## Railway Accounts Department Examinations

Showing posts with label Additional PG. Show all posts
Showing posts with label Additional PG. Show all posts

## Sunday, August 16, 2020

### Additional PG - Performance Guarantee calculation -If the Tenderer offered lower than the Tender Value

If the Tenderer offered lower than the Tender Value

 excerpt of Para 16 (4) (h) of Revised GCC for Works-July 2020  Click for Revised GCC 2020 "The tenderer who has offered lower total cost as compared to tender value by more than 10 %, shall be required to submit additional Performance Guarantee of value equal to half the percentage of tender value by which offer is lower than 10%. (e.g. in a tender costing Rs 100, if contract value is Rs 80, additional Performance Guarantee shall be [0.5x{(100-80)-10}] percentage of tender value.)"

Object : To discourage the Contractors to quote the unreasonable rates and doing incomplete  work  or abandon the work after awarding the same, because of non viable/non feasible rates.

Example A:

Tender value is Rs 100.  Tenderer offered rate is Rs 80 only. So calculation of PG is as follows:

 PG Rate on Contract/Tender Value Calculation PG Amt (Rs) Original PG 5% of Contract Value Rs. 80 5/100x80 4.00 Additional PG 0.5 % of 10 i.e., {(100-80)-10} (additional Performance  Guarantee of value equal  to half the percentage of  tender value by which offer is lower than 10%. 0.5/100x10 0.05 Total PG 4.05

Example B:

Tender value is Rs 100.  Tenderer offered rate is Rs 70 only. So calculation of PG is as follows:

 PG Rate on Contract/Tender Value Calculation PG Amt (Rs) Original PG 5% of Contract Value Rs. 70 5/100x70 3.50 Additional PG 0.5 % of 20 i.e., {(100-70)-10} (additional Performance  Guarantee of value equal  to half the percentage of tender value by which offer is lower than 10%. 0.5/100x20 0.10 Total PG 3.60

In Simple , calculation of Additional PG is 0.5 % of  (90 % of Tender Value - Accepted Offer value)

Note:

If the Lowest quote is Rs. 90 and above against Tender Value of Rs. 100, the PG is just 5 % of Contract Value only.

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