PRESS RELEASE Rural Development and Panchayat Raj Department As per the directive of Hon'ble Chief Minister of Tamil Nadu Thiru C. Joseph Vijay The "Guidelines for Registration of Contractors for Contract Works, 2026" were released today (01.07.2026) at the Secretariat by the Hon'ble Minister for Rural Development and Water Resources, Thiru N. Anand. These guidelines shall be called the "Guidelines for Registration of Contractors for Contract Works of the Rural Development and Panchayat Raj Department, 2026" and shall apply to all contract works implemented by notified procuring entities of the Rural Development and Panchayat Raj (RD&PR) Department. They supersede all previously issued guidelines, instructions and Government Orders on contractor registration, including G.O. (Ms.) No. 109, RD&PR (SGS-2) Department, dated 27.06.2024, and G.O. (Ms.) No. 366, RD&PR (SGS-2) Department, dated 29.12.2025. 1. Contractor: A contractor for a contract work may be an individual, a partnership firm, a company registered under the Companies Act, a registered society, or any other legally recognised entity constituted under statutes enacted by the Government and eligible to enter into a contract under the Indian Contract Act, 1872. 2. Procuring Entities: The notified procuring entities of the RD&PR Department are: the Executive Officer, Village Panchayat; the Block Development Officer (BDO/AE) and Block Development Officer (VP wing); and the Project Director, District Rural Development Agency (DRDA). 3. Bank Guarantee: The bank guarantee must be in electronic form. 4. Registering Authority: (i) District-level registration only – registration of contractors for all procuring entities within a district shall be done at the DRDA. Contractors may register in the district where they wish to participate in tenders. (ii) Contractors registered with a district's DRDA are eligible to participate in tenders called by any procuring entity within that district. (iii) Participation in neighbouring districts – there is no common statewide registration; contractors are eligible to participate in tenders called by procuring entities in districts that share a geographical boundary with the district where they are registered (Example: a contractor registered in Tirunelveli is eligible to participate in tenders called by procuring entities in the neighbouring districts of Kanniyakumari, Tenkasi and Thoothukudi). (iv) DRDAs shall maintain lists of registered, banned and blacklisted contractors from their district. (v) This list shall be published on district tender notice boards and websites and updated continuously. (vi) A contractor already registered at the block level in a district shall be automatically included in that district's registered contractor list, and shall be assigned a new class equivalent to the maximum financial limit of the class in which they were previously registered. 5. Classification of Contractors: Contractors shall be classified into 3 classes. The class determines the maximum value of a single work for which a contractor is eligible to bid. Table I – Classification: Class IA – Other-department contractors – Nil minimum registration deposit; Class I – above Rs. 50 lakh and up to Rs. 2 crore – registration deposit Rs. 4 lakh; Class II – up to Rs. 50 lakh – registration deposit Rs. 1 lakh; New Entrant – up to Rs. 10 lakh – registration deposit Rs. 20,000. These are minimum amounts; contractors may pay an additional deposit at any time to raise their registration capacity up to 50 times. 6. Eligibility Criteria for Registration (Classes I, II and New Entrants): (i) Minimum business existence – the applicant must have been in the construction business for a minimum of two years. (ii) Financial capacity – the contractor must have GST turnover equal to 20% of the value sought for registration in any one of the preceding ten financial years. (iii) The contractor must have an annual income equal to or greater than the value sought for registration, and must submit audited financial statements and an auditor's certificate. (iv) The contractor must have filed GST and income tax returns up to date. (v) Technical capacity – construction-work experience – the contractor must have executed construction works equal to 50% of the value sought for registration in any one of the preceding 10 financial years (Example: for registration applied for in 2026-27, experience from 2016-17 onwards will be counted; private-sector experience is also counted). (vi) Calculation of work experience – the value of works executed in any year within the preceding 10 years shall be escalated at 5% per year up to the current year (Example: work worth Rs. 20 lakh executed in 2020-21 will be escalated by 30% up to 2026-27, giving a present value of Rs. 26 lakh). Both financial capacity and construction-work-experience criteria are independent and mandatory (except for new contractors). Registration is not required for tenders valued above Rs. 2 crore; any contractor meeting the eligibility criteria specified in the tender document may participate — such contractors are classified as 'Class IA (Special Category)'. Entirely new applicants with no prior construction experience shall, subject to submission of required financial documents, be registered only for works up to Rs. 10 lakh, under the 'New Entrant' category. 