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1. PROCUREMENT
PROCEDURES AS PER
CVC GUIDELINES
DEBENDRA KUMAR SAHU
DY MATERIALS MANAGER
VISAKHAPATNAM PORT TRUST

2. PROCUREMENT
Procurement is the process of purchasing goods or
services and is usually in reference to business
spending, which is usually involves several areas of
a company/bussiness.

3. VIGILANCE GUIDELINES
Vigilance is the state of being watchful or alert for
possible danger or difficulties or some other kind of
trouble.
Vigilance guidelines is the guidelines issued by the CVC
from time to time to avoid dangers, difficulties and
troubles in tendering process for better transparency and
competition

4. PROCUREMENT
PROCEDURES
A procurement process is a series of steps that an
organization identifies and follows in order to obtain
goods or services for their goals and objectives.
Step 1 – Needs Recognition.
Step 2 – Purchase Requisition.
Step 3 – Requisition review.
Step 4 – Selection of vendors and market.
Step 5 – Bid invitation and evaluation.
Stap 6- Negotiate price and terms.
Step 7 – Finalisation of the Purchase Order/contract.
Step 8- Receipt and inspection of the delivered goods.
Step 9 – Receipt of Invoice and Process of Payment.
Step 10 – Delivery and Audit of the Order.
Step 11- Dispute management.
Step 12 – Maintain Accurate Record.

5. TENDER
Tendering usually refers to the process whereby
governments and financial institutions invite
contractors to place a bid for work on a construction
project or materials supply that must be submitted
within a finite deadline.

6. WHY
TENDERING ????

7. FUNDAMENTALPRINCIPLE OF PUBLIC BUYING
(A) Procurement of goods in Public
Interest –
i. Efficiency
,
ii. Economy,
iii. Transparency
(B) Fair &Equitable treatment of suppliers
(C)Promotion of Competition

8. PUBLIC PROCUREMENT : YARDSTICKS
—
Specifications in terms of quality
—
Need based procurement (avoid
excess)
—
Fair
,Reasonable &Transparent
procedure
—
Procurement VsRequirement
—
Reasonableness of Rate
—
Each stage of procurement should be
recorded

9. 5 R’s OF PROCUREMENT
i) Right Quality
ii) Right Quantity
iii) Right Price.
v) Right Time and Place
v) Right Source

10. PUBLIC PROCUREMENT CYCLE
i) Need Assessment: Need assessment, formulation
of Specifications and Procurement Planning;
ii) Bid Invitation: Preparing bid documents,
publication, receipt and opening of bids;
iii) Bid Evaluation: Evaluation of bids and award of
contract;
iv) Contract Execution: Contract management and
closure;
v) Disposal of Scrap: Disposal of Scrap through
various modes of disposal.

11. NEED ASSESSMENT
•The expression/description of the need.
•Method of satisfying it.
•Time-schedule and place.
•Formulation of Specification.
•Estimation of Cost.

12. THE EXPRESSION/DESCRIPTION OF THE NEED
The following Guidelines to comply with the ‘Procurement
Guidelines for the Value for Money (VfM) and to ensure wide
competition.
a) Use Unambiguous, complete, using common terminology
prevalent in relevant trade.
b) Except in case of proprietary purchase from a selected
single source, reference to brand names, catalogue
numbers or other details that limit any materials.
c) Owning/leasing/hiring/out sourcing or through Public
Private Partnership (PPP), and so on) may be determined.
d) The quantity of the subject matter of procurement,
commensurate with economy units of quantity.
e) Time-schedule and place of product/work/service delivery

13. FORMULATION OF SPECIFICATIONS
Ensure value for money(VFM), transparency, level
playing field and ensuring widest competition.
i) Provides a level playing field and ensures the widest
competition;
ii) Be unambiguous, precise, objective, functional,
broad based/generic, standardised (for items
procured repeatedly) and measurable.
iii) Set out the required technical, qualitative and
performance characteristics to meet just the bare
essential needs of the Procuring Entity without
including superfluous and nonessential features.
iv) All dimensions incorporated in the specifications
shall be indicated in metric units.

14. FORMULATION OF SPECIFICATIONS
V) Make use of best practices. Preference should be given to
procure the goods which carry the BIS mark.
VI) Commensurate with VfM, avoid procurement of obsolete
goods and require that all goods and materials be new,
unused and of the most recent or current models.
VI) Should have emphasis on factors such as efficiency,
optimum fuel/power consumption, use of environmental-
friendly materials, reduced noise and emission levels, low
maintenance cost, and so on. Government of India has set
up the Bureau of Energy Efficiency (BEE)
VII) Comply with sustainability criteria and legal requirements
of environment or pollution control and other mandatory
and statutory regulations, or internal guidelines, if any,
applicable to the goods to be purchased;
•A standardized product is a product that regardless of what company furnishes the good, consumers regard the product furnish

15. STANDARDISATION
.Standardization is the process of creating protocols to
guide the creation of a good or service based on the
consensus of all the relevant parties in the industry. ...
Standardization also helps in ensuring the safety,
interoperability, and compatibility of goods produced.
.The 3’S refer to standardization, simplification and
specialization three related which are at the roof of any
economic analysis of product design.
PISTON INDUSTRY- Standard sizes of piston are
produced for different products .
NUT &BOLT INDUSTRY- standard nut and bolts are
produced so that they can be easily available in market
in case of

16. COPYING PAPER
Whether ISI Marked:YES
Size of paper:Legal/Protrait
GSM of paper:75
"Number of sheets per Ream“:500
"ISO Brightness,percent,Min" (N>=80):90
Opacity percent,Min (N>=85):90
"One minute Cobb test both sides,g/m2,Max" (N<=25):25
"Tensile Index Machine Direction (MD) ,Nm/g, Min“:50(N>=40)
Tensile Index Cross Direction(CD),Nm/g,Min (N>=25)35
"Tear Index in mN m²/g,Machine Direction(MD),Min”(N>=3.5)4.5
"Tear Index in mN m²/g,Cross Direction(CD)Min," (N>=4.5)5
"Smoothness for both sides in ml/min,Max" (150<=N<=300)284
"Ash content(900◦C),percent by mass,Max" (N<=16)15
Thickness in µm,Min (N>=100+/-5)100
"Moisture content,percent,Max" (4<=N<=5.5)5
"Taber Stiffness ,Machine Direction(MD),Min" (N>=2)4

