NTPC R&R Colony, Darlipali NTPC Bhadla NTPC Kudgi

NTPC Contracts
Manual
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Contracts Manual of NTPC

Contracts Manual of NTPC is divided into following Chapters:

(i) Chapter-1 : Introduction
(ii) Chapter-2 : Bidding Systems and Mode of Procurement
(iii) Chapter-3 : Consultancy Contracts
(iv) Chapter-4 : Pre-NIT Activities
(v) Chapter-5 : Bidding Documents
(vi) Chapter-6 : Invitation for Bids
(vii) Chapter-7 : Receipt and Opening of Bids
(viii) Chapter-8 : Evaluation of Bids and Contract Award
(ix) Chapter-9 : Post Award Activities

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Chapter-1 : Introduction

Objective of Manual
“The objective of this manual is to provide broad guidelines for procurement for all procurement units of NTPC
so as to ensure the availability of the required equipment/material, works and services in the right quality and
quantity at the right time and at the right price after giving fair and equal chance to bidders, subject to the
guidelines laid down herein, so as to obtain the optimum value for each unit of expenditure”

 Basic Aims of Procurement – Five R’s of Procurement

(i) Right quality

(ii) Right quantity
(iii) Right price
(iv) Right time and place
(v) Right source.

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Chapter-1 : Introduction

Fundamental Principles of Public Procurement

 Transparency principle
 Professionalism principle
 Broader obligations principle
 Extended legal principle
 Public accountability principle.

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Chapter-1 : Introduction

Standards (Canons) of Financial Propriety

 Every employee should exercise the same vigilance in respect of expenditure incurred from public moneys
as a person of ordinary prudence would exercise in respect of expenditure of his own money.

 The expenditure should not be prima facie more than the occasion demands.

 No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or
indirectly to its own advantage.

 Public moneys should not be utilized for the benefit of a particular person or section of the community, unless

• Amount of expenditure is insignificant.

• A claim for the amount would be enforced in a Court of Law.
• Expenditure is in pursuance of a recognized custom or policy.
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Chapter-1 : Introduction
Legal Aspects Governing Public Procurement
A public procurement professional is expected to be generally aware of the implications of following basic laws
affecting procurement; however, he or she is not expected to be a legal expert.

 The Constitution of India;

 Indian Contracts Act, 1872;
 Arbitration and Conciliation Act, 1996 read with The Arbitration and Conciliation (Amendment) Act, 2015;
 Competition Act, 2002 as amended with Competition (Amendment) Act, 2007;
 The Information Technology Act, 2000 (IT Act, regarding e-procurement and e-auction, popularly called
the Cyber Law);
 Right to Information (RTI) Act 2005;
 Central Vigilance Commission Act, 2003;
 Delhi Special Police Establishment Act, 1946 (DSPE – basis of the Central Bureau of Investigation);
 Prevention of Corruption Act, 1988;
 Code of Criminal Procedure, 1973 (Sections 195(1) and 197(1))
 Various labour laws applicable at the works’ site
 Various building and safety acts, codes, standards applicable in the context of the scope of work; and
 Various environmental and mining laws, codes, standards applicable in the context of the scope of work.

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 Chapter-1 : Introduction
 The Basic Principles of undertaking works
(i) No new works should be sanctioned without
a) Careful assessment of the assets or facilities already available and time and cost required to complete
the new works.
b) A concept plan/ preliminary drawing have been approved by the Authority competent to accord
sanction.
(ii) No project or work will be split up to bring it within the sanctioning powers of a lower authority.
(iii)The construction period and sanctioned cost stipulated in the sanction of Project will not be exceeded as
far as possible.
(iv)The competent financial authority granting administrative approval should be kept informed of the physical
and financial progress of the work till their completion through regular periodical reports.
(v)Subject to the observance of these general rules (Rule 130 – 141, GFR, 2017), the initiation, authorization,
procurement and execution of works shall be regulated by detailed rules and orders issued by NTPC.

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Chapter-1 : Introduction

No works shall be commenced, or liability incurred in connection with it until:-

 Feasibility Study Report / Detailed Project Report (DPR) has been prepared
 Administrative approval (A/A) has been obtained
 Expenditure Sanction / Investment approval to incur expenditure has been obtained from the competent
authority.
 Technical approval has been obtained of the detailed and coordinated design of all the Architectural, Civil,
Electrical, Mechanical, and any other services included in the scope of the sanction and of the Detailed Cost
Estimates containing the detailed specifications and quantities of various items has been prepared.
 Funds to cover the work, have been provided by competent authority.
 Tenders have been invited and processed in accordance with rules.
 Award of work and execution of Contract Agreement.

