SECTION

ENLISTMENT OF CONTRACTORS, STANDING SECURITY

DEPOSIT, UPGRADING, REMOVAL AND
DOWN GRADING OF CONTRACTORS
111■141MMMIMIM 41119511111,

1.1 Ge e
(a) Applications for enlistment will be submitted by the contractors on [IAFW-2190 (Revised
2009) (Appendix 1.1) to the appropriate enlisting authority
(b) Fresh enlistment in MES opened from time to time as per separate notification by the
11.-in-C's Branch. However in respect of certain remote and difficult areas, enlistment may be done at
any time after satisfactory completion of work(s) by the contractor in MES in such areas with prior
permission of E-in-C's Branch in respect of D to S Class and CE Command in respect of E Class.
(c) Fresh enlistment in MES is done (whenever opened) in respect of those contractors only,
who have already completed satisfactorily at least one work in MES. No other firm is enlisted
either on the basis of having worked on power of attorney or under any other capacity or on the
basis of Job orders etc. Other firms who have not executed any MES work but are performing
exceptionally well in other Government Departments and their enlistment is considered in the
Interest of MES, may also be enlisted after prior approval of CE Zone [or CE Command/ADG (OF &
DRDO) where there is no CWE Office] in respect of enlistment in 'E' Class, CE Command/ADG (OF
& DRDO) in respect of enlistment in ID' to 'A Class and E-in-C's Branch in respect of enlistment in 'S'
Class.
(d) Applications received for enlistment in MES from the contractors during ban period shall be
returned advising them that presently enlistment is banned and they will be informed, whenever
enlistment is open, to apply at that time. However they will be sent the criteria for enlistment in
MES, to comply with. Record of such contractors and provisionally enlisted contractors shall be
maintained in a separate register in each office of enlisting authorities and these contractors will be
informed to apply whenever enlistment is open.
1.2 Categories of Works for Registration
Contractors will be enlisted for one or more of the following categories of works for which they
are considered suitable :
(a) Civil Engineering Works
(i) Building and Roads
(ii) Water Supply and Sewage Disposal
(iii) Runways and Pavements
(iv) Marine and Harbour Works
(3)
 PART—I : PRE—CONTRACT STAGE
4

(b) Electrical Engineering Works

(i) Low Tension Electric Works (upto 1100 Volts)
(ii) High Tension Electric Works (excluding 33 KV)
(iii) 33 KV and Extra High Voltage Installations
(c) Electrical/Mechanical Engineering Services
(i) Air Conditioning and Refrigeration
(ii) Lifts
(iii) Electrically Operated Cranes
(iv) Incinerators
(v) Mechanical Laundry
(vi) Fire Fighting and Fire Detection System
(vii) Water and Effluent Treatment
(d) Miscellaneous
(i) Manufacture of Furniture
(ii) Handling of Engineer Stores and Transport
(iii) Horticulture and Landscaping
(iv) Information Technology Services
(v) Maintenance and Operation of E/M Installation
(vi) Repair of Transport Vehicles
(vii) Energy Audit Services
(viii)Auction Services
Note : Contractors of class A' and above only shall be eligible for enlistment in categories (a)(iii) Runways and Pavements
and (a) (iv) Marine and Harbour Works, subject to prior approval of E-in-C.

1.3 Classification of Contract"

The Classification, value of Standing Security Deposit, Competent Enlisting Authority and
tering Authority shall be as under :
Class Upper Value of Standing Authority Competent to enlist Authority Competent to
Tendering limit Security Deposit Register
(Rs.) (Rs.) .,.

(1) (2) (3) (4) (5)

SS No limit 15 Lakhs E-in-C's Branch E-in-C's Branch

S 1500 Lakhs 11 Lakhs CE Command/ ADG (OF & DRDO) CE Command/ADG (OF & DRDO)

A 750 Lakhs 7 Lakhs CE Zone/Project CE Command/ADG (OF & DRDO)

B 300 Lakhs 4 Lakhs P CE Zone/Project CE Command/ADG (OF & DRDO)

C 100 Lakhs 1.75 Lakhs CE Zone/Project CE Command/ADG (OF & DRDO)



r 1)

E
50 Lakhs
25 Lakhs
1.00 Lakh
50,000/
CE Zone/Project CE Command/ADG (OF & DRDO)

CWE (CE Zone/Projept in case there CWE (CE Zone/Project in case there
is no CWE Office) is no CWE Office)
5

for Fresh Dili

1.4 Criteria
ria for Fresh Ealistment/U_ _ radation in various classes shall be as under :
Limit of minimum
F
alun Past It of
completed works in last
Financial
soundness
reserves/ total of movable
or immovable property or
5 Years fixed assets (in case of
companies) (80% of
Engineering minimum reserves/ assets
establishment shall be in shape of
immovable property) (Rs.
in lakhs)
of .
(4) (5)
LT (2) (3)
(a) Three graduate Engineers 120.00
'SS' (a) Two works costing not (a) Solvent upto Rs. 8.00
less than Rs. 12.00 crores crores from a Government
each or recognised institution with
for minimum experience of 5
or financially sound
One work costing not less engagement upto Rs. 40.00 Years
than Rs. 20 crores crores and
and (b) working capital not less (b) Five diploma Engineers
thanRs. 75.00 lakhs from Government recognized
(b) Average annual turn over
for last two consecutive years institution with minimum
shall not be less than Rs. 20 experience of 8 years
crores. and
(c) One of the Engineers
should have capability to use
Project Management Software
like MS Projects/Primavera in
all projects
80.00
(a) Two works costing not (a) Solvent upto Rs. 4.00 (a) Two graduate Engineers
`S'
less than Rs. 7.50 crores crores from a Government
or or recognised institution with
for minimum experience of 5
One work costing not less financially sound
years
than Rs. 12.00 crores engagement upto Rs. 15
crores and
and
(b) working capital not less (b) Three diploma Engineers
(b) Average annual turn over from Government recognized
than Rs' 50.00 lakhs
for last two consecutive years
institution with minimum
shall not be less than Rs. experience of 5 years.
12.00 crores
75.00
`A' (a) Two works costing not (a) Solvent upto Rs. 2.00 (a) One graduate Engineer
less than Rs. 4.00 crores crores from a government recog-
or nised institution with mini-
or
mum experience of 5 years
One work costing not less financially sound for
engagement up to Rs. 7.50 and
than Rs. 6.00 crores
crores (b) Two diploma Engineer
and
(b) working capital not less from Government recog-
(b) Average annual turn over nized institution with
than Rs. 30.00 lakhs
for last two consecutive minimum experience of 5
financial years shall not be
years.
less than Rs. 6.00 crores
 PART—I : PRE—CONTRACT STAGE
0
One graduate Engineer 60.00
`B' (a) Two works costing not (a) Solvent upto Rs. 100.00 (a)
less than Rs. 1.50 crores lakhs from a government
or or recognised institution with
One work costing not less financially sound for minimum experience of 4
than Rs. 2.50 crores rs
yea
engagement upto Rs. 3.00
or crores and
(b) Average annual turn over (b) working capital not less (b) One diploma Engineer
for last two consecutive years than Rs. 12.00 lakhs from Government reco-
shall not be less than Rs. gnized institution with
300.00 lakhs minimum experience of 5
years
(a) One graduate Engineer 25.00
`C' (a) Two works costing not (a) Solvent upto Rs. 40.00
less than Rs. 50.00 lakhs lakhs from a government recog-
or nised institution with mini-
or
for mum experience of 2 years
One work costing not less financially sound
engagement upto Rs. 100.00 and
than Rs. 80.00 lakhs
or lakhs (b) One diploma Engineer
(b) Average annual turn over (b) working capital not less from Government recognized
for last two consecutive years than Rs. 10.00 lakhs institution with minimum
shall not be less than Rs. experience of 4 years
100.00 lakhs

