1. DIRECTORATE GENERAL OF SUPPLIES & DISPOSALS PROCUREMENT PROCEDURES

2. Background - Organization DGS&D - Central Purchase Organization of Govt of India  Headquartered at New Delhi with three regional purchase offices in Metros and 27 QA offices in major industrial towns  Purchase directorates organized commodity wise to facilitate maintenance of data, market intelligence, technological advancement in products and processes  Quality Assurance offices located near users and industry to facilitate quick response  Technical and multi-disciplinary workforce including two Group “A” engineering services recruited thru UPSC  ISS (purchase) officers posted in other ministries to assist in procurement of exclusive items

3. Background – Role  DGS&D is engaged in diversified activities like -  Conclusion of Rate Contracts for over 350 product categories involving 20000 items besides spares etc.  6000 GoI users spread across the country  Serves / facilitates over 10000 tenderers including 2600 DGS&D registered suppliers,  Pre-despatch inspection against DGS&D contracts and direct orders on requestinspection  Formulate procurement policies and procedures  Cargo clearance at major ports  Provide consultancy in the procurement management  Goods procured worth Rs 40 bn during 2005-06.  Estimated procurement by State Govt, PSUs & other Organizations based on R/Cs – Rs. 60 bn.  DGS&D provides single point contact for Govt users and vendors/suppliers for procurement of commonly used goods

4. Transparency DGS&D manual prescribes procurement procedures, forms, delegation to different functionaries and guides decision making. It is a priced document & available on DGS&D website. All Products categories, specifications, bidding terms and conditions finalised through extensive consultative process with suppliers and users DGS&D website (dgsnd.gov.in) contains details of products/ procurement specifications, tender enquiries, rate contracts, registered firms, policies & procedures, forms etc. On-line tendering made compulsory from 1 st April 2006. Well defined delegation of powers and channel of submission. All R/C proposals scrutinized by Finance. Additionally CCA exercises checks at post-contract stage. Regular rotational transfers of officers. Works under a focused attention of Industry and vigorously interacts with industry, users and other connected with Purchase management. Full fledged vigilance set-up at DGS&D and Department of Commerce. All contractual and other documents are regularly audited by a dedicated wing of CAG.

5. Rate Contracts – Advantages to users COMPETITIVE & ECONOMICAL PRICE DUE TO AGGREGATION OF DEMANDS. R/C PRICES REMAIN MOST ECONOMICAL AT ALL TIMES THROUGH OPERATION OF FALL CLAUSE SAVES TIME, EFFORTS, MAN-HOURS AND RELATED COSTS INVOLVED IN TEDIOUS & REPETITIVE TENDERING AT MULTI-USER LOCATIONS AVAILABILITY OF QUALITY GOODS WITH FULL QUALITY ASSURANCE BACK-UP ENABLES PROCUREMENT AS AND WHEN REQUIRED - REDUCTION IN INVENTORY CARRYING COST ADVANTAGES EVEN TO SMALL USERS & THOSE LOCATED IN REMOTE AREAS SINGLE POINT CONTACT FOR PURCHASES OF COMMON USER GOODS SAVES THE COST – BOTH ADMINISTRATIVE AND PERSONNEL – OF CREATING SPECIALIZED PROCUREMENT CELLS IN DIFFERENT DEPARTMENTS/ ORGANIZATIONS

6. Rate Contracts – Advantages to Suppliers REDUCES MARKETING COST & EFFORTS. ELIMINATION OF REPETITIVE TENDERING AND FOLLOW UP WITH MULTIPLE AUTHORITIES / LOCATIONS SPREAD ACROSS THE COUNTRY PROVIDES SINGLE POINT CONTACT FOR GOVT SUPPLIES. AGGREGATION OF GOVT DEMAND LEADS TO PLANNED AND ECONOMIC PRODUCTION VALUE AND IMAGE ENHANCEMENT IN THE OPEN MARKET. LEADS TO MOST COMPETITIVE PRICES BEING OFFERED PROMOTES QUALITY DISCIPLINE AND TECHNICAL UPGRADATION. FACILITATES SALE TO STATE GOVTS. / PSUS Non utilization - Disadvantages Non utilization - Disadvantages

