PG & APG in Works - Simple Calculation

Click for ACS 11 (introduction of APG)

 PG & APG in Works - Simple calculation 

95 is the safety line; below it APG joins

Example: Advertised Tender value = Rs. 100

Successful Bidder’s offer is	PG	APG	Total PG
Rs. 95 & above	5 %	Nil	5 %
Below Rs. 95	5 %	5 %	10 %

Authority: New Para 16 (4) (h) of Part II of IR Standard GCC - General Conditions of Contract for Works April 2022 Edition vide ACS 11 vide Railway Board Letter dated 13.03.2026

PG stands for Performance Guarantee & APG stands for Additional Performance Guarantee

PG & APG are calculated on the Original Contract Value (Accepted Bid Value), not on Advertised Tender Value.

95 or above → Only PG (5%)

Below 95 → PG (5%) + APG (5%)  

GCC for Works 2022 April - Correction Slip - ACS 11 of March, 2026

 

Click for ACS 11 to GCC for Works 2022 April

ACS No. 11 to the Indian Railways Standard General Conditions of Contract (GCC), April-2022, issued by Railway Board on 13-03-2026 and applicable prospectively to Works Contracts of Indian Railways.

Below is the item-wise explanation, clearly indicating what existed earlier and what is newly modified.

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1. Bid Security (Para 5(1)(a) – Part-I of GCC-2022)

Existing Provision

Earlier, Bid Security depended on the value of the work. If the estimated cost of work was up to ₹1 crore, the bidder had to submit 2% of the estimated cost as Bid Security. For works above ₹1 crore, the Bid Security was calculated as ₹2 lakh plus 0.5% of the amount exceeding ₹1 crore, subject to a maximum limit of ₹1 crore.

Modified Provision

The revised rule simplifies the structure. For all works, irrespective of value, Bid Security will be 2% of the estimated cost of the work. The complicated formula linked to the ₹1 crore threshold has been removed.

Other Provisions (unchanged but reiterated)

• Bid Security must be rounded off to the nearest ₹100.

• Start-ups recognised by DIPP (Department for Promotion of Industry and Internal Trade) are exempt from Bid Security.

• Labour Cooperative Societies need to submit only 50% of the Bid Security.

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2. Sub-contracting Limit (Para 7(a)(i) – Part-II of GCC-2022)

Existing Provision

Earlier, the rule stated that the total value of work assigned to sub-contractors should not exceed 50% of the total contract value.

Modified Provision

The rule is now made stricter and more structured.

• Sub-contracting is limited to a maximum of 40% of the contract price.

• The contractor must execute at least 60% of the contract value directly under its own supervision and personnel.

Additionally, the revised provision clarifies that procurement of materials, hire of equipment, or engagement of labour by the contractor will not be treated as sub-contracting.

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3. Performance Guarantee (Para 16(4) – Part-II of GCC-2022)

Existing Provision

Earlier, the successful bidder had to submit Performance Guarantee equal to 5% of the original contract value. One of the forms permitted was an Insurance Surety Bond, but this option was allowed only when the Date of Completion (DOC) was within 36 months. If the completion period exceeded 36 months, another form of security had to be submitted.

Modified Provision

The revised rule retains 5% Performance Guarantee, but adds important clarifications:

• Additional Performance Guarantee may also be required as per clause 16(4)(h).

• If the Date of Completion is extended, the contractor must submit extended Insurance Surety Bond / fresh Insurance Surety Bond / fresh Performance Security before expiry of the existing bond.

Thus, the emphasis is now on continuity and validity of security during extensions of contract period.

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4. New Clause – Additional Performance Security for Abnormally Low Bids (Para 16(4)(h))

Earlier Position

There was no explicit clause dealing with additional security when a bidder quoted unusually low rates.

New Provision

A new rule has been introduced.

If a bid is accepted at rates below the advertised tender value, the bidder must submit Additional Performance Guarantee (APG).

Structure of APG:

• Bid quoted between 0% to 5% below advertised value → No additional security

• Bid quoted more than 5% below advertised value → Additional Performance Guarantee of 5%

This provision is intended to discourage abnormally low bids and protect project execution risk.