7. Registration Deposit and Maximum Work Limit (50-Times Rule): Every registered contractor must furnish an irrevocable bank guarantee valid for three years as the registration deposit. The minimum registration deposit shall be as specified in Table I (calculated by dividing the class ceiling by 50). Maximum work limit (50-times rule): a contractor may undertake works simultaneously up to a maximum of 50 times the value of their registration deposit. Contractors may increase their registration capacity to 50 times by paying additional deposit at any time. The class limit applies only to the value of a single work, whereas the 50-times rule governs the total value of works that may be undertaken at any given time. The final eligibility of the lowest bidder (L1) shall be determined based on the 'estimated bid capacity' specified in the tender document. While submitting a bid, contractors must submit a self-certified affidavit detailing works currently in hand; this requirement shall also be incorporated in tender documents, and tender-scrutinising officers must verify compliance with the maximum work limit. 8. Unregistered Contractors: An unregistered contractor may participate in a tender in any district provided all eligibility criteria specified in the tender are met. If such a contractor wins the tender, they must furnish an amount equal to the prescribed earnest money as a 'Failsafe Deposit' in the form of an irrevocable bank guarantee. Entirely new private firms with no prior experience with any government department must also furnish the same failsafe deposit, which shall be released upon successful completion of the work. Upon successful completion, such a contractor shall, subject to submitting the required registration deposit and documents, be automatically added to the district's contractor list. 9. Contractors Registered with Other Departments: Contractors registered for construction works with any government department shall be automatically eligible to participate in tenders. Upon submitting the registration deposit, they shall be automatically added to the district's registered contractor list, and may participate in tenders up to the maximum financial limit of their class as registered with that department. 10. Registration Process: Application forms may be downloaded only from the website tnrd.gov.in. Completed applications, along with other documents, may be submitted directly, by registered post, or online, to the concerned officer, with a proper acknowledgement receipt. Verification of documents and approval/rejection must be completed within 15 days of receipt of the application. Discrepancies, if any, shall be referred to the Appellate Authority. Online application facility for registration will be introduced in future. 11. Renewal of Registration: Registration is valid for three years. For contractors already registered prior to issuance of this order, the registration date shall be counted from the date of issue of this order. Registration of contractors who execute at least one work under the Rural Development Department during the validity period shall be automatically renewed for a further three years. Contractors who do not execute any work during the validity period must apply for renewal before expiry; no fee is required for such renewal. 12. Registration Fee: Registration fee is payable by: new applicants; contractors registered with other departments/agencies seeking registration with RD≺ contractors registered in one district seeking registration in another (non-adjoining) district; contractors seeking upgrade to a higher class; contractors who fail to renew registration more than 6 months after expiry (50% fee if within 6 months of expiry) or are not eligible for automatic renewal; blacklisted contractors seeking re-registration after the ban period; and contractors registered with other departments seeking registration with the Rural Development Department. Fees must be paid only through the online banking channel. Table II – Registration fee by class: Class 1A – Nil; Class I – Rs. 30,000; Class II – Rs. 20,000; New Entrants – Rs. 10,000. Exemption from fee payment is granted to: Scheduled Caste/Scheduled Tribe applicants (individual, partnership firm, or private limited company where all partners/directors are SC/ST, including inter-caste married couples); Self Help Groups (SHG)/Panchayat Level Federations (PLF); and unemployed civil engineering graduates/diploma holders (who completed their course within the preceding 5 years). SHGs/PLFs and unemployed engineering graduates are also exempt from submitting income tax/GST certificates, but are eligible only for works up to Rs. 5 lakh in value, with a total aggregate work value not exceeding Rs. 10 lakh at any time. Only SHGs/PLFs recognised by TNCDW are eligible; unemployed engineers must submit an unemployment certificate from the District Employment Officer, renewable every 6 months (this concession is available only once, for a period of 3 years). Women contractors registering as sole proprietors are eligible for full exemption from the registration fee only (other conditions apply in full). 