WORKS TENDERS & WORKS

CONTRACTS
Brief presentation on important
items
 Background & Scope
• Indian Railways is one of the world’s largest railway
networks having 17 zones with Railway Board as the
apex governing body. IR plays vital role in
transportation of lakhs of passengers and goods
covering all parts of the country. Given its vast
infrastructure viz., Track, Bridges, Rolling stock,
buildings etc., catering to transportation, IR is
constantly involved in maintenance of its existing
assets and also in expansion of its services. These
activities are facilitated through awarding of contracts
and procurement of various items through a well
structured process called tendering.
 What are tenders and contracts
• A tender is an official invitation to contractors,
suppliers or service providers to submit their bid
proposal to execute the work/ project, supply
goods or services. As per the monetary value of
the works involved, tenders range from small-
scale contracts to large scale infrastructure
projects like laying of new tracks, construction of
bridges, ROBs, stations, or maintenance of existing
assets viz., tracks, bridges, buildings, yards, rolling
stocks, electrical and signalling infrastructure.
 What is a contract
• Contract is a legally binding agreement between
Railway and a contractor/ vendor or service
provider. Contract is a document signed by both
the parties, contains salient features viz., scope of
the work, terms and conditions, payment terms,
time frame for completion of the awarded work,
compliance and regulations for adherence by the
contractor, dispute resolution mechanism in case
of claims/ disputes arising out of contract. Types
of contracts such as Works contracts, supply
contracts, service contracts, EPC contracts etc.,
are the most widely adopted system in IR.
 What are EPC contracts
• EPC ( Engineering, Procurement and
Construction) contracts have become
predominant in IR system particularly for large
scale infra projects that require meticulous
execution with accountability. Under EPC
contracts, contractor is responsible for
end-to-end project commissioning, including,
Desigen, Procurement of materials and
construction within pre- agreed rates, terms
and conditions, and time lines.
 Live examples of EPC projects
• Stations redevelopments at major stations.
• Railway Electrification.
• Dedicated Freight Corridors.
• Gauge conversions, Doubling projects
 RFP ( Request for Proposal)
• RFP is a comprehensive tender document
issued to invite bids from contractors for
execution of major infra projects viz., Station
redevelopment, Guage conversion, laying of
new lines, Electrification, signalling projects
etc.,
 Ghati Shakti
• The Railway Board had approved setting up of Gati
Shakti Units (GSUs) in divisions to fast track the
construction works required to remove bottlenecks in
operations and improve mobility that would lead to
increased cargo, major infrastructure development
works such as station re-development, major yard
remodeling, coal connectivity, port connectivity, traffic
facilities works and ROB/RUB works. Existing Branch
officers ( OL) will continue to deal with works viz.,
Track Renewals ( PH-31, Bridges (PH-32), staff welfare
(PH-51), Station buildings, maintenance,S&T etc.,
 Important references
• IR [Link] -2012 ( with correction slips
issued from time to time ( upto CS 63
incorporated in August 2024 edition.
• IR General Conditions of Contract April – 2022
with correction slips issued from time to time
• Schedule of Powers – Part-A ( works matters)
• Part-C ( [Link])
• Railway Board’s circulars.
 IR [Link]
• Railway Board ( Civil Engg. Directorate)
formulates the policy to deal with the Works
tenders and contracts. The policy guidelines
are issued from time to time with in
consultation with the Finance Directorate, and
other concerned Directorates. Chapters XII, XII
and XIV of Engineering Code contain
important topics pertaining to Works
contracts, tenders and other associated
subjects.
 IR General Conditions of Contracts
(GCC)
• GCC is divided in two parts viz., part-I containing Regulations for
Tenders and contracts and part-II containing Standard GCC
• Applicability: for all the tenders and contracts of railways for
execution of ‘Works’ as defined in GFR 2017.( General Financial
Rules).
• GCC contain salient clauses relating to
• i) credentials of contractors , approved list of contractors, tender
forms, Bid security, Annexures ( for undertaking, execution of
