Form 26 is the CPWD Running Account Bill form. It is the document on which a contractor is paid for work in progress, and it is the point where a set of measured quantities turns into a rupee figure with a cheque behind it.
Most of the difficulty people have with it is not the arithmetic. It is that the form does three different jobs in three parts, and the third part — the Memorandum of Payments — is laid out as a running account across bills rather than as a standalone statement. This page walks through all three, then works a complete bill end to end.
The three parts of Form 26
The form separates *what was built*, *what was advanced against materials*, and *what is actually being paid*. Keeping those three apart is the whole design.
| Part | Purpose | What it holds |
|---|---|---|
| Part I | Account of work executed | Item-wise quantities, rates and values — the abstract derived from the measurement book |
| Part II | Secured advances | Advances made against materials brought to site but not yet built in, and their recovery. The detail sits in the Form 26A annexure |
| Part III | Memorandum of Payments | Everything financial on top of the work value — advances, recoveries, withheld amounts — and the net figure to be paid |
Form 26A is the annexure that lists the materials held under secured advance. Part II of Form 26 carries the totals; 26A carries the item-level detail behind them.
Part I — the account of work executed
Part I is the abstract: for each agreement item, the quantity executed up to date, the rate, and the value. Subtracting the value paid up to the previous bill gives the value of work for this bill.
Every quantity here has to be traceable to the measurement book. Part I is a summary of the MB, not an independent statement — if the two disagree, the MB is right and the bill is wrong.
- Quantities are up to date, not for-this-bill. The for-this-bill figure is a subtraction, and showing both columns is what makes the subtraction checkable.
- Rates are agreement rates, or sanctioned rates for extra and deviated items. An unsanctioned rate in Part I is what stalls the bill.
- Items billed at a part rate appear at that rate for the affected quantity only, with the balance of the item at the full rate.
Part II — secured advances
A secured advance is money paid against materials that have been brought to site and are covered by an indenture, but have not yet been incorporated into the work. It is a loan against material, not a payment for work.
Two consequences follow, and both are routinely got wrong:
- The advance is recovered as the material is built into the work. The recovery appears in the memorandum as the corresponding item is measured and paid — otherwise the department pays for the same steel twice, once as material and once as reinforcement.
- The advance is limited by the material actually at site and its assessed value, which is what Form 26A records. An advance carried forward against material that has already been consumed is an outstanding recovery, not a live advance.
Part III — the Memorandum of Payments
This is the part the whole form builds toward. It starts from the value of work in Part I and applies every financial adjustment to arrive at what is actually paid.
It is laid out in three columns, and understanding those columns is most of understanding the form:
| Column | Meaning |
|---|---|
| Since previous bill | The cumulative figure for this line as at the last bill |
| This bill | The movement on this line in the current bill |
| Up to date | Since previous + this bill — the running total |
Every recurring line — security deposit, income tax, GST, water and electricity — carries forward from the previous bill by that structure. A new bill's memorandum should therefore open already populated with last bill's up-to-date figures sitting in "since previous", not as a blank sheet to be retyped. Retyping is where transcription errors enter, and they compound across bills because each one becomes the next bill's opening figure.
What goes in each section
The memorandum groups its lines into additions, recoveries and withheld amounts. CPWD does not hard-code the labels — the lines that apply depend on the agreement, the state and the current statutory position — but the shape is consistent.
| Section | Typical lines | Effect on the payment |
|---|---|---|
| Additions | GST on the work value; secured advance on materials at site; mobilisation advance where the agreement provides for one; escalation where payable | Increases |
| Recoveries | Security deposit / retention; income tax TDS; GST TDS; labour cess; water and electricity charges; recovery of previously paid secured or mobilisation advance; cost of departmental material issued | Decreases |
| Withheld | Amounts held back against defective or incomplete work, pending compliance, or under dispute | Decreases, but recoverable later |
Recovery and withholding are not the same thing and should never be merged. A recovery is money that belongs elsewhere — to the tax authority, to the security deposit account, against an advance. A withheld amount is the contractor's money that is being held pending something, and it is released back to them when that something is done.
Worked example: a second running account bill
The figures below are illustrative. The percentages in particular are agreement-specific and statutory rates change — take your own from the agreement and the position in force, not from this table.
Work value. Value of work executed up to date is ₹42,60,000. Value paid up to the previous bill was ₹28,40,000. Value of work for this bill is therefore ₹14,20,000.
| Line | Since previous (₹) | This bill (₹) | Up to date (₹) |
|---|---|---|---|
| Value of work executed | 28,40,000 | 14,20,000 | 42,60,000 |
| Additions | |||
| GST @ 18% on work value | 5,11,200 | 2,55,600 | 7,66,800 |
| Secured advance on materials at site | 0 | 1,80,000 | 1,80,000 |
| *Total additions* | 5,11,200 | 4,35,600 | 9,46,800 |
| Recoveries | |||
| Security deposit @ 5% | 1,42,000 | 71,000 | 2,13,000 |
| Income tax TDS @ 2% | 56,800 | 28,400 | 85,200 |
| GST TDS @ 2% | 56,800 | 28,400 | 85,200 |
| Labour cess @ 1% | 28,400 | 14,200 | 42,600 |
| Water & electricity charges @ 1% | 28,400 | 14,200 | 42,600 |
| Recovery of earlier secured advance | 0 | 1,20,000 | 1,20,000 |
| *Total recoveries* | 3,12,400 | 2,76,200 | 5,88,600 |
| Withheld | |||
| Held pending rectification of flooring | 0 | 50,000 | 50,000 |
| Net payable | 30,38,800 | 15,29,400 | 45,68,200 |
The this-bill column reads: 14,20,000 + 4,35,600 − 2,76,200 − 50,000 = ₹15,29,400. Each up-to-date figure is its since-previous plus its this-bill, and the net payable up to date (₹45,68,200) equals the sum of the two net columns — that cross-check is the quickest way to catch a line that was typed into the wrong column.
Note the two secured-advance lines pulling in opposite directions in the same bill: ₹1,80,000 advanced on material newly at site, and ₹1,20,000 recovered against material from the previous bill that has since been built in. That is the normal steady state on a job with material advances, not an error.
Where bills go wrong
- The memorandum is retyped each bill. Since-previous figures should carry forward from the last bill automatically. Every manual re-entry is a chance to drop a line, and a dropped recovery line stays dropped for the rest of the contract.
- GST charged on a tax-inclusive rate. If a sanctioned NS rate already includes GST, adding GST again in the memorandum charges it twice. Fix the basis once, in the rate analysis, and keep the bill consistent with it.
- Secured advance never recovered. Advances are recovered as material is consumed. An advance sitting at the same figure across four bills usually means the recovery line was never added.
- Withheld amounts merged into recoveries. They behave differently at final bill — withheld money is released, recovered money is not — and merging them makes the final bill impossible to close cleanly.
- Part I not reconciled to the MB. Any difference between the bill's quantities and the measurement book's is an error in the bill by definition. It is worth a deliberate check before the bill is finalised, because once the MB and bill are locked together the correction is a fresh bill rather than an edit.