Contract Management

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  • Опубліковано 16 гру 2024
  • All contracts and assurances of property shall be made by such person
    authorized to do so under article 299 (1) of the Constitution in such manner as may be
    prescribed.
    (2) The various kinds of contracts and assurances of property, which may be executed
    by different persons shall be such as may be prescribed.
    (3) The powers of various authorities, the conditions under which such powers shall
    be exercised and the general procedure specified with regard to various classes of
    contracts and assurances of property shall be such as may be prescribed.
    153. Basic principles for contract. - The following basic principles shall be observed
    while entering into contracts:-
    (a) the terms of contract shall be precise, definite and without any ambiguities. The
    terms shall not involve an uncertain or indefinite liability, except in the case of a
    cost plus contract or where there is a price variation clause in the contract;
    (b) standard forms of contracts shall be adopted, wherever possible, with such
    modifications as are considered necessary in respect of individual contracts. The
    modifications shall be carried out only after obtaining advice of the Finance
    Department;
    (c) in cases where standard forms of contracts are not used, advice of the Finance
    Department shall be taken in drafting the clauses of the contract;
    (d) a Department may enter into any kind of contract containing basic terms and
    conditions;
    (e) no work of any kind shall be commenced without proper signing of contract
    documents;
    (f) contract documents, where necessary, shall be signed by both the parties within
    time limit as specified in the contract from the issue of letter of acceptance. Nonfulfillment of this condition of executing a contract by the contractor or supplier
    shall constitute sufficient ground for annulment of the award and forfeiture of
    Earnest Money Deposit;
    (g) cost plus contracts may be avoided. Where such contracts become unavoidable,
    full justification shall be recorded before entering into the contract. Where
    supplies or special work covered by cost plus contracts have to be continued over
    a longer duration even after the completion of period of contract, fresh contracts
    shall be made on a firm price basis after allowing a reasonable period to the
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    suppliers/contractors, to stabilize their production or execution methods and
    processes;
    Explanation : A cost plus contract means a contract in which the price payable
    for supplies or services under the contract is determined on the basis of actual
    cost of production of the supplies or services concerned plus profit either at a
    fixed rate per unit or at a fixed percentage on the actual cost of production;
    (h) (i) a schedule of quantities shall form an essential part of the contract. Price
    variation clause shall be provided in long-term contracts, where the delivery
    or execution period extends beyond the limits specified in contract documents.
    In short-term contracts, firm and fixed prices shall be provided. Where a price
    variation clause is provided, the price agreed upon shall specify the base level
    viz. the month and year to which the price is linked, to enable variations being
    calculated with reference to the price levels prevailing in that month and year;
    (ii) a formula for calculation of the price variations that have taken place between
    the base level and the scheduled delivery date shall be included in this clause.
    The variations shall also be calculated by using indices published by the
    Governments periodically.
    (iii)the price variation clause shall also specify cut off dates for material and
    labour to be used for execution of the contract;
    (iv)the price variation clause shall provide for a ceiling on price variations,
    particularly where escalations are involved. It may be a percentage per annum
    or an overall ceiling or both.
    (v) the clause shall also stipulate a minimum percentage of variation of the
    contract price above which price variations shall be admissible.
    (vi) where advance or stage payments are made, there shall be a further stipulation
    in the contract that no price variation shall be admissible on such portions of
    the price, after the dates of such payment;
    (vii)no price variation shall be admissible beyond the original scheduled date for
    execution of contract due to defaults solely on the part of the contractor;
    (viii)price variation may be allowed beyond the original scheduled date, in cases
    of Force Majeure or defaults on the part of the Government. In such cases
    extension of time for execution of contract may be granted to the contractor
    after affording him an opportunity of being heard;
    thanks
    #Sanjay Sankhyan
    #HPFR2009
    #Types of contract
    #price variation clause
    #cost plus contract
    #item wise contract
    #percentage rate contract
    #Express contract
    #implied contract

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