Para 4.1.5 — CONSULT_MANUAL

2. Schedule of Requirement shall indicate only a tentative estimate of the volume of required service as well as the contract Period (one year, unless otherwise stipulated) over which such volume is likely to be availed. The Services shall be availed on-call as and when needed by the procuring entity without any commitment regarding the volume of services. The consultant shall be selected based on the total price (unit rate multiplied by indicative volume) of such Services/ Inputs (including service charges and taxes) over the period of contract.

4.1.5 Indefinite Delivery Contract (Price Agreement) 1. 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. This is akin to the system of 'Rate Contracts' or framework contracts in the procurement of Goods. There is no commitment from Procuring Entity for the quantum of work that may be assigned to the consultant. The Procuring Entity and the firm agree on the unit rates to be paid, and payments are made periodically on the basis of the time/ quantum of service actually used during the period.

5. Indefinite Delivery Contracts - Risks and Mitigations

Risk Mitigation 1. The quality and Scope of the Output/ deliverables as in Lump-sum Contracts, is not linked to the payment. There may be tendency for the consultant to cut corners on quality, scope, and timing of the output/ deliverables by saving on resources employed. The contract should include provision for evaluation of quality and scope of deliverables and certificate for its acceptability may be recorded. Payments should be released only against such certificates. 2. Performance in each time period is not linked to the payment. There may be tendency for the consultant to use resources in a dilatory and un-productive manner. Contracts need to be closely monitored and administered by the 'Procuring Entity' to ensure that the progress of assignment is commensurate with the time spent and that the resources for which payment is claimed have actually efficiently and productively been deployed on the assignment during the period. A system of monthly reporting of payouts and quantum of work achieved by the consultant to CA should be instituted to enable supervision. 3. Time and Cost over-run is a major risk in such contracts, as the output may not be achieved in the estimated time. This type of contract should include an upper limit of total payments to be made to the consultants to safeguard against excessive prolonging of time and payments. After this limit is reached, or the period of completion is exceeded, CA should review justification for extension of the contract. 4. Risk of over-utilization: Indefinite Delivery Contracts are at risk of being over-utilized in excess of actual need since the scrutiny of service need may not be as intense as in case of other types of contracts. The need assessment of utilized services should be subject to some scrutiny, to ensure that there is no abnormal unexplainable trend in utilization. Such contracts need to be closely monitored and administered by the 'Procuring Entity' to ensure that the there is no indiscriminate or unwarranted usage, and a maximum contract value may be laid down to keep control over usage and approval of CA may be obtained to extend it beyond such limit. A system of monthly reporting of payouts and quantum of work achieved by the consultant to CA should be instituted to enable supervision.

3. Please read the para 4.1.2-3) for differences between Time-based and Indefinite Delivery contracts. Manual for Procurement of Consultancy Services, Second Edition, 2025

4. Due to risks and mitigations discussed below, Indefinite Delivery contracts are commonly used to retain “advisers” or avail services 'on-call' - for example; expert adjudicators for dispute resolution panels, institutional reforms, procurement advice, technical troubleshooting, Document Management, Taxi Services, Temporary Manpower Deployment and so forth – normally over a period of a year or more.

Chapter 4: Bidding Design for Consultancy Services

Risk Mitigation In the report a monthly payout benchmark may be kept, above which the report may be required to be sent to a level above CA.