JE Works – Induction Phase I

19.10
Urgency Certificate,
Material Modification and
Minor modifications
 THE EXECUTION OF WORKS
Engg. Code Chapter XI

• 1101. Commencement of Works--An order to prepare an

estimate for a work is no authority for the execution of that
work. The commencement of a work or the incurrence of any
liability thereon should, as a rule be authorised by the
competent authority by a written order sanctioning the
detailed estimate therefor and allotting the requisite funds. In
rare cases where verbal orders have to be acted upon, the
officer complying with the verbal orders should solicit written
confirmation of such orders within a reasonable time. Unless
it can be shown that the complying officer has conformed to
this rule, the responsibility for the expenditure incurred will
rest with him.
 THE EXECUTION OF WORKS
Engg. Code Chapter XI

• 1102. The ordinary rule is that no work may be commenced

and no liability or, expenditure incurred on a work until a
detailed estimate for it has been sanctioned and an allotment
of the requisite funds made by competent authority. This rule
pertaining to preparation of estimates does not apply in the
following cases:-

• i. For the construction or purchase of new work or asset

under the category of new minor works if estimated to cost
up to Rs 50,000/-
 THE EXECUTION OF WORKS
Engg. Code Chapter XI

• ii. For renewals and replacement of existing works and assets

chargeable to Open Line Works Revenue as a new minor work
if estimated to Cost upto Rs50,000/-
• iii. For, renewals and replacements of assets charged to
Development Fund and Depreciation Reserve Fund if
estimated to cost upto Rs. 50,000/-;
• iv. For renewals and replacements of assets charged to
Revenue if estimated to cost up to Rs. 2 lakh; and
• v. For reconditioning of existing assets if estimated to cost up
to Rs 1 lakh and any repair work chargeable to revenue
costing up to Rs 5 lakh (c.f. para 70I).
 Work started on Urgency Certificate
• 1103. Work started on Urgency Certificate.-In addition to the
exception mentioned in the preceding paragraph the
following are the only classes of work on which expenditure
or liability may be incurred prior to the receipt of sanction of
the authority competent to sanction the estimates under the
ordinary rules :--
• (i) Works, which are considered to be urgently necessary to
safeguard life or property or to repair damage to the line
caused by flood, accident or other unforeseen contingency, so
as to restore or maintain through communication.
• Note : Where applicable the instructions in paragraph 1260
should be observed.
 Work started on Urgency Certificate
• 1104. As regards class (i) in the para above, the Divisional
Engineer may authorize the commencement of the work, but
should at once submit, through usual channel, a report to the
authority competent to give administrative approval to the
work and to allot the required funds. This report which may be
called an "Urgency Certificate" or "Urgency Report" (Form E
1104) should contain (i) a description of the work, (ii) the date
of its commencement, (iii) the circumstances which bring the
work within this category, (iv) the maximum probable cost of
the work with an enclosure containing an abstract of
calculations and (v) the date by which a detailed estimate of
cost will be submitted. The Divisional Engineer should at the
same time send a copy of this report (Form E. 1104) to the
Accounts Officer.
 URGENCY CERTIFICATE
• Form No. 1104
.........................................RAILWAY
URGENCY CERTIFICATE
• Department....................................Division..................................Station.................................
• 1. Description of work................................................................................................
• 2. Circumstances which warrant the urgency............................................................
• 3. Maximum probable cost.........................................................................................
• 4. Date of commencement of work..............................................................................
• 5. Probable date of submission of detailed estimate................................................
• 6. Provision of Funds..................................................................................................
• No.....................................Station................................Date…...............................
• Forwarded to the Divisional Railway Manager/Chief Engineer/General Manager for sanction.
• (Through the Divisional Accounts Officer/Dy. FA & CAO).
• Station............................................ Signature.............................................
• Date................................................ Designation.........................................
• SANCTIONED
• Station.............................................. Signature.............................................
• Date................................................... Designation........................................
• Copy to.--The Divisional Accounts Officer/FA & CAO for information.
• Station............................................... Signature............................................
• Date.................................................... Designation.........................................
 Commencement of Works
• 1260. Execution of contract prior to commencement of
works or supplies:-
• (i) No contractor should be permitted to commence work or
supply materials until the relevant contract or work order has
been signed by the parties competent to do so;
• (ii) Exceptions to this rule are permissible only in cases of
extreme urgency such as work or supplies necessary to
safeguard life or property or to repair damage to a track caused
by flood, accident or other unforeseen contingency; so as to
restore and maintain through communication. Even in such case,
if circumstances, permit, some form of written contract or at
least an agreed statement of rates to be paid should be prepared
before the commencement of works or supplies, the intention
being that the conditions, specifications, etc. with sufficient
items and rates to carry on with, should be agreed upon hand.
 Commencement of Works

• (iii) In other exceptional but less emergent cases in which

the commencement of work or supply cannot be
postponed till the preparation and sanction of the
contract documents, prior consultation with the Financial
Adviser and Chief Accounts Officer shall be necessary.

