Schedul Schedulee of Rates Rates is a schedu schedule le mainta maintaine ined d in a Public Public Works Works Division Division to incorporate the rates in respect of all the classes of works that are commonly undertaken in the Division. This schedule facilitates the the preparation of the estimates in the Division. Division. It is prepared on the basis of rates prevaili prevailing ng in each locality locality.. It is supplemented supplemented by a detailed analysis showing how the elements of cost of component items of work have been added up to arrive at the final rate. The schedule of rates is subect to revision after intervals when it is felt that the market rates have gone up or down to such an e!tent that the schedule of rates has become redundant. This schedule is also referred referred to at the time of settling rates for work during negotiation with the contractors. "nalysis of rates is a component#wise break up of the rate indicated for each item of work in the schedule of rates or in the estimate of work or a non#scheduled item in a contractor$ contractor$ss bill. It is a detailed detailed working sheet showing showing the %uantity and value of each input re%uired re%uired to completely completely do an item of work. work. If some inputs inputs are to be replaced by superior or inferior input& then "nalysis of Rates is handy to work out the rate for the modified item of work. It& thus& supplements or supports the Schedule of Rates. Market Rate and Issue Rate:
'arket rate indicates the cot per unit at which the article (or an article of similar description) can be procured& at a given time from the public market suitable to the Division to obtain it supply. supply. This cost should include the the e!penses likely to be incurred on carria carriage ge and incide incidenta ntall charge chargess also. also. In determ determini ining ng the market market rate& rate& reason reasonabl ablee provision may be made for wastage and depreciation where these are inevitable.
Issue Rate is fi!ed on the principle that the cost to be charged to works on which the materials are to be used should appro!imately e%ual the actual cost of the stores and that that there there may be no ultimate ultimate profit profit or loss loss on stock stock account. account. Thus& Thus& the issue rate rate provides for the element of (i) purchase price& (ii) cost of carriage to stores and (iii) *ost of storage (ie.& e!penses on work charged establishment employed on handling& custody and keepin keeping g initi initial al account accountss of stores stores beside besidess e!pendi e!penditur turee of mainte maintenanc nancee of stores stores godown). The issue rate rate of an article article of stock stock is fi!ed at the beginning of each year. +ut& as purchases purchases during the year are made variation variation of cost should should be watched. If there is material variation in the purchase price& the issue rate can be revised at the discretion of the divisional officer. officer. If& If& the the issu issuee rate rate is appre appreci ciab ably ly lowe lowerr than than the the mark market et rate rate&& the the foll follow owin ing g precautions are observed. I) II) II)
"ll "ll sal sales es and and iss issue ue to cont contra ract ctor orss sha shall ll be made made at at mar marke kett rat rates es.. Issu Issues es to to othe otherr Divi Divisi sion onss and and Depa Depart rtme ment ntss shal shalll be res restr tric icte ted d and and may may be made at a rate higher than the Issue Rate.
Operation and Out turn:
,peration is the e!penditure incurred in connection with the manufacture of an articl articlee or a ob (say& (say& bricks bricks or R** slabs etc.). etc.). This This is a term term used in manufa manufactu cture re accounts and workshop accounts. This includes direct materials& materials& cost of labour and other other
general and indirect e!penditure in connection with manufacture (in addition to the proportionate share of capitali-ed land and kiln). ,ut turn is also a term used in manufacture accounts and work shop accounts. +ut it represents the value of the finished products derived from the manufacture or work shop. Imprest and Te Temporary mporary Advance:
Imprest is a standing advance of a fi!ed sum of money given to an individual to enable him to make certain classes of disbursement& which may be entrusted to his charge. The amount of an imprest imprest is to be kept as low as possible possible and in no case should e!ceed Rs./// without the sanction sanction of government. The account of imprest imprest cash along with the paid vouchers is sent to the officer from whom the imprest is held. held. This account of impr impres estt shou should ld be subm submit itte ted d at the the time time of clos closur uree of mont monthly hly acco accoun untt by the the Divisional ,fficer. ,fficer. It may be closed earlier also if& (i) the balance of imprest is small and needs recoupment or (ii) it is proposed to increase0decrease the amount of the impest or (iii) the account of the imprest is to be closed altogether. Tempor mporar ary y "dvanc dvancee when when a Disb Disbur ursi sing ng ,ffi ,ffice cerr make makess a remi remitt ttan ance ce to a subordinate officer to enable to make specific petty payments on vouchers which have been already passed for payment& the amount remitted is treated as temporary advance. "fter making the payment the subordinate submits an account of the advance along with the unspent balance& if any. The following are also treated as Temporary "dvance1 "dvance1 i) ii)
'oney taken out by the Disbursing ,fficer himself for making disbursements at out stations when on tour. "dvance on trans ansfer to a gover vernment serv ervant pend ending drawal of the advance from the treasury0bank in the normal n ormal course.