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Chapter-1 : Introduction

Other Guidelines

 Make in India
It is the policy of the Government of India to encourage 'Make in India' and promote manufacturing and
production of Goods and Services in India.

 Benefits to MSEs
Micro and Small Enterprises (MSEs) are eligible for various benefits in procurement of Goods and Services by
Government entities/ Public Sector Enterprises, which are as under

 Issue of tender documents free of cost

 Exemption from payment of Earnest Money Deposit (EMD)
 Purchase Preference to MSEs.
 25% of total annual purchases of products or services from MSEs.
 358 items are reserved for exclusive purchase from MSE sector.
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Chapter-1 : Introduction

Other Guidelines
 Fraud Prevention Policy

The “Fraud Prevention Policy” has been framed to provide a system for detection and prevention of fraud,
reporting of any fraud that is detected or suspected and fair dealing of matters pertaining to fraud.

The policy applies to any fraud and is applicable on

 All employees of NTPC
 Vendors
 Suppliers
 Contractors
 Consultants

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Chapter-1 : Introduction

Other Guidelines
 Integrity Pact

 The pact essentially envisages an agreement between the prospective contractors/ bidders and the
Procuring Entity, committing the persons/ officials of both sides, not to resort to any corrupt practices in any
aspect/ stage of the contract.
 Only those contractors/ bidders will be considered competent to participate in the bidding process who
commit themselves to integrity pact.

 Independent External Monitors (IEMs)

 IP would be implemented through a panel of Independent External Monitors (IEMs), appointed by the
organization in consultation with Central Vigilance Commission

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Chapter-1 : Introduction

Other Guidelines
 Land border sharing guidelines

 Any ‘Bidder from a country which shares a land border with India’, will be eligible to bid in a tender provided
the bidder is registered with the Competent Authority.

 Any bidder (including bidder from India) having specified Transfer of Technology (ToT) arrangement with an
entity from a country which shares a land border with India, will be eligible to bid only if the bidder is
registered with the same competent authority.

 Requirement of registration will not apply to bidders from those countries to which the Government of India
has extended lines of credit or in which the Government of India is engaged in development projects.

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Chapter-1 : Introduction

Other Guidelines
 Debarment of Business Dealings
 The objective of this act is to deter the Bidders/Contractors to indulge in unethical practices or violation of
Contractual obligations and to bring uniformity in the debarment process throughout the company.

 Conflict of Interest among Bidders

 A bidder shall not have conflict of interest with other bidders.

 Such conflict of interest can lead to anti-competitive practices to the detriment of NTPC’s interests.
 The bidder found to have a conflict of interest shall be disqualified.
 Consideration of Indian Agents etc

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Chapter-1 : Introduction

Other Guidelines
 Consideration of Indian Agents

 In a tender, either the Indian agent on behalf of the Principal/OEM or Principal/OEM itself can bid but both
cannot bid simultaneously for the same item / product in the same tender.

 If an agent submits bid on behalf of the Principal / OEM, the same agent shall not submit a bid on behalf of
another Principal / OEM in the same tender for the same item / product.

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Chapter- 2 : Bidding Systems and Mode of Procurement
 Types of Tendering
 Open Tendering
In case of open tendering, Invitation for bids is published on tender website and on various other portals as
per the guidelines/circulars issued by Policy Group of Corporate Contracts & Materials Department in this
regard and all the parties are given equal opportunity to submit their bids
» ICB
» DCB

 Limited
 Limited Tendering is a restricted competition procurement, where a preselected list of bidders, are
directly approached for bidding

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Chapter- 2 : Bidding Systems and Mode of Procurement
 Types of Tendering
 Single Tender
 In case of a Single Tender, bid is invited only from one Bidder.
 Finalization of award on a Contractor using this method does not provide the benefit of competition in
terms of quality and price therefore, it is adopted only under special circumstances.

 Quality-cum-cost based Selection (QCBS)

 This method aims to strike a balance between the quality of the services or goods provided
and the cost of obtaining them.

 Enlistment, Bulk Tendering / Rate Contract

 Enlistment is the process of finalizing the approved vendor list through Pre-Qualification Requirement and
open advertisement.
 After completion of enlistment through this process, procurement can be done through Limited Tender
enquiries to all eligible enlisted vendors.

