‘Single bid valid; final payment to contractors within 3 months’
*Guidelines laid for awarding of stalled works, timelines extension
Mohinder Verma
JAMMU, Nov 10: In order to bring transparency in the procurement and project management, the Government of Union Territory of Jammu and Kashmir has directed all the departments to strictly implement the detailed instructions issued by the Department of Expenditure of Union Ministry of Finance based on the guidelines prepared by the Central Vigilance Commission, Comptroller and Auditor General of India and National Institution for Transforming India (NITI) Aayog.
These instructions on procurement and project management have been issued for empowering those implementing projects to take better decisions in public interest while adhering to probity and fairness and without any favour and fear.
These instructions pertain to feasibility study/ground survey; detailed project report; availability of land and statutory clearances; pre-tender activities; tender documents; project management; delay in payment to the contractors; engineering, procurement and construction contracts; substitution of key personnel during execution of consultancy contract; additional methods of procurement; arbitration and dispute resolution and aligning the interest of stakeholders.
“The minimum necessary encumbrance free land should be available before award of contract and the minimum may be determined based on the circumstances of each case or general guidelines issued by the concerned authorities”, the instructions said, adding “only such land, non-availability of which will prevent essential components of work from execution, should be insisted upon”.
As the time taken in grant of statutory and other clearances also contributes to the time and cost of public projects, the Department of Expenditure said that public authorities/project executing authorities should plan for obtaining all necessary clearances quickly and closely monitor the progress, adding “for the completion of projects within stipulated time and cost and with specified quality standards, periodical review should be done by various levels of the officers”.
Pointing towards rejection of single bid, the department said, “it has become a practice among some procuring entities to routinely assume that open tenders which result in single bids are not acceptable and to go for re-tender as a ‘safe’ course of action”, adding “this is not correct. Re-bidding has costs—firstly the actual costs of re tendering; secondly the delay in execution of the work with consequent delay in the attainment of the purpose for which the procurement is being done; and thirdly the possibility that the re-bid may result in a higher bid”.
“Lack of competition shall not be determined solely on the basis of the number of bidders. Even when only one bid is submitted, the process should be considered valid if procurement was satisfactorily advertised and sufficient time was given for submission of bids; the qualification criteria were not unduly restrictive and prices are reasonable in comparison to market values”, the department said.
About extension of time for completion of projects, the instructions said that procuring entity may put in place a graded authority structure whereby extension of time for completion of contract, beyond a specified threshold value of contract, may be granted by the next higher authority.
“Delay in decision making by the officials of the project executing authority on various changes in the project scheme arising out of emerging situations during execution of the work is also one of the contributors to the delay in completion of projects”, the Department of Expenditure said, adding “sometimes timely decisions on these changes are so crucial that the next step could only be taken after addressing the change”.
Stating that delay in decisions by the project executing authority can also lead to litigation due to inadequate utilization/ idling of resources of the contractor, the department said, “there is frequently a feeling among officials that indecision is safe while a decision may lead to adverse consequences for the decision maker. Therefore, there is a need for project executing authorities to put in place a system of resolution of the issues coupled with timelines for various levels to take decisions”, adding “the project executing authorities may review the flow chart of decision making and remove redundancies for faster decision making”.
About awarding of works in stalled contracts, the department said, “in cases, where a contractor abandons or stops the work mid-way, either due to insolvency or a dispute or other reason, engagement of the new contractor takes considerable time and in the meanwhile public money is locked up in assets which cannot be utilized, apart from inconvenience and loss or amenities to the general public due to such half completed works”.
“Notwithstanding anything in the General Financial Rules or the Manual, procuring entities should devise methods to deal with part completed contracts, wherever the work is abandoned by the contractor mid-way. However, for issuance of limited/ single tenders in such cases, at least 20%, of work should have been billed by the contractor who has abandoned the work. Moreover, procurement approval of such limited/ single tender should be at the next higher level or such level as may be prescribed”, the department said.
As delay in eligible payments to contractors leads to delay in execution of projects, cost overruns and disputes, the instructions said that ad-hoc payments of not less than 75% of eligible running account bill/ due stage payment, shall be made within 10 working days of the submission of the bill. This period of 10 days is for completion of all processes including prima facie scrutiny and certification by the engineer in-charge”.
“The remaining payment is also to be made after final checking of the bill within 28 working days of submission of bill by the contractor. In case the payment has not been released within 10 working days, it shall be made as soon as possible, and after payment a written explanation for the delay shall be submitted to the next higher authority within three working days”, the department said.
The public authorities may put in place a provision for payment of interest in case of delayed payment of bills by more than 30 working days after submission of bill by the contractor. “Where interest is to be paid, the rate of interest should be the rate of interest on General Provident Fund”, the department said, adding “in case of unwarranted discretionary delays in payments, including failure to authorize / make ad hoc payments responsibility shall be fixed on the concerned officers”.
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