Government of India
MINISTRY OF SUPPLY
CONDITIONS OF CONTRACT
GOVERNING
CONTRACTS PLACED BY THE CENTRAL PURCHASE
ORGANISATION OF THE GOVERNMENT OF INDIA
(NOW UNDER MINISTRY OF SUPPLY)
(Amended upto 28-12-82)
GOVERNMENT OF INDIA
Ministry of Supply
General conditions of Contract applicable to Contracts placed by the Central Purchase Organization of the Government of India
(Now under Department of Supply)
FORM No. D. G. S. & D. 68 (Revised)
GENERAL CONDITIONS OF CONTRACT
1. DEFINITIONS AND INTERPRETATION
(1) In the Contract the General and Special Conditions governing it, unless the context otherwise requires:-
(a) “Acceptance of Tender” means the letter or memorandum communication to the contractor the acceptance of his tender and includes an advance acceptance of his tender;
(b) “Consignee” means where the stores are required by the acceptance of tender to be dispatched by rail, road, air or steamer, the person specified in the acceptance of tender to whom they are to be delivered at the destination; where the stores are required by the acceptance of tender to be delivered to a person as an interim consignee for the purpose of dispatch to another person, such other person; and in any other case, the person to whom the stores are required by the acceptance to tender to be delivered in the manner therein specified;
(c) “Contract” means the invitation to tender, instructions to tenderers, tender, acceptance of tender, particulars and the general and special conditions specified in the acceptance of tender and includes a repeat order which has been accepted or acted upon by the contractor;
(d) “Contractor” means the person with whom the contract is made and includes his heirs, executors, administrators or successors and permitted assignees, as the case may be;
(e) “Drawing” means the drawing or drawings specified in or annexed to the Schedule or specifications;
(f) “Inspector” means the person specified in the contract for the purpose of inspection of the stores or work under the contract and includes his authorized representative;
(g) “Material” means anything used in the manufacture or fabrication of the stores;
(h) “Particulars” include –
(i) specification;
(ii) drawing;
(iii) pattern bearing the seal and signature of the Inspector (hereinafter called the sealed pattern) which shall include also a certified copy thereof sealed by the Purchaser for the guidance of the Inspector;
(iv) sample sealed by the purchaser for the guidance of the Inspector (hereinafter called the certified sample) which shall include a certified copy thereof sealed by the Purchaser for the guidance of the Inspector;
(v) trade pattern, that is to say, a pattern, stores conforming to which are obtainable in the open market and which denotes a standard of the Indian Standards Institute or other standardizing authority or a general standard of the industry;
(vi) proprietary mark or brand means the mark or brand of a product which is owned by an industrial firm;
(vii) any other details governing the construction, manufacture or supply of stores as may be prescribed by the contract.
(i) “Purchase Officer” means the officer signing the acceptance of tender and includes any officer who has authority to execute the relevant contract on behalf of the Purchaser;
(j) “Purchaser” means the purchaser named in the Schedule of acceptance to the tender and includes his successors or assignees;
(k) “Secretary” means the Secretary of Ministry or Department of the Government of India for the time being in administrative charge of the Central Purchase Organization of the Government of India and includes an Additional Secretary, Joint Secretary or Deputy Secretary in such Ministry or Department, the Director General of Supplies & Disposals, Additional Director General/Deputy Director General of Supplies and any officer of the said Central Purchase Organization who is authorized for the time being to execute relevant contracts relating to purchase and supply of stores on behalf of the purchaser;
(l) “Schedule” means the Schedule annexed to the acceptance of tender;
(m) “Signed” includes stamped, except in the case of an acceptance of tender or any amendment thereof;
(n) “Site” means the place specified in the Schedule at which any work is required to be executed by the contractor under the contract or any other place approved by the Secretary for the purpose;
(o) “Stores” means the goods specified in the schedule which the contractor has agreed to supply under the contract;
(p) “Supply Order” means an order for supply of stores and includes an order for performance of service;
(q) “Test” means such test as is prescribed by the particulars or considered necessary by the Inspector within the ambit of the specifications whether performed or made by the Inspector or any agency acting under the direction of the Inspector;
(r) “Unit” and “Quantity” means the unit and quantity specified in the Schedule;
(s) “Writing” includes matter either in whole or in part, in manuscript, typewritten, lithographed, cyclostyled, photographed, or printed under or over signature or seal, as the case may be.
(2) The delivery of stores shall be deemed to take place on delivery of the stores in accordance with the terms of the contract after approval by the Inspector; to
(i). the consignee at his premises, or
(ii). where so provided the interim consignee at his premises, or
(iii). a carrier or other person named in the contract as an interim consignee for the purpose of transmission to the consignee.
(iv). The consignee at the destination station in case of contracts stipulating for delivery of stores at destination station.
(3) Words imparting the masculine gender shall be taken to include the feminine gender and word imparting persons, shall include any company or association or body of individuals, whether incorporated or not.
(4) The heading of these conditions shall not affect the interpretation or construction thereof.
(5) Terms and expressions not herein defined shall have the meanings assigned to them in the Indian Sale of Goods Act, 1930, or the Indian Contract Act, 1872 or the General Clauses Act, 1897, as amended from time to time.
2. (a) PARTIES
The parties to the contract are the contractor and the Purchaser, named in the Schedule.
(b) AUTHORITY OF PERSON SIGNING THE CONTRACT ON BEHALF OF THE CONTRACTOR
A person signing the tender or any other document in respect of the contract on behalf of the contractor without disclosing his authority to do so shall be deemed to warrant that he has authority to bind the contractor. If it is discovered at any time that the person so signing had no authority to do so, the Secretary may, without prejudice to any other right or remedy of the purchaser, cancel the contract and make or authorize the making of a purchase of the stores at the risk and cost of such person and hold such person liable to the purchaser for all costs and damages arising from the cancellation of the contract including any loss which the purchaser may sustain on account of such purchase. The provisions of clause 14 shall apply to every such purchase as far as applicable.
(c) ADDRESS OF THE CONTRACTOR AND NOTICES AND COMMUNICATIONS ON BEHALF OF THE PURCHASER
(i) For all purposes of the contract including arbitration there under, the address of the contractor mentioned in tender shall be the address to which all communications addressed to the contractor shall be sent, unless the contractor has notified a change by a separate letter sent by registered post acknowledgement due to the Director General of Supplies & Disposals or the heads of his concerned Regional Offices. The contractor shall be solely responsible for the consequence of an omission to notify a change of address in the manner aforesaid.
(ii) Any communication or notice on behalf of the purchaser, in relation to the contract may be issued to the contractor by purchase officer and all such communications and notices may be served on the contractor either by registered post or any other mode of written communication as deemed necessary by such officer.
3. AUTHORITY OF THE SECRETARY
For all purposes of the contract including arbitration proceedings there under the Secretary shall be entitled to exercise all the rights and powers of the Purchaser.
4. RESPONSIBILITY OF THE CONTRACTOR FOR EXECUTING THE CONTRACT
(1) Risk in the stores. - The contractor shall perform the contract in all respects in accordance with the terms and conditions thereof. The stores and every constituent part thereof, whether in the possession or control of the contractor, his agents or servants or a carrier, or in the joint possession of the contractor, his agents or servants and the purchaser, his agents or servants, shall remain in every respect at the risk of the contractor until their actual delivery to the consignee at the stipulated place or destination or, where so provided in the acceptance of tender, until their delivery to a person specified in the Schedule as interim consignee for the purpose of dispatch to the consignee. The contractor shall be responsible for all loss, destruction, damage or deterioration of or to the stores from any cause whatsoever while the stores after approval by the Inspector are awaiting dispatch or delivery or are in the course of transit from the contractor to the consignee or, as the case may be, interim consignee. The contractor shall alone be entitled and responsible to make claims against a railway administration or other carrier in respect of non-delivery, short delivery, misdelivery, loss, destruction damage or deterioration of the goods entrusted to such carrier by the contractor for transmission to the consignee or the interim consignee as the case may be.
(2) Consignee’s right of rejection.- Notwithstanding any approval which the Inspector may have given in respect of the stores or any part or portion thereof or any materials or other particulars or the work or workmanship involved in the performance of the contract (whether with or without any test carried out by the contractor or the Inspector or under the direction of the Inspector) and notwithstanding delivery of the stores where so provided to the interim consignee, it shall be lawful for the consignee, on behalf of the Purchaser to reject the stores or any part, portion or consignment thereof (i) within sixty days after actual delivery thereof to him at the place or destination specified in the schedule and (ii) in the case of stores the conditions of the contract in respect of which are dealt with in any of the forms DGS&D-71, DGS&D-72, and DGS&D-73 within 90 days reckoned from the date of receipt of complete equipment with spares and accessories, as ordered if such stores or part, portion or consignment thereof is not in all respect in conformity with the terms and conditions of the contract whether on account of any loss, deterioration or damage before dispatch or delivery or during transit or otherwise howsoever:
Provided that where, under the terms of the contract, the stores are required to be delivered to an interim consignee for the purpose of dispatch to the consignee, the stores shall be at the purchaser’s risk after their delivery to the interim consignee but nevertheless it shall be lawful for the consignee on behalf of the purchaser to reject the stores or any part, portion or consignment thereof upon their actual delivery to him at the destination if they are not in all respects in conformity with the stipulated specifications and the terms and conditions of contract except where they have been damaged or have been deteriorated in the course of transit or otherwise after their delivery to the interim consignee.
The provisions contained in clause 17 relating to the removal of stores rejected by the Inspector shall, mutatis mutandis, apply to stores rejected by the consignee as herein provided.
Clause 4 (2) (a) : The Contractor shall refund any advance/part payment received by him in respect of the rejected stores within 14 days of the receipt of intimation from the consignee at the destination about the rejection of the stores in terms of clause 4.2. In default the purchaser may take steps against the contractor for recovery of such price. This is strictly without prejudice and in addition to the right provided in clause 17 (8) 1514 DGS&D/90-2.
(3) (a) Subletting and assignment.- The contractor shall not, save with the previous consent in writing of the Secretary, sub-let, transfer or assign the contract or any part thereof or interest therein or benefit or advantage thereof in any manner whatsoever. Provided, nevertheless that any such consent shall not relieve the contractor from any obligation, duty or responsibility under the contract.
(b) Changes in a firm:-
(i) Where the contractor is a partnership firm, a new partner shall not be introduced in the firm except with the previous consent in writing of the Secretary, which may be granted only upon exception of a written undertaking by the new partner to perform the contract and accept all liabilities incurred by the firm under the contract prior to the date of such undertaking.
(ii) On the death or retirement of any partner of the contractor firm before complete performance of the contract the Secretary may, at his option cancel the contract and in such case the contractor shall have no claim whatsoever to compensation against the purchaser.
(iii) If the contract is not determined as provided in sub-clause (ii) above notwithstanding the retirement of a partner from the firm he shall continue to be liable under the contract for acts of the firm until a copy of the public notice given by him under Section 32 of the Partnership Act has been sent by him to the Secretary by registered post acknowledgement due.
(c) Consequence of breach.- Should the contractor or a partner in the contractor firm commit breach of either of the conditions (a) or (b)(i) of this sub-clause, it shall be lawful for the Secretary to cancel the Contract and purchase or authorise the purchase of the stores at the risk and cost of the contractor and in that event the provisions of clause 14 shall as far as applicable apply.
(d) The decision of the Secretary as to any matter or thing concerning or arising out of this sub-clause or on any question whether the contractor or any partner of the contractor firm has committed a breach of any of the conditions in this sub-clause contained shall be final and binding on the contractor.
(4) Assistance to the Contractor.- (a) The contractor shall be solely responsible to procure any material or obtain any import or other licence or permit required for the fulfillment of the contract and the grant by the Secretary or any other authority of a quota certificate or permit required under any law for distribution or acquisition of iron and steel or any other commodity or any other form of assistance in the procurement of the material aforesaid or any attempt to render assistance in the matter aforesaid, shall not be construed as a representation on the part of the purchaser that the material covered by such licence or permit or quota certificate is available or constitute any promise, undertaking or assurance on the part of the purchaser regarding the procurement of the same or effect any variation in the rights and liabilities of the parties under the contract. But, if by reason of any such assistance as aforesaid, the contractor obtains any materials at less than their market price or the cost of production of the stores is lowered, the price of the stores payable under the contract shall be reduced proportionately, and the extent of such reduction shall be determined by the Secretary whose decision shall be final and binding on the contractor.
(b) Every agreement made by the Secretary to supply, or give assistance in the procurement of materials, whether from the Government stock or by purchase under a permit or released order issued by or on behalf of or under authority from Government or by any officer empowered in that behalf by law or under other arrangements made by the Secretary shall be deemed to be subject to the condition that it will be performed with due regard to other demands and only if it is found practicable to do so within the stipulated time and the decision of the Secretary whether it was practicable to supply or give assistance as aforesaid or not shall be final and binding on the contractor.
5. USE OF RAW MATERIALS SECURED WITH GOVERNMENT ASSISTANCE.
(1) (a) Where any raw material is procured for the execution of a contract with the assistance of the government rendered in the form of permit or license or quota certificate/essentiality certificate or release order issued by or on behalf of or under the authority of the Government or by an officer empowered in that behalf, or
(b) Where the raw material is issued to the contractor from Government stock, or
(c) Where advance payments are made to the Contractor to enable him to purchase the raw material, or
(d) Where raw material is arranged by the Government, the contractor.
(i) shall hold such material as trustee for the Government;
(ii) shall use such material economically and solely for the purpose of the contract;
(iii) shall not dispose of the same without the previous permission in writing of the Secretary; and
(iv) shall render due account of such material and return to the Government at such place as the Secretary may direct all surplus or unserviceable material that may be left after the completion of contract or its termination for any reason whatsoever:
On returning such material the contractor shall be entitled to such price therefore as the Secretary may fix having regard to the condition of such material.
(2) Where the contract is terminated due to any default on the part of the contractor, the contractor shall pay all transport charges incurred for returning any material upto such destinations may determined by the Secretary and the decision of the Secretary in that behalf shall be final and binding on the contractor.
(3) If the contractor commits breach of any of the conditions in this clause specified, he shall, without prejudice to any other liability, penal or otherwise be liable to account to the Government for all moneys, advantages or profits accruing from or which in the usual course would have accrued to him by reason of such breach.
(4) Where the stores manufactured or fabricated by the contractor out of the materials arranged or procured by or on behalf of the Government are rejected the contractor shall, without prejudice to any other right or remedy of the Government, pay to the Government on demand the cost price or market value of all such materials, whichever is greater.
6. QUOTATION OF RATES BY CONTRACTORS
(i) The price quoted/charged by contractor shall not be higher than the controlled price fixed by law for the stores or where there is no controlled price, it shall not exceed the prices or contravene the norms for fixation of prices laid down by Government, or where no such prices or norms have been fixed by Government it shall not exceed the price appearing in any agreement relating to price regulation by any industry in consultation with the Government.
