GSIDC introduces ESCALATION CLAUSE w.e.f. 4th March 2008 in the tender documents of ITEM RATE TENDER

ESCALATION CLAUSE FOR CEMENT, STEEL REINFORCEMENT BARS, BITUMEN, AND STRUCTURAL STEEL SECTIONS FOR WORKS WHERE THE STIPULATED TIME IS EIGHTEEN MONTHS OR LESS

If after submission of the tender, the price of cement and/or steel reinforcement bars and/or bitumen and/ or structural steel sections incorporated in the works increase(s) beyond the price(s) prevailing at the time of the last stipulated date of receipt of tenders (including extensions, if any) for the work, then the amount of the contract shall accordingly be varied and provided further that any such increase shall not be payable if such increase has become operative after the stipulated date of completion of work in question.

If after submission of the tender, the prices of cement and/or steel reinforcement bars and/or bitumen and/or structural steel sections incorporated in the works is decreased, the Employer (GSIDC) shall in respect of these materials incorporated in the works be entitled to deduct from the dues of the contractor such amount as shall be equivalent to the difference between the prices of Cement and/or Steel reinforcement bars and/or Bitumen and/or structural steel sections as prevailed at the time of last stipulated date for receipt of tenders (including extensions if any) for the work and the prices of these materials on the coming into force of such base price of cement and/or steel reinforcement bars and/or bitumen and/or structural steel sections issued under the authority of Managing Director, GSIDC.

The increase/decrease in prices shall be determined by the All India Wholesale Price Indices for Cement, Steel (bars and rods), bitumen, angles, channels & sections, and pipes and tubes as published by Economic Advisor to Government of India, Ministry of Commerce and Industry and base price for cement and/or steel reinforcement bars and/or bitumen, and/or structural steel sections as issued under authority of Managing Director, GSIDC as valid on the last stipulated date of receipt of tender, including extension if any and for the period under consideration.

The amount of the contract shall accordingly be varied for cement and/or steel reinforcement bars and/or bitumen, and/or structural steel sections and will be worked out as per the formula given below:

1. a) Adjustment for component of ‘Cement’

Vc = Pc x Qc x   C1 – C1₀         

C1₀

 

Where,

V_c = Variation in cement cost i.e. increase or decrease in the amount in rupees to be paid or recovered.

Pc = Base Price of cement as issued under authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions, if any.

Qc = Quantity of cement used in the works since previous bill.

C1₀ = All India Wholesale Price index for cement as published by the Economic Advisor to Government of India, Ministry of Industry and Commerce as valid on the last stipulated date of receipt of tenders including extensions, if any.

C1 = All India Wholesale Price Index for cement for period under consideration as published by Economic advisor to Government of India, Ministry of Industry and Commerce.

1. Adjustment for component of ‘Steel’ (TMT and/or CRS)

Vs = Ps x Qs x  S1 – S1₀

S1₀

Where,

Vs = Variation in cost of steel reinforcement bars (TMT and/or CRS) i.e. increase or decrease in the amount in rupees to be paid or recovered.

Ps = Base price of steel reinforcement bars, as issued under authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions, if any.

Qs = Quantity of steel paid either by way of secured advance or used in the works since previous bill (whichever is earlier).

S1₀ = All India Wholesale Price Index for Steel (bars & rods) for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry and Commerce as valid on the last stipulated date of receipt of tenders including extensions if any.

S1 = All India Wholesale Price Index for Steel (bars & rods) for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry and Commerce.

1. C) Adjustment for Component of ‘Bitumen’ (Grade 60/70 and/or 80/100 and/or as per approved specifications)

V_b = P_b x Q_b x   BI – BI₀

BI₀

Where

V_b = Variation in cost of Bitumen (grade 60/70 and/or 80/100 and/or as per approved specification by employer GSIDC) i.e. increase or decrease in the amount in rupees to be paid or recovered.

P_b =Base price of Bitumen (grade 60/70 and/or 80/100 and/or as per approved specification) as issued under the authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions if any.

Q_b = Quantity of bitumen used in the works since previous bill.

BI₀ = All India wholesale price Index for bitumen for the period under consideration as published by Economic Advisor to Govt. of India, Ministry of Industry and Commerce as valid on the last stipulated date of receipt of tenders including extensions if any.

BI =   All India whole sale price Index for bitumen for the period under consideration as published by Economic Advisor to Govt. of India, Ministry of Industry and Commerce.

1. D) Adjustment for component of “Structural sections” for finished items of works, under following categories:-

CATEGORY 1: For Angle, channel, joist, plates, Tees fabricated at site as per drawing and design.

