Sudhakar V. Joshi WEL-COME TO THE PRESENTATION BY SUDHAKAR V. JOSHI I.A.S. (RETD.) MANAGEMENT CONSULTANT

Sudhakar V. Joshi

WEL-COME TO THE PRESENTATION

BYSUDHAKAR V. JOSHI

I.A.S. (RETD.)

MANAGEMENT CONSULTANT

Sudhakar V. Joshi

TENDER PROCEDURE FOR

CONTRACTS

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STORES WORKS SERVICES

CONTRACTS

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ARTICLE 14

CONSTITUTION OF INDIA

Fundamental Rights

The State shall not deny to any person equality before the Law or the equal protection of the laws within the territory of India

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In this part, unless the context otherwise requires, “the state” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.

ARTICLE 12


Fundamental Rights

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• Award of a Contract is a largess

• For grant of a contract every person has to be afforded equal opportunity to participate in the process.

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PROCEDURE FOR STORE PURCHASE BY PUBLIC BODIES

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All articles and materials purchased or otherwise acquired for the use of Government, including not only expendable and articles in use or accumulated for specific purposes, but also articles of dead stock of the nature of plant machinery, instruments, furnitures, equipment, fixtures, live-stock, etc…

STORES

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1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurance of property made in the exercise of that power, shall be executed on behalf of the President or the Governor by such persons and in such manner as he may Direct or authorise.

Article 299 :

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A) The contract must be executed by a person duly authorised by the President or the Governor as the case may be :

b) The contract must be executed by such person “ on behalf of” the President or the Governor as the case may be :

c) The contract must be “ expressed to be made by the President or the Governor as the case may be, i.e. for and on behalf of the President or the Governor”

d) The contract must be executed in such manner as the President or the Governor may direct.

The provisions are four fold :-

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THESE FOUR RESTRICTIONS ARE MANDATORYAND NONE OF THE FOUR CONDITIONS CAN BE WAIVED.

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Article 299 :

2) Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purpose of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof.

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THE PERSONAL IMMUNITY OF OFFICERS

OF GOVERNMENT CONTRACTS IS

AVAILABLE ONLY IF THE CONTRACT

DULY COMPLIES WITH THE FORMALITIES

LAID DOWN IN CLAUSE (1) OF ARTICLE

299.

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CONSTITUTION OF INDIAArticle 77

Clause (1) : All executive action of the Government of India shall be expressed to be taken in the name of the President.

Clause (3) : The President shall make rules for the more convenient transaction of the business of the Government of India ….

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Article 166 Clause (3) : The Governor shall make rules for the more convenient transaction of the business of the Government of the State, ….

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MAHARASHTRA CONTINGENT EXPENDITURE RULES 1965

RULE 94 TO 103Prescribe maintenance of the Inventory of

Dead- Stock.

RULE 169 TO 186Govern the Essential principles to be observed

in making Store Purchases.

FIANANCIAL PUBLICATION NO.V

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Procedure prescribed by - • Statute • Rules • Administrative Orders

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Bombay Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965

Section 93

Maharashtra Municipal Account Code, 1971

Rules 157 to 186 ….Works

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Hyderabad Municipal Corporations Act, 1955

Section 124, 124A, 125, 126, 127, 128, 129 129A

Municipal Corporation of Hyderabad Tender Rules, 1970

Rules 3, 3A, 4 to 11 – Works

Rules 12 to 18 –Supplies of Material

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FUNDAMENTAL PRINCIPALES OF PURCHASE PROCEDURE

CANON OF FINANCIAL PROPRIETY

Every public officer should exercise the same vigilance in respect of expenditure incurred from Government Revenue, as a person of ordinary prudence would exercise in spending his own money.

