INDIANOIL CORPORATION LIMITED

REFINERIES DIVISION

MATERIALS MANAGEMENT MANUAL JUNE 2014

Contents S. No. Chapter heading

Page no

1 Chapter I: Introduction 1 2 Chapter II: Estimates & Purchase Requisition 5 3 Chapter III: Invitation & Receipt Of Tenders 11 4 Chapter IV: Evaluation and Acceptance of Tenders 37 5 Chapter V: Public Procurement Policy for Micro & Small Enterprises

(MSE) 56

6 Chapter VI: Central Procurement Cell (CPC) 58 7 Chapter VII: E-Tendering 59 8 Chapter VIII: Imports 65 9 Chapter IX: Material Codification & Codification Cell, RHQ 80 10 Chapter X: Inventory Control 82 11 Chapter XI: Transport, Receipt and Inspection 85 12 Chapter XII: Custody and Issue 93 13 Chapter XIII: Non-Moving Items and Disposal of Surplus and Scrap

Materials 97

14 Chapter XIV: Implementation of Integrity Pact Program (IPP) 103 List of Annexure to Materials Management Manual

Annexure 1 to Annexure 12 Annexure 1: Sample format for concise NIT for Press Tenders Annexure 2: General Purchase Conditions Annexure 3: Guidelines for splitting of orders Annexure 4: Guidelines for Holiday Listing of Vendors Annexure 5: Format for Tender Opening sheet in other than e-tenders Annexure 6: Checklist type format for proposal requiring approval of Director / Chairman / Committees Annexure 7a: Standard Price Bid Opening proposal format Annexure 7b: Standard PO proposal format Annexure 8: Guidelines for preparing agenda items for Board / Committees Annexure9: Format for letter seeking for extension of validity of the Bank Guarantee or encashment Annexure 10: Sample format for Fax of Acceptance Annexure 11: Chemical Testing and Sampling Annexure 12: Procedure for Taking & Handing over Project Spares & Leftover materials

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CHAPTER - I

INTRODUCTION The responsibility of the Materials Department shall be to ensure that the right materials in the right quantity are procured from the right source at the right price and delivered in the right condition at the right place at the right time. 1.1. General Outline of the Materials Management Manual 1.1.1. The Materials Management manual has the approval of the Director (Refineries). 1.1.2. The Materials Management manual outlines the policies and procedures for carrying

out the Purchase, Stores and Inventory Control functions falling under the purview of the Materials Department.

1.1.3. Circulars / guidelines on modification in these policies and procedures shall be issued

by Finance Department at Refineries Head Quarters, New Delhi. 1.1.4. Future Circulars relevant to the Materials function shall be incorporated from time to

time and the updated manual will be available online at http://10.18.64.116/admin/CircularFormsImgs/31112013121157_Materials_Manual.pdf (present location, which may change at a later date). The authority to incorporate such circulars in the manual shall be Finance Department at Refineries Head Quarters, New Delhi.

1.1.5. Any deviation to the manual, if deemed necessary in the interest of operation, shall

be taken from the Unit Head with Finance concurrence. All such deviations shall, however, be brought to the notice of Materials Department at Refineries Head Quarters for review and suitable incorporation in the manual. In case, for some reason, the deviation accepted by Unit is not approved for incorporation in the manual, such deviation shall still be deemed as accepted for the particular case against which it was approved.

1.1.6. All expenditure incurred on procurement of materials, capital or revenue, is to be

regulated in accordance with the procedure prescribed in this manual. 1.1.7. This manual shall be read in conjunction with the Delegation of Authority. Wherever

there is a conflict between this manual and the DOA, DOA will prevail. 1.1.8. Any discrepancy noted in the MM manual shall be brought to the notice of RHQ

Materials.

1.2. General Outlines of Procurement Procedure 1.2.1. Tenders requiring issuance of Purchase Order for supply of materials including

associated services, if any, can be issued only by the Materials Department. 1.2.2. The power to sanction expenditure in respect of procurement is subject to provision

in the approved budget. 1.2.3. No expenditure on procurement can be incurred unless the work is administratively

approved, budget is available and a detailed estimate is prepared, checked and concurred by Finance as per Delegation of Authority and approved by the authority

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empowered to do so. Indenting Department shall be responsible to ensure availability of requisite budget.

1.3. Organizational Setup of Materials Department in Refineries Division

Materials Department in the Refineries Division is at two levels:

1.3.1. Unit Level:

Each Refinery Unit has a Materials Department, which comprises three Sections viz. Purchase, Inventory Control and Stores.

Responsibilities include:

i. Ordering of MRP and non MRP items ii. Follow up for timely delivery of materials iii. Facilitating payment by resolving disputes in the despatch documents w.r.t. PO,

if any iv. Stock Transfer Order creation and facilitating despatch to other Units v. Transportation management vi. Receipt of materials vii. Insurance Claims and Settlement viii. Custody and Preservation ix. Issue of materials x. Assist in physical verification and stock reconciliation xi. Inventory Management xii. Review of slow and non moving inventory xiii. Identification and disposal of Surplus xiv. Scrap Disposal xv. Disposal of condemned assets xvi. Vendor registration and updation of Vendor Master xvii. PO closure in SAP

There are 2 Port Offices in the Refineries Division, at Kolkata and Mumbai.

Responsibilities include:

i. Customs Clearance of imported consignments ii. Lining up Rate Contracts for sea freight iii. Lining up Rate Contracts for air freight iv. Opening Letter of Credit for Refineries v. Inland transportation of imported consignments from Port to Units vi. Lining up insurance for import consignments (other than Project consignments

dealt by RHQ PJ Materials group) vii. Local procurement viii. Procurement assistance to Units, wherever requested

1.3.2. RHQ Level:

Materials Department at RHQ has three major functions:

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Central Procurement Cell & RHQ Materials

Responsibilities include: i. Procurement of items as per approved list ii. Lining up Rate Contracts for Units to place Call - Up Orders iii. Processing Unit proposals for approval of Director and above iv. Local procurements for RHQ / CO / Township etc. v. Vendor registration and updation of Vendor Master vi. Maintaining updated Vendor Holiday List vii. Coordinating agency on issuance of policy guidelines on Materials Management viii. PO closure in SAP

Project Materials

Responsibilities include:

i. Preparation of Project Procurement Procedure ii. Ordering of materials for conventional Projects iii. Processing and issuing Change orders iv. Assistance in preparation of Vendor Master for Projects v. Request for Opening Letters of Credit for import orders vi. Request for EPCG License and Invalidation Letter vii. Coordination with Vendor for import materials despatch viii. Facilitating payment for import orders ix. Lining up special transports (like barge movement) for Over Dimensional

Consignments (ODC) x. Coordination with TRANSCHART for sea shipment of import project orders xi. Coordination with Port Offices xii. PO closure in SAP

Codification Cell

Responsibilities include:

i. Materials Codification for Refineries Division ii. Liaising with Units’ nodal Materials Coordinator for codification iii. Removal of duplication in existing codes iv. Assisting Units in removal of codes for obsolete items

Apart from the above roles, RHQ Materials shall also function as the nodal office for updation of Materials Management manual.

1.4. Abbreviations Used in this Manual

CBA: Commercial Bid Analysis CDD: Contractual Delivery Date or approved extended delivery date CQ: Commercial Query DOA: Delegation of Authority DOP: Delegation of Power EPCM: Engineering, Procurement and Construction Management - Consultants for conventional projects FOA: Fax of Acceptance FIM: Free Issue Material GPC: General Purchase Conditions GRN: Goods Receipt Note

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HOD: Head of Department defined as Officer in Grade “F” or an officer in Grade “E” who is designated as HOD through an Office Order by Human Resources (HR) Department for the purpose of exercising powers of an “F” Grade Officer under DOA. MM Manual: Materials Management Manual MR: Materials Requisition MRP: Materials Requirement Planning (the term has been used interchangeably with IC or Inventory Control) M&I: Maintenance & Inspection Department PBG: Performance Bank Guarantee PBO: Price Bid Opening PO: Purchase Order PQC: Pre Qualification Criteria PR: Purchase Requisition (the term has been used interchangeably with “Indent”) RFA: Recommendation for award (or award proposal or purchase proposal) RFQ: Request For Quotation (the term has been used interchangeably with “Tender Document” RHQ: Refineries Head Quarters, New Delhi SAP: Refers to the Enterprise Resource Package (ERP) being used by IOCL TBA: Technical Bid Analysis TBE: Technical Bid Evaluation TPIA: Third Party Inspection Agency TQ: Technical Query

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CHAPTER - II

ESTIMATES & PURCHASE REQUISITION 2.1 Estimates

Whenever a proposal for initiation of procurement is made, a detailed estimate on landed cost basis shall be prepared. The cost estimate should be as comprehensive as possible to provide yardstick of assessment of reasonability of quoted rates. It shall be ensured that no item is included in the estimate without indicating the quantity. 2.1.1. Estimates for Non Inventory Control or Non MRP Items For Non Inventory Control items (NIC / Non MRP), a report containing the following details shall be attached as the face sheet of the estimate: (i) Name of the material (ii) Location (iii) Total amount of the estimate (iv) Justification for the materials procurement (i) Basis for rates considered in the estimate. Basis of estimate could be last PO price of

IOCL or other PSUs or Government organizations or budgetary offer or cost derived through extrapolations. Budgetary offer not to be adopted as basis of estimation in case of single tender procurement from the same vendor

(v) Suitable escalations shall be applied (vi) Estimates shall be approved with Finance concurrence, wherever required by the

Competent Authority defined in the DOA 2.1.2. Estimates for Inventory Control or MRP Items

(i) Estimate shall be made considering either the last PO price or last Rate Contract price (ii) All IC items’ estimate shall be approved by HOD, Materials Department with Finance

concurrence, wherever required as per DOA. (iii) Suitable escalations shall be applied

2.1.3. Estimates for CPC (Central Procurement Cell procured) Items

CPC covered items are divided into two categories: a) Where PRs are generated by separate indenting group and b) Where PRs are generated by Materials Department. For items covered under a) above, the estimate shall be prepared by indenting group and methodology and approval as followed in Non MRP procurement shall be followed. For items covered under b) above estimate shall be prepared by the Materials (CPC) group and shall follow the methodology of MRP (IC items) estimate. 2.1.4. Estimates for EPCM procurement (Conventional Project procurement

through EPCM Consultant)

2.1.4.1. Estimates shall be prepared by Consultant.

2.1.4.2. Concurrence of estimate by IOCL Finance is not required.

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2.1.4.3. Basis of estimate could be last PO price of IOCL or other organizations with suitable

escalations or budgetary offer or cost derived through extrapolations or from Consultant’s database.

2.1.4.4. Budgetary offer not to be adopted as basis of estimation in case of single tender from the same vendor

2.1.4.5. Estimates shall be provided in sealed cover to IOCL’s Project Engineering by EPCM Consultant. Once approval is received for Price Bid Opening, Materials shall convey to Project Engineering regarding estimate opening and review.

2.1.4.6. Estimate shall be opened in the presence of Finance by Project Engineering. The same shall be reviewed by them and in case required, the Consultant shall be asked to revise the same with justification.

2.1.4.7. Revised estimate, if any, shall again be opened in the presence of F. This shall supersede the originally opened estimate.

2.1.4.8. Project Engineering shall give their recommendation regarding review and acceptance of estimate to Materials.

2.1.4.9. After this the Price Bid Opening clearance shall be given to the Consultant as per the coordination procedure agreed for the project.

2.1.5. General Notes on Estimates

2.1.5.1. Estimates shall be on landed cost basis for the purpose of administrative

approvals, EMD calculation, tendering procedure, applicability of Integrity Pact etc. However, for the purpose of deciding the Pre Qualification criteria and price justification, estimated cost on FOB / FOR Despatch point basis shall be considered so that different taxes, duties and freight do not play any role in justification and pre qualification checking.

2.1.5.2. It is the responsibility of the originating department to ensure that the estimate is structurally and technically sound.

2.1.5.3. Wherever required as per DOA, estimate shall be sent to Finance for checking and concurrence by the originating department.

2.1.5.4. Wherever required, the detailed estimates shall be scrutinized by Finance in accordance with the instructions applicable. After the estimates are found to be in order, financial concurrence shall be accorded and forwarded for administrative approval of the competent authority.

2.1.5.5. Estimate must be approved by competent authority only. Approval by any lower level officer on behalf of competent authority should not be resorted to unless the concerned officer has been asked to officiate through an Office Order.

2.1.5.6. Purchase Requisition along with estimate should be raised by the indenting department and tender should be invited and finalized by Purchase Section of Materials Department. However, in case of MRP items, indent along with estimate shall be raised by IC Section of Materials Department and tendering shall be done

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by Purchase Section of Materials Department. For items procured by CPC, please refer the Chapter on Central Procurement Cell.

2.1.5.7. If an estimate is based on rate analysis or contains items having rate analysis, the rate analysis shall be concurred by F and approved by competent authority not below the rank of HOD, before the same is taken as basis for the preparation of any estimate.

2.1.5.8. In case of any change in technical specification, scope of work or change in tax structure and variation in the prices of material having an impact on prices, the estimate should be re-visited and duly concurred and approved by the approving authority before opening of price bids. This revised estimate shall be used for comparison of prices and finalization of the order.

2.1.5.9. The estimates received in Finance Department shall be scrutinized with reference to the following points before according financial concurrence:

i. That the general instructions regarding preparation of estimates have been

followed by the departments concerned.

ii. That there is a budget provision in the approved budget for the work proposed to be undertaken.

iii. That proper justification for undertaking the procurement exists.

iv. That the rates adopted for each item are duly supported by basis of estimate.

v. That the proposal is administratively approved or is ultimately being submitted for

such approval.

vi. That for emergency procurement, the circumstances leading to such emergency are recorded in writing.

vii. That the calculations shown in the estimate are arithmetically accurate. The

correctness of rates applied for taxes and duties shall be ensured.

viii. That the DOA Clause and competent authority for approval is mentioned. 2.1.6. Escalation used during preparation of estimates / justification shall be as

per the following methodology:

2.1.6.1. Where referred PO is from an indigenous source, escalation shall be made considering WPI (eaindustry.nic.in) / inflation. Wherever specific commodity is known the WPI for that commodity shall be considered else generic data (under “all commodities”) shall be considered.

2.1.6.2. Where referred PO is from a foreign source help shall be taken from price indices’ websites like meps.co.uk (for steel), LME (for non ferrous), BLS etc. If nothing is clearly available nominal escalation of 5% p.a. or part thereof shall be taken.

2.1.6.3. Where PO / Rate Contract is to be lined up for variable price, the estimate shall be prepared considering the price variation formula for the material.

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2.1.6.4. In case of crash / emergency requirement estimates shall be suitably loaded for urgency

2.2 Indent / Purchase Requisition

2.2.1 All Purchase Requisitions (PRs) shall be prepared through SAP. PRs released online

through SAP shall not require signature on the PR. However, hard copies of PRs will be sent to Materials Department for initiating any procurement action. Original signed notes of approval of competent authority for single tender and proprietary procurements shall be attached with the PR. The PR must specify the following:

i. Material Code Number ii. Budget head iii. Estimated cost iv. Specifications of material required with adequate number of drawings, specifications/

data sheets, wherever necessary. v. Quantity to be procured vi. Special packing requirement wherever necessary vii. Scope of inspection where pre dispatch inspection is required. Normally all the M&I

approved TPI agencies shall be considered for each tender unless a limited list is specified.

viii. Delivery period required (Indicative / Specific). ix. Details of previous PO, if any or First Time Purchase certificate x. In case of first time purchase, indicative vendor list with approval in case limited

tendering has to be done xi. End use of the items indented xii. Technical Pre-Qualification criteria to be issued in the NIT / tender document in case

of Open tender xiii. Justification for the procurement xiv. Requirement of samples, catalogue, test certificates, guarantee certificates etc. xv. Seeking information related to loss control such as MSDS / Shelf Life xvi. Technical evaluation / Technical loading criteria (if any) xvii. Non Disclosure Agreement, if any xviii. In case of chemicals / catalysts sample testing, final testing on receipt, assay

methodology xix. Check for surplus availability of required materials in other plants including usability

and indicate the same in PR. For such sparable and usable items in other Units, Stock Transfer Order (STO) shall be raised by Materials Department. STOs shall be created by the Inventory Control or any other assigned Group.

It is advisable for Materials Department to provide a Check List to the indenting departments for attaching with the PRs to ensure that all requirements for raising the PR have been met.

2.2.2 PR for Inventory Control Items (IC Items / MRP Items)

2.2.2.1 Inventory control items are items with repetitive requirement for which inventory

levels (Re-order Level, Re-order quantity etc) have been fixed and the responsibility of raising PRs, procurements, stocking and supply to the consuming departments rests entirely with the Materials Department. Details about Inventory Control items are given later in this manual in the Chapter on Inventory Control.

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2.2.2.2 Purchase Requisition for IC items are to be approved by HOD of Materials Department.

2.2.2.3 Purchase Requisition for IC items required for any special jobs / shutdown should be prepared by User Department and approved by competent authority and sent to Materials Department. Such PRs should be routed through the IC Section who shall forward it to the Purchase Section for taking procurement action.

2.2.3 PR for Non Inventory Control Items (NIC Items / Non-MRP Items)

2.2.3.1 All items other than the IC items are Non-Inventory Control items. User

Departments shall raise PR through SAP and shall forward to Purchase Section of Materials Department with the approval of competent authority.

2.2.3.2 PRs for medicines and hospital items should also be raised through SAP by

hospital.

2.2.3.3 PR for vehicles, office equipments, stationery & printing, furniture, uniform, canteen / welfare requirements shall be raised by Administration Department.

2.2.3.4 PR for periodicals, books and magazines shall be raised by the Department under which Library functions but through SAP only.

2.2.3.5 Computer hardware / software (except stationery items) to be indented by IS Department. However, if such PRs are raised by User Department, the same shall be endorsed by HOD, IS Department.

2.2.3.6 Approving authority for Purchase Requisition for Non Inventory Control (NIC)

items shall be as under (ref: Finance Circular no F/12/014 dated 04.07.2008)

Value Approving Authority Upto Rs. 5 Lac HOD of Indenting Department More than Rs. 5 Lac and upto Rs 25 Lac DGM of Indenting Department More than Rs. 25 Lac GM / ED of Indenting Department Note: Finance release in SAP (i.e. Finance concurrence) shall be required for PRs with estimated value exceeding value limit indicated in DOP for estimate concurrence

2.2.3.7 Concurrence for PR which consists of both materials and services, has to be made in line with guidelines applicable to materials PR

2.2.4 PR for EPCM based project procurement

IOCL’s Project Engineering shall provide PR in SAP to Materials within 7 days of submission of Recommendation for Award (RFA). This SAP PR is not required to be approved and considered only as regularization PR. This shall be used by Materials to create SAP Purchase Order.

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2.3 Proprietary Items

2.3.1.1 Procurement of any spare from the original vendor or the original manufacturer of the sub assembly / component shall be deemed as a proprietary purchase. Apart from this, where the User Department is of the opinion that there is no technically feasible alternative but to procure the material from a particular single source, such items shall be considered as proprietary.

2.3.1.2 List of proprietary catalysts and additives shall be compiled by RHQ Technical in coordination with Refinery & Petrochemical Units and got approved from Director (R) for the entire division with Finance concurrence every year.

2.3.1.3 List of all proprietary items except those mentioned above in Cl. 2.3.1.2, shall be

approved by GM of the User Department with Finance concurrence every year for addition / deletion / no change.

2.4 Tendering when budget has not been approved in case of Capital

procurement

Where budgets have not been approved but in view of urgency a need is felt to initiate tendering prior to budget approval, the indenting department shall take specific approval for initiating procurement action pending budget approval. Approval note shall give justification for tendering without budget and approving authority shall be Unit Head. SAP PR shall be prepared by using the investment scale that blocks creation of SAP PO.

In such cases only technical bids shall be opened and evaluated prior to budget approval. Price Bids shall be opened only after approval of budget. Indenting Department shall mention the likely date of budget approval to the Materials Department for seeking appropriate validity. Validity of not more than 6 months shall be asked in such cases initially.

The tender documents should state that on any account, in case bids have to be revalidated before PBO beyond the originally sought validity, the same may be allowed with or without change in prices. However, IOCL reserves the right to cancel such tender and refloat the same. Such price implications may be allowed only with the approval from HOD of Materials Department with justification. However should the situation warrants, the tender can be cancelled and refloated with approval from competent authority.

2.5 Closing of open PRs in SAP: PRs for items dropped for procurement to be closed in

SAP by the respective Indenting Department.

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CHAPTER - III

INVITATION & RECEIPT OF TENDERS 3.1. Tender Document

3.1.1. Materials Department (Purchase Section) shall generate enquiry / Request for

Quotation (RFQ) document through SAP for issuance to the prospective bidders.

3.1.2. In case of press tenders and complex items, detailed tender documents shall be prepared preferably with the following list of documents, which is illustrative only:

i. Index ii. Notice inviting tenders / Letter inviting tender with PQC and EMD requirement iii. Covering letter for tender iv. General Purchase Conditions & Formats for Bank Guarantees v. Technical specifications along with technical evaluation and loading criteria vi. Quality Assurance Plan vii. Time schedule viii. General instructions to the bidder ix. Special instructions to the bidder (SITB) x. Agreed Terms and Conditions (ATC) xi. Price Schedule format for materials supply, site services, site work, AMC, mandatory,

commissioning and O&M spares, training, taxes, duties and freight xii. List of Board of Directors (or reference link to web address may be given) xiii. Format for declaration of Holiday List xiv. Integrity Pact Agreement xv. Commercial Evaluation & Loading Criteria xvi. Deviation List proforma separately for commercial and technical. xvii. Proforma for contact details of bidder (normally a part of the ATC) xviii. Proforma for Permanent Establishment Certificate, Permanent Account Number (PAN)

issued by Indian Authority and Tax Residency Certificate, Form 10 F (for Foreign bidders, in case site activities are also involved)

xix. Bank Mandate details xx. In case of e-tendering bidder shall declare: “The bidder declares that none of the e-

documents have been tampered with. In case of tampering of e-documents, the bid shall be rejected outright and EMD forfeited without prejudice to any other rights or remedies available to IOCL.”

Standard commercial tender document shall be developed by Materials Department and approved by the HOD of the Materials Department as a one-time exercise for open and complex tenders. Any changes to the standard documents shall be approved and changed in the standard documents.

Any deviations proposed in the tender document w.r.t. General Purchase Conditions (GPC) and evaluation methodology indicated in this manual shall be concurred by Finance and approved by GM.

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3.2. Tendering In case of EPCM based project procurement 3.2.1. General Commercial Tender Document (including Special Instructions to the Bidder,

ATC, GPC, General Notes, covering letter, evaluation, loading methodology, Price Format etc.) shall be provided by Materials to the Project Coordinator. This document shall be prepared by Materials, concurred by Finance and approved by an officer not below the rank of GM heading Materials function.

3.2.2. This shall be a one-time exercise for the complete project. Unless written

instructions are received from Materials, the Consultant shall not be allowed to change these tender documents and use the same for all Tenders for the Project. Price Format shall be suitably modified from case to case basis but any major changes in the same shall again require IOCL’s approval. However, unless changed, individual tenders shall not be sent to Materials for approval of commercial portion.

3.2.3. Revisions, if any, arising out of circulars, change in interest rates, policies etc. shall

be communicated to Project Coordinator with copy to Consultant and Finance. Correspondence over e-mails shall be acceptable.

3.3. Notice Inviting Tenders

The detailed notice inviting tenders shall contain the following particulars:

i. Name of the item ii. Amount of earnest money to be deposited by the bidders iii. Place and date for sale of tenders iv. Due date, time and place for submission and for opening of tenders v. The authority with whom tender should be submitted (in case of physical tenders) vi. Instruction that the offer shall be sealed and super scribed with tender number and

details of tender and the due date of opening (in case of physical tenders) vii. The notice will contain a provision with regard to the right to reject any or all of the

tenders or any part of a tender so received without assigning any reasons viii. Pre-Qualification criteria

The concise version of NIT should be published in the newspaper requesting bidders to visit our website for detailed NIT and complete documents / details. A sample format for concise NIT for Press Tenders is placed at Annexure - 1

3.4. Pre Qualification Criteria

3.4.1. Financial Criteria

The annual turnover of the bidders during any of the preceding three financial years should be at least 60% of the annualized estimated value of procurement under consideration where completion period is more than a year. In other cases, where the completion period is upto a year, the annual turnover of the bidders during any of the preceding three financial years should be at least 60% of the estimated value of the procurement.

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3.4.2. Commercial Experience Criteria For experience, the order(s) executed by the bidder, during the last five years ending on the last day of the month immediately preceding the month in which the last date of bid submission falls, should be considered as under:

Three completed orders of “similar item” each costing not less than the amount equal to 30% of the estimated cost OR

Two completed orders of “similar item” each costing not less than the amount equal to 40% of the estimated cost OR

One completed order of “similar item” costing not less than the amount equal to 50% of the estimated cost

“Similar item” to be defined by the Indenting Department.

“Estimated cost” for this purpose shall be as defined in Cl 2.1.5.1 of this manual.

3.4.3. General notes on Pre Qualification criteria

3.4.3.1. The pre qualification criteria indicated above can be modified for specific cases,

after recording reasons, with Finance concurrence and the approval of GM. Prescribed criteria should form part of NIT.

3.4.3.2. If more than one agency is to be lined up, pre qualification criteria shall be calculated based on the maximum amount of order to be awarded to any single agency.

3.4.3.3. In case of requirement of any technical pre qualification criteria, the same shall be got approved from an authority not below GM of Indenting Department.

3.4.3.4. In case there is a specific technical experience criteria which is directionally

meeting the commercial experience criteria specified in Cl. 3.4.2 above then there will be no need to have a separate commercial experience criteria (given in Cl. 3.4.2 above) and approval for the same shall be taken from GM giving reasons and with due vetting of Finance.

3.4.3.5. Indenting Department shall ensure that the technical pre qualification criteria, like membership of any body or institution should not create any discrimination or restriction for any bidder(s) with regard to eligibility even though they otherwise satisfy all the technical / statutory requirements.

3.4.3.6. The criteria once fixed should not be relaxed or changed.

3.4.3.7. In case a foreign bidder submits any of the Pre Qualification support documents

in any language other than English, then it will be the responsibility of such foreign vendor to also provide the English translation copy of the same duly certified, stamped and signed by their Local Chamber of Commerce.

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3.4.3.8. For fulfilling the commercial experience criteria any one of the following

documents may be considered as valid proof for meeting the criteria:

(i) Purchase Order copy along with Invoice(s) with certification that supplies against the invoices have been executed.

(ii) Purchase Order copy along with Bank Certificate indicating payment against the PO

(iii) Execution certificate by client with order value (iv) Goods Receipt Note (GRNs) in case where IOCL is a client (v) In case any other document is submitted by bidder in support of execution,

the same shall be properly checked by the concerned officers before acceptance.

3.4.3.9. For fulfilling the financial criteria, normally an audited balance sheet of the bidder

shall be considered as acceptable proof. Published Annual report shall also be acceptable.

3.4.3.10. In case the balance sheet is available in the public domain the same shall be

accepted.

3.4.3.11. The requirement for submission of audited financial statement is sometimes not accepted by some foreign bidders due to their internal / local regulation (particularly in case such bidders are subsidiaries of other foreign company). Instead of this they prefer to submit CEO / CFO certificate (the parent company for itself or for its subsidiary) for their turnover or the financial statement.

In such case CEO / CFO’s certificate in original from the company or from the parent company (in case bidder is a subsidiary) stating the turnover of the bidding entity along with a declaration that the bidding company is not in a position to submit its financial statement as per the local / internal regulation (clearly specifying the applicable regulation) with an endorsement by Chartered Accountant / Statutory Auditor / Certified Public Accountant (not being an employee or a Director or not having any interest in the bidder(s) company / firm) may be accepted.

Wherever Chartered Accountant / Statutory Auditor / Certified Public Accountant (not being an employee or a Director or not having any interest in the bidder(s) company / firm) is not in a position to endorse such CEO / CFO’s certificate due to local regulations, CEO / CFO’s certificate in original without endorsement may be accepted provided a reference of the local regulation restricting this endorsement is given in the CEO / CFO certificate.

3.4.3.12. Similarly in case where the bidder cites the reasons of Non Disclosure Agreement (NDA) for its inability to submit necessary documents in support of meeting the experience criteria, a certificate, in original, certifying all the required information, issued by CEO / CFO of the company along with a declaration that the bidding company is not in a position to submit the required documents owing to the NDA with an endorsement by Chartered Accountant / Statutory Auditor / Certified Public Accountant (not being an employee or a Director or not having any interest in the bidder(s) company / firm) may be accepted.

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Wherever Chartered Accountant / Statutory Auditor / Certified Public Accountant (not being an employee or a Director or not having any interest in the bidder(s) company / firm) is not in a position to endorse such CEO / CFO’s certificate due to local regulations, CEO / CFO’s certificate in original without endorsement may be accepted provided a reference of the local regulation restricting this endorsement is given in the CEO / CFO certificate.

3.4.3.13. A Company (bidder) shall not be allowed to use the credentials of its parent or any group company to meet the Experience Criteria.

3.4.3.14. The bidding document shall clearly specify the following:

(i) Submission of authentic documents is the prime responsibility of the bidder.

(ii) Wherever IOCL has concern or apprehension regarding the authenticity / correctness of any document, IOCL reserves the right of getting the documents cross verified from the document issuing authority.

3.4.3.15. Notwithstanding any other condition / provision in the tender documents, in case

of ambiguity or incomplete documents pertaining to PQC, bidders shall be given only one opportunity with a fixed deadline after bid opening to provide complete and unambiguous documents in support of meeting the Pre Qualification Criteria. In case the bidder fails to submit any document or submits incomplete documents within the given time, the bidder’s tender will be rejected. This provision shall also be incorporated in the tender documents.

3.4.3.16. The responsibility of checking and verifying the Technical Experience criteria shall lie with the Indenting Department and shall form part of the technical recommendation. Similarly the responsibility of checking and verifying the Financial criteria and Commercial Experience criteria shall lie with the Materials & Finance Departments and shall form part of the Price Bid Opening (PBO) proposal and Recommendation for Award (RFA). In case of commercial experience criteria if any clarification is required w.r.t. “similar item” the same may be sought from Indenting Department.

3.4.3.17. In case of Rate Contracts lined up by Central Procurement Cell (CPC) commercial

experience and financial criteria shall be based on total contract value divided by the number of quarters for which the Rate Contract is being lined up.

3.5. Earnest Money Deposit

Earnest Money Deposit is prescribed with a view to ensure that the bidder / vendor does not fail to honour the tender /offer terms. The amount of earnest money shall be fixed on the following lines (ref. Finance Circular no F/12/018 Dated 06/10/2008):

Estimated Tender Value

Amount of EMD

Up to Rs. 5 Lakh Nil From Rs.5 Lakh to Rs.500 Lakh 1% From Rs.501 lakhs to Rs.2500 Lakh

Rs.5 Lakh plus 0.5% on additional value of Tender over Rs.500 lakh

Above Rs.2500 Lakh

Rs.15 lakh plus 0.25% on additional value of Tender over Rs.2500 lakh

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3.5.1. If EMD amount is upto Rs. 1,00,000.00, EMD shall be accepted in the form of a Pay

Order or Demand Draft or through Electronic Clearance System (ECS). In case of ECS, the details of the deposit (Name of the Bank, Transaction details etc.) shall be furnished by the bidder in the technical offer.

3.5.2. If EMD amount is more than Rs. 1,00,000.00 EMD shall be accepted in the form of

Demand Draft / Pay Order / Banker Cheque or Bank Guarantee or through Electronic Clearance System (ECS). In case of ECS, the details of the deposit (Name of the Bank. Transaction details etc.) shall be furnished by the bidder in the technical offer. Validity of BG in lieu of EMD shall be 3 months beyond bid validity.

3.5.3. EMD is not required in case of:

3.5.3.1. Purchase of spares / critical equipment of proprietary nature from original

equipment manufacturers / distributors / sole agents / authorized dealers on Single tender proprietary item basis.

3.5.3.2. In Limited Tender Enquiries with estimated values upto Rs. 50 Lac.

3.5.3.3. Micro & Small Enterprises (MSE) registered with agencies as mentioned later in this

manual in the Chapter on MSE vendors, only for the items for which the MSE is registered.

3.5.3.4. Government organization & Public Sector Undertaking of the Central / State

Government

3.5.3.5. JV companies of IOCL

3.5.4. In case of foreign bidders, the EMD shall be in equivalent US Dollar. Based on authorization by foreign bidder, their Indian associates may be allowed to submit EMD in INR in form of only Demand Draft / Bankers Cheque. This shall be a part of tender terms.

3.5.5. EMD from the foreign bidder shall be obtained in the form of Demand Draft / Bank

Guarantee / ECS / wire transfer. SWIFT and bank details of IOCL shall be mentioned in the tender to facilitate ECS / wire transfer.

3.5.6. In case where more than one agency is to be lined up, EMD shall be calculated

based on the maximum amount of order to be awarded to any single agency. 3.5.7. Offers received without EMD as per tender requirement shall be liable for rejection.

In cases where the rejection on account of non submission of EMD is resulting in 2 or less offers; bidder(s) who have not submitted EMD, shall be given only one chance to submit EMD within a given deadline.

3.5.8. If required and there are sufficient reasons for the same, approval for EMD waiver

shall be taken from the Competent Authority for approval of tender as per DOP but not above the rank of GM. This shall be done at the time of tendering.

3.5.9. Release of EMD: Following shall form part of the tender documents:

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3.5.9.1. EMD of bidders disqualified during techno-commercial bid evaluation shall be released immediately after approval of Price Bid Opening.

3.5.9.2. EMD of bidders qualified in the techno-commercial bid but unsuccessful in the

price bid stage shall be released immediately after final approval of the ordering proposal by the competent authority.

3.5.9.3. EMD of the successful bidder shall be released after receipt of an acceptable PBG. 3.5.10. Forfeiture of EMD: Following shall form part of the tender documents:

Earnest Money shall be forfeited in the following circumstances:

i. In case the bidder alters / modifies / withdraws the bid suo-moto after opening the bids (Technical bids in case of two bid system) within the validity period. In such a case, the tender submitted by the bidder shall be liable for rejection.

ii. In case the tender is accepted and the vendor fails to deposit the PBG or to

execute the contract within the stipulated period. 3.6. General Purchase Conditions (GPC)

An approved General Purchase Conditions (GPC) shall be applicable in case of purchase tenders (for the present GPC please refer Annexure 2). The GPC shall be made available in the web site also. GPC may be reviewed from time to time.

3.7. Special Technical Conditions

3.7.1. Special Conditions pertaining to technical part, if any, shall be drafted by the Indenting Department taking into consideration the special requirement and shall usually indicate evaluation criteria, safety, health & environment requirements, and other special formalities required to be considered / complied with by the bidder while submitting offer and / or after award of purchase order.

3.7.2. Special technical conditions having commercial implication like technical loading

shall be included in the tender document after indenting department takes approval of the same from an authority not below the rank of GM.

3.7.3. The following penalties may also be considered with a view to improve the safety

aspects of execution of POs involving site work based on the job requirements:

Penalties for Violation / Non-adherence of safety procedures and practices: 1. Violation of applicable Safety, Health and Environment related norm a penalty of

Rs.5,000.00 per occasion 2. Violation as above resulting in any physical injury, a penalty of 0.5% of the contract

value (maximum of Rs.2,00,000.00) per injury in addition to Rs.5,000.00 per occasion as in item 1.

3. Fatal accident, a penalty of 1% of the contract value (maximum of Rs.10,00,000.00) per injury in addition to Rs.5,000.00 per occasion as in item 1.

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3.7.4. The vendor should be advised to take appropriate insurance policy for the effective implementation of the above penalty provision.

3.7.5. In case of accidents depending on the seriousness of injury etc. in addition to the

hospitalization / treatment charges and group insurance amount, compensation shall be paid by the vendor to the affected person / his family members in presence of Engineer-in-charge as per Workmen Compensation Act.

3.8. Other miscellaneous points

3.8.1. Tender document should contain a clause indicating that any legal dispute shall be

within the jurisdiction of local court of the Purchasing Office / Authority.

3.8.2. The technical specifications of the procurement shall be prepared by the User / Engineering Services / Technical Department to indicate the tolerance, applicable standards and specifications conforming to the procurement.

3.8.3. Consortium bids shall not be normally accepted unless specific approval of GM has been taken by indenting department due to nature of job. In such case, Pre Qualification Criteria and Umbrella Agreement between the consortium partners shall be prepared and approved by indenting department. The same shall be included in the tender document with F Concurrence. Tender document should contain a clause indicating acceptance / non acceptance of Consortium bids.

3.8.4. The NIT should contain a clause that IOCL reserves the right to allow purchase preference to MSEs as per Government policy and to JV Companies as per IOCL policy in vogue. Provisions relating to purchase preferences and royalty inflow (in case of IOCL R&D formulations) should be specified in the NIT. For the purpose of Purchase Preference, the total net of cenvat landed cost of the lowest bidder (s) shall be considered to decide applicability of the Purchase Preference and not the estimated value of the tender. Purchase preference is to be given in respect of 102 medicines produced by IDPL (ref Finance Circular F/12/16 dated 29.07.2008).

3.8.5. The following conditions are to be incorporated in NIT / Tender documents for conventional tenders invited through www.indianoiltenders.com

3.8.5.1. Bidders are advised to download the documents from Indian Oil website i.e. www.indianoiltenders.com, after due registration. This is to ensure that the bidder downloads proper / complete tender documents. This also enables the bidder to visit the website for any corrigendum / correction which is essential for submitting proper tender. However, tenders from bidders who have not downloaded the documents from IOCL website may also be accepted, provided the bidder submits the EMD along with the Techno Commercial Bid. Such Bidders are also advised to visit the official website from time to time for any corrigendum or correction. Failure of bidder to submit tenders without taking cognizance of corrigendum / amendment issued by IOC are liable for rejection.

3.8.5.2. Bidders submitting documents downloaded from other than official website should

give an undertaking to the effect that they shall abide by all the terms and conditions as per documents hosted in official website, should there be any discrepancy observed in the submitted tender, at a future date. Also they should undertake to agree for all decisions confirmed in pre-bid meeting, if any, conducted by IOCL irrespective of whether the bidder attended the same or not. A standard

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undertaking in this regard may be included as a part any declaration that is normally obtained from the bidders.

3.8.5.3. It is also clarified that the above is not applicable for e-tendering 3.8.6. Sufficient time shall be allowed for the bidders to submit their tenders from the

date of issue of tender notice. The following timetable may be adopted for the purpose of issue of tenders.

Nature of Tender Minimum Time Period

(e-tender / physical tender)

Limited - Only Indian bidders for non package / non equipment purchase

2 weeks / 3 weeks

Limited - Global bidding (all cases) and for packages / equipments (all cases)

3 weeks / 4 weeks

Open – Only Indian bidders for non package / non equipment purchase

3 weeks / 4 weeks

Open - Global Tender (all cases) and for packages / equipments (all cases)

4 weeks / 5 weeks

Based on the circumstances of each case, time limit may be modified by taking approval of HOD of Materials Department.

3.8.7. Where delivery is of prime consideration, the maximum delivery period should be

indicated in tender clearly indicating that offers not meeting the delivery requirement shall be rejected. In other cases indicative delivery period shall be given in tender and bidders shall be asked to quote their best possible delivery.

3.8.8. In case where an order has been placed on the ground of early delivery on other than lowest basis, a special delivery clause besides the GPC to be incorporated in the Purchase Order indicating that delivery period is the essence of the Purchase Order and for failure on the vendor’s part to complete supplies within the specified contractual delivery period, the vendor shall be liable to pay to the Corporation the difference over the rates of the lowest acceptable tender along with the price adjustment on account of delayed delivery in accordance with IOCL GPC. This can be operated only after taking the bidder’s consent and shall be added in the PO.

3.8.9. The bidder shall be asked to quote in words and figures for packages and equipments. For bulks and tagged instruments running into more than 10 line items, only rates in figures shall be taken. In case of a conflict between figures and words, value indicated in words shall prevail. Total amount need not be asked to avoid the possibility of mathematical error creeping in.

3.8.10. Wherever applicable, tender document should stipulate the treatment of the

Statutory Duty Variation viz. Excise Duty / Sales Tax / VAT / Service Tax, Works Contract tax and FE Variation as per details given below:

Excise Duty / Sales Tax / VAT / Service Tax will be paid / reimbursed extra at actual within the contractual delivery date. Any increase in the rates of Excise Duty and Cenvatable Service Tax beyond the CDD [contractual delivery date or approved extended date] will be borne by IOCL to the extent Cenvatable documents are passed on to IOCL and IOCL is in a position to get the CENVAT claim from the

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Excise authorities. The benefit of any reduction beyond CDD must be passed on to IOCL. In case of Sales Tax / VAT and other non Cenvatable taxes / duties any increase beyond the CDD shall be borne by the vendor but reduction shall be passed on to IOCL.

3.8.11. Customs Duty rate variation can be agreed subject to the following conditions:

CIF value should be indicated in the offer. Materials to be imported covering the above CIF value should also be clearly spelt out. The rate of Customs Duty and the Tariff Number under which the item is covered should be clearly spelt out.

Any increase in price due to increase in Customs Duty rates beyond two thirds of the CDD in respect of items which require further fabrication after import and for bought out imported items beyond the CDD, will be to vendor’s account. Increase in Counter Veiling Duty (CVD) portion of Customs Duty can be reimbursed to the vendor to the extent Cenvatable documents are passed on to IOCL and IOCL is in a position to get the Cenvat claim from Excise authorities. However, any decrease in the prices due to decrease in Customs Duty rate at the time of actual clearance of imported materials, shall be passed on to IOCL. For all such claims necessary documentary evidence shall be provided by the vendor to IOCL along with their claim request.

3.8.12. FE variation shall normally not be allowed. In (global tenders) cases where Foreign

Exchange (FE) involvement is envisaged, tender documents shall contain a clause indicating that in case the bidders are quoting for FE rate variation, the details of item wise maximum CIF value (indicating quantity) of each currency should be indicated in the offer. This list shall be vetted by the indenting department / PMC at the time of giving technical recommendation to the effect that the listed items are required for the tendered material. Any increase in price due to increase in FE rates beyond two thirds of the CDD in respect of items which require further fabrication after import and for bought out imported items beyond the CDD, will be to vendor’s account. However, any decrease in the prices due to decrease in FE rate at the time of actual clearance of imported materials, shall be passed on to IOCL. FE variation shall also include recovery if the actual exchange rate is less than the quoted rate. While seeking the maximum CIF value in the tender documents, the bidder shall be asked to separately indicate the imported bought out items and their maximum CIF value. In case order stipulates FE variation clause, the vendor shall furnish Bill of Entry documents along with the invoice and raise invoice accordingly.

3.8.13. In case of any variation in tax or duty rate or introduction of new tax / duty after

submission of bid, the offers shall be evaluated considering the rate / tax / duty as applicable on the date of price bid opening.

3.8.14. In case any new tax / duty is introduced after placement of order but within the

contractual delivery period the same shall be to IOCL’s account against submission of relevant documents.

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3.8.15. If advance is to be given, it should be expressly stated in the Tender documents, indicating the amount clarifying whether it is interest free or interest bearing, rate of interest, and submission of BG of equal amount. Tender document should clearly indicate the payment terms applicable and also state that in case bidders take deviations to the specified payment terms, loading for interest implication shall be done. This loading shall be indicated in the tender document as equivalent to 1% (one percent) per annum above the Cash Credit Rate of IOCL with the State Bank of India.

