Budget Order & Expenditure Order

 Budget Order: 

• Order by means of which was voted by Parliament & approved by President, communicated by Railway Board & Zonal Railway. 

Expenditure Order: 

• When orders are issued by the Railway Board authorising the Railway administrations to incur expenditure to a certain extent over and above the allotment sanctioned for them, they should be taken as Expenditure Order as distinct from “Budget Order”

Productivity Test or Review (Post Appraisal)

 Productivity Test / Review

 

·         Source: Chapter 2 of Indian Railway Finance Code

 

·         Also called as Post appraisal

 

·         Object: 

1. To compare the earnings or savings in working expenses  eventually realized after the new expenditure (capital) has fructified with that anticipated when the proposal was embarked upon.  

2.  That means to ensure that the estimated return at the time of proposal has attained or not.

3. Not only to furnish information as to the results actually achieved to the authority who sanctioned the expenditure but also to serve as a lesson for the future.

 ·         Applicable for all Major works.

 ·         Conducted by Financial branch.

 ·         Separate records of expenditure & earnings related to the selected works (for Productivity Test) have to be maintained by the Accounts officers. So that the Productivity Test can be conducted as soon as it falls due.

 ·         Additional earnings and working expenses   - computation should be done at the project estimate stage.

 

·         To avoid the changes in prices due to escalation – comparison in terms of physical units or throughput i.e., class wise passenger traffic & commodity wise Goods traffic may be carried out.

 

·         New Lines – A statement showing the financial results of its working in specified Form (F 244) should reach the Railway Board not later than 31st December

• Accompanied by a covering memorandum in which brief explanations should be given of important variations between the actual realization and the estimated earnings.

• Also a Note by the GM indicating how the actual net cash flow compares with what was estimated at the project stage.

• Also bring out the probable traffic prospects of the line in the 6th and the  11th year of opening.

 

• Open Line works - Such Tests applied within five to seven years of their completion.

• Selection will be made out of these works sanctioned (and/or charged to Capital) on grounds of remunerativeness.

• All such works costing over Rs. 1 crore will invariably be subjected to this test.

• The result of the test should be reported by the General Managers to the Railway Board.

• Works costing between Rs. 20 lakhs and Rs.1 crore charged to Capital and sanctioned by the General Manager within his powers 'of sanction  - Selection will be made by GM in consultation with PFA. 

• Productivity review  will be conducted for  Works costing above Rs.10 Lakhs - chargeable to DF. Though ROR is not mandatory for execution of those works.  

• The fact that productivity tests are to be applied to a particular work should be intimated to the authorities entrusted with its execution as also to the Accounts and Audit officers.

• Maintenance of Register with the following particulars. 

1. Reference to sanction of the estimate.

2. Brief particulars of work 

3. Total estimated expenditure

4. Nature and extent of "productivity" claimed in the estimate.

5. When the test or review is to be applied

6. Brief remarks about the results of the test or review.

• Review of Register - Half yearly

• PFA should submit a report embodying the results of the test or review to the GM. 

• Works selected by the Railway Board - The GM will submit the PFA’s report to the Board with his own comments.  The object of these reports is not only to furnish information as to the results actually achieved to the authority who sanctioned the expenditure but also to serve as a lesson for the future.

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Differences between GCC of Works and Services

Inputs by Shri Afzaluddin, Sr.AFA/SCR

Differences between GCC of

SN	ITEM	WORKS	SERVICES
1	EMD rounded to	Rs. 100	Rs.10
2	EMD of successful tenderer	Retained as SD	Returned to the tenderer after submission and verification of prescribed PG (Because SD is not applicable)
3	EMD exemption	MSME & Start-ups registered with DIPP	Start-ups registered with DIPP only
4	PG - % of Contract value	5 %	10 %
5	Submission of PG	Within 21 days from LOA	Within 30 days from LOA
6	Penal interest for delayed PG	12 % from 22nd day to 60 days	10 % from 31st day to 90 days
7	Termination of Contract on failing of PG submission	After 60 days from LOA	After 90 days from LOA
8	SD	5%	Nil
9	LD – Liquidated Damages	0.5 % of 1 % of Contract value for each week or part of the week	Shall not exceed 5 % of Contract value plus token penalty
10	Forfeiture of PG	No link with LD	LD exceeds 50 % - 25 % of PG to be forfeited LD exceeds 75 % - 50 % of PG to be forfeited
11	Vitiation	Sanction of Competent Authority as per Single Tender to be obtained. However 1. up to 50 Lakhs – 10 % Vitiation permitted 2. Above 5 Lakhs – 5 % Vitiation permitted	Payment shall be restricted to the lowest calculated value of all valid offers
12	Two packet system	Above Rs. 10 Crores Tenders	Above Rs. 50 Lakhs tenders
13	PV Clause	Above Rs. 5 Crores	More than 18 months contract – irrespective of its value
14	PV clause	Labour component – 20 %	Labour component – 70 %
15	Technical eligibility	In the last 7 years 1 work – 60 % of value 2 works – 40 % of value (each) 3 works – 30 % of value (each)	In the last 3 years 1 work – 35 % of value
16	Technical Eligibility	Rs. 50 Lakhs and above Tenders	All works
17	Bonus for early completion	1 % for every 30 days	Nil
18	Contractor’s Measurements	Above Rs. 20 Crores works	Not applicable
19	Tendering through	IREPS	GeM
20	GCC issued by	Civil Engineering Directorate	Transformation Cell ( Mech & EnHM Directorates)
21	GST	12 % on composite supply	18 % for services other than Goods/Works

 

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GCC for Works latest one July 2020

Click for latest version of GCC for works 2020 July

GCC 2020 with changes highlighted by Red colour. Thanks to Shri Afzaluddin, Sr.AFA/SCR

Material At Site

Material At Site A/c – M A S

·         Source: 1436 Engineering Code

·         It is one of the Suspense heads operated on erstwhile Demand No. 16

·         M A S A/c records the stores obtained for specific works.

