procurement procedure in ssa

Procurement Procedure in SSA

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PART - I

(i) Introduction

(a) Main Considerations

(b) Objectives of Effective Procurement

(c) Procurement in SSA

(ii) Financial Ceiling

(iii) Levels of Procurement

(iv) Procurement Plan

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Main Considerations

PROCUREMENTPROCUREMENT

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Main Considerations of Proficient Procurement

(i) Economy: Give the purchaser best value for money.

(ii) Efficiency: Best procurement is simple and swift, producing positive results without protracted delays.

(iii) Fairness: Impartial, consistent, and therefore reliable.

(iv) Transparency: Maintains rules and procedures that are accessible and unambiguous. It is not only fair, but should be seen to be fair.

(v) Accountability and Ethical Standards: A key deterrent to collusion and corruption, and a key prerequisite for procurement credibility.

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Why is Procurement Important?Why is Procurement Important?

• In procurement terms inputs are generally grouped into three categories:

(i) Civil Works – School Infrastructure and facilities like New PS, UPS, Residential Schools, Hostel, ACR, HM Room, BRC/URC, CRC, Drinking water, Toilets, Girls Toilet, Ramps, Handrail, Electrification, Retro-fitting, Boundary wall/ fencing, Major Repairs, etc.

(ii) Goods - Typically equipment, computers, furniture, textbooks, library books, uniforms, TLE, TLM, other materials, supplies, commodities, etc.

(iii) Services – Hiring of services including academic, technical and resource support provided by institutions/organizations in all areas, research studies, third party quality evaluation of civil works, auditors etc.

• The quality, timeliness, local appropriateness and affordability of those procured inputs can largely determine whether the public investments will succeed or fail.

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Effective ProcurementEffective Procurement

ObjectivesObjectivesObjectivesObjectives

Right Quality product

Right Quality product

Right quantities

Right quantities

Lowest possible

price

Lowest possible

price

Meeting recognized standards

Meeting recognized standards

Timely Delivery as per

schedule

Timely Delivery as per

schedule

Reliable suppliersReliable

suppliers

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PROCUREMENT IN SSA

• Strictly follow procurement procedure prescribed in Chapter IX of the Manual on Financial Management and Procurement (FM&P).

• Mandatory to follow the Manual provisions for all procurements under SSA.

• Follow States’ financial ceilings except when not prescribed by MHRD.

• Strictly follow MHRD’s financial ceilings when ever prescribed for various method of procurement which shall prevail on States’ ceilings.

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• Identification of Needs.

• Ensure availability of specific budget provision.

• Assessment of bulk requirement at the beginning of the financial year.

• Computer, equipment, furniture, books etc in economic lots as per

annual need.

• Procure miscellaneous items of stores not covered by bulk requirement

as per actual need.

• Make all purchases to the best advantage after comparison of

competitive prices.

• Strictly follow the level of procurement prescribed in the Manual

• Encourage decentralized procurement

• Avoid centralized procurement of items prescribed at lower level

Points to be kept in view Points to be kept in view

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PROCUREMENTPROCUREMENT

Strictly follow the levels of procurement provided in Para 112 of the Manual on FM&P

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School/KGBV levelSchool/KGBV level

All civil works, except buildings for Residential Schools/Hostels and

KGBV. Furniture to Govt. UPS Library Books for schools Teaching Learning Material School grant. Maintenance grant.

Teaching Learning EquipmentREMSLearning Enhancement Programme (LEP).Items required for KGBV.Uniform

Special Training related ItemsSpecial Training related Items

TLM, Contingency etc.

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CRC/BRC levelCRC/BRC level

Furniture/ equipment/computer etc.

Office contingencies

Teaching Learning Material

Teacher Training

Community Training

Civil works for construction of BRC, augmentation of BRC

and CRC

Maintenance of BRC and CRC

Printing work

REMS

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District levelDistrict level Office equipment for DPO Office furniture for DPO Textbooks/other books/supplementary materials Computers and accessories Aids and appliances for CWSN Office contingencies Hiring of vehicles Maintenance of equipment and vehicles District level training and workshops Printing work REMS ECCE Kit Educational Kits for girls Learning Enhancement Programme (LEP) Construction of Residential Schools/Hostel and KGBV

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State levelState level Textbooks Computers and its accessories Office equipment for SPO Office furniture for SPO Equipment for distance education Aids and appliances for CWSN Office contingencies Hiring of vehicles Maintenance of equipment and vehicles State level training and workshops Printing work Engagement of consultancy firms (service contract) Engagement of Auditors for external and internal audit Engagement of experts/resource persons Engagement of NGOs REMS Learning Enhancement Programme (LEP).

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PART - II

(i) Method of Procurement

(a) Open Tender

(b) Limited Tender

(c) Single Tender

(d) Without Quotation

(e) Through Community

(ii) Steps involved in various method of Procurement

(iii) Major Procurement in SSA

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Method of ProcurementMethod of Procurement

Method of Method of ProcurementProcurementMethod of Method of

ProcurementProcurement

Open Tender Open Tender

Limited TenderLimited Tender

Single TenderSingle Tender

Procurement without tender /

quotation

Procurement without tender /

quotation

Procurement through

communities

Procurement through

communities

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OPEN TENDEROPEN TENDERMeaning

• Competitive bidding procedure and is the most efficient and economic way of procuring goods or works.

