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INDEX
CHAPTER PARA DESCRIPTION PAGE No 1 INTRODUCTION 1-3 1.1 NEED FOR UPDATION 1.2 AUTHORITY FOR INTERPRETETION AND REVIEW OF PROCUREMENT MANUAL 1.3 OBJECTIVES OF PROCUREMENT 1.4 ROLE OF DEPARTMENTS 1.5 GLOSSARY OF TERMS 1.6 DEFINITIONS 2 ITEMS OF PROCUREMENT 4-6 2.1 PROJECT ITEMS 2.2 GENERAL STOCK ITEMS 2.3 CAPITAL ITEMS 2.4 DIRECT PURCHASE ITEMS 2.5 SHIP REPAIR ITEMS 2.6 GUARANTEE REFIT ITEMS 2.7 CIVIL WORKS ITEMS 2.8 CANTEEN ITEMS 2.9 OUTSOURCING 2.10 HIRING 2.11 ACQUISITION 3 METHODS OF PROCUREMENT 7-8 3.1 TYPES OF BIDDING SYSTEM 3.2 METHODS OF PROCUREMENT 3.3 MODES OF PROCUREMENT 4 BIDDING SYSTEMS 9-11 4.1 SINGLE BID SYSTEM 4.2 TWO BID SYSTEM 4.3 TECHNICAL EVALUATION 4.4 COMMERCIAL DISCUSSIONS 4.5 PRICE BID
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CHAPTER PARA DESCRIPTION PAGE No 5 OPEN COMPETITVE BIDDING 12-19 5.1 OPEN COMPETITVE BIDDING (OCB) 5.2 EXCEPTIONS TO OPEN COMPETITIVE BIDDING 5.3 PUBLISHING TENDERS 5.4 TIME PERIOD 5.5 PROCESSING BIDS 5.6 GLOBAL TENDER 5.7 TENDER FEE 5.8 EARNEST MONEY DEPOSIT 5.9 EXEMPTION FROM EMD 5.10 PROCESSING EMD 5.11 RELEASE OF BANK GURANTEE 5.12 FOREFEITURE OF EMD 5.13 SECURITY DEPOSIT 5.14 BANK GUARANTEE 5.15 WAIVER OF SECURITY DEPOSIT 5.16 REFUND OF SECURITY DEPOSIT 5.17 RELEASE OF BG 5.18 FOREFEITURE OF SD AND ENCASHMENT OF BG 5.19 PERFORMANCE BANK GUARANTEE ( PBG) 5.20 INVOCATION OF PBG 6 LIMITED COMPETITIVE BIDDING 20-21 6.1 LIMITED COMPETITIVE BIDDING 6.2 BID PROCESSING 7 TWO STAGE BIDDING 22-23 7.1 WHEN TWO STAGE BIDDING? 7.2 EXPRESSION OF INTEREST (EOI) 7.3 PROCEDURE 8 SINGLE SOURCE PROCUREMENT 24-25 8.1 WHEN SINGLE SOURCE PROCUREMENT? 8.2 PROCEDURE 8.3 RESULTANT SINGLE VENDOR
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CHAPTER PARA DESCRIPTION PAGE No 9 EMERGENCY PROCUREMENT 26-30 9.1 EMERGENCY PROCUREMENT 9.2 LOCAL PROCUREMENT THROUGH COMMITTEE 9.3 SELECTION OF ITEMS BY CUSTOMER REPRESENTATIVES 9.4 PROCUREMENT OF SPARES FOR PLANT MAINTENANCE 9.5 PROCUREMENT OF ITEMS & SERVICES FOR SHIP REPAIR & MAINTENANCE 9.6 CASH PURCHASES 9.7 PROCEDURE 10 RATE CONTRACT 31-36 10.1 OBJECTIVES 10.2 GOODS AND SERVICES TO BE RATE CONTRACTED 10.3 INFORMATION FOR TENDER ENQUIRIES 10.4 RC PLACING DEPTS 10.5 PERIOD OF RC 10.6 CONDITIONS APPLICABLE 10.7 PARALLEL RC 10.8 EXTENSION OF RC 10.9 GUIDELINES TO AVERT DELAY 10.10 PLACEMENT OF SUPPLY ORDERS 10.11 MAINTENANCE CONTRACT 10.12 LOGISTICS CONTRACT 10.12.1 TRANSPORTATION OF GOODS 10.12.2 TAXI SERVICES 10.12.3 YARD CLEANING & MATERIAL HANDLING 10.13 COMMON POINT FOR ALL CONTRACTS 11 ELECTRONIC REVERSE AUCTION 37-40 11.1 PRE-REQUISITES 11.2 INFORMATION IN NIT 11.3 BUSINESS RULES 11.4 PREPARATION TO ERA 11.5 SYSTEM AUDIT 11.6 DURATION 11.7 PASSWORD CHANGE
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CHAPTER PARA DESCRIPTION PAGE No 11.8 OPENING PRICE (OP) 11.9 VISIBLE ON THE SCREEN 11.10 BIDDING 11.11 EMERGENCY BIDDING 11.12 PROXY BIDDING 11.13 CLOSING PRICE (CP) 11.14 NO BID RECEIPT 12 E-TENDERING 41-47 12.1 OBJECTVES 12.2 THRESHOLD LIMIT 12.3 DIGITAL SIGNATURE CERTIFICATES (DSC): 12.4 ENROLLMENT 12.5 DSC REGISTRATION 12.6 MANUAL 12.7 LOGGING IN 12.8 BASIC DETAILS 12.9 COVER DETAILS 12.10 NOTICE INVITING TENDERS (NIT) 12.11 WORK ITEM DETAILS 12.12 FEE DETAILS 12.13 TENDER DATES 12.14 BID OPENERS 12.15 BILL OF QUANTITY (BOQ) 12.16 PUBLISHING TENDERS 12.17 CORRIGENDUM 12.18 ENCRYPTION AND DECRYPTION 12.19 VIEWING THE DOCUMENTS 12.20 BID EVALUATION 12.21 PRICE BID OPENING 12.22 FINANCIAL BID EVALUATION 12.23 AWARD OF CONTRACT 12.24 CENTRAL PUBLIC PROCUREMENT (CPP) PORTAL
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CHAPTER PARA DESCRIPTION PAGE No 13 ON LINE PROCUREMENT 48 13.1 UNIQUENESS 13.2 PROCEDURE 13.3 APPLICATION 13.4 MANUAL PROCESSES 14 SOURCING GOODS 49-57 14.1 BIDDER BASE 14.2 SUPPLIER LIST 14.3 SUPPLIERS GROUPING 14.4 BaaN SUPPLIER MASTER 14.5 NOMINATION OF SUPPLIERS 14.6 DQA COMPENDIUM 14.7 CLASSIFICATION SOCIETY LIST 14.8 REGISTRATION OF NEW SUPPLIERS 14.9 MODE OF REGISTRATION 14.10 REGISTRATION PROCEDURE 14.11 ASSESSMENT OF CAPACITY AND CAPABILITY 14.12 CAPACITY EVALUATION 14.13 FINANCIAL CAPACITY AND CLASSIFICATION 14.14 ASSESSMENT 14.15 DOCUMENTS 14.16 CLARIFICATIONS 14.17 VALIDITY 14.18 AMENDMENT TO SUPPLIER DETAILS 14.19 ON-LINE VENDOR REGISTRATION 15 NEED OF PROCUREMENT 58-60 15.1 NON-AVAILABILITY 15.2 ESTIMATE OF QUANTITY 15.3 COST ESTIMATE 15.4 VETTING COST ESTIMATE
15.5 EXEMPTIONS
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CHAPTER PARA DESCRIPTION PAGE No 16 PROCUREMENT ADVICE 61-64 16.1 PROCUREMENT ADVICE (PA) 16.2 TECHNICAL ADVICE (TA) 16.3 PROJECT PROCUREMENT ADVICE (PPA) 16.4 PROCUREMENT ADVICE SERIES 16.5 GENERAL STOCK PROCUREMENT ADVICE (GSPA) 16.6 DIRECT PROCUREMENT ADVICE (DPA) 16.7 SUB CONTRACT ADVICE (SCA) 16.8 REQUISITION FOR SERVICES (RFS) 16.9 EQUIPMENT PROCUREMENT PROPOSAL 17 BID DOCUMENTS 65-72 17.1 DETERMINE METHOD 17.2 BID DOCUMENT 17.3 FORMATS 17.4 DEVIATIONS 17.5 TAXES AND DUTIES 17.6 ISSUE OF EXCISE DUTY EXEMPTION CERTIFICATE (EDEC): 17.7 ISSUE OF CUSTOM DUTY EXEMPTION CERTIFICATE 17.8 CUSTOM CLEARANCE 17.9 APPEAL 17.10 EXCHANGE RATE VARIATION (ERV): 17.11 DOCUMENTS FOR ERV 17.12 PARTICIPATION OF INDIAN REPS FOR OVERSEES BIDDERS 17.13 BID REJECTION CRITERIA 17.14 BID REJECTION WITH APPROVAL 17.15 BIDDERS SEEKING CLARIFICATION 17.16 BID RESUBMISSION AND WITHDRAWAL 17.17 CORRIGENDUM 17.18 BID VALIDITY 17.19 GRIEVANCE CELL 17.20 BOOK EXAMINATION CLAUSE (BEC)
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CHAPTER PARA DESCRIPTION PAGE No 18 PAYMENT TERMS 73-82 18.1 STANDARD PAYMENT TERMS 18.2 INDIGENOUS SUPPLIERS 18.3 OVERSEAS SUPPLIERS 18.4 DEVIATIONS 18.5 TIMELY PAYMENT 18.6 BILL TRACKING SYSTEM 18.7 GUIDELINES FOR 90% PAYMENT 18.8 GUIDELINES FOR PAYMENT THROUGH BANK (DTB) 18.9 RECEIPT MAINTANCE OF GOODS 18.10 GUIDELINES FOR ADVANCE PAYMENT (ADV) 18.11 GUIDELINES FOR LETTER OF CREDIT (LC) 18.12 COLLECTION AGAINST DOCUMENT (CAD) 18.13 INTEREST BEARING ADVANCE 18.14 STAGE PAYMENTS (STG) 18.15 PAYMENT FOR PART SUPPLY 18.16 PAYMENT FOR SHIP REPAIR WORKS 18.17 PAYMENT TERMS FOR OUTSOURCING 18.18 PAYMENT TERMS FOR MAINTENANCE CONTRACTS 18.19 MODES OF PAYMENT 18.20 DISPENSATION 19 LIQUIDATED DAMAGE 83 19.1 LEGAL STATUS 19.2 QUANTUM OF LD 19.3 WAIVER OF LD 19.4 FORCE MAJUERE 20 BIDS PROCESSING 84-88 20.1 SUBMISSION OF BIDS 20.2 HAND DELIVERY OF BIDS 20.3 CORRIGENDUM 20.4 CLARIFICATIONS 20.5 RE-SUBMISSION OF BIDS 20.6 OPENING OF BIDS
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CHAPTER PARA DESCRIPTION PAGE No 20.7 DELAYED BIDS 20.8 LATE BIDS 20.9 UNSOLICITED AND UNSIGNED BIDS 20.10 EXERCISING CAUTION 20.11 ERROR IN PRICES 21 TECHNO-COMMERCIAL EVALUATION 89-91 21.1 TECHNICAL EVALUATION 21.2 TNC MEETING GUIDELINES 21.3 WAIVER OF QUALIFICATION REQUIREMENT 21.4 COMMERCIAL EVALUATION(CNC): 21.5 GUIDELINES FOR CNC 22 SCRUTINY OF PRICE BIDS 92-99 22.1 Scrutiny of Bids 22.2 RANKING OF BIDS FOR DEFENCE PROJECTS 22.3 RANKING BIDS OTHER THAN FOR DEFENCE PROJECTS 22.4 LOADING FACTOR 22.5 NON-ACCEPTANCE OF STANDARD PAYMENT TERMS 22.6 ADVANCE PAYMENT 22.7 FREIGHT AND INSURANCE 22.8 OVERSEAS BIDS 22.9 OVERSEAS VIS-À-VIS INDIGENOUS BIDS 22.10 PERFORMANCE BANK GUARANTEE 22.11 ADDITIONAL DELIVERY PERIOD 22.12 DEVIATION IN LD CLAUSE 22.13 DEVIATION IN WARRANTY CLAUSE 22.14 DEVIATION IN PRICE VALIDITY OF OFFFER 22.15 B&D AND OTHER STANDARD CLAUSES 22.16 OTHER DEVIATIONS 22.17 DEVIATIONS IN TECHNICAL SPECIFICATIONS 22.18 OPENING OF PRICE BIDS 22.19 RETURN OF BIDS 22.20 FURTHER PROCESSING
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CHAPTER PARA DESCRIPTION PAGE No 23 BID EVALUATION AND PRICE NEGOTIATION 100-106 23.1 COMPARATIVE STATEMENT (CST): 23.2 EVALUATING INDIGENOUS BIDS 23.3 EVALUATING OVERSEAS BIDS 23.4 PURCHASE AND PRICE PREFERENCE 23.5 REASONABLENESS OF PRICE 23.6 LAST PURCHASE PRICE(LPP) 23.7 TRANSPARENCY IN ASSESSMENT 23.8 DATA SHARING 23.9 PRICE NEGOTIATION 23.10 PRICE NEGOTIATION COMMITTEE (PNC) 23.11 PNC GUIDELINES 23.12 NEGOTIATION THRO’ CORRESPONDENCE 23.13 NEGOTIATION IN PARALLEL CONTRACTS 23.14 PARALLEL CONTRACTS INVOLVING SUB-ACTIVITIES 24 CONTRACT FINALISATION 107-109 24.1 RESULTANT SINGLE BID 24.2 REASONS FOR RETENDERING 24.3 RETENDERING 24.4 PROCURING MINIMUM QUANTITY 24.5 MANAGEMENT APPROVAL 24.6 AWARD OF CONTRACT 25 DELEGATION OF POWERS 110-114 25.1 OBJECTIVE 25.2 RESPONSIBILITY OF TENDERING OFFICER 25.3 RESPONSIBILITY OF CFA 25.4 CANONS OF FINANCIAL PROPRIETY 25.5 POLICY GUIDE LINES FOR FINANCIAL CONCURRENCE 25.6 FINANCIAL CONCURRENCE-PROCEDURE 25.7 CASES OF FINANCIAL CONCURRENCE REQUIREMENT 25.8 CASES NOT REQUIRING FINANCIAL CONCURRENCE 25.9 FINANCIAL CONCURRENCE-LIMITATIONS 25.10 CHANGES IN GUIDE LINES 25.11 COMPOSITION OF PNC
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CHAPTER PARA DESCRIPTION PAGE No 26 AWARD OF CONTRACT 115-122 26.1 LETTER OF INTENT (LOI) 26.2 PURCHASE ORDER 26.3 CHECKING AND SIGNING ORDER 26.4 INCOTERMS 26.5 ACKNOWLEDGEMENT OF ORDER 26.6 AMENDMENT TO CONTRACT 26.7 AMENDMENT TO COMPANY’S NAME OR CONSTITUITION 26.8 EXTENSION OF DELIVERY 26.9 REPLACEMENT FOR REJECTION 26.10 RECOVERY OF TAXES DURING DELIVERY EXTENSION 26.11 DELIVERY EXTENSION WHEN PVC CLAUSE EXISTS 26.12 MONITORING THE DELIVERY 26.13 EXPORT LICENSE 26.14 FORCE MAJEURE 26.15 CANCELLATION OF ORDER 26.16 CONDITIONS FOR RISK PURCHASE 26.17 PROCEDURES FOR RISK PURCHASE 26.18 REPEAT ORDER 27 EXECUTION OF CONTRACT 123-130 27.1 RECEIPT OF GOODS 27.2 BONDING AND DE-BONDING 27.3 IN-BOND & OUT-BOND 27.4 DEMURRAGE 27.5 DEFECTS AND DEFICIENCIES 27.6 RE-EXPORT OF DEFECTIVE/REJECTED ITEMS TO FOREIGN COUNTRIES 27.7 DEVIATION IN INSPECTION 27.8 MINOR DEVIATION 27.9 INSPECTION OF CAPITAL EQUIPMENT 27.10 INSPECTION OF GENERAL STORES 27.11 INSPECTION AT SUPPLIERS AND SUB-CONTRACTOR’S WORKS 27.12 BAAN RECEIPT IN RESPECT OF WEAPONS & SENSORS
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CHAPTER PARA DESCRIPTION PAGE No 27.13 REJECTION OF STORES 27.14 INSURANCE CLAIMS 27.15 SERVICES 27.16 FREE ISSUE MATERIALS 27.17 SHORT OR EXCESS SUPPLY 27.18 ADDITIONAL WORK 27.19 CONTRACTOR’S DEFAULT 27.20 MONITORING OF SECURITIES AND OTHER INSTRUMENTS 28 PROCUREMENT BY CIVIL ENGINEERING SECTION 131-168 28.1 INTRODUCTION 28.2 DETAILS & SYSTEM REVIEW OF CIVIL ENGINEERING WORKS 28.3 BRIEF PROCEDURE FOR CARRYING OUT CIVIL WORKS 28.4 PREPARATION OF ESTIMATE 28.5 DETAILED PROCEDURE FOR TAKING UP OF ANY CIVIL WORKS 28.6 TENDERS 28.7 TENDERING & EVALUATION OF BIDS 28.8 CONTRACTS FOR CIVIL WORKS 28.9 CONSULTANCY 28.10 PLACEMENT OF ORDERS / CONTRACTS 28.11 SUSPENSION OF WORKS, TERMINATION OF CONTRACTS, ARBITRATION AND FORCE MAJEURE 28.12 VARIATIONS 28.13 AMENDMENTS 28.14 PAYMENTS 28.15 PRICE ADJUSTMENT CLAUSE 28.16 MEASUREMENT 28.17 TAKING OVER CERTIFICATE 28.18 FINAL BILL 28.19 SITE RECORD 28.20 INSPECTION OF WORKS 28.21 OVER PAYMENTS / UNDER PAYMENTS
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CHAPTER PARA DESCRIPTION PAGE No 29 SUPPLIERS EVALUATION 169-172 29.1 PURPOSE 29.2 RATING SYSTEM 29.3 WEIGHTAGE FACTORS 29.4 QUALITY POINT AND RATING 29.5 DELIVERY POINT AND RATING 29.6 PRICE POINT AND RATING 29.7 INSPECTION POINT AND RATING 29.8 SERVICE POINT AND RATING 29.9 FINAL RATING 29.10 REVIEW 30 DELINQUENT SUPPLIERS 173-176 30.1 VENDOR HOLIDAY 30.2 STANDING COMMITTEE 30.3 TERMS OF REFERENCE 30.4 PROCEDURE 30.5 RECOMMENDATIONS 30.6 TEMPORARY DEREGISTRATION 30.7 PERMANENT DEREGISTRATION 31 FILE RETENTION PERIOD 177-178 31.1 CLOSURE OF PROCUREMENT FILES 31.2 FILING SYSTEM 31.3 E-PROCUREMENT DATA 32 CODE OF INTEGRITY 179-180 32.1 CODE OF CONDUCT FOR PROCURER AND BIDDER 32.2 PENALTY FOR VIOLATIONS 32.3 PUNISHMENT FOR PROCURER 32.4 INTERFERENCE WITH PROCUREMENT PROCESS 32.5 INTEGRITY PACT
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CHAPTER -1
INTRODUCTION
1.1 NEED FOR UPDATION GSL procurement manual was last revised in December 2006. Over the years, many issues were encountered and decided. The decisions taken need to be incorporated in the manual. Approving authority requires to be decentralized for expeditious processing of proposals. Government of India has since then promulgated rules reserving some products for procurement from Cottage industries and reserved some percentage of procurement from Micro and Small Enterprises (MSEs). It has also circulated draft Public Procurement Bill 2012 (PPB).
E-Tendering was carried out earlier only for small value of items without Digital Signature Certificates (DSC). It is now being used extensively with DSC for all items above a threshold limit. Electronic Reverse Auction (ERA) is being pursued on trial basis. In view of all these, need was felt to come out with an updated comprehensive Procurement Manual. While preparing the manual, various Government directives and Chief Vigilance Commission’s (CVC) guide lines on the subject have been taken into account.
1.2 AUTHORITY FOR INTERPRETETION AND REVIEW OF PROCUREMENT MANUAL
a) In case where a question arises as to the interpretation of any of the clauses of the procurement manual, the decision of the Chairman & Managing Director shall be final and binding. The Procurement manual may be reviewed & revised as and when deemed necessary by the company with the approval of Audit Committee. Further, In case of inconsistency between procurement manual provisions and referred CMD memos, the provisions of PM will be applicable.
b) In the event of issuance of fresh CVC Guidelines, the commercial department will take appropriate action for amendment of the PM periodically.
1.3 OBJECTIVES OF PROCUREMENT:
a) To ensure that goods and services prescribed in the specifications are procured in accordance with needs, from reliable sources, in right quantities, at the right prices, at the required time so as to meet production, ship repair, plant up keep and other requirements.
b) To ensure that procurement is carried out in fair and transparent manner and in accordance with the various directives and guide lines issued by Government and CVC.
c) To ensure that the procurement is carried out efficiently and effectively so that the procurement price is reasonable and consistent with the quality required.
d) To ensure adequate vendor base so as to promote competition
e) To provide fair and equitable treatment to bidders.
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1.4 ROLE OF DEPARTMENTS
In meeting the above objectives, the following departments or sections shall adhere to the following:
a) Design or indenter:
i) To ensure that requirements are projected on time or as per prescribed schedule and the projected quantity for procurement is in accordance with the actual requirement.
ii) To prepare, complete scope of supply or work, technical specifications and drawings as the case may be to meet the end use requirements
iii) To furnish reasonable cost estimates for the indented requirements.
iv) To expeditiously conduct technical evaluations and negotiations, if required and submit reports as per laid down norms.
b) Planning:
i) To ensure that schedules of delivery of goods and services are in accordance with Project Planning Schedules or end use requirement and the lead time of the goods and services which are provided by the Commercial Dept.
ii) To update as required, delivery schedules of various requirements in accordance with the physical progress of the projects.
c) Purchase and Outsourcing:
i) To ensure procurement of goods & services as per laid down rules, regulations, procedures and norms set herein.
ii) To follow up with suppliers to ensure timely delivery or completion of works as the case may be.
iii) To follow up with suppliers to expedite supply of deficient items and / or making good defects as the case may be.
d) Finance:
i) To participate and advise in the procurement process as laid down in the rules, regulations and procedures to achieve the procurement objectives.
ii) To scrutinize suppliers’ challans, invoices and other documents and effect timely payments in accordance with the Procurement Contract terms and conditions.
e) Stores:
i) To receive goods and offer them for inspection expeditiously
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ii) To process documents expeditiously for taking goods on stock and effecting payment to suppliers in accordance with contract terms and conditions.
f) Quality Assurance
To ensure that inspection of goods and services is carried out as per Procurement Contract specifications and / or as per Quality Assurance Manual (QAM) standards.
g) User:
i) To ensure inspection of goods where involved is done expeditiously
ii) To submit technical evaluation reports as per laid down norm expeditiously wherever required.
iii) To certify completion of services by Service Providers (SP) expeditiously and in accordance with the terms and conditions of the Procurement Contracts.
iv) To provide conducive environment for the SPs, in accordance with Procurement Orders to work and fulfill contractual obligations.
1.5 GLOSSARY OF TERMS
Glossary of terms and abbreviations used in this manual are listed with full descriptions at APPENDIX-A.
1.6 DEFINITIONS
Definitions of various important terms used in the manual are described at APPENDIX- B.
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CHAPTER – 2
ITEMS OF PROCUREMENT
Various goods, services and works that are procured to carry out multifarious activities in the shipyard are enumerated below.
2.1 PROJECT ITEMS
Project goods are procured/ awarded for Ship Building, Ship repairs (SR) and General Engineering Services’ (GES) activities. Both indigenous and imported goods are procured. Some of them are on turnkey basis also. These goods are procured against specific yard numbers (nos.) allotted by Planning (PLG) department. PLG Department issues Procurement Advices (PA) for ship building projects based on TA received from TS Dept. Commercial dept. makes procurements based on TA & PA received. Separate groups for procuring Hull, Engineering and Electrical items have been formed within the Commercial dept. to make these procurements. In the case of SR & GES, project group issues Technical Advice (TA) cum PA which forms the basis for procurement. The procurement is made by Procurement cell. These are by and large, project specific items. Each item has a code number. Each project has a Project Coordinating Manager (PCM). These PCMs are empowered to carry out cash purchases. When some items are required urgently for projects, PCMs procure these items, mostly from local sources.
2.2 GENERAL STOCK ITEMS
Goods that are generally required for yard consumption are kept in stock. Re-order level, ordering quantity etc are fixed for these items. As and when the stock level reaches re-order level, Stores division raises PA. Fittings, pipes, tools, welding materials, paints etc come under this category. Separate section in Commercial dept. carries out these procurements.
2.3 CAPITAL ITEMS
The dept. that requires infrastructural facilities for their dept., project the requirement to PLG dept., indicating details like specification, estimated cost, necessity of requirement, maintenance cost of the equipment, cost benefit analysis etc. They are collated and put up to management for scrutiny and analysis. The proposals cleared by management are included in the Annual Capital Budget and put it up to Board of Directors (BoD) for approval. The capital item may include machinery, tools, which may contain imported items, furniture, civil works, acquisition of properties etc. After approval by BoD, the concerned users raise Equipment Procurement Proposal (EPP) for approval of Competent Financial Authority (CFA). The approved EPPs, except pertaining to civil works and acquisitions are forwarded to Capital Procurement section of Commercial dept. for procurement. The civil works are done by Civil & Modernisation dept. Asset acquisition is dealt by Asset Acquisition Committee (AAC) appointed vide CMD Memo on the subject.
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2.4 DIRECT PURCHASE ITEMS
These are non-stock items which do not have regular use. Mostly, these will be low value, locally available items. The end user, who requires any such non-stock items, raises an indent to Stores division. Stores division confirms the non-availability in stock and raises a Direct Purchase Advice (DPA). The procuring section which procures General Stock items processes these DPAs and procures these items.
2.5 SHIP REPAIR ITEMS
Items required for ship repair and refit are procured by a procurement section in the SR&GES dept. This de-centralization set up facilitates expeditious processing of procurement requirements.
2.6 GUARANTEE REFIT ITEMS
New construction ships are guaranteed against manufacturing defects for a period of one year since handing over of the ships. During that period, if any items are required to be procured and fitted or if any jobs and services are to be outsourced to a SP to carry out defect rectification, Guarantee Refit (GR) Section undertakes these procurements.
2.7 CIVIL WORKS ITEMS
Civil works are tendered and also executed by the Civil section in Shipyard Modernisation Project dept. (SMP). These works are ordered on civil contractors through civil contracts. Dredging of water fronts are also processed by civil section. Non-stock items required for civil maintenance of yard, like sand, cement etc. are processed through DPAs.
2.8 CANTEEN ITEMS:
Provision items, fish, chicken, vegetables, etc required for canteen are procured by Personnel & Administration (P&A) dept. Welfare Officer handles this procurement. Generally they are rate contracted.
2.9 OUTSOURCING:
Outsourcing of services required for ship building projects are carried out by a dedicated Outsourcing section. PLG dept. raises PA indicating the scope of work, estimated man days involved in the work and estimated cost. Outsourcing section processes these PAs and release Work Orders. Outsourcing requirements of Ship Repair & General Engineering Services (SR & GES) are processed by procurement section in the SR & GES dept. Jobs to be outsourced during Guarantee Refit is carried out by GR section. Jobs to be outsourced for yard maintenance and upkeep, goods clearance, forwarding, transporting etc are handled by sections in Commercial dept. These jobs are normally rate contracted.
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2.10 HIRING
Hiring of living accommodation is processed by Administration wing of P& A dept. Hiring of facilities and services for conducting any function is also done by the Administration section. Hire purchases like cars, buses & warehouses are processed by Commercial dept., based on the advice received from the concerned users. In the case of cars and buses, the advice is generated by Transport section. For hiring warehouses, Stores division sends the request. In all such cases, approval of Competent Finance Authority (CFA) is obtained by the users before sending the advice.
2.11 ACQUISITION
Acquisition of properties is undertaken by AAC. It is preceded by approval by BoD in the Annual Capital Budget.
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CHAPTER – 3
METHODS OF PROCUREMENT
3.1 TYPES OF BIDDING SYSTEMS
a. Single bid system
b. Two bid system
C Three bid system
3.2 METHODS OF PROCUREMENT
A. Procurements shall be carried out in following tendering types:
I. Single stage bidding
a. Open Competitive Bidding i. Open Tender for Indian Suppliers. ii. Global Tender for International as well as Indian Suppliers.
b. Limited Competitive Bidding
II. Two stage bidding
a. Open Competitive Bidding i. Open Tender for Indian Suppliers. ii. Global Tender for International as well as Indian Suppliers.
b. Limited Competitive Bidding
III. Single Source Procurement
B. Procurements shall be carried out in the following methods:
a. Normal Procurement b. Emergency Procurement i) Procurement through Committee ii) Cash Purchase c. Rate Contract for a fixed no. of years (ARC, BRC, TRC etc.) d. Maintenance contract for a fixed no. of years (AMC, BMC, TMC etc.)
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3.3 MODES OF PROCUREMENT
a. E-Procurement
b. On line Procurement: i) Direct Purchase ii) General stock procurement
c. Manual Procurement: i) Project Procurement ii) General stock procurement iii) Civil contract works iv) SR & GES procurement
These are dealt in the succeeding chapters.
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CHAPTER – 4
BIDDING SYSTEMS
4.1 SINGLE BID SYSTEM
Single bid, as the name implies shall have only one cover. Item description, bid reference no. and bid opening date shall be superscribed on the cover. This cover shall contain technical, commercial and price details, all in one bid. Single Bid system shall be used for procurements having estimated value up to Rs. 5.00 lacs. For civil contracts, this limit shall be as indicated in Clause 28.6.2.1(a). It shall be used where the specification, scope of supply, inspection procedure and applicability of tender terms are simple, clear, explicit and unambiguous. The offers are to be forwarded to Technical/ User Dept. for scrutiny and clearance.
4.2 TWO BID SYSTEM:
4.2.1 This bidding system facilitates checking of payment of tender fee and EMD, if any before opening the price bid. More importantly, it is essential to evaluate the techno-commercial aspects before considering the financial aspect. However, for the value of the contract below Rs 5 lacs, two bid system may be followed if required.
4.2.2 In this bidding system, the bidder shall forward two covers. One cover , part I, shall contain tender fee, EMD if applicable, Bank Solvency Certificate, technical bid, supporting technical and commercial documents, drawings, technical deviations if any, commercial terms and conditions, deviations from commercial terms if any, documents towards compliance of pre-qualification and other documents as required for the bid. In other words, all documents except the price bid shall be enclosed in this cover. The cover shall be superscribed with bid description, bid reference no., bid opening date and also on top “Technical Bid- Part I”. The second cover shall contain only price bid. This cover shall be superscribed, in addition to above mentioned tender details, ”Price Bid- Part II”. Both the covers shall be put in a bigger envelope, which shall be superscribed with the above tender details.
4.3 TECHNICAL EVALUATION:
a) When two-bid system is followed, the technical cover containing technical details, drawings and all other documents except the price bid shall be opened on the due date. The relevant technical documents of bidders who meet the tender fee, EMD & Bank Solvency Certificate requirements if any, only shall be forwarded to the concerned section of technical dept. or user dept. for evaluation, which raised the requirement. The firms can claim exemption from Tender fee/ EMD with valid certificates under the grounds of having registered with NSIC. NSIC certificates should indicate specific products / services tendered for consideration of the procurer. The matter needs to be verified with concerned authorities in case of ambiguity in authenticity of the
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documents. In order to save time, such offers also shall be forwarded for technical evaluation along with other eligible offers, with a noting that prior to final technical clearance, clarification will be obtained regarding applicability of the exemption to the firm and will be forwarded to technical dept. / user dept. The Tendering dept. shall forward the confirmation regarding rejection based on the qualifying criteria of the offer to the technical/ user dept. prior to issue of technical clearance.
b) The evaluating officer may obtain the technical clarifications on the bids, directly from the Suppliers through email/ letters, if required. While seeking clarification, last date for receipt of this clarification is to be fixed. This time period shall be reasonable enough for the bidder to offer clarification. This shall vary, depending upon the item of procurement from 1 to 3 weeks. Before rejecting any bid for want of receipt of technical clarification, a notice is to be issued to the bidder that failure to offer clarification would result in rejection of their offer. AGM / DGM of Technical / User dept. may decide regarding technical rejection of items up to Rs. 30 lakhs in case of project items and Rs.10 Lakhs in case of Capital items, beyond which, approval shall be obtained by the officer of Technical / User dept. for rejecting any bid on technical grounds, from CFA. HOD of respective Technically rejecting depts. Shall be part of CFA. Such approvals shall be forwarded to tendering depts. for enclosing to the Procurement proposals.
c) If the technical officer decides that it requires a detailed discussion, the bidders may be called for discussions. Adequate time to be given for the bidder to attend the discussion session. The bidders are to be intimated by TS/ User Dept. regarding schedule of TNC meeting, under intimation to tendering dept. Tendering dept. may schedule CNC meeting, and intimate the bidders accordingly. No payment shall be made to the bidder for attending technical/ commercial discussions. In case of overseas bidders, adequate time to be given for them to obtain visa and other formalities. The overseas bidders must furnish their passport details to enable to obtain management approval to issue entry gate pass. As per the contract, if required, customer representatives may have to be involved in the technical discussions. Adequate notice shall be given for them to attend. As and when video conferencing facility is available, it shall be used for technical discussions. However, details of all such discussions are to be recorded and signed by the participants.
d) At times, during discussions, there could be a need to upgrade or modify the issued specifications. In such cases, the changes made, are to be listed and furnished to the Tendering dept. along with the record of technical discussions held. If any bidder is rejected technically, reasons shall be clearly indicated in the technical reports. Technical discussions shall be concluded as expeditiously as possible as but normally not later than 45 days from the date of receipt of technical bids by them.
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4.4 COMMERCIAL DISCUSSIONS Normally, after opening of techno commercial bids, commercial clarifications are obtained from the firms by Tendering dept. by correspondence simultaneously during technical evaluation by TS/User dept. It shall be concluded before opening the price bids. Discussions would require to be conducted, when bidders do not agree to some of GSL commercial terms & conditions and also when the scope of original supply is altered during technical discussions which may necessitate submission of supplementary price bid. For major equipment, Commercial Negotiations Committee (CNC) discussions are held by inviting the reps. of the suppliers, and such discussions are to be recorded and signed by all the participants, viz. reps. of GSL Tendering dept. & Finance dept and Suppliers. CFA approval shall be obtained for deviations agreed during the discussions and rejection of any bid on commercial grounds.
4.5 PRICE BID
Price bids of those bidders who are technically and commercially accepted shall be opened on scheduled date & time for further processing. The scheduled date & time are intimated to the Bidders, with a reasonable notice period, through mail/ fax to enable them to attend the Price-bid opening. Price bids of the firms, which are rejected technically or commercially, shall be returned to the concerned bidders, in unopened condition in case of offline tenders. The queries from the Bidders, if any, regarding reasons of technical / commercial rejection need to be addressed by respective depts.
Manually received Price-bids shall be opened by Internal Auditor on the notified date & time in presence of Bidders or their authorised reps. if present, and rep. of Tendering dept.
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CHAPTER-5
OPEN COMPETITIVE BIDDING
5.1 OPEN COMPETITIVE BIDDING (OCB)
Open competitive bidding shall be resorted to when –
a. Procurement of Capital goods like equipment against EPP when the value exceeds Rs. 10 lacs. This excludes automobiles & vehicles.
b. Procurement of goods other than Capital (EPP) items when the value exceeds Rs.30 Lacs.
c. Outsourcing and civil contract works, when the value exceeds Rs.10 lacs.
d. Rate contracts / maintenance contracts for goods and services, when value exceeds Rs.10 lacs
5.2 EXCEPTIONS TO OPEN COMPETITIVE BIDDING
Open competitive bidding shall be exempted when -
a) Procuring proprietary or customer nominated items or items for research, experiment, study or development.
b) Customer has furnished a list of suppliers from whom alone the goods are to be procured.
c) Procuring, based on current DGS&D contracts or from Govt. nominated outlets.
d) Procuring specific branded items and items which have been standardized in GSL.
e) Procuring industrial oils including diesel, petrol & lubricants from PSUs. /OEMs/OEM recommended sources
f) Procuring tailor-made, patented, or pattern numbered ship building items.
g) Goods to be procured are covered under License agreements or long term contracts in force.
h) Procuring goods and services where confidentiality is required and hosting them on web or advertising may not safeguard national interest or legitimate commercial interest of GSL. In line with Ministry of Finance, Department of Expenditure order no. 10/1/2011-PPC dated 30.11.2011, approval of Chairman & Managing Director with the concurrence of Director (Finance) shall be obtained in each such case of exemption.
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i) Sources of supply are definitely known and possibility of fresh source of supply is remote.
j) The time and cost involved to examine and evaluate a large number of bids may not be commensurate with the value of the subject matter of procurement or schedule of requirement.
k) Owing to an urgency brought about by unforeseen events, the subject matter of procurement cannot be usefully obtained by adopting the method of open competitive bidding.
l) The goods or services to be procured are necessarily from local place. (open tender with advertisement in local news papers in place of national news papers)
m) Due to any other special circumstances, for valid reasons to be recorded, the open tender procedure may be waived and limited tender may be processed.
Cases that fall under category (i), (j) (k), (l) & (m) shall require prior approval of CFA to dispense with Open Competitive Bidding. In all above cases, other methods of procurement may be resorted to.
5.3 PUBLISHING TENDERS
In case of an open competitive bidding, bids shall be invited by exhibiting an invitation on the Central Public Procurement (CPP) portal, GSL website, GSL e- procurement portal and by giving wide publicity, through advertising in one of the leading English news papers having all India circulation. In addition, it shall be published in English & Hindi in any of the local news papers. The Tender Notice shall be brief indicating brief description, tender due date, contact phone no. and reference of GSL web site and portal. A format of the Tender Notice is placed at APPENDIX-C. Further, a copy of the press advertisement may also be sent to bidders registered with GSL and to known sources of supply. The advertisements shall be issued as per the procedure enumerated vide GM (P&A) memo no. 58 dated 30.06.2010.
5.4 TIME PERIOD Ordinarily, the minimum time to be allowed for submission of bids shall be two weeks for domestic, three weeks for all over India and four weeks for overseas bidders. However, in special circumstances, for valid reasons to be recorded, the minimum / maximum period of submission of bids may be reduced / increased with the approval of CFA.
5.5 PROCESSING BIDS
As bids of estimated value above Rs 5 lacs are necessarily to be processed through e- tendering, all OCB bids are to be received and processed through e-tendering system. The bidders shall have to enroll in the GSL portal before submitting bids. Bidder shall also register his Digital Signature Certificate (DSC) Class III, with the portal. Bidder has to submit bid before the due date and time indicated for submission of bids. The
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system will not accept any bids submitted after the due date and time. However, if the bidder desires to re-submit the bid before the due date and time, bidder can do so and the system will recognize only the last bid submitted. Opening of bids and further processing shall be done as detailed under e-tendering.