17. DESK TOP COMPUTER
Chipset Series: Intel Q Series
Chipset Number: Intel Q 470
Processor Make:Intel
Processor Generation:10
Number of Cores per Processor:8
Processor DescriptionIntel Core: i7
Processor NumberIntel Core :i7 10700
Operating System (Factory Pre-Loaded):Windows10
Professional RAM Size (GB):8
RAM Expandability up to( using spare DIMM Slots in GB):64
Type of Drives used to populate the Internal BaysHDD ,SSD
Total HDD Capacity (GB):1000
Total SSD Capacity (GB):256
Monitor Technology:TN
LED Backlit Monitor Size (INCHES):18.5
Monitor Resolution (PIXELS)1366x768
On Site OEM Warranty (Year)3

18. ALMIRAH
MaterialM S Sheet:Grade D of IS:513/2008
Material of Almirah Doors:Grade D of IS:513/Latest
Sheet Thickness of door in mm0.7 mm
Sheet Thickness of 0.7 mm minimum
No of shelves (Nos)4
Type of Shelves:Adjustable
Locker Provided:yes
Number of Doors (Nos)2
Height (Without Pedestal) (in mm) (+/- 10 mm)2400
Width in mm (± 7 mm)900 millimeter
Depth in mm (±5 mm)505 millimeter
Width of Stiffner in mm (±5 mm)N.A
WARANTEE PERIOD IN NUMBER OF YEARS1

19. BICYCLE
TypeTwo Wheeled Cycles for Men
Weight of Bicycle (kg)15
Applicable Indian StandardIS 10613:2004
Size of Frame (cm) 56
Reflector Yes
Bell Yes
Lock Yes
Stand Yes
Basket yes
Thickness of Crank at Axle Hole (mm)34 millimeter
Type of RimBeaded Edge(BE)
Material of RimAluminium
Size Designation of Rim26
Thickness of tube (mm)2 millimeter
Top Tube Diameter (mm)32 millimeter
No. of Holes in Rear Wheel36
Front Axle Length (mm)38 millimeter
Hub Axle Diameter for Front Wheel (mm)1 millimeter
Material of NippleBrass Conforming to IS 2704

20. THE ESTIMATED COST
•Processes, approvals and establishing reasonableness of prices
should be worked out in a realistic and objective manner.
•The prevailing market price ascertained through a market
survey or budgetary quotes from potential parties.
• For equipment/craft which are uniquely custom-built to buyer’s
•Likewise rates should be compared with recent
orders/purchases of similar equipment by other states/
Departments.
• Estimated rate in past indents of the same goods.
• Last purchase price of this or similar or nearly equivalent
requirements.
• Costing analysis based on costs of various components/raw
materials of the item;

21. THE ESTIMATED COST
• Rough assessment from the price of the
assembly/machine of which the item is a part or vice versa.
• Through the internal or external expert costing agencies.
• As a last resort, rough assessment from the opportunity
cost of not using this item at all.
• These methods are not mutually exclusive and can be
supplemented with escalations to cater for inflation, price
increases of raw materials, labour, energy, statutory
changes, price indices, and so on, to make them usable in
conditions prevailing currently.
•In case of foreign currencies, the rate should be reduced to
a common denomination of Indian Rupees.
• Price indices can be obtained from the Internet.

22. PROCUREMENT PLANNING
Procuring Entity should take following decisions to
initiate procurement, to ensure conformity to the
Procurement Guidelines:
i) Within 14 (Fourteen) working days of receipt of the
indent from the user Department, the procuring
authorities should critically review the description and TS
enclosed with the indent for
completeness/approvals/funding, VfM and possibility of
the widest competition and seek clarifications from the
indenting officer, if needed, before initiating such
procurement.
ii)Reassessment of the quantity and appropriate
aggregation of quantities of various
iii) Determine and declare in documents, any limitation on
participation of bidders as per the Government’s
procurement policy.

23. PROCUREMENT PLANNING
v) Selection of a system of bidding (single/two stage;
single/two bids; suitability for e-Procurement or reverse
auction).
v) Select the mode of procurement (open tenders, limited
tenders, single tenders, rate contracts, and so on).
vi) Decisions on the timeframe for completing various
stages of procurement, which should be declared in the
pre-qualification/bidder registration or bidding
documents.
vii) Integrated procurement plan should be prepared for
goods, works and services for the ensuing financial year
based on the latest cost estimates, and realistic time
schedule for procurement

24. GFR 2017: Procurement of goods and services
—
Rule 142 : This chapter contains the general rules
applicable to all Ministries or Departments,
regarding procurement of goods required for use in
the public service.
Rule 143: Definition of Goods: The term ‘goods’ used
in this chapter includes all materials, intangible
products like software, training and maintenance,
works and services etc.
Rule 144 Fundamental principles of public buying
(for all procurements including procurement of
works)

25. GFR 2017: Procurementof goodsand services
Rule 145: Authorities competent to purchase goods.
Rule 146 Procurement of goods required on mobilisation
of military operations.
Rule 147 Powers for procurement of goods. The Ministries
or Departments have been delegated full powers to make
their own arrangements for procurement of goods.
Rate Contract. Organisation shall conclude rate contracts
through DGS&D. Govt of ndiahas established the GeM for
common use Goods and Servioes. GeM.
Rule 149 Government e-Marke place
(GeM):Government of india has established the
Government e- Marketplace (GeM) for common use
Goods and Servioes.

26. RULE 149,GFR 2017
THE GEM PORTAL SHALL BE UTILIZED BY THE
GOVERNMENT BUYERS FOR DIRECT ON-LINE PURCHASES
AS UNDER :-
(i) UP TO RS.25,000/- THROUGH ANY OF THE AVAILABLE
SUPPLIERS ON THE GEM, MEETING THE REQUISITE
QUALITY, SPECIFICATION AND DELIVERY PERIOD
(ii) ABOVE RS.25,000/- UP TO RS.5,00,000/- THROUGH
THE GEM SELLER HAVING LOWEST PRICE AMONGST THE
AVAILABLE SELLERS, OF AT LEAST THREE DIFFERENT
MANUFACTURERS, ON GEM
(iii) ABOVE RS.5,00,000/- THROUGH THE SUPPLIER
HAVING LOWEST PRICE, MANDATORILY OBTAINING BIDS,
USING ONLINE BIDDING OR REVERSE AUCTION TOOL
PROVIDED ON GEM.