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5. Bid Capacity Eligibility (Annexure VI)

Existing Provision

Earlier, this rule applied only to tenders with advertised value above ₹20 crore. In such cases, bidders were required to demonstrate available bid capacity equal to or greater than the bid value.

Modified Provision

The threshold has been reduced from ₹20 crore to ₹10 crore.

Now, for tenders above ₹10 crore, bidders must prove available bid capacity equal to or greater than the tender value.

This change expands the financial capacity check to a larger number of works contracts.

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6. Illegal Gratification / Ethical Practices (Para 18(1))

Existing Provision

Earlier, the clause simply stated that if the contractor offered bribes, commissions, gifts, or undue advantage to Railway officials, the contract could be rescinded and losses recovered.

Modified Provision

The rule has been expanded into a detailed “Code of Integrity in Procurement” covering several prohibited practices. These include:

• Corrupt Practice – offering or accepting bribes or rewards.

• Fraudulent Practice – false information or misrepresentation in tendering.

• Anti-competitive Practice – bid rigging, cartelization, or collusion.

• Coercive Practice – threats or pressure affecting procurement decisions.

• Conflict of Interest – relationships affecting impartial decision-making.

• Undue Advantage – misuse of confidential information.

• Obstructive Practice – interfering with investigation or audit.

This significantly strengthens procurement ethics and transparency provisions.

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7. Punitive Provisions for Violation of Code of Integrity (Para 18(2))

Existing Provision

Previously, the rule mainly stated that if the contractor had monetary dealings with Railway employees, the Railway could cancel the contract and recover losses.

Modified Provision

The revised rule introduces detailed punitive measures if integrity violations are detected.

Possible actions include:

• Forfeiture of Bid Security

• Cancellation of contract

• Recovery of payments including advances with interest

• Debarment or banning from future tenders for at least one year

• Reference to Competition Commission of India in anti-competitive cases

• Initiation of disciplinary or criminal proceedings

This converts the earlier clause into a comprehensive penalty framework for procurement misconduct.

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✅ In summary, the Correction Slip mainly introduces:

• Simplified Bid Security rule (2% for all works)

• Stricter limits on sub-contracting (40%)

• Provision for Additional Performance Security for low bids

• Lower threshold for bid capacity check (₹10 crore)

• Detailed integrity and anti-corruption provisions with penalties

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Completion Reports - Works Contracts

 

Completion Reports

•  Source: 17th Chapter of Engineering Code   

• At the time of closing of Construction works, any items which were in progress should be completed and the accounts of the Project should be closed as soon as possible.  

• The Project Engineer should therefore take prompt action as follows:

1. To bring into account all charges and credits pertaining to the Project. 

2. Take steps to liquidate all outstanding liabilities.

3. Clear Suspense balances.

4. Pay up outstanding Contractor’s claims

5. Dispose of all surplus stores and tools and plants returned from work. 

6. After all charges and credits relating to the Project have been booked in the accounts of the Project, a CR - Completion report of the Project should be prepared. 

 

Objects:  

1. To compare the cost of work actually constructed with those provided in the last sanctioned estimate. 

2.  To close the accounts of the work. 

3.  To serve as a lesson to prepare the estimates for similar future works more realistically.

4.  To regularise the excess over-sanctioned estimate

5.  To transfer the expenditure reported in CR to Open Line through TWFA

• Details: It should state the expenditure in the same details as the abstract estimate sanctioned by the Railway Board and should indicate any material modifications thereto. 

• Verification: By Accounts Officer

• Submitted to:  Railway Board

• Target: Within 18 months from the end of the financial year in which the completion estimate is submitted. 

• Example:  Suppose the Completion estimate is sanctioned in June 2018.  The end of the Financial year is March, 2019. Hence the due date for submission of Completion Report is 18 Months from March, 2019 i.e., September, 2020. 

 

•  Addl information in CR:  Any other information as would in the opinion of the Railway administration be of interest to the Railway Board. 

 

• Form E. 1706

COMPLETION REPORT FOR THE WORK................

