Standard Operating Procedure for Engineer in Charge

A booklet titled “Standard Operating Procedure for Engineer in Charge” was unveiled today during the Seminar on the theme Ethics and Contract Management. It will act as a tool for ethical, efficient and transparent contract management. This booklet which is a generalised version aims to serve as a guiding light for ensuring clarity of roles and responsibilities while promoting transparency and facilitating compliance with contractual terms and conditions. This booklet prepared by me with assistance of 'Vigilance' and 'Material & Contract' departments
can be further customised as per specific requirements of special contracts such as Mine Development contracts, EPC contracts for Infrastructure works, etc.
It was a memorable moment when the booklet was unveiled by CMD and Board Members of HCL in presence of Major General (Dr) Mohan Jeet Singh Syali, VSM, Secretary and DG, Institution of Engineers(India) alongwith Sh @Rajesh Prasad , Advisor/IRCON, Swami Vedatitananda ji from Ramakrishna Shilpamandira, Sh Ashutosh Mishra, Advocate on Record/Hon'ble Supreme Court and other dignitaries including CVOs, Ex-CVOs and Officers of Central Govt Organizations in and around Kolkata and Ministry of Mines, and HODs and Officers of Hindustan Copper Ltd.

1. (9) gar ater fes
25 HINDUSTAN COPPER LIMITED

tentes

STANDARD

OPERATING PROCEDURE
FOR

ENGINEER IN CHARGE

3. 11
12
13

EN
32
33
34
35
36
37
38
39
3.10

a
42

‘TABLE OF CONTENTS

Clause

Contract Management (Before Contract Agreement/
Commencement)

Performance Security Submission
Insurance Policies

Labour License

Execution of Contract Agreement

Contract Management After Agreement

Material Passing

Quality Control

Works Review Meetings

Measurement and Payments

Contract Variations

Handling Disputes

Documentation and Record Keeping

Ensuring Completion as per Scope and Specifications
Extension of Time

Finalization of Contract and Issuance of Completion
Documents

General: Proper Correspondence with Contractor
‘Timely Replying of All Letters
Issuing Notices and Information Timely

5. Standard Operating Procedure for Engineer in Charge

A Standard Operating Procedure (SOP) for the Engineer In Charge (EIC) standardises.
supervision, measurement and payment certification in line with contract terms &
conditions. By daily site checks, joint measurements, written variation statements and
tamper-proof records, the procedure curbs discretionary decision-making, accelerates
interim payments and safeguards the organization against any contractual disputes
while also facilitating the agency by smoother and faster execution. EIC is the
‘authorised official of the Management who handles the contract. Sometime he may not
be an engineer but a non-technical oficer. The term BIC here covers any officer as
appointed by Competent Authority and who shall be in-charge of the contract work.

1. Contract Management (Before Contract Agreement / Commencement)

‘Submission of Performance Security, Insurance Policies, Labour licences & other
documents as required under the contract.

1.1 Performance Security Submission:

Before the formal commencement of the contract, the contractor is required to
submit a Performance Security (also known as Performance Bank Guarantee or
Security Deposit) as stipulated in the contract documents. This security ensures
the contractor's commitment towards satisfactory contract performance and
safeguards the employer against defaults or non-performance. It must be validated
for the correct amount, format, validity period and issued by financial institution.
‘The Security should cover the entire contract duration as per the extant contract
provisions and typically extend through the defect lability/warranty period.

1.2 Insurance Policies:

‘The contractor must submit all necessary insurance policies prior to
‘commencement of work. This generally includes:

a), Workmen's Compensation Insurance
b. Contractor's All-Risk Insurance

©. Third-Party Liability Insurance

&. Equipment insurance

‘These policies protect both parties against unforeseen losses, damages, or
Liabilities. The Engineer-in-Charge or contract manager verifies that the policies
are adequate, valid and comply with contractual requirements as well as relevant
statutory norms.

