Para 9.2.2 - Option Clause Rules | KartavyaDesk

Original Rule Text

a) If the quantity has been increased under the option clause, the negative option clause should not be invoked thereafter, or vice a versa. b) In case of a decrease in the ordered quantity, it would be fair to allow the firm to supply work-in-progress or goods already put up for inspection; c) There should be no declining trend in the price of the stores as evidenced by the fact that no order has since been placed at lower rates and no tender has been opened since the time offers have been received at lower rates – even if not finalised; d) If the option clause exists during the provisioning of the next cycle and tender evaluation in the next cycle of procurement shows an increasing price trend, the application of the option clause must be positively considered. The contract management authority must also keep an eye on delivery against the contract. If other conditions are satisfied, the option clause must be exercised; e) The option clause is normally exercised after receipt of 50 (fifty) per cent quantity. If the delivery period is going to expire and other conditions are fulfilled, it can be exercised even earlier; f) The option clause shall be exercised during the currency of the contract so that the contractor has reasonable time/notice for executing such an increase. It can be exercised even if the quantity of the original ordered order is completed before the original last date of delivery. If not already agreed upon, the delivery period shall be fixed for the additional quantity on the lines of the delivery period in the original order. This will satisfy the requirement of giving reasonable notice to the supplier to exercise the option clause; g) This provision can also be exercised in case of PAC/single supplier OEM cases. h) However, where parallel contracts on multiple suppliers are available, care should be taken in exercising the option clause so that the original tender decision of splitting quantities and differential pricing is not upset or vitiated. Other things being equal, the supplier with the lower rate should first be considered for the option quantity.

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

• •Once the quantity is increased using the option clause, the negative option (decreasing the quantity) cannot be invoked, and vice versa.
• •If the ordered quantity is decreased, the supplier should be allowed to supply work-in-progress or goods already prepared for inspection.
• •The option clause should be considered if there's an increasing price trend in the next procurement cycle.
• •The option clause is normally exercised after 50% of the original quantity is received, but can be exercised earlier if the delivery period is expiring.
• •When multiple suppliers are available, the supplier with the lowest rate should be considered first for the option quantity.

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.