27. Rule 150 Registration of Suppliers
Credentials, capability, QC systems, past
performance, after sale service, financial
background,
Reg for period 1-3 years depending upon nature of
goods.
At the End of period all including new have to apply
for registration afresh.
Performance to be watched by the department
Remove from the list, defaulters in terms of bad
quality, delays ,falsification of records/decleration

28. Rule 151 Debarment from bidding
(i) A bidder shall be debarred if he has been
convicted of an offence— (a) under the
Prevention of Corruption Act, 1988; or (b) the
Indian Penal Code or any other law for the time
being in force for a period not exceeding three
years commencing from the date of d e b a r m e n t .
(ii) D e p a r t m e n t o f Commerce (DGS&D) will
maintain such list which will also be displayed
on the website of DGS&D as well as Central
Public Procurement Portal.
(iii) A procuring entity may debar a bidder or any of
its successors, from participating in any
procurement process undertaken by it, for a
period not exceeding two years, if it determines
that the bidder has breached the code of
integrity.

29. Rule 152 Enlistment of Indian Agents
. As per the Compulsory Enlistment Scheme of the
Department of Expenditure, Ministry of Finance, it is
compulsory for Indian agents, who desire to quote
directly on behalf of their foreign principals, to get
themselves enlisted with the Central Purchase
Organisation (eg. DGS&D). However, such enlistment
is not equivalent to registration of suppliers as
mentioned under Rule 150.

30. Rule 153 Reserved Items and other
Purchase/Price Preference Policy
(i) The Central Government, through
administrative instructions, has reserved all
items of hand spun and hand-woven textiles
(khadi goods) for exclusive purchase from Khadi
Village Industries Commission (KVIC
(ii) Ministry of Micro, Small and Medium Enterprises
(MSME) have notified procurement policy under
section 11 of the Micro, Small and Medium
Enterprises Development Act, 2006.
(iii) The Central Government may, by notification,
provide for mandatory procurement of any
goods or services from any category of bidders,
locally provided goods and services.

31. Rule 154 Purchase of goods without quotation
Purchase of goods upto the value of Rs. 25,000
(Rupees twenty five thousand) only on each occasion
may be made without inviting quotations or bids on
the basis of a certificate to be recorded by the
competent authority.
“I,, am personally satisfied that these goods
purchased are of the requisite quality and
specification and have been purchased from a reliable
supplier at a reasonable price.”

32. Rule 155 Purchase of goods by Purchase Committee
Purchase of goods costing above Rs. 25,000 (Rupees
twenty five thousand only) and upto Rs.2,50,000/-
(Rupees two lakh and fifty thousand only) on each
occasion may be made on the recommendations of a
duly constituted Local Purchase Committee consisting
of three members of an appropriate level as decided
by the Head of the Department.
Committee’s responsibilities
a) Market Survey
b) Reasonableness of Rates
c) Quality & Specifications
d) Identify appropriate supplier
e) Joint Certificatebythe Committee

33. Joint Certificate by the Committee
“Certified that we, ---------, members of the
purchase committee are jointly and individually
satisfied that the goods recommended for purchase
are of the requisite specification and quality, priced
at the prevailing market rate and the supplier
recommended is reliable and competent to supply
the goods under procurement and the firm is not
debarred by Department of Commerce or Ministry/
Department concerned.”

34. Rule 156
Ministry and departments may purchase from
suppliers on terms and conditions specified in rate
contract. Make own arrangement for inspection.
CPO(DGS&D) should host updated details of
different rate contracted items on the web-site
for the use of procuring Department
Rule 157
Demand not to be divided into small quantities
to make piece meal purchases to avoid sanction
by higher authority wrt estimated value of total
demand.

35. Except in cases covered under Rule
154,155, and 156(1), Ministries or
Departments shall procure goods
under the powers referred to in Rule
147 above by following the standard
method of obtaining bids in :
(i) Advertised Tender Enquiry
(ii) Limited Tender Enquiry
(iii) Two-Stage Bidding
(iv) Single Tender Enquiry
(v) Electronic Reverse Auctions
Rule 158 Purchase of goods by obtaining bids.

36. Rule 159 E-Publishing
(i) It is mandatory for all Ministries/ Departments
to publish their tender enquiries, corrigenda
thereon and details of bid awards on the Central
Public Procurement Portal (CPPP).
(ii) Individual cases where confidentiality is
required, for reasons of national security, would
be exempted from the mandatory e-publishing
requirement.
(iii) The above instructions apply to all Tender
Enquiries, Requests for Proposals, Requests for
Expressions of Interest, Notice for pre
Qualification/ Registration

37. Rule 159 E-Publishing
(iv) In the case of procurements made though
DGS&D Rate Contracts or t h r o u g h a n y o t h
e r C e n t r a l Procurement Organizations
(CPOs) only award details need to be published.
(v)These instructions would not apply to
procurements made in terms of provisions of
Rules 154 (Purchase of goods without
quotations) or 155 (Purchase of goods by
purchase committee) of General Financial
Rules.

38. E-Procurement
It is mandatory to receive all bids through e-
procurement portals in respect of all
procurements.
Departments which do not have a large volume
of procurement may use e- procurement solution
developed by NIC.
Other Departments may either use e-
procurement solution developed by NIC or engage
any other service provider following due process.

39. RULE 161: Method ofobtainingbid:
Advertised TenderEnquiry(open)
—
Tender value >= 25 Lac
—
—
Publish atown website &NIC website
—
NIT to Indian Embassies abroad as well as
foreign embassies in India
—
Three Weeks time from dateof
publication of bid

40. Rule :162- LIMITEDTENDER ENQUIRY
—
Value up to 25 Lac
—
Bid document should be sent to Regd.
Suppliers by Speed Post/Regd Post/
Courier/ e-mail
—
No. of supplier firms in Ltd.Tender should
be more than three
—
Web based publicity also through CPPP
and Department’s website,
—
N.B. – Sufficient time should be givenin
Ltd.Tender

41. LIMITEDTENDER ENQUIRY
Certificate that demand is urgent. Add
expenditure justified in view of urgency.
Put on record the nature of urgency and reasons
why procurement could not be anticipated.
sufficient reasons to be recorded that Open
tendering not in public interest.
Sources of supply are definitely known and
possibility of fresh sources is remote.