12.50
(a) Two works costing not (a) Solvent upto Rs. 20.00 One graduage Engineer from
`D'
less than Rs. 25.00 lakhs lakhs a government recognised in-
or or stitution with minimum expe-
for rience of 2 years
One work costing not less financially sound
engagement upto Rs. 50.00 or
than Rs. 40.00 lakhs
lakhs One diploma Engineer from
or
(b) working capital not less Government recog- nized
(b) Average annual turn over institution with minimum
than R ' 7.50 lakhs
for last two consecutive years an s
experience of 4 years
shall not be less than Rs.
50.00 lakhs
8.00
`E' (a) Three works costing not (a) Solvent upto Rs. 10.00 One graduate Engineer from a
less than Rs. 7.50 lakhs lakhs Government recognised
Or or institution
or
Two works costing not less financially sound for
than Rs. 10.00 lakhs engagement upto Rs. 25.00 One diploma, Engineer from
or lakhs Government recognised
(b) working capital not less institution with minimum
One work costing not less experience of 2 years
than Rs. 5.00 lakhs
than Rs. 21.00 lakhs
or
(b) Average annual turn over
for last two consecutive years
shall not be less than Rs.
25.00 lakhs
 7
.101.4 t PRE-CONTRACT STAGE
(b) The Contractors shall also meet the requirement of minimum T & P/Machinery and
it titiNport for fresh enlistment/upgradation in various categories corresponding to their classes as
Ittikr
Special T & P/ Machinery! Transport Minimum Nos. required for Remarks
enlistment in class
SS S A B C D E
10) (1). Building & Road category
1. One bag capacity concrete mixer (diesel) - - - 3 2 1 1
2. Vibrators (Needle and Plate type) 20 15 6 4 4 2 2
3. Tower/builder's hoist 4 2 1 1 1 - -
4. Steel shuttering with spans, props etc. (sqm) 6000 4000 2000 1500 1000 500 200
5. Trucks/Tippers 5 2 1 1 - - -
6. DG Sets 5/10 KVA 3 2 1 1 - - -
7. Total Stations 3 2 1 1 - - -
8. Concrete cube testing machine (Hydraulically operated) 3 2 1 1 - - -
9. Fully automatic concrete batching plant 1 1 1 - - - -
10. Transit Mixers 3 2 2 - - - -
11. Concrete Pumps 3 2 2 2 1 - -
12. Concrete mobile weigh batchers 3 2 2 2 1 - -
13. Cranes 2 2 1 1 - - -
14. Excavators (Power shovels/draglines) 2 2 1 1 - - -
15. Bull dozers 2 2 1 1 - - -
16. Road Rollers 2 2 1 1 - - -
17. Drilling machines 3 2 1 1 - - -
18. Boring rig 5 4 3 2 1 1 1 Optional in case
of tube well
boring work
19. Pile driving equipment (sets) 5 4 3 2 1 1 1 Optional in case
of pilling work
20. Pile testing equipment (sets) 3 2 - - - -do-
. ,
(a) (iii) . , ,, -.: ; ,.
1. Vibratory rollers 1 1 1 - - - -
2. Pneumatic wheeled roller 1 1 1 - - - -
3. Fully automatic concrete batching plant 1 1 1 - - - -
4. Concrete Paver finisher 1 1 1
5. Continuous type hot mix plant 1 1 1
6. Cold Milling Machine 1 1 1
7. Paver finisher (Hydraulically controlled) 1 1 1
sensors operated electrically for the pave
finisher (Hydraulically controlled)
 PART-I : PRE-CONTRACT STAGE

MEM,
5 5 5 - - - -
8. Bitumen sprayer
5 5 5 - - - -
9. Trucks/ti.. - r

..,
1. Pile driving equipment for :
2 2 2 - - - -
(a) On shore piles with operating devices
(b) Off shore pile driving device with complete equipment 2 2 2 - - - -
to facilitate lowering of rift, mixer, concreting etc.
2. Bentonite circulation eqpt 2 2 2 - - - -

3. Kelly grab for diaphragm wall construction 2 2 2 - - - -

4. Crawler mounted crane of suitable capacity with dam 2 2 2 - - - -

shell attachment for grabbing
5. Diesel/Elec operated hammer/devices for sheet pile 2 2 2 - - - -
driving and extraction
6. Concrete Mobile Weigh batchers 3 2 2 - - - -
2 2 2 - - - -
7. Pumping sets elec/diesel of suitable capacity
8. Drifter equipment for rock anchors 2 2 2 - - - -

9. Sand blasting facility for clearing of rift of rock anchors 2 2 2 - - - -

10. Under water cutting of sheetpiles 2 2 2 - - - -
11. Welding eqpt and radiography eqpt for testing of joints 2 2 2 - - - -
12. Field testing equipment 2 2 2 - - - -
13. Concrete grouting equipment 2 2 2 - - - -
14. Needle and plate type vibrators 4 4 4 - - - -
(b) (ii) (iii) Electrical Engineering (High Tension and Extra High Tension Electric Works)
1. Steel/Aluminum ladders 1.5 m. to 8m. (Nos) 10 8 6 4 3 2 2

2. Chase cutting machines 3 2 2 2 1 1 -

3. Torque wrench for nuts/bolts/screws 3 2 2 2 1 1 -
4. Primary and secondary injection equipment 3 2 2 2 1 1 -
5. Dielectric strength testing eqpt 3 2 2 2 1 1 -
6. Magnetic dial indicator for alignment 3 2 2' 2 1 1 -
7. Conduit die set 3 2 2 2 1 1 -
8. Pipe vice 3 2 2 2 1 1 -
9. Bench vice 3 2 2 2 1 1 -
10. LT Meggar 500 volts 3 2 2 2 1 1 -
11. HT Meggar 5000 volts Y 3 2 2 2 1 1 -
12. Tong tester 3 2 2 2 1 1 -

PART-I : PRE-CONTRACT STAGE 9
Cate. , Special T ,ik P1 1W,achinery/ Transport Minima= Nos. required for Remarks
gory 4 enlistment in class
SS S AB CD E
13. Hydraulically operated & hand operated crimr3ing 3 2 2 2 1 1 -
machines
14. Earth tester 3 2 2 2 1 1 -
15. Portable drilling machines 3 2 2 2 1 1 -
16. Over head conductor pulle'r 3 2 2 2 1 1 -
17. Test bench for light fittings 3 2 2 2 1 1 -
18. Cable fault location meggar 3 2 2 2 1 1 -
19. Oil testing set 3 2 2 2 1 1 =
20. Multi 3 2 2 2 1 1 -
(d) (i) Manufacture of furniture . -

