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Procurement

Procurement. F undamental Principles of Public B uying. Efficiency, economy and transparency Every authority delegated with the financial powers of procuring goods shall have the responsibility and accountability to bring efficiency, economy, transparency.

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Procurement

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  1. Procurement

  2. Fundamental Principles of PublicBuying • Efficiency, economy and transparency • Every authority delegated with the financial powers of procuring goods shall have the responsibility and accountability to bring efficiency, economy, transparency. • The procuring authority should be satisfied that the selected offer adequately meets the requirement in all respects • That the price is reasonable and consistent with the quality required • The procuring authority must place on record, in precise terms, the considerations which weighed with it while taking the procurement decision. • All materials received shall be examined, counted, measured or weighed when delivery is taken and approved quality and specifications are checked by a responsible officer.

  3. Procurement - GFR • Rule 145. Purchase of goods without quotation : Purchase of goods upto the value of Rs. 15,000/- (Rupees Fifteen Thousand) only on each occasion may be made without inviting quotations or bids on the basis of a certificate to be recorded by the competent authority in the following format.

  4. Certificate • “I, ___________________, am personally satisfied that these goods purchased are of the requisite quality and specification and have been purchased from a reliable supplier at a reasonable price.”

  5. Rule 146. Purchase of goods by purchase committee : Purchase of goods costing above Rs. 15,000/- (Rupees Fifteen Thousand) only and upto Rs. 1,00,000/- (Rupees One lakh) only on each occasion may be made on the recommendations of a duly constituted Local Purchase Committee consisting of three members of an appropriate level as decided by the Head of the Department

  6. Certificate • “Certified that we _________________, members of the purchase committee are jointly and individually satisfied that the goods recommended for purchase are of the requisite specification and quality, priced at the prevailing market rate and the supplier recommended is reliable and competent to supply the goods in question. “

  7. Rule 147. Purchase of goods directly under rate contract :

  8. Rule 148. A demand for goods should not be divided into small quantities to make piece meal purchases to avoid the necessity of obtaining the sanction of higher authority required with reference to the estimated value of the total demand.

  9. Rule 149. Purchase of goods by obtaining bids: • Except in cases covered under Rule 145, 146 and 147(1), Ministries or Departments shall procure goods under the powers referred to in Rule 140 above by following the standard method of obtaining bids in : • (i) Advertised Tender Enquiry; • (ii) Limited Tender Enquiry; • (iii) Single Tender Enquiry.

  10. Advertised Tender Enquiry. • Subject to exceptions incorporated under Rules 151 and 154, invitation to tenders by advertisement should be used for procurement of goods of estimated value Rs. 25 lakh (Rupees Twenty Five Lakh) and above.

  11. An organisation having its own web site should also publish all its advertised tender enquiries on the web site and provide a link with NIC web site. It should also give its web site address in the advertisements in ITJ and newspapers.

  12. Limited Tender Enquiry. • (i) This method may be adopted when estimated value of the goods to be procured is up to Rupees Twentyfive Lakhs.

  13. Cost of tender documents • Up to 1 lakh- 150 • Up to 50 lakh- 500 • Up to 2 crore- 1000 • Above 2 crores -1500

  14. Purchase through Central Purchase Organisation • DG S&D will prepare and maintain item-wise list of eligible and capable suppliers (Registered suppliers) • DG S&D will host the specifications, prices and other salient details of different rate contracted items, appropriately updated on the website

  15. Payment procedure of purchases made through DG S&D • Initially DG S&D makes payment to the contractors by cheque • Simultaneously, DG S&D sends debit vouchers directly to concerned PAO and sends an advice to RBI directing it to debit the balance of DOP • RBI debit the DOP account and submits the clearance memo to PAO • Vouchers received at PAO will be sent to the concerned purchasing office for confirmation • After getting the confirmation on vouchers, charge the corresponding Head of Account of Purchasing Office

  16. Purchase of rate –contracted goods directly • In case of purchase of rate contracted goods directly, the conditions for purchase be in line with those specified in the rate contract. • The department shall make its own arrangement for inspection and testing of such goods where required. (Rule 147)

  17. Purchase of goods by obtaining bids • Advertised Tender Enquiry: If estimated value is above Rs. 25 lakhs • Limited tender Enquiry: When estimated value is upto Rs.25 lakhs • Single tender Enquiry: only a particular firm is the manufacturer of the required goods. Proprietary Article certificate is to be obtained

