13.1.1 At the time of issuing Notice Inviting Tenders for a particular work, the Engineer in Charge should specify the time allowed for completion of the work consistent with the magnitude and urgency of the work.
13.1.2 The time allowed for carrying out the work as entered in the contract shall be strictly observed by the contractor. In the LOA, reference is given to the time limit as reckoned from 15 days or as mentioned in Schedule F after the issue of LOA or first day of the handing over of the site whichever is later. LOA shall not be issued unless part of site adequate to execute the work in the first few months is available, with the assurance that the balance site will be made available progressively to enable completion of the work within the Scheduled time.
13.1.3 The work shall, throughout the stipulated period of the contract, be proceeded with all due diligence (time being deemed to be the essence of the contract) on the part of the contractor.
13.1.4 To ensure good progress of the work during the execution, contractor shall be bound, in all cases, in which the time allowed for any work exceeds one month (save for special job), to complete the works as per the milestones given in Schedule F under Clause 5 of contract or as per the rescheduled milestones. However, for special jobs if a time schedule has been submitted by the Contractor and the same has been accepted by the Engineer in Charge the contractor shall comply with such time schedule. This should be incorporated by an amendment to the Milestones, if required.
13.1.5 The NIT approving authority shall stipulate time schedule for milestones in Schedule ‘F’ in the NIT. The Engineer in Charge shall as far as possible review the progress of work each month with all the concerned disciplines including the contractor. The factors affecting the progress shall be identified and discussed and remedial measures taken, wherever required. Detailed minutes of these meetings shall be issued. For larger projects, in addition to the monthly review, the Engineer in Charge shall, in a similar manner, specifically review in detail the progress of the work just before the stages of 1/4th, ½, 3/4th and also about a fortnight before completion of the stipulated contract period. Whenever physical milestones have been specified in the NIT, the detailed review may be carried out on the dates specified for such milestones. If an extension of time granted by the competent authority for genuine hindrances, he should re-schedule the milestones for the work appropriately, if required.
13.2 REQUIREMENTS OF CLAUSE 5
Clause 5 of Contract empowers the Engineer in Charge to allow extension of time for the completion of the work in normal course on certain conditions. He can exercise such powers if the following conditions are satisfied subject to getting approval of Competent Authority to grant extensions (as per SOP).
i) the Contractor must apply to the Engineer in Charge in writing for extension of time.
ii) Such application must state the grounds which hindered the contractor in the execution of the work within the stipulated time.
iii) Such an application must be made within 14 days of the date on which such hindrance arose.
iv) The Engineer in Charge must be of the opinion that the grounds shown for the extension of time are reasonable.
13.3 POWERS OF OFFICERS FOR GRANT OF EXTENSION OF TIME
The powers for grant of extension of time have been delegated to RITES Officers in the Schedule of Powers.
13.4 GRANT OF EXTENSION OF TIME WITHOUT APPLICATION
13.4.1 Based on Hindrance Register where adequate and proper grounds exist, the Engineer in Charge can grant extension of time even in the absence of application from the contractor under Clause 5.
13.4.2 The extension, in order to be binding, will have to be by parties’ ‘agreement’ express or implied. It, therefore, follows that if the extension of time is granted by the Competent Authority and such extension of time is accepted by the contractor, either expressly or implied by his action before and subsequent to the date of completion, the extension of time granted is valid. It is, therefore, necessary that the Competent Authority grants extension of time even when the contractor does not apply for extension of time in order to keep the contract alive. If the contractor refuses to act upon the extension granted by the Engineer-in- Charge it will attract the provisions of clauses 2&3 of the Contract.
13.4.3 The recovery of liquidated damages for delayed performance, on account of which extension of time is granted under clause 2, is a distinct matter and would depend on factors enumerated in para 12.3.4
13.5 FORM OF APPLICATION FOR EXTENSION OF TIME
13.5.1 The form of application for extension of time to be submitted by the contractor has been standardized and is at Annexure 13.1. Part I of the form is one on which the contractor is required to apply for grant of extension of time. Part II of the form is to be used by RITES officers for purposes of dealing with the application for extension of time.