3.8.16. Tender document should contain a clause for forfeiture of EMD and debarring future

enquiries as per applicable procedure. 3.8.17. Intention of splitting the contract

3.8.17.1. Splitting of orders shall be done as per guidelines vide CO/PAG/23 dtd

15.03.2000(Annexure-3).

3.8.17.2. Approval of Unit Head shall be taken in all cases where tender is to be issued with splitting of quantity.

3.8.17.3. In the event no bidder is willing to match the price of the lowest bidder then the

balance quantity shall be re-tendered including the lowest bidder against the earlier tender.

3.8.17.4. Further splitting of leftover quantity, if required, will also require approval of

competent authority as defined above. 3.8.18. It should be ensured that pre-qualification criteria, performance criteria and

evaluation criteria are incorporated in the bid document in clear and unambiguous terms as these criteria are very important to evaluate bids in a transparent manner. In order to avoid confusion and to provide transparency in the bid evaluation, a clear cut pre-qualification criteria, performance criteria and evaluation criteria should be decided and the same should be included in the tender documents. Evaluation criteria should include all commercial condition generally put forward by the bidders and loading procedure should be specified in the tender document.

3.8.19. Indenting Department shall ensure that PR is raised only after completion of

detailed engineering with unambiguous and firm technical specifications, PQC and technical evaluation criteria etc. so as to avoid issue of amendments and seeking revised price bid from bidders.

3.8.20. The terms of the contract shall be precise and definite and there shall be no room for any ambiguity or misconstruction thereof.

3.8.21. No condition involving uncertain or indefinite liability or of unusual nature shall be incorporated.

3.8.22. Further, third party inspection shall be carried out for procurement of equipment / materials wherever necessary.

3.8.23. A clause should be inserted in all tender documents whereby the bidder is required

to state “Whether any of the Directors of BIDDER is a relative of any Director of IOCL or the BIDDER is a firm in which any Director of IOCL or his relative is a

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Partner or the BIDDER is a private company in which any director of IOCL is a member or Director.”

3.8.24. Wherever no deviation is desired from the specific terms and conditions, the bidders

should be informed in the tender documents itself that their offer shall be rejected if they take deviations.

3.8.25. Tender document should contain a clause that advance payments, if any as per

tender conditions, shall be made against bank guarantee only. Standby LC shall also be acceptable in lieu of Advance Bank Guarantee and Performance Bank Guarantee.

3.8.26. Tender documents should contain the clause indicating the bidders to quote

competitive prices considering the fact that price negotiations, if required, to be held with the lowest bidder only.

3.8.27. Tender document should contain a clause seeking acceptance of IOCL’s GPC. 3.8.28. The tender document should cover owner’s intention of availing Cenvat benefit

against ED / CVD / Service Tax. Evaluation of bid shall be done after taking into account the Cenvat benefit available. Necessary details required from the bidders should be specified in the tender document.

3.8.29. The tender document should stipulate wherever site work is involved, the provision

regarding water and power availability at the site and whether the same shall be provided free of cost or at cost. Rate chargeable, if any, should be specified. All these shall form part of the technical portion of the tender document.

3.8.30. Tender document should contain a clause stating that cutting and corrections in the

bid document should be avoided and if it is unavoidable, it should be kept at the bare minimum and it should be neatly cut and re-written without over-writing and use of erasing fluid. All corrections should be duly signed by the bidder. Use of white / erasing fluid is not allowed. IOCL reserves the right to accept or reject the offer either in part or full wherever white / erasing fluid is used.

3.8.31. Tender document should contain a clause indicating that the bidders should respond

to the tender either by submitting their bids or by explaining the reasons for non-submission of the offer.

3.8.32. Tender document shall categorically state the incentives applicable to manufacturers

offering the items based on IOC R&D formulations to the extent of royalty inflow net of prevailing taxes / surcharges, if any (to be mentioned) which will be deducted from the quoted price of such Vendors. To facilitate this, the tender document should contain suitable provision for the Vendor to declare that the offered item is based on IOC R&D formulation and the agreement of royalty payment with IOC is valid.

3.8.33. Tender document should seek information from bidders regarding power

consumption of the equipment to be installed by them along with other technical details, and operating cost of the plant, wherever required, in case loading to be done for the variation in power consumption, and operating cost. The basis of evaluation including the rate power to be spelt out in the tender documents. All these shall form part of the technical portion of the tender document

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3.8.34. Tender document should contain a clause that in case of involvement of foreign Vendors, tenders can be submitted either by the Vendor directly or through their Indian Agent / representative on behalf of them, but not both. The Indian Agent / representative should represent only one Vendor and he should not be allowed to quote on behalf of another Vendor for the same tender.

3.8.35. Standard specification for each type of job should be developed to the extent

possible. Uniformity shall help the bidders in understanding the specifications and will lead to avoidance of queries and clarifications later.

3.8.36. Tender document should stipulate that tendering can be abandoned without

assigning any reason. No compensation shall be paid for the efforts made by the bidder.

3.8.37. Tender document should stipulate that IOCL reserves the right to reject, accept or

prefer any tender or to abort the bidding process without assigning any reason whatsoever.

3.8.38. Tender document should stipulate that although normally the lowest responsive bid

amongst the bids submitted by bidders and considered by IOCL to be qualified and competent shall be preferred, IOCL reserves the right not to accept the lowest bid if in its opinion this is not in the interests of IOCL.

3.8.39. However, it shall be ensured by IOCL that any rejection, acceptance, preference etc.

is done only after thorough evaluation and there are ample and unambiguous reasons for the same.

3.8.40. In order to compare prices and to avoid placement of order at higher cost on

agents, attempt should be made to obtain quotation from Original Equipment Manufacturers (OEMs) also in addition to their authorized agents at the time of floating of enquiries for the procurement of spares for proprietary equipments.

3.8.41. Procurement tenders shall be invited and award proposals raised only by officers of Materials Department.

3.9. Methods of Tendering Generally procurement of materials and associated services, if any, shall be made by any of the following modes of tendering:

• Open Tender (Press tender: National or Global) • Open Tender (non Press) • Limited Tender • Single Tender

3.9.1. Open Tender (Press Tender: National or Global) 3.9.1.1. Press Tenders shall be invited for tenders with estimate above Rs. 50 Lac.

3.9.1.2. For items of regular consumption nature where source of supply has already

been established and where the list of approved vendors is maintained duly updated from time to time, press tenders need not be invited even if the estimated value is more than Rs 50 Lac but approval of competent authority for

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waiver of press tendering is to be taken. The competent authority for waiver of press tender shall be the approving authority as per DOP for Limited Tender Lowest basis for the estimated value of the Purchase Requisition but not beyond GM.

3.9.1.3. Press Tender may be issued in case of items where reliable sources of supply are not known and Press Advertisement is considered necessary for development of additional sources of supply or to procure the material at more competitive terms.

3.9.1.4. Press Tenders shall be invited through Press Advertisement. However, approval of HOD Materials Department is to be obtained for NIT for issuance of Press Notification and / or distribution to other agencies, as the case may be.

3.9.1.5. All Press Tenders shall be uploaded on IOCL’s e-tender website iocletenders.gov.in

3.9.1.6. Complete tender document shall be hosted on the web site to enable intending

bidders to download the tender documents and participate in the tender.

3.9.1.7. Web site address must be given in the advertisement / NIT.

3.9.1.8. The NIT shall indicate “Any Addendum / Corrigendum / Sale date extension in respect of above tender shall be issued on our website: 'https://iocletenders.gov.in' only and no separate notification shall be issued in the press. Bidders are therefore requested to regularly visit our website to keep themselves updated.”

3.9.2. Open Tenders – non Press (upto Rs. 50 Lac) 3.9.2.1. In case where an approved Vendor Master is not available for particular item(s),

open tenders may be issued for value even less than Rs. 50 Lac. Such tenders shall be issued on IOCL’s e-tendering portal, which will automatically show them on the Central Public Procurement Portal of Government of India (https://eprocure.gov.in/). These tenders shall be treated at par with Open Tenders. However, in this case no advertisement shall be given in Press against each tender. Periodic notification to this effect shall be given in the local press by respective Refinery Units and in the national press by RHQ.

3.9.2.2. For tenders up to Rs. 5 Lac, pre qualification criteria is not required. However for

tenders above Rs. 5 Lac and upto Rs. 50 Lac only experience criteria (in accordance with Cl. 3.4.2 of this manual) will be applicable.

3.9.3. Limited Tender 3.9.3.1. Limited tenders may be invited in the following circumstances after recording the

reasons in writing and obtaining the approval of the administrative authority within whose power the approval of award of job lies (based on estimated value) but not above the rank of GM:

3.9.3.1.1. For jobs involving specialized know-how and patented processes where the

sources are known and the possibility of developing fresh reliable sources by open tendering / press advertisements are remote.

3.9.3.1.2. Where there are sufficient reasons to indicate that it is not in the public interest

to call for open tenders.

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3.9.3.1.3. When the Indenting Department certifies that the procurement is to be taken on an urgent basis and there is no sufficient time for getting tenders through Open Tendering.

3.9.3.1.4. Wherever an approved Vendor Master exists and sufficient numbers of vendors

are available in the Vendor Master, limited tendering can be resorted in cases where estimate is less than Rs. 50 Lac. No approval shall be required to float tender if all vendors approved in the Vendor Master are considered to issue LTE. In cases where estimate is more than the threshold limit, limited tendering can still be done in cases where Vendor Master with sufficient vendors is available, but in such cases waiver for press tender shall be taken from the competent authority as per Cl. 3.9.1.2 of this manual.

3.9.3.1.5. For items of critical nature where bulk contracts with manufacturers / suppliers

located at faraway places are likely to cause transport bottlenecks resulting in disruption in operation, it will be permissible to restrict limited tendering to local and nearby sources after obtaining specific approval of not less than GM.

3.9.3.2. Vendor Master

3.9.3.2.1. Vendor Master shall be prepared and approved based on empanelment /

registration process carried out through a press advertisement.

3.9.3.2.2. Vendor Master shall be got approved from an authority not below the rank of GM.

3.9.3.2.3. Vendor Master shall be reviewed and updated periodically but at least once

every 3 years.

3.9.3.2.4. Press notification for new enlistment shall be published at least once every 3 years. Press notification shall be published in newspapers and also on the IOCL website.

3.9.3.2.5. New vendors suggested by the indentor, with justification, and approved by

respective GM shall also be considered for limited tendering for the specific case in question. In such cases where the estimate is more than threshold limit for Press Tender but Indenting Department wants to go for limited tendering the Indenting Department shall also take approval from the GM for waiver of Press Tender along with vendor approval.

3.9.3.2.6. In cases where Indenting Department requires enquiry to be floated only to suggested vendors, approval shall be taken with justification by Indenting Department from respective GM for issuance of tender only to suggested vendors for specific case.

3.9.3.2.7. The vendor who participates in an earlier open tender and is found techno

commercially acceptable shall be considered as approved vendor in the Vendor Master.

3.9.3.2.8. In case of Projects, the Project Consultants shall suggest vendors based on their

previous experience and also after assessing the vendors. Such suggested vendors shall be submitted to IOCL for approval and once approved shall form

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part of the Project Master Supplier List (MSL). Project MSL shall be internally recommended by a Committee and approved by the GM (Projects).

3.9.3.2.9. List of approved vendors may be put on IOCL’s website along with all the

relevant information. 3.9.3.3. Holiday Listing of Vendors 3.9.3.3.1. A list of vendors put on Holiday list shall be maintained by Materials Department

at Refineries HQ and made available online on the Intranet. All such vendors' name will be entered in the alphabetical order as and when communications are received from the Ministry / Regions / Departments. The database will contain the following information:

i. Name & address of the vendors put on Holiday list. ii. Period for which the firm is put on Holiday List. iii. Reference No. vide which the action was taken to put on Holiday list. iv. Any other relevant information.

3.9.3.3.2. The list of vendor put on holiday list should be updated regularly. It must be

ensured that no debarred/ banned/ blacklisted vendor gets order / Enquiry. 3.9.3.3.3. Action to debar/ ban / Holiday Listing of a firm / bidder shall be taken as per

guidelines with due approval of competent Authority. Guidelines for Holiday Listing is given in Annexure-4.

3.9.3.4. Vendor – name change

3.9.3.4.1. In case of any change of vendor name or contact details, vendor shall inform the

same to IOCL and shall regularize the changes in IOCL records / SAP system with relevant supporting documents.

3.9.3.4.2. Following documents shall be submitted by indigenous vendors for the purpose: a) Formal request for change of name and / or contact details in vendor’s letter

head, preferably in the letter head of preceding company on whom Purchase Order is issued.

b) Vendor code(s) for which changes are requested, if available with the vendor. c) Copy of “Certificate of Incorporation” for change of name issued by Registrar

of Companies. d) Copy of PAN card and other documents as per Bank Mandate details to be

uploaded in SAP. Documents shall be in the name of new entity. e) Vendor’s declaration that the new entity is not black listed by IOCL in the

prescribed format.

3.9.3.4.3. In case of foreign vendors following documents shall be submitted to regularize the changes:

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a) Formal request for change of name and / or contact details in vendor’s letter head preferably in the letter head of preceding company on whom Purchase Order is issued.

b) Vendor code(s) for which changes are requested, if available with the vendor. c) Any legal document in the vendor’s country which can be used as

documentary evidence towards changes made with notary certificate.

3.9.3.4.4. Documents submitted by vendors shall be reviewed and put up for approval of HOD of Materials Department.

3.9.3.4.5. Approval of competent authority and all supporting documents shall thereafter be provided to Information System (IS) Department in scanned copies to regularize the name change in SAP. Changes made by IS shall be confirmed by Finance in SAP.

3.9.3.5. General notes on Limited Tenders 3.9.3.5.1. Limited Tender Enquiry (LTE) shall be issued to all the approved vendors. In

case for some specific reasons enquiry has to be issued to less vendors, the same shall have to be justified and approval taken from GM.

3.9.3.5.2. Limited tender enquiry shall be issued by registered post / speed post / courier /

e-tendering only. In case e-mail tenders have to be issued, specific approval of HOD of Materials Department with proper justification shall be taken. In case tenders are issued by e-mail, purchasing official shall ensure that the tender is issued to the correct e-mail id.

3.9.3.5.3. Proof of despatch shall be maintained. 3.9.4. Single Tender 3.9.4.1. Single tender should normally be avoided for non proprietary items. 3.9.4.2. Purchase of non proprietary items on single tender basis, will be resorted to only

in the following cases: 3.9.4.2.1. Situations of natural calamities and emergencies declared by the Government 3.9.4.2.2. Emergencies like fire, civil disturbances, war, cyclones, blow out etc. 3.9.4.2.3. Operational break down or exigencies threatening operational disruptions 3.9.4.2.4. Where procurement is possible from a single source only 3.9.4.2.5. Where supplier has exclusive rights in respect of goods and reasonable

alternatives do not exist 3.9.4.2.6. Standard brand items are also permissible on single tender basis provided there

are strong justifications, which shall be recorded in writing. (Please refer the relevant clause given below).

3.9.4.2.7. Where an item has been identified or specified by Process Licensor the nature of item is proprietary of single manufacturer and no other substitute material is acceptable for technical reason.

3.9.4.2.8. Items where procurement needs to be done on selection basis through committee purchases

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3.9.4.3. All single tender non proprietary procurement PRs should give proper justification in line with the above. In order to exercise control on single tender procurement, approval for single tender shall be taken from GM. All single tender procurement cases shall be brought to the notice of Unit Head in the form of monthly MIS or in the form of presentation during monthly reviews.

3.9.4.4. In case it is decided by the indenter to restrict their procurement to a single make

/ model out of various makes / models available in the market, following procedure will be followed:

3.9.4.4.1. Standardization of that specific Brand / Make has to be approved by Unit Head

not below the rank of GM / ED with proper justification for the same. This will be a onetime exercise and will be valid for next two years from the date of approval.

3.9.4.4.2. Subsequently such standardization items can be procured like any other item and

approval for placement of order for standardized item can be taken based upon the mode of tendering (Single / Limited) and number of technically acceptable offers received under relevant DOA.

However, the above shall not be applicable for smaller, low cost, branded items like Odonil, Liquid soap, Toilet rolls, Harpic, Vim powder, Duster etc. that are being used on day to day basis. (Exception given vide Finance Circular F/12/039 Dated 06.09.2010).

3.9.4.5. Those items that can’t be substituted by any other items but to go to the same

manufacturer only for procurement shall be considered as proprietary items e.g. equipment spares, additives etc.

3.9.5. Repeat Order 3.9.5.1. Repeat Order on same terms and conditions may be allowed provided it fulfills

the following conditions: 3.9.5.1.1. That the original order against which Repeat Order is being considered was not

placed earlier than six months. 3.9.5.1.2. That the quantity proposed to be purchased against the Repeat Order is less

than or equal to the quantity originally ordered. 3.9.5.1.3. That there has been no reduction in the market rates of similar material since

the original order was placed. 3.9.5.1.4. That the original order was placed as a result of regular tender enquiry and the

order was placed on techno commercially acceptable lowest offer basis. 3.9.5.2. Repeat Order should be issued only from the original file. 3.9.5.3. More than one Repeat Order can be placed against the same file as long as

aggregate quantity of all Repeat Orders does not exceed original order quantity for a certain line item.

3.9.5.4. Where assigned orders placed on competitive basis are treated as single tender

(as per Circular F/12/025 dtd 8.2.10 and F/12/33 dtd 7.6.10), repeat ordering

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can be made. However, approval for repeat order shall follow the single tender DOP after considering the earlier order also.

3.9.5.5. In case of repeat order proposals, the aggregate value of original order and

Repeat Order shall be considered for determining the approving authority and Finance Concurrence.

3.9.6. Purchase where tendering procedure is not required 3.9.6.1. For value upto Rs. 1,00,000.00 in each case, regular tendering procedure is not

necessary and such items can be procured by the respective department from the market.

3.9.6.2. This option shall not be applicable in case of procurement of asset items.

3.9.6.3. Such procurements can be made by respective departments for direct

consumption without the assistance of Materials Department. In case such materials are required to be kept in Stores, normal procurement procedure shall be followed by Materials Department against receipt of PR from the User Department.

3.9.6.4. In procurements directly by User Departments a procedure shall be firmed up with the approval of respective Unit Head, which will clearly indicate the financial limits upto which the same is allowed but not beyond Rs. 1,00,000.00.

3.9.6.5. It shall be ensured by the Officer responsible for purchasing that the items are being purchased at reasonable prices prevailing in the market.

3.9.6.6. The items should be purchased, preferably, from Govt. owned / state owned

department stores / cooperative stores. 3.9.7. Committee Purchases

Committee purchases shall be resorted to only in exceptional cases such as urgent procurement, procurement of items like uniforms, shoes, furniture, utensils, curtain accessories etc. Committee Purchase may also be done for cases where it is difficult to prepare and compare specification and involves selection by the Indenting Department.

The approved Purchase Requisitions for Committee Purchase should be forwarded by Indenting Department to Materials Department along with duly approved note for Committee Purchase.

Approval for Committee Purchase shall be taken by Indenting Department from their GM. A separate note to this effect containing justification for resorting to Committee Purchase and time period for placement of order shall accompany the PR. The approval note shall also contain nomination of members from Indenting, Finance and Materials Departments. The members shall be nominated by respective HODs and shall form part of the approval note. Committee members shall be as under:

Estimate Committee Members

Upto Rs. 10 Lac Officers in Grade A - C in Materials, User and Finance

More than Rs. 10 Lac D Grade and above Officers in Materials, User and Finance

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The Committee shall collect quotations preferably from minimum three vendors.

In case of urgency or as per requirement, order can be placed by the Committee by taking decision on the spot and the same shall be regularized by taking approval from Competent Authority after the Committee returns to the Headquarters. Alternatively, the order may be finalized after returning to Headquarters and taking approval from Competent Authority as per DOP.

If the order is not finalized within the originally envisaged period, fresh approval of the Competent Authority would be necessary with proper justification/explanation.

3.9.8. Purchase against DGS&D rate/running contracts

It is not mandatory to procure items under DGS&D rate contract. However, the bidder should be asked in the tender to confirm whether the quoted items are covered under the DGS&D rate contract. The following clause shall be included in the tender document (Agreed Terms and Conditions)

(A) The bidder is requested to advise whether they have a Rate Contract for the

same item with DGS&D and if so whether the same could be extended to IOCL.

(B) If response to (A) is “YES”, a copy of the extract of the Rate Contract showing the prices and other terms and conditions including validity of the same should be submitted along with the bid.

Else the bidder undertakes that the price quoted by them is the lower of the DGS&D Rate Contract and the market price.

For obtaining the copies of the Rate Contract, Regional Officers in Mumbai / Chennai / Kolkata or Directorate of DGS&D at New Delhi may be contacted by the various Units of Refineries Division or the details can be downloaded from the Govt. of India official web site (http://dgsnd.gov.in/).

3.9.9. Two Bid System 3.9.9.1. In case where detailed engineering specifications are not worked out by the

Engineering Department or the specifications are not comprehensive / well defined, or the scope involves design work also by the bidder, or the tender estimate is above a threshold value, two bid tendering system shall be adopted. Two bid system of tendering shall be followed where estimated value of the procurement is more than Rs. 50.00 lac. However, two bid system can be followed irrespective of any value limit in case the Indenting / Materials Department deem it in the interest of the procurement.

3.9.9.2. Under two-bid system, the tender enquiry shall clearly specify that the quotations

shall be received in two separate covers one containing all details of the tender viz. specifications, delivery schedule and other commercial terms and conditions except price and the other containing the price. The "Un-priced Bid" should not contain any prices or indication thereof in any manner whatsoever. Both the sealed covers shall be super scribed "Un-priced Bid" and "Priced Bid" as the case may be, along with the tender enquiry number and both the envelopes shall be placed in one single sealed cover super scribed with the tender number. “Un-priced Bid” may also be referred as the “Technical Bid”

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3.9.9.3. Bidders should be asked to submit EMD along with Un-priced Bid. In case of BG, if

these are sent directly by the Bank, a certified copy of the said BG shall be enclosed along with the techno-commercial offer.

3.9.9.4. Price Bids should not be opened until evaluation of the Un-priced Bid has been

completed. Price bid of only techno-commercially acceptable bidders should be opened after seeking approval from the Competent Authority. Approval shall be taken from the authority who can approve ordering but not above the rank of GM.

3.9.10. Single Bid System

In single bid system, offers are invited in single part in a sealed envelope, i.e. both the priced and un-priced parts are clubbed and submitted together by the bidder in a single envelope.

Single bid system of tendering shall generally be followed where estimated value of the procurement is less than Rs. 50.00 Lakh and technical specifications are comprehensive and deviations not envisaged.

3.9.11. Tender Fee

Since majority tenders come under the purview of either Press or e-tendering, soft copies of tender documents shall be downloaded by the bidders hence tender fee shall not be applicable for all tenders.

In case of EPCM procurement also since tendering is done by Consultants on behalf of IOCL, tender fees shall not be applicable.

3.9.12. Issue of Tender documents 3.9.12.1. A Register / record should be maintained for issue of Tender Documents (other

than e-tendering). The names of the parties to whom the Tender Documents are issued will be entered in this Register. The Register will contain the following information:

Tender number with due date

Name & address of the party to whom Tender Documents are issued Remarks 3.9.12.2. No tender papers shall be issued after the last date prescribed for the issue, as

given in the tender notice, unless the same is extended. 3.9.12.3. Tender document can be issued in electronic format in order to avoid printing and

handling of voluminous tender document. However the document to be submitted should be printed set duly signed by the bidder.

3.9.12.4. In case of Open Tender, which consists of document of classified / secret nature,

pre-qualification of the bidders should be done in the first stage of the tender. Along with the Pre Qualification criteria the bidder shall also be required to submit a signed copy of the Secrecy / Non Disclosure Agreement before the tender document is issued. Once the bidders are pre-qualified and signed NDA / Secrecy Agreement received, complete tenders including classified / secret documents which form part of the tender can be made available to them for submitting their bid.

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3.9.12.5. All tenders are to be mandatorily hosted on the Central Public Procurement Portal of Government of India (please refer Finance Circular no F/12/050 Dated 03.01.2012)

3.9.13. Receipt of Tenders (in case of hard copy bidding) 3.9.13.1. A sealed tender box with two separate locks shall be maintained in a prominent

place in the office in which sealed tenders can be dropped by the bidders. Keys for one lock shall be in the custody of the Purchase Section, while key for another lock shall be in the custody of Finance Department.

3.9.13.2. For voluminous tenders, there should be a separate room with locking facilities for

keeping the tenders since tender box may not have space to contain such voluminous tender documents.

3.9.13.3. Tender received by post upto the prescribed time for closing of tenders as and when received shall be dropped immediately into the tender box. In case of single tenders / proprietary items, due date can be manually modified to read as “ ….or earlier” and can be opened on receipt.

3.9.13.4. The tender box shall be sealed after the time appointed for receipt of tenders. Any tender received after the prescribed time shall be marked with the time and date of receipt by the officer receiving the same and shall be distinctly super scribed as "LATE" or "DELAYED" as the case may be. Delayed tenders are defined as tenders posted on the date prior to the opening of tender but received after tender cut off time. Late tenders are tenders posted on or after the date of tender cut off time.

3.9.13.5. It shall not be necessary for the bidder to return the complete tender document (big Volumes) duly signed as a token of their acceptance of the same while submitting their bid. Instead, the bidder may submit an undertaking along with the Index Page of tender document duly signed to the effect that he has fully read and understood the tender requirements and accepts all terms and conditions of the tender (except for the ones mentioned in the deviation statement) and his offer is in confirmation to all terms of tender.

3.9.13.6. In general, the receipt of tender should be through tender boxes as stated above.

However, in cases where the tenders are required to be submitted by hand, it may be ensured that the names and designation of at least two officers are mentioned in the bid documents. The information about these officers should also be displayed at the entrance / reception of the premises where tenders are to be deposited so as to ensure convenient approach for the bidders.

3.9.14. Opening of Tender (in case of hard copy bidding) 3.9.14.1. On the date and time fixed for opening of tenders, the tender box with two

separate locks shall be opened by the representatives of Purchase Section & Finance Department.

3.9.14.2. After the tender box is opened, all the tenders shall be marked serially. The serial

number shall be given as numerator and the total number of tenders received shall be shown as denominator. For example, if ten tenders have been received the first tender shall be marked as 1/10 and the last tender shall be marked as 10/10. All the envelopes shall be initialed by the officers opening the tender duly marking the serial number.

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3.9.14.3. On opening, the tender papers shall be initialed by the tender opening team in ink. The number of tenders shall be noted on all the pages of the tender. All corrections and cuttings shall be initialed and dated. The corrections and cuttings shall be circled and the total number of corrections on each page shall be noted down at the end of the page. In case there is no correction, the word "no corrections" shall be written at the end of the page. Whenever the bidder has not quoted the rates both in figures and words (as per requirement), this fact shall be mentioned in the face of the Price Schedule while initialing the tender. In case white fluid is used for correction, the same should be recorded at the time of opening of tender along with corrected matter.

3.9.14.4. Vendors present for witnessing of tender opening shall be informed of the names

of participating bidders and EMD details during Techno-commercial bid opening. 3.9.14.5. The procedure to be followed in case any tender received is found in open / torn

condition is given below:

In case tender is opened inadvertently by any IOCL personnel during handling of the tenders or the tender has been received in torn / open condition, the tender should be put immediately in another envelope and sealed by putting signature on the fresh envelope along with old envelope with date and designation, also super scribing the fact on the new envelope. This fact should also be brought to the knowledge of the HOD of Materials Department in writing.

3.9.14.6. However to avoid opening the tender by mistake, all concerned to strictly adhere to the instructions by keeping the Tender Box wherever possible (it may not be possible where size of the tender documents are quite big).

3.9.14.7. In case Tender Opening team finds at the time of opening of tender box that the

submitted tender is in open / torn condition, the members of the Tender Opening team should record and sign on the envelope with date and their designations.

3.9.14.8. Tender opening team shall incorporate the above fact in the tender opening

register and inform all the bidders witnessing the tender opening. 3.9.14.9. In case of two bid system on opening of techno-commercial bid the committee

finds that the price bid envelop is in open / torn condition, the committee should immediately put the price bid in another envelope and seal the new envelope by recording the above fact and the tender opening team should sign on the new envelope as well as old envelope and also mention date with their designations.

3.9.14.10. In case of two-bid system, on the due date of opening, the sealed covers

containing the "Un-priced bid" shall be opened by the Tender Opening team from Purchase Section and Finance Department. The envelope containing the Price Bid should be signed on the top by the Tender Opening team as a token of having received the cover containing the Price Bid. The attending bidders shall be allowed to be present at the time of opening of Un-priced Bid. All other provisions regarding opening of tender shall be applicable in case of tenders under two-bid system also. The sealed price bids shall be kept in a separate box in two locks. The keys for one lock shall be in the custody of Purchase Section while the key for the other lock shall be in the custody of Finance Department. On the day of opening of the Price Bid, representatives of Purchase Section and Finance Department shall follow the stated procedure.

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3.9.14.11. After the tenders have been opened, a statement of offers received shall be

prepared and shall be signed by the tender opening team and kept in the file. 3.9.14.12. In case of Single bid system, EMD cover to be opened first. The demand drafts /

BG received from the bidders against earnest money shall be detached from the tender papers and kept safely by Purchase Section till it is forwarded to Finance Department.

3.9.14.13. In case tenders are invited on behalf of IOCL by Project Consultant, other than

PSU Consultant, opening of price bids to be witnessed by Finance representative of IOCL.

3.9.14.14. Date and time of opening of Price Bid shall be intimated to parties concerned (for

tenders with estimated value more than that specified for public opening) so that the bidders may be present at the time of opening if they so desire.

3.9.14.15. On due date and time of opening of Price Bid, original price bid along with

implication, if any, shall be opened by observing all the procedures of tender opening.

3.9.14.16. The rates as well as the special terms and conditions related with price evaluation

shall be read out in the presence of attending bidders.

3.9.14.17. Price Bids of techno-commercially acceptable bidders shall only be opened. In case of partially acceptable bids, prices of only acceptable line items shall be read out.

3.9.15. Witnessing of Tender opening

In case of e-tendering witnessing bid opening has no relevance since bidders can view the same online from anywhere. Wherever bids are invited through hard copies (physical form) for tenders with estimated value above the threshold limit for e-tendering, witnessing of such tenders shall be allowed. Witnessing of tender opening is not required below the e-tendering threshold limit. Bidders' authorized representative (one representative for each bidder) only shall be allowed to be present at the time of opening tenders. A statement of such bidders shall be prepared and their names and signatures shall be obtained thereon (please refer Annexure-5 for Tender Opening Sheet in case of physical tenders).

3.9.16. Constitution of Tender Opening Team

Tenders shall be opened by the representatives of Materials and Finance Department irrespective of grades.

3.9.17. Tenders received by fax / e-mail / single bid in case of two bid (in case of

hard copy bidding) 3.9.17.1. Offer by fax / e-mail sent by bidder of their own (i.e. against our tender

stipulation of submitting in sealed envelope) and received before due date and time shall be opened by tender opening authorities as per the following procedure:

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3.9.17.2. The tenders so received, in case of single bid system, shall be signed by an officer of Purchase Section and sealed in an envelope super scribing tender number and due date and “e-mail offer/fax offer” as the case may be, and kept along with other tenders.

3.9.17.3. In case of two bid system the offer so received shall be signed by an officer of

Purchase Section and a photocopy of the offer with price portion blank shall be taken and sealed in an envelope marked “Unpriced Bid” and the original shall be sealed in another envelope marked “Price Bid”. Both the envelopes shall be sealed in another envelope super scribing tender number and due date and “e-mail offer / fax offer” as the case may be and kept with other offers.

3.9.17.4. Similar procedure shall be followed for Un- super scribed offers or offers received

in single bid system as against our requirement of two bid system. 3.9.17.5. Fax or e-mail offer can be considered in case of proprietary and single tender

procurements. 3.9.18. Late Tenders 3.9.18.1. Delayed Tenders / Late Tenders will not be opened but will be kept intact and

should be indicated in the Tender Opening Register / record and also incorporated in the proposal leading to approval.

3.9.18.2. In case the bidder whose offer has been received late, has attached any Bank

Draft or original Bank Guarantee towards EMD with his tender, the unopened tender envelope may be returned intact to the bidder, against request of the bidder, after recording on the envelope the date and time of receipt of the tender, without waiting for finalization of tender. A photocopy of the envelope cover should be kept in the file and necessary evidence of having returned the envelope should also be maintained in the file.

3.9.18.3. In all other cases even without request from the bidder(s), Late Tenders shall be

returned to the respective bidders in as received condition after finalization of the tender, after recording on the envelope the date and time of receipt of the tender. A photocopy of the envelope cover should be kept in the file and necessary evidence of having returned the envelope should also be maintained in the file.

3.9.19. Invalid Tenders and tenders liable for rejection

A Tender is liable for rejection in the following circumstances:

i. Does not pay the EMD before deadline ii. Does not fulfill minimum pre qualification criteria as per the Tender Documents iii. Submits the tender late i.e. after due date and time iv. Unsolicited tenders v. Stipulates the validity period less than what is stated in the Tender Documents vi. Stipulates his own conditions and does not agree to withdraw the deviations,

rendering his bid unacceptable vii. Does not disclose the full names and addresses of all his partners or Directors as

applicable wherever called for in the tender. viii. Does not fill in and sign the required annexures, specifications, etc. as specified in

the tender.

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ix. Does not submit bid in the prescribed format making it impossible to evaluate the bid x. Indulges in tampering of tender documents xi. Does not conform to any tender condition which stipulates non-conformance of

tender conditions as a rejection criteria 3.9.20. Cancellation of Tender

In order to maintain uniformity in the procedure, whenever any tender is to be cancelled / annulled, approval to be taken for such cancellation indicating the reasons. Finance concurrence should be obtained for such cancellations. In case cancellation is on account of commercial issues the approving authority should be the same authority who has approved the proposal for floating of tender. In case cancellation is on account of technical issues (including inability to justify quoted prices compared to estimate), the approving authority shall be PR approving authority. Cancellation note shall be duly concurred by Finance.

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CHAPTER - IV

EVALUATION AND ACCEPTANCE OF TENDERS 4.1. Purchase File

A Purchase File shall normally consist of two parts namely “notes portion” and “correspondence portion”. The “notes portion” shall contain internal (IOCL) notings pertaining to the case and “correspondence portion” shall contain all the issued and received correspondence including tenders. Every page in the “notes portion” of the file shall be consecutively numbered.

4.2. Technical & Commercial Queries 4.2.1. Procedure in case of Single Bid System:

No techno – commercial clarification having direct or implied financial implication shall be permitted with bidders. It is advisable to issue Single Bid Tenders as “Zero Deviation” bids.

4.2.2. Procedure in case of Two-Bid system: 4.2.2.1. After opening of the un-priced bids, the offer shall be scrutinized technically by the

Indenting Department and commercially by the Purchase Section.

4.2.2.2. Techno-commercial clarifications shall be obtained from the bidders and, wherever necessary, offers shall be brought at par through discussions and correspondence. Technical and / or commercial clarification shall normally be taken not more than two times and decision will be taken based on the documents and information available with IOCL. If the clarifications are still not clear or there are unacceptable deviations, the offer may be rejected.

4.2.2.3. Reasonable time should be given to the parties depending upon the nature of

items involved for seeking technical details / clarifications. To expedite evaluation, normally the correspondence shall be done via electronic media.

4.2.2.4. In case of e-mail correspondence, the queries and clarifications should be on the

body of the e-mail (and not as attachments). In case of attachments, only signed and scanned attachments shall be accepted.

4.2.2.5. Before giving final technical recommendation, all technical points to be sorted out

from vendor through Purchase Section. Indenting Department shall not directly take up the matter on technical clarification with the vendor. However, in the interest of faster finalization of the technical recommendation, with the specific approval of DGM, Indenting Department may take-up with vendors on technical points keeping copy of communications / MOM / reply etc. in the file. In such cases Indenting Department shall ensure that no price implication is sought from bidders. Price implication, if required, shall be communicated to Purchase Section and taken by them.

4.2.2.6. If there are at least three technically and commercially acceptable bids without

the need of seeking any clarifications from them on opening the Un-Priced Bid then there shall be no need to raise TQ/CQ to the non compliant bidders and the file may be processed based on available information.

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4.2.2.7. In case of any substantial change, re-bidding is desired. For minor clarifications after Un-Priced Bid opening, communication may be sent to all the bidders who have submitted their offers. However, the same should be clearly brought out in the recommendation for Price Bid Opening / Award proposal.

4.2.2.8. Changes in the material specification / scope of work etc. should be minimized as

far as possible and should be totally avoided after opening of the price bid. 4.2.2.9. TQ / CQ shall indicate whether price implication is permitted or not. Supplemental

letters for revision in prices received from bidders shall be considered for evaluation only in those cases where the revision in the price is asked for by IOCL based on changes in specification / scope of work / commercial terms and conditions.

4.2.2.10. Normally, wherever required, bidders shall be asked to submit price implications.

However, in case it is imperative to take revised price bid instead of price implication, approval shall be taken from order approving authority not above the rank of GM and both the original and revised price bids shall be opened.

4.2.2.11. Rejection of offer on techno-commercial basis should be got approved from the

competent authority with whom the approval of the tender rests but not above the rank of respective GM.

4.2.2.12. Where there is no technical rejection, technical recommendation duly endorsed by concerned HOD can be accepted. Technical Bid Analysis or Evaluation (TBA / TBE) shall be signed by an Officer of Indenting Department and form part of the technical recommendation. A list of acceptable deviations shall be indicated.

4.2.2.13. Normally the payments on account of statutory levies i.e. Excise Duty, Sales Tax

etc. are payable extra based on documentary evidence for which existing applicable rates should be indicated by the bidders.

4.2.2.14. Offer can be rejected on grounds other than technical reasons, in case some facts

have come to the light of the capability of the party after the issue of the tender, prior to issue of order with the approval of GM.

4.2.2.15. In case of procurement of items through Buy-Back offers following procedure

should be followed:

i. Approval for the procurement of the item should be taken on gross value without considering the deduction/discount allowed for taking back the old condemned item and delegation of authority to be decided accordingly.

ii. Approval for disposal of old items and consequential write off value for the losses on the disposal to be taken from the competent authority.

iii. Cenvat credit availed on the goods disposed to be reversed as per rule 3(5) of Cenvat Credit Rules.

4.2.2.16. Whenever a bidder make a request for assigning the Purchase Order in favour of

its sister firm or associate partner the offer should be considered as single tender and approval taken accordingly. However assigning of orders shall not be allowed where specific PQC has been called for in the tender and the assignee (sister firm or associate partner) is not meeting the PQC.

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4.2.2.17. Suo moto changes shall be treated as per the following matrix. The same should be included in the tender document also

Stage Price Increase Price Decrease

After opening of un-priced bid

Not Acceptable. Bid shall be liable for rejection. Action regarding Holiday Listing may be taken. EMD shall be forfeited

In case of suo moto price decrease:

1. Tender evaluation shall be done without considering suo moto price decrease.

2. Ordering shall be done considering suo moto price decrease.

4.2.2.18. No finance concurrence is required for administrative approval like waiver of EMD,

extension of due date, waiver of press tendering etc.

4.2.2.19. Commercial Bid Analysis (CBA), which is a tabulation of commercial terms and conditions, shall be signed by an officer of Purchase Section. Finance official shall also sign the CBA for cases requiring Finance Concurrence as per DOP.

4.2.3. Additional Procurement Procedure for case with estimated value Rs.5 cr

and above: The following procedure will be followed in case of tenders with estimated value of Rs.5 cr and above:

4.2.3.1. In case of tenders with estimated value of Rs.5 cr and above, there will be a pre-

price bid conference with technically acceptable bidders wherein all the commercial aspects will be fully clarified to the technically acceptable bidders. However, in case there is no commercial deviation, approval for waiver of Pre Price Bid meeting shall be taken from GM.

4.2.3.2. No technical issues shall be raised / discussed by either side during Pre Price Bid meeting.

4.2.3.3. Based on discussions in the pre-price bid conference, deviations, if any, from tender terms and conditions shall be communicated in writing to all the bidders and they shall be asked to submit price implication when substantial changes are made after taking into account the modified terms and conditions including deviations, within stipulated period. It should be clearly mentioned to the bidders that if they take any further deviations, their offer shall be rejected outright. Price implications received after the stipulated date are not to be considered. Bidders unable to comply with IOCL’s terms and conditions including proposed deviations will be allowed to withdraw.

4.2.3.4. If a bidder takes any further deviations other than those agreed, while submitting

the revised price bids, its bid shall be rejected outright without any reference. In case it is found after opening that any deviation is incorporated in the revised price bid, bidder is also liable to be placed on holiday for a period of one year for future tenders in IOC after following the laid down policy in this regard.

4.2.3.5. These terms and conditions should be made known to the prospective bidders as

part of Tender Document.

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4.2.4. Procedure for loading deviations to tender conditions 4.2.4.1. Loading and evaluation criteria shall form part of the tender document. 4.2.4.2. The commercial conditions put forward by the bidders in case of single bid

system and after CQs in case of two bid system shall be loaded as indicated in the tender document.

4.2.4.3. Loading and ordering shall be done on FOT Despatch Point basis for Indian

vendors and FOB Port of Exit basis for Foreign vendors.

4.2.4.4. Foreign bids shall be compared considering Bill Selling Rate released by SBI on the date of PBO.

4.2.4.5. Price Variation Clause (PVC)

Bidders asking for Price Variation Clause (PVC) have to quote a ceiling for the same. Ceiling shall be loaded for evaluation purpose. Offers received without any ceiling shall be rejected unless all the bidders have asked for the same PVC without ceiling. If well defined and workable PVC can be established, the same should be made part of the tender documents, wherever required. Where IOCL gives PVC in the tender it may be with or without ceiling. Reasons for not indicating ceiling shall be indicated in approval note for such tenders.

4.2.4.6. Price Adjustment clause on account of delay in delivery

This clause shall be as per Cl. 12 of IOCL’s GPC. The exceptions are given in a) and b) below:

a) In case of package items (ordered as a complete system), the price adjustment shall be applicable on the entire order value of that package and not on the value of the undelivered portions (even though a billing breakup has been approved for the package).

b) In case of purchase of bulk items where tolerance limit is specified (e.g. pipes,

cables, steel etc.), price adjustment clause shall be applicable on the actual quantity supplied, within the tolerance limit, instead of Purchase Order quantity.

The difference between the quantum as per GPC and that offered by the bidder shall be loaded. For non-acceptance of this clause or for accepting Liquidated Damage, loading of 5% shall be done. In case the clause as per IOCL GPC is accepted but with maximum limit indicated as 5% of undelivered order value, loading of 2.5% shall be done.

4.2.4.7. Payment Terms

The applicable payment terms should be clearly indicated in the tender documents and bidders should be informed that if they take deviations to the specified payment terms, loading for interest implication at 1% higher than IOC's cash credit account rate applicable on the date of issuance of tender document which shall be mentioned in the tender documents. Following period shall be considered for loading in case of deviations:

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i. Drawing approval – 80% of the delivery period. ii. Receipt of raw materials at Supplier’s works – 50% of the delivery period. iii. Final 10% payment also against dispatch – 30 days

4.2.4.8. Specific Discount

This option should be considered while preparing comparative statement. Suo moto discount shall be treated in line with the guideline given in this manual.

4.2.4.9. Discount for prompt payment

This should be ignored. 4.2.4.10. Variation in operating cost

Wherever operating costs are required to be assessed while evaluating the offers of the parties, the basis of evaluation of operating cost must form part of tender documents. Wherever variation in the power consumption to be loaded, incremental cost of power consumption to IOC to be considered. The incremental power consumption should be based on cost sheet of previous year for fuel and other utilities. Maximum Limit should be prescribed. In all cases of technical loading, there shall be a corresponding clause on penalty in case of not meeting the guaranteed parameters. The parameters used for calculating the loading component shall be the same as those used in calculating the penalty amount. Technical loading and penalty shall ordinarily be limited to maximum of 10% of the capital cost.

