My bank floated a tender for providing security services through an open tender. One security agency was selected for the same at a service charge (agency charge) of 2%. The total quantity of security guards supplied is 32. The wage structure was as per DGR (Director General Re-settlement)/ Central Minimum Wages. Also, the agency agreed to provide two pairs of uniforms to its guards.
When the agency produced the first bill, it was found without EPF and ESI challans. Additionally, in the salary statement of the guards, one allowance, i.e., Uniform Outfit Allowance, was missing. Upon our repeated instructions, the agency has paid the ESI and EPF. However, they are now adamant about not paying the Uniform Outfit Allowance, claiming they provide free uniforms.
The agency is claiming the Uniform Outfit Allowance from us (the bank) but is not passing the same to the guards. Currently, their bill for the month of July is pending (the contract started on 1st July 2015), and they have refused to pay the salaries to the guards for the month of August (salaries for July have been paid to guards without the outfit allowance).
As the principal employer, our action should be to address the issue promptly by communicating clearly with the agency about the non-compliance and the importance of fulfilling all agreed-upon terms, including the Uniform Outfit Allowance for the guards. It may be necessary to escalate the matter if the agency continues to refuse to comply with the agreed terms and obligations.
From India, Jaipur
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When the agency produced the first bill, it was found without EPF and ESI challans. Additionally, in the salary statement of the guards, one allowance, i.e., Uniform Outfit Allowance, was missing. Upon our repeated instructions, the agency has paid the ESI and EPF. However, they are now adamant about not paying the Uniform Outfit Allowance, claiming they provide free uniforms.
The agency is claiming the Uniform Outfit Allowance from us (the bank) but is not passing the same to the guards. Currently, their bill for the month of July is pending (the contract started on 1st July 2015), and they have refused to pay the salaries to the guards for the month of August (salaries for July have been paid to guards without the outfit allowance).
As the principal employer, our action should be to address the issue promptly by communicating clearly with the agency about the non-compliance and the importance of fulfilling all agreed-upon terms, including the Uniform Outfit Allowance for the guards. It may be necessary to escalate the matter if the agency continues to refuse to comply with the agreed terms and obligations.
From India, Jaipur
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Dear Mr. Amit,
The security agency is required to follow the statutory rates of Guardboard if it is applicable to you. If they are not paying the outfit allowance, you can hold back the bills until they pass on the full statutory dues to the employees as agreed in the contract agreement.
Thank you.
From India, Pune
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68The security agency is required to follow the statutory rates of Guardboard if it is applicable to you. If they are not paying the outfit allowance, you can hold back the bills until they pass on the full statutory dues to the employees as agreed in the contract agreement.
Thank you.
From India, Pune
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Dear Mr. Amit,
As a principal employer, you have to ensure that the employee receives all the specified amounts. It is advisable to call the contractor and explain to him which amounts fall under the Director-General Re-settlement Central Minimum Wages, and he must pass the entire amount to the security guard. In addition to the uniform already provided to the guard, he must bear the cost of those uniforms as per the contract.
Warm Regards,
Anurag
From India, Hyderabad
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As a principal employer, you have to ensure that the employee receives all the specified amounts. It is advisable to call the contractor and explain to him which amounts fall under the Director-General Re-settlement Central Minimum Wages, and he must pass the entire amount to the security guard. In addition to the uniform already provided to the guard, he must bear the cost of those uniforms as per the contract.
Warm Regards,
Anurag
From India, Hyderabad
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Dear Mr. Amit,
In my opinion, the agency is right because you pay them some amount against the uniform, and the agency is providing the uniform set to security personnel from their pocket. Now, the considerable point is the terms you have decided/negotiated in the quotation/agreement.
Is it mentioned in the quotation that the Uniform Outfit Allowance will be payable to the security staff? If so, then the agency should pay the allowance.
Generally, in a security contract, the Uniform Cost indicates that the agency will provide the uniform set (you can ask for details) 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).
Please note, the agency is working on a 2% margin, which is too little. How will they pay for the uniform allowance/set from their cost?
You released a tender, and they are the lowest one with a 2% margin. From my point of view, you can ask them to produce the document supporting whatever they have claimed in their quotation. Instead of going with the lowest bidder, you should opt for the best one in compliance.
However, you can call their representative for discussions across the table. Since it is a new contract, it may take time to streamline things. They have already paid one month's salary and compliances from their pocket. Now, discuss with them and release a part payment (at least the salary amount of 32 personnel) to enable them to release the August 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.
From India, Delhi
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In my opinion, the agency is right because you pay them some amount against the uniform, and the agency is providing the uniform set to security personnel from their pocket. Now, the considerable point is the terms you have decided/negotiated in the quotation/agreement.
Is it mentioned in the quotation that the Uniform Outfit Allowance will be payable to the security staff? If so, then the agency should pay the allowance.
Generally, in a security contract, the Uniform Cost indicates that the agency will provide the uniform set (you can ask for details) 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).
Please note, the agency is working on a 2% margin, which is too little. How will they pay for the uniform allowance/set from their cost?
