KartavyaDesk

Para 6.5.2 - Contractor Payments | KartavyaDesk

WORKS_MANUAL

Original Rule Text

days of submission of bill by the contractor. In case the payment has not been released within 10 working days as prescribed above, it shall be made as soon as possible, and after payment a written explanation for the delay shall be submitted to the next higher authority within three working days. b) 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 bill by the contractor. Where interest is to be paid, the rate of interest should be the rate of interest of General Provident Fund. c) In case of unwarranted discretionary delays in payments, including failure to authorise/ make ad hoc payment as prescribed in para 12.1 above, responsibility shall be fixed on the concerned officers. Project executing authorities should have a system to monitor delays in payments and to identify such unwarranted delays. d) The final bill should also be paid to the contractor within three months after completion of work. e) All project executing authorities implementing works contracts involving aggregate payments of more than Rs.100 crore per annum shall have an online system for monitoring of the bills submitted by contractors. Such system shall have the facility for contractors to track the status of their bills. It shall be mandatory for all contractors bills to be entered into the system with date of submission and date of payment. Such system shall be put in place within one year of issue of these instructions.)

What This Means

Para 6.5.2 of the Works Manual focuses on ensuring timely payments to contractors for completed work. It sets deadlines for processing and releasing payments, emphasizing accountability for delays. The rule aims to protect contractors from financial hardship caused by delayed payments and promotes transparency in the payment process. It applies to all government departments and agencies involved in executing works contracts.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Payment should be released within 10 working days of bill submission.
  • •Delayed payments beyond 10 days require a written explanation to the next higher authority within 3 working days.
  • •Public authorities may implement interest payments for delays exceeding 30 working days, using the General Provident Fund interest rate as a benchmark.
  • •Responsibility is to be fixed for unwarranted delays, and project authorities must monitor payment timelines.
  • •Final bills should be paid within three months of work completion.

Practical Example

ABC Construction submitted a bill for Rs. 5,00,000 on October 26, 2023, for road repair work completed for the PWD. According to Para 6.5.2, the payment should have been released by November 9, 2023 (10 working days). However, due to internal processing delays, the payment was released on December 15, 2023. Since the payment was delayed beyond 10 working days, Mr. Sharma, the responsible engineer, had to submit a written explanation to his superior, Mr. Verma, within three working days of the payment release, detailing the reasons for the delay. Because the payment was delayed beyond 30 working days, the PWD also considered paying interest to ABC Construction at the prevailing GPF rate.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What happens if a payment is delayed beyond the stipulated 10 working days?▼
A written explanation for the delay must be submitted to the next higher authority within three working days of the payment release.
Can interest be charged on delayed payments?▼
Yes, public authorities may implement a provision for interest payments if the delay exceeds 30 working days. The interest rate should be equivalent to the General Provident Fund (GPF) interest rate.
What is the deadline for paying the final bill to the contractor?▼
The final bill should be paid to the contractor within three months after the completion of the work.
What is the purpose of monitoring payment delays?▼
Monitoring helps identify unwarranted delays and fix responsibility on the concerned officers, ensuring accountability and timely payments.
Do all project executing authorities need an online system for monitoring bills?▼
Only project executing authorities implementing works contracts involving aggregate payments of more than Rs. 100 crore per annum are required to have an online system for monitoring bills.

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

According to Para 6.5.2 of the Works Manual, within how many working days of a contractor's bill submission should payment ideally be released?

Related Rules

Para 3.2.4Manual for Procurement of Works, 2022 - Para 3.2.4 - Chapter 3Para 3.5.13Manual for Procurement of Works, 2022 - Para 3.5.13 - Chapter 4Para 3.2.6Manual for Procurement of Works, 2022 - Para 3.2.6 - Chapter 3Para 4.10Manual for Procurement of Works, 2022 - Para 4.10 - Chapter 4Para 4.11Manual for Procurement of Works, 2022 - Para 4.11 - Chapter 4

Need help understanding this rule?

Ask Niti — your AI assistant for WORKS_MANUAL and other government rules