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1. of Obvious Necessity2. of Required Minimum Specifications3. at the Most Competitive, Fair and

Reasonable Rates4. within the Stipulated Time Frame5. keeping in view the Government

Policy6. with Absolute Transparency in the

process

Procedure should attempt to ensure purchase of stores :-

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OBIVIOUS NECESSITY

Careful Indenting

Canon of financial propriety –

“No money should be drawn from the treasury unless it is required for

Immediate Payment”

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Factors determining the quantity to be purchased (Inventory Control)A) Office work and/or activity shall never suffer for want of store;B) shall never be in Excess of requirement which results in – i) Locking of scarce resources ii) Increase in the cost of Godowning

and Security iii) Deterioration of the Quality.

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Required Minimum SpecificationsFactors:-

i) COST - Minimumii) UTILITY - Fulfill the Purpose

Drawing of Specifications:-

UNAMBIGUOUS:-i) ISI make (BIS-Number)ii) As drawn by Laboratories/ Technical

Institutions, Recognised by the Government

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i) Wide Publicity ii) Maximum participation of Tenderers

(minimum three) iii) Ascertaining prevailing market prices

for retail/bulk quantities.iv) Cost plus Formula

AT THE MOST COMPETITIVE FAIR AND REASONABLE

RATES

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The lowest rate offered may not necessary be the Fair and Reasonable Rate.

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REASONABLENESS OF RATE

In all events purchasing officer / Technical Expert should certify the reasonableness of Rate Applied in the following format

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For the specifications mentioned in the above tender, I have Ascertained the present market trend, evaluated the estimated cost,compared previous rates in this transaction and I certify that the Rate of Rs. per proposed for acceptance is reasonable.

Date Name and Designation

CERTIFICATE

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i) Single Tender (Normally when the Value is less than Rs.500/-as

a Rule) ii) Limited Tenders

a) When the Value is more than Rs.500/- but less than Rs.50,000b) Urgent Order Procedure

WITHIN THE STIPULATED TIME FRAME

The process involves cost and time Types of Tender Enquiries

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iii)By Negotiations with one or more firms (Proprietary articles)

iv)By Repeat orders (Placing Orders on the contractor on the basis of previous contract.)

v) Open Tenders In all other Cases.

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To.a) Government Departments e.g. jailb) Government undertakings helping SSI,Village

artisans, Ex-Servicemen backward/under privileged classes, women.

c) NGOs running institutions for the Rehabilitation / welfare of physically handicapped, mentally retarded, blind, ex victims of dreadful deceases etc.

KEEPING IN VIEW GOVERNMENT POLICY

Marketing support throughi) Purchase Preference.ii) Price Preference.

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TRANSPARENCYMaxim Of Justice

‘Justice must not merely be done but it is seen to be done’

Entire process including Receipt, Storage,opening of tenders should be

open to the participants.

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CONTRACTS

Rate Contract Quantity Contract

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Rate contract is for the supply of stores at specified rates during the period covered by the Contract.

No quantity is mentioned in such a contract and the contractor is bound to execute any order which may be placed upon him, during the currency of the contract, by the Direct Demanding Officers, at the rates specified therein.

RATE CONTRACT

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Quantity Contract is a contract entered into where the suppliers are called upon to offer to supply definite number of quantity [ 25% plus or minus] by a date or dates as may be specified in the tender notice.

QUANTITY CONTRACT

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Conditions Original contract by open Tenders. Within Six months of the original

contract. Certificate that market trend is not

downward. Quantity not more than 200% of

the original contract.

REPEAT ORDERS

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URGENT ORDER PROCEDURE ( UOP)

Sanction of the Secretary to the Government in the concerned Administrative Department.

Limited Tendersregistered and recommended Suppliers

Short Period (10 days)

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TWO ENVELOPES

PREQUALIFICATIONi) Technical Bid

ii) Commercial Bid (Price)

TWO BID SYSTEM(GOM-RESOLUTION 30/3/94)

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Documents Constituting Contract

1] Tender Notice2] Tender Enquiry3] Tender Form4] Pre-Bid Conference Proceedings 5] Letter of Acceptance (A.L.)6] Agreement 7] Acceptance of Tender (A.T.)