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Chapter- 2 : Bidding Systems and Mode of Procurement
 Types of Tendering

 Bulk Tendering / Rate Contract

The works which are common to many stations/projects can be procured through Bulk Tendering / Rate
Contract.

 Committee mode of Procurement, Sundry Requirement, repeat orders

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Chapter- 2 : Bidding Systems and Mode of Procurement

 Types of Contracts:
 Lumpsum Contract
 This form of Contract is used for work in which contractors are required to quote a lump sum price figure
for completing the works in accordance with the given designs, specifications, and functional
requirements

 Item Rate (Unit Rate) Contract

 For item rate tenders, contractors are required to quote the rate for each individual items of work based
on Bill of quantities (BOQ) in the Bid Documents
 Reasonable variations in quantities can be allowed during the execution in terms of the contract.

 Percentage Rate Contract

 For percentage rate contract, the contractors are required to quote rate as overall percentage above or
below the total estimated cost.

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Chapter- 2 : Bidding Systems and Mode of Procurement
 Types of Contracts

 Piece Work Contract

 Piece Work Contract is to be used mainly in following cases
 In exceptional cases, in which it is necessary to start the work in anticipation of formal acceptance of
contract, an agreement on piece work contract may be drawn.
 The contract may be cancelled as soon as regular contract is signed.

 Engineering Procurement & Construction (EPC) Contracts

 The Engineering, Procurement and Construction (EPC) approach relies on assigning the responsibility for
investigations, design, supply and construction to the contractor for a lump sum price determined through
competitive bidding.

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Chapter- 2 : Bidding Systems and Mode of Procurement
 Types of Contracts
 Procurement of Capital Goods/ Equipment

 Annual Maintenance Contract

 For trouble-free service of equipment NTPC may enter a maintenance contract.
 Maintenance contract is to start after the expiry of the warranty period.

 Consultancy Contract
 “Consultancy services” covers a range of services that are of an advisory or professional nature and are
provided by consultants.

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Chapter- 2 : Bidding Systems and Mode of Procurement
Types of Bidding Systems :

 Single Stage Single Envelope Bidding

In this Bidding Process, Bidders submit both Techno-Commercial and Price Proposal together and both are
opened at the same time.

 Single Stage Two Envelope Bidding

In the Single-Stage Two-Envelope bidding procedure, Bidders are required to submit simultaneously, the
Techno-Commercial Proposal and the Price Proposal in separate cover.

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Chapter- 2 : Bidding Systems and Mode of Procurement
Types of Bidding Systems :
Two Stage Bidding
 The submission of proposals takes place in two stages.
 The first stage is used for determining responsiveness to the request for offers and for clarifying and
reaching agreement on the Techno-Commercial conditions/specifications.
 The Techno-Commercial proposals submitted are evaluated for responsiveness.
 In the second stage, responsive bidders of first stage are then invited to submit Price proposals based on
the amended Techno-Commercial conditions/specifications.
 The Price Proposals are evaluated, and the Contract is awarded to the Bidder whose bid is determined to
be the lowest

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Chapter- 2 : Bidding Systems and Mode of Procurement
Types of Bidding Systems :
 EOI(Expression of Interest)
• Generally used in Complex project.
• Don’t have full knowledge various technical solutions available.
• Don’t know availability likely Contractors for such Works.
 Two Stage Bidding with EOI

 Pre-Qualification Bidding
• This type of bidding is done in high value contracts or complex technical requirements where
capability of source of supply is crucial, for the successful performance of the contract.

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Chapter- 3 : Consultancy Contracts
Types of Consultancy Service Contracts

 Lumpsum (Firm Fixed Price) Contract

• The lump sum (firm fixed price) contract is the preferred form of contract and under normal
circumstances
• Lump sum Consultant contracts should be used mainly for assignments in which the quality, scope
and the timing of the required output of the consultants are clearly defined
 Time-Based (Retainer-ship) Contract
• In Time-based (Retainer-ship) contracts payments are based on agreed hourly, daily, weekly, or
monthly rates for staff and on reimbursable items using actual expenses.

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Chapter- 3 : Consultancy Contracts
Types of Consultancy Service Contracts
 Percentage (Success/ contingency Fee) Contract
• Percentage contracts directly relate the fees paid to the consultant to the estimated or actual project
cost, or the cost of the goods procured or inspected.
• Since the payment is made after the successful realization of objectives, it is also called success (or
contingency) fee contract

 Retainer and Success (Contingency) Fee Contract

• In Retainer and Success (Contingency) fee contracts the remuneration of the consultant includes a
retainer (time based, monthly payment) and a success fee (Percentage based), the latter being
normally expressed as a percentage of the estimated or actual Project cost. Thus, this type of
contract is a combination of Time Based and Percentage Contracts.

