Para 9.5.5 — GOODS_MANUAL

9.5.5 Payments to the Contractor and Handling of Securities 1. Payments and decisions in contract management requested by the suppliers should be made within a reasonable time. An atmosphere of lackadaisical dilatory functioning in such matters is liable to lead to bidders quoting higher prices in future bids, besides delays in supplies and disputes in the contract. It should be ensured that all payments due to the firm, including the release of the performance security, are made on a priority basis without avoidable delay as per the tender/contract conditions. Before the payment is made, the invoice should be cross-checked with the actual receipt of material to ensure that the payment matches the actual performance.

9.6. Logistics: Transportation, Receiving, Storage and Issue of Goods

2. Delay in payment to the contractors: Public authorities may put in place a provision for payment of interest in case of delayed payment of bills by more than 30 working days after submission of the bill by the contractor. Where interest is to be paid, the rate of interest should be the rate of interest of the General Provident Fund (GPF). In case of unwarranted discretionary delays in payments, as mentioned above, responsibility shall be fixed on the concerned officers. There should be a system to monitor delays in payments and to identify such unwarranted delays, including an online system for monitoring the bills submitted by contractors. Such a system shall provide contractors with the ability to track the status of their bills. It shall be mandatory for all contractor bills to be entered into the system with the date of submission and date of payment.

3. Proper procedures for safe custody, monitoring and return of bank guarantees and other instruments may be followed. Chapter 6 has more details in this regard. Before making a final payment or before releasing the performance bank guarantee, a ‘No Claim Certificate’ (Annexure 24) may be insisted upon from the supplier to prevent future claims. Whenever a bank guarantee is released following due procedure and safeguards, acknowledgement thereof should also be taken from the contractor.