Railway Accounts Department Examinations

Showing posts with label GCC for Services. Show all posts
Showing posts with label GCC for Services. Show all posts

Monday, February 26, 2024

Service Contracts - Acceptance Powers


Service Contracts - Acceptance Powers

  • Source: Railway Board Letter No.2023/F(X)II/PW/1 dated 27.12.2023 Click for the Letter 

  • Path: Finance Directorate > Content of Finance / Expenditure >  FX-II Letters

Service Contracts - Delegation of Powers of Acceptance

Monetary Values


(Each Service Tender)

Accepting Authority

Division controlled units

HQ controlled & Other Units

Up to Rs. 50 Lakhs

SG/JAG/SS(Independent charge)

Direct Acceptance of Tenders

Up to Rs. 4 Crore


Above Rs. 4 Crore and up to Rs. 20 Crore



Above Rs. 20 Crore and up to Rs. 100 Crore



Above Rs. 100 Crore and up to Rs. 500 Crore



Above Rs. 500 Crore




  • Recruitment Tenders - Chairman RRB can exercise the powers of CHOD (i.e., up to Rs. 500 Crores)

  • RRB Service Tenders accepted at Zonal Railways - Variations in quantities will be approved by Chairman/RRB, if the revised value of Agreement lies within their current tender acceptance powers. 


Thursday, June 22, 2023

GCC for Services - Key points for MCQ - Numbers or Figures


The General Conditions for Services, 2018- Key points for MCQ 

Click for the latest copy of GCC for Services, 2018

  1. The GCC for Services - Issued by the Transformation Cell

  2. GCC for Services document prepared based on: 

  1. The recommendations of the EDs Committee 

  2. Approval of Civil Engineering, Transformation & Legal Directorates with Finance Concurrence and finally by the Railway Board 

  1. Examples of various types of Contracts: 

  1. Service Contracts: Any subject matter of procurement other than Goods or works 

  • Physical maintenance 

  • Housekeeping

  • Professional 

  • Intellectual 

  • Training 

  • Consultancy 

  • Advisory services 


  1.  Works Contracts: The work contemplated for delivery of services as per Drawings & Schedules set forth in the Bid forms & required to be executed according to the specification 

  2. Earnings Contracts: 

  • Operating 4-wheeler / 2-wheeler stands 

  • Publicity on the Platforms / Trains 

  • Running various types of stalls on the Platforms 

  1. SOR stands for Schedule Of Rates 

  2. Two Packet tender - Applicable for - Period of 18 Months and above  

  3. Bidders must not have suffered bankruptcy/insolvency during the last ___ -   5 years 

  4. JV firms participated Tendering process as Bidders:  

  1. Lead Member - Should be holding of ______   -  Above 51 %  

  2. If JV is up to 3 Members, the other member’s share is ______  -   Above 20%   

  3. If JV is more than 3 Members, the other member’s share is _____  -  Above 10 %

  4. If JV with Foreign members, the lead members have to be ______  - Indian   

  1.  QCBS - For consulting services, where the quality of consultancy is of prime concern such as Management counseling, feasibility studies, etc. 

  1.  Stands for Quality & Cost Based Selection 

  2. Applicable for Tenders valued - Rs. 50 Lakhs and above    

  3. The ratio of Quality & Cost is as follows:  










  1.  The bid with the highest weighted combined score (Quality & Cost) shall be selected  

  2. Weightage of Technical parameters i.e., Non-financial parameters in no case should exceed  ______   -  80 %

  1. Eligibility conditions - Work Experience  

  1.  35 % of Advertised Value in the previous 3 FYs and Current FY 

  2. Satisfactorily completed a Similar Single Service Contract (which is specified by the competent authority. ) 

  3. Satisfactorily completed means - Subject to payment of Bills - amounting to at least 35% of the advertised value of the Bid

