New Delhi, Apr 7 (KNN) The Consulting Engineers Association of India (CEAI), the apex body of engineering professionals in the country, has urged the government to declare COVID -19 as a 'Force Majeure' event for all consultancy contracts under implementation as both parties, neither the client nor the consulting companies are able to meet contractual performance in ongoing projects.

'Force Majeure' clause is a contractual provision that addresses circumstances in which contractual performance becomes impossible and impractical due to events that could not be foreseen, and are not within party’s control.

“The total lock-down, though was inevitable, has major implications on companies, particularly the Consulting companies, which have a small capital base. In present lockdown conditions, it will be difficult for these consulting companies to meet contractual performance for Consultancy Contracts under implementation or under service including preparation of Feasibility Report and Detailed Project Report (DPR), Detailed Engineering, Project Management by an Authority Engineer” said Amitabha Ghoshal, President, Consulting Engineers Association of India (CEAI).

CEAI further said that the running contracts expiring during the lock-down period should be given an automatic extension of time and there should be a waiver for Submission or extension of Bank Guarantees as provided for in the Contracts, during this lock down period. 

''Provision for payments need to be made for deployment during extended period along with the overheads,” said Ghosal.

CEAI past president, K K Kapila said that the government should release 90 per cent payments of the already submitted Invoice amount by the consulting firms, as per valid payment clause in the Contract, prior to scrutiny of Invoice by the department staff.

''The balance payment may be released after the due process. This will enable Consultants to pay to their staff and to the support organizations that work for them as well as to large number of informal persons whose services are availed from time to time.” Kapila added.

“For redressal of immediate financial crisis, the Income Tax refunds for FY 2016-17 and 2017-18 may be released on top priority across the spectrum, particularly to the Engineering Consultancy fraternity, who operate on a small capital base, ‘Kapila avowed.