CHAPTER 10 ANNEXURE-23 ( c.f..Para-10.2.11) STANDARDISED PRICE VARIATION CLAUSES PRICE VARIATION CLAUSE FOR CABLES.

. In case of variation in the price of Aluminium is desired the price variation shall be allowed in the manner indicated below:1. Price of finished product quoted should be based on the following price of E.C. Grade Aluminium Ingots:E.C. Grade Aluminium Ingots of minimum 39.6% Purity (IS:4076/1978) 2. Rs. Per M.T Exclusive of Excise Duty Ex. NALCO PLANTS.

a)

Price to be taken into account for working escalation/de-escalation will be as declared by NALCO in case of E..C, Grade Aluminium ingots. The price variation claim shall be worked out with reference to the quantities of E. C. Grade Aluminium as given below:For any lot supplied, price adjustment will be computed on the basis of actual price variation as declared by NALCO. The price taken for the purpose of working out adjustment will consist of basic price only as indicated above prevailing on the dte of 30 days prior to the date on which the said lot was offered for inspection as indicated in the Inspection Notes. For determination the quantum escalation per KM of cables indicated below shall be taken. All relevant documents shall be submitted you in this connection for verification of your claim. For every rise or fall of Rs.10/-per M. T in the basic price of aluminium ingots, the amount of adjustment in price per KM of cables will arise. No adjustments in contract price will be made if the variation up Or down the aforesaid Basic rate of materials is less than Rs. 10/- per M. T.

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Note : No escalation claim less than Rs.100/- shall be entertained for entire contract and not for unit prices. For every rise or fall of the Rs.10/- per M.T. in the price of E.C. Grade Aluminium as price shall be as follows:Sl. No. Size of Cable Net weight of Amount of adjustment

Aluminium is finished 1 II. METAL PRICE CONDUCTORS. 2 VARIATION CLAUSE FOR

in cable (Rs. Per KM) 3 ACC & ACSR

In case variation in price of steel/Aluminium is desired the price variation shall be allowed in the manner indicated below:1. Price of finished product quoted should be based on the following prices of E. C. Aluminium ingots and steel. a) E. C. Grade Aluminium Ingots Rs. Per M. T. of minimum 99.6% purity Exclusive of Excise (IS : 4076/1978) Duty Ex-NALCO PLANT. b) Steel (Tested STD IS-226 (high carbon) 8.0 mm (basic price). 2. In coll Rs. M.T.Exclusive of Excise Duty. Per

Price to be taken into account for working the escalation/de-escalation will be as notified by NALCO in case of E. C. Aluminium Ingots and JPC in case of Steel. The price variation claim shall be worked out with reference to the quantities of E. C. Aluminium and Steel, as listed below. For any lot supplied, price adjustment will be computed on the basis of actual price variation as notified by NALCO/JPC as the case may be. The price taken for purpose of working out adjustment will consist of basic price only as indicated above, prevailing on the date 30 days prior to the date on which the said lot was offered for inspections as indicated in the inspection Note. For determining the quantum of escalation per KM indicated below shall be taken. All relevant documents shall be submitted by you in this connection for verification of our claim.

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For every rise and fall of Rs. 10/- per MT in the basic price of aluminium Ingots/Steel the amount of adjustment in price per KM will arise. No adjustment in contract price will be made if the variation up or down the aforesaid basic price rate of materials is less than Rs.10/per M..T. Note:-It should be noted that:-

1. No escalation claim less than Rs. 100/- shall be entertained for entire contract and not for unit prices. 2. Rs.10/- per MT apply separately to E. C. Aluminium ingots/steel and or collectively. For every rise or fall of Rs.10/- per M. T. in the price of E. C. Grade Aluminium and Steel, as mentioned above and declared by NALCO/JPC, the amount of adjustment in the price per KM. will be as follows:Sl. No. Size Net weight of Aluminium in Kg. Per K. M. 3. Amount of Net weight adjustment of steel in in conductor (Kg. /KM) (Rs. Per KM) 4. 5. Amount of adjustment in conductor (Rs. Per KM) 6

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III.