• (iv) In all cases of departure from sub-para (i) above, the

completion and execution of the main contract should be
proceeded with expeditiously.
 Commencement of Works
GCC - Clause 19

• 19.(2) Commencement of Works:

• The Contractor shall commence the works
within 15 days after the receipt by him of an
order in writing to this effect from the
Engineer and shall proceed with the same
with due expedition and without delay
 Administrative approval and Sanction
• 1105. In according administrative approval or sanction and in
allotting funds, if required, the competent authority will give such
instructions as he considers necessary regarding the execution of
the work to executive officers subordinate to him and fix a date by
which the detailed estimate for the work should be prepared and
got sanctioned. He will at the same time furnish a copy of his
sanction and instructions to the Accounts Officer.
• 1106. The detailed estimate of the work should be prepared and
submitted to the Accounts Officer for verification well in advance of
the date fixed under the preceding paragraph. Should the detailed
estimate not be received by the specified date or should the
sanction of competent authority not be received within one month
of the date, the Accounts Officer will, in the absence of a
satisfactory explanation of the cause of the delay, make a full report
to the General Manager, who should in cases where the cost of the
work is likely to exceed his powers of sanction, at once inform the
Railway Board of the reasons for the delay.
 Administrative approval and Sanction
• 1107. As regards works falling under class (ii) of paragraph 1103
ante, if the cost of the work is not likely to exceed his own powers
of sanction and if he is able to allot the necessary funds, the
General Manager may authorize the commencement of work prior
to the preparation of estimates.
• When the General Manager accords sanction to the
commencement of a work in such circumstances, he should, in
communicating his sanction to the Accounts Officer supply to that
officer the information required under paragraph 1104 .
• If the cost is likely to exceed General Manager's powers of sanction
or if the General Manager is unable to allot the necessary funds,
the work should not be commenced without the consent of the
Railway Board. The General Manager when applying to the
Railway Board for sanction to commence a work in such
circumstances, should supply all the information required under
paragraph 1104 and furnish a copy to the Accounts Officer. In
either case, the procedure laid down in paragraphs 1105 and 1106
 Expedition in Executing Works

• 1108. Expedition in Executing Works.-All works

should be carried on as rapidly as is possible, due
regard being had to the extent of funds allotted and
to soundness of execution. All interruptions to large
works in progress should be immediately reported to
the Head of the Railway Administration, the causes
and probable duration of such interruptions being
duly explained.
 Material Modifications

• 1109. Material Modifications.-

• No material modification in a work or scheme as
sanctioned, should be permitted or undertaken
without the prior approval of the authority who
sanctioned the estimate.
• In the case of estimates sanctioned by the Railway
Board or higher authority, instances of what will be
considered to be a material modifications of a
sanctioned project or work are given in paragraph
1110.
 Material Modifications
• 1110. The following may be taken as material modifications
on lines under construction and open line works estimated to
cost rupees one crore and over.
• (a) Any change in the alignment likely to affect the facilities
offered to the public in the neighbourhood or likely to
increase or decrease the length of the line by over one
kilometre.
• (b) Introduction of any new station or omission of any station.
• (c) Any alteration in the type or number of engines or vehicles
provided in an estimate for rolling-stock.
• (d) A change in the layout of a yard affecting the general
method of working or increasing or reducing the number of
trains that can be dealt with.
 Material Modifications
• (e) Any departure from the standards of construction as
prescribed in Chapter II or as accepted by the Railway Board
in the Abstract Estimate or use of any second hand material, if
it affects the speed of trains or the number of trains to be
dealt with than contemplated originally.
• (f) The introduction or omission of any work or facility
involving a sum of Rs.5 lakhs and over.
• (g) Any modification of a sub-work provided for in the
estimate of a sanctioned work involving an additional outlay
on that sub-work of more than Rs.5 lakhs.
• (h) The introduction of the new sub-work not provided for in
the estimate of a sanctioned work involving an outlay of more
than Rs.5 lakhs.
• (i) Any alteration in the standards of interlocking.
 Material Modifications
• 1111. With a view to ensure effective control over the
execution of works within the powers of sanction of the
General Manager, it will be open to him to expand the
scope of the term "material modification" as defined in
the preceding paragraphs and to prescribe what other
instances will be regarded as material modifications by
him.
• 1112. Any modification other than a "material
modification" in the scheme or project sanctioned by the
Railway Board or a higher authority may be sanctioned
by the General Manager or any lower authority, provided
that the amount of additional expenditure, if any,
necessitated by such modification, does not cause an
excess beyond his powers of sanction.
 Sanctions to Material Modifications
• 1113. Sanctions to Material Modifications.--If the
introduction of a material modification becomes
necessary in a project sanctioned by the Railway Board
before the work is actually commenced, an amended
abstract estimate should be prepared for the project and
submitted for the approval of the Railway Board.
• When the introduction of a material modification in a
project as sanctioned by the Railway Board or higher
authority becomes necessary during the progress of the
work, a revised abstract estimate should be submitted to
the Railway Board, even when no excess in the amount
of the sanctioned estimate is likely to result.
 Sanctions to Material Modifications

