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My Bank floated a tender for providing security services through open tender, One Security Agency was selected for the same at service charge(agency charge) of 2 %, the total quantity of security guards supplied are 32. The wage structure was as per DGR(director general re-settlement)/ central minimum wages, also he agreed to provide two pairs of uniform to its guards.

when he produced the first bill, it was found without EPF and ESI challans, also in the salary statement of the guards one allowance i.e. Uniform outfit allowance was also missing. On our repeated instruction he has paid the ESI and EPF but now he is adamant for not paying Uniform Outfit Allowance as he is providing free uniform.

he is claiming uniform outfit allowance from us(Bank) but not passing the same to the guards, Now his bill for the month of July is pending(Contract started from 1st July 2015) and he has refused to pay salaries to the guards for the month of August(salaries for the month of july has been paid to guards without outfit allowance).

What should be our action as Principal employer.
9th September 2015 From India, Delhi
Dear Mr Amit,
The Security agency is requirred to follow the statutory rates of Guardboard if it is applicable to you. So also if he is not paying the outfit allowance, you can hold back the bills till he passes on the full statutory dues to the emlployees as agreed in the contract agreement
11th September 2015 From India, Pune
Dear Mr. Amit
As a principal employer you have to insure that employee gets all the said amount. it is advisable that call the contractor and explain him what are the amount come under director general re-settlement central minimum wages and he have to pass whole amount to security guard. Aside the uniform he already provided to guard the cost he have to bear the cost of those uniform as per contract .

Warm Regards
14th September 2015 From India, Hyderabad
Dear Mr. Amit,

As per my opinion the agency is right. Bcoz you pay them some amount agst uniform and the agency is providing the Uniform Set to security personnel from their pocket. Now considerable point is that at what terms you have decided/negotiated in the quotation/agreement.

Whether it is mentioned in the quotation that the Uniform Outfit Allowance will be payable to the security staff. If so, than the agency should pay the Allowance.

But generally in security contract the Uniform Cost indicates that the agency will provide the uniform set (u can ask the detail) from their pocket, and they will not recover the same from the security staff. It does not mean that they will pay the uniform allowance (which is not part of Minimum Wages).

Pls see, the agency is working on 2% (too little), how they will pay the uniform allowance / set from from their cost.

You release a tender, they are the lowest one with 2% margin. From my point of view, you can ask them to produce the document whatever they have claimed in their quotation. You should not go with the lowest one, instead you should opt for the best one in compliances.

However, you can call upon the representative and have discussions cross the table. It is a new contract can take time to make thing streamline. They have already paid one month salary and complicances from their pocket. Now you discuss with them and release part payment (At least salary amount of 32 personnel). Enable them to release Aug Salary.

