and readily indicate the cost of the work. Moreover if the detailed planning and estimate is to be done in advance, less dispute arises. The demerits of such contracts are that too much preparation is required in the beginning. Secondly, the management of deviations during the progress of work is difficult. (e) Schedule Contract :- In this type of contract, the contractor agrees to carry out a work or effect supply as specified a given period, at the fixed unit rates or the prices for each of the various items comprising such a work or supply.The quantity of each item is given in a schedule.The sum to be paid will depend an actual quantities of the work done or the supply made against each item of work/supply. The contracts normally need a ‘Master Schedule of rates’ along with standard specifications on which the rates are based. The contractor is required to quote a single percentage for the whole work and not for individual items.In Engineering Department most of the tenders fall in this category. The merit of this system is that tenders are easily finalised. The demerit of this system is that dealing of the variations is difficult. In this system ,one has to avoid the abnormal variation in the schedule items and quantities. 166 (F) Piece Work Contact :- Piece work contract is a contract under which only unit rates are fixed for various kinds of the works or materials are agreed upon ,without reference either to the quantity of work to be done or the material supplied within a given period.The Zonal contracts adopted on the Railways fall under this category. The merits of this system are that advance planning is not required.As and when petty repair works arise ,the work order can be placed.The prerequisite of this system is availability of an updated master schedule of rates.If the schedule of rates is old ,therefore ,some items the rates will be profitable and for some items loss making. There is a tendency of the contractor not to execute items loss making items. CONTRACT DOCUMENTS Every contract shall be so framed as to place beyond all reasonable doubt all the matters upon which parties intend to agree, and the matters to be agreed upon shall include in details, the following: (a) What the contractor is to do, when, where, and to whose satisfaction it is to be done. (b) What government is to do, and what terms. (c)What payment is to be made, what is to cover ,to whom it is to be made and the method & basis of making it. (d) The responsibility of contractor in respect of adequate supervision, care of government property and the protection of outside interests and those of his staff and workman. (e) The terms of which variation and modifications, if any ,are to be permitted, the authority competent to order and to asses them and the occasion and basis of such assessment. (f) The measures to be adopted in the event of breach of contract by either party thereto and the method of an grounds for the determination thereof. (g) The method of setting disputes. The contract documents are important tools of the project management. These documents play a pivotal role in determining scope, time, cost, quality, risk, communication and matter relating to human resource development in contract. The main documents is: (i) Standards and special conditions of contract. (ii) The specifications, drawing (iii) The schedule of items ,quantities and rates (iv) The agreement form (vi) Instructions to the tenderers and the tender form (vii) Issue of tools and plants ,Railway material to contractor. (viii) General conditions of contract (ix) Monthly schedule of supply. (x) Completion period by which works to be completed. (xi) Maintenance period if any 167 GENERAL PRINCIPLES The general principals to be followed to entering into contracts are as under: (a) As far as possible ,legal and financial advice should be taken in drafting contracts before finalisation. (b) Standard forms of contract should be adopted wherever possible. (c ) The terms of the contract once entered into, should not be materially varied except in consultation with the competent legal and financial authority. (d) Provision must be made in contracts for safeguarding Government properties entrusted to contractor. (e) Wherever practicable and advantageous , contracts should be placed only after tenders have been openly invited and in cases where the lowest tender is not accepted, reasons should be recorded. (f) In selecting the tender to be accepted ,the financial status of the individuals and firms tendering must be taken into consideration in addition to all other relevant factors. (g) Even in cases where a formal written contract is not made, no order for supply should be placed without atleast the written agreement as to price. (h) No contract involving an uncertain or indefinite liability or any condition of unusual character should be entered into without the previous consent of the competent legal and financial authority. (i) In entering into long term agreements or contracts consideration should be given to the desirability of providing for the Railway administration to have unconditional power to cancel the contract with notice period as desirable. (j) The power to retain and set off all claims whether arising out of a particular contract or out of any other transaction or claim what so ever against the contractor should be secured for the Railway administration. CONDITIONS OF CONTRACT The conditions of contract are the rules; statements governing management of contracts.These are the guidelines clearly defining the roles, obligation, and rights of both the parties. These details statements reduce the area of clash or dispute. These are closely linked to the rates and specifications for an item of work/supply. The conditions are of two types:-- 1) General conditions