5.6 GLOBAL TENDER:
a) It is a form of open tender wherein the Tender Notice inviting tenders shall be globally published to make overseas bidders aware of company’s requirement. Global tendering shall be resorted to in cases where the right quality of materials or services are not available from indigenous sources and where it is possible to get competitive price and quality product from overseas sources.
b) In the case of global tenders, the Global Tender Notice shall be advertised on Indian Trade Journal (ITJ) published by The Director General of Intelligence and Statistics, Kolkata in line with Para 5.3. This is in addition to publishing in the CPP portal, GSL web site, GSL e-procurement portal and in one all India News Paper. A copy of the press advertisement shall also be sent, if required to Indian Embassies abroad where prospective bidders could be available and to foreign embassies in India requesting them to give wide publicity in their countries. The copies of the tender notices should be sent to all the registered / past / likely suppliers by UPC and also to the Indian Missions / Embassies of major trading countries.
c) Open competitive bidding shall be followed in case of two stages biddings and processed through e-tendering and depending on the value and item through Electronic Reverse Auction (ERA).
5.7 TENDER FEE
A non-refundable tender fee amount of Rs.1,000/- may be charged from bidders against open competitive biddings to cover approximate cost involved in preparation of bidding documents and also to discourage non-genuine parties. Cost of the tender fee must be indicated in the Tender Notice as well as in the bidding document. Authorized Indian representatives of the overseas bidders can submit DD, on their behalf in Indian Rupees. This merely does not entitle them to submit offers on their behalf. Micro & Small Enterprises (MSE) having registered with NSIC are exempted from payment of tender fee as directed by Government of India vide Department of Defence Production order no. 4(9)/08/D(Coord/DD dated 09.05.12) . However, to avail this facility, they shall furnish valid copy of MSE registration for the products and services. The exemption available to MSEs shall be mentioned in the invitation to bid.
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5.8 EARNEST MONEY DEPOSIT:
a) The primary objective of submission of Earnest Money Deposit is to establish earnestness of the bidder, so that, bidder does not withdraw, impair, or modify the offer within the validity of the bid. It also helps in restricting, if not eliminating ‘non-earnest’ bidders from participation. It is therefore necessary to charge EMD for all open competitive biddings where even bidders, not registered with GSL may also take part. EMD, as a norm shall not be charged for limited competitive biddings. However, in exceptional cases, for valid reasons recorded, it may be charged with the approval of CFA.
b) EMD amount shall be fixed approximately @ 2 to 5% of estimated value of the subject matter of procurement, rounded off to the nearest 1000. In case, EMD amount of 2 to 5% of the estimated value is found to be too high, and there is a possibility that enough suppliers, may not participate in the tender, then with the approval of CFA, with highest authority as CMD, the EMD amount may be reduced to Rs. 1 Crore. In exceptional cases EMD may be 10% of estimated cost with prior approval of CFA.
c) If the payment is to be made ‘off line’, it shall be in the form of Demand Draft (DD) or Bankers Cheque (BC) or in the form of Bank Guarantee (BG) from any scheduled banks of India (excluding co-operative banks) or banks of International repute. The BG shall be as per GSL format and it shall be issued by any scheduled bank other than Co-operative bank. The BG shall be kept valid for, 03 months beyond the validity period of offer. Format for BG for EMD is placed at APPENDIX-D. On line payment through ‘payment gateway’ for e-tenders is however accepted. The exemption available to MSEs shall be mentioned in the invitation to bid.
d) Indian representatives of overseas bidders can submit EMD, on their behalf in the form of Bank Draft in Indian Rupees or BG from any scheduled banks of India (excluding co-operative banks) or banks of International repute. This, however merely does not entitle them to submit offer on their behalf.
5.9 EXEMPTION FROM EMD:
a) The Bidders, registered with NSIC are exempted from payment of EMD as per order. The Bidders shall submit valid registration certificate for specific products/ services with the financial ceiling in order to claim the exemption.
b) In case of State & Central Govt. of India depts./ Undertakings and Public Sector Undertakings(PSU), EMD can be accepted in the form of Indemnity Bond.
c) Tenders of the value up to Rs 5 lakh except for Civil works up to Rs 1 lakh.
Since any relaxation regarding submission of EMD has financial implications, the terms & conditions shall clearly stipulate that offers without EMD would be considered as non-responsive and summarily rejected. Any relaxation/ waiver
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in submission of tender fee and EMD in the tender documents shall have CFA approval.
5.10 PROCESSING EMD
On receipt of EMD, the dealing procuring officer shall forward the same to Finance department. EMD shall be refunded to unsuccessful bidders within 30 days from the date of award of contract, upon instruction from the dealing tendering officer to Finance department. In the event of cancellation of tender, the EMD, DD or Bank Guarantee shall be refunded or returned in the same manner as stated at above. No interest shall be paid on the EMD amount.
5.11 RELEASE OF BANK GURANTEE:
The BG furnished against EMD shall be returned to the un-qualified bidders only after opening the Price Bid. For qualified bidders, the Bank Guarantee shall be released only after award of contract. For successful Bidder, Bid Guarantee shall be released after accepting the BG for security of Contract.
5.12 FOREFEITURE OF EMD
EMD shall be forfeited, after obtaining approval from CFA in the following cases.
i. When bidder withdraws or amends the bid or goes back on the agreed terms and conditions of Technical Negotiation Committee (TNC), Commercial Negotiation Committee (CNC) and Price Negotiation Committee (PNC), in any respect, or does not accept the Letter of Intent (LOI) or Purchase order, within the period of validity of the offer or its extension thereof.
ii. When it comes to the notice of GSL that the bidder has submitted any false information or forged documents.
5.13 SECURITY DEPOSIT
In order to safeguard the organisation’s interest and bind the supplier to complete execution of contract, it is necessary to obtain a reasonable amount towards Security Deposit (SD). It shall be charged for all open competitive biddings. SD as a norm will not be charged for limited competitive biddings. However, in exceptional cases, for valid reasons recorded, it may be charged with the approval of CFA. The amount shall be 5% of the value of the contract rounded off to the nearest thousand. No interest is payable against Security deposit. EMD of successful bidders can be adjusted against Security Deposit. Any relaxation or waiver in submission of Security deposit in the tender documents shall have CFA approval.
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5.14 BANK GUARANTEE
Earnest Money Deposit (EMD) or Security Deposit (SD) can be in the form of Bank Guarantee (BG) in approved GSL format from scheduled Banks other than Co- operative Banks. Overseas bidders can submit BG from banks of international repute. In case of EMD the BG shall be valid for 3 months more than the validity of the offer. In case of SD, the BG shall be valid for 3 months more than scheduled works or supplies completion period. If for any reason, the contractual period is extended either due to default by supplier or amendment issued to the contract, the validity of the BG shall be suitably extended by the supplier. BG submitted by the bidder or supplier towards EMD or SD needs to be verified immediately from the issuing Bank by the concerned Finance officer and if there is any problem in accepting the BG, it shall be informed to the tendering officer immediately for taking up with the bidder or supplier. The bidder or supplier should not change the Bank during the entire period of performance of the contract. In case the supplier furnishes the BG from a different bank then, they may be requested to include a clause, stating, ‘This B.G. is issued on behalf of -----in lieu of their earlier B.G. No. ----dt---- for Rs.---- furnished by------Bank.
I) VERIFICATION OF BG
BG shall be verified for the following:
a. The BG submitted is in accordance with the GSL standard format. In case of any variance in the contents or text of the B.G., it shall be referred to GSL legal cell for scrutiny and acceptance.
b. Validity of the BG is till the end of the delivery or Guarantee or Warranty period as the case may be, as stipulated in the contract in addition to a claim period of three more months.
c. The name and designation of the officer executing the BG and his power of attorney or signing power no. are duly shown therein and each page of the BG is duly signed or initialed by the executants and the last page is signed with full particulars as required in the standard format of B.G. and seal of the bank is affixed.
d. The B.G. is executed on non-judicial stamp paper or Franking of appropriate value as indicated by the legal cell before demanding BG from the bidder or supplier. The date of execution of B.G. shall not be earlier than the date of stamp paper, while the same may be on date of sale of stamp paper.
e. The factual details such as purchase order number, value of the contract, amount of advance, value of contract performance guarantee, validity of the guarantee etc. are thoroughly checked. It may also be ensured that over- writings or scorings if any are properly authenticated with signature(s) and seal of the executants.
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f. In case there are any mistakes in the B.G., the same shall be notified to the bidder or supplier requesting him to issue appropriate amendment and the same shall be obtained by Tendering Dept. However, return of original BG is to be avoided.
g. The original BG may be kept in the safe custody of Finance Department.
h. Any change in the BG format shall be with the approval of Legal Cell.
Note: Bank Guarantee to be verified for PO reference, Value and validity as per the order by the Tendering Officer. However acceptability and genuineness of the BG to be verified by the Finance Dept.
II) A letter of confirmation shall be addressed by the purchase branch to the executants of the BG seeking confirmation whether the BG has been executed by the executants and whether he is duly authorized to do so. This letter shall be issued in duplicate by registered post in the name of the executants of the BG as per the approved format. The executant’s bank will be required to return one copy of the letter with a certificate thereon duly signed and stamped under its seal through registered post within 15 days of receipt of letter of confirmation. In no case a supplier be allowed to bring this letter with the certificate of confirmation from bank, not even under sealed cover of the bank.
III) In case of overseas guarantees, other than Bid Guarantee, the BG must be routed through the correspondent bank, State Bank of India for due verification of signatures of the executants. This guarantee shall be received directly from the correspondent bank. In no case, the overseas guarantee, other than Bid Guarantee shall be received directly from the bidder or supplier. BG furnished by overseas banks shall also be subject to similar checks as mentioned above at 5.14. (a) to (h).
5.15 WAIVER OF SECURITY DEPOSIT
Since submission of security deposit has financial implications, the requirement of SD, the SD amount and the time by which the SD has to be furnished by the successful bidder shall be indicated in the tender. The BG should be kept valid for, 90 days beyond the date of completion of contract. However the submission of SD can be waived off in respect of the following.
a) Firms registered with NSIC as per order at circular-3. b) From Public Sector Undertakings (PSU), State & Central Govt. of India depts. Or undertakings SD, in the form of indemnity bond to be obtained.
5.16 REFUND OF SECURITY DEPOSIT
SD shall be refunded without interest to the supplier after satisfactory completion of contract and certification by the contract issuing officer. He shall certify after taking in puts from the concerned end user or Stores officer as the case may be. It shall be ensured before releasing the SD that liquidated damages or risk purchase recovery or other recoveries if any are already made.
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5.17 RELEASE OF BG:
a. In the case of B.G. for faithful performance, the B.G. shall be released duly discharged by Finance Dept. against the receipt of completed Inspection– cum- Receiving Report (IRR) from user dept.
b. In the case of combined B.G. for the both faithful performance and warranty, the B.G. shall be released after ensuring that invocation of the B.G. is not required and after fulfilment of the contract and obtaining a certification from the user department to this effect.
c. Release of all Bank Guarantee shall be routed through respective HOD of Tendering Dept. to HOD(F). 5.18 FOREFEITURE OF SD AND ENCASHMENT OF BG
In the case of non-performance or default or breach in accordance with the terms and conditions of the contract, SD shall be forfeited or BG shall be en-cashed with the approval of CFA.
5.19 PERFORMANCE BANK GUARANTEE (PBG)
(As amended in line with CMD Memo 40/2017 dtd. 17.10.2017) Goods, especially equipment are covered by Guarantee /Warranty clause. In such cases , PBG in GSL format equivalent to an amount as per Purchase Order shall be obtained from the supplier and the same shall be retained till the expiry of the Guarantee /Warranty period .It shall be recorded during CNC discussions that PBG should be extended if there is any delay in installation or commissioning of the equipment or there are frequent failures during the guarantee period. The PBG shall not be required for contracts of value less than Rs 5.00 Lacs and for the procurement of consumables such as oil, grease, petrol & diesel irrespective of the value. However, for all other major equipment or systems, a Performance Bank Guarantee of a Scheduled Bank, other than a Co-operative Bank as per the GSL format will have to be provided by the supplier as following:- a) 10% of order value in form of Bank guarantee for order value more than Rs 5 lac and upto Rs.50 Crore. b) 5% of order value in the form of bank guarantee for order value exceeding Rs.50 Crore. (CMD memo No. CMD/18/2016 dated 30/08/2016 also relevant.)
5.20 INVOCATION OF PBG
Finance Officer has to follow up the expiry date of PBG and advise Tendering officer, at least 1-month before the expiry of the guarantee period. The Tendering officer shall initiate appropriate action for release or extension or invocation as the case may be. For release or invocation or extension of PBG, the User dept. shall advise the concerned Tendering officer suitably. While rendering advice for invocation, he shall adduce reason for such advice. Then the Tendering officer, with the approval of CFA shall advise Finance Department to invoke the PBG. In case of release of PBG, the Tendering officer is empowered to advise Finance dept. without CFA approval. In the case of renewal of PBG, the concerned Tendering officer shall write to the supplier well before the expiry date. Page 19 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
CHAPTER-6
LIMITED COMPETITIVE BIDDING
6.1 LIMITED COMPETITIVE BIDDING:
a) Sourcing of various items and services of high quality, reliability and timely availability is paramount in the construction of high tech. shipbuilding and general engineering industry. It warrants careful selection of bidders. Therefore, after careful scrutiny of registration documents submitted by various vendors, the qualified ones only are registered with GSL Limited tenders shall be issued where the estimated contract value of
I. Goods required is up to Rs. 30 lacs II. Services upto Rs 10 lacs III. Capital items up to Rs 10 lacs IV. Civil works up to Rs 1 lac.
It shall be ensured that the original requirement should not be split so as to avoid OCB process.
b) In Limited Competitive Bidding (LCB) process, bidding documents shall be sent to the bidders registered with GSL. If adequate vendors are not available in the registered vendor list, the following may be included with the approval of CFA. In case, CFA is PSC or BOD, then with the approval of CMD.
I. Vendors who are already registered with DGQA or with DGS&D. II. Vendors who are already registered with other DPSUs. III. Vendors who are approved by Classification Societies like ABS, LRS, IRS etc.
If adequate vendors are still not available and if time and cost involved in OCB is not commensurate with the contract value, LCB may be resorted, even though the contract value is more than the above indicated value. Simultaneously, where number of registered vendors is less than three, LCB may be resorted, however, simultaneously; action shall be initiated for registering more vendors.
c) If the contract value of the Items to be procured is above Rs 5 lacs, it shall necessarily be processed through e-tendering system. Items having technical implications and high value orders shall be processed in two bid system. Bid document, in GSL standard format, only shall be sent to a minimum of three or all the registered vendors. The ceiling for maximum no. of Vendors to be registered for each product may be fixed as 15 and the enquiries at every time need to be sent to all the Vendors. In case, the enquiry is to be sent to part of the registered Vendors, due to any reason, CFA approval is to be taken for the same.
d) In addition to above, in all the following cases, limited tendering may be resorted even if the contract value of the tender exceeds Rs 30 lacs and Rs 10 lacs in limits as specified at (a).
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e) Where procuring proprietary or customer nominated item or item for research, experiment, study or development.
f) Where Items are procured from firms based on current DGS&D Rate Contracts or from Govt. nominated outlets.
g) Automobiles & Vehicles.
h) GSL standardized items or developmental items.
i) Procuring industrial oils including diesel, petrol & lubricants from PSUs.
j) Procuring tailor-made, patented, or pattern numbered ship building items.
k) Procuring goods and services where confidentiality is required and hosting them on web or advertising may not safeguard national interest or legitimate commercial interest of GSL.
l) Sources of supply are definitely known and possibility of fresh source of supply is remote.
m) The time and cost involved to examine and evaluate a large number of bids may not be commensurate with the value of the subject matter of procurement.
Cases that fall under category (k) to (m) shall require prior approval of CFA before floating the tender enquiry.
LCB bidding documents shall be posted Under Certificate of Posting or Registered A/D or Speed post or through other approved mailing system. If it is processed through e-tendering, it shall be displayed on the CPP portal and GSL e-procurement portal.
6.2 BID PROCESSING
As bids of contract value above Rs 5 lacs are necessarily to be processed through e- tendering, all LCB bids costing Rs 5 lacs and above shall be processed through e- tendering. When the contract value of the goods to be procured is less than Rs 5 lacs, they may be processed through manual mode.
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CHAPTER-7
TWO STAGE BIDDING
7.1 WHEN TWO STAGE BIDDING?
A tendering officer may choose to procure the subject matter of procurement by the method of two-stage bidding, if— (a) It is not feasible to formulate detailed specifications or Identify specific characteristics for the subject matter of procurement, without receiving inputs regarding its technical aspects from bidders; or (b) The character of the subject matter of procurement is subject to rapid Technological advances or market fluctuations or both; or (c) The organization seeks to enter into a contract for the purpose of research, experiment, study or development, except where the contract includes the production of items in quantities sufficient to establish their commercial viability or to recover research and development costs; or (d) The bidder is expected to carry out a detailed survey or investigation and undertake a comprehensive assessment of risks, costs and obligations associated with the particular procurement.
7.2 EXPRESSION OF INTEREST (EOI):
(a) Like advertising for OCB, tenders shall be invited, inviting EOI to participate in the bidding process. It could be processed in Single bid system or two bid system. If it is in single bid system, bids shall be invited containing Tender Fee, EMD as the case may be and the pre- qualification criteria, technical aspects and contractual terms and conditions of the proposed procurement without a bid price; (b) If processed in two bid system, the 1st bid-Part I shall contain tender fee and EMD. The 2nd bid, part-II shall contain qualification criteria, technical aspects, contractual terms & conditions etc.
7.3 PROCEDURE
The procedure for two stage bidding shall be as follows: a) In the first stage of the bidding process, all first stage bids, which are otherwise eligible, shall be evaluated in accordance with the procedure, preferably by an appropriate committee constituted for the purpose.
(b) After detailed scrutiny of offers and considering the technical and financial pre-qualification criteria, the committee may call for pre-bid conference to hold discussions with the bidders. During the discussions, equal opportunity shall be given to all bidders to participate in the discussions; Proper record of discussions and presentations and the process of decision making shall be kept.
(c) While revising the relevant terms and conditions of the procurement, the committee shall not modify fundamental nature of the procurement
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itself, but may add, amend or omit any specification of the subject matter of procurement or criterion for evaluation.
(d) In the second stage of the bidding process, bids shall be invited from all those bidders whose bids at the first stage were not rejected, to present final bid with bid prices in response to a revised set of terms and conditions of the procurement.
(e) If any bidder, invited to bid but not in a position to supply the subject matter of procurement due to modification in the specifications or terms and conditions, he may withdraw from the bidding proceedings without forfeiting any bid security that he may have been required to provide or being penalized in any way, by declaring his intention to withdraw from the procurement proceedings with adequate justification. In case, the justification provided by the bidder is considered inadequate, then the bidder will have to forfeit the bid security provided by him, as detailed in the tender terms.
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CHAPTER-8 SINGLE SOURCE PROCUREMENT
8.1. WHEN SINGLE SOURCE PROCUREMENT?
A tendering officer may choose to procure the subject matter of procurement by the method of single source procurement:
(a) When demands are specifically certified as proprietary item by the indenting department. An item is considered to be proprietary in nature when no equivalent or near equivalent substitute from any other source is acceptable to the indenter, and the indenter to authenticate the same against such requirements. The particular prospective bidder shall have exclusive rights in respect of the subject matter of procurement. Or (b) The procurement from a particular prospective bidder is necessary due to specific written instruction from Customer/ user dept. or it is mandatory to procure the subject matter of procurement from a specific bidder according to an instruction from Government. Or (c) Procurement of spares and services from OEM Or (d) Owing to a sudden unforeseen event, there is extremely urgent need for the subject matter of procurement and engaging in any other method of procurement shall cause delay. In such cases, approval of CFA shall be taken, recording the reason for such urgent procurement. Or (e) The tendering officer, having procured goods, equipment, technology or services from a bidder after conducting bidding process in which multi- bidders participated, determines that additional supplies or services shall be procured from such bidder for reasons of standardization or because of the need for compatibility with existing goods, equipment, technology or services; In such cases, the ordering quantity shall not exceed 100% of the original contracted quantity and there is no downward trend in the price. The contractual delivery of the original goods or services shall be less than 1-year from the day of re-ordering. Approval of CFA shall be obtained before awarding contract. Or (f) The indenting dept. certifies that the use of any other method of procurement is not appropriate for the protection of the national security. A certificate shall be issued by the indenting dept. to that effect before processing the requirement. Or (g) Firms listed under DGS&D Rate Contract.
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8.2 PROCEDURE
The procedure for single source procurement shall be as follows:
(a) In case of goods and services, not covered under contracts for projects or Equipment Procurement Proposal (EPP) for capital items, before procuring any goods / services on single source basis, a Proprietary Article Certificate (PAC) APPENDIX-F or a certificate as indicated in APPENDIX-G. is to be provided by the indenting dept. duly approved by respective HOD.
(b) The tendering officer then shall solicit a bid from the single prospective bidder. Generally he will be OEM or their sole authorized sales outlet for the region.
(c) The provision of ‘late tender’ or ‘delayed tender’ as well as process of receipt and opening of bids twice in a week, i.e. Tuesday and Friday, as applicable for OCB and LCB shall not apply in case of procurement through single source. As far as possible, the single Tender bid should be obtained in a duly sealed cover and in warded through dispatch section. The sealed Single Bid should be opened in the presence of Internal Audit and dealing Tendering Officer.
(d) The tendering officer may engage in negotiations, with the bidder.
8.3 RESULTANT SINGLE VENDOR
There would have occasions where either only a single offer or a single valid offer would be received or single offer is technically cleared, against OCB or LCB. This is known as resultant single bidding situation indicating lack of competition. These cases shall not be considered or treated as procurement against single source.
In case of resultant single bidding situation, the procedure for either going ahead with the processing of the offer or resorting to re-tendering to be done as elaborated in CMD’s Memo No. CMD/17/2011 dtd 02-06-2011.
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CHAPTER-9
EMERGENCY PROCUREMENT
9.1 EMERGENCY PROCUREMENT
Emergency procurement shall be made when requirement of goods or services is urgent and immediate. It shall be ensured that this procurement is made without loss of time. Emergency procurement covers all items and services required urgently for various activities of projects during construction or repair or Ship repair or guarantee refit that includes docking, undocking, launching, fitting out, equipment trial, Basin Trial (BT), Contractors Sea Trial (CST) etc. and also for Yard facilities including break down maintenance of boats, machinery, production hold ups, accidents, organizing events at short notice and other urgent requirements in unforeseen circumstances.
9.2 LOCAL PROCUREMENT THROUGH COMMITTEE
This procedure shall be followed for items required urgently for important events like launching, commissioning, delivery of ships, Sea trials, company’s official functions, sundry items required for guest house, sports club etc. where cost of procurement of goods is above Rs 20,000/- and up to Rs. 10,00,000/- against one procurement advice. Project Coordinating Manager (PCM) or Additional General Manager( Administration) or any other Dy. General Manager or Additional General Manager( AGM) who is in-charge of organizing these events shall obtain in-principle approval from the concerned HOD for procurement. After approval, the availability of the items in Stores shall be checked by the above officer. Clear and complete description of items to be procured is to be mentioned. It shall be ensured that the requirement is not split to facilitate procurement under this category. The Project Coordinating Manager (PCM) or Additional General Manager( Administration) or any other Dy. General Manager or Additional General Manager( AGM) who is in-charge of organizing these events shall put up proposal to the concerned Director, recommending members to form Local Procurement Committee (LPC). The committee shall normally have one member from the user dept., one member from Finance dept. and one member from procuring dept. Each committee shall be formed separately on each occasion.
The committee shall be required to survey the market to ascertain the reasonableness of rate, quality and specifications and identify the appropriate supplier. No quotation shall be obtained from any party banned by GSL. In order to assess the reasonability of price, the committee may obtain minimum three quotations from known reputed sources of supply by making verbal or telephonic or written enquiry. Last Purchase Price (LPP), available in the system or records, may also be used in establishing the reasonability of the offer. As far as possible, the items being procured shall be standard, branded, packaged in original packing with standard warranty of the manufacturer. No item covered under ARC shall be procured through Local Purchase Committee. If the items are available in Khadi Village Industries Commission (KVIC), Kendriya Bhandar, National Consumer Co operatives Federation or Handicraft Emporium or any other unit run by State or central Government, then preference shall be given to procure the items from these sources.
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Offers obtained, shall be tabulated in a Comparative Statement and negotiation may be carried out for getting quickest delivery at the lowest price. Recommendation for procurement may be made by the committee generally from the lowest techno-commercially acceptable bidder. Before recommending for placement of purchase order, the members of the committee shall jointly certify in the format as at APPENDIX-H.
Based on the LPC recommendation, concerned User Dept. officer shall obtain approval of concerned Director with financial concurrence before issuing purchase order Items, for which DGS&D rate contract exists, can be recommended by the LPC for procurement directly from the suppliers on the same terms & conditions and price agreed upon in the said contract.
9.3 SELECTION OF ITEMS BY CUSTOMER REPRESENTATIVES
It may be required to procure items based on selection by customer representatives (reps). In such cases, direct offer to be obtained from the concerned firms, even if they are not registered with GSL for items selected by the customer. This offer shall be sent to the Technical Dept. who shall check the budgeted estimate price and the specification in the Contract. After their clearance, it shall be processed in the normal manner.
9.4 PROCUREMENT OF SPARES FOR PLANT MAINTENANCE
Procurement of spares under this category shall be exceptional and only for meeting critical requirements for equipment, machinery or prime movers. Officer-in-Charge (OI/C), Plant Maintenance section may procure spares without raising indent for a value not exceeding Rs.50,000/- in each case. A proposal for procurement of spares shall be initiated by OIC Plant Maintenance indicating in which machinery the spares are required and sent through DGM/AGM (Finance) for approval of HOD (Production). A certificate about non availability of spares in General Stores or Plant Maintenance stock must be accompanied along with the said proposal. It is to be ensured that the requirement is not split to circumvent the financial limit of Rs. 50,000/.
After approval, procurement shall be made from OEM or their authorized distributor or dealer. In case the spares are procured from authorized distributor or dealer, a copy of valid distributorship or dealership certificate issued by OEM shall be obtained. Procurement of spares shall be carried out based on the standard price list of OEMs. Discount shall be obtained wherever feasible. In case standard price list is not available, telephonic or written quotation from OEM or authorized dealer may be obtained. In case the spares required to be procured are standard items like bearings, belts etc, telephonic or written quotation from two reputed sources may be obtained. If criticality does not permit time to obtain two offers, the OIC Plant maintenance shall satisfy himself about the quality and price and certify to that effect in the proposal. As far as possible the spares being procured shall be branded or packaged in original packing or may be accepted based on standard warranty of the OEMs.
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OIC, Plant Maintenance shall issue Purchase Order for such procurement. A separate purchase order series will be created by EDP for the purpose. On receipt of spares along with delivery challan, duly inwarded through Central Industrial Security Force( CISF), OIC ,Plant Maintenance will certify the receipt of spares and forward along with the firm’s bill to Finance for payment. No separate Goods Receipt Number (GRN) is required to be prepared. The maximum financial limit for such procurement shall be limited to Rs. 20 lakh in a year. The spares recommended by OEMs shall invariably be maintained by Plant & Maintenance Dept. to avoid breakdown.
9.5 PROCUREMENT OF ITEMS & SERVICES FOR SHIP REPAIR & MAINTENANCE
Ship Repair (SR) works require to be completed in short time and in a time bound manner. This would require procurement of items and services on fast track basis. In order to meet a large number of such emergency requirements, a committee comprising an officer carrying out Ship Repair, an officer from Finance dept. and a procuring officer of SR dept. shall be constituted with due approval of functional Director.
Under this procurement, issuing of tender enquiry and receipt of bids can be by Fax or E-mail and the response time shall generally be kept between 2 to 5 days. The Committee may decide about the need to have negotiation on the price. All evaluation and procurement formalities shall be completed within the required time frame. This fast track procurement shall be carried out by LPC and single bid system and preferably from registered sources. The other applicable clauses of LPC and procurement through LPC shall be complied with by the said Committee. Payment term can be reduced to 7 to 15 days to express GSL’s seriousness on fast track procedure. Bid opening sheet is to be maintained to establish number of offers received against particular tender. Offers are required to be opened in the presence of the Committee. As orders are placed on fast track, the time limit for supply of items or rendering of services shall be as short as possible and no delay shall take place in receipt inspection or certification of work completion and payment thereof.
Financial limits shall be Rs. 1,00,000/- for procurement of each item and Rs. 50,000/- for each subcontract activity with an overall limit of 30% of the Ship Repair contract value agreed with the Customer.
9.6 CASH PURCHASES
Cash or Spot procurement may be resorted under the following conditions:
a) When procurement by normal procedures are considered to be uneconomical in terms of the value of the item and availability in the open market, and wherein the requirement is immediate.
b) And when the value of procurement is not more than Rs. 20,000/- for each item.
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c) And when the item is not regularly procured and not included in the Annual Rate Contract.
d) And when the item is available ex-stock from show rooms or shops specially dealing with the items of such nature.
e) And when the item is branded or packaged in original packing or may be accepted based on standard warranty of the manufacturer.
9.7 PROCEDURE: a) The decision to make cash purchase shall be taken by the concerned officers in consultation with his section head and HOD. A certificate about non availability of item in stores shall be accompanied along with the indent for cash purchases.
b) For Cash Purchase, an imprest amount of Rs. 1, 00,000 /- to the officers of the rank of Senior Manager and above and Rs 50,000/- for the rank of Managers and below will be made available. They shall be nominated by the concerned HoDs.
c) Cash Purchasing shall be made by a team comprising of the concerned Procuring officer and a Finance officer. They may co-opt user department representative on need basis. The HOD, Finance will nominate the officer to be associated with cash Purchases, on monthly basis.
d) No separate financial concurrence is required and no purchase order will be issued.
e) Cash Purchases will be made on cash payment basis preferably from dealers or show rooms after obtaining proper cash memo, money receipt and warranty certificate, if any, against any manufacturing defect.
f) No cash purchase shall be made from any firm banned by GSL.
g) As far as possible, the purchase of items should be against Taxable Invoice and VAT input on credit on purchases made through Cash Purchases should invariably be availed. The respective officer holding imprest cash will initiate necessary action in this regard and forward it to Finance Department. The concerned Finance officer shall consolidate for the entire Yard once in a quarter to claim the credit due.
h) The officer holding imprest cash is responsible to get cash purchased items in- warded at the gate by the CISF. Items shall be accepted and duly received on the bill itself, mentioning the name & employee number of the person who received. The bills shall be settled against the advance amount drawn by the concerned Procuring manager.
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i) Any rejection shall be intimated to the officer holding imprest cash by the user department in writing within 3 days from the date of receipt. Replacement shall be arranged within 7 days by the procuring Manager.
j) The claim for recoupment of Cash shall be accompanied by a Cash Purchase statement duly countersigned by the accompanied Finance officer and Head of Department. At the time of countersigning the statement, the concerned HOD shall satisfy himself that the procurements have not been deliberately split to circumvent the normal procurement procedure.
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CHAPTER-10
RATE CONTRACT
10.1 OBJECTIVES
Rate Contract (RC) shall be resorted when need for the subject matter of procurement is expected to arise on a recurring basis during a given period of time. It enables procurement of the same item subsequently promptly. By combining the total requirement and tendering out, quantity discount could be obtained and timely delivery can be ensured. It also helps in reducing procurement cost and inventory carrying cost. Therefore, efforts shall be made to bring as many goods and services as possible under this category. TS Dept. or User Dept. to project specification and quantities for these items, based on which, commercial dept. can initiate the process for RC.
10.2 GOODS AND SERVICES TO BE RATE CONTRACTED: a. Commonly used goods required on recurring basis. b. Goods for which prices are likely to be stable or if the goods are having fluctuating market trend, a clear and unambiguous price variation clause can be worked out based on prevailing Indian or international bureau like London Metal Exchange (LME) price
c. Services which are regularly or periodically needed.
RC may be avoided for scarce items.
10.3 INFORMATION FOR TENDER ENQUIRIES The user shall forward the following in puts as regard to goods and / or services required to the Tendering Officer (TO) for processing RC requirements.
(a) Detailed scope of supply of work or services required.
(b) Period of Contract, whether annual or biennial.
(c) Eligibility criteria.
(d) Requirement of single or multiple contracts.
(e) Budgetary estimate duly vetted and approved by CFA.
(f) Process for inspection.
(g) Bill certification procedure for release of payment.
(h) Approval in principle for undertaking RC
(i) Probable and known source if any
(j) User Dept. to indicate name of the Contract Operating Authority (COA)
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(k) Any other instructions requiring incorporation in the tender document.
If the requirement is from more than one dept., the main user shall collate requirements from other users and forward to the TO.
10.4 RC PLACING DEPTS.
RCs may be processed through OCB or LCB or SSP depending on the estimated value of the contract. RC for maintenance of yard equipment, facilities and services shall be dealt by the concerned dept. In addition, other services like Freight forwarders, Custom clearing agents etc. required to meet commercial functions shall be dealt by Commercial dept. RC for providing specific services to SR & GES shall as and when arises be dealt by them. RC for providing civil maintenance services for GSL yards I, II & III, Officers Enclave and other GSL properties shall be issued by Shipyard Modernization Project (SMP) dept. Each procurement dept. may decide for themselves, based on the need and procure goods or services under RC. Orders against a RC concluded by any Dept. may be placed on the same terms and conditions by any other dept., subject to there being no downward trend in prices. To facilitate such operation, a suitable provision shall be made in the bid documents and RCs and copy of these RCs be forwarded to the concerned dept & section.
10.5 PERIOD OF RC
RC shall normally be concluded for one or two or three years. However, if circumstances warrant, shorter or longer period, not exceeding three years, may be considered. As far as possible, conclusion period of RC shall be so fixed as to ensure that budgetary levies would not affect the price and thereby frustrate the contracts.
10.6 CONDITIONS APPLICABLE Following terms and conditions shall be followed for all RCs. a) EMD & SD shall be applicable even if it is LCB. SD need not be demanded for supply of goods. b) Against the schedule of ‘quantity required’, only ‘anticipated quantity required’ shall be mentioned. c) It shall be mentioned that in case of emergency, the procuring dept. reserves the right to procure the same item(s) from other sources. d) Depending on the market trend, the procuring dept. as well as the firm has the option to terminate the contract with one month’s prior notice from either side. e) Terms of delivery of goods / services shall normally be FOR GSL f) Individual supply orders for goods, incorporating definite quantity of goods to be supplied are to be issued for obtaining supplies through the rate contract. g) A clause stating, “The procurer or the authorized users of RC are entitled to place supply orders up to till the last day of the validity of the RC even though supplies against such supply orders will be effected beyond the validity period
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of the rate contract. All such supplies shall be guided by the terms and conditions of the rate contract” to be included in the tender. h) A “Fall Clause” as mentioned below shall be included in the bid document and RC.
“If the RC holder either reduces his price or sells or offers to sell any of the items of the RC to any other procurer at a lesser price than that of RC at the same or similar terms and conditions, the RC price shall automatically reduced to that sale price, with effect from the date of sale or offer for sale and RC price shall be amended accordingly”
10.7 PARALLEL RC
In cases when a single supplier does not have adequate capacity to cater to the entire demand of subject matter of procurement, or for strategic reasons to ensure uninterrupted services even if one supplier fails due to any reason, on the basis of the requirement projected by user, the RC issuing authority may enter into RC with more than one bidder. However, in such cases, it shall be stated before hand in the bidding document that contract will be split in certain ratio and placed on two or more bidders, provided L2, L3 firms match with the price of L1 firm.
10.8 EXTENSION OF RC
Procedure for renewal and extension of the contracts is to be followed as per CMD memo No. CMD/31/2011 dtd. 09 Nov. 2011
a. It shall be ensured that new RC is made operative right after the expiry of the existing RC without any gap. However, if it is not possible to conclude new rate contract due to internal and external factors, timely steps shall be taken to extend the term of the existing rate contract with the consent of the rate contract holders, with the same terms and conditions. While extending the existing RC, it shall be ensured that the price trend is not on the lower side. In case, the firm does not agree to extend the contract then a time frame of 2 weeks may be given to the bidders for submission of their bids and the tender shall be finalized only for a short period which is considered necessary.
b. The RC may be extended with the approval of CFA, initially, for a period of not more than 3 months. Thereafter, depending upon the circumstances, further extension for a period not exceeding another 3 months, may be allowed by the said CFA. Any extension beyond the period of 6 months shall require approval of CMD with financial concurrence.
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10.9 GUIDELINES TO AVERT DELAY
a) Complete information for floating tenders, as indicated at 10.3 shall be furnished by the user dept. at least 7- months prior to the expiry of any existing RC.
b) The Tendering Officer shall prepare the tender document and release the Notice Inviting Tender (NIT) for publication within 3 weeks from the receipt of the information.
c) Tender for new RC shall be published at least 6 months prior to the expiry of the existing contract.
d) A period of 4-6 weeks will be allowed for submission of the tenders.
e) The Tendering Officer shall check for receipt of tender fee or EMD if any and forward the technical bids of qualified bidders in terms of submission of tender fee & EMD, including documents supporting pre-qualification criteria to the user dept. for scrutiny within 5 days from the date of opening of the bids.
f) The Technical Evaluation Manager (TEM) shall scrutinize the bids and furnish his recommendation within 4-weeks of receipt of technical bids. Where it is felt necessary that a committee should scrutinize the bids, the user may initiate action for forming a committee, suggesting names of members and obtain approval of CFA.
g) The Tendering Officer shall within 10 days of the receipt of the technical report, shall invite the technically acceptable bidders for commercial negotiations & price bid opening, giving 10 days’ advance notice to the bidders.
h) After opening the price bids, the Tendering Officer may conduct price negotiation if necessary, and put up proposal to CFA for approval and release RC within 4-6 weeks from the date of opening of the price bids.
10.10 PLACEMENT OF SUPPLY ORDERS
Supplies are to be obtained against a rate contract by placing on the rate contracted firm, supply order containing the quantity of the goods to be supplied and incorporating the prices and delivery. The Supply orders can be placed by other ordering depts. ALSO. In such cases, prior to placement of order the balance quantity available under RC should be confirmed and on placement of supply order the PO No. is to be intimated to the dept., who has finalized the RC, for record.
10.11 MAINTENANCE CONTRACT
In General, there are two types of Maintenance Contracts viz. Comprehensive and non-comprehensive maintenance contracts. In the case of comprehensive maintenance contract, the supplier provides consumable spares with some exception and for non-comprehensive contracts, supplier provides only services for
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maintenance of equipment and all spares are to be provided by GSL. These contracts may contain the following additional conditions: a. In addition to preventive maintenance, the contractor shall undertake breakdown maintenance of equipment and machinery. b. He must attend to break down maintenance within 24- hrs of intimation. c. Down time of machinery beyond a certain period, indicated by the user shall be to Contractor’s account, making him liable for paying penalty. d. Damage to machinery due to negligence by Contractor shall be liable for penalty.
10.12 LOGISTICS CONTRACT
It involves hiring of taxi, transport services for transportation of goods, cleaning of yard, material handling of goods etc. These types of contracts shall contain following additional clauses:
10.12.1 TRANSPORTATION OF GOODS:
a) In case of any delay in collection of goods by GSL from the Transporter’s go-down, the contractor shall not claim demurrage charges. b) The transporter shall compensate for loss or damage during transit. c) All goods shall be transported through shortest route. As far as possible, transshipment en-route or waiting for other consignments to carry full load shall be avoided. d) Delay for delivery beyond a reasonable period shall be liable for imposing penalty.
10.12.2 TAXI SERVICES:
a) Condition of the vehicle shall be part of technical evaluation.
b) Payment shall be made depending on the certified time of reporting and leaving.
c) In case of break down, suitable another taxi shall be arranged. Similarly, in case of absenteeism of a regular driver, another qualified driver shall be provided.
d) Repeated reporting of rash driving or insubordination may lead to cancellation of contract.
e) No compensation shall be payable for accidents caused.