(ii) In any case, save for special reasons stated in the tender, the price quoted/charged for indigenous stores shall not be higher than the lowest price charged by the contractor for stores of the same nature, class or description to an individual/firm/organization or department of Government in India and for imported stores the price quoted shall not be higher than the lowest price charged by the contractor for stores of the same nature, class or description to a purchaser, domestic or foreign or to any organization or departments of Government.
(iii) If the price quoted/charged is higher than the controlled price etc. referred to in sub-clause (i) above or where there is no controlled price, the price lowest charged by the contractor from a private purchaser, domestic or foreign or from any organization or department of Government, for the stores of the same nature, class or description, etc. as referred to in sub-clause (ii) above, the contractor will specifically mention this fact in his tender giving reasons for quoting higher price(s). If he fails to do so or makes any mis-statement it shall be lawful for the Secretary (a) to revise the price at any stage so as to bring it in conformity with the sub-clause (i) or (ii) above or (b) to terminate the contract and purchase the stores at the risk and cost of the contractor and in that event the provisions of clause 14 shall apply as far as applicable as if the contractor has failed to deliver the stores within the period fixed.
7. SECURITY DEPOSIT
(1) The Secretary may at his option require the contractor/tenderer to furnish a security deposit which shall be made before or on the acceptance of the tender as may be required by the Secretary and which shall be made within the period specified by the Secretary. Such security deposit shall not ordinarily exceed 5 % but which if the Secretary so decides may be upto 10 % of the total consideration payable under the contract/proposed contract and shall not be less than Rs. 25 as the Secretary may specify and the security shall be in any of the following forms :-
(i) Bank Deposit Receipts or Fixed Deposit Receipts of or Demand Drafts on any of the Scheduled Commercial Banks; Cash or Money Order.
(ii) Promissory Notes and Stock Certificates of the Central Government or a State Government, Municipal Debentures or Port Trust Bonds at five percent below the market price or at their face value whichever is less. Treasury Savings deposits, Post Office Cash Certificates or Defence Saving Certificates, 10-year Defence Deposit Certificates, at their surrender value at the time of tender endorsed in favour of Director (Co-ordination and Statistics), Directorate General of Supplies & Disposals, New Delhi/Director of Supplies (Textiles), Bombay; Director of Supplies & Disposals, Madras/Calcutta/Bombay.
(iii) National Plan, National Savings or National Plan Savings Certificates, 12 years National Defence Certificates at their surrender value at the time of tender, Post Office Savings Bank (Security Deposit Account) pledged in favour of the Purchaser named in the Schedule to the Acceptance of Tender.
(iv) Performance bond in the prescribed form from the Life Insurance Corporation of India or Insurance Companies who are subsidiaries to the Life Insurance Corporation of India subject to the following conditions :-
(a) That the performance Bond should remain valid till the contract is fully performed and the purchaser has certified to that effect; and
(b) The purchaser is the sole judge to decide whether the supplier has committed a breach of the contract or not.
(v) Bank Guarantees in the prescribed form from any of the Scheduled Commercial Banks.
No other form of Security shall be accepted.
(2) If the contractor having been called upon by the Secretary to furnish security fails to do so within the specified period, it shall be lawful for the Secretary -
(i) to recover from the contractor the amount of such security deposit by deducting the amount from the pending bills of the contractor under the contract or any other contract with the purchaser or the Government or any person contracting through the Secretary or otherwise however, and/or,
(ii) to cancel the contract or any part thereof and to purchase or authorize the purchase of the stores at the risk and cost of the contractor and in that event the provisions of clause 14 shall apply as far as applicable.
(3) No claim shall lie against the purchaser either in respect of interest or any depreciation in value of any security. In case of bank deposit receipts the purchaser shall not be responsible for any loss that may result on account of failure or such bank.
(4) If the contractor fails or neglects to observe or perform any of his obligations under the contract it shall be lawful for the Secretary to forfeit either in whole or in part, the security deposit furnished by the contractor. Save as aforesaid, if the contractor duly performs and completes the contract in all respects and presents an absolute “No Demand Certificate”, in the prescribed form and returns in good condition, the specifications, drawings and samples or other property belonging to the purchaser, the Secretary shall, refund the security deposit to the contractor after deducting all costs and other expenses that the purchaser may have incurred and all dues and other moneys including all losses and damages which the purchaser is entitled to recover from the contractor.
8. SPECIFICATION ETC.
(1) Unless otherwise specified, the stores shall be entirely brand new and of the best quality and workmanship to the satisfaction of the Inspector. The contractor shall supply the stores in accordance with the particulars unless any deviation has been expressly specified in the acceptance of the tender. The stores shall further be in all respects acceptable to the Inspector.
(2) In particular and without prejudice to the foregoing condition, when tenders are called for in accordance with the particulars, the contractor’s tender to supply the stores in accordance with such particulars shall be deemed to be an admission on his part that he has acquainted himself with the details thereof and no claim shall lie against the purchaser on the ground that the contractor did not examine or acquaint himself with such particulars.
(3) Where the contract has been placed in accordance with a specification or drawing, a sealed pattern or a certified sample of the stores will govern only workmanship and finish.
(4) Where no specification, drawing, sealed pattern or certified sample exists or is specified in the contract, the stores shall be of such quality, material and workmanship as is specified in the contract and in any such case the stores supplied shall in all respects correspond to the approved sample submitted by the contractor and specified in the contract.
(5) If any dimension figured upon a drawing differs from that obtained by scaling the drawing, the contractor shall bring the discrepancy to the notice of the Inspector and the Purchase Officer. The Inspector’s decision in the matter shall be final and binding.
(6) It shall be lawful for the Secretary to alter by mutual consent at any time and from time to time the specifications, patterns and drawings and as from the dates specified by him stores to be supplied shall be in accordance with such altered specifications, patterns and drawings; provided that if any such alterations involve increase or decrease in the costs of or in the period required for production, a revision of the contract price and/or of the period prescribed for delivery shall be made by mutual agreement in respect of the stores to which the alteration applies. In all other respects, the contract shall remain unaltered.
(7) Unless some special Warranty/Guarantee clause has been stipulated elsewhere in the invitation to tender or any of its annexures, the following warranty shall form part of the contract placed on successful tenderer.
(i) Except as otherwise provided in the invitation to the tender, the contractor/seller hereby declares that the goods, stores articles sold/supplied to the purchaser under this contract shall be of the best quality and workmanship and new in all respects and shall be strictly in accordance with the specification and particulars contained/mentioned in contract. The contractor/seller hereby guarantees that the said goods/stores/articles would continue to conform to the description and quality aforesaid for a period of twelve months, from the date of delivery of the said goods/stores/articles to the purchaser or 15 months from the date of shipment/dispatch from the contractor’s works, whichever is earlier and that notwithstanding the fact that the Purchaser (Inspector) may have inspected and/or approved the said goods/stores/articles, if during the aforesaid period of 12/15 months the said goods/stores/articles be discovered not to conform to the description and quality aforesaid or not giving satisfactory performance or have deteriorated and the decision of the purchaser in that behalf shall be final and binding on the contractor/seller and the purchaser shall be entitled to call upon the contractor/seller to rectify the goods/stores/articles or such portion thereof as is found to be defective by the purchaser within a reasonable period, or such specified period as may be allowed by the purchaser in his discretion on an application made thereof by the contractor/seller, and in such an event, the above mentioned warranty period shall apply to the goods/stores/articles rectified from the date of rectification thereof, otherwise the contractor/seller shall pay to the purchaser such compensation as may arise by reason of the breach of the warranty herein contained.
(ii) Guarantee that they will supply spare parts, if and when required on agreed basis for an agreed price. The agreed basis could be and including but without any limitation an agreed discount on the published catalogue or an agreed percentage of profit on the laded cost.
(iii) Warranty to the effect that before going out of production for the spare parts they will give adequate advance notice to the purchaser of the equipment so that the latter may undertake the balance of the lifetime requirements.
(iv) Warranty to the effect that they will make available the blue prints of drawings of the spares if and when required in connection with the main equipment.
9. SAMPLES
(1) Advance Sample.- Where an advance sample is required to be approved under the terms of the contract, the contractor shall deliver the same free of cost to the Inspector within the time specified in the Acceptance of Tender. If the contractor is unable to do so, he must apply immediately to the Office issuing the Acceptance of Tender for extension of time, stating the reasons for the delay. If the Secretary is satisfied that a reasonable ground for an extension of time exists, he may allow such additional time as he considers to be justified (and his decision shall be final) with or without alteration in the delivery period stipulated in the acceptance of tender and on such conditions as he deems fit. In the event of the failure of the contractor to deliver the advance sample by the date specified in the Acceptance of Tender or any other date to which the time may be extended as aforesaid by the Secretary or of the rejection of the sample, the Secretary shall be entitled to cancel the contract and if so desired, purchase or authorize the purchase of the stores at the risk and cost of the contractor, in which case the provisions of clause 14 shall apply as far as applicable.
(2) Unless otherwise provided in the contract, all samples required for test shall be supplied by the contractor free of cost. Where a sample which is supplied free is rejected after examination and test, the same or whatever remains of the sample after examination and test will be returned to the contractor at his request and cost within three months of the date of such rejection. The reasons for rejection shall be communicated to the contractor.
(3) Marking. - Samples submitted shall be clearly labeled with the contractor’s name and address and the acceptance of tender number.
(4) If the contractor submits a sample whether with, before, or after the tender, the same shall not govern the standard of supply except when it has been so specifically stated in the Acceptance of Tender.
(5) Where under the contract, the contractor is required to summit an advance sample, any expenses incurred by the contractor on or in connection with the production of stores in bulk, before the sample has been approved unconditionally shall be borne by the contractor and he shall not claim any compensation in the event of such sample being found unacceptable by the Inspector.
(6) The rejection of the sample by the Inspecting Authority or the Inspector shall be final and binding on the contractor.
(7) Where the contract does not require any advance sample to be approved, the contractor may before proceeding with bulk manufacture or delivery of the stores, if he so desires submit for inspection a sample of the stores in which case a quantity not less than 1 percent of the total quantity to be supplied shall be submitted. The contractor shall not, however, be entitled to be shown any consideration or given any extension of time or claim to be exonerated from completing the delivery within the stipulated period only on the ground of delay in the approval of any such sample.
(8) If under the contract supplies are governed by a sealed pattern, the contractor shall be bound to examine such pattern before preparing a sample or manufacturing the stores in bulk as the case may be.
(9) Loan of samples. - If a certified sample is lent to the contractor, it will bear a label containing inter alia variations known to the Inspector between the said sample and the stores desired. If the contractor finds any further variation between the certified sample and the particulars or specifications mentioned in the Schedule he shall at once refer the matter to the Inspector and shall also give intimation of such discrepancy to the Purchase Officer. The contractor shall follow the instructions of the Inspector to be given in writing as to what sample or particulars should guide the production of the stores and the decision of the Inspector in the matter shall be final and binding on the contractor.
The contractor shall not detach the said label from the certified sample and if for any reasons the said label gets detached, the contractor shall at once return the certified sample to the Inspector for attaching a fresh label.
10. RETURN OF PARTICULARS
The contractor shall return in good condition all the particulars or certified samples (with the labels intact). In the event of his failure to do so, he shall be liable to pay to the purchaser as agreed liquidated damages a sum not exceeding three times the price of such particulars or the certified samples or Rs. 250 whichever is greater as may be determined by the Secretary. The decision of the Secretary in that behalf shall be final and binding on the contractor.
11. RISK OF LOSS OR DAMAGE TO GOVERNMENT OR PURCHASER’S PROPERTY
(1) All the property of the Government or purchaser loaned whether with or without deposit, to the contractor in connection with the contract shall remain the property of the Government or the purchaser, as the case may be. The contractor shall use such property for the purpose of the execution of the contract and for no other purpose whatsoever.
(2) All such property shall be deemed to be in good condition when received by the contractor unless he shall have within seven days of the receipt thereof notified the purchase officer to the contrary. If the contractor fails to notify any defect in the condition or quality of such property he shall be deemed to have lost the right to do so at any subsequent stage.
(3) The contractor shall return all such property and shall be responsible for the full value thereof to be assessed by the Secretary whose decision shall be final and binding on the contractor. The contractor shall be liable for loss or damage to such property from whatever cause happening while such property is in the possession of or under the control of the contractor, his servants, workmen, or agents.
(4) Where such property is insured by the contractor against loss or fire at the request of the Government or purchaser such insurance shall be deemed to be effected by way of additional precaution and shall not prejudice the liability of the contractor as aforesaid.
12. PACKING AND MARKING.
(1) The contractor shall pack at his cost the stores sufficiently and properly for transit by rail/road, air and/or sea as provided in the schedule so as to ensure the same on arrival at their destination being free from loss or damage.
(2) Unless otherwise provided in the schedule all containers(including packing cases, boxes, tins, drums and wrappings) in which the stores are supplied by the contractor, shall be considered as non-returnable and their cost as halving been included in the contract price.
(3) If the schedule provides that the containers shall be returnable, they must be marked “returnable” and they will be returned to the contractor as per terms of the contract.
(4) If the schedule provides that returnable containers shall be separately charged, they shall be invoiced by the contractor at the price specified in acceptance of tender. In such cases the contractor shall give full credit for the invoiced amount if the containers are returned to the contractor. Return of containers shall be made within a reasonable time and in the event of any dispute or difference arising as to whether the containers were so returned, the decision of the Secretary thereon shall be final and binding and the Secretary may in his discretion award such compensation as may in his opinion be proper for any undue delay in returning the containers.
(5) Each bale or package delivered under the contract shall be marked by the contractor at his won expense. Such marking shall be distinct (all previous irrelevant marking being carefully obliterated) and shall clearly indicate the description and quantity of the stores, the name and address of the consignee, the gross weight of the package and the name of the contractor with a distinctive number or mark sufficient for the purpose of identification. All marking shall be carried out with such material as may be found satisfactory by the Inspector as regards quickness of drying, fastness and indelibility.
(6) The Inspector may reject the stores if the stores are not packed and/or marked as aforesaid and in case where the packing materials are separately prescribed, if such materials are not in accordance with the terms of the contract. Such rejection of the stores by the Inspector shall be final and binding on the contractor.
(7) If the contractor fails to carry out or comply with any instructions issued to him by the Inspector before onward dispatch of the stores to the consignee within a reasonable time, the Inspector may himself carry out and comply with them at the cost and expense of the contractor, or reject the stores in terms of sub-clause 6 above.
(8) Each bale or package shall contain a packing note specifying the name and address of the contractor, the number and date of the acceptance of tender or Supply Order and the designation of the Purchase Officer or Officer issuing the supply Order, the description of the stores and the quantity contained in such bale or package.
13. CHARGES FOR WORK NECESSARY FOR COMPLETION OF CONTRACT.
The contractor shall pay all charges such as for handling, stamping, printing, painting, Marking and for protecting and preserving patent rights and for all such measures which the Inspector may require the contractor to take for the proper completion of the contract though no specific provision in respect thereof may have been made in the contract.
14. DELIVERY
(1) Time for and date of delivery, the essence of the contract. The time for and the date of delivery of the stores stipulated in the schedule shall be deemed to be of the essence of the contract and delivery must be completed not later than the date(s) as specified in the contract.
