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iii) Where the price indicated in the LPP / last work order value is subject to variation,
besides indicating the original price of the LPP / last work order value, the updated
price as computed in terms of the price variation clause, should also be indicated.
iv) Where the supply/work order against the LPP / last work order value is yet to
commence, i.e., delivery / completion schedule is not yet due, it should be indicated in the
contract proposal, whether the contract holder is a past supplier/registered vendor/new vendor.
In case of a new vendor, the price paid against the previous contract as in the case of (ii)
above should be indicated.
v) In the case of wholly imported stores, the comparison of the LPP should be made with the
net C.I.F. value in foreign currency only.
Indication of the percentage of increase over LPP/ last work order value should invariably be
given in the contract proposals. For this purpose, a LPP / last work order value register will be
maintained by all contract departments after sharing information among all the plants and HQ by
sending copies of PO/WO for items/ works common to them.
3.ESTIMATE :-
As the estimated rate is a vital element in establishing the reasonableness of prices, it is important
that the same is worked out in a realistic and objective manner on the basis of prevailing market
rates, last purchase prices rate (not older than three years), economic indices (In absence of related
indices, inflation @ 6% p. a or part there off. may be considered) for the raw material/labour (the same
may be obtained from Labour Bureau, Shimla, RBI, or other Govt. published bulletin), other
input costs, IEEMA formula, published data in paper/journals, wherever applicable and
assessment based on intrinsic value etc. To take care of annual inflation last purchase rate if older
than one year, @ 6% or change in related indices against basic material can be escalated per year.
In case of preparation of estimate for AMC/ARC/one time job, due consideration should be given
to the prevalent market rate for deployment of different category of workers/supervisors &
engineers for the job based on minimum wages of Central govt. adopted by corporation.
For civil works, latest published schedule rate of DSR has to be consulted. Items related to civil
works of power plant reference of similar items of other organization like NTPC, BHEL & Govt.
PSU may be referred if the item is not available in DSR.
Budgetary offers from the reputed manufacturers for procurement may also be considered as a
basis of estimate. Multiple budgetary quotations is preferable to be obtained and the 90% of
lowest budgetary offer should be considered.
Every indent for procurement must be forwarded with estimated cost along with the basis for the
same, wherever possible.
4. Indent should be forwarded through system by the Plant Chief/Chief Engineers to the Chief
W& P Manual – 2012 Page 13