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Airports Authority of India Financial control in Project Management Classification of Contracts based on value l Mega Projects above Rs 1000 crores l Major Projects between Rs 100 crores to Rs 1000 Crores l Minor projects less than Rs 100 Crores Classification based on type of works l Composite Contracts : Normally such types of contracts contains all activities like construction, supply, installation and furnishings l Construction contracts : Excludes supply and installation of major equipments. l SITC : Supply , Installation, Testing and Commissioning contracts. This may be for Aircon, Power Supply equipments, Escalators, Lifts, PBB, CNS equipments, XBIS, etc.
Airports Authority of India Financial control in Project Management Preliminary Estimates- Points from Finance concurrence angle 1) Does the estimate include expected escalation considering completion period? 2) Is the draft Scope of work formulated and approved by the competent authority? 3) Has the cost index been applied to lump sum items and market rate based estimates? 4) Have all subheads identified and grouped with estimated cost thereon? (Refer 9. 6. 1 of Works Manual) 5) Is the estimate for pavement work (Runways, Apron etc. )–Yes-Has the item for Measurement of PCN value before commencement of work and after completion included in the estimate? 6) Is the estimates for resurfacing , strengthening & extension of Runway/Apron/Taxiway – Yes - Does the estimate give the break up of the three items separately? 7) Does the estimate contain allowance for operational area, remote areas, disturbed area, WCT, Contingency etc if so does it meet the requirements of Para 10. 6. 1 read with Appendix 10 of the Works Manual?
Airports Authority of India Financial control in Project Management Administrative Approval and Expenditure Sanction. Finance Concurrence point of view 1) Does the proposal of AA/ES for Capital works and Special repairs contain Preliminary Estimates? 2) Is the proposal counter signed by the TS authority? 3) Does the proposal file carry draft AA/ES as per Appendix -1 of the Works Manual? 4) Are the details of Budget Provisions mentioned in the proposal as per approved Annual? The provisions should be checked by the Finance from its record and authenticated. 5) The column Head of Account in the draft AA & ES should be filled by Finance while giving the concurrence and give the correct Code of accounts along with responsibility code. 6) FC should indicate the competent authority for granting AA/ES with reference to DOP, Chapter 6.
Airports Authority of India Financial control in Project Management 7) Does the AA/ES proposal contain the proposed mode of execution for example Global Tender, Open Tender, Limited Tender etc? 8) Finance department should maintain the details of AA/ES accorded against each approved scheme and mark it as allocated. The proposal concurred should contain a unique reference number. 9) Is the proposal covered under any approved Budgeted Scheme? If not the proposal has to be treated as Non Budgeted and processed as per DOP 6. 1. 2/6. 1. 3. Revised AA/ES & Appropriation of funds. 1) To check whether the proposal is for re-appropriation of funds between subheads of the same approved scheme ? If so whether it has been dealt as per 9. 6 of the Works Manual. 2) Revised AA/ES would be required in cases where the actual expenditure exceeds the AA/ES amount by more than 10% and the same requires appropriation of budget by the competent authority as Works Manual clause 9. 5 and DOP 6. 1. 1. 3) Does the actual expenditure exceed 10% of the Technical sanctioned amount? If yes, then whether revised TS has been taken as per Works Manual 9. 9.
Airports Authority of India Financial control in Project Management Proposal for Award of Work 1) To check whether the NIT has been approved by the Competent Authority as per DOP 6. 4. 2) To check whether all actions that are required as per Works Manual 9. 11 and 9. 12. have been completed. 3) To check that for publicity of tender guidelines as per section 26 of the works manual has been followed. 4) The latest guidelines issued from time to time for e-tender process is to checked for compliance. 5) In case of Limited tenders whether the guidelines as per para 26. 3 of the works Manual has been complied with? 6) While processing for acceptance it should be ensured that time limits as prescribed in para 26. 4. 1 has been followed. 7) To check that Statement of Justified Cost opened along with the Price bid is in conformity to the provisions of para 28. 3 of works manual. 8) Whether the proposed total award value is within the approved AA&ES? ? Reference to TI 71 Dated 10/01/11 is invited. 9) Whether the lowest price bid is within 5 % of the Justified Cost? ? If yes then it can considered for award by the competent authority subject to all other conditions being satisfied. If No, then only deviations upto 10% can be considered by the next higher authority subject to recording of proper justification by the Engineering department.