agreement, work order etc, , consideration of tenders, eligibility
criteria for participation in tenders, clauses dealing with extension
of time for completion of contracts, Security deposit, Variation in
the extent of contracts, Measurements, payments ( on account
and final , Labour Acts relating to works contracts , Determination
of contracts, settlement of disputes/ claims arising out of
contract.
 Schedule of Powers (SOP)
• SOP consists of parts wherein the powers are delegated to
various levels of officers for various purposes. Part-A (
Works matters) and part-C ( Misc. matters) contain
important powers delegated to officers at difference levels
of heirarchy . For example, the powers to invite tenders (
open, Limited, Spl. LT and Single tender), powers for
acceptance of tenders, signing of agreements, granting of
extension of time for completion of contracts, release of
deposits such as PG, Security, imposition of LD and waival of
LD, sanction of variation in quantities, introduction of
additional SSR and NS items during course of execution of
contracts, determination of contracts (termination,
foreclosure etc., )
 Planning of Works
• IRPSM (Indian Railways Projects Sanctions
Management). All new works to be taken up
during next financial year will be processed
through Works Programme, keeping in view
the ongoing works and expenditure to be
incurred for the same. Through IRPSM module
( online processing of proposals)
 IRPSM- A Pre-requisite
Any work without unique ID, as
generated automatically through
IRPSM will not have any sanctity of
sanction.
This ID shall be mentioned in plan,
estimates, indents, tenders, contracts,
MB, bills etc.
CHECK LIST BEFORE CALLING TENDERS
• Tenders not to be called without satisfying the
following check list conditions.
• 1. Approval of detailed drawings.
• 2. Sanction of detailed estimate.
• 3. Preparation of tender schedules.
• 4. Availability of Funds.
• 5. Site availability.
• 6. Availability of materials.
 Eligibility Criteria
• Eligibility criteria to be incorporated in all tenders costing more
than Rs.50 lakhs.
• Eligibility Criteria:
• Technical Eligibility Criteria:
• Technical Eligibility Criteria: (a) The tenderer must have
successfully completed or substantially completed any of the
following during last 07 (seven) years, ending last day of month
previous to the one in which tender is invited: Three similar works
each costing not less than the amount equal to 30% of advertised
value of the tender,
• or Two similar works each costing not less than the amount equal
to 40% of advertised value of the tender,
• or One similar work each costing not less than the amount equal
to 60% of advertised value of the tender.
 Eligibility criteria ( i)
• In case of tenders for composite works (e.g. works involving more
than one distinct component, such as Civil Engineering works, S&T
works, Electrical works, OHE works etc. and in the case of major
bridges – substructure, superstructure etc.), tenderer must have
successfully completed or substantially completed any one of the
following categories of work(s) during last 07 (seven) years, ending
last day of month previous to the one in which tender is invited:
• Three similar works each costing not less than the amount equal
to 30% of advertised value of each component of tender, or
• Two similar works each costing not less than the amount equal to
40% of advertised value of each component of tender, or
• One similar work each costing not less than the amount equal to
60% of advertised value of each component of tender.
 Financial Eligibility Criteria:
• The tenderer must have minimum average annual contractual
turnover of 1.5 V/N or V whichever is less.
• where V= Advertised value of the tender in crores of Rupees
• N= Number of years prescribed for completion of work for which
bids have been invited.
• The average annual contractual turnover shall be calculated as an
average of 'total contractual payments" in the previous three
financial years, as per the audited balance sheet. However, in case
balance sheet of the previous years is yet to be prepared/ audited,
the audited balance sheet of the fourth previous year shall be
considered for calculating average annual contractual turnover.
The tenderers shall submit requisite information as per
Annexure-VIIB of GCC along with copies of Audited Balance Sheets
duly certified by the Chartered Accountant/ Certificate from
Chartered Accountant duly supported by
 Care in submission of offers

