1. NATIONAL SUMMIT ON PUBLIC PROCUREMENT1
NATIONAL SUMMIT ON PUBLIC PROCUREMENT
OVERVIEW ON GFR-2005
Presentation by: G A R Rao, Director (Finance)
Mazagon Dock LTD.

2. EVOLUTIONARY PROCESS OF GENERAL FINANCIAL RULES2
EVOLUTIONARY PROCESS OF GENERAL FINANCIAL RULES
1947 : IN THE FORM OF EXECUTIVE INSTRUCTIONS
1963 : 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 Managers
Chapter 6
Procurement of Goods and Services
Chapter 1 : Introduction
Chapter 2 : General System Of Financial Management
Chapter 3 : Budget formulation and implementation
Chapter 4 : Government Accounts
Chapter 5 : Works
Chapter 6 : Procurement of Goods and Services
Chapter 7 : Inventory Management
Chapter 8 : Contract Management
Chapter 9 : Grants-in-Aid and Loans
Chapter 10 : Budgeting and Accounting for Externally Aided Projects
Chapter 11 : Government Guarantees
Chapter 12 : Miscellaneous Subjects

4. GENERAL FINANCIAL RULES, 20054
GENERAL FINANCIAL RULES, 2005
Fundamental principles of Public Buying (Rule 137)
“Every authority delegated with the financial powers
of procuring goods in public interest shall have the
responsibility and accountability to bring
Efficiency,Economy and Transparency
in matters relating to Public procurement and
for fair and equitable treatment of suppliers
and promotion of competition in public procurement.”

5. FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING (RULE 137)5
FUNDAMENTAL 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 may
result in unwarranted expenditure.
Fair,transparent and reasonable procedure.
Get satisfied that the selected offer adequately meets the
requirement in all respects.
Offer is reasonable and consistent with the quality required.
Concerned procuring authority must place on record, in precise
terms,the considerations which weighed with it while taking
the procurement decision.

6. FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING6
FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING
RESPONSIBILITY AND ACCOUNTABILITY TO BRING
EFFICIENCY
ECONOMY
TRANSPARENCY
PROMOTION OF COMPETITION
FAIR AND EQUITABLE TREATMENT OF SUPPLIERS
RECORD THE CONSIDERATIONS FOR THE DECISION

7. POWER FOR PROCUREMENT OF GOODS Rule 140 :7
GFR
Equivalent Procedure in MDL
The ministries or departments have been delegated full powers to make their own arrangement for procurement of Goods
DGS &D
Delegation of Powers for CFA
Board of Directors
Procurement SubCommittee(PSC)
CMD
Functional Director
GGM,GM to the level of Manager

8. REGISTRATION OF SUPPLIERS(SR&R Dept) Rule 142:8
GFR
Equivalent Procedure in MDL
Eligible &Capable suppliers Credentials verification.
- Mfg. Capabilities
- Quality Control System
- Past Performance
- After Sales Service
- Financial Background
Item-wise list of suppliers
Registered 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 Performance
After Sales Service
- Financial Background
Documents as per statutory requirement
Site visits
Product wise list of , Permanent and Temporary supplier
Permanent vendors registered for 3 Yrs
Suppliers willing to continue will have to
apply for re-registration.
Vendor Rating is done on basis of :
Quality, Delivery, Services
Where >80% is Very good
< 40% is Unsatisfactory
Yearly Vendors Meet

9. PURCHASE OF GOODS WITHOUT TENDERS9
PURCHASE OF GOODS WITHOUT TENDERS
PURCHASE OF GOODS WITHOUT TENDERS
GFR
Equivalent procedure in MDL
Rule 145:
Upto ` 15000/- on each occassion
(Certificate to be recorded by Competent authority)
Rule 146:
>` 15000/- upto ` 1Lakh by 3 Members purchase committee
Rule 147:
Purchase of goods directely under rate contract(DGS&D)
Emergency Cash Purchase for Projects :
up to ` per item/service for projects
Petty Cash Purchase:
up to ` for petty miscellaneous items
Per purchase.
Delegated power upto ` 10 Lakhs
Items covered under DGS&D

