Procurement Procedure in SSA

Procurement Procedure in SSA

PART - I Introduction (a) Main Considerations
(b) Objectives of Effective Procurement (c) Procurement in SSA Financial Ceiling Levels of Procurement Procurement Plan

Accountability and Ethical Standards
PROCUREMENT Main Considerations Accountability and Ethical Standards Economy Efficiency Fairness Transparency

Main Considerations of Proficient Procurement
Economy: Give the purchaser best value for money. Efficiency: Best procurement is simple and swift, producing positive results without protracted delays. Fairness: Impartial, consistent, and therefore reliable. Transparency: Maintains rules and procedures that are accessible and unambiguous. It is not only fair, but should be seen to be fair. (v) Accountability and Ethical Standards: A key deterrent to collusion and corruption, and a key prerequisite for procurement credibility.

Why is Procurement Important?
In procurement terms inputs are generally grouped into three categories: (i) Civil Works – School Infrastructure and facilities like New PS, UPS, Residential Schools, Hostel, ACR, HM Room, BRC/URC, CRC, Drinking water, Toilets, Girls Toilet, Ramps, Handrail, Electrification, Retro-fitting, Boundary wall/ fencing, Major Repairs, etc. (ii) Goods - Typically equipment, computers, furniture, textbooks, library books, uniforms, TLE, TLM, other materials, supplies, commodities, etc. Services – Hiring of services including academic, technical and resource support provided by institutions/organizations in all areas, research studies, third party quality evaluation of civil works, auditors etc. The quality, timeliness, local appropriateness and affordability of those procured inputs can largely determine whether the public investments will succeed or fail.

Effective Procurement
Objectives Timely Delivery as per schedule Right Quality product Lowest possible price Meeting recognized standards Reliable suppliers Right quantities

PROCUREMENT IN SSA Strictly follow procurement procedure prescribed in Chapter IX of the Manual on Financial Management and Procurement (FM&P). Mandatory to follow the Manual provisions for all procurements under SSA. Follow States’ financial ceilings except when not prescribed by MHRD. Strictly follow MHRD’s financial ceilings when ever prescribed for various method of procurement which shall prevail on States’ ceilings.

Points to be kept in view
Identification of Needs. Ensure availability of 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. Procure miscellaneous items of stores not covered by bulk requirement as per actual need. Make all purchases to the best advantage after comparison of competitive prices. Strictly follow the level of procurement prescribed in the Manual Encourage decentralized procurement Avoid centralized procurement of items prescribed at lower level

School/Community/ KGBV
PROCUREMENT Strictly follow the levels of procurement provided in Para 112 of the Manual on FM&P Levels of procurement School/Community/ KGBV CRC / BRC District State 9 9

Special Training related Items
School/KGBV level All civil works, except buildings for Residential Schools/Hostels and KGBV. Furniture to Govt. UPS Library Books for schools Teaching Learning Material School grant. Maintenance grant. Teaching Learning Equipment REMS Learning Enhancement Programme (LEP). Items required for KGBV. Uniform Special Training related Items TLM, Contingency etc.

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

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

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).

PART - II Method of Procurement (a) Open Tender (b) Limited Tender
(c) Single Tender (d) Without Quotation (e) Through Community Steps involved in various method of Procurement Major Procurement in SSA

Procurement through communities Procurement without tender / quotation
Method of Procurement Method of Procurement Procurement through communities Open Tender Limited Tender Single Tender Procurement without tender / quotation

OPEN TENDER Meaning Competitive bidding procedure and is the most efficient and economic way of procuring goods or works. Provides for adequate competition in order to ensure reasonable prices. Ensures transparency and equal opportunity to all. The methods used in the evaluation and the award of contracts are made known to all bidders. Items covered Civil works construction of BRC, Residential schools / Hostel, KGBV, SIEMAT and any other civil works specifically approved by Project Approval Board through contractors. Goods

OPEN TENDER 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 bidder based on post qualification; Negotiation with L-1 (if necessary) Contract award; and Contract performance