7. E-Procurement - Components  E-Purchase  Registration  Store coding  Technical Particulars  Evaluation of Bids  Award of Rate Contract  E-Inspection / Supply  Supply Order  Inspection  Dispatch Details  Receipt Details Benefits Benefits ChallengesChallenges  E-Tendering  Tender Notice  Tender enquiry  Bid submission  Bid opening  E-Payments  Bill submission  Processing  Payments  Debit Adjustments  Status  Complaints Matrices

8. DGS&D Website –(http://www.dgsnd.gov.in) A comprehensive DGS&D website facilitates – A single access point for DGS&D officers, suppliers and customers Downloading of DGS&D Manual, forms, conditions of contract, circulars Notices, agenda and minutes of the Consultative Meetings Suppliers registration Download of summary and full text of Parallel Rate Contracts Creation and Hosting of Tender enquiries & tender notices and corrigenda Rate contracts, Technical specifications.

9. DGS&D Website –(http://www.dgsnd.gov.in) Provides access to Indentor’s page and Vendor’s page for the following activities – Indentors Page- Online placement of supply orders Entering Receipt Particulars of stores Intimation regarding shortages/quality Suggestions for bringing new items on RC Vendors page Online submission of Registration application Online inspection call Entering dispatch particulars Online submission of Bills Suggestions for bringing new items on RC

10. PROCUREMENT PROCEDURES DGS&D Manual Separate chapters on Product Specifications (Chapter 4) Registration of Firms (Chapter 5) Earnest Money and Performance Security (Chapter 6) Methods of Purchase, Issue & Preparation of Tender Enquiry (Chapter 8) Evaluation of Ad-hoc Tenders and Formulation of Purchase Proposals (Chapter 9) Rate Contracts (Chapter 13) Inspection of Stores (Chapter 14) Payment (Chapter 16)

11. Bidding Documents General Terms & Conditions – Rate Contracts (DGS&D – 1001 & 69) Ad-hoc Contracts (DGS&D – 68 (R) Special Products – (DGS&D – 70, 71 & 72) Instructions to Bidders (DGS&D – 229) Instructions to Users Schedule to Tenders Product details Specifications Eligibility & Qualification Criteria Standard Contract Forms

12. Procurement Procedures – Pre-contract New Products/ Items Pre-Qualification – Registration Products/ Specifications Tender Notices/ Enquiries E – Tendering Evaluation of Tenders Award of Contracts

13. Procurement Procedures – Post contract Supply Order Pre dispatch Inspection Performance/ Monitoring Transportation Receipts Payments Complaints Resolution Debit Adjustments

14. Procurement – Associated/ Support Activities Shipping & Cargo Clearance Consultancy Disaster Management Items Policies & Co-Ordination Computerization & Training Vigilance Litigation & Arbitration Management Information Services Internal Work Study Unit Complaints &Public Relations Information facilitation Administration

16. Challenges (1) Integration of Nation wide spread of DGS&D Purchase and QA offices Multiple Matrices of Rate Contract as against Single/Limited Matrix of Fixed Quantity (Ad-hoc) Contracts Multiple Matrices Integration of large Govt user base including those in far flung areas (over 6000) Tenderers spread across the country (over 10000) Registration of vendors (over 2600) Management of over 2500 Contracts and 60,000 supply orders Different Purchase Directorates have different requirements

17. Challenges (2) Adherence to GFR, DGS&D Manual, CVC Guidelines and other Instructions issued by Government Interface With External Agencies like NSIC, DGQA (Defence), BIS etc. People and Process Change management Technical challenges like IT Infrastructure, Data Security, backups, etc.

18. MATRIX OF EFDEF EB TENDERS OPENED ON 06-10-2005 PICTORIAL PRESENTATION ONLY IN RESPECT OF TWO FIRMS OUT OF 33 BIDDDERS 20 ITEMS 33 FIRMS 6 PARAMETERS Price Registration BIS Licence Technical compliance Compliance to Special & General Terms & Conditions Excise Duty Sales Tax Past Performance – 3 yrs SSI Status Terms of Delivery Delivery Period

19. MATRIX OF XLPE (LT) TENDERS OPENED ON 29-09-2005 88 ITEMS 38 FIRMS 6 PARAMETERS Price Registration BIS Licence Technical compliance Compliance to Special & General Terms & Conditions Excise Duty Sales Tax Past Performance – 3 yrs SSI Status Terms of Delivery Delivery Period PICTORIAL PRESENTATION ONLY IN RESPECT OF TWO FIRMS OUT OF 38 BIDDDERS