• Provides for adequate competition in order to ensure reasonable prices.

• Ensures transparency and equal opportunity to all.

• The methods used in the evaluation and the award of contracts are made known to all bidders.

Items covered

Civil works construction of BRC, Residential schools / Hostel, KGBV, SIEMAT and any other civil works specifically approved by Project Approval Board through contractors.

Goods

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OPEN TENDER

Steps Preparation of tender documents

Notification / Advertisement;

Issue of tender documents;

Pre-bid Conference

Submission of tender documents;

Public opening of tender;

Evaluation;

Selection of lowest evaluated responsive bidder based on post qualification;

Negotiation with L-1 (if necessary)

Contract award; and

Contract performance

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Tender documents:Tender documents: Should be user friendly, self contained, comprehensive, unambiguous

and relevant to the objective of purchase. Use Standard State Government’s tender documents duly modified, if

necessary, to cover the following sections: Section - I – Invitation for Bids (IFB)

Section - II – Instructions to Bidders (ITB)

Section - III – General Conditions of Contract

Section - IV – Special Conditions of Contract

Section - V – Schedule of Requirements

Section - VI – Technical Specifications

Section - VI-A – Post Qualification Criteria

Section - VII – Bid form and Price Schedule

Section - VIII – Bid Security Form

Section - IX – Contract Form

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Section - X – Performance Security Form

Section - XI – Performance Statement

Section - XII – Manufacturers Authorization Form

Section - XIII – Form for Bank Guarantee for Advance Payment

Section - XIV – Performa for Equipment and Quality Control employed by the Manufacturer

Important Clauses: Notification of Tender Notice Sale of tender documents Schedule of requirement Bid Form Bid Prices Technical Specifications Post-Qualification Criteria Bid Validity Period

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Earnest Money Pre-bid Conference Signing of Bids Submission of bids Opening of bids Evaluation criteria Negotiation with L1 Award of contract Security deposit Retention money Signing of agreement/contract Payment terms Adjudicator Force Majeure Liquidated damages Corrupt or Fraudulent Practices General Conditions of Contract (GCC) Special Conditions of Contract (SCC)

Procurement Steps Procurement Steps

Notification of Tender Notice

• Timely notification of bidding opportunities is essential in competitive bidding.

• Invitation to bid to be published in newspapers, and at least in one national English daily, if value is more than ` 20 lakh.

• While a gist of the notification is published in the news paper detailed notification be uploaded on State SSA’s website.

• Notification should cover:

Cost of bidding documents and mode of payment

Details of goods / equipment /works, quantity, delivery/ completion date

Date of commencement and last date for sale of bidding documents

Notification of Tender Notice

Last date and time for receipt of bids

Time and date of opening of bids

Place of opening of bids

Address for communication

Earnest Money and its mode of payment

– Last date for receipt of tender documents –

The day following the date for close of the sale of tender documents.

– Tendering period –

Not less than 30 days from the date of sale of tender documents.


Sale of Tender Documents

Begin only after publication of notification of tender.

Close one day prior to the last date for receipt of tender.

Prescribe a reasonable cost. Levy additional charges in case of sending by post or courier.

Allow to down load from web site, subject to payment of the prescribed cost of the tender documents while submitting it.

Non-refundable cost in the form of a Demand Draft / Bankers’ Cheque on any Nationalized/Scheduled bank in favor of the purchaser/employer

Not transferrable from one bidder to another

All associated cost borne by the bidder


Schedule of Requirement

Use the prescribed format given in the bidding documents

Clearly specify the work to be carried out, location, goods to be supplied, place of delivery / installation, schedule of delivery / completion, earnest money deposit, minimum performance requirement, warranty and maintenance requirement and other terms & conditions

Prepare based on the items to be procured

Include similar items in one schedule or package, include dissimilar items in separate schedule or package


Bid Form

Use the prescribed form given in bid documents

Indicate brief description of the goods / equipment / work, quantity and bid price

This is an undertaking given by the bidder to the purchaser on the acceptance of the conditions and the bid validity period

Signed by the bidder or his authorized representative holding power of attorney

Unsigned bids not to be accepted


Bid Prices Indicate the unit price, total bid price including taxes and duties,

transportation and other incidental charges for the total quantity required in the price schedule

Allow to submit bids for any one or more schedule/package in the case of multiple schedule/package and offer discounts for combined schedules/packages

Should quote the complete requirement specified under each schedule/package failing which such bids need not be considered

Remain fixed during the currency of the contract unless in the case of civil works where prices may vary as per the variation orders issued

Reject all adjustable price quotations Need not consider offer of any conditional discounts In the case of discrepancy between unit price and total price, unit price

shall prevail. In the case of discrepancy between amount in figures and words,

amount in words shall prevail.


Technical Specifications Prescribe technical specifications in Annex – IV of the Bid Documents,

required for each item after carrying out the market survey to ascertain updated version of that item.

Ensure clarity while drawing specifications

Typical technical specifications of Text Books are given in Annex-I.

