Transcript Procurement Procedure

Procurement Procedure and
Preparation of Procurement Plan
30th Review Meeting of State FCs- Delhi
(4th - 5th August 2011)
PROCUREMENT
• Strictly follow procurement procedure prescribed in
Chapter IX of the revised Manual on FM&P.
• Manual provisions mandatory for all procurements.
• Follow State's financial ceilings except
prescribed by MHRD.
when not
• MHRD prescribed ceiling on 17-09-2008
• MHRD’s ceilings extended up to 30-9-2012 vide letter
dated 2-7-2010.
• Shall prevail on State ceilings.
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PROCUREMENT
Main
Considerations
Economy
Efficiency
Equal
Opportunity
Transparency
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PROCUREMENT
Points
to be kept in view
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Identification of Needs.
Requisition from users.
Exists 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.
• All purchases be made to the best advantage after
comparison of competitive prices.
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PROCUREMENT
• Strictly follow the levels
provided in Para 112 of FM&P
of
procurement
School/Community/ KGBV
CRC / BRC
 District
 State
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School/KGBV level
 All civil works, except buildings for BRCs, SIEMAT,
Residential Schools/Hostels and KGBV.
 Furniture to Govt. UPS
 School library
 Teaching Learning Material
 School grant.
 Maintenance grant.
 Teaching Learning Equipment
 REMS
 Learning Enhancement Programme (LEP).
 Items required for KGBV.
 Uniform
EGS/AIE/Special Training related items

TLM, Contingency etc.
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CRC/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 level
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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 level
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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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PROCUREMENT
• Prepare the Procurement Plan every year and upload on
SSA’s website as envisaged in Para 113 of the Manual.
• Strictly follow financial ceiling prescribed for each method.
• Urged the States on 16th June 2011 to prepare the annual
procurement plan for 2011-12 and upload the same on the
web site.
• Information received from 6 States of Chandigarh, HP,
Maharashtra, Meghalaya, Rajasthan and Uttarakhand.
• Remaining States yet to prepare the plan. Accord priority.
• Linkage of all procurements with plan will be looked in audits,
post review and concurrent review.
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Method of Procurement
1.
2.
3.
4.
Open Tender (Para 115-117 of the Manual)
Limited Tender (Para 118 of the Manual)
Single Tender (Para 119 of the Manual)
Procurement without tender / quotation (Para 120 of
the Manual)
5. Procurement through communities (Para 121 of the
Manual)
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Financial ceiling for each contract
(In US $ equivalent)
Category
Open Tender
Limited
Tender
Single
Tender
Goods
>50,000
<3000,000
< 50,000
<30,000
Works
>40,000
<300,000
<50,000
<40,000
Text books
Upto 1 million
SIEMAT
Upto 800,000
Information Technology
equipment
>50,000
million
<4
<40,000
<500.000
<50,000
Books, Teaching materials
school facility improvement,
hiring of vehicles of equipment
Service Contract
Community
<30,000
<200,000
• Any contract in excess of the maximum limit indicated above shall not 12be
procured using SSA funds.
OPEN TENDER
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Items covered: Civil works construction of BRC,
Residential schools/Hostel, KGBV, SIEMAT and goods.
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 tender
based on post qualification;
 Negotiation with L-1 (if necessary)
 Contract award; and
 Contract performance
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Prescribe bidding documents covering :
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Documents user friendly, self contained, comprehensive,
unambiguous and relevant to the objective of purchase.
Schedule of requirements
Bid form and price schedule
Technical specifications
Post qualification criteria
Validity period
Earnest money
Signing of bids
Pre-bid conference
Submission of bids
Opening of bids
Evaluation criteria
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Negotiation with L1
 Award of contract
 Signing of agreement/contract
 Security deposit
 Retention money
 Payment terms
 Liquidated damages
Repeat Orders
 Quantity as per State procedure
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Place order within one month from the date of last supply
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Prices have since not reduced
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Purchases not made on urgent basis
Rejection of all bids
 Lack of competition
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Tenders not substantially responsive
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Obtain the approval of competent authority
LIMITED TENDER
Items covered:
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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.
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LIMITED TENDER
Invitation for quotations –
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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.
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LIMITED TENDER
Bid Price
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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.
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LIMITED TENDER
Steps
 Identifying items;
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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;
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Processing quotations received;
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Obtaining orders of competent authority for
placing orders for supply;
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Issuing letters placing orders for supply and
delivery period;
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Quoted price shall include all duties, taxes and
other levies;
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Rates quoted
adjustment;
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Ensuring inspection;
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Ensuring timely supply: and
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Making payments after delivery in satisfactory
condition.
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The financial ceiling prescribed for limited tender
shall be applicable for Rate contracts of DGS & D
and Rate contracts of State Governments.
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be
fixed
and
not
subject
to
SINGLE TENDER
Followed 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.
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WITHOUT TENDER / QUOTATION
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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 COMMUNITIES
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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
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Identify the committee locally operating in the area.
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Keep the following points in view:
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Active involvement of community in planning and
implementation;
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Who will procure the materials or goods used in
works;
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Goods / works have to be executed as per
approved plans and specifications
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The name and designation of the Engineer for
technical supervision and certification.
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Suggested advance payments based on the certificate
issued by the Supervising Engineer
Advance (mobilisation advance
upon start up of the work and
on 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
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Procurement of major items
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Textbooks – Single Tender (Textbooks Corporation,
NCERT etc) and Open Tender
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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
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Printing work – Rate Contract approved by State
Government, Limited Tender and Open Tender
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Service Contract
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Preparation of Terms of Reference
Preparation of Cost Estimate and Budget
Advertising
Preparation of short list of consultants
Receipt of proposals
Formation of Evaluation Committee
Evaluation of Technical and Financial proposals
Final discussions including negotiations and award of
the contract
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Non-Government Organizations
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Preparation of Terms of Reference
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Advertising
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Formation of Evaluation Committee
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Selection of NGOs
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Approval by Grant-in-Aid Committee
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PROCUREMENT
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Post Review by Government of India
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Mis-procurement
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Complaint Handling Mechanism
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Key Observations of Post review of Procurement
Review revealed :
need for tightening of procurement system
especially on procedural lapses
incomplete documentations
irregularities
diversions of funds
Procedural 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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Key Observations of Post review of Procurement
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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Key Observations of Post review of Procurement
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
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delivery/invoice/payment dates on the same day.
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Key Observations of Post review of Procurement
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. 32
Key Observations of Post review of Procurement
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.
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.
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Key Observations of Post review of Procurement
Irregularities in Procurement
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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
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Used ACR fund for the construction of library
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