optional clause

factories should decide at the tendering stage itself as to

whether any optional clause for quantity enhancement will be
included in the supply order to be finalised against tender.
it may be noted that even if no mention is made specifically
about option clause , the right to order additional quantity
upto 25% is catered in form no dgof-3 (para b-1(a)).
where it is decided to include such option clause the matter
should be indicated in the tender enquiry itself
tenderer should be directed to quote for quantities
mentioned in the tender as well as well as give consent for
upto 100% enhanced quantities against option clause to be
operated within the curreny of the initial supply order.
in case of dp extension , only on unsupplied quantity option
clause will be aplicable.

performance security deposit.

performance security deposit (psd) payable to the purchaser

is furnished by the supplier in the form of bank guarantee(bg)
, within 30 days from the date of contract.
the deposit is ment to compensate the purchaser for any loss
suffered due to failure of the supplier to complete his
obligation as per the contract.
in case the execution of the contract is delayed beyond the
contracted period and the purchaser with or without ld ,
grants extension to delivery period, the supplier must get the
bank guarantee revalidated ,if not valid already.
the performance security deposit is to be paid by all firms
irrespective of their registration status with dgs&d/nsic . in no
case performance security deposit shall be waived in order to
safe guard the interest of the purchaser.
quantum : preferably , performance security deposit is
payable by the supplier at the rate of 10% of the contract

value.the pbg is kept with the purchaser and must be valid for
the entire period of contract and may be retained for the
duration of the warrantee period also.
forms of psd : 1.dd.
2.fd.
3.bg.
bg should be valid upto 60 days after the date of completion
of performance.
time : normally a period of four weeks from the date of issue
of s.o should be allowed to the firm to furnish performance
security deposit.
adjusted against : emd, bills.
in case of demand draft : cash section on whom the demand
draft will be passed on, shall take immediate steps for
encashment of the demand draft.
event of failure on the part of the contractor to furnish the
psd.

a. registered firm ban for one.

where execution of the contract is going to be delayed

beyond the period for which performance security deposit is
valid , the concerned purchase officer will take action well
ahead in time for its renewal .
refund: when contractor duly perform and completes the
contracts in all respects and
present an no demand certificate in prescribed form.
forfeiture: decesion by gm.

year.
unregistered firm emd.
forfeited.
renewal and refund.

breech strictly in terms of relevant aggreement.

lapse : if psd is not claimed in three complete account year it
will go to consolitated fund of india

earnest money deposit. :

to be taken against open tender

enquiry.
for unregistered vendor only.
2% to 5% of the estimated value of store subject to a ceiling
of rs 2 lakh.
order value less then one two lakh : no emd.
exact amount of emd to be
calculated.
registered with sister ordnance factories/dgs&d / nsic for the
same item / process/technology may be exempted from
payment of emd.
emd cannot be waived by gm- once specified in te after
exempting the firms as per waivel conditions.
forms of emd : demand draft, fixed deposits receipts, bankers
cheque,bank guarantee.
note : in case of bg should be kept valid for 45 days beyond
the validity period of offer.
the purchaser may adjust emd furnished towards the
performance security deposit where ever possible.

refund of emd : emd of successful tenderers shall be refunded

after the performance security deposit is received.

for unsuccessful tenderer it will be returned as early as

possible- but not later then 30 days after the award of the
contract.

forfeiture of emd: emd will be forfeited if the tenderer

withdraws or amends impairs or derogate from the tender, in
any respect, within the period of validity of tender.

if psg is not given, then also emd forfeited.

delivery period.
time and date of delivery is considered as essence of
contract.
dp date of tender and so should be same.

the delivery must be completed by the agreed date.

clause 14(8) grace period of 21 days for despatch and not for
submission for inspection.

grace period can also be disallowed. to be mentioned in

tender.
wheather the extension of delivery date is to be granted as
asked for by the supplier or the contract may be cancelled
should be decided on the merit of the case.
extension of dp can be granted by cfa , but with prior
concurrence of lao/finance.
extension of delivery date to be with the express consent of
the supplier.

contract come to an end after delivery date.

standard franking clause if inspected in last few days of dp.

let the supplier ask for the dp extension.

extension of delivery date to be with r/r (reserving the right)
and denial clause.
by reserving the right of purchaser to levy liquidated
damages for delay and denial of increase in price, taxes,
duties, ect.

taking place during the extended period.

franking clause to be adopted in the case of acceptance of

stores.

the fact that the stores have been inspected after the d/p
and passed by the inspector will not have the effect of
keeping the contract alive ,i.e r/r and denial clause will be
applicable on the contract.
repeat order.

repeat order against a previous

order may be considered for approval by the respective cfa in
cases of unforseen additional requirements --when there is
not enough time to position the material by processing the
procurement case in the normal manner.

this is subject to following stipulations .:

item ordered have been delivered successfully.
original order not to cover urgent/ emergent demand.
order is not split to avoid next cfa.

no downward trend in prices as ascertained

through

market intelligence and a clear certificate should be

extended to that effect(budgetory quote to be taken as
guiding price).

it is placed within 12 months from the date of supply against

previous order and only once .

repeat order is to be normally restricted to a maximum of

100% of last order quantity both in case of indigenous
procurement and import order.

if option clause is availed then repeat order is not desirable.