Works Manual

Book – I: WORKS 125 Annexure –II: Model of Note on Work Bills accounted for in the Account Books ? :  If the EMD / PS / ASD is in the form of BG, is it received in PAO’s Office? :  Is it in proper form and for the correct amount, etc.? :  Is it valid to the end of Completion date / Extended Period + Defects liability period thereafter? :  Is its genuineness certified ? :  If currency of BG expired, is necessary recovery proposed from Bill ? : 4.7: Other Points: (See Study Material 4.7 / 5.4.7): : 4.7.1:  Reimbursement of Insurance Premium: See that this is included in the Main Bill : 4.7.2:  Reimbursement of Technical Agents: : See that this is included in the Main Bill : : 4.7.3 to 4.7.10:  Is necessary certificate of IR Paras furnished as per G.O. Ms. No. 507 Fin. (TFR) Dept., dt. 10-4-2002 ?  Are any other recoveries proposed ?  If yes, furnish details 4.8: Certificates: (See Study Material 4.8 / 5.4.8) : 4.8.1:  Are levels certificates by DyEE and EE furnished ? : : 4.8.2:  Is Q.C. certificate furnished / enclosed ? : 4.8.3:  Are all relevant certificates furnished ? :  Is Discharge Certificate of Contractor recorded & signed (for Final Bills) ?  Are signatures of Contractor obtained in MBs, LF Books, CS Sheets ? 4.9: Memo of Payment, Pass Order: (See Study Material 4.9 / 5.4.9)  Are Memo of Payment and Pass Order correct ? :  Is head of account correct ? :

Book – I: WORKS 126 Annexure –II: Model of Note on Work Bills  Has Previous Payment been verified & endorsed so : by the Supdt. ? 4.10: APERP (Irrgn. Comp) Works: (See Study Material 4.10 ) :  Are the stipulations followed? 4.11: ‘Food for Work’ Programme Works: (See Study Material 4.11 / 5.4.11) (a) Are the guidelines followed? : : (b) Value of Labour Component : Rs. (c) Value of Rice issued : Rs. (d) Value of Labour engaged : Rs.  Tally: (c) or (d) = (c) [& never > (c) or (d)]; Is it so ? (e) No. of days of execution as per measurements: _____ days; (f) No. of mandays as per Muster Rolls : _____ days; (g) No. of mandays as per Estimate : _____ days;  Tally: (f)  (g); Is it so ? : :  Are the Muster Rolls in order and enclosed to bill ? : 4.12: Post check by JDWA: (See Study Material 4.12 & 5.4.12) :  Is 40% / 80% / direct Final Bill check by JDWA due?  If so, keep record ready to submit MBs, etc. : to JDWA, after payment :  If it is over, are any remarks of JDWA outstanding?  What is the status ? 4.13: Mobilisation Bill: (See Study Material 4.13 / 5.4.13) :  Is the claim as per Agreement ? :  Is it in order ? : :  Is necessary proof enclosed with details : (for Machinery adv.) ?  What is the amount claimed ?  Is it included in the Main Bill ?

Book – I: WORKS 127 Annexure –II: Model of Note on Work Bills 4.14: Price Adjustment Bill: (See Study Material 4.14 / 5.4.14) :  Is the claim as per Agreement ? : :  Is it in order ? : :  Is it calculated as per Agreement conditions / rules ?  What is the amount claimed ?  Is it included in the Main Bill? 4.15: Bill Form: :  Is correct Bill Form used and signatures of DDO & Contractor affixed? 4.16: Previous Remarks: :  Are any previous remarks on previous Bill / Agreement / : Estimate outstanding ?  If so, give details & status 4.17: L.O.C. / DEPOSITS:  Is sufficient L.O.C. available under the head of account ? :  Is sufficient Deposit available for this bill ? : 4.18: OTHER POINTS: :  (Bring forth any other points not covered by above) 4.19:CONCLUSION / ORDERS: :  (Seek orders of PAO / APAO on admission of the bill) Auditor Supdt. PAO / APAO

Book – I: WORKS 128 Annexure –II: Model of Note on Work Bills _____________________________________________________________________________________________ FINAL CHECK SLIP: _____________________________________________________________________________________________ Sir, After Approval / Orders as above, the Pay Order is affixed as below: Debits: Rs. Gross : (Less) Advance Adjusted / Recoveries creditable to work : Final Amount charged to Work : Credits: Rs. IT : ______________ VAT : ______________ SC : NAC : CMRF : R&R : Others : Total : Net by Cheque: _______________ : _______________ Posted in: P…………………….; P…………………….; 1. L.O.C. Register P…………………….; 2. Deposit Register P…………………….; 3. Contractor’ Ledger P…………………….; 4. Works Abstract 5. Other Registers Draft put up for communication of Remarks ( * Letter No………….. & date ……………..) Auditor Supdt. PAO / APAO _____________________________________________________________________________________________ * Give reference no. and date after dispatch of the letter. _____________________________________________________________________________________________

