Procedure for dealing with inevitable excesses that may occur during | execution of works:—The excess in the revised estimates of major projects and schemes may be

inevitable due to conditions beyond the control of the department example:—

1. Increase in cost in the present context of rising cost of works that are spread over a long period.

2. Increase in schedule of rates on labour and materials.

3. Increase in the cost of controlled materials.

4. Increase due to more excavation foundations based on the geology of rocks.

Para 154] Works 79

5. Increase in un-precedent dented and providential damages if reported in advance and the cost of such damages and proposed write of the as per clause 50 of A.P.S.S.

The officers should deal such cases judiciously and intimate the competent authority in advance. [CE's Circular Memo.No. Re A2/77279/68, Dt. 16-2-1978]

(1) The Board of Chief Engineers at its meeting held on 4-12-1969 have decided that in respect of items of any tender where the variation in rates exceeding (plus) or (minus) 25 per cent the specific approval of the next higher authority should be obtained.

The Chief Engineer (Projects) Drainage wing has pointed out during discussions in the Board of Chief Engineers meeting held on 30-1-1971 that several minor items in a tender involving variation in quoted rate over and above (plus) or (minus) 25% are being referred to higher authorities for approval even though such minor items have no material effect on the overall lender percentage excess or less as they are all of very small value. He has therefore suggested that;

(2) The approval may have to be obtained from higher authority for items exceeding (plus) or (minus) 25 per cent over estimates rate provided the tendered value of such item is above Rs. 1,000/- on any individual items or alternatively the estimated value of such items put together is lower 10 per cent of the estimate value of tender under consideration.

(3) The above suggestion was considered by the Chief Engineers at the meeting held on 30-1-1971 and it was decided to clarify the previous decision of the Board of Chief Engineers, dated 4-12-1969 mentioned in Para 1 above as follows.

(4) In respect of items of any tender where the variation in rates exceeds (plus) or (minus) 25 per cent the specific approval of the next higher authority should be obtained- (5) However, in respect of minor items in a tender, whose quoted rate will not substantially affect the overall tender percentage, the authority competent to accept the tender can do so without referring to higher authority irrespective of the percentage variation in the quoted rate after full satisfying himself that the quantity specified in the lender schedule under these minor items do not alter in actual execution.

(6) The S.Es, are informed, that for any variation in the quantities specified in the tender schedule under such minor items with abnormal high or less rates during actual execution resulting in charge is the over-all tender percentage of the tender, the tender accepting authority who has accepted these rates under the above discretionary powers will be held personally responsible for any consequent monetary loss to Government.

(Govt.Memo.No. 16-Y/72-4,Dt. 13-3-1972)

A review of the quarterly return on the acceptance of tenders other than the lowest has revealed some irregularities in the acceptance of lenders. The following instructions are issued for the guidance of departmental officers ;

Acceptance of the lowest tender:—In respect of the work relating to strengthening of Surreally Major Distributary, the lowest tender was rejected on the ground that the tenderer did not sign the tender documents. None signing of a specification should not be the sole reason for rejection of the tender. If the tender is otherwise acceptable, the tender accepting authority should call for the tender and obtain his signature. The Chief Engineer (Major Irrigation and General) is requested to re-circulate the Chief Engineer's Confidential Officers for their guidance. In respect of the same work, the second lowest tender also was rejected on the ground that it had been received late after the time fixed for receipt of lenders. Tenders received after the time should not be taken into consideration for comparison of tenders- Such lapses should be avoided.

80 A.P. PUBLIC WORKS DEPARTMENT CODE

In respect of work relating to excavation of the toe trench in block No, 73 of Srisailam Dam; the lowest tender was rejected on the ground that the tenderer was a new man. According to the confidential instructions issued by the Chief Engineer (General) in Memo.No, 1237-Ac/Gl., dated 19-6-1935 the fact that the lowest tenderer is a new man is not by itself a sufficient reason for the rejection of his tender. In such cases, enquiries should be made as to his financial status and capability. If having regard to the nature of the work to be done and the result of enquiries it is found that the tenderer is suitable, his tender should not be rejected. Instructions in the Chief Engineer's Memo No.l237/Act/35/

Gl, dated 19-6-1935 should be scrupulously followed by the Departmental Officers. , Finalisation of tenders within the validity period :—It is noticed mat tenders' which require Government approval are sent up to Government after considerable delay, In all cases where approval of higher authority is required, the Chief Engineer should ensure that tenders are sent to the concerned authority as quickly as possible at any rate within one month of their receipt.

The monthly return presented in Government Memo-No. 1406-Y/70-1, dated

25-1-1970 should indicate where the delay occurred as also the detailed reasons for the delay, Revision of tenders after tender call:—In some cases it has been noticed that

after ^call of tenders revision of estimates has been proposed. Revision of estimates after tender call with a view to bringing down tender percentage is irregular. If there is need for revision of estimates, it should be done before the tenders are called for. ,

In the return of the Chief Engineer, NagarJunasagar Left Canals for the quarter¹ ending March, 1971 some items were not shown although acceptance of tenders was over for the reason that the arrangements were not concluded- It is clarified that the date of acceptance of the tender is the criteria for inclusion in the quarterly return and not the date of conclusion of agreement.

