Presentation on theme: "NATIONAL SUMMIT ON PUBLIC PROCUREMENT"— Presentation transcript:
1 NATIONAL SUMMIT ON PUBLIC PROCUREMENT 1NATIONAL SUMMIT ON PUBLIC PROCUREMENTOVERVIEW ON GFR-2005Presentation by: G A R Rao, Director (Finance)Mazagon Dock LTD.
2 EVOLUTIONARY PROCESS OF GENERAL FINANCIAL RULES 2EVOLUTIONARY PROCESS OF GENERAL FINANCIAL RULES1947 : IN THE FORM OF EXECUTIVE INSTRUCTIONS1963 : THE COMPENDIUM OF EXECUTIVE INSTRUCTION MODIFIED AND GENERAL FINANCIAL RULES, WERE ISSUED.1963 –JUN 05: GFR SUPPLEMENTED BY GOVT. OF INDIA DECISIONS.TASK FORCE SET UP TO RECAST THE RULES, SINCE SOME OFTHESE HAD BECOME REDUNDANT.JUL 2005 : RULES RECAST AND ISSUED IN THE FORM OF GFR 2005.
3 THE TOPICS COVERED IN G.F.R. 2005 ARE SHOWN BELOW Relevant for Material ManagersChapter 6Procurement of Goods and ServicesChapter 1 : IntroductionChapter 2 : General System Of Financial ManagementChapter 3 : Budget formulation and implementationChapter 4 : Government AccountsChapter 5 : WorksChapter 6 : Procurement of Goods and ServicesChapter 7 : Inventory ManagementChapter 8 : Contract ManagementChapter 9 : Grants-in-Aid and LoansChapter 10 : Budgeting and Accounting for Externally Aided ProjectsChapter 11 : Government GuaranteesChapter 12 : Miscellaneous Subjects
4 GENERAL FINANCIAL RULES, 2005 4GENERAL FINANCIAL RULES, 2005Fundamental principles of Public Buying (Rule 137)“Every authority delegated with the financial powersof procuring goods in public interest shall have theresponsibility and accountability to bringEfficiency,Economy and Transparencyin matters relating to Public procurement andfor fair and equitable treatment of suppliersand promotion of competition in public procurement.”
5 FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING (RULE 137) 5FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING (RULE 137)The specification in terms of quality,type etc .,as also quantity of goods.Remove superfluous and non-essential features,which mayresult in unwarranted expenditure.Fair,transparent and reasonable procedure.Get satisfied that the selected offer adequately meets therequirement in all respects.Offer is reasonable and consistent with the quality required.Concerned procuring authority must place on record, in preciseterms,the considerations which weighed with it while takingthe procurement decision.
6 FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING 6FUNDAMENTAL PRINCIPLES OF PUBLIC BUYINGRESPONSIBILITY AND ACCOUNTABILITY TO BRINGEFFICIENCYECONOMYTRANSPARENCYPROMOTION OF COMPETITIONFAIR AND EQUITABLE TREATMENT OF SUPPLIERSRECORD THE CONSIDERATIONS FOR THE DECISION
7 POWER FOR PROCUREMENT OF GOODS Rule 140 : 7GFREquivalent Procedure in MDLThe ministries or departments have been delegated full powers to make their own arrangement for procurement of GoodsDGS &DDelegation of Powers for CFABoard of DirectorsProcurement SubCommittee(PSC)CMDFunctional DirectorGGM,GM to the level of Manager
8 REGISTRATION OF SUPPLIERS(SR&R Dept) Rule 142: 8GFREquivalent Procedure in MDLEligible &Capable suppliers Credentials verification.- Mfg. Capabilities- Quality Control System- Past Performance- After Sales Service- Financial BackgroundItem-wise list of suppliersRegistered for fixed period between(1-3 years) Suppliers willing to continue will have to apply for renewal.Vendor Rating-Mfg. Capabilities-Quality Control System-Past PerformanceAfter Sales Service- Financial BackgroundDocuments as per statutory requirementSite visitsProduct wise list of , Permanent and Temporary supplierPermanent vendors registered for 3 YrsSuppliers willing to continue will have toapply for re-registration.Vendor Rating is done on basis of :Quality, Delivery, ServicesWhere >80% is Very good< 40% is UnsatisfactoryYearly Vendors Meet
9 PURCHASE OF GOODS WITHOUT TENDERS 9PURCHASE OF GOODS WITHOUT TENDERSPURCHASE OF GOODS WITHOUT TENDERSGFREquivalent procedure in MDLRule 145:Upto ` 15000/- on each occassion(Certificate to be recorded by Competent authority)Rule 146:>` 15000/- upto ` 1Lakh by 3 Members purchase committeeRule 147:Purchase of goods directely under rate contract(DGS&D)Emergency Cash Purchase for Projects :up to ` per item/service for projectsPetty Cash Purchase:up to ` for petty miscellaneous itemsPer purchase.Delegated power upto ` 10 LakhsItems covered under DGS&D
10 PURCHASE OF GOODS WITH TENDER 10GFREquivalent Procedure in MDLRule 150:Advertised Tender EnquirySubject to exemptions incorporatedunder Rules 151 and 154.(for the value above ` 25L)Rule 151:Limited Tender Enquiry.(upto ` 25L)No. of supplier more than ThreeRule 154:Single Tender EnquiryParticular firm is themanufacturer of required goodsIn case of EmergencyWeb Tender - ` 5L to `25LGlobal/Press Tender- > ` 25LUpto ` 5L No of Supplier more than Five.Items Proprietery in nature (PAC)Customer instruction/RequirementEmergency Tender : Exigency due to operational or technical requirementsCMD> `25L Director:Up to ` 25LEnquiry by Fax/ /Courier/Speed PostTEF with essential conditions only.