WAGE ESCALATION CLAUSES 1. For every rupee or part thereof exceeding 50 paise per month of full normal working duration by which the wage structure of the minimum rated direct worker varies from that of the base month, as a result of direct government action, adjudication or legislation either Centre or State, the basic price excluded escalator claims, shall be adjusted by ______________ % (here insert the agreed escalator faction) or as be determined by the agreed escalator factional or as be determined by the Chief Cost Accounts Officer based on the actual man months for direct workers as hereinafter defined subject to the ceiling of ______________ man months as quoted by you initialing. Such adjustment shall be applied to that basic prices of only those stores which have been tendered for inspection after _______________ days (here insert the agreed time lag factor) after the variation accrues, provided however, that in case the amount of variation for the higher paid direct worker was less than that for the minimum rated workers, the weighted average variation would form the basis for the adjustment. This clause shall apply to the first and all subsequent variations. For the purpose of this all clause the expression director governmental action shall include any bipartite settlement which has been arrived at in the course of conciliation proceedings and the expression adjudication shall include only that arbitration award in respect of which a notification under Section 10A of the Industrial Dispute Act, 1947 has been issued. The expression Director Worker shall cover only those of permanent and temporary persons

(excluding casuals) who are employed at the works of the contractor in altering the construction, conformation and composition of the items assembled/manufactured within the works of the contractor. The factor for wages escalation as well as the variation in wages will be arrived at on the basis of data available separately for the specific activity as contracted for and only in the event of non-availability of date for that specific activity, will the date for the works as a whole be adopted. 2. The number of direct workers in each category on the base date would form the basis of calculation.

a) If an award was given during the currency of the contract the impact of variation due to the same would be applicable only to the rest of the contract delivery period after the date effect of the award. b) In major contracts for construction/fabrication of the unit in which the delivery period in scheduled to be a period longer than 30 days from the date of placing the order, the impact of variation in wages, occurring on any date after placement of the order, will be applied only on the portion of the contract, value which bears that same proportion as the remaining contract period bears to the initial total contract period. 3. The increments in any time-scale of pay would not be taken into account. The base year, month and date will be ___________ (to be indicated) and the wage structure at that time per month of permanent direct worker shall be comprise the following items:1. 2. 3. 4. 5. Basic Wage. Dearness Allowance Employers Contribution to provident Fund Employers contribution to Employees State Insurance Scheme. Employees contribution and payment to any other scheme which may be instituted by govt. above those made during the base month and specifically for inclusion in wages escalation. Employees bonus where it is limited to the variation in the rate of statutory minimum bonus under the Bonus Act.

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The monthly wages of direct worker on daily rates of pay shall be computed by treating the month as consisting of the normal monthly working days and working hours as per standing orders of the factory. Pro-rata adjustment of variations in wage structure is falls below the normal working days.

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If the deliveries are not made accordingly to the Schedule and are delayed owing to any circumstances whatsoever, and wage increase is awarded meanwhile, such will not be admitted, unless specifically agreed to at the time of granting extension in the delivery schedule. The variations, if any, in terms of clause-I will be admitted only after Book examination of the relevant period by the Government chief Cost Accounts Officer or any other officer nominated by government. You shall indicate the quantity (Tonnage/Nos.) tendered on each day for inspection along with the description and number components in the offering memo. It should be noted that:-

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Note:(i) (ii) (iii)

No escalation claims shall be entertained for amounts less than Rs.100/-. Claims shall be preferred not oftener than once in 6 months. The ceiling of Rs.100/- will apply to the entire contract and not to the unit price.