6. 1.8 Labour Licence
‘A valid labour license must be obtained by the contractor as per applicable
provisions for required number of workers tobe deployed.

2. Execution of Contract Agreement

2.1 The contract agreement is the legally binding document signed by both parties
‘outlining scope, terms and conditions, obligations and schedules.

2.2. The Engincer-in-Charge should ensure that:

a) The agreement is executed in a timely manner after issuance of Letter of
Acceptance/Letter of Intent. (in Gem Contracts, the agreement is self.
{generated by the Gem portal at the time ofaward)

b) All annexures, specifications, subcontractor details and schedules are
correctly attached.

©) Copies are distributed to all stakeholders including Finance, Legal and
Project teams for reference and compliance.

4) Akick-offmeetingis typically conducted to:

J. Align the understanding between the contractor, EIC and other parties.

i. Review scope, timelines, key personnel, key equipment, reporting
formats and riskeareas.

Hi. Bstablish communication protocols and escalation matrices,

3. Contract Management After Agreement
Post-agreement, successful contract delivery depends upon diligent management
of multiple facets as outlined below:

3.1 Material Passing.

a) Materials supplied by the contractor must be inspected and approved by the
Engineer-in-Charge or authorized official to ensure they meet contract
specifications and quality standards. This must be ensured before the material
used.

b) Material Receiving Reports and challans are verified, quantities and qualities are
checked and supplier test certificates or third-party certificates are cross-
validated.

<) Aformal material passing process avoids usage of substandard or unauthorized
material, saves costs and ensures compliance,

3.2 Quality Control

‘Continuous quality monitoringofcontractor' activities is essential This involves:

a), Checking adherence to drawings, technical specifications, relevant codes and
best practices.

b) Conducting periodic site inspections, lab testing of samples and witnessing
test procedures, as may be applicable.

9 Maintaining quality checklists, non-conformance reports and implementing
‘corrective actions promptly.

7. 4) Coordinating with Quality Assurance/Control teams and external agencies if
required, to maintain documented evidence confirming quality compliance
throughout the contract,

3.3 Works Review Meetings

34

‘Regularly scheduled meetings (weekly, fortnightly and/or monthly) should be held
for important and large contracts involving contractor’ representatives, project
engineers, and management, These sessions must review:

a) Progress updates against work schedules,

b) Quality issues and rectifications

©) Safety performance

4) Resource utilization and manpower status

e) Pending approvals or clarifications

9 Riskfactors and mitigation plans

Minutes of meeting (MoM) should be recorded and circulated for accountability

‘and follow-up on action items. Its advisable to issue jointly signed minutes which

are signed by the EIC and the authorised signatory ofthe contractor.

‘Measurement and Payments

a) Measurement of completed work is carried out jointly by the representative of
BIC and contractor to verify quantities actually executed. Test checks must be
carried out as per the guidelines issued.

b) Measurements must follow contract procedures, referencing approved
drawings and specifications. Measurement books must be maintained
securely alongwith the relevant backup calculations and test reports.

9 Necessary deductions for tax, penalties and liquidated damages must be made

applicable.

4d) Payment of price escalation or variation claims is made only if contractually
allowable and backed by substantiating documents such as prescribed price
indices.

+) Interim/Running Account bills should be processed promptly to maintain
healthy cash flow and contractor's motivation. Adhoc payments as per
provisions, where applicable should be made on priority so that the contractor
maintains the cashflow.

‘The following must be ensured by EIC:

4) RABIllshould be complete in all respect

4i) RA Bills must have the all supporting documents including documents
fornecessary statutory compliances

Hi) Revenue and Capital nature items may be clearly segregated in RA Bll

iv) Cumulative Progress Report, both quarter wise and till date wise to be
reported with RA Bill

Y) EIC to ensure to run ‘process recovery’ program in ERP at the time of
preparing RA Bill (Cases where GST is recoverable)

8. vi) Tax Invoice Number should match with Invoice Number mentioned in RA
Bil (Le, there should not be any difference between Invoice ofthe Party
‘and ERP Invoice)

vi) Documents like PO amendment, BG extension / amendment, TDS
Exemption Certificate, Deviation Statement, Material Consumption
Statement will be part of RA Bill as and when appears.