1. Properly fitted workshop 1 1 1 1 1 1 1

2. Sawing machine 2 2 1 - - - -
3. Planing machine 4 3 2 2 1 1 1
4. Machine for cutting, grooving, moulding & beading 4 3 2 2 1 1 1
5. Compressor for spray painting 4 3 2 2 1 1 1
6. Bending machines 4 3 2 2 1 1 1
7. Welding sets 4 3 2 2 1 1 1
8. Machines for screw driving 4 3 2 2 1 1 1
9. Drilling machine 4 3 2 2 1 1 1
T.77-r.T
(d) (ii) Handling of Engineer stores and ansport
1. Trucks I 7 5 1 5 5 13 3 3

(c) Verification of character and antecedents of Proprietors/ Partners/Directors shall be done

through police authorities (not below the rank of Superintendent of Police) before he is brought on
the approved list.
Notes :
1.For enlistment in class 'SS', the company incorporated under the 'Companies Act 1956' shall only be eligible.
2. The categories for enlistment shall be decided on the basis of nature of works executed by Contractor and T&P/machinery
possessed by him.
3. For enlistment in category (b) Electrical Engineering Works, one of the engineers employed by the Contractor should be
degree/diploma holder in electrical engineering with requisite experience and for enlistment in category (b) (ii) and (iii), the
Contractor should also employ persons having valid electrical licence from competent authority on their permanent
establishment atvo persons for class 'SS' and one person for class 'S' to 'E' ). For this, he will submit requisite affidavits and
attested copies of Licences.
4. Working capital with the Contractor shall be judged from balance sheet/bank's certificate as per Appendix 1.2/bank
statement for last 6 months/overdraft facility from bank/fixed deposit receipts with banks.
5. Immovable/movable property (minimum reserve) shall be exclusively in the name of Contractor and not in the name of
family members/relatives/others. In case of limited companies immovable/movable property (considered for minimum
reserve) shall be exclusively in the name of company and should be reflected in the Balance Sheet of the Company.
 PART—I : PRE—CONTRACT STAGE
10
6. Requirements of Engineering establishment shall not be insisted upon if enlistment is to be done for(iii) following categories
Horticulture and
of Furniture, (ii) Handling of Engineer Stores and Transport,
only : (d) Miscellaneous Manufacture
Landscaping, (iv) Energy Audit Services, (v) Auction Services. Contractor is considered for
7. Upgradation of an enlisted Contractor shall be done gradually in stages. Before a
upgradation, he should have worked at least for 2 years in the present tendering limit and ifalso
a time. However, meets the criteria
performance of any laid down.
particular
next higher class at
Normally
Contractor upgradation
is found to bewill be done
of very high only
ordertoand
oneEnlisting Authority considers upgradation of such Contractor by more than
one class justified, the same shall be done only with prior approval of E-in-C's Branch. Following considerations shall only be
applied to ascertain whether the performance of Contractor is of very1.25 hightimes
orderthe
or requirements
otherwise : in which the upgradation is
than
(a) Contractor has completed the works value of which is more
being considered. 1.25 times the requirement in which the upgradation is being
than
(b) Average Annual Turnover of the Contractor is more
considered. lakh proosed
p to be upgraded to class A' having
Contractor enlisted in class 'C' having tendering limit of Rs. 100 turn over shall be as under
Example : value of works completed and/or
tendering limit of Rs. 7.50 crore, minimum
than Rs. 5.00 crore each (1.25 x 4.00)
(i) '1Wo works completed costing not less
Or
One work costing not less than Rs. 7.50 crore (1.25 x 6.00)
(1.25 x 6.00) than
(ii) Average annualsecured
turnover
in Rs. 7.5 croresReports
Performance (Stage II) for the' works completed in last five marks.
years shall not be less
(c) Average marks to contain only 60% average
70%. Where report for any work is not available, it will be deemed
8. The criteria laid down above for enlistment/upgradation may be relaxed in the case of Contractors whose performance has
prior approval of E-in-C's Branch.
been found to be of a very high order. Such relaxation may, however be given only with(a)
t in categories the(iii) Runways and Pavements and
9. Contractor of class A' and above shall only be eligible for enlistmen
E-in-C.
(a) (iv) Marine and Harbour Works, subject to prior approval of +.7

5 Documents required to be submitted the Contractor tor enli

1
1 Applications for enrolment as Contractor on IAFW-2190 (Photographs affixed on
(a) Application shall be got attested by any Government Gazetted Officer).
Affidavit for constitution of firm (only limited companies shall be enlisted in 'SS' Class).
(b)
(c) List of works executed during last 5 years.
Annual turnover certificate from CA/Income-tax deduction at source (TDS) certificates
(d)
from GEs in support of annual turnover during last 5 years.
Balance sheet of last 5 years in case of limited companies.
(e)
Affidavit for immovable properties indicating present market value and containing
(f)
following endorsements :
(i) That the immovable property is free from mortages, hypothecation or any other dispute
and encumbrances and clearly belongs to the Contractor.
Or
That the immovable property is free from any disputes and encumbrances and clean
belongs to the Contractor. The immovable property has been mortagaged/hypothecate

Market value of immovable property as per valuation report No
for Rs Therefore balance market value I
is Rs.
given by Registered valuer mortagaged value) is free from ar
s. (Market value minus
Pro
pp i.e. R
mortgage/ hypothecation.
PART—I : PRE—CONTRACT STAGE 11

(ii) That the said immovable property has not been shown for seeking enlistment of a sister
concern in MES.
(iii) That the said immovable property will not be sold, transferred, gifted or otherwise
disposed off without prior intimation to the registering authority in MES. While giving
such prior intimation, new affidavit for alternate immovable property of value at least
equal to minimum requirement as per scales alongwith valuation report from registered
valuer shall also be submitted; failing which the Registering Authority may declare the
contractor unenliste4 or may take action as deemed fit till acquiring alternate immovable
property by the Contractor.
Note : In case of partnership firm, the partner having immovable property in his name, shall also endorse the following in
addition to above :
"Irrespective of my share in partnership firm, my whole property may be utilised by the Government for realising their
dues/recovery, if the firm fails to deposit the same".
(g) Valuation report from Registered (with any Government body) valuer for immovable
property clearly indicating ownership details. Alternatively the Contractor may submit
certificate from the Deputy Commissioner/ Collector/First Class Magistrate or assessment of
wealth tax authorities.
(h) Affidavit for movable property (T & P. machinery, transport etc.) : If certain,
movable property is being considered towards requirements of minimum reserve,
endorsements as required for immovable property shall also be given on affidavit for
movable property and valuation report from Registered (with any Government body)
valuer for movable property clearly indicating ownership details shall also be submitted.
(j) Solvency certificate from the scheduled bank as per specimen given in Appendix-1.2
(k) Working capital certificate from the scheduled Bank as per specimen given in Appendix
1.2. Alternatively Contractor may submit bank statement for the last 6 months/attested
copies of fixed deposit receipts/balance sheet in support of Working Capital.
(1) Affidavit from contractor for employment of Engineers.
(m) Affidavit from Engineers for employment with the Contractor.
(n) Experience and Degree/Diploma certificates of Engineers.
(o) Affidavit from Contractor that there is no Government dues/recovery outstanding against
him. (If there is any Government dues/recovery outstanding from the Contractor,
enlistment/upgradation shall not be done)
(p) Affidavit from Contractor that he is not involved in any arbitration/litigation cases. If he is
involved, he will give brief details of such cases on affidavit and enlisting authority will
critically examine such details and if contractor is considered habitual litigant, his
enlistment/ upgradation shall not be done.
(q) Two photographs of proprietor/partners/directors of firm for verification of character and
antecedents from the police authorities.
(r) Copy of partnership deed in case of partnership firm.
(s) Memorandum and Articles of Association in case of Limited Companies.
(t) Copy of Registration Certificate of firm/company with Registrar of Companies.
12 PART—I : PRE—CONTRACT STAGE

