G.O.Ms.No.195

GOVERNMENT OF ANDHRA PRADESH ABSTRACT
ABSTRACT

Panchayat Raj& Rund Davelopment Department - Reforms in Panhayati Raj Engineering Department - Revision and streamlining of Tender Procedure - Orders- issued

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PANCHAYATI RAJ & RURAL DEVELOPMENT (PROGS-II) DEPARTMENT

G.O.Ms.No. 195

Dated:10.5.1998

Read the following:-

1.  G.O,Mc.No.589, PR & RD (Mandals-I) Dept, dt.20-9-89
2.  G.O.Ms.No.177 to 182, I& CAD (PW:COD) Department, dt.27-9-97
3.  G.O.Ms.No. 477, PR & RD (Proga-II) Dept, dt.12-11-6B
4.  G.O.Ms.No.94, PR & RD (Estt-III) Dept, dł.B-3-99
5.  G.O.Ms.No.95, PR & RD (Estt-III) Dept, 0I.8-3-90
6.  G.O.Ms.No. 23, I & CAD (PW.COD) Dept, dt.5.3.80
7.  From the Engineer-in-Chief(PR) Letter NO.T1/10744/05, dated 6.4.99

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Government have from time to time initiated several reforms in tendering for Public works with a view to bring in simplification of procedures, greater transparency and to ensure better quality of works.

2. Government issued orders in the G.O 2^ndread above introducing comprehensive reforms streamlining and standardising the procedures for calling tenders and award of contracts.

3. Government issued ordars in the G.O. 3^rd read above, ordering further tender reforms with a view to curb collusion and unfair practicess adopted by the Contractors in the tendering process.

4. Aftar isauance of the aforesaid orders, cornplaints were received by the Government that the Contractors were still indulglng in unfair practices and colluding in filing the tenders. Government, therefore, with a view to take stringent action in such cases, convened a workshop on 10-11-1996, with the representatives of Builders Association, Contractors and Government Officials to elicit their vieves on furthar reforms required to be introduced. The Committee constituted with the represantatives of the Builders Association and Government Officials, after thorough examination of the consensus emerged in the workshop has made certain recommendations to Govemment.

Contd.Page.2

Page.No.2

5.  Government after carefull consideration of the recommendations of the Cabinet Sub Committee and in partial modifications of the orders issued in G.O.Me.No, 477, PR & RD Department, dt.12-11-1998, issue the following orders in respect of Tender procedures and othar allied matters relating to Panchayati Raj and Rural Development Department to ensure free and fair competition in award of Works and to bring in greatar transparency in tender procedure.

