1. Revised Procurement Policy, 2016
Deepa Sadekar- Deshpande
Associate Professor
Yashada

2. Constitutional background for Procurement
Article 166 of the Constitution - Conduct of business of the Government of a State
All executive action of the Government of a State shall be expressed to be taken in the name of the Governor
Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor

3. Constitutional background for Procurement
Article 299
No personal liability -Though Government contracts are made in the name of the President and in the States in the name of the Governor, these persons are not personally answerable in respect of any contract. Similarly, the officers who contract on behalf of the Government are not personally liable since they are acting for the Government and not for themselves.
The same is the law in England. In Macbeath v. Haldimand, which arose out of supplies of stores for a fort under the control of the Government of Quebec, it was held that public officers cannot be sued, either personally or in their official capacity, for contracts made by them in their official capacity.

4. Scope and Applicability
All State Government Departments and subordinate offices who are empowered for the procurement ,
Public Sector Undertakings, which are owned and controlled by the Government ,
Any Company , where 50 % share capital is hold by the State Government
Local Bodies like PRIs, Corporations, Municipal Councils etc.
Any Institution, Corporation, Pradhikaran, Society, Autonomous Body , which is formed by State Legislature or owned and controlled by the State Government.
Any Institution receiving grants from the State Government for the purpose procurement

5. Fundamental Principles of Public buying
Efficiency and Ecomomy
Value for Money
Honesty and Transparency
Promotion of Competition
Sustainable Procurement Policy

6. Role of Procurement Officer - 2.10
at least Group B level officer
member secretary of Procurement Committee
must ensure that the procurement procedure and principles are followed
availability of grants
organization must be benefitted by the whole procurement procedure.
The whole report of Procurement Procedure needs to be submitted

7. Preference for the vendors from the state (3.1.2.8)
The rate given by the vendor (out of state) is L-1and L-2 is the vendor from the state and if he is willing to supply the goods at the rate of L-1. 50% contract can be given to local vendor
The purchase committee is authorized to do the same.
For this purpose the vendors who are registered under VAT are considered as local vendors.

8. Incentives for Start-Up projects established in Maharashtra (3.1.2.9)
Start-Up projects – Notification of Ministry of Commerce and Industries dated 17/2/16.
5 Years from the date of registration of the firm.
Turnover less than Rs. 25 Crores.
Venture Capital Initiatives
As per the policy of DIPP (Department of Industrial Policy and Promotion) , the start- up projects will get concession for
Tender fee
EMD
Annual turnover
Experience Criteria

9. Yardsticks to Public Procurement
Need based procurement (avoid excess)
Procurement Vs Requirement
Specifications in terms of quality :- restriction on the use of brand name
Fair, Reasonable Transparent procedure
Administrative Approval
Reasonableness of Rate – LPP, market survey, total costing etc.
Priority to the suppliers of State – VAT holders; method of finalizing L1 ( )
Procurement within MRP & payment through RTGS
Each stage of procurement should be recorded

10. Procurement Thresholds
Purchases below Rs.5000/- : No need to call three quotations .Annual limit for such purchasing is Rs It can be done directly through manufacturer, authorised dealer and distributor.(3.2.2)
Purchases above Rs 5000/- and below Rs /- at one time : At least three quotations from the agency having VAT/TIN No. If the agency does not have Vat No., then PAN card of the supplier is needed.
Procurement on Rate contract of DGS&D is permissible only upto Rs. 1 CRORE (Annual Limit) for branded items.
Motor car can be procured directly from the manufacturer or dealer , But if the amount is more than 1 crore, then
e-tender process need to be followed.
Procurement above Rs /- shall be compulsorily by e tender.
Procurement Committee shall procure within their financial limits ; responsible for all the related decisions

11. Types of Procurement ( 3.2 )
Spot Purchase
Procurement by Quotation
Limited Tender Enquiry
Rate Contrct
Single source procurement
Swiss Challenge Procedure of Procurement
Expression of Interest
Procurement by E- Tender

12. Spot Purchase – 3.2.2 Less than Rs. 5000. Annual limit Rs. 50000.
Direct procurement by producer, authorized dealer, supplier.
Procurement officer must certify the quality and rate of the product.
Threshold limit of spot purchase may be increased by the Department of Industry after every 5 years.

13. Procurement by Quotation – 3.2.3 & 4.2
Rs Rs. 3 lakhs
minimum 3 quotations from open market .
splitting of order is not admissible .
maximum limit for procurement on quotation for the same item is Rs. 3 lakhs.
written invite to all the bidders, which contains terms and conditions, date and time for submission and opening of the quotation . Quotation is opened before the representatives of the vendors .
One quotation from one vendor.
VAT/CST no. and the copy of PAN card is required on the letter head,
publicity on the website of the department ; one weeks time for submission.

14. Single source procurement-3.2.6
Award for supply of a good or service that can only be purchased from one supplier because of its specialized or unique characteristics is called sole sourcing or single sourcing. Must be used exceptionally.
Natural calamity or any other critical situation
Procurement of additional items from the same vendor, for the want of standardization, reasonableness of cost etc.
National security
Developmental activities , research and study
Annexure 13 of the GR. Need is certified by of HoD or nominee and approval needs to be obtained . From the Secretary /CS/ ACS of the Department

15. Swiss Challenge Process of procurement – 3.2.7
Submission of proposal regarding rate and quality of goods by the vendor to the Deptt.
Counter proposal made by the Deptt. And submitted to other vendors to confirm rate
If lower rate is received, the negotiation is done with the original vendor
Award of contract to lower one

16. Swiss Challenge
Approval of High Power Committee is must. The Committee is headed by the Secretary of the Department.
Applicable for the products, which are rare and not easily available in the open market.
Vendor shall submit the detail proposal to the Department
Technical and financial scrutiny of the proposal is made by the Department.
Contract for the services can br made by using this method.