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10.12.3 YARD CLEANING & MATERIAL HANDLING:
a. Police clearance needs to be obtained for the workers before deploying them on job.
b. GSL shall not be responsible for accidents and injuries to their workers due to their negligence.
c. Contractor shall indemnify GSL against all claims arising out of this contract for any reason, whatsoever.
d. Contractor shall provide to their workers, uniform, shoes, helmet, gloves and other safety appliances and ensure that they are put on while doing work.
e. Contractor shall be responsible for any damage caused to GSL by their workers.
10.13 COMMON POINT FOR ALL CONTRACTS
As per Para 4 of MOM of CMC dtd. 02.12.2011, it has been decided to stop in all future tenders/ contracts, the provision of providing food coupons at subsidized rates in GSL canteen for all contract employees.
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CHAPTER-11
ELECTRONIC REVERSE AUCTION
11.1 PRE-REQUISITES
Electronic Reverse Auction may be resorted when-
a. It is feasible to formulate a detailed description of the subject matter of the procurement
b. There is a competitive market of bidders anticipated to be qualified to participate so that effective competition is ensured
c. The criteria to be used for determining the successful bid are quantifiable and can be expressed in monetary terms.
11.2 INFORMATION IN NIT GSL may engage an Application Service Provider (ASP) for conducting ERA. Before conducting ERA, it shall be indicated in the NIT that ERA would be conducted for the subject matter of procurement. The NIT shall contain detailed Business Rules (BR) for conducting the ERA.
11.3 BUSINESS RULES
In the BR, it shall be mentioned that It should be the responsibility of the bidders to have infrastructure ready and in functional or proper working condition during auctioning and GSL shall not be responsible in any way for malfunctioning of the equipment or failure of power supply or any other interruptions. GSL shall not also be responsible for any damages or consequential damages for any malfunctioning of the system during auctioning. It shall also be mentioned that bids made during auctioning are binding on them and the excuse of ‘rates quoted by mistake’ will not be accepted at all. In such cases, suitable penal action shall be taken against the negligent bidder. It shall also be mentioned that if any bidder is found indulging in unethical act of colluding with other bidders or any other unethical acts, they shall be de-barred from doing any further business with GSL. A compliance form consenting for the BR shall be obtained duly signed by participating bidders before commencing the auction. GSL shall retain the right to open the BOQ price bid submitted in the price bid cover, as and when the situation warrants. ERA may also be cancelled, if the circumstances warrant and in such cases, off line negotiation may be carried out. A format of BR is at APPENDIX-I.
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11.4 PREPARATION TO ERA Adequate training shall be imparted to bidders before commencing the auction. A confirmation shall be obtained before hand from all bidders who are participating in ERA that they are trained and have knowledge on how to participate and bid in the ERA system and they shall be responsible for the bids quoted by them. Only bidders who are qualified technically and commercially shall participate in the ERA process. They all shall be brought on par technically and commercially, if necessary by applying loading factors. The NIT shall contain the weightages that shall be loaded for various factors like freight, insurance, etc. Before conducting ERA, each bidder shall be informed of the loading that would be done to his offer. Therefore, when a bidder bids in an ERA, he shall be able to see the comparative cost of his bid.
11.5 SYSTEM AUDIT It is essential in any ERA procedure to ensure that the identity of the bidders who are participating in the auction is kept confidential. The ASP shall have in-built system to ensure this and regular system audit should be conducted on to their system and a report be obtained for records.
11.6 DURATION The duration of the auction shall normally be between 45 to 60 minutes, depending on the participation of overseas bidder and the nature of the subject item of procurement. The bid of the bidder will be taken to be an offer to execute the work. Bids once made by the bidder shall not be cancelled. If a bidder places a bid in the last 5 minutes of closing of the ERA and if that bid gets accepted, then the auction’s duration shall get extended automatically for another 5 minutes, for the entire auction i.e. for all the items in the auction, from the time that bid comes in. There shall not be any restriction on the no. of such auto extensions.
11.7 PASSWORD CHANGE Each Bidder shall be assigned a Unique User Name and Password by the ASP. The Bidders should change the password after the receipt of initial password. They shall also edit the information and check the company details in the Registration Page of the ASP. All bids made from the Login ID given to the bidder shall be deemed to have been made by the bidder. ASP and GSL shall not be responsible if that is not done.
11.8 OPENING PRICE (OP) All bidders shall be informed of the procedure to be followed. Date and time of commencement of auction, opening price of GSL and decrement value to be quoted shall be spelt out clearly before the auction. The GSL OP shall be the market price. It can be found out from budgetary quotations received or can be the estimated price based on the last procurement price or based on the information of recent sale of the items to any Govt. units or PSUs. Decremental value may vary from Rs 5,000/- to Rs 20,000/- depending on the estimated value of the item to be procured.
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11.9 VISIBLE ON THE SCREEN It is essential that the identity of the bidders participating in the auction shall not be known to each other. For this purpose, only the following minimum information shall appear in the bidding screen;
a. Bid Placed by the individual bidder shall be seen by the individuals only. For others, his quote shall be seen as just a bid from unknown coded person.
b. Lowest Bid Value prevailing at any time of auction.
c. Own Rank of the individual bidder
d. Bid Decrement Value
11.10 BIDDING
The OP of an item shall be visible to all the participating eligible bidders. Any bidder can start bidding, online, from the OP. If the start price is the price of a bidder, the bidder still needs to bid online. The first online bid that comes in the system during the ERA can be equal to a bidder’s start price, or lesser than the auction's start price by one decrement, or lesser than the auction's start price by multiples of decrement. The second online bid and onwards will have to be lesser than the L1 rate by one decrement value, or lesser than the L1 rate by multiples of the decrement value.
11.11 EMERGENCY BIDDING In extreme cases of failure of Internet connectivity, at the request of a bidder, ASP may upload their bid conveyed in writing. The bidder may covey their bidding price by a fax to ASP with a copy forwarded to GSL. It shall be made clear that the concerned bidder communicating their price to ASP provider has to solely ensure that the fax message is received by the ASP in a readable, legible and unambiguous form. The bidder should simultaneously check up with ASP about the clear receipt of the price faxed.
11.12 PROXY BIDDING
Proxy bidding is a pro-supplier feature to safe guard the bidder’s interest in case of any Internet failure or to avoid last minute rush. The Proxy feature allows bidders to place an automated bid against other bidders in an auction and bid without having to enter a new amount each time a competing bidder submits a new offer. The bid amount that a bidder enters is the minimum that the bidder is willing to offer. Here the software bids on behalf of the bidder. It can be carried out as described below:
i. The proxy amount is the minimum amount that a bidder is willing to offer. During the course of bidding, the bidder cannot delete or change the amount of a Proxy Bid.
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ii. Bids are submitted in decrements. The application automates proxy bidding by processing proxy bids automatically and submitting bid every time at the next lower decrement value available than the lowest value that appears in the screen. It can bid, till the last specified value in the proxy bid. It can submit bid regardless if competing bids are submitted as proxy or standard bids.
iii. This feature can be used only once during a particular ERA. The bidder can exercise option to bid manually when the L1 rate is equal to or less than the minimum bid amount that the bidder has put in the system. In no case during the bidding, till the L1 rate or less is not reached as equivalent to the minimum bid amount offered by the bidder, will the bidder get the option to manually bid for the same.
11.13 CLOSING PRICE (CP) The ratio of Closing Price (CP) and originally quoted price shall be applied on all elements of originally quoted prices to arrive at the final price break-up. Successful bidder shall be required to submit to GSL, within 24 hours of completion of the ERA, the final prices duly signed and stamped, as token of acceptance without any new condition other than those already agreed to before start of auction. A format of that intimation is at APPENDIX-J.
11.14 NO BID RECEIPT During the ERA, if no bid is received in the auction system within the specified time duration, then GSL at its discretion, may decide to revise the auction's OP and re- conduct the ERA or scrap the ERA and proceed with the conventional mode of opening the BOQ or call the L-1 bidder for price negotiation as per rule.
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CHAPTER-12
E-TENDERING
12.1 OBJECTVES
The objective of e-Procurement is to automate the procurement process to
a) Improve efficiency b) Cut down the total procurement time and cost c) Widen data base of suppliers. d) Enhance transparency e) Enhance integrity in the procurement process
12.2 THRESHOLD LIMIT
In view of the transparency and security built in into the system and opportunity available for reducing the procurement cycle time, wider usage of e-procurement mode for procurement of goods, services and works is advised. As per CMD memo no. CMD/15/2012 date 18 May 2012, with effect from 01 July 2012, all tenders having threshold value of Rs 5 lacs and above shall be processed only on e-tender mode. Where exemptions are being made, it shall be with the approval of CMD. All such exemptions, after approval are to be forwarded to Internal Audit who shall compile them and put up for perusal of the Audit Committee.
12.3 DIGITAL SIGNATURE CERTIFICATES (DSC)
MoD has directed vide minutes of meeting held on 27 Dec 2011 that by end Mar 2012, DPSUs should upgrade to using class 3 Digital Signature Certificates. Therefore, all users in GSL and bidders shall use only class 3 DSCs. They also have to get dual functional DSC, one for signing and another one for encryption. They shall get DSC on their names, on behalf of the company they represent. Overseas bidders shall also get DSCs issued by Indian authorized authorities. DSCs issued by overseas authorities in their countries are not acceptable. Other details are available in the ‘Dash Board’ of GSL procurement portal, “ http://www.eprocuregsl.gov.in ’’, under the heading ‘Information about DSC’.
12.4 ENROLLMENT
Every bidder who desires to do business with GSL, has to enroll their company with our portal, “http://www.eprocuregsl.gov.in ’’. He has to click on ‘Click here to enroll’ at the portal and thereafter fill a series of fields. Fields marked with an * sign are mandatory fields. Detailed steps on how to enroll is available in the portal, on clicking “Bidders Manual Kit” and further clicking on ‘Bidders Enrollment’. LCB bid documents shall be issued only to those bidders who are enrolled with GSL portal. In the case of OCB, those who desire to bid shall have to enroll in the portal before submitting their bid. Bidders, registered with National Small Industries Corporation (NSIC) and wish to avail of Tender Fee and EMD exemptions and Purchase Preference facility shall have to specify so in the system.
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12.5 DSC REGISTRATION
Another pre-requisite for participating in the e-tender process is that the bidder should register their DSC with the GSL portal. They have to enter their e-mail IDs and passwords in the portal and click. Then they have to insert their DSCs, install the DSC driver software and register as per the instructions that appear on the screen. Detailed steps on how to register DSC is available at ‘Bidders Enrollment’, as stated at 12.4.
12.6 MANUAL
The following manuals are available in the portal.
a. Help for Contractors b. Help for Departmental Users c. Information about DSC d. FAQs e. Resources required f. Bidders manual Kit.
Detailed instructions on how to proceed are available in these manuals.
12.7 LOGGING IN
Procurement officer shall use his DSC to’ log in ‘to the system. He is solely responsible for safe custody and keeping the pass word of the DSC confidential. It is an offence under IT Act 2000 to share his DSC with others. While ‘logging in’, he shall also check the last logged in date and time to ensure that no one has unauthorizedly opened the system.
12.8 BASIC DETAILS
a) On receipt of Procurement Advice and Technical Advice or Requirement For Procurement (RFP), the procuring officer shall click on the ‘Tender List;’ and ‘create a new call for tender’ in the system. He has to fill up ‘basic details ‘like PA / Requisition reference, whether open or limited tender, whether single cover or two covers bidding, whether it is for supply of goods or service or for works, No. of bid openers, whether to allow rebid submission, withdrawal of bids, whether there is technical evaluation, price preference, purchase preference, multi -currency acceptable and off line receipt of payment. It is to be chosen in the system whether item wise rates are to be obtained or lump sum rate is to be obtained. Accordingly, the system will make comparative statement to arrive at L-1.
b) When the system asks the no. of bid openers, whether they are 2/4 or 3/4 or 4/4, it means whether any two openers out of the specified 4 openers can open the bids or any 3 openers out of the specified 4 openers etc. It is advisable to choose 2 openers out of 4.
c) The system allows resubmission of bids, any no. of times before the bid submission closing date and time. The last bid submitted by a bidder only will be taken in to
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account by the system. Similarly, the system permits withdrawal of submitted bids before the bid closing date and time.
12.9 COVER DETAILS
The procurer has to indicate the ‘cover details’ i.e. what each cover should contain. It must be very clearly brought out what all documents bidders have to submit. In a single cover system, technical specification and Bill of Quantity (BOQ) shall be put in one cover. In 2- cover system, technical specification, deviation to technical specification, commercial terms, deviation to commercial terms, Solvency certificate, work experience details, etc shall be put in the technical cover. Separate file for each of the above requirement is to be created. The documents can be uploaded either in .pdf or .jpg or .rar formats. Each file size shall not exceed 7 MB. If the file size is more than 7 MB, the file has to be compressed using rar software which is available in the portal under heading ’Resources Required’. The system will not allow the bidder to upload more no. of documents than what is specified under technical cover. Therefore, adequate no. of files are to be created so that the bidder is not wanting to send the required files. The bidder has to upload these documents one by one. Under Price bid cover, the bidder shall attach only BOQ. It shall be submitted only in.xls format. Details of how to submit bid or re-submit bid are available in bidders manual.
In three bid cover system, 1st cover can be used for furnishing details of tender fee and EMD, 2nd cover for technical bid and 3rd cover for BOQ. In 4-cover system, 1st cover can be used for tender fee and EMD, 2nd cover for furnishing support documents for pre-qualifying criteria, 3rd cover for technical bid and 4th cover for BOQ. Bidders qualified against 1st cover only shall qualify for opening in the next cover at each stage.
12.10 NOTICE INVITING TENDERS (NIT)
All documents including technical specification, drawings , commercial terms and conditions etc that are to be sent to bidders are to be uploaded under ‘Notice Inviting Tender’ ( NIT). It shall again be either in .pdf or .jpg or .rar formats, except the BOQ which shall be in .xls format. Before uploading, each file is to be invariably ‘digitally authenticated’ and ‘verified’. After uploading, summary of documents uploaded can be seen.
12.11 WORK ITEM DETAILS
The procuring Manager then has to enter ‘work item details’. This would include Goods/ Works title, description, what should be the validity of the offer, when delivery is required, if pre-bid is required and if so what is the qualification criteria, what is the address of the meeting place etc.
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12.12 FEE DETAILS
Tender fee and / or EMD details are to be mentioned in this screen. Till payment gate way arrangements are made, fees can be paid off line. However, the details of Demand Drafts (DD) or BGs are to be entered by the bidder in the system. The bidder has to ensure that the DD, put in a cover super scribed with tender title, reference and tender opening date reaches GSL before the bid opening date and time. While opening the bids in the system, the bid opener has to physically check the DD with reference to the details furnished in the system and endorse in the system whether the tender is accepted or not for further processing.
12.13 TENDER DATES
Subsequently, tender publishing date and time, clarification start and end dates with times, bid submission start and closing dates and times and bid opening date and time are to be entered in to the system. Bidders who seek clarifications, have to seek clarifications before the closing date and time set for the purpose. Clarifications sought after the ‘closing date and time will not be accepted by the system. The closing date for seeking clarification shall be maximum 7 days prior to the tender closing date. The procurer shall ensure that the clarifications are furnished at the earliest from the date of receipt. While forwarding the clarifications, the system will send the clarifications to all bidders to whom NIT was issued, irrespective of whether they sought clarification or not. The system will not allow tenders to be opened, under any circumstances prior to the tender opening date and time. However, tenders can be opened at any time after the due date and time. There has to be a time gap of at least one day between the date for submission of bids and date for opening the bids. This is to facilitate that if adequate no. of bids are not received, the due date of tender opening can be extended, if required with the approval of concerned HOD.
12.14 BID OPENERS
After fixing various dates, the names of bid openers are to be selected. If we had mentioned in the basic details at Para 11.7, the total bid openers- 4, then names of 4- officers who are having DSCs are to be selected. While selecting, two officers may be selected from procurement departments to facilitate that even if one officer is not available, the other officer can open the bids. In a similar way, one officer may be selected from technical evaluation department so that he can open the bids directly, scrutinize, evaluate the offers and attach evaluation report in the system. The other officer can be from Finance dept. No officer shall share his DSC with others under any circumstances.
12.15 BILL OF QUANTITY (BOQ)
a) The comparative statement will be prepared by the system. Hence, care has to be taken while designing the format. Columns are to be created to enable bidder to specify all applicable duties, like excise duty, auxiliary excise duty, custom duty, advalerum duty etc, taxes like VAT, CST, service tax, entry tax, octroi etc and charges like freight, packing, forwarding, insurance, inspection, testing, loading and unloading etc. If some taxes and charges are unforeseen, columns are to be created for ‘other charges’ or for ‘other taxes’. In addition to that, columns are to be created for
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loading factors for payment, LC charges, bank guarantees, warranties etc. Wherever the % of taxes, duties, charges, loading factors are known, they are to be incorporated in the BOQ. Needless to say, they should also be indicated in the tender terms and conditions.
b) Proper designing of BOQ format would eliminate problems at a later date. This would complete the process of creation of new tender. During these processes, the system will not allow to go to the next screen unless the mandatory fields are all filled in the previous screen.
12.16 PUBLISHING TENDERS
The tender so created needs to be published. Before publishing any tender, the contents are to be re-verified. Once any tender is published, it will appear in the home page with date and time of publication.
12.17 CORRIGENDUM
Corrigendum if required can be issued for changing the quantity, specification, tender conditions, payment of fees, tender due date, BOQ, etc. Before uploading the corrigendum, it is to be verified and authenticated. It should be ensured that they are issued at least 7 days before the due date for opening the tender. Corrigendum for extending the due date shall be issued before the due date and time for opening the bids. After the due date and time, no corrigendum can be issued. The tender has to be re-floated.
12.18 ENCRYPTION AND DECRYPTION
When bidders are submitting their bids, the files or contents first need to be encrypted. Encryption changes normal texts into cyber texts which are not readable. When bid openers open the bids, they first decrypt the encrypted texts. It brings back the contents in to the normal texts from the cyber texts. Using their DSCs, any 4- of the officers mentioned at para 12.16 for opening of the bids may decrypt the bid one by one. Moment a bid is decrypted by any one of the openers, the system will show that a red dot against that opener, turning in to green. Firstly, bid fee or EMD document if any is to be decrypted. Then, pre-qualification documents if any, techno-commercial bid and finally price bids are to be decrypted in that order.
12.19 VIEWING THE DOCUMENTS
After decryption, the system will indicate at what time the bids were decrypted. It will also show the bids withdrawn, if any by any bidder and for what reason. The unopened covers of a bidder will be displayed in the system by a ‘closed lock’ symbol. Once that bid is opened, the symbol will become an ‘opened lock’. Once one bidder’s 1st cover is opened, the system will show the no. of documents enclosed in that cover. It may include fee exemption certificate, pre-qualification compliance document, technical document, etc as the case may be. Each document is to be first viewed, verified and then checked for authentication. The details of EMD or bid document fee paid can be also seen. If bid document fee or EMD or both as applicable are not provided by a bidder, the bid is to be rejected in the system and reason for such rejection is to be recorded. Likewise other documents of bidder-1 are
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to be opened, evaluated and remarks offered. This process is to be repeated for other bidders who participated in the tender.
12.20 BID EVALUATION
If bid evaluation officer is one of the bid openers, he can straight away open and see all bids one by one. As stated earlier, the opening should be in the order of Fee document, prequalification document and then techno-commercial document. If a bidder has not sent original of DD or not furnished DD, his offer should be rejected even at that stage itself. While evaluating technical bids, if the concerned officer needs some clarification from the bidders, the clarification can be sought outside the system. After evaluation of each bid, he should attach his report and furnish comments against each bid whether it is accepted or rejected and if rejected for what reason. Once this process is over, it is to be mentioned in the system when the price bid will be opened. A summary of bid acceptance or rejection can be uploaded on to the system. After technical evaluation, the system sends the result to the bidders who participated in the process.
12.21 PRICE BID OPENING
As done for technical bid opening, the following process is to be repeated for opening price bids.
‐ Decrypt bidder cover ‐ Open price bid cover of bidder A ‐ Verify the document ‐ Accept or reject for further processing ‐ Repeat the process for bidder B ‐ The opened bids will be indicated by a ‘opened lock’ symbol ‐ System will furnish a list of bidders who have been cleared for price bid evaluation ‐ Generate automatic comparative statement through the system ‐ System will furnish a summary of total cost of all bidders who participated. ‐ It can also give a detailed break up of prices of each party. ‐ As done for technical summary, we can have financial bid summary uploaded on to the system ‐ The system will produce ranking of the bidders
12.22 FINANCIAL BID EVALUATION
The system will produce the result of comparative statement and indicate who LI, L2 etc is. The procurer will select the successful bidder or bidders as the case may be. A summary of price bid evaluation can be loaded on to the system. The system will then intimate all participants the status of their price bid/CST. However, any errors in auto generated CST as a result of errors in BOQ to be communicated to the bidders through message box.
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12.23 AWARD OF CONTRACT
After the evaluation and approval of bids by the CFA, the successful bidder will be formally notified of the award by order prior to expiration of the validity period. The system will generate a letter called “Award of Contract” which will state the contract price, terms and conditions. However, a formal order as is in vogue has to be sent in the usual way.
12.24 CENTRAL PUBLIC PROCUREMENT (CPP) PORTAL
Govt. of India, vide circular no. 10/1/2011-PPC dated 30 Nov 2011 has directed that all Central Public Sector Enterprises should mandatorily publish their tender enquiries, corrigenda and details of bid awards on the CPP Portal using e-publishing module. GSL has made arrangements with NIC by which NIC would themselves automatically upload these details on the CPP Portal with effect from 1st Feb 2012.
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CHAPTER – 13
ON LINE PROCUREMENT
13.1 UNIQUENESS
It is differentiated from e-tendering in that DSC is not being used in this process. This unique process has been in vogue since 2003. NITs and bids are not encrypted nor decrypted in this process. Tender enquires may be sent on line and off line also where it is needed to registered bidders as done in any LCB. Offers may be received on line and off line. Where offers are received off line, they shall be opened in the presence of reps of Procuring dept., Internal Audit dept., and mail in-warding section as normally being done in any LCB bids received off line. The bids received off line shall be entered in the system and processed further on line.
13.2 PROCEDURE
Where required, the bids may be sent for technical evaluation. If the user is not connected in the work flow, the bids may be sent off line, otherwise it shall be sent on line for evaluation. The evaluation reports received off line shall be entered in the system and processed further. The system makes the comparative statement, indicates the details of last procurement made that includes, Last Purchase Price (LPP), Supplier name and date of procurement. The system has the unique facility to set the work flow so that the proposal along with the Comparative Statement (CST) is sent to various recommending and approving authorities. The system is interfaced with BaaN ERP system. Therefore, after approval, like any other Purchase Orders, for on line procurement also, BaaN orders are generated and issued.
13.3 APPLICATION
This system shall be used for General Stock as well as non-stock, Direct Purchase items. It may be used for low value, standard, off the shelf items and when tenders are to be issued only to registered bidders. The contract value in any case shall not exceed Rs 5 lacs.
13.4 MANUAL PROCESSES General procurement procedure, from commencing vendor registration till receipt of goods that shall be followed for all manual processes are detailed in the succeeding chapters. The underlying principle however is applicable for all procurements including e-procurements.
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CHAPTER – 14
SOURCING GOODS
14.1 BIDDER BASE
Adequate bidder base is essential to get quality product or service at competitive price. GSL is getting majority of its project items from states other than Goa. It is therefore all the more necessary to have an adequate, broad based bidder net work. Modern and sophisticated equipment are fitted on board the ships. These equipment are to be updated to keep pace with development of technology. Bidders need to be developed, if the above purpose is to be achieved. Development of new bidders is equally important if new products are to be produced and fitted.
14.2 SUPPLIER LIST
All procuring depts. and sections shall update their part of vendor details regularly. This list shall be accessible in the BaaN system for reference of the users. The list shall contain supplier registration code, expiry of supplier registration if any and categorization or monetary limit of suppliers if any. Unless special approval is obtained, NIT for LCB shall be issued only to bidders who are in the suppliers list.
14.3 SUPPLIERS GROUPING
The approved suppliers list shall be grouped under following categories:
a. Hull b. Engineering c. Electrical d. Capital e. General Stock & Direct purchases f. Miscellaneous g. Import & Export h. Outsourcing i. GES and Ship Repair j. Modernisation & Civil Works k. Maintenance Service Contracts
14.4 BaaN SUPPLIER MASTER
All approved suppliers shall be included in the BaaN Supplier Master (BSM), which shall contain details of above category of vendors or contractors or sub-contractors stat groupwise. A new supplier, who gets an order against OCB, shall automatically be included in the BSM. Suppliers who are approved for registration shall get added in the list. Details of suppliers like their Factory and Office addresses, person(s) authorized to sign and do business, his telephone, mobile and fax nos., E-mail address, TAN, PAN, MSME, CST, VAT, Excise duty, Custom duty, ECS, RTGS, DSC registration nos., other details etc shall be made available in the BSM.
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14.5 NOMINATION OF SUPPLIERS
Indian Navy, Indian Coast Guard and other customers some times nominate suppliers or furnish a panel of suppliers or a mutually agreed list of suppliers figures in the Build Specification for procurement and fitment on board their ships. They do this for the purpose of achieving standardization, variety reduction and to facilitate maintenance support. They generally propose suppliers from DQA (WP) and DQA (N) compendiums for supply of Engineering, Hull, Cables, Paints, Electrical, Electronic, Weapon Equipment and Naval Stores items. These comprehensive lists also provide complete address and other details of the suppliers. If such nominated suppliers do not find a place in our BSM, they may be included on case to case basis, after obtaining the approval of CMD. Similar procedure may be followed for registration of a PSU, suppliers registered with MDL and suppliers having current rate contract with DGS&D. However, no LCB shall be issued to bidders who are not registered with GSL except with the approval of CFA.
14.6 DQA COMPENDIUM DQA Compendium consists of DQA(WP) and DQA(N) list of registered vendors for Engineering, Hull Cables, Paints, Electricals, Electronics, Weapon Equipment and Naval Stores. This comprehensive list provides complete address of Supplier with telephone, Fax no., Range of products and validity of registration. It is updated periodically.
14.7 CLASSIFICATION SOCIETY LIST Major ships equipment are inspected and approved, before being dispatched by suppliers by the concerned Classification Society Surveyors like ABS, LRS, IRS etc. Most of the surveyors have their own list of approved suppliers. They enlist them after inspecting the facilities available with these suppliers. If we place an order on a supplier who is not enlisted by them, they inspect the facility of the supplier and after inspection and approval only they inspect the equipment. To avoid this delay, their list may be referred and if such suppliers are not registered with GSL, the above procedure may be followed for getting them registered.
14.8 REGISTRATION OF NEW SUPPLIERS
A prospective new supplier may be considered for registration under the following Circumstances:-
a. Introduction of a new product or process or equipment or technology or service b. When present supplier base is inadequate, viz. less than 10.
c. Registration of Micro, Small Enterprise (MSE) and Micro, Small and Medium Enterprises (MSME) to meet the target of procurement set by Govt. even if the supplier base is exceeding 10 but not more than 15.
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14.9 MODE OF REGISTRATION
The following initiatives shall be done to increase the supplier base.
a. By conducting Suppliers’ Meet on need basis.
b. By publishing in the News Papers, inviting new registration of suppliers once in three years or on need basis for special requirements.
c. When suppliers approach the Company directly pursuant to its participation in any Exhibitions or Suppliers Meet organized by State or Central Govt. or by its bodies.
d. When the concerned Commercial or Technical or user sections recommend, based on their expertise and experience with a view to rope in quality suppliers or expand the existing supplier base subject to the no. of suppliers is not exceeding the limits referred at para 14.8 (b) & (c) above.
e. When a prospective bidder applies on his own.
f. When there is an initiative by State or Central Govt. to develop a region industrially, even if the supplier base will be more than 10.
g. Under special circumstances, with the approval of Functional Director even if the supplier base will be exceeding 10.
14.10 REGISTRATION PROCEDURE
Downloadable Vendor Registration Questionnaire (VRQ) form no. 06/QSP/13P is available in the GSL web site. Prospective vendors can download the form or they can request GSL to send the form to them. Duly filled in VRQ form along with all supporting documents and Registration fee of Rs 1,000/- in the form of DD, drawn in favour of Goa Shipyard Ltd. Payable at Vasco-da-gama, Goa may be sent to GSL. The type and nature of documents to be attached, applicable are given in VRQ. The committee shall have one member each from Finance, Quality Assurance, Technical dept. and Planning dept. Members of the committee may be changed at the discretion of the respective HODs. An officer from the concerned procuring dept. or section shall be the Secretary of the committee. Each procuring dept. or section shall initiate for registration in their dept. or section. They shall ensure that the registration process is completed within 45 days of receipt of application complete in all respect. The Vendor Evaluation Committee (VEC) shall scrutinize the applications as detailed in the succeeding Para.
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14.11 ASSESSMENT OF CAPACITY AND CAPABILITY The capacity and capability of each vendor shall be determined by assigning certain weightages for the following factors:
a. Infrastructure b. Technical capabilities. c. Availability of skilled man power. d. Financial capacity e. Proximity to GSL. f. Whether ISO company or registered with other PSUs or DQA(WP) or DQA(N). g. QA system in vogue. h. Whether MSE i. Approval by Classification Society
Weightages may be assigned depending on the type of procurement. Suppliers obtaining less than 50% weightage shall not be considered.
14.12 CAPACITY EVALUATION
The VEC member(s) may visit the premises of the suppliers, if necessary, and verify for themselves the infrastructure facilities available. After the visit, a detailed report on the availability of Plant and Machinery, workshop facilities, testing and quality control facilities, covered and uncovered space of factory or workshop, ownership of factory or workshop etc. shall be submitted. The details collected by the VEC member(s) shall be scrutinized by VEC and processed for registration.
14.13 FINANCIAL CAPACITY AND CLASSIFICATION
Balance Sheet and Profit & Loss Account of the last 3 years ending 31st March of the previous year shall be obtained and verified. Solvency Certificate of the firm shall also be obtained and verified. The vendor shall give details of segment wise annual turnover for past 3 years. The vendor also required to submit the documentary evidence of executing highest value of order during preceding 3 years. The vendor will be registered 1.5 times the value of such order. While making a proposal for placement of order, it will be ensured that, the value of order under consideration does not exceed the average annual turnover of the vendor for past 3 years by 1.25 times when grossed with its existing order book position.
The vendors will be classified for order placement as under. Cat. A : Less than Rs.5 Lakhs per order Cat. B.: Up to Rs.10 Lakhs per order Cat. C.: Up to Rs.20 Lakhs per order Cat. D.: Up to Rs.50 Lakhs per order Cat. E.: Up to Rs.1 Crore per order Cat. F.: Up to Rs.5 Crores per order Cat. G.: Up to Rs.10 Crores per order Cat. H.: Up to Rs.20 Crores per order Cat. I.: Up to Rs.50 Crores per order
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Cat. J.: Up to Rs.100 Crores per order Cat. S. (Special): Unlimited
Above is in line with Management approval vide DM no.DM/2012/68405 dtd.02.07.2012.
14.14 ASSESSMENT
Commercial, Technical, Quality, Finance and Planning assessments shall be carried out by respective members of VEC as per weightage sheet at APPENDIX-K. Upon completion of Vendor Evaluation by the committee, approval shall be obtained from CMD for enlistment as vendor.
14.15 DOCUMENTS
All documents as required in the application form such as proof of ownership certificate in the case of partnership concerns, Memorandum and Articles of Association in the case of Limited Companies, as the case may be, shall be obtained. Further, they shall be asked to furnish Permanent Account No.( PAN), Tax Account No (TAN) , VAT, CST , ED and Service Tax Registration Certificates, NSIC Registration Certificate, if registered with them etc.
14.16 CLARIFICATIONS
If a proprietary firm is registered for a particular goods or services, then any other firm wherein he is a proprietor or partner shall not be considered for separate registration for the same goods or services. Similarly, In case of Partnership Firm, no two firms with same partner(s) shall be considered for registration separately for the same goods or services. If a particular firm has been debarred by Central or State Government or by other Statutory Agencies, then any other firm having same Promoters or Directors or Partners from the debarred company shall not be considered for registration. If they are already registered, they may be barred from business dealing for the duration for which the debarring of the firm or supplier or company prevails.
14.17 VALIDITY
On completion of the assessment, if a supplier is found suitable, a Vendor Registration Certificate (VRC) shall be issued. It shall be valid for a period of three years. After the validity period, they shall have to apply for renewal. The renewal shall be based on performance of the suppliers depending on their “Vendor Rating”. Any supplier securing a rating of below 50% shall not be considered for renewal except with the approval of CMD, stating the grounds for consideration.
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14.18 AMENDMENT TO THE SUPPLIER DETAILS
At times, suppliers approach GSL with a request to amend their particulars in the vendor list due to change in their name, change or addition in their products, their merger with another company, taking over of their company by another company etc. In such cases the Secretary, Vendor evaluation committee shall obtain the documents confirming the changes as reported by the supplier. In case of any doubt the matter may be referred to legal cell for clarity. Once, the Secretary, Vendor evaluation committee is satisfied with the genuineness of the case, approval of functional Director shall be obtained prior to making the changes. In case of change or addition in the products, the matter may also be referred to TS and QA reps of the committee for their concurrence prior to obtaining approval from functional Director.
14.19 ON-LINE VENDOR REGISTRATION
On line Vendor registration Process for vendors, service providers and contractors shall be in place. The software shall facilitate
a) Evaluating the vendors.
b) Direct registration of vendors registered with DGQA, IHQ(N), CGHQ and DPSUs.
c) Registering new vendors on receipt of applications, scrutiny and approval.
d) Renewal of registration of registered vendors after expiry dates.
e) Making amendments to the details whenever there is change in details of Vendors.
f) Putting on ‘Vendor holiday’ the registered vendors.
g) Non-accepting the applications.
Direct Registration
(As amended in line with CMD Memo 13/2017 dtd. 17.10.2017) Vendors already registered with DGQA, IHQ, CGHQ & other Defence PSUs will be Deemed as Registered with GSL. Direct registration session shall facilitate those vendors to furnish details with registration nos. so that without further scrutiny, they can be enrolled directly after obtaining management approval. This Deemed Registration will enable the vendors to participate in all future tenders of GSL for specific category of goods / services subject to fulfillment of other eligibility criteria indicate in the Tender. However, all the formalities relating to completion of regularization of the procedure / scrutiny of papers by GSL, process of obtaining management approval and generation of registration letters with financial limit as per the procedure will be completed prior to placement of order. The registration fee will not be applicable to such vendors for direct deemed registration.
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Registering New Vendors
Software shall facilitate uploading and processing the following information:
a) Details of Head office, Branch Offices, Production Units, Service centres, Godowns and authorized dealers addresses, contact persons with designations, contact phone and Mobile nos., Email addresses. b) Details of nature of company ( PSUs, Private limited company, limited liability company, etc., with names of partners/ Directors/Proprietors) nature of business (Manufacture, Turnkey firm, EOU, authorized distributors, trader, service provider, contractor etc.,) type of industry (Micro, small, medium, large )with details and supporting documents. c) Details of sister concerns where there are common Director(s). d) Details of registration with NSIC/ DGS&D/DGTD/DRDO/DG(QA)/ DPSUs/reputed firms. e) Details of local ST/CST no./VAT no./Excise duty no./ TIN no./PAN no./ECS or RTG no. / Digital Signature Certificate ref no. and whether capable of participating in e-tendering and e-auctions/PF code/ESI code with details and supporting documents. f) Details of products along with brochures. g) Details of Standards/Certification achieved (ISO 9001, 14001 etc.,) and MOU/Collaboration arrangements made with experts/OEMs with details and supporting documents. h) Details of employees, both permanent and temporary(Engineers, Supervisors, skilled personnel and unskilled personnel ) with qualification, experience etc., i) Details of facilities available (Equipments for production, testing, and handling and packing with special reference to Quality assurance systems in vague). j) Details of customers with special reference to Govt./PSUs/Oversees customers/Indigenous reputed firms in detail with copies of orders. k) Financial performances in the last 3 years with copies of Annual Reports, Balance Sheets, Profit and Loss accounts, banker’s address and solvency certificate with supporting documents. l) Software shall have sessions to record the details of registration fee. Payment through payment gate ways shall be encouraged. However, provision shall be made for recording payments by ways of DD also. m) Session shall facilitate vendor to furnish additional details if he so desires. n) There shall be mandatory fields and optional fields. If mandatory fields are not filled, the system shall alert. o) Whenever required, guiding notes shall be provided for vendor to fill the form. p) The software shall be user friendly. Pop up message shall appear wherever required. q) Dash Board shall have FAQ, help menu, provision to check the status of registration by vendors etc., r) The system shall allow vendors to save the draft and send the form later if he so desires. s) The system shall permit sending the form only when the registration fee column is filled. t) The system shall have provision to seek clarifications from vendors.
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u) The system shall raise alert if no reply is received from vendors after lapse of some fixed time period. v) The system shall generate a unique number when a form is filled and submitted successfully. w) GSL shall provide a dedicated server. Vendors shall access the server for down loading the registration form or for uploading the filled forms. x) Provision shall be made for sending bulky documents in hard form and having its reference incorporated in the session. y) The software shall facilitate vendors to upload the form, digitally sign/encrypt and then forward to GSL. z) Provision shall be available to forward the form without encryption. ab) The registration form shall have GSL logo/water mark.
ac) The software provider should train concerned GSL personnel on using the software.
ad) They shall also provide manual/booklet for their reference.
ae) The software shall have provision for vendors to make their suggestions.
af) The system shall automatically remind about expiry of registration 45 days in advance.
ag) The software shall be able to generate various reports like list of rejected applications, list of pending applications etc.,
Renewal of Registration
The software shall facilitate uploading and processing the following details.
a) Previous registration no. with validity. b) Past performances during the last registration that includes i) No. of enquiries sent ii) No. of quotations received. iii) No. of orders placed. iv) No. of times delivery/ execution made as per the schedules of order v) Vendor rating grade(to be imported from Baan) vi) Changes, if any in the organization structure, product mix, expansion, collaboration etc since the last registration.( To be supported by documents wherever necessary) vii) Past 2 years financial performances supported by Annual reports, Balance Sheets and profit and Loss accounts. To receive in puts on past performance, the software is to be integrated with BaaN.
c) Payment of renewal fee.
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Amending the Data already provided
After registration, at any point of time, if substantial changes have taken place at the vendors/ contractors end and due to that the data provided earlier needs to be updated, this session should facilitate that updation, The system shall record the no. of revisions being made. If the improvements made necessitates upgrading the vendor from one grade to another, the system shall facilitate that. The updations so made shall also get reflected automatically in the subsequent reports generated.
Registration cancellation or suspension
Session shall facilitate temporary suspension of registration or permanently canceling the registration. The period of temporary cancellation will be indicated after obtaining management approval. Based on the approval, the system shall generate a letter automatically to be sent to the concerned vendors. Vendors registration list shall automatically get updated based on these in puts. The system shall remind one month before the expiry of temporary cancellation to enable to review such cases.
Non-Acceptance of Applications
The software shall have provision for non-accepting applications for
a) Specified items/category for which adequate number of vendors are already empanelled. b) Specified vendors who have already been debarred from doing business by CVC/Govt/PSUs. The list of items/names of the companies shall be furnished by GSL.
Evaluating the Vendors
The software shall facilitate making summary of data furnished by vendors and forward to Vendor Evaluation Committee THRO’ ITS OWN WORK FLOW so that the document can be sent to various committee members for evaluation. If any clarification is required, the same shall be communicated to the vendor. The final approval shall be obtained from management thro’ ITS OWN WORK FLOW. After approval, vendors shall be informed of their registration no., validity etc or rejection of their application with reason as the case may be. The system shall send alert if the evaluation is pending with any committee member for more than a specified period.