Book – I: WORKS 129 Annexure –II: Model of Note on Work Bills

Book-I(Works)EPC 39 2.A SCRUTINY OF ENGINEERING PROCUREMENT AND CONSTRUCTION CONTRACTS EPC stands for Engineering, Procurement and Construction. It is a common form of contracting arrangement within the construction industry. Under an EPC contract, the contractor will design the installation, procure the necessary materials and construct it, either through own labor or by subcontracting part of the work. The contractor carries the project risk for schedule as well as budget in return for a fixed price, called LS or LSTK depending on the agreed scope of work.[1] When scope is restricted to engineering and procurement only, this is referred to as an EP or E+P contract. This is often done in situations where the construction risk is too great for the contractor or when the Owner has a preference for doing the construction himself. In short, an EPC contract is a design and construct contract where a single contractor takes responsibility for all elements of design (engineering), construction and procurement In an engineering, procurement and construction (EPC) contract, the EPC contractor (EPC) agrees to deliver the keys of a commissioned plant to the owner for an agreed amount, just as a builder hands over the keys of a flat to the purchaser. The EPC way of executing a project is gaining importance worldwide. But it is also a way that needs good understanding, by the EPC, for a profitable contract execution. The coordination is more difficult during commissioning and post-commissioning times, because each agency tries to correlate its own performance with the others'. It is very likely that, in an EPC contract, the communication channels get overlapped, short-circuited and confused. The EPCC is the prime functionary and so there has to be a conscious effort for clear messages. Under normal departmental rules, for every work proposed to be carried out, a detailed estimate should be prepared by the P.W.D for according Technical Sanction to the estimate, which can be done by the Government or the officers of PWD duly authorized in this regard. The Superintending Engineer shall be responsible for the engineering features of all designs prepared by him. In case of large irrigation projects, the procedure envisaged in Para 367 to 406 of APPW’D’ Code has to be followed. The investigation of each major irrigation project is beset with innumerable difficulties owing to multiple complexities, and delicate socio-economic issues resulting in inordinate delay running to decades for grounding any such venture, much less possibility of reaping the benefits for the generation it is intended. Thus the major hurdle in grounding any INED work has been identified as ‘survey’ of the work proposed to be taken up with the limited man power the government can engage at any point of time. To obviate

Book-I(Works)EPC 40 the difficulty, the Government of Andhra Pradesh, have introduced the new method of executing the works, i.e., by method (iv) in addition to the three methods already existing under para 150 of APPW “D” Code. In regard to this method (iv), the details are set forth clearly in the form of articles of agreement, tender notice and bid documents approved by the Government. A Code has been brought out by the Government in G.O. Ms.No.50 Dated 2-3-2009 duly amending relevant provisions of P.S to APSS, APPW’D’ Code, AP Financial Code and APPW “A” Code. Therefore it is felt appropriate to discuss the amended provisions, for better appreciation of contractual obligation of either parties to the contract under EPC system for correct regulation of payments and avoidance of audit objections. As already stated, the detailed procedure to be followed in bidding for works, entering into agreements, mutual rights and obligations of the parties to the contract, discharge of contract etc., are self-contained in the tender notice and bid documents approved by the Government. The powers and functions of the officers of the department are discussed below under EPC contracts, as per the amended provisions to various codes. Certain works have been grounded under EPC system in 2004 and 2005, pending issue of amendments to the existing rules. In all such cases, regularization orders have been issued in Govt. memo. No. I& C AD. 5217/Reforms/2006 dated 23-2-2006 as mentioned below; 1. Want of Administrative Approval Ratified 2. Want of Technical Sanction Ratified 3. Want of Format of Agreement Ratified 4. (a) B.G submitted with tender is not acceptable for concluding the agreement. (b) 2.5% of the contract value to be collected as EMD at the time of concluding agreement without restricting the amount of EMD to Rs.50 Lakhs. 5. Where the retention amount from the part bills is specified as 5%, it is to be recovered at 5%. Where it is mentioned as 5% at one place and 7.5% at other place in the agreement it is to be recovered at 7.5%. In all future contracts the rate of recovery is 7.5%. 6. Release of retention amount against BG in multiples of Rs.25/50m Lakhs. Release of retention amount in multiples of Rs.1000/-against interest bearing securities, subject to the condition that the rate of progress is maintained.

Book-I(Works)EPC 41 7. Insurance policy to be obtained for the total period of contract at the time of concluding the agreement by paying the premium at one time only. 8. Any corrections or amendments to the agreements involving financial commitment shall be by the government only. 9. Measurements are recorded by the contractor, and check-measurement by departmental officers. 10. Third party quality assurance is introduced. 11. (a) Payments shall e made as per annexure to schedule-A to the agreement which specifies percentage of payments component wise (b) On receipt of construction programme from the contractor, the SE will revise the milestone in consultation with the CE who will approve the same. If there is financial implication due to this revision, it shall be referred to the government. 12. Unit length for arranging payment of Earth Work Excavation is given in the agreement, and payment shall be arranged as per agreement conditions only. 13. Price escalation is to be termed as ‘price adjustment’ which is applicable only on steel cement and fuels. Component of percentage of fuels and lubricants shall be decided by the committee constituted for the purpose. Price escalation shall not be allowed, where liquidated damages are levied and EOT granted for reasons attributable to the contractor. 14. (a) The contractor makes available the ayacutdar particulars, pipe wise, village wise to MROs, MDOs, GPs for public awareness. (b) The specified ayacut as noted in the agreement shall be developed. In case of shortfall the ayacut has to be made good in higher reaches through sprinklers, or drip at the cost of the agency. Any deletion of the ayacut shall reach the agreement concluding authority before 50% of payment of contract value. Payment shall be restricted to the actual ayacut proportionately. 15. Expert committee constituted is only competent to grant EOT up to 6 months. Beyond 6 months, the committee has to send its recommendations to the Government. 16. There shall be no incentive clauses in the future agreements.