(2) Passing of Property.- Property in the stores shall not pass to the purchaser unless and until the stores have been delivered to the consignee or interim consignee, as the case may be him accordance with the conditions of the contract:
(a) Incases where stipulation is for :
(i) local delivery; or
(ii) free delivery at the specified destination; or
(iii) delivery to an interim consignee; and
(b) In any other case where the contractor has obtained the railway receipt, consignment note, the bill lading or warehouse certificate as the case may be, in accordance with the terms of the contract.
(3) The purchaser shall not be liable to assist in securing or to arrange for or provide transport to the contractor unless it is so specifically stated in the schedule notwithstanding that transport of the stores is controlled by or under the orders of the Government.
(4) The contractor shall deliver the stores in accordance with the conditions of contract at the time/times and at the place/places and in the manner specified in the schedule.
(5) Facilities to Inspector. - The contractor shall allow reasonable facilities and free access to his works and records to the Inspector, Progress Officer, or such other Officer as may be nominated by the Secretary for the purpose of ascertaining the progress of the deliveries under the contract.
(6) The Purchaser shall not be bound to apply for delivery but the contractor shall when the stores are ready for inspection and test send a notice in writing to the Inspector specifying the place where inspection is offered and the Inspector shall on receipt of such notice notify to the contractor the date and time when the stores would be inspected.
(7) Failure and termination.- If the contractor fails to deliver the stores or any instalment thereof within the period fixed for such delivery or at any time repudiates the contract before the expiry of such period, the Secretary may without prejudice to the right of the Purchaser to recover damages for breach of the contract :-
(i) recover from the contractor as agreed liquidated damages including administrative expenses and not by way of penalty a sum equivalent to 2 % of the price of any stores which the contractor has failed to deliver within the period fixed for delivery in the schedule for each month or part of a month during which the delivery of such stores may be in arrears where delivery thereof is accepted after expiry of the aforesaid period, provided that the total damages so claimed shall not exceed 10% of the total contract price.
(ii) Contract or authorize contracting elsewhere without a show-cause notice to the contractor, on the account and at the risk of the contractor of the stores not so delivered or others of a similar description (where stores exactly complying with particulars are not in the opinion of the Secretary, which shall be final, readily procurable) without canceling the contract in respect of the instalments not yet due for delivery. If the contractor had defaulted in the performance of the original contract, the purchaser shall have the right to ignore his tender for risk purchase even though the lowest.
(iii) Cancel the contract or a portion thereof without a show-cause notice to the contractor and if so desired contract or authorize contracting for the stores not so delivered or others of a similar description (where stores exactly complying with particulars are not in the opinion of the Secretary, which shall be final, readily procurable) at the risk and cost of the contractor. If the contractor had defaulted in the performance of the original contract, the purchaser shall have the right to ignore his tender for risk purchase even though the lowest.
(iv) Where action is taken under sub-clause (ii) or sub-clause (iii) above under the provisions of this it shall be in the discretion of the purchaser to collect or not to collect the security deposit from the firm on whom the contract is placed at the risk and expense of the defaulted contractor.
(v) Where action is taken under sub-clause (ii) or sub-clause (iii) above, the contractor shall be liable for any loss which the purchaser may sustain on that account p[provided the contract or, if there is an agreement to contract, such agreement is made, in case of failure to deliver the stores within the period fixed for such delivery within six months or within such period as may be agreed upon from the date of such failure and in case of repudiation of the contract, before the expiry of the aforesaid period of delivery, within six months. The contractor shall not be entitled to any gain on such purchases and the manner and method of such purchases shall be in the entire discretion of the Secretary. It shall be necessary for the purchaser to serve a notice of such purchase on the contractor.
(vi) Where action is taken under sub-clause (ii) and (iii) above, the risk purchase contract that will be entered as a result thereof will as far as possible be limited to firms who are past suppliers for the subject stores. It will be no defence that the Purchaser has ignored offers from untried firms, and sub-clause (v) above shall still apply. The contractor shall be liable for any loss which the purchaser may sustain on such account.
(8) Where delivery is effected within 21 days of the contract delivery period and not any extended date of delivery, the same will be accepted by the purchaser provided, however that the said period of 21 days would not be available in cases where the contract is placed on a higher price in consideration of earlier delivery as also in cases where the application of the said clause is expressly excluded in the Tender Enquiry. This period of 21 days would only be applicable for effecting the delivery and would not be available for offering stores for inspection.
(9) Notification of delivery.- Notification of delivery or despatch in regard to each and every instalment shall be made to the Purchase Officer on the prescribed form copies of which may be obtained from the Purchase Officer. The Contractor shall further supply to the consignee, or the interim consignee, as the case may be, a packing account quoting number of the acceptance of tender and/or Supply or Repeat Order and date of dispatch of the stores. All packages, containers, bundles and loose materials part of each and every detail of the contents of the packages and quantity of materials shall be given to enable the consignee to check the stores on arrival at destination. The railway receipt, consignment note or the bill of lading, if any, should be drawn in the name of the consignee or the interim consignee as the case may be and should be sent to him by registered post vide c.s. No. 10 dt. 03-08-1973 acknowledgement due immediately on despatch of the stores, quoting the No(s) and date(s) of the corresponding Inspection Note(s) in relation to the stores covered by the said Railways Receipt, the consignment note or the Bill of Lading, as the case may be. The contractor shall bear and reimburse to the purchaser, demurrage charges, if any paid by reasons of delay on the part of the contractor in forwarding the Railway receipt, consignment note or bill of lading.
(10) Force Majeure Clause. - The force majeure clause in the following form only (which will not form part of the General Conditions of Contract) should be included in such, contracts where the suppliers specifically insist on the provision of a force majeure clause and there is no alternative but to accept the same. This clause should, therefore, not be incorporated in the Invitation to Tender. But where a supplier insists for this clause, prior to acceptance of an offer, the supplier should be asked to accept this clause as governing conditions of force majeure.
“If at any time, during the continuance of this contract, the performance in whole or in part by either party of any obligation under this contract shall be prevented or delayed by reason of any war, hostility, acts of public enemy, civil commotion, sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lockouts or act of God (hereinafter referred to “events”) provided, notice of the happening of any such event is given by either party to the other within 21 days from the date of occurrence thereof, neither party shall by reason of such event, be entitled to terminate this contract nor shall either party have any claim for damages against the other in respect of such non- performance or delay in performance, and deliveries under the contract shall be resumed as soon as practicable after such event has come to an end or ceased to exist, and the decision of the Secretary as to whether the deliveries have been so resumed or not, shall be final and conclusive, PROVIDED FURTHER that if the performance in whole or part or any obligation under this contract is prevented or delayed by reason of any such event for a period exceeding 60 days, either party may at its option terminate the contract provided also that if the contract is terminated under this clause, the purchaser shall be at liberty to take over from the contractor at a price to be fixed by the Secretary, which shall be final, all unused, undamaged and acceptable materials, bought out components and stores in course of manufacture in the possession of the contractor at the time of such termination or such portion thereof as the purchaser may deem fit excepting such materials, bought out components and stores as the contractor may with the concurrence of the purchaser elect to retain.”
15. PROGRESS REPORTS.
(1) The contractor shall from time to time render such reports concerning the progress of the contract and/or supply of the stores in such form as may be required by the Secretary.
(2) The submission, receipt and acceptance of such reports shall not prejudice the rights of the Purchaser under the contract, nor shall operate as an estoppel against the purchaser merely by reason of the fact that he has not taken notice of or objected to any information contained in such report.
16. FREIGHT
(1) The stores shall be dispatched at public tariff rates, railway material concession rates or military concession rates, as may be specified in the schedule. In cases where railway material concession rates or military concession rates apply, the Secretary will indicate the authority from whom the railway material consignment note or permit or military credit note should be obtained, if the document does not accompany the acceptance of tender. It shall be the responsibility of the contractor to obtain such document according to his requirements from the authority empowered to issue it. The grant of military credit note or railway material consignment note or permit shall not prejudice the right of inspection and rejection at the destination.
(2) In the case of a f.o.r. station of dispatch contract, the stores shall be booked at full wagon rates whenever available and by the most economical route or by the most economical tariff available at the time of dispatch as the case may be. Failure to do so will render the contractor liable for any avoidable expenditure caused to the purchaser.
(3) Where alternative routes exist, the Secretary shall if called upon to do so indicate the most economical route available, or name the authority whose advice in the matter should be taken and acted upon. If any advice of any such authority, is sought, his decision or advice in the matter shall be final and binding on the contractor.
17. INSPECTION AND REJECTION
(1) Facilities for test and examination.- The contractor shall, at his own expenses, afford to the Inspector all reasonable facilities and such accommodation as may be necessary for satisfying himself that the stores are being and or have been manufactured in accordance with the particulars. The Inspector shall have full and free access at any time during the execution of the contract to the contractor’s works for the purpose aforesaid, and he may require the contractor to make arrangements for inspection of the stores or any part thereof or any material at his premises or at any other place specified by the Inspector and if the contractor has been permitted to employ the services of a sub-contractor, he shall in his contract with the sub-contractor, serve to the Inspector a similar right, provided, however, such inspection shall not preclude the purchaser/inspection authority form re-inspection of the goods after they have been inspected by the Inspector for the purpose aforesaid. The decision of the purchaser/inspection authority in this regard shall be final and binding on the contractor. All terms and conditions of the contract as they apply to the inspection shall save further in inspection also apply to re-inspection.
(2) Cost of test.- The Contractor shall provide, without any extra charge, all materials, tools, labour and assistance of every kind which the Inspector may demand of him for any test, and examination, other than special or independent test, which he shall require to be made on the contractor’s premises and the contractor shall bear and pay all costs attendant thereon. If the contractor fails to comply with conditions aforesaid, the Inspector shall, in his sole judgement, be entitled to remove for test and examination all or any of the stores manufactured by the contractor to any premises other than his (contractor’s) and in all such cases the contractor shall bear the cost of transport and/or carrying out such tests elsewhere. A certificate in writing of the Inspector, that the contractor has failed to provide the facilities and the means for test and examination, shall be final.
(3) Delivery of Stores for Test.- The Contractor shall also provide and deliver for test, free of charge, at such place other than his premises as the Inspector may specify such material or stores as he may require for tests for which contractor does not have the facilities or for special/independent tests.
(4) Liability for costs of special or independent tests.- In the event of rejection of stores or any part thereof by the Inspector in consequence of the sample thereof, which is removed to the laboratory or other place of test, being found on test to be not in conformity with the contract/or in the event of the failure of the contractor for any reason to deliver the stores passed on test within the stipulated period, the contractor shall, on demand, pay to the purchaser all costs incurred in the inspection and/or test. Cost of test shall be assessed at the rate charged by the Laboratory to private persons for similar work.
(5) Method of testing.- The Inspector shall have the right to put all the stores or materials forming part of the same or any part thereof to such tests as he may think fit and proper. The contractor shall not be entitled to object on any ground whatsoever to the method of testing adopted by the Inspector.
(6) Stores expended in test:- Unless otherewise provided for in the contract if the special or independent test proves satisfactory and the stores or any instalment thereof is accepted, the quantity of the stores or materials expended in test will be deemed to have been taken delivery of by the purchaser and be paid for as such.
(7) Inspector. - Final Authority and to Certify Performance.- The Inspector shall have the power:-
(i) before any stores or part thereof are submitted for inspection to certify that they cannot be in accordance with the contract owing to the adoption of any unsatisfactory method of manufacture.
(ii) to reject any stores submitted as not being in accordance with particulars.
(iii) to reject the whole of the installment tendered for inspection, if after inspection of such portion thereof as he may in his discretion think fit, he is satisfied that the same is unsatisfactory.
(iv) To mark the rejected stores with a rejection mark so that they may be easily identified if re-submitted.
(8) Consequence of rejection.- If on the stores being rejected by the Inspector or consignee at the destination, the contractor fails to make satisfactory supplies within the stipulated period of delivery the Secretary shall be at liberty to :-
(i) Require the contractor to replace the rejected stores forthwith but in any event not later than a period of 30 days from the date of rejection and the contractor shall bear all cost of such replacement, including freight, if any, on such replacing and replaced stores but without being entitled to any extra payment on that or any other account.
(ii) purchase or authorize. The purchase of quantity of the stores rejected or stores of a similar description when stores exactly complying with particulars are not in the opinion of the Secretary, which shall be final, readily available without notice to the contractor at his risk and cost and without affecting the contractor’s liability as regards the supply of any further installment due under the contract, or
(iii) cancel the contract and purchase or authorise the purchase of the stores or stores of a similar description (when stores exactly complying with particulars are not in the opinion of the Secretary, which shall be final, readily available) at the risk and cost of the contractor. In the event of action being sub-clause (ii) above or this sub-clause the provisions of clause 14 shall apply as far as applicable.
(9) Inspector’s decision as to rejection final. - Inspector’s decision as regards the rejection shall be final and binding on the contractor.
(10) Where under the contract the price payable is fixed f.o.r. dispatching station, the contractor shall, if the stores are rejected at destination by the consignee, ‘be liable in addition to his other liabilities, including refund of price recoverable in respect of the stores so rejected, to reimburse to the purchaser the freight and all other expenses incurred by the purchaser in this regard.
(11) Notification of result of Inspection.- Unless otherwise provided in the specification of schedule, the examination of the stores will be made as soon as practicable after the same have been submitted for inspection and the result of the examination will be notified to the contractor.
(12) Marking of stores. - The contractor shall if so required at his own expense mark or permit the Inspector to mark all the approved stores with a recognized Government or purchaser’s mark. The stores which cannot be so marked shall, if so required by the Inspector, be packed in suitable packages or cases each of which shall be sealed and marked with such mark.
(13) (a) On rejection of all stores submitted for inspection at a place other than the premises of the contractor, such stores shall be removed by the contractor at his own cost, within 14 days of the date of intimation of such rejection. If the concerned communication is addressed and posted to the contractor at the address mentioned in the schedule, it will be deemed to have been served on him at the time when such communication would in the course of ordinary post reach the contractor. Provided that the Inspector may call upon the contractor to remove dangerous, infected or perishable stores within 48 hours of the receipt of such communication and the decision of the Inspector in this behalf shall be final in all respects. Provided further that where the price or part thereof has been paid the consignee is entitled without prejudice to his other rights to retain the rejected stores till the price paid for such stores is refunded by the contractor save that such retention shall not in any circumstances be deemed to be acceptance of the stores or waiver of rejection thereof.
(b) All rejected stores shall in any event and circumstances remain and always be at the risk of the contractor immediately on such rejection. If such stores are not removed by the contractor within the periods aforementioned, the Inspector may remove the rejected stores and either return the same to the contractor at his risk and cost by such mode of transport as the Secretary or Inspector may decide, or dispose of such stores at the contractor’s risk and on his account and retain such portion of the proceeds if any from such disposal as may be necessary to recover, any expense incurred in connection with such disposals (or any price refundable as a consequence of such rejection). The purchaser shall, in addition, be entitled to recover from the contractor handling and storage charges for the period during which the rejected stores are not removed/disposed of in accordance with the provisions thereof.
