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Normally the concerned Vendor should make an appeal before expiry of scheduled contractual
period to consignee and order issuing authority mentioning the reasons for delay.
If the delay is attributable to the vendor (can be ascertained as per calculation shown in the
foregoing) as assessed be the order executing authority, LD Clause shall be imposed on the
vendor even if the Corporation has not suffered any demonstrable actual loss for such delay, as it
is a pre-estimated compensation only.
Equipment and materials will be deemed to have been delivered only when all its components,
parts are delivered. If certain components are not delivered in time, the equipment & materials
will be considered as delayed until such time all their parts/ components are delivered.
While finalizing final time extension, if Liquidated Damage is levied in each and every
contract/Purchase Order undergoing delay in completion period, without examining the merit of
the case and the taking relevant aspects into account, such a decision will not only be against the
spirit of the contract/Purchase Order but may not ultimately be in the interest of DVC also. At the
same time, cases involving loss/damages to DVC due to delays by vendor should not be dealt
with leniently. Hence, in order to safeguard the long term and larger interest of DVC, the cases
for imposition of Liquidated Damage need to be dealt with logically and rationally, maintaining
consistency in approach by order executing authority. Accordingly, in the normal course, the
cases of time extension/Liquidated Damage will be dealt with as per guidelines given hereunder.
Every delay has a cost. LD is basically pre-estimated loss to DVC in case of delayed
delivery/delayed completion period of work. Damages, with reference to a contract, in the context
of Liquidated Damage, can be defined as the amount adjudged to be paid by vendor to the owner
as compensation for the loss sustained by the owner in consequence of the breach of contractual
obligations pertaining to time schedule. The fundamental principle underlying the theory of
damages is not punishment but compensation.
In contract / Purchase Order awarded by DVC delay in performance of the contract / Purchase
Order may be on account of one or more of the following:
(i) Reasons attributable to the owner viz. delay in giving approval of submitted drawings, in
sending Inspector to carry out inspection at vendor’s works, in issuing despatch clearance, in
issuance of road permit etc.
(ii) Reasons attributable to “Force Majeure” conditions as defined in the contract / Purchase
Order.
Reasons attributable to the vendor viz., delay in the submission of drawings for approval, in
getting the materials from vendor/vendor’s principal/manufacturer in abroad, in getting the raw
materials etc.
The proposal for time extension and decision on LD shall, accordingly, contain a detailed analysis
by the executing authority indicating reasons & period of delay on each account, as detailed
above, along with documentary evidence thereof to the extent feasible and relevant. Based on the
analysis, the period of delay due to ‘Force Majeure’ and for reasons attributable to DVC shall be
W& P Manual – 2012 Page 67