Differences between Variation & Vitiation

Differences between Variation & Vitiation

Variation of quantities

v  Detailed instructions regarding variation of quantities are available in Clause No.42(4) of GCC – General Conditions of Contracts

v  Variation of quantities  - Increases

	Variation	Rates	Approval	Concurrence	Remarks
Individual items of the contract	100% to 125%	Same rate	No	No
	126% to 140 %	98 % of the rate	S.A.G Officer & above	No	If unavoidable, considering the floating of fresh tenders.  If not practicable, go for reducing rates with the existing agreement.
	141 % to 150 %	96% of the rate
	Beyond 150 %	96% of the rate		Associate finance concurrence required
Overall Agreement value	Beyond 150 %		General Manager	Personal concurrence of FA&CAO/FA&CAO(C)	Through fresh tenders or negotiating with the existing tenderer

v  Variation of quantities – decreases

	Variation	Rates	Approval	Concurrence	Remarks
Individual items of the contract	100% to 75 %	Same rate	Contract signing authority	No
	75 % and below	Same rate	S.A.G Officer & above	Associate finance concurrence required	1.Obtain “No claim certificate” from the contractor. 2.Furnish detailed reasons for such decrease 3.Certified that the work proposed to be reduced will not be required in the same work.
	Beyond 150 %	96% of the rate		Associate finance concurrence required
Overall Agreement value	Beyond 150 %		General Manager	Personal concurrence of FA&CAO/FA&CAO(C)	Through fresh tenders or negotiating with the existing tenderer

v  Foundation Items – No such quantity variation.

v  SOR items – limit of 25 % apply to the value of SOR schedule as a whole and not on individual SOR items.

v  But in case of NS items, the limit of 25% would apply on the individual items irrespective of the manner of quoting the rate (single percentage rate or individual item rate)

v  For the tenders accepted at Zonal Railways level, variations in the quantities will be approved by the authority in whose powers revised value of the agreement lies.

v  For tenders accepted by General Manager, variations up to 125% of the original agreement value may be accepted by General Manager.

v  For tenders accepted by Board Members and Railway Ministers, variations up to 110% of the original agreement value may be accepted by General Manager.

Vitiation

ü  Meaning of Vitiation is invalid or legally defective.

ü  In Railways, Vitiation is change in inter se of contractors due to variation of quantities in the work during the course of execution.

ü  The aspect of vitiation of tender with respect to variation in quantities should be checked and avoided.

ü  Example of Vitiation:

Tabulation of Tenderers of the Work

				A		B		C
Item	Quantity	Rate	Total	%	total value	%	Total value	%	Total Value
X	100	1000	100000	2	102000	1	101000	6	106000
Y	200	50	10000	5	10500	10	11000	5	10500
Z	300	20	6000	10	6600	20	7200	5	6300
Grand total					119100		119200		122800
					L 1		L 2		L 3

                Suppose, during the course of execution of above work, the quantity of Item X may be increased from

              100 to 125.  Then we have to check, whether any vitiation is occurred or not.

				A		B		C
Item	Quantity	Rate	Total	%	total value	%	Total value	%	Total Value
X	125	1000	125000	2	127500	1	126250	6	132500
Y	200	50	10000	5	10500	10	11000	5	10500
Z	300	20	6000	10	6600	20	7200	5	6300
Grand total					144600		144450		149300
					L 2		L 1		L 3

ü  Due to change in the quantity of X item, the inter se of Contractors has changed and L1 (at the time of awarding contract) is now become L 2 and vice versa.  This is called Vitiation of the Agreement.

ü  Tenderer should be advised to quote a common percentage below/above for SSR items as well as for NS items. Such a common percentage of rates will facilitate quicker evaluation of tender and its finalization. Besides, the possibility of vitiation of tender as a result of variations in quantities of different items will also be eliminated.

ü  In case of vitiation of the tender (both for increase as well as decrease of value of contract agreement), sanction of the competent authority as per single tender should be obtained.

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PAC - Public Accounts Committee

Public Accounts Committee - PAC

                                   

v  Shortly or popularly called as PAC.

v  It is one of the Standing Parliamentary committees in India. Hence it is under the control of Speaker of Lok Sabha.

v  The term of office of PAC members is one year only.

v  Total Members should not be more than 22.  (15 Members were from Lok Sabha and 7 Members were from Rajya Sabha)

v  None of the above members shall be a Minister of Government.  If a Member after his election to the PAC is appointed a Minister, he ceases to be a member of the Committee. 

v  The Chairman of PAC is appointed by the Speaker amongst its members of Lok Sabha. Since 1967, the Chairman of the PAC has been a member of Opposition.  This practice has been continued since then, though it is not mandatory.

v  Functions of PAC

1. Examination of the Appropriation Accounts relating to Railways, Defense Services, P & T Dept and other civil ministries of Central Government.

2. Examination of Reports of CAG on the above Appropriation Accounts.

3. Examination of CAG Report on Revenue Receipts of Government of India.

4. That the money shown in the Appropriation accounts as having been disbursed were legally available for and, applicable to the service or purpose to which they have been applied or charged.

5. That the expenditure conforms to the authority which governs it.

6. That every re-appropriation has been made in accordance with the provisions made in this behalf under rules framed by competent authority.

v  Normally all the recommendations of the PAC are implemented by the Government.

Working of the PAC:

v  The representatives of the Ministries like Railways, Defense etc appear before the PAC when examining the Accounts and Audit (CAG) reports relating to their ministries.

v   The committee proceeds by way of INTERROGATION of witnesses.  The CAG is the "friend, philosopher and guide of the PAC" while attends the sittings of the Committee and assists it in its deliberations.

v  The Committee may appoint one or more Sub-Committees/groups to examine any particular matter.

Govt's Action on PAC recommendations:

v  Stages  are  1. Action taken Notes  2.  Action taken Report  3. Action taken Statement.

v  1. Action taken Notes:  Govt take action on the recommendations of the PAC and submit ACTION TAKEN NOTES to the Committee.

v  2.Action taken Report:  The PAC then present ACTION TAKEN REPORT after considering the views of Government.

v  3. Action taken statement:  The Government further submit an "Action Taken Statement on the action taken by the Government on the Action Taken Report of the committee.  Action taken Statement is generally laid before the House without any further examination by the PAC. 

v  Normally, almost all the recommendations of the Committee are implemented by the Government.

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