and 2) Special conditions of the contract. Normally conditions are framed by the department but sometimes the contractors quote their conditions alongwith his rates. These may have financial implication.Hence their evaluation is done by competent authority with finance concurrence if required. A] General conditions of contract;-- These are basic conditions of the contract framework. These are applicable to all the contracts. GCC are framed by the Railway Board.Any modification to GCC needs Railway 168 Board’s approval.The GCC are issued and modified by Railway Board. Generally it contains 64 clauses grouped in the following main headings. (i) Definitions and interpretations –clause1 (ii) General obligations ----- clause 2 to 18 (iii) Execution of works------- clause 19 to 40 (iv) Variation in the extent of contract –clauses 41,42,43 (v) Measurement, certification and payments--- clause 44 to 53 (vi) Labour related aspects –Clause 54 to 60 (vii)Determination of contract --- Clause 61,62 (viii) Settlement of Disputes -- Clause 63,64 B) Special Conditions Of Contract(SCC):SCC are decided as per specific requirement case to case basis. Tender System : Tender can be termed as invitation extended to the general public for supply of material or carrying out work in exchange of consideration. Tenders are most effective means to keep the rates at the lowest level. It is the duty of the executive officer to obtain the best value for the money spent hence utmost care should be taken while inviting tenders. Executive may decide not to invite tenders in cases to avoid delay in completion of work or where the cost of work involved is of a small value. Types of tenders: i) Open tender. ii) Limited tender iii) Single tender iv) Global tender (a) Advertised Tender or Open Tender system : As the name implies, in this system, Rly publish the tender notices in public newspapers, periodicals & on IREPS website so that anybody who is in a position of supplying that material can purchase the tender documents from PCMM's/Executive’s office and can submit his tender. As wide publicity is given to the requirement, we generally get most competitive offers. But due to various reasons, in this system, time taken in purchasing the material is large. In Railways, we adopt this system only when estimated purchase value of the item is more than Rs.25 lakhs.  Invitation of Tender from open market through advt.  By advertising through 1)National and local news papers 2) Internet 3) Magazine 169  4) IREPS Open tender should be invited if the estimated value of purchase is over Rs. 25 lakhs. Powers for Invitation of open Tender: Power of invitation of Open tender are as per SOPGEN or as per policy directions time being in force. (b) Limited Tender System : Purchase through advertised tender is time consuming process and therefore, when the purchase value is less than Rs.25 lakhs or if the item is urgently required, we invite tenders from a limited number of firms. These firms are normally our approved suppliers, but in certain cases, limited tenders can be invited from unregistered firms also with the approval of the competent authority.  Registered firms are invited for submission of tender value less than Rs.25 lakhs  Powers for invitation of Limited /Bulletin Tenders  Schedule of Power as per SOPGEN  Registered firms are invited for submission of tender value less than Rs.25 lakhs.  Last successful suppliers must be invited  Inquires may be issued to min.3 firms & max.7 to 8 firms  When large number of firms are registered for group/item inquiries are sent to all of them in rotation  EMD & SD is not collected Different forms of limited tender are : (i) Ordinary limited tenders-- when separate tender inquiriesare sent for each item; (ii)Bulletin Tender-- All PCMMs publish a weekly bulletin containing purchase requirements of all purchase sections. (iii) Special Limited Tenders-- These are limited tenders issued for the item whose estimated value is more than Rs. 25 lakhs. We resort to this system in case of all safety items, items urgently required and items having only limited sources of supply. (A) In view of Emergency Emergency should be recorded in writing , and Tender may be called for by the competent level authority as per SOPGEN.for example:  JAG officer up to Rs.8 lakhs & SAG above Rs.8 lakhs  DYCMM-upto Rs. 1.5 Crs.,  CMM- upto Rs.05 Crore ,  COS- upto 10 Crore,  AGM- upto20 Crore, (B) For Safety items and items which approved list is issued by centralized agency RDSO/PU/CORE  AMM - upto Rs. 05 lakhs, SMM-upto Rs. 10 lakhs,  DYCMM- upto Rs. 1.5 Crs. , CMM- upto05 Crore ,  PCMM- upto10crore , AGM- upto20crore (Ref. RLY.BD.MODEL SOP 2017 &Rly.Bd.l.no.2017/Trans/01/policy/stores dt.29.12.2017) 170 (c) Single Tender: In this system, tender inquiry is sent to only onefirm. This is resorted to in the following situations: (i) There is only single supplier of the item i.e. the item is of Proprietary nature (ii) Item is extremely urgently required and there is no timeto go for limited tender inquiry. (iii) Items of petty value where it may not be economical to go for competitive offers. Powers For Invitation of Single Tender for items where it has been possible to certify that a similar article ,which could be used in lieu is not manufactured /sold by any other firm.(PAC ‘C’ certified) PAC ‘C’ -----AMM-Upto Rs. 5 lakh ,SMM-Upto Rs 10 lakh DYCMM-Upto Rs.01 Crore, CMM-Upto Rs.10 Crores. , PCMM-Upto Rs.200 Crs. Powers For Invitation of Single Tender for items where it has not been possible to certify that a similar article ,which could be used in lieu is not manufactured /sold by any other firm.