(u) Affidavit that no near relative(s) of the contractor or their employees/agents is/are
working as Gazetted/ Commissioned Officer in MES/Corps of Engineers/ Ministry of
Defence. If his/their near relative(s) is/are working in such capacity, he/they shall furnish
details. The contractor shall not be entitled to tender for the works in entire area of CE
Zone/Project under whose control his/their near relatives are working as Gazetted/
Commissioned Officers.
(v) Affidavit that no near relative(s) of the contractor is/are working as Junior Engineer in
MES/Corps of Engineers. If his near relative (s) is/are working in such capacity, the
contractor shall furnish details. The contractor shall not be entitled to tender for the works
in entire area of GE (I)/GE in which his near relative(s) is/are working as Junior Engineer.
(w) Copy of power of attorney given to any person/partner/ director by the Contractor.
(x) Copy of last income tax return.
(y) A separate sheet containing specimen signatures (signed in black ink) and affixed with
photographs of proprietor/ partners/directors. (To be used as Appendix B of enlistment
letter)
Notes : (i) All the documents submitted by the Contractor shall be signed by him.
(ii) Photo copies of documents shall be attested by the Gazetted Officer/ Notary Public.
(iii) All the affidavits shall be given on non judicial stamp paper of appropriate value duly signed by the contractor and attested
by the Magistrate/ Notary Public.

1.5.1 On receipt of letter from enlisting authority asking standing security deposit and standing
security bond (Bond to secure performance of agreement), and unless the contractor decides to
deposit individual security for each work he secures, he shall furnish the following :
(a) Standing security deposit of appropriate value (Acceptable form of standing security
deposit shall be as given in para 2.1 (h) of section 2 except Bank Guarantee Bonds)
(b) Standing security bond (Bond to secure performance) on non judicial stamp paper of
appropriate value as per specimen given at Appendix 1.4 duly signed by Contractor and
attested by Magistrate/Notary Public.
1.6 Income Tax Clearance Ce
W.e.f. 30.10.03 requirement of submission of ITCC by the contractors for enlistment purposes
has been dispensed with.
1.7 Verification of Character and Antecedents of Contractors ttF

(a) There have been cases where foreign nationals and other anti-social elements were found
associated with Defence works. In the interest of security, therefore, the following action
will be taken :
(i) Character and Antecedents of a Contractor (Proprietor/ Partners/Directors) shall be
verified through police authorities (Not below the rank of Superintendent of Police) before
he is brought on the approved list.
(ii) Character and Antecedents of agents of contractors shall be verified through police
authorities (Not below the rank of Superintendent of Police) before they are associated
with the contract work.
PART-I : PRE-CONTRACT STAGE 13
(iii) Character and Antecedents of a sub-contractor shall be verified through police authorities
(Not below the rank of Superintendent of Police) before he is associated with the contract
work.
(iv) Character and. Antecedents of an unregistered contractor to whom a tender may be issued
shall be verified through police authorities (Not below the rank of Superintendent of
Police) before a tender submitted by him is opened. In case the police verification is not
received till the date of opening of tender, the tender of such Contractor shall not be
opened. K.
(v) Foreign nationals including labour shall be excluded from all contracts unless for reasons
of technical collaboration or some other consideration, their inclusion is unavoidable.
(b) The following instructions shall be followed for verification of character and antecedents
of contractors :
(i) Verification of character & antecedents of contractors and their agents shall be taken up
with Superintendent of Police of the District to which the individual belongs.
(ii) If an unregistered original equipment manufacturer and multinational company applies
for issue of a tender and he is considered otherwise suitable, immediate action shall be
taken to get the Police verification done. It may not, however, be possible to know the
result of the Police verification before issue or even before acceptance of a tender
submitted by such a tenderer. In such a case, the Accepting officer must, before issuing a
tender, satisfy himself about the character and antecedents of the Contractors. If necessary,
references to other departments with whom the Contractor may have been working may
be made for the purpose.
(iii) Provision shall be made in all tender documents to the effect that Contractor shall employ
only Indian Nationals after verifying their character, antecedents and loyalty. Attention of
tenderers shall also be drawn to Condition 25 of IAFW-2249 (or other similar condition in
the applicable Contract form).
(c) All possible steps shall be taken to ensure that a person of doubtful character and
antecedents is not associated with Defence Works. If in doubt, a reference shall be made to
police authorities for fresh verification.
(d) It has been clarified by the Ministry of Home Affairs that verification of antecedents in case
of Government Undertakings is not necessary.
(e) It has been decided by the Ministry of Defence that verification of antecedents in respect
of the following shall be got done through Intelligence Bureau, Ministry of Home Affairs :
(i) Indian Firms of Contractors having both Indian as well as foreign nationals as
Directors.
(ii) Foreign firms of Contractors.
(iii) Indian Firms of Contractors having Indian Nationals as Directors living - in India as
well as Directors of Indian nationality living abroad.
(iv) Indian Firms of Contractors having Indian Directors living in India as well as Directors
of Indian origin having acquired foreign nationality/ citizenship and living abroad.
14 PART-I : PRE-CONTRACT STAGE

(f) Any Indian firm having one or more Directors of Indian Nationality but living abroad or
having one or more Directors of Indian origin having taken up foreign nationality/
citizenship may not be enlisted. However, in exceptional cases only and with the approval
of Ministry of Defence, work can be awarded to such firm after verification of their
antecedents and their performance through CBI.
(g) Verification of antecedents of Proprietor/Partners/ Directors of the Firm in connection
with issue of tender and or Enlistment shall be Govt. responsibility and accordingly
payment to police authorities towards verification of antecedents shall be made by
contractor.
(h) Verification of antecedents of Contractor's representatives/labour deployed at site in
connection with execution of work under the contract, as per security requirements of
User Unit/installation shall be the responsibility of the contractor and all expenses in
connection with verification of antecedents by Police Authority/Security Agency shall be
borne by the contractor. An appropriate clause to this effect shall be incorporated in the
contract.
4
1.8 Procedure for Ellis
To ensure uniformity of the procedure for enlistment/ upgrading, the various points to be
checked are enumerated in the 'Check List' given at Appendix 1.3. The points given in the list
should be checked while examining the case of enlistment/upgrading and complied with. Following
procedure will be followed for enlistment of contractor.
(a) 'SS' Class : Application for enlistment as an approved contractor in 'SS' Class is to be
submitted by the Contractor to E-in-C for decision. A contractor of 'S' Class already
enlisted by CE Command should normally apply through that CE Command.
(b) 'S' Class : (i) Application for enlistment as an approved contractor in 'S' Class is to be
submitted by the Contractor to the Command CE for decision. A Contractor not enlisted
with MES may submit his application direct to Command CE but a contractor of 'A Class
already enlisted by a Zonal/Project CE should normally apply through that CE. Having
taken a decision to enlist a contractor in 'S' Class the Command CE will inform the
contractor about it and the categories for which it is proposed to enlist him, and call upon
him to deposit the required Standing Security Deposit and to execute the Standing
Security Bond, unless the contractor decides to deposit individual security for each work
he secures.
(ii) On receipt of the Standing Security Deposit and Standing Security Bond from the
Contractor, the Command CE, after having completed the bond by making the following
endorsenient at the bottom of the last page, allot a number and issue enlistment letter to
the Contractor under intimation to the E-in-C, CEs of other Commands, all Zonal/Project
CEs, CsWE, GEs and Independent AGEs in his Command :
"Accepted for and on behalf of the President .of India
Signature and Designation of CE Command"
■