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CHAPTER – 15
NEED OF PROCUREMENT
15.1 NON-AVAILABILITY
Before initiating any procurement, it shall be the responsibility of the concerned officer to check Non-availability of item/material in stock including surplus stocks of projects before raising PA In case of doubt about acceptability of substitute item in stock, the issue shall be referred to the concerned in the Technical Services Dept (TSD) / User dept. If there is any doubt about the condition of the item in stock that is being considered as a substitute, the issue shall be referred to the concerned in the Quality Assurance Dept. (QAD).
15.2 ESTIMATE OF QUANTITY
The concerned TS Dept officer issuing TA shall reasonably work out the estimate of the quantity required so as to avoid surplus stock on completion of projects. In case of building series of ships, especially in the case of consumables like paints, insulation materials etc, the Technical Services (TS) officer shall study the consumption of items in the first ship and shall take suitable remedial action so that surplus stock is avoided to the extent possible.
15.3 COST ESTIMATE
A precise cost estimate would avoid cost over run at the time of procurement. The estimate shall take into consideration all relevant factors based on the prevailing market price of various inputs such as labour, material, equipment, etc. at the concerned locations. The estimates shall include the basic price, fabrication charges if any, inspection, packing, forwarding and transportation, insurance charges, CST, VAT, ED and service tax etc. Works Contract Tax (WCT), octroi duties, entry tax and any other statutory levies and installation, erection, testing and commissioning charges, licence fees, contingencies, etc as applicable at the time of finalization of bids. The estimates shall have the cost break-up for sub – items like material, labour, installation charges and other main cost elements. Every procurement exceeding Rs 5 lacs, whether it is a revenue or capital item shall have an estimate.
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15.4 VETTING COST ESTIMATE:
a) The competent officers for vetting cost estimates shall be as follows:
(As amended in line with CMD Memo 13/2016 dtd. 02.06.2016) Sr. Vetting Group Financial Limit No
Functional GM and Above Rs. 5 Lacs, upto Rs 1 HOD(F) 25 lacs
Functional GM, HOD(F), Above Rs 25 lacs upto Rs 5 2 D(C) or D(O) crores
Functional GM, HOD(F), 3 D(C ) or D(O), D(F) & Above Rs 5 crores CMD
The above groups can co-opt any members based on need and technical requirements.
b) E-tenders are to be floated for contract estimate value above Rs 5 lacs. To facilitate tendering departments to decide the category of tender to be floated, the range of estimate shall be indicated in the TAs or Procurement Advice (PA) by the concerned depts. The range of estimate may be as follows:-
Sr. No Range Rs in Lac Sr. No Range Rs in Lac
i) 0 to 5 v) Above 35 to 50
ii) Above 5 to 10 vi) Above 50 to 100
iii) Above 10 to 20 vii) Above 100 to 200
iv) Above 20 to 35 viii) Above 200
b) In accordance with CVC guidelines, the estimated value shall be indicated in the NIT for all Civil Works. The cost estimate, as finalised by committees at para 15.4 shall be made available to the HOD of the procuring dept., on requisition, before conducting price negotiations or finalising the price with the bidders. When it is not possible to prepare an internal estimate due to inadequacy of past data or
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lack of technical expertise or non-availability of relevant financial yard sticks, prior approval of the concerned Functional Director shall be obtained by the TS Dept. for not preparing the cost estimate and forwarded along with the TA to the Procuring Dept.
c) Whenever there is a revision in the scope of supply during TNC which will have cost implications, a revised estimate shall be furnished by the TS officer. It also shall have the approval of the committee which originally approved it. When customer has nominated only one supplier for supply of any equipment and the contract with the customer caters for payment of difference in amount between GSL estimate and the finalized price with the Supplier, it is a must that PNC shall be made known of this clause. In such cases, the customer rep. may also participate in the PNC.
15.5 EXEMPTIONS
Furnishing estimate is exempted in respect of following procurements:
(i) Cash Purchases (ii) Emergency Procurements (iii) Procurements below Rs 5 lacs value. (iv) For services such as hiring Hotel facilities, hiring cars and transports, Air Ticketing, Sweeping and Cleaning contracts, Canteen procurements, etc where Last Procurement Price ( LPP) may be the relevant guiding factor. (v) Onboard and B&D Spares for which selection, scaling and ranging and seeking budgetary sanction is done by the customer. (vi) Procurement of material and services for ship repair activities since price break- up indicating cost to GSL, overheads and profit margin as approved by customer is available.
In all other cases, procurements made without approved estimate shall be null and void.
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CHAPTER – 16
PROCUREMENT ADVICE
16.1 PROCUREMENT ADVICE (PA)
It is a basic instrument for demanding a particular product or service. A PA may contain more than one item, with different item codes. The descriptions in the PAs shall be self explanatory, clear and unambiguous in respect of quantity, unit of measure, date required etc. The estimate reference, specifications, scope of supply and inspection authority are detailed in TA based on which Planning dept issues PA.
The following types of PAs are in vogue.
a. Project Procurement Advice b. General Stock Procurement Advice c. Direct Procurement Advice d. Equipment Procurement Proposal (EPP) e. Requisition for Services f. Sub Contract Advice g. Civil Work Requisition
Except cash and emergency purchases, all other procurements shall have PAs.
16.2 TECHNICAL ADVICE (TA) By and large, all project procurement of goods shall be initiated with the release of TA. It can also be termed “Specification Of Technical Requirement “(SOTR). It shall precede PA and be initiated by Technical Services Department. In exceptional cases where items are found missing or stolen or damaged during fitment or maintenance etc, on the advice of the concerned Project Coordinating Officer (PCO) or section head, PA issuing dept or section may raise PA directly. A TA shall normally contain the following details:
a. All applicable drawings, samples, sketches and documents. b. Applicable quantity in terms of nos., length, area, volume and weight with units of measurement. c. Applicable National, International codes or standards. d. Requirement of OBS , B&D and trial spares as applicable e. Product support of materials and services as applicable for handling, preservation, installation, test and trial, commissioning, training, guarantee or warranty etc. f. All applicable tests such as factory acceptance tests (FAT), routine tests, type tests, pre-qualification tests and the testing authorities.
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g. Inspection requirements, stages of inspection, names of inspection authorities such as DGQA, WOT, CGRPT, MTU, IRS, ABS, LRS, DNV etc and acceptance criteria. h. Documentation requirements. i. Specific requirements of customers. Segregate services from items where possible so that items or services can be sourced from different suppliers. j. Proprietary Article Certificate (PAC) issued by Customer or certificate of procurement on single source basis, if any specified in the contract. k. Reference clause in the project technical Specification for procurement. l. In addition, due consideration shall be given to the aspects of rationalization, variety reduction, simplification, standardization and substitution while preparing the TA with the aim of making available products or services easily at optimum time and cost.
16.3 PROJECT PROCUREMENT ADVICE (PPA)
Planning Dept. shall issue PA for all ship building projects. All Project Officers of Planning Dept. are authorized to raise PAs. All project PAs shall be auto generated through BaaN ERP system. However, in case of Ship Repair & General Engineering Works, manual PA may be generated by the concerned technical officer of the project, indicating project name and code. To enable Planning dept. to raise PA, procuring officer, on receipt of intimation of TA from TS dept shall maintain “Localized Data“ in BaaN session. All PAs shall be accompanied by TAs along with relevant drawings if any. The PA shall indicate the schedule of receipt of materials at GSL. Wherever possible, they may indicate a staggered schedule to reduce the inventory holding. Special care shall be taken while indicating schedules for limited shelf life items like paints. When a paint life gets expired, they shall, through the concerned procuring officer explore the possibility of getting the validity of the paint extended. To enable Planning officer to monitor the shelf life of paints, the concerned stores officer shall forward every month a statement of paints in stock with their shelf life validity dates. When a project is getting delayed, the concerned Planning Officer shall review the delivery schedules indicated earlier and advise the procuring officer appropriately.
16.4 PROCUREMENT ADVICE SERIES
The following serial numbers are used in different types of PAs.
a. Hull -- series 100000 b. Engineering -- series 140000 c. Electrical -- series 180000 d. DPO & General Stock -- series 300000 /310000/280000 e. Capital -- series 360000 f. Maintenance Contracts -- series 370000 g. Rate contracts -- series 340000 h. General Engineering Services-- series 400000
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i. Ship repair -- series 200000 j. Guarantee Refit -- series 550000 k. Outsourcing -- series 700000 l. Civil -- series 900000 m. Work orders for ship repair -- series 500000 for (hull) n. Work orders for ship repair -- series 520000 for (engineering) o. Work orders for ship repair -- series 540000 for (electrical)
16.5 GENERAL STOCK PROCUREMENT ADVICE (GSPA)
General Stock items are commonly used items for ship construction, Ship Repair, General Engineering services, Civil works, Yard and Plant Maintenance. These items are codified with a 10 digit item code. On these codified general stock items, ABC analysis and Inventory Controls are done to classify the items, fix Economic Order Quantity (EOQ), Re-order levels and safety stocks. A GSPA shall be raised as soon as stock level reaches re-order level. The GSPA shall be raised well before stock out, giving adequate lead time for procurement.
16.6 DIRECT PROCUREMENT ADVICE (DPA): Non-stock items and items required urgently shall be covered under DPA. They could be for projects, ship repair, GES, Civil works, welfare, gift items for Business Promotion, yard and plant maintenance items. Based on the Material Requisition (MR) raised by the concerned officer, on checking non-availability, Stores Division shall issue DPA to commercial dept. for procurement.
16.7 SUB CONTRACT ADVICE (SCA)
Two types of sub-contracting are in vogue. i. Turn key Contract ii. Labour contract
TS dept. shall forward TA, like any other TA, for turn key jobs. It shall get processed through Planning dept. and their PA shall reach Commercial dept. If it involves outsourcing mainly the labour content, taking the required in put from TS dept., Planning dept. shall raise PA and forward the same to Outsourcing Dept.
The advice shall generally contain the following.
a. Detailed scope of work. b. List of materials that will be supplied by GSL free of cost and on cost if any. c. List of material that is to be supplied by the firm. d. A clause , where applicable stating that the successful contractor shall account for the free materials received from GSL and utilized by them and
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balance materials to be returned to GSL, considering generation of reasonable amount of scrap. e. List of consumables and other materials , if any in the scope of supply of bidder f. The yard facilities that will be provided by GSL, if any, either free of cost or at cost. g. The pre-qualification criteria h. Inspection and test requirements that include stage inspections, welders’ qualification test etc. i. Who shall bear the cost of inspection by Surveyor(s) or cost of x-ray, radiography tests etc. j. Who shall bear the cost of transportation k. Date of commencement and completion of work. l. Warranty for the work to be executed. m. Assistance during installation, commissioning and trials. n. Estimated man days involved in the job. o. Quality Assurance Plan (QAP), wherever required.
In case of SR & GES, in line with CMD Memo No.11/2003 dt 06 Oct, 2003, the advice for sub-contracting is generated by the concerned technical officer of the project and further processed by the commercial section of SR&GES dept.
16.8 REQUISITION FOR SERVICES (RFS)
Requisition for services required for yard maintenance or functional requirements of depts. shall be raised by the concerned officer or dept. The requisition shall indicate the period of service, the qualification criteria and other special conditions if any. They shall be processed by Commercial dept. Since these requisitions will be converted in to rate contracts, the specifications shall be generic so as to enable more bidders to participate. 16.9 EQUIPMENT PROCUREMENT PROPOSAL (EPP)
All equipment, tools and facilities required for capacity enhancement or up gradation of existing plant facility or manufacturing process shall be initiated by the respective users and projected in the ‘Justification for Capital Equipment’ format or ‘Civil Works Proposal’ format, through their respective HoDs and Directors. Proper justification shall be furnished for new requirement or replacement. All these formats shall be collated by OIC, Resource Planning and presented to CMD and CMC for discussion and approval. The approved proposals shall form part of proposed Annual Capital Budget to be presented to Board of Directors for approval. After approval, each user shall put up a detailed proposal for each equipment in the ‘Equipment Procurement Proposal’ format, for approval by CFA. The approved EPP in original shall be sent to the procuring officer for initiating procurement.
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CHAPTER – 17
BID DOCUMENTS 17.1 DETERMINE METHOD
On receipt of Procurement Advice, the tendering officer shall determine i) Whether to go for Single bid or Two bid or Three bid system. ii) Whether to go for LCB or OCB or two stage bidding etc. iii) Whether to have tender fee, EMD, Security Deposit and if so how much. iv) Whether the item falls under purchase preference list, SMEs list or cottage industry list and whether price preference or exemptions from tender fee, EMD and SD to be catered. v) Whether CFA approval required for including vendors not registered with GSL. vi) Registered vendors having DSCs, having ECS or RTG account vii) Any other special conditions to be considered Approval of CFA shall be obtained wherever required to proceed with procurement.
17.2 BID DOCUMENT
A bid document shall contain the following details wherever applicable. (i) Address of the web site for down loading the documents, Description of items with its complete specifications with drawings including the scope of supply or work, quantity, inspection authority, type testing if any, requirement of OBS, B&D spares, installation and handling tools, commissioning spares, preservation materials, Warrantee period, training of crew, service assistance, schedule and place of delivery, mode of delivery, method of packing, shipping agent particulars, LD, PVC, ERV, escalation clauses, etc; (ii) Tender Fee, EMD and Security deposit amount and mode of such payment (iii) Advance payment if payable and how it shall be adjusted. iv) Schedule for seeking clarification (v) Schedule for furnishing clarification vi) Schedule for submission of bids vii) Schedule for opening the bids viii) Qualification criteria if any and list of documents to be furnished to support the qualifying criteria. User or officer initiating procurement shall indicate the qualification criteria. viii) Evaluation and bid rejection criteria: TS or User officer shall indicate the technical evaluation and rejection criteria in Technical Advice. The Tendering officer shall indicate Commercial evaluation and rejection criteria in the tender. x) Purchase preference or reserved procurement if any. xi) Price preference if any. xii) Exemptions from tender fee, EMD and Security Deposit. xiii) Applicable Loading factors. xiv) If there is GSL supply of materials, whether free of cost or on chargeable basis. xv) Supply of materials in the scope of Service providers. xvi) Whether there is any proposal of parallel contract.
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xvii) Where documents are to be submitted in standard formats and copies of formats such as Performance Bank Guarantee, Security Deposit Guarantee, RTGS/ NEFT/ ECS , Letter of Credit, Bid Bond, Integrity pact etc where applicable. xviii) If compliance to technical or commercial or general terms and conditions are to be furnished in a specified format, such formats. xix) Price format. xx) Business rules and compliance formats in case of ERA. xxi) Any other details or documents to be submitted by bidder. xxii) GSL Standard Terms And Conditions (STAC) – (Indigenous) APPENDIX-L. xxiii) GSL Standard Terms And Conditions (STAC) – (Foreign) APPENDIX-M. xxiv) General Terms and Conditions (GTAC), APPENDIX-T. xxv) International Commercial Terms and Conditions (INCOTERMS), APPENDIX-Q. xxvi) Guide lines to the bidders xxvii) Clause stipulating that cost of delay in retiring bank documents due to deficiency in supply of documents to suppliers account. xxviii) Any other special terms and conditions. Legal or Financial advice wherever required may be obtained before proceeding with procurement.
17.3 FORMATS
The following general bid document formats shall be made available for reference.
i) STACS for procurement of Items and services of Commercial Department, applicable for all indigenous or imported goods.
ii) STACS for services , applicable for all Outsourcing and Rate Contracts
iii) GT&C for procurement of items & services
iv) Special Conditions of Contract (SCC) of Civil Engineering Department
v) General Conditions of the Contract (GCC) of Civil Engineering
17.4 DEVIATIONS
a) Deviations from Standard Terms & Conditions, General Terms & Conditions need to be discouraged. As a matter of policy, if two or more techno commercial bids are received without any deviation to the terms and conditions stipulated in the tender, bids of deviating bidders may not be loaded and not considered for further evaluation .This condition should be clearly stipulated in the tender. Non Compliance to terms and conditions of the tender need to be resolved during TNC and CNC. In respect of any deviations, in deserving cases, specific financial concurrence and CFA approval shall be obtained before opening of Price Bids.
b) No deviation in STACS in respect of agency commission, use of undue influence, corrupt practices, immunity of government of India clause, duty of Personnel of contractors or suppliers, export license, integrity pact shall be
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considered except with the concurrence of D(F) and approval of CMD, irrespective of tender value.
17.5 TAXES AND DUTIES
Following are normal taxes and duties that are applicable in procurement.
a. Excise Duty (ED) , Auxiliary Excise Duty(AED) b. Custom Duty (CD), Advalorem duty, Countervailing duty(CVD) c. Central Sales Tax (CST) d. Value Added Tax (VAT) e. Service Tax (ST) f. Work Contract Tax (WCT) g. Entry Tax( ET) h. Octroi i. Any other tax as applicable from time to time
17.6 ISSUE OF EXCISE DUTY EXEMPTION CERTIFICATE (EDEC)
i. Goods used in construction of Coast Guard or Indian Navy vessels are exempted from payment of excise duty against issue of EDEC. In such cases, EDEC shall be issued to principal suppliers on whom the order is to be placed or sub-supplier of principal suppliers, for appropriate value of supply of goods for use during construction of ships.
ii. The tender enquiry shall indicate that sub-suppliers of principal suppliers would also be eligible for EDEC. The principal supplier should indicate in their quotation whether or not they would need EDEC for the sub-supplier.
iii. After placement of order, the principal supplier should indicate the names of firms and value for which EDEC would be required within the stipulated time. The orders to be placed by the principal supplier on sub-supplier should clearly indicate GSL’s PO No., Project No. and Equipment for which the sub-order is issued. Such order copies with value should be given to GSL.
iii. It shall be informed to principal supplier that it would take 4-6 weeks time for arranging EDEC from the concerned authority. It shall also be stated that the sub-suppliers and also the principal supplier should certify that the goods for which EDECs are obtained have been made use of fully and wholly in the manufacture of equipment supplied by the principal supplier.
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17.7 ISSUE OF CUSTOM DUTY EXEMPTION CERTIFICATE
i) The goods required for construction of, or fitment to, ships of Indian Navy and Coast Guard are exempted from payment of Custom Duty by way of issue of Custom Duty Exemption Certificate as per Custom Notification No 39/96 dtd 23/07/1996 as amended from time to time.
ii) Goods used for repair or refit of Coast Guard or Navy vessels are exempted from payment of custom duty as per Custom notification No. 21/2002 dtd. 01.03.2002 as amended from time to time.
iii) Supplier will forward to GSL separate lists of items required to be imported by them and their sub-suppliers giving the details in the prescribed format along with the copy of the import Purchase order, prior to actual import with sufficient time period for obtaining the notification. Based on the details received from the supplier or sub-supplier, the request for authorization for signing CDEC from MOD in the prescribed format of General Exemption Certificate shall be obtained.
iv) After receipt of MoD authorization, at the time of actual import, Customs Duty Exemption Certificate will be provided by GSL to the supplier or to their sub- suppliers as against the Supplier’s request on receipt of the following documents:- a. Copy of the import Invoice. b. Air Way Bill / Bill of Lading. c. Copy of Packing List. d. A request letter along with dispatch/arrival status of goods.
17.8 CUSTOM CLEARANCE
i) Along with the shipping documents, the technical details and its end use, with catalogue or write up are to be provided by the supplier and it shall be forwarded to Custom Clearing agent for clearance of goods on its arrival with a proper B.T.N. classification for finalization of Bill of Entry (BOE). This will avoid loss of time in clearing the goods. ii) In case of any arithmetical error, suitable request with custom authorities will be made to rectify or amend the same. iii) In case of any damage/ short landing of the cargo, prior to its clearance, a survey for the same will be made and accordingly, further custom clearance process will be carried out.
iv) In case, any Bill of Entry is erroneously assessed and the higher duty has been paid, then Draw back claim is to be filed for getting the refund of the excess duty paid. Such claim has to be filed within 24 months from the date of Bill of Entry. Stage of claim is to be lodged with Assistant Commissioner of Custom, Refund Section within six months from the date of BOE.
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17.9 APPEAL
In case of rejection by First authority, Refund section, second stage claim is to be preferred with Commissioner of Custom (Appeals) within 3 months from the date of receipt of order-in-original by affixing court fee stamp of required value. In case of rejection at the Appellate level, claim is to be preferred with the tribunal level with Custom Excise & Gold (Control) Appellate Tribunal (CEGAT). An appeal has to be preferred in ‘CA-3’ form with special Bench of the Custom Excise and Gold (Control) Appellate Tribunal, located at West Block No. 2, R.K. Puram, New Delhi in quadruplicate accompanying the following;
i. Order from Commissioner of Customs (Appeals) along with a Certified copy.
ii. Order in original from Assistant Commissioner of Customs (Refund Section)along with a certified copy
iii. A crossed DD for a specified sum obtained from a Nationalized Bank drawn in favour of the Assistant Registrar of the Bench of the Tribunal concerned and should be on the branch of the bank at the place where the registry of the bench is situated. The documents authorizing the representative to sign and appear on behalf of the appellant, if the appeal is signed by an authorized representative, specified under rule 9 of chapter –IV of the customs (Appeals) Rules 1982.
17.10 EXCHANGE RATE VARIATION (ERV)
(As amended in line with CMD Memo 37/2016 dtd. 31.12.2016)
Normally, no ERV clause shall be included in the Purchase Order for procurement of goods. However, in case Foreign Exchange (FE) variation reimbursement clause exists in the contract with Customer like Indian Navy, Coast Guard, similar FE variation clause shall be included in the POs for procurement of goods. The breakup of major currency-wise and year wise FE content should be clearly indicated by the bidder in their bid and discussed during PNC. Detailed time schedule for procurement of imported material and their value also to be given by the bidder in their bid. ERV is payable I refundable depending on prevalent rate on the date of transaction wrt Base Exchange Rate on the date of closing of the tender.
The Base Exchange rate of the major currency shall be the TT selling exchange rate of State Bank of India prevailing on the date of closing of tender and variation will be given up to the scheduled delivery period only. In case, delivery is affected by supplier beyond the scheduled delivery period, due to the fault of the supplier, no ERV shall be admissible for the delayed portion of the supply. ERV will also be allowed only if the resulting increase or decrease 1s more than 2.5% of the contract price and will be limited to maximum of 10% of the contract price unless otherwise specifically agreed to in PNC. However, this clause has to be brought out clearly in the bid document itself.
No ERV shall be payable on the portion of contract price paid to the contractor as an interest free advance. Wherever stage payment, if any, is allowed with Page 69 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
reference to procurement of equipment or bulk material, ERV will be limited to the date of such procurement or up to a date of 3 months before scheduled delivery whichever is earlier.
The ERV shall not be applicable if the delivery period is less than one year.
17.11 DOCUMENTS FOR ERV
The following documents will be required for claiming ERV.
a) ERV claim bill enclosing worksheet.
b) Banker’s Certificate or debit advice detailing FE paid, Exchange rate and date of the transaction.
c) Copies of import orders placed on the suppliers.
d) Invoice of supplier for the relevant import orders.
17.12 PARTICIPATION OF INDIAN REPS FOR OVERSEES BIDDERS
In accordance with MoD’s instruction issued vide circular No. 3(2)/PO (Def) 2001 dated 02 November 2001 and MoF directive issued vide circular No. F-23(1)-E.11 (A)/ 89 dated 31 January 1989, they are to be registered with the appropriate authorities before taking part in the bidding. Further, in accordance with CVC directive, it is mandatory that one agent cannot represent two suppliers or quote on their behalf in a particular tender enquiry. If any agent represents more than one supplier as stated above, all such offers will be rejected.
17.13 BID REJECTION CRITERIA
The bidders shall be informed about the bid rejection criteria in the NIT itself. Following criteria liable for rejection of the bids may be incorporated in all the tender enquires. If the schedule of delivery is required to be a part of bid rejection criteria, the same needs to be precisely stated in the tender document.
i. Bids received after tender closing date and time, if it is a late tender
ii. Bids not accompanied by tender fee or EMD where applicable.
iii. Bidders not agreeing to furnish required Security Deposit or Performance Guarantee or retention of equivalent amount by GSL
iv. Bidders not agreeing to provide assistance for installation of equipment supplied by them or stand guarantee for the equipment supplied or quoting to only one part of the tender while not submitting quote to the other part which is, inseparable with the first part.
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17.14 BID REJECTION WITH APPROVAL
Following criteria may render the bids for rejection with the approval of competent authority:
i. Bidder’s failure to reply to clarifications sought during evaluation of the bids within the given period which may range between two to three weeks depending on the deficiencies noticed in the bids or drawings or technical data provided the last date for submission of clarification is within the validity period of offer. However, overall time allowed in respect of normal procurement shall not exceed 3 weeks and one week in case of emergency procurement. ii. Misleading bids with malafide intention, in the considered opinion of TNC. iii. Technical requirements and/ or terms not acceptable to GSL or Customers. iv. Bids received without support documents for pre-qualification. v. Bids not meeting the pre-qualification parameters stipulated in the tender enquiry. vi. Wherever Price Variation Clause (PVC) is allowed as per Tender but the bidder(s) quoted fixed price or vice versa. v. BOQ not submitted in the GSL format
vi. Submission of forged documents or false declarations made or indulging in corrupt practices or not following to the code of conduct.
NOTE: Approval for Commercial rejection shall be obtained by Tendering dept., from CFA, whereas, approval for technical rejection shall be obtained by TS/ User dept. from CFA, where required, as per clause 4.3(b).
17.15 BIDDERS SEEKING CLARIFICATION
A date shall be set in the bid documents to enable prospective bidder to seek clarification, in case he desires so, before that date. This date shall normally be 7 days before the last date for submission of the bids. On receipt of clarification from any bidder, suitable clarification shall be sent within 4 days from the date of receipt so that the bidder will have 3 days at his disposal to prepare his bid. Copies of the clarification shall be sent to all other prospective bidders to whom the bid document was issued or those who purchased or down loaded documents in the case of OCB.
17.16 BID RESUBMISSION AND WITHDRAWAL
A bidder shall be allowed to re-submit his bid before the due date for submission of bids. In such cases, only the last bid submitted shall be reckoned for processing further. Similarly, a bidder shall be allowed to withdraw his bid before the due date of submission. His withdrawal shall be treated as ‘regret bid’ for the purpose of deciding whether a bidder has responded to a tender or not. EMD amount paid if any by such bidders shall not be forfeited. No bid shall be allowed for withdrawal after opening of the tender. Withdrawal of such bids shall result in Bidder’s forfeiture of bid security.
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17.17 CORRIGENDUM
At any time prior to the date of submission of bids, the tenderer may, whether on his own initiative or in response to a clarification sought by prospective bidder, modify bid documents by issuing corrigendum. Prior approval of HOD of the tendering dept. shall be obtained for issue of corrigendum. To facilitate prospective bidder, a reasonable time to take the amendment in to account in preparing their bids, the tenderer may, at his discretion, extend the due date for submission of bids. Such corrigendum shall be issued in the same manner in which original tender was published viz, by press advertisement or by LCB or by E-tender.
17.18 BID VALIDITY
A single bid system bids shall remain valid for ninety days from the date of opening of the tender and one hundred twenty days in case of a two bid system bids, unless otherwise specified. A bid valid for shorter period can be rejected by a tenderer with the approval of CFA, provided such clause is incorporated in the bid document. The tenderer may also request the consent of the bidder for extension of the bid validity. Such request shall be made formally. In such cases, EMD validity shall also be suitably extended. A bidder accepting the request and granting extension shall not be permitted to modify his bid.
17.19 GRIEVANCE CELL
The bidders who participated in any bidding process shall be given an opportunity to express their grievances or complaints if any related to that bidding process. Hence a public grievance cell has been set up in the company and details of the authority to whom such grievances are to be addressed for redressal shall be clearly indicated in the bid document.
17.20 BOOK EXAMINATION CLAUSE (BEC)
Bid document should invariably contain Book Examination Clause for high value procurement of Rs 10 cr and above, from a single source. The breakup data on cost could be sought. This is an indicative guideline and should not hold up finalization of price negotiation and concluding the contract.
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CHAPTER – 18
PAYMENT TERMS
18.1 STANDARD PAYMENT TERMS
The standard payment terms shall be as follows:
a. 100 % payment with duties and taxes within 30 days of receipt and acceptance of goods. In BaaN system this is termed as ’30DAYS’.
b. 90% payment with duties and taxes on receipt of goods and balance 10% on acceptance. In BaaN system this is termed as ‘AGD’.
c. 100% payment on production of proof of dispatch of goods. In BaaN system this is termed as ‘DTM’.
d. 100% payment in advance against readiness of material and receipt of Proforma Invoice. In BaaN system this is termed as ‘ADV’.
e. 100% payment against irrevocable letter of credit through State Bank of India (SBI), Vasco or Bank of Maharashtra (BOM), Panaji or Canara Bank, Panaji, Goa on submission of indicated shipping documents along with Inspection certificate and Performance Bank Guarantee for 10% of the order value valid till the guarantee period plus claim period of 3 months”. In BaaN system this is termed as ‘LC’.
f. Stage payments against Milestones. In BaaN system this is termed as ‘STG’.
g. PBG clause shall be included wherever applicable.
h. Part (%) payment with duties and taxes against dispatch documents through Bank and balance (%) on acceptance . In BaaN system this is termed as ‘TBK’.
i. For all other payment terms, financial concurrence and approval of CFA shall be obtained.
18.2 INDIGENOUS SUPPLIERS
i) As a general rule, the standard applicable payment term for Indigenous supplier shall be “100% payment with duties and taxes within 30 days of receipt and acceptance of goods at GSL”.
ii) When suppliers do not agree for the above payment term, the payment term of “90% payment with duties and taxes through Bank and balance 10% on acceptance “(TBK) may be offered.
iii) In compelling instances like proprietary nature of item, scarce material, monopoly, urgency, etc or as mutually agreed during PNC the payment term
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of “100% on production of proof of dispatch of items or readiness of material and on receipt of Proforma Invoice (ADV/ DTM)” may be agreed upon.
iv) Where required, “submission of Performance Bank Guarantee for 10% of the order value valid till the guarantee period plus claim period of 3 months” clause shall be added.
(As added in line with CMD Memo 12/2017 dtd. 03.03.2017)
v) Payment of advance upto 15% of order value to MSEs/SMEs & Start-Ups on a case to case basis against submission of bank guarantee issued by any scheduled commercial bank valid till execution of order'.
(As added in line with CMD Memo 26/2017 dtd. 28.06.2017)
vi) “To allow 100% payment to Indigenous(domestic) suppliers under Buy Global Category (Global open as well as limited tenders) against Inland/domestic Letter of Credit and with Performance bank guarantee for 10% value of order valid till guarantee period plus 3 months claim period, if order value exceeds Rs.1 Cr”.
(As amended in line with CMD Memo 18/2016 dtd. 30.08.2016)
Relaxation of Norms in payment terms for domestic firms including MSEs a) General Stores, DPO, Consumables items and Yard Material. Approved value upto Rs. 10 Lacs (Landed Cost) Payment Terms : 100% payment within 21 days from date of receipt and acceptance of material at GSL stores.
b) General Stores, DPO, Consumables items and Yard Material. Approved value above Rs. 10 Lacs (Landed Cost) Payment Terms : i) 90% payment within 21 days from receipt of material.
ii) Balance 10% within 45 days from acceptance of material and on submission of 10% PBG.
c) Project items with third party inspection like IRS, ABS,LRS, DQWP etc.
Approved value upto Rs. 25Lacs (Landed Cost)
Payment Terms :
i) 80% payment within 21 days from receipt of material along with Inspection certificate/ Release Note.
ii) Balance 20% within 45 days from acceptance of material and on submission of 10% PBG
d) Project items with or without third party inspection
Approved value above Rs.25 Lakhs (Landed Cost)
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Payment Terms :
i) 80% payment within 21 days from receipt of material along with Inspection certificate/ Release Note.
ii) Balance 20% within 45 days from acceptance of material and on submission of 10% PBG
Receipt inspection will be completed within 30 days from receipt of equipment at GSL.
Note :
i) Receipt and acceptance will be maintained for serial a) & b) above by Stores as being done presently.
ii) Maintenance of receipt for serial c) above in ERP system will be done by Stores for releasing 80% payment within 21 days from the date of receipt of material along with Inspection certificate/Release Note. Maintenance of acceptance of the material after due receipt inspection will be done by QA in ERP system for release of balance 20% payment within 45 days from the date of acceptance of material and on submission of 10% PBG.
iii) Separate Tag to be given in ERP system for such orders for further compilation of the data.
18.3 OVERSEAS SUPPLIERS
The standard payment term applicable to foreign suppliers shall be “100% payment through Letter of credit (LC)”. In exceptional cases, the payment term of “Stage payments against Milestones (STG)” shall be agreed upon against submission of a valid Bank Guarantee (BG) from a scheduled bank or bank of international repute for a value of 100% of the stage payment valid till dispatch of the material with 3 months claim period. GSL shall not be bound by any printed conditions or provisions in the bidders Bid Forms or acknowledgement of CONTRACT, invoices, packing List and other documents which purport to impose any conditions at variance with or supplemental to Contract.
Where required, “submission of Performance Bank Guarantee for 10% of the order value valid till the guarantee period plus claim period of 3 months either from the OEM or their Indian rep.” clause shall be added.
18.4 DEVIATIONS
a) The bidders, who do not agree with the above applicable standard payment term(s) prescribed in the bid document and have quoted different payment term(s) not conforming to any of the above, shall be asked to agree to the prescribed payment term(s) during Commercial Negotiations (CNC). In the event there being two or more number of bidders who have submitted the bids in conformity with the prescribed payment term(s) of tender and qualified technically, the bid of the deviating supplier may be rejected by invoking the tender clause , “Bid Rejection
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Criteria”. However, in that case, the Bid rejection criteria shall have such a clause in the bid document.
b) In case, the payment term quoted by a bidder does not conform to the bid document term but what is quoted falls within the categories of standard payment terms defined at Para 18.1 above, the bid of such bidders shall be considered by adding a loading factor as per bid loading criteria prescribed in Chapter 22 of the manual. This loading criteria shall be indicated even in the bid document.
18.5 TIMELY PAYMENT:
The credit payment mode, payment within 30 days from the date of receipt and acceptance of goods is highly desirable. To ensure more and more vendors agree to this, credibility has to be established for making payment within the time frame stipulated in the order. For this purpose, all bills with support documents from suppliers for credit payment shall be received and recorded in the centralized dispatch section under BTS and forwarded to concerned section. If any bill is found incomplete or having discrepancy, it shall be communicated to the concerned supplier by procuring officer. The process of maintaining receipt of goods in BaaN system by Stores Section and inspection of goods by Quality Assurance Department (QA) are to be completed within six weeks of receipt for major equipments and two weeks for other items. The Finance dept. shall make all efforts to make timely payment. Receipt of documents by each dept. at each stage shall be properly recorded so that bottle neck areas in the process are identified and cleared.
18.6 BILL TRACKING SYSTEM
An effective bill tracking system is in place to enable various GSL departments to view the status of supplier bills. The following minimum stages shall be incorporated in the BaaN and ‘On line purchase ‘system. In this regard, CMD Memo nos. CMD/34/2010 dated 29/10/2010 and CMD/17/2012 dated 12/06/2012 refer.
a) Receipt stage
b) Inspection stage
c) Processing stage at stores
d) Processing stage at Finance
e) Payment made details including the amount paid.
18.7 GUIDELINES FOR 90% PAYMENT
i) Where third party inspection is involved, the certification of receipt of goods or services shall be made only when it is supported by third party inspection certificate / release note. The payment shall be released against delivery after deducting LD amount, if any, due to delay in delivery.
ii) Where 90% payment is to be released on receipt of indigenous items at consignee premises, other than GSL, Goa, the consignment shall be inspected by a competent GSL representative at consignee premises and he shall issue
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an Inspection Certificate. The said inspection certificate is to be produced by the supplier along with invoice and other specified documents in the PO for release of payment.
iii) In case of supply from reputed manufacturers, manufacturer’s test certificate shall be sought along with the delivery of the goods.
iv) On receipt of the consignment, the maintenance of receipt of goods in Baan system by Stores Section and inspection of goods by Quality Assurance Department (QA) is to be completed within six weeks of receipt for major equipments and two weeks for other items, so that this advance payment is regularized. For this purpose, a co-ordinated approach between tendering Department, Stores Division, Quality Assurance Department & Finance Department is essential. In case, the maintenance of receipt of goods in Baan system by Stores Section and inspection of goods by Quality Assurance Department (QA) exceeds above stipulated period, the Stores Division shall report to the concerned Head of tendering Dept.
v) The supplier shall make a payment request by enclosing Invoice along with prescribed documents as per PO, in quadruplicate.
vi) In case of ex- works PO where GSL is responsible for collection of the materials, the cheque shall be handed over to the Stores or User section for taking delivery of the materials against payment.
vii) The balance 10% amount as per PO is to be paid to the supplier against a supplementary bill to be raised by the supplier within 30 days from the date of delivery of goods or receipt of 90% payment whichever is later . All bills for balance payment shall be addressed by the supplier to the HOD of procuring dept. directly.
vii) When balance payment bills are received along with maintenance of receipt of goods in Baan system indicating rejection and short supply, Finance Department may refer the deficiency to ordering department to take up the issue with the supplier to enable the Finance Dept. to make payment.
18.8 GUIDELINES FOR PAYMENT THROUGH BANK (DTB)
(b) In order to avoid any communication gap, the banker’s name and address must be properly indicated in the PO. In the PO, the documents to be negotiated should be clearly stated. One of the important documents to be negotiated is the third party Inspection Certificate or release note and / or Manufacturer’s Test Certificate as applicable. It must be stated in the PO that the supplier should be responsible for delay in retiring documents from bank and consequent demurrage charges if any, if all the prescribed documents mentioned in the PO are not attached. Any LD or Demurrage charges if applicable shall be deducted before making payment and their bankers must be advised to accept deduction of these charges. It must also be specifically mentioned in PO, that the Supplier’s bank charges shall be borne by the supplier and GSL’s Bank charges will be borne by GSL.
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( c) For all critical equipment or systems, a Performance Bank Guarantee of a Scheduled Bank, other than a Co-operative Bank for 10% of ordered value as per GSL format will have to be insisted upon from the supplier. ( d) The supplier will invariably be required to send an advance copy of bank documents marked to the attention of the tendering Officer. On receipt of the advance copy, the concerned officer shall coordinate with Finance Department so that the documents could be retired from the bank without any delay and to avoid any demurrage.
18.9 RECEIPT MAINTENANCE OF GOODS
On receipt of the goods in GSL, maintenance of receipt of goods in Baan system by Stores Division and receipt inspection of goods by Quality Assurance Department are to be completed within six weeks of receipt for major equipments and two weeks for other items to regularize payment already made.
18.10 GUIDELINES FOR ADVANCE PAYMENT (ADV)
i) Where third party inspection is involved, Proforma Invoice should be accepted only when it is accompanied by third party inspection certificate/ release note. The payment should be released against readiness of material after deducting Liquidated Damage, if any, due to delay in delivery.
ii) Where inspection has to be done by GSL, the consignment shall be inspected by a competent GSL representative and the Inspection Certificate will have to accompany the proforma invoice. Where applicable, manufacturer’s certificate may be insisted.
iii) Format for Bank Guarantee for Advance Payment is placed at APPENDIX-O.