Imprest is a standing advance of a fi!ed sum for making payments left to the charge of a subordinate which the latter is an advance made temporarily to a subordinate to make a number of specific petty payments on muster rolls and vouchers which have already been passed for payment. Administrative Approval and Technical Sanction:
" government college building is to be constructed by Public Works Division but is to be used by the 2ducation Department. PWD is the Technical Technical Department whereas 2ducation is the "dministrative Department to the incurring of e!penditure on their behalf. It only signifies acceptance of the "dministrative Department that the proposed work meets their needs. It carries no more more authority. authority.
Technical sanction is the responsibility of the PWD& the technical Department. The grant of technical sanction signifies that the design is technically sound& suitable to the needs and reasonably economical. It also signifies signifies that the estimate estimate of %uantities of work and of cost have been based on ade%uate ade%uate data and sound and authori-ed authori-ed rates (like the Schedule of Rates).
Sub-head and Sub-work:
The term sub#head is the sub#division into which the cost of the work or its sub# works& if it is large work is divided for purpose of financial control and statistical convenience e.g.& e!cavation& brick work& concrete wood work& etc.& on the other hand the term sub#work is applied to a distinct unit of a work& when it is sufficiently important to be kept distinct for the purpose of accounts. 3or e!ample& the solitary cells& the cook houses and the ailors %uarters are sub works in the case of a large *entral 4ail whereas the e!cavation& brick work& etc of these sub#works are sub#heads.
arnest Money and Security !eposit:
2arnest money is the amount of money that a tender has to deposit along with his tender to assure the government that he is earnest in e!ecuting the work at the rates tender tendered. ed. Incase Incase his tender tender is accepte accepted& d& and he fails fails to proceed proceed with the work in accordance with the rates and terms of his tender& his earnest money can be forfeited. "fter a work of construction or supply has been allotted to a contractor& a sum of money (5 to 6/5) is deducted from the amount for work or supply due t him as security security for satisfacto satisfactory ry completion completion of the work or supply as per agreement. 2arnest 2arnest money money receiv received ed with his tender tender is also treated treated as part part of his security security deposit deposits. s. 7o security is deducted from his payments so long as the amount deductible is less than the earnest earnest money. This also safeguards0 safeguards0ensure ensuress that government government property property handed over to contractor is received back on the completion of the work. !eposit works and Takavi works:
Deposit Deposit works is applied to work e!ecuted e!ecuted in PWD but the cost of which is met& not out of government funds& but from funds provided provided by non#government sources. The property of the work will also vest in the body funding it. Works Works e!ecuted for 'unicipalit 'unicipalities& ies& *orporations *orporations&& Panchayats& Panchayats& 7on#governm 7on#government ent organi-at organi-ations ions and private private parties fall in this category. 3unds for the work may be deposited by these bodies either in cash or otherwise placed at the disposal disposal of PWD Division. 7ormally& 7ormally& no e!penditure shall be incurred by PWD on Deposit works unless there are sufficient funds at its disposal to meet their cost (including (including departmental charges). "ny e!penditure incurred in e!cess of deposits received must be removed form the account of deposits and taken under 8'iscellaneous Public Works "dvances9 "dvances9 till more funds are made available. Takavi Works denote works of construction or maintenance of water courses etc.& e!penditure on which is treated by government as Takavi "dvance (ie.