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Chapter- 3 : Consultancy Contracts
Types of Consultancy Service Contracts
 Indefinite Delivery Contract (Price Agreement)
• These contracts are used when Procuring Entity need to have “on call” specialized services, the
extent and timing of which cannot be defined in advance
• These are like rate contract in the procurement of Goods

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Chapter- 3 : Consultancy Contracts
System of Selection of Consultants

 Price based System - Least Cost Selection (LCS)

• In this method of selection, consultants/ service providers submit both a technical proposal and a
financial proposal at the same time.
• This system of selection is roughly the same as the price based selection of L-1 offer (among the
technically responsive offers) in procurement of Goods/ Works.
 Quality and Cost Based Selection (QCBS)
 Direct Selection: Single Source Selection (SSS)
• Under some special circumstances, it may become necessary to select a particular consultant/
service provider where adequate justification is available for such single-source selection in the
context of the overall interest of NTPC

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Chapter- 4 : Pre-NIT activities
 Preparation and Inputs for FR
 Following inputs are required for preparation of FR:

(i) Write up of the Systems, BOQ from various PE groups

(ii) Project Implementation Write Up & Implementation Schedule (From PM)
(iii) BOQ of township (if applicable)
(iv) Write-up on R&R (if applicable), Manpower Training & Placement
(v) Write-up on Operation & Maintenance Philosophy
(vi) Write-up on Marketing Philosophy
(vii)Write-up on fuel linkage, availability, requirement, and fuel parameters etc.
(viii)Write-up on Environmental Aspects from Environmental Engineering.
(ix) General layout Plan, single line diagram and other relevant drawings.
(x) Project Cost, Interest During Construction (IDC) accrued, Actual drawal of loans year wise / loan wise, interest
rates, financing charges etc.
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Chapter- 4 : Pre-NIT activities

 Contract Package List

• A project, the total project works are broken down into smaller, well defined `Packages’.
• To optimize the number of contracts to be handled for better planning, coordination and
implementation of the whole project and at the same time to execute the Project at an optimum cost.

Administrative Approval / Investment Approval

• Administrative approval and Expenditure Sanction/Investment Approval (A/A and E/S) will be
accorded to the execution of work by the competent authority after due examination of the project and
Preliminary estimates.

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Chapter- 4 : Pre-NIT activities

Preparation of Cost Estimate

The cost data for the preparation of NIT Cost estimate will be considered based on the analysis carried out
for :
(i) Past awards at different time frames
(ii) Recent bids (L1,L2,L3…..) or Recent awards
(iii) Budgetary Offers, wherever obtained
(iv) Rate analysis (based on guidelines laid down by CWC / CPWD) for civil works for Hydro projects.

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Chapter- 5 : Bidding Documents
Structure of Bidding Documents

Generally, a Bidding Document shall comprise the following Sections:

Section-I: Invitation for Bids (IFB):-This section contains the abridged and detailed Invitation for bids.

Section-II: Instructions to the Bidders (ITB):-This section contains various instructions for bidders with regards
to preparation of bids, submission of bids, bid opening and evaluation of bids and Award criteria etc. It
facilitates bidders to prepare and submit their bids.

Section-III: Bid Data Sheets (BDS):-This section consists package specific changes to ITB.

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Chapter- 5 : Bidding Documents
Structure of Bidding Documents
Section-IV: General Conditions of Contract (GCC) / General Purchase Conditions (GPC):-This section consists
of General Conditions of Contract.

Section-V: Special Conditions of Contract (SCC) / Special Purchase Conditions (SPC):-This section consists
package specific changes to GCC / GPC as the case may be.

Section-VI: Tech Specifications/Drawings:-This section is prepared and provided by Engg. department and
consists technical specification and various drawings for a package.

Section-VII: Forms & Procedures:-This section comprises Bid form and various forms like Bank Guarantee
forms, Form of Contract Agreement, Letter of Credit form, Forms of Joint Deed of Undertaking etc.

However, the structure of bidding documents may differ based on the nature of contracts / procurement.