(14) Inspection Notes: - On the stores being found acceptable by the Inspector, he shall give to the contractor necessary copies of inspection notes duly completed. The Inspection Note shall be stamped as “This I/Note is valid till – for purpose of dispatch only”. The covered by such Inspection Notes much be dispatched within 30 days from the date of the inspection notes. If the contractor is not able to dispatch the stores as above the officer not less than next to higher in rank who issued the Inspection Notes may on sufficient cause such as non-availability of Railway booking, steamer booking, Force Majeure conditions, etc. shown to him allow a further period of 30 days to the contractor within which the stores must be dispatched. The Inspector shall make an endorsement of the fact of extension of the Inspection Notes. If the stores are not dispatched within this total period of 60 days the contractor will have to get the goods re-inspected and has to obtain fresh inspection notes in lieu of the earlier inspection notes. In case of sub-centres, the 2nd validation of I/Note can be done by the head of the sub-centres irrespective of the officer who have signed I/Note.
The Inspector shall state on the fresh inspection notes that these have been given in lieu of the earlier inspection notes indicating clearly the printed serial number and date of issue of the invalid I/Note.
All the terms and conditions will apply to this re-inspection as they apply to the original inspection of the stores.
The validity of the inspection notes shall not, in any manner whatsoever, have the effect of keeping the contract alive if it is not otherwise alive.
18. WITHHOLDING AND LIEN IN RESPECT OF SUMS CLAIMED
Whenever any claim or claims for payment of a sum of money arises out of or under the contract against the contractor the purchaser shall be entitled to withhold and also have a lien to retain such sum or sums in whole or in part from the security, if any, deposited by the contractor and for the purpose, aforesaid, the purchaser shall be entitled to withhold the said cash security deposit or the security, if any, furnished as the case may be and also have a lien over the name pending finalization or adjudication of any such claim. In the event of the security being in sufficient to cover the claimed amount or amounts or if no security has been taken from the contractor, the purchaser shall be entitled to withhold and have a lien to retain to the extent of the such claimed amount or amounts referred to supra, from any sum or sums found payable or which at any time thereafter may become payable to the contractor under the same contract or any other contract with the purchaser or the Government or any person contracting through the Secretary pending finalization or adjudication of any such claim.
It is an agreed term of the contract that the sum of money or monies so withheld or retained under the lien referred to above, by the purchaser will be kept withheld or retained as such by the purchaser till the claim arising out of or under the contract is determined by the arbitrator (if the contract is governed by the arbitration clause) or by the competent court as prescribed under clause 20 hereinafter provided, as the case may be, and the contractor will have no claim for interest or damages whatsoever on any account in respect of such withholding or retention under the lien referred to supra and duly notified as such to the contractor. For the purpose of this clause, where the contractor is a partnership firm or a limited company, the purchaser shall be entitled to withhold and also have a lien to retain towards such claimed amount or amounts in whole or in part from any sum found payable to any partner/limited company, as the case may be whether in his individual capacity or otherwise.
18-A. LIEN IN RESPECT OF CLAIMS IN OTHER CONTRACTS
Any sum of money due and payable to the contractor (including the security deposit returnable to him) under the contract may be withheld or retained by way of lien by the purchaser or Government or any other person or persons contracting through the Secretary against any claim of the purchaser or Government or such other person or persons in respect of payment of a sum of money arising out of under any other contract made by the contractor with the purchaser or Government or with such other person or persons.
It is an agreed term of the contract that the sum of money so withheld or retained under this clause by the purchaser or Government will be kept withheld or retained as such by the purchaser or Government or till his claim arising out of in the same contract or any other contract is either mutually settled or determined by arbitrator, if the contract is governed by arbitration clause or by the competent court under clause 20 hereinafter provided, as the case may be, and that the contractor shall have no claim for interest or damages whatsoever on this account or on any other ground in respect of any sum of money withheld or retained under this clause and duly notified as such to the contractor.
19. PAYMENT UNDER THE CONTRACT.
(1) The payment of full 100% of price of the stores of each consignment thereof will be made after receipt and acceptance of the stores by the consignee in good condition. Bills are to be submitted in the prescribed form which may be obtained from DGS&D and are to be supported with inspection note issued by the Inspector and consignee’s Receipt Certificate.
Payment will be made in accordance with the instructions given in the acceptance of tender by a cheque or demand draft on a Branch of Reserve Bank of India or State Bank of India transacting Government business
(2) Provided that for contractors registered with DGS&D and/or NSIC under the single point registration scheme payment for the stores or for each consignment thereof may be made to them on submission of bills in accordance with the following procedures.
(i) 95% of the price of the stores of each consignment thereof shall be paid on proof of dispatch to the consignee or delivery to an interim consignee, if any, and on production of a valid Inspection Note issued by the Inspector. A Photostat copy of Railway receipt duly attested by the contractor, postal receipts bill of lading or consignment note under which the goods charged for in the bill are dispatched by rail, post, sea or air respectively and a copy of the letter with which such Railway receipt, postal receipt, bill of lading or consignment note is forwarded to the consignee shall be furnished with the bill. However, in case where the facility of furnishing a Photostat copy is not available there is no objection in furnishing true copy of R/R duly attested by a Gazetted Officer, M.P., M.L.A., Notary Public and/or Magistrate. In the case of stores desptached by sea one copy of the bill of lading shall also be attached to the bill and in the case of stores desptached by Air a copy of the consignment note issued by the Airline Company will be submitted along with the bill and in the case of stores desptached by post, the postal receipt shall be attached in original to the bill.
(ii) The balance of 5% shall be paid on receipt of the stores or each consignment thereof in accordance with the terms of the contract in good condition, by the consignee, with a certificate to that effect endorsed on the copy of the Inspection Note by the consignee which shall accompany the bill submitted by the contractor.
(iii) In cases where the contractor is not in a position to submit bills for the balance 5 % for want of the receipted copies of Inspection Notes from the consignee and the consignee has not complained about non-receipt shortage or defects in the supplies made, the balance amount of 5% will be paid by the Controller of accounts without consignees receipt certificate after three months from the date of advance payment subject to the following conditions :-
(a) The contractor will make good any defect or deficiency that the consignee(s) may report within six months from the date of dispatch of stores.
(b) Delay in supplies, if any, has been regularized.
(c) The contract price where it is subject to variation has been finalized.
(d) The contractor furnishes the following undertaking;
I/We………….. certify that I/We have not received back the Inspection Note duly receipted by the consignee of non-receipt, shortage or defects in the stores supplies.
I/We………….. agree to make good any effect or deficiency that the consignee may report within three months from the date of their final balance payment.
I/We…………… further agree that all rights of the Purchaser under the general and special conditions of the contract shall remain entirely un-affected there.”
Note :- This sub-clause will not apply to the rate and running contract, F.O.R. destination contract, supply and Erection Contracts and such other contracts where this clause is excluded specifically.
(iv) In the case of local delivery and in case of stores dispatched by road advance 95% payment may be allowed on proof of inspection and delivery to the consignee, the proof of delivery being a provisional certificate from the consignee. The balance 5 % will be payable on final acceptance by the consignee as recorded in his final receipt certificate.
The standard form of provisional certificate referred to above will be as under:
“This is a provisional receipt; it may only be taken as the receipt of the stores by the consignee and is without prejudice to his rights of inspection and rejection under the General Conditions of Contract. It is issued on “said to contain basis”, the contractor remaining responsible for proving the total quantities actually delivered.”
19(2) (v) The above facility mentioned in clause 19(2)(iv) may be withdrawn by the purchaser at any time or during the currency of the contract if he is satisfied that it has been misused or any irregularity has been committed by the contractor. Such withdrawal will be forth with and apply for payment against all pending as well as future bills/contracts and the payment against such cases will be regulated in accordance with para 19(i).
19(3) Where the Inspector also acts as the interim consignee or where inspection is carried on by the consignee himself at destination and in all cases of local delivery full payment shall be made on submission of “Final 100% bill” supported by the Inspector Certificate and consignee’s receipt as aforesaid to the Accounts Officer concerned.
19(4) Payment of Insurance charges.- In the case of f.o.r. station of dispatch contracts insurance and other incidental charges incurred by and payable to the contractor in accordance with the terms of the contract, as specified in the schedule or as intimated in subsequent instructions by the purchaser will be reimbursed to him along with the payment of 95% of the price on production of documentary evidence proving that such charges have actually been paid and/or such expenses have been actually incurred to the satisfaction of the authority paying the bill.
20 LAWS GOVERNING THE CONTRACT
(1) This contract shall be governed by the laws of India for the time being in force.
(2) Irrespective of the place of delivery, the place of performance or place of payment under the contract or the place of issue of advance intimation of acceptance of tenders, the contract shall be deemed to have been made at the place from where the tenders have been invited.
(3) Jurisdiction of Courts.- The courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract.
(4) Marking of stores.- The marking of the stores must comply with the requirements of the laws relating to Merchandise Marks for the time being in force in India.
21. INDEMNITY
(1) The contractor shall at all time indemnify the purchaser against all claims which may be made in respect of the stores for infringement of any right protected by patent, registration of designs or trade mark. Provided always that in the event of any claim in respect of alleged breach of letters patent, registered designs or trade mark being made against the purchaser, the purchaser shall notify the contractor of the same and the contractor shall at his own expense either settle any such dispute or conduct and litigation that may arise therefrom.
(2) The contractor shall not be liable for payment of any royalty, license fee or other expenses in respect of or for making use of patents or designs with respect to which he is according to the terms of the contract, to be treated as an agent of the Government for the purpose of making use of the patent or trade mark for fulfillment of the contract.
22. CORRUPT PRACTICES
(1) The contractor shall not offer or give or agree to give to any person in the employment of the purchaser or working under the orders of the Secretary any gift or consideration of any kind as an inducement or reward for doing or for bearing to do or for having done or forborne to do any act in relation to the obtaining or execution of the contract or any other contract with the purchaser or Government or for showing or forbearing to show favour or disfavour to any person in relation to the contract or any other contract with the purchaser or Government. Any breach of the aforesaid condition
by the Contractor, or anyone employed by him or acting on his behalf(whether with or without the knowledge of the contractor) or the commission of any offence by the contractor or by anyone employed by him or acting on his behalf under Chapter IX of the Indian Penal Code, 1860 or the Prevention of Corruption Act, 1947 or any other Act enacted for prevention of corruption by Public Servants shall entitle the Secretary to cancel the contract and all or any other contracts with the contractor and to recover from the contractor the amount of any loss arising from such cancellation in accordance with the provisions of clause 14.
(2) Any dispute or difference in respect of either the interpretation effect or application of the above conditions or of the amount recoverable thereunder by the Purchaser from the contractor, shall be decided by the Secretary of the Ministry of the Government of India administratively in charge of the Directorate General of Supplies & Disposals or his nominee whose decision thereon shall be final and binding on the contractor.
23. INSOLVENCY AND BREACH OF CONTRACT
The Secretary may at any time, by notice in writing, summarily determine the contract without compensation to the contractor in any of the following events, that is to say :-
(i) if the contractor being an individual or if a firm, any partner thereof, shall at any time, be adjudged insolvent or shall have a receiving order or order for administration of his estate made against him or shall take any proceeding for composition under any Insolvency Act for the time being in force or make any conveyance or assignment of his effects or enter into any arrangement or composition with his Creditors or suspend payment or if the firm be dissolved under the Partnership Act, or
(ii) if the contractor being a company is wound up voluntarily or by the order of a court or a Receiver, Liquidator or Manager on behalf of the Debenture holders is appointed or circumstances shall have arisen which entitled the Court or Debenture-holders to appoint a Receiver, Liquidator or Manager, or
(iii) if the contractor commits any breach of the contract not herein specifically provided for :
Provided always that such determination shall not prejudice any right of action or remedy which shall have accrued or shall accrue thereafter to the purchaser and provided also the contractor shall be liable to pay to the purchaser for any extra expenditure he is thereby put to and the contractor shall under no circumstances be entitled to any gain on re-purchase.
24. ARBITRATION
(i) In the event of any question, dispute or difference arising under these conditions or any special conditions of contract, or in connection with this contract (except as to any matters the decision of which is specially provided for by these or the special conditions) the same shall be referred to the sole arbitration of an officer in the Ministry of Law, appointed to be the arbitrator by the Director General of Supplies & Disposals. It will be no objection that the arbitrator is a Government Servant that he had to deal with the matters to which the contract relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to this contract.
(ii) In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, shall be lawful for the Director General of Supplies & Disposals to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid.
(iii) It is further a term of this contract that no person other than the person appointed by the Director General of Supplies & Disposals as aforesaid should act as arbitrator and that, if for any reason that is not possible, the matter is not to be referred to Arbitration at all.
(iv) The arbitrator may from time to time with the consent of all the parties to the contract enlarge the time for making the award.
(v) Upon every and any such reference, the assessment of the costs incidental to the reference and award respectively shall be in the discretion of the arbitrator.
(vi) Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the Arbitration proceedings under this clause.
(vii) If the value of the claim in a reference exceeds Rs. 1 lakh, the arbitrator shall give reasoned award.
(viii) The venue of arbitration shall be the place from which formal Acceptance of Tender is issued or such other place as the Director General of Supplies & Disposals at his discretion may determine.
(ix) In this clause, the expression “the Director General of Supplies & Disposals” means the Director General of Supplies and Disposals for the time being and includes if there be no Director General of Supplies & Disposals or if Director General of Supplies & Disposals is on leave or is absent from duty or is not available for any reason whatsoever, the Additional Director General of Supplies & Disposals; in case both the Director General and Additional Director General of Supplies & Disposals are on leave or are absent from duty or are not available for any reason whatsoever, the officer who is looking after the current duties of Director General and/or Additional Director General of Supplies & Disposals whether in addition to other functions or otherwise.
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FORM No. D.G.S.&D. 69
CONDITIONS OF CONTRACT GOVERNING RATE
CONTRACTS
The General Conditions of Contract in Form No. D.G.S. & D. 68 (Revised) included in the pamphlet entitled “Conditions of Contract” governing contracts placed by Central Purchase Organisation of the Government of India (now under Ministry of Supply) as modified upto-date; and in addition to those General Conditions, the following special conditions shall govern the contract.-
SPECIAL CONDITIONS
1. Purpose of Contract and parties to the Contract.- The parties to the contract, which shall be deemed to be a ‘Rate Contract” and which is intended for the supply of the stores of the descriptions set forth in the Schedule to Tender during the period therein specified shall be the Contractor of the one part and the Purchaser(s) named in the Schedule of Tender.
2. Number of Quantity contracted for-Subject as hereinafter mentioned, no guarantee can be given as to the number or quantity of the stores which will be ordered during the period of the rate contract which is only in the nature of a standing offer from the Contractor but the purchaser(s) undertake(s) to order from the contractor all stores as detailed in the schedule of stores and prices which he/they require(s) to purchase except that he/they reserve(s) the right (1) of submitting to competition any supply of articles include in the contract the total value of which exceeds such amount as the Secretary (whose decision shall be final), may determine upon consideration of the tenders, (2) of placing this contract simultaneously of at any time during its period with one or more contractors as he/they may think fit, and (3) of obtaining from any source any stores referred to in the contract to meet an emergency, if the Secretary (whose decision shall be final) is satisfied that the contractor is not in a position to supply specific quantities or numbers within the period in which supplies are required.