Tender documents: Should be user friendly, self contained, comprehensive, unambiguous and relevant to the objective of purchase. Use Standard State Government’s tender documents duly modified, if necessary, to cover the following sections: Section - I – Invitation for Bids (IFB) Section - II – Instructions to Bidders (ITB) Section - III – General Conditions of Contract Section - IV – Special Conditions of Contract Section - V – Schedule of Requirements Section - VI – Technical Specifications Section - VI-A – Post Qualification Criteria Section - VII – Bid form and Price Schedule Section - VIII – Bid Security Form Section - IX – Contract Form

Section - X – Performance Security Form
Section - XI – Performance Statement Section - XII – Manufacturers Authorization Form Section - XIII – Form for Bank Guarantee for Advance Payment Section - XIV – Performa for Equipment and Quality Control employed by the Manufacturer Important Clauses: Notification of Tender Notice Sale of tender documents Schedule of requirement Bid Form Bid Prices Technical Specifications Post-Qualification Criteria Bid Validity Period

Earnest Money Pre-bid Conference Signing of Bids Submission of bids Opening of bids Evaluation criteria Negotiation with L1 Award of contract Security deposit Retention money Signing of agreement/contract Payment terms Adjudicator Force Majeure Liquidated damages Corrupt or Fraudulent Practices General Conditions of Contract (GCC) Special Conditions of Contract (SCC)

Procurement Steps Notification of Tender Notice
Timely notification of bidding opportunities is essential in competitive bidding. Invitation to bid to be published in newspapers, and at least in one national English daily, if value is more than ` 20 lakh. While a gist of the notification is published in the news paper detailed notification be uploaded on State SSA’s website. Notification should cover: Cost of bidding documents and mode of payment Details of goods / equipment /works, quantity, delivery/ completion date Date of commencement and last date for sale of bidding documents

Procurement Steps Notification of Tender Notice
Last date and time for receipt of bids Time and date of opening of bids Place of opening of bids Address for communication Earnest Money and its mode of payment Last date for receipt of tender documents – The day following the date for close of the sale of tender documents. Tendering period – Not less than 30 days from the date of sale of tender documents.

Procurement Steps Sale of Tender Documents
Begin only after publication of notification of tender. Close one day prior to the last date for receipt of tender. Prescribe a reasonable cost. Levy additional charges in case of sending by post or courier. Allow to down load from web site, subject to payment of the prescribed cost of the tender documents while submitting it. Non-refundable cost in the form of a Demand Draft / Bankers’ Cheque on any Nationalized/Scheduled bank in favor of the purchaser/employer Not transferrable from one bidder to another All associated cost borne by the bidder

Procurement Steps Schedule of Requirement
Use the prescribed format given in the bidding documents Clearly specify the work to be carried out, location, goods to be supplied, place of delivery / installation, schedule of delivery / completion, earnest money deposit, minimum performance requirement, warranty and maintenance requirement and other terms & conditions Prepare based on the items to be procured Include similar items in one schedule or package, include dissimilar items in separate schedule or package

Procurement Steps Bid Form
Use the prescribed form given in bid documents Indicate brief description of the goods / equipment / work, quantity and bid price This is an undertaking given by the bidder to the purchaser on the acceptance of the conditions and the bid validity period Signed by the bidder or his authorized representative holding power of attorney Unsigned bids not to be accepted

Procurement Steps Bid Prices
Indicate the unit price, total bid price including taxes and duties, transportation and other incidental charges for the total quantity required in the price schedule Allow to submit bids for any one or more schedule/package in the case of multiple schedule/package and offer discounts for combined schedules/packages Should quote the complete requirement specified under each schedule/package failing which such bids need not be considered Remain fixed during the currency of the contract unless in the case of civil works where prices may vary as per the variation orders issued Reject all adjustable price quotations Need not consider offer of any conditional discounts In the case of discrepancy between unit price and total price, unit price shall prevail. In the case of discrepancy between amount in figures and words, amount in words shall prevail.

