Govt contractors to get 6-month work extension due to Covid lockdown

In a bid to offer some relief to government contractors whose work has been hit by Covid-19 lockdown, the state government on Wednesday announced measures including

In a bid to offer some relief to government contractors whose work has been hit by Covid-19 lockdown, the state government on Wednesday announced measures including a six-month work extension for projects.

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Following the footsteps of the Central government, which offered its contractors an extension of three to six months to complete the projects, the state finance department issued a government order to grant a work extension deadline of six months to contractors who seek the same. The six-month period will stretch from March 15 to September 15, and contractors will not be penalised for the delay in completing their works for their period. This will also mean a delay in most government works and projects by six months.

The finance department noted that the lockdown had adversely hit construction and infrastructure works by impacting supply chains, access to labour, manpower, etc.

“The guidelines issued by the finance department are applicable to all government contractors as well as those hired by local authorities, civic corporations, and public companies. However, individual authorities have the right to implement the guidelines in toto or make changes as required. The underlining motive is to give relief to contractors in these unforeseen circumstances,” said a senior bureaucrat.

The other measures include offering relief via payment of security deposits (a percentage of the total work contract) and performance deposit.

The security deposit is paid partially at the time of tendering, and the rest is paid through running bills raised by the contractor in the course of the project. The contractors will now get additional time to pay the deposit. For instance, contractors who were expected to pay 1% of the security deposit through their running bills will now be allowed to pay this amount until as much as 75% of the work gets completed.

In the case of performance guarantee, if a contractor has finished work that is 50% of the total project cost, then 50% of the cost of the work done will be paid back as deposit to the contractor.