Execution of Agreement/Work Order
As soon as possible after the acceptance of a tender and award of work, the successful tenderer is called upon to furnish the required initial security deposit and to execute a formal agreement. Only work order is issued to the contractor for works valued upto Rs. 5 lakhs and it is not necessary to execute agreements in such cases. Standard documents only form part of the contract agreement. Important points of the correspondences with the contractor should be reflected in the work order/contract agreement.
A formal agreement is executed on a non-judicial stamp paper of appropriate value for contracts more than Rs. 5 lakhs. The agreement and the work orders shall be thoroughly scrutinized with reference to the following:
i) That the agreement is signed by the contractor himself or a person holding the power of attorney to sign the agreement.
ii) Any alteration to the standard form may result in legal complications. No officer should accept unauthorized alterations to the standard printed contract The primary responsibility for issuing amendments to the contract will always rest with the authority who has originally approved the contract though for administrative reasons, he may delegate the powers of issuing amendments to his subordinate authorities subject to the delegation of financial power rules of the company. The subordinate authority will keep the superior authority informed in writing whenever such amendments are issued. At the time of closing the contract, the authority who had originally approved the contract must satisfy itself that the amendments issued by the subordinate authority are in order. He may, if required, evolve his own control systems to see that the contracts approved by him are being executed properly.
iii) That the terms of the agreement/work orders are precise and definite without any ambiguity or misconception/wrongful words.
iv) whether there are provisions in the contract for making available land for construction of temporary structure, allotment of company’s buildings, supply of electricity,supply of water, supply of equipment etc. for the execution of the contract. If so, whether clear stipulations have been made for the recovery of the cost thereof.
v) The provision has been made for recovery of all statutory dues wherever applicable, sales tax on works contracts and other taxes and duties.
vi) All decisions taken by correspondence with the contractor shall form part of the agreement and shall be duly incorporated.
vii) That the quantities stipulated in the agreements are in accordance with those shown in the tender document.
viii) That the rates and the amounts in the agreements/work orders are in accordance with the accepted tender.
ix) That the dates of commencement and completion of the work have been clearly specified.
x) Whether there is any provision in the tender/work order/agreement for issue of materials to the contractor. If so, whether the rates of recovery have been clearly specified
xi) That the contractor has submitted a labour license under Contract Labour (Regulation & Abolition) Act 1970 and rules 1971.
xii) The Clause for “ Compensation for Delay ’’ in execution of works is included.
xiii) The agreement includes provision of adequate technical supervision and quality assurance by the contractor.
xiv) The agreement includes undertaking on behalf of the contractor to provide reasonably clean and hygienic habitation to the staff/labourers on roll of the contractor.
xv) The common defects to be taken care of regarding agreement :
a) The original offer by the contractor is kept in a correspondence file that is freely
b) Pages of agreement are not numbered Page numbering is necessary to ensure that no unauthorized deletions or additions are made.
c) The condition of contract many times call for submission of drawings for prior approval. This is not enforced.
d) Acceptance letter as well as letters which contain important deviations from the contract conditions but which have been agreed to during negotiations are not attached to the agreement.
xvi) The contractor indemnifies the Company against any liability arising out of non observance of the statutory provisions like royalty payments, all taxes, workmen compensation act, minimum wages act, income tax act, contract labour & abolition act etc.