This document shall be prepared by the indenting department along with the PR. Loading shall be done only in cases where parameters can be clearly measured.

4.2.4.11. CENVAT benefit

For the purpose of evaluation of offers, Cenvat benefit on account of Excise Duty / CVD / SAD / Service Tax is to be considered. No VAT benefit shall be considered for evaluation of offer.

4.2.4.12. Evaluation of tender for procurement of common chemicals / catalysts

supply (please refer Finance circular F/12/28 dated 05.04.2010)

While evaluating the offers of common chemicals / catalysts which are meant for use of manufacture of both dutiable and exempted products (LPG for domestic, SKO for PDS, LSHS / Naphtha / FO for fertilizer) CENVAT credit admissibility should be considered in comparative statement while evaluating the tender. As CENVAT credit on these common chemicals / catalysts are admissible on pro rata basis, any evaluation without considering CENVAT credit may lead to incorrect evaluation if one party is giving Cenvat invoice while others are not giving on the same common chemical /catalyst. Further since the percentage of dutiable goods clearance vary from month to month in each refinery; overall percentage of last financial year (to be provided by Finance) can be used for pro-rata credit on these chemicals / catalysts in the year of evaluation of bids.

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4.2.4.13. Royalty Inflow

In case of any benefit to IOC R&D for the usage of IOC R&D formulations by the bidder in the form of royalty, such royalty inflow net of prevailing taxes / surcharges, should be deducted from the quoted price as specified in the tender documents.

4.2.4.14. Freight components

Bidders shall be asked to furnish firm freight charges in their offer. In case bidder does not submit the same and mentions “Freight to pay”, freight loading shall be done considering the higher of the following two options: a) fixed reasonable percentage / absolute value that shall be decided by

individual units

b) maximum prorated (on the basis of distance) freight quoted by any other bidder against the same tender

After Loading, if the same Bidder becomes L1 (lowest) then the order will be placed based on Freight Charges payable extra at actual subject to maximum freight charges by which the prices of the L1 bidder has been loaded. When a bidder does not mention anything about the freight component, the same shall be considered as “nil” and to this extent, a clause shall be indicated in the Agreed Terms and Conditions or elsewhere in the tender document, as the case may be. Where bidder has quoted firm freight charges, documentary evidence of freight is not required. Vendor shall be paid as per the percentage / lump-sum freight quoted by them.

4.2.4.15. Taxes & Duties

When a bidder does not mention Taxes & Duties, the same shall be considered as “Borne by vendor” and to this extent, a clause shall be indicated in the Agreed Terms and Conditions or elsewhere in the tender document, as the case may be.

4.2.4.16. Inspection charges

When a bidder does not quote inspection charges in spite of having been stipulated in the tender document to indicate inspection charges, the same shall be considered as “nil” and to this extent, a clause shall be indicated in the Agreed Terms and Conditions or elsewhere in the tender document, as the case may be. Documentary evidence of Inspection Charges is not required. Vendor shall be paid as per the percentage / lump-sum charges mentioned in the Order.

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4.2.4.17. Components / spares / accessories

If a vendor does not quote for some components / spares / accessories specifically indicated in the tender for consideration along with the main equipment, the same shall be considered as “free supply” and to this extent, a clause shall be indicated in the tender document.

4.2.4.18. Performance Bank Guarantee (PBG)

4.2.4.18.1. Performance Bank Guarantee shall be normally furnished for 10% of order value

unless otherwise specified in the tender documents.

4.2.4.18.2. In case of Rate Contracts lined up by Central Procurement Cell (CPC), PBG shall be applicable as under: Part-1) 2% of the value of rate contract shall be submitted at RHQ valid for ARC period + delivery period + six months Part-2) 8% of the individual call up order value shall be submitted at Ordering Unit valid as specified in the tender.

4.2.4.18.3. In case of Rate contracts lined up by CPC if the vendor offers to submit one time single PBG of 10% of the Rate contract value at RHQ, the same shall be acceptable and treated at par with distributed PBG (2% RHQ and 8% Unit).

4.2.4.18.4. In case of change in the order value due to an amendment, the PBG value shall be proportionately changed.

4.2.4.18.5. For the Rate Contract items where prices are variable, PBG shall be submitted by vendor for the amount of Call-Up PO. Quantity tolerance and escalation due to price variation clause shall not be considered for PBG.

4.2.4.18.6. In case bidder does not agree to submit PBG as per tender requirement, 10% loading shall be done. In case PBG is agreed for less than 10%, loading shall be done for the differential amount.

4.2.4.18.7. Performance Bank Guarantee need not be taken for spares of proprietary nature, stationery and computer consumables.

4.2.4.18.8. PBG shall not be applicable in case tender estimate is less than Rs. 25 Lac. However, this exemption shall not be applicable for equipments and packages. The requirement of PBG shall be clearly indicated in the tender document.

4.2.4.18.9. Mobilization and Milestone Advance payments shall be released to the vendor

only after submission of PBG, if applicable.

4.2.4.19. Transit Insurance

In case insurance charges are extra and to be covered by IOCL, a nominal loading of 0.5% shall be done for evaluation. In case the bidder quotes insurance charges inclusive, its bid shall still be loaded by this amount for evaluation purpose.

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4.2.5. Price Negotiation 4.2.5.1. Price Negotiations with the bidders shall not be conducted as a matter of routine. 4.2.5.2. It should be clearly mentioned in tender documents for information of bidders that

“Negotiations will not be conducted with the bidders as a matter of routine. However, IOCL reserves the right to conduct negotiations.”

4.2.5.3. Negotiation shall be done with Finance concurrence and approval of at least GM

4.2.5.4. Negotiations can be done in any of the following cases: 4.2.5.4.1. In case of open or limited tenders, where number of technically acceptable

offers received is less than three and where quoted price of L1 bidder is more than 10% of estimate after review of estimate.

4.2.5.4.2. In case of single tender (proprietary and non proprietary) procurement where the estimate is based on budgetary offer and in other cases where the offer is more than 10% of the estimate.

4.2.5.4.3. In cases where number of parties is limited and estimate is not based on in-

house data viz. selection of licensor / technology

4.2.5.4.4. In case rates quoted by the lowest bidder (L-1) are Abnormally High rate (AHR) for certain items

4.2.5.4.5. In case of high value tenders (even if quoted price is within 10% of

departmental estimate) 4.2.5.4.6. Negotiation can also be conducted in case of items where procurement is

sourced from more than one source for reasons of continuity in supplies in case one party fails or due to the fact that L-1 cannot meet entire requirements etc. In this case negotiations can be held with L-2, L-3 etc. for matching rates of L-1.

4.2.5.5. In case of negotiation, the party should be asked to give the revised reduced rate

or a percentage reduction from the original amount. No new condition by the bidder should be permitted during negotiation.

4.2.5.6. Unless otherwise specified in the note leading to approval for holding price

negotiation, negotiation shall be conducted by Tender Committee considering the value of the order and level of officials shall be as per TC constitution based on value of procurement.

4.2.5.7. All communications to bidders for negotiations should be sent by Registered Post /

Speed Post / Fax / Courier / Email. In case of local bidders, the same can be delivered by hand after obtaining dated signatures of the bidders. Reasonable time should be given to the bidders to attend the negotiation.

4.2.5.8. The record of negotiations at all stages shall be kept and shall be signed by all the

participants. 4.2.5.9. In case lowest party backs out before the Purchase Order is placed or before the

execution of the work order, there should be re-tendering in a transparent and fair

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manner. In such cases, negotiation should not be held with the next lowest party. The Authority may, in such a situation, call for a limited or short notice tender if so justified in the interest of the work and take a decision on the basis of the lowest tender.

4.2.5.10. In order to avoid delays, negotiations through email / teleconference / video

conference shall also be acceptable for agencies who are stationed at a distant place or from abroad with specific approval of GM. In such case, negotiation committee shall prepare a discussion note and signed by all committee members. The discussion should be confirmed over fax / letter from the bidder before finalizing the contract.

4.2.5.11. If the lowest bidder fails to reduce the price to an accepted level, re-tendering is

to be done if time permits. Otherwise, order may be placed by recording justifications.

4.2.6. Validity of offer 4.2.6.1. Sufficient period for the validity of the rates quoted by the bidders shall be

prescribed in the tender documents. Normally a validity for four months shall be sought which can be modified depending upon specific tender requirement.

4.2.6.2. In case of items where prices are normally varying at a faster pace, long validity period is not desirable.

4.2.6.3. It must be ensured that validity is as per tender documents and the issue should be

sorted out along with the commercial terms and conditions before opening of price bid. If the party does not give validity as desired, his price bid need not be opened. However, based on merits of the case, such as single offer or poor response, the same may be considered but the justifications for such consideration should be recorded in the approval note.

4.2.6.4. The tender documents should state that on account of exigencies, in case bids have

to be revalidated before PBO beyond the originally sought validity, the same may be allowed with or without change in prices. However, IOCL reserves the right to cancel such tender and refloat the same.

Such price implications may be allowed only with the approval from HOD of Materials Department with justification. However should the situation warrants, the tender can be cancelled and refloated with approval from competent authority.

4.2.6.5. After opening of the price bids, in cases where validity extension is required, the same may be sought from only the lowest bidder.

4.2.7. Recommendation for placement of order 4.2.7.1. After opening of the Price Bids, Price Comparative Statement (CS) shall be made

by Purchase Section. Price evaluation shall be done based on the defined evaluation and loading philosophy.

4.2.7.2. CS shall be signed by an officer of Purchase Section and Finance concurrence shall be done for cases requiring Finance Concurrence as per DOA.

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4.2.7.3. For all cases falling within Tender Committee (TC) purview, the CS will be first forwarded in file to Finance Department for checking. The officer of Finance Department shall check and, if found correct, sign the CS and return the file to Purchase Section for submitting for TC consideration.

4.2.7.4. While recommending the acceptance of tenders, apart from other relevant points mentioned elsewhere in this manual Purchase Section shall also consider the following points over and above the comparative rates of the bidders:

4.2.7.4.1. In case it is recommended by the Tendering Department to accept a tender

which is other than the lowest, reasons & justification for rejecting each of the lower tenders shall be recorded in writing.

4.2.7.4.2. In case the prices quoted by the lowest bidder are below our estimates by more

than 20%, estimate to be reviewed first and workability certified.

4.2.7.4.3. If the indenting Department considers the L1 prices workable, then the quoted price may be considered for placement of order.

4.2.7.4.4. If certified unworkable by Indenting Department, bidder shall be called for

justification and workability of quoted rates by Materials Department on the recommendation of Indenting Department following the approval process as in the case of price negotiation. Bidder’s response shall be reviewed by the Indenting Department for workability. In case the price is then considered workable, order shall be placed on the lowest evaluated price. In case the price is found unworkable, approval of the Competent Authority of Indenting Department with whom the powers for the approval of the contract rest not above the rank of GM should be obtained for rejecting such line item. Bidder will still be considered for other items in its offer. In case a line item is declared unworkable the next lowest bidder for that line item shall be considered to be lowest or single as per DOP clause considering the number of remaining offers for that line item.

4.2.7.4.5. The TC recommendation / Recommendation for Award (RFA) shall be made as

per the approved proposal format to ensure that none of the points is missed while making the proposal.

4.2.7.4.6. Supply and site work should be separately identified and ordered as separate

line items for clarity and taxation purpose. 4.2.7.4.7. It should be ensured that wherever the proposal requires the approval of

Director / Chairman / Board of Directors, a checklist type proposal is sent along with a brief write-up / summary of the proposal to be enclosed while forwarding the proposals for approval. It is better to follow such checklist in all cases. Please refer Annexure-6 for check list for forwarding proposals required approval of D (R) / Chairman / Contracts Committee of Board of Directors / Board of Directors.

4.2.7.4.8. Please refer Annexure-7 a for Price Bid Opening format and Annexure-7 b

for PO proposal format.

Wherever the proposal requires the approval of Board / Committees, the guidelines for preparing the agenda items shall be as per Annexure-8.

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4.2.7.4.9. Review of already approved techno-commercial evaluation should be avoided. However, in exceptional circumstances, the review may be taken up with full justification with the approval of Unit Head.

4.2.7.4.10. In case the vendor has been put on Holiday List of the Corporation, the bid of

such vendor shall be rejected, even if the vendor had been declared ‘qualified’ in the techno-commercial evaluation.

4.2.7.4.11. GPC deviations taken by the bidder can be accepted with the approval of GM

with Finance Concurrence. 4.2.7.4.12. Comparison with estimate shall be done only in case where the number of techno‐

commercially acceptable offers is less than 3.

4.2.7.4.13. In case a bidder does not accept Part Order condition or gives conditional acceptance of Part Order, its price bid shall still be opened. In case the bidder is lowest for all items or meeting the part order condition, order shall be proposed on that bidder. In case not meeting the part order condition, the bidder’s offer shall be commercially rejected for the entire tender or specific line item depending on the part order condition. DOP shall be taken accordingly. In such case the next lowest bidder shall become the lowest bidder.

4.2.7.4.14. Sometimes the per diem charges quoted by vendor for installation are very

high, in such cases efforts should be made by IOCL / its representatives to verify and confirm reasonability of per diem charges.

4.2.8. Finance Concurrence: 4.2.8.1. After the proposal is scrutinized and found acceptable, finance concurrence shall

be recorded for the proposal having value above the limits specified as per DOA. 4.2.8.2. After the tender papers along with the recommendations have been received in

Finance, the same shall be scrutinized with a view to see that the procedural instructions have been complied with in general. Particular attention shall be paid to the following points:

4.2.8.2.1. That the work has been administratively approved and detailed estimates

sanctioned by the competent authorities. 4.2.8.2.2. That the mode of tendering adopted is in accordance with the general

instructions in this regard or any specific relaxations made by the competent authority.

4.2.8.2.3. That the tenders have been opened as per guidelines and (in case of hard copy tenders) are signed by the officers having opened these tenders. There should be no unattested cuttings and alterations.

4.2.8.2.4. To ensure that all tenders received in time are incorporated in the comparative statement correctly and the additional conditions quoted by the tenders have been evaluated in financial terms so as to bring the tenders at par for the purpose of comparison.

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4.2.8.2.5. That the proposal is made for the lowest acceptable tender and in cases where it is proposed to accept a tender other than the lowest, reasons are recorded for ignoring the lower offers and the same are justifiable.

4.2.8.2.6. That the proposed terms and conditions are clear, unambiguous and with adequate financial safeguards.

4.2.8.2.7. In cases where negotiations have been carried out, the same have been done after the approval of the competent authority and record of negotiations at various stages as signed by the participants has been kept.

4.2.8.2.8. That the value particulars shown in the CS are correct. The value put up for the approval should include all costs, duties, taxes, freight, etc payable by owner.

4.2.8.2.9. It is to be ensured that wherever any decisions are taken by overriding the comments already available on record, the appropriate clauses of the Manual and the Circular reference shall be given by the authority who is overriding or revising the earlier findings available on the record especially where issues deserve retendering but due to paucity of time, the tender is to be finalized without any retendering.

4.2.8.2.10. It is to be ensured that no unsolicited loading in the price bid is done without the proper approvals and documentation.

4.2.8.2.11. It is to be ensured that cost estimation should be as comprehensive as possible to provide proper yardstick for assessment of reasonability of quoted rates.

4.2.8.2.12. It is to be ensured that the instructions issued by Government of India from time to time regarding the purchase preference available to MSEs are adhered to.

4.2.8.2.13. It is to be ensured that rules regarding the splitting of the contract are followed

4.2.8.2.14. It is to be ensured that wherever Indian agents are involved, registration of the agent should be ensured before finalizing the order.

4.2.9. Tender Committee (TC) 4.2.9.1. Proposals above Rs.10 Lac shall be put up for consideration by the Tender

Committee. Tender Committees will consist of three members i.e. the Convener from Materials Department, Finance member and a member from the Indenting / User Department.

4.2.9.2. TC consideration and recommendation is not required in following cases:

i. In respect of proposals received from consultants for projects ii. Single tender procurements iii. Repeat Order proposals iv. Lone offer received against limited or open tender enquiry

4.2.9.3. In case of Lone techno commercially acceptable offer, despite having received more

than one offer, TC recommendation shall be required

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4.2.9.4. Financial limit, set forth for constitution of Tender Committee, is as under:

Sl. No

Estimate in case of PBO and Total Landed Cost in

case of RFA

Designation of TC signatory

1 Rs.10 Lac to Rs.20 Lac Accounts Officer Officers in Grade B from Materials Department and Indenting / User Department

2 Above Rs.20 Lac to Rs.250 Lac

Sr. Accounts Officer Dy Manager from Materials Department and Indenting / User Department

3 Above Rs.250 Lac to Rs.500 Lac

DFM Manager from Materials Department and Indenting / User Department

4 Above Rs.500 Lac FM Senior Manager from Materials Department and Indenting / User Department

4.2.9.5. Wherever particular grade officer is not available, the next higher grade officer will

represent the Tender Committee.

4.2.9.6. The recommendations of the tender committee shall be concurred by Finance (by an authority not lower than the Finance representative in T.C.) irrespective of the fact that the T.C. member happens to be the concurring authority for approval of the proposal.

4.2.9.7. For tenders requiring TC consideration (based on estimated value) PBO approval

shall also require TC recommendation, Finance Concurrence and approval of competent authority.

4.2.9.8. TC meeting minutes shall be prepared and signed by all the TC members. The TC

minutes shall be recommendatory in nature and the proposals shall be put up to the competent authority for approval with signature of all TC members on all the pages.

4.2.9.9. TC shall make conclusive recommendations for the approving authority and all

members of the Committee shall be jointly responsible for the recommendations made. Difference of opinion, if any, will be specially recorded and brought out in the proceedings.

4.2.9.10. Standard TC formats for Price Bid Opening proposals and Purchase proposals shall

be as given in Annexure-7 a and Annexure 7 b respectively. 4.2.9.11. The following are the specific responsibilities of the TC Members: 4.2.9.11.1. To ensures that tenders are evaluated as per laid down procedure

4.2.9.11.2. To ensure that the Comparative Statement has been prepared, checked and

signed by officials of Purchase Section and Finance Department

4.2.9.11.3. To recommend the proposal for the approval of competent authority as per DOA.

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4.2.9.11.4. To sign all the pages of TC minutes

4.2.9.11.5. To ensure that TC minutes are in proper format and all the relevant information are given in the TC Minutes.

4.2.10. Bank Guarantees (BG) 4.2.10.1.1. Bank Guarantees shall be as per IOCL format. These formats should be made

part of the tender documents so that deviations, if any, can be resolved prior to placement of order.

4.2.10.1.2. BGs less than Rs. 1 cr may be accepted from any scheduled bank (including

nationalized banks, other scheduled commercial banks, scheduled cooperative banks and scheduled regional rural banks) as appearing in the Second Schedule to the RBI Act 1934.

4.2.10.1.3. BGs of Rs. 1 cr and above may be accepted, which is issued by any of the

following Banks:

1. Allahabad Bank 2. Bank of Baroda 3. Bank of India 4. Bank of Maharashtra 5. Canara Bank 6. Central Bank of India 7. Corporation Bank 8. Indian Bank 9. State Bank of Bikaner & Jaipur 10. State Bank of Hyderabad 11. State Bank of India 12. State Bank of Mysore 13. State Bank of Patiala 14. State Bank of Travancore 15. UCO Bank 16. Union Bank of India 17. United Bank of India 18. Vijaya Bank 19. Andhra Bank 20. Dena Bank 21. IDBI Bank 22. Indian Overseas Bank 23. Oriental Bank of Commerce 24. Punjab & Sind Bank 25. Punjab National Bank 26. Syndicate Bank 27. ICICI Bank 28. HDFC Bank 29. Kotak Mahindra Bank 30. South Indian Bank 31. Federal Bank 32. Exim Bank 33. ING Vysya Bank 34. Axis Bank

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35. Yes Bank 36. Citi Bank n.a. 37. HSBC Bank 38. Deutsche Bank ag 39. Bank of America n.a 40. Royal Bank of Scotland 41. BNP Paribas 42. Bank of Nova Scotia 43. Bank of Tokyo-Mitsubishi UFJ Ltd. 44. Mizuho Corporation Bank Ltd 45. Barclays Bank Plc 46. ANZ Bank 47. JP Morgan Chase Bank 48. Standard Chartered Bank 49. DBS Bank 50. First Rand Bank

4.2.10.1.4. BGs from any bank other than above can be accepted only if the same is

counter-guaranteed by any of the above 50 banks.

4.2.10.1.5. The rating of bank sanctioning the BG should not fall below the rating of 'A' from Moody's or equivalent (from other rating agency) in case of foreign bank and rating of at least 'AA' from CRISIL or equivalent (from other rating agency) in case of Indian banks during the tenor of the BG. In case the rating falls below threshold level at any time during the tenor of BG, the party will arrange to replace the BG, at its own cost, through any of the bank acceptable to IOC.

4.2.10.1.6. In case there is failure on the part of the vendor and it is intended to encash

the BG or extension is otherwise necessary, the concerned personnel in Materials Department shall write by registered post / speed post / courier to the Bank for extension of validity of the BG or encashment thereof as the case may be at least 30 days before the expiry date of the relevant BG as per the enclosed proforma (Annexure-9). Local Finance Department shall be consulted and kept informed.

4.2.10.1.7. In case a BG whose validity is to expire within 30 days, no payment due to the

vendor on any account of that order shall be released by Finance unless the BG is extended / encashed except with the approval of the Head of the Unit in exceptional cases, the reasons for which will be recorded by the concerned Materials Department for making such payment.

4.2.10.1.8. When the BGs are no more required in terms of contractual stipulation, the

expired BG shall be returned within 90 days by Finance to the Bank under intimation to the vendor and Materials Department.

4.2.10.1.9. Finance shall maintain record of BGs with them and inform the concerned

department regarding BGs that are due for expiry within the next 3 months.

4.2.10.1.10. In case it is decided to encash BGs of PSU due to non-performance / poor performance, matter should be taken up with the concerned PSUs indicating clearly our intention for encashment of the BG. Pending settlement of dispute,

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it is to be ensured that the concerned PSUs should keep the BG adequately valid.

4.2.10.1.11. Please refer Finance Circular F/12/56 dtd 06.09.2012 for other provisions

regarding Bank Guarantees.

4.2.11. Letter of Acceptance (LOA) / Fax of Acceptance (FOA) 4.2.11.1. After a tender is accepted by the competent authority, Purchase Section shall

issue an LOA / FOA. The letter of Acceptance shall indicate a reference to the vendor’s offer. This should be concurred by Finance before issue for more than the amount specified in DOA.

4.2.11.2. LOA / FOA is issued to covey our acceptance of the selected vendor’s offer within

validity and it shall be a firm commitment. Salient terms shall be indicated in addition to the amount.

4.2.11.3. Issuing of FOA / LOA is not mandatory and instead SAP Purchase Order can straight away be issued.

4.2.11.4. A sample format is enclosed as Annexure 10 4.2.12. Free Issue of Materials (FIM)

The issue of materials to the contractors / vendors shall be governed by the provisions of General Purchase Conditions and special conditions (if any). The materials can be issued to the contractors / vendors under following conditions:

When it is provided in the order that the materials for the execution of PO shall be supplied by IOCL as FIM.

Whenever any material is issued to a vendor / contractor, their acknowledgment along with date shall be obtained on the material issue vouchers giving full particulars of the material and quantity issued.

Proforma of Bank Guarantee to be obtained from vendor for material issued to them is annexed to GPC. Bank Guarantee shall be issued for the total landed cost of Free Issue Materials. In case the materials are issued from inventory, then the book value of the FIM appearing in SAP shall be taken for the Bank Guarantee amount.

4.2.13. Purchase Order: 4.2.13.1. FOA / LOA shall be regularized through a Purchase Order (PO). All POs shall be

prepared through SAP as per PO release strategy and shall be issued under the signature of authorized officer of Materials Department as per DOA.

4.2.13.2. No department other than Materials Department is allowed to sign and issue

Purchase Orders.

4.2.13.3. FOA / Order should specifically ask for order acknowledgement. No further acceptance is required since the order has already been issued in accordance with the vendor’s offer and mutually agreed terms and conditions.

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4.2.13.4. Wherever POs are placed with reference to any agreement (like Licensor Agreement involving supply part), the same can form an attachment to purchase order.

4.2.13.5. Record of Purchase Orders will be maintained by Materials Department. Manual

registers shall be dispended with wherever the information are maintained in SAP. For purchase orders released through SAP on line release system, signed hard copy of PO is not required for further processes of GR and Payments. Accordingly, copy of POs will not be distributed amongst any internal users.

4.2.14. Billing Breakup

4.2.14.1. In some packages or equipments where it is not possible for the vendor to

despatch all the materials as a single consignment and Indian Oil has agreed to make prorata payments to facilitate part despatch and / or part payment the vendor shall submit a billing breakup within a specified time for approval of Indian Oil.

4.2.14.2. Maximum number of invoice, for payment purpose, against a billing breakup shall be fixed while taking approval for billing breakup. Payment against Billing Breakup shall be made upto 90% of the payment due against dispatch. Beyond that, payment shall be made only after completion of the entire supply. The same shall be indicated in the tender document and also in the approval note of the billing breakup.

4.2.14.3. Billing breakup shall indicate item-wise or lot-wise dispatch plan consistent with site requirement. The Billing breakup shall be reviewed by Indenting / User Department for despatch schedule and rate breakup.

4.2.14.4. User / Indenting department shall give their recommendation to Materials Department.

4.2.14.5. Materials Department shall ascertain that the billing breakup is consistent with any earlier partial breakup indicated by the bidder in its offer. Totaling shall also be checked and ensured that it matches with the order amount.

4.2.14.6. Billing breakup shall be concurred by Finance and approved by the order approving authority but not above the rank of GM.

4.2.14.7. Wherever site work is part of purchase order, billing breakup for site work shall be submitted to Engineer In-Charge who shall take approval of the same without routing through Materials Department. A copy of the approved billing breakup issued to the vendor shall be sent to Materials Department for record.

4.2.14.8. Billing breakup shall not be approved after expiry of the Contractual Delivery Date (CDD).

4.2.14.9. Wherever CDD has expired, billing breakup can still be approved only to facilitate part despatch from vendor’s works and for taxation purpose only. Prorata payment shall not be applicable in such case. Such billing breakup approval do not require Finance Concurrence and can be approved by the order issuing authority since this approval is without any financial implication on IOCL’s part.

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4.2.14.10. In case of any deviation to the above procedure, approval shall be taken from

GM. 4.2.15. Amendments to Purchase Orders 4.2.15.1. Any amendment to the purchase orders necessitating changes in specifications,

quantity, price and delivery shall be examined with utmost prudence. 4.2.15.2. Minor changes in specifications shall be agreed if the quality of the material is not

affected from utility angle. However, major changes in the specifications affecting utility value of the material ordered shall not be accepted if it is possible to obtain fresh competitive quotations for the materials of the changed specification.

4.2.15.3. In case of lack of competition, such changes shall be agreed upon only after

ensuring that they do not result in acceptance of less favorable terms and if such changes justify any reduction in price, negotiations shall be conducted to obtain price reduction and amendment to purchase order can be processed for approval of the tender approving authority as per DOA.

4.2.15.4. Delivery period amendment shall not be allowed where interest of the Corporation

is adversely affected.

4.2.15.5. Amendment in quantities to accommodate lot sizes, variation in random lengths or volumes of containers etc., shall be agreed as per the percentage limits of the value prescribed in the delegation of powers after obtaining approval of the competent authority.

4.2.15.6. Where alternate mode of transport becomes necessary due to exigencies of

demands, the additional expenditure to be incurred shall be got approved from the competent authority and amendment shall be issued.

4.2.15.7. Change Order requests, in terms of cost and / or time implications, received on

account of engineering / technical changes / reasons shall require recommendation from the Indenting / User Department. Such recommendation shall be sent to Materials Department after taking in principle approval of the authority who is empowered to approve the Change Order but not above the rank of ED. Materials Department shall, then, based on such in principle approval, take approval of Change Order as per DOA.

4.2.15.8. For reduction in order quantity / value no separate approval shall be required.

Necessary amendment in SAP shall be made as per the SAP release strategy including Finance release (wherever required). This shall be based only on Indenting / Engineering / User Department recommendation giving reasons for reduction in scope / quantity. Such recommendation shall be sent to Materials Department with the approval of DGM of Indenting / User / Engineering Department. However before exercising such change in the order, Materials Department to ensure that there is no pending PR for the items for which the quantity is being reduced.

4.2.15.9. All amendments against a particular Purchase Order shall be assigned a serial

number in proper sequence before issue for identification purpose and distribution

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of copies may be done as in case of Purchase Order to all concerned for appending to the original Purchase Orders for easy reference.

4.2.16. Short Closing of Purchase Orders in SAP

4.2.16.1. All unexecuted POs whose contractual delivery date expired one year back shall be

reviewed by taking report from SAP on half yearly basis. 4.2.16.2. In case of Short Supply from the vendors limited to an extent of 10% of item wise

quantity against ordered quantity in case of bulks like pipes, cables, structural items, bulk chemicals, etc., the concerned Purchase Officer may short close the relevant item(s) of the Purchase Order provided no concern has been raised by the Indenting / User department in the interim period. No approval shall be required to short close such orders.

4.2.16.3. In case of non execution of Purchase order for bulks for more than 10% of ordered item-wise quantity, indenting department shall be asked to review the requirement for unexecuted quantity. In case indenting department confirms that pending quantity is still required, vendor shall be persuaded for delivery of unexecuted quantities & further actions will follow.

4.2.16.4. In case HOD of indenting department confirms that pending quantity can be short closed, approval to short close these POs shall be taken from the approving authority who originally approved the proposal for award of PO but not above the rank of HOD, Materials Department.

4.2.16.5. In case of purchase orders wherein advance payments have been made to vendors & the same are still unexecuted in full / part, for more than a year beyond CDD, the indenting department shall be asked to review the requirement. In case indenting department confirms that unexecuted quantity is still required, vendor shall be persuaded for delivery of the pending quantities. In case the HOD of indenting department confirms that unexecuted quantity can be short closed, approval to short close such POs shall be taken from the approving authority only after recovery / adjusting the advance payments. The approval to short close these POs shall be taken from the approving authority who originally approved the proposal for award of PO but not above the rank of HOD, Materials Department.

The above procedure shall apply to other non bulk orders also even where advance is not paid.

4.2.16.6. Before closing any PO for Proprietary items, consent of User shall be taken.

4.2.16.7. In case of Projects, short closure of PO shall be done only after the completion of the project and with the approval of DGM of Project Engineering.

4.2.16.8. For short closing, POs shall be de-released in SAP and delivery completion indicator ticked in Delivery tab against each item to be short closed. After short closing, the PO shall be kept de-released only. However, if there is any specific requirement related to pending GRVs or pending payments, etc. POs can be again released in SAP after getting request from concerned section.

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CHAPTER - V

PUBLIC PROCUREMENT POLICY FOR MICRO & SMALL ENTERPRISES (MSE) 5.1. Circular No. F/12/67 dtd 20.12.2013 shall be applicable for procurement policy for

MSE Vendors. 5.2. Illustrative Tender Conditions for Benefits / Preference for Micro & Small

Enterprises (MSEs) I. As per Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 issued vide Gazette Notification dated 23.03.2012 by Ministry of Micro, Small and Medium Enterprises of Govt. of India, MSEs must be registered with any of the following in order to avail the benefits/preference available vide Public Procurement Policy MSEs Order, 2012. a. District Industries Centers (DIC) b. Khadi and Village Industries Commission (KVIC) c. Khadi and Village Industries Board d. Coir Board e. National Small Industries Corporation (NSIC) f. Directorate of Handicraft and Handloom g. Any other body specified by Ministry of MSME II. MSEs participating in the tender must submit the certificate of registration with any one of the above agencies indicating the details of the particular tendered item along with their bid. III. The registration certificate issued from any one of the above agencies must be valid as on close date of the tender. The successful bidder should ensure that the same is valid till the end of the contract period. IV. The MSEs who have applied for registration or renewal of registration with any of the above agencies / bodies, but have not obtained the valid certificate as on close date of the tender, are not eligible for exemption/preference. V. The MSEs registered with above mentioned agencies / bodies are exempted from payment of Earnest Money Deposit (EMD). VI. Purchase Preference – Subject to meeting terms and conditions stated in the tender document including but not limiting to prequalification criteria, twenty percent of the total quantity of the tender is earmarked for MSEs registered with above mentioned agencies/bodies for the tendered item. Where the tendered quantity can be split, MSEs quoting a price within a price band of L1 + 15 percent shall be allowed to supply up to 20 percent of total tendered quantity provided they match L1 price. In case the tendered quantity cannot be split, MSE shall be allowed to supply total tendered quantity provided their quoted price is within a price band of L1 + 15 percent and they match the L1 price. In case of more than one such MSEs are in the price band of L1 + 15% and matches the L1 price, the supply may be shared proportionately.

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VII. Out of the twenty percent target of annual procurement from micro and small enterprises four percent shall be earmarked for procurement from micro and small enterprises owned by Scheduled Caste & Scheduled Tribe entrepreneurs. In the event of failure of such MSEs to participate in the tender process or meet the tender requirements and L1 price four percent sub-target so earmarked shall be met from other MSEs. VIII. To qualify for entitlement as SC/ST owned MSE, the SC/ST certificate issued by District Authority must be submitted by the bidder in addition to certificate of registration with any one of the agencies mentioned in paragraph (I) above. The bidder shall be responsible to furnish necessary documentary evidence for enabling IOCL to ascertain that the MSE is owned by SC/ST. MSE owned by SC/ST is defined as: a. In case of proprietary MSE, proprietor(s) shall be SC /ST b. In case of partnership MSE, The SC/ST partners shall be holding at least 51% shares in the enterprise. c. In case of Private Limited Companies, at least 51% share shall be held by SC/ST promoters. NOTE:

1. In case where tender quantity can be split and MSE vendor is already getting order for more than 20% of the tender value, no additional purchase preference is required to be given in that tender.

2. In case MSE vendor is already getting order for less than 20% of the tender quantity,

purchase preference to this and other MSE vendors (together) shall be given only up to the differential quantity to make total as 20% to MSE vendor.

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CHAPTER - VI

CENTRAL PROCUREMENT CELL (CPC)

6.1. CPC was formed in 2007 to procure materials centrally for all the Refinery Units. As per the revised scope in 2009, CPC lines up Rate Contracts (Annual / Long Term) for materials which are commonly used by the Refinery Units. These Rate Contracts will be used to place Call-Up Purchase Orders by all the Refinery Units as and when required.

6.2. Refinery Units will use the Rate Contracts for their revenue requirements only. 6.3. Estimate and PR for CPC items shall be prepared as under:

Sr. No.

Item Department responsible for furnishing approved PR & Estimate

1 All Catalysts and Chemicals e.g. MFA, Stadis-450, Liquid Anti Oxidant, Cetane Improver, Lubricity Additive, Butane -1, Morpholine, Tri Sodium Phosphate (TSP), Perchloroethylene, N – MDEA, Orange Dye, Tetra Ethylene Glycol (TTEG), Anti-oxidant for ATF, Demulsifier, Corrosion Inhibitor, Hydrazine Hydrate, Rock Salt etc. etc.

RHQ-Technical / CPC (with vetting of RHQ Technical)

2 All Safety items including AFFF where HSE is responsible for technical specifications.

RHQ HSE / CPC (with vetting of RHQ HSE)

3 Pipe, Pipe-fittings, flanges, Bearings, Mech. Seals, Cable etc. etc where M&I is responsible for technical specifications

M&I / CPC (with vetting of M&I)

6.4. Rate Contracts lined up by CPC

1. Re-allocation of Quantity / Value after placement of Purchase Order or Rate Contract shall be done by CPC. Re-allocation of contract value shall be done with approval of approving authority not above the rank of GM. No finance concurrence shall be required since there is no additional financial implication.

2. Validity: Extension of validity of Rate Contract without financial implication shall be

done with the approval of the authority who has approved the proposal but not above the rank of GM with Finance vetting.

3. Issuance of call up orders by Units: Once a Rate Contract has been approved and outline agreement created in SAP, no further approvals shall be required at the time of placement of call up order. However, the dealing Purchase Officer shall ensure that the call up order is being issued against a properly approved Purchase Requisition duly released in SAP. The above shall also be applicable for Rate Contracts lined up by Units for which outline agreement has been created in SAP.

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CHAPTER - VII

E-TENDERING 7.1. Introduction 7.1.1. Indian Oil Corporation Ltd. is using the e-tender portal (https://iocletenders.gov.in)

developed by NIC, which is a secured and user friendly system to enable bidders to search, view, download and participate in tenders directly. All interested bidders are required to register themselves with the portal indicated above and enroll their Digital Signature Certificate (DSC) with the user id for participation in the tender.

7.1.2. e-tendering shall be done in all cases where estimate value is Rs. 5 lakh or more (please refer Finance Circular F/12/72 dtd 17.06.2014).

7.2. Approved Vendor List

7.2.1. All the approved vendors shall be considered for e-tendering. 7.2.2. In case an approved vendor does not have a Digital Signature Certificate (DSC) or is

not registered / does not get registered on the portal within a specified time, tender specific approval for exclusion of the vendor in the e-tender may be obtained from GM explaining reasons thereof. However, the vendor’s name shall continue to remain in the approved vendor list.

7.2.3. In case some vendors refuse to participate in e-tendering citing reasons of

confidentiality, the case shall be reviewed and, if required, approval taken from GM for hard copy tendering.

7.3. Tender Document

7.3.1. The e-tender documents may consist of any or all of the following:

Sl No

Document Type of file

(i) Index pdf (ii) Cover Letter of tender indicating among other things the

EMD amount, time schedule for sale period, tender submission, pre bid meeting and tender opening

pdf

(iii) Notice Inviting Tender / Letter Inviting Tender with PQC pdf (iv) Special instruction to Bidders pdf (v) Instructions to bidders for participation in E-Tendering pdf (vi) Agreed Terms and Conditions (Questionnaire) for

indigenous and foreign bidder xls

(vii) General Instruction to the Bidder pdf (viii) General Purchase Conditions pdf (ix) Technical specifications pdf (x) Proforma of Declaration of Black Listing / Holiday Listing xls / pdf (xi) Un-priced Schedule for mentioning quoted / not-quoted xls (xii) List of Board of Directors (or reference link to web

address may be given) pdf

(xiii) Integrity Pact document in case of tender having estimated cost of Rs 10 Cr or more

pdf

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(xiv) Format for quoting technical and commercial deviations pdf / xls (xv) Price Schedule format (Bill of Quantity or BOQ) for

quoting prices xls

7.4. Miscellaneous points 7.4.1. In case of limited tenders, the e-tendering portal’s auto e-mail to the bidder shall be

considered as sufficient Proof of Despatch (POD).

7.4.2. The responsibility of downloading the tender documents including corrigenda, if any, and subsequent uploading of offer shall rest with the bidder.

7.4.3. Vendors can also view the tender at the Central Public Procurement Portal of Government of India (https://eprocure.gov.in/)

7.4.4. When any tender is hosted on the IOCL e-tender website, it automatically gets listed on the Central Public Procurement Portal of Government of India (http://eprocure.gov.in/). This satisfies the Office Memorandum No. DPE/3(3)/10-Fin dated 20th December from Department of Public Enterprises (DPE) conveying the mandatory applicability of the instructions issued by Department of Expenditure (DoE) on the subject vide its Office Memorandum No. 10/1/2011-PPC dated 30th November,2011.

7.4.5. In case of press tenders the concise version of NIT should be published in the newspaper requesting bidders to visit our website https:\\iocletenders.gov.in for complete details.

7.4.6. It is the vendor’s responsibility to ensure that a valid DSC has been registered on the portal and the same has sufficient validity.

7.4.7. Bids will be accepted only through the e-tender portal. However, it should be clearly mentioned that tender issuing authority is not responsible for the delay / non-downloading of tender document by the recipient due to any problem in accessing the e-tender website. The tender issuing authority is also not responsible for delay in uploading bids due to any problem in the e-tender website.

7.4.8. The scanned copy of the EMD (bank draft / bank guarantee / ECS details) has to be uploaded in the un-priced bid.

7.4.9. The summary of un-priced bid opening can be viewed by all bidders. The complete

offer, techno-commercial queries and their subsequent clarifications are visible only to the respective bidder.

7.4.10. Tender can be cancelled at any stage by uploading a corrigendum for cancellation in

the e-tender website without assigning any reason. The cancellation of tender shall be taken in accordance with the relevant clause of the Materials Management manual.

7.4.11. Tender document fees will not be applicable. 7.4.12. In case of limited tender, the name of the approved bidders shall be selected while

uploading the tender. The bidders shall be informed beforehand to ensure that they are registered in the e-tender portal with a valid DSC. After publication of the tender

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in website, a system generated email will be sent to the registered email id of the bidders informing them about the tender.

7.4.13. Notwithstanding any other condition / provision in the tender documents, in case of ambiguity or incomplete documents pertaining to PQC, bidders shall be given only one opportunity with a fixed deadline after bid opening to provide complete and unambiguous documents in support of meeting the Pre Qualification Criteria. In case the bidder fails to submit any document or submits incomplete documents within the given time, the bidder’s tender will be rejected. This provision shall also be incorporated in the tender documents.

7.5. Resubmission and Withdrawal of Bids

a. As per standard feature, a bidder is allowed to submit and withdraw / replace

bids before the bid due date. b. System does not allow withdrawal of offer after the expiry of final date & time of

submission of bids.

7.6. Receipt of Tenders 7.6.1. Late and delayed bids is not permitted in the e –tendering portal. No bid can be

submitted after the due date and time of submission. No bid can be modified after the dead line for submission of bids.

7.6.2. The system time (IST) displayed on e-tendering web page shall be the reference time and no other time shall be taken into cognizance.

7.6.3. No manual bids shall be permitted along with electronic bids.

7.6.4. The Un-priced and Price Bids have to be submitted online only. However, documents

like EMD and any other documents mentioned in the tender which need to be submitted in hard copy have to be submitted offline.

7.6.5. In case of limited tender, bids can be uploaded by only those bidders who have been

invited to bid through e-tender website and through the same User ID as per the invitation

7.6.6. Before the bid is uploaded, the bid comprising of all attached documents should be digitally signed using digital signatures issued by an acceptable Certifying Authority (CA) in accordance with the Indian IT Act 2000.

7.7. Opening of Tender 7.7.1. The un-priced and priced bids shall be opened in the portal by two officers

irrespective of grades from Materials and / or Finance departments.

7.7.2. These representatives shall log in the website through their separate User ID, password and DSC. After opening by both the representatives, the bids can be downloaded from the website for techno-commercial evaluation.

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7.7.3. Materials Department representative will assign the name of Finance and Technical evaluators.

7.7.4. Wherever required, price implication has to be taken in hardcopies in sealed cover since the feature to include price implication in the portal is presently not available.

7.7.5. In case where Price implications are also taken against a tender, then the same along with price bids on the portal shall be opened by one representative each from Finance and Tendering departments.

7.7.6. A printout of bid opening summary shall be placed in the file. The same shall contain the following information:

i. Bid Opening date & time ii. Name of bid openers iii. Number of total valid bids iv. Tender reference number, tender ID and tender title. v. Name of bidders whose price bid is being opened. vi. Price Implication, wherever applicable

7.8. Witnessing of Tender opening

Tender opening can be witnessed by bidders by logging into the e-tender website. Tenders shall, however, be opened irrespective of whether the bidders witness it or not.