42. Rule 163 Two Bid System
1. For high value plant ,machinery of
complex and technical nature items.
2. TechnicalBid (Tech.+ Comm.Terms )
3. Financial Bid (Item wise price )
(1) + (2) = (3) MainEnvelop
Firstly T
ech. Bid shall be opened and
evaluated
 Secondly Fin. Bid of Technically
acceptable offer should be opened &
evaluated

43. Rule 164 two stage bidding
Obtain bids in two stages with receipt of financial bids
after receipt and evaluation of technical bids
It is not feasible to formulate detailed specifications or
identify specific characteristics
Rapid technological advances or market fluctuations or
both
All first stage bids, which are otherwise eligible, shall be
evaluated, may hold discussions with the bidders, and
consider revising the relevant terms and conditions of the
procurement
Invite bids from all those bidders whose bids at the first
stage were not rejected, to present final bid with bid
prices in response to a revised set of terms and conditions
of the procurement

44. Rule 165 late bids
Bids received after the specified date and time
should not be considered.

45. Rule 166 SingleTender
Ifonly aparticular firm is the
manufacturer
Emergency need to procure from a
particular source
T
echnicalreason to be recorded
(standardization of machinery – HP
,
SONY etc.)
N.B. - Single response to an open bid
can’tbe termed as Single Tender

46. Rule 167 Electronic Reverse Auction
(i) Electronic Reverse Auction means an online real-
time purchasing technique utilised by the procuring
entity to select the successful bid.
(ii) A procuring entity may choose to procure a
subject matter of procurement by the electronic
reverse auction method,
(iii) The procedure for electronic reverse auction
similar to e-procurement; and (b) The invitation shall,
in addition to the information as specified in e-
procurement, include details relating to access to and
registration for the auction, opening and closing of the
auction and Norms for conduct of the auction.

47. Rule 168 Contents of Bidding Document
—
Instruction to Bidder
—
Conditions of Contract
—
Schedule of Requirement
—
Specifications &alliedTech.details
—
Price Schedule
—
Contract Form
—
Other Standard Forms

48. Rule 169 Maintenance Contract
Depending on the cost and nature of the goods to be
purchased, it may also be necessary to enter into
maintenance contract(s) of suitable period either with
the supplier of the goods or with any other competent
firm, not necessarily the supplier of the subject goods.
Such maintenance contracts are especially needed for
sophisticated and costly equipment and machinery. It
may, however, be kept in mind that the equipment or
machinery is maintained free of charge by the supplier
during its warranty period or such other extended
periods as the contract terms may provide and the paid
maintenance should commence only thereafter.

49. Rule 170 Earnest Money Deposit
—
To safeguard the interest of Deptt
(withdrawal /alter the bid by bidder)
—
Exemption – Regd.With CentralPurchase
Organisation /National Small Industries
Corporation
—
EMD - 2 % to 5% of estimatedvalue
—
Can be DD/ FDR/Banker Cheque /BG
—
Unsuccessful bidders EMD should be
returned /refundedatthe earliest.

50. Rule 171 Performance Security
—
From the successful bidders
—
Amount – 5%to 10%
—
DD/FDR
—Should be valid for 60 days beyond the
date of completion of all the contractual
obligations of the supplier including
warranty
—
Bid Security should be refunded to
the successful bidder on receipt of
Performance Security

51. PROCESS ATA GLANCE
 Estimate (Qty. andAmount)
 EOI – Expressionof Interest
 RFP/RFQ – Request for Proposal /Quotation
 PBC – Pre BidConference
 NIT – Notice Inviting Tender
 APPROVAL
 WEB PUBLICITY
 EMD – Earnest Money Deposit
 BIDDING
TOC – Tender Opening Committee (Tech)
APPROVAL

52. PROCESS ATA GLANCE


TOC – Tender Opening Committee(Fin.Bid)

APPROVAL


TEC – Tender Evaluation Committee

 APPROVAL

PO - Purchase Order

AWARD OF CONTRACT

SD - Security Deposit

AGREEMENT

REFUND OF EMD

NOTICE /WEB PUBLICITYABOUT AWARD
OF CONTRACT(Downloadable form)

53. Rule 172 (1) Advance payment to supplier
Ordinarily, payments for supply and services rendered are
released only after the services have been rendered
Advance payment may be necessary by firms holding
maintenance, fabrication contracts, turn-key contracts etc
Limits 30% of the contract value to private firms
40% of the contract value to a State or Central
Government Agency or a PSU
In case of maintenance contract, the amount payable for
6 months under the contract.
Ministries/Departments may relax the ceilings in
consultation with the FA
Adequate safeguard in the form of BG should be obtained
from the firm obtained from the firm.

54. Rule 172(2) Part payment to suppliers
Part payment permitted depending upon terms of
contract.
After dispatch of goods from premises.

55. Rule 173 TRANCEPARECY, COMPETITION FAIRENESS
the text of the bidding document should be self-
contained and comprehensive without any
ambiguities, clearly spelt out in the bidding
document in simple language.
The bidding document should contain, (a) the
criteria for eligibility and qualifications to be met
by the bidders such as minimum level of
experience, past performance, technical
capability, manufacturing facilities and financial
position, goods indicating any legal restrictions etc
(c) the procedure as well as date, time and place
for sending the bids; (d) date, time and place of
opening of the bid; (e) terms of delivery; (f)
special terms affecting performance,

56. Rule 173 TRANCEPARECY, COMPETITION FAIRENESS
suitable provision should be kept in the bidding
document to enable a bidder to question the
bidding conditions, bidding process and/or
rejection of its bid. The bidders should be given
reasonable time to send their bids. The
specifications of the required goods should be
clearly stated without any ambiguity so that the
prospective bidders can send meaningful bids. In
order to attract sufficient number of bidders, the
specifications should be broad based to the extent
feasible. Efforts should also be made to use
standard specifications which are widely known to
the industry. .

57. Rule 173 TRANCEPARECY, COMPETITION AND FAIRENESS
Criteria for determining responsiveness of bids,
criteria as well as factors to be taken into account
for evaluating the bids on a common platform and
the criteria for awarding the contract to the
responsive lowest bidder should be clearly indicated
in the bidding documents. Bids received should be
evaluated in terms of the conditions already
incorporated in the bidding documents; no new
condition which was not incorporated in the bidding
documents should be brought in for evaluation of the
bids. Determination of a bid’s responsiveness
should be based on the contents of the bid itself
without recourse to extrinsic evidence.