• Before submitting a tender, the tenderer will be deemed to

have satisfied himself by actual inspection of the site and
locality of the works, that all conditions liable to be
encountered during the execution of the works are taken into
account and that the rates he enters in the tender forms are
adequate and all inclusive
 GST
Tenderers will examine the various provisions of The
Central Goods and Services Tax Act, 2017(CGST)/
Integrated Goods and Services Tax Act, 2017(IGST)/
Union Territory Goods and Services Tax Act,
2017(UTGST)/ respective state’s State Goods and
Services Tax Act (SGST) also, as notified by
Central/State Govt.& as amended from time to time
and applicable taxes before bidding. Tenderers will
ensure that full benefit of Input Tax Credit (ITC) likely
to be availed by them is duly considered while
quoting rates.
 TENDERER’S CREDENTIALS (BID CAPACITY)
• For tenders having advertised value more than Rs 20 crore
wherein eligibility criteria includes bid capacity also, the
tenderer will be qualified only if its available bid capacity is
equal to or more than the total bid value of the present
tender. The available bid capacity shall be calculated as under:
• Available Bid Capacity = [A x N x 2] – 0.33xNxB
• Where,
• A = Maximum value of construction works executed and
payment received in any one of the previous three financial
years or the current financial year (up to date of inviting
tender), taking into account the completed as well as works in
progress.
• N= Number of years prescribed for completion of work for
which bids has been invited.
• B = Value of existing commitments and balance amount of
ongoing works with the tenderer as on date one month prior
to the tender closing date to be completed in next ‘N’ years.
 Bid Security
• Up to Rs/1 Crore: 2% of estimated cost.
• More than Rs.1 Crore: Rs.2 lakhs + ½ % of balance
above Rs.1 Crore subject to a maximum of Rs.1 Crore.
• The Bid Security shall be rounded off to the nearest
₹100. This Bid Security shall be applicable for all
modes of tendering.
• Any firm recognized by Department of Industrial Policy
and Promotion (DIPP) as ‘Startups’ shall be exempted
from payment of Bid Security detailed above.
• Labour Cooperative Societies shall submit only 50% of
above Bid Security detailed above.
 PERFORMANCE GUARANTEE
• 16.(4)GCC Performance Guarantee
• The successful bidder shall have to submit a Performance
Guarantee (PG) within 21 (Twenty one) days from the date
of issue of Letter of Acceptance (LOA). Submission of PG is
mandatory for execution of agreement. Extension of time
for submission of PG beyond 21 (Twenty one) days and upto
60 days from the date of issue of LOA may be given by the
Authority who is competent to sign the contract agreement.
However, a penal interest of 12% per annum shall be
charged for the delay beyond 21(Twenty one) days, i.e. from
22nd day after the date of issue of LOA..
• The failed Contractor shall be debarred from participating in
re-tender for that work.
 Security deposit
• The Security Deposit shall be 5% of the
contract value. The Bid Security submitted by
the Contractor with his tender will be
retained/encashed by the Railways as part of
security for the due and faithful fulfillment of
the contract by the Contractor.
Documents to be submitted along with
the tender as credentials

• List of personnel and organization.

• List of plant and machinery.
• List of works completed in the last 3 years.
• List of works on hand.
• (Certificates from private individuals should
not be accepted)
 Types of tenders
• 1. Open or Advertised Tenders.
• Powers to call open tenders delegated vide item-5 (A)(i) of part-A of S.O.P

• 2. Limited Tender.
• Powers to call Limited tenders delegated vide item-5 (A)(ii) of part-A of
S.O.P

• 3. Special Limited tender.

• Powers to call Special Limited tenders delegated vide item-5 (A)(iii)
of part-A of S.O.P
• 4. Single tender.
• Powers to call Single tender delegated vide item-5 (A)(iv) of part-A of S.O.P
 IREPS
• Indian Railway Electronic Procurement System (IREPS) is the
Application Software of Indian Railways for online activities
for procurement of Goods, Works & Services, Sale of
Materials, and Leasing of Assets through the process of
E-Tendering, E-Auction or Reverse Auction. The application
allows users to capture data at various levels of the
procurement process in a secure manner using various
security features like digital signature, digital encryption
certificate for encryption and decryption of data etc. The
application can be accessed with valid user ID and Password
in combination with a Digital Signing Certificate. The
application is divided in different work areas depending
upon the nature of activity viz. Supply and Services, Works,
Leasing, Auction Sale etc.
 Finalisation of tenders
• After opening of tender
• Following will be generated
• Consolidated Techno Commercial statement
• Consolidated Financial statement with ranking
automatically generated
• Individual Techno commercial & Financial offers
of participating tenderers
• No finance vetting is required for the above
system generated documents digitally signed by
nominated tender opening officials.
 Tender finalisation
• As per the total value of the first lowest offer
inclusive of all taxes, duties, the level of tender
committee will be decided
• Upto Rs.50 laks - No T.C- Direct acceptance
(SG/JAG or [Link] i/c
• Upto Rs. 4 cr. SG/JAG ([Link] committee)
• 4 cr to 20 cr. SAG/ADRM (JAG committee)
• 20 cr to 50 cr. DRM/CWM
• 20 cr to 75 cr CHOD/SAG
• 20 cr to 300 cr. AGM/HAG/PHOD
 Finalisation of tender
• Convenor of T.C will log in and prepare TC
proceedings on line for digital signature by all
members of nominated TC including Finance
member.
• TC recommendations put upto Tender
Accepting Authority who has powers to
reject/modify/accept with digital signature
• As per TCR accepted by TAA, LOA will be
issued before validity period.
 Extension of currency of contract
• Cluase- 17 (A) of GCC- On Railway’s account. But
contractor is not entitled to seek any compensation
from Rlys. Contractor will get PVC benefit during the
extended currency, provided Agreement has PVC.
• Clause-17 (B) of GCC- On contractor’s failure. With
imposition of Liquidated Damages and with Token
penalty. the total amount of liquidated damages
under this condition shall not exceed 5% of the
contract value or of the total value of the item or
groups of items of work for which a separate distinct
completion period is specified in the contract.
 Item no-11 Advances to contractors: 46-4 of GCC
para 1264 of Engg. code deal with granting of Advances to contractors.