& an advance to cultivators cultivators). ). The transactions transactions relating relating to Takavi Takavi Works Works are recorded in the Divisional Divisional "ccou "ccount ntss agai agains nstt 8:/# 8:/#*i *ivi vill "dvanc dvances es&& Takavi kavi Works rks "dva "dvanc nces es9. 9. Thee Thee are are consolidated in the schedule of Takavi Works 3orm ;; which shows (i) the e!penditure incurred incurred during the month and up#to#date& up#to#date& (ii) Realisations Realisations during the month and up#to# date. The percentage percentage charges charges leviable leviable should be adusted adusted in the e!penditure e!penditure month by month. The account of all completed works should be closed as soon as possible. Takavi Takavi works relating to ordinary maintenance and repair should be treated as closed on <6 st ,ctober each year (or any other date prescribed by the government as the end of Takavi
year). 2!penditure incurred on them subse%uently should be treated as pertaining to new work of the following year. Ordinary Tools and "lant and Special Tools and "lant:
Tools and plant which are kept in a Public Works Division for general use in the Division& e.g.& =ammers& spades& >assis& 'easuring Tapes& Tapes& R** mi!ers& vibrators& Road# rollers rollers etc.& are e!amples e!amples of ordinary ordinary tools and plant. plant. These are purchased purchased from the the budget under the minor head 8'achinery and e%uipment9 of the maor head of the Division. Special Tools and Plant ac%uired by the Division for a particular work mainly because these are specially needed for it and are not ordinarily stocked in the Division. These are almost invariably re%uired for maor irrigation proects& say bulldo-ers for a canal. !irect #har$es and Indirect #har$es:
Direct *harges mean charges that pertain e!clusively to any ob under suspense head 8Work 8Work shop Suspense9. These represent direct inputs in the the e!ecution of a ob& such as direct material and direct labour. labour. 'aterials purchased or issued for a ob and wages to labour doing that ob are e!amples of direct charges. Indi Indire rect ct *har *harge gess are are thos thosee whic which h are are not not dire direct ct inpu inputt on the the ob ob but but have have necessarily to be incurred for for the work shop as a whole. 3or e!ample machinery& machinery& cost of supervisory staff& watch and ward& interest on capital invested& water& rent of work shop& etc are not directly incurred for carrying out a single ob. +ut each ob must par take of a portion of these costs when we work out its manufacturing cost. Thus& supervision charges& depreciation charges& interest charges& rents are all indirect charges relating to a ob undertaken. Advance "ayment and "ayment on Account:
"dvance payment denotes a payment made to a contractor on a Running "ccount for work done but not measured. Such payment is usually usually made to enable the contractor contractor to discharge his liabilities like payment of wages to workers and his suppliers in cases where there is delay in measuring up the work done by him. This gives financial financial support to the the cont contra ract ctor or till till ,n "ccou ccount nt paym paymen entt is made made for for the the work work done done afte afterr its its measurement. The amount of advance payment is always always less than the e!pected amount due for work done. " contra contract ct may run over a long period. period. In that cases& cases& the work work done by the contractor is measured at intermediate stages and payment made for it on a running account basis. basis. This is called called Payment Payment ,n "ccount. "ccount. Such payments payments are based based on actual measurement of work done. %irst and %inal &ill and Runnin$ Account &ill:
When a single payment is to be made to a contractor or supplier on its completion and after satisfying that the work has been completely done as per specifications and as per agreement and no item of the contract remains to be done& it is paid on a 3irst and 3inal +ill.