• No liability should be incurred on the modification,

nor, if a saving is likely to be affected by its
introduction, should the saving be utilised for any
other purpose, until the proposed modification has
received the approval of the Railway Board.
• Note.--No material modification can be sanctioned by
the General Manager, if as a result thereof, an excess
over sanctioned estimate occurs beyond the
sanctioning powers of the General Manager.
 Minor Modifications

• 1114. Minor Modifications.-

• Executive Engineers need not ordinarily refer to
higher authority for orders proposals for the
introduction of any modification, which is
necessitated by purely engineering considerations
and which involve an outlay of less than Rs.10,000
provided the financial powers of the authority who
sanctioned the estimate are not exceeded thereby.
Powers to sanction Modifications
Model SOP
Variations in Extent of Contract

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 41. Modification To Contract To Be In Writing:
(GCC - Clause 41)
 After the contract documents have been signed, the
modifications shall be made in writing and signed by the
Railway and the Contractor.

 No work shall proceed under such modifications until this has

been done.

 Any verbal or written arrangement abandoning, modifying,

extending, reducing or supplementing the contract or any of
the terms shall be deemed conditional and shall not be binding
on the Railway unless and until the same is incorporated in a
formal instrument and signed by the Railway and the
Contractor.
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 42. Powers of Modification To Contract :
(GCC - Clause 42(1))

 The Engineer on behalf of the Railway shall be entitled by

order in writing to enlarge or extend, diminish or reduce the
works or make any alterations in their design, character
position, site, quantities, dimensions or in the method of their
execution or in the combination and use of materials for the
execution or to order any additional work to be done or any
works not to be done.
 Contractor will not be entitled, to any compensation for any
increase/reduction in the quantities of work but will be paid
only for the actual amount of work done and for approved
materials supplied against a specific order.

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 Variation in Quantities (Clause 42(2))
Unless otherwise specified in the special conditions of the contract,

 The accepted variation in quantity of each individual

item of the contract would be upto 25% of the quantity
originally contracted, except in case of foundation work.
 42(2)(ii)Contractor shall be bound to carry out the work
at the agreed rates and shall not be entitled to any claim
or any compensation whatsoever upto the limit of 25%
variation in quantity of individual item of works.
 In case of earthwork, the variation limit of 25% shall
apply to the gross quantity of earth work and variation
in the quantities of individual classifications of soil shall
not be subject to this limit. 25
 Variation in Quantities (Clause 42(2))

 In case of foundation work, no variation limit shall

apply and the work shall be carried out by the contractor
on agreed rates irrespective of any variation.
 For SOR items -limit of 25% would apply to value of SOR
schedule as a whole and not on individual SOR item
 However, in case of NS items, the limit of 25% would
apply on the individual items irrespective of the manner
of quoting the rate (single percentage rate or individual
item rate).

26
 Variation in Quantities (Clause 42(2))

 42(2)(iii) In case an increase in quantity of an individual item

by more than 25% of the agreement quantity is considered
unavoidable, the same shall be executed at following rate.