Procurement Steps Technical Specifications
Prescribe technical specifications in Annex – IV of the Bid Documents, required for each item after carrying out the market survey to ascertain updated version of that item. Ensure clarity while drawing specifications Typical technical specifications of Text Books are given in Annex-I. Use the internationally or nationally accepted standards Based on relevant characteristics and / or performance requirements Avoid references to brand names, catalogue numbers or similar classifications In case brand name or catalogue number is necessary to quote, add the words “or equivalent” Permit the acceptance of offers which have similar characteristics and provide performance at least substantially equivalent to those specified Define the test, standards, and methods that will be employed to judge the conformity of equipment as delivered, or works as performed, with the specifications Deviations not allowed after opening of bids

Procurement Steps Documents Establishing Technical Qualifications
Documentary evidence of conformity in the form of literature, drawings and data which consist of : a detailed description of the essential technical and performance characteristics of the goods ; a list giving full particulars, including available sources and current prices, of spare parts, special tools, etc., necessary for the proper and continuing functioning of the goods for a period of three years, following commencement of the use of the goods by the purchaser; and an item-by-item commentary on the purchaser’s Technical Specifications demonstrating substantial responsiveness of the goods and services to those specifications or a statement of deviations and exceptions to the provisions of the Technical Specifications.

Procurement Steps Documents Establishing Technical Qualifications
For purposes of the commentary to be furnished, the Bidder shall note that standards for workmanship, material and equipment, and references to brand names or catalogue numbers designated by the purchaser in its Technical Specifications are intended to be descriptive only and not restrictive. The Bidder may substitute alternative standards, brand names and/or catalogue numbers in its bid, provided that it demonstrates to the purchaser’s satisfaction that the substitutions ensure substantial equivalence to those designated in the Technical Specifications.

Procurement Steps Post-Qualification Criteria
Prescribe in the Annexure given in the bidding documents. Typical post qualification criteria is given in Annex-II. Provide documentary evidence to establish post- qualification Manufacture’s authorization in case the bidder himself is not the manufacturer; Ensure financial, technical and production capability necessary to perform the contract

Procurement Steps Bid Validity Period
Remain valid for 90 days after the date of bid opening Reject the bids in case of shorter period of bid validity In case delay anticipated for completing the formalities of evaluation and award of contract extension of bid validity with the consent of the bidders Seek extension of validity of earnest money deposit in the case of extension of bid validity period No price variation No forfeiture of earnest money in case the bidder refuse for the extension

Procurement Steps Earnest Money (Bid Security)
To protect the purchaser against the risk of bidders conduct which would warrant forfeiture of earnest money Amount - 2 % of the estimated contract value indicated in fixed amount for all prospective bidders Method of payment - bank guarantee, irrevocable letter of credit, demand draft or banker’s cheque issued by a Nationalized/scheduled bank Date of Deposit - after the date of notification of the bid Validity Period days beyond bid validity period of the bid Reject the bids, if, not accompanied by the requisite amount, not covering the validity period and not adhering to the mode of payment Return to unsuccessful bidders soon after the final acceptance of bid Adjustment in the case of successful bidders against security deposit (performance security) Forfeiture - withdrawal of bids during bid validity, non acceptance of correction of arithmetic errors, failure to sign the contract, not furnishing security deposit within the stipulated time by the successful bidders Not forfeited in case of refusal for the extension of bid validity period

Procurement Steps Pre-bid conference
Arranged by the purchaser/employer as per the notification to provide clarifications on the provisions of the bidding documents to the prospective bidders. Bidders can seek the clarifications in writing well in advance before the scheduled date Issue addendum, if needed as a result of the pre-bid conference, well in time to enable the bidders for compliance In case sufficient time is not available, extend the tendering period Furnish the minutes of the pre-bid conference along with the addendum to all bidders who had purchased the bids and also along with the bid documents to the bidders purchasing the documents subsequently.

Procurement Steps Signing of Bids
Signed by the bidder or his representative who is authorized to do so by a power of attorney which should be attached with the bid Bid in original in conformity with the bid documents All corrections be signed with date All pages of bid documents be signed

Procurement Steps Submission of Bids
Bids typed or written in indelible ink and sign by the bidder or his representative, authorized by a power of attorney (attach with the bid). Single Envelope System: Submit both the technical and financial bid along with earnest money deposit in a single envelop. Double Envelope System: Submit the technical and financial bids in separate envelopes along with earnest money deposit indicating on each envelope “Technical Bid” or “Financial Bid” as the case may be. Seal the original and copy of bid in separate inner envelopes and then place all the inner envelopes in outer envelope and seal. Address both the envelopes to the purchaser indicating “Do not open before _______ hours on________. Sent by post/courier or dropped in person in the bid box placed in the purchaser’s office. Bids received after deadline need not be considered and returned unopened. Reject Bids sent by or fax. Accept only one bid from one bidder.

