BOOK EXAMINATION CLAUSE
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Meaning:
Government/Purchaser to call for and verify and examine the books of the
contractor/Supplier is called Book Examination Clause.
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Books include
Account books, vouchers, receipts, memorandum, paper or writing or any copy of
or extract from any such document.
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Object:
Verifying or ascertaining the cost of execution of the contract.
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When : before
or after the prices have been finally fixed.
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Contractor's duty:
Afford facilities to the Government Officer concerned to visit the Contractors
works for the purpose of examining the processes of manufacture and estimating
or ascertaining the cost of production of the articles. If any portion of the
work be entrusted by a sub-contractor or any of its subsidiary, the authorized
Government Officer shall have power to examine all the relevant books of such
sub- books of such sub-contractor or any subsidiary shall be open to his
inspection as mentioned in clause.
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Period: The
Contractor or its agency is bound to allow
examination of its books within a period of 60 days from the
date the notice is received by the Contractor, or its agencies.
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If Contractor fail to
produce the Books: The
purchaser can reduce the Contract price according to his best judgment. The decision of the Purchaser in regard
contract price is final and binding on the Contractor and his agencies.
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Result : If on such examination, it is established that
the contracted price is in excess of the actual cost plus reasonable margin of
profit, the Purchaser shall have the right to
reduce the price and determine the amount to a reasonable level.
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