18.11 GUIDELINES FOR LETTER OF CREDIT (LC)
a. A letter of credit is a written undertaking given by the procurer’s bank (the issuing bank) on behalf of and at the request of its customer, the procurer, through the bank in the seller’s country (advising bank) to the seller that the issuing bank guarantees to pay the seller for the goods / services within a specified time provided that the conditions laid down in documentary credit are fully satisfied. A LC can be established in any of the nationalized banks. The supplier shall give a notification within a specified period about the readiness of goods, and then Letter of Credit shall be opened by GSL, 30 or 60 days or any other period as specified in the Purchase order, prior to scheduled delivery with a validity of 90 days from the date of its opening. The LC can be amended / extended by mutual consent of both seller and buyer. In case of extension of validity of LC, the last date of shipment is also to be extended accordingly. In this case, both LC and Delivery Period should be extended. The LC amendment charges shall be borne by the supplier or GSL, depending upon who is responsible for the cause. In exceptional circumstances, if any Supplier insists for a confirmed LC, then the confirmation charges shall be borne by the Supplier / GSL as agreed during PNC.
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b. LC may be for inland or overseas delivery. The terms and conditions governing any LC shall be properly scrutinized and be mutually agreed upon so that subsequent amendment to LC could be avoided. For the purpose of opening an inland LC, a formal request, in the standard proforma shall be made to Finance Department after receipt of order confirmation from the supplier. Generally LC shall allow payment against presentation of the following documents in original + 4 copies to the Bank:-
i. Original “ Clean onboard Bill of Lading “ or Airway Bill
ii. Commercial Invoice indicating 100% value of the goods as per PO terms along with item wise price.
iii. Inspection Acceptance Certificate / Release note issued by inspection agency.
iv. Packing List.
v. Certificate of Country of origin duly stamped by the Seller’s Chamber of Commerce.
vi. Manufacturer’ Quality Assurance Certificate.
vii. Insurance and freight documents (in case of CIF contracts).
viii. Performance Bank Guarantee for the value as per contract. The Format for Performance Bank Guarantee which is linked to post supply performance is placed at APPENDIX-E.
ix. Guarantee / Warranty certificate as per contract.
x. Acceptance of deduction of LD and demurrages in case of delay in delivery or deficiency in issuing documents respectively.
Any special terms and conditions like acceptance of Part delivery or variation in weight or length (+/-) to an acceptable limit, payment at sight or afterwards etc shall be incorporated clearly.
c. Where delivery period is long, efforts shall be made to avoid opening LC immediately on placement of the orders. It is preferred that the LC is opened four weeks before maturity of the delivery. The supplier, however, must be taken in to confidence so that arbitrary order cancellation does not arise. d. On receipt of request from procuring Department for opening LC, Finance Department shall ensure that Inland letters of credit and foreign letters of credit are opened as per requirement of the PO. Copy of LC shall be given to the Ordering department by Finance dept for information. e. Where fixed delivery date is stipulated in the P.O. against LC payment terms, timely opening of LC is to be particularly ensured, without which L.D. clause may not be applicable. f. Charges levied by Bankers for extension of LC at the request of Foreign Supplier shall be recovered from them.
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18.12 COLLECTION AGAINST DOCUMENT( CAD)
There could be a situation where 90% or 100% payment have to be made, on Collection Against Document (CAD) basis, on negotiation of delivery documents as per PO. Suppliers should essentially furnish their clear and timely acceptance of the order and dispatch shall be made as per delivery schedule. All the bank charges outside India shall be borne by the Beneficiary (Supplier). Invoice value to be limited to the extent of items being dispatched. In the event of delay in dispatch, the invoice value shall be reduced to the extent of penalty amount by the Beneficiary which will enable retirement of documents in time.
18.13 INTEREST BEARING ADVANCE
Such advances shall bear interest at the PLR of SBI plus 2% as per the notification issued by HOD Finance every quarter. The said rate of interest shall be indicated in the bid document. Variation in payment terms, if any, among bids received shall be normalized by adopting the aforesaid interest rate. Recovery of such advance shall be made proportionately by deduction from ‘on account payment’ or stage payments so that all the sums advanced with the interest thereon shall be fully recovered by the time work or supply completion amounting to 90% of the order is attained.
The Bank Guarantee taken towards security of ‘Mobilization Advance’ / ‘Interest Free advance’ should be at least 110% of the advance so as to enable recovery of not only principal amount but also the interest portion, if so required. The mobilization advance should not to be paid in less than two installments except in special circumstances for the reasons to be recorded. This will keep check on contractor misutilising the full utilization advance when the work is delayed considerably. A clause in the tender enquiry and the contract of cases providing for interest free mobilization advances may be stipulated that if the contract is terminated due to defaults of the contractor, the ‘Mobilization Advance’ would be deemed as interest bearing advance at an interest rate of _____% (to be stipulated depending on the prevailing rate at the time of issue of NIT as per HOD (F) circular) to be compounded quarterly. (This is applicable for clause 18.14 as well).
18.14 STAGE PAYMENTS (STG)
a) In cases of a contract for manufacture, supply and commission of equipment or system or contract for work, Stage payments or Milestone payments up to a maximum of 20% of contract value against valid BG from a scheduled bank or bank of international repute may be made. Bank Guarantee and Performance Bank Guarantee in the prescribed formats for post supply performance are to be enclosed along with bid document.
b) Stage payments shall be made only against certification of stage completion by competent authority in the concerned dept. for work completion or receipt of binding data or drawing or other information as per contractual terms.
c) The milestones agreed for claiming various stage payments by GSL with its Customers, Coast Guard and Indian Navy shall be taken into account while negotiating the stage payments with suppliers.
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18.15 PAYMENT FOR PART SUPPLY
In general, 100% or 90% payment is released on receipt of equipment or system at GSL. However there may be cases where the payment could not be released for want of supply of some minor items, reports, manuals etc or minor defects or damages which make the supply incomplete. If such minor incomplete supplies do not hold installation of equipment or progress of the work related to it substantially, it is unfair to hold the entire payment. It holds good even for works and out sourced jobs also. In such cases, part payment may be made against certification by a standing committee constituted in this regard. Such committee shall be constituted on yearly basis by CMD. The standing committee shall consist of one representative each from Technical Services (TS), Quality Assurance (QA), User dept., Concerned Procuring dept, and Finance Departments. The concerned procuring officer shall be the Secretary for that individual case. The committee may meet as and when required. The committee shall assess the criticality of the item yet to be supplied or the nature of job still to be done and decide whether part payment needs to be released and if so what percentage (%) of order value. The committee shall finalize its recommendations within 7 days from the date of receipt of the reference. The concerned procuring officer, on receipt of the committee report shall obtain the CFA approval for the part supplies payment and forward the same to Stores for maintenance of receipt and Finance for payment.
18.16 PAYMENT FOR SHIP REPAIR WORKS
In general, the following payment may be made for ship repair works.
i) 90% value of work order within 30 days from the date of submission of invoice in line with subcontract work order, Work done certificate issued by the designated officer or ship staff or customer rep in original along with ESI and PF formats dully filled, signed and stamped accompanied by copies of paid challans.
ii) Balance 10% of the order value on submission of the performance bank guarantee from scheduled or nationalized bank, for like value, valid till the expiry of the guarantee period of 6 months with claim period of 3 months.
The following payment may be considered for jobs where duration is more than one month:
iii) By monthly running account bill per activity or percentage of completion basis prepared by contractor and certified by the designated officer and against the submission of documents such as invoices, guarantee etc. as per the Contract terms within 30 days.
iv) By final bill, after deducting LD if any and other deductibles after total completion of the work certified by the designated officer and against the submission of the documents such as invoices, guarantees etc. as per Order/ Contract terms within 30 days.
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iii) For works or jobs such as manufacture and Supplies involving issue of material, drawings etc by GSL, payment shall be under head ‘For Other Items’ irrespective of duration of completion but with additional requirement of guarantee towards Free Issue Material (FIM) as applicable
iv) For works or jobs of less than one month duration, by way of a single bill after total completion of the work certified by the user or contract operating authority and against the submission of documents such as invoices, guarantees etc as per Contract terms within 30 days.
18.17 PAYMENT TERMS FOR OUTSOURCING
a) Following payment term may be considered for jobs having work order value more than Rs 50 lakh:
i) 90% of the running bill, each bill having not less than Rs. 5 lakh amount, maximum no. of bills not exceeding 10, will be paid within 30 days from the date of submission of documents, invoice , satisfactory work done certificate duly certified by the designated officer in production dept in original and ESI and PF format dully filled, signed and stamped, as per the order terms and conditions. ii) Balance 10% of the order value will be paid after submission of the performance bank guarantee from scheduled or nationalized bank, for like value, valid till the expiry of the guarantee period of the contract.
b) Following payment term may be considered for jobs having work order value less than Rs 50 lakh:
i) 90% of the running bill, each bill having not less than Rs. 5 lakh amount , maximum no. of bills not exceeding 05, will be paid within 30 days from the date of submission of documents, invoice , satisfactory work done certificate duly certified by the designated officer in production dept in original and ESI and PF format dully filled, signed and stamped, as per the order terms and conditions. ii) Balance 10% of the order value will be paid after submission of the performance bank guarantee from scheduled or nationalized bank, for like value, valid till the expiry of the guarantee period of the contract.
18.18 PAYMENT TERMS FOR MAINTENANCE CONTRACTS The payment for Maintenance contracts shall be released on completion of the following: a) Submission of Original Invoice duly certified for payment by COA. b) Submission of Service reports signed by COA. c) Completion of ESI/PF formalities. d) COA shall advise EDP to maintain the receipt in Baan system e) After maintenance of receipt, EDP forwards the documents to Finance department for release of payment.
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18.19 MODES OF PAYMENT
This includes Telegraphic transfer (TT), Demand Draft (DD), Cheque, Electronic Payment System (EPS) APPENDIX-N, Letter of Credit (LC), and cash payment against delivery or spot purchase.
(a) Direct Bank Transfer:
This is also termed Telegraphic Transfer. It shall be done where there is high degree of trust between parties. In this case, GSL releases the payment prior to or after receipt and acceptance of the goods and documents.
(b) EPS:
In this system, the supplier shall provide information of their bank details, in the prescribed format as at Format- and the payment is released through bank transfer.
(c) Letter of Credit (LC):
It can be subdivided as follows:
i) Irrevocable letter of credit. ii) Confirmed irrevocable letter of credit.
iii) Revolving letter of credit
(d) Cash payment against delivery or spot purchases.
18.21 DISPENSATION
For Cases which do not fall in any of the above referred categories of payment terms, CFA approval shall be obtained furnishing detailed justification.
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CHAPTER – 19 LIQUIDATED DAMAGES 19.1 LEGAL STATUS
Liquidated Damages (LD) is meant to ensure timely delivery of goods. It is compensation of loss on account of late delivery where loss is pre- estimated and mutually agreed. Law allows recovery of pre-estimated loss, provided such a term is included in the contract. For imposition of LD, there is no need to establish actual loss due to late supply. The legal position with regard to claim for LD is as follows: a. Whatever the quantum of the loss sustained, the claim cannot exceed the sum stipulated in the contract. b. Only reasonable sum can be calculated as damages, which in given situation may be less than the sum stipulated. c. What is a reasonable sum would depend on facts. d. Court may proceed on the assumption that the sum stipulated reflects the genuine pre- estimate of the parties as to the probable loss and such clause is intended to dispense with proof thereof.
19.2 QUANTUM OF LD
Levy of LD beyond 4 weeks of contractual delivery @ 0.5% of the order value, per week shall be charged subject to a maximum of 5%. In case of delay in supply of materials beyond grace period of 4 weeks, the LD shall be levied from the date of original delivery date as per PO. @ 0.5% of the order value per week subject to a maximum of 5%. The maximum LD limit may be fixed at less than 5% on case to case basis, subject to approval of the CFA.
19.3 WAIVER OF LD
LD may be waived in case of force majeure or in case of delay attributable to GSL or third party inspection agencies, where supplier does not have a control and same needs to be established through documents . Any delay by GSL that has caused delay in delivery has to be certified by the concerned officer causing the delay indicating the reasons for such delay. In such cases, LD can be waived with the approval of CFA.
19.4 FORCE MAJEURE
Force majeure, if insisted by the firm, has to be defined in line with CMD Memo No.CMD/22/2001 dated 13.08.2001.
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CHAPTER – 20
BIDS PROCESSING
20.1 SUBMISSION OF BIDS
The prospective bidders shall submit bids as per instructions given in the bid document within due date and time. Off line bids, for value less than Rs 5 lacs are to be deposited in the tender box, kept securely at Reception Centre. In case of late or delayed bids, receipt date and time shall be mentioned on the bid by Inward section. Bids shall be received in sealed and closed envelopes. Bids received by post within the prescribed date and time of submission of tender shall be dropped inside the tender box when received by the Inward section or Procuring Department. However, if bids are received in the form of Fax, E-mail or in open condition, they are to be deposited in tender box prior to opening and considered along with other bids on the due date and all bids received in open conditions shall be so recorded. Such bids will be received at the risk of bidders.
20.2 HAND DELIVERY OF BIDS
Where bids are delivered by hand or required to be submitted by hand, it shall be handed over to any of the two designated officers of the Despatch section. The names and designations of these two officers shall be mentioned in the bid document. The information about these officers shall be displayed at the Reception Center where bids are to be deposited.
20.3 CORRIGENDUM
Whenever there is any change in the scope of work or terms and conditions or bid opening date etc, a corrigendum shall be issued in the same manner as how original tender notice was issued, well before the bid opening date, giving adequate time to bidders to respond. In the case of OCB, the intimation shall go to those who purchased the tender documents, in addition to the normal mode of publication.
20.4 CLARIFICATIONS
Bidders shall be permitted to seek clarification, if they are in doubt of scope of work or terms and conditions etc of a tender. A last date shall be set for seeking the clarification which shall be maximum 7 days prior to the bid opening date. On receipt of query from any bidder, the user or technical dept. shall answer the query at the earliest. The query as well as the answer shall be sent by the user or technical dept even to those bidders who have not raised any query but participating in the bidding process. If the clarification is taking time more than the above period, the bid opening date shall suitably be extended.
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20.5 RE-SUBMISSION OF BIDS
If a bidder desires to modify and submit a revised bid with in the due date for submission of the bids, it shall be permitted. However, a notification to that effect is to be obtained from such bidders in the form of fax or letter or email etc, indicating the reason for revision so as to reach the tendering dept. prior to the closing date and time of tender. Such covers should be clearly super scribed ‘Revised bid against tender no. xxx for the item yyyy due on zzz.’ The responsibility of submission of such revised bids before closing date and time of tender shall be that of bidders. The tendering officer shall take note of such notifications and ensure that only the last submitted revised bid alone shall be opened. A suitable note as indicated below shall be included in the bid document.
“Bidders desirous of revising bids prior to the closing date and time for submission of bids may do so by sending a notice by fax, letter or e-mail etc but followed by a signed confirmation copy of request so as to reach the undersigned not later than the due date and time for submission of bids. However it shall be the responsibility of the bidder to ensure that the covers containing revised bids are clearly super scribed ‘Revised Bid, against tender no. xxx for item yyyy due on zzz ‘and deposited in the designated tender box before the closing date and time for submission of bids”.
20.6 OPENING OF BIDS a) Tender box shall be opened by representative of Secretariat & Legal section at 15:00 Hrs. on due dates. All bids received from tender box are initialed and dated by a committee comprising of officers from Secretariat & Legal, Tendering dept. and Finance Dept. The bids receipt details shall be recorded on the Comparative Statement Form (CST). In the case of sealed envelopes received in the tender box without proper superscription of tender number on the envelope or inadequate details, these envelopes shall be opened immediately by the tender opening officers and if the bids received are found not pertaining to the tender being opened, these envelopes shall be sealed immediately by writing the subject of contents inside the envelope including due date of opening, on top of the envelope and initialed by the tender opening officers with date and time. These sealed envelopes shall be put back in the tender box.
b) Bids shall be opened after the due time for opening the bids in the presence of bidders or their authorized reps who choose to present. Details of attendees with signatures shall be obtained and kept on record. In the case of off line OCB, the names of the bidders, their rates and important details shall be read aloud. The authority letters brought in by the representatives shall be attached with the CST. All the opened bids shall be initialed by an officer of Financial Dept. and subsequently by the Procuring section.
c) Names of the bidders and the No. of bids received shall be recorded in the CST or Bid Form (BOF) and placed in the file. Bids received without EMD where it was required shall be clearly indicated in the CST / BOF. Bid documents must remain in the custody of the Tendering Officer. If there be any over-writing, erasing and correction in the quoted rate, it shall be circled and written in words and attested by bid opening officers to avoid any ambiguity or alteration later. In case of two bid system, only techno-commercial bids shall be opened first. In such cases, officers of Finance dept. and Tendering sections shall sign on the sealed envelope of price bid and
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obtain initials of bidder or his rep if present. Thereafter these shall be kept in the safe custody of the concerned Tendering officer. The unopened price bids shall be kept in the custody of HoD.
d) In case, the price bid has been inadvertently placed by the bidder in the techno- commercial bid, the same is to be separately sealed immediately by the tender opening officers super scribing “ Price bid , with tender number xxx “ on the envelope along with their observation made in the Comparative Statement Form (CST).
e) In Single Bid System, the sealed cover containing combined techno- commercial and price bids shall be opened and endorsed and dated by both the officers of Finance dept. and Tendering dept. The envelopes and bids shall be retained in the file.
f) In the case of LCBs, bid opening officers shall open the offers of only those firms to whom the bid documents were issued. If a bidder who is a principal firm directs the bid document to his dealer or distributor or rep to quote, before considering such bids from their reps, it shall be ensured that a letter in original be obtained from the principal firm requesting GSL to accept bid from their reps.
g) No document presented by a bidder after the closing date and time will be entertained, unless it is purely technical in nature and has no financial bearing on the contract and does not seek major changes to the technical specification furnished in the bid documents. If a bidder offers a rebate unilaterally after the closing date and time for submission of bids, it shall not be considered. However, if that bidder emerges as the L-1 bidder, the rebate offered shall be taken into account.
20.7 DELAYED BIDS
They are bids which are received after the due date and time for submission of bids, but were posted before the due date and time. In such cases, HOD of the Tendering dept. may decide whether to accept or reject such bids depending upon the merit of each case. However, this shall not be applicable for open tenders. The unopened “DELAYED BIDS” shall be returned to the bidder after placement of contract.
20.8 LATE BIDS
They are bids, posted and received after the due date and time for submission of bids. They shall not be considered as a norm. However, in exceptional circumstances, when there is lack of competition, late bid may be considered by the concerned HOD with reasons recorded. Again, this shall not be applicable to open tender. The unopened “LATE BIDS” shall be returned to the bidder after placement of contract.
20.9 UNSOLICITED AND UNSIGNED BIDS
They are bids received from those to whom bid documents were not issued in the case of LCB. They shall be summarily rejected. Unauthenticated bids, i.e. bids without signature shall also be rejected.
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20.10 EXERCISING CAUTION
a. The bids that do not meet the basic requirements shall have to be treated unresponsive bid and ignored.
b. Unsigned bid to be treated unresponsive bid
c. Unqualified bids shall be rejected. Eg. Large scale unit firm applying against bids meant for SMEs
d. Non-payment of EMD or tender fee, if not qualified for exemption shall be rejected.
e. Bids received without proper authorization letter from principal, where required shall be treated unresponsive bids
f. Where bidder has not agreed to furnish required security deposit or performance guarantee, his bid shall be rejected.
g. If bidder is not complying to any essential condition of bid document, like liquidated damage clause, warranty clause, dispute resolution mechanism, applicable laws, sub mission of BG, PBG, payment etc. bid may be rejected with the approval of CFA. In case of single bid system, CFA approval for rejection of any bid may be obtained while taking final approval for placement of order. In case of Two bid system, CFA approval for rejection of any bid may be obtained prior to opening of price bids.
h. Bids not meeting technical requirements shall be rejected by Technical / User Dept and HOD approval to be obtained by them for the same.
i. When requested for supply and installation of equipment, bid with offer for only supply shall be rejected
j. Procurer may seek clarifications on minor deviations like non-furnishing income tax clearance certificate, etc
k. In case of any doubt, the concerned HOD shall be consulted and his advice shall be taken. While rendering such advices, it shall be uniformly applicable for all such future cases. HOD may also take the advice of the concerned Director if need be.
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20.11 ERROR IN PRICES
a. If there is discrepancy between the unit price and the total price which is obtained by multiplying the unit price by the quantity, the unit price shall prevail and the total price corrected accordingly, unless in the opinion of the purchaser there is an obvious misplacement of the decimal point in the unit price, in which case the total price as quoted shall govern and the unit price corrected accordingly.
b. If there is an error in a total corresponding to the addition or subtraction of subtotal, the subtotal shall prevail and the total shall be corrected
c. If there is a discrepancy between words and figures, the amount in words shall prevail, unless the amount expressed in words is related to an arithmetic error, in which case the amount in figures shall prevail.
d. If there is any discrepancy between an original and an additional copy of a bid, the original copy shall prevail. Here also, this issue is to be taken up with the tenderer / bidder in the same manner as above and subsequent actions taken accordingly.
e. If there are such discrepancies in bids, the decision of the procurer on the above lines shall be communicated to the bidder. If the bidder does not agree to the observation of the procurer, the bid shall be rejected.
f. Above actions shall have the approval of the competent authority at appropriate stages.
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CHAPTER – 21
TECHNO-COMMERCIAL EVALUATION
21.1 TECHNICAL EVALUATION:
a) It shall normally be carried out by a Technical Negotiation Committee (TNC). The team shall comprise of reps. from Technical, Planning, User and QA depts. according to the individual bid requirements. In case of deviations or deficiencies, the dept. carrying out technical scrutiny shall correspond with the bidders directly. If bidders are called for discussions, in person, they may be given 1 to 2 weeks’ notice, depending on whether they are indigenous or overseas bidders. The discussions that have taken place shall be recorded and signed by those participated in the discussions. As and when video conferencing facility is available, the discussions may take place through this communication facility. In such cases also, the record of discussions shall be recorded and minutes be signed by those involved in the discussions.
b) Wherever GSL contract with customer stipulates inclusion of customer representative in the TNC, it shall be followed. The concerned officers who conduct such TNCs shall organize the meetings, communicating with bidders and customer reps. The senior most member of the committee shall chair the meeting. If bidder has not agreed to meet any of the essential requirements of specifications, it shall be recorded. If a bid is rejected on technical grounds, it shall be specified in the minutes itself and the minutes shall be signed by all who participated in the TNC and a copy shall be given to the concerned bidders.
21.2 TNC MEETING GUIDELINES:
i. If for any reason a nominated member is unable to attend either being on leave, or away on duty or absent, the concerned HOD shall nominate a suitable alternate member. This fact however shall be recorded in the TNC meeting. ii. Any member having any personal relationship with the bidder rep who is attending the TNC or having any business interest with the firm shall refrain from participating in the committee. iii. It is preferable that all technical requirements are tabulated and compliance or alternatives offered or otherwise against each be obtained from bidder. iv. Deviations granted to one firm shall not put other firms in a disadvantageous position to ensure fair competition. a. The final scope of work or supply shall be same or on par with all bidders. v. In case of change in specification or scope of supply or work during TNC that will have impact on price, the changes made shall be clearly brought out in the TNC minutes of meeting, as a covering note, indicating specifically the details of changes made in the scope of supply and need for submitting the supplementary price bids by the firm. This is required to enable the Procuring officer to accept the supplementary price bid from the firms and PNC to appreciate the changes made and decide about the impact on price.
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vi. In such cases, all eligible bidders shall be afforded an opportunity to review their price and quote price for the deletions or additions made. When such changes are made, approval of CFA shall be taken for obtaining supplementary bids. However such changes should not be misconstrued or misused to substantially change the tender conditions or the scope of the supply to favor any bidder. vii. The bidders shall be advised to deposit their supplementary bids in the tender box on or before a specified date and time. If there is no supplementary bid from any of the bidders, a letter shall be obtained from them that their price bid submitted earlier remains unchanged even after the technical discussions held on the date. viii. The TNC report shall clearly state whether a bid is accepted or not and nothing shall be in between. It shall be based on the requirements projected. Further, TNC minutes with list of deliverables covering requirement of seating, binding drawings, bill of material, drawings, documentation, special tools, installation material, service engineer requirement, FATs, Training, OBS and B&D spares, and inspection requirement as applicable shall be forwarded to Tendering dept. ix. In case, the evaluation requires site visit to the works of bidders, it may be undertaken by Members of TNC. xi. Seeking piecemeal information from bidders shall be avoided. xii. During technical evaluation, ability of a bidder to deliver the items or provide the services according to the requisite time line shall be examined to avoid slippage of delivery on account of too many orders placed on the basket of the same supplier. xiii. If a bidder is not responding to technical queries before the set time for clarification or buys time in not clarifying to the point raised and thereby delaying finalization of TNC, the evaluating officer, at his discretion, after giving ultimatum in writing, may reject the bid on this ground. xiv. The TNC conducting officer shall carry out scrutiny of bids as expeditiously as possible. The normal time for completion of technical scrutiny after opening of the technical bids shall be 4 weeks. However, in case of major equipment, the technical scrutiny shall be completed within 45 days. In case of any delay in completion of technical scrutiny, reason for the same shall be recorded by the TS/User Dept.
21.3 WAIVER OF QUALIFICATION REQUIREMENT
There shall be no waiver of qualification criteria after issue of bid documents, as this may result in denial of opportunity to firms which could have met the revised essential parameters, had this been reflected initially in the Tender. This is particularly relevant in single bidder or resultant single bidder cases where waiver of essential parameters after issue of bid documents and receipt would be prejudicial to the interest of other firms which might have submitted their bids as per the revised parameters but could not, because of the essential parameters mentioned in the bid document.
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21.4 COMMERCIAL EVALUATION (CNC)
As a general principle, no bid involving any uncertain or indefinite liability or any condition of unusual character should be considered. Commercial terms and conditions of all bidders who have been technically cleared shall be brought on par during CNC. It shall be carried out by the concerned Tendering officer and Finance dept. officer. Commercial deviations if any are to be resolved through correspondence or discussions in person, considering the time frame available for finalizing the orders. Such meetings may be organized by Tendering officer either with each bidder separately or with all the bidders jointly for resolving them to acceptable level. Concerned finance officer shall also be present in such meetings. Once the bids are commercially cleared and categorized as “Techno commercially cleared bids”, the manual price bids of successful bidders are opened by Internal Audit officer, in the presence of bidders who choose to be present.
21.5 GUIDELINES FOR CNC
A guiding list for Commercial Evaluation (CNC) is as follows:
i. Confirm commercial terms indicated in bid document are fulfilled. ii. Check whether Custom Duty, Excise Duty, Octroi, Sales Tax, Service tax and any other levies, as applicable, as per statutory requirements are taken into account. iii. Confirm all charges are taken in to account. iv. Confirm delivery schedule. v. Extend validity of offer to suit processing time, if required. vi. Examine Payment terms. vii. Confirm inspection agencies and inspection charges included or not. viii. Check product support. ix. Legal Jurisdiction as applicable. x. Warranty / Guarantee Offered xi. Prices fixed and firm or having Price variation Clause (PVC) or ERV clauses etc. xii. Compliance to LD clause, penalty clause, integrity pact clauses, PBG clauses, furnishing PBG, cost of preservation, de-preservation, re-preservation, test and trial spares, installation and commissioning tools and oils, total service engineer man days for series of ships adjustable among the yards, service engineer charges for additional requirement of man days, on board training, class room training, notice period for attending Factory Acceptance Trials etc. xiii. Confirmation on loading factors xiv. Any other conditions that may be relevant for determination of ultimate price.
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CHAPTER – 22
SCRUTINY OF PRICE BIDS
22.1 SCRUTINY OF PRICE BIDS
Comparison and evaluation of price bids shall be done on the prices offered inclusive of all levies, taxes, and charges as indicated in the price schedule of the bid document, but exclusive of Octroi or Entry Tax which is to be paid extra at actual, wherever applicable.
22.2 RANKING OF BIDS FOR DEFENCE PROJECTS
The ranking of tenders relating to procurement for Defence Project to determine L1 – bidder shall be done as under:
i. In case of overseas bidders, the cost, insurance and freight (CIF) plus customs clearance, LC opening & retirement charges, port handling and transportation charges to GSL shall be the basis for the purpose of comparison of various bids. Taxes, duties and levies in India shall be excluded for the purpose of ranking the bidders against issue of exemption certificate. Thus least cost to the GSL is to be considered. ii. In case of indigenous bidders, the total basic cost and transportation charges to GSL and Taxes, if any, shall be the basis for comparison of various bids. Duties and levies may be excluded for the purpose of ranking the bidders against issue of exemption certificate. Thus least cost to the GSL is to be considered. iii. Cost of OBS shall be considered for arriving at L-1 bidder. However, cost of B&D spares shall not be considered for arriving at L-1 bidder. Offer for OBS and B&D Spares, shall be submitted by the firm along with the offer for the Main equipment. Order for OBS and B&D Spares will be placed separately subsequently as per the terms of the contract with the customer. iv. It shall be made clear in the bid document that the method of excluding the taxes, duties and levies payable as at (i) & (ii) above is applicable for the purpose of ranking the price bids in the clause of defining L1 criteria.
22.3 RANKING BIDS OTHER THAN FOR DEFENCE PROJECTS
Procurements other than above, ranking shall be done on the basis of “all inclusive of taxes, duties and charges”. In general “L-1” offer shall be determined on the basis of cost to the company. L-1 bidder shall be determined based on equipment cost plus cost of OBS. If a bidder desires to claim variations in statutory levies as and when it takes place during supply, he has to furnish clearly in the bid itself, the break up cost indicating the present taxes, duties and levies; otherwise his claim shall not be considered. Therefore, the requirement to furnish the break-up regarding taxes, duties and levies shall be stated in the bid document.
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22.4 LOADING FACTOR In the tender document, firms will be insisted upon for agreeing to our commercial terms and conditions without any deviation. Offers containing deviations may be liable for rejection commercially. However, if deviations are proposed by the firm, the same may be discussed through correspondence or CNC meeting comprising of Commercial & Finance representatives and mutually agreed upon with due deliberations subject to approval of Management. The following clause will be invariably indicated in the tender.
“The tenderer should adhere to the commercial terms and conditions mentioned in the tender. Offers containing deviations may be liable for rejection commercially. However, any deviations to the commercial terms and conditions proposed by the tenderer may be discussed and mutually agreed upon. The said agreed deviations will be subject to the approval of GSL management. Loading factors for non acceptance of standard payment terms shall be as per the Procurement Manual of GSL.”
22.5 NON-ACCEPTANCE OF STANDARD PAYMENT TERMS
Offers with deviations to GSL Standard Payment Terms will be loaded interest charges @ Prime Lending rate (PLR) of State Bank of India (SBI) plus 2% thereon for indigenous bidder and foreign bidders for deviated amount for deviated period for the purpose of evaluating the lowest bidder. Offers with advance payment are liable to be rejected. In no case GSL shall accept liability towards interest. Loading factors applicable for different payment terms are as under.
Sr. Payment terms offered by Loading Factor No.
INDIGENOUS SUPPLIER 1 100% within 30 days from NIL receipt and acceptance
2 100% through bank Interest charges @PLR of SBI plus 2% on 100% value for 2 months
3 100% advance against Interest charges @PLR of SBI plus 2% on Proforma Invoice 100% value from payment date till delivery date plus 2 months
4 20% stage payment and Interest charges @PLR of SBI plus 2% on balance 80% through 20% value from payment date till delivery bank date plus 2 months & Interest charges @PLR of SBI plus 2% on 80% value for 2 months 5 20% stage payment and Interest charges @PLR of SBI plus 2% on balance 80% after receipt 20% value from payment date till delivery and acceptance within date plus 2 months & no loading on 80% 30 days value.
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FOREIGN SUPPLIERS
6 100% through LC Interest charges @ PLR of SBI plus 2% on 100% FOB value for 2 months.
7 20% stage payment and Interest charges @ PLR of SBI plus 2% on balance 80% through LC 20% value from payment date till delivery date plus 2 months & Interest charges @ PLR of SBI plus 2% on 80% value for 2 months.
22.6 ADVANCE PAYMENT:
a. If the bidder seeks advance payment at a lower rate of interest than the rate specified in the bid document, if any, then only the differential amount of interest shall be loaded to the quoted price. b. It shall be stated clearly in the bid document as to when and how an interest free advance would be adjusted. c. Interest bearing advance shall carry interest till it is adjusted either against the installments or stage payments or the amount payable when supplies are received in accordance with the terms of Contract. d. Bid documents shall also clearly state as to how and when interest on interest bearing advance would be adjusted or paid by supplier. e. Stage payments against achieving a stipulated milestones or physical progress shall wherever possible be against certification of nominated Inspection Agencies. Any interest free advance shall be paid only after receipt of Bank Guarantee or Indemnity Bond, as the case may be, till receipt of deliveries. f. The bank guarantee or indemnity bond so taken towards security of mobilization of advance shall be for at least 110% of the advance amount payable, to enable recovery of not only principle amount but also the interest portion, if so required. g. The mobilization advance shall not be paid in less than two installments except in special circumstances for the reasons to be recorded. This is to ensure that contractor is not misutilising the advance amount when the work is delayed considerably.
22.7 FREIGHT AND INSURANCE (a)Indigenous Supplies: FOR – Destination means FOR- GSL Stores, Vasco.
Forwarding, Freight & Insurance are in Suppliers scope i.e. included in the quoted prices. Materials to be dispatched through GSL approved carriers freight pre-paid. However, for unavoidable reasons, if bids are exclusive of transport and / or insurance, the same will be loaded on the following manner.
In case of Ex-works offer and if the firm does not specify the packing and forwarding charges, 2% of the Ex-works price will be loaded to arrive at the FOR dispatching station price. Insurance charge, 0.044% of the Ex-works prices will be loaded to FOR destination price.
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In case of FOR dispatching station offer, the following percentage will be added to arrive at the FOR destination price, as element of estimated freight up to destination :
Approximate Distance of % of FOR dispatching
Dispatching station from site station price
Above 2001 Km 5% 1501 to 2000 Km 4% 1001 to 1500 Km 3% 501 to 1000 Km 2% 500 Km and below 1%
Note: In case the firms are unable to quote on FOR GSL delivery basis as per GSL Standard terms, then the firms shall be requested to indicate break-up of cost towards Packing, Forwarding, Freight and Insurance charges in their offer as applicable for loading purpose for arriving at L-1 bidder. However, if the firms fail to do so, then the above loading factors shall be considered.
(b) Foreign Supplies:
(As amended in line with CMD Memo 09/2016 dtd. 13.05.2016) Mode of Shipment- By Sea
In view of mandatory finalization of contracts for import on FOB or FAS seaport basis vide office memorandum no. SC-11021/3/99-AS0-1 VOL Ill dated 15.09.2001 issued by Ministry of Shipping, the foreign firms were required to indicate FOB / FCA basis inclusive of SEA worthy packing and inclusive of origin charges upto FOB seaport. However, now MoS vide office memorandum dt.08.09.2015 decentralized shipping arrangement in respect of ocean transportation of cargo under the control of Govt. PSU. Thus MoS has allowed import on FOB/ FAS or CFR(C&F) / CIP(CIF) as per lncoterms 2010 without NOC from MoS.
In case the firm is not indicating prices on CIF/CIP Mumbai / Nhava Sheva Seaport basis, then CIP/ CIF Mumbai / Nhava Sheva seaport price will be worked out by GSL considering following percentage for arriving at L1 prices. This is required for comparison with offer from Indigenous firms.
i) Freight charges from Nearest International seaport to Mumbai / Nhava Sheva Seaport: The indicative freight charges will be obtained from MOS /SCI/ Balmer Lawrie /Sea freight forwarders holding valid multi-modal licence issued by DG Shipping for dispatch of equipment from nearest International seaport to Mumbai /Nhava Sheva seaport and shall be loaded SCI /Balmer Lawrie /Sea freight forwarders obtaining sea freight charges from MOS / to firm's quote to arrive at CFR price. For holding valid multi-modal licence issued by DG Shipping firm is required to indicate weight, size and volume of the consignment, break-bulk or containerized cargo and type of container in the techno-commercial bid of the offer.
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ii) Insurance charges: Prevailing Insurance charges (present rate is @0.046%) of FOB cost per ship set shall be added to firm's quote. However, in the event, it is not possible to get indicative sea freight from MOS /SCI /Balmer Lawrie / Sea freight forwarders holding valid multi-modal licence issued by DG Shipping / loading factor towards sea freight will be applied as laid down under para 23.3 of Procurement Manual 2014.
Mode of shipment- By Air The foreign firms are required to quote on FCA Airport basis as per lncoterms 2010- including origin charges for delivery upto FCA Airport of shipment since GSL has rate contracts with air freight forwarders. Indicative air freight obtained by GSL from freight forwarder will be loaded to firms quote to arrive at CFR Mumbai Airport price. i) For obtaining air freight charges from GSL nominated freight forwarders, firm is required to indicate weight, size, volume and nature of the consignment whether Normal/DGR /Hazardous cargo in the techno-commercial bid of the offer. ii) Insurance charges: Prevailing Insurance charges (present rate is @0.046%) of FCA cost per ship set shall be added to firm's quote
Note: The indicative_freight charges received from MOS/SCI/ Balmer Lawrie / Sea freight forwarders holding" valid multi-modal licence issued by DG Shipping (in case of sea) and GSL nominated freight forwarder (in case of air) plus prevailing insurance charges (present insurance charges @0.046%) of FOB/FCA cost towards insurance shall be added to the quotes to arrive at CIF/CIP cost of foreign for comparison with indigenous firm.
iii) Port clearance & Forwarding charges: Port cleara.nce & Forwarding charges @ 0.46% of FOB/FCA cost per shipset shall be added to firm(s) quote(s).
iv) Inland Freight charges: The inland freight charges from Mumbai Seaport to GSL will be added to firms quote based on the size, value, weight and no. of packages as per GSL rate contract existing at the time of finalisation.
22.8 OVERSEAS BIDS
The CIF price will be multiplied by the Exchange Rate between Indian Rs. and the quoted Foreign currency, prevailing on the date of closing of the tender. The applicable rate will be “TT selling rate”, of the State Bank of India. If the date of opening the tender happens to be holiday or non- transaction day, the exchange rate on immediate previous working day will be adopted.
Customs Duty as applicable on assessable value (CIF plus landing charges etc.) will then be added on the CIF price, thus converted into Indian currency.
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22.9 OVERSEAS VIS-À-VIS INDIGENOUS BIDS
For comparison of Import offer with the indigenous offer for the materials in a Global Tender / Limited Tender (involving Indian as well as foreign offers), landed price of indigenous offer (i.e. FOR destination price plus Excise Duty, plus Sales tax plus Octroi, if any) will be compared with the landed price of Import offer (i.e. Freight & Insurance upto Mumbai Port, LC opening & retirement charges, Custom clearance, Port clearance & forwarding and Freight & Insurance charges for the materials upto GSL), as explained in para 22.7 (b) above.
Note: Wherever, exemption and or concessions towards taxes and duties (Custom duty / Excise Duty / Octroi) are available by law / notification, the same will not be reckoned for evaluation of bids and deciding L1 status.
22.10 PERFORMANCE BANK GUARANTEE
In respect of the requirement for furnishing Bank Guarantee for Equipment Performance (specified number of months from date of supply or specified number of months from the date of commissioning of equipment or specified number of months from commissioning of ship whichever is earlier), the question of loading factor does not arise when the non-compliance is a bid rejection criteria. If it is not a bid rejection kcriteria, the variation shall be normalized as follows:
10% of quoted price X (GSL warranty period in months- Quoted warranty period in months)
GSL warranty period in months.