IV. A. i)

EXCISE DUTY CLAUSE TO BE INCLUDED IN THE INVITATION TO TENDER :If it is desired to ask for excise duty or any other charges as extra, the same must be specifically stated. In the absence of any such statement no claim for the same will be entertained. (Where the excise duty is leviable on ad-valorem basis, the tenderer should submit alongwith the tender, the For-I and Manufacturers Price List showing the actual assessable value of the store as approved by the Excise Authorities). If reimbursement of the Excise Duty is intended as extra over the quoted prices, the supplier must specifically say so. In the absence of any such stipulation it will be presumed that the prices quoted are firm and final and no claim on account of excise duty will be entertained after the opening of tenders. If a tenderer chooses to quote a price inclusive of excise duty and does not confirm that the excise duty no included is firm and final, he should clearly indicate the rate of excise duty and quantum of excise duty included in the price. Failure to do so may result in ignoring of such offers summarily. If a tenderer is exemted from payment of excise duty upto any value of supplies from them, he should clearly limit of exemption which he may have. If any concession is available in regard to rate/quantum of Centeral Excise

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Duty, it should be brought out clearly. Stipulations like, excise duty was presently not applicable but the same will be charged if it becomes leviable later on will not be accepted unless in such cases it is clearly stated by a tenderer that Excise Duty will not be charged by him even it the same becomes applicable later on. In respect of the tenderers who fail to comply with this requirement, their quoted prices shall be loaded with the quantum of excise duty which is normally applicable on the item in question for the purpose of comparing their prices with other tenderers. v) Any change in excise duty upward/downward as a result of any statutory variation in excise taking place within any contract terms shall be allowed to the extent of actual quantum of excise duty paid by the supplier. Similarly, in case of downward revision in excise duty, the actual quantum of reduction of excise duty shall be reimbursed to the purchaser by the supplier. All such adjustments shall include all reliefs, exemptions, rebates, concessions etc. if any obtained by the supplier. Tenderers should note that in case any refund of excise duty is granted to them by Excise Authorities in respect of stores supplied under the contract they will pass on the credit to the purchaser immediately along with a certificate from their Director/Manager/Proprietor/Accountant that the credit so passed on, related to the excise duty originally paid for the stores supplied under the contract. In case of failure to do so within 10 days of the issue of the excise duty refund orders to them by the Excise Authorities, the purchaser would be empowered to deduct a sum equivalent to the amount refunded by the Excise Authorities without any The tenderer is also required to furnish to the Controller of Accounts the following certificates:Certificates with each bill to the effect that no refund has been obtained in respect of the reimbursement of Excise Duty made to the Contractor during three months immediately preceding the date of claim covered by the relevant bill. Firms/Mills/Statutory Auditors certificate as to whether any refunds have been obtained or applied for by him or not in the preceding financial year, after the annual audit of their accounts, also indicating details of such refunds, applications, if any. This certificate should contain reference to all ad-hoc A/Ts/rate contracts/running contracts held by the firm/mills. A certificate along with the final payment bills by the firms/mills to the effect whether or not they have any pending appeal/protest for refund or partial refund of Excise Duties already reimbursed to the firm/mills by the Government pending with the Excise Authorities and if so, the nature the

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amount involved, and the position of such appeal. This certificate should be signed by the firms/mills Managing Director/Manager Accountant. (4) An undertaking to the effect that in case if it is detected by the Government that any refund from Excise Authorities was obtained by the firm/mill after obtaining reimbursement from the Controller of Accounts and if the same is not immediately refunded by the firm/mill to the Controller of Accounts giving details and particulars of the transactions, Controller of Accounts will have full authority to recover such amounts from the firms/mills outstanding bills against that particular contract or any other pending Government contracts and that no dispute on this account would be raised by the supplier. CLAUSE TO BE INCORPORATED IN THE CONTRACTS:When the rate of duty is on fixed amount basis:

B. i)

The prices are based on the current rates of Excise Duty viz. . And in the event of any statutory variation in this rate the prices will be adjusted accordingly. (ii) When the duty is on percentage ad-valorem basis:

The rate of excise duty is . % ad-valorem the excise duty at present leviable in this case is .. % on Rs.. being the unit value of the stores as assessed by the Controller of Excise. . are.. (iii) In both the types of cases covered by (I) and (ii) above.

