Rail Vikas Nigam Limited

(A Govt. of India Enterprise)

Corporate Office: 1st Floor, ‘B’ Block, August Kranti Bhawan, Bhikaji Cama Place, New Delhi– 110066.
Tel: +91 11 26738299 Fax +91 11- 26182957; Web :www.rvnl.org

No. ED-Genl/32 Date:06.07.2021

All CPMs/GGMs/GMs, RVNL.

Sub : Fixing new rate for an item of work in contracts.

1. Corporate Office is in receipt of references from contractors representing that PIUs are not
accepting the laid down ‘priority of documents’ in GCC for deriving new rate for an item of
work and are insisting on accepting ‘Last Accepted Rates / average of Last Accepted
Rates’ for that item. This issue was also raised during Partner’s Meeting held on
15.05.2021 chaired by CMD RVNL, MOM of which have already been circulated vide this
office letter of even number dated 12.06.2021 vide which it was deliberated that “LAR is
not a suggested method of fixing new rate in GCC”.

2. The Clause 12.3.1 of RVNL’s GCC lays down situations where fixing new rate for an item
of work is appropriate and GCC Clause 12.3.2 lays down the manner in which new rate is
to be derived.

In order to arrive at new rate, depending on the conditions stipulated in GCC Clause
12.3.1, either latest SBOQ rate is to be adopted (with PVC from the date up to which
SBOQ rate is updated) or rate analysis has to be resorted to using the prescribed ‘priority
of documents’ in GCC i.e. ‘Analysis of Unified SOR of Indian Railway’, ‘Analysis issued by
MORTH’, ‘Analysis of Delhi Schedule of Rates issued by CPWD’ or ‘Market analysis’.

Adoption of ‘Last Accepted Rate / average of Last Accepted Rates’ as new rate for an item
of work is not prescribed in any situation.

3. The matter has been viewed seriously and it is once again reiterated that new rate of an
item of work has to be derived as prescribed in the GCC clause 12.3.2 only which is based
on basic principle of “an assessment of the reasonable cost of executing the work with an
additional element of 15% towards overheads and profit of the Contractor”. Latest copy of
GCC is enclosed for ready reference. However, PIUs are requested to follow the GCC of
the Contract Agreement.
Encl.: As above
VIKAS Date:
2021.07.06
AWASTHI 21:04:43 +05'30'
Executive Director
Planning
Copy:
All PEDs / EDs RVNL.

1
 Annexure
Provisions pertaining to new rate in Latest GCC
(Annexure to letter number ED-Genl/32 dated 06.07.2021)

Clause 12.3.1
However, a new rate or price shall be appropriate for an item of work if:

(a) all the following conditions are met for existing item of the contract:

(i) the measured quantity of the item is increased by more than 50% from the quantity
of this item in the Bill of Quantities or the Schedule,
(ii) this item is not specified in the contract as a “fixed rate item”.

OR

(b)
(i) the work is instructed under clause 13[Variations and Adjustments],

(ii) no rate or price is specified in the contract for this item, and

(iii) no specified rate or price is appropriate because the item of work is not of similar
character, or is not executed under similar conditions, as any item in the contract.

OR

(c) On passage of original completion period stipulated in the contract, if site in some
stretches has not been handed over for execution of the work due to any of the
reasons mentioned below:

(i) non acquisition of land,

(ii) non availability of forest/wild life clearances,
(iii) non removal of encroachments, delay in shifting of utilities (to be shifted by other
agencies) and
(iv) non handing over of the sites by other agencies/authorities and the contractor
otherwise has been executing the works satisfactorily on other sites, as certified by
the Engineer, the contractor shall be entitled for new rates for the items and
quantities of work which could not be executed in the stretches still to be handed
over. In case the progress is not satisfactory, the contractor shall not be entitled for
new rates and the Employer shall have the option either to continue the work in
these stretches through the same agency or get it executed through other means.

In case of entitlement for new rates, if the contractor is not willing to take up the
work in these stretches, he will have the option to say so in writing or if no
agreement is reached on new rates, the remaining works of such stretches shall be
excluded from the scope of the contract through a variation statement. In such a
case the contractor shall not be entitled for any claim or compensation on this
account. The employer shall get the remaining works on these stretches executed
through other means.

Clause 12.3.2

(i) Each new rate or price for item(s) as described in sub paragraph 12.3.1 (a) & (c)
above shall be derived from an assessment of the reasonable cost of executing

VIKAS Date:
2021.07.06
2
AWASTHI 21:05:35 +05'30'
 the work with an additional element of 15% towards overheads and profit of the
Contractor.
(ii) Each new rate or price for item(s) as described in sub paragraph 12.3.1 (b) above
shall be derived from an assessment of the reasonable cost of executing the work
with an additional element of 15% towards overheads and profit of the
Contractor, subject to the condition that such item(s) as described in sub
paragraph 12.3.1 (b) above is/are not available in the “Standard Bill of Quantities
of RVNL”.
(iii) In case item(s) as described in sub paragraph 12.3.1 (b) above is/are available in
the latest “Standard Bill of Quantities of RVNL, new rate or price for such items
shall be the rate as available in the latest “Standard Bill of Quantities of RVNL and
price variation shall be applicable from the date up to which rates have been
updated in the SBOQ.
(iv) The assessment of reasonable cost of executing the work (except over heads and
profit which shall be 15%) shall be arrived at based on the prevailing rates and by
taking guidance from the following documents. The priority of the documents
shall be in accordance with the following sequence:
a) Analysis of Unified SOR of Indian Railway;
b) Analysis issued by MORTH;
c) Analysis of Delhi Schedule of Rates issued by CPWD;
d) Market analysis.
(v) If the final rate decided by the competent authority as per RVNL SOP is not
acceptable to the contractor, the contractor will be bound to execute the work at
the rates as decided by the competent authority of RVNL but he may refer the
dispute in rate for settlement as per provisions of clause 20 of General Conditions
of Contract. Until such time as an appropriate rate or price is agreed or
determined, the Engineer shall make the Interim payment at the rate of 80% of
the rate proposed by him and accepted by the Project Director (concerned
CPM/GM in charge of the project).
Date:
VIKAS 2021.07.06
AWASTHI 21:06:01
+05'30'