Procurement Steps Deadline for submission of bids Late Bids
Bids must receive within the time and date specified in the invitation for bids. In the event of the specified date for submission of bids being declared a holiday, the bids will be received up to the specified time on the next working day. The purchaser may extend this deadline by amending the bid documents which will be strictly adhered to by the purchaser and the bidder. Late Bids The bidder should ensure timely submission of bids. Any bids received after the prescribed deadline shall be rejected and returned to the bidder unopened.

Procurement Steps Opening of Bid
Follow the procedures described in the Instructions for Bidders (IFB). Open in public in the presence of bidders or his authorized representatives ( maximum 2) who choose to attend the bid opening process. The authorized representatives must carry an authorization letter from the bidder. Strictly follow the date, time and place of bid opening specified in the IFB Open immediately after the deadline for submission of bids but not exceed more than one hour from the deadline for submission of bids. In the event of the specified date for opening of bids being declared a holiday, the bids will be opened up to the specified time and location on the next working day. Obtain the signature of the bidder or his authorized representatives who are present for having attended the bid opening.

Procurement Steps Manner of Opening the bids
The Purchase Committee shall count the number of bids received and allot numbers to each bid based on the total number of bids. If 10 bids are received, the numbers will be allotted as 1/10, 2/10, 3/10 and so on. All the members of the Committee shall initial with date on the outer cover of all the bids. In case the envelopes containing the bid offer are not properly sealed, such bids need not be opened and rejected outright. The reasons for not opening such bids shall be recorded on the face of the envelope and all the members of the Committee shall initial with date. Read out at the bid opening, the bidders’ name, bid modifications or withdrawals, bid prices, discounts, and the amount of earnest money deposit.

Procurement Steps Manner of Opening the bids
No bid shall be rejected at bid opening except those received after the deadline for receipt of bids and unsealed bids which shall be returned to the bidder unopened. Prepare a summary of the read out bid prices as per the format given in Annex-III. All members present in the bid opening must sign with date all pages of the bid documents, and the supporting documents submitted by the bidder except printed materials. Prepare the Minutes of the bid opening. To assist in carrying out the opening and preparing of the record, a bid opening check list is provided in Annex-IV.

Procurement Steps Clarification of bids
Request clarifications of bidders on ambiguities or inconsistencies, if any, in bid. During evaluation, if clarifications considered necessary, seek from the bidder in writing, indicating time limits for submission of the response. Not to seek or accept any change in the price or scope of the originally offered goods, works, or services except for the correction of arithmetic errors. The bidder shall submit the clarifications in writing within the specified time limit. No circumstances shall justify meetings or conversations between the purchaser and bidders during the bid evaluation process.

Procurement Steps Evaluation of Bids Preliminary Examination of Bids
Begin immediately after bid opening the evaluation process. The purpose of preliminary examination is to identify and reject bids that are incomplete, invalid, or substantially non-responsive to the bidding documents and therefore are not to be considered further. Such bids shall not subsequently be made responsive by correction or withdrawal of the non conforming deviation or reservation. Carry out the following checks:

Procurement Steps Verification
Attention should be given towards deficiencies that, if accepted, would provide unfair advantages to the bidder. Sound judgment must be used: for example, simple omissions or mistakes arguably occasioned by human error should not be grounds for rejection of the bid. Rarely is a bid perfect in all respects. However, the validity of the bid itself, for example, its signatures, must not be in question. If the bidder is an agent, an authorization from the supplier or manufacturer must be provided in addition to any documentation required of the supplier or manufacturer itself.

Procurement Steps Earnest Money Deposit
Must conform to the requirements of the ITB, and it must accompany the bid. If the earnest money deposit is issued as a bank guarantee, it must be consistent with the wording of the bid security form provided in the bidding document. Submission of a copy of the security or submission of a counter- guarantee naming the purchaser’s bank instead of the purchaser is unacceptable. Deposit for an amount smaller or for a period shorter than the one specified in the IFB, not in conformity with the form and bank specified in ITB are not acceptable.

Procurement Steps Completeness of Bid
Unless the bidding documents have specifically allowed partial bids—permitting bidders to quote for only select items or for only partial quantities of a particular item—bids not offering all of the required items should ordinarily be considered non-responsive. However, under works contracts, missing prices for occasional work items are considered to be included in prices for closely related items elsewhere. If any erasures, interlineations, additions, or other changes have been made, they should be initialed by the bidder. Missing pages in the bids shall be a cause for rejection of the bid.

Procurement Steps Substantial Responsiveness
A substantially responsive Bid is one which conforms to all the terms and conditions, and technical specifications prescribed in the bidding documents, without material deviation or reservation. Major deviations to the commercial requirements and technical specifications are a basis for the rejection of bids. As a general rule, major deviations are those that, if accepted, would not fulfill the purposes for which the bid is requested, or would prevent a fair comparison with bids that are properly compliant with the bidding documents.

Procurement Steps Examples of major deviations include:
Stipulating price adjustment when fixed price bids were called for Failing to respond to specifications by offering instead a different design or product that does not offer substantial equivalence in critical performance parameters or in other requirements Phasing of contract start-up, delivery, installation, or construction not conforming to required critical dates or progress markers Sub-contracting in a substantially different amount or manner than that permitted Refusing to bear important responsibilities and liabilities allocated in the bidding documents, such as performance guarantees and insurance coverage Taking exception to critical provisions such as applicable law, taxes and duties, and dispute resolution procedures Those deviations that are specified in the ITB as requiring rejection of the bid (such as, in the case of works, participating in the submission of another’s bid other than as a subcontractor).

Procurement Steps Detailed Preliminary Examination
The results of preliminary examination should be presented in Annex-V. If the bid fails preliminary acceptance, the reasons must be clearly explained in footnotes or in an attachment, as necessary Detailed Preliminary Examination A typical Checklist for the detailed preliminary examination of the bid is given at Annex-VI. Reject the bids determined as non-responsive in the check list. Technical Evaluation In combined bids invited in one envelope system, the technical evaluation will be carried out simultaneously by a Technical Committee constituted for this purpose. The ranking system by allotting marks will not be followed in the case of technical evaluation of goods/equipment and works.

Procurement Steps The Technical Committee will examine the bids with reference to the technical specification specified in Annexure of the bidding documents and comment on the responsiveness of the technical specifications. Reject the bids which do not conform to the technical specifications specified in the bidding documents. The format to ascertain responsiveness to technical aspects is provided in Annex-VII. In double envelope system, the evaluation of technical qualification is carried out first and financial evaluation is done only the bids that qualifies technical qualification. Evaluation and comparison of substantially responsive bids Only those bids surviving preliminary examination need to be examined in this phase. The purchaser reserves the right to accept or reject any variation, deviation, or alternative offer.

Procurement Steps Determination of post qualification criteria
Variations, deviations, and alternative offers and other factors which are in excess of the requirements of the Bidding documents shall not be taken into account in bid evaluation. If the Bid of the successful Bidder is seriously unbalanced in relation to the purchaser’s estimate of the cost of goods/equipment to be supplied under the contract, purchaser may require the Bidder to produce detailed price analysis of ex-factory/ex-warehouse/off-the-shelf price of the goods offered, such price to include all costs as well as duties and taxes paid or payable, cost of incidental services, transportation, insurance etc. Determination of post qualification criteria The purchaser will determine to its satisfaction whether the Bidder that is selected as having submitted the lowest evaluated responsive bidder meets the post qualification criteria specified in the Annexure of ITB and is qualified to perform the contract satisfactorily. The determination will take into account the Bidder's financial and production capabilities.

Procurement Steps It will be based upon an examination of the documentary evidence of the Bidder's qualifications submitted by the Bidder as well as such other information as the purchaser deems necessary and appropriate. A typical check list for the determination of post qualification criteria is given in Annex-VIII. This may be modified suitably in conformity with the post qualification criteria prescribed in Annexure of ITB used for the procurement. If the lowest evaluated bidder fails post qualification, its bid should be rejected, and the next ranked bidder should then be selected subject to fulfillment of post qualification. If successful, this bidder should receive the award. If not, the process will continue. The rejection of a bid for reasons of post qualification requires substantial justification, which should be documented in attachments to the bid evaluation report.

Procurement Steps Negotiation Inspection
In exceptional cases the purchaser may undertake negotiation with the lowest evaluated responsive bidder (L1) Inform the bidders in writing to attend the negotiation proceedings in the appointed time by giving sufficient time to attend In case the rates even after negotiation are very high , invite fresh bids after rejecting all bids Inspection Premises inspection - In case the purchaser desired to carry out the inspection of the premises of the supplier/contractor, the same may be carried out before the award of contract.

Procurement Steps Performance Testing – Test at the supplier’s premises on test stands on measured data, corrected data and calculated performance value, compared with specifications. Packing and Marking Inspection – Verification of equipment before packing, checking of packing material, fixation, protection, desiccators, handling signs and documentation. Supervision of Loading – Verification of packing material, cleanliness of container/truck/rail car, loading operation, stowing, fastening, protection and transport documents. Commissioning Testing – Check the testing program, the equipment, measuring instruments and testing methods. Reporting performance test results.

Procurement Steps Repeat Orders
Quantity increase/decrease 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 Right to Accept any Bid or Reject all Bids The purchaser has the right to accept or reject any bid and to annul the bidding process and reject all bids at any time prior to award of contract. Rejection of all bids Lack of competition Tenders not substantially responsive Review the causes justifying the rejection Obtain the approval of competent authority

Procurement Steps Award of Contract Award Criteria
Award the contract within the bid validity period. Award the contract to the successful lowest evaluated responsive bidder The selected bidder need not undertake work not specified in bidding documents or to modify his bid. Single offers received: Consider if; publicity was adequate, bid specifications / conditions were not restrictive or unclear and bid prices are considered reasonable.

Procurement Steps Notification of Award (Para 26.2)
Within the bid validity period the purchaser may notify the successful bidder in writing on the acceptance of bid which will constitute the formation of contract Upon furnishing of security deposit by the successful bidder notify promptly each unsuccessful bidder and discharge their earnest money deposit.

Procurement Steps Contract Document
Define the following clearly in the contract document the scope of work to be performed: the goods to be supplied the rights and obligations of the purchaser and of the contractor or supplier the functions and authority of the engineer, if one is employed by the Purchaser in the supervision and administration of the contract. Use the format of contract given in Annexure of the bidding documents Documents forming an integral part of the agreement: the Bid Form and the Price Schedule submitted by the Bidder; the Schedule of Requirements; the Technical Specifications; the Purchaser’s Notification of Award. approved rates, purchase order/ work orders and other instructions issued by the Purchaser.

Procurement Steps Security Deposit Retention Money
5% of the contract value to protect the implementing agency in case of breach of contract by the contractor/supplier. Refund within one month of the completion of supply of goods/ works or on the expiry of guarantee/ warranty/maintenance period. Forfeited in case the bidder fails to make complete supply satisfactorily or complete the work in time. Retention Money In the case of civil works contract - 5% of contract price Retained 50% till completion of the work and Retained 50% till the end of the defects liability or maintenance period

Procurement Steps Signing of Agreement
On acceptance of the bid, the Purchaser notifies the successful bidder and send the bidder the prescribed Contract Form, incorporating all agreements between the parties Within 21 days of receipt of contract form, the successful bidder will sign the contract and returns to the purchaser On signing of the agreement the same will constitute the award of contract on the bidder. The contractor/supplier will have to bear all relevant expenses in connection with signing of agreement including the purchase of stamp papers.

Procurement Steps Corrupt or Fraudulent Practice
Bidders to observe highest standard of ethics during the procurement and execution of contract; Corrupt practice means offering, giving, receiving or soliciting anything of value to influence the action of officials in the procurement process; Fraudulent practice means a misrepresentation of facts in order to influence a procurement process or the execution of a contract or collusive practice among bidders designed to establish bid prices at artificial non-competitive level to deprive the purchaser of the benefits of free and open competition; Such bids will be rejected and declare the bidder ineligible for further award of contract financed by the purchaser.

Procurement Steps General Conditions of Contract (GCC):
Follow the provisions of the General Conditions of Contract prescribed in the bidding documents Special Conditions of Contract (SCC). Follow the provisions of the Special Conditions of Contract prescribed in the bidding documents Adjudicator Appointed jointly by the purchaser and bidder to resolve disputes in the first instance. Disputes or differences shall be settled in accordance with the Arbitration and Conciliation Act, 1996. Consist of three Arbitrators, one is to be appointed by the purchaser and the bidder, the third shall be chosen by the two Arbitrators so appointed who will be the presiding Arbitrator. If one of the parties fails to appoint its Arbitrator within 30 days after receipt of the notice of the appointment of its Arbitrator by the other party, then the presiding Arbitrator shall be nominated by Indian Council of Arbitration.

Procurement Steps Delivery and Damages
Delivery of the goods shall be made by the Supplier in accordance with the terms specified by the Purchaser in the notification of the award. The documents to be furnished by the Supplier are given below: (i) Copies of the Supplier invoice showing contract number, goods' description, quantity, unit price, total amount; (ii) Railway receipt/road transport receipt/airway bill/bill of lading and acknowledgment of receipt of goods from the consignee(s); (iii) Insurance Certificate; (iv) Manufacturer's/Supplier's warranty certificate; (v) Inspection Certificate issued by the nominated inspection agency, and the Supplier's factory inspection report; and (vi) Certificate of Origin their representatives.

Procurement Steps Terms of Payment Typical terms of payment
The method and conditions of payment to be made to the Supplier are given in Special Conditions of Contract. Typical terms of payment Advance Payment: Pay 10% of the Contract Price within 7 days of signing of Contract on a simple receipt. Obtain a bank guarantee for the equivalent amount valid until the Goods are delivered. On Delivery: Pay 80% of the contract price on receipt of Goods and upon submission of the requisite documents On Final Acceptance: Pay the remaining 10% of the Contract Price within 30 days after the date of the acceptance certificate issued by the Purchaser’s representative for the respective delivery.

Procurement Steps Liquidated Damages
Include in the conditions of contract to levy damages for: Delay in delivery of goods; Delay in completion of works; Failure of the goods or works to meet performance requirements @ 0.5% per week of the contract value and a maximum of10% of the contract value.

Procurement Steps Force Majeure
Clause 23 of the GCC provides Force Majeure conditions. In case of natural calamities or an event beyond the control of the supplier/contractor the delay in performance will not forfeit the performance security or will not charge liquidated damages. In such situations the supplier/contractor will notify the purchaser in writing and continue to perform its obligations under the contract as far as it is reasonable practical and seek all reasonable alternative means for performance not prevented by force majeure.

LIMITED TENDER Items covered: Invitation for quotations –
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.

LIMITED TENDER Invitation for quotations – Bid Price
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. 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.

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;

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.

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.

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

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.

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

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

PART - III Service Contract Selection of NGOs Post Review
Mis-Procurement Complaint Handling Mechanism Key Observations

Service Contract Considerations High Quality Economy Efficiency
Transparency Economy

Service Contract Selection process Preparation of Terms of Reference
Preparation of Cost Estimate and Budget Advertisement, seeking Expression of Interest (EOI) short listing of consultants/firms based on EOI Issue of Request for Proposal (RFP) to short listed Consultants/firms. Receipt of RFP in two envelope system, technical and financial proposals separately. Formation of Evaluation Committee Evaluation of Technical proposal and assign individual mark by each member on the basis of responsiveness to the TOR Open the Financial proposals of the qualifying Consultants publicly in the presence of the Consultants/representatives Final discussions including negotiations Award of contract

Service Contract Terms of Reference (TOR)
Prepare a well-defined TOR specifying the services to be provided on the following lines: Background information; A precise statement of objectives; An outline of tasks to be carried out; A time schedule for completion of tasks; The support/inputs provided by the Client; Composition of Review Committee to monitor the services; List of key personnel whose CV and experience would be evaluated.

Service Contract Preparation of Terms of Reference
Preparation of Cost Estimate and Budget Advertisement, seeking Expression of Interest (EOI) short listing of consultants/firms based on EOI Issue of Request for Proposal (RFP) to short listed Consultants/firms. Receipt of RFP in two envelope system, technical and financial proposals separately. Formation of Evaluation Committee Evaluation of Technical proposal and assign individual mark by each member on the basis of responsiveness to the TOR Open the Financial proposals of the qualifying Consultants publicly in the presence of the Consultants/representatives Final discussions including negotiations Award of contract Performance of contract

Service Contract Cost Estimate and Budget
Based on the assessment of resources needed to carry out the assignment, staff time, logistical support and physical inputs. Costs divided into two broad categories (a) fee or remuneration and (b) reimbursable. Ensure that the requested services are within the current financial budget. Advertising Not necessary for short term consultancy services. Advertisement seeking Expression of Interest for other services, is published in regional and national newspapers having wide circulation and uploaded in the web site of the Client. Specify requisite qualifications, experience etc. in the notification.

Service Contract Short list of Consultants Receipt of proposals
Short list the Expression of Interest received based on the relevant qualifications and experience specified in the notification. Receipt of proposals Issue letter of Invitations along with the TOR to the short listed consultants/firms. Seek proposals from the short listed consultants / firms in two envelope system i.e, technical proposal in one envelope and financial proposal in another envelope. Evaluation Committee Constitute evaluation committees separately for technical and financial evaluation This committee will evaluate the proposals received from the consultants / firms

Service Contract Evaluation Evaluation of Technical Proposal
Carried out in two stages, first the quality and then the cost Until the technical evaluation is concluded the evaluators of technical proposals will not have access to the financial proposal Evaluation of Technical Proposal Carried out on the basis of the responsiveness to the TOR. The technical evaluation committee will prepare an evaluation report on the technical aspects of the proposal. The report shall substantiate the results of the evaluation and describe the relative strength and weaknesses of the proposals. Individual marks will be assigned by each member and a consolidated mark sheet is prepared. Minimum qualifying marks should be provided in the Letter of Invitation and those who are not obtaining this will be disqualified

Service Contract Evaluation of Financial Proposal
On completion of technical evaluation, notify those consultants whose proposals did not meet the minimum qualifying marks that their financial proposals will be returned after completing the selection process. Simultaneously notify the consultants who have secured the minimum qualifying marks and intimate the date and time set for opening the financial proposal. Allow sufficient time for attending the opening of financial proposals The financial committee shall open the financial proposal publically in the presence of representatives of the consultants / firms who choose to attend. Read aloud the name of the consultant / firm, the quality scores and the proposed prices when the financial proposals are opened Prepare the minutes of the public opening.

Service Contract Final discussions (negotiations)
Held with the selected consultant /firm on the following issues The selected consultant /firm shall not be allowed to substitute key staff unless both parties agree that undue delay in the selection process makes such substitution unavoidable or that such changes are critical to meet the objectives of the assignment. Financial discussions shall include in addition to fee / remuneration, clarification of the consultant’s / firm’s tax liability and how this tax liability shall be reflected in the contract. In case these discussions fail to result in an acceptable contract, terminate the process and invite the next ranked consultant / firm for discussion After the process is successfully completed, promptly notify other consultants /firms on the short list that they were unsuccessful

Service Contract Award of Contract
Award the contract to the selected consultant / firm Use the prescribed contract agreement form for signing the contract Indicate the fee/remuneration negotiated with the selected consultant/firm to be paid for the services in the contract agreement and also the terms of payment

Non-Government Organizations
Preparation of Terms of Reference Publication of advertisement Formation of Evaluation Committee Short-listing of NGOs on the basis of specifications and scope of the work specified in the TOR. Desk appraisal and if found suitable, field appraisal by the Evaluation Committee Recommendation by the Evaluation Committee for the selection of NGOs to the Grant-in-Aid Committee. Approval by Grant-in-Aid Committee based on the report of the Evaluation Committee on the desk and field appraisal.

PROCUREMENT Post Review Mis-procurement
Government of India or the funding agencies shall undertake post review of the contracts awarded on procurement of goods, works and services on a random basis. All procurement documents should be retained and made available to the review team. Mis-procurement Goods, works and services that have not been procured as per the Manual shall be treated as mis-procurement and SSA funds cannot be used for such procurement.

PROCUREMENT Complaint Handling Mechanism
Set up complaint handling mechanism at national as well as State level to deal with complaint received from contractors/suppliers. Dealt with at a level higher than that of the level at which the procurement process is being undertaken Undertake a thorough enquiry of the allegations made If found correct, take appropriate remedial measures Initiate disciplinary proceedings against the delinquent staff Receipt of any illegal gratification by staff is considered as misconduct and result in disciplinary proceedings against such staff, in addition to imposing penalties under the law.

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.

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.

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.

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.

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.

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

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Procurement Procedure in SSA

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Procurement Procedure in SSA

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