3.8 Contract Variations
Variations include additions, deletions, or modifications to the original scope of
work, often necessitated due to design changes and unforeseen site condition
‘The BIC should ensure that:
a), Any variation in the work executed should have a formal written approval.

b) Cost implications and time impact are evaluated and agreed before
implementation.

9 Variation proposals and agreements are documented clearly to prevent
disputes.

4d) Amendments are incorporated into the contract following internal approval
‘workflows.

3.6 HandlingDisputes
Despite best efforts, disputes may arise related to quality, delays, payments or
scope of work interpretation. Prompt identification, open communication, and
escalation of disputes to higher authority for amicable resolution is encouraged to
avoid project disruption. The BIC plays pivotal ole in:

a) Maintaining impartial records and documentation.
b) Facilitating discussions between parties.
9 Supporting mediation, arbitration or legal proceedings as per contract terms.

3.7 Documentation and Record Keeping
Maintaining comprehensive and organized records is critical for transparency and
audit purposes. Digital repositories or BRPs should be leveraged for easy retrieval.
Thisincludes:

a) Contract documents, amendments, correspondence and approvals
b) Inspection reports

©) Measurement books and test results

4d) Minutes of the meetings and progress reports

e) Payment records and statutory flings

3.8 Ensuring Completion as per Scope and Specifications
‘The BIC should monitor that all contractual work is completed in accordance with
approved drawings, technical specifications, quality standards, and within safety
protocols.

9. Progress tracking tools, snaglists for punch-point clearance, and final inspections
‘ensure that deficiencies are identified and addressed prior to acceptance.

3.9 Extension of Time
Contractors may request extensions oftime due to unforeseen delays such as force
‘majeure or other grounds.
EIC should examine these claims thoroughly, verifying delay causes and
concurrency with contractor's progress. Hindrance register is most useful for this
purpose and must be maintained.
‘Time extensions may be granted with or without liquidated damages as per
contract provisions and competent authority's approval. Empowering BIC to grant
Provisional extension is inbuilt with LD. Final time extension with delay analys
to be submitted for approval of CA and based on the approval final time extension
with or without LD to be amended in WO and LD 90 far deducted to be retained as
erapproval
Clear communication of granted extension or rejection is essential to maintain
faimess and legal implication.
‘Timely extension of BG (ifrequired)

3.10 Finalization of Contract and Issuance of Completion Documents
Upon satisfactory completion, the EIC should supervise the preparation of final
bills, reconciliation of accounts, and settlement of any outstanding dues or claims.
‘The contract is formally closed out by issuing key documents including completion
certificate confirming fulfilment of contract obligations and release of performance
security and security deposit as per timelines in the contract agreement,

‘Timely return of BG on completion ofcontract.
General: Proper Correspondence with Contractor

4.1 Timely Replying of All Letters:
All letters and communications received from the contractor must be replied to
‘promptly within the contractual timeline, Delays or evasive responses can lead to
misunderstandings or disputes. Necessary approvals from competent authority
must be obtained for responses affecting contract terms or finances, as may be
required.

4.2 Issuing Notices and Information Timely:
‘The employer's department and BIC must issue all contractual notices such as
notices of delays, defects, violations, or claims rejection adhering strictly to
stipulated timeframes and formats. This ensures enforceability and demonstrates
procedural fairness.

10. Note: The above SOP is for guidance of the Engineer-In-Charge for smooth execution of
the contract work. EIC should not limit himself/herself only to above points but must
‘adhere to the above ones to the extent applicable. When there is any deviation, the
matter should be brought to the notice of the HOD/M&C, C.O and the competent
‘authority (contract accepting authority).

6

12. 0)

f rare Fate
HINDUSTAN COPPER LIMITED