1TYPES OF PURCHASES

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TYPES OF PURCHASES(As per General Financial Rules-2005)

1. Direct Market Purchase without quotation. (upto Rs. 25,000).

2. Direct Market Purchase(LPC) (upto Rs. 2 Lakh).

3. Limited Tenders Enquiry

4. Advertised Tenders Enquiry (Above Rs. 50 Lakh)

5. Single Tender Enquiry ( Proprietary Item).

6. Purchase through other Rate Contract.

7. Repeat Orders

8. Purchase through Buy-back offer.

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1. PURCHASE WITHOUT QUOTATION

• As per GFR -145

• Purchase upto Rs. 25,000 on each occasion may be made without inviting quotations by competent authority.

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• As per GFR -146

• Purchase of goods upto Rs. 2.00 Lakh on each occasion may be made by an authorised committee through Market Survey with due certifications.

• In case of web survey, printouts of survey of three companies may be attached to proposal.

• In each case, copy of three indicative bids to be attached.

2. DIRECT MARKET PURCHASE-LPC

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3. LIMITED TENDER INQUIRY (LTI)

AS per GFR – 151

• LTI to be issued for all purchases from Rs. 1 to Rs. 50 Lakh.

• Enquiry should be sent to more than THREE parties.

• Atleast three quotations should be received.• Otherwise, approval of competent authority

required to open 1 or 2 tenders.

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4. ADVERTISED / GLOBAL TENDER INQUIRY

As per GFR - 150

• All tenders above Rs. 50 Lakhs to be advertised in leading newspapers.

• Tender to be published on CPPP also.

• In case of Global Tender more lead time can be given with wider publicity.

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5. SINGLE TENDER INQUIRY (STI)

As per GFR – 154

• Single Tender Enquiry means purchasing without competition.

• STI should be used as exceptional cases.• Single Tender Inquiry to be issued when:

•Parts of Existing Equipments.•AMC of Equipment by the sellers after Warranty•Proprietary Items-single source of supply.

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6. Purchase through other Rate Contract

• As per GFR – 147

• Purchase of item(s) can be made using DGS&D rate contract without inviting quotations.

• Get valid DGS&D Rate Contract copy from bidders or from DGS&D site.

• Process file under ' OTHER RATE CONTRACT' head in OPS.

• Follow the same procedure for Institute Rate Contract.

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7. Repeat Order

• The repeat order is made without any change in the rates, specifications as well as terms and conditions of supply.

• The repeat order shall be placed within 180 days from the date of original purchase order.

• No repeat order will be placed if buy-back is involved in the purchase.

• Any amended order shall not be considered for repeat order.

CONTRACTAGREEMENT

WHAT IS PURCHASE ORDER

https://www.youtube.com/watch?v=GLVAQ2cSWN4

NEGOTIATING SKILLS & TECHNIQUES

DON'T DISCLOSE YOUR DEADLINE

1. Don’t reveal your deadline unless it is in your best interest. 2. Focus on the deal itself.

KNOW WHAT YOU WANT

Make a list of what you need & the specifications you want & stick to it.

THINK, THEN SPEAK.

KNOW YOUR MARKET.

Information is the negotiator’s most powerful asset. If you are well prepared, you will be rarely fooled.

Knowing the strength & weaknesses of your opponent’s bargaining position will make you a stronger negotiator.

Standard Purchase Order

Reference Tender Number / File No.Purchase Order date & number.Detail item description and specifications.Suppliers details with full address.Reference of supplier quotation and date.Amount of purchase including all taxes.Date and place of supply.Time and days of supply.Order Acknowledgment.

