Para 4.2.1 - Unit-Rate Contracts | KartavyaDesk
Original Rule Text
4.2.2. Time-Based (Unit-rate) Contract 1. In Time-based (unit-rate) contracts, payments are based on agreed unit prices. This Type of Contract can be based either on input (more often) or output admeasurement. Payments are usually released every month for the quantum of inputs/ output actually performed. 2. In input admeasurement Time- based contracts, the Schedule of Requirement shall indicate the quantum, performance standards, frequency and duration of the Services/ Activities and also key inputs estimated to be required per month (Personnel, Equipment, Materials and Miscellaneous) for performing the Services/ Activities to the stipulated performance standards and quality. It shall also indicate the contract Period (one year unless otherwise stipulated) of the service required. The Bidders shall quote the unit rates of inputs and the quantum of inputs per month he considers necessary to perform the Services/ Activities to the required performance standards and quality. He shall also quote service charges and taxes over and above the cost of inputs. Financial evaluation shall be based on the total cost of all inputs (plus service charges and taxes) over the Contract Period. 3. In output admeasurement Time-based contracts, the Schedule of Requirement shall indicate the quantum of the Services, its performance standards, and the timeline/ milestones of its delivery. It shall also indicate the contract Period (one year unless otherwise stipulated) of the service required. Bidders shall quote per unit rate of the outputs of services, timelines/ milestones, and taxes. 4. In both variations (input or output admeasurement) of Time-based – Unit-rate contracts, the procuring entity may possess a realistic and validated database of rates for standard services or activities, supported by their own internal costing. In such cases, it may be
What This Means
Para 4.2.1 of the Manual for Procurement of Non-Consultancy Services explains how 'Time-Based (Unit-Rate)' contracts work. Think of it like paying for a service based on how much of it you use or how long it takes. Instead of a fixed price for the whole job, you agree on a price per unit of work or time. This rule outlines two main ways to structure these contracts: either based on the 'inputs' needed (like labor, materials) or the 'outputs' achieved (the completed service). The government agency will pay based on the agreed unit prices for the actual amount of inputs used or outputs delivered each month.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Time-based contracts involve payments based on agreed unit prices, either for inputs or outputs.
- •Input-based contracts require specifying the quantum, performance standards, frequency, and duration of services, along with estimated inputs (personnel, equipment, etc.).
- •Output-based contracts require specifying the quantum of services, performance standards, and timelines/milestones.
- •The procuring entity may have a database of validated rates for standard services to aid in pricing.
- •Financial evaluation is based on the total cost of all inputs (plus service charges and taxes) over the contract period for input-based contracts.
Practical Example
The Ministry of Jal Shakti needs to hire sanitation workers for cleaning the Ganga River. They decide to use an input-based, time-based contract. The Schedule of Requirement specifies that each worker needs to clean 50 meters of the riverbank per day (performance standard). The contract estimates that each worker will require 2 liters of cleaning solution and 1 pair of gloves per day. The ministry receives a bid from 'Swachh Bharat Services' quoting ₹500 per day for labor, ₹50 per liter for cleaning solution, and ₹100 per pair of gloves, plus 18% GST. The financial evaluation will be based on the total cost of labor, cleaning solution, and gloves, plus GST, over the one-year contract period, assuming the specified performance standards are met.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between input and output admeasurement in time-based contracts?▼
How are payments made in time-based contracts?▼
What should the Schedule of Requirement include for input-based contracts?▼
What should the Schedule of Requirement include for output-based contracts?▼
What if the procuring entity has its own rate database?▼
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
In Time-Based (Unit-Rate) contracts, payments are primarily based on what?
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