  4. By Private Individuals  - Not accepted  

  5. By Public listed companies / Private ltd companies / Trusts whose annual turnover is Rs. 500 Crores and above. 

  1. Eligibility - Financial Turnover  

  1. 150 % of  the Bid value in the last 3 FY plus the current year 

  2. Support document: Audited Balance Sheet duly certified by CA with Stamp, Signature & Membership Number 

  3. T2 Liquidity - 5% of estimated Bid value - Access to available liquid assets, Lines of Credit & other Financial means  to meet Cash Flow 

  4. T2 Liquidity -  From Scheduled Banks only 

  5. T2 Liquidity - Net Current Assets + Bank references 

  6. T2 Liquidity - If Current Assets are negative, only Bank references were considered 

  1. Action - In case the submitted documents by the Bidder are found to be False / Forgery  

  1. Before awarding the Contract: Bid is summarily rejected, Forfeit of EMD & other legal action if any 

  2. After awarding the Contract: Forfeit of PG & Dues if any.    

  1. Evaluation of the Financial bids:  

  1. If the two bidders are the lowest and the same:  The bid whose technically more sound will be selected 

  2. If the two bidders are the lowest and same - Financially & Technically: The Bidder whose cumulative Annual Financial Turnover in the last 3 Previous FYs + Current Year shall be considered 

  1. If the Bidder expires - after submission of offer / after acceptance of his offer - Awarding of the Contract is canceled. 

  2. If the Successful L1 Bidder withdraws or fails to sign the Agreement or fails to provide the PG  - May award the Contract to the L2, if he matches the price bid of L1 (subject to ensuring no Cartelization) 

  3.  EMD - Earnest Money Deposit

  • Earnest means – Showing sincere interest/seriousness in participating in the Tender process if awarded executing the Work for Organizations like Indian Railways.


  • EMD – means an earnest payment as a specific form of Deposit to demonstrate that the applicant is serious/sincere to participate in the Tender work and complete the work for organizations like Indian Railways if awarded.

  • Rounded off to the nearest 10 Rupees.  (In case of Works - Rs. 100) 

  • EMD Rates are as follows.

Value of the Work

EMD ( Rounded to the nearest Rs.10)

Up to Rs.1 Crore

2 % of the value of the work 

Beyond Rs. 1 Crore

Rs. 2 lakhs + 0.5 % of the excess of the estimated 

cost of work beyond Rs.1 Crore

  • Maximum EMD is Rs. One Crore only.  

Examples of calculation of  EMD under different circumstances: -


  1. Tender Value of Work  - Rs. 25,60,520

2 % of Rs.25,60,520  - Rs. 51,210

Answer is Rs. 51,210 /-


  1. Value of Work  - Rs. 4,00,00,000 ( Rs. Four Crores)

First one Crore

Rs.2,00,000 (Rs. Two Lakhs)

One Crore to Four Crore ( 3 Crores)

Rs.3 Crores x 0.5 % = Rs. 1,50,000 (Rs.1.5 Lakhs)

For a Value of Rs.4 Crores

Rs.2 Lakhs plus Rs.1.5 Lakhs = Rs.3.5 Lakhs


  1. Value of Work  - Rs. Two Hundred Crores

First one Crore

Rs.2,00,000 (Rs. Two Lakhs)

One Crore to Two Hundred Crore ( 199 Crores)

Rs.199 Crores x 0.5 % = Rs.99,50,000

For a Value of Rs.200 Crores

Rs.2,00,000 plus Rs.99,50,000 = Rs.1,01,50,000.  However maximum Bid Security is Rs.1 Crore.  So EMD is Rs.1,00,00,000/- ( Not Rs.1,01,50,000)


  • EMD is applicable to all modes of Tenders such as Open, Limited, Single, etc.


  • Exemption for Submission of Bid Security as well as the cost of Tender form (Bid)

  1. MSEs registered with: 

  1. District Industries Centres

  2. Khadi & Village Industries Commission 

  3. KVIB - Khadi & Village Industries Board 

  4. NSIC - National Small Industries Corporation 

  5. Directorate of Handicraft & Handloom 

  1. Any other body specified by the Ministry of MSME 

  2. “STARTUPS” by ____________ 

Forfeit of EMD: 

  1. If the successful Tenderer resile/abandon his offer, Or 

  2. Modify the terms and conditions thereof in a manner not acceptable to the Railways or

  3. If the successful tenderer is unable to submit the PG – Performance Guarantee within the validity of time.  


  1. Bid  / Tender - shall be signed by the individual legally authorized to enter into commitments on their (firm) behalf.     