(PAC ‘A’ certified) POWERS PAC ‘a’-----------AMM-Upto Rs.1 lakh,SMM-Upto Rs.3 lakh, DYCMM-Upto Rs.5 lakh,CMM-Upto Rs.8 lakh, COS-Upto Rs.15 lakh *Invitation of Single tender Developmental items ---- DYCMM-Upto Rs.5 lakh CMM-Upto Rs.8 lakh COS-Upto Rs.15 lakh GLOBAL TENDER This type of tender is resorted to when the work cannot be done indigenously and hence international firms are invited to quote their rates. The powers for invitation have not been re-delegated and the same rest with RAILWAY BOARD. Tender Invitation : After obtaining orders from purchase officer, tender documents are prepared. If open tenders are to be issued, then a tender notice is prepared and uploads at IREPS also sent to Chief Public Relations Officer for Publication in the news papers: Tender documents are then forwarded to the centralized tender section for sale to firms on payment. If the item is to be included in the Bulletin, then information on the prescribed proforma ,is prepared and sent to bulletin section for further compilation. Ordinary or special limited tender inquiries are directly dispatched to suppliers by Registered AD or under postal certificate (UPC).In IMMS tender are uploaded on website and sent to the registered firm for the particular trade group. 171  All the tenders, irrespective of their type, bear due date and time by which offers should be submitted. After this, purchase case is transferred to tender section for further dealing. Tender Notice Invitation of bids from general public or from contractors borne on approved list is done through tender notice. The following information is given through tender notice. 1) Name of the work, which includes nature of work as well as the location of work. 2) Approximate cost of the work. 3) Earnest money to be submitted along with the tender. 4) Form of earnest money. 5) Official from whom tender documents can be obtained. 6) Cost of tender booklet. 7) Date & time up to which tender booklets will be available for sale. 8) Date, Time and place for submission of tender. 9) Date, time and place for opening of tender. 10) Period of completion. Opening of Tenders : On the due date and time, tenders are opened. There is an elaborate system for tender opening to ensure that all the tenders submitted by the firms are properly linked in the respective cases and any additions or alterations after opening of the tenders are not possible. All advertised tenders and special limited tenders (tenders in which estimated value of purchase is more than Rs. 25 lakhs) are opened inpublic and firms' representatives who want to be present during openingare allowed to be present. Such tenders, should be opened by a Gazetted Officer from Stores Department and Account Officer or at least a Section Officer from Accounts Department. All limited tenders are opened by a Office Superintendent from Stores Department and a Section Officer from Accounts Department. At the time of opening of these tenders, firm's representatives are not allowed to be present. After opening these are signed by the tender opening officials on each page and all financial aspects are encircled, over writing etc. are also attested. Then the tenders are sorted tender case-wise. After sorting, tenders are linked in the respective tender cases and then they are transferred to respective purchase officers. However, in all the cases in which lowest tender is valuing more than Rs.45 lakhs, detailed abstract of all tenders (also known as tabulation statement) is prepared and also got vetted from Accounts department. After this, the tender case is passed on to respective purchase officer on the basis of value of lowest tender. CONSTITUTION OF TENDER COMMITTEE AND ACCEPTING AUTHORITY FOR WORKS TENDERS – OPEN LINE:(As per the delegation of powers in Model SOP 2017) 172  1. Letter of Acceptance shall be issued only with the prior vetting of associate finance with respect to the items, rates & quantities as accepted by the Accepting authority. 2. The Accepting authority while accepting the tender shall record a reasoned note with regard to tender evaluation and acceptance in the form of detailed speaking order. 3. The Accepting authority shall be responsible to ensure that: a. No splitting has been done while inviting tender to bring it within the ambit of power of direct acceptance of tender. b. Sanctioned detailed estimate is available. c. The tender schedule has been prepared as per rates, items and quantities provided within the sanctioned detailed estimate. 4. In case the tender notice period is less than 21 days or accepting authority intend to accept offer other than lowest financial offer; direct acceptance of tender is not allowed in the tender up to and including Rs 50 lakh. Such tenders shall be dealt by an appropriate Tender Committee. 5. The existing practice of three-member tender committee shall be applicable for works tender of value more than Rs.2 Crs each 6. For other than open tenders and tenders not invited through ‘e’ tendering; 7. The two-member committee shall be constituted one from Executive Department and other from Finance Department for works up to and including Rs 20 lakhs as mentioned in the above table. 8. For tenders above Rs 20 lakhs, three members committee shall be constituted as stipulated in the above table. 9. The level of TC to be decided based on the lowest valid offer. 10. In case of Two packet system of tendering, for Packet-I Technical Bid, the level of TC to be decided based on Face value of the tender and for Packet-II Financial Bid, the level of TC to be decided based on the face value of the Tender or the lowest valid offer whichever is higher. 11.Where the department is not headed by HAG Officer, AGM shall be the Accepting Authority. Where no AGM is posted, such tenders shall be accepted by GM. 12. In case of JAG officer not being posted in workshops, WAO will be the Finance member for both Sr. Scale and JAG level Tender Committees. 