Contract act

shrikant (Querist) 19 September 2020 This query is : Resolved
Respected learned members,I am working in public limited electricity distribution company LTD.Contract for erecction and construction of electricity contract has been terminated for non performance of contract .The official of company negligient in encashing bank guarentee as well as10% retention amount.Now the same contractor whose contract has been terminated approches company and ready to perform the obligation asnd agreed to deposit Bank g and perform the works at old rate ie terminated contract rates .My question is it lawful to make a fresh new agreement/contract with same contractor without going for tendering again( sinceflotting new tender means the increse in costof tender at the riskand cost of terminated contractor, since the Company not encash the bank guarentee as well as not retain 10%retension amount it means company has bear the incresed cost burden.Sir,please guide i am waiting eagarly If case law provided it will be very helpful for me

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A member from a public limited electricity company is seeking guidance on whether they can lawfully enter into a new contract with a previously terminated contractor without re-tendering. The contractor is willing to perform at the original rates. The company has not yet encashed the bank guarantee or retention amount, which could lead to increased costs if a new tender is issued. Advice suggests consulting legal counsel and checking departmental provisions before proceeding.

Dr J C Vashista (Expert) 19 September 2020
What is your personal interest in awarding fresh contract to an experienced non-performer contractor ?

Dr J C Vashista (Expert) 19 September 2020
Being a commercial query you should have consulted and engaged a lawyer, which the company can afford to seek professional service.

Rajendra K Goyal (Expert) 19 September 2020
Full documents need to be referred.
If the contractor is not blacklisted / termination etc. process is not pending.
Contract can be entrusted whether in new or on old terms till departmental provisions allows.
Before proceeding, it is advisable to get clearance from your law department.

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