• Quantities in excess of 125% but up to 140% shall be

paid at 98% of the awarded rate;
• Quantities in excess of 140% but up to 150% shall be
paid at 96% of the awarded rate;
• (c) Variation in quantities of individual items beyond
150% will be avoided and would be permitted only in
exceptional unavoidable circumstances and shall be
paid at 96% of awarded rate.
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 Variation in Quantities (Clause 42(2))
 42(2)(iii)(d) Variation in Minor Value Item: An item whose
original agreement value is less than 1% of the total
agreement value.
 The limit for varying quantities for minor value items shall be
100% (as against 25% prescribed for other items).
• Up to 100% of agreement quantity- to be paid at the
awarded rate.
• Variation of 100 to 200% of agreement quantity- to be paid
at 98% of the awarded rate.
• Variation beyond 200% will be avoided and would be
permitted only in exceptional unavoidable circumstances
and shall be paid at 96% of awarded rate.
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Variation in Quantities : MODEL SOP (item no. 9)
• For tenders accepted at zonal level, variation will be
approved by the authority in whose power the revised
value of agreement lies.
• For increase in quantity of individual items upto 150%,
only prior approval of TAA, not below the rank of JAG, is
required. (Without finance concurrence)
• Variation beyond 150% (for individual items) will be
avoided and would be permitted with concurrence of
Associate Finance and shall be paid at 96% of awarded
rate.
• Supplementary agreements needs to be vetted
by Associate Finance.
29
 Variation in Quantities : MODEL SOP (item no. 9)
• Execution of quantities beyond 150% of overall agreement
value should not be permitted and, if found necessary,
should be only through fresh tender or by negotiation
with existing contractor, with personal concurrence of PFA
and personal sanction of GM.
• For tenders accepted by Board Member and Rly. Ministers,
GM can approve variation upto 110% of original
agreement value.
• For Zonal contracts, variation should not exceed 25% of
contract value.
• The aspect of Vitiation if any, shall be governed as per
Railway Board’s Transformation Cell Letter. 30
 Variation in Quantities : MODEL SOP (item no. 9 B)

• Saving in Individual Items upto 25% by executive

competent to sign agreement, without
Finance cuncurrence.
• Savings more than 25% in Individual Item or
contract agreement value
 With ‘No Claim Certificate’ from the contractor
 With Finance concurrence and approval of SAG giving detailed
reasons.
 Also a certificate that the quantities proposed to be reduced will
not be required in the same work in latter stage.

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 Variation in Quantities :
MODEL SOP-2018: Corrigendum No. 1 dt 17/10/18
• Vetting of Corrigendum/ addendum in case of variation is not
required when all following conditions are being satisfied:
 Value of new items (SOR/NS) is < Rs. 5 Lakh
 % change in overall contract value < 10%
 % change in all individual NS items < 25% (100% for
minor items)
Not in GCC.
Finance concurrence is not required subject to : value of new items
is less than Rs. 5 lakh or % change in original contract value is
less than 10%
Full power with Finance concurrence.
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 Variation in Quantities : excess
Variation < (+)25% on Individual Variation > (+)50%
Variation > (+)25%
items (Existing NS item. / SOR on Individual items
upto (+)50% on & subject to overall value
Schedule as a whole)
Individual items to be within +50%
Overall CV<10% CV >10%

Admn. App. Of TAA (as per Revised CV)

Admn. App. Of TAA
Not lower than JAG for
(as per Revised CV)

Finance
Vetting of Corrigendum / addendum)
Concurrence

Sanction of Accepting Authority as per Revised Contract value

(Signing of Subsidiary Agreement)

Payment to contractor 33
Variation in Quantities : Savings
Variation < / = (-)25% on Variation > (-)25% on
(i) Individual Existing NS item.
(i) Individual Existing NS item.
(ii) SOR Schedule as a whole
(ii) SOR Schedule as a whole
(iii) Overall Agreement Value

Admn. App. Of AA
Approval of Contract (Not lower than SAG)
Signing Authority [on Original CV]

Vetting of Corrigendum / addendum) Finance Concurrence

Sanction of VS by AA on Revised Contract Value

(Signing of Supplementary / Subsidiary Agreement) 34

 7. Introduction of New SOR items:
MODEL SOP (item 7)
MODEL SOP-2018: Corrigendum No. 1 dt 17/10/18

• 1. The items of work proposed for inclusion should be relevant to

the main scope of work.
• 2. Revision to contract value shall be proposed by way of
variation statement.

• Not in GCC.
• Divisional officers SG/JAG/SS (independent Charge) Full Powers
• Finance concurrence is not required subject to : value of new
items is less than Rs. 5 lakh or % change in original contract
value is less than 10% .
• Full power with Finance concurrence.
35
8. Introduction of New NS items: MODEL SOP (item 8)

• Not in GCC.
• New NS items in a contract can be introduced without
Finance concurrence to a maximum ceiling of Rs. 5 lakh
or 10% of original contract value in a contract
(whichever is less)
• Full power with Finance concurrence.
• Rate of such NS items accepted without Finance
concurrence cannot be quoted as LAR. Only rates
obtained through competitive tender process can be
adopted as LAR.
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THANKS