13. In a particular Division/Department/Unit where Jr. Scale/Group-B post does not exist or is vacant, a Sr. Scale officer can associate in the tenders and in such a case, the tender needs to be accepted by JAG/SG. Similarly, where Sr. Scale post does not exist or is vacant, a JAG/SG officer can associate in the tenders and in such case, the tender needs to be accepted by ADRM/SAG officer. 14. Single Tender: Constitution of Tender Committee and Accepting Authority should be at least one step (level) higher than the members nominated in case of open tender/limited tender except where GM is the accepting authority. (Authority: Rly Bd’s Letter No.94/CE-1/CT/4 dt.17.09.1997). Decision of Tenders : The tenders are now to be decided to either accept the suitable offer out of all the tenders received or reject or file them. All the tenders in which acceptable offer is less than Rs. 50 lakhs can be decided by the respective purchase officer as per the purchase powers delegated to him but, if the acceptable offer is valuing more than Rs. 50 lakhs, then the tenders have to be discussed by a tender committee consisting of 3 officers, one from Stores Department one from consuming department and one from Accounts Department. 173 As per Railway Board MODEL SOP 2017 & Rly.Bd.l.no.2017/Trans/01/policy/stores dated 29.12.2017 Constitution of Tender Committee and Accepting Authority as under-- Sr. Value limit Acceptance Stores Consuming Finance No. by Department Dept. Dept. 1 Above Rs.50 lakh JAG Sr.scale ------ Sr.scale to Rs.1 Crs. 2 Above Rs.1 Crs. to SAG JAG JAG JAG Rs.10 Crs. 3 Above Rs.10 Crs. to PHOD SAG SAG SAG Rs.200 Crs. 4 Above Rs.200Crs. AGM PHOD PHOD PHOD to Rs.500 Crs. 5 Above Rs.500 Crs. GM PHOD PHOD PHOD Tender Committee is always a recommending body and its recommendations have to be accepted by a competent accepting officer. Some of the points to be kept in mind for deciding tenders are as under: (a) The offer should be technically suitable i.e. the material offered by the firm should be exactly as per our specifications given in the tender inquiry. Offers of substandard materials are normally ignored; (b) Out of all technically suitable offers, lowest offer is examined for reasonableness of rates. (c) If the rate of lowest technically suitable offer is considered reasonable, then it is to be seen whether delivery offered by the firm will meet our requirement with respect to delivery period and place of delivery. (d) After satisfying about (a), (b) & (c) above, we see that the firm is reliable and has satisfactory record of past performance. (e) Finally before accepting the offer, we see that all terms and conditions offered by the firm are acceptable. We normally, place all our purchase orders as per 'Indian Railways Standard (IRS) Conditions of Contracts.' As per these conditions, we have right to reject the sub-standard materials, levy liquidated damages for delayed supplies, make risk purchases, etc. Placement of Purchase Order : When the tenders have been decided, purchase officer records acceptance on the tender accepted by him and then the purchase case is passed on to the respective purchase section for preparation of purchase order. After the purchase order has been signed by the purchase officer, it is sent to Accounts Department for vetting if the value is more than Rs.15 lakh for safety items and more than Rs.8 lakhs for items other than safety items. 174  All purchase orders issued against demands submitted by Stores Depots for stock items, availability of funds out of purchase grant is to be ascertained from Accounts Department. For this purpose, Accounts Department is maintaining an up-to-date liability register. At the time of issue of purchase order, value of purchase order is posted in liability register and a funds certificate is recorded on the purchase order. Finally, the purchase order is numbered. Purchase Order Number. consists of 17 digits out of which first 8 digits are same as Demand No. or Tender No., 9th digit indicates mode of purchase, 10 th to 14th digits are serial number which are allotted paying authority- wise, 15th to 17th digit indicates serial No. of the item, consignee, delivery date if there are more than one item, consignee, delivery dates respectively in the purchase order.After numbering, the purchase order is dispatched to suppliers by registered post with Acknowledge Due. Contract Administration : The purchase activity is not over only on placement of purchase order For getting the material in time, contract has to be properly administered Immediately on placement of orders or after some time, we may get request from supplier for amending some of the clauses of the purchase order. All these requests have to be examined in proper perspective and amendments (or modification advises) against the purchase orders are issued. For all the amendments which may result into financial repercussions, we may have to take finance concurrence. If the supplier is not able to supply the materials within the stipulated delivery period, then as per law of contract, contract expires. Further extension has to be with mutual consent. Normally suppliers request for extension of delivery date and this is examined keeping all relevant factors in mind. As per IRS conditions of contract, we have right to recover liquidated damages for any loss or inconvenience suffered by us due to delays in supply of material. Purchase/procurement through Quotation: If the tender is not finalized in required time, or the purchase is of essential or urgent nature, or the cost is comparatively less, the cometent authority may purchase through quotation. In case of invitation of quotations following pre-requisites should be ensured. 1) Quotations should be invited from minimum three contractors placed on approved list of contractors. 