3. Deliveries.- The Contractor shall, as may be required, either deliver free at, or dispatch “f.o.r.” from the places specified in the Schedule(s) such numbers or quantities of stores as may be ordered direct from the Contractor from time to time by the Purchaser(s) or by any officer who may at any time during the period of contract the authorized by the said Secretary to place such orders.
4. Monetary limits for indents.- The Contractor shall not, except with prior approval of the office placing the Acceptance of Tender, comply with the orders exceeding in value the amount determined under clause 2 received from officers authorized by that office to place order against the contract direct on the Contractor.
5. The expression ‘Secretary’ has in these special conditions the same meaning as assigned thereto in the General Conditions.
Special Conditions, where they differ from the General Conditions, override the latter.
6. System of Payment.- 98 per cent payment will be allowed on proof of inspection and despatch and balance 2 per cent on receipt of stores by the consignee. In other respects the provisions of clause 19, payment under the contract in DGS&D-68 (Revised) will apply.
7. FALL CLAUSE:-
(i) The price charged for the store supplied under the contract by the Contractor shall in no event exceed the lowest price at which the contractor sells the stores or offers to sell stores of identical description to any persons/organizations including the purchaser or any Department of the Central Government or any Department of a State Government or any statutory Undertaking of the Central or State Government, as the case may be during the period till performance of all Supply Orders placed during the currency of the rate contract is completed.
(ii) If at any time, during the said period the contractor reduces the sale price, sells or offers to sell such stores to any person/organization including the purchaser or any Department of Central Government or any Department of a State Government or any statutory undertaking of the price chargeable under the contract, he shall forthwith notify such reduction or sale or offer of sale to the Director General of Supplies & Disposals and price payable under the contract for the stores supplied after the date of coming into force of such reduction or sale or offer of sale shall stand correspondingly reduced. The above stipulation will, however, not apply to:-
(a) Export/Deemed Exports by the Contractor,
(b) Sale of goods as original equipment prices lower than the prices charged for normal replacement,
(c) Sale of goods such as drugs which have expiry dates, and
(d) Tender submitted in response to fixed quantity contract enquiries issued by DGS&D.
(iii) The contractor shall furnish the following certificate to concerned Controller of accounts along with each bill for payment for supplies made against the Rate Contract:
“I/We certify that there has been no reduction in sale price of the stores of description identical to the stores supplied to the Government under the contract herein and such stores have not been offered/sold by me/us to any person/organization including the purchaser or any Department of Central Government or any Department of a State Government or any statutory Undertaking of the Central or State Government as the case may be upto the date of bill/the date of completion of supplies against all supply orders placed during the currency of the R/C at a price lower than the price charged to the Government under the contract except for quantity of stores categorized under sub-clauses (a), (b), (c) and (d) of sub-para (ii) above, details of which are as follows :-
NOTE : The Contractor will also inform the Controller of Accounts concerned and the DGS&D as soon as supplies against all supply orders placed against the Rate Contract are completed.
**********
FORM No. D.G.S. & D. 70
CONDITIONS OF CONTRACT GOVERNING RUNNING
CONTRACTS
In addition to the General Conditions of Contract in Form No. D.G.S. & D. 68 (Revised) the following special conditions shall apply to Running Contract.
SPECIAL CONDITIONS
1. Purpose of contract and parties to the contract.- The parties to the contract, which shall be deemed to be a “Running Contract” and which is intended for the supply of the stores of the descriptions and approximately in the quantities set forth in the Schedule hereto annexed during the period therein specified, shall be the Contractor of the one part and the authorities named in the Schedule to Tender hereinafter called the Purchaser (which expression shall, where the context so admits or implies, be deemed to include his successors and assigns) of the other part.
2. The Secretary may authorize any officer (who shall hereinafter be called Direct Demanding Officer) at any time during the period of the contract, to place orders direct on the Contractor. The Contractor shall deliver or dispatch the full quantity of the stores so ordered within the period specified in the Schedule hereto.
3. Increase or decrease of quantities. - The quantities shown in the said schedule are approximate. The Purchaser is entitled at any time to increase or decrease the approximate total quantities of each description of the stores shown in the said Schedule by not more than 25 per cent, after giving a reasonable notice in writing of any such increase or decrease to the Contractor.
4. Maintenance and replenishment of stocks.- To meet casual demands, the contractor shall maintain at all times in stock (until 75 per cent of the requirements have been drawn) at the place(s) specified in the Contract, the quantity/quantities mentioned therein. All demands should be complied with immediately they are received by the contractor or within the period, if any, stipulated in individual orders. As soon as the Contractor is called upon to effect supplies, he shall take action to replenish the guaranteed stocks until such times as 75 per cent of the toal approximate requirements has been drawn and such replenishment shall be completed within the period specified in the schedule, after the receipt by the contractor of casual demands. Due notice will be given to the contractor by the Direct Demanding Officer or by the Purchaser, if any additional quantities over and above 75 per cent of the total approximate requirements are required and the contractor shall then arrange stocks accordingly.
The period for replenishment of stocks will be allowed only if the material is not in stock; if the material is in stock this provision will be inoperative even though the guaranteed stock quantity may have been supplied against the contract.
5. Reporting Progress of Contract.- The Contractor shall in three calendar months before the termination of the contract or at such intervals as may be specified in the schedule, submit a report to the Purchaser stating the total quantity of stores delivered or dispatched under the contract.
6. System of Payment. - 98 per cent payment will be allowed on proof of inspection and dispatch and balance 2 per cent on receipt of stores by the consignee. In other respects the provisions of clause 19, payments under the contracts in DGS&D-68 (Revised) will apply.
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N.B.- The Secretary reserves the right to allocate this agreement in whole or in parts to one or more of the parties above mentioned.
To be deleted where on Government is concerned.
FORM No. D.G.S. & D.-71
CONDITIONS OF CONTRACT GOVERNING SUPPLIES OF
PLANT AND MACHINERY
In addition to the General Conditions of Contract in Form No. D.G.S. &. D 68 (Revised) the following special conditions shall apply to contracts for the supply of plant and machinery and manufactured equipment. Special Conditions, where they differ from the General Conditions shall override the latter.
SPECIAL CONDITIONS
1. Definitions.- (a) The expression “Work” means all the work specified or set forth and required in and by the said specifications, drawings and schedule hereto annexed or to be implied therefrom or incidental thereto, or to be hereafter specified or required in such explanatory instructions and drawing (being in conformity with the said original specification, drawing and schedule) and also in such additional instructions and drawings not being in conformity as aforesaid as shall from time to time, during the progress of the work hereby contracted for, be supplied by the Purchaser.
(b) The term “Test” shall mean such test or tests as are prescribed by the specification to be made by the Purchaser, or his nominee, after erection at site before the plant is taken over by the Purchaser.
2. Performance of work.- The work shall be performed at the place or places named in the tender or at such other place or places as may be approved by the Purchaser.
3. Specification.- If the Contractor shall have any doubt as to the meaning of any portion of the conditions or of the specification, drawings or plants he shall before submitting the tender, set forth the particulars thereof and submit them to the Secretary in writing in order that any such doubt may be removed.
4. Mistake in Drawings.- The Contractor shall be responsible for and shall pay for any alterations of the works due to any discrepancies, errors or omissions in the drawing or other particulars supplied by him whether such drawings or other particulars have been approved by the Purchaser or not, provided that such discrepancies, errors or omissions be not due to inaccurate Information or particulars furnished to the Contractor on behalf of the Purchaser. If any dimensions figured upon a drawing or plan differ from those obtained by scaling the drawing or plan, the dimensions as figured upon the drawings or plan shall be taken as correct.
5. Variations.- No alternations, amendments, omissions, additions, suspensions or variations of the work (hereinafter referred to as . “Variations”) under the contract as shown by the Drawings or the specification shall be made by the Contractor except as directed in writing by the Inspector, but the Inspector shall have full power, subject to the proviso hereinafter contained, from time to time, during the execution of the contract, by notice in writing to instruct the Contractor to make such variation without prejudice to the contract, and the Contractor shall carry out such variations, and be bound by the same conditions shall carry out such variations, and be bound by the same conditions, so far as applicable, as though the said variations occurred in the specification. If any suggested variation would, in the opinion of the Contractor, if carried out, prevent him from fulfilling any of his obligations or guarantees under the contract, he shall notify the Inspector thereof in writing and the Inspector shall decide, forthwith whether or not the same shall be carried out, and if the Inspector confirms his instructions the Contractor’s obligations and guarantees shall be modified to such an extent as may in the opinion of the Inspector be justified. The difference of cost, if any, occasioned by any such variations, shall be added to or deducted from the contract price as the case may require. The amount of such differences, if any, shall be ascertained as determined in accordance with the rates specified in the Schedule of prices, so far as the same may be applicable, and where the rates are not contained in the said schedules, or are not applicable, they shall be settled by the Purchaser and Contractor jointly. But the Purchaser shall not become liable for the payment of any charge in respect of any such variations unless the instructions for the performance of the same shall have been given in writing by the Inspector.
In the event of the Inspector requiring any variations, such reasonable and proper notice shall be given to the Contractor as will enable him to make his arrangements accordingly, and in cases where goods or materials are already prepared, or any designs, drawings or patterns made or work done required to be altered, a reasonable sum in respect thereof shall be allowed by the Purchaser.
Provided that no such variations shall, except with the consent in writing of the Contractor, be such as will involve and increase or decrease of the total price payable under the contracts by more than 10 per cent thereof.
In any case in which the Contractor has received instructions from the Inspector as to carry out the work which either then or later, will in opinion of the Contractor, involve a claim for additional payment the Contractor shall, as soon as reasonably possible after receipt of the instruction aforesaid, advise the Inspector to that effect.
6. Obligation to carry out Inspector’s Inspection.- The Contractor shall also satisfy the Inspector that adequate provision has been made (i) to carry out his instructions fully and with promptitude; (ii) to ensure that parts required to be inspected before use are not used before inspection; and (iii) to prevent rejected parts being used in error. Where parts rejected by the Inspector have been rectified or altered, such parts shall be segregated for separate inspection and approval before being used in the work.
7. Responsibility for completeness.- Any fittings or accessories which may not be specifically mentioned in the specification but which are usual or necessary, are to be provided by the Contractor without extra charge, and the plant must be complete in all details.
*In all cases where the contract provides for tests on site, the Purchaser, except where otherwise specified, shall provide free of charge, such labour, materials, fuels, stores, apparatus and instruments as may be requisite from time to time and as may reasonably be demanded, efficiently to carry out such tests of the plants, material or workmanship in accordance with the Contract.
In the case of Contracts requiring electricity for the completion of the works and for tests on site, such electricity, when available, shall be supplied free to the Contractor at the pressure of the ordinary supply. Unless otherwise specified, the Purchaser will supply free of charge to the Contractor (1) unskilled labour, (2) timber, stores and lifting tackle necessary for the erection of the plant and all consumable stores including fuel and lubricating oils required during erection setting to work and testing the plant. The Contractor shall provide (1) skilled labour and (2) tools and any other equipment which may be necessary.
*Erection Contracts only
8. Supervision.- The Contractor shall provide adequate supervision at all stages of the work and examine all parts for accuracy before erection is commenced. He shall also provide facilities and space satisfactory to the Inspector for laying out for his inspection any parts to be used in the work at such stages of manufacture as he may direct.
9. Inspection.- The Contractor shall inform the Inspector in writing when any portion of the work is ready for inspection giving him sufficient notice to enable him to inspect the same without retarding the further progress of the work. No portion of the work shall be considered completed in accordance with the terms of the annexed tender until the Inspector shall have certified in writing that it has been inspected, and approved by him. The expenses incurred in sending the Inspector to carry out inspection and or tests at the place agreed upon in the contract will be defrayed by the Purchaser provided that the results are satisfactory and in accordance with the terms of the contract. In the event of the inspector and/or tests proving unsatisfactory and resulting in the non-acceptance of the plant/structure or any portion thereof, the cost of such inspection and/or tests (including the traveling and halting expenses incurred, if any), or such portion thereof as may be determined by that officer, shall be borne by the Contractor.
10. Inspection in the country of supply. - In the case of materials or parts intended to be imported from outside India and requiring inspection in the country of supply, the demand for inspection shall be submitted by the Contractor to the Inspector in the form prescribed by the Inspector who will countersign and forward it to the Inspector duly appointed by the Purchaser in the country of supply. The demand for inspection shall be in respect of materials or parts intended for used in execution of work specifically included in the contract, and shall give particulars of the materials or parts to be inspected.
11. Final tests.- If required by the purchaser, all tests necessary to ensure that the plant, machinery or equipment complies with the particulars and guarantees, shall be carried out at the Contractor’s or Sub-Contractor’s premises. Should, however, it be necessary for the final tests as to performance and guarantees to be held over until the plant is erected at site they shall be carried out within one month of completion of erection. Should the result of these tests not come within the margin specified, the tests, shall if required be repeated within one month from the date the plant is ready for re-test, and the Contractor shall pay to the Purchaser all reasonable expenses to which he may be put by such tests.
12. Rejection of Defective Plant.- If the completed plant, or any portion thereof, before it is taken over under Clause 17 be defective or fail to fulfill the requirements of the contracts, the Inspector shall give the Contractor notice setting forth details of such defects or failure and the Contractor shall forthwith make the defective plant good or alter the same to make it comply with the requirements of the contract. Should he fail to do so within the time specified by the Inspector/consignee in his notice of rejection the Purchaser may reject and replace at the cost of the Contractor, the whole or any portion of the plant as the case may be, which is defective or fails to fulfill the requirements of the contract. Such replacement shall be carried out by the Purchaser within reasonable time and at a reasonable price and where reasonably possible to the same particulars and under competitive conditions. The Contractor’s full and extreme liability under this clause shall be satisfied by the payment to the Purchaser of the extra cost, if any, of such replacement, delivered and/or erected as provided for in the original contract, such extra cost being the ascertained difference between the price paid by the Purchaser, under the provisions above mentioned, for such replacement and the contract price for the plant so replaced, and the repayment of any sum paid by the Purchaser to the Contractor in respect of such defective plant. Should the Purchaser not so replace the rejected plant within a reasonable time, the Contractor’s full and extreme liability under this clause shall be satisfied by the repayment of all moneys paid by the Purchaser to him in respect of such plant.
13. Replacement of defective work or material.- If during the progress of the work, the Purchaser or his representative shall decide and notify in writing to the contractor that the contractor has executed any unsound or imperfect work or has supplied any plant or material inferior in quantity or quality to those specified, the contractor on receiving details of such defects or deficiency shall, at his own expense, within seven days’ of his receiving the notice, or otherwise within such time as may be reasonably necessary for making in good, proceed to alter, reconstruct, or remove such work, or supply fresh materials up to the standard of the particulars and in case the Contractor shall fail to do so, the Purchaser may, on giving the Contractor seven days’ notice in writing of his intention to do so, proceed to remove the work or materials complained of , and at the cost of the Contractor perform all such work or supply all such materials, provided that nothing in this clause shall be deemed to deprive the purchaser of or affect, any rights under the contract which he may otherwise have in respect of such defects or deficiencies.