58. Rule 174 Efficiency, Economy and Accountability in
Public Procurement System
Public Procurement procedure to ensure efficiency, economy
and accountability in the system. To achieve the same, the
following key areas should be addressed:
1. To reduce delay, appropriate time frame for each stage of
procurement should be prescribed by the Ministry or
Department. Such a time frame will also make the concerned
purchase officials more alert.
2. To minimize the time needed for decision making and
placement of contract, every Ministry/Department with the
approval of the competent authority, may delegate, where
necessary, appropriate purchasing powers to the lower
functionaries. 3. The Ministries or Departments should ensure
placement of contract within the original validity of the bids.
Extension of bid validity should be resorted to only in
exceptional circumstances.

59. Rule 175 CODE OF INTEGRITY
Promise by the Principal not to seek any illegal
benefit.
Promise by the bidders not to offer any benefit to
the employees of the principal.
Bidders not to enter into any understanding with
other bidders regarding prices and rigging etc.
Bidders not to pass any information of the
procurement entity.
Foreign bidders to disclose the details of its agent
in India. Indian bidders to disclose their foreign
associates.
Bidders to disclose payments to be made to agents
and any misintention to influence tender.

60. Rule 176 BUY BACK OFFER
If it is decided to replace an existing old item with a
new and better version – the department may trade
the existing old item while purchasing the new one
A suitable clause is to be incorporated in the
bidding document so that the prospective and
interested bidders can formulate their bids
accordingly
The time as well as the mode of handing over the
old item to the successful bidder to be suitably
incorporated in the bidding document
Provision should also be kept in the bidding
document to enable the purchaser either to trade or
not to trade the old item, while purchasing the new
one

61. EVALUATION OF TECHNO-COMMERCIAL BID
Evaluation of Techno-commercial Bid In evaluation of the techno-
commercial bid, conformity of the eligibility/ qualification, technical and
commercial conditions of the offered goods to those in the bid document
is ascertained to be considered for evaluation.
i) Evaluation of eligibility/qualification Criteria
ii) Evaluation of Technical Suitability.
iii)Evaluation of Commercial Conditions.
iv) Considering Minor Deviations not amount to material deviations.
v) Declaration of Successful Bidders
BIDDER HAS RIGHT TO QUESTION REJECTION AT TECHNO-
COMMERCIAL STAGE

62. EVALUATION PROCESS -micro
—Tender is sealed
—
Tender documents must clearly
specify evaluation criteria.
—
Two types of Bids:
◦ Technical
◦ Financial
—
Tender evaluation to be in
accordance with evaluation criteria.

63. EVALUATION PROCESS -micro
—
Time taken for evaluation and
extension of tender validity.
—
Process of tender evaluation to be
confidential until the award of the
contract is notified.
—
Difference between TOC (Tender
Opening Committee) & TEC
(Tender Evaluation Committee)

64. EVALUATION PROCESS -micro
—
The factors for initial examination:
◦ Whether the tenderer meets the eligibility
criteria ?
◦ Whether the crucial documents have been
submitted &duly signed /attested ?
◦ Whether the requisite EMD (Earnest Money
Deposit) has been furnished ?

65. EVALUATION PROCESS -micro
—
Satisfaction of Conditions specific to the
contract
—
SampleTesting
—
Capacity Evaluation.
—
Turnover
—
Statutory documentation
—
Arrival atOutcome Price of the bid
—
Determination of L-1, L-2,L-3……
—
Determining Reasonableness of the L-1 Rates
—
Recommendation for Negotiation (if require)

66. CVC Guidelines: Pre-AwardStage
—
Financial and Technical sanction of competent
authority is available.
—
Adequate and wide publicity is given.
Advertisement is posted on website and tender
documents are availablefor downloading.
—
Convenient tender receiving/opening time and
address of the tender receiving officials/tender
box are properly notified.
—In the case of limited tender
, panel is prepared in
atransparent manner clearly publishing the
eligibility criteria.The panel is updated regularly.
—Pre-qualification criteria are properly defined/
notified.

67. CVC Guidelines: Pre-AwardStage
—Short listed firms/consultants are fulfillingthe
eligibility criteria.There is no deviation from notified
criteria during evaluation.
—Experience certificates submitted havebeen duly
verified.
—Tenders/bids are opened in the presence of bidders/
their authorised representative.
—Corrections/omissions/additions etc.,in price bid are
properly numbered and attested and accounted page
–wise.Tender summary note/Tender opening register
is scrupulously maintained.
—Conditions having financial implications are not
altered after opening of the price bids.

68. CVC Guidelines:Negotiations
—
Circular No.4/3/07,3rd March, 2007
As post tender negotiations could often
be a source of corruption, it is directed that
there should be no post-tender negotiations
with L-1, except in certain exceptional
situations. Such exceptional situations would
include, procurement of proprietary items,
items with limited sources of supply and
items where there is suspicion of a cartel
formation. The justification and details of such
negotiations should be duly recorded and
documented without any loss of time.

69. Latest guideline of CVC on negotiation

70. Procurement ofWorks, Goods
and Services - Guidelines on
Tenders/Use of website
—
http://cvc.nic.in/proc_works.htm

71. VIGILANCE ANGLE
AND
SAFE GUARDS

72. Definition of Vigilance
To be watchful
To be alert
What is happening
And what can happen
As per George Bernard Show “ Man is moral but we
have not tested him. So cannot say that he is
sincere”
Keep a watch on the people working under you.
Try to remove opportunities to reduce the crime
“Wearer of shoes know where it Pinches”
American- All Open offices United Kingdom- Room
wise “More open working less chance of Corruption

73. Objectives of vigilance
Raising strong signals regarding complexities in
procedure. i.e. System Analysis
Identifying places and point of corruption. i.e. for
inspections, surprise checks and posting of suitable
hands (and if this is not feasible closer supervision of
work) including rotation of staff
Eliminate the corruption and the crooked staff
Watch of work
Inside and outside conduct and contacts

74. Realize that cumbersome procedure are the main
stay of corruption.
I. Modify/ eliminate the blocks.
II. Simplify procedure codify them in manual to
remove ambiguity.
III. Should have list of bad and loose integrity
persons.
IV. Visit pressure points frequently to ensure, no
leakage happens