Use the internationally or nationally accepted standards

Based on relevant characteristics and / or performance requirements

Avoid references to brand names, catalogue numbers or similar classifications

In case brand name or catalogue number is necessary to quote, add the words “or equivalent”

Permit the acceptance of offers which have similar characteristics and provide performance at least substantially equivalent to those specified

Define the test, standards, and methods that will be employed to judge the conformity of equipment as delivered, or works as performed, with the specifications

Deviations not allowed after opening of bids


Documents Establishing Technical Qualifications

Documentary evidence of conformity in the form of literature, drawings and data which consist of :

a detailed description of the essential technical and performance characteristics of the goods ;

a list giving full particulars, including available sources and current prices, of spare parts, special tools, etc., necessary for the proper and continuing functioning of the goods for a period of three years, following commencement of the use of the goods by the purchaser; and

an item-by-item commentary on the purchaser’s Technical Specifications demonstrating substantial responsiveness of the goods and services to those specifications or a statement of deviations and exceptions to the provisions of the Technical Specifications.


Documents Establishing Technical Qualifications

For purposes of the commentary to be furnished, the Bidder

shall note that standards for workmanship, material and

equipment, and references to brand names or catalogue

numbers designated by the purchaser in its Technical

Specifications are intended to be descriptive only and not

restrictive.

The Bidder may substitute alternative standards, brand names

and/or catalogue numbers in its bid, provided that it

demonstrates to the purchaser’s satisfaction that the

substitutions ensure substantial equivalence to those designated

in the Technical Specifications.


Post-Qualification Criteria

Prescribe in the Annexure given in the bidding documents.

Typical post qualification criteria is given in Annex-II.

Provide documentary evidence to establish post- qualification

Manufacture’s authorization in case the bidder himself is not the

manufacturer;

Ensure financial, technical and production capability necessary to

perform the contract


Bid Validity Period

Remain valid for 90 days after the date of bid opening

Reject the bids in case of shorter period of bid validity

In case delay anticipated for completing the formalities of

evaluation and award of contract extension of bid validity with the

consent of the bidders

Seek extension of validity of earnest money deposit in the case of

extension of bid validity period

No price variation

No forfeiture of earnest money in case the bidder refuse for the

extension


Earnest Money (Bid Security) To protect the purchaser against the risk of bidders conduct which would warrant forfeiture of earnest money Amount - 2 % of the estimated contract value indicated in fixed amount

for all prospective bidders Method of payment - bank guarantee, irrevocable letter of credit,

demand draft or banker’s cheque issued by a Nationalized/scheduled bank

Date of Deposit - after the date of notification of the bid Validity Period - 45 days beyond bid validity period of the bid Reject the bids, if, not accompanied by the requisite amount, not

covering the validity period and not adhering to the mode of payment Return to unsuccessful bidders soon after the final acceptance of bid Adjustment in the case of successful bidders against security deposit

(performance security) Forfeiture - withdrawal of bids during bid validity, non acceptance of

correction of arithmetic errors, failure to sign the contract, not furnishing security deposit within the stipulated time by the successful bidders

Not forfeited in case of refusal for the extension of bid validity period


Pre-bid conference

Arranged by the purchaser/employer as per the notification to provide

clarifications on the provisions of the bidding documents to the

prospective bidders.

Bidders can seek the clarifications in writing well in advance before

the scheduled date

Issue addendum, if needed as a result of the pre-bid conference, well

in time to enable the bidders for compliance

In case sufficient time is not available, extend the tendering period

Furnish the minutes of the pre-bid conference along with the

addendum to all bidders who had purchased the bids and also along

with the bid documents to the bidders purchasing the documents

subsequently.


Signing of Bids

Signed by the bidder or his representative who is authorized to do

so by a power of attorney which should be attached with the bid

Bid in original in conformity with the bid documents

All corrections be signed with date

All pages of bid documents be signed


Submission of Bids Bids typed or written in indelible ink and sign by the bidder or his

representative, authorized by a power of attorney (attach with the bid). Single Envelope System: Submit both the technical and financial bid

along with earnest money deposit in a single envelop. Double Envelope System: Submit the technical and financial bids in

separate envelopes along with earnest money deposit indicating on each envelope “Technical Bid” or “Financial Bid” as the case may be.

Seal the original and copy of bid in separate inner envelopes and then place all the inner envelopes in outer envelope and seal.

Address both the envelopes to the purchaser indicating “Do not open before _______ hours on________.

Sent by post/courier or dropped in person in the bid box placed in the purchaser’s office.

Bids received after deadline need not be considered and returned unopened.

Reject Bids sent by e-mail or fax. Accept only one bid from one bidder.


Deadline for submission of bids

Bids must receive within the time and date specified in the invitation for bids.

In the event of the specified date for submission of bids being declared a holiday, the bids will be received up to the specified time on the next working day.

The purchaser may extend this deadline by amending the bid documents which will be strictly adhered to by the purchaser and the bidder.

Late Bids

The bidder should ensure timely submission of bids. Any bids received after the prescribed deadline shall be rejected

and returned to the bidder unopened.


Opening of Bid Follow the procedures described in the Instructions for Bidders (IFB).

Open in public in the presence of bidders or his authorized representatives ( maximum 2) who choose to attend the bid opening process.

The authorized representatives must carry an authorization letter from the bidder.

Strictly follow the date, time and place of bid opening specified in the IFB

Open immediately after the deadline for submission of bids but not exceed more than one hour from the deadline for submission of bids.

In the event of the specified date for opening of bids being declared a holiday, the bids will be opened up to the specified time and location on the next working day.