Book-I(Works)EPC 42 17. In memo. no. 22500/reforms/2008 dt. 20-8-2008 it has been instructed to commence deduction of mobilization advance in the next interim payment after reaching the 10 % of the contract value. The recovery is to be made @ 20% of the entire amount paid till then together with interest thereon. Since this procedure resulted in certain anomalies instructions have been revised in memo no.23724/Reforms-A/2008-1 dt.19-11-2008 to effect recovery of 20 % only on the interim payment excluding the first 10 % of the total contract value, and to appropriate the amount entirely to principal amount. Up to date interest is to be recovered in full as on the date of payment additionally. Where there is a condition in the agreement that no interest shall be charged, such cases should be referred to government for write off orders. 18. Seignorage charges shall be recovered as per materials actually used on the work at the rates mentioned din the agreement. All materials including ordinary earth used on the work will attract seignorage charges even if they are supplied free of cost as per agreement conditions. 19. Liquidated damages shall be recovered as per conditions of the agreement and the EE shall be responsible for effecting recovery. The CE is competent to revise the milestone. In G.O. Ms.No. 204 dated 13-9-2007, a committee has been constituted to decide on the following issues. (i) Tender evaluation (ii) Entrustment of additional items and prices to be paid thereon. (iii) Deletion of items (iv) Approval of sub-contractors. (v) POL and price adjustments (vi) Extension of Time. Specific concurrence of Finance Dept is not necessary since DFA is a member of the committee. In Govt.memo.no.12907/reforms/2006 dated 8-5-2006, a committee has been constituted to fix the internal bench mark values with the following members. (i) Concerned Advisor to the Government (ii) Chief Engineer , CDO (iii) Concerned Engineer-in-Chief. In G.O. Ms.No. 971 dated 13-8-2004, 9 firms approved for taking up prioritized projects under EPC system. In G.O Rt.No.26 dated 7-1-2005 ten more firms have been added to this list.

Book-I(Works)EPC 43 In G.O. Ms.No.727 dated24-9-04, forty-six firms have been approved to take up medium size prioritized projects under EPC system. In G.O. Rt.No.550 dated 24-6-05, eighteen firms approved for taking up third party quality assurance work, subject to the condition that the design consultant to the contracting firm should not given the job of quality assurance to the same firm. In Memo. No. 1605/F3(2)/2006-1 PAO (Projects) Hyderabad is authorized to make payment to the third party Q.C agencies of all projects in the State. In Memo.No.19147/reforms/2006 dated 6-7-06, quality management plan has been prescribed. “Whenever a bill is received from a contractor, in full shape for payment, a certificate of verification of quality and conformity of the work to the required specifications is to be obtained from the third party Q.C.Team. The CEs and SEs should submit list of defects and rectifications attended by the contractor with each payment. Extension of time is to be granted to the Q.C contractor, whenever EOT is granted to the EPC or non-EPC contractor vide memo.no.31481/reforms/2007 dated 6-11-2007. Quality control certificate is required for each payment of work bill and also for final payment as per agreement conditions vide meme.no.34786/2007 dated 27-6-2008. In EPC contracts BG submitted by successful bidder at the time of tender with conditional obligations should not be accepted and retained as EMD for performance at the time concluding the agreement. Unconditional and irrevocable BG should be obtained at the time of concluding the agreement vide Fin (W&P) memo.no.64073/F8-1/05 dated 10-6-2005. All HODs of I&CAD are instructed to obtain revised administrative approvals beforehand in EPC contracts since payment in excess of administrative approval cannot be made in EPC contracts vide I&CAD meme. no. 2287/Reforms/2006-2 dated 15-2-2006. Schedule of payments stipulates the percentage of bid price that each component has. The SE has to extrapolate the total amount payable in rupees for a particular component, from the total amount payable for a component, from which the unit rate payable shall be worked out. The

Book-I(Works)EPC 44 unit rate shall determine the amount to be paid to the contractor by way of intermediate payment. I&CAD memo.no. 22918/Reforms/06 dated 14- 8-2006. Payment of mobilization advance is to be regulated as follows as per I&CAD memo.no.26135/Reforms/06 da6ted 16-9-2006. (a) 1% after concluding the agreement (b) 4% at the time of commencement of work (after completion of investigation, survey, and designs) As per I&CAD memo.no.34843/Reforms/06 dated 7-5-08 basic parameters of a project are defined as follows:- (a) In respect of Head Works of projects, the basic parameter would be water storage capacity, with reference to FRL and Maximum Flood Discharge, number and discharging capacity of Head Regulators, river sluices, Penstocks. (b) In respect of canals, the basic parameter would be Canal Discharging Capacity, Full Supply Level, Bed Level, Command area to be covered, location of starting and ending of canal, distributaries. (c) In respect of pumping stations, the basic parameter would be capacity and efficiency of motors, and pumps, quantity of water to be lifted, the height of lift (static), location of pump house, delivery level, location of delivery cistern, power supply, location of pressure main, connecting pump house and location of delivery cistern and discharge to be delivered at cistern. “The cost of any component due to implementation of any approved design should always be on contractors account within the cost of total contract amount under EPC until and unless such designs effectively change any of the basic parameters as defined above. When there are variations in design due to change in basic parameters, then modifications for effecting such a change in will be decided with the prior approval of the Government.