In cases where a contractor is to be paid at periodic intervals for that part of the work done& till then& as per specifications& the payment is called a Running Payment. The bill on which these payments are made are called Running "ccount +ills. Thus& when (i) periodic payments on account& (ii) advance payments& (iii) secured advances are paid to the contractor& it will be obvious that the system of Running Payments is in force and such will be made on Running "ccount "ccount +ills. +ills. In the system of making making 3irst and 3inal payment& there is no scope for grant of advance payments or secured advances or payment for a part of the work done. Rate of #ost and Inclusive Rate of #ost:
Rate of cost generally means the total cost of a work or supply divided by its %uantity %uantity&& it means cost per unit. unit. Rate of cost of a sub#head sub#head of work can similarly similarly be derive derived d by dividi dividing ng the up#to# up#to#dat datee final final charges charges of that that sub#he sub#head ad by the up#to# up#to#dat datee %uantity of work e!ecuted under that sub#head. sub#head. If materials are posted under a sub#head separately& then the rate of cost will naturally not include the element of cost of materials used on that sub#head. Inclusive rate of cost means the rate of cost of a sub#head of work including the cost of materials used on that sub#head of materials issued to the work are recorded separately in a sub#head 8'aterials9 in the wo rks abstract. Intermediate "ayment and On Account "ayment:
"ny payment on a running account e!cept 3inal Payment is called Intermediate Payment. Payment. Thus& advance advance payments& payments& secured advances advances and on account payments are all e!amples of intermediate payments. payments. Such payments one of the many that are to to be made according according as the work progresses. progresses. In the process process of e!ecution e!ecution of a work& a contractor contractor may be paid (i) payment for part of the work done at various intervals of time or (ii) an advance payment payment for work done but not measured& measured& or (iii) (iii) payment of secured secured advances as per rules. " contr contrac actt may may run run over over a long long perio period. d. In that that case& case& the work work done done by the contractor is measured at intermediate stages and payment made for it on a running account basis. basis. This is is called called payment on account. account. Such payments payments are based based on actual actual measurement of work done. !eposit 'ork and (ocal (oan 'ork:
Deposit work is applied to work e!ecuted in PWD but the cost of which is met& not out of government funds& but from funds provided provided by non#government sources. The property of the work will also vest in the body funding it. Works Works e!ecuted for 'unicipalities& *orporations& Panchayats& 7on#government organi-ations& private parties fall in this category. category. 3unds for the work may be deposited deposited by these bodies either in cash or otherwise placed at the disposal of PWD PWD Division. 7ormally& 7ormally& no e!penditure shall be incurred by PWD on Deposit Works unless there are sufficient funds at its disposal to meet their cost (including (including departmental charges). "ny e!penditure incurred in in e!cess of Deposi Deposits ts receiv received ed must must be remove removed d from from the account account of Deposi Deposits ts and taken taken under under 8'iscellaneous Public Works Works "dvances9 till more funds are made available.
this case& case& works works e!pendit e!penditure ure incurre incurred d by PWD PWD on the the (ocal (oan 'orks In this works is treated as loan to the the party on whose behalf the work is done. Thus ?ocal ?oan woks woks are are work workss under underta take ken n on behal behalff of a loca locall body body& 'uni 'unici cipa pali lity ty&& 'uni 'unici cipal pal *orporation or a Port Trust& etc.& when the cost of the work is to form a part of the loan given to it by the @overnment for the purpose. 2!penditure on a local loan work is accounted for under the ?oan head concerned and and shown shown in the the Sched Schedul ulee of Debi Debitt of 'isc 'iscel ella lane neous ous heads heads of accou account nt 3orm 3orm A;& supported by a schedule of works e!penditure. "ll charges charges relating to a loan work should be brought to account immediately as they occur so that interest charges may be co rrectly calculated and adusted by the "ccounts ,fficer. Secured Advance and Security !eposit:
Secured "dvance is an advance given to a contractor on the security of materials brought to the site of work in case where the contract is for completed items of work. Secured "dvance can be sanctioned by the Divisional ,fficer subect to the following conditions1# 6) The amount amount of advance advance does not e!ceed e!ceed A5 of the value value of materials materials brought brought to to site by him. B) The materials materials of an imperish imperishable able nature nature and a formal agreement agreement is is drawn up with with the contractor contractor which gives government government a lien on the materials materials and safeguards its interest against losses or misuse. <) 2!penses 2!penses for the watch watch and ward of the material materialss shall be born by the the contractor contractor.. C) SD, in#ch in#charg argee should should certif certify y that1# that1# i) ii) ii) iii)
stat stated ed %ua %uant ntit ity y of of mat mater eria ials ls have have act actua uall lly y been been bro broug ught ht to site site&& no secu secure red d adv advan ance ce has has bee been n pai paid d on on the them m pre previ viou ousl sly y& mater ateria ials ls are are re%u re%uir ired ed for for use use by the the cont contra ract ctor or on item tem of wor work bein being g e!ecuted by him on finished rates.