Obtain the signature of the bidder or his authorized representatives who are present for having attended the bid opening.


Manner of Opening the bids The Purchase Committee shall count the number of bids received

and allot numbers to each bid based on the total number of bids.

If 10 bids are received, the numbers will be allotted as 1/10, 2/10, 3/10 and so on.

All the members of the Committee shall initial with date on the outer cover of all the bids.

In case the envelopes containing the bid offer are not properly sealed, such bids need not be opened and rejected outright.

The reasons for not opening such bids shall be recorded on the face of the envelope and all the members of the Committee shall initial with date.

Read out at the bid opening, the bidders’ name, bid modifications or withdrawals, bid prices, discounts, and the amount of earnest money deposit.


Manner of Opening the bids

No bid shall be rejected at bid opening except those received after the deadline for receipt of bids and unsealed bids which shall be returned to the bidder unopened.

Prepare a summary of the read out bid prices as per the format given in Annex-III.

All members present in the bid opening must sign with date all pages of the bid documents, and the supporting documents submitted by the bidder except printed materials.

Prepare the Minutes of the bid opening.

To assist in carrying out the opening and preparing of the record, a bid opening check list is provided in Annex-IV.


Clarification of bids

Request clarifications of bidders on ambiguities or inconsistencies, if any, in bid.

During evaluation, if clarifications considered necessary, seek from the bidder in writing, indicating time limits for submission of the response.

Not to seek or accept any change in the price or scope of the originally offered goods, works, or services except for the correction of arithmetic errors.

The bidder shall submit the clarifications in writing within the specified time limit.

No circumstances shall justify meetings or conversations between the purchaser and bidders during the bid evaluation process.


Evaluation of Bids

Preliminary Examination of Bids

Begin immediately after bid opening the evaluation process.

The purpose of preliminary examination is to identify and reject bids that are incomplete, invalid, or substantially non-responsive to the bidding documents and therefore are not to be considered further.

Such bids shall not subsequently be made responsive by correction or withdrawal of the non conforming deviation or reservation.

Carry out the following checks:


Verification

Attention should be given towards deficiencies that, if accepted,

would provide unfair advantages to the bidder.

Sound judgment must be used: for example, simple omissions or

mistakes arguably occasioned by human error should not be

grounds for rejection of the bid.

Rarely is a bid perfect in all respects. However, the validity of the

bid itself, for example, its signatures, must not be in question.

If the bidder is an agent, an authorization from the supplier or

manufacturer must be provided in addition to any documentation

required of the supplier or manufacturer itself.


Earnest Money Deposit

Must conform to the requirements of the ITB, and it must

accompany the bid.

If the earnest money deposit is issued as a bank guarantee, it must

be consistent with the wording of the bid security form provided in

the bidding document.

Submission of a copy of the security or submission of a counter-

guarantee naming the purchaser’s bank instead of the purchaser is

unacceptable.

Deposit for an amount smaller or for a period shorter than the one

specified in the IFB, not in conformity with the form and bank

specified in ITB are not acceptable.


Completeness of Bid

Unless the bidding documents have specifically allowed partial bids—permitting bidders to quote for only select items or for only partial quantities of a particular item—bids not offering all of the required items should ordinarily be considered non-responsive.

However, under works contracts, missing prices for occasional work items are considered to be included in prices for closely related items elsewhere.

If any erasures, interlineations, additions, or other changes have been made, they should be initialed by the bidder.

Missing pages in the bids shall be a cause for rejection of the bid.


Substantial Responsiveness

A substantially responsive Bid is one which conforms to all the

terms and conditions, and technical specifications prescribed in the

bidding documents, without material deviation or reservation.

Major deviations to the commercial requirements and technical

specifications are a basis for the rejection of bids.

As a general rule, major deviations are those that, if accepted,

would not fulfill the purposes for which the bid is requested, or

would prevent a fair comparison with bids that are properly

compliant with the bidding documents.


Examples of major deviations include: Stipulating price adjustment when fixed price bids were called for Failing to respond to specifications by offering instead a different

design or product that does not offer substantial equivalence in critical performance parameters or in other requirements

Phasing of contract start-up, delivery, installation, or construction not conforming to required critical dates or progress markers

Sub-contracting in a substantially different amount or manner than that permitted

Refusing to bear important responsibilities and liabilities allocated in the bidding documents, such as performance guarantees and insurance coverage

Taking exception to critical provisions such as applicable law, taxes and duties, and dispute resolution procedures

Those deviations that are specified in the ITB as requiring rejection of the bid (such as, in the case of works, participating in the submission of another’s bid other than as a subcontractor).


• The results of preliminary examination should be presented in Annex-V. If the bid fails preliminary acceptance, the reasons must be clearly explained in footnotes or in an attachment, as necessary

Detailed Preliminary Examination

A typical Checklist for the detailed preliminary examination of the bid is given at Annex-VI.

Reject the bids determined as non-responsive in the check list.

Technical Evaluation

In combined bids invited in one envelope system, the technical evaluation will be carried out simultaneously by a Technical Committee constituted for this purpose.

The ranking system by allotting marks will not be followed in the case of technical evaluation of goods/equipment and works.


The Technical Committee will examine the bids with reference to the technical specification specified in Annexure of the bidding documents and comment on the responsiveness of the technical specifications.