[Note 1:-Tenders should invariably be called for when the amount involved in a particular contact is Rs. 20,000 or more. If it is proposed, m any case, whether for urgency or any other reason, to depart from this rule, and entrust the works on nomination at rates nol exceeding estimate rates, the previous approval of the Superintending Engineer should be obtained in the case of works costing not more than Rs. 50,000, of the Chief Engineer in the case of work costing not more lhan Rs- 1,00,000, When the amount is less than Rs, 20,000 the Executive Engineer may call for tenders at his discretion. This rule does not however, admit of a major work being split into parts each costing less than Rs. 20,000 and each part being given on contract without calling for tenders, in the case of Electrical Works, powers of the Executive Engineer. Superintending Engineer and Chief Engineer to dispense with the call offenders are limited to Rs. 1,000, Rs. 2,500 and Rs.5, 000 respectively.

Para 154] Works 81

Instruction

Execution of Works under contract system Revision of Estimates, etc. -Modification of existing provisions

(G.O. Ms. No. 37. Transport, Roads and Buildings (B.I.) Dept. Dt. 30-!-!990) Order :—Government have been considering for some time various measures aimed at promoting efficiency and economy as also time and cost consciousness in planning and implementation of various public projects. It is considered that inadequate and superficial investigation practices vastly contribute to diseconomies and inefficiencies and some times even to outright wastage of public resources. Faulty investigation not only leads to subsequent inflation of costs, but also inhibits competitive bids, which would have been otherwise forthcoming, if the entire quantities of work involved are correctly estimated and included in the original tender. Further change if the scope of the work midway leads to cost escalation, legal complications, unintended benefits to contractors and inordinate delays in the completion of projects. In order to effectively control the time and cost overruns m the implementation of the projects and to fix up specific responsibility for proper investigation, implementation and monitoring of the projects and to avoid additional burden on public exchequer by way of escalation and subsequent revision of estimates, the following instructions are issued :—

(1) As all the project works arc to be implemented strictly in a time bound manner, no clause providing for escalation shall be included in any future contract except in respect of works covered by external assistance.

(2) As already laid down in G.O- Ms. No. 430, dated 24th October, 1983, all claims of ihe contractors above Rs. 50,000/- should be settled in a Court of competent jurisdiction by way of a regular suit and the agreement should specifically prohibit arbitration for settling such claims.

(3) The A.P.P.W. Department Code already provides that me Chief Engineer should inspect all works costing over Rs. 10 lakhs before technical sanction is accorded- In order lo ensure that this inspection serves the objective in view, a detailed check-memo is hereby prescribed and given in Annexure-I to this G,0. The Chief Engineer's inspection should be thorough and detailed and should cover:

(a) Me suitability of site;

(b) The suitability of foundations;

(c) Adequacy of design;

(d) Soils and materials (qualitative and quantitative) and leads;

(e) Soil classification of trial pits upto hard rock level;

(f) Dewatering;

(g) Land acquisition;

(h) Forest clearance, etc.

Only after the Chief Engineer is thoroughly satisfied on all the above aspects that the project is feasible and is also capable of immediate execution and the estimate

A check slip for the inspection of the Chief Engineer is given at Annexure- A copy oft technical sanction issued, together with the inspection report, should be invariably sent I the Government. If these instructions are followed, the cases of revision of estimate particularly on account of change in the soil classification or quantities of materials shout be few and far between. It is expected that the Chief Engineer would personally satisi}

himself that the estimate technically sanctioned by him incorporates the full requirement of the project consistent with the conditions at site.

These instructions should also be followed mutatis mutandis by Superintended Engineers and Executive Engineers while according technical sanction with the modification mat copies of the technical sanction and inspection report be submitted to the next higher authority.

(4) Since most of the works are on L.S. contract system, time is the essence of contract. It is therefore absolutely necessary that a realistic period for the execution of the work is assured at the beginning and strictly adhered to.

For this purpose, at the time of entering into an agreement, the contractor should b( asked to give a detailed programme for execution of work, physically and financially (item wise), completing the entire work well within the time prescribed. In the alternative, the consent of the contractor should be obtained to the programme work drawn up by flit department. If the work is not completed at the end of the contract period, action shoulil be taken to determine the contract under the relevant clause ofA-P-D-D.S. If there are valid reasons for extending the contract period, proposals for extension of time should be sea to the authority competent to accord administrative sanction sufficiently in advance and any case at least one month before the expiry of the contract period.

It may be specifically provided that the period of agreement operates from the data|

of signing of agreement and not from the time of handing over of site, as some contracts deliberately avoid taking possession of the site.

In respect of check measurements and passing of bills:—

(5) Checkmeaswement should be done as per para 294 of A.P.W.D. Code G.O.

Ms. No. 405, Irrigation (Projects Wing) Department, dated 14-8-1984. The componn selected for check measurement should not be less than 50% of the value of the work don and specially include such of the items where there is scope for fraud. In the case o embankments, L.S. of Cut-offs should invariably be checked for levels as well as for soi classification and also their suitability for foundation and impermeability by the sanctioning authority or by the Superintending Engineer incharge of the work. In cuttings, .soil classification should be checked as per the existing instructions contained in Government Memorandum No. 364/NSP-II (i)/80-21, dated 29-10-1984.

