1. Procurement Procedure and Preparation of Procurement Plan
30th Review Meeting of State FCs- Delhi (4th - 5th August 2011)

2. 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 when not prescribed by MHRD.
MHRD prescribed ceiling on
MHRD’s ceilings extended up to vide letter dated
Shall prevail on State ceilings.

3. PROCUREMENT Main Considerations Economy Efficiency Equal Opportunity
Transparency

4. Points to be kept in view
PROCUREMENT
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.

5. PROCUREMENT
Strictly follow the levels of procurement provided in Para 112 of FM&P
School/Community/ KGBV
CRC / BRC
District
State 5 5

6. EGS/AIE/Special Training related items
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.

7. 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

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

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

10. 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 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.

11. Method 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)

12. Financial ceiling for each contract
(In US $ equivalent)
Category
Open Tender
Limited Tender
Single Tender
Community
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, <4 million
Books, Teaching materials school facility improvement, hiring of vehicles of equipment
Service Contract
<200,000
Any contract in excess of the maximum limit indicated above shall not be procured using SSA funds.

13. OPEN TENDER
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

14. Prescribe bidding documents covering :
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

15. 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
Place order within one month from the date of last supply
Prices have since not reduced
Purchases not made on urgent basis
Rejection of all bids
Lack of competition
Tenders not substantially responsive
Obtain the approval of competent authority

16. LIMITED TENDER Items covered: goods including books, uniforms
teaching learning materials,
school equipment,
hiring of vehicles, and
operation and maintenance of equipment
Invitation for quotations –
Based on comparing price quotations obtained from several suppliers, usually at least 3 to ensure competitive prices.
Issue a letter to the supplier to furnish the quotations for the required goods/equipment.

17. LIMITED 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

18. LIMITED 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

19. LIMITED TENDER Steps Identifying items; Laying down specifications;
Estimating total numbers and costs of items;
Need not notify in newspaper/website
Identifying likely agencies borne on the approved list of contractors/ suppliers; (minimum 3, for more competitive rates)
Obtaining approvals of competent authority;
Issuing letters of invitation;
Processing quotations received; 19

20. Obtaining orders of competent authority for placing orders for supply;
Issuing letters placing orders for supply and delivery period;
Quoted price shall include all duties, taxes and other levies;
Rates quoted be fixed and not subject to adjustment;
Ensuring inspection;
Ensuring timely supply: and
Making payments after delivery in satisfactory condition.
The financial ceiling prescribed for limited tender shall be applicable for Rate contracts of DGS & D and Rate contracts of State Governments.

21. 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.

22. WITHOUT TENDER / QUOTATION
Procurement of goods or group of goods estimated to cost the equivalent of the ceiling of State Govt.
Issue suitable guidelines by the SIS
THROUGH COMMUNITIES
Construction of all civil works except, BRC, Hostel, KGBV and SIEMAT
BRC construction if the community is technically capable
Purchase of materials as per ISI certification, if available;
SPD may provide simple procurement guidelines

23. Identify the committee locally operating in the area.
Keep the following points in view:
Active involvement of community in planning and implementation;
Who will procure the materials or goods used in works;
Goods / works have to be executed as per approved plans and specifications
The name and designation of the Engineer for technical supervision and certification.

24. 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
upon start up of the work) cost : 75% of total
Plastering and completion
of work cost : 25% of total

25. Procurement of major items
Textbooks – Single Tender (Textbooks Corporation, NCERT etc) and Open Tender
IT Equipment – Limited Tender (State approved vendors)
State Electronic Corporation/IT Deptt/other State agencies provided they follow State procedure and Manual provisions
Open Tender and e-procurement
Printing work – Rate Contract approved by State Government, Limited Tender and Open Tender

26. Service Contract 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

27. Non-Government Organizations
Preparation of Terms of Reference
Advertising
Formation of Evaluation Committee
Selection of NGOs
Approval by Grant-in-Aid Committee

28. PROCUREMENT Post Review by Government of India Mis-procurement
Complaint Handling Mechanism

29. 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.

30. 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.

31. 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 delivery/invoice/payment dates on the same day.

32. 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.

33. 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.

34. Key Observations of Post review of Procurement
Irregularities in Procurement
Selected same contractor on single source basis in two schools.
Purchased Computers from agencies not on authorized DGS&D or State Government Rate contract entities.
Assets procured were not available for physical verification.
Absence of concerned staff during the course of review despite prior notification of the visit.
Diversion of funds
Used ACR fund for the construction of library

35. Thank You