Reject the bids which do not conform to the technical specifications specified in the bidding documents.

The format to ascertain responsiveness to technical aspects is provided in Annex-VII.

In double envelope system, the evaluation of technical qualification is carried out first and financial evaluation is done only the bids that qualifies technical qualification.

Evaluation and comparison of substantially responsive bids Only those bids surviving preliminary examination need to be

examined in this phase.

The purchaser reserves the right to accept or reject any variation, deviation, or alternative offer.


Variations, deviations, and alternative offers and other factors which are in excess of the requirements of the Bidding documents shall not be taken into account in bid evaluation.

If the Bid of the successful Bidder is seriously unbalanced in relation to the purchaser’s estimate of the cost of goods/equipment to be supplied under the contract, purchaser may require the Bidder to produce detailed price analysis of ex-factory/ex-warehouse/off-the-shelf price of the goods offered, such price to include all costs as well as duties and taxes paid or payable, cost of incidental services, transportation, insurance etc.

Determination of post qualification criteria The purchaser will determine to its satisfaction whether the Bidder that

is selected as having submitted the lowest evaluated responsive bidder meets the post qualification criteria specified in the Annexure of ITB and is qualified to perform the contract satisfactorily.

The determination will take into account the Bidder's financial and production capabilities.


It will be based upon an examination of the documentary evidence of the Bidder's qualifications submitted by the Bidder as well as such other information as the purchaser deems necessary and appropriate.

A typical check list for the determination of post qualification criteria is given in Annex-VIII. This may be modified suitably in conformity with the post qualification criteria prescribed in Annexure of ITB used for the procurement.

If the lowest evaluated bidder fails post qualification, its bid should be rejected, and the next ranked bidder should then be selected subject to fulfillment of post qualification.

If successful, this bidder should receive the award. If not, the process will continue.

The rejection of a bid for reasons of post qualification requires substantial justification, which should be documented in attachments to the bid evaluation report.


Negotiation

In exceptional cases the purchaser may undertake negotiation with

the lowest evaluated responsive bidder (L1)

Inform the bidders in writing to attend the negotiation proceedings in

the appointed time by giving sufficient time to attend

In case the rates even after negotiation are very high , invite fresh

bids after rejecting all bids

Inspection

Premises inspection - In case the purchaser desired to carry out the

inspection of the premises of the supplier/contractor, the same may

be carried out before the award of contract.


Performance Testing – Test at the supplier’s premises on test

stands on measured data, corrected data and calculated

performance value, compared with specifications.

Packing and Marking Inspection – Verification of equipment before

packing, checking of packing material, fixation, protection,

desiccators, handling signs and documentation.

Supervision of Loading – Verification of packing material,

cleanliness of container/truck/rail car, loading operation, stowing,

fastening, protection and transport documents.

Commissioning Testing – Check the testing program, the

equipment, measuring instruments and testing methods. Reporting

performance test results.


Repeat Orders

Quantity increase/decrease as per State procedure

Place order within one month from the date of last supply

Prices have since not reduced

Purchases not made on urgent basis

Right to Accept any Bid or Reject all Bids The purchaser has the right to accept or reject any bid and to annul

the bidding process and reject all bids at any time prior to award of contract.

Rejection of all bids Lack of competition

Tenders not substantially responsive

Review the causes justifying the rejection

Obtain the approval of competent authority


Award of Contract

Award Criteria Award the contract within the bid validity period.

Award the contract to the successful lowest evaluated responsive bidder

The selected bidder need not undertake work not specified in bidding documents or to modify his bid.

Single offers received:

Consider if; publicity was adequate,

bid specifications / conditions were not restrictive or unclear and bid prices are considered reasonable.


Notification of Award (Para 26.2)

Within the bid validity period the purchaser may notify the

successful bidder in writing on the acceptance of bid which will

constitute the formation of contract

Upon furnishing of security deposit by the successful bidder notify

promptly each unsuccessful bidder and discharge their earnest

money deposit.


Contract Document Define the following clearly in the contract document

the scope of work to be performed: the goods to be supplied the rights and obligations of the purchaser and of the contractor or

supplier the functions and authority of the engineer, if one is employed by

the Purchaser in the supervision and administration of the contract.

Use the format of contract given in Annexure of the bidding documents Documents forming an integral part of the agreement:

the Bid Form and the Price Schedule submitted by the Bidder; the Schedule of Requirements; the Technical Specifications; the Purchaser’s Notification of Award. approved rates, purchase order/ work orders and other

instructions issued by the Purchaser.


Security Deposit

• 5% of the contract value to protect the implementing agency in case of breach of contract by the contractor/supplier.

• Refund within one month of the completion of supply of goods/ works or on the expiry of guarantee/ warranty/maintenance period.

• Forfeited in case the bidder fails to make complete supply satisfactorily or complete the work in time.

Retention Money

• In the case of civil works contract - 5% of contract price

• Retained 50% till completion of the work and

• Retained 50% till the end of the defects liability or maintenance period


Signing of Agreement

On acceptance of the bid, the Purchaser notifies the successful

bidder and send the bidder the prescribed Contract Form,

incorporating all agreements between the parties

Within 21 days of receipt of contract form, the successful bidder will

sign the contract and returns to the purchaser

On signing of the agreement the same will constitute the award of

contract on the bidder.