  18. Contents of bidding Document • Chapter 1: Instructions to Bidders • Chapter 2: Conditions of Contract • Chapter 3: Schedule of requirements • Chapter 4: Specifications and allied Technical Details • Chapter 5: Price Schedule • Chapter 6: Contract form • Chapter 7: Other standard forms, if any, to be utilised by the purchaser and the bidders

  19. Two-bid system • Technical bid consisting of all technical details along with commercial terms and conditions • Financial bid indicating item-wise price for the items mentioned in the technical bid

  20. Bid security • Bid Security (EMD): Should be between 2% to 5% of the estimated value of the goods to be procured. • To be furnished along with the bid. • To be credited to UCR. • Not required to obtain from bidders regd with Central Purchase orgn, National Small Industries Corporation or the concerned Ministry or dept • Bid security of unsuccessful bidders to be returned after expiry of final bid validity and latest on or before the 30th day after the award of the contract

  21. Performance security • 5% to 10% of the value of the contract • It can be Account payable Demand Draft, fixed deposit receipt from a commercial bank, Bank guarantee • Performance guarantee should remain valid for a period of sixty days beyond the date of completion of all contractual obligations, including warranty obligations of supplier. • Bid security to be returned to the successful bidder on receipt of performance security.

  22. Tender document • Bidding document to self-contained and comprehensive • Minimum level of experience, past performance, technical capability, financial position • The procedure, date, time and place for sending the bids • Date, time and place of opening of the bid • Terms of delivery • Provision to be made to enable the bidder to question the bidding conditions

  23. Tender document • Suitable provision for settlement of disputes, emanating from the resultant contract • The bidding document should indicate clearly that contract will be interpreted under Indian Laws • The bidders should be given reasonable time to send their bids • The bids should be opened in public and authorised representatives of the bidders • Mandatory components of tender forms are given from slide no.21 to 28

  24. Tender Process • In case of contracts of special nature for procurement of sophisticated and costly equipment, pre-bid conference for clarifying issues may be held, ahead of bid opening date. • Negotiation with bidders after bid opening is discouraged, but in exceptional circumstances, may be resorted with lowest evaluated responsive bidder. • The award of tender should be done within one month from the date of recommendations • In case of L-1 backing out , re-tender • If the lowest bidder is not in a position to supply the full quantity required, the remaining quantity be ordered from the next higher responsive bidder at the rates offered by the lowest responsive bidder

  25. Procurement of services • Preparation of scope of the required work/service eligibility and pre-qualification criteria • Estimating reasonable expenditure • Identification of likely sources • Preparation of Terms of reference • Preparation and issue of request for proposal

  26. Procurement of services • Two-bid system with technical and financial bids sealed separately • Evaluation of technical bids • Evaluation of financial bids of the technically qualified bidders • Consultancy by nomination • Monitoring the contract, by a task force approach and continuously monitoring the performance

  27. Outsourcing of services • In the interest of economy and efficiency outsourcing of services may be done • Preparation of tender enquiry a. Details of work or service to be performed b. The facilities and inputs which will be provided c. Eligibility and qualification criteria d. The statutory and contractual obligations to be complied by the contractor

  28. Outsourcing of services • For estimated value of the work or service upto Rs.10 lakhs or less limited tender enquiry may be issued. • The no. of contractors so identified for issuing limited tender enquiry should not be less than 6 • For estimated value of above Rs.10 lakhs advertised tender enquiry to be published in a national newspaper • Outsourcing by choice: detailed justification, circumstances to be explained and consultation with the Financial adviser is necessary

  29. Mandatory Components of tender form • Schedule of tender contains Tender no. Tender form cost Last date and time of receipt of tender Amount of earnest money deposit Date and time of opening tender Venue

  30. Components of tender form • 1. Parties • 2. Addresses • 3. Earnest money • 4. Preparation and submission of tender • 5. Signing of tender • 6.Technical bid • 7.Commercial bid

  31. Components of tender from • 8. Validity of bids • 9.Opening of tender • 10.Criterion for evaluation of tender • 11. Right of acceptance • 12. Communication of acceptance • 13. Time schedule for completion of work • 14. Security deposit • 15. Penalty