1. Individual PWS Schemes in a Mandal or Assembly Constituency shall be packaged into viable financial units of say Re.100.00 lakhs and above. The packages shall be tendered and entrusted to experienced Registered contractors on turn key system, i.e. construction, testing, commissioning and maintenance of the scheme for 2 years and all materials like Steel, Cement, Pipes, Pumps, Specials and Motors etc, required for the work shall be procured by the contractors only and department shall not procure any material. Payment shell be made on the basis of finished work.
2. The maximum ceillng of excess tender percentage shall be 15% instead of 20% allowad earlier. The lower limit and the conditions therefore will be continued. No negotiation will be conducted with the tenderers. Tender received with more than 15% excess shall be summarily rejected.
3. In order to maintain anonymity, tender schedulls shall be supplied on payment of a cost to any contractor in tendering. The present practice of collecting EMD at the time of sale of Tender Schedules shall be dispensed with. Here after, the Contractors shall pay the EMD at the time of filing their tender documents only. The EMD shall be at the rate of 1% of estimated contract value and it shall be paid in full, wñhout concession, either in the shape of a Bank Demand Draft or unconditional Bank Guarantee.
4. For the works costing upto Ra.10.00 lakhs. The eligibility criteria i.e., financial and physical shall not be made applicable for these works.
5. The Contractors will no longer be required from now onwards to produce clearance cartificate from the Mines Department and Seigniorage charges wlll be deducted by th concerned works Departmant from the bills of the Contractors for the materials used on the works.
6. The Contractors will be allowed the facility of deductton of sales tax at the rate of 2% at source and be exempted from producing the clearance certificate from Commercial Tax Department.
7. Expert Committees at different levels shall be constituted by Departments to resolve the disputes of the Contractors in so far as technical issues are concerned.
8. To resolve the problems of the Contractors vis-a-vis the Government, an institutional mechanism will be created at the district leval with the Collector as the Chairman and at the State level the Chief Secretary as Chairman to reviaw periodically and to redress the difficulties of the Contractors.
9. To enforce quality control standards in execution of the performance of the Contractors and the Engineers incharge of the work shall be graded by Associating professional bodies and suitable incentives / punitive system shall be impliamented on the basis of such grading ard stern action will be taken for defective works against both the Engineers as well as Contractors.
10. Quality control shall hereafter be the primary responsibility of the Engineers executing the Works.
11. As a measure to encourage good contractors, the procedure of registration shall be rationalised and made more scientifc by introducing a grading syatem, which will take into account the technical qualification of the contractors, their standing in the civil contract fields, post track record of execution of works, ownership of plant and machinery, financial status and training, and memberships in professional bodies. The contractors with history of litigation will be suitably down graded/ black listed or debarred.
12. Minor Irrigation works shall be entrusted to Ayacutdar committees as per guidelines issued tn G.O.RT. No. 1863, PR & RD (Prog-I) Department, Dated 23-11-98.

Contd.Page.3

Page.No.3

6. In order to avoid ambiguity in implementing tne order, datailed guidelines are formulated in Annexures I and II to this order.

7. The above orders shall come in to force with immediate effect. Howevar these ordars shall ba made applicable only for the tenders invited after isauance of the G.O

8. The Engineer-in-chief, PR Department shall furnish necessary proposals for making suitable amendmants to the G.O. 1^st cited.

9. This order isued with the concurrance of Fin Plg(FW.EBS.XV) Department vide their U.0.No 17789/223/EBS.XV/A1/99, dated 23.4.1099.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)

P.RAMAKAHTH REDDY

PRINCIPAL SEČRETARY TO GOVERNMENT(RD)

To,
The Engineer-in-Ceief, Panchayati Raj, Hyderabad.
All Chief Engineers, Panchayat Raj Engineering Depanment
Tha Commissioner, Panchayati Raj& Rural Devalopment
All Chief Executive Officers of all Zila Parishads
Copy to All Superintending Engineers PR & RWS.in the State. The Accountant General, Andhra Pradesh, Hyderabad Finance & Planning (Fin EBS XV} Department.
I & CAD department
TR &B Department.
PR & RD (RWS.II/ Mandal-I) Dept.
P.S. to Ministor (PR & RD)
P.S. to Principal Secretary to Government, PR & RD
P.S. to Principei Secretary to Government,(RD), (PR & RD)
S.F.

//Forwarded by Ordar//

Government of Andhra Pradesh
Panchayat Raj Department
Offlce of tha Engineer-in- Chief (PR) Hyderabad
Endt.No.T1/29042/96 dated: 14.05-1999

Communicated in continuation of this office circuar Memo No TI/29042Ø6, dt30-3-99. with a request to follow the Government order scrupulously and communicate this G.O. upto to level of Deputy Executive Engineer(PR) under their jurisdiction.

Sd/Dr.M.Venkateshwarlu

Engineer-in-Chief,(PR)HYD.

Contd. Page.4

Page.No.4

ANNEXURE-I
G.0.Ms.No.195 PR & RD (Progs-II)Dept, dated 10.5.99

1.0. Preparation of Realistic Estimates

1.01. Standard Data

1. The standard data which folia basis for preparation of estimates for all Civll Engineering Works shall be updated taking the improved Construction technology in to consideration.
2. The Chairman, Board of Chief Engineers and Engineer-in-Chief (Admin) I &CAD Department shall complete the updation of standard data with in a period of six months

1.02  Finalisatlon of Standard Schedule of Rates (SSR )

1. The SSRs shall be finalised bafore June without exception every year. The preparation of SSR shall be made more transparent by associating the representatives of Construction Industry, National Academy of Constructicn and the Institution of Engineers (India) A. P. State Centre, at the time of finalisation. For cities like Hyderabad and Vitakhapatnam. Unit rates will be prepared for various component items.