Book-I(Works)EPC 45 I&CAD m,emo.no.5217/Reforms/06 dated 13-7-06 The agreement concluding authority shall verify the genuineness of the BG and after accepting the BG have to communicate the same to the PAO duly endorsing the acceptance. The PAO should immediately communicate any defects in the BG and indicate when they would lapse. I&CAD memo.no.31960/Reforms/2007-1 dated 27-5-08 For C.M & C.D works, payment is to be regulated as follows; (a) Completion of foundations including earthwork- 30% 30% (b) Completion of sub-structure- © Completion of deck slab of structure- 30% (d)After completion of full structure for all EPC turn key System works- 10% Extension of time due to change in designs is not attributable to the department. It is to the account of the agency in EPC contracts vide memo.no.8597/Reforms/08 dated15-4-08. G.O. Ms.No.94 dated 16-4-08 as amended in G.O. Ms.No.269 dated 15-9-08 Monthly price adjustment for steel and cement by the absolute variation between the estimated rate and the rate approved by the Government w.e.f 1-3-08.The adjustment scheme will be applied in all cases where the variation is more than 5% in a particular month. The price adjustment shall not be limited to Rs.50 lakhs. The price adjustment is not applicable when EOT is not granted contractor’s default. The price adjustment shall be applicable for component of works actually carried out during the period of the bill. It is limited to the lowest rate of invoice or rate fixed by price adjustment clause whichever is less. G.O. Ms.No.252 T, R&B dated 28-80-2008 Fortnightly price adjustment for bitumen and POLs, by replacing the coefficient of 0.85 by “1” i.e., absolute variation of the rate fixed by the PSUs. The variation should be more than 5%. It shall not be limited to Rs.50 lakhs. It is applicable to all ongoing works for actual components of items of works actually carried out during the period of the bill.

Book-I(Works)EPC 46 G.O. Ms. No. 35 dated 30-1-09 (a) For all items including water supply, sanitary, electrical, labor charges and machinery charges, price adjustment shall be effected in the ongoing works by adjusting the difference in estimated rates to those of prevailing SSR rates whenever there is change in SSR. (b) 1st June of every year shall be the effective date for price adjustments or the date of release of SSRs whichever is later. (c) Measurements and check-measurements shall be commensurate with the progress of work and shall form the basis for adoption of price adjustments. (d) Rate analysis for the purpose of price adjustment shall be prepared and approved by the competent authority deriving rates from the original estimates based on the current SSRs. (e) Fro non-SSR items where price adjustment is applicable, as per provisions of this order, usual procedure shall be followed to finalize such rates as per provisions of this order. (f) Tender premium/discount is operative on the ECV and on price adjustment. (g) Contract agreements shall be amended with work-slips and supplemental agreements for the applicable quantities with the modified or adjusted prices for making payment to the agencies. (h) For EAP works, the guidelines specified therein are to be followed. (i) Price adjustment shall be applicable for all ongoing and extended period of contracts due to departmental delay but not due to contractor’s default. These orders are applicable where final bills are not paid as on the date of issue of these orders (30-1-2009). Price adjustment shall be applicable for actual component of items of works actually carried out during the period of the bill. (j) These orders come into effect from 1-3-2008. G.O. Ms. No.49 dated 2-3-09 Standard Data has been revised and issued in four parts for different departments as follows; Part-I I&CAD Part-II Roads & Bridges Part-III Part-IV Buildings Drinking Water Supply Schemes

Book-I(Works)EPC 47 P.S. 8 P.S. 11 Note .2 under P.S. 8 P.S. 12 The ‘employer’ is the Superintending Engineer, i.e. the agreement concluding authority. ‘Engineer-In-Charge’ is The Executive Engineer in charge of execution. Note.1 under P.S.11: In respect of EPC works the conventional Schedule.A giving the quantities against each item of work is dispensed with. Only project information regarding project features, major components as available are given in project profile of bid documents. Scope of work and basic project parameters of the project shall be defined in the bid documents. The bidders shall review the data / information provided in bid documents and satisfy themselves. Any doubts shall be got cleared in pre bid meeting.The contractor shall quote the bid price in lumpsum after careful analysis of cost involved for the performance work considering all basic parameters, specifications and conditions of contract The bid offer shall be for the whole work and not for individual item / part of work. The bidder shall quote for the entire work on a single source responsibility basis. The cost of all items of work necessary to achieve the objective as setout in the basic parameters shall be included in the bid price. The total cost of work shall be mentioned. Note.1 under P.S. 12: In respect of EPC works the execution shall be strictly in accordance with bid conditions. Contractors shall not deviate from basic parameters of the project to reduce his costs. EPC being a turnkey system extra items / financial claims on the departmet contingent to the work other than price adjustments shall not be considered.

