Para 1.3 — WORKS_MANUAL

1.3 Applicability of this Manual i) Works: This manual is applicable to procurement of Works is defined as “any activity, sufficient in itself to fulfil an economic or technical function, involving construction, fabrication, repair, overhaul, renovation, decoration, installation, erection, excavation, dredging, and so on, which make use of a combination of one or more of engineering design, architectural design, material and technology, labour, machinery and equipment. Supply of some materials or certain services may be incidental or consequential to and part of such works. The term “Works” includes

(i) civil works for the purposes of roads, railway, airports, shipping-ports, bridges, buildings, irrigation systems, water supply, sewerage facilities, dams, tunnels and earthworks; and so on, and

(ii) mechanical and electrical works involving fabrication, installation, erection, repair and maintenance of a mechanical or electrical nature relating to machinery and plants”.

ii) Classification of Works: The civil works are classified in GFR 2017 (Rule 130) into three categories:

(a) Original Works

(b) Minor Works and

(c) Repairs Works. “Original works” means all new constructions, site preparation, additions and alterations to existing works. It also includes special repairs to newly purchased or previously abandoned buildings or structures, including remodelling or replacement. “Minor works” mean works which add capital value to existing assets but do not create new assets. “Repair works” means works undertaken to maintain building and fixtures. Expenditure on Repair Work does not add to the value of the asset and only restores the functionality of the asset. Repair Work can be further categorized as

(i) Annual repairs covering routine and yearly operation and maintenance work on buildings and services

(ii) Special repairs, which are undertaken as and when required, covering major repairs to existing buildings or services. Some types of the Special repairs may qualify to be categorised as ‘Original Work’ as mentioned earlier.

Major Works procuring Ministries/ Departments like the Central Public Works Department (CPWD); Military Engineering Service (MES); Border Roads Organisation (BRO); Ministries of Railways; Information & Broadcasting and Departments of Posts, and Space etc. already have their own detailed guidelines tailored to unique individual requirements, e.g. Manuals or Procedure Orders, which will continue to be applicable to these organizations.

This manual for procurement of works is more specifically addressed to those Ministries/ Departments and their attached and subordinate offices, as well as autonomous bodies (except to the extent the bye laws of an autonomous body provides for different provisions, which have been approved by the Government) which don’t have in-house capabilities to execute Works and assign most of the procurement of works to third parties (Public Works Organisations or PSUs).

This Manual is also useful for directly execution of repair works by these agencies up to 6 Rs. thirty lakh. iv) For procurements financed by Loans/ Grants extended by International Agencies: The Articles of Agreement with the International Agencies like the World Bank, Asian Development Bank etc. stipulate specific procurement procedures to be followed by the borrowers. The procurement procedures, as finalized and incorporated in the

iii) Procurement Entities Procurement Entities which can benefit from this manual include ministries, departments, or a unit thereof, or an attached or subordinate offices/ units; any other body (including autonomous bodies) substantially owned or controlled by or receiving substantial financial assistance from the Central Government. It can still be utilised, if these procurement entities outsource the procurement process or bundle the procurement process with other contractual arrangements or utilise the services of procurement support agency or procurement agents to carry out the procurement on their behalf. But these procurement guidelines would not apply to procurements by these procuring entities for their own use from their subsidiary companies including Joint Ventures in which they have controlling share.

Agreements after consideration and approval of the Ministry of Finance are to be followed accordingly. 1.4 Basic Aims of Procurement – Five R’s of Procurement

In every procurement, public or private, the basic aim is to achieve just the right balance between costs and requirements concerning five parameters called the five R’s of procurement. The entire process of procurement (from the time that need for an item, facility or services is identified till the need is satisfied) is designed to achieve following basic aims. Although couched in jargon of procurement of Goods, it’s equally applicable to procurement of Works. The term ‘Right’ is used here in the sense of being optimal:

i) Right quality; ii) Right quantity; iii) Right price; iv) Right time and place; and v) Right source. (For more details on basic aims of procurement, please refer to Chapter 1 of the Manual for Procurement of Goods 2017 – reproduced in Appendix 1. Please refer to Broader obligation principle under Appendix 1 for instructions related to registration of bidders belonging to countries sharing land border with India, and Annexure-13).