The supplier while submitting the excise duty bills will furnish the following certificates on the Bills itself: (a) Certified that the Excise Duty charges on this/these bill(s) are not more than what is/are payable under the provision of the relevant Act or the Rules made thereunder:(b) Certified that the amount of Rs. claimed as Excise Duty in this bill is in accordance with the provisions of the Rules in all respect and that the same has been paid to the excise Authorities in respect of stores covered by the Bill. The supplier shall submit to the concerned Controller of Accounts the following certificates:(1) Certificate with each bill to the effect that no refund has been obtained in respect of the reimbursement of Excise Duty made to the Contractor during three months immediately preceding the date of the claim covered by the relevant bill.

(2) Firms/Mills statutory Auditors certificate as to whether any refunds have been obtained or applied for by the firm/mill or not in the preceding financial year, after the annual audit of their accounts, also indicating details of such refunds/application, if any. This certificate should contain reference to all ad-hoc A/Ts/Rate Contracts/Running Contracts held by the firm/mills. (3) A certificate ALONG WITH THE FINAL PAYMENT BILLS OF the firms/mills to the effect whether or not they have any pending appeal/protest for refund of partial refund of excise duties already reimbursed to the firm/mills by the Government, pending with the Excise Authorities and if so, the nature, the amount involved, and the position of such appeals. This certificate should be signed by the firms/mills Managing/Accountant. (4) An undertaking to the effect that in it is detected by the Government that any refund from Excise Authorities was obtained by the firm/mill after obtaining reimbursement from the Controller of Accounts and if the same is not immediately refunded by the firm/mills to the Controller of Accounts giving details and particulars of the transaction, the Controller of Accounts will have full authority to recover such amounts from firms/mills outstanding bills against that particular contract or any other pending Government contract and that no dispute on this account would be raised by the supplier. FOR PURCHASE OFFICERS Instances have come to notice that in some cases firms/mills have obtained refund of the Excise Duty from the Excise Authorities and have failed to pass on the credit to DGS&D. In order to prevent recurrence of such instances it has been decided in consultation with the Department of Supply and Ministry of Law to incorporate a provision in the Tender Enquiry and the resultant contract reserving the Governments right to recover such amounts of refund obtained, from the pending bills of the suppliers and also revise the existing clauses/certificates prescribed for the reimbursement of excise duty. In this connection extracts of legal opinion given by JS & LA. Law are reproduced below:It was held by the Supreme Court in the Air Foam case that the Department would not be in a position to recover or appropriate any amount claimed by them on account of damages for breach of the contract unless the claim is adjusted by the Civil Court of the Arbitrator as the case may be. In cases where excise duty has already been paid to the firm by the Department and subsequently the excise authorities grant a refund of the amounts so paid in whole or in part, the Department is entitled to recover the same from the firm. Such recovery not being in the nature of damages, thee appears no legal impediment to the insertion of a clause as proposed here in under in the T/E and in the A/T which is placed on the firm pursuant thereto provided the firm does not object to it in their tender.

In case firm intimates that any appeal regarding excise duty is pending under the clause prescribed in para-II (3) above then the final payment against the contract should be released by the Controller of Accounts and necessary instructions should be sent to him by the Purchase Officer concerned. The Purchase should follow the about instructions in all future contracts. C. ADDITIONAL CLAUSE TO BE INCORPORATED IN THE A/T WHERE THE TENDERER DESIRES STATUTORY VARIATIONS FROM THE DATE OF THE TENDER.

The prices are based on the current rate of excise duty viz. .. and in the event of any statutory variation in the duty adjustment will be allowed from . (date specified here should be the date of the firms tender). Firms claim for statutory variations in the excise duty leviable on percentage ad-valorem basis should be supported by the Form I and the manufacturers price list as approved by excise authorities. The two certificates after payment of excise duty as indicated above is required to be submitted in such cases also.