Adoption of overhead Charges in works

GOVERNMENT OF ANDHRA PRADESH
ABSTRACT

P.R. & R.D. DEPARTMENT – Road and Bridge works – Adoption of overhead Charges and Contractors profit for Road and Bridge works taken up in P.R. & R.D. Department and allowing of tender premium in respect of works for which MORD specifications adopted – Permission – Accorded – Orders – Issued.

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PANCHAYAT RAJ & RURAL DEVELOPMENT (PROGS.II) DEPARTMENT

G.O.Ms.No.57

Dated: 19-2-2008.

Read the following:

1. G.O.Ms.No.141,T.R. & B. Department, dt.27.7.2006.
2. G.O.Ms.No.230,T.R. & B Department, dt.13.8.2007.
3. From the E-in-C(P.R.),Hyderabad lr.No.T1/29042/96, dt.17.11.2006.
4. G.O.Ms.No.122,P.R. & R.D.(Progs.II)Dept.,dt.30.3.2007.
5. Govt.Memo.No.8887/Progs.II(2)/07,dt.8.5.2007.

-:O:-

O R D E R:

  In the references 1st and 2nd read above TR&B Department have accorded permission adopting 20% overhead charges, contractors profit and allowing 5% tender premium in respect of works for which the Ministry of Road Transport and Highway (MORTH) specifications are adopted for all Road and Bridge works.

2.  In the reference 3rd read above, the E-in-C(P.R.) has requested the Government to issue orders for adopting contractors profits, overhead charges, Tender premium to P.R. department also.

3.  In the reference 5th read above orders were issued permitting 16.5% overhead charges for PMGSY Phase VI works which includes 10% contractors profit + overhead charges + 1.4% VAT subject to no tender premium of 5% normally permissible and no cost escalation.

4.  During the review meeting it was pointed out that the different rates and different specifications within P.R. & R.D. Department and within P.R. & R&B Department are causing difficulties in eliciting the response from the contractor, which is resulting in slow progress of works. Therefore it has been proposed for all the tender works of Panchayat Raj department to follow the specifications of Ministry of Rural Development, Government of India which are by and large, same as manual specification of Ministry of Road Transport and Highway (MORTH). Apart from following a uniform specification of MORD to all the tender works in Panchayat Raj Department, it is proposed that the allowances given by R&B Department are also applicable to the works for P.R. Department including PMGSY. In case of Panchayat raj Department works the MORD standards shall apply with regards to specifications as well as use of machinery and the MORD rates are contigent to following of the standards as above.

5.  Government have examined the matter carefully and hereby accord permission for adoption of 16.5% overhead charges which includes contractors profit at 10% for all the tender works of Panchayat Raj including PMGSY by following the specifications of MORD, subject to following conditions:

1. In framing data adopting MORD specifications, the component of overhead charge is included at the prescribed percentages. This component of overhead charges includes Sales Tax/VAT. Hence, this component of Sales Tax/VAT shall be deducted in the overhead charges in the data but, shall be separated and shown in Part-B of the estimate. The VAT component so deducted should not be less than the reimbursable amount.
2. A condition shall be included in the agreement that the VAT component loaded in the estimate shall be added in each bill of the contractors who opt for composition scheme and recovered.
3. In respect of those contractors, who do not opt for composition scheme, the VAT component loaded in the estimate shall not be released to them with their bills and VAT, however, shall be recovered and for the recovery made, a deduction certificate shall be issued, based on which they have to claim adjustment through their returns submitted to their respective assessing authorities.

6.  Government hereby also order to allow 5% tender premium on par with TR&B Department in second or subsequent tender calls only.

7.  The price escalation orders issued vide reference 4th read above are also applicable to all the tender works including PMGSY.

8.  The above orders shall be implemented subject to the following conditions.

1. These orders are applicable with prospective effect only.
2. Already settled/closed cases shouldn’t be reopened for applying the orders of this G.O.
3. Price escalation clause should be allowed carefully duly ascertaining the fulfillment of all the aspects of quantity, quality and contractual obligations.
4. No cases of revised administrative sanction will be entertained.
5. The concession given under this G.O. are not applicable to the works entrusted on nomination basis.

9.  This order issues with the concurrence of Finance (Expdr.P.R.& RD) Department vide their U.O.No.04947-A/88/A1/Expdr.P.R.& R.D./08,dt.19.2.2008.

10.  The Engineer-in-Chief (P.R.) shall take necessary action accordingly.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)

DR.V.P.JAUHARI

SPECIAL CHIEF SECRETARY TO GOVERNMENT

To
The Engineer-in-Chief(P.R.), Hyderabad.
Copy to:
Accountant General, A.P,,Hyderabad.
Finance (Expdr.P.R.) Department.
P.S. to M(P.R.)/Spl.C.S.
Sf/Sc.

//FORWARDED::BY ORDER//

SECTION OFFICER

Deductions from works bills

GOVERNMENT OF ANDHRA PRADESH
ABSTRACT

PR&RD DEPT – Issues of Builders Association of India (AP Center) related to civil works in PR Department – Certain Guidelines - Orders – Issued.

