E2-E3/Civil Rev date: 01-04-2011

E2-E3: CIVIL

CHAPTER-12
BSNL CONTRACT CLAUSES

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BSNL Contract Clauses.

Clause 1

Performance
Guarantee

1. For proper performance of the Contract Agreement.

2. Applicable for the works of tender amount above 15Lakhs.
3. 5 % of the Tendered Amount as P.G.
4. To be given within 15 days of issue of letter of Acceptance.
5. Shall be in the form of BG, FDR.
6. Award letter shall be issued only after the Performance Guarantee is
received.
7. EMD shall be forfeited, if PG is not submitted.
8. Validity of P.G. at least upto due Date of Completion + 60 days.
9. Returned after recording of Completion Certificate by competent
Authority without interest.
10. P.G. shall be forfeited, if fails to pay BSNL any amount due, either as
agreed by the contractor or determined under any of the Clauses
/Conditions of the agreement, within 30 days of notice to this effect by E-
in-Charge.
11. The performance guarantee will be discharged by the BSNL only after
satisfactory completion of the complete obligation under the contract.
12. In the event of the contract being rescinded under provision of any of the
clause/ condition of the agreement, the P.G. shall stand forfeited in full
and shall be absolutely at the disposal of the BSNL and shall be en-cashed
at the pleasure of BSNL.

Clause – 1A

Recovery of Security Deposit

5% of Tendered value for tender amount > Rs.15.0 Lakhs.

10% of Tendered value for the works if tender amount is less than or upto Rs.15.0
Lakhs.

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Deduct at 5% or 10%( as per above) of the Gross Amount of each running bill till
the sum along with the sum already deposited as EMD, will amount to S.D. of
10% of the tender value of the work

All Compensations or other payments which are due, may be deducted from SD.
A notice shall be issued, if the part of SD is reduced to make good the deficit
within 10 days.
Clause 1 not applicable if tender amount < Rs. 15 lacs and 1A applicable with
S.D. recovery @ 10 %.

Clause 2

Compensation for Delay

If the contractor fails to maintain the required progress in terms of Clause 5 or

fails to complete the work and fails to clear the site on or before the contract or
extended date of completion then…… Compensation for delay of work: @ 2.0 %
Per month of delay to be computed on daily basis for the works with stipulated
time of completion > 6 months @ 1.0 % Per week of delay to be computed on
daily basis for the works having stipulated time of completion up to 6 months But
will not exceed 10 % of the tendered value of work

If the Contractor fails to meet milestones [as per Cl. 5] then with-held money
from his bills automatically without any notice to contractor. It can be released if
later-on contractor picks up the progress.

1/8th work 1/4th time 1% of the tendered value of work will

be withheld for failure of each
milestone from Running payments
3/8th 1/2th
3/4th 3/4th
Full Full No interest payable.

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Levey Compensation
EE( C ) tender amount upto Rs.6lakhs.
SE (C) without SW, tender amount above Rs.6lakhs upto Rs50 lakhs. SE with SW
above Rs.6Lakhs upto 70 Lakhs PCE/CE:-For all works tender amount above
Rs.50Lakhs /Rs.70 Lakhs as the case may be.

Clause 2A

Bonus

Eligibility
For works costing Rs. 10 Lakhs and above.
Applicable only when so provided in ―Schedule F‖ by the NIT authority.
Completes the work ahead of the scheduled completion time.
Amount : @ 1 % per month computed on per day basis.
Maximum: 5% of the tendered value.
To be paid along with final bill only after completion of work.
Authority: Decision of the C.E. regarding quantum of bonus shall be final and
binding.
Provided: always that Bonus shall be applicable only when so provided in
Schedule ‗F‘.

Clause 3

When Contract can be Determined

When Contract Can be Determined or Rescinded :

1. When a contractor fails to rectify, reconstruct or replace the defective
work within 7 days of notice or
2. If contractor without reasonable causes suspends work or
3. Slow progress and continues to be slow so even after a notice in writing
of seven days.
4. Persistently neglects contractual obligations and does not take remedial
steps within 7 days.

