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Corrigendum & Extension of time of tender

1) Date of opening of tender No.26/08-09 in connection with Malda Division Tender Notice
No.14/2008-09/MLDT is hereby extended and re-scheduled to be opened on 15.07.08. Sealed
tender for that work will be received upto 14.00 hours on 15.07.08 into the box placed at
Divisional Office, Malda. The tender documents will be sold upto 14.00 hours of 14.07.08.
However, the tenderers may also drop the tender into the box placed in the office of
AEN/Sahibganj upto 16.00 hours on 14.07.08. Both the tender boxes will opened at 15.00 hours
on 15.07.08 at Divisional Office, Malda.

2) Since the tender is more than Rupees One Crore, Price variation clause is applicable for this
tender. The tenderer should read the correction made in this regard and submit those pages
[appended below] while submitting their offer.

(i) Item No. 13.0 of Chapter I in Tender Document should be correctly read as:- Price Variation
Clause (PVC) shall be applicable for this tender.

(ii) Item No. 13 is to be added in Chapter-VIII of Tender Document which is produced below:-

13.0 PRICE VARIATION :

13.1 General:

13.2 The rates for each item quoted by the contractor and accepted by the Railway shall hold good
till completion of the work.
13.3 Fluctuations in market rates/conditions, taxes, additional levies, tools or any other changes in
the cost of an item, as a whole or in the cost of a component of expenditure constituting that
item, shall be taken into account and payments to contractor shall be adjusted i.e.
increased/decreased in accordance with the provisions of this clause. No other claims on
account of these inputs shall be admissible.
13.4 The total amount payable to the contractor for the payments made through on account/final bills
for the work done in a particular quarter shall be adjusted i.e. increased/decreased, based on the
overall market situation as reflected by increased/decreased in various Price Indices published
by the Reserve Bank of India form time to time.
13.5 The amount of adjustment i.e increased/decreased in the payments to the contractor shall be
calculated in accordance with the method detailed in this clause.

13.6 The Price Variation Clause will be applicable to all extensions of time granted to the date of
completion in cases where the original time of completion was more than a year except
extensions granted under clause 17(B) of GCC-2001.

AMENDMENT TO PVC CLAUSE IN WORKS CONTRACT :

In partial modification of Board’s letter No. 85/W-1/CT/7-Vol.1 dated 4.4.96 (Ref. Board’s letter
No. 2007/C-1/CT/18 dated 28.09.07), the following changes are introduced regarding Price
Variation Clause :-
(i) The minimum prescribed limit of one year of contract completion period for incorporating
Price Variation Clause in tenders (para 1(a) of above referred letter dated 4.4.96) stands
deleted.
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(ii) Price Variation Clause (PVC) shall be applicable for tenders of value more than Rs.1
crore irrespective of the contract completion period and PVC shall not be applicable to
tenders of value less than Rs. 1 crore.

(iii) The present stipulation that “Price Variation Clause will not apply if the price variation
is upto 5% and that reimbursement/recovery due to variation in prices will continue to
be made only for the amount in excess of 5% of the amount payable to the contractor”
vide para 1 of above referred letter dated 4.4.96 shall continue to be enforced. However,
the existing upper limit prescribed at 15% and 25% (vide para 1 (b) and 1 (c) of Board’s
letter dated 4.4.96 referred above) for price variation claim stands deleted.

In partial modification of item no. 2(iii) of Board’s letter No. 2007/C-1/CT/18 dated 28.09.07, it has
been decided to delete the existing lower limit of 5% for disallowing the PV claim. (Ref. Board’s
letter No. 2007/CE-1/CT/18 dated 07.03.08).

13.7 Ceiling on price variation:

13.8 The adjustment i.e reimbursement/recovery based on price Indices shall be made only if and to
the extent the amount to be adjusted is in excess of 5% of the amount payable to the contractor
as per accepted rates.

NOTE:
1. The period of completion is the period originally mentioned in this tender documents and it
will not include extensions granted under any clause of GCC-2001.