14. Appeal. - If the Contractor desires to appeal against the decision of the Inspector against the rejection of any work as not being in accordance with the contract, he shall appeal to the Secretary within fourteen days after the Inspector’s decision and if an appeal is so preferred, the decision of the Secretary shall be final and conclusive.
15. Time and date of completion of the work; essence of the contract.- The time and date stipulated in the tender for the completion of the work shall be deemed to be of the essence of the contract. In case of delay the Contractor shall in addition to other liabilities mentioned in the General Conditions of Contract be liable for all costs of inspection which may be incurred after the date on which the work ought to have been completed and in the event of the Contractor’s failure to complete the work within the period prescribed for such completion, the Purchaser shall be entitled to withhold any payments until the whole of the work has been completed and to recover from the Contractor a sum 2 per cent of the total contract price of the work for each and every month or part of a month during which the completion of the work may be delayed. But if the delay shall have arisen from any cause such as strikes, lockouts, fire, accident, riot, etc. which the Purchaser may admit as reasonable ground for further time, the purchaser will allow such additional time as he may consider to have been required by the circumstances of the case.
16. Transport and responsibility for breakages en route.- Unless otherwise specified, the consignee will take delivery of the plant from the railway authorities at the railway station named in the schedule; he will undertake the transportation of the plant from the railway station to the site and he will bear the cost of the handling and transportation necessitated, but the Contractor will be responsible for any damage which may be caused to the plant during transit to the site and should insure the plant at his own cost up till the time it is taken over as in Clause 17.
17. Taking-over. - When all performance tests called for by the particulars have been successfully carried out before shipment the plant shall be accepted and taken over when it has been satisfactorily put into operation on site, or within one month of its being ready to be put into operation whichever shall be the earlier and the Inspector shall forthwith issue a Taking-over Certificate.
In the event of final or any outstanding tests being held over until the plant is erected, such Taking-over Certificates shall be issued subject to the results of such final or outstanding tests which shall be carried out in accordance with Clause 11.
When the particulars call for tests on site, the plant shall be taken over and Taking-over Certificate issued immediately after such tests have been satisfactorily carried out.
The Inspector shall not delay the issue of any Taking-over certificate contemplated by this clause on account of minor defects in the plant which do not materially affect, the commercial use thereof provided that the Contractor shall undertake to make good the same in due course.
18. Guarantee against defects.- Notwithstanding any inspection carried out by the Inspector at any time and/or approval, the contractor shall be responsible for a period of twelve calendar months after the plant has been taken over under Clause 17. The Contractor shall be responsible to the extent in this clause expressed for any defects that may develop under the conditions provided for by the contract and under proper use, arising from faulty materials, design or workmanship in the plant, or from faulty erection of the plant by the contractor, but not otherwise and shall remedy such defects at his own cost when called upon to do so by the Purchaser who shall state in writing in what respect the portion is faulty. If it becomes necessary for the Contractor to replace or renew any defective portions of the plant under this clause, the provisions of this clause shall apply to the portions of the plant so replaced or renewed until the expiration of six months from the date of such replacement or renewal or until the end of the abovementioned period of twelve months whichever may be the later. If any defects be not remained within sixty days from the date of communication thereof or within such other specific period as may be allowed by the purchaser in his discretion on application made to that effect by the contractor the Purchaser may proceed to do the work at Contractor’s risk and expense, but without prejudice to any other rights which the Purchaser may have against the Contractor in respect of such defects.
19 Inability to perform contract --- Should the Contractor’s preparation for the commencement of the work, or any portion of it or his subsequent rate of progress be, from any cause whatever, so slow that in the opinion of the Inspector, which shall be conclusive, the Contractor will be unable to complete the work or any portion thereof as agreed upon, or should he not have the work ready for delivery in conformity with the contractor or should he neglect to comply with any directions given to him by the inspector or in any respect fail to perform the contract, the purchaser shall have power to declare the contract at an end, in which case the Contractor shall be liable for any expense, loss or damage which the Purchaser or Indentor may incur or sustain by reason of, or in connection with the Contractor’s default.
18. Sub-letting contract-- The Contractor may, with the written permission of the purchaser, sub-let or assign a portion or portions of the contract for minor details, or for any part of the works of which the makers are named in the contract, provided that any such consent shall not relieve the Contractor from any obligation, duty or responsibility under the contract.
21 Provision of fencing, lights, etc.—The Contractor shall at all times provide sufficient fencing, notice-board, light and watchmen to protect and warm the public and guard the works and in default thereof the Purchaser may provide such fencing notice-board, lights and watchmen as he may deem necessary and charge the cost thereof to the Contractor.
22 *Access to site and work on site --- Suitable access to and possession of site shall be afforded to the Contractor by the Purchaser in reasonable time, and the Purchaser shall have all such foundations as are to be provided by him ready when required by the Contractor. Where a crane is available, its safe lifting capacity shall be stated in the specification and it shall be available for free use of the Contractor until the plant is taken over.
The work so far as it is carried out in the Purchaser’s premises, shall be carried out at such time as the Purchaser may approve, and so as not to interfere unnecessarily with the conduct of the Purchaser’s business, but the purchaser shall give the Contractor all reasonable facilities for carrying out the work.
The Contractor shall be responsible for the correctness of the positions, levels and dimension of the work, according to the drawings, notwithstanding that he may have been assisted by the Purchaser or his representative in setting out the same.
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*Erection Contracts only.
23 Deferring shipments --- If the Purchaser shall have notified the Contractor in writing that the former is not ready to take delivery, no plant or materials shall be forwarded until an intimation in writing shall have been given to the Contractor by the Purchaser that he is ready to take delivery.
24 System of payment – Unless otherwise agreed between the parties, payment for the delivery of the stores will be made by the Pay and Accounts Officer of the Administrative Ministry in charge of the Central Purchase Organisation concerned on submission of bills in the prescribed form in accordance with the instructions given in the Acceptance of Tender by cheque on a Government Treasury or on a branch of the Reserve Bank of India or the State bank of India transacting Government business at Agra, Ahmedabad, Aligarh, Ambala, Amritsar, Bangalore, Bombay, Calcutta, Delhi, Hyderabad (Deccan), Jamshedpur, Jabalpur, Kanpur, Lucknow, Madras, Nagpur, Nainital, New Delhi, Poona and Trivandrum. Government retains the right to reduce the number of Banks or Treasuries at which payment will be made.
Payment for the stores or for each delivery will be made to the contractor on submission of bills in accordance with the procedure laid down by the Secretary, as detailed below:-
(1) 90 per cent of the contract price of each consignment delivered to the consignee or despatched from a station in India and on production of an initial Inspection note. The No. and date of the Railway Receipt or bill of lading under which the stores charged for in the bill are despatched, should be quoted on the bill. In the case of stores despatched by sea, one copy of the bill of lading should also be attached to the bill. In case deliveries direct to the consignee (otherwise than by rail or streamer) the contractor should by way of proof of delivery, furnish an acknowledgment of the stores by the consignee recorded on the relevant copies of the inspection Note.
(2) The firm furnishes the following certificates:-
“I/we have personally examined and verify and do hereby certify that the goods in respect of which the payment is being claimed have been actually dispatched by me/us under R.R. No/Air Consignment Note No./Postal receipt No……………………… dated ………………..duly drawn in favour of the consignee which is genuine and mentioned in the bills and that I/we hold myself/ourself personally responsible for the correctness of this statement”.
“I/we further certify that the above-mentioned R/R No./B.L. No./Air consignment Note No………………………. dated …………has been forwarded to the consignee mentioned in the contract under registered post acknowledgement due on…………….
The above certificate is to be signed by a duly authorized person of the firm and he should be the same as signing the bill. His designation and name of the firm on whose behalf he has signed the bill is required to be indicated below his dated signature.
*(3) Ten percent of the contract price of the plant plus the cost of erection if any, on final inspection and test; or alternatively at the Contractor’s option the full 100 percent after erection on final Inspection and test.
In addition to his other remedies under the law and these conditions, the Purchaser shall have a lien on each consignment in respect of which the 90 per cent has been paid to secure repayment of this amount and recovery of any sum due from the Contractor, should the plant not be taken over under Clause 17 :
(3) 10 per cent of the contract price of the plant plus the cost of erection if any, on final inspection and test; or alternatively at the Contractor’s option the full 100 per cent after erection on final inspection and test.
In additional to his other remedies under the law and these conditions, the Purchaser shall have a lien on each consignment in respect of which the 90 per cent has been paid to secure repayment of this amount and recovery of any sum due from the Contractor, should the plant not be taken over under Clause 17 :
PROVIDED THAT in cases where the erection or final inspection and test of the plant at site is delayed for any reasons for which the Purchaser is responsible, 5 per cent of the contract price of the plant shall become payable, after the expiry of four months from the date of arrival of the last consignment at site, the remaining 5 per cent, being payable after erection and test and acceptance of the plant by the Inspector.
In respect of non-erection contracts, the system of payment stated in the general Conditions shall apply.
25. Liability under the Workmen’s Compensation Act --- The Contractor shall at all times indemnify the Purchaser against any claims which may be made under the Workmen’s Compensation Act, 1923 or any statutory modification thereof or otherwise for or in respect of any damages or compensation payable in consequence of any accident or injury sustained by any workman or other person whether in the employment of the Contractor or not.
26. Regulations of local authorities ----- The purchaser shall, throughout the continuance of the contract, and in respect of all matters arising in performance thereof, serve all notices and obtain consents, wayleaves, approvals and permissions required in connection with the Regulation and Bye-laws of the local or other authority which shall be applicable to the works.
Any work of an electrical nature to be executed under the contract shall comply with the provisions of the Indian Electricity act, 1910 and the Rules thereunder for the time being in force.
Any steam boilers forming part of this contract shall comply with the Indian Boiler act, 1923, and the Rules thereunder for the time being in force.
Form No. D.G.S. & D 72
CONDITIONS OF CONTRACT GOVERNING SUPPLIES OF
SEA AND RIVER CRAFT
In addition to the General Conditions of Contract in Form No. D.G.S. & D-68 (Revised) the following Special Conditions shall apply to Contracts for Sea and River Craft, Special conditions where they are at variance with the General Conditions in Form no. D.G.S&D-68 (Revised) shall override the latter.
SPECIAL CONDITIONS
1. Definitions --- The term “Drawing” means the Drawings” and plans specified in the specification hereto annexed. The expression “Work” means all the works specified or set forth and required in and by the said specifications, drawing and schedule hereto annexed or to be implied therefrom or incidental thereto or to be hereafter specified or required in such explanatory instructions and drawings (being in conformity with the said original specification, drawing and schedule) and also in such additional instructions and drawings not being in conformity as aforesaid as all from time to time, during the progress of the work hereby contracted for, be supplied by the Purchaser.
The term “Test” shall mean such test or tests as are prescribed by the specification to be made by the Purchaser, or his nominee before the vessel is taken over by the Purchaser.
The term “Variations” includes alterations, amendments, omissions, additions or suspensions of the work.
2. Performance of work --- The work shall be performed at the place or places named in the tender or at such other place or places as may be approved by the Purchaser.
3. Specification -- If the Contractor shall have any doubt as to the meaning of any portion of the conditions or of the specifications, drawings or plans he shall before submitting the tender, set forth the particulars thereof and submit them to the Secretary in writing in order that any such doubt may be removed.
4. Mistakes in drawings--- The Contractor shall be responsible for and shall pay for any alterations of the work due to any discrepancies, errors or omissions in the drawings or other particulars supplied by him whether such drawings or particulars have been approved by the Purchaser or not, provided that such discrepancies, errors or omission be not due to inaccurate information or particulars furnished to the contractor on behalf of the Purchaser. If any dimensions figured upon the drawing or plan differ from those obtained by sealing the drawing or plan, the dimensions as figured upon the drawing or plan shall be taken as correct.
5. Variations – No variations under the contract as shown by the Contract Drawings or the Specification shall be made by the Contractor except as directed in writing by the Inspector, but the inspector shall have full power, subject to the proviso hereinafter contained, from time to time, during the execution of the contract, by notice in writing to instruct the Contractor to make such a variation without prejudice to the contract, and the contractor shall carry out such variations, and be bound by the same conditions, so far as applicable, as though the said variations occurred in the specification. If any suggested variation would, in the opinion of the Contractor, if carried out prevent him from fulfilling any of his obligations or guarantees under the contract, he shall notify the inspector thereof in writing and the inspector shall decide forthwith whether or not the same shall be carried out, and if the inspector confirms his instructions, the contractor’s obligations and guarantees shall be modified to such an extent as may in the opinion of the inspector be justified. The difference of cost, if any, occasioned by any such variation shall be added to or deducted from the contract price as the case may require. The amount of such differences, if any, shall be ascertained and determined in accordance with the rates specified in the schedule of prices, so far as the same may be applicable, and where the rates are not contained in the said Schedule, or are not applicable, they shall be settled by the Purchaser and contractor jointly. But the Purchaser shall not become liable for the payment of any charge in respect of any such variations unless the instructions for the performance of the same shall have been given in writing by the Inspector.
In the event of the inspector requiring any variations, such reasonable and proper notice shall be given to the contractor as will enable him to make his arrangement accordingly, and in cases where goods or materials are already prepared, or any Designs, or drawings, or patterns made or work done that require to be altered, a reasonable sum in respect thereof shall be allowed by the Purchaser:
Provided that no such variations shall except with the consent in writing of the Contractor, be such as will involve an increase or decrease of the total price payable under the contract by more than 10 per cent thereof.
In any case in which the Contractor has received instructions from the inspector as to carrying out the work which either then or later will in the opinion of the contractor, involve a claim for additional payment, the contractor shall, as soon as reasonably possible after receipt of instruction/aforesaid advise the inspector to that effect.
6. Obligation to carry out inspector’s instructions---The contractor shall also satisfy the Inspector that adequate provision has been made, (i) to carry out his instructions fully and with promptitude; (ii) to ensure that parts required to be inspected before use are not used before inspection; and (iii) to prevent rejected parts being used in error. Where parts rejected by the Inspector have been rectified or altered, such part shall be segregated for separate inspection and approved before being used in the work.
7. Responsibility for completeness --- Irrespective of any inspection and tests made by the Inspector, the Contractor shall be entirely responsible for the proper execution of the contract notwithstanding any approval which may have been given by the inspector of the work or of tests carried out either by the Inspector or the Contractor.
Any fittings or accessories which may not be specifically mentioned in the specification but which are usual or necessary are to be provided by the Contractor without extra charge.
8. Supervision --- The Contractor shall provide adequate supervision at all stages of the work and examine all parts for accuracy before construction is commenced. He shall also provide facilities and space satisfactory to the inspector for laying out for his inspection any parts to be used in the work at such stages of manufacture as he may direct.