11 CONTENTS OF BID DOCUMENT RULE 155: 11GFREquivalent Procedure in MDLInstruction to BiddersCondition of ContractSchedule of RequirementSpecification and allied technical.Price scheduleContract formOther standard form if any.Tender enquiry form(TEF)Detail scope of supplies/work specification including Insp&QA requirement.Price bid format.Standard terms and condition(STACS) along with acceptance form.General terms and condition(GT&C) along with acceptance form.Shipping instructionStatutory RequirementOfficial Secret Act 1923 and Safety clause.Format for BG,SD,RTGS/NEFT,LC, BID BOND ,BG for advance payment etc.
12 ADVANCE PAYMENT TO SUPPLIER RULE 159: 12GFREquivalent Procedure of MDLAdvance payment is demanded by supplier for maintenance contractAdvance payment is demanded by Firms against turnkey contracts/High value/Overseas suppliesLimit for Advance Paymenta) 30% to Private firmb)40% State or Central Govt agency or PSU.c)Maintenance Contract,Amt not exceeding the Amt. Payable for six months.Upto ` 1Cr contract value - No advance payment.> ` 1Cr contract value – 15% interest bearing (PLR+2%) against BG equivalent to the amount.
13 Equivalent Procedure in MDL TRANPARENCY,COMPETITION,FAIRNESS AND ELIMIMNATION OF ARBITRARINESS IN PROCUREMENT PROCESS Rule 160:13GFREquivalent Procedure in MDLBidding document to be self –contained and comprehensive without any ambiguitiesCriteria for eligibility and qualification-Date ,place and time for sending/opening bids-Terms of deliverySuitable provision for settlement of dispute.Reasonable time for sending bids.The bids should be opened in publicThe specification of required goods should be clearly stated without any ambiguity.Draft of tender enquiry approved by HOD(C)Bid Rejection criteria is defined.Date ,place and time for sending/opening bidsTerms of Delivery:-Indian :Free delivery at MDL- Overseas: FOBIndian arbitration and conciliation act 1996Press Tender: 4 Wks,Web Tender : 3 WksLimited :2 Wks for local bidder ,Emergency : 1 Wk for local bidderPart I&II bids witnessed by the biddersTechnical specification prepared by Design
14 Equivalent Procedure in MDL TRANPARENCY,COMPETITION,FAIRNESS AND ELIMIMNATION OF ARBITRARINESS IN PROCUREMENT PROCESS Rule 160:14GFREquivalent Procedure in MDLIn case of turn-key projects pre-bid conference to be indicated in bid,for clarifying issues/doubts.Criteria /Factors for evaluating the bidsReceived bids to be evaluated as per bidding documents.Bidders should not be allowed to alter/modify bids.Negotiation in exceptional circumstances.Contract should be awarded to lowest evaluated bidderPre Bid may be scheduled as an exception rather than a rule to avoid cartel formation.Loading criteria towers deviation in delivery ,warranty & payment terms are definedin bid documentsBid evaluated by designated technicalEvaluation CommitteeBidders cannot alter/modify bids.Based on specific reason and beyond widevariation in prices with approval of CFALowest Technically qualified bidder
15 Equivalent procedure in MDL EFFICIENCY,ECONOMY AND ACCOUNTABILITY IN PUBLIC PROCUREMENT SYSTEM Rule 161:15GFREquivalent procedure in MDLAppropriate time frame of each stage of procurement should be prescribed to reduce delay.Placement of contract with in original validity of bidsRate contract systemTechno-commercial scrutiny- 4 WksOrder Placement- 6 Wks after Techno-commercial clearanceOverall time frame within validity periodCoded items/Service/Maintenance ContractDGS&D contract with supplier consent
16 BUYER IN PRIVATE SECTOR 16BUYER IN PRIVATE SECTORPrinciples of ConfidentialityCompliance with Statutory and Internal AuditResponsible to mainly Share HoldersBUYER IN PUBLIC SECTORTransperacy ,Non Discrimination & Equal Opportunity to allRule based,Compliance with Government Audit(CAG) in addition to Statutory and internal Audit.Responsible to Public