2) Urgency of work should be established. 3) Work should not be split to bring the work within these powers. 4) Annual ceiling limit being strictly enforced. 5) Prior concurrence from associate finance being obtained. 175  Policy for Leasing of Parcel Express Train to Private Operator(PCET-Leasing) 26. Objective:- c. To increase parcel income. d. To attract and sustain long term guaranteed parcel traffic. e. To increase Capacity utilization of Parcel vans(VPHs/VPs/VPUs). f. To provide value added assured service with guaranteed transit time at competitive rates. Salient Features: 1.0 The service will be provided on end-to-end basis on round trip basis only,. 2.0 Minimum composition leased PCET shal be fifteen parcel vans (VPHs/VPs/VPUs) + one brake van ( two compartments of four tonnes CC each). The reserve price for leasing of parcel express train shall be worked out with a minimum composition of 15 parcel Van + One brake van ( two compartments of four tonnes CC each). After 6 months minimum composition of PCET shall be 20 Parcel van(VPH/VPs/VPU) + One brake van ( two compartments of four tonnes CC each), and lump sum leased freight shall be charged on prorata basis. however, the rake composition may be increased upto 24 Parcel van by enhancing prevailing acceted rate on prorata basis. Moreover, the composition may also be reduced up to 20 Parcel van and leased freight reduced on prorata basis. 2.1 Reserve price for round trip:- Applicable for Reserve price i) For all origin-destination ( round trip) 1.25 times of single journey freight at scale P 2.2 A brake van (SLR) will be attached to parcel express trains , the same may be allowed for loading and charge at the CC of both the compartments of brake van as per lump sum leased freight ( accepted rates) 2.3 Budgetary increase: Budgetary or any other increase shall not be applicable during the contractual period. 2.4 Additional parcel vans: Additional parcel vans in the parcel express trains are permitted on receipt of demand from the lease operator and availability of stock. Freight for additional parcel vans may be charged as per lump sum lease freight (accepted rates). 176 2.5 Pre-payment of lump sum leased freight: Pre-payment of lump sum freight is compulsory for each trip separately at each and for entire parcel express train of minimum fifteen parcel vans irrespective of partial/non utilisation. Lump sum lease freight shall be collected on the day of loading which will be calculating as per actual permissible carrying capacity of the parcel vans (VPHs/VPs/VPUs) supplied for loading. However, in case of increase in frequency of service, prepayment of lump sum freight‍for round trip for additional trips shall be collected from leaseholder in advance at gthe originating station ofcontract awarding railway, before the rake is placed for loading. outstanding freight charges, if any, accrued against the laeseholder must also be frecovered in full before running of additional trips. 2.6 No additional Security deposit /Performence guarantee shall henceforth be levied, on any increase in frequency of trips of PCET, during currency of the contract. 2.7 Reserve Price for leasing of PCET(round trip) shall be equivalaent to 1.25 times of single journey freight of Scale”P”. However, Divisions may with approval of DRM, revise the resrved price on the basis of recommendation of three member standing committee of Assistant Grade (comprising Comml,Opearting and financial officers) In case lease is finalized at Zonal headquarter, the standing committee of Division may recommend for revision of reserve price. 3.0 Duration of contract: Parcel express trains shall be leased out for a period of six years. there will be no escalation in first 3 years in the leased rate. from 4th year, 10 % annual escalation per anum will be applicable in leased freight rate. PCET shall not be leased out on medium term, short term or day to day basis. 4.0 Invitation of open tenders: - The zonal railways, which wants to lease out parcel express trains, shall obtain operational clearance from the controlling zonal railway of destination station before inviting tenders. NOC must be issued by the concerning zonal railway within seven days from the date of receipt of letter from the zonal railway seeking NOC. 5.0 Eligibility Criterion : Registered lease holder and others having average anual turnover of Rs. ten crores during the last three last financial years shall be eligible to participate in open tenders 5.1 Cost of Tender Form: Rs. 10000/- per form. 6.0 Formation of tender committee: Contract‍Value Level‍ Of‍ Tender‍ Accepting‍Authority Committee Up to Rs. 50Lakh No-Required Sr DCM/DCM holding independence charge 177  >Rs.50 Lakh and up to Rs 2 crore Jr Scale(2Member) DCM >Rs.2 Crore and up to Rs 2.5 crore Jr Scale DCM >Rs.2.5 Crore and up to Rs 5 crore Sr Scale Sr DCM >Rs.5 Crore and up to Rs 50 crore JAG ADRM >Rs.50 Crore and up to Rs100 crore JAG DRM >Rs.100 Crore SAG CCM(PHOD)/CCM(CHO D) or AGM in Absence of CCM(PHOD/CHOD) 6.1 If tender notice period is less than 21 days or tender other than H-1 is being accepted direct acceptance is not allowed. 6.2 If lease contract value is more than 2 Crore, there will be 3 Members in tender Committee(One Commercial + One from Finance and another decided by Tender).‍ 6.3 There should be standing Tender committee unless accepting authority changes the member of TC. 7.0 Earnest money: Each participant while submitting the tender shall be required to deposit rupees Ten lakh in the form of bank draft/banker cheque as earnest money. Earnest money of successful bidder may be adjusted against the freight payable by the lease operator. Earnest money of unsuccessful bidders shall be refunded. 