7.9. Techno-commercial Evaluation

7.9.1. Techno - commercial queries are raised and clarifications sought on the portal.

7.9.2. The Technical Bid Analysis (TBA) shall be prepared by indenting department in hard

copy. Signed copy of the same shall be sent to Tendering department with due approval of competent authority.

7.9.3. Technical evaluation results of bids (acceptance / rejection) shall be entered in the website by Indentor / Technical Evaluator.

7.9.4. Commercial Bid Analysis (CBA) shall be prepared by Tendering department in hard

copy. Signed copy of the same shall be kept in the file and sent for Price Bid opening (PBO) approval.

7.9.5. Finance will enter the commercial evaluation results of bids (acceptance / rejection)

in the website after checking the PBO proposal. This shall be required only in case where Finance concurrence is required. In all other cases Materials’ representative shall enter this information.

7.9.6. On receipt of PBO approval, the Tendering department representative will enter the

final techno-commercial evaluation details in the website. 7.9.7. The bid evaluation and further processing shall be done as per procedure laid down

in the Materials Management Manual for physical tender.

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7.10. Price Bid opening

The price bids of techno-commercially acceptable bidders are opened after completion of techno-commercial evaluation. The price bids are downloaded from website to prepare Comparative Statement.

7.11. Digital Signature

This is a unique digital code which can be transmitted electronically and primarily identifies a unique sender. The Controller of Certifying Authorities of India (CCA) has authorized certain trusted Certifying Authorities (CA) who in turn allot on a regular basis Digital Certificates, Documents which are signed digitally are legally valid documents as per the Indian IT Act (2000).

In order to bid for Indian Oil e-tenders, all the bidders are required to obtain a legally valid Digital Certificate as per Indian IT Act from the licensed Certifying Authorities (CA) operating under the Root Certifying Authority of India (RCAI), Controller of Certifying Authorities (CCA) of India. The Digital Certificate is issued by CA in the name of a person authorized for filing bids on behalf of her Company. A bidder can submit bids online only after digitally signing the bid documents with the above allotted Digital Signatures.

Bidders have to procure Digital Certificate (Class 3) on their own from any of the Certifying Authorities in India.

7.11.1. Scope of e-Tender

a. Inclusions: Issue of tender, Pre-bid meeting, corrigendum, receipt of bids,

opening of bids, Technical query, commercial query, entry of techno-commercial evaluation results, pre price bid meeting and price bid opening.

b. Exclusions: Price implication, price negotiation, Technical Bid Analysis, Commercial bid analysis, tender committee minutes, price comparative statement, order proposal and ordering.

7.11.2. Requirement Of Physical Documents Following physical documents shall be kept in the Purchase file:- a. Duly approved Purchase Requisition with Estimate. b. Tender details downloaded / emailed from e-tender website c. Intimation for the limited tender published (Emails forwarded to Tender inviting

Authority from website, in case of limited / single tender) d. Hard copy of all approvals taken for the subject tender. e. Limited Bidders Details (List of bidders to whom tender enquiry was issued) f. Corrigendum Details (if corrigendum issued) g. Number of bids submitted against the tender enquiry. h. Bid Opening statement

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i. EMD details / documents (if applicable). j. Signed Technical Bid Analysis (TBA) and Commercial Bid Analysis (CBA) k. Duly approved technical recommendation from indenting department. l. Price bid opening proposal / TC minutes. m. Signed and concurred (wherever applicable) Price Comparative Statement. n. Award proposal o. Fax of Acceptance (FOA) or SAP Purchase Order reference. p. Post order correspondence, if any

7.12. Important Note 7.12.1. Audit trails and system logs to be maintained for all transactions on the e tendering

portal during complete tendering process. Historical records for required number of years to be maintained in soft form with adequate data backup, recovery and archival.

Processes not explained here are same as conventional tendering.

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CHAPTER - VIII

IMPORTS

8.1. Ordering All imported orders will normally be placed on FOB / FCA port of exit basis. However, order is placed indicating IOCL’s right to convert it into a CFR order later at the freight charges quoted by the vendor. In rare cases tender itself may state ordering on CFR basis (in such cases also clearance from TRANSCHART needs to be taken). These orders shall be governed by the relevant INCOTERMS (present INCOTERMS 2010) published by the International Chamber of Commerce (ICC) that are widely used in International commercial transactions.

8.2. Mode of Payment: Payment may be made through any of the following: 8.2.1. Letter of Credit or L/C

Most foreign vendors insist on payment through L/C. In order to save time and avoid post PO hassles, L/C draft should be discussed and mutually agreed with the bidders prior to price bid opening. Approval should be taken from the authority approving the order for any specific deviation to the standard terms. Unless specific dates or milestones for opening of L/C have been mutually agreed, L/C shall normally be opened on receipt of PO acceptance from the vendor and receipt of Performance Bank Guarantee, if any (these terms should be indicated in the tender documents itself). IOCL normally opens irrevocable, unconfirmed L/C. However, some vendors may insist on confirmed L/C. This can be agreed with specific approvals. Confirmation charges, in such case, shall be to vendor’s account. L/C expiry date is considered as 30 days from the Contractual Delivery Date (B/L or AWB date) Item description in the L/C shall be the same as the Purchase Order and EPCG License, if any. Port of loading and port of discharge have to be clearly indicated in the L/C. All documents required for release of payment (considering the payment terms of the original order) shall be clearly indicated in the L/C along with the details of Price Adjustment clause in case of delay in shipment. Documents are made to the order of the L/C issuing bank. On receipt of payment advice, the Bank releases the original documents and endorses them in the name of IOCL. In case L/C has been opened by Units and payment made from there, these documents will then be sent to the Port Office for clearance of consignment.

8.2.2. Wire Transfer / Telegraphic Transfer (TT)

Wire Transfer payment may be used in case of small value items or when the consignments are of very small size, weight and can be transported by Air. In case of DDP (deliver duty paid) shipments also, payment may be made through Wire Transfer. Acceptance of Shipper regarding any change in mode of payment shall be taken in advance before the booking of the vessel for shipment or before the air freight. The despatch documents are made to the order of Indian Oil Corporation Ltd. as the original documents are not routed through the bank. These originals are sent directly to IOCL. On finding the documents in order, payment clearance is given to Finance for releasing the payment to the vendor.

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8.2.3. Cash against Documents (CAD) Here all the documents are finalized with the shipper prior to submission of the documents to the bank. Immediately on shipment these documents are submitted by the Shipper to IOCL’s nominated Bank for payment. On getting the original documents, Bank intimates IOCL for payment.

8.2.4. Any change in mode of payment after placement of order will require approval of

HOD Materials with Finance concurrence. 8.3. Sea Freight 8.3.1. Vessel Booking

Imported consignments are despatched either as Containerized Cargo or as Break-Bulk Cargo (which cannot be shipped in containers). IOCL, Mumbai Office lines up a Rate Contract with Shipping Corporation of India (SCI) for arrangement of transportation from all the major international seaports in the world to the Indian Seaports (Nhava Sheva, Mumbai & Kolkata).

There is no contract for USA and transport has to be lined up on case to case basis through TRANSCHART. For containerized cargos coming from USA, case to case freight charges are being sought from SCI and OPT (M/s Overseas Project Transport Inc) through TRANSCHART. Similarly for all break-bulk cargos, details are mailed to TRANSCHART who inform the rates quoted by their freight forwarders. The freight thus obtained is compared with the vendor’s original quoted freight charges for finalization of the transportation on lowest basis by IOCL. In case the freight charges obtained through TRANSCHART is more than the quoted freight charge of the vendor, then either TRANCHART negotiates with its freight forwarders and asks them to match IOCL’s rates or gives a No Objection Certificate (NOC) to IOCL to import the material on CFR basis. No Finance concurrence is required for such change in order.

A 30 days advance intimation of readiness of cargo for shipment shall be given by the Shipper to the nominated Freight Forwarder in case of Containerized cargos and 45 days for Break-Bulk cargos. In case of Containerized cargos, nominated freight forwarders are asked for arrangement of transportation of the total order up to India within the contractual rates. The Vendor shall furnish the details of consignment such as outside dimensions, weights (both gross and net), number of packages, type and number of containers required, technical description and drawings, name of the supplier, port of loading etc. to enable the nominated freight forwarder arrange the shipment.

In case of Break Bulk consignments of ODC (over dimensional consignments) nature, port of destination in India is finalized before the intimation of shipment so that any last moment change can be avoided since in India all seaports are not equipped to handle ODCs. In case discharge has to be taken at the Ro-Ro Jetty, it will be clearly informed to the bidders to quote for Ro-Ro Jetty discharge during tendering stage and arrange for the same during arrival of the consignment at the destination port. In case the same could not be finalized during tendering stage, separate tender should be floated for arrangement of transportation upto the destination port or arrangement of Barge for discharge upto Ro-Ro Jetty.

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8.3.2. Documentation details Following documents will be required for making the payment in case of foreign shipments. To avoid last minute problems and delays, the draft documents shall be taken from the Shippers well in advance and corrections made and sent back to the Shipper for submission of correct documents to IOCL. The documents shall be in English language only. Following documents are mentioned in case of L/C payment. Minor changes, as required, are to be made in case of wire transfer / CAD.

a. Original full set (3/3) + 3 Copies of Signed 'clean on board' Bill of Lading made

out to order of L/C Issuing Bank, notify Applicant, marked “Freight to pay (FOB shipment) / Freight pre-paid (CFR shipment)”; indicating the Letter of Credit No, Date of Issuance and Purchase Order no. Ultimate consignee with the Refinery details, container details, total Gross Weight and Volume of the cargo. FOB port of shipment, Destination port and Vessel Name is a must in the B/L. B/L without any date is considered invalid for payment.

b. Original signed commercial Invoice in 1 original + 3 Copies indicating Letter of Credit No., Item Description and quantity on the invoice. This should match exactly with the item description on L/C and EPCG License (if any). Ultimate consignee (Refinery Name) and details with total invoice value should be indicated on the invoice. In case of partial shipments, actual invoice value of the partial part should be mentioned, clearly indicating “Partial Shipment” on the invoice.

c. Original Packing List (PL) in 1+ 3 Copies. Item Description on the PL shall match exactly with the description as in L/C, EPCG License and Invoice.

d. Original Certificate of Origin (CO) in 1 original and 2 copies certified by local chamber of commerce.

e. Original copy of beneficiary's fax / e-mail sent to applicant informing shipment details.

f. Original Inspection Release Note (IRN) from the Third Party Inspection Agency certifying acceptance of goods.

g. Original Seaworthy Certificate issued by the Shipping Company or their Agent (In Duplicate) stating that the carrying vessel named in the B/L is a seaworthy vessel and is not more than 25 years old and that it is approved under institute classification clause (class maintained equivalent to Lloyds 100 A1) and has been registered with an approved classification society.

h. Copy of Letter from IOCL for the acceptance of Performance bank Guarantee for 10% of the order value valid till Guarantee period + 3 Months. In absence of this letter, 10% of FOB value shall be retained while making payment.

i. Copy of Dispatch clearance (DCC), if any. 8.4. Air freight

In case of urgency of material, the same may have to be air freight. Approval has to be taken from competent authority (with Finance concurrence) with proper justification. In case the air freight charges are more than the approved freight of the purchase order, the same is put up for approval for the acceptance of extra freight charges. There may also be cases where the Purchase Order itself calls for air freight (usually, in case of consignments with very small weight and size where there

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is a possibility of misplacement of the consignment in sea transportation and also in case of urgency).

For Air freight, Port Office at Mumbai lines up a Rate Contract for arrangement of air freight from all the major international airports worldwide. On getting the packing details (L x W x H), volumetric weight should be calculated and compared with the Gross weight of that cargo and whichever is higher will be considered for calculation of air freight charges. Weight above 0.5 Kg will be considered as 1 Kg and less than 0.5kg as 0.5kg for determining the freight charges. All other terms will be as per the Rate Contract terms and conditions. In order to avoid payment of ODC charges, the cargo should be broken up into smaller pieces, if possible.

8.4.1. Air Freight: Important Note Following clauses should be incorporated in all import PO especially for airfreight so that IOCL can save on air freight charges. The same are also incorporated in the Air Import Consolidation Contract as well to take care of this before accepting the cargo. However, it is desired that shipper must also ensure this.

8.4.1.1. ODC CARGO

Shipper will ensure that the goods are properly packed to withstand the sea / air and Road Journey and the markings for gross weight, net weight, material description, IOCL material code, safety precautions are boldly and legibly put on at least two sides of the packages. Packing of the individual boxes should be done in such a way that the consignment does not become an ODC (Over Dimensional Consignment) for Air Transport. When the size of the package exceeds the standard pallet (PIP) dimensions (for Air Transport) which are given below, they will be treated as ODC:

Length 121 inches Width 84 inches Height 60 inches Maximum Gross Weight 4626 Kg Maximum Net Weight 4508 Kg Floor Load Limitations 90.7 Kg /Sq Ft

In case of ODC consignments, Shipper to inform IOCL (PO Issuing Authority) to settle the freight rates & only after receiving IOCL’s confirmation, the goods must be handed over to the overseas forwarding agents.

8.4.1.2. Dangerous Goods Clause

The Shipper has to arrange shipment / air freighting of the dangerous and normal consignment separately in two different air way bills instead of air freighting both the consignment on a single air way bill. The necessary shipping documents like invoice etc. must be prepared separately by the shipper (Not to exceed PO Order Value) and handed over to the overseas freight forwarding agents of IOCL. The Shipper has to ensure that the that DGR and normal cargo are air freighted by overseas freight forwarding agents of IOCL under two separate HAWB / MAWB.

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8.4.2. Documentation for air freight

Since the air consignment will reach the destination Air Port in India maximum within 2-3 days and getting the originals within this period through L/C is not possible, the vendor is advised to issue the Airway Bill (AWB) in the name of “Indian Oil Corporation Ltd, with the Refinery Name” only (along with the copies of other shipping documents made to the order of Indian Oil Corporation Ltd, Refinery Name). For Customs clearance, scan copies of shipping documents made to the order of “Indian Oil Corporation Ltd, with the Refinery Name” is used. However at a later stage, original AWB has to be submitted to the Customs Authorities for formal regularization.

Hence, vendors should be advised to send all original shipping documents directly to the concerned Port Office of IOCL (vendor is requested to follow up with the Freight Forwarder for issue of Airway Bill) so that documents can be submitted to the customs at the earliest possible time. Payment is usually made through Wire Transfer.

8.5. Submission of documents and Payment release 8.5.1. L/C Mode

In case of L/C payment, vendor will be required to submit the original shipping documents to their bank within 21 days from the date of Bill of Lading (15 days in case of shipment from nearby countries whose vessel normally reaches India within 21 days of B/L date). Immediately on issue of original B/L to the Shipper, regular follow up should be made with the Shipper to submit all the documents to the bank so that original documents can be retired in time (after payment) and can be produced to the Customs Authorities in time to avoid any demurrage and detention of the cargo and cleared within the free period given by the vessel owner. If documents are found correct, Beneficiary Bank forwards the documents to the L/C Issuing Bank for payment. On receipt of documents, L/C Issuing Bank forwards them to IOCL Finance along with copies of the documents received by them. These documents are checked and payment advice given to the Issuing Bank in case the documents are checked and found compliant. Payments shall be released as per timeline defined in UCP 600.

The bank may also refer some discrepancies in documents to IOCL. If IOCL accepts such discrepancies without reference to the Supplier, then also the document shall be considered compliant. In cases where discrepancies are required to be referred to the vendor for resolution, Materials Department shall take up with the vendor for resolution. A copy of such communication is sent to Finance so that the bank can be suitable informed. Such cases shall not fall under the timeline defined in UCP 600.

Details of EPCG license (if any) shall be informed to the concerned Port Office. In case of Customs clearance of any partial shipments of package item, Port Office shall ensure the use of EPCG License proportionately.

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8.5.2. Wire transfer / CAD

Minor changes, as required, are to be made in case of wire transfer / CAD.

8.6. Export Promotion Capital Goods (EPCG) Scheme

Export Promotion Capital Goods (EPCG) scheme under the new Foreign Trade Policy 2009-14, allows import of Capital goods for pre-production, production and post production at zero Custom Duty, subject to an export obligation of 6 times of duty saved on capital goods of FOB basis imported under EPCG scheme, to be fulfilled within a period of 6 years reckoned from Authorization issue date.

Block year for export obligation shall be, 1st to 4th year- 50% and 5th to 6th year – 50%. IOCL can discharge the export obligation by way of direct export as well as through third party export.

"Capital Goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up-gradation or expansion. It also includes packaging machinery and equipment, refractories for initial lining, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge plus one subsequent charge, equipment and instruments for testing, research and development, quality and pollution control. Import of second hand goods is not allowed.

"Spares (including refurbished / reconditioned spares), moulds, dies, jigs, fixtures, tools, and refractory for initial lining; for existing plant and machinery (imported earlier, under EPCG or otherwise), is allowed to be imported under the EPCG scheme subject to an export obligation equivalent to 50% of the export obligation as mentioned above to be fulfilled in 6 years for zero duty EPCG. This would however be subject to the condition that the CIF value of import of the above spares etc. will be limited to 10% of the value of plant and machinery imported under the EPCG scheme. In case of plant and machinery not imported under the EPCG scheme, CIF value of import of the spares etc. will be limited to 10% of the book value of the plant and machinery

In case, IOCL fails to fulfill prescribed export obligation, it has to pay the custom duty plus interest for the period of delay.

8.6.1. Invalidation Letter IOCL can also authorize indigenous suppliers to import capital goods under invalidation letter. Here, IOCL shall make a request to the licensing authority (DGFT - Directorate General of Foreign Trade) for invalidating the EPCG license for direct import by the indigenous supplier. IOCL informs the DGFT office regarding the name and address of the organization from which IOCL intends to source the capital goods.

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On receipt of such request, either at the time of issuance of license or subsequently, the licensing authority shall make the license invalid for direct import and issue an invalidation letter, in duplicate. The licensing authority shall simultaneously grant permission to IOCL to procure the capital goods indigenously in lieu of direct import.

The indigenous manufacturer then applies for the issuance of Advance License to the licensing authority for deemed exports for import of inputs including components required for the manufacture of capital goods to be supplied to IOCL.

8.6.2. Procedure for Applying EPCG License / Invalidation Letter

Immediately on placement of order, Purchase shall forward the request for issue of EPCG Import License / Invalidation Letter to Finance. Purchase shall provide all details like Item description, Quantity, Unit of Measure (UOM), Customs Tariff / HS Code, Country of Origin, Port of Discharge, CIF value, nature and primary use of capital goods to the concerned Finance Department. IOCL Finance applies to DGFT office for grant of EPCG License / Invalidation Letter.

For the purpose of applying Invalidation Letter under the EPCG License, along with the above details following documents received from indigenous supplier are also required:

• Import Export Certificate • Copy of valid RCMC (Registration-cum-Membership Certificate) issued by FIEO

(Federation of Indian Exports Organizations) • Industrial License • SSI Registration, if any

DGFT office takes at least 15 days for issue of EPCG License and another 15 days for issue of invalidation letter from the date of receipt of application from Finance along with all required documents. Hence, application of EPCG License / Invalidation letter should be sent to Finance well in advance of the delivery period. Approximately 2 months time is required from sending application to Finance to receiving the Invalidation Letter.

An EPCG License is issued with a specific duty saved amount and corresponding export obligation. EPCG authorization is issued with a single port of registration for imports. However; this can be transferred to any of the registered Indian Port having the facility of Customs clearance.

8.6.3. Activities after clearance of Imported Consignments against EPCG License

Along with the EPCG license, IOCL submits a “Nexus Certificate” from an independent Chartered Engineer to the Customs authorities at the time of clearance of imported capital goods for availing the Zero duty benefit.

A copy of the Nexus Certificate has to be submitted to the concerned Regional Authority (RA) along with copy of the Bill Of Entry, within 30 days from the date of import of the Capital Goods. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the Nexus Certificate.

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RA shall, thereafter, forward a copy of the EPCG authorization to the concerned Jurisdictional Central Excise Authority. The wastage so permitted at the time of issuance of authorization would be allowed to be sold on payment of applicable duty on sale of scrap / waste.

IOCL shall produce to the concerned RA a certificate from the Jurisdictional Central Excise Authority, confirming installation of Capital Goods at factory / premises of authorization holder or his supporting manufacturer(s) / vendor(s) within six months from date of completion of import for capital goods. In the case of import of only spares, the installation certificate shall be submitted by IOCL within a period of three (3) years from the date of import.

8.7. Customs Clearance Procedure

All goods imported into India have to necessarily pass through the procedure of customs for proper examination, appraisal, assessment and evaluation. This helps the Customs authorities to charge proper duties and also check the goods against illegal import. No import is allowed in India if the importer does not have the IEC number issued by DGFT (except personal use).

8.7.1. Bill of Entry

A Bill of Entry, also known as Shipment Bill, is a statement of the nature and value of goods to be imported or exported, prepared by the Importer or its representative and presented to a Custom House. The importer clearing the goods for domestic consumption has to file Bill of Entry in four copies; original and duplicate are meant for Customs, third copy for the importer and the fourth copy is meant for the bank for making or adjusting remittances.

If the goods are cleared through the EDI system, no Manual Bill of Entry (BE) is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the BE for customs clearance.

In the non-EDI system & EDI System along with the bill of entry filed by the importer or his representative the following documents are also generally required:-

• Signed Commercial invoice (Pro Forma, Shipping Invoice etc not accepted) • Packing list • Bill of Lading or Delivery Order / Airway Bill • GATT declaration form duly filled in • Importers / CHA’s declaration • License wherever necessary • Letter of Credit / Bank Draft wherever necessary • Insurance Policy • Import License • Industrial License, if required • Test report in case of chemicals • Duty Entitlement Pass Book (DEPB) / Focus Marketing (FM) scrips in original • Catalogue, Technical write up, Literature in case of machineries, spares or chemicals

as may be applicable • Separately split up value of spares, components machineries • Certificate of Origin. (Original is Mandatory in case of Preferential duty benefit to be

claimed)

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8.7.2. Amendment of Bill of Entry

Whenever mistakes are noticed after submission of documents, amendments to the bill of entry is carried out with the approval of Deputy / Assistant Commissioner.

8.7.3. Green Channel facility

Some major importers have been given the green channel clearance facility. It means clearance of goods is done without routine examination of the goods. They have to make a declaration in the declaration form at the time of filing of bill of entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods.

8.7.4. Payment of Duty

Import duty may be paid in the designated banks or through TR-6 challans. Different Custom Houses have authorized different banks for payment of duty and it is necessary to check the name of the bank and the branch before depositing the duty.

Duty payments are normally done online by way of RTGS through ICEGATE (Customs) site and SBI E-Payment / Online site by IOCL.

8.7.5. Prior entry for Shipping Bill or Bill of Entry

For faster clearance of the goods, provision has been made in section 46 of the Act, to allow filing of bill of entry prior to arrival of goods. This bill of entry is valid if vessel / aircraft carrying the goods arrive within 30 days from the date of presentation of bill of entry.

8.7.6. Specialized Schemes

Import of goods under specialized scheme such as EPCG etc is required to execute bonds with the Customs authorities. In case failure to fulfill commitments as per the terms of bond, importer is required to pay the actual duty leviable on those goods with interest. The amount of bond would be the difference of actual duty being paid and the actual amount of duty leviable on merit basis.

8.7.7. Bill of Entry for Bond / Warehousing

A separate form of bill of entry is used for clearance of goods for warehousing. Assessment of this bill of entry is done in the same manner as the normal bill of entry and then the duty payable is determined at the time of removal of goods from bonded warehouse.

8.7.8. Procedure for import clearance Prior to issue of Purchase order by units, they should check the import provision as to whether import is free or restricted. If restricted, units should obtain specific License & forward it to Port Office for clearance prior to establishment of LC or arrival of goods as the case may be. For this, units can request the suppliers to indicate the HSS classification number in their offer at the time of tendering. This will also ensure

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proper loading of duties as well at the time of comparative evaluation. Further the Purchase order item description should also match the item being imported. The invoice should be as per purchase order only.

Immediately on receipt of dispatch details from overseas supplier, Purchase order print out is taken by the Liaison offices directly from SAP. Thereafter, Invoice is checked to be in line with PO for value, type of material, quantity, transport arrangement required and any special condition of PO. Also copy of LC is obtained.

As soon as these details are checked, X Form is prepared & the cargo is insured & simultaneously, message is sent to unit for Non Negotiable documents, Originals & as well as Technical Write up for specialized items / chemicals. It should be ensured by units that overseas supplier informs dispatch details to Port Office immediately after dispatch. Immediately on berthing of vessel & discharge of Cargo, insurance survey is carried out on specific instructions for Break Bulk, ODC.

The shipment is tracked for its arrival including transshipment, if any, by port office either through website of shipping companies or EXIM News Bulletin or through their agents at Mumbai. The Prior Entry IGM is filed by shipping agents once the vessel arrives in Indian Waters & the details of our shipments can be checked. The Vessel after arrival waits for allotment of berth in stream. After berthing of vessel, date of berthing is given in the shipping news (EXIM Paper) or can be known from the steamer agent. When the vessel’s two thirds of the cargo is discharged, General Landing Date (GLD) for that vessel is declared. Also the final IGM is filed. Three working days are allowed free by Port after GLD. Last date of free delivery (LFD) is called Last Free Date. After discharge of containers from the vessel, the same is moved by road to the designated container freight station (CFS). All subsequent clearance activity is to be carried out from the CFS.

Prior to or on arrival of vessel, freight bill is obtained & compared with the contract prices. In case the same is not under the contract, units are requested to inform the agreed freight rate to pass the freight bill and thereafter Check list Bill of Entry is prepared by CHA & forwarded for checking & approval by IOCL. The BE is completely checked & if found in order for Assessable Value, HS Code, Custom Tariff rate, BL Number, No of Packages, IGM Number, Container Numbers, License number etc, CHA is advised to file the BE immediately after final IGM is filed. Once the BE is passed in the Customs system, the CHA communicates the BE & TR 6 challan Number to IOCL for making Customs Duty payment. The BE & TR 6 challan numbers are visible online on ICEGATE (Customs) site for payment purposes online. The BE & TR 6 challan number and the amount of duty available online is matched with the BE & TR 6 challan provided by CHA telephonically and the amount of duty as per approved Check list Bill of Entry. On finding no discrepancies, duty payment through online/e-payment mode is done through ICEGATE (Customs) and SBI site by RTGS. The payment details are thereafter provided to CHA by E-Mail.

In the meanwhile Original documents endorsed by bank are received either at port office for those shipments where LC has been opened by port office or from units. It must be ensured that all pages of BL & invoice are endorsed by bank with seal. Further the bank should endorse on the reverse side of page of BL to deliver the consignment to IOCL with signature & seal where the consignee is to the order of the bank. These must be checked by units prior to forwarding the originals as well as road permits to port office. The originals should also consist of Packing List,

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Certificate of Origin, copy of Inspection Certificate, Phytosanitary certificate in case of wooden packing.

After receipt of original documents, Delivery order is obtained from the agents of the shipping company & other payments such as THC, CFS Charges, Wharfage Charges, Stamp Duty charges etc are made. Further clearance, if required, from Assistant Drug Controller is also obtained for some listed chemicals only. The transporter is simultaneously informed to place the truck. During the interim period, examination of the cargo is carried out & out of charge of Customs is obtained & material dispatched to units. Thereafter, units are informed of dispatch details. Prior to dispatch of shipment, survey is conducted by Insurance Surveyor. Once the material is unloaded at units, the containers are deposited back at the designated yards of shipping agency as agreed & thereafter the container bond issued by port office is got cancelled from Customs.

Some chemicals are being imported by Units in Shipper’s own containers. In such cases also the containers are to be exported back within six months from the date of IGM since no duty is being paid on such containers after following all formalities for export failing which Customs Duty with interest is liable to be paid. Therefore units must have control over such chemicals for use on FIFO basis to ensure that they are exported back within the time frame allowed by customs.

After dispatch of materials, the CHA provides all the documents back to Port Office along with copies of BE. The exchange control copy is sent to Units in case LC has been established by Units to hand it over to Bankers & in cases where LC has been opened by Liaison Office, the same is forwarded to Bank directly. The Cenvat copy of BE is forwarded to Units under intimation for availing Cenvat Credit.

8.7.9. Project Import under 9801 chapter

For Setting up of Grass Root Refinery or for substantial expansion or other projects (Vide Mini Budget Notification No 7/2004-Custom dated 8/1/2004), imports can be done under this chapter availing concessional rate of duty as specified from time to time. In this case the project is to be registered with Customs by providing the following details:

1. Application for Registration of contract in the prescribed Form “A” 2. Details of the project with plot plan. 3. Copy of approval of the Board Of Directors 4. Essentiality certificate with list of Goods to be imported for the Project. 5. Continuity Bond in Duplicate. 6. Undertaking Duly Signed & Notarized in Duplicate. 7. Copies of Purchase orders 8. Copy of Industrial License. 9. Brief Technical Write Up. 10. Copy of Environmental Clearance Certificate 11. Agreement copy, Board’s approval copies of the project.

Further every Purchase Order has to be registered with the Contract Cell of Customs. Once these documents are received, application is made with the Contracts Cell of Customs for registration of the Project. At the time of registration of the Project, an Indemnity Bond is submitted (for Govt. Undertakings only) for the differential value considering the normal rate of duty & Project Rate of Duty. This is required since all

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BEs are provisionally assessed at the time of import under this chapter. The procedure for Customs clearance is the same as already explained above.

After completion of all imports, Installation Certificate is obtained from the unit Head & final documentation covering all imports made against the project with each BE with supporting invoice, payment certificate & other related import documents are submitted to Customs for Final assessment of all Bills of Entry & closure of Project. After Final assessment of all imports & closure of the project by Customs, the Indemnity Bond is cancelled & redeemed from Customs.

The Installation Certificate is to be provided within six months from the date of last import against the project failing which Customs can deny the benefit of concessional rate of duty & raise demand for payment of differential duty considering Merit Rate of Duty with interest.

8.7.10. Export Promotion Capital Goods (EPCG) License clearance Procedure

On receipt of EPCG License issued by DGFT, Port Office forwards the same for registration supported by following documents:

1. EPCG License in original (Customs Copy) 2. EPCG Bond duly endorsed & notarized. 3. Affidavit. 4. Copy of Power of Attorney for signing EPCG Bond. 5. Copy of Central Excise registration Certificate. 6. Copy of IEC (Importer Exporter Code). 7. Copy of Status Holder- Trading House Certificate.

At the time of registration of EPCG License, Indemnity Bond is issued to Customs towards fulfilling the export obligations within the time frame mentioned & furnishing of installation certificate within six months from the date of last import against the subject License. The value of Indemnity Bond to be submitted (for Govt. Undertakings only) is for the differential value considering the normal rate of duty & Project Rate of Duty. The Installation Certificate is to be provided within six months from the date of last import against the license & export obligation is to be completed as per time frame provided, failing which Customs can deny the benefit of concessional rate of duty & raise demand for payment of differential duty considering Merit Rate of Duty with interest.

After registration of License, Customs clearance procedure against imports is the same. However it is to be ensured that item description with Tag Numbers as provided in the EPCG License are appearing in all import documents, especially the invoice. The Bill of entry is passed with duty saved amount i.e. Merit rate of duty – EPCG duty = Duty saved. Further the entry of duty saved amount of the particular shipment & cumulative duty saved is also endorsed in the license. This is to ensure that the total duty saved amount does not exceed the actual duty saved amount as per the License. There is a provision for auto enhancement up to 10 % beyond which DGFT has to be again approached for value enhancement.

On completion of import against EPCG License following actions are taken: a) Original EPCG license sent to Project- Finance at RHQ. b) An Import data sheet is prepared by port office indicating complete import details such as Name of Exporter, Invoice Value in Foreign Currency, Description of Item, BE

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No., BE Date, BE Cash No., CIF Value in Indian Rupees, Assessable Value in Indian Rupees, Merit Duty Payable, CTH NO for Merit Duty, EPCG License Serial No., EPCG Duty Paid, EPCG Debit No., Benefit accrued to Company, Cumulative CIF Value & remarks if any. The same is sent to respective unit with copy to Project-Finance at RHQ for obtaining Plant Site Verification Certificate (PSVC) duly signed & certified having installed the same from Local Excise Authorities. It is mandatory to submit PSVC to Customs within six months from the date of last import against license. There after the PSVC is submitted to customs within stipulated period.

On completion of Export obligation, Export Obligation Discharge Certificate (EODC) issued by DGFT is received by Port Office from RHQ, New Delhi. The same, along with forwarding letter, is then sent to Customs for cancellation of EPCG Bond supported by following documents.

1. Copy of EODC 2. Copy of EPCG Bond. 3. Copy of EPCG License with debit sheet. 4. Copy of Installation Certificate. 5. Copy of C.A. Certificate 6. Copy of Bank Certificate of Export & Realization along with shipping bill. 7. Copy of statement of Export Registration of EPCG in ANF -5B Form.

8.7.11. Customs Clearance against Duty Entitlement Pass Book (DEPB) / Focus

Marketing (FM) Scrips

We are receiving DEPB Scrips of two types from BD group in CO for taking exemption of duty as under:

1. DEPB Scrips of EDI Port. 2. DEPB Scrips of Non-EDI Port

On receipt of the DEPB / FM Scrips, Port Office sends the same for registration to Customs for availing the benefit of duty exemption to the extent of value indicated. In case of DEPB / FM Scrips of EDI Port, the same can be registered with Customs directly and no confirmation is required from issuing port. Thereafter the duty benefit is availed once registration formalities are completed by Customs. The duty benefit availed against each import is recorded in the DEPB scrips against each BE and its cumulative value to ensure utilization of full credit. Thereafter the original scrip with detailed statement of duty benefit availed is sent back to BD group at CO.

In case of non-EDI scrips the following steps are required to be taken by the importer to avail the duty benefit. On receipt of non-EDI scrips with Release Advise (Importer’s Copy) from the originating customs house, the same is forwarded to Customs authorities for registration at the port where this script is to be utilized for availing the duty benefit. The Customs will not register the RA unless they receive their Custom copy of Release Advise which is forwarded directly to them through Speed Post by the original DEPB / FM scrip issuing Port directly. Even after receipt of the same, the Customs authorities port of registration where the script is to be utilized prepares a Release Advise confirmation letter and faxes the same to R.A. issuing Port for verification/confirmation of having issued such Release Advise. It is only after receipt of confirmation either by fax or speed post, the Customs authorities register the Non-EDI Script and allow the importer the duty benefit to the extent of R.A. Value. The duty benefit availed against each import is recorded in the DEPB/FM scrips against each BE and its cumulative value to ensure utilization of full

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credit. Thereafter the original script with detailed statement of duty benefit availed is sent back to BD group at CO.

8.7.12. Re-Export Procedure

Re-export may be required to be done under the following conditions: 1. Rectification of defective supplies 2. Rectification of damaged imported consignment 3. Re-export of spent catalyst for recovery of Noble Metal 4. Re export of SOC (Shipper’s Own Containers) 5. Re export of tools and tackles

The Documents required for Re Export are as under:

1. Original PO Copy & import documents including BE at the time of first import. 2. Reasons for export enclosing the correspondence exchanged by unit with the

supplier. 3. If the item being re-exported is shippers own containers, then original import details

to be stated & it should be declared that it is return of shippers own containers in Export Invoice & Packing list.

4. If the item is being sent for repairs & to be reimported back, Identification mark which is distinct should be there at the time of Export & Reimport. The identification marks must be mentioned in the invoice at the time of reimport by supplier. Further the same identification marks must be clearly visible on the item & the same should be visible immediately on opening of the box at the time of Re-Import after repairs during Custom Examination.

5. Item description, approximate value, dimensions of the package, net & gross weight, and complete address of the supplier with contact person. This should be there on the invoice & packing box as well.

6. The Re-export documents viz Export invoice, packing list (to be prepared by the Unit) along with copy of original import documents are to be sent to the Port Office duly signed & stamped on all pages for obtaining waiver from the bank in case LC or payment for original import has been released from the Refinery Liaison Office at Mumbai/Kolkata. In other cases the Guaranteed Remittance (GR) waiver should be obtained by Unit concerned from the bank through which original import payments were released & forwarded to Refinery Liaison Office at Mumbai/Kolkata.

7. The invoice should indicate the repair charges to pay Customs Duty on the same. 8. Mode (By Air or Sea), Port of Dispatch, Port to which it is to be dispatched is to be

clearly indicated. Further it should be made clear that the vendor will collect the materials from Port & follow all customs procedures of that country or the same is to be cleared in all respects & delivered at their works. It is in the interest of the Corporation to make the supplier agree to take delivery from Sea/Airport to the extent possible.

9. Freight to be paid by IOCL or supplier. This should be clearly indicated for export as well as import after repair.

10. Transit insurance to be arranged by IOCL or supplier. 11. Clearance from Unit for payment of Octroi at Mumbai. In case the material is to be

cleared under ‘n-form facility’ (viz. waiver from Octroi payment), than the material is to be dispatched to the supplier within seven days after entry into Mumbai jurisdiction. In order to ensure this, the transporter being lined up by Unit for dispatch of the consignment from unit to Mumbai has to get in touch with Refinery Liaison Office at Mumbai / Kolkata. The transporter representative in Mumbai /

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Kolkata should collect the ‘N-form’ from the office and submit the same to the octroi authorities for clearance from Octroi post while entering Mumbai / Kolkata. This will be the responsibility of the transporter & units must ensure strict adherence of the same.

12. Units to ensure that the material is not dispatched till clearance is given by Refinery Liaison Office at Mumbai/Kolkata after completing all export formalities as well as lining up of vessel/flight for export.

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CHAPTER IX

MATERIAL CODIFICATION & CODIFICATION CELL, RHQ 9.1. For implementation of SAP- MM Module, Common Materials Master is being created

and uploaded in the system, which is available to all the users across the corporation. Post SAP Implementation, Indian Oil is having a single catalogue, with a common codification scheme for the entire organization and unified description of items.

9.2. Purpose

• Materials management include materials planning, purchasing, receiving, storing, issues, control and surplus disposal.

• Materials Catalog provides a logical identification of materials for all these functions. • Hence the backbone of an effective materials management system is a state of the

art materials catalog. 9.3. Codification Methodology Creation of Common Material Master in SAP is achieved through a specially Designed Kit Called CDK which serves as the Master data entry hub where all the Logics of codification are inbuilt and codification takes place before porting the same into SAP thru an interface program YM84. CDK – Catalog Development Kit is a materials cataloging Software, specifically developed to suit the current global scenario with Standardized codifying methodology. The CDK nomenclature is used in classifying a material with a set of Main Group, Sub Group & Sub Sub Group along with a group of characteristics.

• CDK helps to generate a complete and comprehensive catalog of materials in a very user-friendly environment

• CDK is a software tool for materials catalog development and its maintenance. CDK can be used while cataloguing items for a new facility or an existing facility

• Serving as a catalog for effective buying description • Providing a very flexible approach in classifying materials • Facilitating an intuitive search • Providing a flexible and expandable database

Material codification in SAP is at the client level with a view to have common codification of material across Indian Oil. Material can be extended to desired company code, Plant as per the requirement of the Plants. Non Hydrocarbon material is a 10 digit intelligent coding. First 6 digit is called coding schedule followed by 3 digit which is running numbers and followed by another digit which is a identifier / indicator. The codification hierarchy is as under: The 10-digit code comprises of:

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Main group Sub Group Sub-sub Group Serial no. Identifier AA

BB CC

DDD Z

Identifier / indicator 1-Imported proprietary, 2-Imported common spare,3-Indigenous proprietary,4-Indigenous common 5-Non valuated / Insurance spare CDK (Catalogue Development Kit) is available for viewing as Web Base CDK viewer in Server at COIS, Gurgaon with IP address http://10.51.25.23/ Users across IOCL can click on the desired main group for which they want the material code. This will take them to the first screen and again click on icon to get sub group of main group. Continue above to get sub-sub group. Finally they get desired material code as given below. Whenever Users do not find a material in CDK, Material codification request on the prescribed format be sent to Codification Cell of Central Procurement Cell at Refineries Head Quarter duly suggesting codification schedule i.e. 1

st 6 digits after

checking in the system that it is not already codified. In case Material is already codified and existing in some other Plant, a request may be made, online (t-code YMC) for extending the material to requisite Plant. Request for extension of Material master can be done online thru t-code YMC. 9.4. Material Master Fields Material master information is to be provided in following fields:

Field Name Field Type

Field length

Description of field

Material number Char 10 Key that uniquely defines a material. 10digit logic already defined.

Material short text (short description)

Char 40 Text, consisting of up to 40 characters, concisely describing the material.

Base unit of measure

Char 3-4 Unit of measure in which stock of the material are managed.

PO text for material description

Char 70 each field

Text, any length, with a limit of 70 characters in each field, that describes the material in detail

9.5. Codification Cell

Codification Cell at RHQ is taking care of the codification requirements of all the refineries. Standardization of Technical Specification in Material Master shall be undertaken wherever necessary on the recommendations of M&I.

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CHAPTER - X

INVENTORY CONTROL 10. Introduction

In financial parlance Inventory is defined as the sum of the value of raw materials, work-in-process and finished goods at any given point of time. For our purpose the operational definition of Inventory would be: "The amount of materials, fuels, lubricants, spares, consumables etc. held for smooth running of the plant. Inventory will also include materials held by vendor / contractors such as CR Coil issued to drum manufacturer, spent catalyst (in stock as well as issued for recovery of noble metal), noble metal recovered from spent catalyst and noble metal issued to catalyst manufacturers."

10.1. Reasons for holding inventory

The main reasons for holding inventory are:

i. Protection against uncertainties of demand and supply that cannot be predicted with sufficient accuracy

ii. To avoid stock out iii. Long delivery period

In a nut shell, Inventory Control, therefore, deals with determination of optimal procedure for maintaining stocks to ensure continued availability of required material while at the same time avoiding storage of excessive and obsolete stocks.

10.2. Selective Inventory Control techniques 10.2.1. ABC Analysis is a basic analytical management tool which enables the

management to exercise selective control and place the efforts where the results would be greatest. ABC analysis is based on the concept of "Vital Few" "Trivial Many". ABC classification is based on annual consumption of materials.

10.2.2. Facility to take out reports on the basis of consumption is available in SAP from

where the limits can be set for A, B and C class items 10.2.3. The purpose of carrying out ABC analysis could be for selective control w.r.t.

material planning, safety stock determination, MRP level review etc. 10.2.4. The degree of control should be rigorous for "A" items, moderate for “B” items and

minimum for "C" items. 10.3. Guidelines for inclusion as Inventory Control items

10.3.1. Items’ specifications should be firm.

10.3.2. Request for inclusion in IC list of Stores & Chemicals category items should be given

by the User Department. However, such items should have consumption of regular nature (at least 3 regular issues in the preceding year – special issues like turnaround job and Engineering Services’ requirement shall not be considered).

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10.3.3. In view of the regularly changing market demands of Petrochemical products, additives required for petrochemicals shall not be made IC items.

10.3.4. Equipment Spares should be made IC items. Request for inclusion in IC should be given by the User Department.

10.3.5. User will indicate annual consumption along with consumption pattern for deciding inventory levels. The inclusion of IC items will be approved by GM of the respective User Department.

10.3.6. The first procurement action at the time of request for inclusion in IC list will be initiated by the concerned User / Technical department of the Unit before putting the same into IC list. The quantity of first PR shall be at least upto the Annual Consumption (considering available stock, if any).

10.3.7. Substantial changes in consumption pattern shall be informed to the Materials Department by the User Department with the approval of HOD of User Department for necessary changes in levels.