9. Inspection ----The Contractor shall inform the Inspector in writing when any portion of the work is ready for inspection, giving him sufficient notice to enable him to inspect the same without retarding the further progress of the work. No portion of the work shall be considered completed in accordance with the terms of the annexed tender until the Inspector shall have certified in writing that it has been inspected, and approved by him. The expense incurred in sending the Inspector to carry out inspection and/or tests at the place agreed upon in the contract will be defrayed by the purchaser, provided that the results are satisfactory and in accordance with the terms of the contract.
In the event of the inspection and/or tests providing unsatisfactory and resulting in the non-acceptance of the plan/structure or any portion thereof, the cost of such inspection and/or tests (including the travelling and halting expenses incurred, if any), or such portion thereof as may be determined by the Purchaser shall be borne by the Contractor.
10. Inspection in country of supply -- In case of materials or parts intended to be imported from outside India and requiring inspection in the country of supply, the demand for inspection shall be submitted by the Contractor to the inspector in the form prescribed by the Inspector who will countersign and forward it to the inspector in the country of supply. The demand for inspection shall be in respect of materials or parts intended for use in execution of work specifically included in the contracts, and shall give particulars of the materials or part to be inspected.
11. Replacement of Defective work or material--- If the inspector, shall find any work to be not in accordance with the contract, he shall be entitled to give the Contractor notice thereof and the Contractor shall forthwith make the defective work good or alter the same to make it comply with the requirements of the contract. Should he fail to do so within a reasonable time (as to which the Inspector shall be the judge), the Purchaser may reject and replace at the cost of the Contractor the whole or any portion of the work as the case may be, which is defective or fails to fulfil the requirement of the contract. Such replacement shall be carried out by the Purchaser within a reasonable time at a reasonable price and where reasonably possible to the same specification and under competitive conditions. The Contractor’s full and extreme liability under this clause shall be satisfied by the payment to the purchaser, of the extra cost, if any, of such replacement delivered and/ or constructed as provided for in the original contract, such extra cost being the ascertained difference between the price paid by the Purchaser, under the provisions above mentioned, for such replacement and the contract price for the work so replaced, and the repayment of any sum paid by the Purchaser to the Contractor in respect of such defective work. Should the Purchaser not so replace the rejected work within a reasonable time, the Contractor’s full and extreme liability under this clause shall be satisfied by the repaying of all moneys paid by the Purchaser to him in respect of such work.
12. Trials by Inspector--- The Contractor shall, at his own expense and risk in all respects, within the time within which the vessel is to be completed cause the working of the machinery and the general powers and capabilities of any vessels to be tested in the presence of the Inspector by speed and other trials in the manner provided for in the specification. At the conclusion of these trials, the boilers and machinery are to be opened up by and at the expense of the Contractor for the purpose of examination as required by the Inspector.
The place and manner of the above mentioned trials are to be approved of by the Inspector. The fuel to be used on such trials together with all stores, tools and other articles necessary on such trials shall be supplied by and at the expense of the Contractor. Until the requirements have been complied with and until the vessel is certified in writing by the Inspector to have been in all respects, constructed, fitted and completed in strict accordance with the said specification and drawings of the Contract, and to be capable, of performing the work specified, the vessel will not be considered by the Purchaser to be fully and perfectly completed as aforesaid.
13. Rectification of defects --- Any defects which in the opinion of the Inspector may be apparent after erection and testing as mentioned in the specification, shall be rectified by the Contractor to the satisfaction of the inspector at the expense of the Contractor and it shall be in his power to direct that further test shall be made at the expense of the Contractor after the said defects have been rectified to the satisfaction of the Inspector. If, after a reasonable time for rectifying defects shall have been allowed to the contractor the inspector shall be of opinion that the defect cannot satisfactorily be rectified, and that the vessel is unsuited for or incapable of performing the work required, the Purchaser may, if he shall think fit (without prejudice, and in addition to any other remedy he may have in the premises determine this contract, and thereupon all money paid to the Contractor under the contract in respect thereof shall upon demand be repaid by them to the purchaser, and they shall be liable for all damages heretofore provided for non-fulfillment of contract.
14. Appeal--- If the Contractor desires to appeal against the decision of the inspector against the rejection of the work as not being in accordance with the contract, he shall appeal to the Secretary within fourteen days after the Inspector’s decision and if an appeal is so preferred, the decision of the Secretary, shall be final and conclusive.
15. Time and date of completion of work--- The essence of the contract --- The time and date stipulated in the tender for the completion of the work shall be deemed to be the essence of the contract. In case of delay the Contractor shall in addition to other liabilities mentioned in the General Conditions of Contract be liable for all cost of inspection which may be incurred after the date on which the work ought to have been completed. But if the delay shall have arisen from any cause such as strikes, lockouts, fire, accident, riot, etc; which the Purchaser may admit as reasonable ground for further time, the Purchaser will allow such additional time as he may consider to have been required by the circumstances of the case.
16. Inability to perform contract – Should the Contractor’s preparation for the commencement of the work, or any portion of it or his subsequent rate of progress be, from any case whatever, so slow that in the opinion of the inspector, which shall be conclusive, the Contractor will be unable to complete the work or any portion thereof as agreed upon, or should he not have the work ready for delivery in conformity with the contract or should the Inspector or in comply with any directions given to him by the Inspector or in any respect fail to perform the contract, the purchaser shall have power to declare the contract at an end, in which case the Contractor shall be liable for any expense, loss or damage which the Purchaser may incur or sustain by reason of, in connection with the Contractor’s default.
17. Sub-letting Contract --- The Contractor may with the written permission of the Purchaser sub-let or assign a portion or portion of the contract for minor details, or for any part of the work of which the makers are named in the contract, provided that any such consent shall not relieve the contractor from any obligation, duty or responsibility under the contract.
18. Insurance of material—The Contractor shall immediately upon the granting by the Inspector of his certificate that the Contractor is entitled to the first instalment and before payment by the Purchaser of the first instalment of the contract sum, at his own cost and expense insure (in a company approved by the inspector) against loss or damages by fire and accident, in the name of the Purchaser the vessel and also the engines, boilers, machinery, and fitting thereof for the full term of the Contract, and until delivery at destination, in some one or more of the most respectable offices in India to be approved of by the Purchaser to the full value thereof and when as the work shall be so advanced as to entitle the Contractor to payment of the subsequent instalments then and previously to receiving each such instalments the Contractor shall insure in like manner the works, and material for the full term of the Contract on the additional amount of each such instalment
The contractor shall immediately after any of the said insurances whether against loss by the fire or accident, have been effected, and previously to the payment to him of any part of the said contract sum, produce to and lodge with the Purchaser the policy or policies of every such insurance, and shall from time to time pay or cause to be paid the premium or premia in respect of every such policy or policies and the said policy or policies shall during the period of this contract remain with the Purchaser as a security in case of loss or damage by fire or accident for any moneys which may have been paid by him to the Contractor for or on account of, the said vessel under this Contract.
If the Contractor shall at any time, fail to effect or keep in force any such insurance or insurances as aforesaid or to produce to or lodge with the Purchaser the policy or policies of such insurance or insurances to pay the premia which shall from time to time become payable in respect thereof respectively, then and in any or either of the cases aforesaid it shall be lawful for, but not imperative upon, the Purchaser to effect and keep in force, so long as he shall think fit, any such insurance or insurances either against loss or damage by fire or accident, and to pay any premium or premia that may be necessary for that purpose, and the contractor will on demand pay to the Purchaser any sum or sums which may at any time be expended by him or by his directions for such purposes, or the purchaser may at his discretion deduct any such sum or sums from any money which may at any time or times become payable by him to the Contractor under this or any other contract.
19. Care and protection of the work ---After the launching of any vessel to be made under the contract it shall while receiving its machinery, or being completed be placed in a suitable berth where it cannot touch the ground at any time, and no departure from the provision of this clause shall be made without the previous consent in writing of the Inspector. The Contractor shall be in charge of and entirely responsible for the care and efficient protection and working of the vessel, and all other machinery and things supplied and connected therewith until the said vessel and machinery, boilers and other things, have been tried and accepted by the purchaser as satisfactory under the conditions of the order.
In case the said vessel, or any part thereof, shall be destroyed or damaged by the fire, or otherwise, the same shall at the cost and charges of the Contractor, or by and out of the money, to be received under or by virtue of the said insurances or insurances be with all possible speed rebuilt or repaired and put in the same state and condition in every respect and with materials and workmanship of equal goodness as before the happening of such fire, or other disaster, without any charge of expense to the Purchaser and to the satisfaction of the Inspector or other officer appointed to inspect such rebuilding or repairing. All or any such sum or sums of money as shall be receivable upon and under any such policy or policies of insurance as aforesaid, shall be paid into the hands of the Purchaser and the same shall be issued to the Contractor by such instalments as the Purchaser shall think proper according to the progress made by the Contractor in rebuilding or repairing such vessel, boilers, machinery or fittings and in providing new materials for such rebuilding or repairing after such loss or damage as aforesaid.
20. Taking over --- When all performance tests called for by the specification have been successfully carried out and other terms of the contract complied with the work shall be accepted and taken over within one month of its being ready for service and the inspector shall forthwith issue a Taking Over Certificate.
PROVIDED ALWAYS that for a period of six calendar months after the work has been so taken over the Contractor shall be responsible to the extent in this clause hereinafter expressed for any defects that may develop under the conditions provide for by the contract and under proper use arising from faulty material, design or workmanship in the work or from faulty erection of the work by the Contractor but not otherwise and shall remedy such defects when called upon to do so by the Purchaser who shall state in writing in what respect the same is faulty. If it becomes necessary for the contractor to replace or renew any defective portions of the work under this clause the provision of this clause shall apply to the portions of the work so replaced or renewed until the expiration of six months from the date of such replacement or renewal. If any defects be not remedied within a reasonable time, the Purchaser may proceed to do the work at the Contractor’s risk and expense, but without prejudge to any other right which the Purchaser may have against the Contractor in respect of such defects.
If the replacement or renewals are of such a character as may affect the efficiency of the work, the purchaser shall have the right to give the Contractor within one month from such replacement or renewal notice in writing that tests on completion will be carried out. Should such tests show that the work sustains the guarantees given in the contract the cost of the tests shall be borne by the Purchaser. Should the guarantees not be sustained, the cost of the test shall be borne by the Contractor.
All inspections, adjustments, replacements or renewals carried out by the Contractor during the maintenance period shall be subject to the same conditions as the contract.
21. System of payment--- unless otherwise agreed in writing between the Purchaser and the Contractor, payment for the work shall be made by the Pay and Accounts Officer of the Administrative Ministry in charge of the Central Purchase Organisation by cheque on a Government Treasury or on a Branch of the Reserve Bank of India or the State Bank of India transacting Government business at Agra, Ahmedabad, Aligarh Ambala, Amritsar, Bombay, Calcutta, Delhi, Hyderabad, Jamshedpur, Jabalpur, Kanpur, Lucknow, Madras, Nagpur, Nainital, New Delhi, Poona or Trivandrum in instalments upon production of the certificate of the Inspector appointed by the Purchaser for the supervision of the construction of the work or vessel, provided the Contractor gives notice of 14 days before any instalment is likely to fall due and subject to the condition that the amount of an instalment payment shall in no case exceed the value of the work done.
(a) Steel Craft of Contract price above Rs.10 lakhs each:-
(1) STAGE–I - 5% of contract price within 30 days of issue of order/ A/T after the firm has furnished a Bank guarantee of equal amount valid for the period till the vessel is delivered.
(2) STAGE – II 10% of contract price after principal construction plans such as General arrangement, Midship section, profile and Deck, Bulkheads, shell expansion, have been approved, laying of keel and submission of detailed plans for completion of different stages of vessel.
(3) STAGES- III- 15% of contract price on completion of framing and physical delivery in the yard of the steel required for the completion of vessel upto the stage of completion of hull and submission of completion construction plant of hull machines, gear box, main propulsion, shafting, propellers and other auxiliaries to the appropriate authority.
(4) STAGE –IV: - 5% of contract price after the contractor has entered into firm contract with his suppliers for all main and auxiliary machinery.
(5) STAGE – V: - 10% of contract price after completion of hull.
(6) STAGE-VI - 15% of contract price on physical availability of all main auxiliary machinery.
(7) STAGE-VII:- 10% of contract price on launching of the vessel subject to availability of main and auxiliary machinery as stated in earlier stage.
(8) STAGE-VIII :- 10% of the contract price after the vessel is ready for trials fitted with all machinery.
(9) STAGE –IX:- 15% of the contract price when vessel is accepted after final inspection and delivered as per terms of contract.
(10) STAGE- X :- Balance 5% of the contract price on expiry of guarantee period of six months, rectification of all the defects by the contractor to the satisfaction of the purchaser and final settlement of all claims of the purchaser under the terms of contract.
(e) Steel Craft of contract price upto Rs. 10 lakhs each.
90% and 10% of contract as per clause 24 of conditions of Contracts, governing supplies of plant and machinery, contained in Form No. DGS&D-71
( c) Wood Craft of contract price exceeding Rs. 10 lakhs each:-
(1) 20% of contract price after principal construction plans/general arrangement etc have been approved, laying of keel and submission of detailed plans for completion of different stages of the vessel.
(2) 20% of contract price when hull is planked.
(3) 20% of contract price when deck is laid and engine is installed.
(4) 30% of contract price when vessel is completed and accepted on final inspection, and/or trial.
(5) Balance 10% of contract price on the expiry of guarantee period of 6 months or final settlement of all claims of the Purchaser under the terms of contract whichever occurs later.
(e) FRP Boat of contract price exceeding Rs. 10 lakhs each;-\
(1) 30% of contract price after completion of the mould of hull of the boat.
(2) 30% of the contract price after completion of the moulding of the hull of the boat and physical availability of out Boat motors.
(3) 20% of the contract price after the installation of the engines of the boat.
(4) 10% of the contract price when vessel is accepted after final inspection and delivered as per terms of contract.
(5) Balance 10% of the contract price on expiry of guarantee period of six months, rectification of all defects by the contractors to the satisfaction of the purchaser and final settlement of all claims.
(e) Wood Craft FRP Boat of the contract price upto Rs. 10 lakhs each :-
90% and 10% of contract prices per clause 24 of condition governing supplies of plant and machinery, contained in Form No. DGS&D-71.
In any case, payment of charges of navigation, if any shall be made on arrival of the vessel at destination.
The Purchaser may in his discretion require the contractor to furnish a bank guarantee in such form as may be approved by the purchaser in respect of progress payments made to him.
The Purchaser shall be at liberty to omit any place from or add any place to the list of places of payment given above.
On payment of each instalment, the portion of the work which has been completed and in respect of which payment has been made shall forthwith become the property of and vest in the Purchaser.
But in the event of such portion of the work being found subsequently to be not in proper condition for any reason, the Contractor shall be bound to make any deficiency good or rectify any defect found without charge. The decision of the Inspector in this respect shall be final and conclusive.