13. Documents for Registration: Self-certified copies of income tax/GST return filings, audited accounts and auditor-issued annual income certificate, in the applicant's name; self-certified copies of work-experience documents equal to the value sought for registration; an 'Encumbrance Certificate' (obtained within 30 days of the date of application) relating to property owned by the applicant, self-certified; copy of PAN card; an affidavit that the applicant is not currently blacklisted by any government department/agency within or outside the State; an irrevocable bank guarantee equal to the registration deposit; and proof of online payment of the registration fee. 14. Migration of Existing Registered Contractors to the New System: Contractors registered under the previous procedure shall be automatically migrated to the new class corresponding to the maximum financial limit of their previous class. Upon submitting the new registration deposit as per these guidelines, their existing bank guarantee shall be released. 15. Banning/Blacklisting of Contractors: The Registering Authority, either suo motu or on the report of any RD&PR official, must issue a show-cause notice with 30 days to respond where a contractor is believed to have committed one or more of the violations listed below. Grounds for Banning: submitting abnormally high or low bids more than once in a year without valid reason, causing delay in the tender process; failure to submit the required earnest money deposit while bidding; failure to execute the contract agreement or pay the required security deposit after issuance of the Letter of Acceptance (LoA), or delaying execution beyond 15 days from issuance; withdrawal of a bid after submission (not permitted under Rule 20A of the Tamil Nadu Transparency in Tenders Rules, 2000). Bans are for a short duration of 6 to 12 months, apply only to tenders called by the concerned procuring entity, and do not result in cancellation of registration; the contractor remains free to participate in tenders called by other RD&PR procuring entities during the ban. Grounds for Blacklisting: persistently delaying progress of assigned work against agreed targets; failure to rectify deficiencies or executing work of poor quality; misusing or diverting materials supplied by the department for the work; persistent violation of key contract conditions; bribery, corruption, collusion with other contractors, cartelisation or price-fixing undermining competition; conviction by a court for offences involving moral turpitude in business dealings; and submission of false self-certification/documents or forged registration/renewal certificates to mislead the procuring entity. Blacklisting leads to cancellation of registration, and the contractor shall not be permitted to re-register for a period of 12 to 36 months. Blacklisting affects the contractor throughout the RD&PR Department; all ongoing contracts with the contractor shall be prematurely terminated, and additional costs of completing the balance work through fresh tenders shall be recovered from amounts due to the contractor (with revenue recovery proceedings if amounts due are insufficient); any balance due shall be released within 60 days. 16. Procedure for Banning or Blacklisting: Issue a notice clearly stating the reasons for the proposed action; grant 30 days for the contractor to submit an explanation; all communication must be in writing, sent by registered post or special courier with acknowledgement; notices sent from the Registering Authority's official email to the contractor's registered email shall also be treated as valid proof of notice; the contractor must be given a reasonable opportunity for a personal hearing even if a written reply has been submitted; if the Registering Authority, after following this procedure, considers blacklisting necessary, orders may be issued, which shall be forwarded through the District Collector to the Director of Rural Development and Panchayat Raj, and thereafter to the General (S.C.) Department. 17. Cancellation of Registration: Registration shall be cancelled if the contractor loses the capacity to contract under the Indian Contract Act, 1872 (being adjudged insolvent, of unsound mind, or disqualified from contracting under any law), or if their financial turnover falls below the required level. 18. Revenue Recovery: Any contractor who breaches contractual obligations, including abandonment of work, failure to complete work within the stipulated time, or other defaults resulting in financial loss to the Government/Department, shall be liable to refund the amounts due; such recovery may be effected under the Tamil Nadu Revenue Recovery Act, 1864. The Registering Authority is empowered to refuse, suspend, cancel, or refuse to renew such a contractor's registration after following due process. 19. Re-registration of Blacklisted Contractors: A blacklisted contractor may apply for re-registration only after the ban period expires, by submitting the same set of documents as required for original registration. 20. Appellate Authority: Applicants/contractors may raise grievances with the Appellate Authority regarding non-acceptance of registration/renewal applications, blacklisting, or cancellation of registration. The District Collector shall be the Appellate Authority for this purpose. 21. Savings Clause: All departmental rules, procedures and orders currently in force shall continue to apply to the extent they do not conflict with these guidelines. The Secretary to Government, Rural Development and Panchayat Raj Department, is empowered to amend these guidelines, in consultation with the Director of Rural Development and Panchayat Raj, as and when required. ***** Issued By: - DIPR, Secretariat, Chennai – 9