Rule 169 - Maintenance Contracts | KartavyaDesk
Original Rule Text
the subject goods. Such maintenance contracts are especially needed for sophisticated and costly equipment and machinery. It may, however, be kept in mind that the equipment or machinery is maintained free of charge by the supplier during its warranty period or such other extended periods as the contract terms may provide and the paid maintenance should commence only thereafter.
What This Means
Rule 169 of the General Financial Rules (GFR), 2017, focuses on maintenance contracts for goods, particularly expensive and complex equipment. Essentially, it allows government departments to enter into agreements with suppliers or third-party vendors for the upkeep and repair of equipment they've purchased. This is especially relevant for items like specialized machinery or high-tech instruments where regular maintenance is crucial for optimal performance and longevity. The goal is to ensure these assets remain functional and avoid costly breakdowns.
The rule emphasizes that these paid maintenance contracts should only kick in *after* the warranty period provided by the supplier has expired. During the warranty period, the supplier is responsible for free maintenance as per the original purchase agreement. This prevents the government from paying twice for the same service. By following this rule, departments can ensure their valuable equipment is properly maintained while also avoiding unnecessary expenditure.
This rule directly affects all government departments and agencies that procure and utilize sophisticated equipment. It guides them on how to manage the lifecycle of these assets and ensures responsible financial management by avoiding redundant maintenance costs during the warranty period.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Rule 169 pertains to maintenance contracts for goods, especially sophisticated equipment.
- •Maintenance contracts are particularly important for costly equipment and machinery.
- •Paid maintenance should commence only after the equipment's warranty period expires.
- •The rule aims to ensure proper maintenance and avoid redundant costs during the warranty period.
- •It applies to all government departments procuring and using sophisticated equipment.
Practical Example
The Department of Agriculture purchased a high-tech soil analysis machine for ₹50 lakhs from 'Precision Instruments Ltd.' The machine came with a 2-year warranty covering all repairs and maintenance. After the warranty period ended, the Department entered into a 3-year maintenance contract with 'Precision Instruments Ltd.' for ₹5 lakhs per year. This contract ensured that the machine would be regularly serviced, calibrated, and repaired as needed, preventing breakdowns and ensuring accurate soil analysis for agricultural research. Had they entered into the contract during the warranty period, the department would have been paying for services already covered.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What type of equipment requires a maintenance contract under Rule 169?▼
When should a maintenance contract begin under Rule 169?▼
Who is responsible for ensuring compliance with Rule 169?▼
What are the potential consequences of violating Rule 169?▼
Does Rule 169 apply to software maintenance as well?▼
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 169 of GFR 2017, for what type of goods are maintenance contracts especially recommended?
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