8.0 Security / performers guarantee: The successful bidder shall be required to submit security deposit within 30 days from the issue of Letter Of Acceptance(LOA) in the form of FDR or Demand Draft or bank guarantee (endorsed in favour of Sr DFM/PFA) equivalent to 5% of annual contract value calculted on the basis of accepted lump sum leased freight/ accepted rate at which the train is leased out for composition of 20 Parcel Van + 1 Brakevan( 2 SLR of 4 Ton each) irrespective of number of Parcel Van attached to the train. Security deposit shall be in the standard format in line with all instructions for maintenance, renewal and encashment issued by Account department from time to time. It should be updated, checked and vetted by Accounts and Commercial Departments without fail. 8.1 Failure to operate contract: The successful bidder shall start the service within 60 days from date of receipt of acceptance letter. If the successful bidder fails to start loading within the stipulated period due to any reason, the EMD of such bidder may be forfeited. 9.0 Frequency of service: The service will be provided with minimum frequency of at least two trips per month. However, Zonal Railway ( with approval of concerned DRM) may increase the minimum number of trips per month before floating the tenderduly considering the operational feasibility and availibility of stock. after the contract becomes opeartional, the frequency can be 178  increased ( beyond prescribed minimum frequency) in view of demand, availabilty of stcok and operational feasibility with mutual consent at the same rate. 9.1 Nominated days service: the service may be on nominated days as per round trip turn round giving proper spacing to service. 9.2 Rescheduling of train: when loading is not possible on schedule day, CCM(FM) can reschedule the train for any other day with mutual consent of lease operatorsubject to deposit of lump sum leased freight in advance by the leaseholder. this facility shall be providedfor a maximum of one trip in a month. however, in case leaseholder has not been able to load the train(s)due to circumstances beyond his control(such as curfew, lock down, natural calamity etc.), the restriction on re-scheduling (of maximum one trip in a month) may be relaxed-duly considering the merits of the case- with the approval of PCCM. 9.3 Punctuality of Train: The parcel express train will run on fix path with schedule time table as far as possible. The time table will be prepared by the originating leasing railway in consultation with other zonal railways through which the train passes. The transit time of train should be monitored by the operating department. 10.0 Free time for loading/unloading: Free time for loading/unloading of parcel vans shall be allowed as per rule applicable for such rolling stock. 10.1 Free times for stacking and for removal of parcels: One day advance stacking and one day removal time will be given at both ends. However, Zonal railways may extend the period of advance stacking/removal time in view of local circumstances on case to case basis with the personal approval of GM. 10.2 Wharfage / Dumurrage charges:- Normal rules for detention of rolling stock and delay in removal of parcels shall be applicable. 11.0 Free space to lease holder :- Free space of 15’ X 15’ may be provided, till the period of operation of contract, at suitable location(wherever feasible) for development of office at originating and destination parcel terminals. Cost of construction shall be borne by the leaseholder. Electricity, water charges shall also be recovered from operator as per rules. The leaseholder shall have no right on this space after expiry of contract. 12.0 Free escort with PCET :- One representative of leaseholder shall be allowed to travel free from trains originating to terminating station by the same train for security purposes and handling of parcels at intermediate stations. Necessary authorization will be issued by Dy.CCM(FM) / CCM(FM). the representative of the lease holder who is permitted to travel by the train can be changed at any enroute point during journey. However, only one escort may be permitted at a time. 179 13.0 Termination of contract: - If it is not feasible to continue the contract due to any reason, either the lease operator or railway administration can terminate the contract by giving two months’ notice. In such cases, security deposit/performance guarantee will not be forfeited. 14.0 Change of terminals: - The zonal railways may change the terminal within the same area in view of operational exigencies or party’s request in view of local circumstances provided reasons are justified. This clause should be specially mentioned in the tender notice. 15.0 TXR examination of train: TXR -Certificate must be given before placement of rake on the platform for loading. 16.0 Loading / unloading at originating and intermediate stations: 16.1 Permission for loading/unloading of Parcels may be given at a maximum of four intermediate Stations for PCET covering 2000 Kms between OD pair in single trip journey and above 2000 Km one more intermediate Station can be permitted., through which the parcel train passes. for this purpose,’NOC’ must be obtained from the controling Zonal Railway of the intermediate stations.. 16.2 To facilitate loading/unloading from intermediate station, the train shall be placed on nominated platform and it should not be changed at short notice. If in an emergency change of platform is required, the parcel express train should be placed on the adjoining platform face of an island platform so that stacked parcels can be loaded without any difficulty. 16.3 Lease holder shall complete loading/unloading operation within the prescribed stoppage of train at intermediate station.in case detention to a train beyond prescribed time at that station takes place on account of loading/unloading by the lease holder, demurrage charges shall be recovered for entire rake as per rules. However, detention of train shall not be allowed on regular basis. 