75. COST OF PROCUREMENT
PUBLIC PROCUREMENT IN INDIA
CONSTITUTES ABOUT 28% OF GDP

76. CANNON OF PUBLIC PROCUREMENT
This is to procure work, material, services of the
specified quality within the specified time at the most
competitive prices in a fair, just and transparent
manner. In brief, the watchwords in this context are
• Transparency
• Fairness/equal opportunity(Article 14 of constitution)
• Value for money
• Quality
• Time

77. GUIDING DOCUMENTS
•GENERAL FINANCE RULES-2017
•PROCUREMENT MANUAL FOR
MATERSALS/WORK/SERVICES UPDATED.
•CVC GUIDELINES
•DELIGATION OF POWERS
•NIT-MAIN/GCC/SCC/ANNEXURES OF TENDERS
APPROVED

78. REQUIREMENTS
Whether it was essential to get the work
through contractual agency?
Whether the work could have been done
within existing resources?
Whether the spending proposed is
justified.

79. SPECIFICATIONS:
1. Identify the purpose & plan in advance.
2. Clubbing the similar requirements from all units.
3. Description of item should be clear and complete
with I.S.specification/drawing if any.
4. Specification should not be prepared meeting single
product/specific make.
5.Use Products With Standard Specification.
6. Sample clause if any should be only for ascertaining
‘TOUCH, FEEL & FINISH’ but not for its quality.
7. If the demand of the item is recurring, convert the
same as Stock item.
8. The description of the item should normally be
arranged in Order. A. Basic commodity B.Variance in
kind or use. C. Composition/size/color/shape
D.Specification/drawing No.

80. STANDARDS OF FINANCIAL PROPRIETY
• The Expenditure should not be prima facie be
more than the occasion demands
• Every Govt. Servant should exercise the same
VIGILANCE in respect of expenditure incurred
from public money as a person of a ordinary
prudence would exercise in respect of the
expenditure of his own money
•No authority should exercise its powers of
sanctioning expenditure to pass an order, which will
directly or indirectly to its own advantage.
•Public moneys should not be utilised for the benefit
of a particular person or section of the community

81. APPOINTMENT OF CONSULTANT
Consultant appointed when absolutely essential for
specialized job.
Awarding consultancy contract in transparent and
fair manner.
The consultants role should be well defined as well
as payment conditions.
No change of payment conditions after award of
contract.
The payment made to consultant should be
commensurate with the work done by them.
over dependence on consultants to be avoided.
Role of consultants should be advisory.
case of conflict of interest in appointment.

82. PRE-QUALIFICATION CRITERIA (PQ)
The PQ criteria is a yardstick to allow or disallow
the firms to participate in the bids.
A vaguely defined PQ criteria results in stalling the
process of finalizing the contract or award of the
contract in a non-transparent manner.
PQ criteria for renderers is provided in some of the
tender to have experienced and resourceful
contractors for timely and proper execution of works.
The PQ criteria should be clear and unambiguous.
The PQ criteria should not be too restrictive.
Prequalification/Post Qualification shall be made
taking into account their capacity to accomplice
work.

83. PRE-QUALIFICATION CRITERIA (PQ)
(i) experience and past performance on similar
contracts. (ii) capabilities of personnel, equipment
and manufacturing facilities (iii) financial standing
through latest I.T.C.C., Annual report (balance sheet
and Profit & Loss Account) of last 3 years. The
quantity, delivery and value requirement
It is observed that at times this eligibility criteria
is loosely and selectively applied in various tenders
to favour particular firm.
It is expected that eligibility criteria is applied in
true spirit and uniformly keeping basic objective in
mind.
It should not to be used as a tool to eliminate
unfavourable lower bidders.

84. NOTICE INVITING TENDER
Notice inviting tender contains, general description,
technical specifications of the work, with quantity, unit
and estimated rates. General and special rules and
directions, terms and conditions of the proposed contract,
schedule of materials with prices proposed to be issued by
the department, earnest money to be deposited prior to
tendering, security deposit to be deposited on acceptance
of the offer or prior to executing the contract and time
for completion of the work. This part is applicable to
tenders of all kinds of works.

85. NOTICE INVITING TENDER
Tender Notice shall be issued at least 21 days in
advance from the date of tender opening
In case of urgency – 10-14 days with approval of
HOD
Issue of tender schedules With the approval of
tender calling authority – at least 15 days prior to the
date of tender opening
Date on which the tender documents will be made
available on the website / in the office shall be
clearly brought out in the Tender Notice
Eligibility criteria and similar nature of works should
be specifically mentioned in Tender Notice and in the
tender documents for OT above Rs. 50 lakhs

86. NOTICE INVITING TENDER
•Should be invariably on a Public Tender basis.
• Tenders should be both for technical and financial
bids.
• Technical bids should be scrutinized before financial
bids are opened.
• List of suppliers should be reviewed periodically.
•Delivery samples should be got checked with basic
samples.

87. Open Tenders Common Irregularities
Most Widely Publicized in prescribed form
Any individual or firm can participate in the Open
Tender
Basic Requirement - Free and Fair Competition
Tender should Normally be awarded to Lowest
Suitable Tenderer
Inadequate tender notice
Inadequate time for participation
Inadequate publicity
Late availability of tender documents
Tender box not available in advance
Deviations in eligibility criteria

88. LIMITED TENDERS COMMON IRREGULARITIES
Tender Notice issued to selected firms
Firms short listed in advance, based on past
experience, expertise, and specialization
List of selected firms require finance concurrence
and competent authority's approval
Proof of Service necessary 7
Arbitrary selection of firms.
Firms with better experience ignored and firms
with dubious credential selected.
Inadequate time given for participation in tender.
Tender notice not sent to all the firms.
Bogus firms selected to inflate the number.
Rates can be reasonably higher since the
competition is restricted.

89. SINGLE TENDER COMMON IRREGULARITIES
Tender is invited from single pre- selected bidder of
proven capacity
Used in emergencies and exceptional cases
Where other tender routes can not be followed due
to exigencies of given situation
When item is propriety item or only one firm is
capable of doing the work
Projecting undue/artificial urgency
Selecting unsuitable tenderer based on exaggerated
credential ignoring his past failures.
Accepting exorbitant rates on the grounds of
urgency then merrily giving extensions with token
penalty or without penalty.