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5. Fails to complete the work within stipulated date

6. If the contractor‘s company is wound up.
7. Contractor commits any act as per clause 21(subletting or insolvency of
contractor)
8. Fails to start the work within 1/8th of stipulated time.

Course of Actions after Rescission

In such cases Engineer–in-Charge can take following actions:
a) To determine or rescind the contract –(by issue of termination or
rescission notice)-in such case PG & S.D. is liable to be forfeited
b) Measure up the work done upto rescission after giving notice to the
contractor.
c) Get the balance work done by another contractor to complete the work.
d) Determine the amount, if any, recoverable from the contractor for the
completion of balance work.

The contractor, whose contract is determined or rescinded, is allowed to

participate in the tendering process for the balance work.
The excess amount shall be recovered from any money due to him or from SD
& PG.

If SD & PG is not sufficient, a notice to contractor to remit the balance

amount within 30 days.

If the contractor fails to pay the required sum within 30 days, the E-in-C shall
have the right to sale any or all of the contractor‘s unused materials,
constructional plant, implements, etc.

Important Points
The final notice shall be got approved from Tender Accepting Authority before
serving to contractor.
Whether the date for completion has or has not elapsed, Action under clause-3 can
be taken up.
On recession, E-in-C shall have powers to carry out the balance work by any
means at the risk and cost of the contractor

Clause 4
In case in which any of the powers conferred upon the Engineer-in-charge by
clause 3 thereof, shall have become exercisable and the same are not exercised,
the non exercise thereof, shall not constitute a waiver of any of the conditions

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hereof and such powers shall notwithstanding be exercisable in the event of any
future case of default by the contractor and liability of the contractor for
compensation shall remain unaffected.

Clause 5

Time and Extension for Delay

The time allowed for execution of the works or the extended time shall be the
essence of the contract.

The date of commencement shall be considered as per award letter or date of

handing over of clear site whichever is LATER.

If the contractor fails to commence by the stipulated DOS, forfeit the PG and the
EMD.

To ensure good progress, the Contractor shall carryout the work as per mile
stones stipulated in clause 5.6.

If the Estimated Cost is more than 10 Lakhs, The contractor shall submit a time
and progress chart for each milestone and get it approved by the E-in-C.

Cl.5.2 If the Work(s) is Delayed by:-

Force major, abnormally bad weather, serious damage by fire, strike delay on the
part of other contractors. any other cause which, in the absolute discretion of the
authority mentioned in the Schedule ‗F‘, is beyond the Contractor‘s control. the
Contractor shall immediately give notice to E-in-C.

Cl 5.3 Request for rescheduling of milestones and EOT be made by the

Contractor within 14 days of the happening of the event. Contractor may
request the period for which extension required. The E-in-C may grant
provisional EOT

Cl 5.4 —E-in-C to convey EOT decision within 3 month of request from

contractor.

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Cl 5.5 Non-application by the contractor for EOT shall not be a bar for giving fair
and reasonable extension.

The authority mentioned in Schedule ‗F‘ may give EOT and reschedule the
milestones. It shall be communicated to the Contractor by the E-in-C within 3
months of such request from the contractor.

The EOT can be issued without any application from the contractor.

Cl.5.6-The Milestones to be Achieved

S.No. Milestones Amount to be with-held in case of

non-achievement of milestone
Financial Time Allowed
Progress

1 1/8th (Of the 1/4th (Of the whole 1% of the tendered value of work will
whole work) work) be withheld for failure of each
milestone from Running payments.

2 3/8th 1/2th

3 3/4th 3/4th

4 Full Full

Withholding for delay

If the contractor does not achieve a milestone or the rescheduled milestone (s) in
terms of Clause 5, an amount mentioned against that mile stone shall be
recovered.
Withholding of this amount on failure to achieve a milestone shall be automatic
without any notice to the contractor.
if the contractor catches up the subsequent milestone(s), the withheld amount
shall be released.