The contractor/supplier will have to bear all relevant expenses in

connection with signing of agreement including the purchase of

stamp papers.


Corrupt or Fraudulent Practice

Bidders to observe highest standard of ethics during the procurement and execution of contract;

Corrupt practice means offering, giving, receiving or soliciting anything of value to influence the action of officials in the procurement process;

Fraudulent practice means a misrepresentation of facts in order to influence a procurement process or the execution of a contract or collusive practice among bidders designed to establish bid prices at artificial non-competitive level to deprive the purchaser of the benefits of free and open competition;

Such bids will be rejected and declare the bidder ineligible for further award of contract financed by the purchaser.


General Conditions of Contract (GCC):

Follow the provisions of the General Conditions of Contract prescribed in the bidding documents

Special Conditions of Contract (SCC).

Follow the provisions of the Special Conditions of Contract prescribed in the bidding documents

Adjudicator

Appointed jointly by the purchaser and bidder to resolve disputes in the first instance.

Disputes or differences shall be settled in accordance with the Arbitration and Conciliation Act, 1996.

Consist of three Arbitrators, one is to be appointed by the purchaser and the bidder, the third shall be chosen by the two Arbitrators so appointed who will be the presiding Arbitrator.

If one of the parties fails to appoint its Arbitrator within 30 days after receipt of the notice of the appointment of its Arbitrator by the other party, then the presiding Arbitrator shall be nominated by Indian Council of Arbitration.


Delivery and Damages Delivery of the goods shall be made by the Supplier in accordance

with the terms specified by the Purchaser in the notification of the award.

The documents to be furnished by the Supplier are given below:

(i) .......... Copies of the Supplier invoice showing contract number, goods' description, quantity, unit price, total amount;

(ii) Railway receipt/road transport receipt/airway bill/bill of lading and acknowledgment of receipt of goods from the consignee(s);

(iii) Insurance Certificate;

(iv) Manufacturer's/Supplier's warranty certificate;

(v) Inspection Certificate issued by the nominated inspection agency, and the Supplier's factory inspection report; and

(vi) Certificate of Origin their representatives.


Terms of Payment The method and conditions of payment to be made to the Supplier are

given in Special Conditions of Contract.

Typical terms of paymentAdvance Payment: Pay 10% of the Contract Price within 7 days of signing of Contract on

a simple receipt. Obtain a bank guarantee for the equivalent amount valid until the

Goods are delivered.

On Delivery: Pay 80% of the contract price on receipt of Goods and upon

submission of the requisite documents

On Final Acceptance: Pay the remaining 10% of the Contract Price within 30 days after the

date of the acceptance certificate issued by the Purchaser’s representative for the respective delivery.


Liquidated Damages

Include in the conditions of contract to levy damages for:

Delay in delivery of goods;

Delay in completion of works;

Failure of the goods or works to meet performance requirements

@ 0.5% per week of the contract value and a maximum of10% of the

contract value.


Force Majeure

Clause 23 of the GCC provides Force Majeure conditions.

In case of natural calamities or an event beyond the control of the

supplier/contractor the delay in performance will not forfeit the

performance security or will not charge liquidated damages.

In such situations the supplier/contractor will notify the purchaser in

writing and continue to perform its obligations under the contract as

far as it is reasonable practical and seek all reasonable alternative

means for performance not prevented by force majeure.


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LIMITED TENDERLIMITED TENDER

Items covered:

Goods including books, uniforms

Teaching learning materials,

School equipment,

Hiring of vehicles, and

Operation and maintenance of equipment

Invitation for quotations –

• Based on comparing price quotations obtained from several suppliers, usually at least 3 to ensure competitive prices.

• Issue a letter to the supplier to furnish the quotations for the required goods/equipment.

Invitation for quotations –

No need of publication of notification in the newspaper/website.

Issue the request letters to suppliers on the approved list.

The request letter should indicate description, specifications and quantity of the goods as well as desired delivery time and place.

Only one quotation by each supplier.

Bid Price Quote for the full quantity as described in the invitation letter.

Corrections, if any, made by crossing out, dated initialing and re-writing.

Include all duties, taxes and other levies payable by the Vendor/Supplier in the total price.

The rates quoted by the Vendor/Supplier be fixed for the duration of the contract and not subject to adjustment on any account.

The prices are quoted in Indian Rupee.



Steps Identifying items;

Laying down specifications;

Estimating total numbers and costs of items;

Need not notify in newspaper/website

Identifying likely agencies borne on the approved list of contractors/ suppliers; (minimum 3, 8-10 for more competitive rates)

Obtaining approvals of competent authority;

Issuing letters of invitation;

Processing quotations received;

Obtaining orders of competent authority for placing orders for

supply;

Issuing letters placing orders for supply and delivery period;

Quoted price shall include all duties, taxes and other levies;

Rates quoted be fixed and not subject to adjustment;

Ensuring inspection;

Ensuring timely supply: and

Making payments after delivery in satisfactory condition.

The financial ceiling prescribed for limited tender shall be

applicable for Rate contracts of DGS & D and Rate contracts of

State Governments.

SINGLE TENDERSINGLE TENDERFollowed in the case of Articles specifically certified as of propriety nature; or Manufactured by a particular firm; Goods including books; Teaching materials; School grant; Hiring of vehicles; and Operation and maintenance of equipment etc

Appropriate for Extension of existing contracts Standard equipment/spare parts for existing equipments from original

supplier. Items obtainable from one source Early delivery In exceptional cases such as natural disaster.

