1

• To conduct time to time market survey to know latest price of material.

• Desired quantity of material has to be purchased on lowest market rates.

• Purchase officer should have a record of latest rates of various items.

Duties of Purchase department

2

• Material should be kept stored so can be made available in emergency.

• Purchase officer should get the purchase system approved by senior officer.

• Quality and quantity of material should be verified from by team of experts appointed by senior officer before passing order for making payment to supplier.

• The cost of rejected material should be deducted from the bill of supplier.

Duties of Purchase department

3

• Requisition• Call of quotations• Comparative statement• Purchase order• Inspection of material• Release of payment as per terms and

conditions

Procedure of purchasing

4

• Demand of various items of material and quantity from various departments.

• List of items with complete specifications and quantity required.

• List is to be submitted on a form called requisition form.

• Requisition form is then send to purchase department.

Requisitions

5

• After receiving requisition from various departments, purchase department issues letters to several registered suppliers for calling rate list.

• Issuing registered postal letters to various reputed suppliers for their competitive rates is called ‘calling of quotations’.

• The quotations are called in two ways. 1. By issuing individual letters by register post letters

to suppliers which is called “Limited Tender”

2. By news paper advertisement which is called ‘Tender Notice’ & a “Public Tender” or “Open Tender”..

Call of Quotations

6

• It is an offer made by the supplier or manufacturer in reply to quotation letter for supply of material on the basis of some terms & condition .

• Some money is deposited along with the tender is called Earnest Money Deposit (EMD)

• The earnest money is the guarantee by the tenderer that the party is bounded to supply the material if its tender is found to be competitive but on pre-determined conditions only.

• The earnest money is sometimes called ‘security deposit ’.

Tender

7

From Purchase Manager, XYZ To,

PQR pvt. LTD Apna road, new city.

Memo No. Q/AC/07/04Dated: 30/07/2004Subject: Quotation.Dear Sir,

You are requested to please send your lowest quotations & intimate the terms of payment & delivery period on our own terms & conditions.:

1. The last date for receipt for quotation will be 20/07/2011.2. The quotation will be valid for 2 months from the date of issue of this letter.

3. Please submit the bill in duplicate for the cost of material supplied along with the material.

4. The payment of bill will be made within one month from the date of receipt of material in good condition.

5. The material will be supplied by you exactly according to the specifications given. 6. The envelop containing quotations will be subscribed as ‘Quotation’.

Sr.No. Description of material Quantity required

1. Moving Iron voltmeter(0-230V)20Nos.

Calling quotation

8

• Open tenders are preferred when quantity & cost of material to be purchased is more.

• For small purchases ,the rate list is called from suppliers through registered letters.

• Some emergency purchases are made directly by the purchase officer after collecting quotations from local suppliers personally, are called “Short Tenders”.

Call of quotations

Opening the tenders or quotation

• Tenders or quotations are received before the last date for receipt of quotations.

• The tenders or quotations are registered in the receipt register maintained in the office.

• Tenders or quotations are opened by a committee of 3 responsible officers in the presence of suppliers or their representatives on the date & time mentioned in the quotation letter.

9

Opening the tenders or quotation

• To ensure that there is no change of rates after opening the tender/quotations, the committee of purchase officers put their signatures on each page of tender/ quotations.

• Another entry to be made on each tender/ quotations is that the serial no. of quotation opened out of the total no. of tender/quotations received in the office.

• This should be clearly written on each page of the tender/quotations & entry circled. If first quotation out of 10 is opened, it will be marked 1/10 in circle.

10

Comparative statement• After opening the tender/quotations, the

purchase clerk prepares a comparative statement on a form.

• There should be at least three quotations for issue of supply order.

• The lower rates are marked with red ink for clear identification.

11

Comparative statementName of office of purchase officer: ___ Date: ____Quotation Notice No. _______ Date of opening: _________Time:___Approved Requisition No. ____ No. of suppliers to whom Quotation letters sent_ No. of suppliers offered Quotations________

Name & designation of Name & designation of Chief purchase officerPerson who prepared inspection officer the statement_______________ ________________ ______________ Signature Signature Signature 12

Sr. No.

Full specifications of items

Qty Reqd.

M/S___

M/S___

M/S___

M/S___

M/S___

Recommendations

1.2.3.

13

• After the approval of quotation if the purchase officer has to place orders for large scale purchases, then the purchase order should get approved by the administrative officer & accounts officer so that funds are made available before issue of supply order.

• The supplier selected above is issued purchase order for supply of material strictly as per quotations offered by the party on terms & conditions laid down on the quotation form.

• If the supplier fails to supply the material or violets the terms & conditions, the earnest money deposited by the supplier is forfeited.

Purchase order

14

From Executive engineer, PQR electrical department Mumbai(Maharashtra)

Memo No.______Dated: ____To,

M/S _______companies, Mumbai.

Sub: Purchase order for supply of material to PQR Elect. Dept.Sir,

Reference your quotation letter No.___dated___.The rates offered by your firm have been found to be minimum & the terms & conditions offered by your firm have been accepted. Kindly supply the following material on terms & conditions already agreed upon.

Copies send to:1. Store in charge2. Accounts branch3. Requisition officer ___________________4. Security officer of dept. Signature 5. Copy for purchase officer Executive Engineer

Sr. No.

Full specifications of items

Quantity Reqd.

Rate TotalAmount

Remarks

1.2.3.

Purchase order

15

• It is the information to be made available for certain heavy purchases through the news papers.

• Tender notice is given in all major news papers in the region.

• The tender notice is given for large scale purchases or for purchase of costly equipment.

• It contains :– information of material to be purchased,– its approximate cost, – quantity, – last date for receipt of sealed tenders, – tender form & – Details of EMD.

Tender Notice

16

• The tender form contains every information (as given in tender notice) & completes specifications of shape, size, rating & other relevant information about the material to be purchased. The drawing is supplied where it is necessary.

• It also contains the terms & conditions of supply.

Tender Notice

17

• The tenders are invited on tender form prescribed by the purchase department.

• Once the tender notice is published in news papers, the changes if any are also got published in the same news paper.

• These changes firstly approved by the purchase officer.

• The sealed tenders are invited publicly through news paper.

Guide lines for inviting Tender

18

• On what dates & timings the work site or further details of purchases can be seen & examined by the supplier, the offices where tender forms are available, the amount of EMD .

• The date, time & place where tenders are to be opened.

• The amount of earnest money, security deposits, & the mode of deposit i.e. by bank draft or cheque

• The officer is authorized to accept, reject or open the tender.

The tender notice should have following information mentioned clearly

19

• For heavy purchases, the suppliers should be given at least one month’s time from the date of issue of tender notification to file their tenders.

• All tenders for the concerned work should be opened in the presence of contractors by the officer officially authorized by the department on the date & time as mentioned in news paper notification.

• The EMD of unsuccessful contractors should be returned at the earlier or probably on the same day.

Guidelines for inviting Tender

20

• Normally the tender offering lowest rate is accepted

• Tender with partial or no EMD can be rejected

• Tender with lowest rates but poor track record (official) can be rejected.

Guidelines for inviting Tender