PART—I : PRE—CONTRACT STAGE 15

(c) 'A' to 'D' Class : (i) Application for enlistment as an approved contractor in any of the
financial classification 'A to 'D' is to be submitted by the Contractor to the Zonal/Project
CE who will decide as to whether the applicantls to be enlisted and if so, in what class and
for what categories of work. Having taken a decision, the Zonal/ Project CE will inform
the Contractor of the class and categories for which he proposes to enlist him. He will also
call upon the Contractor to deposit the standing security appropriate to that class and to
execute the Standing Security Bond, unless the contractor elects to deposit security for
each work he secures. K.
(ii) On receipt of the security and the bond, Zonal/Project CE will forward these alongwith
contractor's application together with all supporting documents to the CE Command for
safe custody and allotting an index number and issue of enlistment letter to the
Contractor.
(iii) On receipt of the documents, the CE Command shall ensure that Index Number is
allotted and enlistment letter issued as early as possible but in no case later than TWO
months from the date of receipt of documents in his office. All actions in such cases should
be dealt with expeditiously.
(iv) The Command CE will complete the bond by making endorsement at the bottom of
the last page as stated in para 1.8 (b) above. Thereafter the CE Command will issue
letter of enlistment to the Contractor concerned, under intimation to the E-in-C, CEs of
other Commands and all Zonal/Project CEs, CsWE, GEs and Independent AGEs in his
Command. This letter will, inter-alia, indicate the Index number allotted to the Contractor
in the Command.
It is hereby clarified that while, no doubt, the competent authority for enlisting Contractors in
Classes 'A to 'D' is the Zonal CE, the Command CE may at his discretion scrutinise the enlistment
papers forwarded by Zonal CEs and satisfy himself about the correctness and eligibility of
enlistment, before allotting Index Number etc. Command CEs are advised that such checks to be
carried out by them should be institutionalised. It need hardly be emphasised that delays should not
occur in finalising enlistments, by entering into protracted correspondence with the Zonal CEs.
Note : (i) The documents pertaining to securities in respect of enlistment in 'S' and A' to D' Classes will be forwarded by
Chief Engineer Command to the PCDA/CDA concerned for safe custody and periodical drawal of interest and payment
thereof to the Contractor
(ii) Wherever standing security deposit is required to be released in respect of contractor of S' and A' to D' Classes, necessary
action to obtain "Clearance" from all concerned and to release it shall be taken by the CE Command.
(iii) From the above, it will be observed that authority on whose register Contractors of A' to D' Classes will be deemed to
be borne shall be the CE Command.
(d) 'E' Class : (i) Application for enlistment as an approved Contractor in 'E' Class is to be
submitted by the contractor to the concerned CWE/CE (where there is no CWE Office)
who will decide as to whether the applicant is to be enlisted and if so for what categories
of work.
(ii) Having taken a decision, the CWE/CE will take appropriate action to intimate the
contractor of his decision and to obtain Standing Security Deposit and Standing Security
Bond as described in para 1.8 (b) above. After completing these formalities, he will allot
an Index number and issue enlistment letter to the Contractor under intimation to
 PART-I : PRE-CONTRACT STAGE
16
Command CE, Zonal/Project CE, CsWE in the Command, GEs and Independent AGEs in
his Area.
(iii) Documents pertaining to security in respect of enlistment of contractors of Class 'E'
will be forwarded by the CWE/CE to the PCDA/CDA concerned for safe custody and
periodical drawal of interest and payment thereof to the contractor.
(e) Specimen copy of enlistment letter to be issued by the registering authority is given at
Appendix 1.5
1.9 Enlistment A
Contractors of following classes who are enlisted and have lodged Standing Security Deposit
and executed Standing Security Bond in one command (i.e., the Contractor's parent command) can
get themselves enlisted without lodging fresh Standing Security Deposit and Standing Security
Bond in :
Any Command or Command(s) — For 'S' Class Contractors
Any TWO Additional Command(s) — For 'A Class Contractors
Any ONE Additional Command — For 'B' to 'D' Class Contractors
For this purpose the interested Contractors may forward their application for enlistment to the
CE of the new command through CE of their parent Command, who will give his recommendations
in this regard which will be accepted by the other command CE without further scrutiny.

1.10 Facility for Working for otier

The Contractors of `E' to `S' Class registered with any one MES formation providing services to
either Army or Navy or Air Force or Ordnance factories or R&D, and who have deposited Standing
Security Deposit and executed Standing Security Bond will be allowed to execute work in respect of
GEs working for other services also without depositing separate security deposit provided the works
pertaining to other services are located at same station (i.e., within the same municipal
corporation/cantonment limit) at which GEs/AGEs of his enlisting authority are located and also
provided that such works come under the jurisdiction of the same PCDA/CDA to which the enlisting
authority has furnished Standing Security Deposit and Standing Security Bond for safe custody.

1.11 Transfer of Enlistment on Reorganisatioggjos,orma

(a) If any MES formation is disbanded/reorganised, the contractors enlisted with that
formation may get their enlistment transferred to any one other formation at their
willingness. In such cases the contractor will have to submit fresh Standing Security Bond.
They will also have to submit fresh Standing Security if PCDA/CDA also changes and his
old standing security will be refunded.
(b) If any new MES formation is raised, the enlisted contractors, who are willing to work in
area of new formation, may get their enlistment transferred to new formation and will
have to submit fresh Standing Security Bond. They will also have to submit fresh Standing
Security if PCDA/CDA also changes and his old Standing Security will be refunded. After
enlistment in new formation, their enlistment with old formation will cease to exist.
 PU-CONTRACT STAGE 17