Airports Authority of India Financial control in Project Management 1) 2) 3) 4) 5) Earnest Money During Financial concurrence it should be seen that the amount of EMD defined in the tender document should be as per para 29. 2 of the works manual. The mode of payment should be as per para 29. 4 of the works manual. Refund of EMD should be in conformity to para 29. 5 of the works Manual. The proposal forfeiture of EMD should be concurred with reference to 29. 6 of the works manual. The schedule of EMD should be reviewed periodically and either the EMD should be converted to SD or forfeited and transferred to miscellaneous Income. Any amount lying unadjusted to be referred to the concerned Department for confirmation of the status. The accounting policy 15 (iii) to be followed.
Airports Authority of India Financial control in Project Management 1) 2) 3) 4) 5) Security Deposits While processing the 1 st RAR bill it should be ensured that the amount of SD has been defined in the work order as per para 30. 1 of the works manual. The EMD should be converted into SD and the balance if any should be recovered from the RAR bill. In case the EMD converted into SD is more than the SD as per RAR the difference will be adjusted against the 2 nd RAR. No refund should be made. In case the work order specifies that the party can submit the SD in the form of Bank guarantee then before release of the SD/EMD amount the BG should be verified from the issuing bank. For acceptance of SD in the form of BG/FDR the procedure given in para 30. 3 and 30. 4 of works manual should be followed. Refund of SD should be in conformity to section 31 of the works manual.
Airports Authority of India Financial control in Project Management 1) 2) 3) 4) 5) 6) 7) Payment to Contractors-Bill processing While processing the payment of Mobilisation Advance first it has to be ensured that the NIT approving authority has specifically approved the payment of this advance. (Para 39. 1 of works manual) The rate of interest to be charged for this advance should be verified from the contract. In case the contact is silent then the rate of interest should be taken as 10%. Accrued interest and principal should be recovered from the RAR bills. Mobilisation advance should be secured by a BG. While processing claims of Secured Advance it should be ensured all the formalities given in works manual para 39. 2 is completed. Before payment of Secured Advance the bill paying officer should ensure that the materials are insured as per Appendix 67 of the works manual. No second Secured advance to be paid till the first such advance has been fully recovered.
Airports Authority of India Financial control in Project Management Payment to Contractors-Bill processing- Contd… 8) To check that all extra and /or substituted items have been approved by the competent authority. (Section 33 of the works manual) 9) 10) To check all deviations in quantity are within the limits specified in the contract. To check that extension of time if any has the approval of the competent authority as per DOP 6. 9. The Liquidated Damages recovered /with held are properly deducted from the payment and accounted for. Release of with held amount should be with the approval of the competent authority. Payment of escalation provided in the agreement should not be contravention to the provisions of para 32. 10 of the works manual. Test checking of measurements should be available with every bill as per Section 17 of the Works manual. 11) 12) 13)
Airports Authority of India Financial control in Project Management 1) 2) 3) 4) 5) 6) 7) 8) Other Important Points to be noted while making payments The status of the contractor that is whether it is a Sole Proprietor, Partnership Firm, Private Limited Company, Public Limited Company, Limited Liability Partnership (LLP) should be established by the bill processing officer. In case of Joint Venture then the payment should be made to the Joint Venture Enterprise only. Payment in ratio or percentage to the individual consortium entities should be avoided. In exception it should have the approval of the tender accepting authority. The PAN details of the entity should be obtained and verified from NSDL/Itax department before the first payment. TDS should be deducted as per the rates specified in the Income Tax Act. In case the party submits certificate from the IT department entailing deduction at lower or nil rate then the same should be approved by the GM/Incharge of Finance of the region/station/project specifically. TDS returns should be submitted within the given dates and it would be advisable to have a mechanism to report the compliance to the GM of the region/ Airport/ project on quarterly basis. The report for every quarter should be downloaded and printed from the NSDL/IT site for every TAN number and placed on the file to the GM’s concerned along with the compliance report. This will be required for TAX audit. The name of the company and status as given by the contractor along with the bank details for e-payments/RTGS should be verified from the bank concerned through mail/letter in each case before releasing the first payment. Service tax details to be also captured for cenvat credit as applicable.