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Rule 133 - PSU Work Awards | KartavyaDesk

GFR 2017

Original Rule Text

Rule 133 (3) As an alternative to 133(2), a Ministry or Department may award repair works estimated to cost above [Rupees Sixty Lakhs]5 and original works of any value to: (i) any Public Sector Undertaking set up by the Central or State Government to carry out civil or electrical works or (ii) to any other Central/ State Government organisation/ PSU which may be notified by the Ministry of Housing and Urban Affairs (MoHUA) for such purpose after evaluating their financial strength and technical competence. For the award of work under this subrule, the Ministry/ Department shall ensure competition among such PSUs/ Organisations. This competition shall be essentially on the lump sum service charges to be claimed for execution of work. In exceptional cases, for award of work under (i) and (ii) above, on nomination basis, the conditions contained in Rule 194 would apply. The work under these circumstances shall also be awarded only on the basis of lump sum service charge [Note: (i) Scientific Ministries/ Departments can assign repair Works estimated to cost up to Rs 5 crore on nomination basis even in normal cases only to the organizations specified in this subrule of GFRs. (ii) This special provision will be applicable upto 31.03.2025. Thereafter review will be made by Department of Expenditure to decide on further extension of these powers.]6

What This Means

Rule 133(3) of the General Financial Rules (GFR) 2017 provides an alternative way for government departments to award repair and original construction works. Instead of the standard tendering process, departments can directly assign these projects to Public Sector Undertakings (PSUs) established by the Central or State Government for civil or electrical works, or to other Central/State Government organizations/PSUs notified by the Ministry of Housing and Urban Affairs (MoHUA). This is applicable for repair works estimated above Rupees Sixty Lakhs and original works of any value.

However, to ensure fairness and value for money, the department must still encourage competition among eligible PSUs/organizations. This competition should primarily focus on the lump sum service charges they will levy for executing the work. In exceptional cases, if the work is awarded on a nomination basis (without competition), the stricter conditions outlined in Rule 194 of the GFR apply. Even in these nominated cases, the award must be based on the lump sum service charge. Scientific Ministries/Departments have a special provision to assign repair works up to Rs 5 crore on nomination basis to specified organizations, valid until 31.03.2025, after which it will be reviewed.

In essence, this rule offers a streamlined approach for awarding certain types of construction and repair projects to government-owned entities, while still emphasizing the importance of competition and cost-effectiveness. It affects all Ministries and Departments of the Government of India and the PSUs/Organizations eligible to undertake such works.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Allows direct award of repair works (above ₹60 Lakhs) and original works to eligible PSUs/Organizations.
  • •Requires competition among eligible PSUs/Organizations, focusing on lump sum service charges.
  • •Nomination basis awards are possible under exceptional circumstances, subject to Rule 194.
  • •Scientific Ministries/Departments can assign repair works up to ₹5 crore on nomination basis (subject to review after 31.03.2025).
  • •MoHUA notifies eligible Central/State Government organizations/PSUs after evaluating their financial strength and technical competence.

Practical Example

The Ministry of Jal Shakti needs to repair a dam, and the estimated cost is ₹80 Lakhs. Instead of issuing a public tender, they decide to utilize Rule 133(3). They identify three eligible PSUs: 'Ganga Infrastructure Corp Ltd' (a UP state PSU), 'Narmada Valley Construction Ltd' (a MP state PSU), and 'Central Water Engineering PSU'.

The Ministry invites these three PSUs to submit proposals outlining their lump sum service charges for executing the repair work. After evaluating the proposals, they find that 'Ganga Infrastructure Corp Ltd' offers the most competitive service charge. The Ministry then awards the repair work to 'Ganga Infrastructure Corp Ltd', ensuring that the project is completed efficiently and cost-effectively.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is meant by 'lump sum service charge'?▼
It refers to a fixed fee charged by the PSU/Organization for executing the entire project. This charge covers their overheads, profit margin, and other expenses, excluding the direct cost of materials and labor, which are usually reimbursed separately.
What happens if only one PSU is capable of doing the work?▼
In such exceptional cases, the work can be awarded on a nomination basis, but the conditions outlined in Rule 194 of the GFR 2017 must be strictly followed. This includes ensuring that the service charge is reasonable and justified.
Does this rule apply to all types of construction works?▼
No, it specifically applies to repair works estimated above ₹60 Lakhs and original works of any value. Other types of construction works may be subject to different rules and regulations outlined in the GFR 2017.
Where can I find the list of PSUs/Organizations notified by MoHUA?▼
The Ministry of Housing and Urban Affairs (MoHUA) maintains and updates the list of notified PSUs/Organizations. You can usually find this information on the MoHUA website or by contacting the relevant department within MoHUA.
What is the significance of the 31.03.2025 date mentioned in the rule?▼
This date refers to the expiry of the special provision allowing Scientific Ministries/Departments to assign repair works up to Rs 5 crore on nomination basis. After this date, the Department of Expenditure will review the provision to decide whether to extend it further.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 133(3) of GFR 2017, for repair works estimated to cost above Rupees Sixty Lakhs, a Ministry or Department may award the work to a PSU. What is the primary basis for competition among such PSUs?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

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