WITHOUT TENDER / QUOTATIONWITHOUT TENDER / QUOTATION Procurement of goods or group of goods estimated to cost the

equivalent of the ceiling of State Govt.

Issue suitable guidelines by the SIS

THROUGH COMMUNITIESTHROUGH COMMUNITIES Construction of all civil works except, BRC, Hostel, KGBV and SIEMAT

BRC construction if the community is technically capable

Purchase of materials as per ISI certification, if available;

SPD may provide simple procurement guidelines

Identify the committee locally operating in the area. Keep the following points in view:

Active involvement of community in planning and implementation;

Who will procure the materials or goods used in works;

Goods / works have to be executed as per approved plans and specifications

The name and designation of the Engineer for technical supervision and certification.

Suggested advance payments based on the certificate issued by the Supervising Engineer

Advance (mobilisation advanceupon start up of the work andon reaching lintel level) : 75% of total cost

Plastering and completion of work : 25% of total cost

School toilet and other repair works

Advance (mobilisation advance upon start up of the work) cost : 75% of total

Plastering and completion of work cost : 25% of total

Procurement of major items

Textbooks – Single Tender (Textbooks Corporation, NCERT etc) and Open Tender

IT Equipment – Limited Tender (State approved vendors)

State Electronic Corporation/IT Deptt/other State agencies provided they follow State procedure and Manual provisions

Open Tender and e-procurement Printing work – Rate Contract approved by State

Government, Limited Tender and Open Tender

PART - III

(i) Service Contract

(ii) Selection of NGOs

(iii) Post Review

(iv) Mis-Procurement

(v) Complaint Handling Mechanism

(vi) Key Observations

Service Contract

Considerations

Service Contract Selection process Preparation of Terms of Reference Preparation of Cost Estimate and Budget Advertisement, seeking Expression of Interest (EOI) short listing of consultants/firms based on EOI Issue of Request for Proposal (RFP) to short listed

Consultants/firms. Receipt of RFP in two envelope system, technical and financial

proposals separately. Formation of Evaluation Committee Evaluation of Technical proposal and assign individual mark by

each member on the basis of responsiveness to the TOR Open the Financial proposals of the qualifying Consultants

publicly in the presence of the Consultants/representatives Final discussions including negotiations Award of contract

Service Contract

Terms of Reference (TOR) Prepare a well-defined TOR specifying the services to

be provided on the following lines: Background information; A precise statement of objectives; An outline of tasks to be carried out; A time schedule for completion of tasks; The support/inputs provided by the Client; Composition of Review Committee to monitor the services; List of key personnel whose CV and experience would be

evaluated.

Service Contract Preparation of Terms of Reference Preparation of Cost Estimate and Budget Advertisement, seeking Expression of Interest (EOI) short listing of consultants/firms based on EOI Issue of Request for Proposal (RFP) to short listed

Consultants/firms. Receipt of RFP in two envelope system, technical and financial

proposals separately. Formation of Evaluation Committee Evaluation of Technical proposal and assign individual mark by

each member on the basis of responsiveness to the TOR Open the Financial proposals of the qualifying Consultants

publicly in the presence of the Consultants/representatives Final discussions including negotiations Award of contract Performance of contract

Service Contract Cost Estimate and Budget Based on the assessment of resources needed to carry out the

assignment, staff time, logistical support and physical inputs. Costs divided into two broad categories (a) fee or remuneration

and (b) reimbursable. Ensure that the requested services are within the current

financial budget.

Advertising Not necessary for short term consultancy services. Advertisement seeking Expression of Interest for other services,

is published in regional and national newspapers having wide circulation and uploaded in the web site of the Client.

Specify requisite qualifications, experience etc. in the notification.

Service Contract Short list of Consultants Short list the Expression of Interest received based on the

relevant qualifications and experience specified in the notification.

Receipt of proposals Issue letter of Invitations along with the TOR to the short listed

consultants/firms. Seek proposals from the short listed consultants / firms in two

envelope system i.e, technical proposal in one envelope and financial proposal in another envelope.

Evaluation Committee Constitute evaluation committees separately for technical and

financial evaluation This committee will evaluate the proposals received from the

consultants / firms

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Service Contract Evaluation

Carried out in two stages, first the quality and then the cost Until the technical evaluation is concluded the evaluators of

technical proposals will not have access to the financial proposal

Evaluation of Technical Proposal Carried out on the basis of the responsiveness to the TOR. The technical evaluation committee will prepare an evaluation

report on the technical aspects of the proposal. The report shall substantiate the results of the evaluation and

describe the relative strength and weaknesses of the proposals.

Individual marks will be assigned by each member and a consolidated mark sheet is prepared.

Minimum qualifying marks should be provided in the Letter of Invitation and those who are not obtaining this will be disqualified

Service Contract

Evaluation of Financial Proposal On completion of technical evaluation, notify those

consultants whose proposals did not meet the minimum qualifying marks that their financial proposals will be returned after completing the selection process.

Simultaneously notify the consultants who have secured the minimum qualifying marks and intimate the date and time set for opening the financial proposal.

Allow sufficient time for attending the opening of financial proposals

The financial committee shall open the financial proposal publically in the presence of representatives of the consultants / firms who choose to attend.