Particular Heads of Account and Description of works	Amount of Estimate with reference to authority for sanction	Actual Expenditure	Difference		Remarks & Explanations
			Excess	Saving

• Explanations: 

1. Excesses:  Not less than 10 % or Rs. 25000 whichever is less over the Estimate  - Sub work wise. 

 

2. Savings: Not less than 20 % or Rs. one Lakh whichever is less over the Estimate  - Sub work wise. 

• If variations are within 5 % of the Sanctioned Estimate, the respective Engineer is authorised to approve CR behalf of GM.  

 

• CR of New Railway Lines:   Accompanied by a Comparative statement showing the literal prospects of the line as anticipated and updated with ref to the Completion Cost. While working out, the changes that happened for the estimate of Earnings up to the date should have been taken into account while working out the financial prospects. 

 

• CR of Works costing less than Rs. One Crore

1.  Should be considered as completed when it funds the purpose for which it when sanctioned, was intended,

2. and when there has been no expenditure thereon for 3 months thereafter. 

3. All outstanding debits and credits - as a rule adjusted in the account of work within 3 months of the date of completion. 

4. The account of a completed - should be closed 6 months after the date of completion and CR should be drawn.

5. CR should be prepared in the same work as that for works costing over Rs. One Crore. 

6. Explanations:  Excesses and Savings - 5% or Rs.10000 whichever is less.  

7. Should be submitted within 6 months of the Completion of the Work.  

8. No expenditure is recorded for 3 consecutive months - Accounts officers should call for the CR. 

9. Uncompleted Works - The executive officer should advise the Accounts Officer of the probable dates of completion and submission of the completion reports.

10. Abnormal delay in the submission of reports by the executive officers should be brought to the notice of the Head of the Railway Administration by the accounts Officer.

• Sanctioning of CR: 

1. The authority who accorded the Administrative approval to the work for information or regularisation. 

 

2. Structural & Track Renewal works or Works costing over Rs.2.5 Crores included in the Budget with prior approval of Railway Board or Out of Turn works sanctioned with the administrative approval of Railway Board being beyond the GM’s powers         -   GMs  

 

3. Where Material modification involved or beyond the GMs powers  - Railway Board.  

Accounts verification: 

1. Check that the CRS have been prepared in the proper form

2. Check the entries with the particulars of sanction and  booked outlay. 

3.  Correctness of postings of all final bills in the CR

4. Test checking the correctness of a percentage of other items. 

5. Satisfactory explanations for excesses and savings. 

6. Unused materials are returned to Stores or  transferred elsewhere and the account of work credited with their value. 

7. CRRM - Credits for the Railway Released Materials provided in the estimate - adjusted against the work or not

8. Verification Certificate should state the authority competent to sanction the outlay in the Report. 

Completion Statements: 

• In case of works - Expenditure on such works is within the competence of the Head of Railway to sanction.  Formal CR on the prescribed form need not be prepared. 

• All information required in CR, the Accounts officer certificate and the sanction of the competent executive authority may be recorded in the Works Registers under the relevant columns. 

• E1744 - Completion Statement

1. Reference to estimate.

2. Amount of sanctioned estimate.

3. Actual expenditure as finally booked.

4. Brief explanation of excess or saving. 

Problems facing drawal of CRs

1. Works Registers not being up to date

2. Old works –no Records

3. Final Bills yet to be passed

4. Adjustments pending

5. No Funds

6. Arbitrations and Disputes

7.  Lethargy and Slackness

8.  No adequate  monitoring at higher levels

9.  Frequent changes in staff/Jurisdictions 

10.  Lack of interest & guidance

11.  Large variations in Cost and Sanctions

12.  Non-realisation of Credits 

13.  Vigilance Cases/Audit Objections

14.   Mobilisation Advance remaining unrecovered 

15.  Compensation for land acquisition not finalised in courts

Suggestions: 

1. Reconciliation of Works Registers with the records available in the Accounts Office. 

2.  Draw up provisional CR in case any Arbitration case is pending or balances lying under MAS or MAC (Risk & Cost) 

3. Submission of Part CRs to the coordinating Dept for inclusion in the General CR. 

4. Finally, after the sanction of Competent Authority is obtained, action is to be taken to write to Sr.EDPM to close the work code, for stopping further printing of Works Register.

• accounting and financial principles envisage that the accounts of the completed works should be closed as expeditiously as possible so that the housekeeping in both the Accounts and Executive Departments will be in order.

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