UNILATERAL CHANGES IN THE DOCUMENTS LEGALLY NOT PERMISSIBLE.

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A )Invitation of tenders For and on behalf of the President of India or the the Governor, as the case may be.

B) Eligibility of tenderer I ) In case of items of Purchase Preference

II ) In case of other items.

C)Last date, Duration of Time and Place of availability of the Priced Tender Forms.

INVITATION TO TENDEREssential Ingredients

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D) Last date, Time and Place of submission of Sealed Tenders in two Envelopes as per Two Bid System, in Duplicate.

E) Amount and Mode of payment of the Earnest Money Deposit.

F) List of Essential Documents to accompany the Technical Bid.


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G) Date, Time and Place fixed for opening of the Technical Bids.

H) Validity period of the tender.

I) Duration of the Rate Contract Period with Extension Clause,

OR


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J) Approximate Quantity (plus-minus 25%) for which the Quantity Contract is to be executed.

K)Description of goods with details of Specifications, such as, I.S Mark No., if any, General Description, materials, Manufacture (Origin, Indigenous or Foreign) Dimensions, Workmanship and Finish, Tests, Marking,preservation, Packing and Delivery installation,Successful Demonstration etc.


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L)Inspection of Goods/Samples i.e. before

opening the envelope containing Commercial

(Price ) Bid, ii. Predespatch, iii.pre-delivery,iv.

Post-delivery etc. etc.

M)Indication of rates in Metric System of

weights and Measures.N)Mode of delivery i.e. F.D./F.O.R.

Destination /F.O.B. etc etc.


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O) Terms of payment of Bills of the Contractors.

P) Date/Period of completion of delivery.

Q) All-inclusive Price to be quoted

R) Post tender Revision of Rates not to be

generally entertained.

S) Amount and mode of Security Deposit.


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T) Inclusion of warrantee clause and service after warrantee period etc.

U) Application of FALL CLAUSEV) Inclusion of RISK PURCHASE CLAUSE.W) Penalty on Contractor’s failure to comply

with the terms and conditions of the Contract.

X) Right of purchase officer to reject all or any tender without assigning reasons therefore.


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Y) Refund of EMD and Security Deposit.

Z ) Any other Condition as may be fixed.


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PRE-BID CONFERENCE

Proceedings discussing queries and clarifications form part of the tender document and also the contract.

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Post Tender Revision of Rates not to be generally entertained.

Normally no communication revising the rates after receipt/opening of tenders shall be considered.

Three types of Revision of Rates:i) A tenderer gains at the expense of the Governmentii) A tenderer may secure the order at the expense

of some other tenderer iii) The Government may gain and no one suffers

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Post Tender Revision of Rates not to be generally entertained.

While the first two types of Revision (i) and (ii) shall not to be accepted, the third type of Revision shall invariably be accepted.

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The prices charged for the stores supplied under the contract by the contractor shall in no event exceed the lowest price at which the Contractor sells the stores of identical description to any persons/Organisations including the Purchaser of any Department of the Central Government or of a State Government or any statutory undertaking as the case may be during the currency under the quantity contract is completed or during the currency of the Rate contract.

FALL CLAUSE

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FAILURE OF CONTRACTORS

i) After issue of Letter of Acceptance Consequences :-

a) Forfeiture of the earnest Money deposit.

b) Awarding of fresh contract.

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ii) After agreement executed and A/T issued Consequences –

a) Forfeiture of Security deposit and termination of Contract /Black listing the Contractor after following procedure.

b) Risk Purchase : De novo tender procedure.

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PRINCIPELS OF NATURAL JUSTICE TO BE OBSERVED

Black listing has the effect of preventing a person from the privilege and advantage of entering in to Lawful relationship with the Government for purposes of gains… fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the black list.( AIR 1975SC266)

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“ Thank You ”