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Chapter- 5 : Bidding Documents

Pre-Bid Conference
 For all the tenders having cost estimate (excluding taxes and duties) above INR 100 Crores, prospective
Bidders will be invited to attend Pre- Bid Conference to clarify any issue regarding the Bidding Documents

 Amendment / Clarification to Bidding Documents

 Amendment/Clarification originating at the instance of NTPC
 Amendment/Clarifications originating due to queries from Bidder

Bid Validity
 A bid shall remain valid for the period mentioned in the bidding documents.
 In exceptional circumstances, the consent of the bidder may be requested in writing for an extension to the
period of bid validity

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Chapter- 6 : Invitation for Bids

 Pre-Requisites for Invitation for Bids (IFB) / Notice Inviting Tenders (NIT)

 Approved Cost Estimate (In case, approved cost estimate is not available, finance vetted cost estimate
can be used for the purpose of release of NIT/IFB)
 Approved Qualifying requirements (in case of open tender)
 Salient Technical Features
 Brief Scope of Work
 Detailed Technical Specification and Drawings (if any)
 Schedule for Completion of work
 Any other inputs required.

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Chapter- 6 : Invitation for Bids

 Procedure for Invitation for Bids (IFB) / Notice Inviting Tenders (NIT)
1. C&M Coordinator shall initiate a proposal for approval of issuance of NIT/IFB. This proposal shall be
routed through concerned departments
2. After approval NIT/IFB shall be published in CPP Portal, NTPC tender website and various other
portals as per system guidelines/circulars.
3. After the NIT/IFB has been hosted on the website/portal, C&M Coordinator shall check the
correctness of the text of NIT/IFB on the websites and coordinate with Nodal person for arranging
correction, if any.
4. C&M Coordinator shall send the detailed NIT/IFB to all prospective bidders for the package based on
past experience through email. In case of packages tendered on ICB basis, C&M Coordinator shall also
send the detailed NIT/IFB to all the Embassies/High Commissions in India in addition to prospective
bidders
5. The due date fixed for opening of the tender shall be minimum 21 (twenty-one) days from the date of
advertisement which may var, considering the nature of procurement or mode of tendering adopted.

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Chapter- 7 : Receipt and Opening of Bids

 Tender Committee & its Nomination

In order to obviate delays in inter-departmental noting's and cross references, a Tender Committee of officers
representing Indenting, Contract Services/Materials Management Services and Finance Departments will be
constituted at a level appropriate to the value of each procurement
 Extension of Bid Opening
Date of Bid opening can be extended in case request is received from prospective bidder(s) for extension of
Bid Opening or if there is a need for extension of Bid Opening to enhance competition/provide reasonable time
for preparation of bids or based on the discretion of Employer
 Receipt and Opening of Bids (Techno-Commercial & Price)
 Reverse Auction

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Chapter- 8 : Evaluation of Bids and Contract Award

 Preliminary examination of Techno-Commercial Bids

 TC will examine the bids to determine whether they are complete, whether required securities have been
furnished, whether the documents have been properly signed and whether the bids are generally in order.

 TC shall examine the techno-commercial bids for completeness and responsiveness as per the provisions
of the Bidding Documents.

Qualification of Bidders
 Bidders are required to furnish the details of the past experiences based on which selection is to be made as
per format enclosed in the bidding documents for the same and enclose relevant documents like copies of
authentic work order, completion certificate, agreements etc. supporting the details/data provided in the
format

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Chapter- 8 : Evaluation of Bids and Contract Award

Evaluation of Techno-Commercial Bids

TC will carry out a detailed evaluation of the Techno-Commercial bids in order to determine whether the
technical aspects are in accordance with the requirements set forth in the bidding documents
Preliminary Examination of Price Bids
 The Price Bid submitted by the bidder needs to be in strict compliance to all the provisions of the bidding
documents including its amendments/ clarifications issued by NTPC and no deviations/variations/
exceptions to the bidding documents and/or its amendments/ clarifications shall be permitted in the Price
Bid.
 Price bid should not contain any matter in respect of Technical and / or Commercial aspects other than the
details specifically sought in the Price bid. If the Technical/commercial matters indicated in Price envelope
are found to be in contradiction with the details furnished in Techno-Commercial bid, the details furnished
in Techno-Commercial envelope shall prevail.
After opening of the Price bids, the TC will examine the Price bids to determine whether they are complete,
whether any computational errors have been made, and whether the bids are generally in order.

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Chapter- 8 : Evaluation of Bids and Contract Award

 Evaluation of Price Bids

 The evaluated bid price shall be calculated based on the criteria specified in the bidding documents. The
comparison of the evaluated bid prices shall be carried out as per the criteria specified in the bidding
documents.
 Based on the approval of the price evaluation, the Contract shall be awarded to the successful Bidder whose
Bid has been determined to be the lowest evaluated, responsive, and meeting the specified qualifying
requirements.