2. Material supplied free by Railway to the contractor will fall outside the purview of price
variation clause.

13.9 Method of calculation of adjustment:

13.10 The amount of adjustment i.e. increase/decrease in total payable amount shall be calculated by
the following formula for each component of impute, i.e. labour, material, fuel, explosive,
detonator. There shall be a fixed component also on which no adjustment shall be made:

R X (l- l0) P
(a) L = X
I0 100

R X (W- W0) Q
(b) M = X
W0 100

R X (F- F0) Z
(c) U = X
F0 100

R X (E- E0) S
(d) X = X
E0 100

R X (D- D0) T
(e) N = X
D0 100
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Where: L = Amount of price variation in labour.

M = Amount of price variation in materials.
U = Amount of price variation in fuel.
X = Amount of price variation in explosives.
N = Amount of price variation in detonators.
R = Gross value of the work done by the contractor as per on-account bills excluding cost of
materials supplied by Railway free or at a fixed price. This will also exclude specified payment,
if any, to be made to the consultants engaged by the contractors (such payment will be indicated
in the contractor’s offer).
Io = Consumer Price Index Number for Industrial Workers – All India - published in RBI
Bulletin for the base period.
I = Average Consumer Price Index number for Industrial Workers – All India - published In
R.B.I. Bulletin for the 3 months of the quarter under consideration.
Wo = Index Number of Wholesale Prices – by groups and sub-groups - All commodities-as
published in the R.B.I. Bulletin for the base period.

W = Average Index Number of wholesale Prices – by groups and sub groups-All commodities
– as published in the R.B.I. Bulletin for the 3 months of the quarter under consideration.

Fo = Index Number of whole – Sale Prices – by groups and sub-groups for Fuel, power, light
and lubricants as published in the R.B.I. Bulleting for the base period.

F = Average Index Number of wholesale Prices – by groups and sub-groups for fuel, power,
light and lubricants as published in the R.B.I. Bulletin for the 3 months of the quarter under
consideration.

E0 = Cost of explosive as fixed by DGS & D in the relevant rates contract of the firm from
whom purchase of explosives are made by contractor for the base period.

E = Average cost of explosives as fixed by DGS & D in the relevant rate contract of the firm
from whom purchase of explosives are made by the contractor for the 3 months of the quarter
under consideration.

Do = Cost of detonators as fixed by DGS & D in the relevant rate contract of the firm from
whom purchase of detonators are made by the contractor for the base period.

D = Average cost of detonators as fixed by DGS & D in the relevant rate contract of the firm
from whom purchase of detonators are made by the contractor for the three months of the
quarter under consideration.

P = % of Labour component.
Q = % of Material component.
Z = % of Fuel component.
S = % of explosive component.
T = % of detonators component.

13.11 Index number:

The Base Index Number shall be that published by RBI for the month of opening of this tender
and the quarters will commence form the month following the month of opening of the tender.
However, in case of the tender finalised after the negotiation, quarterly periods shall be counted
commencing form the month following the month in which the last negotiation was held leading
to the award of contract.
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The percentages P, Q, Z, S and T of various components i.e. labour, material etc. for different
types of work shall be as follow:-

Earthwork items:
Labour component 50%
Fuel component 20%
Other material component 15%
Fixed component 15%

Ballast and Quarry products items:

Labour component 55%
Fuel component 15%
Other materials component 15%
Fixed component 15%

Tunneling Items:
Labour component 45%
Fuel component 15%
Explosive component 15%
Detonators component 5%
Other materials component 5%
Fixed component 15%

Other works Items: (Amended in terms of Bd’s L/No.85/WI/CT/7.Pt.I dt. New Delhi
18/19/04/06 for supply of cement & steel)

Labour component 30%

Materials component 25%
Fuel component 15%
Fixed component 30%

Prices of cement are to be linked with the wholesale price Index of the respective subgroups as
per RBI Index Numbers. Henceforth, the formula for calculating the amount of variation on
account of variation in prices of cement would be as indicated below :-

Mc = R x (Wc –Wco)/Wco

Where
Mc = Amount of price variation in material (Cement).

R = Value of cement supplied by Contractor as per on account bill in the quarter under
consideration.

