Para 4.4.1 - Rate Contracts | KartavyaDesk

Original Rule Text

a) The Procuring Entity may prescribe the amount of Bid Security in the Tender Document. b) No quantity is mentioned in the Schedule of Requirement; only the anticipated drawable quantity is mentioned without commitment. c) The purchaser reserves the right to conclude one or more than one rate contract for the same item. d) The purchaser and the Supplier may short-close the rate contract by serving suitable notice to each other. The prescribed notice period is generally fifteen to thirty days. e) The purchaser can renegotiate the price with the rate contract holders, even during the validity, if market conditions change significantly or undertake repeat competitive bidding through open/ advertised tenders on the same terms and conditions, including specifications during the validity period of existing valid R/Cs. In such cases, the existing R/C holders can bid, apart from the new eligible bidders, and equal and fair opportunity would be provided. If the prices received are found lower than the existing R.C. prices, new R/Cs may be awarded at reduced prices and existing R/Cs at higher prices may be short-closed, giving adequate notice if they do not match such reduction in prices under the fall clause. f) In an emergency, the purchaser may purchase the same item through an ad hoc contract with a new supplier. g) The purchaser and the authorised users of the rate contract are entitled to place supply orders up to the last day of the validity of the rate contract, and though supplies against such supply orders will be delivered beyond the validity period of the rate contract, the terms & conditions of the rate contract will guide all such supplies. h) Fall Clause: The fall clause is a price safety mechanism in rate contracts. The fall clause provides that if the rate contract holder reduces its price or sells or even offers to sell the rate contracted goods or services following conditions of sale similar to those of the rate contract, at a price lower than the rate contract price, to any person or Organisation during the currency of the rate contract, the rate contract price will be automatically reduced with effect from that date for all the subsequent supplies under the rate contract and the rate contract amended accordingly. Other parallel rate contract holders, if any, are also to be allowed to reduce their price by notifying the reduced price to them, giving 07 (seven) days to intimate their revised prices, if they so desire, in a sealed cover to be opened in public on the specified date and time and

What This Means

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

Key Points

• •The procuring entity decides the Bid Security amount.
• •Rate contracts can be short-closed by either party with proper notice (typically 15-30 days).
• •Price renegotiation is possible if market conditions change significantly, or through repeat competitive bidding.
• •The 'Fall Clause' ensures the government benefits from any price reductions offered by the supplier to other buyers.
• •Purchasers can place orders until the last day of the rate contract validity, even if delivery extends beyond that date.

Practical Example

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

Frequently Asked Questions

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