10.3.8. In case material is required to be procured from specific source(s), such source(s)

of supply shall be mentioned in the note leading to the approval for inclusion of items into Inventory Control. The same shall be used by Purchase group for future procurement till any new vendor is added by the User Department.

10.3.9. Non Inventory Control (NIC) items showing regular consumption pattern (as defined

above) may be proposed by Materials Department (IC Section) to the User Department for inclusion in IC list.

10.3.10. Insurance Items are not to be included in IC List.

10.4. Guidelines for removal of items from Inventory Control list: 10.4.1. If the Stores category IC items have no issue transaction at least once in two years,

the same shall be removed from IC list and intimation to this effect shall be given to the User Department by the Inventory Control Section. IC Section shall take approval from HOD of Materials Department for removal from IC list.

10.4.2. In case of Spares category IC items, even if there is no issue transaction in three

years, the item shall continue to remain in IC list. However, in case no consumption is observed for any IC spare for more than three years, then such list shall be sent to User to confirm whether the main equipment is in operation or not. In case it is not in operation, all the spares under that header / group shall be removed from IC. The Codification Team at RHQ shall also be apprised of any such changes by the Unit Inventory Control Section. If the main equipment is in operation, user will review the levels and confirm revised levels (if required) to be maintained.

10.4.3. Chemicals shall be removed from IC only with the consent of User Department /

Technical Services. However, IC Chemicals showing no issue movement at least once in two years shall be brought to the notice of the User Department / Technical Services. Review of IC Chemicals shall also be done in Chemical review meeting with User Department / Technical Services at least once in a month.

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10.4.4. The User Department shall give regular report to Materials regarding obsolescence and non operation. In case no such obsolescence / non operation is observed in a Calendar Year, a “NIL” report shall be furnished by the User Department to IC Section every December.

10.5. Inventory Control section shall raise PRs based on the inventory levels. Inventory

levels shall be periodically updated by the IC section in accordance with the last 3 years’ consumption pattern and lead time. Assistance from User may be taken, if required. Level fixation and subsequent changes in inventory level shall be done with the approval of HOD Materials.

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CHAPTER - XI

TRANSPORT, RECEIPT AND INSPECTION 11. Introduction

Materials required for operation and maintenance of Refineries are received from the following sources:

i. Indigenous and foreign suppliers on whom Purchase Orders have been placed ii. Loan or transfer from other Units or other Organizations

11.1. Responsibilities of the Receipt Section 11.1.1. On receipt of dispatch documents or intimation, Receipt Section should follow up

with the transporter for delivery of materials.

11.1.2. To check if the documents received through bank or through Purchase Section or along with door delivery consignments are in accordance with the PO terms. In case of non receipt of any document, the same shall be taken up with the Supplier.

11.1.3. Taking over consignments from Transport Section and receiving door delivery consignments.

11.1.4. All materials received against Purchase Orders / FOA should generally be routed

through the Receipt Section. However, exceptions can be made with regard to project part supplies, bulk materials (like pipes, plates, cables, structurals, heavy equipments, chemicals etc.) directly unloaded at designated place of storage in Warehouse. Such materials will be unloaded by Receipt Section in consultation with Custody Section to minimize the requirement of repeated material handling and proper storage of materials.

11.1.5. Direct receipt of materials by User Department as exceptional case shall be done

with the approval of HOD of User Department or HOD of Materials Department. On direct receipt of materials by User Department, the delivery challan shall be certified by the user with signature and “Received & Accepted” indicated on the same. In case of rejection or partial acceptance of materials, the same shall be noted in the delivery challan and the rejected materials shall be returned to the vendor directly. The certified challan along with Invoice and Material Issue Reservation shall be sent to the Receipt Section for creation of GRN and posting the Reservation.

11.1.6. Receipt Control number (RC no.) in SAP should be generated immediately on receipt

of materials at Stores. RC number, date and location of materials shall be recorded on the Delivery Challan / Invoice. All the materials received in the Receipt Section should be properly stored and marked or tagged for easy identification and reference.

11.1.7. Before actually taking delivery of materials, the materials will be visually checked

for any apparent damage or discrepancy. Appropriate remarks / endorsements will, accordingly, be made on the consignment notes / challans in case of discrepancies or deviations being found in the received supplies and signature of the transporter representative taken. In such cases a Damage Certificate shall be obtained from the transporter.

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11.1.8. In case material is not delivered within 30 days of the date of consignment note

(CN), Receipt Section shall write to the Transporter with a copy to Supplier to deliver the material. In case where the dispatch documents / intimation is received at Receipt Section after 30 days of the date of CN, such letter shall be issued to Transporter with copy to Supplier immediately on receipt of such intimation / dispatch documents. Even after two such communications (separated by 15 days) the material is not received a communication regarding issuance of Non Delivery Certificate shall be sent to the Transporter with copy to Supplier.

11.1.9. In case, no discrepancy / damage is outwardly or immediately visible, the challan

may be cleared with the remark "received subject to check / inspection". Persons other than those specifically authorized for the purpose will not take delivery or clear consignment notes / challans.

11.1.10. Receipt and handing over of CENVAT papers and counterfoils of Road Permit (Way Bill), wherever applicable, to Finance Department. Proper endorsement at the back of consignment note / challan should be made if CENVAT papers are not received along with the consignment and get the signature of the transporter’s representatives for future correspondence.

11.1.11. Incoming consignments should be opened and checked.

11.1.12. Materials received will be checked with the relevant Purchase Orders and details

received with the consignments. Any discrepancy in quantity / quality or breakage / damage noticed at the time of checking after opening will be communicated to the Supplier with copies to transporter and underwriters. Copies of such advice will be forwarded to Purchase Section, Finance Department and also the User Department, for follow up action regarding claim / replacement and / or rectification or such other action as warranted. In case of any discrepancy observed in the supplies the same shall first be entered in a discrepancy register and intimated to the supplier with copy to transporter and Purchase Section.

11.1.13. Wherever any discrepancy cannot be resolved or in case of non delivery of part or

full consignment against dispatch documents, a claim will be lodged with transporter & supplier with copies to Underwriters, Finance Department and Purchase Section. Raising of discrepancy reports and preparation and lodgment of claims with the carriers / suppliers / underwriters shall be done within the specified time limit as defined in the insurance policy. These claims will cover damages and loss in transit. All claims lodged by Receipt Section to be followed up and settled by Receipt Section.

11.1.14. Coordination for getting incoming materials inspected. Offering consignments for

inspection to the Indentor / User Department by intimating them on regular basis (or uploading on local Intranet) after unpacking. Inspection of the incoming materials shall be completed within 7 working days of receipt of material. Materials to be tallied with supplier’s delivery notes / challans along with relevant papers i.e. documents copies of Purchase Orders specifications, drawing or sample, relevant test certificates etc. by the inspecting authority

Inspection of incoming materials should be carried out in accordance with the PO specifications, prescribed tests, drawings, approved samples, relevant test certificates etc. mentioned in the PO. This would be in addition to the inspection of

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materials that may have been carried out at the manufacturer’s works in accordance with the PO terms and conditions. All correspondence relating to disputes related to inspection of materials, their acceptance or rejection should be conducted by the Receipt Section in coordination with Purchase (wherever required) until final acceptance or rejection.

Inspection of standard incoming IC items shall be done by IC Section. However, User / Technical Department may be asked to inspect incoming IC items if so requested by IC Section for any specific reason.

11.1.15. Handing over of accepted materials to the respective Custody Section. In case

where direct issue from Receipt Section has to be made to User Department, reservation voucher posting shall be done by the Receipt Section.

11.1.16. Goods Receipt Notes (GRN) will be prepared for the accepted items. There is no

need for signed copy of Purchase Order for GR process. When the consignment is not linked to an SAP PO it should be linked to the Letter of Acceptance / Fax of Acceptance (LOA / FOA) for temporary record keeping of the receipt and issue till a Purchase Order in SAP is available for GR processing. Items finally accepted will be physically handed over to the Custody Section and their acknowledgement obtained in the appropriate column of the GRN. Copies of GRN will then be sent, as under:

i. Original to Accounts along with Cenvat documents ii. One copy in the Receipt File

GRNs shall be reconciled on a monthly basis with Finance Department.

11.1.17. Accounting and facilitating disposal (including return to supplier whenever

required) of rejected stores. Rejected materials shall be segregated in the demarcated area with proper tagging.

11.1.18. Consignments should not be allowed to be mixed up or lie unaccounted for a long

time. 11.1.19. Clearance of empty packages and packing materials released and depositing them

to the designated area or Scrap Yard on regular basis. 11.1.20. Up-keep of receipt files in an orderly fashion. 11.2. General points related to Receipt 11.2.1. Procedure for Chemicals testing and sampling

Procedure for chemicals testing and sampling shall be as given in Annexure 11. Deviations, if any, w.r.t. above guidelines, will be taken by Technical Services Department of respective Units with due justification and approval of GM of Technical Services.

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11.2.2. Accounting of Samples

Trade samples received along with the offer by Purchase Section will be sent to the concerned User / Indenting Department at the time of technical evaluation. The accepted sample of the successful bidder will be retained by Purchase Section. To this effect a clause shall be included in the PO so that the incoming materials can be inspected comparing with the approved sample. After inspection of each lot of supplies, the sample shall be returned to Purchase Section. All such samples shall be retained in Purchase Section and will be destroyed at the time of weeding out the Purchase File. The samples of unsuccessful bidder(s) shall be retained by Purchase Section for a period of 1 year from the date of finalization of tender.

11.2.3. Rejection of Materials 11.2.3.1. Items rejected during inspection will be kept separately in the Receipt Section in a

separate area identified as “Rejected Store” so that there is no possibility of mixing with the accepted consignments. Each rejected item will be labeled properly, indicating thereon the name of the Supplier, PO number with (reversed) RC number and date, Invoice Number, Challan etc. The Receipt Section shall immediately inform the Suppliers in case the materials are rejected. A copy of the intimation shall be sent to the Purchase Section.

Receipt Section, in coordination with Purchase Section, shall take up the matter with the Suppliers to sort out, repair or replace the defective goods expeditiously.

11.2.3.2. In case the vendor fails to replace / rectify the rejected materials within a

reasonable time frame, action to be taken for recovery of sums due. 11.2.3.3. If the materials are not acceptable, the Supplier shall be asked to make

replacement supply and remove the rejected goods within a specified period. On specific advice of the Supplier the goods can be returned as per the mode of despatch indicated by the Supplier at his risk and cost.

11.2.3.4. In case payment has been made to the Supplier for the material rejected, the

rejected material shall be returned to Supplier only after receipt of replacement.

11.2.3.5. In case of rectification and where advance payment has been made earlier for material rejected, care shall be taken to secure refund of advance before returning the rejected material to the supplier.

11.2.3.6. Rejected items may normally fall under any of the following three categories:

i. Items to be returned to Supplier for replacement / rectification keeping in view the financial safeguards

ii. In case the vendor fails to remove the rejected goods within a specified time period and no payment has been made against such material, the rejected material can be shifted to scrap yard after giving a final notice to the vendor to this effect. The concerned supplies will ultimately be treated as unserviceable stores / scrap and disposed off accordingly.

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iii. In case inspite of having carried out repair / rectification / replacement and payment having been released for the finally accepted material, if the original rejected material is not lifted by the vendor, the same treatment as indicated in (iii) above shall apply.

11.2.4. Claims for Loss or Damage to Cargo in Transit

11.2.4.1. When loss or damage to the goods which are covered by transit insurance comes to the knowledge of the Receipt Section, the Underwriters and the Carriers must be advised simultaneously to hold surveys and copies of all correspondence with carries / suppliers must be endorsed to the Underwriters for their information and further action.

11.2.4.2. Claims may have to be lodged on carriers for partial or total damage / loss of materials during transit and on suppliers for shortages.

11.2.4.3. It is the duty of the insured to intimate a claim first against the carriers, after taking all requisite steps like arranging for survey, open delivery etc., and then forward all the documents along with a Letter of Subrogation / Power of Attorney to the Insurers. Prescribed forms of a Letter of Subrogation and for Power of Attorney available with the Insurance Company will be obtained from them and submitted duly filled in and signed by the Receipt Officer. These will entitle the Insurance Company to institute legal suits for recovery of claims from the carriers or others upto the amount paid by them in respect of the loss.

11.2.4.4. Copies of claims should also be sent to Finance Department and Purchase Section.

11.2.4.5. All claim notices will be entered serially in a Claim Register to be maintained by the Receipt Section. Separate files will be opened for each claim containing all connected correspondence relating to that claim. The Receipt Officer will carry out monthly inspection of the above register as to ensure that the claims are regularly pursued and that they get settled in time.

11.2.4.6. The responsibility for taking steps for lodging and pursuing claims till it is settled,

in consultation with Finance, will be that of the Receipt & Transport Section.

11.2.4.7. In the case of transit loss pertaining to the imported consignments cleared through Port Offices, concerned Receipt Officer shall intimate to the Port Office regarding the loss immediately. The Port Office will lodge the claim on Insurance Company. The Receipt Officer shall get the consignment surveyed with the help of local office of the Insurance Company and send survey report to the Port Office for further pursuance of the settlement. Claim will be settled by respective Port Office

11.2.4.8. Realization of Claim

On settlement of a claim by the carrier, the Insurers will be intimated accordingly. If any amount is paid by Insurers against the Letter of Subrogation, it is only an advance without interest subject to adjustment after the claim is finalized with the carriers.

It is the responsibility of the Receipt & Transport Section to pursue all claims till finalization. If claims are paid short or repudiated, the Receipt Officer should obtain specific order from Stores in charge before accepting the repudiation.

In case, it is finally decided to close the case, the Receipt Officer will inform all concerned and initiate write-off proposal for any loss that may be involved.

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11.3. General points related to consignments received through Railways 11.3.1. Supporting Documents for Valid Claim

Claim notices served on the Railway Administration will always be supported by the following documents:

11.3.1.1. For non-delivery claim for piece consignments

i. Non-delivery certificate obtained from the Railway Station Master as separate memos, or endorsements on the back of Railway Receipts (R/R) under the station stamp

ii. Original R/Rs wherever necessary

iii. Copies of Supplier's delivery invoices 11.3.1.2. For non-delivery of full wagons

i. Original R/Rs if all wagons booked under particular R/Rs have not been received

ii. If the wagons have been received partially, a true copy of the R/Rs along with a non-delivery certificate or a certified copy of the remarks passed in the Railway Delivery

iii. Copies of Supplier's Sale Invoice 11.3.1.3. For claims for shortage/damages or short delivery in piece

consignments

i. True copies of the Railway Receipt

ii. Railway certificates supporting the shortages / damages

iii. Extracts from the challans or supplier's delivery notes in respect of items involved in the claim

iv. Full particulars of the materials that are damaged or not received, together with their value

v. Where some of the parts of equipment are damaged, the cost of repair or replacement of the parts supported by Performa invoices or bills of the suppliers

11.3.1.4. Shortages / damages in full Wagons

i. Copies of the R/Rs

ii. Railway shortages / damage certificate

iii. In addition to the above documents, the claims on the railways will be accompanied by claim bills which will be prepared by the accounts officer concerned and sent to the railway administration in continuation of the claim notice given by the receipt section

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11.3.2. Preferring Claims on Railways

It may be noted that the Railways will not accept liability, if notification in writing of claim for compensation is not preferred against them within 6 months from the date of booking. All letters / notices to the Railways Administration will be addressed by the Receipt Section per "Registered Post / Acknowledgement Due" and the postal and / or other acknowledgement will be preserved.

In respect of the original claims for non-delivery of full consignments of wagons, shortages / damages may be noticed when the consignments / wagons are delivered later by the Railways as sometimes happens. In such cases also "Open Delivery" will be insisted upon and the original claims will be modified instead of raising fresh claims.

11.3.3. Claim Bill

A monetary claim bill, showing the amount claimed and how it is arrived at, will be forwarded by the Receipts Officer to the Railways authorities and the underwriters with a copy of the claim to Finance Department.

11.3.4. Payment of freight to Railways

As far as possible, all payments to Railways shall be made by Railway Credit Notes that may be issued by the Stores / Accounts Officer who are authorized to do so.

11.4. Responsibilities of the Transport Section

This section will be responsible for the following activities: 11.4.1. Receipt and registration of incoming railway receipts, air / road / river transport

consignment notes and other accompanying vouchers and handing over the consignment to Receipt Section / Custody Section or directly to the site.

11.4.2. Collection of stores from Railway station or siding / Transporters’ godown / Courier

office / Post office / Bank 11.4.3. Off loading of wagons from Railways / Stores sidings 11.4.4. Wherever materials are received at the Refinery railway siding, sending off-loading

messages to the OM&S Department with regard to the off-loading of wagons to admit removal of empties by the OM&S Department

11.4.5. Collection of stores from the godowns of different suppliers if so stipulated in the

purchase order 11.4.6. Preparation of monthly statement of outstanding consignment notes 11.4.7. Obtaining shortage / assessment certificate from Railway authorities or other

transport agencies or postal / courier / authorities as the case may be 11.4.8. Transport Section will process the freight bill as per provision of the Purchase

Order.

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11.4.9. Keeping running records of consignments in which containers / ISO tanks / Euro-Tainers have to be returned and of those for which containers belong to Corporation

11.4.10. Expediting consignments with carriers, wherever required

11.4.11. Maintaining close contact with unloading and transport contractors and processing bills of the contractors for verification etc. and submission to the concerned Receipt Officer and Finance.

11.4.12. Non receipt of CenVAT documents should be clearly indicated and signed by transporter & representative of Receipt Section or Transport Section on the back of the Challan or Consignment note. Such non receipt should also be clearly indicated in GRN.

11.4.13. Receipt of LSC document from Finance.

11.4.14. Reconciliation of collection on weekly basis for clearing the backlog.

11.4.15. Ensure timely payment to the transporters. Responsibilities of the Transport Section shall be taken care of by the Receipt Section where a separate Transport Section does not exist.

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CHAPTER-XII

CUSTODY AND ISSUE

12.1. Responsibility of the Custody & Issue Section (hereinafter referred to as Custody Section for the sake of brevity)

The principal functions of the Custody Section of Stores are summarized below:

12.1.1. Timely taking over of materials against GRNs.

12.1.2. Proper storage in appropriate bin and bin location entry in SAP. Endeavour to

ensure that multiple bin locations for the same material are reduced as far as possible. Also efforts to be made that similar type of materials are stored in the same vicinity.

12.1.3. Preservation of materials and good house-keeping.

12.1.4. Issue of material including checking of relevant vouchers and the consequent arrangement and on-line posting of issue notes in SAP.

12.1.5. Reconciliation of stocks as per: i. Discrepancies in stock verification reports of Finance. ii. Any quantity related discrepancy observed at any other time.

12.1.6. Maintaining records of returnable cylinders / toners and verifying rental bills for such returnable cylinders / toners. Accounting of empty cylinders as per PO, return details, rental bill payment and advising Purchase & Finance for release of security.

12.1.7. Assisting in stock verification jointly with Stock Verifiers and certifying the

correctness of verification and making stock adjustment notes for correction of stock figures.

12.1.8. Taking return from various Departments.

12.1.9. Taking over of Project leftovers.

12.1.10. Proper labeling of materials. 12.2. Responsibilities of Custody Section in detail 12.2.1. GRN verification

Following should be checked by the Custodian: i. That the received material is matching with the description and part number,

quantity and item codes entered in the GRN. ii. That the received material is checked by visual inspection for physical damage. The

Custodian should then place the material in the proper bin location and note the bin location in the GRN, wherever new locations are assigned and post the correct bin location in SAP immediately.

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12.2.2. Returned Stores

12.2.2.1. All materials, which have been previously issued for works or other jobs and are no longer required, should, in the absence of special instructions to the contrary, be returned to Stores with proper identification and accompanied by SAP Materials Return Voucher. The vouchers should show all details i.e. the SAP Code Number, quantity and reference of the issue requisition under which the material was originally drawn.

12.2.2.2. In case of unused materials drawn against a package order, materials shall be

returned after appropriate codification, pricing and tagging by the User Department. This will be treated in line with Project Leftover stores described elsewhere in this manual.

12.2.2.3. The technical acceptance of these new and unused returned materials shall be

certified by the User Department before accounting of materials in SAP by Stores. The same shall also be linked to proper Test Certificates / Inspection Release Note. The returned materials should be received in the appropriate Custody Section.

12.2.2.4. Used but repaired equipment shall not be taken as Returned Stores. Repaired

equipments shall be retained by respective User Department for optimum use. 12.2.3. Issue of materials by the Custodian

Reservation Vouchers are presented to Custody Section for issuing materials. It shall be the responsibility of the Custodian to verify:

i. That the Reservation Voucher is signed by the authorized personnel of the User Department.

ii. In case of issue of FIM, the Work Order / PO number shall also be indicated in the Reservation Voucher.

iii. That the correct date and time of presentation of the Reservation to Stores is noted.

After the above mentioned verification, the material shall be issued and voucher posted in SAP.

12.2.4. Material Transfer Posting in SAP

Material Transfer notes are raised in case of code to code (to reduce duplicate codes in use) or storage location transfer of materials and it shall be the responsibility of the Issuing and Receiving Custodian that necessary entries are made in SAP. Code to code transfer shall require approval of HOD of Materials Department.

12.2.5. Transfer of goods to other IOCL Units / outside Organizations

Authorization and modality for issue of materials to other IOCL Units / outside Organizations shall be as under:

i. Transfer to other IOCL Units: Authorization by Stores in charge against SAP Stock Transfer Order (STO) created by the IOCL Unit that requires the material. STO is posted in SAP by the Issuing Custodian and corresponding Despatch Challan printed from SAP.

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ii. Transfer to other Organizations: a) On Loan - Authorization by GM. b) As Free Issue Materials (FIM) for fabrication against approved orders /

contracts – this shall be done on receipt of request letter and Reservation Voucher from User Department.

Before any item is sent outside the Refinery, intimation to be given to Finance Department by Materials Department for reversal of CenVAT.

12.2.6. Cylinder on rental basis

Cylinder on rental basis are required for consumable gases like Oxygen, Acetylene, Hydrogen, Nitrogen, Carbon Dioxide, Ammonia, Chlorine, Sulphur Dioxide, Carbon Monoxide, Calibration Gas Cylinders, Cab, Cab-2, Cd, Cj, Teal, Ipra, Ticl4 Cylinders / Toners etc. Cylinder accounting shall be done considering the following: i. The rent free period and ii. The need for a faster turnaround of cylinders. Dates of return should be determined and prominently marked on the challans (extra copies to be insisted upon or prepared if necessary) at the time the cylinders are received. Lot-wise records of these cylinders should be maintained. Periodic reviews should be carried out to ensure timely return of cylinders.

12.2.7. Gate pass 12.2.7.1. No material should be allowed to go outside the Refinery gates without a

Material Gate Pass. The signatory of the Gate Pass will be nominated by HOD.

12.2.7.2. Materials Gate Pass shall be issued by the User Department for any materials issued to User Department which needs to be taken out of the Refinery premises.

12.2.7.3. All material passing out of Refinery premises with gate pass should be examined

and checked by the security personnel at the gate. Record of gate passes should be maintained by the Custody Section, if the same is issued from Stores. For materials loaded in lorries, it is necessary for the Security to witness the loading in order to keep a check on the materials being loaded. This would also avoid unloading at the gate for the purpose of checking, which is particularly difficult for heavy items and bulks.

12.2.7.4. Tracking of materials against returnable gate pass shall be the responsibility of

the Officer of the concerned department. The incoming material shall be cross referenced with the material gate pass number.

12.2.8. Project Leftover materials

Procedure for takeover of leftover project materials shall be as detailed in Annexure 12 (ref. Finance Circular F/12/035 dtd 15.07.10)

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12.2.9. Stock Verification The object of stock verification in the Custody Section of Stores is to ensure that:

a. The materials tally with the description shown in SAP b. The physical quantity tallies with the SAP quantity c. The discrepancies noticed are investigated and adjusted / accounted for

12.2.10. Frequency of Verification shall be as under (ref. Finance Circular

F/12/042 dtd 06.01.11):

Category Value # Periodicity A Exceeding Rs. 5 Lac Once in 6 months B Exceeding Rs. 1 Lac and upto Rs. 5 Lac Once in a year C Exceeding Rs. 25,000.00 and upto Rs. 1 Lac Once in 3 years D Exceeding Rs. 5,000.00 and upto Rs.

25,000.00 Once in 5 years

E Upto Rs. 5000.00 Random basis each year

# per SAP material code per Refinery location

12.2.11. General Rules for guidance of Stock Verifiers 12.2.11.1. Entering the Field Book

The Stock Verifiers should enter in their field books the detailed particulars of items to be verified together with the names of the warehouse and the section that they propose to verify on the following day. Book balance should not be entered in the field book until the stocks have been actually verified. Concerned Custodian shall verify and endorse the Stock Verifier’s Field Book / report.

12.2.11.2. Description & Nomenclature of materials

It must be seen that the materials verified agree with the description, nomenclature and the Unit of Measure (UOM) in SAP.

12.2.11.3. Materials under Issue or Receipt

Stock Verifiers should also examine materials under issue and receipt. If the items under verification happen to be there, it should be seen that the relevant Issue Vouchers have been duly posted in SAP. If not, the quantities proposed to be issued should be added to the stock figures.

12.2.11.4. Investigation and resolution of Discrepancies

Any discrepancy found as a result of stock verification between physical and SAP stocks shall be investigated by the Stores Officer who will make a report thereon & submit to HOD Materials through Stores in charge. Any adjustments to be made as a result of this shall be made on the basis of such reports supported by necessary documentation.

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CHAPTER - XIII

NON-MOVING ITEMS AND DISPOSAL OF SURPLUS AND SCRAP MATERIALS 13.1. A list containing all non moving items (more than 5 years) shall be circulated every

year to the HODs of the concerned User Departments or multi disciplinary committee. The multi disciplinary committee or HODs of concerned departments shall review these lists, identify surplus and inform Materials Department. Based on these comments / recommendations, Stores Section shall process note for approval of Competent Authority of User Department as per DOA for declaring these items as surplus for disposal.

13.2. A list of non valuated stock shall be taken out once a year by Inventory Control

Section and sent to HODs of the concerned User Department for checking if the parent equipment is still in operation. In case the User Department certifies (with the approval of their HOD) that the parent equipment has become obsolete, further action regarding de-capitalization of the items and subsequent identification and disposal as surplus shall be taken. Suitable information shall also be given to RHQ Materials Codification team to make necessary updates in SAP Materials Master.

13.3. Institute of Chartered Accountants had issued ASI-2 (2000) and specified that

insurance spares should be capitalized and depreciated along with the original asset. Machinery spares are classified as insurance spares if they satisfy the two conditions that they are specific to a particular item of fixed assets and their use is expected to be irregular. (ref. Finance Circular NO.F/12/02 dated 18.10.06). Insurance spares should be identified before raising of PR and to be treated as capital item. The approval of Competent Authority should be taken as required for capital items before raising of the indent and should be classified / capitalized properly and not to be included with the normal inventory. Replacement of insurance spare should be procured under capital budget w.e.f. 01.04.14.

13.4. Items not moved for more than five years with total stock value below Rs. 10,000.00

(excluding spares) may be declared as surplus. Other materials should also be reviewed critically.

13.5. Wherever the parent equipment is no longer in operation or the equipment / spare has become obsolete, the spares may be declared as surplus. Approval for obsolescence and / or non operation shall come from the HOD of the concerned User Department.

13.6. Off-cut materials 13.6.1. The cut pieces of pipes, sheets, structural etc. less than their standard size of

supplies and cables less than 100 m in case of power cable and 300 m in case of signal & control cables shall be treated as off-cut materials and charged to the job.

13.6.2. If any such off cut material is to be retained the same shall be retained by the User

Department and the balance material shall be deposited in the scrap-yard.

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13.7. Shelf life items

All items whose life is limited, i.e., whose properties change after a certain period of time thereby making these materials unsuitable for their intended use are known as shelf-life items. Examples of such items are refractory, paints, rubber-sheets, chemicals, catalysts, additives etc. These items should be closely monitored to avoid expiry of shelf life.

Stores Section shall maintain the batch / shelf life / SLED (Shelf Life Expiry Date) of Chemicals, Catalysts and Additives at the time of GRN creation in SAP.

Such materials should be procured with staggered delivery so that these are consumed well within the expiry period. In cases where staggered delivery is not possible due to various commercial restrictions only optimum quantity should be procured considering the consumption pattern and the shelf life. Due care should be exercised in procuring such materials against new Project installations so that these are received at site at the right time in right quantity.

The responsibility to monitor the shelf life shall rest with the Indenting Department. Where shelf life of an item is nearing expiry efforts shall be made to consume it or put to alternate use. If it cannot be consumed and no possible alternative use could be ascertained, the book value of the materials shall be written off and disposed off as scrap. Write off shall be obtained from the Competent Authority after recording proper reasons and such expired stock to be removed from the inventory thereafter.

Exclusions: Chemicals which are directly unloaded at Production site are excluded from the list of chemicals for which shelf life is being maintained by Stores.

13.8. Scrap

13.8.1. After salvaging the usable materials, all scrap materials should be deposited

category-wise in the Scrap Yard into different lots by various User Departments and their representatives. No further approval is required for declaring material deposited in the scrap yard as scrap.

13.8.2. Radioactive material, e-waste and hazardous waste shall not be deposited in the scrap yard and stored in designated area and disposed of as per statutory requirements in vogue.

13.8.3. Scrap materials which have to be disposed as hazardous waste will be disposed

on as is where is / arising basis from the demarcated location in the concerned waste generating units. In such cases Production and HSE Departments will be consulted. The responsibility of materials being loaded as scrap / hazardous waste from the various Units inside the Refinery will rest entirely with the concerned User Department.

13.8.4. Where scrap is to be disposed off from other than designated scrap yard, specific

approval of respective DGM shall be taken by User Department and the same forwarded to Stores.

13.8.5. Reserve Price shall be fixed by a committee formed for the purpose with the

approval of GM. Reserve Price shall be fixed considering the following:

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i. Last Sale price of similar item at the same Unit / nearby Unit ii. Current market price given by Auctioning agency iii. Reserve price of the item should not be fixed less than the scrap value

considering the metallic content.

13.8.6. Approval for issuing scrap tender along with approvals for Reserve Price and provision for “Subject to Approval” (STA) shall be taken as specified in DOA for sanctioning disposal of waste materials.

13.8.7. Scrap should be disposed off considering the following: 13.8.7.1. If the highest / lone bid is greater than or equal to the RP the scrap can be sold

with approval as per DOA. 13.8.7.2. If the highest (not lone) bid is less than the RP, scrap shall be sold off with

justification (including review of RP if required / market conditions) and disposal approval as per DOA.

13.8.7.3. In case of lone bid, less than RP, at least two refloats shall be done after which

the scrap shall be sold off with justification (including review of RP if required / market conditions) and approval as per DOA.

13.9. Condemned Assets 13.9.1. An asset may become unserviceable on account of any or all of the following:

i. The operational cost is highly disproportionate in relation to the operational cost of similar assets.

ii. The working condition of the assets is such that it becomes a safety hazard. iii. The asset has become obsolete and it is proposed to procure an improved model to

increase the operational efficiency. iv. The asset has outlived its normal life and cannot be economically operated or

repaired. 13.9.2. The proposal for condemnation and disposal of an asset on account of the above

reasons shall be initiated through the HOD of User Department for examination by a committee formed with the approval of GM. The committee shall comprise of representatives of User, Materials and Finance Departments.

13.9.3. The Condemnation Committee shall also fix the reserve price (RP). The RP shall be the higher of Written Down Value (WDV) or the estimated metallic content value. In exceptional cases where it is difficult for the committee to assess a realistic RP and the services of an external valuer is required to fix the RP then approval of GM shall be taken with justification to appoint the valuer. The RP shall be fixed based on the assessment of the external valuer by the committee.

WDV shall mean the written down value as on the date of condemnation of asset.

13.9.4. The final recommendations of the Condemnation Committee (including the RP and STA provision) shall be submitted to competent authority as per DOA for declaring the asset as condemned and disposal thereof. The User Department member shall make a specific mention that the asset does not contain any radioactive material.

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13.9.5. Asset declared as condemned should be disposed off considering the following:

13.9.5.1. Where RP is more than or equal to WDV

13.9.5.1.1. Highest / Lone bid is greater than or equal to RP, asset shall be sold off with approval as per DOA.

13.9.5.1.2. Highest / Lone bid is less than RP but more than or equal to WDV and the RP has been fixed based on metallic content and / or the recommendation of external valuer, in such case asset shall be sold off based on the recommendation of the condemnation committee with justification (including review of RP if required / market conditions) and disposal approval as per DOA.

13.9.5.1.3. Highest (not lone) bid is less than WDV, asset shall be sold off based on the recommendation of the condemnation committee with justification (including review of RP if required / market conditions), write off approval and disposal approval as per DOA.

13.9.5.2. Where RP is less than WDV

13.9.5.2.1. Highest / Lone bid is greater than or equal to WDV, asset shall be sold off with approval as per DOA.

13.9.5.2.2. Highest (not lone) bid is less than WDV, asset shall be sold off based on the recommendation of the condemnation committee with justification (including review of RP if required / market conditions) write off approval and disposal approval as per DOA.

13.9.5.3. Situations not defined above shall call for at least two refloats after which the asset shall be sold off based on the recommendation of the condemnation committee with justification (including review of RP if required / market conditions), write off approval and approval as per DOA.

13.9.6. Where the asset in question to be disposed off is a transport vehicle, complete

particulars of registration number, type, model, year of make, particulars of road tax etc. shall be given, wherever applicable. It shall also be made clear in the terms and conditions of sale that the registration and / or transfer charges shall be borne by the purchaser.

13.9.7. If no offers are received for any lot / item after three attempts, the book value shall be written-off as per DOA and the asset disposed off as scrap.

13.10. Surplus 13.10.1. In case of spares identified as surplus due to obsolescence, it should be checked

through SAP whether the same make and model of equipment is available in other units. If available, the list of surplus spares to be sent to the unit for indicating their requirement and their response shall be obtained within a period of three months before action taken for disposal.

13.10.2. If any of the surplus material is required for use by any contractor for jobs in any

IOCL location, the same should be issued to them at current market price (on landed cost basis) with 20% discount. By this action we will not only be able to liquidate our surplus but also realize at least 80% of current market value which is not so in case of disposal through tender. Current market price shall be

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established based on the latest orders as per SAP and if the same is not available in SAP then by obtaining offers from the open market.

13.10.3. Non returnable materials, against STO, shall be treated as “Surplus Identified” and

“Surplus Disposed”.

13.10.4. Reserve Price shall be fixed as the lower of Moving Average Price (MAP) or last purchase price (LPP) under that SAP Company Code.

13.10.5. The approval for RP shall be taken from competent authority as per DOA for

declaring the material as surplus and disposal thereof. STA provision shall be kept while tendering.

13.10.6. Material declared as Surplus should be disposed off considering the following: 13.10.6.1.1. Highest / Lone bid is greater than or equal to RP, surplus material shall be sold

off with approval as per DOA. 13.10.6.1.2. Highest (not lone) bid is less than RP, surplus material shall be sold off with

justification (including review of RP if required / market conditions), write off approval and disposal approval as per DOA.

13.10.6.1.3. In case of lone bid, less than RP, at least two refloats shall be done after which the surplus material shall be sold off with justification (including review of RP if required / market conditions), write off approval and approval as per DOA.

13.10.7. In case of surplus items if no offers are received for any lot / item after three

attempts, the book value shall be written-off as per DOA and the surplus item to be disposed off as scrap.

13.10.8. If CENVAT benefit has been availed at the time of purchase of the materials which is being sold as surplus material then the same has to be reversed at the time of sale of material and the same has to be considered for the purpose of determining the write off amount. Wherever the amount of Cenvat cannot be ascertained on materials on which Cenvat credit was availed, Excise Duty shall be paid on transaction value and shall be considered for determining the write off amount.

13.10.9. Write off approval shall be taken on individual item / lot basis.

13.11. Method of disposal

Disposals can be done through e-auctioning portals of an auctioning agency such as MSTC or any other Government approved auctioneers or through open tendering (physical auction or sealed bid) mode. In case disposal is made by a mode other than e-auction, modus operandi for the same shall be got approved by the concerned Units from the Unit Head, with due Finance vetting.

13.12. Earnest Money Deposit

EMD shall be taken as 5% of the RP. EMD of other than H1 bidders shall be released after completion of auction / tender process. EMD of the H1 bidder shall be retained till the completion of Sale Order in case the auction / tender leads to a Sale Order. In

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case the auction does not lead to a Sale Order the EMD of H1 bidder shall be returned immediately on taking decision to annul the auction / tender. However, in case of tendering through MSTC, MSTC norms for EMD shall apply.

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CHAPTER-XIV

Implementation of Integrity Pact Program (IPP)

In order to ensure transparency, equity and competitiveness in the tendering system, IOCL decided to implement Integrity Pact Program in all tenders above Rs.10 cr w.e.f. 15th July 2008.The guidelines got changed from time to time The latest guidelines relating to IP are mentioned herein below for uniform implementation across the Corporation (Circular No. F/12/44 Dated 25/02/11)

1) ED (CA) shall be the Nodal Officer for coordinating all the activities relating to implementation of the IP program. At the Divisional level, concerned ED (F) shall be the Divisional' Coordinator. For Corporate Office, ED (CF) shall be the Coordinator.

2) The IP program will be implemented in phases and initially the threshold limit of the

tenders covered under the IP program shall be Rs. 10 Crore and above. In respect of each of the high value tenders above Rs. 150 Crore an exclusive IEM will be nominated to oversee the entire process, right from the Notice Inviting Tender (NIT) /pre-bid stage till the conclusion of the contract including the warranty/guarantee period. IEM shall be nominated by the Nodal Officer based on a roster for which proper record shall be maintained by CA Group. It will be mandatory to include the name of the nominated IEM in the detailed NIT.

3) In case the revised tender estimate or the order value (at the time of placement of

order) exceeds the threshold value (i.e. Rs. 150 Crore) even though the original tender estimate is below Rs. 150 Crore, IEM shall be nominated / associated with the tender. Even in case, the order value (at the time of placement of order) falls below the original tender estimate of Rs. 150 Crore or above, IEM once nominated will continue to be associated with the tender. Thus the IEM will continue to be nominated / associated at whichever stage the tender/order-value exceeds the threshold value of Rs. 150 Cr.

4) Apart from all high value contracts, any contract involving complicated or serious

issues could be brought within the ambit of IP, after approval of concerned Divisional Directors.

5) The threshold limit of Rs. 10 Crore/ Rs.150 Crore will be determined based on the

total estimated value of the tender (irrespective of the duration of the contract). For example, if the estimated tender value is Rs. 500 Crore for a LSTK Contract with a completion schedule of 3 years, Rs. 500 Crore and not Rs. 167 Crore should be considered for referring to IEM. Similarly for a contract value of Rs.6 Crore for a period. of 6 months, the relevant value would be Rs. 6 Crore and not Rs. 12 Crore

6) In case of transportation, Capex, material procurement tenders, etc. the threshold

value shall be calculated based on the total estimated value of the entire work as per approval of the competent authority inviting the tender. In such cases, even though the individual contract value may be less than Rs.10 Crore, the bidder will still have to sign the I P agreement while submitting the tender

7) All categories of tenders including those related to transportation, "Capex",

Proprietary supplies, supplies from Original Equipment Manufacturers/Suppliers and services of proprietary nature as well. as single tender shall be covered under the IP

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program, unless specific approval is taken for exemption. For any exemption of a particular tender category from purview of 1P, the issue will be first deliberated with the IEMs and thereafter note, with full justification, shall be put up by the concerned department for approval by Competent Authority. A uniform approach would be adopted in all such cases to avoid discrimination against any bidder(s).

8) For vendor familiarization, as a confidence building measure, each Division, during

the tender invitation stage itself, will make suitable efforts to familiarize the vendors with regard to I P.

9) (i) The IP Agreement (IPA), finalized by the CA Group, shall form a part and parcel of

all tenders above the threshold limit of Rs. 10 Crore (initially). (The IPA and other IP documents are hoisted on www.iocl.com.) All the prospective bidders willing to participate in the tenders above Rs. 10 Crore shall have to necessarily sign the IPA in order to be eligible to participate in the tender. In case the bidder does not sign the IPA, a reasonable. grace time as determined by the Tender Inviting Authority may be given and thereafter, the bidder shall be disqualified. However, no EMD shall be forfeited in such cases.

(ii) In the case of Proprietary suppliers, original Equipment Manufacturers/Suppliers and Service providers (of proprietary nature). Any instance of bidder's refusal to sign IPA, due to partial or total non-acceptance of IPA terms, despite sufficient opportunity, will be first brought to the notice of the IEMs and thereafter the approval of Order Approving Authority will be taken for any dispensation from IP in such cases, after providing full justification.

10) All CVC guidelines as well as internal guidelines, policies. and procedures pertaining

to Invitation of Tender, Award of Contracts, etc shall be followed while implementing the IP.

11) In case there is violation of the IPA after submission of the tender, the tender

inviting authority shall suitably consider the case and may forfeit the EMD. Similar procedure shall be followed in case of any violation after the award of the contract after considering the various factors.

12) IPA would prevail over the General Condition of Contract (GCC) and General

Purchase Conditions (GPC) with regard to specific clauses of the IPA including any consequential breaches by the bidder. However, the imposition of liabilities (period of holiday listing, amount of damages, forfeiture of EMD/SD etc) arising out of the breach shall be decided by the tender inviting / competent authority. Any decision on holiday listing of any bidder on account of violation of the Integrity pact shall be decided on case to case basis considering the severity of the violation and. the existing organizational procedures.

13) Any violation/alleged violation of IPA would not be subject matter of Arbitration as

provided under the contract.

14) All complaints related to IP tenders, above Rs. 10 Crore, directly received by IEMs or any other source, including the Vigilance/Functional Department, will be first forwarded to the Nodal Officer, who shall, in turn, forward the complaint to the concerned department or the IEMs as the case may be. The Functional Group's response to the complaint, duly approved by the concerned Functional Director, will be submitted to the CA Group for verification, well in advance. Thereafter, the

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concerned Division shall make the final presentation to the full panel of IEMs for their views in the matter. Record of all complaints, including response thereof, and all other related materials shall be maintained by the concerned Functional Group.

15) The IEMs, if required, shall investigate the complaint and submit a report to the

Chairman, IOCL within a period of-6-8 weeks. The Divisional Coordinator shall provide the IEMs with all necessary documents for the investigation of the complaint, if so required.

16) Anonymous complaints will be examined / investigated on grounds of merit.

Complaints with non-vigilance angle will be forwarded to IEMs while complaints with vigilance angle will be forwarded to CVO for further necessary action. However, it will be Management's prerogative to decide the nature of complaint and designate the investigating authority.

17) Complaints relating to Dealership/Distributorship will not fall under the purview of IP

as the procedure does not entail tendering and selection is based on the Marketing Discipline Guidelines, as amended from to time by the Government.