Mobilization advance : Limited to a max. of 10% of contract value and restricted to

high value of Rs.50 Cr. and above each. Interest rates as applicable as per RB’s
guidelines.
• i. Mobilization advance.
• a. It is limited to a maximum of 10% of the contract value.
• b. The advance shall be payable against irrevocable guarantee (Bank Guarantee,
FDRs, KVPs/NSCs) of at least 110% of the value of the sanctioned advance amount.
(covering Principal plus interest). The Bank Guarantee shall be from a Nationalized
Bank in India or state Bank of India in a form acceptable to the Railways.

• The advance shall be payable in two stages as indicated below:

• Stage I – 5% of the contract value on signing of the contract agreement.

• Stage II – 5% on mobilization of site Establishment, setting up offices, bringing in
equipment and actual commencement of Work.
• d. The two stages of advances shall be payable immediately after signing of
contract documents and at the time of mobilization respectively.
 Machinery & Plant Advance
• Advance against new plant and machinery. –
• Limited to 10% of contract value or 75% of the
value of new M&P whichever is less.
PHOD/HOD having full powers as per accepted
tender.
 Powers of Modification to Contract: ( Variation)
• 42.(1) Railway shall be entitled by order in writing
to enlarge or extend, diminish or reduce the
works or make any alterations in their design,
character position, site, quantities, dimensions or
in the method of their execution or in the
combination and use of materials for the
execution thereof or to order any additional work
to be done or any works not to be done and the
Contractor will not be entitled, to any
compensation for any increase/reduction in the
quantities of work but will be paid only for the
actual amount of work done and for approved
materials supplied against a specific order.
 On-Account " Payments
• 46.(1) The Contractor shall be entitled to be
paid from time to time by way of
"On-Account" payment ( Contractor’s
Certificate CC) only for such works as in the
opinion of the Engineer he has executed in
terms of the contract. All payments due on the
Engineer’s/Engineer's Representative's
certificates of measurements or Engineer’s
certified “Contractor’s authorized Engineer’s
measurements” shall be subject to any
deductions .
 Price Variation Clause (PVC) 46-A
• 46A.1 Applicability: Price Variation Clause (PVC) shall be
applicable only in tender having advertised value above Rs.
2 Crores Provided further that, in a contract where PVC is
applicable, following shall be outside the purview of price
adjustments (i.e. shall be excluded from the gross value of
the work for the purpose of price variation) :
• Materials supplied by Railway to the Contractors, either free
or at fixed rate;
• Any extra item(s) included in subsequent variation falling
outside the purview of the Bill(s) of Quantities of tender,
under clause 39. (1)(b) of these Standard General
Conditions, unless applicability of PVC and ‘Base Month’ has
been specially agreed, while fixing the rates of such extra
item(s).
 PVC ( contd…..)
• 46A.2 Base Month: The Base Month for ‘Price
Variation Clause’ shall be taken as the one
month prior to closing of tender, unless
otherwise stated elsewhere. The quarter for
applicability of PVC shall commence from the
month following the Base month. The Price
Variation shall be based on the average Price
Index of the quarter under consideration.
 Imp. Labour Acts applicable to contracts