1.03. Provisons to be made in estimates

In order to prepare realistic estimates, the following provisions are permitted to be addad in the estimate.

1. Turnover tax at the rate of 1 percent for item relating to canal digging lining, repairing road works etc., where the earth work excavation and embankment is involved and for works other than the above, turnover tax at 3 percent shall be added in the data.
2. A Lumpsum provision shall be made in the abstract estimate towards works, by obtaining details of Insurance premium from Insurance.
3. A lumps-um provisions shall be made in abstract estimates to meet tha expenditure to be incurred by the Contractor on engaging Technical Personnel based on number of persons indicated in the tender document and permissible wages as per SSRs.
4. A lumpsum provisions shall be made in the abstract estimate towards Banker&pos;s charges for obtaining Bank guarantees for payment of E.M.D., performance security and release of retention amount as per prevailing procedure based on the period i.e. period of completion plus defect liability period. The Chief Engineer concerned shall assess duly obtaining the details there of from the Scheduled Banks and suitable provision shall be made.
5. A provision at 1 percent of the cost of Cement towards construction of temporary store shed shall be added on the data of relavant items.

Contd. Page. 5.

Page.No.5

1.04   At the time of preparation of estimates, proper care should be taken to provide the lumpsum provisions for the aforesaid items and necessary conditions also should be incorporated in the tender document for euitable reimbursement to the contractors from out of the above provisions, however not exceeding the amounts indicated against each, on production of the Insurance policies, copies of appointment orders with payments vouchers, Bank Guarantee etc. Failing to comply with the above, reimbursement shall not be allowed but suitable penalty shall be imposed for not engaging technical personnel and the Agreement authority shall take Insurance policy at the cost of contractor duly deducting the premium from the contractor’s bills. Contractor has to take policy in favour of the employer i.e. department.

1.05 For earth work excavation & embankment upto 10000 Cum. The manual rate shall be provided and if the quantity exceads 10000 Cum, the machinery rates shall be adopted. However, the contractor will be given an option either for manual or machine operations. For earthwork, quantity upto 10000 Cum, if the contractor executes not with machine operations, the machinery rates will be allowed. Irrespective of the quantities, the following items of works shall be taken up manually.

1. Stripping where the depth is inadequete for handling with machinary
2. Excavation of sub-minor and field channels, narrow reaches and formation of Sub-grade base for receiving lining of canals, excavation of rock toe, toe drains, filter drains and building foundations and Pipe line trenches.

2.0. Sanction of Estimates

2.01. Administrative Approval

Administrative approval to the estimates for works costing above Re. 50.00 lakhs or any bridge works or cause way and PWS schemes irreepective of Cost shall be given after fulfillment of following items.

1. Detailad investigation
2. Preparation of detailed designs/drawings

2.02 Technlcal sanction

The orders issued in G.0.Ms.No.94, PR & RD (Edit-III) Dapt, dt.8-3-99, are indicated below shall be applicable for according Technical Sanction to estimates.

AE/AEE	25,000
Dy.E.E.	Upto Rs.2,0D,000/-
E.E.	Above Ra.2.00 lakhs to Re.10.00 lakhs
S.E.	Above Rs. 10.00 Lakhs to Rs.50.00 Lakhs
C.E.	Above Ra. 50.00 Lakhs

The technical sanction shall be limited to the amount of administrative sanction/approval.

Contd. Page. 6.