18) In order to ensure timely nomination of IEMs by the Nodal Officer, in respect of

Tenders above Rs. 150 Crore, the respective Functional Department/Division will put up a note, routed through the Divisional Coordinator, with all relevant tender details, well before publication of the NIT. In case of any delay in putting up such note, the Functional Department will also record the reasons of delay

19) In line with the CVC guidelines, information relating to tenders in progress and

tenders under finalization needs to be shared with the IEMs. Accordingly, in respect of all tenders above Rs. 150 Crore, the IEMs will be apprised of the stage-wise progress report, as per formats provided by CA Group. The Functional Group will submit the Report to the Nodal Officer i.e. ED (CA), well in advance, duly routed through the concerned Divisional Coordinator for onward' submission to the nominated IEM. Further, a presentation shall be made by the Functional Department to the full panel of IEMs, in the structured monthly meetings, based on the above report(s) submitted to the nominated IEM. The various stages of submission of report are

• Report 1 - NIT issue stage • Report 2 Upon opening of tender • Report 3 - After completion of evaluation of techno-commercial bids of Tender and

approval for opening of price bids • Report 4 - After completion of evaluation of price bids of tender (only after approval

for placement of order) • Report 5 Upon award of work order and acceptance of work order by the party

20) To comply with the CVC Guidelines, the Divisional Coordinator shall submit MIS (in

prescribed formats by 7th of each month) towards IP compliance to the Nodal Officer, for compilation and submission to CVO (for onward reporting to CVC) and apprising the IEMs

21) For tenders above Rs. 10.Crore (& less than. Rs. 150 Crore) the IEMs shall only be

broadly involved in the process of implementation of IP program. All the relevant details regarding such tenders shall be compiled by the respective Divisions on a monthly basis and submitted in the form of consolidated MIS.

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22) A separate, dedicated section on I P, hosted on www.indianoiltenders.com shall be

regularly updated so as to provide the stakeholders with the relevant information regarding implementation of IP Programme including the progress of tenders(above Rs. 150 Crore) immediately upon issue of NIT. The Divisions shall provide timely inputs to CA Group to ensure regular updation

23) In case of joint OMC tenders, the threshold value will be based on the estimated

value of the tender irrespective-of the value apportioned to IndianOil. For joint OMC tender invited by IndianOil, on behalf of the Oil Industry, IEM will be nominated in line with our IP procedures, so as to ensure accountability for compliance to IP Guidelines up to the tender evaluation/work-order stage, as mutually agreed between the OMCs. Any subsequent complaint (after tender evaluation/work-order stage, as applicable) shall be referred to the respective IEMs of the concerned OMCs.

24) Where IndianOil is a bidder in response to a tender and if the tender falls within the

purview of IPA as applicable to tenderer, IndianOil shall submit its bid in line with the IPA requirements of the tenderer and no vetting of Indian Oil's Legal Group is required before signing. The above is applicable only in respect of the Agreement to be executed by IndianOil as a bidder against the tender of a PSU / Govt. Department, which incorporates therein the Agreement under IPA.

Annexure 1 Sample Format for NIT for Press Tenders

IndianOil

Refineries Division …………….

(Materials & Contracts Section) NOTICE INVITING E - TENDERS

(GLOBAL BIDDING / DOMESTIC COMPETITIVE BIDDING)

Indian Oil Corporation Limited invites electronic bids through its website https://iocletenders.gov.in under two-bid system from bonafide bidders as per the following details : - NIT No. : Description of Material ………. …………

………… ……………

Sale Period : ……….. to …………….. Bid submission closing date and time: ………….. at …. Contact person (s): Designation Tel :……….. ; Fax : ………… Email : ……….@indianoil.in Note: Any Addendum / Corrigendum / Sale date extension in respect of above tender shall be issued on our website : 'https://iocletenders.gov.in' only and no separate notification shall be issued in the press. Bidders are therefore requested to regularly visit our website to keep themselves updated.

GENERAL PURCHASE CONDITIONS

TABLE OF CONTENTS 1.0 DEFINITIONS 2.0 CONFIRMATION OF ORDER 3.0 PRICE 4.0 EARNEST MONEY 5.0 TERMS OF PAYMENT 6.0 VENDOR’S DRAWINGS AND DATA REQUIREMENT 7.0 FREE ISSUE MATERIALS (for incorporation in the Indigenous supply) 8.0 THE BILL OF MATERIALS 9.0 MODIFICATION 10.0 SUB-CONTRACTS 11.0 EXPEDITING 12.0 RESPECT FOR DELIVERY DATES AND PRICE DISCOUNT 13.0 DELAYS DUE TO FORCE MAJEURE 14.0 WARRANTY OF TITLE 15.0 INSPECTION AND TESTING 16.0 ACCEPTANCE OF MATERIALS & GUARANTEES 17.0 FREIGHT, TAXES AND DUTIES 18.0 WEIGHTS AND MEASUREMENTS 19.0 PACKING AND MARKING 20.0 DESPATCH INSTRUCTIONS 21.0 SHIPMENT AND SHIPMENT NOTICES 22.0 MARINE AND TRANSIT RISK INSURANCE 23.0 SHIPPING AND SHIPPING DOCUMENTS 24.0 INVOICING & NEGOTIATION OF DOCUMENTS 25.0 TRANSFER OF TITLE AND RISK OF LOSS 26.0 TERMINATION 27.0 RECOVERY OF SUMS DUE 28.0 NON-WAIVER 29.0 COMPLETE AGREEMENT 30.0 EXCLUSION OF THE GOVT. OF INDIA’S LIABILITY 31.0 TECHNICAL INFORMATION/CONFIDENTIALITY 32.0 MODE OF COMMUNICATION 33.0 PART ORDER/REPEAT ORDER 34.0 ARBITRATION AND GOVERNING LAW 35.0 JURISDICTION ANNEXURE A: Proforma for Bank Guarantee in lieu of Earnest Money Deposit ANNEXURE B: Proforma for Irrevocable Letter of Credit ANNEXURE C: Proforma for Performance Bank Guarantee ANNEXURE D: Proforma for Bank Guarantee for full value of Free Issue Material(s) ANNEXURE E: Proforma for Bank Guarantee for full value of Rejected Material(s)

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GENERAL TERMS AND CONDITIONS OF PURCHASE

1.0 DEFINITIONS 1.1 Unless repugnant to the subject or context thereof, the following expressions

herein used shall carry the meaning hereunder respectively assigned to each, namely:

(a) “Bulk Consumables” mean items specifically defined in the Contract

Documents to constitute bulk consumables. (b) “Contract” shall mean the contract as derived from:

i) The Tender Documents; ii) Agreed Variations to the Tender Documents; iii) Vendor’s Priced bid; and iv) The Purchase Order.

(c) “Contract Document(s)” shall mean individually and collectively the documents constituting the contract.

(d) “Defect Liability Period” in respect of:

(i) Bulk Consumables shall be the date of delivery plus 6 (six)

months; (ii) In the case of other Material(s) shall be 18 (eighteen) months

from the date of delivery or 12 (twelve) months after the same have been put in service or commissioned, whichever is earlier;

(iii) In the case of altered or replaced Material(s):

(a) With respect to Bulk Consumables, shall be 6 (six) months

from the date of alteration, repair or replacement as the case may be; and

(b) With respect to other Material(s), shall be 12 (twelve)

months from the date of alteration, repair or replacement as the case may be.

(e) “Delivery”

(i) with respect to Imported Material(s) means the date of completing shipment of the Material(s) on board the designated

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vessel or aircraft at the designated port or place of shipment, securely packed and loaded below deck and unless otherwise determined, shall be deemed to be the date of the relative Bill of Lading or Airway Bill; and

(ii) with respect to Indigenous Material(s) means the date of

completing shipment of Material(s) F.O.R./F.O.T. securely packed and loaded and unless otherwise determined, shall be deemed to be the date of the relative Truck/lorry Receipt or Railway Receipt.

(f) “Earnest Money Deposit” means the Demand Draft or Banker’s Pay

Order or the bank guarantee furnished by the Vendor in lieu of cash in support of his/its bid as required by the Bid Documents.

(g) “Equipment” means plant, machinery, equipment, instruments,

computer, control and other electronic and electrical systems, and shall include parts, components, assemblies and sub-assemblies thereof.

(h) “Free Issue Material(s)” means any equipment, parts or components

or spares to be supplied by IOCL to the Vendor which are to be incorporated in any supply of Indigenous Material(s).

(i) “IOCL” means Indian Oil Corporation Ltd., a company incorporated in

India and having its registered office at G-9, Ali Yavar Jung Marg, Bandra (East) Mumbai – 400 051 and having the Head Office of its Refineries Division at Scope Complex, Core 2, 7 Institutional Area, Lodhi Road, New Delhi-110 003 and includes its successors, assigns and all persons through whom it acts in any matter for the purpose of the Tender or the Contract.

(j) “Imported Material(s)” mean(s) the materials to be fabricated,

manufactured or procured by the Vendor outside India for shipment to India under the Contract.

(k) “Indigenous Material(s)” mean(s) materials to be fabricated,

manufactured or procured by the Vendor within India for supply under the Contract.

(l) “Inspectors” means Inspectors nominated, appointed, approved or

deputed by IOCL for inspection of the Material(s) prior to Delivery. (m) “Material(s)” means any and all raw materials, manufactured articles,

equipment, spares and other goods and supplies whatsoever and includes wherever applicable drawings, data, specifications and intellectual property rights and all services (including but not limited to design, fabrication, inspection, delivery and testing) required to be supplied, done, performed, prepared or undertaken to meet the requirements of the Contract.

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(n) “Procurement Coordinator” means the representative or agency

appointed by IOCL for managing, expediting and/or coordinating the supply of Material(s).

(o) “Project” means the Project or Refinery for which the Material(s) is/are

required.

(p) “Project Site” means the site of the Refinery unit or site of the Project for which the Material(s) is/are required.

(q) “Purchase Order” means IOCL’s acceptance of the Vendors’ offer/bid

and includes any formal or detailed Purchase Order issued by IOCL pursuant to the acceptance of the bid.

(r) “Stipulated Delivery Period” means the date(s) for delivery of the

Material(s) as stipulated in the Contract and failing such stipulation, shall mean the date(s) for such delivery(ies) as agreed between the Vendor and IOCL.

(s) “Tender Documents” with reference to the Purchase Order mean:

(i) Material Requisition/Request for Quote; (ii) General Terms and Conditions of Purchase; (iii) Technical Specifications;

(iv) Special Conditions of Purchase ( if any); (v) Addendum (a) (if any) to the Tender Documents.

(t) “Total Contract Value” means total value of the Material(s) and

services to be supplied as specified in the Purchase Order, exclusive of reimbursable taxes and duties.

(u) “Vendor” means the successful bidder on whom the Purchase Order is placed.

1.2 Interpretation of Contract Documents 1.2.1 The several Contract Documents forming the Contract are to be read together

as a whole and are to be taken as mutually explanatory. 1.2.2 Should there be any doubt or ambiguity in the interpretation of the Contract

Documents or in any of them, the Vendor shall prior to commencing the relative supply or work for supply under the Contract apply in writing to IOCL for resolution of the doubt or ambiguity. Should the Vendor fail to apply to IOCL within 7 days from the date of receipt of the Order for its clarification as aforesaid, the Vendor shall perform the relative work and/or make the relative supply at his own risk.

1.2.3 Any item of supply or service relative thereto shown, indicated or included by

expression or implication in any document forming part of the Contract shall be

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deemed to form part of the Scope of Supply with the intent that the indication or inclusion of the supply or service within any of the said documents shall be a sufficient indication of the Scope of Supply or service covered by the Contract.

1.2.4 No verbal agreement or assurance, representation or understanding given by

any employee or officer of IOCL or so understood by the Vendor shall anywise bind IOCL or alter the Contract Documents unless specifically given in writing and signed by or on behalf of IOCL as an Agreed Variation to the relative term(s) in the Contract Document(s).

1.2.5 Clause headings given in this or any other Contract Documents are intended

only as a general guide for convenience in reading and segregating the general subject of the various clauses, but shall not govern the meaning or import of the clauses there under appearing or confine or otherwise affect the interpretation thereof.

1.3 Irreconcilable Conflicts

Subject to the provisions of Clause 1.2 hereof, in the event of an irreconcilable conflict between the provision of these General Terms and Conditions of Purchase and/or the Special Conditions of Purchase and/or Addendum (a) and/or the Agreed Variations to the Tender Documents and/or the Purchase Order and/or between any of the other said documents so that the conflicting provision(s) cannot co-exist, to the extent of such irreconcilable conflict, the following order of precedence shall apply so that the conflicting provision(s) in the document lower in the order of precedence set out below shall give way to the conflicting provision(s) in the document higher in the order of precedence, namely:

(i) Agreed Variations to the Tender Documents; (ii) Purchase Order; (iii) Addendum/Addenda (a) to the Tender Document; (iv) Special Conditions of Purchase; (v) General Terms and Conditions of Purchase; (vi) Other Contract Documents.

2.0 CONFIRMATION OF ORDER 2.1 Without prejudice to the formation of contract by acceptance of bid, the Vendor

shall acknowledge the acceptance of the Purchase Order by signing and returning the duplicate/photocopy within 7 (seven) days following receipt of the Purchase Order and such acknowledgement shall constitute conclusive evidence of a concluded contract without exception, on the terms and conditions set out in the Bid Documents.

2.2 Should the Vendor fail to acknowledge acceptance of the Purchase Order

within the period specified above, IOCL may, without prejudice to any other right or remedy available to it, forfeit the Earnest Money Deposit.

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3.0 PRICE 3.1 Unless otherwise specifically stipulated, the price shall be firm and shall not be

subject to escalation for any reason. 3.2 Unless otherwise specifically stipulated, the price for Indigenous Material(s):

(i) shall be inclusive of road/rail worthy water-proof packing and forwarding charges upto effecting delivery at F.O.T./F.O.R despatch point and shall also be inclusive of inland freight and octroi, terminal taxes and entry taxes as leviable on the transportation or entry of goods into any local area or limits pursuant to the Contract; and

(ii) shall be exclusive of transit insurance, VAT, Central Sales Tax, State

Sales Tax, Excise Duty and/or such other imposts which are leviable by law on the manufacture of finished goods or their sale to IOCL pursuant to the Contract.

3.3 (a) If it is stipulated that octroi, terminal taxes and entry taxes are to be borne by

IOCL, the Vendor shall arrange for the transporter to pay the octroi, terminal taxes and/or entry taxes, if any leviable and claim reimbursement thereof from IOCL against proof of payment.

(b) If it is stipulated that dispatch shall be on “freight to pay basis”, the Vendor

shall advise the transporter to collect the freight from IOCL after the full quantity of the Material(s) has/have been delivered in good condition to the Project Site.

3.4 Unless otherwise stipulated, the price of Imported Material(s) shall be the FOB /FCA price of Material(s) and shall be inclusive of sea/air worthy water-proof packing and forwarding charges and loading of Material(s) below deck of vessel and all taxes upto delivery of Material(s) at stipulated Indian Port, shipped through Indian flag vessels, but shall be exclusive of marine/air insurance and ocean/air freight. Except for stipulations to the contrary in the Contract, the provisions of FOB (INCOTERMS-2000) shall apply to ocean shipments and the provisions of FCA (INCOTERMS-2000) shall apply to air shipments.

4.0 EARNEST MONEY 4.1 A bid is liable to be rejected unless it is supported by earnest money of a value

as provided in the Purchase Requisition/ Request for Quote. 4.2 Earnest Money by the tenderers shall be accepted only in the form of a

Demand Draft or Bankers Pay Order drawn on a local bank in favor of Indian Oil Corporation Limited. Bank Guarantee in the format set forth in Annexure “A” hereto may be furnished in lieu thereof if the amount of Earnest Money Deposit is not less than Rs. 100,000/-(Rupees one hundred thousand only).

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4.3 If the Earnest Money is in the form of a Bank Guarantee, the validity of the Bank Guarantee shall be extended by the Vendor at the Vendor’s cost and initiative for a period of 3 (three) months beyond the date of the acceptance of bid by IOCL, failing which the Bank Guarantee may be encashed by IOCL and the proceeds held as security for the performance of Vendor’s obligation and the due discharge of Vendor’s liability under the resultant Contract until the Vendor acknowledges the acceptance of the Purchase Order and furnishes the Performance Guarantee. Should the Vendor fail to accept the Purchase Order and/or furnish the Performance Guarantee within the time specified in this behalf, or specifically permitted by IOCL for the purpose, IOCL may encash the Bank Guarantee furnished by the Vendor by way of Earnest Money Deposit and/or forfeit such proceeds or other encashable Earnest Money Deposit held by it in cash without prejudice to any other right or remedy available to it.

4.4 The Earnest Money paid by the unsuccessful bidder(s) shall be

refunded/returned within 15 days of the finalisation of the Tender by IOCL. 4.5 Earnest Money furnished by a tenderer may also be forfeited in the following

circumstances:

(a) If the tenderer alters or modifies or withdraws their bid prior to opening of the price bid and within the specified validity period of the Tender; or

(b) If the tenderer withdraws their bid after the Tender is opened.

5.0 TERMS OF PAYMENT 5.1 For Imported Material(s):

a) The price of Imported Material(s) shall be paid in the currency specified in the Contract.

b) 100% (one hundred percent) of the price of the relative Imported

Material(s) (after considering price reduction for delay, if any, as per clause 12.0) will be paid under an irrevocable Letter of Credit against submission of documents specified in the Letter of Credit. The Letter of Credit shall be substantially in the format set forth in the Annexure “B” hereto and shall be established either by the State Bank of India or other bankers of IOCL in India.

c) Unless otherwise specified, the Vendor may draw against the Letter of

Credit on presentation of all the following documents: (i) Invoice (ii) Clear Bill of Lading/Airway Bill covering the Material(s) invoiced (iii) Packing list for the consignment

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(iv) Third party Inspector’s Certificate covering the invoiced Material(s) wherever applicable

(v) Test/Composition Certificate (vi) Certificate of origin (vii) Drawing(s)/Catalogue(s) covering the Material(s), wherever

applicable. (viii) Export Certificate, wherever applicable (ix) Invoice of Inspector’s charges, wherever applicable (x) IOCL’s acknowledgement of Performance Bank Guarantee

wherever applicable. d) Bank charges payable to IOCL’s banker for opening of the Letter of

Credit shall be borne by IOCL and bank charges payable to the Vendors’ banker shall be borne by the Vendor.

e) Should the Vendor desire to get the Letter of Credit confirmed by any

other banker, confirmation charges will be borne by the Vendor.

f) Unless otherwise agreed, the Letter of Credit shall not permit drawing in more than 3 (three) tranches.

g) Unless otherwise specified, the Vendor shall furnish a Bank Guarantee

towards performance favoring IOCL within 15-days of the Purchase Order for an amount equivalent to 10% (ten) of the Price of Material(s) from a Scheduled bank in India (including an Indian branch of a foreign bank) acceptable to IOCL in the format set forth in Annexure “C” hereto valid (in the first instance) for the period specified in Clause 16.12

h) In the event that IOCL requests the Vendor to hold or to warehouse the

Material(s) for any period after the Material(s) are ready for shipment, the storage charges as agreed, shall be borne by IOCL in addition to the Price.

5.2 For Indigenous Supply:

a) Unless otherwise specified in the Contract, where the total contract value does not exceed Rs.50,000/- (Rupees fifty thousand only), IOCL shall release 100 % of the relative Price of Material(s) within 30 days of receipt of the Material(s) at Project Site and their acceptance.

b) Unless otherwise specified in the Contract, where the total contract

value exceeds Rs. 50,000/-(Rupees fifty thousand only) but is less than Rs. 1,00,000/- (Rupees one hundred thousand only), IOCL shall release 90% of the relative Price of Material(s) on delivery of the documents specified in (c) hereof below relative hereto, and will release the balance 10% of the Vendor’s invoice within 30 (thirty) days of receipt of Material(s) at Project Site and their acceptance.

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c) Unless otherwise specified, where the total contract value of the Material(s) is Rs. 1,00,000/- (Rupees one hundred thousand only) and above, IOCL shall release 90% of the relative price against the documents specified here below relative hereto through IOCL’s bankers and will release the balance 10% on the Vendor’s invoice within 30 (thirty) days of receipt of Material(s) at the Project Site and its/their acceptance. Unless otherwise mentioned, the specified documents are:

(i) Invoice (ii) Clear Railway Receipt/Truck Receipt/Goods Receipt covering

the Material(s) invoiced (iii) Packing list for the consignment (iv) Third Party Inspector’s Certificate covering the invoiced

Material(s)/ Release Note, wherever applicable (v) Test/Composition Certificate, wherever applicable (vi) IBR Certificate/CMRS Certificate, wherever applicable (vii) Drawing(s)/Catalogue(s) covering the Material(s) , wherever

applicable (viii) Guarantee/Warranty Certificate(s), wherever applicable (ix) Invoice of Inspector’s charges, wherever applicable (x) Freight Memo(s) if freight is not included in the Price and the

RR/TR/GR does not give the freight particulars. (xi) Acknowledgement by IOCL of receipt of Performance Bank

Guarantee (wherever applicable)

d) The financial settlement of the Vendor’s invoice is liable to be withheld in the event the Vendor fails to submit the drawings, data and all other documents as called for in the Purchase Order.

(e) Unless otherwise specified, the Vendor shall furnish a Bank Guarantee

towards performance favoring IOCL within 15-days of the Purchase Order for an amount equivalent to 10% (ten) of the Price of Material(s) from a Scheduled bank in India (including an Indian branch of a foreign bank) acceptable to IOCL in the format set forth in Annexure “C” hereto valid (in the first instance) for the period specified in Clause 16.12.

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6.0 VENDORS’ DRAWINGS AND DATA REQUIREMENT The Vendor shall submit drawings, data and documentation in accordance with

(but not limited to) what is specified in the Purchase Requisition/Tender documents and/or Vendor’s drawing and data form attached to the Purchase Order, within 30 (thirty) days of the Purchase Order. The types, quantities and time limits for submitting these must be respected by the Vendor and the Material(s) shall be deemed not to have been delivered for all purposes (including payment) until completion of the said submissions to the satisfaction of IOCL.

7.0 FREE ISSUE MATERIALS (for incorporation in the Indigenous supply) If the Purchase Order involves the incorporation of any Free Issue Material(s): (a) The Vendor shall prior to taking delivery of the Free Issue Material(s)

arrange for a Bank Guarantee for the full value of the Free Issue Material in the format set forth in Annexure “D” hereto valid from the date of the receipt of the Free Issue Material(s) until delivery of the Material(s) in which the Free Issue Material(s) has/have been incorporated.

(b) The Vendor shall inspect the Free Issue Material(s) at the time of taking

delivery thereof and satisfy itself of the quality, quantity and condition of the Free Issue Material(s). IOCL shall not be liable for any claims or complaints whatsoever in respect of the quality, quantity or condition of the Free Issue Material(s) once the Vendor has taken delivery thereof.

(c) All Free Issue Material(s) shall be taken delivery of, transported, held,

stored and utilized by the Vendor as trustee of IOCL, and delivery of the Free Issue Material to the Vendor shall constitute an entrustment thereof by IOCL to the Vendor with the intent that any transportation, utilization, application or disposal thereof by the Vendor otherwise than for incorporation in the Indigenous Material(s) shall constitute a breach by the Vendor.

(d) The Vendor shall transport the Free Issue Material(s) only by such

transportation as is suitable and shall hold and store the Free Issue Material(s) only at such place and/or premises that are air and water tight and otherwise suitable for the storage of the Free Issue Material(s) so as to prevent damage or deterioration or theft or other loss, and shall arrange such watch and ward as shall be necessary to ensure the safety thereof.

(e) Notwithstanding the Bank Guarantee mentioned in sub-paragraph (a)

above, the Vendor shall replace any Free Issue Material(s) which is/are lost, damaged, misused, stolen or deteriorated with other Material(s) of equivalent quantity and quality and condition, and the same shall be deemed to constitute Free Issue Material(s) and the provisions of sub-

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paragraphs (a) to (f) hereof shall apply thereto in the same manner as to the originally supplied Free Issue Material(s).

(f) Unused Material(s) from the Free Issue Material(s) shall be returned by

the Vendor to IOCL and if IOCL so directs, the Vendor shall dispose of the same by sale or otherwise on such terms and conditions as IOCL may stipulate or approve and the Vendor shall pay to IOCL the sale proceeds of the Material(s) so disposed of by sale.

8.0 THE BILL OF MATERIAL(S) 8.1 Where the price of Material(s) is a lumpsum price and pro-rata payment is

envisaged in the Purchase Order, the Vendor shall within 30 (thirty) days of the issue of the Purchase Order furnish to IOCL for approval, a priced and detailed Bill of Material(s)/ Billing Schedule as required covering all Material(s), which shall conform to the price break-up and Total Contract Value given in the Purchase Order. The Bill of Material(s) shall operate as the Billing Schedule for payment of the price of the Material(s). In preparing the Bill of Material(s), the Vendor shall ensure that all contracted Material(s) are included in the Bill of Material(s) so as to ensure that IOCL is not required, due to any oversight or omission, to pay any taxes and duties on a value in excess of the total Value indicated in the Contract. Should IOCL be required to pay excise duty, sales tax or customs duty on account of such oversight or omission, the Vendor shall reimburse such excess payments to IOCL.

8.2 The Material Safety Data Sheets in the case of catalysts and chemicals and

other items where ever applicabe shall also be submitted within 30 days after receipt of the Purchase Order.

9.0 MODIFICATION 9.1 IOCL shall have the right to request changes or modifications in the technical

documents and/or specifications comprised in the Contract, subject to the Vendor’s approval thereto. IOCL shall bear any additional cost and shall be entitled to the benefit of any reduced cost resultant upon any such change or modification.

9.2 As soon as possible after receipt of a written request from IOCL for change(s),

the Vendor shall furnish in writing to IOCL an estimate of the additional cost or benefit for the change(s) and/or modification(s) requested and its effect on the delivery date. On agreement with respect to the enhanced/reduced cost and modified delivery time, which shall be finalized within 10 (ten) days of the request for the modification, IOCL shall issue an amendment to the Purchase Order, and the Vendor shall promptly proceed with the change(s)/modification(s) contemplated by the amended Purchase Order.

10.0 SUB-CONTRACTS 10.1 The Vendor shall not assign the Contract in whole or part without obtaining the

prior written consent of IOCL.

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10.2 The Vendor shall, notwithstanding the consent and assignment, remain jointly

and severally liable and responsible to IOCL together with the assignee, for and in respect of the due performance of the Contract and the Vendor’s obligations there under.

11.0 EXPEDITING 11.1 IOCL may appoint a Procurement Coordinator to manage, expedite and

coordinate the manufacture, shipment and/or despatch of Material(s) covered by the Contract.

11.2 The Vendor shall furnish to the Procurement Coordinator within 30 (thirty)

days of receiving the Purchase Order, the required number of copies of documents including but not limited to Schedule of manufacture/PERT chart, unpriced copies of sub-orders, phased programme of item-wise manufacture, testing and delivery and any other information and/or documents as may be called for by the Procurement Coordinator.

11.3 The Procurement Coordinator shall have free access to the Vendor’s shop and

sub-suppliers’ shop during normal working hours and shall be provided all the necessary assistance and information to help him perform his job.

12.0 RESPECT FOR DELIVERY DATES AND PRICE DISCOUNT 12.1 The time and date of Delivery of Material(s) as stipulated in the Contract shall

be adhered to on the clear understanding that the Price(s) of the Material(s) has/have been fixed with reference to the said Delivery date(s).

12.2 If any delay is anticipated by the Vendor in the delivery of the Material(s) or

any of them beyond the stipulated date(s) of Delivery, the Vendor shall forthwith inform IOCL in writing of such anticipated delay and of the steps being taken by the Vendor to remove or reduce the anticipated delay, and shall promptly keep IOCL informed of all subsequent developments.

12.3 If any Material(s) is/are not delivered within the Delivery date(s) stipulated in

respect thereof, IOCL shall be entitled to a discount by way of price adjustment in a sum equivalent to 0.5% (one half percent) of the price of such Material(s) per week or part thereof that the Material(s) remain(s) undelivered beyond the stipulated Delivery period in respect thereof, subject to a maximum discount of 5% (five percent) of the Total Contract Value. Such discount shall be given by the Vendor by equivalent reduction in the invoice value before presentation of documents to the Bank/IOCL for payment. Should the Vendor fail to deliver the Material(s) or to make such adjustment, the discount may be recovered by any other means.

12.4 Without prejudice to its rights under Clause 12.3 hereof and to entitlement to

discount(s) accrued in terms thereof and in addition thereto, IOCL may at any time after the expiry of the stipulated date(s) of Delivery in respect of any

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Material(s), at its discretion terminate in whole or part the Contract in respect of the undelivered Material(s) or any of them and either purchase such Material(s) from any other available source at the risks and costs of the Vendor and recover from the Vendor any additional cost incurred by it on such purchase or recover from the Vendor without such purchase the difference between the market and contract price of such Material(s) on the date of termination of Contract relative thereto.

13.0 DELAYS DUE TO FORCE MAJEURE 13.1 If a force majeure event as defined below, affecting the Vendor, arises prior to

the expiry of the stipulated Delivery period in respect of any Material(s) and the Vendor intends to claim extension of the stipulated date of delivery in respect of such Material(s) or any of them, the Vendor must advise IOCL by notice in writing of such event by means of communication which secures undisputed service of the notice not later than 10 (ten) days of the occurrence of the event. Such occurrence shall be duly certified by a local Chamber of Commerce or statutory authority. The Vendor shall within 10 (ten) days of the end of the Force Majeure event similarly notify IOCL of such cessation, and of the period and Material(s) for which an extension of Delivery date(s) is consequently claimed. Such notification shall be a mandatory pre-condition to a claim for such extension.

13.2 Events of Force Majeure shall mean:

(a) natural calamities, civil wars and national strikes which have a duration

of more than seven consecutive working days; and (b) strike at Vendor’s works for more than 10 consecutive days.

13.3 Commercial hardship and third party breach, strike, shutdown or lockout other

than as specified in Clause 13.2 hereof shall not constitute an event of Force Majeure.

13.4 In the event of Force Majeure, each party shall bear any costs incurred by it

resulting therefrom. The party affected by Force Majeure shall use all reasonable efforts to prevent and reduce to a minimum and mitigate the effect of delays occasioned by such Force Majeure.

13.5 Subject to receipt of notices under Clause 13.1 above, the stipulated Delivery

date(s) may be extended by IOCL. The decision of IOCL on the Vendor’s claim for extension of time and the time of extension and Material(s) on which extension is given shall be final and binding on the Vendor. On the grant of such extension, the extended date shall be deemed to be the stipulated Delivery date for the purpose of calculating price discount under Clause 12.3 hereinabove.

13.6 If the Vendor is prevented from fulfilling its contractual obligations for a

continuous period of three (3) months because of Force Majeure, then the Vendor and IOCL shall consult with each other with a view to agreeing on the action to be taken under the circumstances, and failing such agreement, IOCL

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shall be entitled to terminate the contract in whole or to the extent that its performance is prevented by Force Majeure.

14.0 WARRANTY OF TITLE 14.1 The Vendor warrants that the Material(s) sold and supplied by it to IOCL

pursuant to the Contract shall be free from any and all defects in title including but not limited to any charge, third party claim, mortgage, hypothecation, foreclosure, lien, restriction, injunction, attachment or encumbrance whatsoever and shall hold and keep IOCL indemnified from and against any and all contrary claims, demands, actions and proceedings and all costs (including legal costs), charges, expenses and losses suffered or incurred by IOCL as a consequence thereof and/or to defend any such claim, demand, action or proceeding.

14.2 The Vendor shall be understood to have represented to IOCL that the use by

IOCL of the Material(s) supplied by the Vendor will not infringe any third party patent rights or pending patent applications or other intellectual property rights. Accordingly, the Vendor will hold harmless and indemnify IOCL against all costs (including legal costs), charges and expenses incurred or any damages or other sums that may be assessed or become payable under any decree or judgment of any court or under any settlement resulting from any suit, claim or action for infringement of third party patents or other third party intellectual property.

15.0 INSPECTION AND TESTING 15.1 In addition to any tests to be conducted by the Vendor under the Contract or

any applicable codes or standards, the Material(s) shall be subject to inspection and/or testing by Inspector(s) (including Third Party Inspector(s)) at any time prior to shipment and/or despatch and to final inspection within a reasonable time after arrival at the Project Site. The Inspector(s) shall have the right to carry out the inspection or testing, which will include inspection and testing of the raw materials at manufacturers shop, at fabricators shop and at the time of actual despatch before and/or after completion of packing.

15.2 In addition to testing and inspection by Inspectors, IOCL may nominate an

institutional agency like Boiler-Inspectorate for official testing of coded equipment. The Vendor shall ensure that all procedures for preparation and performance of tests prescribed by such institution shall be scrupulously complied and observed.

15.3 Unless otherwise specified in the Contract, the inspection shall be carried out

as per the relevant standards/scope of inspection provided alongwith the Tender Enquiry/Purchase Order. All charges for Third Party Inspectors shall be borne by the Vendor and IOCL shall reimburse these charges at actual against documentary proof of payment (limited to the amount indicated in the Contract towards third party inspection,) unless such inspection has become infructuous for any cause.

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15.4 All manufacturers’ mill test certificates and analytical reports from material laboratories in respect of raw materials employed and components incorporated shall have to be presented by the Vendor.

15.5 Before shipping or despatch, the Material(s) will have to be checked and

stamped by the Inspector(s) who may forbid the use and dispatch of any equipment and/or Material(s) which during tests and inspection fail(s) to comply with the specifications, codes and testing or other contractual requirements applicable thereto, and the Vendor shall not tender such rejected Material(s) for supply to IOCL nor shall incorporate the same in any Material(s) to be tendered for supply to IOCL.

15.6 The Vendor will inform IOCL at least eight (8) days in advance of the exact

place, date and time of tendering the Material(s) for required inspection and provide free access to the Inspector(s) during normal working hours at Vendor’s or his/its sub-Suppliers’ works, and place at the disposal of the Inspector(s) all useful means for undertaking the Inspection, checking the results of tests performed, marking the Material(s), getting additional tests conducted and final stamping of the Material(s).

15.7 All tests will be performed at the Vendors’ expense and if required by the

Inspector(s), shall be conducted in accordance with the Inspector’s instructions. The Vendor shall also bear the expense for the preparation and rendering of tests required by the Boiler Inspectorate or other statutory testing or certifying agencies/institutions.

15.8 Unless otherwise specified, all charges for the Inspection shall be borne by the

Vendor. 15.9 IOCL may, at its own expense, have its representative(s) witness any test or

inspection. In order to enable IOCL’s representative(s) to witness the tests/inspections, the Vendor shall notify IOCL at least 30 (thirty) days in advance, of the schedule of all inspection hold points prior to the initiation of equipment fabrication. IOCL shall be notified eight (8) calendar days in advance of any changes in the schedule of inspection. IOCL will advise the Vendor in advance whether it intends to have its representative(s) be present at any of the inspections.

15.10 Even if the inspection and tests are fully carried out, the Vendor shall not be

absolved from its responsibilities to ensure that the Material(s), raw materials, components and other inputs are supplied strictly to conform and comply with all the requirements of the Contract at all stages, whether during manufacture and fabrication, or at the time of Delivery as on arrival at site and after its erection or start up or consumption, and during the defect liability period. The inspections and tests are merely intended to prima facie satisfy IOCL that the Material(s) and the parts and components comply with the requirements of the Contract.

15.11 The Vendor’s responsibility shall also not be anywise reduced or discharged

because IOCL or IOCL’s representative(s) or Inspector(s) shall have examined

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or commented on the Vendor’s drawings or specifications or shall have witnessed the tests or required any chemical or physical or other tests or shall have stamped or approved or certified any Material(s).

15.12 Unless otherwise specifically permitted by the Contract, no Material(s) shall be

dispatched for delivery or delivered under the Contract without being stamped or otherwise approved for delivery by the Inspector(s).

15.13 Notwithstanding approval by the Inspector(s), if on testing and/or inspection

after receipt of the Material(s) at Project Site, any Material(s) is/are found not to be in strict conformity with the contractual requirements or specifications, IOCL shall have the right to reject the same and hold the Vendor liable for non-performance of the Contract. The provision of Clause 16.5 to 16.11 shall mutatis mutandis apply to such rejected Materials.

16. ACCEPTANCE OF MATERIALS & GUARANTEES 16.1 The Vendor acknowledges that notwithstanding the provision or approval of

any drawings, designs, specifications, source of supply or other data relative thereto by IOCL and/or the testing of Material(s) in accordance with the requirements of the Contract or any applicable code or specification and/or any inspection of the input or Material(s) by the Inspector(s) or issue of an Inspection Certificate relative thereto and/or any other act, matter or thing done or required by IOCL to satisfy itself of the quality, quantity, sufficiency or efficiency of the Material(s) prior to delivery thereof and/or the transfer of title and/or risks in relation to the Material(s), shall not be deemed or understood to constitute acceptance of the Material(s) by IOCL nor shall IOCL be understood to have accepted any Material(s) other than plant, machinery, equipment and parts and components unless such Material(s) have been received at the Project Site of IOCL and found to be acceptable as evidenced by a Certificate of Acceptance issued by IOCL, and in case of plant, machinery, equipment and parts and components, unless they have been incorporated into the relative Project Unit and the said Unit has been tested and the relative plant, machine, equipment, part or component has successfully functioned without patent defect.

16.2 To this end, the Vendor guarantees that:

(i) All materials used in the execution of the Contract and all Material(s)

used in performance thereof shall be in strict compliance and conformity to the characteristics, requirements and specifications of the Contract and suitable for the purpose for which such Material(s) are intended to be used if such purpose has been disclosed or is/are suitable for use to which such Material(s) are ordinarily put to use, if such purpose has not been disclosed.

(ii) In the case of machinery, plant or equipment with rated capacities,

outputs or other characteristics, that the machinery, plant or equipment as the case may be, shall function to such capacities and/or outputs and shall meet the other characteristics required in respect thereof.

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16.3 The Vendor further undertakes to replace any Material(s) if found not to

conform to the guarantees aforesaid at any time during the defect liability period applicable thereto. IOCL shall give written notice of the defect to the Vendor and of the rejection of the defective Material(s).

16.4 If the defect can be rectified or repaired without diminishing the quality, utility,

efficiency or life of the Material(s) (of which IOCL shall be the sole judge), instead of outright rejection of the Material(s) IOCL may at its discretion permit the Vendor to rectify the defect(s) within a period to be specified by IOCL in this behalf in the notice. Should the Vendor fail to take action satisfactory to IOCL to rectify the defect(s) within the period specified, IOCL may at its option, at the risk and cost of the Vendor in all respects, rectify or repair or cause to be rectified or repaired the defect(s) either by itself or through any other source or agency, or to reject the defective Material(s).

16.5 Should IOCL, notwithstanding the endeavour to do so, be unable to rectify or

repair or get rectified or repaired the defect(s) within a reasonable time, IOCL may, notwithstanding such endeavour reject the defective Material(s).

16.6 The Vendor shall repair, rectify and/or replace, as the case may be, the

defective and rejected Material(s) without entitlement to any extra payment. DDP INCOTERMS 2000 shall apply for such replacement parts or components or Material(s) at Project Site with respect to imported parts or components or materials.

16.7 The Vendor shall at its own risk and cost remove any rejected Material(s) from

the Project Site, and in case of plant, machinery, equipment, parts or components which have been installed, cause the same to be dismantled and removed from the Project Site subject to the Vendor in all cases prior to the removal of the rejected Material(s) from the Project site:

(i) furnishing a bank guarantee to IOCL from a Scheduled bank in India

(including an Indian branch of a foreign bank acceptable to IOCL) and in a format set forth in Annexure “E” hereto for the value paid by IOCL on the Material(s) rejected; and

(ii) undertaking to replace the rejected Material(s) with other Material(s)

conforming to the Vendor’s guarantees aforesaid applicable thereto. 16.8 The Vendor shall not without the prior written consent of IOCL utilize any

rejected Material(s) in the re-supply. 16.9 The Defect Liability Period with respect to any Material(s) replaced, repaired

and/or rectified shall be reckoned from the date of such replacement, repair and/or rectification as the case may be.

16.10 Should the Vendor fail to dismantle and/or remove any rejected Material(s)

from the Project Site within the time specified in the notice of rejection, IOCL may without prejudice to any other right or remedy, at the risk and cost of the

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Vendor cause the rejected Material(s) to be dismantled and sold by public auction or private treaty as it deems fit and hold or adjust the sale proceeds for the recovery of the cost of dismantling, sale and removal of the rejected Material(s) and any amount paid by IOCL towards the price of the rejected Material(s). In so doing, IOCL shall not act as a trustee or constructive trustee of the Vendor and shall be entitled to act solely on the basis of its best judgment without being accountable or liable to the Vendor in any manner except for the proceeds of the sale.

16.11 The time taken for the repair, rectification or replacement of Material(s) will not

be added to the stipulated Delivery date for the purpose of calculating price discount, and delivery of such Material(s) shall be the date of Delivery of the repaired, rectified or replaced Material(s).

16.12 As security for the due performance of its obligations and the due discharge of

its liabilities under the Contract, the Vendor shall within 15 (fifteen) days of the issue of the Purchase Order furnish to IOCL a Bank Guarantee issued by a Scheduled Bank in India acceptable to IOCL, in the format set forth hereto and marked Annexure “C” hereinbefore. The Bank guarantee shall remain in force for the entire period required for the performance of the contract and the defect liability period plus a 3 (three) months claim period thereafter. Any shortfall in the value of the Bank Guarantee, as a result of encashment by IOCL either in full or in part, shall be made good by the Vendor within 7 (seven) days of notice by IOCL to the Vendor in this behalf. Any failure by the Vendor to furnish the Bank Guarantee or to enhance the Value of the Bank guarantee as stated above shall constitute a default by the Vendor for which IOCL shall, without prejudice to any other right or remedy available to it, be entitled to terminate the Contract with consequences as indicated in clause 12.4, the provisions whereof shall mutatis mutandis apply.

17. FREIGHT, TAXES AND DUTIES 17.1 Subject to the provisions of Clause 17.2, hereunder, Excise duty and Sales

tax/VAT payable on the sale and delivery of Material(s) pursuant to the Contract will be paid in the case of Sales tax and reimbursed in the case of VAT and Excise duty at actual within the contractual delivery date. Any increase in the rates of Excise Duty & VAT beyond the contractual completion date or approved extended contractual completion date will be borne by IOCL to the extent CENVATABLE documents passed on to IOCL and IOCL is in a position to get the CENVAT claim from the authorities. However, the benefit of any reduction must be passed on to IOCL

17.2 Taxes and duties payable or reimbursable by IOCL to the Vendor on the supply

of Indigenous Material(s) shall be included in and shown separately in the Vendor’s invoice for the Material(s). However, the Vendor shall not be entitled to claim payment from the bankers or IOCL of CENVATABLE or VATABLE taxes or duties on which IOCL would be entitled to other credits (presently Excise Duty, Value Added Tax (VAT) and Service Tax) without furnishing IOCL

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the documents required for IOCL to avail of the full CENVAT / VAT or other tax benefits available to IOCL against the payment of the tax. The Vendor shall prior to despatch of the Material(s) obtain from IOCL a list of the documents required by IOCL to enable it to avail of the relative benefits. Payment or reimbursement of the CENVATABLE / VATABLE / other taxes and duties on which credit is available to IOCL shall be made upon the Vendor furnishing the relevant documents.

17.3 Freight and/or octroi and entry and/or terminal taxes, if any, payable or

reimbursable by IOCL shall be invoiced separately and shall be paid/re-imbursed by IOCL after receipt of the Material(s) at the Project Site and satisfactory proof of payment of the relative octroi, entry and/or terminal taxes, as the case may be.

17.4 Freight, taxes and duties are not intended to operate as a profit centre but are

intended only to meet the relevant costs incurred on this account. If any reimbursement or collection of the taxes or duties by the Vendor from IOCL is in excess of the freight, taxes and/or duties actually paid by the Vendor, the Vendor shall forthwith refund such excess to IOCL together with interest thereon at 1% (one percent) per annum above the Prime Lending Rate of the State Bank of India from the date of collection until the date of refund.

18.0 WEIGHTS AND MEASUREMENTS 18.1 The shipping documents, invoices, packing lists and all other relevant

documents shall contain the same units of weights and measurements as given in the Contract Documents, in respect to the following data:

a. Unit net weight b. Unit gross weight (including packing) c. Dimensions of packing

18.2 All weights and measurements recorded by the Procurement Co-ordinator or Inspector(s) on receipt of the Material(s) at the Project site will be treated as final.