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Clause 6
Measurements of Work Done

All measurements and levels shall be taken jointly and shall be signed and dated
by the E-in-C and the contractor(s) or his/their representative in token of their
acceptance. ‗3‘ days notice shall be given to contractor & If the contractor does
not remain present at the time of Measurements and…..fails to countersign or to
record objection within a week from the date of the measurement, then….. such
measurements recorded in his absence by the Engineer-in-Charge or his
representative shall be deemed to be accepted by the Contractor.

The contractor shall give not less than seven day‘s notice before covering up and
will not cover the work without consent of the Engineer-in-Charge.
In case of Items not covered by specs, measurements be taken as per:
*BIS (Bureau of INDIAN Standard) or if its is not available then as per mutual
consent

Clause 7
Payment on Intermediate Certificate
to be regarded as Advances

No payment shall be made for work of E/cost Rs.20000 or less till after the whole
of the work has been completed and certificate of completion given.
For works of E/cost over Rs. 20,000,R/A bills shall be submitted by the contractor
(in triplicate) on or before the date of every month, fixed for the same by the
Engineer-in-Charge.

In the event of the failure of the contractor to submit the bills, E-in-C shall
prepare bills & in such a case no claims whatsoever due to delays on payment
including that of interest shall be payable to the contractor.

The amount admissible will as far as possible be paid by 10th working day after
the day of presentation of the bill by the Contractor to the Engineer-in-Charge or
his S.D.E. and in 15 days for works outside the headquarter.

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Clause 8

Completion Certificate
& Completion Plans

Within 10 days of the completion of the work, the contractor shall give notice of
such completion and within 30 days the E-in-C shall inspect the work and if there
is no defect in the work, shall furnish the contractor with a final certificate of
completion, otherwise a provisional certificate of physical completion indicating
defects shall be issued.
Work not to be said complete till all defects complete & rubbish removed.

Clause 8A
• Contractor to Keep Site Clean

In case of repairs and maintenance works, the splashes and dropping from white
washing, colour-washing, painting etc, on walls, floor, windows etc. shall be
removed and the surface cleaned simultaneously with the completion of these
items of work in the individual rooms. In case the contractor fails to comply then
E-in-C can get this work done at the cost of the contractor after 10 days notice to
the contractor.

Clause 8B
Completion Plans to be
Submitted by the Contractor

The Contractor shall within 1 month of the date of completion of the work
submit:-
Completion plans for Electrical works.

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Completion plans of internal and external sanitary, water supply and drainage
installations showing all lines/fixtures etc in the manner specified by the E-in-C.
The Contractor shall also arrange statutory inspection and certification of the
aforesaid installations by local authorities in conformity with the bylaws.
Failure to do so then E-IN-C shall get the above done at the cost of contractor.

Clause 9
Payment of Bills

The contractor shall submit the final bill within 1 month of the date of the final
certificate of completion furnished by the E-in-C. No claims after that.

Payments of undisputed items will be made within the period as below, reckoned
from the date of receipt of the bill by the E-in-C, complete with account of
materials issued by the BSNL and dismantled materials:
i) If the Tendered value is upto Rs.5 Lakhs: 3 months
ii) If the Tendered value is more than Rs.5 lakhs: 6 months

Clause 9A
Payment of Contractor’s Bill to Banks
Payments due to the contractor may, if so desired by him, be made to his bank
instead of direct to him provided that the contractor furnishes to the Engineer-in-
Charge necessary documents

Clause 10
Cement & Steel:-
The contractor shall submit every month statement of cement, reinforcement steel
and PVC Pipes procured, consumed and balance at site, supported by complete
calculations I/C total consumption and certified balance (diameter/ section-wise in
case of reinforcement steel) and resulting variations and reasons thereof.

Clause 10 A
(1)Materials to be provided by the Contractor:-
The contractor shall, at his own expense, provide all materials, required for the
works for testing.
The E-IN-C shall within 30 days intimate to the Contractor whether samples are
approved by him or not.
(2)The contractor shall bear all charges and cost of testing.

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Clause 10 B
Secured Advance on Non-perishable Materials:-
(i)To be paid as already work being done No secured advance, shall be paid on
high-risk materials such as ordinary glass, sand, petrol, diesel etc.