90. RECEIPT OF TENDERS
A proper arrangement for the receipt of tenders at
scheduled date and time through tender box needs to
be adopted.
Commission, where due to the bulky size of tender
documents the bid conditions envisaged submission of
tenders by hand to a designated officer and 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.

91. TENDERS OPENING
Opened at the specified time, date and place by an
officer nominated in the presence of authorised reps
of tenderers.
Seal of the Tender Box to be checked
Tenders should be serially numbered
Initials on cover page and all other loose sheets
attached by tenders.
Rates quoted should be circled.
Corrections, over writings & omissions to be
numbered and written on each page and attested
with date.
Check completeness of tender form (for tampering
etc.) downloaded from internet

92. TENDERS OPENING (CONTD …)
Name of the tenderers and rates quoted by each
tenderer should be read out
No clarifications to be solicited from tenderers
Samples, if any to be initialed
Any Blank Column shall be struck off.
LATE tenders to be marked and to be returned to
the firm.
Both the Accounts and Executive witnessing
officials are INDIVIDUALLY responsible the procedure
laid down for tender opening.

93. Comparative statement
Details of offers received
Period of validity of offers.
EMD details of each tenderer.
Last accepted rates for similar type of works.
Financial implications on the special conditions.
Remarks on special conditions quoted by the
tenderer.
Credentials of the tenderer.
Other certificates/documents submitted by the
tenderer.
Details of the contracts of the tenderer during the
last 3 years

94. BACK TO BACK TIE UP / AWARD
ON NOMINATION BASIS
•Back to back basis that the works are being awarded in
an ad-hoc and arbitrary manner without inviting tenders
and ascertaining the performance, capability and
experience of the tenderers.
• In some cases, the works were awarded on single tender
basis/limited tender basis though sufficient time was
available with the Organisation to invite open tenders.
•No transparency in selection of contractor for the back to
back tie up which is the main source of corruption.
•Collusion among the contractors was observed where
more than one contractor was involved at various stages.
Ineligible contractor obtains the contract through the
PSUs.

95. BACK TO BACK TIE UP / AWARD ON NOMINATION BASIS
Purchase preference misused by the PSUs.
No supervision by the PSU as they put the staff mainly for
coordination work.
Quality ultimately suffers due to lack of supervision by the PSUs.
contractor, has to execute the work by functioning like a contractor
instead of sub-letting the 100% work on back to back basis.
Open tenders to be invited for selection of sub-contractors as far as
possible.
In case, it is not possible to invite open tenders, selection should be
carried out by inviting limited tenders from the panel approved in
the following manner. Panel of contractors are to be prepared for
different categories monetary limits, regions, in a transparent
manner clearly publishing the eligibility criteria etc. The above
panel is to be updated every year.

96. BACK TO BACK TIE UP / AWARD ON NOMINATION BASIS
The terms and conditions of the contract of the
client especially those pertaining to subletting of
works should be strictly adhered to by the PSUs.
Adequate staff to be deployed by the PSUs to ensure
quality in construction etc.
There is a need to bring greater transparency and
accountability in award of such contracts on
nomination basis and reports relating to such awards
will be submitted to the Board every quarter.
The audit committee may be required to check at
least 10% of such cases. for necessary observance.
Further, all nomination/single tender contracts be
posted on the website ex

97. TENDER NEGOTIATIONS
•There should be no post-tender negotiations with L-1,
except in certain exceptional situations.
•procurement of proprietary items,
• items with limited sources of supply
•items where there is suspicion of a cartel formation.
•The justification and details of such negotiations
should be duly recorded and documented without any
loss of time.
•ii) In cases of jeopardizing the essential operations,
maintenance and safety, negotiations would be
permitted with L-1 bidder(s) for the supply of a bare
minimum quantity. The balance quantity should,
however, be procured expeditiously through a re-
tender, following the normal tendering process.

98. TENDER NEGOTIATIONS
•Negotiations should not be allowed to be misused as a tool
for bargaining with L-1 with dubious intentions
• It is reiterated that in case L-1 backs-out, there should be
a re-tender.
•If L-1 alone is not capable of supplying and there was no
prior decision to split the quantities, then the quantity being
finally ordered should be distributed among the other
bidders in a manner that is fair, transparent and equitable.
Counter-offers to L-1, in order to arrive at an acceptable
price, shall amount to negotiations. However, any counter-
offer thereafter to L-2, L-3, etc., (at the rates accepted by
L-1) in case of splitting of quantities, as predisclosed in the
tender, shall not be deemed to be a negotiation.

99. CONSIDERATION OF INDIAN AGENTS
In order to maintain the sanctity of tendering
system, it is advised that the purchases should
preferably be made directly from the
manufacturers. Either the Indian Agent on behalf of
the foreign principal or the foreign principal
directly could bid in a tender but not both. Further,
in cases where an agent participates in a tender on
behalf of one manufacturer, he should not be
allowed to quote on behalf of another
manufacturer along with the first manufacturer in a
subsequent / parallel tender for the same item.

100. IRREGULARITIES IN GENERAL
Twisting, Suppression, exaggeration, Manipulation,
and Half truth by TC to
Depict better placed bidder as unsuitable or less
suitable
Exaggerating track record of favourite bidder
Suppression/ down playing his past failures
Exaggerating past failures of his main rival Contd.
Ignoring/Suppressing otherwise satisfactory
credentials of main rival
Projecting the lowest rates of main rival as
‘unworkable’ on the basis of exaggerated estimated
cost
Projecting undue/ artificial urgency bypassing
lowest offer

101. IRREGULARITIES IN GENERAL
Manipulating technical aspect to reject
inconvenient bids on artificial grounds.
Considering tender on extraneous conditions not
included in the tender.
Falsely Certifying that the quality of product/
material offered by favourite firm as okay vis-a-vis
specifications
Deliberately painting the quality of product offered
by the better placed bidder as unsuitable.
Exaggerating capacity/ resources of favorite
contractor and downplaying that of his rival (lower
bidders)

102. IRREGULARITIES IN GENERAL
Favoritism i.e. Award of contract to favoured
firm bypassing more deserving lower tenderer/s
on flimsy grounds
Award of contract at exorbitant rates
Execution of Substandard work
Acceptance of Substandard Supplies
Overpayment / Payment of work not done
Failure to Carryout out Quality Check
Misappropriation of material by contractor in
connivance with officials

103. IRREGULARITIES IN EXECUTION
OF CONTRACT
Failure to incorporate accepted tender
conditions in contract agreement.
Introduction of conditions having financial
implications. Change in specifications during
execution.
Altering the location or nature of work giving
undue advantage to the tenderer.