17. Expression of Interest- 3.2.8
Rates are already fixed by the Department.
The competition is based on the technical bid and specification
The technical design of the bid document is important
Marking system for the scrutiny
Technical Scrutiny is based on
Production capacity of the firm
Past Experience
Skilled and unskilled manpower
Certified/ audited balance sheet for last 3 years, etc.

18. Urgent Order Procedure – 3.3.1
Limited tender enquiry
Short period (upto one week or 5 working days whichever is more )
Higher rates likely to be quoted by suppliers
Certificate in the prescribed form as mentioned in Annexure 3 , signed by the HoD for the procurement of Rs. 1 crore and for more than Rs1 crore the approval of High Power Committee is required. ( 2.9.1)
To be used only when requirements are of an emergent, unexpected or un avoidable nature.

19. Repeat Order - 3.3.2 Placed only once
50% of original order or Rs. 10 crore ; whichever is less.
If original order is urgent tender enquiry – no repeat order
Placed within six months from the original work order.
Same quality ; same rate
Principle of ordinary prudence.
Approval of Regional Procurement Committee/ Procurement Committee is must

20. Tender Process at a Glance
Estimate Quantity and Amount
Framing technical specifications
Preparation of Tender Document
Publication of Tender Notice
Sale of Tender Documents
Pre Bid conference

21. Tender Process at a glance
Submission of Tenders
Opening of Tenders
Evaluation of Tenders
Finalisation and Approval
Award of Contract
Performance Security
Contract Agreement

22. Tender Period & Extension of Tender – 4.4.3
Lakh week or 5 working days whichever is more
25Lakh– 5Cro. – 2 weeks/10 working days whichever is more
5 Cro. & above – 3 weeks/15 working days whichever is more
Urgent Tender Enquiry -- 1 week/5 working days whichever is more

23. Extension of Tender – 4.4.3.1 First Extension - One Week
Second Extension - One Week
Finalization with conscience
Estimated Cost less than Rs. 10 Lakhs – Only one extension is enough
If the cost difference ranges from -20% to 10% ; can be accepted.

24. Tender Fee & EMD Estimated Cost Tender fee (Rs.) Yearly Increase (Rs.)
EMD (Rs.)
Upto Rs. 5 Lakhs
1000
100
5000
500
Rs.5 Lakhs -10 Lakhs
2000
200
10000
Rs.10 Lakhs -50 Lakhs
3000
300
50000
Rs.50 Lakhs – 1 Crore
100000
Above 1 crore
Respective Dpartment

25. Security Deposit - 4.6
Within 15 days from the date of work order. If the party is unable to submit the SD the office may cancel the tender.
SD can be retained till the warranty period , after the warranty period, if the Department does not receive any complaint SD can be returned by taking an undertaking on indemnity bond.
If the firm registered under Department of Industries / National Small Industries Corporation (NSIC) / Micro,Small and Medium Enterprises development Institute (MSMEDIS) , 3% of tender cost or Rs , whichever is less.
3% of the estimated cost : DD or Bank Guarantee ( Annexure 10 )
2% of estimated cost if
The firm is registered under DGS&D
The work is undertaken by any Govt., Semi Govt office or Zilla Parishads or any other State or Central Govt. Undertakings

26. Security Deposit - 4.6 No security deposit is received from
a. Oil companies of Central Government i.e. Indian Oil, Bharat
Petroleum, Hindustan Petroleum etc.
b. besides these companies , if request is received, the decision is
taken on case to case basis by the Deptt. of Indistry.
Return of SD
a. after completion of warranty period
b. no complaints have been received against the supplier.
c. NoC from the deptt.

27. Post Tender Action (4.7 )
Inspection of Goods. Communication of observations within 15 days from the date of receipt of goods.
Receipt of inspection note before payment
Submission of bills by Supplier
Release of Payment

28. EVALUATION PROCESS * Satisfaction of Conditions specific to the contract * Sample Testing * Capacity Evaluation * Turnover * Statutory documentation * Arrival at Outcome Price of the bid * Determination Of L-1, L-2, L-3 ……. * Determining Reasonableness of the L-1 Rates * Recommendation for Negotiation (if require)

29. POST CONTRACT MANAGEMENT
All clauses in the contract to be studied carefully.
Extension to Delivery Period not be entertained.
No relaxation in contract terms to be allowed except in very exceptional cases.

30. NEGOTIATIONS ( )
Post Tender negotiations should be generally avoided.
If unavoidable ,should be done only with L1 in case of purchase of goods.
Should be done only with H 1 in case of sale of material.
Negotiations ; not by a person but by the purchase committee.
Documents of negotiations shall be maintained.

31. Finalization of Tender (4.5.2 )
On the basis of price
If any other criteria is mentioned along with price, then tender can be finalized with that
The final decision of the committee shall be published on the portal of the department within 7 days.
Communication is made to the successful bidder in the format as mentioned in Annexure 7.
Tender acceptance prapatra. : Annexure 4 (A)
Procurement Officer must be confident regarding
1. availability of grants
2. all the required documents
3. best possible decision
4. conflict of interest.

32. IMP CLAUSES IN CONTRACT
Delivery Schedule
Pre-dispatch Inspection
Warranty
Risk purchase
Penalty

33. THANK YOU