Standard Purchase Order

Penalty Clause.Guarantee and Warranty clause.Clause on right to reject material if not

satisfactory.Purchase order is subject to all terms

and conditions mentioned in tender document.

https://www.youtube.com/watch?v=9DJQSL7hpNY

https://www.youtube.com/watch?v=6v8UXcCvBKU

FREIGHT FORWARDING & CUSTOM CLEARANCE

Guidelines for Receiving Materials

Following checks must be applied : 1) Check whether material is against valid PO or else. 2) Material should be accompanied by valid challan. 3) Materials Specification as per PO on challan. 4) Condition of Box and material should be checked. 5) Short supply to be reported. 6) Damaged materials to be reported and noted

on challan itself.

Guidelines for Clearing Bills

Bill Clearance : 1) PBG. 2) Issue Note / Acceptance Note/ GRN. 3) Octroi

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RE-EXPORT PROCEDURE

1.Letter from the Indentor to re-export the defective equipments.

2. Consent letter from the foreign supplier that the company is ready to repair or replace the same.

3. Copy o f the original purchase order.

4. Instructions from the Indentor giving the details of fund to which the re-export charges to be debited.

5. DRMM will send a letter to SBI for obtaining No Objection Certificate to re-export.

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MATERIALS TO BE WRITTEN OFF

• All broken, obsolete, old, beyond repair items must be written off regularly.

• There are used chemicals to be disposed off safely.

• Old books, old newspapers needs to be sold regularly.

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METHODS OF DISPOSAL

–Replacement supply / buy-back offer.

–Sell to local vendor by limited tenders.

–Advertised Tender.

–Auctions & E-Auction.

–Disposal of Hazardous Waste.

CASE STUDIES

M/s Victory Genset did not supply 625 Genset for 2 years. Penalized for Rs. 8.00 Lakh. Legal notice settled.

M/s Ocimum-Bio did not supply item after taking advance of Rs. 8.80 Lakh.

M/s AC WORLD employees use to steal copper pipes in night of installed ACs by them. Caught and jailed. Company Blacklisted.

M/s Datawind of Aakash-II, did not supply in time for more than a year. Penalty recovered of Rs. 29 Lakh.

M/s Machwel quoted 700 chairs to Hostel-14 at very low rate (Rs.900), supplied sub-standard chairs, replaced all on holding payment and guarantee.

AREAS OF PROCUREMENT ACTIVITIES COVERED BY CVC

GUIDELINES

CVC GUIDELINES COVER VARIOUS CVC GUIDELINES COVER VARIOUS IMPORTANT ASPECTS OF PUBLIC IMPORTANT ASPECTS OF PUBLIC

PROCUREMENTPROCUREMENT

SOME SUCH ASPECTS ARE:SOME SUCH ASPECTS ARE:

TRANSPARENCY IN TENDERING SYSTEMTRANSPARENCY IN TENDERING SYSTEM

RECEIPT AND OPENING OF TENDERSRECEIPT AND OPENING OF TENDERS

TIME BOUND PROCESSING OF PROCUREMENTTIME BOUND PROCESSING OF PROCUREMENT

ADOPTION OF INTEGRITY PACT IN MAJOR PROCUREMENTADOPTION OF INTEGRITY PACT IN MAJOR PROCUREMENT

TRANSPARENCY IN CONTRACTS AWARDED TRANSPARENCY IN CONTRACTS AWARDED

POSTING OF DETAILS OF CONTRACT ON WEBSITESPOSTING OF DETAILS OF CONTRACT ON WEBSITES

USE OF PRODUCTS WITH STANDARD SPECIFICATIONUSE OF PRODUCTS WITH STANDARD SPECIFICATION

DELAYS IN PAYMENT TO CONTRACTORSDELAYS IN PAYMENT TO CONTRACTORS

CONSIDERATION OF INDIAN AGENTSCONSIDERATION OF INDIAN AGENTS

MOBILIZATION ADVANCEMOBILIZATION ADVANCE

NEGOTIATION WITH L1NEGOTIATION WITH L1

CVC GUIDELINES COVER VARIOUS CVC GUIDELINES COVER VARIOUS IMPORTANT ASPECTS OF PUBLIC IMPORTANT ASPECTS OF PUBLIC

PROCUREMENTPROCUREMENT

TRANSPARENCY IN TENDER DOCUMENTSTRANSPARENCY IN TENDER DOCUMENTS

Essential criteria like:Essential criteria like:

Specification, Specification,

Pre-qualification, Pre-qualification,

Tender Evaluation, Tender Evaluation,

Disqualification, etc. Disqualification, etc.