22.11 ADDITIONAL DELIVERY PERIOD
For any additional delivery period sought by a bidder over the stipulated date of delivery as per bid document, the following shall be loaded.
0.5% of quoted price X (Quoted delivery period in months - GSL delivery period in months)______
GSL delivery period in months
Difference in delivery offered and GSL Planning Dept. for project item is less than a month need not be construed for loading purpose. However, if stipulated delivery period in the bid document is a must, as per Planning Dept. Advice at that point of time, then offers not meeting the stipulated delivery schedule may be rejected. In such a case, this becomes a bid rejection criterion and should be indicated in the bid document. An outer time limit even with said criteria for normalizing the bids may be specified in the tender depending on the time frame available for receipt of goods or services. Delivery being the essence of the contract, it is desirable if bidders adhere to the stipulated clause.
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22.12 DEVIATION IN LD CLAUSE
Deviations sought in respect of LD rate per week and / or maximum ceiling in respect of LD shall be loaded to the quoted price. For instance, if the maximum ceiling towards LD indicated in the bid document is 5% and the bidder seeks to limit it to say 3.50%, then the price quoted will be loaded by 1.5 %. If the rate of LD per week is 0.5% per week or part thereof as per bid document and the bidder seeks it say, 0.4% per week or part thereof, the maximum ceiling on LD as per bid document shall first be equated to weeks , 10 weeks with a ceiling of 5% in this case, and the rate proposed by the bidder i.e. 0.40% will be multiplied by the so equated maximum period , which works out to 4% and the quoted price shall be loaded accordingly by the difference in percentage which is 1%. Delivery being the essence of the contract, it is desirable if bidders adhere to the stipulated clause.
22.13 DEVIATION IN WARRANTY CLAUSE
Deviation in respect of period of Warranty shall be loaded to the quoted price @ 0.25% per month or part thereof, if the period under variation does not lead to Bid Rejection criteria. This does not arise if the bidder quotes additional price for the differential period.
22.14 DEVIATION IN PRICE VALIDITY OF OFFER
Deviation in respect of the Price validity of offer shall be loaded to the quoted price @ 0.25% per month or part thereof, if the period under variation does not lead to Bid Rejection criteria. This does not arise if the bidder quotes additional price or the differential period.
22.15 B&D AND OTHER STANDARD CLAUSES
Non supply of onboard spares and B& D spares shall be a bid rejection criteria and hence no need to propose any factor for normalizing the bids. The requirement of cost break up of itemized B& D spares, wherever applicable shall be indicated in the bid document and the bidders be informed that non-compliance may be liable for rejection of their bids. The cost of suggested B& D spares , shall not however, be considered for evaluation of bids as these would get finalized only at a later date by the customer after ranging and scaling. Since the effective utility of the equipment over the years is essentially governed by the B&D spares to be held in stock, it is desirable that the price list is obtained at the point of receipt of bids for the main equipment.
22.16 OTHER DEVIATIONS
Deviation in L/C charges for amendment, price variation formula, ERV formula, arbitration clause, Force Majeure clause, Risk Purchase clause, etc. being non quantifiable on a rational basis at the time of bid evaluation and are contingent on event occurring post-order placement, may be ignored for loading at the bid evaluation stage but may be negotiated during CNC.
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22.17 DEVIATIONS IN TECHNICAL SPECIFICATIONS
They shall be ironed out during TNC. If there is a change in scope of work, supplementary bids may be sought. Hence, there is no necessity to normalize further. Variation on the quantum of Security Deposits or Performance Guarantee, whether by way of Bank Guarantee or by way of Demand drafts shall not be loaded as the deviation is treated as Bid Rejection Criteria. Approval of CFA may be obtained in respect of any deviations not covered herein. Directive of CFA is final on any divergent views in regard to the basis for normalization.
22.18 OPENING OF PRICE BIDS
Opening of Price Bids shall follow after conclusion of TNC and CNC. In case of change of specification or scope of supply/ work based on TNC held, an opportunity shall be given to all eligible bidders to revise their prices within a stipulated time frame. An advance intimation shall be given to the bidders to witness price bid opening. The price bids of the techno-commercially accepted firms shall be opened by the internal auditor on the notified date and time in the presence of bidders or their authorized reps who choose to present.
The following procedure shall be adopted for opening price bids.
a) The concerned procurement officer shall collect the sealed Part II envelopes of the approved bids kept in the safe custody and after careful scrutiny of the sealed covers ensure that the bids are in sealed or unopened condition with tender ref. No. correctly indicated. b) The Internal Auditor and the concerned procurement officer shall then endorse the sealed envelopes and open the price bids in the presence of bidders or their representatives, if any present. c) Any corrections or over-writings observed in the price bids shall be circled or highlighted and initialed by the Internal Auditor and the concerned procurement officer. d) All the pages of price bids shall be initialed and dated by Internal Auditor and concerned procurement officer. e) The details of the price bids opened viz. names of firms and no. of bids opened shall be noted in the CST. f) The file containing the opened price bids along with empty envelopes and CST shall then be collected by the concerned procurement Officer.
The names of the firms and their offered prices as given in the rate sheet shall be read out after each price bid is opened. A list of firms attending the tender price bid opening shall be prepared and signatures of authorized representatives attending the tender opening obtained. Queries from firms subsequent to completion of price bid opening shall be dealt with by the concerned HOD of the procurement dept. appropriately
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22.19 RETURN OF BIDS
Unopened bids to be sent back to the bidders. In case of unsuccessful bidders the query, if any, regarding rejection/acceptance status shall be clarified.
22.20 FURTHER PROCESSING
Bids falling under bid rejection criteria shall be rejected with the due approval of concerned HOD. However, in case only one bid is received which has shorter validity period, then approval for consideration of the bid shall be obtained from the concerned HOD with reason and justification. Concerned procurement officer shall make a comparative statement of the price bids of all qualified bidders together with loading factors towards deviations sought by the bidders. The CST shall be signed by HOD of procurement dept. for procurements where CFA is Functional Director and above. In all other cases, concerned procurement Officer shall sign the CST.
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CHAPTER – 23
BID EVALUATION AND PRICE NEGOTIATION
23.1 COMPARATIVE STATEMENT (CST)
Before making a CST, all eligible bidders shall be brought on par technically and commercially. Wherever required, appropriate loading factors shall be loaded to arrive at L-1.
A comparative statement shall indicate the following:-
i. Names of eligible bidders, brief description of items and quantity of each. ii. Prices quoted by all the eligible bidders indicating all taxes and charges. If bidders have offered alternatives or substitutes, their prices shall also be indicated. iii. If bidder has indicated that duties and taxes are payable extra, the rates applicable shall be mentioned iv. Delivery terms. v. Payment terms. vi. Tender fee, EMD and security deposit status if applicable vii. Status of Warranty, LD, ERV, price variation clauses viii. Other significant terms indicated by bidders xi. Deviations in specifications in a single bid system. x. Deviation from standard terms and conditions and any special terms stipulated by bidder in a single bid system. xi. Where rates are in overseas currencies, the rate of Foreign Exchange at the time of opening of Price bids. xii. Discount, if offered xiii. Loading factors added xiv. Validity of offers xv. The final total prices of all including taxes, duties, charges and loading factors i.e cost to the company. xvi. Purchase / Price Preference applicable, if any xvii. The Last Purchase Price (LPP) with PO No. and date, as available in the System.
Taking all factors into consideration, overall cost evaluation shall be made. The information regarding the number of bid documents issued and received shall be indicated in the procurement proposal.
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23.2 EVALUATING INDIGENOUS BIDS: i. Whenever a bid indicates that taxes and duties payable are extra, the current rate of taxes and duties as applicable shall be added. ii. Conditional discounts, like quantity discounts, payment discounts etc shall be indicated in the CST but the discounted price shall not be reckoned for price comparison purpose. Only unconditional discounts shall be taken into account for arriving at total price. iii. If a bidder offers a rebate unilaterally after closing date and time of bid, it shall not be considered for evaluation purpose but the rebate offered shall be availed of while awarding the contract if the bidder emerges as the lowest evaluated bidder. iv. In case, the price is stated to be inclusive of Excise Duty, the current rate included in the price must be obtained. In case, the rate of Excise Duty varies with the turnover of the company and the price is exclusive of Excise Duty, and the firm fails to specify the exact rate applicable, the maximum rate currently leviable shall be loaded on the price. v. In spite of mentioning that bids should be submitted on FOR destination basis, if bidders quote on different delivery basis like EX- works or FOR dispatching station etc, the price shall be loaded as indicated below. a. In case of Ex-works bids, if a bidder does not specify the packing and forwarding charges, 2% of the Ex-works shall be loaded. Insurance charge for loading purpose shall be considered as 0.044%. b. If freight charges are not indicated by a bidder from FOR dispatching station, the following percentage shall be loaded to arrive at the FOR destination price:
Approximate Distance of % of FOR dispatching station Dispatching station from site price
Above 2001 Km 5%
1501 to 2000 Km 4% 1001 to 1500 Km 3% 501 to 1000 Km 2% 500 Km and below 1%
c. If a bidder quotes his amount of freight or the packing and forwarding charges, only that shall be added in place of the above percentage amounts.
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23.3 EVALUATING OVERSEAS BIDS: a. In case of overseas bids, where bidder quotes on FOB delivery port basis, the following freight charge loading factors shall be added.
Port of Delivery Freight (%)
USA and Canada 12% of FOB value
All other Sectors 10% of FOB value
Insurance charges for loading purpose shall be considered as 0.046%. All such loading percentages and amounts that would be added shall be indicated in the bid document itself.
(As amended in line with CMD Memo 37/2016 dtd. 31.12.2016)
b. The CIF price shall be multiplied by the Exchange Rate between Indian Rupees and the quoted Foreign currency, prevailing on the date of closing of the tender. The applicable rate shall be 'TT Selling rate" of SBI. The same will be considered for financial evaluation of bids. c. Customs Duty if applicable shall then be added on to the CIF price in Rs. d. On this net price, 2% shall be added towards port clearance and forwarding charges and 3% towards inland freight charges and insurance up to destination to arrive at the landed price of overseas goods. e. While comparing an overseas bid with an indigenous bid in a Global Tender or LCB , landed price of indigenous bid i.e. FOR destination price + Excise Duty + Sales tax shall be compared with the landed price of overseas bid ie. CIF Price + Customs Duty + Port Clearance charges + Inland Freight and insurance charges. f. Wherever, exemption and / or concessions towards taxes and duties like Custom duty or Excise Duty are available as per law or by a notification from Govt., it shall not be reckoned for the purpose of evaluation of bids and deciding L1 status. Evaluation of price bids shall be based on the cost to the company. The above methodology of evaluation of tender shall be indicated in the bid document.
23.4 PURCHASE PREFERENCE In accordance with Govt. of India, Department of Defence Production circular no. 4(9)/08/D(Coord)/DDP dated 09.05.2012, the DPSUs will continue to procure 358 items as per the list enclosed to MSME letter No. D.O.21 (1)/2011-M.A. dtd. 25.04.2012, MSEs registered with NSIC are already exempted from payment of tender fees, EMD and security deposit.
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(Added in line with CMD Memo 32/2016 dtd. 22.12.2016)
A) 'Provisions on benefits to MSEs under MSE Act & Public Procurement Policy
1) In order to encourage procurement from MSEs, as per Ministry of MSME Notification dated 26 Mar 2012 on the Public Procurement Policy, Public Sector Undertakings have to meet a target of 20 % annual procurements from MSEs with a sub-target of 4% to be procured from MSEs owned by SC/ST entrepreneurs.
2) In order to achieve the procurement target / participation from MSEs & SC/ST entrepreneurs, it is necessary that a suitable clause on MSE is included in Standard Terms & Conditions of all Tenders. Accordingly, new clause on MSME is proposed to be incorporated in the standard terms and conditions for all tenders i.e (closed I open) aligning with MSME Act Gazzette notification dated 26.03.2012
3) The MSEs registered with District Industries Centre or Khadi& Village Industries Commission or Khadi & Village Industries Board or Coir Board or National Small Industries Corporation[NSIC) or Directorate of Handicraft & Handloom or Udyog Adhar or any other bodies specified by Ministry of Micro, Small & Medium Enterprises will be eligible to be considered under MSE category." Documents & Entrepreneurs' Memorandum (EM Part-11) for manufacture I supply of concerned equipment/item must be submitted by MSEs along with the offer for such purpose to claim the benefits being offered to MSEs.
3.1) Following facilities/benefits are available to MSEs:-
(i) Issue of Tender sets free of cost I No tender fee is applicable. (ii) Exemption from payment of Earnest Money Deposit. (iii) The vendors registered with NSIC under single point registration for manufacture/supply of concerned equipment/ item, will also be exempted for submitting the Security Deposit.
3.2) (a) MSEs registered with MSME authority as above, quoting prices exceeding up to and within 15% of lowest eligible price bid of other bidder(s) shall be eligible for purchase preference for 20% of ttie order quantity (subject to order quantity being adequate for this purpose) provided the MSE matches the L1 landed cost at GSL. (b) If it happens that two or more MSEs are within L1 +15% range, all such MSEs will be given an opportunity to accept the L1 price and to share 20% of the order value equally. (c) In case the MSE is owned by SC/ST owners, then the Enterprise will get a share of 4% of the above 20% exclusively in addition to sharing of equal portion of balance 16% with other non-SC/ST MSEs. (d) If more than one MSE owned by SC/ST owners are th re in case of a tender, such MSEs will share 16% of the total ordered value equally with other non- SC/ST owned MSEs in addition to equally sharing 4% exclusively reserved for SC/ST owned enterprises. (e) .To qualify for entitlement as SC/ST owned MSE, the SC/ST certificate issued by the District Authority must be submitted along with the offer.
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3.3) Participant MSE firms registered with NSIC under its "Single Point Registration Scheme", EMD Exemption will Apply only to items/services for which they are registered. Firms in the process of obtaining N"SIC registration will not be considered for EMD exemption. Participant MSE firm submitting Udyog Adhar /NSIC/ DIC/ SSI/ other authorized bodies registration certificate specified by Ministry of MSME has to qualify for EMD exemption should necessarily submit valid copy of the Registration certificate along with list of items/services for which they are registered & certified. Firms should upload scanned copy of valid registration certificate as issued in Part-A of e-offer during bid submission.
3.4) Notwithstanding the above, GSL's decision in this matter on exemption from EMD for items/ services & tender fee to participants shall be final and binding.
3.5) The GSL reserves the right to accept and or reject any or all tenders and or to withdraw the tender in toto and or award the contract I order in full or part to more than one vendor I contractor without assigning any reason whatsoever and without thereby incurring any liability to the affected Bidder or Bidders or any obligations to inform the affected Bidder or Bidders of the grounds for GSL action.
(Added in line with CMD Memo 14/2017 dtd. 03.03.2017)
B) Exclusive Procurement of 18 Project Items from MSEs Over and above list of 358 items
“Exclusive procurement of 18 less technology intensive ship building items, as listed below, from MSEs including SC/ST owned entrepreneurs over and above list of 358 items reserved for mandatory procurement by MSME. Accordingly, the procurement of 18 items will hereafter be restricted from MSEs”.
PRODUCTS
1 M.S. BOLLARDS 2 HAND OPERATED DAVITS M.S. 3 M.S. DRAIN PLUGS 4 FURNITURE INCLUDING M.S. AND ALUMINIUM FOR OFFICE USE ( NON PROJECT) 5 FAIRLEADS ( CAST STEEL) 6 M.S. LADDERS 7 M.S. MANHOLE COVERS 8 RUBBER FENDERS EXCLUDING HYDRO-PEUMATIC 9 GUARD RAIL STANCHIONS 10 BULK HEAD AND DECK PIECES (MS & MS HOT DIP GAVALNISED) 11 COMPOSITE/ GM FLANGES 12 FABRICATED MS & MS HOT DIP GALVD. MARINE FITTING (LIKE MUD BOX, STRUM BOX/HOSE CONNECTING FITTING/SOUNDING PIPE WITH CAPS DECK FTGS. FLANGES & PIPE CLAMPS ETC.) 13 TALLY PLATES 14 RUBBER MATS & ANTI SKID 15 M.S. HATCHES 16 TANKS(LOOSE) / HYDROPHORE TANKS Page 106 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
17 CABLE TRAYS & HANGERS 18 DUPLEX FILTERS LESS 80NB
(Added in line with CMD Memo 43/2017 dtd. 18.11.2017)
C)1 (a) Purchase Preference to Local Indian Manufacturers over Foreign Manufacturers The purchase preference shall be applicable for the tenders estimated to cost more than Rs. 50 Lacs. In a competitive bidding process involving participation by Indian & Foreign bidders under Buy Global category (Open as well as Limited tenders), the Indian Bidder quoting in Indian Rupees, with minimum 50% Indigenous content (Aggregate, over series of ships) will be eligible for Purchase preference of upto 20% higher price (landed cost including custom duties but excluding net domestic indirect taxes, if any) over the Foreign bidder as per the following structure :
i) 10% Purchase Preference - For Proposal value Up to Rs. 5 Cr. ii) 15% Purchase Preference - For Proposal value above Rs. 5 Cr upto Rs. 20Cr iii) 20% Purchase Preference - For Proposal value Above Rs. 20 Cr.
ii) Verification of Local Content :
a) The local supplier at the time of tender, bidding or solicitation shall be required to provide self certification that the item offered meets the minimum local content and shall give the details of the location ( s) at which the local value addition is made.
b) In cases of procurement for value in excess of Rs 10 Crore, the local supplier shall be required to provide a certificate from the statutory auditor or cost auditor of the company (in the case of companies) or from a practicing cost accountant or practicing chartered accountant (in respect of suppliers other than companies) giving the percentage of local content as per the details specified Tender /Purchase Order.
Criteria For Goods of Divisible nature. c) Among the qualified bidders, if L1 is from a local supplier, the contract for full quantity will be awarded to L1. d) If L1 bid is not from a local supplier 50 % of the order quantity shall be awarded to L1. Thereafter, the lowest bidder among the local suppliers will be invited to match L1 price for the remaining 50 % quantity subject to the local supplier’s quoted price falling within the margin of purchase preference and the contract for that quantity shall be awarded to such local supplier subject to matching L1 price. In case such lowest eligible local supplier fails to match the L1 price or accepts less than offered quantity then the local supplier who has quoted the next higher price within the margin of purchase preference shall be invited to match the L1 price for remaining quantity and so on, and the contract shall be awarded accordingly. In case some quantity is still left uncovered on local suppliers, then such balance quantity may also be ordered on the L1 bidder.
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iii) Criteria For Services & Goods of Indivisible Nature. a) Among the qualified bidders, if L1 is from a local supplier, the contract for full quantity will be awarded to L1.
b) If L1 is not from a local supplier, the lowest bidder among the local suppliers, will be invited to match the L1 price subject to local supplier’s quoted price failing within the margin of purchase preference and the contract shall be awarded to such local supplier subject to matching the L1 price.
c) In case such lowest eligible supplier fails to match the L1 price the local supplier who has quoted the next higher price within the margin of purchase preference shall be invited to match the L1 price and so on and the contract shall be awarded accordingly. Incase none of the local suppliers within the margin of purchase preference matches the L1 price then the contact is awarded to L1 bidder.
Penalty in Case of Non Compliance of Indigenous Content: In case the percentage of indigenization to be achieved, as declared by the vendors prior to placement of order, is not achieved at the time of supply, then 2.5% of the order value per 10% increase over and above the committed import content, or part thereof, shall be deducted as penalty while making final payment for non compliance towards indigenization.
Bank Guarantee: Firm eligible for purchase preference in accordance with this policy will be required to submit Bank Guarantee, within three weeks from the date of placement of order for an amount equivalent to the purchase preference given to the firm i.e. difference between firm's offer and L1 price of the foreign firm or 1% of the order value, whichever is more, valid till execution of the order plus three months encashing period. In case, the firm is not able to meet the percentage of Indigenization promised as per the Purchase Order terms, the penalty as elaborated in Note (ii) shall be adjusted by the firm in their Invoice, or else, same shall be adjusted by encashing the bank Guarantee.
Debarment of bidders for false declaration : a) The penal provision stipulates debarring bidder or its successors for a period two years in case of false declaration of local content. b) A supplier who has been debarred by any procuring entity for violation of Order shall not be eligible for Purchase Preference. c) The list of debarred suppliers along with period of debarment will be maintained and displayed in websites.
2 (a) Assurance of Orders for Items Indigenized Successfully for Import Substitution. The purchase order(s) will be placed on the same Indian firm, who has executed the original import substitution order, for similar requirements arising in GSL in next 5 yrs, in case the Indian firm develops the Import substitute successfully, meeting all the specifications and project time lines. The pricing will be suitably adjusted for annual inflation based on indices for labour, material and services as applicable at that point of time as per the mutual agreement.
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23.5 REASONABLENESS OF PRICE
The reasonability of the price proposed shall be established for major equipments, before concluding a contract. In the case of competitive bids where two or more bidders are competing independently without cartelization to secure a contract, the competitive bids themselves provide market rates. Last purchase price, Price variation clause in the last purchase, estimated value as furnished by technical depts. or end users, DGS&D , SAIL or HINDALCO prices, market price or London Metal Exchange (LME) prices, minimum wages rates proposed by State and Central Govt., Consumer Price indices for industrial products promulgated by Govt., escalation index declared by professional bodies , overhead rates as applicable in GSL from time to time, cost analysis etc are some of other tools to determine the price payable. Website of Ministry of Industry, www.eaindustry.nic.in furnishes price indices for some category of items. Web site, www.mmr.online.com provides market rates for metals and other minerals. The World Economic Outlook- a monthly report from IMF, gives inputs on price trends of different countries. Price paid to a supplier when he sells goods on clearance sale or distress sale to avoid further inventory carrying cost are not accurate indicators. Further, price paid against emergency procurement shall not be taken on face value for establishing the market price.
23.6 LAST PURCHASE PRICE(LPP)
LPP could be used as an input for assessing the rates by adding yearly escalation, if LPP is more than 3 years old and considered necessary. While considering LPP, the following shall be taken care.
a) LPP should pertain to procurement of similar magnitude in quantity or value for similar scope of supply. b) Factors like basket price and bulk discount offered during last purchase due to distress or clearance sale are to be taken in to account while making comparison. c) Price variation clause, if any during last purchase.
23.7 TRANSPARENCY IN ASSESSMENT Assessing reasonableness of price sometimes becomes very difficult especially where price data are not available or when it is an overseas procurement. In such cases, it is important to place on record efforts made at arriving an acceptable price.
23.8 DATA SHARING The ERP cell shall put in place a system for data sharing and data networking, among the various procuring departments to ensure that different prices are not paid by different Procuring departments within GSL.
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23.9 PRICE NEGOTIATION:
(As amended in line with CMD Memo No. 09/2016 dtd. 13.05.2016) a) As per CVC guidelines, there should be no post-tender .,negotiation with L-1. However in order to meet GSL business requirement in cost effectiveness, negotiation can be conducted with L-1 in any one or more of the following, exceptional situations. i) Procurement of proprietary items ii) Procurement of items under limited sources of supply. iii) Procurement of items / services from single or resultant source. iv) Procurement of items / services from authorised distubutor / agent. v) If the technically & commercially cleared lowest bidder (L-1) price is more than the internal cost estimates. vi) Where there is suspicion of a cartel formation. Justification shall be recorded by the Price Negotiating Committee.
b) Negotiation shall not be allowed to be misused as a tool for bargaining with L-1 with dubious intentions or lead to delays in decision-making. Competent authority shall exercise due diligence while accepting a tender or ordering negotiations or calling for a re-tender. All the efforts to be made to ensure that the entire process of award of orders does not exceed the validity period of the tender and it shall be ensured that tenders are invariably finalized within their validity period. c) No price negotiation shall be held for value below Rs.5Lakh where competition exists. However, if in the opinion of dealing officer if the prices are considered to be not reasonable and the need exists for negotiation, the same shall be conducted with the concurrence of finance rep and approval of HOD/GM of indenting dept.
23.10 PRICE NEGOTIATION COMMITTEE (PNC) The concerned tendering officer shall put up through HOD to Director or CMD, as the case may be for appointing a chairman for the PNC if the offered value is more than Rs. 35 lacs. The proposal shall contain details of the procurement process had so far, the estimated value of procurement , Quoted value of L-1, reason for conducting the PNC with L-1 and proposed members of PNC. The concerned tendering officer shall be the secretary of the PNC. The chairman of the PNC shall be aided by the Secretary and technical officer who conducted technical evaluation of offers. Adequate notice shall be given to bidders to attend PNC. The Secretary shall prepare minutes of the meeting of the PNC and obtain signatures of all who participated in the PNC. Before the PNC, the Secretary shall brief the chairman and members on (a) The procurement process held so far. (b) Technical Evaluation report. (c) Price Comparative Statement with estimated value. (d) Points for negotiation.
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He shall furnish reference documents required for negotiation to chairman and all members.
23.11 PNC GUIDELINES: a. Decision arrived at in the PNC shall be deemed to be agreed by all members It is therefore required that all the members be present and participate in the deliberations. b. If a member is known to be absent on the day of the PNC, the concerned HOD shall nominate an alternate member. c. Any member having any interest in the Company should refrain from participating in the committee. d. As a principle, no offer involving any uncertain or indefinite liability or having any condition of unusual nature shall be accepted except with the approval of CMD. e. Procurement price shall not be finalized on “all inclusive” or ‘lumpsum’ basis, but rather on item wise or element wise basis, so that variations in actual supplies can be appropriately dealt with. Firm should also indicate price for item, model, part number, etc. for facilitating placement of purchase order in detail and the subsequent corroboration of supplies with GRN. f. A record of the negotiations shall be prepared preferably on the same day after the meeting is conducted and a copy of the minutes given to the firm’s representative so as to ensure that the prices negotiated are confirmed by the firm’s representative. g. If negotiations could not be concluded on the same day, it may be postponed to the next day or some other day. There could be more than one round of discussions in PNC. h. Only the authorized rep(s) of the bidder who should either be an employee or partner or business rep shall take part in the PNC. i. The PNC recommendations should be by consensus. However, a member may record a note of dissent, if irreconcilable differences persist. j. PNC shall examine scope for acceptance of part supplies within the delivery schedule for release of payment against part supplies. Needless to state that the advance payment made, if any will be adjusted pro-rata. k. The PNC shall not commit placement of order other than what is being discussed. l. The best possible reduced rates after negotiations shall be recorded and all deviations sought by the bidder are to be spelt out. m. Bidder shall be made aware that the decisions of the PNC shall be subject to approval of the CFA. n. If the negotiated price is not acceptable due to vast difference between the estimated price and last offered price by a bidder, the PNC may recommend re-floating of tenders.
23.12 NEGOTIATION THROUGH CORRESPONDENCE If the value of contract is Rs 10 lac and below and if conducting PNC meeting is considered uneconomical the price negotiations may be carried out through correspondence by the concerned procurement officer and appropriate discount or reduction in cost obtained. In the case of bids where the value is more than Rs 10 lacs and where the bidder expresses inability to attend PNC meeting in writing for genuine reasons such as uneconomy for the bidder in undertaking travel, non-availability due Page 111 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
to health etc procurement officer may obtain CFA approval and carry out the price negotiations through correspondence to obtain the best price. In such cases, PNC and its recommendations do not arise.
23.13 NEGOTIATION IN PARALLEL CONTRACTS: a) If it is considered necessary to have more than one source of supply, either due to critical or vital nature of item or due to short supply of item in the market or due to need to develop more suppliers etc and it is intended to place order on more than one supplier, the intention of placing parallel contract splitting quantity between qualified suppliers shall be stated in the bid document. It shall also be specified that GSL reserves the right to decide the appropriate ratios in the best interest of Company.
b) PNC meeting shall be held first with L-1 bidder as per procedure. Thereafter, price negotiations shall be held with L2, in case of contract with two bidders and L2 & L3 in case of contract with three bidders etc. As far as possible, all bidders must be persuaded to match the price of L1 like finalising contract for hiring of taxis, custom clearing agents for various sectors, Transportation of goods etc. If L1 does not have capacity to supply the full quantity within the delivery period as per bid document, after loading L-1 to their full capacity, L-2 may be considered and so on. Where it is not possible to obtain L1’s price from L-2 or L-3 , CFA may approve , within his financial powers , with the concurrence of appropriate Finance Officer, price differential up to 5% of L-1. In such cases, the quantity ordered may be distributed in such a manner that the total cost to GSL is optimal. The procurement process shall be done in a fair, transparent and equitable manner. In exceptional cases where parallel contracts cannot be finalized within the predefined range of price band, it may be finalized, with utmost caution, with CFA approval.
23.14 PARALLEL CONTRACTS INVOLVING SUB-ACTIVITIES If a job consists of several sub-activities which are interrelated and cannot be split, order shall be awarded for the whole composite job on one contractor. Considering the total volume of such jobs, parallel contracts may be entered into with more than one contractor allotting the work as stated above, as in the case of fabrication of hull blocks. If the activities in a job are not interrelated and can be divided into sub group of activities, parallel contracts may be entered into for each of the subdivided group of activities on the same lines as stated above. Bid document shall clearly spell out the grouping of activities for which price bids are invited and the proposed basis of allocation of work. HOD (outsourcing.) shall finalize such grouping of activities in a job in consultation with Planning department or HOD (Production) as the case may be. Ranking of bids shall be made on the basis of the total value of the quote for the entire sub-group or for the entire job, notwithstanding the requirement stipulated for furnishing price breakup for each of the activities in the sub- group. The contract operating authority, based on the technical requirements, may consider execution of certain activities included under the respective group allotted to the contractor or entire work for recommending the payments. *****
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CHAPTER – 24
CONTRACT FINALISATION
24.1 RESULTANT SINGLE BID When only one bid is received it is a ‘Single bid‘ situation. When more bids are received and after technical scrutiny, only one bidder is found eligible, it is a resultant single bid situation. Both the situations indicate lack of competition. It is different from single source procurement where bid documents are sent to only one bidder. In a single bid or resultant single bid situation, if the goods are not required very urgently, it is preferable to re-float tenders.
24.2 REASONS FOR RE-TENDERING
Re-tendering may be recommended by procurement officer and approved by CFA under the following circumstances:
a. When bids do not conform to qualitative requirements and other terms & conditions set out in the bid documents.
b. When there are major changes in specification during technical discussions which may enable even others to participate in the bidding process.
c. When L-1 price is unreasonably high with reference to estimated price or there is evidence of a sudden slump in prices after receipt of the bids or there is cartelization.
d. where there is lack of competition due to restrictive specification, which did not permit many bidders to participate.
e. When L-1 bidder with draws his bid.
f. When successful bidder did not fulfill contractual obligations that includes unsatisfactory performance of the contract. Forfeiting security deposit, en- cashing bank guarantee, initiating risk purchase are some of the options that shall be considered, in addition to re-floating tenders.
g. Any other compelling situations.
In all such cases, approval of CFA shall be obtained, indicating the reasons for re- tendering. If the CFA for procurement proposal is CMD or PSC or Board of Directors, proposal for re-tendering, duly justified and recommended by the concerned functional Director and concurred by Director (Finance) is required to be approved by CMD.
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24.3 RE-TENDERING
The following one or more actions may be considered before retendering.
a) Including more bidders with the approval of CFA or
b) Modifying the specification to general standards or to industry friendly specifications if it does not affect basic requirements
c) Relaxing eligibility criteria to the extent that it does not violate the CVC guide lines nor allow entry of incompetent and sub-standard bidders
d) Giving wide publicity
24.4 PROCURING MINIMUM QUANTITY
In cases, where it is decided to re-tender due to unreasonableness of the quoted rates and at the same time the requirement is urgent and re-tendering the entire quantity may likely to delay the availability of the goods, jeopardizing the essential operations, maintenance and safety, negotiation may be held with the L1 bidder for supply of a bare minimum quantity. The balance quantity may however, be procured expeditiously through retendering.
24.5 MANAGEMENT APPROVAL
The procurement proposal shall be prepared by concerned procurement Officer. All proposals shall begin with relevant facts and information from the time the Technical and Procurement advices are received. The purchase proposal shall be self explanatory and shall include the following information as applicable:
a. TA Particulars i. Description of item and quantity ii. Specification or standard if any iii. Class inspection. iv. Drawing reference if procurement is in accordance with drawing. v. TA No. & Date
b. PA Particulars i. Name of the issuing Department. ii. PA No. & Date . iii. Delivery period or staggered delivery period. iv. Quantity as per TA, Quantity in stock if any and quantity to be procured. v. Project reference. vi. Special instruction if any.
c. Tender Details i. Type of tender enquiry ii. Date of tender invitation iii. Date of tender opening iv. Bidders who have quoted and bidders who have regretted v. Exemption of EMD or tender fee or security deposit if any vi. Details of bidders found disqualified if any with reasons
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vii. Date of TNC held and its outcome. If bidders found rejected during TNC , reasons for that viii. Date of CNC held and CST with loading factors ix. If bidders found rejected during CNC, reasons for the same x. Details of PNC held with reason and its outcome
d. Last Purchase Price( LPP) i. Date of last purchase , LPP and the supplier ii. Likely price with escalation where applicable. iii. Market trend if any. iv. Cost of similar product or services if there is any relevance.
e. Major Deviations. i. Technical. ii. Commercial. iii. Price preference if any iv. Purchase preference if any.
f. Detailed Purchase Proposal i. Scope of main product. ii. Spares and tools. iii. Service, preservation & Training assistance. iv. Documents, Manuals and drawings v. Inspection charges. vi. Warranty clause
24.6 AWARD OF CONTRACT
All relevant files and correspondence are to be attached with the Document Manager proposal. The concerned procurement officer shall put up proposal for award of contract to the successful bidder whose bid has been determined to be substantially responsive and has been found to be technically, commercially and financially acceptable and determined to be lowest evaluated bid. The procurement proposal has to be approved by CFA.
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CHAPTER – 25
DELEGATION OF POWERS
25.1 OBJECTIVE
Financial powers are decentralized and sub-delegated to various authorities down to the section head and dealing concerned officers to expedite decision making and provide authority where responsibility is vested. These powers shall be used within the framework of laid down procedures, cannons of financial propriety and amplificatory instructions. CFAs shall ensure that financial propriety and probity are observed in all cases.
25.2 RESPONSIBILITY OF TENDERING OFFICER He shall ensure that the quoted terms and conditions of the bidder, delivery period, taxes and duties applicable, freight, insurance and other charges, technical and commercial terms & conditions are in compliance with GSL requirements or acceptable to GSL. He shall ensure that ranking of the bidders is computed properly. He shall be responsible for processing procurements in accordance with rules and procedures prescribed in the Procurement Manual. On issues where there is lack of clarity or guidance, he shall take the advice of his HOD in writing. HOD may refer cases that he deems fit to CFA for directive or concurrence. The decisions of the CFA shall be circulated to all other tendering officers for future guidance. All such circulars shall be serially numbered for easy reference and compilation. They shall then become part of authentic order for compliance. The Procurement Manual shall then be updated after few years incorporating all such orders.
25.3 RESPONSIBILITY OF CFA The CFA shall consider all aspects of the case to ensure that they are carried out in accordance with Procurement Manual. He shall ensure that there is fairness and transparency in the process. He shall ensure, before according sanction that proper procedures have been followed at various stages of procurement.
25.4 CANONS OF FINANCIAL PROPRIETY Every officer incurring or authorizing expenditure from company’s funds shall be guided by high standards of financial propriety. They shall follow the following:- i) Every officer shall exercise the same vigilance in respect of expenditure incurred from company’s money as how a person of ordinary prudence would exercise in respect of expenditure of his own money. ii) The expenditure shall not be more than the occasion demands.
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iii) No authority shall exercise his powers of sanctioning expenditure to pass order to his own advantage, directly or indirectly. iv) Company’s money shall not be utilized for the benefit of a particular person or section of a community unless:- a) The amount of expenditure involved is insignificant, or
b) A claim for the amount could be enforced in a Court of Law, or
c) The expenditure is in pursuance of a recognized policy or custom.
25.5 POLICY GUIDE LINES FOR FINANCIAL CONCURRENCE The internal control shall be exercised through vetting and concurrence by Finance department so that decision making is in accordance with the policies, guidelines, rules, regulations, provision of budgets etc. The decision made shall be beneficial to the Company.
25.6 FINANCIAL CONCURRENCE-PROCEDURE The financial concurrence shall be prior to the approval by approving authority. It shall be done by an officer from Finance Department who is normally not more than two levels below the approving authority except where an officer in the required grade is not posted or available due to leave or on Ty. Duty etc.
a. All proposals requiring approval of Chairman or Board shall be first concurred by head of finance followed by concurrence by Director (Finance). b. In case of disagreement between the views of the concurring authority and approving authority, the approving authority may overrule the advice of the concurring authority and record the reasons in writing. However, such cases shall be brought to the notice of the authority one level higher than the approving authority. The one level higher authority shall not be below the level of HOD or Chief General Manager. c. In case, where either the required financial concurrence is not taken or the intimation regarding the over ruling of the advice of the concurring authority is not brought to the notice of the authority one level higher than the approving, such approvals shall not be considered as approved and approving authority shall be liable for all consequences. d. CMD may add any item to the list which in his opinion requires financial concurrence. e. To provide flexibility and to meet the administrative requirements, the financial concurrence within the competence of Head of Finance may be sub delegated, with the approval of Director (Finance) to officers subordinate to him.
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25.7 CASES OF FINANCIAL CONCURRENCE REQUIREMENT:
a. All capital estimates and procurements under capital budget
b. As regard to procurement of goods and services and works under revenue expenditure i. Procurement estimates in accordance with CMD’s order CMD/20/2011 dated 20/6/2011. ii. Evaluation and acceptance of tenders including commercial terms & conditions. iii. Issue of procurement orders worth above Rs.25,000/- in each case. iv. Negotiations with bidders on price and commercial terms & conditions of the contract. v. Variations in the standard terms & conditions of contracts vi. Any change in the quantity, terms and conditions and scope of the concluded contracts. vii. Any change in the rates of concluded contract, excluding impact of statutory changes as per contract, agreed to in the approved contract. viii. Advance payment to bidders with or without security ix. Termination of contracts c. Claims, write offs & Waivers: i. Referring disputes for arbitration or initiating court cases ii. Settlement of disputed claims outside the court of law iii. Grant of compensation to any party (excludes statutory requirement) iv. All write off of losses, book debts, claims, recoverables and advances. d. General: i. Price fixation of products/materials/services (including discounts, rebates and incentives to customers) for sale ii. Expenditure on publicity schemes iii. Contribution to External Agencies iv. Fixation of rent for quarters, lands, building etc. belonging to the Corporation v. Hiring of office accommodation, plant & machinery etc.
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vi. Advance payment to outsiders with or without security vii. Permitting credit arrangements for outside parties viii. Disposal of materials – Surplus or otherwise ix. Material loan arrangements x. Sanction of imprests and arrangements relating to handling of cash xi. Matters relating to the change in the accounting systems 25.8 CASES NOT REQUIRING FINANCIAL CONCURRENCE Following matters are specifically excluded from financial concurrence subject to availability of funds as approved by the Board.
a) Works and Procurements:
i) Orders for works and procurements of value Rs. 25,000 and below.
b) General: i) Legal charges and other professional fees up to Rs.25,000/- in each case.
ii) Expenses incurred on tender publication, Publication of notices as per the norms of the Company. 25.9 FINANCIAL CONCURRENCE-LIMITATIONS The following shall not be within the scope of financial concurrence and the initiating officer shall be wholly responsible for:
a) Presentation of facts on the procurement proposal based on the documents and bids available with him. Arithmetic accuracy of all calculations indicated in the proposals.
b) Presentation of the report of technical scrutiny as forwarded by the Technical / User dept. 25.10 CHANGES IN GUIDE LINES
Any changes in above guidelines can be approved by Chairman & Managing Director (CMD) with due concurrence of Director (Finance) considering exigencies of work, nature of transaction, need and extent of financial concurrence requirement, adequacy of internal control system etc. the same may be placed for information of the board and ratification, if necessary.