19.0 PACKING & MARKING 19.1 All Material(s) shall be suitably packed in weatherproof seaworthy/airworthy

packing for ocean/air transport under tropical conditions and/or for rail and road or other appropriate transport within India. The Vendor shall ensure that the packing is strong enough to ensure safety and preservation of the Material(s) upto the Project Site or other point of final destination.

19.2 Material(s) shall be protected by a suitable coat of paint and all bright parts

shall be protected from rust by application of rust preventives as may be necessary. All machinery surfaces shall be suitably protected.

19.3 For uniform Material(s) when packed in several cases/crates, progressive

serial numbers shall be indicated on each end. In case of bundles, the

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shipping marks shall be embossed on metal or tag and wired securely on each end.

19.4. A distinct colour splash in say red-black around each package/crate/bundle

shall be given for identification. 19.5 All nozzle holes and openings as also all delicate surfaces shall be carefully

protected against damage and bad weather. Flange faces of all nozzles shall be protected by blanks. All manufactured surfaces shall be painted with rust proof paint or as specified in the specification.

19.6 All threaded fittings shall be greased and provided with a plastic cap. All pipes

and sheets shall be marked with strips bearing progressive numbers. 19.7 All small pieces shall be packed in cases. All fragile and exposed parts will be

packed with care and packages will bear the words “HANDLE WITH CARE” in English and in the case of Indigenous Supply, in Hindi also.

19.8 The Vendor shall be held liable for all damages or breakages to the Material(s)

due to defective or insufficient packing as well as for corrosion due to insufficient greasing/protection.

19.9 On three sides of the packages, the Vendor shall affix or cause to be affixed

the following marks clearly visible in indelible paint

FROM: VENDOR

TO: INDIAN OIL CORPORATION LTD. [Address] INDIA PURCHASE ORDER NO.: [ ] Rev. No.:[ ]

10 DIGIT ITEM CODE : [ ] EQUIPMENT NOMENCLATURE: [ ]

NET WEIGHT: [ ]kg/lb GROSS WEIGHT: [ ]kg/lb

CASE NO.: [ ]OF [ ]TOTAL CASES DIMENSIONS: [ ] IMPORT LICENCE NO.[ ]

NOTE:Marking shall be bold with a minimum letter height of 5 cm.

19.10 a) For every shipment, packages must be marked with serial progressive

numbering. The numbering will be progressively continued for each subsequent shipment covering the Contract.

b) All packages will bear warning signs on the outside denoting the center

of gravity and sling marks. Packages that require special handling and transport shall have their centers of gravity and points at which they may be gripped clearly indicated and marked “Attention Special Load -

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Handle With Care” in English Language. Any other direction for handling shall also be clearly indicated on the package.

c) Top heavy containers will be marked either “TOP HEAVY” or “HEAVY ENDS’.

d) When packing is clean and light colored, a dark black stencil paint shall

be acceptable. However, where packing is soiled or dark, a coat of flat Zinc white paint shall be applied and allowed to dry before applying the specific marking(s).

e) Colour codification shall be used to identify different items e.g, IBR,

NACE, Fire Safety Items etc. 19.11 In case of large equipments like vessels, heat exchangers etc., documents

contained in a waterproof envelope shall be fastened inside a shell connection with an identifying arrow sign “DOCUMENTS” applied with indelible paint.

20.0. DESPATCH INSTRUCTIONS For Indigenous Material(s) 20.1 Unless otherwise advised by IOCL or the Procurement Co-ordinator in writing,

Material(s) shall not be despatched without prior inspection and/or testing and Release Order/Material(s) Acceptance Certificate issued by the Inspector(s).

20.2 The Vendor shall exercise due care to ensure that the consignment is booked

under appropriate railway classification, failing which any additional freight incurred by IOCL due to the Vendor booking the Material(s) under a wrong railway classification shall be borne by the Vendor.

20.3 The Material(s) shall be consigned in the name of the consignee viz. Indian Oil Corporation Ltd., [Site address] 20.4 The Material(s) shall be transported only through bank approved transporters

by the most economical and expeditious mode of transport to the destination as applicable for respective mode of despatches as follows :

(a) By Rail in wagon load consignment to : [Name and address of Refinery /

Project to be specified]

(b) By road transport to : [Name and address of Refinery / Project to be specified]

IOCL and the Procurement Coordinator shall have the right to advise any

change in despatch point or destination and/or mode of transport in respect of any Material(s). Any extra expenditure incurred by the Vendor on this account

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supported by satisfactory documentary evidence, will be reimbursed to the Vendor by IOCL.

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21.0 SHIPMENT AND SHIPMENT NOTICES 21.1 Imported Material

The Vendor shall make shipment only after prior approval of the Inspector(s) unless otherwise specifically authorized in writing by IOCL or the Procurement Coordinator. As soon as any shipment is made, the Vendor shall send advance information by way of FAX message [Fax No 022-26400774] to the Dy. General Manager, Indian Oil Corporation Ltd.(Refinery Division), G-9, Ali Yavar Jung Marg, Bandra (East) Mumbai- 400 051 for Mumbai consignments and to the Dy. General Manager (Fax: 033-24145020) Indian Oil Corporation Ltd.(Refinery Division), Indian Oil Bhavan (Refineries Division) Central Wing, 6th Floor, 2, Gariahat Road (South), Kolkata-700068 for Kolkatta consignments (or other specified authority in respect of Material(s) consigned to other Ports), giving particulars of the shipments, vessel’s name, port of shipment, Bill of Lading number and date for ocean shipment and Airway Bill number & Date & Flight details for air consignment, total FOB and freight value with confirmation copy to IOCL, addressed to [designation and address]

21.2 Indigenous Material

Immediately after shipment, the Vendor shall inform despatch particulars to IOCL/ Procurement Coordinator hereunder :

1 copy to Chief Materials Manager, [Address & Fax no]

1 copy to IOCL (Stores) addressed to [Designation, Address & Fax no.]

In the case of project orders, in addition to the above, a copy to the Chief Projects Manager addressed to: [Address & Fax no.]

(PMC as per Purchase Order) addressed to: [Designation, Address & Fax no.] 22.0 MARINE AND TRANSIT RISK INSURANCE 22.1 Marine/Air and Transit Risk Insurance shall be covered by IOCL against its

Open General Policy. 22.2 The Vendor shall send IOCL information of the proposed

shipment/consignment well in advance by telegram/fax/e-mail/courier to enable IOCL to take necessary action for the marine/air/transit insurance of the shipment/consignment.

22.3 The Vendor shall advise the despatch particulars of the shipment/consignment

to the Insurance Company by fax / email under advice to the Procurement Coordinator promptly after shipment to ensure that the consignment is fully covered by insurance. Any failure by the Vendor to do so shall place the consignment at the Vendor’s risk.

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23.0 SHIPPING AND SHIPPING DOCUMENTS 23.1 For Imported Materials(s)

(a) The Vendor shall arrange with Vessel owner(s) or Forwarding Agent(s)

specified in the Contract Documents for proper storage of the Material(s) in a manner so as to facilitate the handling and off-loading at the port of destination and to avoid any over carriage on discharge. All shipment by ocean vessel shall be under deck.

(b) The Bill(s) of Lading/Airway Bill shall be made out in favor of “Indian Oil

Corporation Ltd.” [Refinery/Unit] or to the order of the L/C opening bank, and the notify column should indicate [Designation] Indian Oil Corporation Ltd. [Refinery Division], G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai- 400061 for port of discharge Mumbai and to the Dy. General Manager, Indian Oil Corporation Ltd., Indian Oil Bhavan (Refineries Divison) Central Wing, 6th Floor, 2, Gariahat Road (South), Kolkata-700 068 for port of discharge Kolkatta or other specified authority in respect of Material(s) consigned to other ports.

(c) All columns in the body of the Bill of Lading/Airway Bill namely marks and

Numbers, material description, weight particulars, etc. should be completed accurately and such statement should be uniform in all the shipping documents. The freight particulars should mention the basis of freight tonnage, heavy lift charges, if any, surcharge, discount, etc. clearly and separately and the net total freight payable, shown at the bottom.

(d) The Bill of Lading/Airway Bill shall be free of any liability of IOCL to the carrier

for demurrage. (e) The Bill of Lading/Airway Bill shall indicate the following:

Consignee : Indian Oil Corporation Limited [Name of Refinery/Project]

(f) All documents viz. Bill of Lading/Airway Bill, invoices, packing list, freight

memos, country of origin certificate, Third Party Inspection Release Certificate, inspector’s certificate, Export certificate (wherever applicable), test certificates, drawings and catalogues should be in the English language.

(g) (i) In addition to the Bill of Lading/Airway Bill, which should be obtained in 3

(three) stamped originals plus as many copies as required, invoices, packing lists, freight memos (if the freight particulars are not shown in the Bill of Lading), country of origin certificate(s), Third Party Inspection Release Certificate, inspector’s certificate, Export certificate (wherever applicable) and test/composition certificate, shall be made out against each shipment in as many number of copies as are shown in Clause 23.3.

(ii) The Bill of Lading/Airway Bill, invoice and packing list must specifically show

uniformly, the marks and numbers, material description, contents case-wise,

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country of origin, consignee’s name, port of destination and all other indicated particulars. The invoice must show the unit rates and net total FOB price. The invoice must cover also items packed separately and the value shown accordingly.

(iii) The packing list must show, apart from other particulars, the actual contents in

each case, net and gross weights and dimensions and the total number of packages.

(iv) All documents must be duly signed by an authorized representative of the

Vendor.

23.2 In case of FOB contracts: (i) Shipping Arrangements shall be made through nominated freight

forwarders (in the country of exit) as detailed in the Purchase Order and freight will be accordingly paid by IOCL in Indian Rupees.

(ii) The Vendor shall furnish to the respective nominated freight forwarder,

the full details of consignment such as outside dimensions, weights (both gross and net), No. of packages, technical description and drawings, name of the supplier, ports of loading etc. two weeks prior to the proposed date of shipment to enable the concerned agency to arrange the shipping space.

23.3 The Vendor shall obtain the shipping documents in required number of sets

including three original stamped copies of the Bill of Lading/Airway Bill immediately after the shipment is made and airmail the shipping documents in the manner stipulated hereunder to ensure that the documents so forwarded are received at least one week before the vessel’s arrival. The Vendor shall be fully responsible for any delay and/or demurrage in clearance of the consignment at the port due to delay in forwarding the shipping documents. If in terms of the Letter of Credit , the complete original set of documents are required to be sent to IOCL through the bank, the distribution indicated below will be confined to obtaining copies of documents only.

Documents IOCL (Office that issued the

PO)

IOCL (Port

Office)

IOCL (Project

Site) Bill of lading/Airway Bill 3 (including 1 original) 1 1 Invoice 2 2 1 Packing List 2 2 1 Certificate of Origin 2 2 1 Test/Composition Certificate 2 2 1 Third Party Inspection Release Certificate

1 1 1 (original)

Drawing/Catalogue 1 1 1 Invoice of Third Party/Lloyds for Inspection Charges, wherever applicable.

2 1 1

Export Certificate (where applicable) 1 1 1

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24.0 INVOICING & NEGOTIATION OF DOCUMENTS 24.1 Indigenous Material(s) (a) Unless otherwise directed by IOCL, Invoices and other documents shall be

forwarded by the Vendor to IOCL as stipulated hereunder:

(i) Original Invoice+1 copy of document as per Purchase Order to the Chief Finance Manager, [Address, Fax No.]

(ii) 1 copy of Invoice with original documents as per Purchase Order to

Chief Materials Manager, [Address, Fax No.] along with technical catalogues, Inspection certificate and Inspectors Release Note.

(b) Where payment is to be released to the Vendor against despatch documents

through the bank, the Vendor shall forward two complete original sets of the documents specified in clause 5.2(c) to the specified banker of IOCL with a stipulation that the banker shall forward one set of the documents to IOCL with LSC intimation and acceptance before retirement of the documents from the Bank. One complete set of all of the abovementioned documents shall be sent to the Chief Materials Manager [Address, Fax No.]. Documents will not be retired by the bank failing strict compliance by the Vendor of the above mentioned despatch requirements.

(c) Where payment is to be released to the Vendor directly by IOCL, two sets of

all the documents mentioned in (b) above shall be submitted/forwarded directly to the Chief Materials Manager [Address, Fax No.] and upon processing, the payment shall be released through the Finance Department, by cheque.

25.0 TRANSFER OF TITLE AND RISK OF LOSS 25.1 For Indigenous Material(s):

The transfer of property and risk in Indigenous Material(s) shall be deemed to take place as follows:

(a) For delivery F.O.R. or F.O.T. despatch point: On handing over the

Material(s) to the carrier against receipt of clean Railway Receipt/Truck or Lorry Receipt and such receipt having been handed over to IOCL.

(b) For despatch F.O.R destination station : On removal of the Material(s)

by IOCL from the railway authorities at the destination station.

(c) Equipment sent freight/carriage paid to the Project Site: On receipt of the Material(s) by IOCL at the Project Site.

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25.2 For Imported Material(s):

The transfer of property and risks in Imported Material(s) shall be deemed to take place as follows: (a) For FOB / FCA deliveries: On handing over the Material(s) to the carrier

and issue of clean Bill of Lading/Airway Bill (except for freight to pay) and its transmission to IOCL.

(b) For CFR deliveries: On receipt of the Material(s) by IOCL from the

carrier at the destination port/airport.

26.0 TERMINATION 26.1 Without prejudice to IOCL’s right to price adjustment by way of discount or

any other right or remedy available to IOCL, IOCL may terminate the Contract or any part thereof by a written notice to the Vendor, if: i) The Vendor fails to comply with any material term of the Contract. ii) The Vendor informs IOCL of its inability to deliver the Material(s) or any

part thereof within the stipulated Delivery Period or such inability otherwise becomes apparent.

iii) The Vendor fails to deliver the Material(s) or any part thereof within the

stipulated Delivery Period and/or to replace/rectify any rejected or defective Material(s) promptly.

iv) The Vendor becomes bankrupt or goes into liquidation. v) The Vendor makes a general assignment for the benefit of creditors. vi) A receiver is appointed for any substantial property owned by the

Vendor. vii) The Vendor has misrepresented to IOCL, acting on which

misrepresentation IOCL has placed the Purchase Order on the Vendor. 26.2 Upon receipt of said termination notice, the Vendor shall discontinue the work

on the Contract so far as terminated, and matters connected therewith. 26.3 On termination of the Contract, without prejudice to any other right or remedy

available to IOCL under the contract, in the event of IOCL suffering any loss on account of delayed delivery or non-delivery, IOCL reserves the right to claim and recover damages from the Vendor in respect thereof.

26.4 Notwithstanding anything to the contrary herein contained, IOCL will be at

liberty to take independent administrative action to place the Vendor under

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‘holiday list’ for delay or non-performance of its contractual obligations or any of them.

27.0 RECOVERY OF SUMS DUE Whenever there is any claim against the Vendor for payment of sums of

money arising out of or under the execution of the Purchase Order, IOCL may, without prejudice to any other mode or source of recovery available, recover the same from any sum(s) then due or which at any time thereafter may become due to the Vendor under this or any other contract with IOCL and/or by recourse to any bank guarantee available to IOCL for this purpose, and should these sum(s) be not sufficient to cover the recoverable amount, the Vendor shall pay IOCL on demand, the balance.

28.0 NON-WAIVER Failure of IOCL/IOCL’s representative(s) to insist upon adherence to any of the

terms or conditions incorporated in the Contract or failure or delay to exercise any rights or remedies herein or by law accruing, or failure to promptly notify the Vendor in the event of breach or the acceptance of or the payment for any Material(s) hereunder or approval of any design or Material(s) shall not release the Vendor and shall not be deemed a waiver of any right of IOCL to insist upon the strict performance thereof or of any of its rights or remedies as to any such Material(s) regardless of when the Material(s) are shipped, received or accepted nor shall any purported oral modifications or revisions of the Contract by IOCL or IOCL’s representative(s) act as a waiver of the terms hereof.

29.0 COMPLETE AGREEMENT The Contract Document(s) including, technical documents, drawings and

specifications and other Annexures to the Contract documents constitute the entire agreement between the Vendor and IOCL in relation to the Contract arising out of the Purchase Order. Changes or amendments will be binding only if the amendments/modification are agreed to in writing as an amendment/variation to the relative Contract Document and signed by an authorised representative of IOCL.

30.0 EXCLUSION OF THE GOVT. OF INDIA’S LIABILITY

30.1 It is expressly understood and agreed that IOCL has entered into the Contract solely on its own behalf and not on behalf of any other person or entity. In particular, it is expressly understood and agreed that the Government of India is not a party to the Contract and will have no liability, obligation or right whatsoever under the Contract. It is expressly understood and agreed that IOCL is an independent legal entity with power and authority to enter into the Contract solely on its own behalf under the applicable laws of India. The Vendor expressly agrees, acknowledges and undertakes and accepts that IOCL is not an agent, representative or delegate of the Government of India and that the Government of India is not and shall not be liable for any act,

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omission, commission, breach or other wrong or liability arising out of the Contract. The Vendor hereby expressly waives, releases and forgoes any and all actions or claims, including cross claims, impleader claims or counter claims, against the Government of India arising out of the Contract and covenants not to sue the Government of India for any manner of claim, cause of action or thing whatsoever arising out of or under the Contract.

31.0 TECHNICAL INFORMATION/CONFIDENTIALITY

31.1 Drawings, specifications and details shall at all times be the property of IOCL and shall be returned by the Vendor to IOCL on demand. The Vendor shall not make use of any document, drawing, specification, data or any other information connected with the Contract, for any purpose at any time, save and except in the implementation of the Contract.

31.2 The Vendor shall not disclose the technical information furnished or gained by the Vendor under or by virtue of or as a result of the implementation of the Contract and shall make all efforts to ensure that the technical information is kept confidential.

32.0 MODE OF COMMUNICATION 32.1 It is understood that IOCL is a multifaceted and multi-locational organization

and that for any communication to receive attention it is a prerequisite that the communication is properly addressed and that the subject of the communication is properly identified. To this end, except where otherwise provided, all communications, drawings, invoices, shipping notes, packages, packing lists and other document connected with reference to the Contract shall in the heading boldly set out the Purchase Order Number and date, and shall be addressed to the following:

Chief Materials Manager Phone Fax

[Office issuing the Purchase Order] Chief Projects Manager Phone Fax

[Site address] Dy. General Manager Phone Fax IOCL [ concerned Port office] [Concerned office address] (For imports)

With copies to the following in case a Procurement Co-ordinator or Project Management Consultant is involved:

(i) Resident Construction Manager Phone Fax [Site address] (ii) Dy. General Manager (Inspection) of the Procurement Co-

ordinator/Project Management Consultant.

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33.0 PART ORDER/REPEAT ORDER

The Vendor hereby agrees to accept part order at unit prices without limitation and also agrees in case of bulk consumables to accept repeat order(s) during a period of 6 (six) months from the date of original Purchase Order at the same unit price(s) and on the same terms and conditions.

34.0 ARBITRATION AND GOVERNING LAW 34.1 Arbitration: All disputes or differences which may arise out of or in connection

with or are incidental to the Agreement(s) including any dispute or difference regarding the interpretation of the terms and conditions of any clause thereof which cannot be amicably resolved between the parties may be referred to Arbitration of a person selected by the Vendor out of a panel of three persons nominated by the General Manager of the Unit or Project of Indian Oil Corporation Ltd. to which the Contract relates. The Arbitration proceedings shall be governed by and conducted in accordance with the Arbitration and Conciliation Act, 1996. The venue of the arbitration shall be […………] or New Delhi, India.

34.2 Governing Law:The Agreement(s) shall be construed in accordance with and

governed by the laws of India. IOCL shall warrant that the terms and conditions of the Purchase Order shall be valid under existing Indian laws.

35.0 JURISDICTION 35.1 Notwithstanding any other Court or Courts having jurisdiction to decide the

disputed issue, and without prejudice to the provisions or generality of the Arbitration clause, jurisdiction to decide the question(s) arising out of or relative to the Contract in all matters touching or affecting any arbitration, or arising out of or in relation to or under or in accordance with the Arbitration and Conciliation Act, 1996 or otherwise under or with reference to the Contract shall vest exclusively in the court(s) of competent civil jurisdiction at ________ [where the contract(s)/Purchase Order shall be signed on behalf of IOCL] or at New Delhi and only the said Court(s) shall have the jurisdiction to entertain and try any such actions and/or proceedings to the exclusion of all other Courts, provided that nothing herein stated shall be deemed to anywise authorize any party to seek resolution of any dispute(s) otherwise than the recourse to arbitration in accordance with the provisions of the Arbitration clause herein.

Provided always that an award rendered in any arbitration proceedings arising

out of or in relation to the Contract may be enforced or executed in any other country or jurisdiction including without limitation a country in which any party against whom the award is to be enforced or executed is located and a country in which the assets of any such party are located.

* * * *

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Annexure - A

FORM OF BANK GUARANTEE IN LIEU OF EARNEST MONEY DEPOSIT (On non-judicial stamp paper of appropriate value)

BG NO:___________________ DATED:__________________ VALID UPTO:_____________ To, Indian Oil Corporation Limited (Refineries Division) [Address] Dear Sirs, In consideration of the Indian Oil Corporation Ltd. [Address]……… , (hereinafter called the “Corporation”, which expression shall include its successors and assigns) having agreed interalia to consider the tender of_________(Name)_________________, (Constitution) _______________________________ (Address) ___________________________ (hereinafter referred to as the “Tenderer” which expression shall wherever the subject or context so permits include its successors and assigns) for supply of materials to be awarded under Tender No.___________________ upon the Tenderer furnishing an undertaking from the Bank as hereinafter appearing in lieu of a Demand Draft or Bankers Pay Order for the Earnest Money. We __________________________(Name of Bank), a Bank constituted/Registered under the________ Act, having our Head Office/Registered Office at [Address] ___________________(hereinafter called the “Bank” which expression shall include its successors and assigns), at the request of the Tenderer and with the intent to bind the Bank and its successors and assigns do hereby unconditionally and irrevocably undertake to pay the Corporation at New Delhi forthwith on first demand without protest or demur or proof or satisfaction or condition and without reference to the Tenderer, all sums payable by the Tenderer as and by way of Earnest Money to the Corporation, for an amount of Rs............ (Rupees_________________) only or US Dollar _________ (United States Dollars_______________) AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS: 1. The amount stated by the Corporation in any demand, claim or notice made or

given with reference to this Guarantee/Undertaking shall as between the Bank and the Corporation for the purpose of this Guarantee/Undertaking be conclusive of the amount payable by the Bank to the Corporation hereunder.

2. This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency of the Tenderer or by any change in the legal constitution of the Bank or the Corporation.

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3. Without prejudice to any other mode of service, a demand or claim or any

other communication may be made, given and/or transmitted by the Corporation to the Bank either by post or by fax. If transmitted by fax, the transmission shall be complete and shall be deemed to have been acknowledged as soon as the “OK” facsimile transmission report for the fax message has been received.

4. Notwithstanding anything contained herein:

(i) The Bank’s liability under this Guarantee/Undertaking shall not exceed Rs./ US$ ___________ (Rupees / United States Dollars ___________ only).

(ii) This Guarantee/Undertaking shall remain in force upto (fill in date) and any extension(s) thereof; and

(iii) The Bank shall be released and discharged from all liability under this Guarantee/Undertaking unless a written claim or demand is issued to the Bank on or before the midnight of ______ and if extended, the date of expiry of the last extension of this Guarantee/Undertaking.

The Bank doth hereby declare that Shri______________________[designation] is authorised to sign this Guarantee/Undertaking on behalf of the Bank and to bind the Bank thereby. This____ day of _______20___ Yours faithfully, Signature:__________________________ Name & Designation:_________________ Name of the Branch:_________________ NOTES:

1. The Bank Guarantee in lieu of Earnest Money Deposit shall be strictly as per

above proforma and shall be through a Scheduled Bank operating in India, including the Indian Branch of a foreign bank recognized as a Scheduled bank in India.

2. The Bank Guarantee shall be typed on stamp paper applicable to an agreement in the State in which the Bank Guarantee is issued.

3. This Bank Guarantee shall be sent by the Bank directly to:- Chief Materials Manager, IOCL (Refineries Division].

33

Annexure - B

[IRREVOCABLE LETTER OF CREDIT- FORMAT] To: This communication is to be considered as our credit instrument and is subject to the Uniform Customs and Practice for Documentary Credit 1993 revision, I.C.C. publication No. 500. At the request of Indian Oil Corporation Ltd. (hereinafter called “the Corporation” which expression shall include its successors and assignees) we hereby establish our irrevocable Letter of Credit No. ______________dated ___________ in favour of : (Beneficiary) for a sum not exceeding (Currency in figures and words) which is payable at sight at the counter of [Beneficiary’s Bank] in [Address], covering the FOB/CIF/C&F port supply of Material(s) and equipment under Purchase Order No.[ ] for the Unit/Refinery of Indian Oil Corporation Ltd.. (IOCL). This Letter of Credit shall be valid up till [Date] TERMS OF PAYMENT Payments under this Letter of Credit shall be made of ___ % of the value of the Invoice(s) drawn by the Beneficiary on IOCL under the said Purchase Order against presentation of the following documents: Imported Materials: (i) Invoice; (ii) Clear Bill of Lading/Airway Bill covering the Materials(s) invoiced; (iii) Packing list for the consignment; (iv) Inspector’s Certificate covering the invoiced Material(s); (v) Test/Composition Certificate; (vi) Certificate of origin; (vii) Drawing(s)/Catalogue(s) covering the Material(s); (viii) Export Certificate, wherever applicable; (ix) Invoice of Inspector’s charges, wherever applicable; (x) Freight Memo(s) if the freight particulars are not shown in the Bill of

Lading/Airway Bill. (xi) Copy of faxed intimation of the shipment to IOCL certified by the Beneficiary to

be a true copy of the faxed intimation of shipment to IOCL. Indigenous Supply:

34

(i) Invoice (ii) Clear Railway Receipt/Truck Receipt/Goods Receipt covering the Material(s)

invoiced; (iii) Packing list for the consignment; (iv) Third Party Inspector’s Certificate covering the invoiced Material/Release Note; (v) Test/Composition Certificate; (vi) IBR Certificate/CMRS Certificate; (vii) Drawing(s)/Catalogue(s) covering the Material(s); (viii) Guarantee/Warranty Certificate(s), wherever applicable; (ix) Invoice of Inspector’s charges, wherever applicable; (x) Freight Memo(s) if inland freight is not included in the Price and the RR/TR/GR

does not give the freight particulars. (xi) Copy of faxed intimation of the shipment to IOCL certified by the Beneficiary to

be a true copy of the faxed intimation of shipment to IOCL. SPECIAL INSTRUCTIONS * All Bank charges and commissions outside India shall be borne by the

Beneficiary. * Drawing permitted in not more than 3 (three) tranches. * Partial shipment is not permitted. * Trans-shipment not permitted. * Negotiating Bank to reimburse itself after giving 7 (seven) banking days notice

to the Issuing Bank from Issuing Bank’s account with _______ (Name of the Issuing Bank’s correspondent in _____) at maturity under telex/cable advice to the Issuing Bank indicating the amount claimed.

* IOCL to be intimated the shipping details by fax immediately on shipment. * Documents to be dispatched to Issuing Bank by courier within 7 banking days

of receipt by Negotiating Bank. * Documents must be presented within _____ days after the date of

shipment/dispatch to ensure receipt thereof 7 days prior to the arrival of the vessel.

* * * *

35

Annexure -C

[ PROFORMA OF BANK GUARANTEE (PERFORMANCE) ] (On non-judicial stamp paper of appropriate value) To Indian Oil Corporation Ltd. [Address] Dear Sirs, In consideration of the Indian Oil Corporation Ltd. (hereinafter called the “Corporation” which expression shall include its successors and assigns) having awarded to [Name], [Constitution] ________________________________ [Address] ___________________________ (hereinafter referred to as the “Supplier” which expression shall wherever the subject or context so permits include its successors and assigns) a Supply Contract in terms interalia, of the Corporation(s) Purchase Order No. [ ] dated ......... (hereinafter referred to as the “Contract”) upon the condition of the Supplier’s furnishing security in lieu of cash deposit for the Performance of the Supplier’s obligations and/or discharge of the Supplier’s liabilities under and/or in connection with the said Supply Contract upto a sum of Rs./US$ [ ] [Rupees/United States Dollars _________________] only amounting to 10% (ten percent) of the total contract value. We _____________________ (name) a body corporate registered/constituted under the laws of ____________ and having a branch at [Indian branch address] (hereinafter called “the Bank” which expression shall include its successors and assigns) with the intent to bind the Bank and its successors and assigns, hereby undertake to pay the Corporation at [ place ] on first demand in writing without protest or demur or proof or satisfaction or condition and without reference to the Supplier, any and all amounts from time to time demanded by the Corporation from the Bank with reference to this Guarantee/Undertaking upto an aggregate limit of Rs./US$ [ ] only or [Rupees / United States Dollars _________________]. AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS: 1. This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time anywise have in relation to the Supplier’s obligations and/or liabilities under and/or in connection with the Contract and the Corporation shall have full authority to take recourse to or reinforce this Guarantee/Undertaking in preference to the other guarantee(s) or security(ies) at its discretion, and no failure on the part of the Corporation in enforcing or requiring enforcement of any other guarantee or security shall have the effect of releasing the Bank from its full liability hereunder.

2. The Corporation shall be at liberty without reference to the Bank and without

affecting the full liability of the Bank hereunder to take any other security in

36

respect of the Supplier’s obligation(s) and/or liability(ies) under/or in connection with the Contract and/or to vary the terms vis-a-vis the Supplier of the Contract and/or to grant time and/or indulgence to the Supplier or to reduce or to increase or otherwise vary the prices or the total contract value or to release or to forebear from enforcement of all or any of the obligations of the Supplier under the Contract and/or the remedies of the Corporation under any other guarantee(s) or security(ies) now or hereafter held by the Corporation and no such dealing(s), variation(s), reduction(s) or other indulgence(s) or arrangement(s) with the Supplier or release or forebearance whatsoever shall have the effect of releasing the Bank from its full liability to the Corporation hereunder or of prejudicing the rights of the Corporation against the Bank.

3. This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency of the Supplier or any change in the legal constitution of the Bank or of the Corporation.

4. The Bank hereby waives all rights at any time inconsistent with the terms of this

Guarantee/Undertaking and the obligations of the Bank in terms hereof shall not be anywise affected or suspended by reasons of any dispute or disputes having been raised by the Supplier (whether or not pending before any Arbitrator, Officer, Tribunal or Court) or any denial of liability by the Supplier or any other order or communication whatsoever by the Supplier stopping or preventing or purporting to stop or prevent any payment by the Bank to the Corporation in terms hereof.

5. Notwithstanding anything contained herein:

(a) The Bank’s liability under this Guarantee/Undertaking shall not exceed (currency in figures) . . . . . . . . . . . . . . . . (currency in words only ) . . . . . . . . . . . . . . . . . . . . . . . . ;

(b) This Guarantee/Undertaking shall remain in force upto ___________

(here put the entire period required for the performance of the Contract and the defect liability period plus 3 (three) months) and any extension(s) thereof; and

(c) The Bank shall be released and discharged from all liability under this

Guarantee/Undertaking unless a written claim or demand is issued to the Bank on or before the midnight of ________________ and if extended, the date of expiry of the last extension of this Guarantee/Undertaking.

6. The Bank doth hereby declare that Mr. _________________[name &

designation of the person authorised to sign on behalf of the Bank] is authorised to sign this Guarantee/Undertaking on behalf of the Bank and to bind the Bank thereby.

Yours faithfully,

37

(Signature) NAME & DESIGNATION NAME OF THE BANK

NOTES: 1. The Performance Bank Guarantee shall be strictly as per above

proforma and shall be through a Scheduled Bank operating in India, including the Indian Branch of a foreign bank recognized as a Scheduled Bank in India.

2. The Bank Guarantee shall be typed on stamp paper applicable to an agreement in the State in which the Bank Guarantee is issued.

3. This bank guarantee shall be sent by the bank directly to:- Chief Materials Manager, IOCL (Address)

Annexure D

PROFORMA OF BANK GUARANTEE (FULL VALUE OF FREE ISSUE MATERIALS)

(On non-judicial stamp paper Of appropriate value)

To Indian Oil Corporation Ltd. [Address] Dear Sirs, In consideration of the Indian Oil Corporation Ltd. [address] (hereinafter called the “Corporation” which expression shall include its successors and assigns) having awarded to [Name], (Constitution) (Address) (hereinafter referred to as the “Supplier” which expression shall wherever the subject or context so permits include its successors and assigns) a Supply Contract in terms, interalia, of the Corporation(s) Purchase Order No. [ ] dated [ ] (hereinafter referred to as the “Contract”) and having agreed to provide certain free issue material(s) hereinafter referred to as “Free Issue Material” to the Supplier for incorporation in the materials(s) to be supplied under the Contract) upon the condition of the Supplier’s furnishing security in lieu of cash for the said Free Issue Material(s) upto a sum of Rs./US$ .............. (Rupees/ United States Dollars ____________ only] being the value of the Free Issue Material(s): We _____________________ [name] a body corporate registered/constituted under the laws of [Country] and having a branch at [Indian branch address] (hereinafter called “the Bank” which expression shall include its successors and assigns) with the intent to bind the Bank and its successors and assigns, hereby undertake to pay the Corporation at [place] on first demand in writing without protest or demur or proof or satisfaction or condition, and without reference to the Supplier, any and all amounts from time to time demanded by the Corporation from the Bank with reference to this

38

Guarantee/Undertaking upto an aggregate limit of Rs./US$ [ ] (Rupees/ United States Dollars ____________ only] AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS: 1. This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time anywise have in relation to the Supplier’s obligations and/or liabilities under and/or in connection with the Contract and/or the Free Issue Material and the Corporation shall have full authority to take recourse to or enforce this Guarantee/Undertaking in preference to the other guarantee(s) or security(ies) at its discretion, and no failure on the part of the Corporation in enforcing or requiring enforcement of any other guarantee or security shall have the effect of releasing the Bank from its full liability hereunder.

2. The Corporation shall be at liberty without reference to the Bank and without

affecting the full liability of the Bank hereunder, to take any other security in respect of the Supplier’s obligation(s) and/or liability(ies) under or in connection with the Contract or the Free Issue Material and to vary the terms vis-a-vis the Supplier of the Contract or the Free Issue Material and/or to grant time and/or indulgence to the Supplier and/or to reduce or to increase or otherwise vary the prices or the total contract value or the value of the Free Issue Material or to release or to forebear from enforcement of all or any of the obligations of the Supplier under the Contract and/or the remedies of the Corporation under any other guarantee(s) or security(ies) now or hereafter held by the Corporation and no such dealing(s), variation(s), reduction(s) or other indulgence(s) or arrangement(s) with the Supplier or release or forebearance whatsoever shall have the effect of releasing the Bank from its full liability to the Corporation hereunder or of prejudicing the rights of the Corporation against the Bank.

3. This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency of the Supplier or any change in the legal constitution of the Bank or of the Corporation.

4. The Bank hereby waives all rights at any time inconsistent with the terms of

this Guarantee/Undertaking and the obligations of the Bank in terms hereof shall not be anywise affected or suspended by reasons of any dispute or disputes having been raised by the Supplier (whether or not pending before any Arbitrator, Officer, Tribunal or Court) or any denial of liability by the Supplier or any other order or communication whatsoever by the Supplier stopping or preventing or purporting to stop or prevent any payment by the Bank to the Corporation in terms hereof.

5. Notwithstanding anything contained herein:

(a) The Bank’s liability under this Guarantee/Undertaking shall not exceed [currency in figures]. . . . . . . . . . . . . . . . [currency in words] . . . . . . . . . . . . . . . . . . . . . . . . only;

39

(b) This Guarantee/Undertaking shall remain in force upto the midnight of

(here put the scheduled date of delivery of the Free Issue Material + 3 months) and any extension thereof.

(c) The Bank shall be released and discharged from all liability under this

Guarantee/Undertaking unless a written claim or demand is issued to the Bank on or before [ ] and if extended, the date of expiry of the last extension of this Guarantee/Undertaking.

6. The Bank doth hereby declare that Mr. _________________(name &

designation of the person authorised to sign on behalf of the Bank) is authorised to sign this Guarantee/Undertaking on behalf of the Bank and to bind the Bank thereby.

Yours faithfully,

(Signature)

NAME & DESIGNATION NAME OF THE BANK

NOTES: 1. The Bank Guarantee shall be for the full value of the Free Issue Material(s) as

specified by IOCL and shall be strictly as per above proforma and shall be through a Scheduled Bank operating in India, including the Indian Branch of a foreign bank recognized as a Scheduled Bank in India.

2. The Bank Guarantee shall be typed on stamp paper applicable to an agreement in the State in which the Bank Guarantee is issued.

3. This bank guarantee shall be sent by the Bank directly to:- Chief Materials Manager, IOCL [Address].

* *

40

Annexure E

PROFORMA OF BANK GUARANTEE (FOR THE FULL VALUE OF REJECTED MATERIALS)

(On non-judicial stamp paper Of appropriate value)

To Indian Oil Corporation Ltd. [Address] Dear Sirs, In consideration of the Indian Oil Corporation Ltd. (hereinafter called the “Corporation” which expression shall include its successors and assigns) having awarded to [Name], (Constitution) (Address) (hereinafter referred to as the “Supplier” which expression shall wherever the subject or context so permits include its successors and assigns) a Supply Contract in terms interalia, of the Corporation(s) Purchase Order No. [ ] dated [ ] (hereinafter referred to as the “Contract”) and having agreed to permit the Supplier to remove certain rejected material(s) for which the Corporation has paid the Supplier (hereinafter referred to as the “Rejected Material(s)”) upon the condition of the Supplier furnishing security for the satisfactory replacement of the Rejected Material(s) upto a sum of Rs./US$ [ ] (Rupees / United States Dollars _____________ only) amounting to the full value of the Rejected Material(s). We _____________________ [name] a body corporate registered/constituted under the laws of [Country] and having a branch at [Indian branch address] (hereinafter called “the Bank” which expression shall include its successors and assigns) with the intent to bind the Bank and its successors and assigns, hereby undertake to pay the Corporation at [place] on first demand in writing without protest or demur or proof or satisfaction or condition, and without reference to the Supplier, any and all amounts from time to time demanded by the Corporation from the Bank with reference to this Guarantee/Undertaking upto an aggregate limit of Rs./US$ [ ] [Rupees/United States Dollars ]. AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS: 1. This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time anywise have in relation to the Supplier’s obligations and/or liabilities under and/or in connection with the Contract or the Rejected Material(s) and the Corporation shall have full authority to take recourse to or reinforce this Guarantee/Undertaking in preference to the other guarantee(s) or security(ies) at its discretion, and no failure on the part of the Corporation in enforcing or

41

requiring enforcement of any other guarantee or security shall have the effect of releasing the Bank from its full liability hereunder.

2. The Corporation shall be at liberty without reference to the Bank and without

affecting the full liability of the Bank hereunder, to take any other security in respect of the Supplier’s obligation(s) and/or liability(ies) under or in connection with the Contract and/or the Rejected Material(s) and to vary the terms vis-a-vis the Supplier of the Contract or Rejected Material(s) and/or to grant time and/or indulgence to the Supplier and/or to reduce or to increase or otherwise vary the prices of the total contract value or the value of the Rejected Material or to release or to forebear from enforcement of all or any of the obligations of the Supplier under the Contract or otherwise in respect of the Rejected Material and/or the remedies of the Corporation under any other guarantee(s) or security(ies) now or hereafter held by the Corporation and no such dealing(s), variation(s), reduction(s) or other indulgence(s) or arrangement(s) with the Supplier or release or forebearance whatsoever shall have the effect of releasing the Bank from its full liability to the Corporation hereunder or of prejudicing rights of the Corporation against the Bank.

3.. This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency of the Supplier or any change in the legal constitution of the Bank or of the Corporation.

4. The Bank hereby waives all rights at any time inconsistent with the terms of

this Guarantee/Undertaking and the obligations of the Bank in terms hereof shall not be anywise affected or suspended by reasons of any dispute or disputes having been raised by the Supplier (whether or not pending before any Arbitrator, Officer, Tribunal or Court) or any denial of liability by the Supplier or any other order or communication whatsoever by the Supplier stopping or preventing or purporting to stop or prevent any payment by the Bank to the Corporation in terms hereof.

5. Notwithstanding anything contained herein:

(a) The Bank’s liability under this Guarantee/Undertaking shall not exceed [currency in figures]. . . . . . . . . . . . . . [currency in words only] . . . . . . . . . . . . . .

(b) This Guarantee/Undertaking shall remain in force upto (put date fixed for

replacement of the Rejected Material + 3 months) and any extension(s) thereof;) and

(c) The Bank shall be released and discharged from all liability under this

Guarantee/Undertaking unless a written claim or demand is issued to the Bank on or before [ ] and if extended, the date of expiry of the last extension of this Guarantee/Undertaking.

6. The Bank doth hereby declare that Mr. _________________(name &

designation of the person authorised to sign on behalf of the Bank) is

42

authorised to sign this Guarantee/Undertaking on behalf of the Bank and to bind the Bank thereby.

Yours faithfully,

(Signature)

NAME & DESIGNATION NAME OF THE BANK

NOTES: 1. The Bank Guarantee for full value of Rejected Material(s) shall be strictly as

per above proforma and shall be through a Scheduled Bank operating in India, including the Indian Branch of a foreign bank recognized as a Scheduled Bank in India.

2. The Bank Guarantee shall be typed on stamp paper applicable to an agreement in the State in which the Bank Guarantee is issued.

3. This bank guarantee shall be sent by the Bank directly to:- Chief Materials Manager, IOCL [Address].

* *

INDIAN OIL CORPORATION LIMITED

(Refineries Division)

INTER OFFICE MEMO From ED(PJ) HQ N Delhi To ED(PJ&ID)-Marketing Divn.,

Mumbai ED(PJ) -PL-NOIDA ED(RT) - R&D, Faridabad

Our Ref PJ/E&C/24 Your Ref

Date 25th Oct., 2002 Date

Sub : Guidelines for Holiday Listing / Delisting of Vendors/Contractors A Committee was constituted consisting of two officers from each Division i.e. Refinery, Marketing, Pipelines & R&D to propose uniform guidelines for holiday listing/delisting of vendors/contractors. The recommendations made by the Committee have now been approved with certain modifications. A booklet containing approved guidelines for Holiday Listing / Delisting of Vendors / Contractors is enclosed herewith for necessary action in your Division.

Sd/-

(J K VERMA) Executive Director (PJ)

Encl : A copy of guidelines CC : ED(CF) CC : ES TO DIR.(M) / ES TO DIR.(PL) / ES TO DIR.(R&D) CC : ED/GM - P, J, M, H, B, G, AOD, PDRP - for necessary action please.

GUIDELINES

FOR

HOLIDAY LISTING / DELISTING

OF VENDORS / CONTRACTORS

OCTOBER, 2002

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GUIDELINES FOR HOLIDAY LISTING/DE-LISTING OF VENDORS /

CONTRACTORS FOR PURCHASE / WORKS 1. Black listing / Holiday listing / Banning / Removing from approved panel.

The meaning of "black listing", "holiday listing", "banning" and "removing from approved panel" is legally one and the same. Hence hereafter the subject matter shall be referred as "Holiday listing" only.

2. Reasons for putting a Party ("Party" means Bidder / Licensor / Tenderer /

Consultant / Vendor / Contractor / Sub-vendor / Sub-contractor / Sub-consultant) on Holiday.