On the basis of which tender is going to be evaluated are to be On the basis of which tender is going to be evaluated are to be clearly mentioned in the tender document.clearly mentioned in the tender document.

Wherever required, the organization should follow TWO-Wherever required, the organization should follow TWO-BID SYSTEM.BID SYSTEM.

USE OF WEBSITE FOR NIT AND TENDER USE OF WEBSITE FOR NIT AND TENDER DOCUMENTSDOCUMENTS

In addition to advertisement as and when In addition to advertisement as and when required, every tender to be uploaded on required, every tender to be uploaded on Institute Website and CPPP along with Institute Website and CPPP along with

tender document.tender document.

RECEIPT AND OPENING OF TENDERSRECEIPT AND OPENING OF TENDERS

Tenders are to be received by specified date and time. In case of Tenders are to be received by specified date and time. In case of any change in above, needs to be notified on website or in any change in above, needs to be notified on website or in newspapers as the case may be.newspapers as the case may be.

Tenders are to be received through tender box only.Tenders are to be received through tender box only.

Where tenders are required to be submitted by hand, names and Where tenders are required to be submitted by hand, names and designations of atleast two receiving officers are to be mentioned designations of atleast two receiving officers are to be mentioned in the tender documents and also displayed at the entrance / in the tender documents and also displayed at the entrance / reception of the organization.reception of the organization.

Tenders are to be opened on the stipulated date & time in the Tenders are to be opened on the stipulated date & time in the presence of indenting tenderer. presence of indenting tenderer.

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DOs IN PURCHASE MANAGEMENT

• Be Clear about the required end-uses of the items to be purchased.

• Project a standard, well defined, straight forward and broad based technical specification for the items to be purchased.

• Ensure sufficient lead-time for the supply.

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• Ensure that commercial conditions of the tender enquiry are attainable and within the framework of the laws of land.

• Try to avoid proprietary purchases and aim for obtaining competitive tenders.

• Check for availability of required funds.

• Ensure that suppliers are competent and eligible.

DOs IN PURCHASE MANAGEMENT

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• Allow sufficient time to tenderer to prepare and send their tenders.

• Follow standard transparent norms for receipt and opening of tenders.

• Compare tenders on equitable basis with reference to terms and conditions of tender enquiry.

• Check reasonableness of quoted price(s).

DOs IN PURCHASE MANAGEMENT

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• While drafting the contract, put all required terms and conditions in it.

• Ensure that the concerned tenderer has agreed to all the terms and conditions being put into the contract.

• Watch for unconditional acceptance of

contract by suppliers.

• Above all, be transparent.

DOs IN PURCHASE MANAGEMENT

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DON’Ts IN PURCHASE MANAGEMENT

Do not write ambiguous and vague specification for the items to be purchased.

• Do not project specifications and other terms and conditions which are beyond the reach of the industry.

• As per CVC guidelines, Do not negotiate with any suppliers. If necessary, then only with L1 bidder only.

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• Do not give undue preference to a tenderer at the cost of other tenderers.

• Do not place a contract without ensuring required fund.

• Do not proceed with any verbal agreement.

• Do not delay payment to the suppliers when due.

• Do not create a situation where ordered item arrived but the site not yet ready for installation.

DON’Ts IN PURCHASE MANAGEMENT

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After placing a contract, the very first

step is obtaining the supplier’s

unconditional acceptance of the contract.

This is extremely important for a successful contract.

DON’Ts IN PURCHASE MANAGEMENT

Thank you for your patience!