25.11 COMPOSITION OF PNC Composition of PNC to be as per CMD memo No.CMD/33/2008 dtd.29.10.2008.
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AWARD OF CONTRACT
26.1 LETTER OF INTENT(LOI) After receipt of management approval, due to certain compulsions, if it is not possible to issue Purchase Order or Work Order, a letter of intent may be issued under the following circumstances:
a. When the validity of offer of supplier is due to expire and the supplier has to be informed about acceptance of his offer within the validity period. b. To enable supplier to go ahead with mobilizing resources or preparing placing orders on his sub-contractors so that mobilization time or preparation time could be saved. A letter of intent shall normally include GSL tender no. & date, supplier offer no. & date, reference of TNC and PNC minutes, value of order with taxes, duties and applicable charges, delivery schedule and details of payment terms. However, a detailed order shall be issued as early as possible but not later than 30 days from the date of issue of LOI. HOD of the procuring dept. shall sign the LOI. Where the authority delegated for signing is not available, the next higher authority indicated in the Delegation of Powers is authorized for signing the LOI.
26.2 PURCHASE ORDER Purchase Order shall be placed based on the approval of Competent Financial Authority. In addition to supplier address, PO no. and date, it shall contain the following: a. Reference of GSL bid document b. Reference of Supplier’s quotation c. Reference of TNC, CNC and PNC minutes as applicable d. Description of goods or works as applicable e. Unit of measurement and Quantity being ordered f. Rate per unit and total value g. Applicable taxes and duties h. Various charges payable by GSL or borne by Supplier. i. Inspection Agencies who will inspect at their works and on receipt and production of inspection and / or test certificates, lab certificates, x-ray certificates, type test certificates , manufacturer’s certificate etc. as the case Page 120 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
may be and other documents to be provided by the supplier before the supplies and along with the supplies. j. Delivery terms, delivery schedule, packing and delivery instructions to indigenous or overseas supplier as the case may be. k. Documents or certificates or drawings to be issued by GSL for execution of contract, as detailed in TNC and CNC l. Documents or certificates or drawings to be issued by the supplier after receipt of order with schedule, as covered in TNC and CNC m. Terms of payment and complete payment instructions n. Price Variation or Exchange Rate Variation Clause as the case may be o. Bank Guarantee or Performance Guarantee as applicable p. Liquidated damage / Penalty clauses as applicable q. Risk Purchase clause r. Supply of spares, if any s. Guarantee / Warranty period. t. After sales services i.e. services for installation, commissioning, training, trials and guarantee period. u. Agreed GSL Standard Terms And Conditions (STAC), General Terms And Conditions (GTAC) which shall be part of CNC minutes, TNC, and PNC minutes.
v. Other relevant details as applicable.
26.3 CHECKING AND SIGNING ORDER Procurement Orders shall be initialed by the concerned procuring supervisor and Procuring officer as a proof of checking before it is signed by HOD or other authorized signatory. Copy of the procurement order shall be sent to the concerned , like surveyors, , customer nominated inspection agencies , customers (as per the provision in the contract) etc. Soft copy of PO shall be available in the System for reference of all the contract operating departments like Production, Stores, QA, Finance , TS, Planning etc. 26.4 INCOTERMS
These are various abbreviations which are used in international business dealings. List of these INCOTERMS is placed at APPENDIX-Q.
26.5 ACKNOWLEDGEMENT OF ORDER While issuing procurement order to supplier, it shall be specified in the covering letter that the supplier should acknowledge and accept the order on or before a date failing which it would be presumed that the supplier has accepted the order in toto. If the supplier comes up with any clarification on any part of the order, it should be clarified without loss of time. Thereafter, his order acceptance shall be obtained APPENDIX-R. If both the procurer and the supplier simultaneously sign a contract across the table, further acknowledgement from the supplier is not required.
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26.6 AMENDMENT TO CONTRACT Amendment to an already concluded contract may arise when either party to the contract requests for an amendment and the proposed amendment is acceptable to the other party. In such cases, the following procedure laid down vide, CMD Memo No. CMD/40/2010 dtd. 08.12.2010 shall be strictly adhered to:
a) The concerned Officer shall not deviate, in any manner, from the laid down commercial terms & conditions of the bid document without the approval of the CFA. b) In case of any doubt in interpretation of tender terms and conditions, the issue shall be referred to the concerned CFA for decision, and the decision must be recorded. c) Prior to placement of an order, it must be ensured that the requisite laid down commercial terms and conditions of the bid document or the deviations are approved by the CFA. d) Amendments having financial implications, shall be recommended by the concerned HOD, concurred by HOD (Finance) or Director (Finance) as the case may be and approved by CFA, if the CFA is Director or CMD or Procurement Sub-committee or Board. e) If the approving authority is HOD, it shall be proposed or recommended by the section head in the procuring dept. and concurred by the appropriate authority in Finance. f) Amendments having no financial implications like amendment to Drawing No., Part No etc will be approved by the concerned HOD. g) After approval, the concerned tendering officer shall put up a note, along with order amendment to the order signing authority stating that the requisite amendment, as approved by the CFA, has been put for incorporation in the order.
26.7 AMENDMENT TO COMPANY’S NAME OR CONSTITUITION On receipt of intimation to change in the name of the company or the constitution of the firm, the concerned procuring officer shall gather from the firm the details of change and pending orders which are to be amended and after receipt of reply, shall consult legal officer and if satisfied that the change is in order and acceptable shall put up for change in the name of the company to the concerned HOD. On approval of the same, the concerned officer shall recommend to issue amendment to the orders or advise the outgoing and incoming firms to execute a tripartite agreement to be countersigned by the order issuing authority of GSL in the prescribed form, placing on the incoming firm the onus for the execution of the outstanding orders. After the execution of the said agreement, the firms shall be informed that they would be treated as contractor or supplier in respect of the indicated outstanding contracts and they would, in future, duly discharge obligations and stipulation of the assignor company. The intimation shall be sent to all the procuring depts., in addition to the dealing depts. Tripartite deed is not required to be executed if the outgoing firm does not have any contracts pending for execution or payment.
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26.8 EXTENSION OF DELIVERY: a) Delivery extension may be granted with or without levy of liquidated damages or penalty depending upon the merit of the case. CFA shall be approving authority for delivery extension cases without imposition of LD or penalty. Approving authority for issuing delivery extension with imposition of LD or penalty shall be the concerned HOD. All cases of cancellation of contracts shall be done with the approval of CFA.
b) If the reasons for delay in supply are due to “Force Majeure” conditions, extension of delivery period without imposing LD or penalty may be granted after obtaining supporting documentary evidence followed by CFA approval. Planning dept. or customer contract operating dept. shall be informed of such Force Majeure delivery extensions for major equipment or system so that , if required they may take up with customer for delivery extension of the project. If the reasons for delay do not fall within “Force Majeure” conditions but were beyond the control of the supplier, provisional extension may be granted, reserving the right to impose LD or penalty. If the equipment supplier is nominated by customer or he is one of the suppliers proposed by the customer, then the intimation of such delivery extensions shall be sent to contract operating authority (FPG & Planning) so that he may take up with customer, if necessary for delivery extension of the project. After completion of supply by the supplier, final extension may be granted on examining the merit of the case.
c) If the delay in supply is not due to any of the above conditions and the goods are still required, suitable extension of delivery period with clear imposition of LD or penalty may be granted. Planning or user Dept may be referred to ascertain if the materials are still required. Delivery extension within the grace period of 4-weeks shall not attract any LD or penalty. If a supplier requests for delivery extension after completion of supply, extension of delivery period may be granted upto the date of completion of supply with imposition of LD or penalty as indicated above.
d) After completion of supply or works by the supplier or contractor, in order to consider according final extension of delivery period where provisional extension of delivery already accorded, in the case of ship building projects, it shall be ascertained from HOD (Planning) whether GSL would be paying LD to its customer on the project and any loss has been suffered by GSL due to delayed supply of materials. The Planning Dept. shall reply within 15 days of the above request from tendering dept. If the report is likely to be delayed, the Planning Dept shall inform the tendering Department accordingly. If no advice whatsoever is received, within the specified period, it would be presumed that no loss has been suffered by GSL and the tendering Department shall proceed to finalize the case on its merits without any further reference. Where it is established that the supply is delayed solely due to any failure on the part of GSL or inspection agency or Owner’s rep which has a direct bearing on the timely execution of the order by the supplier, extension of the delivery
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period without imposing LD or penalty may be granted with the approval of CFA. Such delays by the owner rep or inspection agency nominated by the owner shall be reported to HOD Planning to take up with the customer if required. In all cases of LD or penalty waiver, CFA approval shall have to be taken.
e) For the purpose of computing the LD or penalty amount, the order value excluding taxes and duties shall be considered. However when prices indicated in the order are inclusive of taxes and duties, such prices shall be taken for computation of LD or penalty. LD shall be leviable only on incomplete part of supply or works.
26.9 REPLACEMENT FOR REJECTION In case of replacement against rejected supplies, the original date of delivery mentioned in the supply order may not hold for various reasons and it would not be possible to compel the supplier to make replacement supply within that particular date. In such cases, conditional delivery extension may be granted reserving the rights to impose LD or penalty to facilitate supplier to offer for inspection or replace the materials. However, such extension of delivery period shall be made in accordance with the above provisions.
26.10 RECOVERY OF TAXES DURING DELIVERY EXTENSION: (i) If delay in supply beyond the original date of delivery of the order is due to any fault of the suppliers and if there is any increase in the rate of taxes and duties during the extended delivery period, GSL shall not pay the increase in the taxes and duties and it shall be borne by the supplier. This shall also be mentioned while issuing amendment. (ii) If delay in supplies is attributable both to supplier and GSL, the excess amount paid towards increase in taxes shall be treated as a potential loss and waiver of recovery of the excess amount paid may be considered with the approval of CFA. (iii) If the delay in supplies is attributable to GSL, the extra amount paid towards increase in taxes shall not be treated as actual or potential loss and waiver of LD or Penalty in such cases shall be considered with the approval of CFA. (iv) In respect of stores on which the rates of existing duties and taxes have been decreased or abolished, steps shall be taken to ensure that it is paid at the decreased rate and if payment of such duties, rates and taxes have already been made, the excess amount so paid shall be recovered forthwith from suppliers. (v) While granting extension of delivery period, any increase in the taxes and levies would not be payable, unless the contract specifically provides for it or it has been expressly agreed with the approval of CFA.
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26.11 DELIVERY EXTENSION WHEN PVC CLAUSE EXISTS If the delay is not attributable to GSL, GSL shall not pay the difference in increase to the supplier. In other cases, depending on the merit of the case, a decision may be taken with the approval of CFA. It shall however, be stated clearly in the amendment letter that extension is granted subject to the right of the purchaser to claim any decrease in the price that may take place during the extended period of delivery. In case of items of short supply, depending on the prevailing situation, putting it on record, a decision to agree for price increase during extended period or not may be taken with the approval of CFA. For cases approved by the PSC or Board, the approval of CMD shall be taken. The price variation increase may be agreed in case of force majeure circumstances. No enhancement in prices shall be allowed unless the contract specifically provides for it.
26.12 MONITORING THE DELIVERY The concerned tendering officer shall periodically monitor the progress of deliveries against various orders issued. He shall keep his HOD informed of the delivery or defect rectification or short supply item status of critical items and equipments on a regular basis.
26.13 EXPORT LICENSE The export license that may be required for delivery of various goods to GSL shall be arranged by the suppliers from the concerned authorities in their respective countries. The supplier should take into account the period required for obtaining such license while indicating delivery period and delay in supplies due to non-availability of such licenses shall not be normally accepted unless some force majeure development has occurred after acceptance of the order. The ‘End User’ certificate if required by the supplier for obtaining the license may be forwarded. However the format and details of the end user certificate required should be forwarded by the supplier to GSL along with the order acceptance.
26.14 FORCE MAJEURE Some of the force majeure circumstances are Flood, Fire, Earthquake and other acts of God, as well as War, Military operations, blockade, acts and actions of Govt. During the execution of the period of contract, if such instances occur, the affected supplier should immediately but in any case not later than ten days from the date of beginning of the occurrence of the event and cessation of the event report in writing. He should obtain and forward a certificate to that effect from Chamber of Commerce (Commerce and industry) or other competent authority or organization as proof of commencement and cessation of the event. He should substantiate how it has affected the execution of the contract for the duration for which extension of delivery is sought. Depending on the merit of the case, contract may be extended after obtaining the approval of CFA, only for the duration of the affected period.
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26.15 CANCELLATION OF ORDER If order has to be cancelled due to non-supply of part or entire goods ordered, notice shall have to be served to the supplier. This notice shall be sent by registered post with acknowledgement received. A copy of cancellation letter shall be sent to those addresses to which the initial order was sent. Inspecting agencies shall be specially advised not to progress further with the inspection. In such cases, the security deposit, if any shall be forfeited. On the other hand, when a supplier desires cancellation on the ground that despite his best efforts he could not execute or complete the order, the CFA, depending on the merit of the case, may agree to approve cancellation on mutual consent. In such case, security deposit need not be forfeited.
26.16 CONDITIONS FOR RISK PURCHASE Risk purchase action may be initiated as a last resort, under any of the following conditions:
a) When a supplier fails to deliver goods even after the delivery period is extended on several occasions, on request from the supplier. b) When a supplier fails to respond to procurer’s request for supply of goods and fails to provide any reason which is considered genuine, for the delay in supply. c) When in the judgment of the procurer, the supplier is unable to execute the order due to various reasons. d) When the goods are urgently required and the supplier fails to deliver the goods within the original or extended delivery schedule. e) When the supplier breaches any of the terms and conditions of the order and as a result, fails to execute the order satisfactorily.
26.17 PROCEDURES FOR RISK PURCHASE:
a) The following procedures shall be followed when it is decided to initiate Risk Purchase action. Approval of CFA shall be taken before initiating such actions. In case, CFA is an authority above functional Director, then the approval for invoking Risk purchase shall be obtained from CMD.
b) A risk purchase notice shall be served, under registered post, to the supplier, giving a time period of not less than 30 days to complete supply. It shall be stated that unless executing of the order is completed by that date, the materials would be purchased at their risk and cost.
c) In case the supplier fails to resume and complete supply even after the above time period, which is considered genuine, the following actions shall be taken:
i. The order shall be cancelled and security deposit forfeited or bank guarantee encashed.
ii. If the cancelled quantity requires to be procured on risk purchase basis, to float enquiry, advertised or limited as the case may be, as per normal tendering procedure with identical specifications. In case of Limited Tenders, enquiries shall
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be sent to at least all the firms to whom the original tender was issued. Copy of the enquiry shall be marked “Risk Purchase Tender” and sent to the defaulting supplier under registered post. He shall be specifically informed that the enquiry is sent only for information and not for submission of any offer.
iii.While evaluating the tenders, any offer submitted by the defaulting firm, in spite of the above instruction for not submitting any offer, shall be ignored.
iv. Simultaneously, all pending claims of the supplier or any amount payable to the supplier shall be withheld to enable the company to recover the amount of difference, if any, between the original ordered price and price payable against the risk purchase to be made. Finance dept. shall be advised to take appropriate action in this regard. In case, no such amount is pending with GSL for payment, the matter may be referred to the Legal Department for filing an appropriate claim on the firm. After recovery of the excess amount for risk purchase, if any, the balance amount may be paid to the defaulting supplier.
v.In case the supplier fails to pay the above amount, necessary action in the court of law shall be initiated by the Legal Department. Procuring Department shall inform Legal Department accordingly. Simultaneously, actions towards de- registration of the firm or suspension of business may also be considered with the approval of HOD of Procuring department.
26.18 REPEAT ORDER
Repeat Order can be placed without obtaining fresh offer from the supplier, in accordance with CMD Memo 57/2000 and subsequent amendments on the subject, meeting following conditions: i. Within 1 year from the date of release of previous order. ii. The previous order should have been placed on competitive basis. iii. There is no downward trend of prices. iv. In case, there is increase in prices, same to be justified. v. Repeat order up to 100% of previous order quantity can be justified. vi. Within one year from the placement of repeat order of a vessel by the Customer under option clause to maintain the standardization and reduce the procurement time.
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CHAPTER - 27
EXECUTION OF CONTRACT
27.1 RECEIPT OF GOODS a) All incoming goods from Transport companies, Railways, Airways or suppliers shall have CISF stamp affixed and entry number written on the reverse of the delivery challans on entry. It shall then be received by the concerned stores section. They shall tally the quantities received or packages received with reference to the delivery challan and issue a provisional receipt stating that it was received subject to inspection. It shall be the responsibility of the stores officer to account the quantity of items or packages received from the suppliers. The concerned stores division shall maintain BaaN receipt linking the PO and the challan of the items received. The Purchase order issued shall have to be complete in all respect to facilitate stores division to maintain receipt. As far as possible, releasing of purchase orders with phantom code needs to be minimized. b) On maintaining receipt in the Baan system, inspection requisition is generated automatically in the BaaN System for carrying out inspection by QA. The QA Department shall carry out the inspection of received material and if found complete in all respect shall approve it in the BaaN System. Inspection shall have to be carried out expeditiously. Whatever drawings or technical documents required for inspection shall have to be sought and kept ready by QA dept. before hand so that delay in waiting for these drawings and documents to be avoided. If customer reps have to be involved in the inspection, QAD shall have to co-ordinate. Where OEM reps are required to be present during inspection, procurement dept. shall advise the OEM appropriately. On approval of receipt by QA Department, the concerned stores section shall forward the invoices of the suppliers along with delivery challan, documents etc to the Finance Department for releasing payment to the suppliers.
c) In the case of Import consignments, if the packing boxes are received in damaged condition, it shall be reported to the concerned authorities. Wherever required, open delivery / examination shall be insisted. The concerned insurance agency and the overseas OEM shall be intimated immediately about the damages. The concerned Stores section shall arrange for unpacking of goods received in GSL. Goods received in stores section in vacuumized packing shall not be opened unless and otherwise it is stipulated in the purchase order or specifically agreed by the supplier. Wherever possible, after inspection the packing has to be restored to the vacuumized condition by requesting the supplier to organized the same at GSL. The presence of OEM rep shall be ensured before unpacking wherever required. During inspection, if any shortages, damages or deficiencies are observed, it shall be recorded in the report and signed by all authorities involved in the inspection. The procuring officer shall ensure that as far as possible, all inspection and test certificates, drawings, manuals, etc. are received along with the consignment.
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27.2 BONDING AND DE-BONDING (a) In case of construction of any vessel other than that of Indian Navy and Indian Coast Guard under Bond, then the imported goods shall be cleared under bond to bond. Imported items on receipt will be stored in bonded warehouse and issue the items, by way of issue application or de-bonded when required to be issued to the Production Department in the presence of Custom Officer. All necessary documents required to be maintained as per the existing law. On completion of construction of the vessel, the same to be custom cleared under Ex-Bond shipping Bill, in accordance with provisions of section 65 of the Customs Act 1962. (b) In case of generation of any scrap from the material that are imported after construction of the vessel, a declaration in the ex-bond shipping bill shall be given and custom duty to the proportionate value of that scrap shall be paid.
27.3 IN-BOND & OUT-BOND
Stores Section on successful completion of receipt inspection by the designated agency shall take on charge item/equipment/material i.e inbonding. The item/equipment/material will be issued against indent from the User Dept. After receipt of indent, the subject store will be issued and charged off from GSL inventor. This cycle will complete out-bonding of stores.
27.4 DEMURRAGE If there is delay in clearance of goods from customs warehouse and resultantly demurrage charges are payable, the concerned officer involved in clearance of imported goods shall examine whether the demurrage is on account of delayed receipt of documents from Supplier. If it is so, he shall advise the concerned procuring Officer so that he will initiate action to recover the demurrage amount from the Supplier. If the delay is on the part of GSL for some reason or due to procedural or system problem with customs dept, approval of the Functional Director shall be obtained who has powers to approve payment of Demurrages up to Rs 50,000/- in each case within the approved budget. It shall be reported to the Audit Committee as and when required. Payment of Demurrages above Rs 50,000/- shall be with the approval of CMD.
27.5 DEFECTS AND DEFICIENCIES: a) When any deficiency, defect, shortages, discrepancies or damage is observed during inspection and recorded in the inspection report, the report shall be forwarded to the concerned procuring officer, who in turn shall take up with the supplier. The intimation to the supplier shall be specific as to when the deficiencies, defects and damages should be made good. The supplier shall also be made aware that delay in making good the damages or the deficiencies would get reflected in his vendor rating. The goods so rectified or supplied anew shall be offered for re-inspection on receipt.
b) User may get associated with inspection wherever it is required. Where inspection is to be done “as per approved sample”, the approved sample shall have to be in the custody of the inspecting officer. The inspection officer may seek the assistance of user dept. to carry out certain tests in house or get it tested in outside laboratories. In Cost Plus contracts, it is necessary to obtain the signature of the customer nominated inspection rep on the inspection reports.
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27.6 RE-EXPORT OF DEFECTIVE / REJECTED ITEMS TO FOREGN COUNTRIES
In case, the imported items found defective or damage after receipt at GSL, then, the same is to be re exported to OEM. For such cases, dealing officer, will initiate the re export request as per format A indicating delivery terms and forward the necessary documents such as original import shipping documents. Based on the input, Import section will prepare the Export Proforma Invoice, Packing List and GR Approval as per the format B,C,D and after obtaining approval for the documents, forward the same to Finance dept for obtaining GR Approval. Finance dept, will request GSL bank for providing the same. Dealing officer, who has initiated the re export request, will forward the MDA to stores section to dispatch the items to Mumbai for onward re export. GSL Mumbai office shall advise the CHA for processing the same from customs dept. In case, where the replacement is received at GSL for the defective items, GR Waiver will be made in place of GR approval, all other process will remain the same as mentioned above.
27.7 DEVIATION IN INSPECTION The inspection deviations are categorized as follows:
Category of Deviation Nature of Deviation
Major deviations in design and material affecting ‘A’ serviceability / function or durability, but not affecting interchange-ability or safety.
Major Deviations in design and material or ‘B’ manufacturing details affecting interchange-ability / or Dimensional conformity but not serviceability
/function, durability or safety.
Minor Deviations in design or material which do not ‘C’ have any significant affect on serviceability /function, interchangeability or Dimensional
conformity
Minor deviations in manufacturing details or exterior finish which do not have any significant affect on ‘D’ durability, serviceability/function, interchangeability or safety.
Minor deviations in supply of Accessories or deliverables / documentation that have no affect ‘E’ on serviceability/ functions, interchangeability, durability or safety.
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CVC has issued guidelines that sub-standard material should not be accepted even with price reduction. Accordingly, goods falling in above A & B categories shall normally not be granted any deviation. However, there may be need to accept material with minor deviations that do not affect serviceability or function or durability or interchangeability or safety. In such cases, the following procedure shall be followed:
27.8 MINOR DEVIATION: (a) HOD of QAD may approve minor deviations of Type D. List of minor deviations will be specified by a Committee of officers, at the level of DGM or above nominated by HODs of Quality Assurance(QA), Commercial, Design and Production Department, which will be used as guide for allowing minor deviations. For deviation of Type E, the section heads of Design Hull, Engg and Electrical shall be the empowered authority, to accept the deviations. Deviations granted shall be intimated to the concerned procuring officer giving full details of the supply order, manufacturer, date of inspection, deviation granted. Simultaneously, the supplier shall also be advised to improve the quality of the product.
(b) Normally deviations in design or use of alternate material shall not be allowed. However, due to urgency it may be allowed after due consultation between Quality Assurance and Technical Services Department concerned. Approval of competent financial authority (CFA), shall be obtained, wherever financial implication is involved.
(c) In case of other minor deviations, the inspecting officer shall prepare a report. This report shall be examined by the above Committee. If the committee recommends, “rework and use”, the goods may be sent to supplier for rectification or it may be rectified by GSL at the cost of supplier after obtaining his concurrence.
(d) When there is a need to issue defective goods to production due to urgency, the stores officer shall issue the same under “QSF 14 Part I” Form and intimate the concerned procuring officer, who shall in turn inform the supplier. After satisfactory defect rectification by production and fitment, the concerned production officer shall complete “QSF 14 form Part II” and return to Stores to enable them to clear the inspection reports.
(e) There may be cases where deviations, so granted, have significant bearing on the cost of the material. In such cases, HOD of the procuring Department may recover appropriate cost from the supplier. The above Committee shall decide the amount of discount. The Committee will decide the quantum of discount and the dealing Purchase Officer shall intimate the discount decided by the committee to the firm. On receipt of written agreement from firm, the Supply Order shall be amended by concerned dealing Purchase Officer to indicate the amount of discount and shall be sent to Finance.
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27.9 INSPECTION OF CAPITAL EQUIPMENT
OEM rep shall be called, if required for inspection. However, he shall be solely responsible for installation and commissioning of the equipment. Installation assistance as indicated in the contract may be provided by GSL. Along with the equipment, installation and maintenance tools and spares shall necessarily be supplied. After commissioning, a certificate duly signed by OEM rep and user department stating that the equipment has been installed and commissioned satisfactorily shall be obtained and forwarded to the inspecting and procuring officer. The inspection report may be clear after receipt of the certificate. Any delay in commissioning the equipment beyond one month after receipt shall be penalisable
27.10 INSPECTION OF GENERAL STORES
General stock, stationery and common DPO items shall be inspected by concerned stores officers. In case of doubt about the quality, make or specification of an item, the advice of the concerned procuring officer may be sought before acceptance. 27.11 INSPECTION AT SUPPLIERS AND SUB-CONTRACTOR’S WORKS
Inspection by GSL at suppliers or sub contractor’s premises shall be restricted when testing facilities are not available at GSL or the unit to be inspected is bulk and difficult to handle and or will have many stage inspections. If payment to goods is to be made against proforma invoice before dispatch, it is better if such goods are inspected by GSL or other inspecting agencies. Certificate issued by such inspecting agencies shall accompany the goods. At the same time, such inspections are to be avoided for non critical items. 27.12 BAAN RECEIPT IN RESPECT OF WEAPONS & SENSORS
In case of imported equipment like Weapons, Sensors etc. where the packages are to be opened at a later date only in the presence of overseas OEM rep, the Stores officer may prepare a BaaN receipt report and indicate therein the number of packages received, details of the contents as per packing list or delivery challan and physical condition of the packages which would be a supporting document for submission of claim bills and enable subsequent clearance after the arrival of overseas OEM rep.
27.13 REJECTION OF STORES
All materials received not in conformity with the specifications and requirements as indicated in the purchase order shall be rejected by the inspecting officer, who will record his reason for such a rejection on the Inspection Report. Based on the report, the concerned procuring officer shall immediately take up the matter with the supplier. The rejected stores shall be suitably labeled and stored in a separately identifiable manner. These shall be handed over to the supplier’s representative or Page 132 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
dispatched to the firm as the case may be through Non-returnable gate passes. The rejected materials shall be accounted separately so that at any point of time, the rejected goods which are yet to be replaced may be known. Any expenditure incurred in sending their rejected goods to the suppliers shall have to be on their account. Alternatively, the Supplier may be instructed by the concerned officer to collect the rejected material from GSL’s store within 30 days from the date of intimation. Stores officer shall obtain an acknowledgement for having issued the rejected material to the supplier. Supplier’s attention should also be drawn to GSL’s right to dispose off the rejected items that are not collected by the Suppliers even after 90 days of issue of letter intimating collection of rejected goods or recover storage charges as the case may be. It shall also be brought to the suppliers notice that GSL would not be responsible for deterioration of the goods.
27.14 INSURANCE CLAIMS
Discrepancies during Transit such as damages, shortages, theft, pilferages etc. to the consignments which are insured by GSL, shall be reported to the Finance dept. by Stores, who in turn will report to Insurance Company immediately and necessary claim shall be raised within the allowed time limit given by the Insurance Company. If required, preliminary claims may be registered with the insurance company pending filing of the final claim. Claim shall also be preferred on carriers within the prescribed time limit with Claim Bill, etc. where ever applicable.
27.15 SERVICES
Contract operating authority (COA) or User Department shall certify satisfactory completion of the work. Where stage payments are involved, periodical certification shall be done in accordance with the terms of the contract. Bills along with work completion certificate shall be forwarded to EDP through P&A Dept., if ESI/PF is applicable. EDP shall make the receipt in the system and forward the bills to Accounts Department for settlement of bills.
27.16 FREE ISSUE MATERIALS
When materials such as MS plates, cut components, fabricated pipes etc are required to be issued free of cost to the supplier outside GSL for galvanizing or heat treatment or fabrication or fitment etc on returnable basis, such goods are to be secured by a guarantee cover provided by the supplier. However, when low value contracts involving issue of high value materials are finalized, submission of indemnity Bond and provision of Insurance cover with GSL as the beneficiary may be accepted with prior approval of the CFA. Such BG or Indemnity Bond or Insurance cover shall be valid up to the execution of the contract or delivery of material, duly inspected or accepted and received at GSL. On completion or execution of the Contract, they may be returned within 15 days from the date of receipt and acceptance of finished product and return of leftover material if any to GSL. The supplies, wherever applicable should accompany a statement of reconciliation, indicating the following: i. Quantity of material issued. ii. Quantity of material consumed vis-a vis percentage of job completed.
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iii. Quantity of material returned to respective stores or held in stock by contractor at his end. iv. Actual quantity wasted or scrapped as a by- product of process as against stipulated amount. Supplier or contractor shall also furnish undertaking, protecting intellectual property rights of GSL over design and drawings issued to him. Those designs and drawings shall be returned to GSL without reproducing or retaining any copies at their end.
27.17 SHORT OR EXCESS SUPPLY
If 5% short or excess quantity over the required quantity is acceptable to end user, the approval of CFA may be obtained even while placing order. If not done, subsequent approval on receipt of goods may be obtained from CFA for amending the order.
27.18 ADDITIONAL WORK
During execution of an order, there could be instances where actual work content may vary as compared to ordered quantity or at times, at the request of customer due to certain unforeseen circumstances, additional works may have to be carried out. Such additional work may have rates indicated in the existing order or may not have. All such additional work required to be undertaken will be intimated to the respective tendering Departments by way of indent, PA or Sub Contract Requisition (SCR) by the authorized Dept. Concerned tendering Officer shall process the additional requirement and call the firm for price negotiations, if necessary and put up proposal for placement of order. Growth of work up to 5% in value of the contract, where rates do not exist, may be approved by CFA. Growth of work, where rates are existing and the quantity of work content increased beyond order quantity up to 100% in value of the Contract, can be approved by CFA, applicable to the enhanced value as if it is a repeat order. In case of growth of work emerges during execution of main defect rectification by subcontractor on ships undergoing repair, quantity to be restricted upto 50% of value of original defect.
27.19 CONTRACTOR’S DEFAULT
If a contractor neglects to execute the ‘work’ with due diligence and expedition or refuses to comply with any reasonable orders given to him, in writing by the COA in connection with the works or contravenes the provisions of the contract, the concerned procuring officer may give notice in writing to the contractor to make good the failure, neglect or contravention complained of. If the contractor fails to comply with the notice within 30 days from the date of service thereof, then the concerned procuring officer shall be at liberty to employ other person or persons and forth with execute such part of the ‘works’ as the contractor may have neglected to do. Or if the concerned procuring officer deem it fit, it shall be lawful for him without prejudice to any other rights he may have under the ‘contract’ to take the ‘works’ wholly or in part out of the contractor’s hands and re-contract with any other person or persons, complete the ‘works’ or any part thereof, the procuring officer shall be free to use without hire charges, of all contractor’s equipment that may have been at the time on the ‘site’ in connection with the ‘works’/ without being responsible to the contractor for fair wear and tear thereof and to the exclusion of any right of the contractor, over the same and the purchaser shall be entitled to retain and apply any balance of money which may otherwise due in the ‘contract’ by him to the
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contractor or such part thereof as may be necessary to the payment of the cost of executing the said part of the ‘works’ or of completing the works as the case may be. If the cost of completing the ‘works’ or executing a part thereof as aforesaid shall exceed the balance due to the contractor, the contractor shall pay such excess. Such payment of excess amount shall be independent of the LD/Penalty for delay which the contractor shall have to pay if the completion of ‘works’ is delayed.
a. In addition, such action by the dealing tendering officer as aforesaid shall not relieve the contractor of his liability to pay LD /Penalty for delay in completion of ‘works’. b. The dealing tendering officer shall in such event give 15 days’ notice in writing to the contractor of his decision to terminate the contract in full / part of the contract specified. c. The termination of the ‘contract’ under this clause shall not entitle the contractor to reduce the value of the performance guarantee nor the time thereof The performance guarantee shall be valid for the full value and full period as originally stipulated in the ‘contract’.
27.20 MONITORING OF SECURITIES AND OTHER INSTRUMENTS
Proper procedure for safe custody and monitoring of bank guarantees and other instruments shall be laid down by HOD (Finance).
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CHAPTER 28
PROCUREMENT BY CIVIL ENGINEERING SECTION
28.1 INTRODUCTION
a) Civil Engineering Section of Modernisation Department shall undertake execution of Civil Works, both capital and revenue, in accordance with the general commercial procedures and rules laid down in this Manual in so far as they are relevant to civil works in addition to the specific procedures and rules laid down in this Chapter:
b) Civil works comprise of works of capital nature and certain revenue works like maintenance work etc. All such works & services shall be sanctioned only when they are essential for efficient working and are in accordance with the laid down policies and procedure approved by GSL Board of Directors from time to time. Civil works shall be undertaken against revenue budget provisions for works of revenue expenditure nature. Capital works shall be undertaken in accordance with approved capital budget. The delegation of powers for according sanction to incur capital or Revenue expenditure in each case is as per the relevant CMD memos issued from time to time.
28.2 DETAILS & SYSTEM REVIEW OF CIVIL ENGINEERING WORKS
28.2.1 Details of Civil Engineering works handled:
The activities of Civil Engineering Discipline in Goa Ship Yard are of diverse nature and are broadly categorized below:
28.2.1. (a). Maintenance Works:
(i). Maintenance and upkeep of company assets such as buildings & infrastructure etc.
(ii). Maintenance of PHE Services such as water supply, sewerage, storm water drainage etc.
(iii). Maintenance of Roads
(iv). Maintenance Dredging of GSL water front
28.2.1.(b). New Works/ Renovation works:
(i). Construction of New buildings and Industrial Sheds inside and outside yard premises including residential enclave/ houses.
(ii). Construction for provision of water supply, sewerage, drainage systems etc inside and outside yard premises including residential enclave/ houses.
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(iii). Renovation work of offices, buildings and other infrastructure etc inside and outside yard premises including residential enclave/ houses.
28.2.1. (c). Other Works:
I) Capital Dredging of GSL water front.
II) Land/Asset Acquisition.
28.3 BRIEF PROCEDURE FOR CARRYING OUT CIVIL WORKS
28.3.1 System Review of Civil Engineering Works:
All Civil Engineering works or schemes need decision making at different stages of planning and construction. Any fresh civil engineering project commonly designated as “Original works” is generally built up through the following stages:
28.3.2 Preparation of a Draft Scheme & Preliminary Estimate
Before commencement of any work, a draft scheme is first prepared with brief outline of the work and the probable cost assessment of the scheme is made through a preliminary estimate. These are mostly prepared on a “Plinth area basis” based on the information from similar works carried out in the past by GSL or information obtained from work of similar nature done by others or else by obtaining budgetary quotations. Budgetary estimates can also be made by referring published schedule of rates for tentative budgeted BOQ. This exercise is carried out for budgeting purpose & appraisal of competent authority.
28.3.3 Detailed Design and Planning
Once the technical sanction, financial concurrence and administrative approval for a work have been obtained the next step consists of preparation and planning for the works.
For relatively simple works the civil section themselves will prepare concept plan / sketches and BOQ with estimate thereof. Where ever considered necessary this can be got vetted in part / whole from external agencies/ reputed academic institutions etc. Based on the complexity of the work a consultant may be appointed to prepare detailed design and BOQ for a detailed project estimate
28.3.4 Preparation of Detailed Estimate
Once the designs and drawings or sketches are ready and the specifications for the various items of work have been finalised, the detailed estimate for the works is to be prepared with the help of published schedules of rates by government agencies.
28.3.5 Optimization of cost
For the purpose of cost optimization, often a number of alternative schemes, satisfying the basic functional requirements, have to be thought / tried and the cost worked out to select the optimum solution.
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28.3.6 Preparation of Tender Documents & Notice Inviting Tender
For execution of the works tender documents are prepared and potential bidders are invited to submit their bids against Notice Inviting Tender (NIT) or in case of limited tenders directly from short listed / enlisted bidders.
28.3.7 Award of Works
The work is to be awarded for execution of the tendered work as per the conditions laid down in the tender to the lowest bidder from amongst the technically acceptable bidders after due approval of CFA. All valid bids received as on due date of opening of tender shall be evaluated by civil section / dealing officer for qualification, technical and commercial compliance to arrive at technically acceptable bids. During the process of bid evaluation clarifications on bid submissions or additional information may be sought for clear understanding of the bid. Where ever Consultant is involved, Consultant may prepare detailed technical evaluation report and forward to GSL for acceptance /approval. The consultant evaluation report will also be examined by the Civil section / dealing officers.
28.3.8 Monitoring of Progress
The award of work will indicate the time frame for completion. The progress of work is to be checked from time to time to ensure that the works /projects are completed on time as per the schedule. Wherever, possible milestones may also be used for monitoring the progress of the work.
28.3.9 Inspection and measurement of works
Work is to be inspected regularly so as to meet dimensional and quality requirements given in the work order. During the execution and also after the works has been completed the same is to be jointly inspected and recorded at various stages of progress with the contractor/ contractor’s representative. Inspection and measurement records are to be used for certification of the bills for the work done.
28.3.10 Acceptance of works
After the works has been completed as per the terms of the contract, the contractor informs the Civil Section and hands over all the completed works. On taking over a work completion certificate is issued to the contractor.
28.4 PREPARATION OF ESTIMATES
Before commencement of any work it is necessary that estimates are prepared for the purpose of obtaining technical sanction and approval.. For relatively simple and routine works, civil section will prepares detailed estimate for obtaining approval from competent authority. Based on the complexity of the work a consultant may be appointed and preliminary estimate is submitted to GSL for approval. On approval, Consultant may further submit detailed estimate. Page 138 of 189 GOA SHIPYARD LTD. PROCUREMENT MANUAL
Estimates as already explained are of two kinds. (i). Preliminary Estimates (ii). Detailed Estimates
28.4.1 Preliminary Estimates
Preliminary estimate is generally done for major / special works wherein Consultancy services are involved to know the financial implication of a proposed work before it is taken up.
28.4.2 Detailed Estimates for Works
Major / special works in nature, on approval of preliminary estimate, consultants are to submit detailed estimate to GSL. For preparation of the detailed estimates, the site investigation, whenever required, for proper design of foundations and for arriving at realistic cost estimates to avoid changes during execution warranting revised estimates. The detailed estimates shall be prepared based on current/updated schedule of Standard Schedule of Rates from CPWD or GSR from Goa PWD or MPT SR and Market rates for items not covered in schedule of rates. For the items of work not covered by the SOR, analysis of the rates shall be prepared based on market rates of materials and labour, rates from past data bank may also be considered and these are to be incorporated separately in the estimate.