Book-I(Works)EPC 48 P.S. 13 Note.1 under P.S.13: P.S. 14 In respect of EPC the E.C.V excluding reimbursible items put to tender value shall be the basis for comparison of tenders. The agency shall furnish the detailed estimates prepared based on approved drawings as per provisions of agreement. Note.1 under P.S. 14: In respect of EPC works drawings given, listed and indexed in bid documents are indicative. The above drawings show the system as a whole .The contractor shall carry out investigation to prepare detailed layout, designs and drawings of all components of the work within the stipulated time period, to be approved by competent departmental authority. The contractor shall follow all relevant BIS codes / circulars issued by the department from time to time for various components of the works. In case of difference of opinion on technical matters between the contractor and the Engineer-in-charge , the decision of the appellate authority shall be final and binding on the contractor. The appellate authority is Superintending Engineer in respect of designs and drawings approved by Engineer-in-charge. The appellate authority is Chief Engineer/ Chief Engineer , (Designs) in respect of designs and drawings approved by Superintending Engineer. The appellate authority is the Committee constituted by the Government in respect of designs and drawings approved by Chief Engineer/ Chief Engineer, (Designs).

Book-I(Works)EPC 49 P.S. 54 Note.1 under P.S. 54: P.S.59 P.S. 60 In case of EPC works, if the prime contractor desires to sublet a part of the work, he should submit the same at the time of filing bids (itself) or during execution, giving the name of the proposed sub contractor, along with details of his qualification and experience. The bid accepting authority should verify the experience of the sub contractor and if the sub contractor satisfies the qualification criteria in proportion to the value of work proposed to be sub let, including his past track record of completion and quality of work, he may permit the same. The aggregate value of works to be awarded on sub letting shall not exceed 50% of contract value. The extent of sub letting shall be added to the experience of the sub contractor and to that extent deducted from that of the main contractor. Note.1 under P.S. 59 In respect of EPC works the Chief Engineer shall permit grant of extension of time up to six months and by the Govt. beyond six months based on the recommendations of State Level Standing Committee constituted by the Govt. and the Superintending Engineer conveys the same to the agency. Note to P.S 60(a) In respect of EPC works. Termination of contact shall also be as per condition No.55 of General Conditions of EPC contract. Note to P.S 60(b) E.O.T in EPC contracts shall be granted. In respect of EPC works EOT with liquidated damages shall be granted by CE concerned upto six months and by the Govt. beyond six

Book-I(Works)EPC 50 months based on the recommendations of State Level Standing Committee constituted by Government and the Superintending Engineer conveys the same to the agency. In respect of EPC contract, payments are made as per payment schedule given in Annexure.II. The payment schedule can be sub divided into sub components. Quantities are not indicated in the agreement or bill. In case of execution of unfinished work of agency the quantities have to be worked out by the department. The following is to be adopted: I. The deletion shall be in conformity with the sub components already fixed. i. If the new agency is willing to carry out work at the amount not exceeding the sub component percentage of original agency ie., where there is no extra liability to government the same can be approved by the employer, irrespective of monetary value. ii. If the new agency is willing to carry out the work and the amount exceed the sub component percentage of original agency, if the difference is within 5% of agreement value the same may be entrusted by the Committee constituted for fixing I.B.M. The difference of 5% is to be made good from original agency. iii. If the agency is willing to carry out the work and the amount exceed the sub component percentage by 5% of agreement value, all such cases require prior approval of Government.

Book-I(Works)EPC 51 P.S.62 Note.1 under P.S. 62 P.S. 63 In respect of EPC works the measurements shall be recorded by EPC agency in M.Books and LF Books issued by the Engineer-in-charge duly certified and numbered which shall be checked by the departmental officers as detailed in departmental codes. Note.1 under P.S. 63 In respect of EPC works the quantities are not shown as in conventional Schedule.A. As such payment for any extra work shall be regulated as under 1 Entrustment of the additional items contingent to the main work and within the scope of contract will be authorised by the employer and the contractor shall be bound to execute such additional items at no extra cost to the employer and the cost of such items shall be deemed to have been included in the contract price quoted. 2 Entrustment of additional items of work contingent to main work and outside the scope of the contract will be authorised by the employer with the prior approval of the Government and the contractor shall be bound to execute such additional items and shall be compensated at the price decided by the Government. 3 Whenever additional items not contingent on the main work and outside the scope of original contract are entrusted to the contractor, entrustment of such items and the price to be paid shall be referred to the Government for final decision.

Book-I(Works)EPC 52 P.S.68 Note.1 under P.S. 68 P.S. 69 In respect of EPC works the amount recovered from the final bills will be retained under deposits and paid together with the EMD retained, after defect liability period as stipulated in the agreement In case of Irrigation Department works the defect liability period is to be taken as 2 working khariff seasons or 24 months whichever is higher. Note .1 under P.S. 69 In respect of EPC works the retention amount in excess of 2.5 % of value of work done shall be released against unconditional BG in multiples of Rs. 25 lakhs(in respect of contracts of Rs.100 crores and below) / Rs.50 lakhs(in respect of contracts of above Rs.100 Crores), if the rate of progress is maintained. The unconditional irrevocable BG shall be for the period till the final bill is paid. In the final bill 2.5 % of value of work done is to be retained and kept under deposits. The same shall be paid after defect liability period. “D” Code Amendment as per EPC Para No.20 Note.1 under Para 20. Superintending Engineer should prepare project profile and basic project parameters with project cost under EPC Agency. The same shall be approved by i) Superintending Engineer - upto Rs.50 Lakhs ii) Chief Engineer - More than Rs.50 Lakhs and equal to Rs.200 Lakhs iii) Committee constituted by Government for works costing more than Rs.200 lakhs.