There is no requirement of lodging separate Individual Security Deposit for running

contracts on account of reorganization of MES formations.
7,
Ili Provisional Enlistment of
(a) Para 419 of the Regulations for the MES-1968 states that tenders will normally be issued
to contractors borne on the approved list of the MES.
(b) Due to dearth of contractors in some areas and with a view to attracting more contractors
to MES, advertisements for MES tenders mention that Contractors not borne on the MES
list may also apply. On receipt of applications from such Contractors they are asked to
submit particulars with regard to their financial and technical capabilities. Simultaneously,
action is also taken to obtain police verification.
(c) On the basis of the particulars submitted, tenders are then issued to such Contractors
whom the Accepting officer considers suitable for the work in question. Should the tender
of any un-enlisted Contractor happen to be the lowest and considered otherwise
acceptable, it should be ensured that the contractor is first provisionally enlisted after
obtaining all documents required for enlistment in MES corresponding to value of work.
1.13 Upgrading of Contractors
(a) Criteria for upgradation of Contractors shall be same as given in para 1.4 here-in-before.
(b) For upgrading from 'S' Class to 'SS' Class, the Contractor will apply to E-in-C through CE
Command with whom he has been working.
(c) For upgrading from 'A Class to `S' Class, the Contractor will apply to the CE Command
through the Zonal/ Project CE with whom he has been working.
(d) (i) For upgrading to higher classes upto 'A Class, a Contractor will normally apply to the
concerned Zonal/Project CE. Occasions may, however, arise when a Zonal/Project CE may
himself consider that a contractor should be upgraded to a higher class upto 'A Class. In
both these cases, the concerned Zonal/Project CEs will ascertain the views of the other
Zonal/Project CEs in the Command, if necessary and after deciding the higher class in
which the contractor is to be placed, intimate his decision to the Command CE.
(ii) If any of the other Zonal/Project CE does not recommend upgrading, then the
Command CE should be informed of the views of the Zonal/Project CE who has not
recommended and the Command CE shall exclude Zonal/Project CEs in which
Contractor's reports are unsatisfactory, whilst issuing letter of upgrading of the
Contractors. Further action for intimating the Contractor of his upgrading and allotting
fresh Index number in the new class will be taken by the Command CE. All formalities for
obtaining from the Contractor, fresh Standing Security Bond and additional standing
security deposit shall be completed by Zonal/Project CE who takes the decision on
upgrading of the Contractor and he shall forward necessary documents to CE Command
for further action as stated in para 1.8 above.
(e) The upgradation of Contractors shall be subject to provisions contained in Note 7 and 8
under para 1.4 hereinbefore.
 PART—I : PRE—CONTRACT STAGE
18

The enlistment of Contractors (in respect of Contractors of 'D' to `SS' Class) is done for the
cyclic period of 5 years i.e. from 01 Jan 2006 to 31 Dec. 2010, 01 Jan 2011 to 31 Dec. 2015 and so
on. With a view to ensure completion of the process ofrenewal well before expiry of the validity
period, the action shall be taken by the registering authorities as indicated hereunder :
(a) Format for Renewal : The format for the application for renewal will be as indicated in
Appendix 1.6, alongwith the document stated therein. (No renewal of enlistment is
required for E class Contractors)
(b) Stages of Renewal : The process of renewal will be carried out in two stages as
indicated below :
First stage • 'SS', 'S', A Class
Second Stage 'B', 'C' and 'D' Class
(c) Time Schedule : The following time schedule is laid down for the various activities
involved in renewal :

Dispatch of letters by registering authorities to
Contractors asking the application for renewal.
Receipt of applications from Contractors
Issue of renewal letters
Last date for appeal by the contractors against non-
renewal of enlistment.
31st Jan of last year of cyclic period 28th Feb of last year of cyclic period
31 May of last year of cyclic period 30 June of last year of cyclic period
30 Sep of last year of cyclic period 31 Oct of last year of cyclic period
31 Oct of last year of cyclic period 30 Nov of last year of cyclic period

(d) Criteria for Renewal : All Contractors who apply for renewal will be re-enlisted except
those falling under the following categories :
Contractors whose contracts have been cancelled and unrealized recoveries exist thereto.
Cases, where cancellation of contract has been declared invalid/illegal in arbitration/
court of law, shall be decided after obtaining approval of E-in-C Branch.
Contractors in whose completed works during the last 5 years, serious defects were
noticed which are substantially attributed to the performance of Contractors, established
through Court of Inquiry or Technical Boards and disciplinary action is pending.
Contractors who could not secure any work in the last 5 years either in MES or any Govt.
Dept./ Public Sector Undertaking/AWHO/ANWHO/ DGsNP; or in case they could not
secure any work, they have not participated in tenderiri*g in MES or have participated in
tendering but have not been in first three lowest.
Contractors who are habitual litigants.
Contractors who are already removed on .account of any default on their part, or banned,
but ban period is not yet over.
Contractors not found fit ,for renewal for reasons other than (i) to (v) above, i.e., unethical
conduct.
ART-S : PRE-CONTRACT STAGE 19

Some of the criteria listed above and action to be taken are elaborated as under :
(1) Regarding criteria (i) above, action needs to be taken to obtain the explanation of the
Contractor allowing 4 weeks time to furnish replies and the issue decided taking into
account the replies of the Contractor.
(2) In respect of criteria (iv) above, a Contractor will be considered a habitual litigant if he
moves the court more than once ignoring arbitration clause and the court does not uphold
his view.
(3) Regarding criteria (vi) above, the Registering Authority will intimate the specific reasons
to the next higher Engineer Authority alongwith the Contractor's explanation and his
views on the same.
(e) Any case of unusual nature may be referred to E-in-C Branch latest by 31 July of last year of
yclic period for advice/ clearance.
1.15 Standing Securitz
(a) The Standing Security Bond form is given at Appendix 1.4. Such of the Contractors who
;we executed this bond will not be required to deposit earnest money and security deposits for
ividual works.
(b) This bond form covers past contracts also and if Contractors execute the bond on this form,
.curities deposited by them in respect of contracts concluded prior to the day of execution of the
and may be either refunded to them or appropriated against the Standing Security of the Bond.
(c) The Standing Security Bond must be stamped and may be registered in accordance with the
iw of the State in which it is executed. Registration of bond however, is not compulsory, but it
Could necessarily be stamped in accordance with the law of the State.
(d) Execution of Standing Security Bond will not be a condition of contract; it will be
'dependent of any or all contracts. However, .in the case of Contractors who decide to execute
tanding Security Bond, the execution of the Bond will be a condition precedent to their enlistment.
(e) In the case of Contractors, who execute Standing Security Bond, recovery of amount(s) due
.om them will be regulated as per the terms of the Bond.

(f) One bond only will be required of any one Contractor irrespective of the trade group in
'hich he is registered.
(g) Contractors of 'SS' class will be required to execute bond with E-in-C. Contractors of `S' &'A
`D' Classes will be required to execute a bond with the Chief Engineer of each Command and in
ie case of 'E' Class Contractors with CWE/CE concerned (where there is no CWE office).
(h) Should the value of the Bond be reduced by an enforceable claim, the Contractor will be
iquired to make up the deficiency (or meet the claim without touching the Bond) before he is
wited to tender for further works.
(j) The value of a bond will not limit the value of a claim by Government under the conditions
the contract.
(k) In case of Contractors of `S' and 'A to 'D' Classes, the jurisdiction to be indicated in the blank
)ace in the first sentence of para 2 of the bond shall be the Command in which the contractor is
ilisted and in para 3 of the bond, the CE Command will be entered as the Registering Officer.