• Minimum Wages Act, 1948

• provisions of the Apprentices Act, 1961
• Payment of Wages Act, 1936
• Provisions of Contract Labour (Regulation and Abolition) Act,
1970:
• [Link] of Employees Provident Fund and
Miscellaneous Provisions Act, 1952
• 55-D. Provisions of “The Building and Other Construction
Workers (Regulation of Employment and Conditions of
Service) Act, 1996” and “The Building and Other Construction
Workers’ Welfare Cess Act, 1996”:
• the Workmen's Compensation Act 1923
• provisions of the Mines Act, 1952
 Shramik Kalyan portal
• Cl.54 & 55 of GCC deals with wages of labour
and action in case of default of contractor to
payment of wages to labour. To increase
transparency in payment of wages to contract
labour and other payments, a web based
e-application developed in website
[Link].
 Shramik kalyan portal (1)
• All contractors are required to upload details of LOA,
engaged workmen, wage payment details, PF/ESI details,
bonus details etc., on monthly basis. This will be available in
public domain. A special condition in the tender and
contract to be incorporated at the time of calling tender as
shown below:
• Contractor to abide by provisions of payment of wages Act,
[Link] Act as per cl.54 & 55 of GCC in web based in
e-application.
• Contractor shall apply for one time registration of his
company/ firm in Shramikkalyan portal with requisite details
subsequent to issue of LOA and Engineer shall approve
within 7 days of receipt of such request from the contractor.
 Shramik kalyan (2)
• Contractor once approved by Engineer can create password with
login ID, PAN for subsequent use of portal for all LOAs in his
favour. The contractor once registered on the portal, shall
provide details of his LOAs/Agareements on Shramikkalyan
portal within 15 days of issue of any LOA for approval of
concerned Engineer, who shall update ( if required) and approve
the details of LOA filled by contractor within 7 days of receipt of
such request.
• After approval of LOA by Engineer, contractor shall fill the salient
details of contract labours engaged in the contract and ensure
updating of each wage payment to them on Portal on monthly
basis.
• It shall be mandatory upon the contractor to ensure correct and
prompt uploading of all salient details of engaged contractual
labour & payments made thereof after each wage period.
 Zonal contracts
• Contracts for Zone Works and Engineering
materials:
• It is advantageous to allot all minor works and all
works of repairs and maintenance in particular.
Zone for a definite period to one contractor. It is
also advantageous to make this contractor who
can be called a zonal contractor responsible for
the conveyance or supply of engineering material
as and when required in a particular zone in a
specified period.

Zonal contracts will include.

 Zonal contracts ( cont)
• Zonal contracts will include.
• New works, additions and alterations to existing structures, special repair
works and supply of building materials subject to contract value of each
work not exceeding Rs.5,00,000. Work order upto Rs.5 lakhs can be issued
against Zonal contract. ( Authority_ RB’s letter dtd. 18/10/2017
• All ordinary repairs and maintenance works.
• Conveyance of materials e.g., bricks, lime, sand etc., which are likely to be
required in a zone during the year.
• Period of zonal contract starts from 1st July to 30th June on yearly basis
contract if however, any special advantage such as more favorable rate is
likely to be secured by giving out contracts for longer periods, contracts for
more than one year may be with concurrence of accounts be entered into.
• If should be ensured as far as practicable, no work orders are approved
against the old contracts after opening of new tenders and all works of old
contract are completed by the end of June. Exceptional cases may
however be dealt on their merits with the approval of competent
authority.
 Claims/ Disputes Cl-63 & 64 of GCC
• All disputes and differences of any kind whatsoever arising out of
or in connection with the contract, whether during the progress of
the work or after its completion and whether before or after the
determination of the contract, shall be referred by the contractor
to the GM and the GM shall, within 120 days after receipt of the
contractor’s representation, make and notify decisions on all
matters referred to by the contractor in writing provided that
matters for which provision has been made in Clauses 8, 18, 22(5),
39, 43(2), 45(a), 55, 55-A(5), 57, 57A,61(1), 61(2) and 62(1) to
(xiii)(B) of Standard General Conditions of Contract or in any
Clause of the Special Conditions of the Contract shall be deemed
as ‘excepted matters’ (matters not arbitrable)and decisions of the
Railway authority, thereon shall be final and binding on the
contractor; provided further that ‘excepted matters’ shall stand
specifically excluded from the purview of the Arbitration Clause.
 SETTLEMENT OF DISPUTES – INDIAN RAILWAY ARBITRATION
AND CONCILIATION RULES
63.1 Matters Finally Determined by the Railway: All disputes and
differences of any kind whatsoever arising out of or in connection
with the contract, whether during the progress of the work or
after its completion and whether before or after the
determination of the contract, shall be referred by the Contractor
to the GM and the GM shall, within 120 days after receipt of the
Contractor’s representation, make and notify decisions on all
matters referred to by the Contractor in writing provided that
matters for which provision has been made in Clauses 7(j), 8, 18,
22(5),39.1, 39.2, 40A,43(2), 45(i)(a), 55, 55-A(5), 57, 57A,61(1),
61(2),62(1), 63(iv) and 63.2.11of the Standard General Conditions
of Contract or in any Clause (stated as excepted matter) of the
Special Conditions of the Contract, shall be deemed as ‘excepted
matters’ (matters not arbitrable)and decisions of the Railway
authority, thereon shall be final and binding on the Contractor;
provided further that ‘excepted matters’ shall stand specifically
excluded from the purview of the Dispute Adjudication Board
(DAB) and Arbitration.