  2. 7 days -  The Bidder whose bid is accepted shall be required to appear in person at the Railways office to execute the Contract document within 7 days after the receipt of notice issued by the Railway that such documents are ready. 

  3. Failure to do so (signing the Agreement) shall constitute a breach of the Agreement - Consequences are 1. Determine that such bidder has abandoned Contract 2. Forfeit of EMD 3. Forfeit of PG - Performance Guarantee 

  4. Contract Document (Agreement) - 3 copies - Signed by the Competent Authority & the Contractor

  1. 1st copy -  Contractor 

  2. 2nd copy - Finance Dept 

  3. 3rd copy - Contract Manager (Executive) 

  1.  Railway Passes - No Railway passes  - to the Contractor & its employees. 

  2. Wherever required, “Authority for entering a restricted area or Authority for on Board Services” shall be provided (like in OBHS - On Board Housekeeping Services) 

  3. PG - Performance Guarantee: 

  1. 10 % of the Contract Value 

  2. 4 separate parts i.e., each 2.5% of the Contract Value 

  3. Due period: 30 days from the LOA 

  4. 60 days - If the Contractor fails to furnish after 60 days from the LOA, a notice will be served to the Contractor to pay the same within 90 days from LOA  

  5. 60th day is Bank Holiday or office closure, the next working should be considered as the last day for submission of PG 

  6. 15% - Penal Interest - 31st day to the Day of submitting PG  

  7. The consequences of failure to submission of PG within 90 days are:  

  • Forfeit of EMD 

  • Forfeit of other dues  

  • Debarrred from participating in re-tender for that work.  

  1.   The decision of the Authority of signing the Contract Agreement is final.  


  1. PG - Variation of the Agreement 

  1. No change in Value of PG -  Up to 25% (Plus or Minus) of the Agreement Value 

  2. Beyond 25% of the Contract Value - Additional PG - 10 % of the Excess value over the Original Contract Value  - in 4 equal parts  

  3. If the Contract value decrease by more than 25% of Original Contract value - PG amounting to 10% of decrease in the Contract Value   - Returned to the Contractor. 


  1. Forfeit of PG  

  • 25 % of PG is forfeit - If the penalty imposed exceeds 50% of the applicable maximum penalty (as per the revised value of the Contract) 

  •  50 % of PG is forfeited - If the penalty imposed exceeds 75 % of the applicable maximum penalty (as per the revised value of the Contract)  

  • The PGs shall be encashed after the completion of the Contract only (not immediately on the date of forfeit of PG) 

  • The logic of submitting PG in 4 equal parts is to make the encashment of the partial PG. 


  1. PG - Submitted in forms of : 

  1. Cash 

  2.  Irrevocable BG - Bank Guarantee 

  3. Govt Securities incl: State loan bonds at 5% below the Market value

  4. Deposit Receipts, Pay Orders, DDs, Guarantee Bonds of SBI or any Nationalised Bank 

  5. Guarantee Bonds/Deposit Receipts of all Scheduled Banks

  6. Post Office Savings Bank Deposit

  7. NSC - National Savings Certificate 

  8. 12 year National Defence Certificate 

  9. 10 year Defence Deposit 

  10. National Defense Bonds 

  11. UTI - Unit Trust Certificate at 5% below Market value or face value which ever is less 

  12. FDR in favour of PFA (free from any encumbrance)

  1. Submission of PG — Between the LOA and Signing of the Agreement.  

  2. PG Validity - Up to Completion Period + Maintenance period, if any + 60 days 

  3. PG Release: 

  • Issue of a Completion certificate issued by the Competent Authority 

  • The passing of the Final bill based on the No Claims certificate from the Contractor 

  • In case, of a warranty/maintenance clause, then 25 % of PG would be retained till the same is over.  