16.4 The leaseholder, if he so desires, may load parcel vans from intermediate station(s). such parcel van shall be attached to the parcel express train from intermediate station(s) subject to operational clearance and payment of lump sum freight on end-to-end basis. 17.0 Procedure for preparation of manifest by lease holder: 17.1 No railway receipt will be issued by railway for consignments being transported by the leased parcel express train. Only money receipt will be issued to leaseholders foe the amount of lump sum leased freight deposited for entire parcel express train from originating to terminating station indicating following particulars:- (i) Name of lease holder :-------------------------- (ii) Parcel express train leased out (origin-destination) from-------to--------. (iii) Number of parcel vans leased out: --------------. (iv) Lump sum leased freight collected for the loading of (date-------------). (v) Freight collected ----------- 180  17.2 Leaseholders shall be liable to produce clear photo copy of the money receipt as documentary proof during in regard to leasing of parcel express train and payment of lump sum leased freight of that particular day. 17.3 Leaseholder shall be required to prepare manifest for each VP as per the prescribed format (Annexure-I). All the copies of manifest will be signed by leaseholder or his authorized representative. The manifest will be countersigned and stamped by the parcel staff of originating station. each manifest will be prepared in five copies to be used as follows: (I) Ist copy to be retained by the lease holder as his record. (II) 2nd copy to be retained by parcel office of originating station. (III) 3rd copy will be kept in the leased VP/SLR near the door, preferably in a transparent polythene folder/bag. (IV) 4th copy to be retained by parcel office of unloading/ destination station. (V) 5th copy to be returned back to the lease holder signed and stamped by the parcel staff of the unloading station. This will serve as an authority to remove consignments at destination station. 17.4 Representative of the leaseholder shall be authorized to takeover and remove consignments from station premises on the basis of the 5th copy of manifest duly signed and stamped by the parcel staff of unloading station. This will be treated as an authority to take delivery and remove the consignments from railway station. 17.5 The leaseholder shall be prima-facie responsible for correctness of entries made in manifest. It will be his responsibility to ensure that the total weight of consignments loaded in the parcel vans is not beyond the permissible carrying capacity of each vehicle. 18.0 Overloading: 18.1 The lease operator shall load parcels in each vehicle up to the permissible carrying capacity of that vehicle. There would not be any penalty , in case of variation in number of packages loaded in vehicle vis-à-vis shown in the manifest so long as the overall weight of the parcels remain within the permissible carrying capacity of the parcel van. In case overloading is detected in any vehicle beyond the permissible carrying capacity, punitive charges may be recovered from the leaseholder as per the rules/rates in force. 18.2 In case a parcel van is found to be overloaded by more than one tonne than the excess weight would be off loaded at the point of detection and lease holder will have to remove of this part consignment on as is where basis is basis. Railway will not be responsible for any damage, deterioration or loss to the excess consignment due to offloading short of destination. 18.3 In case leased consignment are detained by railway administration for weighment purpose, no wharfage would be charged. 19.0 Liabilities of railways towards claims compensation: 181 19.1 Loading will not be supervised by railway staff. After completion of loading all parcel vans/brake vans will be padlocked by the lease holder. In addition to the padlocking, all parcel vans/brake vans shall be sealed by the railway. 19.2 Railway administrations shall not be responsible for claim/compensation due to any reason for consignments loaded in the leased parcel express train. Railway shall only be responsible to carry parcel express train from lease originating to lease terminating station with railway seal and lock intact and shall not be responsible for the contents loaded in parcel express train. 19.3 Railway administration shall not be responsible for any loss, destruction , damage, deterioration or non-delivery of goods arising from the following causes: (i) Act of god (ii) Act of war (iii) Act of public enemies. (iv) Restraint or seizure under legal process. (vi) Orders or restrictions imposed by central government or states government or by any officer or authority subordinate authorized in this behalf. (vii) Fire, explosion or any unforeseen risk. (viii)Act or omission or negligence of the lease holder or consignor or consignee. (ix) Natural deterioration or wastage in bulk ,or due to inherent defect, quality or vice of the goods. (x) Latent defect. 19.4 Lease holder shall carry parcels at his own risk and shall be responsible to consigner/consignee for any loss, damage, destruction, deterioration and non-delivery of the parcels for any act of omission or commission on their part for parcels and it is contents loaded in the leased parcel vans/brake van of parcel express train. 19.5 As space is leased out to the leaseholder, percentage charges shall not be realized. However, claims will be settled on merits under railway rules applicable to consignments booked at owner risk after verification of records but in no case it shall exceed Rs.50/- per kg. of the weight of such goods. The railway may call upon the lease holder to prove the deficiencies by documentary evidence and such other documents as may be deemed necessary before admitting any claim. 