Book-I(Works)EPC 53 Para No.99 Para No.102 Note .1 under Para 99 The estimate shall be prepared based on available Para No.112 Para No. 117 preliminary data, the scope of works and project parameters taking into consideration the points Para No. 120 mentioned in Para 390 and duly furnishing approximate financial break up of component parts as envisaged in Para 101 of A.P.P.W “D” Code and submitted in case of works to be taken up under EPC for according Administrative approval. Note.1 under Para 102 On receipt of Administrative Approval for EPC works the department should verify the estimate prepared as envisaged in Note.1 under para 99 and if satisfied Technical sanction be accorded by the competent authority. In case the department has any new facts which will materially affect the cost of the project they shall be taken into consideration for arriving at the estimate for according Technical sanction. If that cost of estimate is found to exceed the Administrative approval, Revised administrative approval must be obtained before according Technical sanction. Note.1 In case of works taken up under EPC estimate shall be prepared as envisaged in Note.1 under para 102 of “D” Code. In respect of EPC works provision towards contingencies may be made as under subject to the ceilings indicated there in Estimates upto Rs.1.00 crore @ 0.25% maximum Rs. 20,000/- Estimates above1.00 crore and upto Rs. 10.00 crore @0.20% maximum Rs. 1.00 Lakh. Estimates above Rs.10.00 Crores and upto Rs. 100.00 Crores @0.10% Maximum Rs.5.00 lakh. Estimates above Rs.100.00 Crores @0.05% maximum Rs.10.00 lakhs. Note.1 In case of EPC works the designs are to be submitted by the executing agency which shall be approved by the competent authority The EPC agency is

Book-I(Works)EPC 54 Para No. 150 responsible for the technical features of designs. The Para No.151 competent authority approving the designs is Para No.154 accountable to the department. Note.2 The Competent authority for approval of designs /HPs in Chief Engineer/Central Designs Organisation or any other authority as specified by Govt. In addition to the three methods of execution fourth method is introduced for execution of EPC works. (iv) By an agreement in the form approved by Government for EPC. In regard to method (iv) the details are set forth clearly in the form of articles of agreement, tender notice and bid documents approved by Government. Note1 under Para 151: Contract documents approved by the Government for EPC works in terms of Para 153 of “D” Code shall be followed whenever tenders are invited for EPC works. The following shall be added under Para 154 before sub para (1): In respect of EPC works limited/ open tender system shall be followed. The following shall be added under Para 154 (iii). In case of EPC works the bidder shall furnish EMD at 1% of the value put to tender at the time of bid submission. EMD @ 2.5% of bid amount shall be paid at the time of concluding contract by successful bidder. EMD shall be in the form of DD / BG from any Nationalized /Scheduled bank. The following shall be added as 4 under Note.6 of Para 154. In case of EPC works a) Entrustment of the additional items contingent to the main work and within the scope of contract will be authorised by the employer and the contractor shall be bound to execute such additional items at no extra cost to the employer and the cost of such items shall be deemed to have been included in the contract price quoted. b) Entrustment of additional items of work contingent to main work and outside the scope of the contract will be authorised by the employer

Book-I(Works)EPC 55 Para No.174 with the prior approval of the Government and the Para No. 197 contractor shall be bound to execute such additional items and shall be compensated at the price decided by the Government. c) Whenever additional items not contingent on the main work and outside the scope of original contract are entrusted to the contractor, entrustment of such items and the price to be paid shall be referred to the Government for final decision Method (iv) to be inserted after method (iii) 1. (i) In EPC contracts, Mobilisation advance not exceeding 5% of the contract value is payable at the prescribed stages of execution. (ii)Mobilisation advance on new machinery at the prescribed percentage of the value of new machinery not exceeding 5% of contract value is payable against production of original invoices in proof of purchase of the machinery by the contractor/firm/joint venture. 2. The invoices should be in the name of the contractor/firm/joint venture only and the new machinery should have been purchased only after the date of conclusion of the agreement for the work. 3. No mobilisation advance is payable on machinery purchased by an individual firm in respect of joint ventures though that individual firm is a partner in the joint venture. 4. The contractor /firm/joint venture should submit an undertaking to the effect that they have not obtained any mobilisation advance from the government against the machinery for which they are presently claiming payment of mobilisation advance. This is to ensure that mobilisation advance is paid only once against one purchase. Any wrong declaration, when comes to light, entails recovery of the entire amount paid with penal interest in a lump from their immediate next work bill apart from instituting other prescribed penal actions.