  1.   Risk & Cost:  

  • Whenever the Contract is rescinded, the PG shall be encashed/forfeited. 

  • Balance work/service shall be got done independently without the risk & cost of the failed contractor. 

  • The failed contractor is debarred for a period of 2 years from the date of such rescindment from participating in the bid. 

  1. Force Majeure:  

  • 7 days - Notice period by either of the parties - From the occurrence of war, hostility, acts of public enemy, civil commotion, sabotage, serious loss or damage by fire, explosions, epidemics, strikes, lockouts, or acts of God. 

  • 120 days - a period exceeding, such events - can terminate the Contract by either party.  

  1. Commencement of Service - 15 days - Contractor shall commence after the receipt of order in writing from the Manager (Railway) 

  2. Penalty - Maximum 10 % of the Contract value.  

  3. 24/7  - Round the Clock - The Contractor shall have to carry out any required services as per the directions of the Manager (Railway) 

  4. 5 days - Notify the Railways, if the Contractor receives a request from a Data subject to having access to that person’s Personal Data or a complaint or request relating to IR’s obligations under the Law.  

  5. Extension of Time:  

  • If the new Contract has not been finalized  - care should be taken. (other than Consultancy contracts) 

  • Modification of the Contract  - Extension is not less than one month.  

  •  Delay due to Railways 

  • Delay due to the Contractor: Damages should be levied at the rate of 0.10 % of the Contract value for each week or part of the week. (maximum should not exceed 5% of the Contract value.)  (not the penalty) 

  1. Variations:  

In case Increase in Variations: 

Individual NS item  / Whole








Up to 125 %



Contract signing


125% to 140%

98% of Agmt Rate



Unavoidable to operate fresh tenders only


140% to 150%

96% of Agmt Rate



Unavoidable to operate fresh tenders only


Above 150%

96% of Agmt Rate



Exceptional unavoidable to operate fresh tenders only

Overall Agmt 

Above 150%

Yes (of PFA or PFA(C)


Negotiations with the existing Tenderer


Up to 100%



Contract Signing 

Minor value item is defined as an item whose original agreement value is less than 1% of the total agreement value

In case of a Decrease in Variations: 

Individual NS item  / Whole








Up to  25%



Contract Signing


Beyond 25% 




  • With detailed reasons

  • After obtaining No Claims certificate from the Contractor 

  • Certified that the work proposed to be reduced will not be required in the same work


Up to 25%




  • With detailed reasons

  • After obtaining No Claims certificate from the Contractor 

  • Certified that the work proposed to be reduced will not be required in the same work


Up to 100%



Contract Signing 

Minor value item is defined as an item whose original agreement value is less than 1% of the total agreement value


  1. Variations - SOR (Schedule Of Rates) Items  - The limit of 25% would apply to the value of the SOR Schedule as a whole and not to individual SOR items. However, in the case of NS items, the limit of 25% would apply to NS items irrespective of the manner of quoting the rate (single percentage rate or individual item rate)  

  2. Variations - For Tenders accepted at Zonal Railway level - Variations in the quantities - Approval by the Authority in whose powers the revised value of the Agreement lies. 

  3. Variations - For Tenders accepted by GM, variations up to 125% of the Original Agreement value may be accepted by GM.  

  4. Vitiation: Increase as well as decrease the value of the Contract Agreement - the vitiation shall be on the account of the Contractor  - Payments shall be restricted to the lowest calculated value of all valid offers. 

  5. Contractor’s Claims   - Once every Month. 

  6. Within 7 days - Any objection against Measurements by the Contractor  

  1. Checks while Passing the Bills:  

  • All relevant records are to be certified by both the Contractor and the person nominated by the Railway 

  • Ensure that Gross Minimum wages including ESI, PF, etc are paid as per the actuals by the Contractor to all the workers.  If not, the same will be informed to Regional Labour Commissioner.   