20 PART-I : PRE-CONTRACT S

(a) (i) The Standardised Code for registration, demotion, removal, suspension of busines
banning of business etc. of building contractors, agreed to by Ministry of Defence is contain
E-in-C's letter No. 36461/P-1/E8 dated 24 Nov 76. Provision of removal/suspension di
non-production of ITCC shall not be applicable, since this requirement has been dispensed wi
Government now. The decision regarding removal from registration/ suspensiol
business/removal from approved list taken after the issue of show cause notice and considerati
representation, if any, in reply thereto should be communicated to the firm concerned.
Appendix 1.7)
(ii) Copies of the orders of demotion/suspension of business/ removal from the approve(
with a memorandum of reasons, therefore, shall be sent by the concerned Department throu;
administrative Ministry, to the other Ministries responsible for major construction work for
action as they may deem necessary.
(iii) In respect of a contractor registered for various categories of works viz. building and
works, furniture, electrical, sanitary and water supply order regarding removal would apply of
one category unless otherwise specified.
(iv) The Ministries of Defence, Railway, Urban Development, Water Resources, Su
Transport, Information and Broadcasting are the Ministries concerned with major constru
works.
(b) Suspension on account of minor technical offences on the part
Contractor : The Code provides that the competent authority may order suspension of buy
with a Contractor for a specific period on account of comparatively minor technical offences.
(i) Under the existing rule in the MES, temporary suspensions for a period not exceedin:
year may be ordered by the registering authority as a result of minor technical offenc
the part of the Contractors, such as- adoption of inferior material, workmanship an
like. In such cases, though the next higher Engineer Authority will be kept informed,
permission of that authority is not necessary. This action of temporary suspensi
normally taken as a disciplinary measure with ,a view to enabling the Contract
improve his organisation etc. It, therefore, becomes necessary to inform the Contract
the reasons for the suspension.
(ii) Suspension for similar reasons for a period exceeding one year shall be ordered only
the prior approval of the next higher Engineer Authority. In this case also the Contr
shall be kept informed of the reasons. k.
(iii) Suspension for reasons other than technical lapses referred to above, such as susp
malpractices or suspected disloyalty to the State, shall be done only with the
approval of the E-in-C because in such cases other CEs may have to be kept informer
communication is to be sent to the Contractor in such cases.
(c) Demotion to a LowervClass
(i) Demotion to lower class or removal shall be done with the prior approval of the
higher Engineer Authority
 : PRE-CONTRACT STAGE 21

(ii) In the case of demotion to a lower class, the communication to the Contractor shall
normally be a bare intimation of the fact.
(d) Removal from Approved List : Action to remove a Contractor normally falls in the
idermentioned categories :
(i) Where a contract nr himself desires his name to be removed;
(ii) For any of the reasons mentioned in the Standardised Code.
En the above two cases, the communication to the contractor shall be on the lines indicated in
)pendix 1.7.
(e) In the cases mentioned above, where intimation to Contractors regarding suspension,
motion, and removal is given on the lines indicated above, reference to a legal adviser with
wird to the form of communication. to be adopted is not necessary. However, in special cases,
tere doubt arises about the form of communication to be adopted, a reference should be made to
legal adviser.
(f) Before a final decision to demote, remove or suspend business with a Contractor borne on
e list of approved Contractors is taken, the Registering Authority may at its discretion, with hold
me of a tender in respect of any particular work to the Contractor whose case is under reference
it h the next higher Engineer Authority
(g) Action on Cancellation of Contract :
(i) As soon as a contract is cancelled on account of Contractor's default, the Accepting Officer
of the contract shall immediately bring the same to the knowledge of the registering
authority who shall examine the case for taking necessary action in terms of the
`Standardised Code' depending upon the merits of the case. Further his default shall
invariably be brought to the notice of other Zonal Chief Engineers by a separate letter
immediately. This action shall be, besides including the case in the quarterly work load
return on Contractors with clear direction against further issue of tenders to the said
Contractor.
(ii) Once a contract with a Contractor has been cancelled due to his continued default in
completing the works, no tenders shall be issued by any MES formation either to the said
Contractor or to any of his partners individually or to any of his allied firms, till clearance
is obtained from E-in-C's Branch. In exceptional cases where the Command Chief Engineer
considers that action against the Contractor in terms of the Standardised Code (or
with-holding issue of further tenders) is not advisable, he should forward the case to
E-in-C's Branch with his detailed recommendations for a decision. However, pending
decision on such cases from E-in-C's Branch, issue of tenders to the firm shall stand
suspended.
(h) Suspension, down-grading and removal of contractors of `S' Class shall, however be done
ily with the prior concurrence of the E-in-C. Cases may arise wherein an 'S' class Contractor's
wformance in one Command may be unsatisfactory, though he may be executing works quite
tisfactorily in other Commands. The following procedure should therefore be adopted with regard
suspension/ downgrading/removal of a `S' class contractor :
22 PART-I : PRE-CONTRACT STAGI

(i) If the performance of 'S' Class contractor is found to be unsatisfactory in the Commanc
where he is initially enlisted (i.e. parent Command) and suspension/ downgrading/
removal from the approved list is contemplated, the Command CE will initiate actior
including issue of Show Cause Notice where necessary and seek the prior approval o.
E-in-C subsequently. Simultaneously the Command CE will keep the other Command CEs
in whose Commands the Contractor is also enlisted (based on the enlistment in hi:
Command), informed of the action proposed to be taken. On receipt of approval of the
E-in-C, the Command CE will take action to suspend/downgrade/remove the Contractor
Disciplinary action taken by the Command CE, will equally apply to the other Commands.
(ii) If the performance of a 'S' Class Contractor is found to be unsatisfactory in a Commanc
other than the parent Command in which he was initially enlisted anc
suspension/downgrading/removal from the approved list is contemplated, the Commanc
CE will initiate action including issue of Show Cause Notice where necessary anc
subsequently seek concurrence/ comments from other Commands, where the contractor i5
enlisted including the parent Command. There after the case will be referred to the E-in-C
alongwith the views of other Command CEs for prior approval. E-in-C shall then convey
his decision to the Command CE, keeping the parent Command as well as other
Commands also informed of his decision.
(iii) Temporary suspension on account of minor technical offences, may be done by any CE
Command under whom the Contractor is enlisted. Such temporary suspensions will apply
only to the particular Command. However the other Command CEs as well E-in-C will be
kept informed.
(j) With regard to Contractor of other classes namely 'A'. to 'D' the following procedure will be
followed :
(i) If a Contractor's performance is found to be unsatisfactory in any Zone/Project and
suspension, downgrading, removal from the approved list is contemplated by the
Zonal/Project CE, he will inform other Zonal/Project CEs in the Command of the action he
proposes to take and asks for their concurrence/ comments thereon and in the meantime,
temporarily suspend the Contractor so far as his Zone/Project is concerned and will
intimate to all CsWE and GEs under him and Command CE. If all other Zone/Project CEs
agree or indicate no objection to the proposed action of the Zonal/Project CE concerned,
he will forward his proposal to the CE Command for his decision.
(ii) If, however, any Zonal/Project CE does not agree to the aforesaid action and considers the
Contractor to be suitable for work in his Zone/Project, no change will be made, in the
registration of the Contractor in so far as that Zone/Project is concerned.
(iii) CE Command will inform the Contractor and all concerned of the decision indicating, if
necessary the Zone/Projects in which Contractor's enlistment remains unaffected.
1.17 Refund of Stan
(a) The Standing Security deposited by a Contractor will be refunded to him either on
removal of his name from the approved list or on change of category from (a) to (b) of
Para 497 of MES Regulations on production of No Demand Certificate (IAFA-451) by the
Contractor.

