Relaxation of EMD & FSD Orders

Relaxation of EMD & FSD

Finance Department – Treasury Financial Rules – Earnest Money Deposit (EMD) & Further Security Deposit (FSD) – Relaxation of certain contractual obligations in view of COVID-19 pandemic–  Orders – Issued.

The following are the salient points for the above Government Order.

  1. The EMD @ 1% of ECV shall be collected, as per the existing procedure, from all the participating bidders for fresh tenders.
  2. The EMD @ 1% on Contract Value shall be collected, in the form of B.G./ D.D. from the successful bidder at the time of concluding the agreement, instead of the prevailing 2.5% of contract value.
  3. After receiving the EMD mentioned in (b) above from the successful bidder, the EMD collected in (a) above will be returned to the successful bidder at the time of concluding the Agreement.
  4. In respect of the ongoing works/agreements, out of the EMD of 2.5 % on Contract Value collected in the form of B.G./D.D. at the time of agreement,1.5 % on Contract Value shall be returned in the same form as it was collected i.e., B.G./D.D. to the concerned agencies/contractors.
  5. During intermediate bill payments, the Further Security Deposit (FSD) shall be collected @ 2% instead of the existing 7.5 % or any other specific percentage mentioned in the agreement, in form of cash on the value of work done from the agencies/ contractor’s running account bill, & the FSD shall not be released in exchange of B.G.s.
  6. The amount of FSD accumulated to 2% on Contract Value at the end of final bill & the 1% EMD in the form of B.G./Cash/DD will be returned to the agency/ contractor on the successful completion of the Defect Liability Period (DLP)/ maintenance period (+) 28 days’ grace period from end of DLP /maintenance period (or) from the date of check measurement of the rectification plus 28 days of grace period in case the defect rectification is completed beyond the DLP / maintenance period.


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