Para 8.7.5 — CONSULT_MANUAL

2. All contracts shall contain a provision for a) Recovery of liquidated damages (LD) for delay in performance of the contract on the part of the contractor; b) Payment of all applicable taxes by the contractor; and c) for an unconditional power of revocation or cancellation by the Procuring Entity at any time on the expiry of six months’ notice to that effect, when a contract is likely to endure for a period of more than two years, it should, wherever feasible, include a provision. 3. Standard forms of contracts should be invariably adopted, except in following cases: a) Authorities competent to make purchases may, at their discretion, make purchases of value up to Rupees Five (5) lakh by issuing purchase orders containing basic terms and conditions; b) With respect to contracts for purchases valued from Rupees One Lakh to upto Rupees Ten lakhs, where tender documents include the GCC, SCC, and schedule of requirements, the letter of acceptance will result in a binding contract, provided no performance security is called for or due to be submitted. All delivery liabilities would be counted from the date of LoA. (Rule 225 iv)b) GFR 2017). c) In cases where standard forms of contracts are not used or where modifications in standard forms are considered necessary in respect of individual contracts, legal and

8.7.5 Framing of Contract The following general principles should be observed while entering into contracts: 1. Any agreement shall be issued strictly as per approved CEC recommendations, be vetted by the Associated/ integrated Finance, and approved by CA. The terms of contract must be precise, definite and without any ambiguities. The terms should not involve an uncertain or indefinite liability, except in the case of a cost-plus contract or where there is PVC in the contract. In other words, no contract involving an uncertain or indefinite liability, or any condition of an unusual character should be entered into without the previous consent of the Associated/ integrated Finance.

Chapter 8: RfP Evaluation and Award of Contract financial advice should be taken in drafting the clauses in the contract and approval of CAs is to be obtained; and d) Copies of all contracts and agreements for purchases of the value of Rs. 50 (Rupees Fifty) lakh and above, and of all rates and running contracts entered into by civil Departments of the Government should be sent to the Accountant General. e) Copies of the LOA/Purchase Order should also be sent to the Jurisdictional Assessing Officer for GST, mentioned in the bidder’s bid.