Page.No.6

3.00. Preparation of tender documents and finalizatien of tenders

3.01 Tender documents

3.01.1 Tander Notice

The Tender notice or Notice inviting Tenders (NIT) will be approved by the Engineers for the works for which they are competent to accord technical sanction

The Tender documents will be prepared by the concerned Engineers, bringing greater transparency. Tha provisions made in the estimate for items which are reimbursable to the Contractors with conditions there for and other relevant conditions relating to the implementation of contract and other eilgibility criteria on both physical and financial requirements in addition to the conditions not withstandirng any thing contained in tha APSS, APWD code and government orders the following will be incorporated wherever necessary.

3.01.2. The defect liability

The defect liability period is increaeed to two years for the original works and one year for maintenance works, duly taking into account normal wear and tear.

3.01.3 Liquidated damages

The liquidated damages may be imposed on the present practice basing on the milestones.

3.01.4. Seigniorage charges & sales tax.

The seigniorage charges will be recovered from Contractor's bills as per the rates prescribed in the contract documents for the materials used on the work only. The present practice of insisting for production of documentary evidence for the having paid the seigniorage charges in interms of G.O.Ms.No.243 dated 8-5-86 and in the absence of such production of evidence, the imposition of five times penality is dispenced with.

For sales tax/tax on works contract, contractors are given an option to opt for the composing schemes under Section 5(g) of the APGST Act and those opting for it are subject to a tax deduction of 2% at source on the total value of tha contract irrespective of nature of work. In such case, tha departments wlll not insist on production of clearance certificate and no assessement of tax will be neaded. in case of contracts not opted for 2% tax deduction, Tax on works contract (Turn over tax) shall be recovered at the rates indicated in clause 1.03 (a) above.

3.01.5 Payment of bills

The contractors will be permitted to Submit their work bills once in a month and payment will be made after proper check of quantity and quality with in a reasonable time limit.

3.01.6. Quality Control Measures

Emphasis on the quality will be paramount. The concerned Departments are directed to strengthen the quality control mechinery of the Government by keeping a separate Chlef Englnaer for Quality control under the direct control of Government. The Chief Engineer, quality control should see that quality audit is done periodically and also evolve suitable punitive action against Contractors as well as Engineers in Charge of the Work who violate proper quality standards.

3.01.7. Construction matarials

The present practice that the contractor has to procure at his own cost the principal constructton materials like cement, steel, bituman, sand, metal and soils etc. shall continue

The present practice of procuring pipes, specials, valvee, pumps and Motors departmentally for execution of PWS Schemes is dispensed with. The contractors theem selves have to procure these materials with ISI mark where ever preecribed and will be responsible for supply, delivery, testing and commissioning of the scheme on turn key system and maintenance of the scheme for a period of (2) years. For all the materials, pre-delivery quality control inspection shall be done by Quality Control Wing of Panchayati Raj Department or Third party inspection as directed by the Engineer-In-Chief, Panchayat Raj. The inspection charges if done by third party, shall be born by the Contractor.

However, the payments shall be made based on finished work.

3.01.8  Earnest money deposit

In order to maintain the anonymity, Tender Schedules will be supplied on payment of cost to any contractor of eligible class interested in bidding, without insisting for EMD. This is introduced to enable prevention/ reduction of extraneous forcesinterefering or preassurising the contractors to quote or under quote or not to quote at all in the tenders. Hence the practice of collecting EMD in the shape of draft at the rate of 1.50 percent subject to a maximum of Rs.1.00 lakh or Rs.75,000/- from the contractors who have lumpsum deposit with the concerned Chief Engineers ie dispensed with and in lieu thereof. Bank Qugrantee or DD obtained in favour of tha officer as specified in the tendar, at the rate of 1% of the Estimate contract value will be oollected wihout any concession. The balance of EMD at the rate of 1.5% will be collected while concluding the agreement and tho Bank Guarantee shall be unconditional and irrevocable as par the standard format enclosed to the tender document. The contractors who have L.S. Deposit with concerned Chlaf Engineer will be permitted to take back their deposits, subjact to conditions that they are free from all liabilities.

