Presentation on theme: "Procurement Procedure and Preparation of Procurement Plan"— Presentation transcript:
1Procurement Procedure and Preparation of Procurement Plan 30th Review Meeting of State FCs- Delhi (4th - 5th August 2011)
2PROCUREMENTStrictly 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 when not prescribed by MHRD.MHRD prescribed ceiling onMHRD’s ceilings extended up to vide letter datedShall prevail on State ceilings.
3PROCUREMENT Main Considerations Economy Efficiency Equal Opportunity Transparency
4Points to be kept in view PROCUREMENTIdentification 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.
5PROCUREMENTStrictly follow the levels of procurement provided in Para 112 of FM&PSchool/Community/ KGBVCRC / BRCDistrictState55
6EGS/AIE/Special Training related items School/KGBV levelAll civil works, except buildings for BRCs, SIEMAT, Residential Schools/Hostels and KGBV.Furniture to Govt. UPSSchool libraryTeaching Learning MaterialSchool grant.Maintenance grant.Teaching Learning EquipmentREMSLearning Enhancement Programme (LEP).Items required for KGBV.UniformEGS/AIE/Special Training related itemsTLM, Contingency etc.
7CRC/BRC level Furniture/equipment/computer etc. Office contingencies Teaching Learning MaterialTeacher TrainingCommunity TrainingCivil works for construction of BRC, augmentation of BRC and CRCMaintenance of BRC and CRCPrinting workREMS
8District level Office equipment for DPO Office furniture for DPO Textbooks/other books/supplementary materialsComputers and accessoriesAids and appliances for CWSNOffice contingenciesHiring of vehiclesMaintenance of equipment and vehiclesDistrict level training and workshopsPrinting workREMSECCE KitEducational Kits for girlsLearning Enhancement Programme (LEP)Construction of Residential Schools/Hostel and KGBV
9State level Textbooks Computers and its accessories Office equipment for SPOOffice furniture for SPOEquipment for distance educationAids and appliances for CWSNOffice contingenciesHiring of vehiclesMaintenance of equipment and vehiclesState level training and workshopsPrinting workEngagement of consultancy firms (service contract)Engagement of Auditors for external and internal auditEngagement of experts/resource personsEngagement of NGOsREMSLearning Enhancement Programme (LEP).
10PROCUREMENTPrepare 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 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.
11Method of Procurement 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)Procurement through communities (Para 121 of the Manual)
12Financial ceiling for each contract (In US $ equivalent)CategoryOpen TenderLimited TenderSingle TenderCommunityGoods>50,000<3000,000< 50,000<30,000Works>40,000<300,000<50,000<40,000Text booksUpto 1 million<SIEMATUpto 800,000Information Technology equipment>50, <4 millionBooks, Teaching materials school facility improvement, hiring of vehicles of equipmentService Contract<200,000Any contract in excess of the maximum limit indicated above shall not be procured using SSA funds.
13OPEN TENDERItems covered: Civil works construction of BRC, Residential schools/Hostel, KGBV, SIEMAT and goods.StepsPreparation of tender documentsNotification / Advertisement;Issue of tender documents;Pre-bid ConferenceSubmission 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; andContract performance
14Prescribe bidding documents covering : Documents user friendly, self contained, comprehensive, unambiguous and relevant to the objective of purchase.Schedule of requirementsBid form and price scheduleTechnical specificationsPost qualification criteriaValidity periodEarnest moneySigning of bidsPre-bid conferenceSubmission of bidsOpening of bidsEvaluation criteria
15Negotiation with L1Award of contractSigning of agreement/contractSecurity depositRetention moneyPayment termsLiquidated damagesRepeat OrdersQuantity as per State procedurePlace order within one month from the date of last supplyPrices have since not reducedPurchases not made on urgent basisRejection of all bidsLack of competitionTenders not substantially responsiveObtain the approval of competent authority
16LIMITED TENDER Items covered: goods including books, uniforms teaching learning materials,school equipment,hiring of vehicles, andoperation and maintenance of equipmentInvitation 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.
17LIMITED TENDER 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.17
18LIMITED TENDER 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.18
19LIMITED TENDER Steps Identifying items; Laying down specifications; Estimating total numbers and costs of items;Need not notify in newspaper/websiteIdentifying likely agencies borne on the approved list of contractors/ suppliers; (minimum 3, for more competitive rates)Obtaining approvals of competent authority;Issuing letters of invitation;Processing quotations received;19
20Obtaining 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: andMaking 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.
21SINGLE TENDER Followed in the case of articles specifically certified as of propriety nature; ormanufactured by a particular firm;goods including books;teaching materials;school grant;hiring of vehicles; andoperation and maintenance of equipment etcAppropriate forExtension of existing contractsStandard equipment/spare parts for existing equipments from original supplier.Items obtainable from one sourceEarly deliveryIn exceptional cases such as natural disaster.
22WITHOUT 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 SISTHROUGH COMMUNITIESConstruction of all civil works except, BRC, Hostel, KGBV and SIEMATBRC construction if the community is technically capablePurchase of materials as per ISI certification, if available;SPD may provide simple procurement guidelines
23Identify 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 specificationsThe name and designation of the Engineer for technical supervision and certification.
24Suggested 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 costPlastering and completion ofwork : 25% of total costSchool toilet and other repair worksupon start up of the work) cost : 75% of totalPlastering and completionof work cost : 25% of total
25Procurement of major items Textbooks – Single Tender (Textbooks Corporation, NCERT etc) and Open TenderIT Equipment – Limited Tender (State approved vendors)State Electronic Corporation/IT Deptt/other State agencies provided they follow State procedure and Manual provisionsOpen Tender and e-procurementPrinting work – Rate Contract approved by State Government, Limited Tender and Open Tender
26Service Contract Preparation of Terms of Reference Preparation of Cost Estimate and BudgetAdvertisingPreparation of short list of consultantsReceipt of proposalsFormation of Evaluation CommitteeEvaluation of Technical and Financial proposalsFinal discussions including negotiations and award of the contract
27Non-Government Organizations Preparation of Terms of ReferenceAdvertisingFormation of Evaluation CommitteeSelection of NGOsApproval by Grant-in-Aid Committee
28PROCUREMENT Post Review by Government of India Mis-procurement Complaint Handling Mechanism
29Key Observations of Post review of Procurement Review revealed :need for tightening of procurement system especially on procedural lapsesincomplete documentationsirregularitiesdiversions of fundsProcedural lapsesNot 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.
30Key Observations of Post review of Procurement Procedural lapsesEngagement 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.
31Key Observations of Post review of Procurement Procedural lapsesProcured 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.
32Key Observations of Post review of Procurement Procedural lapsesNot 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.
33Key Observations of Post review of Procurement Lack of training on ProcurementThe Head Masters were not aware of the prescribed procurement procedures under SSA.Poor understanding of procurement procedures at State and district level.Irregularities in ProcurementDates 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.
34Key Observations of Post review of Procurement Irregularities in ProcurementSelected 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 fundsUsed ACR fund for the construction of library