V_T1 = P_T1 x Q_T1 x        TI₁ – TI₀₁

TI₀₁

           Where,

V_{T 1}         = Variation in cost of structural steel sections in Category-1 i.e. increase or decrease in the amount in rupees to be paid or recovered.

P_T1       = Base price of structural steel sections in Category-1, as issued under authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions, if any.

Q_T1        =  Quantity of structural steel sections in Category-1 paid either by way of secured advance or used in the works since previous bill (whichever is earlier).

TI₀₁       = All India Wholesale Price Index for Angles, channels & sections for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry and Commerce as valid on the last stipulated date of receipt of tenders including extensions if any.

TI₁         = All India Wholesale Price Index for Angles, channels & sections for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry and Commerce.

CATEGORY 2: For steel tubular and pipe sections, the cross sections of which may be circular, square, rectangular or any designed shape as per drawing and design.

V_{T2       =}              P_T2  x  Q_T2  x  TI_{2     –}   TI₀₂

                                                      TI₀₂

Where,

V_T2     =      Variation in cost of structural steel sections in Category-2 i.e. increase or decrease in the amount in rupees to be paid or recovered.

P_T2       =     Base price of structural steel sections in Category-2 as issued under authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions, if any.

Q_T2       =      Quantity of structural steel sections in Category-2 either by way of secured advance or used in the works since previous bill (whichever is earlier).

TI₀₂   =       All India Wholesale Price Index for Pipes and Tubes for the period under consideration as published by Economic Advisor to Government of India, Ministry of Industry and Commerce as valid on the last stipulated date of receipt of tenders including extensions, if any.

TI₂     =       All India Whole Sale Price Index for Pipes and Tubes for the period under consideration as published by Economic Advisor     to Government of India, Ministry of Industry and Commerce.

The Contractor shall submit along with every running account bill (on account or interim bill) and final bill the afore indicated material wise (i.e. cement, steel reinforcement bars bitumen and structural steel sections) reconciliation statements supported by complete calculations reconciling total purchase, total consumption and certified balance (diameter/section wise in case of steel) and resulting variations and reasons thereof. The Engineer shall check the aforesaid details and ensure that the reconciliation is found to be satisfactory. In case of works where Ready Mixed Concrete (RMC) is stipulated to be used from an approved source/manufacturer, the consumption of cement be recorded from the computerized dispatch slips that are sent with each dispatch of RMC.

The contractor shall also submit theoretical consumption statement for consumption of cement, steel reinforcement bars, bitumen and structural steel sections on the work executed from the start of the work upto and including the work included in the bill should invariably prepared alongwith every running account bill (on account or interim bill) and final bill. The Engineer and Contractor shall sign the theoretical consumption statements so that they are aware of the basis on which the theoretical quantity of the said materials is worked out. This would ensure the Engineer and the Contractor to exercise a check over the consumption of said materials during execution of work.

The exact proportion in which the said materials are to be used by the Contractor for the finished items of works is laid down in the nomenclature of items in BOQ/Specifications governing the contract/Goa Schedule of Rates/Relevant Codes of BIS, IRC and MORTH/MOST specifications and the computation shall be in the order of preference as per the sequential order of the said documents. On similar reference to these guiding documents, the theoretical quantities of the materials that should have been used by the Contractor on execution of the work shall be calculated and the theoretical consumption statements shall be submitted. However, in the case of steel reinforcement bars and/or structural steel sections, the theoretical quantity shall be taken as the quantity required as per design including authorized lappages, chairs, etc., plus 3% wastage due to cutting into pieces, such theoretical quantity being determined and compared with the actual purchase each diameter wise, section wise, and category wise separately.

Over the theoretical quantities of materials so computed a variation shall be allowed as specified below:

a)	Cement	2% plus/minus
b)	Bitumen	2.5% plus only and NIL on minus side
c)	Steel reinforcement bars and structural steel sections	2% plus/minus

In case, the material consumption (cement, steel reinforcement bars, bitumen and structural steel sections) is less than the THEORETICAL CONSUMPTION including PERMISSIBLE variation (as specified above), recovery shall be made from the Contractor’s bill as per the base price of cement, steel reinforcement bars, bitumen and structural steel sections as issued under the authority of Managing Director, GSIDC valid at the time of the last stipulated date of receipt of tender including extensions, if any. In case of excess consumption, no adjustment and/or recovery shall be made.

For non scheduled items, the decision of the Employer regarding theoretical quantities of materials which should have been actually used, shall be final and binding on the contractor.

The said action under this escalation clause is without prejudice to the right of the Employer (GSIDC) to take action against the contractor under any other conditions of contract for not doing the work according to the prescribed specifications.