WEL-COME TO THE PRESENTATION BY SUDHAKAR V. JOSHI I.A.S. (RETD.) MANAGEMENT CONSULTANT
CONTRACTS STORES WORKS SERVICES
CONSTITUTION OF INDIA Fundamental Rights ARTICLE 14 The State shall not deny to any person equality before the Law or the equal protection of the laws within the territory of India
CONSTITUTION OF INDIA Fundamental Rights ARTICLE 12 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.
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.
PROCEDURE FOR STORE PURCHASE BY PUBLIC BODIES
STORES 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…
CONSTITUTION OF INDIA Article 299 : 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.
The provisions are four fold :- • The contract must be executed by a person duly authorised by the President or the Governor as the case may be : • The contract must be executed by such person “ on behalf of” the President or the Governor as the case may be : • 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” • The contract must be executed in such manner as the President or the Governor may direct.
THESE FOUR RESTRICTIONS ARE MANDATORYAND NONE OF THE FOUR CONDITIONS CAN BE WAIVED.
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.
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.
CONSTITUTION OF INDIA Article 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 ….
CONSTITUTION OF INDIA Article 166 Clause (3) : The Governor shall make rules for the more convenient transaction of the business of the Government of the State, ….
FIANANCIAL PUBLICATION NO.V MAHARASHTRA CONTINGENT EXPENDITURE RULES 1965 RULE 94 TO 103 Prescribe maintenance of the Inventory of Dead- Stock. RULE 169 TO 186 Govern the Essential principles to be observed in making Store Purchases.
• Procedure prescribed by - • Statute • Rules • Administrative Orders
Bombay Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 Section 93 Maharashtra Municipal Account Code, 1971 Rules 157 to 186 ….Works
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
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.
Procedure should attempt to ensure purchase of stores :- • of Obvious Necessity • of Required Minimum Specifications • at the Most Competitive, Fair and Reasonable Rates • within the Stipulated Time Frame • keeping in view the Government Policy • with Absolute Transparency in the process
OBIVIOUS NECESSITY Careful Indenting Canon of financial propriety – “No money should be drawn from the treasury unless it is required for Immediate Payment”
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.
Required Minimum Specifications • Factors:- • i)COST - Minimum • ii)UTILITY - Fulfill the Purpose • Drawing of Specifications:- • UNAMBIGUOUS:- • i) ISI make (BIS-Number) • As drawn by Laboratories/ Technical • Institutions, Recognised by the Government
AT THE MOST COMPETITIVE FAIR AND REASONABLE RATES • Wide Publicity • Maximum participation of Tenderers • (minimum three) • iii) Ascertaining prevailing market prices for retail/bulk quantities. • iv) Cost plus Formula
The lowest rate offered may not necessary be the Fair and Reasonable Rate.
REASONABLENESS OF RATE In all events purchasing officer / Technical Expert should certify the reasonableness of Rate Applied in the following format
CERTIFICATE 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
WITHIN THE STIPULATED TIME FRAME The process involves cost and time Types of Tender Enquiries 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.50,000 b) Urgent Order Procedure
By Negotiations with one or more firms (Proprietary articles) • By Repeat orders (Placing Orders on the contractor on the basis of previous contract.) • v) Open Tenders In all other Cases.
KEEPING IN VIEW GOVERNMENT POLICY • Marketing support through • Purchase Preference. • Price Preference. • To. • a) Government Departments e.g. jail • Government undertakings helping SSI,Village artisans, Ex-Servicemen backward/under privileged classes, women. • NGOs running institutions for the Rehabilitation / welfare of physically handicapped, mentally retarded, blind, ex victims of dreadful deceases etc.
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.
CONTRACTS Rate Contract Quantity Contract
RATE CONTRACT 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.
QUANTITY CONTRACT 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.
REPEAT ORDERS • 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.
URGENT ORDER PROCEDURE( UOP) • Sanction of the Secretary to the Government in the concerned Administrative Department. • Limited Tenders registered and recommended Suppliers Short Period (10 days)
TWO BID SYSTEM (GOM-RESOLUTION 30/3/94) TWO ENVELOPES PREQUALIFICATION i) Technical Bid ii) Commercial Bid (Price)
Documents Constituting Contract 1] Tender Notice 2] Tender Enquiry 3] Tender Form 4] 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.
INVITATION TOTENDER Essential Ingredients • A )Invitation of tenders For and on behalf of the • President of India or the the Governor, as the case may be. • 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 TOTENDER Essential Ingredients 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.
INVITATION TOTENDER Essential Ingredients 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
INVITATION TOTENDER Essential Ingredients 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.
INVITATION TOTENDER Essential Ingredients 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.
INVITATION TOTENDER Essential Ingredients • O) Terms of payment of Bills of the Contractors. • Date/Period of completion of delivery. • All-inclusive Price to be quoted • R) Post tender Revision of Rates not to be generally entertained. • S) Amount and mode of Security Deposit.
INVITATION TOTENDER Essential Ingredients T) Inclusion of warrantee clause and service after warrantee period etc. U) Application of FALL CLAUSE V) 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.
INVITATION TOTENDER Essential Ingredients Y) Refund of EMD and Security Deposit. Z ) Any other Condition as may be fixed.
PRE-BID CONFERENCE • Proceedings discussing queries and clarifications form part of the tender document and also the contract.
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 Government ii) A tenderer may secure the order at the expense of some other tenderer iii) The Government may gain and no one suffers
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.