104. IRREGULARITIES IN EXECUTION OF
CONTRACT
Unreasonable variations in terms of quantity
Introduction of new non-schedule items.
Acceptance of material of inferior brand than
specified in contract agreement.
Acceptance of material after date of expiry.
Acceptance of under specification supply.
Accepting material without inspection
certificate.
Accepting material without delivery challans.

105. IRREGULARITIES IN EXECUTION
OF CONTRACT
Acceptance of under specification work or
supply
Not following laid down procedure
By passing certain processes
Not conducting requisite tests
Use of un passed raw materials

106. RING FORMATION
Ring/ Cartel formation among the bidders leads to
elimination of competition and award of contract at
exorbitant rates.
At times it is done with active collusion with
officers concerned.
The ring formation becomes more important in case
of limited tenders thus an attempt should be made to
identify sister concerns.
In case of suspected ring formation with high rates,
tender cancellation is advisable.

107. AWARD OF TENDER AT EXORBITANT RATES
Due to high pitching estimates.
Tenderers are guided by estimated cost given in NIT
and often estimated cost are used to assess
reasonability of rates.
Picking up ‘Comparable rates’ selectively.
Preparing rate analysis after the opening of tender
to justify the high rates received.
Unrealistic short completion period may lead to
high rate.

108. By assuming unreasonably high rates towards
transportation cost, labour cost, local taxes, inflation etc.
Modifying description of items to make them Non- Stock
items in case Of Stores and Non-Schedule item in case
works items leading to purchase/ execution of works at
high rate.

109. POINTS TO BE KEPT IN MIND
Tender opening register must be maintained in emd,
tender cost,returning of sighned credentials documents,
samples,remarks of quoted by renderers are recorded.
This must be signed by renderers and tender opening
officers present at the time of opening.
Delayed tenders i.e. received after closing of box of
tender to be rejected.

110. POINTS TO BE KEPT IN MIND
Under no circumstances no member of TC
should refer the case to any officer/staff under
him for scrutiny / comments.
Rate register should be maintained religiously
in which accepted rates are recorded
chronologically and any adverse remarks
regarding their non-comparability should also be
recorded.
The register can be referred to see that the
rates LAR taken in briefing note are
representative.

111. ADVANCE PAYMENT
•If the advance is to be given, it should be expressly
stated in the NIT/Bid Documents, indicating the amount,
rate of interest and submission of BG of equivalent
amount.
•The advance payment may be released in stages
depending upon the progress of the work and mobilization
of required equipments etc.
• There should be a provision in the contract for
adjustment of advance progressively even as the bills are
cleared for payment.
•In case of „Machinery and Equipment advance‟, insurance
and hypothecation to the employer should be ensured.
•Utilization certificate from the contractor for the mob
advance should be obtained

112. OVER PAYMENT
Temporary overpayment in Running Bills
Payment in anticipation of work to be done or supply to
made Final overpayment
Payment for the services not rendered
Inflated measurement
Multiple measurement

113. ACCEPTANCE OF BANK GUARANTEE
•BG shall be in the form of irrecovarable BG
issued by nationalized and scheduled banks.
•Bank guaranty should be scrupulously
compared with the VPT Performa.
•Should be executed on stamp paper of proper
value.
•Eliminate the possibility of acceptance of any
forged / fake bank guarantees.
•Confirmation of issuing banks should be
obtained for genuiness.

114. POSTING DETAILS OF AWARD OF TENDERS ON
WEBSITE
All the organisations to post on their web-sites
a summary, every month, containing details of
all the contracts/purchases made above a
threshold value (to be fixed by the
organisations) covering at least 60% of the
value of the transactions every month to start
with on a continuous basis.

115. LEVERAGING TECHNOLOGY
•Transparency through effective use of websites in discharge
of regulatory, enforcement and other functions of Govt.
Authorized.
•Issue tenders publish the tender advertisements on e-
tendering platforms. ...
•Bidders need to enroll themselves at the
online tendering platforms to generate user ids and
passwords.
•One needs to upload the requisite documents and mention
the bids online.
•E-Payments
•Post on the website, summary every month, of all the
tenders/works contracts of value more than tha a certain
thresshold value of Engg./Mech/Elec/ Medical departments

116. DELAY IN PAYMENT TO VENDORS
E-payments brings economy and efficiency and at the
same time reducing corruption.
Reducing transaction costs involved in making payments
by way of cheques and sending the same through courier.
e-payments to vendors and employees instead of making
payments by issue of cheques.
Payments are to be made on “firstcome-first-serve” basis.
Payment should be made within a bench mark period from
the date it is due.
Should verify the outstanding bills position by
Contractors, suppliers.

117. E-TENDERING/E-PROCUREMENT
CVC advising organizations to follow a fair,
transparent and open tendering procedure, to
select the application service provider for
implementing their e-tendering solutions.

118. IT PROCUREMENT
Turnkey contracts for net-working of computer systems.
Inclusion of these unrelated items creates opportunities
for malpractices-third party view about the scope of
turnkey projects.
Measures To Curb The Menace Of Counterfeit And
Refurbished IT Products
diligence as well as curbing the menace of counterfeit and
refurbished IT products disguised as new
OEM that would certify that all the
components/parts/assembly/software used in the
Desktops and Servers like Hard disk, Monitors, Memory etc
were original/new components/parts/assembly/software,
and that no refurbished/duplicate/ second hand
components /parts / assembly / software were being used
or would be used,

119. LATEST GUIDELINES ON TENDERS
•No EMD, Cost of Tenders & SD of 3% of the contract
value to be remitted through RTGS/E-Transfer to VPT
account.
•PG shall be in the form of irrevocable BG issued by
nationalised or scheduled bank – 3% of the contract
value. PG shall be furnished by the successful
contractor within 15 days from the date of issue of
acceptance letter & before the signing of the contract
and valid upto expiry of the maintenance period
Clause.

120. Periodical rotation of Officers
Periodical rotation of Officers/staff in sensitive
posts. Review of Immovable property returns
submitted by Officers/Staff. Proper implementation
of DA Rules to weed out corrupt officers. Institution
of effective grievance procedure enquiry.