Reasonableness of Prices:
In every recommendation of the TC for award of contract, it must be declared that the rates recommended are
reasonable. The comparison may be made with the approved cost estimate, similar contracts awarded
elsewhere, Last Purchase Price (LPP), prevailing market conditions, urgency requirement (if any).

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Chapter- 8 : Evaluation of Bids and Contract Award

 Negotiations:
Normally, there should be no negotiation. Negotiations should be a rare exception rather than the rule and may
be resorted to only in exceptional circumstances.

The circumstances where negotiations may be considered could be:

(i) Where the procurement is done on nomination / Single Tender basis;

(ii) Procurement is from single or limited sources;
(iii) Procurements where there is suspicion of cartel formation which should be recorded
(iv) Where the requirements are urgent and the delay in re-tendering for the entire requirement due to the
unreasonableness of the quoted rates would jeopardize essential operations, maintenance, and safety.
Negotiations may be done for bare minimum quantum of requirements. The balance bulk requirement
should, however, be procured through a re-tender, following the normal tendering process

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Chapter- 8 : Evaluation of Bids and Contract Award

Consideration of Abnormally Low / High Bids:

 In case of Civil Packages, if the rates/prices quoted by the successful bidder for certain items of the Bill of
Quantities are found to be having a variation of +/-25% or above in relation to estimate then such items of
works shall be identified as abnormally high rate (AHR) or abnormally low rate (ALR).

 The bidder would be required to produce the detailed price/rate analysis.

 Further, suitable tie-ups (including seeking undertaking) to be done with the successful/L-1 Bidder to
safeguard the interest of the Employer/NTPC and ensure that the Bidder executes the ALR items of works
and completes the entire work under the contract, shall be specified in the Bidding documents.

 if the Tender Committee finds any compelling circumstances to ask for Additional Security Deposit/ Bank
Guarantee (BG) in respect of ALR items, the same may be sought from the successful/L-1 Bidder after
recording necessary reasons with the approval of the next higher authority to the award approving authority
of the tender.

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Chapter- 8 : Evaluation of Bids and Contract Award

Rejection of All Bids/ Re-tender :

 NTPC may cancel the process of procurement or rejecting all bids at any time before intimating acceptance
of successful bid under circumstances mentioned below
 . If the quantity and quality of requirements have changed substantially or there is an un-rectifiable
infirmity in the bidding process;
 b. when none of the tenders is substantially responsive to the requirements of the Procurement
Documents;
 c. none of the technical Proposals meets the minimum technical qualifying requirements;
 d. If effective competition is lacking. However, lack of competition shall not be determined solely on the
basis of the number of Bidders.
 e. the Bids’/ Proposals’ prices are substantially higher than the updated cost estimate or available
budget;
 f. In case, the bidder, whose bid has been found to be the lowest evaluated bid withdraws or whose bid
has been accepted, fails to sign the contract as may be required or fails to provide the security as may
be required for the performance of the contract or otherwise withdraws from the procurement process,
NTPC shall re-tender the case.
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Chapter- 8 : Evaluation of Bids and Contract Award

Award Recommendations/ Report:

The TC has to make formal recommendations for the award of the contract to the bidder whose bid has been
determined to be substantially responsive and the lowest evaluated bid, provided further that the bidder is
determined to be qualified to perform the contract satisfactorily and his credentials have been verified.

Offers have been invited in accordance with the guidelines issued and after following fair and reasonable
procedures in prevailing circumstances

He is satisfied that the selected offer will adequately meet the requirement for which it is being procured;
The price of the offer is reasonable and consistent with the quality required; and

The accepted offer is the most appropriate taking all relevant factors into account in keeping with the standards
of financial propriety.

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Chapter- 8 : Evaluation of Bids and Contract Award

Representation of Bidders against Rejection

 A tenderer shall have the right to be heard in case he feels that a proper procurement process is not being
followed and/ or his tender has been rejected wrongly.

 The tenderer is to be permitted to send his representation in writing.

 The procuring entity should ensure a decision within 15 (fifteen) days of the receipt of the representation.
Only a directly affected bidder can represent in this regard

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Chapter- 8 : Evaluation of Bids and Contract Award

Preparation and Issuance of LOA/NOA :

C&M Coordinator shall prepare draft LOA/NOA and coordinate its vetting from Engg./Indenting Dept. and
Finance Depts.

