CONTENTS - Central Public Works Department

SECTION 33
33.1.2 Recovery of compensation after EOT is sanctioned
The recovery of compensation should be effected after decision on extension of time has been obtained.
33.2 Clause 2A of CPWD Form No 7 and 8 (Incentive for early completion)
(1) This clause, provides for incentive payable to contractor in case of early completion of work by
him. This clause is applicable if so provides in Schedule F of General condition of contract.
(2) Normally this clause may be provided in NIT for works where estimated cost put to tender is more
than Rs. 1 crore. However, technical sanctioning authority may provide this clause in NIT for
works of lower value also, considering the advantage arising out of early completion of the work.
(3) Quantum of Bonus to be paid to the contractor shall be with the approval of Tender accepting
authority but not below the rank of Superintending Engineer.
33.3 Clause 3 of CPWD Forms no. 7 and 8 and clause 17 of CPWD Form no. 12
(1) These clauses deal with determination of contract, forfeiture of security deposit and execution
of work through other agencies. These clauses are very important and are of vital importance.
According to the clauses, when the contractor has rendered himself liable to action under relevant
clause, the Engineer-in-charge, for and on behalf of the President, shall have powers to determine
the contract. Termination notice given in writing to the contractor under the hand of the Engineerin-charge,
for and on behalf of the President, shall be conclusive evidence for enforcement of
this clause.
(2) Clause 3 of the agreement inter-alia provides that if contract is determined, the earnest money
deposit, security deposit already recovered and performance security/guarantee under the contract
shall be liable to be forfeited and shall be absolutely at the disposal of the Government.
(3) The contractor, whose contract is determined as above, shall not be allowed to participate in the
tendering process for the balance work.
33.3.1 Action under clauses 2 and 3 are independent
The provision of clause 3 can be applied even after recovery of compensation under clause 2, as the
two clauses are independently enforceable to the full extent.
33.3.2 Notice to the contractor
(1) Two model forms of letters have been introduced to be issued by the Engineer-in-charge for
and on behalf of the President of India for serving the “Show cause Notice” as well as the
Notice on final action to the contractor under clause 3 of the agreement in respect of works
undertaken in the Department have been introduced. Copies of these model forms are as per
Appendices 33 and 33.
(2) While making use of these forms, the following points should be kept in view:
(a) Alternatives wherever not applicable should be deleted and suitable additions made wherever
considered necessary.
(b) While determining the contract under any of the sub-clause (i) to (xi) of clause 3 for causes
other than the causes as mentioned in the standard form for “Show Cause Notice” (viz. wrongful
delay or suspension of work or slow progress) suitable modifications may be made, where
necessary, according to the requirements of the case.
(3) Final notice under clause 3 of the agreement form may thereafter be drafted and approval of the
tender accepting authority as defined under schedule ‘F’ of contract be obtained. (Modified as
per OM/MAN/169)
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