Para 9.3.4 — GOODS_MANUAL

a) That a higher rate in the original tender was not accepted against other lower quotations in consideration of the earlier delivery b) In the case of fixed price contracts, there is no falling trend in prices for this item, as evidenced by the fact that, in the intervening period, neither orders have been placed at rates lower than this contract nor any tender has been opened where such rates have been received even though the tender is not yet decided. In cases of certain raw material supplies, where prices are linked to the PVC, extension may be granted even in case of a falling trend in price indices since the price variation mechanism protects the purchaser’s interests. However, in such cases, it should be ensured that extensions are done with the denial clause.

2. Extension of the delivery date amounts to an amendment of the contract. Such an extension can be only done with the consent of both parties (that is, the purchaser and supplier). No extension of the delivery date is to be granted suo motu unless the supplier specifically asks for it. However, in a few cases, it may be necessary to grant an extension of the delivery period suo motu in the interest of the administration. In such cases, it is legally necessary to obtain clear acceptance of the extension letter from the supplier.

3. No correspondence should be entered into with the supplier after the expiry of the contract delivery period or towards the end of it, which has the legal effect of condoning the delay/breach of contract. When it is necessary to obtain certain information regarding past supplies, it should be made clear that calling for such information is not intended to keep the contract alive, that it does not waive the breach and that it is without prejudice to the rights and remedies available to the purchaser under the terms of the contract. The last line of such a communication should, therefore, be: “This letter is issued without any prejudice to Procuring Entity’s rights and remedies under the terms and conditions of the subject contract and without any commitment or obligation.” A format for such correspondence is given in Annexure 23.

9.3.4 Extension of Delivery 1. If, at any time during the currency of the contract, the supplier encounters conditions hindering the timely delivery of goods, he shall promptly inform the concerned officer in writing. He should mention its likely duration and request an extension of the delivery schedule accordingly. On receiving the supplier’s communication, the procuring entity shall examine the proposal (refer to Annexure 21) and, on approval from the CA, may agree to extend the delivery schedule, with or without LD and with or without the denial clause (as defined in Para 9.3.7 below), for completion of the contractor’s contractual obligations, provided:

9.3.5 Performance Notice A situation may arise where the supply/services have not been completed within the stipulated period due to negligence/fault of the supplier; however, the supplier has not made any request for an extension of the delivery period, but the purchaser still requires the contracted goods/services, and the purchaser does not want to terminate the contract at that stage. In such a case, a performance notice (also known as notice-cum-extension letter) may be issued to the supplier by suitably extending the delivery date and by imposing LD with denial clauses, along identical lines as in para 9.3.4 above. The supplier's acceptance of the performance notice and further action thereof should also be processed in the same manner as mentioned above. The text of the performance notice will be on similar lines to Annexure 22.

9.3.6 Force Majeure Clause (FM) 1. A Force Majeure (FM) means extraordinary events or circumstances beyond human control, such as an event described as an act of God (like a natural calamity) or events such as a war, strike, riots, crimes (but not including negligence or wrong-doing, predictable/seasonal rain and any other events specifically excluded in the clause). An FM clause in the contract frees both parties from contractual liability and obligation when prevented by such events from fulfilling their obligations under the contract. An FM clause does not entirely excuse a party's non-performance but only suspends it for the duration of the FM. The firm must give notice of FM within a reasonable time as the conditions permit (say, not later than 14 days after its occurrence), and it cannot be claimed ex-post facto. There may be an FM situation affecting the purchase organisation only. In such a situation, the purchase organisation is to communicate with the supplier along similar lines as above for further necessary action. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of FM for a period exceeding 90 (ninety) days, either party may, at its option, seek to terminate the contract without any financial repercussion on either side.

4. When it is decided to extend the delivery period subject to recovery of LD for delay in supplies, contractors must be given a warning to this effect in writing at the time of granting extensions. It is not correct to grant extensions without any mention of the LD if it is proposed to recover such charges eventually. It is also not correct to grant an extension of the delivery period by merely stating that the extension is granted “without prejudice to the rights of the purchaser under the terms and conditions of the contract” as this would mean that all the options given in the conditions of the contract would be available to the purchaser on expiry of the extended delivery period and would not amount to exercise of the option to recover LD. To take care of the complex legalities brought out above, an extension of the delivery period, when granted, should only be done in writing in the format given in Annexure 22.

5. Organisations may put in place a graded authority structure whereby an extension of time for completion of a contract beyond a specified threshold value of the contract may be granted by the next higher authority.

2. Notwithstanding the punitive provisions contained in the contract for delay or breach of contract, the supplier would not be liable for imposition of any such sanction so long as the delay and/or failure of the supplier in fulfilling its obligations under the contract is the result of an event covered in the FM clause.