Book-I(Works)EPC 56 Para No.292 5. Payment of mobilisation advance is also permissible on ordered machinery with approval of Government. 6. Recovery of mobilisation advance along with interest shall be made as per provisions of the contract. Note.4 under para 292 of “D” Code: 1. In case of EPC works, measurements shall be recorded by EPC agency in M.Books and L.F.Books issued by the concerned EE duly numbered and certified. The M.Books and L.F.Books have to be maintained by the EPC agency through authorized graduate engineers as per procedure prescribed in Code and finally to be handed over to the department (Engineer-in-charge). 2. In Earth Work Excavation and embankment AE/AEEs have to verify and record a. 1/3rd of prelevels taken by EPC agency b. 100% levels in case of cut off and foundations c . 25% of intermediate work done levels d. 100% for final levels recorded by EPC Agency. e. All measurements recorded by the EPC agency in the M-Books issued by the EE shall be checked to 100% extent by AEs/AEEs f. DEEs., EEs and SEs have to check the above levels and measurements as per standing codal provisions and orders. 3. Wherever Quality Control agencies are in existence, such agency has to record its findings in M Books/LF Books besides furnishing certificates as prescribed separately. The Engineer-in-charge has to approve the cut-off trench and other foundation in consultation with the authorized geologist.

Book-I(Works)EPC 57 Para No.416. IV Note.1 under Article 193 Contracts: The procedure prescribed by Government for acceptance of tenders in respect of EPC shall be followed. Financial code Amendment as per EPC Article.51 Note under Article 51(a) Article 163 For entrustment of EPC contracts the Government may approve a panel of firms/agencies based on certain prescribed eligibility criteria. This empanelment shall be reviewed at a periodicity of not more than 2 years. In respect of EPC works, limited tender system inviting bids from the approved panel of firms/agencies under each category or open tender system shall be followed. The form of bid documents and contract format approved specially for EPC mode of works shall be used. In respect of pre-qualified agencies, financial bid evaluation shall be done. In respect of open category tenders, technical evaluation shall be done first following the criteria specified in the bid document and financial bid evaluation shall be done in respect of those who are qualified in technical bid evaluation. In addition to the four methods of execution fifth method is introduced for execution of EPC works. (v) By an agreement in the form approved by Government for EPC works.

Book-I(Works)EPC 58 Article 175 In regard to method (v) the details are set forth clearly in the form of articles of agreement, tender notice and tender documents approved by Government. Note 1 under Article 175: 1. In case of EPC works, measurements shall be recorded by EPC agency in M.Books and L.F.Books issued by the concerned Engineer-in- Charge duly numbered and certified. The M.Books and L.F.Books have to be maintained by the EPC agency through authorized graduate engineers as per procedure prescribed in Code and finally to be handed over to the department (Engineer-in-charge). 2. In Earth Work Excavation and embankment AE/AEEs have to verify and record a. 1/3rd of prelevels taken by EPC agency b. 100% levels in case of cut off and foundations c. 25% of intermediate work done levels d. 100% for final levels recorded by EPC Agency. e. All measurements recorded by the EPC agency in the M-Books issued by the EE shall be checked to 100% extent by AEs/AEEs f. DEEs., EEs and SEs have to check the above levels and measurements as per standing

Book-I(Works)EPC 59 Article 177 codal provisions and orders. 3. Wherever Quality Control agencies are in existence, such agency has to record its findings in M Books/LF Books besides furnishing certificates as prescribed separately. Note under Article 177 Method (v) to be inserted 1. In EPC contracts, Mobilisation advance not exceeding 5% of the contract value is payable at the prescribed stages of execution. Mobilisation advance on new machinery at the prescribed percentage of the value of new machinery not exceeding 5% of contract value is payable against production of original invoices in proof of purchase of the machinery by the contractor/firm/joint venture. 2. The invoices should be in the name of the contractor/firm/joint venture only and the new machinery should have been purchased only after the date of conclusion of the agreement for the work. 3. No mobilisation advance is payable on machinery purchased by an individual firm in respect of joint ventures though that individual firm is a partner in the joint venture. 4. The contractor /firm/joint venture should submit an undertaking to the effect that they have not obtained any mobilisation advance from the

Book-I(Works)EPC 60 Article 185 government against the Article.190 machinery for which they are presently claiming payment of mobilisation advance. This is to ensure that mobilisation advance is paid only once against one purchase. Any wrong declaration, when comes to light, entails recovery of the entire amount paid with penal interest in a lump from their immediate next work bill apart from instituting other prescribed penal actions. 5. Payment of mobilisation advance is also permissible on ordered machinery with approval of Government. 6. Recovery of mobilisation advance along with interest shall be made as per provisions of the contract. Note (2) under Article 185 The estimate shall be prepared based on available preliminary data, the scope of works and project parameters taking into consideration the points mentioned in Para 390 and duly furnishing approximate financial break up of component parts as envisaged in Para 101 of A.P.P.W “D” Code and submitted in case of works to be taken up under EPC for according Administrative approval. The following para to be added In respect of EPC works the method of execution shall be as per the provisions of agreement.

