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.

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 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:

(i) In framing data adopting MORD specifications, the component of

overhead charge is included at the prescribed percentages. This
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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.

(ii) 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.

(iii) 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 4 th read above are also
applicable to all the tender works including PMGSY.

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

(i) These orders are applicable with prospective effect only.

(ii) Already settled/closed cases shouldn’t be reopened for applying the
orders of this G.O.
(iii) Price escalation clause should be allowed carefully duly ascertaining the
fulfillment of all the aspects of quantity, quality and contractual obligations.
(iv) No cases of revised administrative sanction will be entertained.
(v) 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