3.01.9 Aplicabltlty of qualification criteria & EMD etc.,

The qualification creteria at para 3.02 aa well as modified procedure of collecting EMD in the shape of Bank Guarantee wilt not be made applicable for the works costing Rs.10 lakhs and below. For thase works costing Rs.10.00 lakhs and bellow single cover system shall be followed and the EMD ahall be submitted along with the completed Tender Schedule.

3.01.10  Subletting

The subletting of the works is strictly prohibited un-officially. In the event it is found that any portion of the work is sublet, action will be taken against the contractor by debarring him from participating in the tander for the period as decided by the Engineer-in-Chief/ Chief Engineer concerned. However, the debarring pariod shall not be less than one year.

Contd. Page.7.

Page.No.7

3.02. Qualification criteria

1. To qualify for award of the Contract, each bidder, in his/ her name should have, during the last five years (specified financial years i.e. they should be immediately preceding the financial year in which tenders are invited)
   1. Satisfactorily completed not less than 90 percent of contract value as a prime contractor and similar works of value not less than Rs. @ (usually not less than 50% of estimated value of contract) in eny one year, during the tast 5 years.
   2. Should hava executed in any one year, the following minimUm quantities of works.

   Cement concrete including RCC and PSC	Cu. M
   Earth work in both excavation and embankment	Cu. M
   OHSRs	Nos and total capacity in liters
   Pipeline laying, joiming & testing	Km
   Filters Units	Ltrs
   a) Rapid Sand Filters
   b)Slow Sand Filter
   Supply erection and testing of power pumps	K.W
   (Relevant principle items be indicated)
   (Usually 50 percent of the expected peak quantities of construction per year)

   
   
2. Each bidder should further demonstrate
1. Availability either owned or leased of the followlng key and critical equipment for the work
• Road Rollers (8 to 10 T )
• Water Tanker
• Proclainers
• Concrete Mixtures
• Pipe Line hydraulic testing equipment
• Equipment for BT work with cold Mix
• Equipment for BT work with hot mix
Note (Based on the studies carried out by the Engtneer, true minimum suggested major equipment to obtain the completion of works in accordance with the presbribad construction schedule/ a mile stones are shown in the above list)
2. Availability of the Key personnel with adequate experience as required should be indicated based on the requiremennt for that work to be executed.
3. Liquid asetts/ credit facilities of not less than Rs.______________lakhs(credit lines letter of ered / solvency certificate from Banks etc., shall be equivevalent of the estimated cash flow for three months in peak
4. EMD in the shape of Bank Guarantee in the standard format enclosed, for Rs.(one percent of the estimated contract value) to be valid for the period as indicated at para (d) i.e. pariod of completion plus defect liability period.
5. Experience relating to the works executed in State/ Central Government departments or State/ Central Government undertaktngs shall only be considered.

3.02.3.  Bid Capaciy

The sub contactors/ GPA holders experience shall not be taken into account in determining the bidders quallfying criteria. Tenderers who meet the requirement qualification cretaria will be quallfied only if their available bid capacity is more than the estimated contract value. Tha available bid capacity will be caliculated as under.

Assessed available bid capacity:  2AN-B
Where
A= Maximum value of civil engineering works executed in any one yaer dunng thę last five years (updated_______________________ price lavel) taking into account the completed as well as works in progress.
N= Number of years prescribed for, completion of the works for which tenders are invited. If months are specified they shall be converted in to years
B= Value of existing comitment and ongoing works to be completed during the period of completion of works for which tenders are invited

Note:-The statement showing the value of existing commitments and ongoing works as well the stipulated period of completion remaining for each of the works listed should be issued by the Engineer-in-Charge of Government department, not below the rank of Executive Engineer or equivalent and countersigned by Superintending Engineer or equivalent. The statement to the above effect shall be clearly enclosed to the Bidding Document, and the tenderer shall furnish the perticulars invariably in the same format failing which the tender shall be treated as incomplete and summarily be rejected.