  • Ensure that all the relevant records related to statutory obligations and agreement conditions are submitted by the Contractor for claiming monthly bills 

  • Railways shall upload the details of the Contractor online on the EPFO (Employees Provident Fund Organisation) Portal and cross-verify the same in monthly statements of the Contractor.  

  • The Contractor is required to provide documentary evidence to show the coverage of all her workers or labour under the schemes on an annual basis.  Upon verification of the records by the Railways, payments can be released to the Contractor.  

  1. PVC - Price Variation Clause:  

  • Settled by every quarter 

  • Applicable for Tenders whose period exceeds 18 months.   

  • Exclusions from PVC -  1. Materials supplied free of cost or at fixed cost by the Railways to Contractor 2. Specific payments to the Consultants  (GFR Rule: 225) 

  • Base Month: Month of the opening bids (incl: extension if any) 

  • Base Quarter: Commence from the month following the month of opening the Bid. 

  • Extended Period - PVC:  

  •  Extension granted under Railways Account: (Clause 5.1) - The PVC (increase in the prices) allowed based on the original completion period or the extended period as the case may be.  

  • Extension granted under Contractor’s Account: (Clause 5.2) - The PVC (decrease in the prices) allowed based on the original completion period or the extended period as the case may be. 

Components % - different Service Contracts  

Service Contracts

























  • Fixed Component - 15 % always in all Service Contracts.   

  • Calculation of variation in Labour component 

L = W x Lq-Lb / Lb x Lc/100 


  • L = Amount of price variation in Labour 

  • W= Gross valueof work done 

  • Lq = CPI - Consumer Price Index number for Industrial worker  - All India published in RBI bulletin for the Quarter under consideration

  • Lb = CPI - Consumer Price Index number for Industrial worker  - All India published in RBI bulletin for the Base period.  

  • Lc = Percentage of Labour component  

  1. Production of Vouchers (may be similar to the Book examination clause in Stores Contracts) - Applicable for Service Contracts valuing Rs. 2 Crores and above.  - On-demand, the Contractor has to furnish quotation, invoice, cost of other accounts, book of accounts, voucher, receipt, letter, memorandum, etc  - to verify the cost of execution of work under this contract.   

  1. Legal obligations:  

  • Employing more than 20 workers - obtain the license from the Assistant Labour Commissioner under the Provisions of Contract Labour (Regulation and Abolition) Act, 1970/Rules 1950   

  • The Labour law awareness: 

1. Mandatorily provide comprehensive day-long training by third-party agency for awareness of labour laws among his workers  and submit documentary proof to the Railways

2. Publish a comprehensive booklet (approved by the Railways) in the local vernacular language about all relevant updated labour legislations & rules to every worker.  

  • Provision of Canteen - More than 100 workers 

  • First Aid box - for every 150 contract labour or part thereof 

  • Wages - Before the expiry of 7 days of the last day of the wage period  - less than 1000 workers

  • Wages - Before the expiry of 10 days of the last day of the wage period  -  more than 1000 workers

  • Weekly rest to all the workers on a staggered basis. 

Numbers - Services 




EMD Rounded off

Rs. 10

Performance Guarantee(PG)

10 %

Of Contract Value

Security Deposit


Because PG is 10 % (for works - 5%)

PG - to be submitted within

30 days

PG Delay 31 to 90 days - penalty Interest

15 %

LD - Liquidated Damages -

Shall not exceed

5 %

Of contract value

Two packet tender


Period 18 Months & above

LD exceeds 50 % of the Contract value

25 % of PG forfeit

LD exceeds 75 % of the Contract value

50 % of PG forfeit

PVC - Price Variation Clause applicable

18 months and above duration

Irrespective of value

Fixed Component

15 %

Turnover certificate

150 %

Technical eligibility

One work of 35 %

Value of Tender


18 %

For services (other than Goods and works)

GM's powers of acceptance  - Services contracts

Above Rs.500 cr. (w.e.f 24/3/2023

PHOD/CHOD- Rs.100 cr – Rs.500 cr.

DRM- Rs.20 cr – Rs.100 cr.

LC - Letter of Credit applicable

Rs. 10 Lakhs and above contracts