10. PURCHASE OF GOODS WITH TENDER10
GFR
Equivalent Procedure in MDL
Rule 150:
Advertised Tender Enquiry
Subject to exemptions incorporated
under Rules 151 and 154.
(for the value above ` 25L)
Rule 151:
Limited Tender Enquiry.
(upto ` 25L)
No. of supplier more than Three
Rule 154:
Single Tender Enquiry
Particular firm is the
manufacturer of required goods
In case of Emergency
Web Tender - ` 5L to `25L
Global/Press Tender- > ` 25L
Upto ` 5L No of Supplier more than Five.
Items Proprietery in nature (PAC)
Customer instruction/Requirement
Emergency Tender : Exigency due to operational or technical requirements
CMD> `25L Director:Up to ` 25L
Enquiry by Fax/ /Courier/Speed Post
TEF with essential conditions only.

11. CONTENTS OF BID DOCUMENT RULE 155:11
GFR
Equivalent Procedure in MDL
Instruction to Bidders
Condition of Contract
Schedule of Requirement
Specification and allied technical.
Price schedule
Contract form
Other 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 instruction
Statutory Requirement
Official 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 159:12
GFR
Equivalent Procedure of MDL
Advance payment is demanded by supplier for maintenance contract
Advance payment is demanded by Firms against turnkey contracts/High value/Overseas supplies
Limit for Advance Payment
a) 30% to Private firm
b)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: 13
GFR
Equivalent Procedure in MDL
Bidding document to be self –contained and comprehensive without any ambiguities
Criteria for eligibility and qualification
-Date ,place and time for sending/opening bids
-Terms of delivery
Suitable provision for settlement of dispute.
Reasonable time for sending bids.
The bids should be opened in public
The 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 bids
Terms of Delivery:
-Indian :Free delivery at MDL
- Overseas: FOB
Indian arbitration and conciliation act 1996
Press Tender: 4 Wks,Web Tender : 3 Wks
Limited :2 Wks for local bidder ,
Emergency : 1 Wk for local bidder
Part I&II bids witnessed by the bidders
Technical specification prepared by Design

14. Equivalent Procedure in MDL
TRANPARENCY,COMPETITION,FAIRNESS AND ELIMIMNATION OF ARBITRARINESS IN PROCUREMENT PROCESS Rule 160: 14
GFR
Equivalent Procedure in MDL
In case of turn-key projects pre-bid conference to be indicated in bid,for clarifying issues/doubts.
Criteria /Factors for evaluating the bids
Received 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 bidder
Pre 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 defined
in bid documents
Bid evaluated by designated technical
Evaluation Committee
Bidders cannot alter/modify bids.
Based on specific reason and beyond wide
variation in prices with approval of CFA
Lowest Technically qualified bidder

15. Equivalent procedure in MDL
EFFICIENCY,ECONOMY AND ACCOUNTABILITY IN PUBLIC PROCUREMENT SYSTEM Rule 161: 15
GFR
Equivalent procedure in MDL
Appropriate time frame of each stage of procurement should be prescribed to reduce delay.
Placement of contract with in original validity of bids
Rate contract system
Techno-commercial scrutiny- 4 Wks
Order Placement- 6 Wks after Techno-commercial clearance
Overall time frame within validity period
Coded items/Service/Maintenance Contract
DGS&D contract with supplier consent

16. BUYER IN PRIVATE SECTOR16
BUYER IN PRIVATE SECTOR
Principles of Confidentiality
Compliance with Statutory and Internal Audit
Responsible to mainly Share Holders
BUYER IN PUBLIC SECTOR
Transperacy ,Non Discrimination & Equal Opportunity to all
Rule based,Compliance with Government Audit(CAG) in addition to Statutory and internal Audit.
Responsible to Public