Read aloud the name of the consultant / firm, the quality scores and the proposed prices when the financial proposals are opened

Prepare the minutes of the public opening.

Service Contract

Final discussions (negotiations) Held with the selected consultant /firm on the following issues

The selected consultant /firm shall not be allowed to substitute key staff unless both parties agree that undue delay in the selection process makes such substitution unavoidable or that such changes are critical to meet the objectives of the assignment.

Financial discussions shall include in addition to fee / remuneration, clarification of the consultant’s / firm’s tax liability and how this tax liability shall be reflected in the contract.

In case these discussions fail to result in an acceptable contract, terminate the process and invite the next ranked consultant / firm for discussion

After the process is successfully completed, promptly notify other consultants /firms on the short list that they were unsuccessful

Service Contract

Award of Contract

Award the contract to the selected consultant / firm Use the prescribed contract agreement form for signing the

contract Indicate the fee/remuneration negotiated with the selected

consultant/firm to be paid for the services in the contract agreement and also the terms of payment

Non-Government Organizations

Preparation of Terms of Reference Publication of advertisement

Formation of Evaluation Committee

Short-listing of NGOs on the basis of specifications and scope of

the work specified in the TOR.

Desk appraisal and if found suitable, field appraisal by the

Evaluation Committee Recommendation by the Evaluation Committee for the selection

of NGOs to the Grant-in-Aid Committee. Approval by Grant-in-Aid Committee based on the report of the

Evaluation Committee on the desk and field appraisal.

Post Review Government of India or the funding agencies shall undertake

post review of the contracts awarded on procurement of goods,

works and services on a random basis.

All procurement documents should be retained and made

available to the review team.

Mis-procurement

Goods, works and services that have not been procured as per

the Manual shall be treated as mis-procurement and SSA funds

cannot be used for such procurement.

PROCUREMENT

Complaint Handling Mechanism Set up complaint handling mechanism at national as well as State

level to deal with complaint received from contractors/suppliers.

Dealt with at a level higher than that of the level at which the

procurement process is being undertaken

Undertake a thorough enquiry of the allegations made

If found correct, take appropriate remedial measures

Initiate disciplinary proceedings against the delinquent staff

Receipt of any illegal gratification by staff is considered as

misconduct and result in disciplinary proceedings against such

staff, in addition to imposing penalties under the law.

PROCUREMENT

Key Observations of Post review of Procurement

Review revealed :• need for tightening of procurement system especially on

procedural lapses• incomplete documentations• irregularities• diversions of fundsProcedural lapses• Not issued solicitation letters to the vendors for obtaining

quotations. • obtained Quotations by hand by visiting the premises of

the vendors. • In some cases, notice inviting quotations being put on the

notice boards of SSA offices.• In some cases, L1, L2 and L3 share the same address and

telephone number.

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Procedural lapses• Engagement of contractors for construction of civil

works without obtaining the prior approval of PAB.• Non observance of the time limit of 30 days for

submission of bids. • Letter of award issued within 20 days, even though 30

days time limit was allowed for submission of bids. • Entire procurement cycle completed within 2 days.• Invoice date is prior to the purchase order date.• Cheques drawn prior to the issue of purchase order.• Splitting of orders to bring it within the financial

ceiling.• Contract amount exceeded without issue of repeat

orders or revision of contract agreement.• Not indicated Bid validity period in the bid

documents.

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Procedural lapses• Procured goods not taken in the fixed asset register.• Procured goods not found at site during visit.• Followed single tender instead of limited tender.• Followed limited tender instead of open tender.• Not taken Earnest money deposit from prospective

bidder. Not indicated validity period of the earnest money

deposit in the tender documents. Not obtained Security deposit/performance guarantee

from selected bidders. Delay in delivery period stipulated in the PAB. Made payment based on provisional bill. The date issued for work order and the

delivery/invoice/payment dates on the same day.

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Procedural lapses Not indicated validity period of the earnest money

deposit in the tender documents. Not obtained Security deposit/performance guarantee

from selected bidders. Not contain clauses for liquidated damages, security

deposits, retention money, delivery schedule and payment schedule in Work Orders .

Not charged Liquidated damages though stipulated in the purchase order.

Not published advertisement in national news paper for open tender valuing more than Rs. 20 lakh.

Not clearly specified Technical specifications, delivery period, payment terms etc in the tender documents.

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Irregularities in Procurement Dates of all bids received were overwritten except the winning

bidder. Vehicle providers had formed a cartel in the award of contracts

for hiring of vehicle. Not selected Lowest bidder in a limited tender for construction of

additional class room on the ground of his inability to handle the construction involving negotiation with second lowest bidder.

Lack of training on Procurement The Head Masters were not aware of the prescribed procurement

procedures under SSA. Poor understanding of procurement procedures at State and

district level.

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Irregularities in Procurement Selected same contractor on single source basis in two

schools. Purchased Computers from agencies not on authorized

DGS&D or State Government Rate contract entities. Assets procured were not available for physical verification. Absence of concerned staff during the course of review

despite prior notification of the visit.

Diversion of funds Used ACR fund for the construction of library

procurement procedure in ssa

Documents

best procurement

procurement fmp

level of procurement

procurement procedure

procurement credibility

procurement terms inputs

various method of procurement

financial year