CONTENTS - Central Public Works Department

160 SECTION 22
SECTION 22
REFUND OF SECURITY DEPOSIT AND PERFORMANCE GUARANTEE
22.1 Conditions for refund of security deposit and performance guarantee
The security deposit and performance guarantee shall not be refunded to a contractor except in
accordance with the terms of his security bond or agreement.
22.1.1 Recording of completion certificate
In case the completion certificate is recorded by a Junior Engineer/Sectional Officer, the Sub-Divisional
Officer concerned shall countersign it within one month. In case of works costing more than the normal
acceptance power of tender of the Executive Engineer, the original certificate must be recorded by the
Sub-Divisional Officer and countersigned by the Executive Engineer within one month. If the Sub-Divisional
Officer is not available the Executive Engineer should himself record the certificate.
22.1.2 Refund of performance guarantee
The performance guarantee shall be refunded to the contractor soon after the completion of the work
and recording of the completion certificate as above.
22.1.3 Refund of security deposit
(1) In the case of works executed against agreements in Forms CPWD 7 & 8 the refund of security
deposit to a contractor on the completion of works is regulated by Clause 17 thereof. This clause
envisages the issue of a completion certificate in terms of Clause 8 of the Contract. Such completion
certificate shall be issued by the authority in a manner detailed under section 30.
(2) The period of maintenance as prescribed in Clause 17 of the Contract will be counted from the
date of completion as recorded in the certificate mentioned above. The security deposit of the
contractor should be refunded by the Executive Engineer after the prescribed maintenance period
as stipulated in the agreement or after the date in which the final bill has been prepared and
passed for payment, which ever is later.
(3) The Divisional Officers should keep a close watch on the delays in the refund of security deposit
to the contractors, and for this purpose they should periodically review the Register of Security
Deposit Form CPWA 67 maintained in the Division. (The instructions contained in para 23.4.20 of
the CPWA Code shall continue to be observed as a normal procedure).
22.2 Refund of security deposit in cases of delay in final bill
(1) Where there is a delay in payment of final bill, the Superintending Engineer shall make an
assessment of the likely recoveries against the contractor, and order release of as much security
deposit as possible unless he has reasons to withhold the release of security deposit to the
contractor. These reasons should be recorded by him in writing.
(2) The Superintending Engineer shall satisfy himself that the following formalities are completed by
all concerned before exercising his discretionary power for part payment of security deposits:
(i) Formalities to be completed by the departmental officers
(a) Completion of prescribed test checks of measurements by Executive Engineer/Assistant
Engineer.
(b) Sanction of extra/substituted items by the competent authorities.
(c) Decision on levy of compensation, etc.
(ii) Formalities to be completed by contractor
(a) Acceptance of final measurement recorded by the departmental officers.
(b) Applying for extension of time as and when required immediately.
(c) Rectification of defects pointed out by the departmental officers.
(d) Completion of work in all respects, including clearance of site, etc.
(e) return of surplus materials issued by the department immediately on completion of work or
as and when it comes to light.