(ii) Mobilisation advance not exceeding 5 % of the estimated cost put to tender or
5% of tender value whichever is less may be given.( But E/cost should be 2 Crore
& above.)

(iii) Advance on plant & machinery—not more then 5% of tender value or of

E/cost whichever is less. No advance if the equipment value is less than 50000 or
it is of perishable nature.

Clause 10 C :-
Payment due to Increase/ Decrease in Prices/Wages after receipt of Tender for the
work:-

If the prices of materials and/or wages of labour required for execution of work
increases, the contractor shall be compensated for such increase as per provisions
of this clause and the amount of contract shall be accordingly be varied subject to
the condition that no such compensation shall be payable if the stipulated period
of completion is 18(Eighteen) months or less. Provided always that the provisions
of the clause 10CA & 10 D shall not be applicable for contracts where provisions
of this clause are applicable but in cases where provisions of this clause are not
applicable, the provisions of clause 10 CA & 10 D hereinafter shall be applicable.

Clause 10(CA) :-
As per this clause after submission of tender if prices of cement and/or steel
reinforcement bars increases beyond the prices prevailing at the time of the last
stipulated date of receipt of tenders for the work then the amount of the contract
shall accordingly be varied and provided further that any such variation shall be
affected for stipulated period of contract including the justified period extended
under clause-5 of the contract without any action under clause-2 subject to the
condition that no such compensation shall be payable for the work for which
stipulated period of completion is 03 months or less.

However in case of tower foundation work and works involving major

consumption of cement, this clause shall be applicable even if the stipulated time
period for completion is even less than three months. Similarly in case of decrease
of prices, provisions of this clause shall also be applicable.

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Clause 10 D:-
Payments on account of increase in Wages due to Statutory Order(s).:-
(1) For Contracts with stipulated time of completion less than 18 months, if after
submission of the tender, the wages of labour increases as a direct result of the
coming into force of any fresh law or statutory rule or order.
And such increase exceeds ten per cent of the wages prevailing at the time of the
last stipulated date for receipt of the tenders i/c extensions if any for the work
and the contractor thereupon necessarily and properly pays in respect of labour
engaged on the work such increased wages, the reimbursement shall be made only
on the excess over 10 % .

(2)Provided that any such increase in the opinion of the S.E. (whose decision shall
be final and binding on the contractor) is not attributable to any delay on the part
of the contractor.
(3)No reimbursement shall be payable if such increase has become operative after
the contract or extended date of completion of the work.

(4)It applies on decrease also.

(5)Also the contractor shall, within a reasonable time of his becoming aware of
any alteration in the wages of labour, gives notice for the same.

Clause 11
Works to be executed in accordance with Specifications, Drawings, Orders
etc.
The contractor shall execute the whole and every part of the work in strict
accordance with the specifications, design, drawings and instructions by the
Engineer – in – Charge.

Clasue-12
Deviations, Variations Extent and Pricing Provisions
The E-in-C shall have power to make alteration, omission, additions, or
substitutions for the original specifications, drawings, designs and instructions
that may appear to him to be necessary or advisable during the progress of the
work .

Contractor shall be bound to carry out the work in accordance with any
instructions given to him in writing signed by the E-in-C.

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He has to carry out on the same conditions in all respects including price on
which he agreed to do the main work except as hereafter provided.

Outcome of Main Provisions

(i) Deviation Items
(ii) Extra Items
(iii) Substituted Items

The time period shall be extended due to increase in cost over the tendered
value, if requested by the contractor, as follows:
(i) In the proportion of extra work plus
(ii) 25% of the time calculated above or any other period which is decided
by Competent Authority i.e.
(iii) 1.25x (A/B)xT
(iv) A= cost of additional work.
(v) B= Tendered amount
(vi) T = time for completion of work