20. NON UTILIZATION OF RATE CONTRACTS - DISADVANTAGES DIRECT PROCUREMENT REDUCES AGGREGATION OF DEMANDS THEREBY PUSHING UP PRICES PAID BY THE GOVERNMENT. INCREASES TOTAL PROCUREMENT COST FOR SUCH ITEMS IN GOVT. SECTOR PROCUREMENT FROM GREY MARKET, DEALERS, AGENTS MAY INVOLVE EVASION OF EXCISE DUTIES, SALES TAX AND OTHER TAXES WHICH ARE REVENUE RECEIPTS OF THE GOVT. THUS ACTUAL PROCUREMENT COST TO GOVT. IS HIGHER OPENS WINDOW FOR ENTRY OF SUB-OPTIMAL QUALITY /OBSOLETE GOODS, UNESTABLISHED/UNSUCCESSFUL SOURCES TENDERING PROCESS ENTAILS WASTAGE OF MANPOWER AND RESOURCES WHICH COULD BE GAINFULLY UTILISED ELSEWHERE UNETHICAL FOR MARGINAL GAINS AS RATE CONTRACT PRICES ARE WIDELY ADVERTISED/ KNOWN

21. Quality Assurance PRE-DESPATCH INSPECTION SERVICE FOR GOVT. PURCHASES UNDER GOVERNMENT OF INDIA REGISTRATION OF VENDORS FOR INDIGENOUS AND IMPORTED STORES ASSISTANCE IN EVOLVING SPECIFICATIONS FOR ITEMS ON RATE CONTRACTS ALL INDIA NETWORK OF 27 OFFICES AT MAJOR INDUSTRIAL CENTRES INSPECTION AGAINST DGS&D CONTRACTS AND DIRECT ORDERS FROM CIVIL GOVERNMENT/SEMI GOVERNMENT BUYERS COMPETES WITH MAJOR INSPECTION AGENCIES LIKE SGS, CROWN AGENTS, RITES, ENGINEERS INDIA LTD. ETC. AND WON CONTRACTS FOR INSPECTION BOTH ON COST EFFECTIVENESS AND QUALITY OF SERVICE

22. Consultancy Services ACTIVITY STARTED FROM 1997 SERVICES ENCOMPASS DIFFERENT AREAS OF PROCUREMENT MANAGEMENT VIZ. BIDDING DOCUMENTS AND STRATEGIES, BID EVALUATION, QUALITY MANAGEMENT, POST CONTRACT MANAGEMENT ETC. MOUs SIGNED WITH CHHATTISGARH, ONGC, CENTRAL POWER DISTRIBUTION COMPANY OF ANDHRA PRADESH (CPDCL), IGNOU, PSEB AND JKSBSE AGREEMENTS WITH ONGC AND CPDCL SHOWS RECOGNITION OF DGS&D EXPERTISE IN PROCUREMENT MANAGEMENT ANNUAL CONSULTANCY FEE EXPECTED TO BE AROUND RUPEES ONE CRORE CONSULTANCY ASSIGNMENTS BEING MANAGED THROUGH EXISTING STAFF STRENGTH AND BUDGET CONSTRAINTS IN ACCEPTING NEW ASSIGNMENTS DUE TO MANPOWER SHORTAGE

23. National Disaster Management RESPONSIBILITY ENTRUSTED BY MHA TO CONCLUDE RATE CONTRACTS FOR IDENTIFIED ITEMS TO FACILITATE RELIEF SUPPLIES FOR DISASTER AFFECTED AREAS AT SHORT NOTICE AND ECONOMICAL PRICES MAINTENANCE OF DATABANK OF VENDORS, SPECIFICATIONS ETC FOR ENTRUSTED ITEMS SIMILAR RESPONSIBILITY ENTRUSTED BY MOD IN WAR/WAR- LIKE SITUATION

24.  Increased Transparency & Wider Competition  Simplify & Speed Up Tendering Processes  Real Time Generation Of Detailed & Accurate Data – Elimination Of Human Error  Seamless Sharing Of Information  Ease Of Operation & Quicker Decision  Comprehensive Website To Facilitate Tendering, Contracting, Ordering And Retrieval Of Information To Authorized Functionaries - Online Interaction Avoiding Physical Visits  Facilitating Pre And Post Contract Management  Reduction In Cost Of Government Purchases E-Procurement - Benefits

25. E-Payment E-Payment System Documents receipt Bill submission Processing Payments Debit adjustments