PART-I : PRE-CONTRACT STAGE 23

(b) The refund of Standing Security Deposit will alw4s be subject to the provisions that there
are no dues to be recovered from the Contractor by the Government, the prescribed
defects liability period of contracts has expired and that the other conditions for the
release of the Security Deposit have been fulfilled (also see paras 512, 513 and 514 of
MES Regulation, 1968 including amendments thereto).
1.18 Procedure for Refund ofltanding Security Deposit
1.18.1 The following procedure is to be followed for refund of standing security of contractors
enlisted in `S' to 'D' class, who have deposited standing security in one Command only even though
they are parallel enlisted in more than one Command.
1.18.2 Action by Executive Authorities
(a) The Contractor will be required to apply to the Chief Engineer Command, with whom the
standing security is lodged, for release of the security deposit alongwith 'No Demand Certificate'. If
he does not send the 'No Demand Certificate' on IAFA-451 (which should cover all contracts held in
the entire area of his operations) alongwith his application or if the release is necessitated by the
contractor having been removed from the list, the Chief Engineer Command will write to him to
furnish a 'No Demand Certificate' on IAFA-451.
(b) The Chief Engineer Command will write under advice to the PCDA, to all GEs and OsC
ESDs/EPs in his Command with a copy to CsWE to render to him (under advice to CsWE) a 'No
Claim Certificate' to the effect that :
(i) there are no claims outstanding against the contractor.
(ii) a period of 12 months has passed since the completion of the last contract executed by the
contractor.
(iii) any guarantee period in any particular contract executed by the contractor is over.
(iv) final bills in respect of all contracts have been paid.
rr

(c) Simultaneously with the action at (a) and (b) above, the CE Command will call for 'No
Claim Certificate' in respect of the contractor from the CEs of the other Commands where contractor
is having parallel enlisted. A copy of this communication will also be endorsed to PCDA/CDA of
these Commands. On receipt of this request the CEs of other Commands will take action similar to
that at para (b) above. On receipt of 'No Claim Certificate' from all the GEs in their Commands, the
CEs will forward 'No Claim Certificate' in terms of para (b) above, to the Chief Engineer initiating
the case.
(d) On receipt of the 'No Demand Certificate' on IAFA-451 from the Contractor and 'No Claim
Certificate' from other CEs Command and from the GEs of his own Command, the CE Command
initiating the case will send to his PCDA the contractor's 'No Demand Certificate' and a 'No Clair
Certificate' based on the certificates received from his GEs and other CEs. It will be his responsibiE
to see that 'No Claim Certificate' has been rendered by all parties.
1.18.3 Actions in Offices of Principal Controllers of Defence Accounts
(a) The PCDA of the Command in which the security is lodged will, on receipt of intimation
from CE Command (vide para 1.18.2 (b) above) calls for 'No Claim Certificate' from
AAOs/RAOs/LAOs etc. of his own Command and also from other PCDA/CDA.
24 PART-I : PRE-CONTRACT STAGE

(b) The PCDA/CDA of other Commands will also take similar action in respect of their areas on
receipt of the first communication on the subject (vide para 1.18.2 (c) and 1.18.3 (a) above).
(c) On receipt of (i) 'No Demand and No Claim Certificate' from the CE of his Command (ii)
`No Claim Certificates' from his AAOs/RAOs/LAOs etc. (iii) 'No Claim Certificate from other
PCDA/CDA, the PCDA of the Command where the Contractor has lodged the standing security will
authorise the CE of his Command to release security to the Contractor.
1.18.4 In the case of Contractor other than those stated in para 1.18.1, the procedure to be
followed is the same as at paras 1.18.2 and 1.18.3 above, except that the action to write to CEs of
other Commands is not necessary
1.18.5 In case of Contractors of 'SS' Class who have deposited standing security to E-in-C's
Branch, the procedure to be followed is same as 1.18.2 and 1.18.3 above except that action is to be
taken by E-in-C's Branch who will write under advice to PCDA/CDA and all Commands CEs.
1.18.6 In case of Contractors whose standing security is lodged with an authority other than the
E-in-C's Branch/CEs Command, the Officer with whom the standing security is lodged shall follow,
mutatis mutandis, the procedure set out in para 1.18.2 to 1.18.4 above.
1.19 Related
(a) In the trade of works contracts, "business relationship" is the most important factor. This is
corroborated with the provision to be made in the notice of tender as such a Contractor or
Corporation, wishing to be registered as an approved Contractor, should give particulars of all MES
registered Contractors with whom he/it has business relationship, irrespective of the fact whether
there is blood/close relationship or not. These would include all sister concerns of the Contractor or
Corporation also.
(b) In case of Contractors having blood/close relation with each other but not any business
relation whatsoever, particulars of such related contractors need not be given under serial no. 7 of
the enlistment form. In such cases, it would not be correct to deny issue of tenders to these
contractors if they otherwise fulfill all requirement in selection for issue of tenders. However, while
deciding a tender in favour of one party, it shall be ensured that fair competition has taken place.
(c) A Contractor/Corporation is termed to have "buginess relationship" with other
Contractor(s)/ Corporation(s) when one or more partner(s)/directors (s) are common.
1.20 Re-enlistment of Proprietorship Firm with Revised Constitution in Favour of Legal heirs of
Contractors in Case of Death of the Proprietor.
The Government has accorded sanctions to enlist one of the legal heir of a proprietorship firm
with revised constitution in case of death of the proprietor provided they meet the following
conditions :
(a) A newly constituted firm shall meet all the criteria as laid down for fresh enlistment of
Contractors.
(b) One of the partners (in case tithe newly re-constituted firm seeking re-enlistment as
partnership firm) or the legal heir seeking re-enlistment as a proprietorship firm was the
power of attorney holder of the original proprietorship firm and had executed work in the
original firm in such capacity to the satisfaction of the department.
PART-I : PRE-CONTRACT STAGE 25

(c) Only one firm will be enlisted as reconstituted firm of the original proprietory concern and
all the legal heirs other than those who are part of the reconstituted firm shall render
irrevocable under taking in the form of affidavit to the newly constituted firm in this
regard.
(d) Reconstituted firm shall take over all liabilities and assets of the original proprietory
concern.
1.21 Change in Consdtutlokof En'1sitogirat
Reconstitution of enlisted Contractors/Firms should be approved by the enlisting authorities
a fte. proper scrutiny and verification that newly constituted firm meets the enlistment criteria and is
considered capable of executing the works. Due inquiry shall be conducted about the bonafides of
newly inducted partners to avoid any proxy enlistment/transfer of enlistment.
1.22 Parent C
The up-gradation, change in constitution, addition/ alteration in categories of enlistment and
disciplinary action on the contractor shall be approved only by the parent Command. The Command
where contractor is enjoying facility of parallel enlistment shall not have any power to alter the
particulars of the contractor than those approved/ amended by parent Command. In case where due
to reorganization, original folder of the contractor has been transferred to new Command, the
Command taking over the folder shall be considered as parent Command.
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