Cl 12.1.2: Rates for such altered, additional or substituted work shall be

determined as follows (when deviations are within deviation limit in the
agreement):
(i) If the rate for altered, additional or substituted item of work is specified in
the schedule of quantities, the contractor shall carry out the altered,
additional or substituted items at the same rate.
(ii) If the rate for any altered, additional, or substituted item is not in the
contract, the rate for that item shall be derived from the rate for the nearest
similar item. The rate of such item shall be worked out on the basis of rate
of similar item plus the difference in rate of the original item and the
substituted item (at the rates entered in Schedule of Rates ) plus/minus the
percentage by which the tendered amount of the work is higher or lower
than the corresponding estimated amount.
(iii) If the rate cannot be determined as per paras (i) & (ii) above, the contractor
shall within 15 days inform the rate which he proposes to claim. E-in-C
shall within three months determine the rate on the basis of market
rate(s). In the event of the contractor failing the E-in-C shall determine rates
on the basis of market rate prevailing during the fortnight following the date
of the order plus ten per cent for profit and overhead.

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Cl 12.2
(if the deviation limits of the contract are exceeded):-
In case of contract items, substituted items, contract cum substituted items or
additional items which individually exceeds the deviation limits in the contract,
the contractor shall within 15 days claim revision of the rates, supported by proper
analysis.
In the event of the contractor failing to claim within 15 days, the E-in-C shall
make payment at the rates as specified in the Schedule of Quantities or those
already determined under sub-paras (i) to (ii) of condition 12.1.2 for the quantities
in excess of the deviation limit.

Cl 12.4
The E-in-C shall intimate to the contractor the sanctioned rates of items falling
under the sub–clauses 12.1.2(i) to (ii) above within 3 months of written orders to
carry out the work

And in case item falling under sub-clauses 12.1.2 (ii) and clauses 12.2, within 3
months of intimation of rate claimed by the contractor.

Cl 12.3—provisions of 12.2 applies to decrease in rates also & ENC after giving
notice & considering reply of contractor will revise the rates as per reduced
market rates.[ Try to do it within 3 months of reply from the contractor].
Under no circumstances the contractor shall suspend the work on the plea of non-
settlement of rates or disputes in the rates of the items falling under the above
clauses.

Deviated Items
Deviation means deviation in quantities of items in agreement.
JTO/SDE are responsible to assess the anticipated deviation and to initiate
Deviation Item Statement.
They shall allow the execution of deviated items only after prior approval of
competent authority.
Deviations, even though they are as per Modifications in drawings made by the
Architects, cannot be done without prior approval of Technical Sanctioning
Authority.
AO/Auditor to be responsible to bring to the notice of EE about items whose qty
has exceeded agreement qty when bill is received in EE‘s office.

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Extra/Substitute Items
Extra Items – Completely new and in addition to (not a replacement) the items in
contract.
Substituted Items – In lieu of already provided with partial modification in items
of work in the contract.
No extra/sub item should be executed without prior approval of the TSA.
In case of works TS by SDE/EE, the E.I./Substituted items not to exceed 30% of
agmt amount and beyond 30% approval of next higher authority reqd.

Clause 13
Foreclosure of Contract
(i) Foreclosure of contract due to abandonment or reduction in scope of
work.
(ii) The contractor shall have no claim for payment or compensation for
reduction in scope of work; changes in drawings, specifications, designs or
any alternations as desired by Engineer –in- Charge.
(iii) Even in case work is abandoned, this clause is applicable - thus no
compensation payable.

Clause 14
Suspension of Work
It could be either due to default of contractor or due to for reasons other than this
then specific provisons exists in the clause for the same.

Clause 15
Inspection and supervision of work
Work open to inspection by QA/CTE etc & contractor to be present for receiving
instructions.

Clause 16
Rectification of defects

(i) If either E-in-C or the Sr. DDG(BW) or QA or CTE finds that any
work has not been executed properly as per contract, the contractor
shall (which shall be intimated to contractor within six months of the
completion of the work not withstanding that the same may have been
passed, certified and paid for) forthwith rectify the work.

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(ii) If contractor fails, then get it done at his risk & cost & decision of E-
in-C will be final & binding.
(iii) Proviosn of acceptance of item at Reduced rates is also there in this
clause.