Whenever the total value of work executed under contract exceeds the percentages of passing of excess by respective sanctioning authorities, further work is to be executed only after sanction of Government.

(6) On-going works ami extension of time:—m respect of on-going works, for!

which technical sanction was accorded by Chief Engineers, in which the final expenditure

| is expected to exceed the original estimate by more than 15%, a report should be sent to the Government within one month from the date of issue of this order. The particulars of such works should be furnished clearlv exDlaimnr the (•irc-iimsfancps unilpr u/hii-i- A

Para 154] Works 83 Simultaneously sent to Commissionerate of Tenders, who shall scrutinise the proposals and offer their comments on the justification for exceeding the estimate provisions. After taking due note of the comments of the Commissionerate of Tenders, orders will be issued by the Government. Pending issue of such orders by the Government, expenditure could be incurred upto 15% over and above the amount for which administrative sanction has been accorded.

2. All the Chief Engineers should ensure that cases in which estimates of works are to be revised, are inspected immediately by Superintending Engineers and Executive Engineers concerned and proposals are sent to Government and Commissionerate of Tenders within the time frame prescribed.

3. To the extent of the instructions issued above, all earlier instructions and provisions of the code stand modified.

Annexure

Check slip to accompany estimate for civil works for technical sanction 1. Name of work:

2. Cost of work:

3. Provision in the Project Estimate:

(a) Reference to Administrative approval:

4. Whether the following enclosures are sent:

(a) Report in ihe form as prescribed in G-0. Ms. No-1514 GL.I/79-1, dated 21-11-1979.

(b) Abstract of estimate as prescribed in C.E. Genera] Circular No. F4/7071/79-4, dated 1.11.1979.

(c) General Index Plan, Site Plan and Typical Drawings showing die general features

of the work.

5. Designation of highest officer who inspected and the dale of inspection for : Designation Dale of Inspection

(a) Suitability of site:

(b) Suitability of foundation:

(c) Adequacy of design suiting local condition:

(d) Soils and materials, qualitative and quantitative and leads - (e) Soil classification of Trial pits upto hard rock level:

(f) Abnormal dewatering:

(g) Land Acquisition:

(h) Forest Clearance;

(i) Availability of funds:

(j) Any other vilal characteristics:

6. Whether the L.S. Provision is in accordance with C.E. Genl. Circular No.

F4/7071/ 79-5, dated 10-11-1979.

7. Whether provision for L.I. & L.A. charges is shown separate! as tumpsum as per

84 A.P. PUBLIC WORKS DEPARTMENT CODE

8. Whether provision for P.S. and contingencies is in accordance with G.O. Ms.

No. 385. Dated 25-10-1979.

9. Whether the rates for earth work by machinery, and gales, hoists, etc., are based on set estimates prepared by the Mechanical Organisation:

(a) In case of embankments whether provision for consolidation by power roller is invariably made.

10. Proposed dale of commencement of work:

11. Proposed date of completion of work:

Chief Engineer

155. As a rule, no tender for the execution of works of any description should be received unless accompanied by a treasury chalan for earnest money to the extent which has been notified as necessary in the tender notice. The earnest money is the guarantee of the tenderer to deposit the requisite security and to enter into the required agreement on intimation of the acceptance of his tender. It is forfeited in case of default - vide Form of tender notice and tender (PWD, Form Nos. V-53(a) and 53(b).

156. In selecting the tender to be accepted, the financial status of the tenderers, their capability, the security offered by them or the record of their execution of any works previously, should be taken into consideration. Other conditions being equal, the lowest tender should be accepted. In cases where a tender other than the lowest is accepted, confidential record should be kept of the reasons for doing so. Specific data with reference' to the financial solvency, income-tax paid, the ability of the contractor to execute the wort, \ security offered by him, the names of at least some works executed formally by the contractor, amount involved therein and the conduct and performance of the contractor during the execution of work should be given. This information should be furnished not only in respect of the tenderer whose tender has been accepted but also of the tenderers whose tender has been rejected. The relative merits of the various contractors concerned should be discussed and cogent reasons should be given while rejecting lower tenders, if they are to be rejected. This confidential record should be shown to the Inspecting Officer of the Audit department, if required. • In addition, in cases where it is proposed to accept a tender other than the lowest, the authority competent to accept the tender should, immediately after accepting it, make a report to indicating the reasons for accepting a higher tender to the next higher authority, who shall scrutinise the report carefully and call for more details if necessary. The Superintending Engineer or Executive Engineer as the case may be, should bring to [he notices of the higher authorities cases in which the rule about the acceptance of the lowest tender has been departed from without sufficient justification.

The acceptance or rejection of tenders is, however, left entirely to the discretion of the officer to whom the duty is entrusted and no tenderer can demand the cause of rejection of his offer.] (Subs, by G.O.Ms-No. 773, PWD, Dt. 5-6-1971)