Certification of work completion
2.0 Brief Introduction:
A CTE type examination was carried out by vigilance department for a Service contract of Electrical Work.
An open tender was floated for the subcontracting Electrical & Weapon cabling work in a ship being built at MDL. During the investigation of the file it is observed that for modification work payment is done based on man day rate and not based on rate for particular activity/line item. It was clarified that the scope involved in the modification work cannot be defined at the time of finalization of the contract as it may involve activities like cutting, welding, fixing of cable trays & hangers and laying cables. Separate rates were not available in the contract for above activities. As per the scope of work modification requiring 15 man-days or less is termed as minor modification and subcontractor will carry out his modification at no extra cost. However, modification requiring more than 15 days will be termed as major modification and will be paid as per man-day rates. The decision regarding minor and major modification is taken after mutual discussion between contractor and ship manager. From the above. It can be seen that there is a chance that this can be mis-utilized. Hence it is considered appropriate to explore other via-media for fixing up the rate for modification work like certain percentage of particular line item.
During the investigation it was also observed that record of material issued to the contractor was being maintained, however the actual usage and wastage/scrap details were not maintained and reconciliation was not done. Though the free issue material was not going out of MDL, it would be appropriate to reconcile the same to control wastage of cables and also to arrive at actual quantity of cables used so that the requirement can be projected accurately for future ships.
The following Systemic Improvements were suggested by Vigilance Department and a memorandum to this effect was issued by concerned Director for compliance by all concerned departments.
(i) No Scope for misuse of work certification authority.
(ii) Transparency in work certification process along with monitoring mechanism along with online/documentary evidence for verifying the work completion.
(iii) Reconciliation of material considering the issue, usage and wastage etc.,
2.3 Impact and Benefits:
With above improvements, work certification process became more transparent and the material wastage was monitored/minimized by reconciling the material reconciliation process.