I have dealt with many security agencies. Keep one month bill pending with you. If they don't submit reliable documents/payment proofs hold the bill, but release a part payment for salary distribution.
15th September 2015 From India, Delhi
Dear Sir,
as you said we are releasing their payment by deducting 5% of outfit allowance so as to enable them to release the salary of August. The firm was very well aware of the terms and conditions where we has said that free uniform(2 sets) will be given by the agency and also uniform outfit allowance will be passed on to guards. Knowingly they have quoted the lowest, since only price bid was the criteria for choosing the L-1 the firm was awarded work.we will keep this in mind next time..
Thanks once again
15th September 2015 From India, Delhi
The agency is trying to cut corners.
2% admin charges may not be giving them sufficient profit and they are now finding ways to increase profit.
The bank has to insist on following the contract word to word.
What ever has been promised to be paid to guards needs to be passed on to them.
As I understand ,the relationship with this agency may not continue and new agency will have to be found out sooner than later.
15th September 2015 From India, Pune
You expect the security agency to pass on the uniform allowance and also pay for free uniforms to the security guards ? Where do you expect the money to come from ? You are giving them 2% service charge and then deducting 2% tds from the bill. Which means the amount they get is equal to the amount they have to pay. That also with payment coming a month late. This must be a joke.
I would like to see a copy of the tender terms where you have stated that uniform must be given free AND allowance must be passed on.
15th September 2015 From India, Mumbai
Here uniform outfit allowance is basically to maintain uniform in a manner that it is presentable in front of public/visitors.
A Guard is almost the first person a customer sees and if his turnout is poor,then it leaves poor impression.
In services Kit maintenance allowance used to be paid on monthly basis to uniformed personnel to ensure highest standard of turnout.
15th September 2015 From India, Pune
To the extent I understand, Uniform Outfit Allowance is MEANT to maintain the uniform issued to the guards & NOT in-lieu of the uniforms issued.
Some Concerns use the wording 'Washing Allowance'.
And I think Amit's Bank needs to revise/modify their Tendering norms........where the L1 is ONLY ONE of the parameters to decide who will be issued the Order.
In fact, this very L1 process has been responsible for India's poor state of affairs vis-a-vis quality of services in most sectors since decades, if not since Independence.
Many they Security or anything else.......quote L1 figures [no surprise if some 'manage' getting competitor figures to ensure they quote lower rates] just to get the Order.....without any verifiable proof/references of their past work.
And @ the EoD, there's point blaming the agencies for the shoddy state of affairs......they were ALLOWED to do so & like any Entity with short-term goals, the Agency just used the loopholes.
15th September 2015 From India, Hyderabad
""In fact, this very L1 process has been responsible for India's poor state of affairs vis-a-vis quality of services in most sectors since decades, if not since Independence""
There is a clear provision in Financial rules that L1 need not be taken always,blindly.
The Competent Financial Authority(CFA) can take the next highest and record reasons in writing.
CFA has to have the moral courage to take such decisions,since he can always be hounded by audit,anonymous complaints etc.
The whole system is crumbling in India due to myriad rules and ancient regulations and a peculiar attitude which blocks progress.
We lack faith in our administrators,fellow workers and keep introducing checks and counterchecks,the net result is delay and delay and escalating prices.
15th September 2015 From India, Pune
Dear Amit,

You have got many reviews and suggestion from members. I would like to add the below:-

1 As I suggested, pls release some amount which is enough for distributing the salary. Holding only 5% is not enough. Bcoz may be agency refused to even distribute the salary. Though they have submitted u the PF-ESI challan, but it is not confirmed that security staff deployed at your bank are covered under the challan or not.

(can be confirmed only after checking the ECR and challan altogether). Since it is new contract may be they have not deposited the PF-ESI. Being a PE, lastly you will be hold responsible for the compliances.

2 I would not suggest to change the agency. Since you are following DGR rules. If the agency is also complying DGR standards in r/o other site, that indicates the agency is not any ordinary one. You need to handle the situation with some techniques and strategy. Dont give them much scope, so that the agency escaped and leave the liability on you. But paralally dont HOLD/Deduct that much amount which make them unable to operate day to day operational activities.

3 Call upon persons from Marketing and F&A Team to discuss the matter. Convince them about the compliances. Always Hold one month payment. If they have much shortage of fund release the payment agst submission of BG.

4. I am giving below a format, pls compare the quotation with the contents and ask the agency to provide the proof accordingly on monthly basis.

1 Basic

2 D.A

3 Total (A)=(1+2)

4 Washing allowance

5 (Total B)=(3+4)

6 PF @ 13.36% (On Total A)

7 ESIC @ 4.75% (On Total A)

8 Total (C )=(5+6+7)

9 Reliever Charges @ 16.67% or 1/6th (Weekly off) on wages part (Total B)

10 ESIC @ 4.75% on Reliever

11 Total (D)=(9+10)

12 Service Charges @ ===

13 Total (E)-(11+12)

5 At the end if after doing all the above effort the agency is not working as per your requirement, process to release new tender.

But give them adequate notice period (01 month). Before choosing the L1, pls check all the contents regarding Compliances, Welfare, Payment Terms etc.
16th September 2015 From India, Delhi
No sir,
If it is washing allowance, it would have been stated as such.
Uniform allowance is the money given to the contracts to pay for uniforms for his employees who are deployed at the site. And that is the uniform practice.
Which is why I said I would like to see the terms originally written.

19th September 2015 From India, Mumbai
Dear Mr. Pan Singh
Kindly do not give wrong information for minimum wages.
For yours reference the wage structure was as per DGR director general re-settlement)/ central minimum wages
19th September 2015 From India, Hyderabad
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