Award of higher rates of an extra item of work to the Contractor. Execution of extra items of work of timbering at a higher rate resulted in undue benefit to the Contractor to the extent of Rs. 4.05 crore.
Uttar Pradesh Jal Nigam18 (UPJN) entered (December 2010) into a contract with a contractor for a survey, design, supply of all materials, labor, T&P (tools and plant) in the work related to the construction of branch, lateral, and main trunk sewer lines and appurtenant works for Bijnor sewerage scheme on a turnkey basis at a cost of Rs. 70.09 crores. Audit noticed (November 2017) following irregularities in the execution of the contract.
(i) As per Schedule-H “Additional Items Rates” of the contract, all extra or additional work done shall be valued at the rates and price set out in the contract. If the contract does not contain any rates or prices applicable to the extra or additional work, then the rates shall be minimum of the rate derived from (a) the tendered/contract rates of the contract of a similar class of work, (b) the UP Jal Nigam schedule of rates of the year in which the work is actually done for Bijnor district.
The contract executed with the Contractor contained rates of “close timbering 3 to 6.0 m19” and “close timbering > 6.0 m left in a trench” at 170 per Sqm and 910 per Sqm respectively. Notwithstanding the above rates in the contract, UPJN paid to the Contractor higher rates of 482 per Sqm for “close timbering 0 to 3.0 m”, 1,206 per Sqm for “close timbering 0 to 3.0 m left in a trench” and 1,981 per Sqm for “close timbering 3 to 6.0 m left in the trench” as extra items. The higher rates allowed were based on the UPJN Schedule of Rate (SoR) 2011-12. As the rates of similar classes of work with higher specifications were available in the contract itself, the UPJN should have paid the same rate for extra items of work as per the provisions of Schedule H of the contract. Thus, violation of the contract resulted in undue favor to the Contractor and excess payment of Rs. 2.42 crore
(ii) As per the terms and conditions of the contract, the timber to be used in the shuttering works was to be from the heart of a sound tree of natural growth with the sapwood being entirely removed. It was to be uniform in substance, straight in fiber, free from large, loose, and dead knots, flaws, shakes, decay, rot, fungi, insect attacks, and from any other damages of harmful nature which may affect the strength, durability, appearance or its usefulness. The color was to be uniform as far as possible. The timber was to comply with other requirements of PWD specifications as well.
Scrutiny of the records related to sewer and appurtenant work revealed that an item providing all material, labor, T&P, etc. for fixing of close timbering 0 to 3.0 m and 3 to 6.0 m depth with unused timber (left in the trench) was got executed by the UPJN at the rate of 2,975 per sqm and 3,690 per sqm respectively based on UPJN SoR 2011-12 as extra items under the above contract. However, the rate quoted by the Contractor for a similar class of work was 910 per sqm only. As timber of only the specified quality was to be used as per contract terms, execution of work using unused timber as an extra item at higher rates was unjustified which resulted in avoidable expenditure of Rs. 1.63 crores incurred by UPJN
The Management stated (May 2019) that the Contractor had expressed unwillingness to execute the extra item of the work on the basis of rate derived from a similar type of work and agreed to work only on the current SoR rate. Since it was not possible to deploy any other agency for the balance work at that stage, hence higher rates were allowed. It was further stated that it was difficult to get used timber of specified quality and specification in the market.
The reply of the Management is not acceptable as the Contractor executed an agreement with UPJN based upon the rates quoted by him. Therefore, it was binding upon the Contractor to execute the work as per the terms and conditions of the contract.
The matter was reported to the Government (December 2018). The reply is still awaited (September 2019).