@=-----------*price level. Financial turnover and cost of completed works of previous years shall be given weightage of 10 percent year to bring them to......Price level*.
*The financial year in which bids are invited.

3.02.4 

Even though the tenderer meets the above qualification critaria, he/she is subject be disqualified if he/she is found to have misled or made false representation in the forms, statements submitted in proof of the qualification requirements or records of poor performance such as abandoning works not properly completed in the contract, inordinate delays in completions, litigation history and or financia1 failures and or participated in the previoue tendering for the same works and had quoted unreasonably high bid prices. In addition to the above, even while execution of the work, if found that the Contractor had produced false/ fake certificates of experience, he/she will be blacklisted and work wiil be takan over invoking clauce 60(a) of PS to APSS.

3.02.5.

Tenders shall be valid for a period of 1/2/3 months as the case may be. Before the expiry of the validity, the authority competent to call for tenders shall seek for further extension of validity from the contractors and in caae the validity is not extanded his/ her tender will not be considered and the EMD shall be returned. During the period of validity, if any tenderer withdraws his tender, his/ her EMD shall be forfeited.

Contd. Page. 8.

Page.No.8

4.0. Evaluadon of Tenders

4.01. Receipt of Tenders

 The Tender schedules snall be issued upto one day prior to the last day of submission of Tenders. Tho tankers shall be received at the oIace and Lima ae spe‹xfied in the Tender Notice. The contractor shall be allowed to 8ubmit the tender Either personally or through his agent or by post. In case of submission of tender by post the risk and responsibility for either loss or delays in transit of the earns is to be txxne by tie comrector. Tra tendar opening autnorify will not consioer any lender reserved by him after the expiry of date and tima fixed for receipt of tenders.

4.01.1 Tenders will be received in two parts in 2 different sealed covors. Cover-A and Cover-B. The Cover-A shall I contain qualification data Viz., Annual Turnover and value of works under execution etc.. as at para 3.02. The Cover-B will contain the financial bid for the work in question. The Covar-A and Cover-B will be sealed and kept in another sealed envelops (cover-C) supplied by the department while issuing Tender Schedules.

4.01.2. The Executive Engineers and Supertntending Engineers delegated with the power to invite tenders will open and evaluate the tenders as par the qualification Criteria. While opening the Tendars care should be taken to ffrst open Cover-C in the presence of the tenderers or their authorised reprasentatives and other officials concerned on the specified date and time and alao to verify whether the Covar-A and Cover-B are property saeaed and minutes be recorded to this effect then and there only. In case the Cowers A&B or any one of them are found unaealad, such tander will not be opened and summarily rejected.

4 01.3.First Cover (Covar-A) suparacribed as "TECHNICAL BID" containing the qualification data as described at para 3.02 will be opened.

4.01.4. Second Cover (Cover-B), superscribed as "PRICE BID" shall contain the Schedule-A i.e., the statement of description of work, quantity, estimate rate and amount. Price bid (cover-B) of those tenderers who aro determined as qualified as per eligibility criteria will be opened on the date specified in the tender notice and the Cover-B of un-quallfied Tnderer will not be oponed and kept in the safe custody till the tandars are finalised and there aftar shall be returned to them along with E.M.D. The schedule-A of pricc bid shall contain the working items indicated as part—I which are to be executed and L.S. Provisions as Part-II. The premium or discount quoted by the contractor shall be applicable only for part-I. Howevar, the provisions containad in part-II will be operable basing on the conditions provided in the tender schedules. The tenderers wilt have to state clearly their willingness to execute the work at percentage excass or less or at par over the Estimate Contract Value indicated at Part-I at the space provided therein.

4.01.5  Before recommending/ accepting the tender, the tender accepting authorify shall verrfy the corractness of certificates submitted to meet the eliglbility criteria and specifically for experiencc, the authanticated agreements or pravious works executed by the lowest tanderer, shall be called for.

The EMD wfll be returned to the qualified but unsuccessful tenderer either after finalisation of tenders or on expiry of validity of tendee which evor earlior

Contd. Page. 9.