  32. Components of tender form • 16.Natural calamity, strike etc • 17. Insolvency • 18. Breach of terms and conditions • 19. Subletting of work • 20.Right to call upon information regarding status of work • 21. Precautionary measures • 22. Samples or experience certificate

  33. 25. Terms of payment • 26. Arbitration

  34. Technical information and undertaking • 1. Name of the tenderer /concern • 2. Name of the concern (Sole proprietor or partnership firm or a company or a govt. department) • 3.ACG 67 receipt No. Dated Name of the Post Office(for EMD) • 4. Whether each page of NIT and its annexure have been signed and stamped • 5. Proposed date to start work • 6. Time required for completing the work • 7. List of important works undertaken during the last three years whose summary is enclosed

  35. Technical information and undertaking • 8. Select list of major customers • 9. Brief details of project personnel to be deployed • 10. whether annual reports of the concern is enclosed • 11. Whether copies of balance sheet for the last three years enclosed • 12. Any other information important in the opinion of the tenderer • Parameters and technical specification for executing the work • Terms and conditions specific to the contract

  36. Commercial information • Total price for the work inclusive of all kinds of incidental charges and all taxes •  Details

  37. Annual maintenance contract • Required for sophisticated and costly equipment • Machinery is maintained free of charge during warranty period • Preference should be to award to OEMs (Original Equipment manufacturers) • Financial condition of AMC • Large scale network of maintenance personnel and offices

  38. Important Components of AMC • Terms of Payment • Departments’ obligation • The time-limit within which work to be attended to be included • Penalty clause • In case of failure, liberty to get it repaired and the cost to be borne by the AMC

  39. Steps involved in Disposal of obsolete stores • The committee will recommend • Recommendation is accepted by the competent authority • Issue of tender/auction • Disposal

  40. Disposal of obsolete stores • A committee at appropriate level to be appointed • The committee shall consist of three members, one from administration, one from technical member having knowledge about the store and one from finance • Authority competent to purchase a store shall be competent to declare the store as obsolete

  41. Disposal of obsolete stores • The committee should take into account the prescribed life –period of the stores • If the life-period is not over, the committee should examine the conditions of the items and record reasons • If an item has become obsolete on account of negligence/fraud or mischief of any govt. servant, it should be brought out.

  42. Disposal of obsolete stores • Where the articles are sold by public auction, the Head of Office of any Gaz. Officer should invariably attend the auction and record the final bid • He should be present, when finally the articles are released when the process of weighing is involved. • A report of surplus of surplus stores should be prepared in form GFR-17

  43. Implementation of comprehensive end to end e-procurement • Dte 12-9/2011/UPE dtd 16-04-2012 • OM 10-3/2012/PPC dtd 30-03-2012 by ministry of finance • Mandatory publication of all procurements on CPPP portal with estimated value of Rs 10 lakh or more • NIC web site http://eprocure.gov.in • Not applicable for procurement through DGS&D

  44. e-Procurement • e-Procurement is the process by which the physical tendering activity is carried out using internet and associated technologies.

  45. CPPP • CPPP is Central Public Procurement Portal of Government of India. It can be accessed at http://eprocure.gov.in • The primary objective of this portal is to provide a single point access to the information on procurements made across various Ministries /Departments and all the organizations under them

  46. CPPP will eventually contain all tender enquiries floated by any central government organization. It will have all circulars / GOs / OMs. It will have links to various sites related to e-Tendering. • All users of Government Departments are expected to upload all tender enquiries, its corrigendum and award details after the bid award on to the site

  47. It will be mandatory for all Ministries / Departments of the Central Government, their Attached and Subordinate Offices, Central Public Sector Enterprises (CPSEs) and Autonomous / Statutory Bodies (hereinafter referred to as “procuring organizations”) to publish their tender enquiries, corrigenda thereon and details of bid awards on the CPP Portal using e-Publishing module with effect from the following dates:

  48. The process of uploading the details of tender enquiry, its corrigendum and award details on to the CPP portal after logging in to the portal with login ID and password. Digital Signature is not mandated for e-Publishing at this stage.

  49. Implementation of e-procure • Accessible through http://eprocure.gov.in • To be done in India post from August 2012 and completed at the last level by January 2013 • All goods worth of Rs 10 lakh or more • All goods worth of Rs 5lakh or more w.e.f 1-4-2014 • All goods worth of Rs 2lakh or more w.e.f 1-4-2015

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