Book-I(Works)EPC 61 Article 192 Article 193 Note.4 under Article 192 Article 195 In respect of EPC works bid documents approved by Government shall be adopted for inviting tenders. Note.1 under Article 193 The procedure prescribed by Government for acceptance of tenders in respect of EPC shall be followed. The following shall be added below ‘f’ 1. Entrustment of the additional items contingent to the main work and within the scope of contract will be authorised by the employer and the contractor shall be bound to execute such additional items at no extra cost to the employer and the cost of such items shall be deemed to have been included in the contract price quoted. 2. Entrustment of additional items of work contingent to main work and outside the scope of the contract will be authorised by the employer with the prior approval of the Government and the contractor shall be bound to execute such additional items and shall be compensated at the price decided by the Government. 3. Whenever additional items not contingent on the main work and outside the scope of original contract are entrusted to the

Book-I(Works)EPC 62 contractor, entrustment of such items and the price to be paid shall be referred to the Government for final decision. A.P.Public Works Amendment as per EPC Accounts Code Note 4 under Para 293 Para 293 In respect of EPC works, M.Books and L.F.Books have to be issued by the Executive Para 294 Engineer to EPC agency duly certified and numbered for recording measurements and levels. The M.Books and L.F. Books shall be maintained by EPC Agency and bills are to be submitted to the Engineer in Charge by the EPC agency along with a true extract of the entire set for checking and making payment. The Engineer-in-charge has to keep the full set of true extract with him and return the originals to the agency for further use. The entire original record shall be finally handed over for record to the Engineer-in-charge by the EPC Agency. Note.6 under para 294 of “A” Code: 1. In case of EPC works, measurements shall be recorded by EPC agency in M.Books and L.F.Books issued by the concerned EE duly numbered and certified. The M.Books and L.F.Books have to be maintained by the EPC agency through authorized graduate engineers as per procedure prescribed in Code and finally to be handed over to the department (Engineer-in-charge). 2. In Earth Work Excavation and embankment AE/AEEs have to verify and record a. 1/3rd of prelevels taken by EPC agency b. 100% levels in case of cut off and foundations

Book-I(Works)EPC 63 Para 297 c . 25% of intermediate work done levels d. 100% for final levels recorded by EPC Agency. e. All measurements recorded by the EPC agency in the M-Books issued by the EE shall be checked to 100% extent by AEs/AEEs f. DEEs., EEs and SEs have to check the above levels and measurements as per standing codal provisions and orders. 3. Wherever Quality Control agencies are in existence, such agency has to record its findings in M Books/LF Books besides furnishing certificates as prescribed separately The following shall be added as: Note.3. 1. In Earth Work Excavation and embankment AE/AEEs have to verify and record a. 1/3rd of prelevels taken by EPC agency b. 100% levels in case of cut off and foundations c . 25% of intermediate work done levels d. 100% for final levels recorded by EPC Agency. e. All measurements recorded by the EPC agency in the M-Books issued by the EE shall be checked to 100% extent by AEs/AEEs f. DEEs., EEs and SEs have to check the above levels and measurements as per standing codal provisions and orders.

Book-I(Works)EPC 64 Para 306 2. Wherever Quality Control agencies are in existence, such agency has to record its findings in M Books/LF Books besides furnishing certificates as prescribed separately. The following shall be added as : 306 (7) - In respect of EPC works, EPC Agency shall prepare monthly work bills based on measurements of work done and submit to Engineer – in-charge. In respect of EPC works, payments shall be regulated in accordance with Annexure.II- Schedule of Payments component wise. The components may be further divided into appropriate sub components and stages. The payment of each stage of sub component shall be expressed as percentage of total cost of approved bid which shall also be approved by the Superintending Engineer or Executive Engineer, if the acceptance of tendors falls within his purview and shall form part of contract. Sum of all such stages of particular component shall be equal to the percentage of that component shown in Annexure.II of Schedule of Payments. The percentage fixed for sub component shall be correlated to the main component and volume of the work. The eligibility for payment shall be limited to completed portions of works, subject to other conditions envisaged in the agreement and executive instructions from time to time. In EPC System, Schedule-A indicates only firm lumpsum amount of the contract., but does not firm the basis for payments. Bidder shall quote lump sum amount for the work as a whole. Percentages of components shall be indicated by the department in Annexure-II to Schedule .A

Book-I(Works)EPC 65 Para 309 Para 457 The Chief Engineer is empowered to modify the percentage of components; stage wise based on the detailed investigation, detailed drawings, and detailed estimation done by the EPC agency keeping the total price bid unaltered, in respect of works accepted by authorities above the level of CE. In respect of other works, the respective authorities to accept tenders have the powers to do so. The Superintending Engineer is empowered to modify the sub-components reach-wise /stage-wise keeping the percentages of component unaltered., if the acceptance of the tender is EE he has the power to do so. The following shall be added under Para 309: The Sub Divisional Officer and Engineer-in- charge shall exercise check to see that the bill submitted by EPC agency is in accordance with agreement conditions and certified by the departmental Quality Control Authorities (or) 3rd Party Quality Control Agency (or) by both if both are deployed on the work. Engineer-in-charge (EE) should check the claim with reference to the measurements recorded to see that the percentage at which the bill is claimed is clearly traceable into the documents on which payments are to be made. Payments shall be adjusted for recovery of advance payments, liquidated damages in terms of agreement conditions, security deposit for due fulfillment of the contract. Recoveries shall be affected towards seignorage charges on the materials used and VAT and other statutory recoveries as per State and Central Government Rules and Acts. The following shall be added to the exemption (1) under Note: In respect of EPC works the retention amount in excess of 2.5% of total value of work billed for shall be released against BG in multiples of amounts specified in the agreement, if the rate of progress is maintained.

Book-I(Works)EPC 66