Clause 17
(i) Contractor liable for damages, defects during maintenance period.
(ii) Six months Maintenance period for works costing up to 15.00 Lakh
except road works.
(iii) For works costing more than 15.00 Lakh maintenance period shall be
:-
a) If any damage happens to the work while in progress from any cause
or any faults appear in the work within 12 months after a certificate
final, the contractor shall make the same good at his own expense.
b) The S.D. shall not be refunded before the expiry of 12 months after
the issue of the certificate final or otherwise, of completion of work, or
till the final bill has been prepared and passed whichever is later.

Clause 18
Contractor to Supply Tools and Plants etc.

Clause 18A
Recovery of Compensation Paid to Workman

Clause 18B
Ensuring Payment & Amenities to Workers, If Contractor Fails

Clause 19
Labour Laws Compliance by Contractor

(i) Contractor to hold valid Labour license till work is completed.

(ii) Labour reports to be given on 4th & 19th of every month. Penalty at a
rate Rs 200 for each default may be levied.
(iii) Contractor to keep bldg free from unauthorised occupancy till it is
taken over by deptt. Failur to enusre means penalty upto 5% of TA by
SE.

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Clause 21
Work Not to be Sublet, Action in Case of Insolvency
Work not to be sublet by the contractor.
Contractor cannot sublet the work or appoint agent for the work by General
Power of Attorney without written approval of Engineer –in-Charge.

In case of Insolvency of Contractor, E-in-C on behalf of BSNL shall have the

powers to take action under any or all courses of action as specified in clause 3 of
the agreement.

Clause 22
Changes in Constitution of Firm to be Intimated in Advance.

Clause-25
Settlement of Disputes & Arbitration

What is a Dispute?
If the contractor considers that he is entitled to any extra payment over and above
the amounts admitted to pay by the BSNL.
If the contractor wants to dispute the validity of any recoveries made or proposed
to be made from the contract.

The Disputes Which Can be Referred to Arbitrator?

(i) The meaning of the specifications, design, drawings and instructions.
(ii) The quality of workmanship or materials used on the work.
(iii) Any other question, claim, right, matter or thing whatsoever in any way
arising out of or relating to the contract, designs, drawings, specifications,
estimates, instructions, orders.
(iv) Arising during the progress of the work or after the cancellation,
termination, completion or abandonment

No Jurisdiction of Arbitrator on:

(i) Clause 2: Quantum of compensation levied under clause 2 of contract by
competent authority.

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Process of Settlement of Dispute

(i) The contractor shall give notice in writing of his claim to the E-in-C
within 30 days from the date of any disallowance.
(ii) The contractor shall be deemed to have extinguished all his rights in
respect of any claims not notified to the E-in-C within 30 days.
(iii) The E-in-C shall give his decision in writing on the claims notified within
30 days.
(iv) If the contractor is not satisfied with the decision of the E-in-C, he may
within 15 days of the receipt of the decision of the E-in-C submit his
claims to the conciliating authority along with all details.

Conciliation Proceedings
(i) Conciliatory Authority-CE for his NIT.SE for his NIT & for NIT of
EE/SDE
(ii) The party initiating conciliation shall send to the other party a written
invitation to conciliate.
(iii) Conciliation proceedings shall commence when the other party accepts in
writing the invitation to conciliate.
(iv) If the other party rejects the invitation, or does not reply within 30 days,
there will be no Conciliation Proceedings.
(v) Settlement agreement [ it has same effect as of arbitral award] shall be
drawn, if both parties are agreeing to settle the dispute as per formulated
terms of Conciliator.
(vi) If a settlement does not appear possible, the Conciliator, after consultation
with the parties shall terminate the Proceedings.
(vii) On failure of CP, the party, which initiated the Conciliation shall, within a
30 days of termination give a notice to the Chief Engineer for appointment
of arbitrator.

Arbitration Proceedings
1. The party invoking arbitration shall give a list of disputes with amounts
claimed in respect of each dispute along-with the notice for appointment
of arbitrator.
2. The CE shall appoint a sole arbitrator.
3. The arbitration shall be conducted in accordance with the provisions of
the A & C Act 1996.
4. The arbitrator shall adjudicate on only such disputes which are referred
to him by the appointing authority.
5. Arbitrator shall give separate award against each claim referred to him.