20.0 Thefts: 20.1 If any one of the leaseholder’s padlock or railway’s seals is in intact condition, railway shall not be responsible for claim / compensation by any way unless there is a specific sign of theft e.g. cutting of side wall of the leased parcel vans/brake van of parcel express train. 20.2 However, if railway seals as well as padlocks of any of the doors of the leased parcel van/brake van are found tampered with, or in case of specific sign of theft e.g. cutting of side wall of the parcel van/ brake van where it is apparent that theft has taken place, First information report (FIR) will be lodged with GRP and a copy of the same will be given to the lease holder. The 182  FIR can be lodged either at the destination or at any intermediate stopping station where the incident of theft is detected. 20.3 In such cases, parcels will be unloaded at destination station in presence of CPS ,RPF and lease holder or his representative. Parcels will be compared with manifest i.e. copy of manifest accompanying the VP/SLR or available with the representative of leaseholder accompanying the train. A certificate of discrepancies found will be prepared in triplicate and signed by CPS, RPF and lease holder or his representative. A copy of the same would be handed over to the lease holder or his representative. 20.4 Balance consignments available in the VP/SLR will not be deposited with the RPF or GRP. Lease holder should be free to take delivery of the remaining portion of his consignments. 21.0 Single window service to lease holders: 21.1 In order to provide customer friendly single window service to leaseholders, Dy. CCM (FM) or the nominated commercial officer may be nominated, who in coordination with other departments shall solve their problems and redress their grievances. In case of any dispute , the matter may be brought to the notice of higher authority. 22.0 Powers to modify the conditions of scheme: Zonal railways , with the personal approval of GM, may modify some of the conditions prescribed in the scheme which are in the spirit of maximization of revenue. Conditions having financial implications may only be changed with the concurrence of FA & CAOs. 23.0 Restriction on loading of certain commodities: 23.1 Lease holder shall load only such commodities which are permissible to be booked as parcel, under prescribed railway rules. Commodities listed in red tariff, offensive , contraband, dangerous , explosive and any other commodities which are prohibited to be carried by railways or banned from time to time by other departments of central/state government shall in no case be allowed to be loaded in any part of parcel of parcel express train. 23.2 In case of false declaration of any commodity, the lease holder and owner of the goods shall be punishable under section 163 of Indian railway act 1989. 23.3 If such articles are found to have been loaded in leased SLR/VP, in contravention of the above Para, a fine of Rs. 5 Lakh shall be imposed on the lease holder. In addition to above, the zonal railway may terminate the contract depending on the seriousness of the offence/violation of rules. In case of serious violation , lease holder will also be liable for prosecution as provided under Indian Railway Act 1989. 23.4 Lease holder shall also be liable for any loss, injury, or damage which may be caused by reason of bringing such offensive goods on the train as per provisions of IRA 1989. 23.5 Any damage caused to the parcel vans/brake vans or to the platform or any other railway property while handling parcels by the leaseholder or their agent at booking or destination 183  station, will be made good by the lease holder. The assessment of damage made by the lease holder. The assessment of damage made by the railway will be final. 24.0 Other terms and conditions of the scheme: 24.1 Lease holder shall be solely responsible for canvassing , booking, handling, loading, unloading , documentation and delivery of the parcels both at originating and destination stations. 24.2 The railway administration shall reserve the right to open padlock and seals of any parcel van/brake van of parcel express train to tranship parcels in unavoidable circumstances like accidents , strike, hot axle etc. 24.3 The railway and other concerned departments shall reserve the right to check the contents of the packages loaded in any vehicle of the parcel express train at any time to see that no dangerous ,explosive ,offensive, contraband or any other banned are loaded. 24.4 The leaseholder shall be liable to mention complete address of consigner and consignee in the manifest. In case consignments are meant for sale ,sales tax registration number/tin must be obtained from consigner. in case of consignments where consigner gives declaration that the consignment is NOT FOR SALE or that NO SALES TAX/VAT is applicable on the commodity booked , then sales tax registration number or TIN is not required to be mentioned, however, leaseholder shall not be held responsible for authenticity of address and other details as given by consigner or consignee to him, for all these declarations , responsibility will rest with consigner/consignee. 24.5 No seizure by sales tax authorities is permitted while parcels are in transit i.e. seizure shall be confined to forwarding or destination stations only. CI/CP-2/1.24 Any other new policy, circulars issued time to time. One Station- One Product Scheme (OSOP) (Commercial Circular No. 12 of 2022) 1. Oobjectives: a) Promoting ‘Vocal for Local’ vision of Government of India. b) Providing a market for the local / indigenous products. 184