) "ccount "ccount of Secured Secured "dva "dvance nce is kept in 3orm 3orm B;" as anne!u anne!ure re to the Running Running "ccount +ill. ;) Recoveries Recoveries of this advance advance are made progressively progressively from from contractor$s contractor$s 8,n 8,n "ccount "ccount +ill9 as the materials are consumed on the work. A) The Secured "dvance "dvance paid is posted posted both in the Works Works "bstr "bstract act and contractor$s contractor$s ledger in the column 8*ontractor$s secured advance9 to watch recovery.
Security !eposit: "fter fter a work work of cons constr truc ucti tion on or supp supply ly has been allot allotte ted d to a contractor& a sum of money (5 to 6/5) is deducted from the amount for work or supply due to him as per agreement. 2arnest money received with with this tender is also treated treated as part of his security deposits. 7o security is deducted from his payments so long as the amount deductible deductible is less than the earnest money. money. This also safeguards safeguards0ensur 0ensures es that government property handed over to contractor is received back on the completion of the work.
Recoverable "ayment and Runnin$ Account:
"ny payment to or on behalf of a contractor which does not represent value creditable to his account (or payable to him) for work done or supplies made is called recoverable recoverable payment. payment. Such payment payment has to be made good from him by e%uivalent cash cash recovery0sh recovery0short ort payment payment from his dues. 3or e!ample& e!ample& payment of wages to set right the work done by a contractor is a Recoverable payment. cases where where a contra contracto ctorr is to be paid at period periodic ic Runnin$ Account &ill: In cases intervals for that part of the work done& till then& as per specifications& the payment is called called a Running Payments. Payments. The bills bills on which these payments payments are made are called called Running Running "ccount "ccount +ills. +ills. Thus& when when (i) periodic periodic payments on account& account& (ii) advance advance payments& (iii) Secured "dvances are paid to the contractor& it will be obvious that the system of Running Payments is in force and such payments will be made on Running "ccount +ills. Secured Advance and Advance "ayment:
Secured "dvance is an advance given to a contractor on the security of materials brought to the site of work in case where the contract is for completed items of work. Secured "dvance can be sanctioned by the Divisional ,fficer subect to the following conditions1# 6) The The amount amount of advanc advancee does does not e!cee e!ceed d A5 of the value value of mater materia ials ls brought to site by him. B) The mater material ialss of an imperish imperishabl ablee nature nature and a formal formal agreemen agreementt is drawn drawn up with the contractor which gives government a lien on the materials and safeguards its interest against losses or misuse. <) 2!pe 2!pens nses es for the the watc watch h and and ward of the mate materi rial alss shall shall be born born by the contractor. C) SD, in#char in#charge ge should should certi certify fy that1# that1# i) ii) ii) iii)
stat stated ed %ua %uant ntit ity y of of mat mater eria ials ls have have act actua uall lly y been been bro broug ught ht to site site&& no secu secure red d adv advan ance ce has has bee been n pai paid d on on the them m pre previ viou ousl sly y& mater ateria ials ls are are re%u re%uir ired ed for for use use by the the cont contra ract ctor or on item tem of wor work bein being g e!ecuted by him on finished rates. ) "cco "ccount unt of Secur Secured ed "dva "dvanc ncee is kept kept in 3orm 3orm B;" as as anne!u anne!ure re to the Running "ccount +ill. ;) Recoveries Recoveries of of this this advance advance are made made progressi progressively vely from from contrac contractor$s tor$s 8,n "ccount +ill9 as the materials are consumed on the work.
A) The The Secur Secured ed "dva "dvance nce paid paid is poste posted d both both in the the Works rks "bstr "bstrac actt and contra contracto ctor$s r$s ledger ledger in the column column 8*ontr 8*ontract actor$ or$ss secure secured d advanc advance9 e9 to watch recovery.