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PANCHAYAT RAJ & RURAL DEVELOPMENT (PROGS.II) DEPARTMENT

G.O.Ms.No.23

Dated.11.02.2014

Read the following

1.  G.O.Ms.No.1, Finance Dept (W&P), dt.25.2.2012
2.  G.O.Ms.No.94, I&CAD (PW-COD) Dept, dt.1.7.2003
3.  G.O.Ms.No.57 PR&RD (progs.II) Dept, dt.19.2.2008
4.  Representation of Builders Association of India (AP Centre), dt.13.9.2012
5.  Memo No.16274/Progs.II(1)/2013, dt.26.6.2013
6.  From the ENC, PR Lr.No.T2/DEE-5/Builder’s Association/2013, dt.21.10.2013

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ORDER:

In the ref 4th read above, Builders Association of India has submitted certain issues requesting to the Government to consider the same and issue suitable orders.

1. Price Escalation
2. Seinorage Charge
3. Tender Premium
4. VAT 5%
5. Labour Cess
6. Completion report
7. Over Head Charges
8. EOAT
9. Price Escalation Provisions
10. Tender Participation
11. Income Tax
12. Sand
13. Payment of Bills

2.  In the ref 5th read above, Government has requested the Engineer-inChief, PR to examine and to furnish a detailed report on the representation of Builders Association of India. The ENC, PR has submitted a detailed report along with the minutes of Board of Chief Engineers held on 19.6.2013 and requested to take necessary action in the matter.

3.  Government have convened a meeting on 17.10.2013 with the Engineer-in-Chief, PR/ Chief Engineers of PR Dept/ representative of Finance Dept/ Members of the Builders Association of Inida in the chambers of Hon’ble M(PR&RWS), the issues have been discussed as put-forth by the BAI in detail.

4.  Government after careful consideration of the issues of the Builders Association and hereby clarified on the following:-

i. Price Adjustment:-

Price Adjustment whether it is increase or decrease in the costs after deducting the basic 5%.

(contd---2)

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As per G.O.Ms.No.1, Finance (Works&Projects-F-7) dept, dt.25.02.2012. Wherein Para-9 of the said G.O. is as follows:

“ Treatment of Price adjustment: It is observed that Departments are adopting diverse interpretations of the existing G.Os relating to treatment of price adjustment from 0 to 5%. After careful consideration, it has been decided that hence forth all the Departments should operate variation in rates only to the extent where it is above 5% over the estimated rates.

In context of the above, the price variation clause over and above 5% should be applied on either side (increase or decrese) and hence whenever there is decrease in price, recovery should be made from the contractor beyond 5% only similar to when there is increase in price

ii.  Seignorage Charges:

The Executive-Engineer should ensure that the seignorage charges are deducted only once, and there should not be any double recovery towards seignorage charges while making payment to the contractor.

While scrutiny of bills before submission to PAO concerned, the EE should add the seignorage charges for arriving the value of the work done and propose for deduction the same for arriving the net amount payable to the contractor, and for adjusting the seignorage charges recovered thereby to the appropriate head by the PAO.

Provision towards Seinorage charges may be allowed in the estimates under Part-B

iii.  VAT:-

As per U.O. Note. No. 2447, dt.17.08.12, Finance Department has informed to adopt VAT at 5% in place of 4% w.e.f 14.09.2011 for all ongoing and future works.

Government decided to allow provision towards VAT charges at 5% in the estimates under Part-B.

iv.  Completion Report:-

Decided that the final payments to the contractors should be made as per approved work done estimate by the competent authority including part-B provisions, based on M. Book measurements after proper check of quantity and quality within a reasonable time limit. The final payment of the contractor should not be delayed for want of certificate from the quality control staff as already instructed in G.O.Ms.No.94, dt.1.7.2003 of I&CAD Dept. This is essential to discourage wanton delays, red tape and consequential ill practices in the department.

v.   Over Head Charges:-

Government have decided to allow that the over head charges @ 14% and VAT @ 5% is being adopted as recommended in the AP Standard data for all the works in PR Dept except PMGSY works. For PMGSY works 12.5% over head charges and VAT 5% is being allowed as per MORD Specification.

(contd---3)

::3::

vi. Extension of Agreement Time:-

Decided to delegate the powers to the Engineer-in-Chief, Panchayat Raj for grant of EOAT without penalty up to 3 months in case where there are valid reasons such as Land Acquisition problems, delay in approval of designs, Court cases, obstruction of power lines and major natural calamities.

vii. Income Tax:-

As per the latest guidelines of the Income Tax Department, TDS rates and returns for the Assessment Year 201415(Financial Year 2013-14) where-in as per section 194 c (1) payment to Contractors on payment exceeding Rs.30,000/- for single payment is 1% to the individual and 2% for others.

5.  The Engineer-in-Chief, Panchayat Raj /Chief Engineer, Panchayat Raj/Chief Engineer, Panchayat Raj NABARD/Chief Engineer Panchayat Raj, MGNREGS Hyderabad are requested to follow the above instructions with immediate effect.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)

V.NAGI REDDY

PRINCIPAL SECRETARY TO GOVERNMENT

To
The Engineer in Chief, Panchayat Raj, Hyderabad
The Chief Engineer, Panchayat Raj, Hyderabad
The Chief Engineer, Panchayat Raj, NABARD, Hyderabad
The Chief Engineer, Panchayat Raj, MGNREGS, Hyderabad
All the Superintending Engineers (PR) in the State
Copy to
The Fin(Expr. PR&RD) Dept
The PS to M(PR&RWS)
The PS to Prl. Secretary to Govt.
Sf/Sc

//FORWARDED:: BY ORDER//

SECTION OFFICER

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