Wco = Index No. of Wholesale Price of sub-group (of cement) as published in RBI Bulletin for
the base period.

Wc = Index No. of wholesale price of subgroup (of cement) as published in RBI bulletin for
the first month of the quarter under consideration.

13.12 The following price variation formula for supply of steel.

Ms = Q (Bs-Bso) where

Ms = Amount of price variation in steel payable/recoverable

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Q = Weight of steel in tones supplied by the contractor as per the on account bill for
the month under consideration.

Bs = SAIL’s (Steel Authority of India Limited) ex-works price plus Excise Duty
thereof (in rupees per tonne) for the relevant category of steel supplied by the
contractor as prevailing on the first day of the month in which the steel was
purchased by the contractor (or) as prevailing on the first day of the month in
which steel was brought to the site by the contractor whichever is lower.

Bso = SAIL’s ex-works price plus Excise Duty thereof (in rupees per tonne) for the
relevant category of steel supplied by the contractor as prevailing on the first
day of the month in which the tender was opened.

Note:
(i) Relevant categories of steel for the purpose of operating the above price variation
formula based on SAIL’s ex-works price plus Excise Duty thereof are as under :-

Sl. Category of steel supplied in the Category of steel produced by SAIL

No. Railway work whose ex-works price plus Excise Duty
thereof would be adopted to determine
price variation.
1 Reinforcement bars and other rounds. TMT 8 mm IS 1786 Fe 415
2 All types and sizes of angles. Angle 65 x 65 x 6 mm IS 2062 E250A SK
3 All types and sizes of plates. PM Plates above 10-20 mm IS 2062
E205A SK
4 All types and sizes of channels and joists. Channels 200 x 75 mm IS 2062 E205A
SK
5 Any other section of steel not covered in Average of price for the 3 categories
the above categories and excluding HTS. covered under Sl. No. 1, 2, 3 above.

(ii) The prevailing ex-works price of steel per tonne as on 1st on every month for the above
categories of steel as advised by SAIL to Railway Board would be circulated to all the
zonal Railways.

13.13 The calculations for adjustments in the amount payable to the contractor shall be made on the
value of work done in each quarter by the contractor. Quarterly periods shall be counted
commencing from the month following the month in which tender had been opened. However,
in case this tender is finalised after the negotiation, quarterly periods shall be counted
commencing from the month following the month in which the last negotiation was held leading
to the award of contract.
13.14 The calculations for adjustments should be based on the average Price Index of the 3 months of
the quarter.
13.15 The demands for escalation of the cost may be allowed on the basis of provisional Indices made
available by the Reserve Bank of India. Any adjustment needed to be done based on the finally
published indices shall be made as and when they become available.
13.16 Making adjustment for price variation:
13.17 The adjustment for variation in prices i.e extra payment in case of increase and recovery in case
of decrease, as required, shall be made in once every quarter in the on account payments. If
more than one on account payment is made to the contractor in a quarter the adjustment, if
required, shall be made in each bill.
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13.18 It shall be contractor’s responsibility to submit the values of various Price Indices for
appropriate points of time along with proof/authenticity thereof to enable the Railway to
calculate the price variations.

13.19 Method of operation of this clause:

13.20 Since the adjustments in payments are based on the amount of work done by contractor in each
quarter, measurements of the actual work done must be taken & recorded in the measurement
books and signed by the contractor at the end of each quarter, if not frequently.

13.21 Since the various Indices are, published by RBI/Ministry of Labour a few months later than the
months to which they pertain, the normal on account bills based on quarterly measurements will
be prepared as per current procedure on the accepted rates without considering the Price
Variation clause. The adjustments for price variations shall be done subsequently, through
separate series of on account bills called Escalation-on-Account Bill No. 1, 2 etc. The
adjustment bills and the normal on account bills will be kept independent of each other for
facility of operations.

13.22 Since the adjustments due to price variations are done on the basis of payments made for each
type of work as defined, it will be advisable to record measurements and prepare abstracts for
each type of work separately in each normal on A/Cs bill so that the on A/Cs bill/measurements
do not have to be worked upon again at the time of preparing Escalation-account- bills.