·         MAS A/c shown as last but two column in the Works Register.  (Last column is Total Charges, Last but one column is value of material recd in advance of payment to contractors, last but third column is Advance payment for supply of materials)

·         For materials obtained for specific works, received at the site of the work and not immediately consumed on the works should be temporarily held at charge of a sub-head of work under “Material-at-Site Account” in the Register of Works.

·         Material obtained for specific works should be kept outside the accounts of any other category of stores. Such material, be deemed to be “Material At Site”

·         MAS A/c – To be maintained for works valuing Rs. One lakh and for Track Renewal works valuing Rs. 3 Lakhs.

·         Maintained by Executive in charge of the work.

·         Custody of Materials under MAS – either under the custody of the in charge of Work or kept in Engineering Stores Depot under the custody of DMS/DSK

·         Minus Issues: Releasing material from works and Material so issued, but found subsequently to be surplus. (Not as Receipts)

·         Minus Receipts : Material returned to Stores or transferred to other works. (not as Issues)

·         Executive is responsible for 1. Daily numerical record 2. Monthly return

·         Accounts Officer is responsible for All final adjustments of MAS transactions in the Works

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Numbers Numbers Numbers

Numbers - Works

Item	Number	Remarks
Bonus for early completion of work	Rs. 20 Crores and above works
Contractor's Measurement Book - CMB	Rs. 20 Crores and above works
Two Packet system	Rs. 10 Crores and above
PMC - Project Maintenance Consultancy	Rs. 10 Crores and above
Technical Eligibility Applicable	Rs. 50 Lakhs and above works
Price Variation Clause	Rs. 50 Lakhs and above
Direct Acceptance of Tenders	Up to Rs. 50 Lakhs	TC not required
Departmental charges (for Deposit works)	12.5 %
Umbrella works - Approval by GM	80% of cost
Umbrella works - Sanction by GM	Up to Rs. 2.5 Crores
Tender Notice Period for works  more than Rs. 2 Crores	30 days
Normal Tender Notice Period for works	30 days
Tender Notice Period -  works up to Rs. 1 Crore by CAO/DRM	21 days	Through IREPS only. Concurrence not required
Tender Notice Period -  works up to Rs. 1 Crore by CAO/DRM	14 days	Through IREPS only. Concurrence required
EMD rounded off	Rs.100
PG - Performance Guarantee	5%	Of contract value
PG - to be submit within	21 days
PG Delay 22 to 60 days - penalty Interest	12 %
Security Deposit	5 %	Of Contract value
LD - Liquidated Damages	0.5 % of 1 % of Contract value	For each week or part of the week
Vitiation permitted	Up to 10 %	Works valued less than Rs. 50 Lakhs
Vitiation permitted	Up to 5 %	Works valued Rs. 50 Lakhs and above
Turnover	150 % of Advertised Tender value	In Last 3 years
Technical Eligibility	60% of Tender value	1 work in last 7 years
Technical Eligibility	40% of Tender value	2 works in last 7 years
Technical Eligibility	30% of Tender value	3 works in last 7 years
Bonus for early completion of work	1 % for every 30 days	Maximum 3 %
GST	12 %
OOT - Out Of Turn Works	Up to Rs. 2.5 Crores	All Plan Heads (Except 5200)
OOT - Out Of Turn Works	Up to Rs. 1 Crore	Plan Head 5200 - Staff Amenities
OOT - Out Of Turn Works	Up to Rs. 10 Lakhs	Plan Head 4100 M & P
OOT - Out Of Turn Works	Rs. 25 Crores	Annual Ceiling for other than Safety Works
OOT - Out Of Turn Works	Rs. 50 Lakhs	Annual Ceiling for M & P (PH 4100)
OOT - Out Of Turn Works	No limit	Annual Ceiling for Safety Works
GM's Powers - Consultancy contracts	Up to Rs. 10 Lakhs per case
LC - Letter of Credit applicable	Rs. 10 Lakhs and above works
Material Modification applicable	Rs. 1 Crore and above works	Railway Board works only

Numbers - Services

Item	Number	Remarks
EMD Rounded off	Rs. 10
Performance Guarantee(PG)	10 %	Of Contract Value
Security Deposit	Nil	Because PG is 10 % (for works - 5%)
PG - to be submit within	30 days
PG Delay 31 to 90 days - penalty Interest	10 %
LD - Liquidated Damages - Shall not exceed	5 %	Of contract value
Two packet tender	Rs. 50 Lakhs and above
LD exceeds 50 % of Contract value	25 % of PG forfeit
LD exceeds 75 % of Contract value	50 % of PG forfeit
PVC - Price Variation Clause applicable	18 months and above duration	Irrespective of value
Labour Component	70 %
Turnover certificatet	150 %
Technical eligibility	One work of 35 %	Value of Tender
GST	18 %	For services (other than Goods and works)
GM's powers - Services contracts	Up to Rs. 100 Crores
LC - Letter of Credit applicable	Rs. 10 Lakhs and above contracts