13.5.2 Whenever any hindrance comes to the notice of the Site Engineer, he should at once make a note of such hindrance in the register kept at site and make a report to the Engineer-in-Charge within a week. The entry of date of removal of hindrance should be made on the same day as the cause of hindrance is removed. The Engineer-in-Charge shall review the Hindrance Register during every visit to the site. The Engineer-in-Charge should workout the over-lapping period, net period of hindrance and weight age of each hindrance and the items of work affected due to the hindrance.
13.5.3 The Engineer in Charge shall decide the question of extension of time within 15 days of receipt of application of the Contractor for extension of time if it is within his competence.
13.5.4 Although the Contractor is required to seek extension within 14 days from the date of occurrence of the hindrance for which the extension is sought, it does not debar the grant of extension sought later by the competent authority who can
condone such delay in application. The competent authority should condone the delay only when the contractor shows good reasons for not seeking it within a period of 14 days. The contractor cannot demand for extension but can only request, in case he has not complied with provisions in Clause 5.
13.6 PROCEDURE FOR GRANTING EXTENSION OF TIME
13.6.1 In cases where the sanction of the higher authority to the grant of extension is necessary, the Engineer in Charge should forward the application as soon as possible and if the orders of the Competent Authority (Tender Accepting Authority) are not received before the expiry of original completion date or the previously extended completion date, the Engineer in Charge should extend the Contract before the stipulated date expires so that the Contract remains in force but while communicating the extension of time, he must inform the Contractor through a letter in the format at Annexure 13.2 that this is without prejudice to RITES right to levy compensation under Clause 2 of the Contract. The Tender Accepting Authority should pass his orders on the application within 15 days of receipt of the same from the Engineer in Charge.
13.6.2 In case the Competent Authority decides to grant the extension without levy of Liquidated Damages, the Engineer in Charge will communicate the same to the Contractor in the format at Annexure 13.3.
13.6.3 The decision in regard to levy of Liquidated Damages for delay in the execution of works in terms of Clause 2 of the Contract should not be recorded in the Measurement Book of the work concerned.
13.7 COMPENSATION UNDER CLAUSE 2
The word compensation should be used in relation to clause 2 of the Contract instead of the word penalty.
13.8 SECTION 74 OF THE INDIAN CONTRACT ACT, 1872
13.8.1 When a contract has been broken, and if a sum is named in the contract as the amount to be paid in case of such breach or if the contract contains any other stipulation by way of compensation, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable amount not exceeding the one so named or as the case may be, the compensation stipulated for.
13.8.2 According to clause 5 of the Contract all letters of extension of time to be issued to the contractor should be over the signature of Engineer in Charge as he is the only officer so empowered contractually to grant extension of time as he has signed the Contract Agreement. Similarly all letters intending to impose compensation or to recover liquidated damages under clause 2 of the contract should be issued over the signature of Engineer in Charge as he is the only officer competent to do so. The above stipulation is to be adopted even if the decision to give extension of time and / or impose levy of compensation may have been taken by RITES official at a higher level.
13.9 PROFORMA FOR INTIMATING THE CONTRACTOR ON LEVY OF COMPENSATION UNDER CLAUSE 2
While Clause 2 of Clauses of Contract stipulates that withholding of amount for failure to achieve any milestones shall be automatic without any notice to the
contractor, in case action is proposed to levy liquidated damages, this will require a show cause Notice to be served on the contractor in the Proforma at Annexure 13.4. This Proforma is to be used in cases where it is proposed to allow the work to be completed by the Contractor without terminating it. The Contractor’s explanation for the delay in execution of the work should be considered by the Authority Competent to levy Liquidated Damages as mentioned in Schedule F. The Competent Authority may decide to grant Extension of Time without levy of Liquidated Damages. Then the Contractor may be advised accordingly through a letter generally in the Proforma at Annexure 13.3. If the Extension of Time is proposed to be given with levy of Liquidated damages, the Contractor may be advised accordingly in the Proforma at Annexure 13.5. Where it is decided to terminate the contract, action can be taken under both Clauses 2 and 3. As regards action under Clause 3, para 12.2 may be referred to. For action under Clause 2, the Contractor is to be issued Show Cause Notice in the Proforma at Annexure 13.6 and final advice on Levy of Compensation in the Proforma at Annexure 13.5.
SECTION 14