After issuance of LOA/NOA, C&M Coordinator shall coordinate the signing of the Contract Agreement(s) within
the time stipulated for this purpose in Bidding Document.

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Chapter- 8 : Evaluation of Bids and Contract Award
Performance Security
To ensure due performance of the contract, performance security [or Performance Bank Guarantee (PBG)] is to
be obtained from the successful bidder awarded the contract. Performance security should be for an amount of
Three (3) to ten (10) per cent of the value of the contract.
Performance security may be furnished in the form of Insurance Surety Bond, bank guarantee issued/
confirmed from any of the banks as per list of acceptable banks or online payment in an acceptable form,
safeguarding the Employer's interest in all respects

For Supply / Supply + Installation Contracts:

The Contractor shall, provide securities for the due performance of the Contract for Ten Percent (10%) of
Contract Price of all the Contracts, with an initial validity up to ninety (90) days beyond the end of scheduled
Defect Liability Period of the last equipment covered under the Contract.

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Chapter- 8 : Evaluation of Bids and Contract Award
Performance Security

For Civil Contracts:

The Contractor must provide a Contract Performance Guarantee of 10% of the Contract Price within 45 days of
the Letter of Award or before the release of the 1st RA bill/Mobilization advance. Alternatively, they can split it
into two stages: 5% at the outset and another 5% before completing 50% of the total scope of work.

The Contractor can opt for an Initial Contract Performance Guarantee of at least 2% of the Contract Price, to be
provided within 45 days of the Letter of Award or before the release of the 1st RA bill/Mobilization advance. In
such cases, the Employer deducts 10% of the gross bill amount until the deducted Contract Performance
Security, including the Initial Contract Performance Security, equals 10% of the Contract Price, with an option
for the Contractor to convert deducted amounts into a Bank Guarantee when it reaches 2% of the Contract
Price.

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Chapter- 8 : Evaluation of Bids and Contract Award
 Distribution of NOA/COA:

 The Notification of Award and Contract Agreement in soft copy shall be distributed by C&M Coordinators to
all respective Coordinators of Indenting Department, Project Site / Station, Project Management, Finance
Departments with a copy to all Heads of respective Departments.

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Chapter- 9 : POST AWARD ACTIVITES
 Project Manager / Engineer-in-Charge
All notices, instructions, orders, certificates, approvals and all other communications under the Contract shall
be given by the Project Manager / Engineer-in-Charge

Contractor Representative
The Contractor shall appoint the Contractor’s Representative within fourteen (14) days of the Effective Date or
before start of work whichever is earlier

The Contractor's representative shall be a regular Employee/ Partner/ Director only and the Contractor shall be
required to submit a Power of Attorney in original in favour of its representative

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Chapter- 9 : POST AWARD ACTIVITES
Payments, Securities & Terms of Payment
The Contract Price shall be paid as per Payment Terms specified in the Contract. The procedures to be
followed in making application for and processing payments are also detailed in the Contract. The Payment
Terms may contain various stages of payment viz., Initial Advance, Interim Advance, Progressive Payment etc
depending on the type of Contract. Also, there are different modes of payment viz., Direct Payment, Letter of
Credit Payment, Payment to designated Account etc.

Alternate Mode of Payment for Micro Small & Medium Enterprises (MSMEs)

 Trade Receivables e-Discounting System (TReDS) is a regulatory framework put in place by the Reserve
Bank of India under the Payment and Settlement Systems Act 2007 (PSS Act) to facilitate the financing of
trade receivables (invoices) of MSMEs through invoice financing by multiple financiers.

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Chapter- 9 : POST AWARD ACTIVITES
Amendments to Contract

 Amendment to Contract at the instance of NTPC involving modification of scope of work, quantity
variation and/or any other technical issue

 Contracts Coordinator shall ensure that the Amendment to Contract should be finalized within one month of
receipt of technical approval, where negotiation with the Contractor is not required.
 In case of variation beyond variation limit provided in the Contract including new/substituted items, negotiation
may be required. In such cases, a committee may be nominated by Contracts Coordinator for processing
Contract Amendment as per DOP.
 Negotiation Committee shall ensure that the Amendment to Contract should be finalized within three months
of receipt of technical approval

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Chapter- 9 : POST AWARD ACTIVITES
Amendments to Contract

 Amendment to Contract at the instance of Contractor involving modification of scope of work,

quantity variation and/or any other technical issue.