"dvance payment denotes a payment made to a contractor on a Running "ccount for work done but not measured. Such payment is usually usually made to enable the contractor contractor to discharge liabilities like payment of wages to workers and his suppliers in cases where there is delay in measuring measuring up the work done by him. him. This gives financial support to the contractor till ,n "ccount Payment is made for the work done after its measurement. The amount of advance payment is always less than the e!pected amount due for work done. &in #ard and "riced Stores (ed$er:
+in *ards are kept in stores stores godown in 3orm:. They record record chronologically chronologically all receipts& receipts& issues issues and the running balances balances of each article article of stock. These cards cards are kept right at the place where the article is placed so that entries may be easily and %uickly made. It is kept only in terms terms of %uantities. "ccounts +ranch of Divisional ,ffice keeps a Priced Stores ?edger in form *PW" *PW" 6B. In it& pages are are set a part part for each article. article. The columns of the ledger provide for receipt& issues and balances& both in terms of %uantities and value. @oods received are valued from the supplier$s bills while goods issued are priced at issue rate fi!ed for the purpose. This gives a complete priced and %uantity account of the stores of o f the division. The ledger is closed monthly for %uantities and value and abstract of total receipts& issues and balances is worked out. Stora$e char$es and Supervision #har$es:
Storage charges are levied on issue of stores from Divisional stock to contractors or to work e!ecuted departmentally. departmentally. +y levying this charge& it it intended that PWD should be able to recover the e!penditure incurred by it on the stores after a fter they were received& such as e!penditure on work#charged staff employed for their custody (like watch and ward& ward& mainte maintenanc nancee of stores stores godown and yard& yard& rent rent of store# store#she shed& d& etc& etc& handli handling ng or stocking of articles& etc.& and on maintenance of their records). The storage charges are levied on percentage basis on the rate at which stores are issued issued.. The percent percentage age rate is fi!ed for each division division on the princip principle le that the total total estimated annual e!penditure of this nature is& as far as possible& recovered from the issues likely to be made during the year. Supervision charges are the charges levied in addition to book value in respect of stock materials sold or transferred and are intended to cover such items of e!penditure incurred on supervision of stores like salaries of regular staff employed such as store# keeper and his assistants& share of cost of regular staff employed on purchase& inspection& accounting& etc. It is levied as a percentage of issue rate plus storage charges. !irect and Indirect Receipts:
Direct Receipts signify those Revenue Receipts which are reali-ed in connection with the supplies supplies of water etc.& etc.& made from the canal or proect. proect. These are brought brought to
account as directly pertaining to the proect. The e!amples are sale of water for irrigation irrigation purposes& sale of water to towns& other canal produce& etc. Indirect Receipts are those receipts which are only incidental to a work or proect. These do not arise directly from the canal or proect and can not be taken as arising from it directly directly.. 3or e!ample& e!ample& ?and Revenue Revenue may increase increase due to better better irrigation irrigation facilities& facilities& and a portion of such increased ?and Revenue may be credited to the account of the proect. +ut this 8portion of ?and Revenue Reven ue due to Irrigation Proects9 would be indirect receipts. Issues to contractors and Issues directly to works:
In this case materials are issued to contractors whose contract is for completed items of works but materials are re%uired to be issued to him at a price in accordance with the contract (either in the interest of the %uality of work or for other considerations like short supply supply in the market). market). The custody custody of such materials materials lying lying at site is that of the contractor and he is responsible for its safety. safety. +ut the contractor is not at liberty liberty to take away the un#used material material without the consent of the Divisional Divisional ,fficer ,fficer.. If there is no such stipulation in the contract& materials should not be issued to the contractor e!cept in e!ceptional circumstances. 'aterial is treated as issued to work when the work is e!ecuted (i) departmentally& or (ii) by contractor whose contract is for labour rates only. " register of material at site is kept for such such materi materials als issue issued d and watch watch is kept against against actual actual consumpti consumption on and wastages and losses etc. Such material at site site is in the custody of PWD. Ori$inal works and Repairs:
