ANNEXURE VII

THE INSTITUTE OF MATHEMATICAL SCIENCES, CIT CAMPUS,

THARAMANI, CHENNAI 600 113

PURCHASE PROCEDURES

 Following are the general rules and guidelines applicable to all types of purchases to be made on behalf of the Institute:

1. APPROVAL OF PURCHASE

  1.        All Purchase proposals shall be made duly approved  by the authorities to whom          

           power to incur expenditure has been delegated.      

  1.       The Indenting Authority should ensure that the specifications of the items  

           required to be purchased is complete in all respects and that no such material is  

           available in stock.

2. MODE OF PURCHASE

  1.  The Purchasing Authority concerned, after satisfying that the indent is complete

in all respects, shall decide the mode of purchase and invite tenders/quotations      

by adopting any one of the following modes of purchase.  In deciding the mode of purchase in respect of imported items, the F.O.B. value shall be the criterion for applying the prescribed financial limit.  Selection of suppliers should ensure a fair number of suitable vendors except in the case of a few proven core suppliers who can be invariably contacted to ensure timely supplies.  The Institute may register as many suppliers as possible who will be in a position to meet the requirements of the Institute. For imported stores, however, the respective foreign manufacturers/suppliers and/or Indian agents shall be contacted.

3. OPEN TENDER/PUBLIC TENDER

3.1 Purchase shall normally be made by inviting Open Tenders in all cases where the estimated value of an item or items of similar nature covered by an indent to be purchased at a time exceeds Rs.10,00,000/-(Rupees Ten lakhs only).

3.2 The Institute may fix tender fees in respect of tender documents to be sold against public tenders invited and shall lay down suitable procedures in this regard keeping in view the estimated value of items to be purchased as well as the man-hours and materials spent in the preparation of tender specifications and drawings.

  1. 'Open Tender' system can be dispensed with and limited tender system adopted as  

the mode of purchase even when the estimated value of an item or items of similar nature covered by an indent to the purchased at a time exceeds Rs.10.00 lakhs(Rupees Ten lakhs only) provided detailed justification for dispensing with the issue of Open Tender is recorded in the following circumstances;

  1. When the requirement of stores is urgent and the desired delivery schedule

cannot be met if Open Tenders are invited.

  1. When the sources of supply are definitely known and limited.
  2. When it is not in the interest of the Institute to call for Open Tenders.
  3. When stores are reserved for purchase from a specified category of industry as per the policy decision of the Institute.
  4. When the field has already been explored by Open Tender for similar items during the period of about one year preceding the date of the indent.

In such cases, depending upon the estimated value of items, the field should be covered adequately by contacting as many suppliers as possible.

4. LIMITED TENDER

  1.        Purchase shall normally be made by Limited Tender in case the estimated value                

of an item or items of similar nature covered by an indent to be purchased at a time exceeds Rs.20,000/- but does not exceed Rs.10.00 lakhs(Rupees Ten Lakhs).  It shall, however, be ensured that the field is covered adequately by contacting as many suppliers as possible depending upon the estimated value of the item.

5.         SINGLE TENDER

  1.  A single tender may be invited in respect of the following cases:-
  2. When an item or items of stores covered by an indent is available from   

only a single source, e.g. where the items are spare parts, attachments, accessories etc. required for an existing equipment or the items of stores are the monopoly products of a single manufacturer, etc.

  1. When an item or item or items of stores covered by an indent is of a proprietary nature and is recommended to be purchased from a single source with sufficient technical reasons for choice of the proprietary make with the approval of the competent authority.

6. 'AB-INITIO' NEGOTIATION

6.1 The system of 'Ab-Initio' negotiation may be adopted with the prior approval of    the Director of the Institute in exceptional circumstances, e.g. where there is no competition or where there is shortage of capacity or where it is in the interest of Institute to adopt this system.  In case the value of the stores to be purchased exceeds Rs.20.00 lakhs, prior approval of the Executive Council shall be obtained.

  1.       Where 'Ab-Initio' negotiation is adopted as the mode of purchase, a set of tender  

forms including specifications, drawings and other allied details of the stores shall be forwarded to the supplier(s) concerned with instructions that they should go through the documents thoroughly and return it with an undertaking that they have fully studied and understood the requirements correctly and can meet the requirement.  Techno-commercial negotiation (excluding price) shall be conducted with such of those suppliers who have agreed to meet the requirements by a committee consisting of the representative of Accounts, Registrar and the Indenting Officer.  After holding the techno-commercial discussion with the supplier(s) concerned, the negotiating committee will draw up minutes of the meeting indicating the techno-commercial agreements reached with the supplier(s) (excluding the price) and get the minutes signed by all the members of the negotiating committee including the supplier's representatives who should be present at the meeting.  The representatives of the suppliers who are present during the negotiation will be informed that they will be required to quote the price for the item in a sealed envelope.  The due date and time for opening the price bid will be indicated in writing to the suppliers.

7. POST TENDER NEGOTIATION

7.1 Post Tender Negotiation should be discouraged except in respect of the following circumstances: -

  1. Purchase of items on single tender basis where the prices quoted by the only supplier are higher than the indent estimate, subject to the condition that the indent estimate is realistic.
  2. There is downward trend in the price of the item in the market after opening of the tenders and the number of technically suitable offers received is only one.

(Here, if the number of technically suitable/acceptable offers are more than one, all such bidders shall be given an opportunity to furnish their revised price bid in a sealed envelope on a specified due date and time, without holding any negotiation)

  1. When the quantities of the item to be purchased are large and the orders will

     have to be placed with more than one supplier and each of them has quoted  

     varying rates in their offer and the intention is to reduce the price gap.

8. RATE AND RUNNING CONTRACT/ANNUAL BULK SUPPLY    

           CONTRACT

  1.       In respect of stores for which there is recurring and regular demand the price of       

which is not subject to appreciable fluctuation and in cases of common user items required by the Institute, annual bulk supply contracts based on Open Tender may be resorted  for an appropriate period not exceeding two years at a time. After conclusion of annual bulk supply contracts with the approved suppliers, the Purchase Orders may be placed for annual bulk supply contract holding firms indicating the description of the items, quantity, price, percentage/quantum of statutory levies, payment terms, details of the consignee, etc. instead of placing individual purchase orders.

8.2 Where valid rate contracts are available, there would be no objection in making direct procurement from the rate contract holders by placing purchase orders provided, they are willing to make suppliers at the rate contract prices.

9. DISPENSATION OF TENDERING FORMALITIES

9.1 No tenders need be invited for the purchase of stores in respect of the following cases and purchase shall be made by adopting any one of the following modes depending upon the circumstances and the estimated value of items of stores covered by an indent.

10. CASH PURCHASE

10.1 When the value of an item or items of similar nature covered by an indent to be purchased at a time does not exceed Rs.1,000/- purchase shall be made by cash.

10.2 In the following types of cases, even though the value does not exceed Rs.1,000/- regular purchase order may be placed:-

  1. Foreign purchases
  2. Purchase of materials from firms located at considerable distance from the institution.
  3. Where the sale procedure of a particular supplier does not provide for cash sale, and
  4. Where the nature of transaction makes it necessary to issue a regular purchase order.

11. TELEPHONIC QUOTATION

11.1 Where the value of an item or items of similar nature covered by an indent to be purchased at a time exceeds Rs.1,000/-(Rupees One Thousand only) but does not exceed Rs.20,000/-(Rupees Twenty Thousand only), quotations by telephone shall be obtained from at least five firms(unless the source of supply is less than five).  If, after obtaining quotations by telephone in respect of the indents where estimated value of the item(s) is shown as Rs.20,000/- or below, the actual price payable for the items is found to exceed Rs.20,000/-, such indents will be processed afresh by the Purchase on Limited Tender basis.

11.2 Firms from whom telephonic quotations are obtained as stated above, shall be asked in writing to confirm that the quotation has been correctly recorded.

11.3 There shall, however, be no objection in inviting limited tenders instead of obtaining telephonic quotations wherever there are difficulties in processing purchases based on telephonic quotations, particularly in case of items of non-standard type and items not readily available, etc.

12. REPEAT ORDER

12.1 If an indent is received for an item or items of stores of identical description for which an earlier purchase order has been placed, fresh tendering action may be dispensed with and purchase made on repeat order basis, that is, either by enhancing the quantity in the earlier purchase order or by placing a fresh purchase order on repeat basis provided that:-

  1. the original purchase order was placed on the basis of a lowest technically acceptable offer and was not on delivery preference.
  2. the new purchase order is placed within six months from the date of issue of the original purchase order.
  3. the requirement is for stores of identical  description
  4. the supplier concerned is willing to accept a purchase order on identical terms and conditions.
  5. there is no downward trend of the prices since the original purchase order was placed which is to be certified by the Authority.
  6. the quantity to be ordered/purchased on each occasion on repeat order basis does not exceed 100% of the quantity as per the original purchase order.
  7. Efforts are made to obtain a suitable rebate from the supplier concerned for the increase in quantity and the results of the efforts are recorded in writing before a repeat order is released.

12.2. The Executive Council may delegate powers to the Director who shall exercise powers to authorize and approve deviations to the value limit, quantity limit and the time limit not exceeding 12 months from the date of the initial purchase order subject to condition that there is no downward trend in the prices of the items in the market after placing the initial purchase order and he is satisfied that it is in the public interest to place a repeat order rather than inviting fresh tenders against the indent raised by the Institute for similar items.

13. TWO-PART TENDERS

  1. Wherever the estimated value of an item or items of similar nature covered by and     

indent to be purchased at a time is Rs.1.00 crore and above, such indents shall be processed by adopting Two Part Tendering system.  In respect of such of those indents where the estimated value is less than Rs.1.00 Crore but the indenting authority suggests processing of such indents on Two-part Tender basis due to the special/unfamiliar nature of the items needing detailed technical scrutiny of the offers before opening the Price Part of the tenders, such indents will also be processed by the Purchase Authority under Two-Part Tendering system.  The Two-Part Tendering system can be dispensed with in respect of the following cases:-

  1. Items to be purchased on Single Tender basis
  2. Purchase of raw materials linked to certain established standards like Indian Standards, British Standards, German Standards, Italian Standards, American Standards such as Fine and Bulk Chemicals, Mild Steel items, Pipe and Pipe Fittings, Sanitary items, Construction Materials, Public Health materials, Furniture and Fixtures and Consumables.
  3. Items of spare parts and components required to be purchased for the Plant, Machinery, Equipment, Vehicles, etc. from the original manufacturers or their authorized distributors/agents as the case may be,
  4. Oils, Paints, Petrol and Lubricants
  5. Drugs, Medicines and Diagnostic Test Kits.

14. PRE-AUDIT

  1. No purchase order exceeding Rs.20,000/- in value and amendment thereto having

financial implications where the value of the order after the amendment exceeds Rs.20.000/- shall be released by the Purchase Units unless these are pre-audited and certified to be in order by an authority at the appropriate level in the Accounts.  However, in the case of financial commitment in respect of the purchase orders below the value of Rs.20,000/-, the authority concerned with the purchase will refer such cases after release of the purchase orders to the concerned Accounts section.

  1. While pre-auditing and certifying the purchase orders, the Accounts section shall   

ensure, inter alia, that:-

  1. approval of competent authority/committee, etc. exists for the purchase
    1. in case of proprietary items, detailed technical justification wherever necessary for the choice of the proprietary make are furnished.
    2. sufficient funds are available.
    3. lowest quotation is accepted or satisfactory reasons have been recorded in writing for not accepting the lowest quotation.
    4. proper procedure for making purchase is followed
    5. approval of the competent authority is obtained for deviation from the procedure and also from the standard terms and conditions of the contract where applicable.
    6. provision is made in the contract for safeguarding Institute's property required to be entrusted to the contractor.
    7. in case of purchase orders proposed on unregistered firms, income tax clearance certificate is obtained and certified to be available with the purchase group concerned.
    8. when a purchase order is proposed based on a single offer received against limited tender, adequacy of the coverage of field and reasonableness of the price are certified by the authority.
    9. whether the provisions of GFR, particularly those relating to contracts, purchases and canons of financial propriety have been followed.
    10. if the purchase order proposed to be placed is on ex-works or F.O.R. basis whether suitable provision has been made in the purchase order for safe delivery of the items by the contractor to the purchaser's site.
    11. whether suitable clause for proper packing is incorporated and whether name and address of the consignee, quantity, rate and other relevant commercial terms and conditions have been correctly reflected in the purchase order.
    12. if previous purchase references is available, whether the rates stipulated in the purchase order are comparable with the previous purchase order.
    13. where advance payment has been agreed to, pre-despatch inspection clause has been incorporated in the purchase order and in cases where pre-despatch inspection is proposed to be waived, whether approval of Director exists.
    14. wherever required and agreed to, whether liquidated damages clause has been incorporated in the purchase order.
    15. whether appropriate guarantee clause has been incorporated in the purchase order.
    16. whether documents to be presented for release of payment have been listed out properly.
    17. in cases where free issue materials are to be provided by the Institute to the Contractors, whether suitable provision for safeguarding the interests of the Institute, manner and method for delivery of free issue materials, furnishing safeguards by the contractor, accounting of free issue materials, the maximum permitted percentage of loss/wastage have been incorporated in the purchase order.

16.        PAYMENT OF BILLS

  1.            Payments against purchase orders shall be released by the Accounts as per

the mode and terms and conditions stipulated in the purchase order.  Bills/invoices from the suppliers for payment against purchase orders placed shall be received by the paying authority as the case may be.

16.2        Besides all necessary checks, the Accounts Officer shall:-

  1. verify the bills/invoices received from the suppliers with reference      

to the purchase orders, receipt voucher raised by the stores unit and       other relevant records/communications, and

  1. ensure that the prescribed certificates relating to excise duty, sales  

tax, free issue materials supplied by the Institute, bank guarantee     

for security deposit, advance/progress payment, performance bond,    

etc. whenever asked for, are available before the payment is

released.

16.3 In respect of such of those purchase orders where the contractors make either excess supply or short supply not exceeding plus/minus (+/-) 10% of the quantity ordered in each purchase order, the paying authority will make payment to the extent of the quantity actually supplied by the contractors without a formal amendment to the purchase order subject to -

  1. availability of funds for the purchase,
  2. the indenting authority agreeing to accept the short supply or excess quantity
  3. the total value of the excess supply not exceeding Rs.50,000/- in each case.

17.          DEVIATIONS

  1. Director is empowered to approve and authorize any deviations from the  

purchase procedure including standard terms and conditions of contract,   

provided, however, that the reasons for such deviations are recorded in

writing and the Director is satisfied of the necessity for such deviations.  

These deviations should however be brought to the notice of the Executive   Council for  information.

18.          SAVING CLAUSE

         

         General instructions issued by the Department of Atomic Energy from time

                     to time, shall be followed.