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6. The arbitrator shall give reasons for the award for each dispute referred
to him.
7. If any fees are payable to the arbitrator these shall be paid equally by
both the parties.

Arbitrator shall be deemed to have entered on the reference on the date he

issues notice to both parties and calling them to submit statement of claims and
counter statement of claims.
The venue of arbitration shall be fixed by arbitrator.
The cost of reference and the award shall be as per the discretion of the
arbitrator.

Clause 28
Action where no Specifications are Specified

Action in works where specifications are not specified then follow this sequence:
o BIS.
o Manufacturer‘s specs
o District specs
o As per direction of E-IN-C

Clause 29:-Lien/Withholding Sum Due from Contractor

Lien and withholding of contractor‘s payments in respect of sum due from the
contractor as per this clause.

 Engineer – in - Charge is competent to withhold contractor ‘s

Payment/S.D.--- for payments/claims due from him subject to final
decision of arbitrator/courts.

Clause 29A:-Lien in respect of claims in Other Contracts

 Payments can be withheld (lien kept) in respect of claims in other
contracts.

Clause 31
Water and Power Supply:-
Contractors shall make his own arrangement for water and power supply and
nothing extra shall be paid.

He will submit No-dues certificate in the last.

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 E2-E3/Civil Rev date: 01-04-2011

Clause 31 A
Departmental Water/Power Supply
If Departmental water supply is given for Work:
 1% water charges on gross amount of work done shall be recovered.
 Contractor to make own arrangement for laying of pipe line as required
from source of supply of water.
 Similarly contractor to install sub meter and extend power supply from
tapping point & cost will be recovered from his bills.

Clause 36
Employment of Technical Staff and
Employees

The technical representative and/or the contractor shall be actually available at

site at least 2 working days every week.
There shall be no objection if the representative/agent looks after more than one
work and not more than three works at the same station.
Further if the contractor fails to appoint a suitable technical representative the
E-in-C shall have full powers to suspend the execution of the work until such
date.

Contractor to Submit Certificates with Every Bill.

If the contractor who himself has such qualifications, it will not be necessary for
the said contractor to appoint such a principal technical representative but the
contractor shall designate and appoint a responsible agent to represent him and to
be present at the work whenever the contractor is not in a position to be present.
All the provisions applicable to the principal technical representative under the
Clause will also be applicable in such a case to contractor or his responsible
agent.

Employment of Technical staff by contractor shall be as per following:

Works costing Technical Staff

1) More than Rs. 5.0 lacks but less - Diploma in Civil Engg.
than Rs. 10.00 lacks.

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 E2-E3/Civil Rev date: 01-04-2011

2) Rs. 10 lacks and above but - B.E. Or Retired A.E( with

less than Rs. 60.00 lacks D.C.E.)

3) Rs. 60.00 lacks and above - Tech. Representative

Experience should be decided by
NIT issuing authority.
Supported by Requisite
Organization.Min. graduate
Civil Engineer with --years
experience or Retired E.E.
(with Diploma in Civil Engg.)

Contractor before commencement of work shall give the Name, Age, Experience,
Qualification, Address, and Certificates for Engineers/Technical staff employed
for the work. If contractor himself is a qualified engineer-not necessary to
employ site engineer.

Recovery for not employing - a) Rs.4000/- month

Site Engineer for Graduate engineer
b) Rs. 2000/- month
for Diploma holder.

Clause 37:-
Levy / Taxes Payable by Contractor
1) Sales Tax and any other taxes on materials shall be paid by Contractor.
2) The contractor shall pay royalty and obtain necessary permits for supply
of sand, stone, kankar (aggregate) etc. from local authorities.