 C&M Coordinator shall receive Contractor’s proposal for Amendment to Contract. On receipt by C&M
Department, a copy of same shall be forwarded to Engg./Indenting Deptt. for their review and comments &
technical approval for the amendments.

 In case of Contracts awarded by Corporate Contracts, CS (P&S) Coordinator shall receive technical approval
from Engg. Deptt./Indenting Dept. and forward the same to respective group for further action as per the
procedure elaborated above

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Chapter- 9 : POST AWARD ACTIVITES

 Preparation, Issue & Acceptance of Amendment to Contract

 C&M Coordinator shall prepare draft Amendment to LOA/ NOA/ Contract Agreement and coordinate vetting of
Amendment from Indenting Deptt. and Finance Departments. Vetting of amendment from Indenting Deptt./
Finance shall be obtained depending upon whether the administrative approval note was routed through them.
 In cases where amendments envisage extra items or increased quantity of the existing items, to be supplied and
or erected by the contractor, the provisions of applicability of price adjustment and work schedule for such
extra items / extra quantities should also be clearly stipulated in the amendments to the contract and the
proposals for approval of such amendments should be put up accordingly
 C&M Coordinator shall incorporate their comments, if any and finalize the Amendment to LOA/NOA/ Contract
Agreement in consultation with Signing Authority in CS as per DOP.

 C&M Coordinator shall then coordinate signing of Contract Amendment and its issuance to Contractor after
signatures of the Signing Authority as per DOP.

 C&M Coordinator shall ensure receipt of acceptance of Amendment to Contract from the Contractor

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Chapter- 9 : POST AWARD ACTIVITES

Post Award Expediting

 Progress report
 CRM

 Delays in Execution
Excusable delays - Force Majeure (FM), that is, acts of God, abnormal weather, floods, and so on, applies;
Compensable delays – or Compensation Events, which put full burden of responsibility on the Procuring
Entity as covered in the GCC; and
Inexcusable delay (contractor’s own faults) which puts the full burden of responsibility on the contractor.
Concurrent delays - when two or more events responsible for delay overlap each other

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Chapter- 9 : POST AWARD ACTIVITES

Time Extension:

Extension of Time (EOT) must not be left to the end.

it should be dealt with promptly during the progress of the contract
The Project Manager shall, after due consultation with the contractor, determine the length of such extension
and notify the contractor accordingly.
After the final stage of completion is reached (final taking-over certificate issued), EOT and LD may be
reviewed

Document which shall form principal basis for time extension without LD
 1. The joint recordings in “Hindrance Register” and “Weekly Review Register”.
 2. Records of Technical Coordination Meetings.
 3. Records of Contract Review Meetings,
 4. Written notices issued by the “Project Manager” or his authorized representative to the Contractor in the
relevant period.
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Chapter- 9 : POST AWARD ACTIVITES

Important Conditions of Contract

 Suspension
 Reimbursement of BG and Insurance Charges on account of delays attributable to NTPC
 Liquidated Damages for Delay
 Price Variation
 Termination of Contract:
 Limitation of Liability:
 Royalty:

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Chapter- 9 : POST AWARD ACTIVITES
Closing of Contract
 In case of Supply cum Erection Contracts the closing of Contract shall be affected after the
warranty period is successfully completed and the CPG of the Contract is returned/discharged.

 For Civil packages the closing of the Contract shall be affected after completion of the defect
liability period and refund of Security Deposit.

CONDITIONAL CLOSING OF CONTRACTS

In large number of cases, contract closure is held up/delayed pending settlement of petty issues which are
neither significant nor have any material effect on the contract performance. But due to the fact that all
liabilities in totality have to be discharged from both the sides, the contracts are not closed under the above
guidelines. In these cases conditional closing can be done to save resources.

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Chapter- 9 : POST AWARD ACTIVITES
 CONTRACTOR PERFORMANCE, COMMERCIAL ISSUES, CLAIMS AND DISPUTES

 CONTRACTOR PERFOROMANCE FEEDBACK AND EVALUATION SYSTEM

Contract shall be evaluated on a continuous basis at regular intervals on the following seven parameters :

 Engineering & Quality Assurance Capability

 Finance
 Supply
 Construction/ Installation
 Field Quality
 Safety
 Claims & Disputes

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Chapter- 9 : POST AWARD ACTIVITES
 Settlement of Commercial Issues in Contracts:

 Dealing with Contractors Claim

 Dispute Resolution.

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NTPC Ramagundam

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