22. Ownership of materials on payment of first instalment--- Upon payment of the first instalment of the Contract price, the vessel so far as then constructed and all machinery and materials either wholly or part constructed or in preparation and set apart from time to time for the purpose of the Contract shall become and shall, with all additions thereto, respectively continue to be the property of the Purchaser subject to the purposes of the Contract; option for taking over possession of partly built vessel will remain with the purchaser; but the Purchaser shall not be liable for any loss or damage by theft, fire, stress of weather or otherwise howsoever. Upon the due completion of Contract all such materials which have not been actually used for the purpose of Contract shall become the property of and be relinquished to the Contractor. The contractor shall not encounter in any manner the property or part thereof vested in the purchaser in accordance with this clause or clause 21 of these conditions.
23. Dock and harbour dues, royalties and patents---- The Contractor must pay all dock and harbour dues, all royalties and payments in respect of patent rights, and all other expenses whatsoever in connection with the vessel incurred before she has been accepted by the Purchaser.
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Form No. D.G.S.& D-73
CONDITION OF CONTRACT FOR THE PURCHASE AND ERECTION OF STRUCTURES
In addition to the General Conditions of Contract in form No. D.G.S. & D 68 (Revised), the following special conditions shall apply to Contracts for Purchase and Erections of structures. Special Conditions where they are at variance with the General Conditions in Form No. D.G.S. & D -68 (Revised ) shall override the latter.
SPECIAL CONDITION
1. Definitions – The expression “Work” means all the works specified or set forth and required in and by the said specifications, drawings and schedule hereto annexed or to be implied therefrom or incidental thereto or to be hereafter specified or required in such explanatory instructions and drawings (being in conformity with the said original specifications, drawing and schedule) and also in such additional instructions and drawings not being in conformity as aforesaid as shall from time to time during the progress of the work hereby contracted for, be supplied by the Purchaser.
2. Performance of work --- The work shall be performed at the place or places named in the schedule to the tender or at such other place or places as may be approved by the Purchaser.
3. Dimensions-- If any dimensions figured upon a drawing or plan differ from those obtained by scaling the drawing or plan, the dimensions as figured upon the drawing or plan shall be taken as correct.
4. Alteration in work---- The purchaser may, through the Inspector require such alterations to be made in the work, during its progress, as he may deem necessary and after due consideration of the relation which such alterations bear to the work and price stipulated therefore in the contract. The Purchaser will determine the amount, if any, which shall on that account be added to or deducted from the contract price, and his decision thereon shall be final and binding on the Contractor.
5 Obligation to carry out inspector’s instructions----- The contractor shall also satisfy the Inspector that adequate provisions have been made, (i) to carry out his instructions fully and with promptitude; (ii) to ensure that parts required to be inspected before use are not used before inspection; and (iii) to prevent rejected parts being used. Where parts rejected by the Inspector have been rectified or altered such parts shall be segregated for separate inspection and approval before being used in the work.
6. Responsibility to executing contract--- The contractor shall provide adequate supervision at all stages of the work and examine in parts for accuracy before erection is commenced. He shall also provide facilities and space satisfactory to the Inspector for laying out for his inspection and parts to be used in the work at such stages of manufacture as he may direct. Irrespective of any inspection and tests made by the inspector, the Contractor shall be entirely responsible for the proper execution of the contract notwithstanding any approval which may have been given by the Inspector of the work or tests carried out either by the inspector or the Contractor. Any fittings or accessories which may not be specifically mentioned in the specification but which are usual or necessary are to be provided by the contractor without extra charge and the structure must be complete in all details.
7. Inspection and tests---- the contractor shall inform the Inspector in writing when any portion of the work is ready for inspection giving him sufficient notice to enable him to inspect the same without retarding the further progress of the work. No portion of work shall be considered completed in accordance with the terms of the annexed tender until the Inspector shall have certified in writing that it has been inspected and approved by him. The expense incurred in sending the Inspector to carry out inspection and/or tests at the place agreed upon in the contract bill be defrayed by the purchaser, provided that the results are satisfactory, and in accordance with the terms of the contract. In the event of the inspection and/or tests proving unsatisfactory and resulting in non-acceptance of the structure or any portion thereof, the cost of such inspection and/or tests including the traveling and halting expenses incurred, if any, (or such portion thereof as may be determined by that officer whose decision shall be final) shall be borne by the contractor.
8. Inspection in Country of supply --- In the case of materials or part intended to be imported from outside India and requiring inspection in the country of supply, the demand for inspection shall be submitted by the contractor to the inspector in the form prescribed by the inspector who will countersign and forward it to the inspector duly appointed by purchaser in the country of supply. The demand for inspection shall be in respect of materials or parts intended for use in the execution of work specifically included in the contract and shall give particulars of the materials or part to be inspected.
9. Liability under workmen’s Compensation Act.---- The Contractor shall at all times indemnify the Purchaser against any claim which may be made under the Workmen’s compensation Act, 1923 or any statutory modifications thereof or otherwise for or in respect of any damage or compensation payable in consequence of any accident or injury sustained by any working or other person whether in the employment of the Contractor or not.
10. Time and date of completion of the work—The essence of the Contract--- the time and date stipulated in Schedule for the completion of the work shall be deemed to be the essence of the contract and in all the event of the contractor’s failure to complete the work within the period prescribed for such completion, the Purchaser shall be entitled to withhold any payments until the whole of the work has been completed and to recover from the Contractor a sum of 2% of the total contract price of the work for each and every month or part of a month during which completion of the work may be delayed and the Contractor shall also be liable for all costs of inspection which may be incurred after the date on which the work ought to have been completed. If the contractor makes default in any of the provisions of the contract owing to circumstances beyond his control, and provided that he shall have notified such circumstances to the Purchaser at the time they arose, and shall have proved to the reasonable satisfaction of the Purchaser that such circumstances were beyond his control and were such as in the opinion of the Purchaser to justify an extension of the contract period for delivery, the Purchaser may, at his discretion extend the time or times for delivery. In the case of supplies manufactured outside India, the requirement of this clause shall be deemed to have been satisfied if the contractor has advised the Purchaser as soon it is practicable after the circumstances leading, or likely to lead to the delay, have actually arisen. Default or delay on the part of Sub-contractors though their employment may have been sanctioned shall not be admitted as reasonable ground for any extension of time or for exempting the Contractor from liability or any such loss or damage as aforesaid.
11. Transport of materials from Railway Station to site--- Unless otherwise specified the consignee will take delivery of the material from the railway authorities at the railway station named in the schedule to the Acceptance of the Tender; he will undertake the transportation of the materials from the Railway Station to the site and he will bear the cost of the handling and transportation necessitated but the Contractor will be responsible for any damage which may be caused to the materials during transit to the site, and should insure the materials at his own cost till the time they are taken over at the site.
12. Insolvency or inability to perform contract satisfactorily--- Should the Contractor’s preparation for the commencement of the work, or any portion of it or his subsequent rate of progress be, from any cause whatever, so slow that in the opinion of the Inspector (which shall be conclusive), the Contractor will be unable to complete the work or any portion thereof, as agreed upon or should he not have the work ready for delivery in conformity with the contract, or should he neglect to comply with any directions given to him by the Purchaser or any Inspector or in any respect fail to perform the contract, the Purchaser shall have power to declare the contract at an end; in which case the contractor shall be liable for any expense; loss or damage which the Purchaser may incur or sustain by reason of, or in connection with Contractor’s default.
13. Provision of fencing, light etc.--- The contractor shall at all times provide sufficient fencing, notice board, lights and watchmen to protect and warn the public and guard the works and in default thereof the Purchaser may provide such fencing, notice board, lights and watchmen as he may deem necessary and charge the cost thereof from the contractor.
14. System of Payment--- unless otherwise agreed between the Purchaser and the Contractor payment for the delivery of the stores will be made by the Pay and Accounts officer of the Administrative ministry in charge of Central Purchase Organisation concerned as follows, by cheque on a Government Treasury or of Branch of the Reserve Bank of India or the State Bank of India transacting Government business at Agra, Ahmedabad, Aligarh, Ambala, Amritsar, Bangalore, Bombay, Calcutta, Delhi, Hyderabad (Deccan), Jamshedpur, Jabalpur, Kanpur, Lucknow, Chennai, Nagpur, Nainital, New Delhi, Pune and Trivandrum, Government retains the right to reduce the number of Banks or Treasure at which payment will be made.
* (i) 80 per cent of the contract price of each consignment delivered to the consignee or despatched from a station in India. The number and date of the railway receipt (or bills of lading) under which the stores charged for in the bill are despatched should be quoted on the bill.
* (ii) 20 per cent of the contract price of the structure plus the cost of creation, if any, on final inspection and test.
In addition to his other remedies under the law and these conditions shall have lien on each consignment in respect of which 80% has been paid to ensure repayment of this amount and payment of any other dues under the contract.
In respect of non-erection contracts the system of payment stated in the General Condition shall apply.
* Contracts for structures requiring inspections after erection at site.
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STANDARD BREAK CLAUSE
1. The Purchaser shall in addition to his power under other clauses to determine this contract have power to terminate his liability thereunder at any time by giving three month’s (or such shorter period as may be mutually agreed) notice in writing to the contractor of the Purchaser’s desire to do so and upon the expiration of the contract shall be determined without prejudice of the rights of the parties accrued to the date of determination but subject to the operation of the following provisions of this clause.
2. In the event of such notice being given the Purchaser shall be entitled to exercise as soon as may be reasonable practicable within that period the following powers or any of them :-
(a) To direct the Contract to complete in accordance with the contract all or any articles, parts of such articles or components in course of manufacture at the expiration of the notice and to deliver the same at such rate of delivery as may be mutually agreed on or in default of agreement at the contract rate. All articles delivered by the contractor in accordance with such directions and accepted shall be paid for at a fair and reasonable prices assessed on the basis of the contract price when it exists.
(b) To require the contractor on the receipt of the notice of termination:-
(i) immediately to take such steps as will ensure that the production rate of the articles specified in the schedule and parts thereof is reduced as rapidly as possible;
(ii) as far as possible consistent with (i) above to concentrate work on the completion of parts already in a partly manufactured state; and
(iii) to terminate on the best possible terms such orders for materials and parts bought-out in a partly manufactured or wholly manufactured state as have not been completed, observing in this connection any directions given under paragraphs (a) and (b) (i) and (ii) above as far as this may be possible.
3. in the event of such notice being given, provided the Contractor has reasonably performed all the provisions of the contract binding upon him down to the date of the notice---
(a) The Purchaser shall take over from the Contractor at a fair and reasonable price (assessed on the basis of the contract price of the completed articles), all unused, undamaged and acceptable materials, bought-out components and articles in course of manufactures in the possession of the Contractor at the expiration of the notice and properly provided by or supplied to the contractor for the performance of this contract except such materials, bought-out components and articles as the Contractor, shall with the concurrence of the Purchaser elect to retain :
Provided that in case the materials and/or the components are supplied to the contractor through the intervention of the Purchaser or on his behalf:-
(1) the said fair and reasonable price shall be assessed on the basis of the cost price of such materials and/or components, and
(2) If the contractor elects to retain any materials, bought-out components and articles as in this clause provided, he shall settle all claims or the supplier in respect of the materials and/or components supplied to him as aforesaid including any claims to any extra charge (if the original stipulated terms had been confessional) and shall keep the Purchaser indemnified against the same:--
(b) The Contractor shall deliver in accordance with the direction of the Purchaser all such unused, undamaged and acceptable materials, bought-out components and articles in course of manufacture (except as aforesaid) taken over by or previously belonging to the Purchaser and the Purchaser shall pay to the Contractor fair and reasonable handling and delivery charges therefore.
© The Purchaser shall indemnify the contractor against any commitments, liabilities or expenditure which in the opinion of the Purchaser are reasonably and properly chargeable by the contractor in connection with the contract to the extent to which the Purchaser is satisfied
that such commitments, liabilities or expenditure would otherwise represent and unavoidable loss by the contractor by reason of the termination of the contract.
Provided that in the event of the contractor not having observed any direction given to him under sub-clause (2) hereof the Purchaser shall not be liable under this sub-clause to pay any sums in excess of those for which the Purchaser would have been liable had the contractor observed that direction.
4. If in any particular cases exceptional hardship to the contractor should arise from the operation of this clause it shall be open to the contractor to refer the circumstances to the Secretary acting on behalf of the Purchaser who on being satisfied that such hardship exists shall make such allowance if any as in his opinion is reasonable
5. The Purchaser shall not in any case be liable to pay under the provision of this clause any sum which when taken together with any sums paid or due or becoming due to the contractor under this contract shall exceed the total price of the articles specified in the Schedule payable under the contract.
6. The Contractor shall in any substantial order or sub-contract placed or made by him in connection with or for the purposes of this contract take power wherever possible by securing the acceptance of the sub-contractor to terminate such order or sub-contract in the event of the termination of this contract by the Purchaser of this clause upon the terms of the foregoing sub-clauses of this clause and save only that::-
(a) the name of the contractor shall be substituted for the purchaser throughout except in sub-clause 3© where it occurs for the second and third times;
(b) the period of the notice of termination shall be two months (or such shorter period as may be mutually agreed upon).
Substantial orders or sub-let contracts shall in this context mean order or sub-let contracts of or over Rs. 25,000 (twenty-five thousand) in value.
BOOK EXAMINATION CLAUSE
(i) The Contractor shall, whenever required, produce or cause to be produced for examination by any Government Officer authorised in that behalf any cost or other account, book of account voucher, receipt, letter, memorandum, paper or writing or any copy of or extract from any such document and also furnish information and returns verified in such manner as may be required in any way relating to the execution of this contract or relevant for verifying or ascertaining the cost of execution of this contract (the decision of such government officer on the question of relevancy of any document, information or return being final and binding on the parties).
The obligation imposed by this clause is without prejudice to the obligations of the contractor under any statute, rules or orders binding on the contractor.
(ii) The Contractor shall, if the authorised government Officer so requires (whether before or after the prices have been finally fixed), afford facilities to the Government officer concerned to visit the contractor’s works for the purpose of examining the processes of manufacture and estimating or ascertaining the cost of production of the articles. If any portion of the work be carried out by the sub-contractor or any subsidiary or allied firm or company, the authorised Government Officer shall have power to secure that the books of such sub-contractor or any subsidiary or allied firm or company shall be open to his inspection
SECRECY
The contractor shall take all reasonable steps necessary to ensure that all persons employed in any work in connection with the contract, have full knowledge of the official Secrets Act and any Regulations framed thereunder.
(2) Any information obtained in the course of the execution of the contract by the contractor, his servants or Agents or any person so employed, as to any matter whatsoever, which would or might be directly or indirectly of use to any enemy of India must be treated as Secret and shall not at any time be communicated to any person.
(3) Any breach of the aforesaid condition shall entitle the Secretary to cancel the contract and to purchase or authorise the purchase of the stores at the risk and cost of the contractor in accordance with Clause 14 of the General Conditions of Contract in form No. DGS&D 68 (Revised). In event of such cancellation the stores or parts manufactured in the execution of the contract shall be taken by the Secretary at such price as he considers fair and reasonable and the decision of the Secretary as to such price shall be final and binding on the contractor.
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