Clause 38
1. Reimbursement of Levy/ Taxes, if levied after last date of receipt of
Tender
2. If contractor actually pays & intimates within 30 days of their
implementation
3. Decision of SE is Final

Clause 42
Recovery for Inadequate Consumption Of Materials---
As per Schedule ´F´

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 E2-E3/Civil Rev date: 01-04-2011

Clause 42:-
Return of Material & for Excess Materials
Store materials issued to contractor (cement, steel etc. ) have to be
returned by the contractor after completion of work.

For theoretical calculations of materials - Variation in quantities

allowed as per Schedule F.

Cement:
For works not more than Rs. 5.0 lacs - 3% minus
For works more than Rs.5.0 lacs - 2% minus

Steel reinforcement & Sections:

2% minus.

In case of steel 3% wastage due to cutting into pieces is (on plus side) allowed for
calculating theoretical quantities.

For the balance materials, if not returned by the contractor, recovery at the
rate specified in schedule F is made.

Clause 45
Release of S.D. after Labour Clearance
Contractor produces a clearance certificate from the Labour Officer. If no
complaint is pending, on record till after 3 months after the completion of the
work and/or no communication is received from the Labour Officer to this effect
till six months after the date of completion, it will be deemed to have received
the clearance certificate and the Security Deposit will be released if otherwise
due

Clause-46
Insurance

Main Provisions
1. The Contractor shall at his own cost take insurance in the joint names of the
BSNL and the contractor.

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 E2-E3/Civil Rev date: 01-04-2011

2. With any of the subsidiary of the GIC of India.

3. To cover for all time during contract i.e. Stipulated, extended and the defect
liability period.
4. The contractor shall submit the insurance policies to the E-in-C within 1 week
of signing of the agreement along with the receipt of premium.

A). Contractor’s All Risks Insurance

The contractor shall insure the work for a sum of Contract value against ALL
RISKS claims, proceedings, loss or damages, costs, charges and expenses from
whatsoever cause arising out of or in consequence of the execution and
maintenance of the work for which the contractor is responsible under the
contract.

Workman Compensation & Employers Liability Insurance

This insurance shall be effected for all the contractor‘s employees engaged in the
performance of the contract
The BSNL shall not be liable in respect of any damages or compensation payable
at law in respect of or in consequence of any accident or injury to any workman or
any other person in the employment of the contractor.

Third Party Insurance.

Against damages or injuries of BSNL Property and Employees where he is
working.
Against damages to BSNL Properties, or any third party occurred during
movement of T&P and Materials.
Contractor should indemnify the BSNL against all claims, compensations under
the provisions of Payment of Wages act, Minimum wages act, Employer‘s
Liability act, The Workman‘s Compensation act, Industrial Dispute act and
Maternity Benefit act.

Remedy on the contractor’s failure to insure

If the contractor fails to keep in force the insurance referred, E-in-C may keep in
force any such insurance and pay such premiums and deduct the amount so paid
from the contractor.

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 E2-E3/Civil Rev date: 01-04-2011

Questions:-
1. What are the provisions of clause-2 of the contract about levy of
compensation? Briefly discuss powers of various authorities about levy of
compensation under clause-2 of the contract.
2. What are the circumstances under which work can be rescinded/
determined under clause-3 of contract? What are the provisions about
forfeiture of various deposits of the contractor under the contract?
3. Briefly discuss about provisions made for, under clause-10 for payment of
escalation to contractor for increase in wages/prices of material/cement &
steel.
4. Please detail the provisions made under clause-12 for deviation and extra
items. Please list out the steps and order as to how the rates of
extra/substituted items are derived?
5. Clause-13 of the contract relates to which actions under the contract?
Please elaborate.
6. Briefly discuss about clause-25 of the General conditions of contract
regarding conciliation and arbitration proceedings.
7. What are the penalties which can be imposed on the agency under clause-
36 for non employment of technical staff and employees by the
contractor?
8. Briefly discuss recovery provisions for cement and steel under clause-42
for inadequate consumption?
9. What are the various insurance covers which a contractor should get done
before the start of work? Please mention the relevant clause also. In case
of failure by the contractor, what are the remedial measures?
10. What are the provisions made under clause-6 about measurement of
works? What are the notices and time periods under this clause for
satisfactory performance of tasks?

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