2.1 The purpose of putting a party on holiday list is to protect the Corporation from

dealing with an undesirable party. Reason for putting a party on holiday list may include any one or more of the following :

If a party a) has indulged in malpractices such as bribery, corruption, fraud and

pilferage. b) is bankrupt or is being dissolved or has resolved to be wound up or

proceedings for winding up or dissolution have been instituted.

c) has submitted fake, false or forged documents / certificates.

d) Has substituted materials in lieu of materials supplied by IOCL or has not returned or has short returned or has unauthorisedly disposed off materials/ documents / drawings / tools or plants or equipment supplied by IOCL.

e) Has obtained official company information or copies of documents, in

relation to the tender / contract, by questionable methods / means.

f) Has deliberately violated and circumvented the provisions of labour laws/regulations/rules, safety norms or other statutory requirements.

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g) has deliberately indulged in construction and erection of defective works

or supply of defective materials. h) has not cleared IOCL's previous dues.

i) has committed Breach of Contract or has failed to perform a contract or

has abandoned the contract.

j) has refused to accept Fax of Acceptance / Letter of Acceptance / Purchase Order / Work Order after the same is issued by IOCL within the validity period and as per agreed terms & conditions.

k) after opening of Price Bid, on becoming L1, withdraws/ revises his bid

upwards within the validity period.

l) has parted with, leaked or provided confidential / proprietary information of IOCL given to the party only for his use (in discharge of his obligations against an order) to any third party without prior consent of IOCL.

m) any other ground for which, in the opinion of the Corporation makes it

undesirable to deal with the party. 2.2 If a communication is received from the Administrative Ministry of IOCL to ban

a party from dealing with IOCL, the party should be automatically put on Holiday list.

2.3 The grounds / reasons for holiday listing indicated in para 2.1 above are merely

illustrative and are intended to provided a guideline for considering placing a party on holiday list. It will be for the initiating department in each case to evaluate whether the conduct of the party is such as it makes it undesirable for the Corporation to deal further with the party and for the committee (refer clause 4 hereinafter) and approving authority (refer clause 6 hereinafter) to determine this on reviewing all relevant factors.

3 Show Cause Notice 3.1 Before placing the party on holiday list, a fair opportunity of hearing the party

should be given by means of a Show Cause Notice. The Show Cause Notice should be issued to the party before placing the party on holiday list.

3.2 A proforma of the Show Cause Notice is enclosed Attachment-1. A reasonable

time (of 15 days) for a reply to the show cause notice should be given. This time

-3-

may be extended at the request of the party, if so warranted, for a period not exceeding 15 days.

3.3 This Show Cause Notice should be issued :

i. For Works Contracts a) By Engineer-In-Charge, after order is accepted by the Party.

b) By the Order Issuing Authority before acceptance of the order by the Party.

ii. For Purchase Contracts: By Purchase Order Issuing Authority.

3.3(a) The show cause notice should be issued with the approval of Order Approving

Authority not above the rank of GM. 3.4 The Show Cause Notice should be issued to the party and a copy may be endorsed

to its CEO ( Chairman / President / Managing Director / Proprietor / Managing Partner etc.)

3.5 The decision to place the party on holiday list should be taken considering the

reply, if any, of the party. 4. Formation of Committee 4.1 A three member Committee shall be formed to recommend action to the

Approving Authority. The Committee shall examine the reply of the party, if any, to the Show Cause Notice. The Committee shall be constituted by the Approving Authority as specified in para 6.1 below and will comprise of.

a) For Refineries, Pipelines, R&D and Assam Oil Division: Representatives

from Execution / User Deptt., Finance Deptt. and Tendering Deptt. b) For Marketing Division : Representatives from Functional, Finance &

Legal Departments. 4.1.1 The Committee should not be formed consisting of junior level officer (A to C

grade), wherever possible. 4.2 The Member nominated from the Deptt. issuing the Show Cause Notice shall be

the Convener of the Committee. 4.3 In formulating its recommendation, the Committee shall take into account the

overall effect on the Corporation of placing a party on holiday list.

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5. Duration of Holiday

The Committee at para 4.1 above should deliberate on duration for which the party is to be put on holiday. Ordinarily, the period for which a party is place on holiday should not exceed 3 years, However, in extra-ordinary circumstances, the period may be more than 3 years & specific reasons for the same shall be recorded.

6. Approving Authority for putting a Party on Holiday 6.1 Unit head / Regional Head / State Head / Departmental Head, not below the rank

of GM, shall be the Approving Authority for putting a party on holiday where the proposed holiday period does not exceed three years.

6.2 For placing a party on holiday for a period in excess of 3 years, Functional

Director concerned shall be the Approving Authority. 7. Effect of putting a party on holiday list 7.1 No enquiry/bid/tender shall be issued to a party as long as the party's name

appears on the current holiday list (i.e. within the holiday period). 7.2 If a party is put on holiday list during tendering (of works / purchase): 7.2.1 If a party is put on holiday after issue of the enquiry/bid/tender but before opening

Technical bids, the bid submitted by the party shall be returned to the party. 7.2.2 If a party is put on holiday after opening technical bid but before opening the

price bid, the price bid of the party shall not be opened and BG/EMD submitted by the party shall be returned to the party.

7.2.3 In case a party is put on holiday after opening of price bid, BG/EMD made by the

party shall be returned, the offer of the party shall be ignored & will not be further evaluated. The party will not be considered for issue of order even if the party is the lowest (L1). In such situation next lowest shall be considered as L1.

7.3 If a party is put on Holiday in one location and is doing job at other location, the

party should be allowed to complete such works which have already been awarded.

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7.4 The holiday listing shall be party specific & when the party is put on holiday, all

the offices of the party shall be on holiday for all locations of IOCL & for all Services / locations of the party. If the party placed on holiday, is a proprietary concern, all the concerns of the same proprietor shall also be considered to be on holiday and if that proprietor is the managing partner of any firm, such firm shall also be considered to be on holiday. The Functional Director may however, if he considers this to be in the interest of the Corporation, remove the bar in respect of any specific service / location.

7.5 If an Original Equipment Manufacturer (OEM) is on Holiday list and if spars of

proprietary nature for the Equipment supplied by the OEM are essentially required to be procured from the OEM, such requirements for spares can be met from the OEM who is on holiday. In such cases, specific approval with justifications shall be obtained from the level not below the rank of General Manager.

7.6 Every Bidder shall, at the time of submission of bid, give a declaration that the

bidder has not been placed on holiday list by IOCL or its Administrative Ministry. If the bidder is a Proprietary Concern, the Proprietor shall also give a declaration at the time of submission of the bids that none of the other concerns of which he is a Proprietor or Managing partner has been placed on holiday by IOCL or its Administrative Ministry. In case the declaration of a party indicates that either the Company or a Proprietorship Concern of the same Proprietor or a Partnership firm in which the Proprietor is also a Managing partner has been placed on Holiday either by IOCL or its Administrative Ministry, the party shall be considered to be on holiday and further actions as per para 7.2.2 for two-bid system & as per para 7.2.3 for single bid system shall be followed. A proforma of the Declaration is attached as Attachment-II.

8. Delisting (from Holiday list) procedure after expiry of the holiday period 8.1 Delisting (from Holiday list) after expiry of the holiday period should be

automatic and will not need further approval, unless any information towards extension of holiday period is received. The party may be considered for issue of enquiry / bid after the specified holiday period is over.

8.2 However, where Approved/Registered list of parties are followed, the party may,

after expiry of holiday period, approach relevant Tender / Enquiry Issuing Authority, for getting itself re-listed.

-6- 9. Review of holiday period (Delisting from holiday list within the holiday

period).

Review of holiday period (delisting from holiday list within the holiday period) should be done in exceptional cases only. A Committee as per para 4.1 above shall put up the proposal for such review. Approving Authority for such de-listing should be one step higher than the authority who approved the holiday listing of the party.

10. Intimation of holiday listing/de-listing to the Party. 10.1 The party should be informed by the initiating Deptt. about their inclusion in

holiday list. A draft of the communication to be sent to the party is enclosed as Attachment-III.

10.2 De-listing from holiday list after expiry of the specified holiday period need not

be communicated to the party. 10.3 If holiday period is reduced after review, the party should be informed

accordingly. 11. Record of holiday listing and circulation of the same in IOCL. 11.1 Head of Contract Cell for Works Contracts & Head of Materials Dept for

Purchase Contracts at respective Divisional HQs shall be the Divisional Co-ordinators. Units / Areas / Regions should send the holiday information to all the Units / Ares/ Regions of respective Division and to the Divisional Co-ordinators of HQ of all the Divisions as soon as a Party is put on holiday. The Divisional Co-ordinators in turn shall send written instructions to Corporate Office (IS) in this regard as soon as they receive information from units / Areas/ Regions / Divisions.

11.2 With the above information, a consolidated record should be maintained at head

quarters of each Division (by Contract Cell for work contracts and by Materials Dept for purchase contracts) in a Register / Electronic Data Bank with column as Sl. No., Name & Address of the Party, Holiday Period and Originating / initiating Dept. with the reference vide which the party is put on holiday. This information should be available in LAN wherever LAN facility is available.

11.3 The list should be updated and circulated by each Divisional Co-ordinator at HQ

(Head of Contract Cell for Work contracts and Head of Material Dept. for Purchase contracts) or any other official who is assigned this work, to other Division Co-ordinators at respective HQ with a copy to Corporate Office (IS) on a quarterly

-7-

basis. The list can also be common for works and purchase if so desired. Names of the parties should appear in alphabetical order. The names of the parties whose holiday period is over shall be dropped from the holiday list.

11.4 Parallely, record of holiday listed vendors / contractors will also be created &

updated in SAP by Corporate Office (IS) based on written instructions from Divisional Co-ordinators.

12. Intimation to Consultant If IOCL retains a consultant whose scope includes lining up of agencies, the

consultant should be informed about the holiday listed parties. 13 PSU Company

Whether the party is Private Sector or a PSU Company, guidelines for holiday listing and delisting shall be the same.

14 Disposal Tenders

The above guidelines shall also apply to parties for disposal tenders. In such cases "Lowest Bidder (LI)" shall mean "Highest Bidder (HI)".

*******************

Attachment-1 (Proforma of Show Cause Notice)

BY REGD. POST/SPEED POST/COURIER

No. : Date : To M/s …………………….. ………………………… ………………………… ………………………… Attn. : Shri ……………………..

Sub : Show Cause Notice

Ref : (Name of job) Dear Sir, You are hereby required to show cause in writing within 15 days from the date hereof why you be not placed on the "holiday list" and be debarred from entering into any contracts with Indian Oil Corporation Ltd / be not de-listed from the list of approved Vendors/Contractors of Indian Oil Corporation Ltd., for the following reasons :

(Give Reasons)

Your reply (if any) should be supported by all documents and documentary evidence which you wish to rely in support of your reply. Should you fail to reply to this Show Cause notice within the time and manner aforesaid, it will be presumed that you have nothing to say, and we shall proceed accordingly. Your reply, if any, and the documents / documentary evidence given in support shall be taken into consideration prior to arriving at a decision.

Yours faithfully,

For & On behalf of Indian Oil Corporation Ltd.

Attachement-II

PROFORMA OF DECLARATION OF BLACK LISTING / HOLIDAY

LISTING In the case of a Proprietary Concern : I hereby declare that neither I in the name of my Proprietary concern M/s _________________ which is submitting the accompanying Bid/Tender nor any other concern in which I am proprietor nor in any partnership firm in which I am involved as a Managing partner have been placed on black list or holiday list declared by Indian oil Corporation Ltd. or its Administrative Ministry, except as indicated below: (Here give particulars of blacklisting or holiday listing, and in absence thereof state "NIL"). In the case of a Partnership Firm: We hereby declare that neither we, M/s _______________________, submitting the accompanying Bid/Tender nor any partner involved in the management of the said firm either in his individual capacity or as proprietor of any firm or concern have or has been placed on blacklist or holiday list declared by Indian Oil Corporation Ltd. or its Administrative Ministry, except as indicated below: (Here give particulars of blacklisting or holiday listing and in the absence thereof state "NIL"). In the case of Company: We hereby declare that we have not been placed on any holiday list or black list declared by Indian Oil Corporation Ltd or its Administrative Ministry, except as indicated below: (Here give particulars of black listing or holiday listing and in the absence thereof state "NIL") It is understood that if this declaration is found to be false in any particular, Indian Oil Corporation Ltd or its Administrative Ministry, shall have the right to reject my/our bid, and if the bid has resulted in a contract, the contract is liable to be terminated.

Signature of Bidder ______________ Name of Signatory ______________

Place ; Date :

Attachment - III

(Proforma of Intimation of placement of a party on Holiday list)

No. Date : To M/s ___________________ ___________________ ___________________ ___________________ Attn. Shri ____________________

Sub : Holiday Listing/De-listing of Vendors / Contractors - Intimation of Placement on Holiday List

Dear Sir, This is further to our Show Cause Notice to you dated ____________________ In spite of the opportunity given to you, you have failed to show cause as required * / Your reply to the Show Cause Notice*(and the documents and documentary evidence submitted in support of your reply) has / have been duly considered. After considering the allegations made in the Show case Notice/Your reply to the Show Cause Notice *(and documents and documentary evidence furnished in support thereof), it has been decided that you be placed on Holiday List and * debarred from entering into any contracts with Indian Oil Corporation Ltd./ *be removed from the list of approved Vendors / Contractors for a period of ______years effective from the date hereof..

Yours faithfully, *Strike out if not applicable.

ANNEXURE – 5

INDIAN OIL CORPORATION LIMITED (REFINERIES DIVISION)

TENDERER OPENING STATEMENT /RECORD

(for other than e-tenders)

1. Description of Item: _____________________________________________________

2. RFQ / Tender Reference: ______________________________________________________

3. Due Date of Opening of the Tender _____/______/______

4. Date & Time of Opening of the Tender _____/______/______ __________________

5. Details :

Sr. No RFQ sent to / Tender Vendors responded EMD Details Signature of vendor’s document purchased / (Quoted / Regretted) representative witnessing downloaded by tender opening.

NOTE: Only representative of parties who have submitted Tenders shall be allowed to be present.

Signature Signature (Materials Department Representative) (Finance Representative)

ANNEXURE – 6

Check list for forwarding proposals requiring approval of D (R) / Chairman / Committees

Reference : File No. : ______________________________________

Sl. Description Comments Ref.No. Page1. Brief Description of the proposal

2. Justification for procurement

3. Estimated cost

• Capital Budget (AF No. Board Agenda / DFR Reference etc) + Copy of approval note with relevant enclosures. • Revenue Budget (Reference of approvals/ Cost centre). • Basis of estimate with break-up papers. (Please enclose relevant papers) • Completion schedule as per the budget approval. • Approved cost with break-up of foreign exchange component.

4. Pre-qualification criteria : Brief details, whether mentioned in the tender conditions.

5. Approval of competent authority for waival of press tender (Waival applicable may be indicated)

6. Nature of tender enquiry:

• Press/Limited Tender (Approval for EMD waival, if required)

• Single tender Proprietary – Justification

Sl. Description Comments Ref.No. Page7. Details of tendering :

• Tender Issue date

• Indent/NIT (enclosed)

• Whether clause for splitting orders was provided in tender document as per CVC guidelines?

• Number of parties addressed to (limited tender)

and approving authority for shortlisting the vendors.

• Number of parties requested for tender document.

• Number of parties to whom tender documents were sold (Any party denied).

• Any special conditions leading to dis-qualification

other than normal condition.

• Number of parties responded/ quoted.

• Date of opening (unpriced bid)

• Number of regret letters.

• If any late tender has been considered? Whether approval of GM/ED has been obtained for the same?

• Whether requisite EMD received from all tenderers.

• Involvement of Indian Agent etc.

• Price preference to PSU’s as per guidelines

• Efficacy loading, Loading for deviations 8. Technical evaluation :

• Basis of evaluation

• Pre-price bid discussion, if any.

• Any change in specification/scope of work after

pre bid discussion • Whether revised bid sought, if so, reasons.

Sl. Description Comments Ref.No. Page

• In case quotation from Indian vendor includes CIF components • FOB/CIF value in foreign exchange and base exchange rate to be indicated • If foreign exchange variation to be given to vendor, whether ceiling has been fixed? (Loading factor to be given in the tender itself). Indicate the period allowed for FE/ CD variation (3/4 of CDD) • Please confirm whether foreign exchange variation given to vendor is applicable to consequential CD/CVD/others or not .

9. In case of interest free advance, whether interest will be charged after contractual delivery period/ completion period.

10. Details of loading basis, if any.

11. Number of technically acceptable bidders.

12. Number of rejected bidders, reasons for rejection.

13. Acceptance of GPC/ATC/GCC terms. Any deviation to be recorded and justification for acceptance of deviation.

14. Opening of price bid

• Date of opening • Signature of Finance and Materials member on all bids (including single tender). • Comparative evaluation of prices, checked and signed by Finance & Materials. • Whether price bid of any rejected vendor was opened, if so, justification?

Sl. Description Comments Ref.No. Page15. Price reasonability : (Basis)

• Last purchase reference. • Similar procurement made by other units. • Comparison with the estimated cost for AF/ DFR for Projects & PMC cost estimate • Any other basis (such as foreign exchange fluctuation, escalation factor etc.)

16. Price Negotiation : • Justification/approvals • Date and details of negotiation • Results

17. Whether the recommended party is put on Holiday list by unit, other units/divisions etc.?

18. Summary of proposal

• Validity • Interest of IOCL officials/ Directors. • Order Value • Total Landed cost (separate cost sheet with break-up of component of price to be made, duly checked by Finance). • Total landed cost, Net on CENVAT. • Approving authority, indicating DOA reference para. • A copy of draft Board Agenda to be attached • Any excess in foreign exchange component (wherever applicable)

Sl. Description Comments Ref.No. Page19. Statutory levies

All taxes, duties etc. to be clarified, whether works contract taxes is payable.

20. Agency commission, if applicable, DGS&D compliance.

21. Budget provision :

• Approved cost • Commitment made/ anticipated upto date • Commitment including the current proposal. • Approved schedule of completion.

22. Terms & Conditions :

• Price – firm or variable. (Variable price formula to be specified)

• Payment terms

• Advance payment (clean/ against BG)

• Delivery period

• CENVAT : Necessary documents for availing CENVAT credit should be furnished by the vendor, failing which the amount will be recovered from the vendor.

• Statutory levies

• Any other variation payable, if so, by whom?

• PBG

• Inspection clause

• Training (whether approved originally).

Sl. Description Comments Ref.No. Page23. Major deviation/significant observation :

• On terms & conditions • Eligibility conditions • Evaluation system • Other special conditions • Time/cost over-run on approved cost/delivery schedule

24. Remarks, if any:

Note : 1. Documents/Attachments should be sent with legible copies

2. For approval of Dir (R)/ Chairman, proposal file should be sent well in advance (min. required validity is 30 days form the date of receipt of file at HQ.) 3. For approval of BOD, proposal should be sent well in advance (min. required validity is 45 days from the date of receipt of file at HQ.)

Signature : __________________________

Name : __________________________

Designation : __________________________

Refineries (HQ/ Unit) : __________________________

Annexure 7 a

Standard Format for processing proposals for Price Bid Opening INDIAN OIL CORPORATION LTD Refinery:

Date: Members Present: (to be mentioned in case of Tender Committee cases) 1. [Name & Designation of Purchase rep] 2. [Name & Designation of Indenting / User rep] 3. [Name & Designation of Finance rep]

Price Bid Opening Proposal

1 Description of Material (in brief)

2 a) Indent Reference & approval [Ref : Flag – 2 a)]

2 b) Tender / RFQ No

3 Approved Estimated Cost: [Ref : Flag – 3]

4 a) Delivery / Completion Period as per RFQ

i) Supply ii) Site Work

[Ref : Flag – 4 a)]4 b) Delivery / Completion Period as per

bidder(s)

i) Supply ii) Site Work

[Ref: Flag-4 b)]5 Whether Revenue / Capital Expenditure

In case of Capital, indicate AF / PJ No,and name of job / Project

6 Tendering details 6(a) Mode of tendering: Single / Two bid 6(b) Type of tender:

i) Single Tender (Proprietary/ Non Proprietary): Justification & approval

ii) Limited Tender: Vendor approval including waiver of press tender

iii) Open Tender: Pre Qualification criteria Considered.

In case of Open Tender Pre Qualification Criteria are considered as below:- As per Tender

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria ii) Financial Criteria

Response of bidder(s) against Pre Qualification criteria:

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria ii) Financial Criteria

[Ref: Flag-6(b)]

6(c) Tenders sold/No. of parties to whom enquiry sent [Ref: Flag-6(c)]

6(d) Time allowed for submission of Tenders: i) Open Tender: from the date of opening of sale of tender documents ii) Limited Tender: from the date of issuance of enquiry

[Ref: Flag-6(d)]

6(e) Extension granted, if any

6(f) Scheduled date and time of the receipt of tenders

6(g) Actual Date of opening of tenders (un-priced part/Single bid)

6(h) No. of offers received up to the scheduled date and time of submission of tenders. [Ref: Flag-6(h)

6(i) No. of late tender received / No. of parties regretted / not responded [Ref: Flag-6(i)

6(j) If any such late tender has been considered, whether the approval of GM has been obtained [Ref: Flag-6(j)

6(k) Whether requisite EMD has been submitted by all tenderers

[Ref: Flag-6(k)]

6(l) Whether tenderers were allowed to be present at the time for opening thereof

6(m) Names of techno-commercially acceptable offers

[Ref: NSP-…]

6(n) Details of offers / items rejected on technical/commercial grounds and reasons thereof

[Ref: NSP-….]

6(o) Whether any of the pre qualified party is on holiday list. If yes, give details.

6(p) Whether PSU or JV company participating in the tender. If Yes, give details

6(q) Details of pre price bid meeting held or its waiver: For procurement more than Rs. 5 crore

6(r) Whether Integrity Agreement (Applicable in case of 10 Crore & above) has been signed.

6(s) Offer Validity: 6(t) Vendor – wise Commercial Deviations (if

any) [Ref: NSP-….]

6.(u) Whether approval has been obtained for procurement on single offer basis

6 (v) Any other relevant information Proposal: In view of the above, it is proposed to approve the commercial deviations mentioned at 6 (t) above and open the priced bid of the following ****** bidders through e-tendering portal:

1. M/s **************** (Original bid + price implication, if any) 2. M/s **************** (Original bid + price implication, if any) 3. M/s **************** (Original bid + price implication, if any)

………………………..

The CBA sheet is placed in file at Flag-. Approving authority: ************************************** Submitted for approval please. (modify suitably in case of non TC recommendation)

______________ ______ ___________ Name & Designation Name & Designation Name & Designation Indentor Deptt. Finance Material … "F" - proposal concurred in for the approval of …… … Approving Authority

Annexure 7 b

Standard Format for processing proposals for award of Purchase INDIAN OIL CORPORATION LTD Refinery:

Date: Members Present: (to be mentioned in case of Tender Committee cases) 1. [Name & Designation of Purchase rep] 2. [Name & Designation of Indenting / User rep] 3. [Name & Designation of Finance rep]

Procurement Proposal

1 Description of Material (in brief)

2 a) Indent Reference & approval [Ref : Flag – 2 a)]

2 b) Tender / RFQ No

3 Approved Estimated Cost: [Ref : Flag – 3]

4 a) Delivery / Completion Period as per RFQ

i) Supply ii) Site Work

[Ref : Flag – 4 a)]4 b) Delivery / Completion Period as per

bidder(s)

i) Supply ii) Site Work

[Ref: Flag-4 b)]5 Whether Revenue / Capital Expenditure

In case of Capital, indicate AF / PJ No,and name of job / Project

6 Tendering details 6(a) Mode of tendering: Single / Two bid 6(b) Type of tender:

i) Single Tender (Proprietary/ Non Proprietary): Justification & approval

ii) Limited Tender: Vendor approval including waiver of press tender

iii) Open Tender: Pre Qualification criteria Considered.

In case of Open Tender Pre Qualification Criteria are considered as below:- As per Tender

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria ii) Financial Criteria

Response of bidder(s) against Pre Qualification criteria:

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria ii) Financial Criteria

[Ref: Flag-6(b)]

6(c) Tenders sold/No. of parties to whom enquiry sent [Ref: Flag-6(c)]

6(d) Time allowed for submission of Tenders: i) Open Tender: from the date of opening of sale of tender documents ii) Limited Tender: from the date of issuance of enquiry

[Ref: Flag-6(d)]

6(e) Extension granted, if any

6(f) Scheduled date and time of the receipt of tenders

6(g) Actual Date of opening of tenders (un-priced part/Single bid)

6(h) No. of offers received up to the scheduled date and time of submission of tenders. [Ref: Flag-6(h)

6(i) No. of late tender received / No. of parties regretted / not responded [Ref: Flag-6(i)

6(j) If any such late tender has been considered, whether the approval of GM has been obtained [Ref: Flag-6(j)

6(k) Whether requisite EMD has been submitted by all tenderers

[Ref: Flag-6(k)]

6(l) Whether tenderers were allowed to be present at the time for opening thereof

6(m) Names of techno-commercially acceptable offers

[Ref: NSP-…]

6(n) Details of offers / items rejected on technical/commercial grounds and reasons thereof

[Ref: NSP-….]

6(o) Whether any of the pre qualified party is on holiday list. If yes, give details.

6(p) Whether PSU or JV company participating in the tender. If Yes, give details

6(q) Details of pre price bid meeting held or its waiver: For procurement more than Rs. 5 crore

6(r) Date of opening of price bid in case of two bid system of tendering

6(s) Whether Integrity Agreement (Applicable in case of 10 Crore & above) has been signed.

6(t) Whether per diem charges quoted for installation/ site services are reasonable? If not, efforts made to reduce the same.

6(u) Whether approval has been obtained for procurement on single offer basis

[Ref: NSP-….]

6.(v) Any other relevant point

7. (a) (b) (c)

Summarized position of the competitive prices of the techno-commercially acceptable offers (Detailed comparative statement duly checked by the Finance Department Placed in the File at Flag 7a) (In case of large number of items please refer annexure) Recommendation of Consultant for cases where EPCM is involved: Any negotiations held with the party(s) with approval of competent authority and if so, give details:

[Ref: Flag-7(c)8 (a) Tender / Non Tender Committee case

(b) Proposal:

Vendor’s Name

No. of Line Items / Tags / Description

Order Value (INR)

Landed Cost (INR Lac) Basis

8(c) In case of Sole offer/Two offer/ Single tender, justification for price reasonability.

[Ref: NSP-…. & Flag- 8(c)]

8(d) In case offer of lowest party is less than 20% of our estimate, indicate

N.A.

workability of the rates 8(e ) In case award is recommended on

other than lowest basis, reason thereof

8(f) Details of advance payment, if any

8(g) Major terms and conditions & time of completion

Major terms and conditions shall be as per Annexure-I [Ref: Flag

8(h) Major variation from GPC/SIB, if any 8(i) Recommendation regarding acceptance

of variation regarding GPC/SIB.

8(j) Compliance to CVC guidelines 8(k) Interest of Directors in the

recommended party, if any

8(l) Interest of tender committee members in the recommended party, if any

8(m) Offer validity 8(n) Validity of EMD (if applicable) [Ref: Flag-8 n8(o) Whether the contract value is within

the approved cost (if not how it is proposed to be met)

8(p) Approved cost of the scheme of project (in case of Projects)

8(q) Cumulative commitments made including the proposal under approval (in case of Projects). To be filled by ”F”

Summary of Recommendation: In view of the above, it is proposed to place order on following bidders for the supply of ******************** as per enquiry no *********** dtd. ******** for ******* as per the details given below. Order approval by: ………… in accordance with DOP clause No………………….

Vendor’s Name

No. of Line Items / Tags / Description

Order Value (INR)

Landed Cost (INR Lac) Basis

Submitted for approval please. (modify suitably in case of non TC recommendation)

______________ ______ ___________ Name & Designation Name & Designation Name & Designation Indentor Deptt. Finance Material … "F" - proposal concurred in for the approval of …… … Approving Authority

Annexure-9

INDIAN OIL CORPORATION LIMITED (REFINERIES DIVISION)

(Complete address of the unit/location)

BY REGD. POST WITH ACKNOWLEDGEMENT DUE No. ………………….. Date

The Branch Manager ……………..Bank, ………………….. ………………….

Fax No. ………………….

Sub: Performance Bank Guarantee No……………………….. dtd. ………………..for

Rs…………………………….. Dear Sir,

We refer to the aforesaid Bank Guarantee issued by you at the request of M/s………………………….(Vendor) towards EMD/Advance/Performance Guarantee/etc. The said Bank Guarantee is expiring on ………………………………... We have requested the vendor to get the above guarantee extended upto ……………. In case the bank guarantee is not extended by……………………….(validity date), this may please be treated as our demand on you to pay us the amount of Rs………………………………………in terms of the Bank Guarantee. Kindly acknowledge receipt.

Yours faithfully, For and on-behalf of, Indianoil

Corporation Limited,

(Name of the officer) Designation Fax &

Phone nos. CC: M/s ……………………… With a request to get the cited Bank Guarantee extended upto

………… (Complete address of the vendor) (Fax No. .………………..) (e-mail id: ……………….)

FAX OF ACCEPTANCE (FOA)

Date: ……..

FAX OF ACCEPTANCE NUMBER:

Indian Oil Corporation Limited Refineries Division (Refinery Address…….. …….. Fax No: …………….. e-mail:

Fax no. & e-mail For M/s. …………… Kind Attention Phone no. Reference Reference to your offer ref……dtd……… and all

subsequent correspondences till date. Item description RFQ / Tender Number Project / Job Name (in case of Capital Budget) Items to be supplied Items as per Annexure- II to this FOA Order Value (Rs.) Delivery basis Other terms & conditions All other terms and conditions shall be as per as per

Annexure-I to this FOA Our detailed Purchase Order follows. In the meantime please treat this FOA as our firm order commitment & confirm per return e- mail / fax your acceptance of this FOA on our e-mail id: ………….@indianoil.in and fax number ………………….

For and on behalf of

Indian Oil Corporation Ltd.

[NAME] [DESIGNATION]

M/s. …….. CC:

Annexure-I to FOA NO – ……

TERMS AND CONDITIONS (sample: to be changed as per requirement)

Vendor: M/s. ……………………… Price basis Packing & Forwarding

Freight charges Transit Insurance

Excise Duty CST Against Form “C”

Delivery / Completion period

Price reduction clause for Delay (PRS) in delivery

Payment Terms

Supply: Site Work: Site Supervision: Transportation: Training: The above payments shall be released by………………

Performance Bank Guarantee

Third Party Inspection Charges as per tender scope

Other inspection and Documentation Charges as per tender scope

Defect liability period

Repeat order Tolerance Limit

All other terms & conditions

All other terms and conditions shall be as per Indian Oil’s General Purchase conditions (GPC)

------------ ---

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. . TECHNICAL DEPARTMENT

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,,, ,­REFINERIES HEAD QUARTERSIndlanOn

ED (HR) - RHO. ToFrom ED (Operations) All Refinery Heads

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02 Aug 2013Date Date

Committee Report on chemical testing and sampling methods in Refineries

A committee was formed vide office order No. PIIRl363 dated 21 st Nov'12 to look into the existing chemical sampling methods adopted & the chemical quality checks being carried out at refinery units. The committee has submitted its report recommending various measures to be adopted for sampling &adherence to the quality standards of chemicals.

The recommendations of the committee are examined at our end & the consolidated list of the acceptabie recommendations Is enclosed for implementation at the Refineries.

,~\~\~ ED (Operalions)

CC: Dir (R) - for kind Information please.

.•. _-....-­ ._-~---~_.'. '.

Chemical Sampling Committee· Accepted Recommendations

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1

Commercial supplies of all chemicals to the Refinery are to be tested at QC lab/ IOCl R&D/ Third Party lab for its compliance to the purchase specifications. Refineries to identify the parameter which will be tested for each chemical.

Purchase specification for acceptance of the chemicals should be part 0

purchase orders. Tender to indicate the specifications and/or efficacy of chemicals will be checked during use &penalties in case it does not meet.

Refineries (Materials, QC, TS, Indenting Dept)

2a RHQ CPC, Refineries (Materials, QC, TS, Indenting Dept)

2b

It is preferred that all the parameters mentioned in the purchase specification are tested at QC lab. In the case where all the parameters in the purchase specification cannot be tested, a predefined fonmat 0

testing of important parameters is to be developed for each chemical by TS/ QC lab for the same. R&D and other refineries may be contacted for finalization of the same if felt necessary by the TS/ QC lab.

For chemicals supplied in stores in drum/ sack! bags, the sampling should be done by lab personnel in presence of store representative and shall be taken by lab personnel to lab for testing in sealed condition. 3 composite samples should be drawn. One sample should be tested in the laboratory and one sample each to be retained by QC lab and store in sealed condition duly signed by Lab personnel & store personnel. The samples to be retained till the quality or efficacy compliance is met as certified by the indenting dept.

For chemicals indented by Stores, the acceptance of the chemical are to be declared by lab personnel after comparing with purchase specifications with the test results. For items indented by TS/ other user dept, the acceptance will be given by TS/User dept officer after comparing the test results with purchase specifications

For bulk chemicals, composite samples are to be collected from each compartment and from top and bottom both. If the sample fails in test, the material shall be retumed back to the vendor for replacement

In case of any vendor submitting test results with alternative test methods, clarification/ confinmation is to be taken from the vendor that it is an equivalent test method to that mentioned in the tender specification. This clarification is to be done during the TQ stage before giving Technical recommendation. However, the acceptance of the' commercial supply will be on the basis of the test method mentioned in the purchase specification which will be done in Refinery QC lab.

Refineries (QC, TS)

3a Refineries (Materials, QC, Indenting dept)

3b Refineries (QC)

4 Refineries (Materials, QC, Indenting Dept)

5 RHQ CPC, Refineries (Materials, TS, Indenting Dept)

,

.. . .. --~.~.---

6

In case of samples failing in a test, the test may be repeated with the retention sample. In case the test is passed, The material is to be accepted & in case the test fails again, the material is to be returned to the vendor. Vendor may be asked to replace the material within reasonable time at his risk &costs.

Refineries (Materials, QC)

7

If acceptable by the user department & depending on plant inventory, few bulk chemicals (eg: Caustic, HCI etc) with slight variation of test results as

. compared to purchase specification may be accepted at reduced rates with due approval of competent authority. The formula for such reduced rate shall be specified beforehand.

Refineries (Materials, Indenting Dept)

8 Plant performance evaluation tests as mentioned in the tender should be carried in the unit for the chemicals (eg: Corrosion Inhibitor, Demulsifier, PPD etc) which are purchased on the basis of performance parameters.

Refineries (PN, TS)

9

If testing of any chemical is not possible due to non availability of testing equipment and testing frequency is very less, the same shall be carried out by sharing of lab facility with equipment procurement by anyone or two units on sharing basis.

Refineries (QC)

10

For chemicals (MFA & Lubricity Additive) where the Purchase Order is placed on the basis of a 'Mutually Agreed Purchase Specification (MAPS)' derived aller the R&D tests, the MAPS should be uploaded in SAP along with the PO.

RHQCPC

11 If any chemical is stock transferred from one refinery to another refinery, the mandatory laboratory tests are to be carried out again by the receiving refinery.

Refineries (Materials, QC)

12 a

Chemical supplied in drums! bag: Sample should be collected from the lot supplied in one lot and shall not be from less than 10% of the lot. The sample shall be made composite sample and should be tested. I composite sample fails then individual testing should be done from the same drum! bag. The selection of the drum! bag should be done as under: 5% by QC lab, 5% by stores

Refineries (Materials, QC)

12 b

Chemical supplied in tanker! ISO tank: Sample should be collected from each compartment of the truck from both top & bottom and shall be made composite sample and should be tested. If composite sample fails then whole truck to be rejected and sent back to the vendor for replacement. However, in case of plant emergencies and also of the chemical can be used with lower efficacy, the same may be accepted at reduced rates with due approval of competent authority as mentioned at S NO.7

Refineries (Materials, QC, Indenting Dept)

13

Checklist of chemical handling prepared by Panipat Refinery should be shared to all refinery locations and considering the comments of all the units, a common manual shall be prepared and to be followed by all refinery units

Refineries

14 It is to be ensured that the chemical test reports submitted by QC Lab also contains the permissible value! limits as mentioned in the technical specification.

Refineries (QC)

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15 It is to be ensured that refineries carry out periodic system audit and an annual surprise check of the sampling procedures &quality check of each incoming chemicals.

Refineries

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Stores to ensure that the bulk chemicals (Caustic, HCI & H2S04) are supplied in the correct tankers bearing the correct chemical name & road safety instructions. Any bulk chemical supplied in incorrect tankers is to be rejected &retumed to the supplier.

Refineries (Materials)

Annexure 12

Procedure for taking & handing over project spares & leftover materials (ref. Finance Circular F/12/035 dtd 15.07.10) The Procedure & guidelines below have been segregated to the extent possible for the different methodology of project execution as under: 1. LSTK Projects 2. Conventional Projects 1.0 LSTK Projects

Generally there are following three types of project leftover materials.

1.1 Category-1 : Scrap (off-cut, damaged, defective materials) like cut pieces of pipes, sheets, structural less than their standard size of supplies, cables less than 100 meters including empty cement bags & drums etc. Materials like refractory paints, rubber-sheets, chemicals etc. with expired shelf life will also be treated as scrap.

As adequate space is normally not available for scrap yard during the project execution stage, the executing contractor may be allowed to dispose of the scrap generated from time to time with the prior approval of PMC/ Engineer-in-charge & the materials department of IOCL. Once the scrap quantity is finalized by the PMC/ Engineer-in-charge & the materials department the same should be disposed of by the contractor to the satisfaction of IOCL and the money received against such disposal shall be passed on to IOCL.

1.2 Cagegory-2 : Mandatory Spares & items to be handed over as per contract

1.2.1 A separate store/ warehouse should be made available for keeping

the workable leftover materials & mandatory spare parts. The warehouse complex should be a part of utility packages so that their construction starts well in time and procurement of racks, almirahs, etc as well as installation of communication system, LAN etc. are included in project package itself. The warehouse should be equipped with racks almirahs & other accessories along with open yards having hard surfacing, fencing for keeping bulk materials like pipe, pipe fittings, valves, structurals, & cables etc. These facilities along with adequate manpower should be made available well in advance, that is, at least one year ahead of mechanical completion of the project.

1.2.2 PMC/ Engineer-in-charge to ensure that the PO placement for all mandatory spare parts is done along with the PO placement of main equipment and within 3 to 6 months of finalization of bulk materials like piping, cables etc. as per the contract document. The PMC/Engineer-

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in-charge shall review and approve the same within stipulated time and on PRIORITY BASIS.

1.2.3 The list of mandatory spares ordered by LSTK contractor is to be reviewed by PMC / IOCL on immediate basis and any addition / deletion on the list of mandatory spares are to be intimated to the LSTK contractor to ensure required action by them.

1.2.4 The contractors should start necessary activities for codification

immediately after placement of the Purchase Order for Mandatory Spare Parts and Code-1 approval for the items progressively. The contractor has to fill all the required details with 6 digit code as per template supplied to them for codification purpose and forward to IOCL for codification.

Based on above IOCL shall allocate 10 digit codes on receipt of filled up templates with 6 digit codes.

1.3 The list of mandatory spares & other items as per contract to be reviewed by concerned planning section of IOCL or as directed by the engineer-in-charge for identifying the insurance items/ spares according to M&I circular dtd. 12.12.05 before handing over, so that capitalization is done according to accounts manual 2008.

1.4 Pricing of the mandatory spare parts: For items already codified

and available in the existing inventory, Moving Average Price (MAP) is to be considered while uploading the stock in the inventory.

For the new items / spares, the price mentioned in the PO placed by LSTK contractor is to be considered. Efforts should be made to enter the realistic price into the SAP data base. The differential value, if any, with contract value for mandatory spares (after considering the cost of all mandatory spares as per contract), is to be capitalized. Technical Committee shall review the pricing done by LSTK bidders and also review the same which shall be considered for valuation. In case of LSTK projects, where book value of items has not been provided by the contractor, the book value of similar items will be considered adequate. If the rate of same size or schedule is not available, the rate can be interpolated/extrapolated.

1.5 The LSTK contractor shall prepare the Material Handing Notes (MHN) to be handed over as per contract (in MS-Excel) immediately on receipt of Mandatory Spares by them as and when the same is received. The MHN should contain the following details:

• Serial Number • LSTK’s identification number

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• IOCL Material Code • Materials description • Quantity • Unit of Measurement • Unit Rate of the item – in Indian Currency • Part number (in case of spares) • Drawing number (in case of spares) • Supplier’s name • Test certificate no.

1.6 The LSTK contractor shall hand over the above mentioned list to the PMC and Engineer-in-charge for approval within a maximum stipulated period of receipt of material progressively.

1.7 Mandatory Spares shall be taken over by IOCL on receipt of Approved

MHNs progressively. IOCL shall put the tag / paint on the items / materials which are being taken over from the contractor for better clarity.

1.8 Wherever possible, like in case of Spares for Pumps, Compressors,

etc., each item shall have metallic tags containing IOCL SAP codes, brief description, reference PO for items. For items like plates, pipes, fittings, flanges, etc., SAP Code and other relevant details to be written on the item itself in white paint on black painted background.

1.9 The MHN after complete actions points as above and along with all

supporting documents viz. Test certificate/ guarantee/ warrantee certificate etc are to be sent to stores at the time of handing over the materials.

1.10 The contractor will bring & shift the materials as per MHN to IOCL

stores site as per direction of stores in-charge. The same shall be transported by the contractor at their own cost. Stores shall verify the quantity, match the identification Mark/ Heat no or any other correlation mark on materials.

1.11 One copy of MHN duly received by stores will be handed over to the contractor. Another copy of MHN will be sent to “F” and the LSTK contractor may be allowed to claim the payment progressively as per payment terms indicated in the contract.

1.12 In case LSTK contractor requires any mandatory spares during

commissioning, the same will be used with the prior permission of the engineer-in-charge and the project co-coordinator on returnable basis.

1.13 In case contractor fails to return the material before releasing final bill,

recovery will be made from the final bill towards replacement cost of the item + overhead charges @18% based on a Valid offer from the OEM/Supplier to be obtained by IOCL/LSTK Contractor for procurement of the same.

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1.14 Category-3 : Workable, useful & serviceable materials (other than mandatory spares and items to be handed over as per contract) - An inventory shall be made by the contractor for the balance left over items (including commissioning spares) which are in good & in acceptable condition like equipment, spares, piping materials, including Cables etc. The full details of items should be in MS Excel sheet as detailed below: • Serial Number • IOCL Material code • Detail material description • Quantity • Unit of Measurement • Unit rate of item – in Indian currency

1.14.1 The contractor at his own cost will transport & shift the same in a manner as explained by the PMC/ EPCM/ engineer-in-charge to IOCL refinery stores. The IOCL stores will accept these materials and provide a separate covered space for storing these materials immediately as per instructions of engineer-in-charge.

1.14.2 The pricing should be done as per para no. 1.4 above.

1.14.3 IOCL shall put metallic tag / paint on the items / materials as explained

in 1.8 above which are being taken over from the contractor for better clarity.

2.0 Conventional Projects The following guidelines are applicable for large conventional projects also where: i. SAP code is already available in the SAP purchase order ii. Warehouse management is done by PMC / EPCM In conventional projects, though inventory is in physical possession of PMC/ EPCM yet its record of receipt, issue & balance is available with IOCL in SAP as capital store. On completion of the project, left over inventory is transferred to revenue store based on Material Handing over Note (MHN) submitted by PMC/ EPCM. For SCRAP Material, Category-1 procedures will be followed.