Penal Action

    Clause 17 (ii ) of the conditions of the contract provides for penal action against the firms for breach of the terms of the contract. This penal action can be in the from of (i ) Risk Purchase and (ii) Banning /debarring from transacting business with the State Government Departments.

    Normally the failure to make supplies of correct specifications within the delivery period originally stipulated or subsequently extended despite repeated opportunities given to the contractor to honour their commitment under the terms of the contract leads to the invocation of this provision.

    Repeatedly offering sub standard material for inspection ,committing fraud ,or indulging in other malpractice’s and unbusiness like conduct also entail penal action.

    It is expected of the contractor to have absolutely fair dealings with the Government and scrupulously honour the terms of the contract even though this may at times result in loss to them.

    Whenever, the penal action is contemplated against the contractor ,a show cause notice is issued giving them an opportunity to explain their position in respect of various acts of omission and commission. In case reply is not received in response to the show cause notice ,within the stipulated period ,ex-parte action taken against them on merit.

    The contractor are, therefore, advised to send their reply well in time and also explain their position in person to the senior officers, of the Directorate in their own interest.

    The order of debarring passed by the Government gives a very serious blow to the reputation of the contractor .This order is circulated amongst all Government Departments, Corporations, Boards and also to the Central Government ,DGS&D, New Delhi. As a results the contractor is not allowed to have any dealings in the States as well as in the Centre. It is, therefore, in the interest of the contractor to avoid running such risks .