You released a tender, and they are the lowest one with a 2% margin. From my point of view, you can ask them to produce the document supporting whatever they have claimed in their quotation. Instead of going with the lowest bidder, you should opt for the best one in compliance.
However, you can call their representative for discussions across the table. Since it is a new contract, it may take time to streamline things. They have already paid one month's salary and compliances from their pocket. Now, discuss with them and release a part payment (at least the salary amount of 32 personnel) to enable them to release the August 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.
From India, Delhi
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Dear Sir,
As you said, we are releasing their payment by deducting 5% of outfit allowance to enable them to release the salary for August. The firm was well aware of the terms and conditions, where we had stated that free uniforms (2 sets) would be provided by the agency and the uniform outfit allowance would be passed on to the guards. They knowingly quoted the lowest price bid since that was the criteria for choosing the L-1, and the firm was awarded the work. We will keep this in mind for next time.
Thanks once again.
From India, Jaipur
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As you said, we are releasing their payment by deducting 5% of outfit allowance to enable them to release the salary for August. The firm was well aware of the terms and conditions, where we had stated that free uniforms (2 sets) would be provided by the agency and the uniform outfit allowance would be passed on to the guards. They knowingly quoted the lowest price bid since that was the criteria for choosing the L-1, and the firm was awarded the work. We will keep this in mind for next time.
Thanks once again.
From India, Jaipur
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The agency is trying to cut corners. 2% administrative charges may not be providing them with sufficient profit, and they are now seeking ways to increase profit. The bank must insist on following the contract word for word. Whatever has been promised to be paid to the guards needs to be passed on to them. As I understand it, the relationship with this agency may not continue, and a new agency will have to be found sooner rather than later.
From India, Pune
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From India, Pune
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You expect the security agency to pass on the uniform allowance and also pay for free uniforms for the security guards? Where do you expect the money to come from? You are giving them a 2% service charge and then deducting a 2% TDS from the bill, which means the amount they receive equals the amount they have to pay. This is 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 uniforms must be given free AND the allowance must be passed on.
From India, Mumbai
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I would like to see a copy of the tender terms where you have stated that uniforms must be given free AND the allowance must be passed on.
From India, Mumbai
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Saswata,
Here, the uniform outfit allowance is basically to maintain the uniform in a manner that is presentable in front of the public/visitors. A guard is almost the first person a customer sees, and if their turnout is poor, it leaves a poor impression. In services, kit maintenance allowance used to be paid on a monthly basis to uniformed personnel to ensure the highest standard of turnout.
Thank you.
From India, Pune
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Here, the uniform outfit allowance is basically to maintain the uniform in a manner that is presentable in front of the public/visitors. A guard is almost the first person a customer sees, and if their turnout is poor, it leaves a poor impression. In services, kit maintenance allowance used to be paid on a monthly basis to uniformed personnel to ensure the highest standard of turnout.
Thank you.
From India, Pune
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To the extent I understand, the Uniform Outfit Allowance is meant to maintain the uniform issued to the guards and not in lieu of the uniforms issued. Some concerns use the wording 'Washing Allowance'.
I think Amit's Bank needs to revise or 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 the quality of services in most sectors for decades, if not since Independence.
Many agencies, whether in security or any other field, quote L1 figures (no surprise if some 'manage' to obtain competitor figures to ensure they quote lower rates) just to secure the order, without any verifiable proof or references of their past work. At the end of the day, there's no point blaming the agencies for the shoddy state of affairs; they were allowed to do so and, like any entity with short-term goals, the agency took advantage of the loopholes.
Regards,
TS
From India, Hyderabad
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I think Amit's Bank needs to revise or 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 the quality of services in most sectors for decades, if not since Independence.
Many agencies, whether in security or any other field, quote L1 figures (no surprise if some 'manage' to obtain competitor figures to ensure they quote lower rates) just to secure the order, without any verifiable proof or references of their past work. At the end of the day, there's no point blaming the agencies for the shoddy state of affairs; they were allowed to do so and, like any entity with short-term goals, the agency took advantage of the loopholes.
Regards,
TS
From India, Hyderabad
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"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 for decades, if not since Independence."
TS, There is a clear provision in financial rules that L1 need not always be taken blindly. The Competent Financial Authority (CFA) can choose the next highest and must record the reasons in writing. The CFA needs to have the moral courage to make such decisions, as they can always be scrutinized by audits, anonymous complaints, etc. The entire system in India is crumbling due to numerous rules, outdated regulations, and a peculiar attitude that impedes progress. We lack faith in our administrators and fellow workers, constantly introducing checks and counterchecks, leading to delays and escalating prices.
From India, Pune
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TS, There is a clear provision in financial rules that L1 need not always be taken blindly. The Competent Financial Authority (CFA) can choose the next highest and must record the reasons in writing. The CFA needs to have the moral courage to make such decisions, as they can always be scrutinized by audits, anonymous complaints, etc. The entire system in India is crumbling due to numerous rules, outdated regulations, and a peculiar attitude that impedes progress. We lack faith in our administrators and fellow workers, constantly introducing checks and counterchecks, leading to delays and escalating prices.
From India, Pune
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