For works of relatively simple nature such as renovation of offices, quarters, construction of small structures / buildings / sheds, road works, maintenance works etc estimated by Civil section, detailed estimate is prepared based on CPWD or GSR from Goa PWD or MPT SR and Market rates for items not covered in schedule of rates. For items not mentioned in the SSR, quotations are obtained form market and rate analysis is done, rates from past data bank may also be considered to obtain the estimated cost of specific item. If required budgetary quote shall be obtained for specific works /items. For labour oriented jobs, rates as per minimum wages specified in the Government circulars and those prevailing in local market are incorporated in the estimate.
28.4.2.1 All detailed estimates may consist of:-
A report covering a brief description of the project and Budget Provision & Allocation
1. Scope of Work.
2. Rates
3. Detailed estimates of the quantities with detailed statement of measurements.
4. Analysis of rates for non-schedule items.
5. Abstract of cost indicating value of work based on SOR and analyzed rates.
6. Method of execution.
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7. Approved makes
8. Period of execution.
9. Budgetary Quotations, if any.
28.4.3 Reconnaissance of site
The reconnaissance of the site is well done by walking on foot across the entire length and breadth of the site to have firsthand knowledge of surface features and ground conditions. The study should include the following:-
The soil cover and its visual characteristic e.g. sandy, silty, clayey etc. Existing drainage pattern, swamps etc. and likely impact on the project. Condition of structures already constructed and Knowledge of their foundation.
28.4.4 Drawings
Works of relatively simple nature whose estimate is done by civil section, appropriate sketches outlining the scheme/ printed literature / brochures as applicable is enclosed with the estimate while taking approval for the work from CFA. For works of complex nature where Consultancy services are availed, layout and tender drawings are submitted by the Consultant along with the estimates.
28.4.5 Specifications
The basic specifications for different items of work are to be decided before the estimates are prepared and specifications are to be laid down with due regards to functional utility, Safety, durability and aesthetics and wherever possible relevant BIS codes are incorporated. Efforts should be to keep the specifications simple and adequate for intended use or purpose. Specifications are brought out clearly in such a way that the same can be verified during execution.
28.4.6 Method of Execution
The concerned officer in-charge / dealing officer will decide the method of execution of the work by any one of the following methods:-
i) Departmental execution.
ii) By regular tenders.
iii) By yearly/bi-annual item rate contract basis.
28.4.6 i). Departmental execution
a) This is done when minor works or for the work of urgent nature are involved with or where for other reasons, it is found essential to do it departmentally by engaging departments own existing workers.
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b) For departmental execution, a proper work allocation shall be done by designated officers / supervisor.
28.4.6 ii) By regular tender system.
This method is the one ordinarily adopted for the execution of work in accordance with the specification for a rate as accepted and incorporated in the agreement. Execution of work on regular tender system is dealt in greater detail later.
28.4.6 iii).By item rate contract basis. (Maintenance Contract)
For revenue nature of works of any value, like white-washing, colour-washing painting, repair of roads, replacement of doors and windows, sanitary items, cleaning, house, Keeping, electrical items etc., like addition/ alteration to existing structures, extension of roads, small culverts, small pipe lines, repair of doors and windows, jungle cleaning and dressing etc. is taken up after inspection and necessary action may be taken by OIC to take up the work.
28.4.7 Deposit works
i).The cost of construction will be reimbursable on the basis of actual expenditure or cost of material and labor used and fixed percentage towards profit and the management services rendered.
ii). The form of contract may be applicable for projects with new technology; all works executed through Govt. agencies, like State P.W.D., CPWD, NBCC, UTISAL and any other designated public sectors etc. who have necessary expertise for executing such works. In all such cases day to day supervision by department is limited. But regular monitoring of the progress is done to ensure timely completion of the work.
For works of minor nature where design experts are required, empanelled consultants are invited to execute the work and for works of complex nature/ specialized works, Consultants may be invited other than that empanelled to offer their services.
28.4.8 Rising of Emergency Works
In emergent cases when nature of work demands, and work is to be taken up on immediate basis, the award of work without call of tenders up to Rs. 3 lakhs may be done by adopting procedures laid down with the approval of Director (CPP) hereinafter for the following categories of works:
1) Production infrastructure related work 2) Sewarage systems breakdowns. 3) Water supply breakdowns. 4) Emergency monsoon related works including damages during monsoon / natural calamities. 5) Inauguration, foundation stone laying & special occasions at short notice. 6) Dredging work at the time of launching. 7) Urgent emergency work related to security of the assets.
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28.4.8 (a) Procedures to be followed to deal with the above works:
i) A panel of good contractors will be maintained in each category.
ii) The job will be offered to one of the empanelled contractor/working contractors.
iii) The job will be executed against work- order which will contain schedule of quantities of work with rates and standard terms and conditions.
28.4.9 Register of tenders
Register of tenders shall be maintained such that the date of the estimates approved shall be serially numbered year wise for easy linkage with status of tendered work. , and shall be used for monitoring the number of days required from tendering to award of work.
28.4.10 Time schedule for the work
For major works where Consultancy services are involved, the estimate should be preferably accompanied by at least a BAR CHART or road map to indicate the time schedule for sanction, tendering, execution etc. for the said job.
28.4.11 Budgetary Control & Monitoring
28.4.11.1 Annual Budget
(i)The annual budget for the new works, capital in nature shall be initiated from the user departments by identifying the work to be done and forwarded to planning department for necessary approvals. Civil section will assist in arriving at preliminary estimates. Provision is to be kept for the ongoing or spill over works (committed works) carried forward to the next year. The expenditure incurred for different works upto the end of the last financial year shall be compiled and the anticipated expenditure for the year of the action should be assessed and provision made in the budget.
(ii)New works to be taken up are identified at the time of preparation of annual plan against the sanctioned project as the case may be as per phased programme of construction indicated in the project reports. The approximate value of work is calculated from prevalent construction cost for the purpose of budgeting and provision is kept in the budget depending on the physical progress of construction and financial outlay required. The completion schedule and the value of the contracts shall form the basis for formulation of budget.
The annual budget will contain a provision of the Provision for new works in the subsequent year, for spending on preparatory works, such as survey and investigation, architecture and engineering etc. and other advance actions as necessary.
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28.4.11.2 Budget heads
The budget for Civil Engineering works shall be compiled under the following heads of account:
A. Capital Budget:
i) Land
ii) Building:
a) Residential buildings.
b) Non-residential buildings.
iii) Development:
a) Dredging.
- Capital
- Maintenance
b) Sustainable development works.
iv) Civil works for Plants/Workshops.
B. Revenue Budget:
Maintenance of assets like residential/Non-residential/Industrial Buildings including roads, other services like water Supply, sewerage disposal, conservancy etc.
28.5 DETAILED PROCEDURE FOR TAKING UP OF ANY CIVIL WORKS
1). Special Projects: These are projects aimed at introducing a new line of product e.g. Shiplift system etc, and may comprise more than one civil works. These are normally been dealt with separately for Board and Government approval as well as financial allocation.
2). Major civil Engineering works: These are works costing above Rs.10 Lakhs and are aimed at creation of new facilities in the yard or estates belonging to the Company. Major civil works will be budgeted individually in the annual Capital Budget.
3). Minor Civil Engineering works: These works are aimed at setting up minor facilities and modifications to the existing works. These will be budgeted collectively under the heading “Miscellaneous Civil Works” in the annual Capital Budget.
Capital Budget: All civil engineering works are included in the Company’s annual Capital Budget which is normally put up for Board approval for the following year’s budget allocation. Additions or alterations to the approved Budget, estimates will be accepted only in very urgent or exceptional cases.
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Accurate cost estimate is also very important and deviation of more than 10% requires approval of the CMD.
28.5.1. Minor Civil Works
These will normally be designed by the Civil Engineering Section. This will include preparation of design, specifications, drawings and tendering. However, in cases where sufficient in-house expertise is not available, assistance from suitable Consultants may be obtained.
Where minor civil works are to be taken up departmentally, the following procedure shall be followed:
(a). The sketches sent by the User Department shall be re-drawn by the Civil Engg Section to incorporate necessary design changes/ details and sent back to the User Department through resources planning for their comments and approval. The user department shall obtain financial approval for taking up the work and forward the same to civil section for tendering.
(b). The bill of material or schedule of quantities will be drawn up and the settlement cost of the project will be worked out from the rate list after taking into consideration prevailing work conditions.
28.5.2. Major Civil Works
The design, specifications, tendering etc for such works may, be done through a Consultant depending upon complexity of the work wherever considered necessary as per CMD memo: MD/128/87.
28.5.3 Technical Proposal and Cost Estimates
On receipt of administrative approval from respective competent authority obtained by the user department is forwarded to the civil section for carrying out the work. Respective Officer /supervisor/ civil assistant shall prepare technical proposal and cost estimates for the work based on Standard Schedule of Rates to be adopted from CPWD or GSR from Goa PWD or MPT SR and Market rates for items not covered in schedule of rates or rates from past data bank may also be considered. For non-scheduled items, rates should be based on proper analysis of rates by getting quotations from the market. If required budgetary quote shall be obtained for specific works. For labour oriented jobs, rates as per minimum wages specified in the Government circulars are incorporated in the estimate. However, due note of prevailing labour rates in local market to be considered while analysing.
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28.6 TENDERS
28.6.1 Objective
The objective of laying down policies and procedures for civil works contracts is to ensure maximum efficiency, while maintaining quality, desired speed and overall economy. The procedure must ensure healthy competition among suppliers and contractors, in a transparent and fair manner.
28.6.2 Types of tenders
While the competent authority sanctions the proposal, technical specifications, estimate, the Engineer in Charge will decide the method of execution of work. Generally civil works are executed on contract by inviting tenders
Tenders are invited in any of the following forms:
i) Limited Tenders
ii) Open Tenders
28.6.2 .1 Limited Tender
(a)Limited tender may be resorted to in special circumstances with the approval of competent authority for works costing up to Rupees One lakhs. The tenders will be issued only to Contractors on the Company’s approved list. In case the work is of a specialized nature/ very urgent nature with strict time frame and stringent quality requirements, limited tenders amongst registered/ working contractors or known agencies of repute may be invited with the approval of Director (CPP & BD).
(b) In case of emergency works, the requirement of open tenders may be relaxed and the work may be executed by call of limited tenders amongst the working contractors with the approval of the competent authority as per the delegation of powers (Based on the value of work) as well as approval from Functional Director for dispensation of Open tender enquiry. In case of limited tenders the tender notice is sent to limited number of contractors enlisted in Civil Department, working contractors or known agencies of repute who are considered suitable for undertaking the job within the time frame set for the urgent works. Press publication for emergency works may be avoided to save time.
28.6.2.2 Open Tender
This is the normal procedure of tender of tendering where tenders are invited from the parties under a given set of terms & conditions regarding their past experiences, present status, depending upon the requirement of work. The minimum time for submission of tender and extent of publicity to be given are elaborated in the relevant clauses. Open tender for works costing more than Rs.5lakhs is done through E-tendering system. Contractors having Class III DSC cards and having registered the same in GSL web portal can upload their quotes.
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28.6.3 The rate can be invited in any of the following forms:
a) Item rates
b) Percentage rates
28.6.3.1 Item Rates
The item rate tenders are invited for all civil works and other non-standard works like industrial building, office building, and development works, water supply, sanitary system etc. In these tenders, tenderers are required to quote the rates against each of the items of “Schedule of Quantities” and not as a percentage above or below the standard schedule of rates.
28.6.3.2 Percentage Rates
The percentage tenders are invited for standard work in which the schedule of quantities indicating item wise rate based on standard schedule of rates and amount. The tenderers are required to quote percentage above or below the schedule attached to the tender.
28.7 TENDERING & EVALUATION OF BIDS
28.7.1 Preparation of Tender Documents
The tender papers are the most vital documents for execution of work through outside agencies and discrepancies in tender documents may lead to serious repercussions in execution of the works. Tender documents should therefore be very carefully prepared with close scrutiny.
The following particulars shall form the part of a complete tender document:
i) Notice Inviting tender
ii) Detailed Tender Notice.
iii) General Terms & conditions/Commercial Terms & Conditions.
iv) Additional Terms and Conditions/Commercial Terms & Conditions.
v). Special conditions of contractor, if any
vi) Schedule of deviations (to be filled in by the Contractor)
vii) Specifications
viiI) Scope of work/Schedule of work/Bill of Quantities.
ix) Tender drawings if any.
ix) Standard formats like bank Guarantee and Articles of Agreement etc., if any.
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28.7.2 Publication of Notices Inviting Tenders
The extent of publicity to be given for any tendered work depends upon the nature and magnitude of work. There is no point in giving state wide or national level publicity for small and medium sized works costing upto Rs.10 lakhs as only local/registered contractors will be interested in such work.
i) For all works above Rs. 1lakh and up to Rs.5 lakhs “Open Tender Enquiry” may be invited on approval of competent authority on case to case basis. The tender notices are to be published on GSL web portal and the notice will also be put upon civil and other departmental notice boards.
ii) For the works costing more than Rs. 5lakhs e-tendering procedure shall be followed. The tender notices are to be published on GSL web portal and the notice will also be put upon civil and other departmental notice boards.
iii). For works of estimated value more than Rs. 10 lakhs e-tender procedure shall be followed with press publication.
28.7.3 Issue of Tender Documents
28.7.3.1Tender Documents shall be issued to all aspiring bidders on payment of the requisite fees towards the cost of tender document (Application Fee) as prescribed in the NIT. In works costing more than Rs. 1lakh and less than Rs.5lakhs , the Tender document is sold to all interested applicants on forwarding DD of the cost of tender fee or download the tender document from GSL website and enclose the DD for tender cost with Volume I of bid submitted. No tender cost will be collected for the works less than Rs. 1 lakh (i.e. Limited tenders)
The following procedure is to be adopted for receipt of Tenders:-
(a). Tenders of estimated value upto Rs. 1 lakh shall be received in single bid system and beyond Rs. 5 lakhs two bid system shall be followed.
(b).Tenders for works of estimated value of over Rs.5 lakhs shall normally be through E-tendering, Contractors having Class III DSC cards, may register on GSL web portal and download the tender document from GSL e- procurement portal and upload the required documents and price bid before the last date of opening of tenders. Tender cost, EMD, original Bank solvency certificate needs to be dropped in the tender box before the opening of tender bid.
(c) The exemption from E-Tendering shall be with approval of competent authority with due justification.
The basic minimum eligibility criteria for the purpose of evaluation of offers received will be as under:-
1.(a) The intending tenderer must have in its name as a prime contractor experience of having successfully completed similar works during last 7 (seven) years ending last day of month previous to the one in which bid applications are invited (i.e. eligibility period) should be either of the following.
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Three similar completed works each costing not less than the amount equal to 40% of the estimated cost.
Or
Two similar completed works each costing not less than the amount equal to 50% of the estimated cost.
Or
One similar completed work costing not less than the amount equal to 80% of the estimated cost.
1. (b) Average annual financial turnover of civil work during the last 3(three) years, ending 31st March of the previous financial year should be at least 30% of the estimated cost. Average annual turnover is not applicable in case of limited tenders of value less than Rs. 1 lakh.
1 (c) Bank Solvency certificate stating the name of work and tender number shall be deposited by the tenderer in the tender box on the due date of opening the tender. Bank Solvency certificate is not applicable in case of limited tenders of value less than Rs. 1 lakh.
The term ‘similar work’ has also to be defined; If any specific work experience is required to provided by the contractor for specific works. The same is to be defined clearly as additional pre qualification. This specific work experience clause may not be applicable to all works.
The intending tenderer must submit documentary evidence in support of 1.(a) & (b) above in the form of certified copy of work order, completion certificate.GSL may request payment certificate/vouchers indicating the work order number, period of work for which the payment has been made in addition to the documentary evidence of completion certificates during technical evaluation of bids if it is considered necessary.
In addition, the intending tenderer has to submit the following:
i) Permanent Income Tax Account Number
ii) Particulars of Registration with appropriate Sales Tax Authorities (In relation with ‘Works Contract Tax’ if applicable.(**)
iii) Particulars of Registration/clearance from the appropriate Provident Fund authorities, if applicable.
iv). Valid ESI/PF numbers issued from Competent authorities.
v). Service tax registration number, if any.
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Copies of all the certificates submitted, duly authenticated by the bidder, are checked by the civil section. However, provisions under (ii) and (iii) above may be relaxed at the discretion of the Tender issuing authority for the purpose of sale of Tender Documents only. These certificates will have to be submitted along with the tender in such cases.
**The Sales Tax Act is a state subject. Therefore its application in its entirety will be as per the respective legislation in force at the place of work.
28.7.3.2 Tender documents can also be issued individually on requisition in writing from the contractors or their accredited representatives on submission of DD of tender cost. Acknowledgement for receipts of tender documents is obtained from the contractor or their accredited representatives on the requisition at the time of handing over of tender documents. In case where tender documents are requested for transmission by post, these may be dispatched by registered A.D / speed post. The department is not responsible for any postal delay in such cases. This will not be applicable in case of e-tenders
28.7.3.3 Tender documents should fulfil the following criteria before being sold to parties:
i). All the copies of tender documents prepared for work should be serially numbered as 1, 2, 3 etc. and the pages and the drawings in each document should also be serially numbered.
ii). The front cover page should convey all the information in the manner indicated.
iii). The certificate of issue by the Engineer-in-Charge.
iv).The name of the work and the serial number of copies of tender documents prepared should be entered in the “Register of issue of Tender documents”. Issue of Tender documents is stopped at least one day prior to the date of opening of tenders.
In case of works whose estimated cost put to tender is RS,.1Lac to Rs, 5Lac, sale of tender documents in physical forms is suspended one day before the date specified for opening of tenders. However, the tender forms can be down- loaded from web site till the opening of tenders.
Incase of e-tender, tender document can be downloaded up to 13.00hrs and uploaded up to 15.00hrs on the date of opening or as specified in the e-portal for that work.
28.7.4 Application Fee
Tender documents shall be issued on payment of ‘Application Fee’ i.e. Rs.500/- or as mentioned in NIT in the form of DD drawn in favour of GSL payable at Goa in case of works costing less than Rs.10lakh. However in case of tenders invited through e-procurement portal, the tender cost shall be submitted offline so as to reach GSL on or before the due date and time for the receipt of tenders. For the works costing more than Rs. 10 lakh the cost of
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tender forms shall be Rs. 1000/-. Incase of certain high value tenders the cost of the tender shall be decided by HOD subjected to a ceiling of Rs.10000/-. Tender cost is not applicable in case of limited tenders of value less than Rs. 1 lakh.
28.7.5 Earnest Money
The earnest money for tenders shall be two to five percent of the estimated value of work, to be deposited in the form of Crossed Demand Draft / Bankers Cheque / Bank Guarantee from any nationalized / scheduled Bank drawn in favour of Goa Shipyard Ltd, payable at Vasco-da- Gama, Goa, along with the covering note as per the format for EMD and will be valid for 6 months for the purpose of claims, if any. The earnest money shall bear no interest and shall be refunded to the unsuccessful tenderers after finalization of tender and award of work. For tenders of high value a lump sum EMD / tender security amount may be specified with due approval of management. For such tenders EMD / Tender security could be in the form of Bank Guarantee (BG) from PSU/ Scheduled bank.
On receipt of Bank Guarantee, an independent reference shall be made to the issuing bank for confirming the issue of BG. The BG on receipt shall be kept under the custody of Finance Department for monitoring the validity and timely renewal.
28.7.5.1 Forfeiture of Earnest Money
(a)According to prevalent standard practice Earnest Money is paid by each tenderers to enable the company to ensure that a tenderer does not refuse to execute the work after it has been awarded to him. In case where the tenderer fails to commence the work latest within one month of award of the work, the Earnest Money shall be absolutely forfeited to the company, on taking approval from competent authority.
In case, where decision has been taken to forfeit earnest money of the tenderer for valid reasons, it is necessary to issue requisite notice to defaulting contractor.
(b) In case the contractor fails to commence the work and as per the above clause EMD is forfeited, GSL will also suspend new business with the contractor for a period of two years.
28.7.5.2 Exemption of Earnest Money
The tenders shall be treated valid when it carries requisite earnest money and the tenders without Earnest Money shall be rejected out right except in such cases where prior approval for exemption has been granted by CFA or as per applicable clause except for exception which may have been provided in th eregistration of contractors.
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28.7.5.3 Refund of Earnest Money
The earnest money will be refunded to the unsuccessful bidders on finalization of the award or on rejection of his bid or at the expiry of the validity period of the tender (unless extended),. The EMD of the successful bidder will be converted as security deposit and will be retained in the finance department. In case where security deposit in the form of Bank D/D or BG is given, the EMD shall be refunded / returned.
28.7.6 Validity of the Tender
The validity of the tenders shall be up to 120 days from the date of opening of Tender.
28.7.7 PROCEDURE FOR SUBMISSION OF TENDER BIDS
28.7.7.1 For works having estimated cost put to tender is more than Rs.1 lakh and less than Rs.5lakhs:
All the tenders will be received in either two envelope or two part system contained in two separate covers as detailed hereafter:
i) The earnest Money, tender cost and Bank Solvency certificate will have to be submitted along with technical bid.
ii) Part-I (first cover) (Technical Bid)
The first cover of the tender will contain the following:
a) Papers relating to Technical aspects of the Bid along with copies of all credentials/certificates related to the technical qualifications of the bidder.
b) Additional commercial terms & conditions, if any.
c) Other deviations from the terms & conditions of the tender, if any. This is to be provided in the requisite places in the Tender Document.
d) Corrigendum/Addendum published, if any.
e). Tender Drawings, if any.
f). Original Solvency certificate and turnover details.
g). Organization chart/Details of personnel employed, if mentioned in the document.
However, in addition to above particulars any other credentials may be asked for in Part-1 if felt necessary by the GSL authority.
iii) Part-II (second cover)
The second cover will contain the tender document issued to the tenderer wherein the price bid/rate should be furnished. Each page of the tender
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document should be signed by tenderers. This will not contain any alternative items or suggestions, comments or conditions.
28.7.7.2 For works having estimated cost put to tender is more than Rs.5lakhs:
i). Contractor having Digital Signature card (Class III) shall enroll on GSL e- portal system.
ii). The bidder shall upload all documents mentioned in the particular tender, such as scanned authorized Volume I, authorized addendum’s, if any, turnover details, solvency certificate, tender fee, work completion certificates, etc
iii). The bidder shall upload the price bid as per GSL format only.
iv). The bidder shall submit the original EMD, tender fee and Bank Solvency certificate in a sealed envelope and drop the same in tender box of GSL/Civil, mentioning clearly on it the name of work, tender number and firm details.
28.7.8 Receipt, Acceptance, Opening of Tenders
The following procedures shall be adopted in respect of receipt, opening and acceptance of tenders.
i) The tenders received at the Dispatch centre of GSL are initialed by the Audit rep, Dispatch in-charge and handed over to the concerned Contract cell representative for further opening of bids.
ii). For limited tenders/quotations, the sealed envelope is opened by the Internal Audit in charge. Signature on every page is done along with encircling of amounts quoted in figures and the final quote of the bidder. Any corrections done by the bidder is highlighted by the Audit Officer. The price bid opened is read out to all bidder’s representative.
iii). For works upto Rs.5lakhs, on signature at Dispatch centre, technical bid i.e. envelope one, is opened by concerned Internal Auditor and initialed on every page of Vol I along with the representative of Contract cell. Discrepancy if any is noted. The number of tenders received the particulars of Earnest Money and name of the bidder representative(s) who participated in the opening of the tenders present at the time of the opening of the tenders are recorded in the CST form. The technical bids opened are further scrutinized by Contract cell/ Civil Department.
iv). For works uploaded on e-tender portal of GSL, the technical bid is opened in presence of Finance reps and Contract cell representative. All data uploaded by the bidders is downloaded for scrutiny
28.7.9 Withdrawal of Tenders by Contractors
Once the tenders have been submitted, the tenderers will not have the option to withdraw offer within the validity period. If any tenderer withdraws his tender before the expiry of validity period or makes any modifications in the terms and
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conditions of the tender which are not acceptable to GSL, then GSL shall, without prejudice to any other right or remedy, be at liberty to forfeit the earnest money deposit.
For habitual defaulters suitable action like not allowing them to participate in future tenders for a specified period of time can be considered.
28.7.10 Late and Delayed Tenders
GSL does not accept any responsibility for non - receipt of tender due to postal or courier delays. Any Tender received by the GSL after the deadline mentioned in NIT or vide corrigendum will be rejected.
28.7.11 Evaluation of Tenders
In case where tenders are submitted in two parts/ two envelope system, Part-I is opened first and evaluated. Thereafter the technical report of the bidders is prepared and approval is taken from Section Head. Shortfalls if any, may be complied by requesting the bidders to submit the necessary clarifications/ documents. Part-II i.e. price bid of only those contractors are opened, whose Part-I offer/ technical bids are found acceptable. The tenders are opened in the presence of the tenderers or their accredited representatives who wish to be present at the place and time as indicated in the notice inviting tender.
The Internal Audit Officer examines the technical report prepared by the technical cell and wherever necessary also examines the original tender document to satisfy itself that all aspects/conditions of each offer has been properly evaluated with respect to the financial implications etc. and truly brought out in the technical report
The deviations from the commercial terms and conditions and the tender specification are scrutinized before opening the price bid. Normally no deviations in the technical terms and conditions indicated in the tender document are accepted. Even though the bidders meet the above qualifying criteria, they are subject to be disqualified if they have made misleading or false representations in the forms, such as statements and attachments submitted in proof of the qualification requirements, and/or record of poor performance such as abandoning the works, not properly completing the contract, inordinate delays in completion, litigation history, or financial failures etc.
The concerned Officer may formulate and freeze the acceptable conditions and intimate all the tenderers. In case of e-tender, after satisfying the pre- qualification criteria, the technical report is uploaded online for the bidders and time and date of price bid opening is declared. Price bids are opened on date and time as mentioned on-line in the presence of bidders or their representatives.
28.7.12 Opening of Price Bids
For works whose estimated cost put to tender is less than Rs.5.00Lacs, the price bids are opened at the time and place fixed for the same and the
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representative of the tenderers and the concerned audit reps are informed to be present for the opening.
Price bids of the tenderer will have no condition and a comparative statement of the price bids offered by different tenderers is prepared by the Contract cell. The price bids which are incomplete and not submitted as per the instructions given in the tender document are rejected.
For tenders on e-portal system, the price bids are opened online in the presence of Finance representative and bidder or their representative, if any.
28.7.13 Comparative Statement
The detailed arrangements for proper check of tenders and preparation of comparative statements are done by the Contract cell, which are as follows:
a) The Contract cell shall date and initial all papers.
b) If on checks there are difference between the rate given by the Contractor in words and figures or in amount worked out by him, the following procedure shall be followed:-
i) when there is a difference between the rates in figures and in words, the rates which corresponds to the amount worked out by the contractor shall be taken as correct.
ii) When the amount of an item is not worked out by the contractor or it does not correspond with the rates written either in figures or words, than the rates quoted by the Contractor in words shall be taken as correct.
iii) When the rate quoted by the Contractor in figures and in words tallies but the amount is not worked out correctly, the rate quoted by the Contractor shall be taken as correct and not the amount.
In case of e-tender, online comparative statement is been generated by the system. However cross checking of calculation is done by civil section in order to avoid mistakes.
If the quote offered by the lowest bidder is more than the estimated cost put to tender, the negotiations may be conducted if considered necessary. However, the price negotiations should not be done as a matter of routine. Price negotiations shall be as per the relavent CMD memos issued from time to time. The quote post negotiations shall be considered for approval for award of work.
28.8 CONTRACTS FOR CIVIL WORKS The types of contracts which are usually entered into for civil works / services are described in the succeeding paras.
28.8.1 Lump-sum Contract based on drawings & specifications
In a contract of this type, the work involved is described in sufficient detail with necessary detailed engineering drawings. Based on these drawings and specifications included in the tender documents, the bidder is required to
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quote a lump-sum for the work involved. Such contracts are usually concluded for construction of buildings etc.
28.8.2 Item Outline agreement (rate contract)
Where the exact quantities of work cannot be determined in advance, a contract may be entered into for different items of works based on estimated quantities. In this case, the various items of work involved and the estimated quantities thereof will be included in the schedule ‘A’ and the bidder will be required to quote his own rate for each items of work included in the tender. On the basis of the rates quoted and the estimated quantities, the value of the tender will be computed for purpose of acceptance.
28.8.2.1As an alternative, the Bill of Quantities based on the estimated quantities will be included in the tender and the bidder will be required to quote a percentage below or above the total estimated cost as indicated in the tender. On the basis of the total quoted percentage and estimated cost, the value of the tender will be computed for the purpose of acceptance.
28.8.3 Term Contract
Term or period contracts should be entered into for attending repairs and miscellaneous works of recurring nature. The advantage of entering into a term contract is that work can be ordered on the contractor any time during the currency of the contract without having to call for quotations for each work. Similarly, annual contracts for routine maintenance services also may be concluded giving the description of scope of work, material/manpower required etc.
28.8.4 Design & Execution Contracts
As against the normal practice of inviting tenders on the basis of GSL’s / consultant’s designs, drawing and specification, it is also contemplated to consider design and execution tenders being submitted by specialist firms and to finalize contracts on the basis of such designs. The firms are required to furnish the design drawings and detailed specifications in addition to quoting a lump sum amount for the work.
28.9 CONSULTANCY
GSL do not have its own design department for civil works. In such circumstances where expertise is not available with GSL, Suitable consultants may be appointed to render required services as per CMD memo: MD/128/87. Civil engineering section will prepare a panel of capable/ empanelled consultants for all the services and will decide in consultation with these agencies standard & uniform terms & conditions and rate for engagements for a minimum term of three years. Addition and deletion of firms from the above shall be a continuous process
For other works of specialized nature like marine structures or works requiring specialized engineering technique / skills, consultants would be appointed to write detailed Project Reports. The number & type of detailed project reports to
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be called for civil works would be decided at the level of Functional Director. Appointment of such consultants will be undertaken by committee(s) appointed by CMD after issuing pre-qualification public notice to enlist names of suitable consultants and after due verification of the credentials and capacity or capability to do the work assigned.
For works which are executed with the assistance of consultants, a formal agreement in consultation with Legal Department incorporating all necessary legal requirements and also clearly defining the services to be provided by the Consultant as per the terms and conditions of the tender, has to be entered into between GSL and Consultants.
The procedure for empanelment / registration of Architects / Design Consultants or Project management Consultants will be as per the project requirement.
While deciding the scope of work for Architects / Consultants, following shall be considered along with the time lines for completion of assigned task(s).
a. The consultant shall prepare a scheme or Detailed Project Report as the case may be, conforming to the requirements (To be mentioned in detail in consultancy offer), and also to such other requirements, which may be stipulated by GSL during planning, design & construction stage.
b. The consultant shall visit the site to understand the existing site condition, assess the scope of work, and understand the activities of GSL in this area/zone before planning the work.
c. The consultant shall study all data available with GSL and if the same is inadequate, he may carry out further topographical survey, soil investigations etc. as may be necessary with prior approval of GSL. The arrangements for the supervision for such surveys / investigations shall be carried out by the consultants on behalf of GSL and the charges / bill of such agencies will be reimbursed by GSL on certification by the consultants.
d. The consultant shall examine / prepare and recommend to GSL the most economical design scheme for the works included in the scope of works.
e. The consultant shall prepare a block of estimate for the entire project, and the detailed item rate estimate / analysis for different parts the project based on standard specification / Guidelines / analysis of work for such items from Standard Schedule of Rates to be adopted from CPWD or GSR from Goa PWD or MPT SR and Market rates for items not covered in schedule of rates or from past data bank may also be considered The estimates so prepared by consultants should be checked item-wise by GSL engineers. It is necessary to prepare item-wise analysis of rates for assessing the reasonability of rates.
f. The consultant shall prepare detailed structural design and working drawings of the project.
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g. The consultant shall be solely responsible for obtaining all necessary permissions, No objection certificates, completion certificates, occupancy certificates from local statutory bodies, state government, etc. It is essential that his Engineer associated with planning & design works shall be conversant with all the development control rules & regulations of local bodies.
h. Consultant shall furnish the bio data of the key personnel who would be associated with the work. GSL reserves the right to accept or reject offer on this account, if the key personnel is found inexperienced for the said work.
i. Consultants shall visit the site and if has any doubts, the same shall be cleared from GSL engineers before submitting the offers.
j. The Consultancy Firm and or any of its affiliates, hired to provide Consultancy service for preparation or implementation of a project will be disqualified from subsequently supplying items or services related to the initial assignment the same project. Conversely a Firm and any of its affiliates, which has been engaged to provide items or services for a project will be disqualified from providing Consultancy services for the same project.
k. The selection of the consultants should be made through competitive bidding. The scope of work and role of consultant should be clearly defined and tender / contract should incorporate clauses having adequate provisions for penalizing the consultants in case of default by them at any stage of the project including delays attributable to the consultants. As far as possible a project implementation schedule indicating maximum permissible time for each activity should be prepared with a view to arrest time overruns of the projects. There should be no major deviation in the scope of work after the contract is awarded and the consultant should be penalized for their poor planning and supervision if the deviations result in excessive cost overruns.
l. Consultant’s fee should be based on original contract value. The role of consultants should be advisory and recommendatory while final authority should be with GSL.
m. Preparation of Feasibility Report, wherever applicable, is to be included in the scope of work of the Consultant and no additional charges are to be paid on this account separately.
28.9.1 Duties of consultants
a. Design & Drawings: The consultants shall have to submit the preliminary scheme, drawings or draft Detailed Progress Report (DPR) and get the same approved by GSL. Additional copies of the drawings for obtaining approvals from various authorities shall be prepared and submitted for approval/sanction.
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b. Consultants shall obtain the approval/clearance from various statutory authorities such as CRZ, MPDA, MMC, GSPCB, etc. Any charges towards security deposit will be paid by GSL. However, co-ordination with these authorities will be consultant’s responsibility.
c. Consultant shall prepare detailed structural/RCC drawings and get the same approved from MMC/MPDA etc and shall submit to GSL for their approval.
d. Consultants shall submit 3 sets of drawing and estimates to GSL along with the total programme / bar chart or CPM network.
28.9.2 Pre-construction stage
a. Consultants shall submit to GSL for approval, a proforma advertisement of Tender Notice for insertion in the leading newspapers. The consultants shall prepare the tender documentation including general condition & special conditions of contract in consultation with GSL and tendering will be done by GSL.
b. After opening of the bids received, the technical bids shall be scrutinised by the consultants. They shall study the conditions if any of the bidders and based on the qualifying criteria & merit, the list of technically qualified bidders shall be recommended to CFA for approval. After opening of price bids of technically qualified bidders they shall study the rates, conditions etc, compare with estimated rates and submit their recommendations to GSL for approval by CFA. After GSL’s approval, the consultant shall prepare the draft of work order and submit the same to GSL.
28.9.3 Construction stage (Project management services)
Scope of work for project management services will cover those specified below:
a. After the award of work, the consultant shall issue the detailed working drawings to the contractor for the execution of work as may be necessary. The consultant shall post at site, competent and qualified Resident Engineer (RE) who has good experience in similar work of civil engineering field. The RE shall supervise the works at site and approve test the materials, shall take the joint measurements of completed item jointly with GSL engineer, certify the bills etc.
b. In general, following shall be the duties of Resident Engineer:
i) Inspect the material brought at site by the contractor.
ii)To prepare monitoring system by way of PERT, CPM method so as to anticipate the critical activity and take remedial action in advance, for timely completion of work.
iii)To ensure the quality and dimensions of work as per standard norms or IS code etc. as applicable.
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iv)To take joint measurements with the representatives of the contractor and GSL Engineer, as per relevant IS codes for measurement of works.
v)To certify the bills of the contractors after the bills/ measurements are duly Checked and verified.
c. A Senior Manager/Engineer/Partner/Proprietor of the consultants firm shall visit the site periodically to monitor the progress. No extra charges shall be paid for such visits.
28.9.4 Post construction stage
a. After the works are complete the consultant shall submit the as built drawings to civil authority like MPDA/MMC to obtain completion certificate/occupancy certificate. They also shall submit 2 sets of as built drawings to GSL for their record.
The consultant shall also submit the statement showing the final completion cost which will take into account the materials issued by GSL at stipulated rates or free of cost if any.
b. Consultant shall also resolve any dispute between the contractor and GSL efficiently and assist GSL for the arbitration, if it is inevitable.
28.9.5 Faulty Execution or delay
In case of faulty design or execution or delay in execution of work on account of oversight/slippage on the part of consultant, either in commencing the project in time (After all the formalities are completed) or an error in designs / drawings / specifications etc. or any other cause attributable to consultant, the Consultants shall be liable for appropriate damages (not exceeding 5% of the total fee payable under the Consultancy agreement) to GSL The decision of CFA in this regard shall be final and binding.
28.9.6. Termination
a. If GSL considers, that the services rendered by the consultant directly or through their associates are unsatisfactory, GSL reserves right to terminate the agreement with consultant in writing at any stage by giving them 30 days notice. In case GSL decides to part with the services of the consultant, the consultant’s fee quoted by them will be restricted to the proportionate work rendered by them up to that stage.
b. The consultants should prepare a Market rate Estimate for major items for a total value of 90% of the tendered value by preparing Rate Analysis for these items based on prevailing market rates for materials & labour and Standard Rate Analysis Handbook. The tendered amount should be compared with this Market Rate Estimate with supporting analysis of Rates should be furnished to GSL. This shall be done after closing date of tender & before opening of price bids.
c. In order to provide some safeguard to secure the Company’s interest in specialised nature of works the design submitted by the Consultants /
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Architects shall be proof checked by seeking the services of a reputed independent organization or through a renowned Consultant after obtaining approval of CFA.
d. In such cases a special condition should be provided for in the contracts clearly stipulating that the Company has the right to inspect the progress and quality of work without, in any way, taking away or diluting, the responsibility of the contracting firms for the soundness of the structure and the execution of the contract. It should be specifically stipulated that, in the event of the Engineer In charge noticing any defect whatsoever during the construction work, it would be binding upon the contracting firm to have the defect investigated in detail by any of the reputed organizations referred to above or such other competent organization acceptable to the Company. The cost of the investigation shall be borne by the contracting firm in case a defect is established or otherwise pointed out by the Company. It will also have to be stipulated that, in the event of any defect having been established, as a result of reference to the specialist organization of the type referred to, it shall be incumbent upon the contracting firm to propose remedial measures therefore and obtain the acceptance of that specialist organization to such measures before the corrective action is undertaken.
e. The consultant is meant to assist the departmental officers because of lack of expertise and it should not meant that they takeover all functions. The responsibilities relating to award of contract and execution of contract after appointment of consultant shall not be abdicated completely by the concerned Department(s). It is, therefore required that appropriate checks should be exercised by the concerned officials at all stages of execution of the contract(s).
28.10 PLACEMENT OF ORDER / CONTRACT
28.10.1 Letter of Intent is an acceptance of offer by the company and it need not be accepted by the tenderer. But the tenderer should acknowledge the receipt of order within 07 days of receipt of Work Order and any delay in acknowledging the receipt would be treated as a breach of contract and compensation for the loss caused by such breach will be declared by the company by forfeiting EMD/Bid bond.
The following documents shall form the contract:
- Tender Notice & Tender Document
- Techno commercial Bid & Price Bid.
- Minutes of technical / price negotiation committee meetings.
- Any correspondence that has taken place between the contractor and GSL from the time the bid is submitted by the bidder to the time the acceptance is communicated by GSL.
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28.10.2 Mobilisation Advance
In case of works valuing Rs. 2 crore and above, the contract terms may provide for payment of mobilization advance with the approval of competent authority. CVC guidelines issued from time to time on the subject to be complied with.
The need for payment of mobilization advance will be indicated in the tender document so that all bidders are given equal opportunity.
28.10.3 Security Deposit / Performance Guarantee / Waterproofing Bank Guarantee
28.10.3.1 Security or Performance Bond/Guarantee
(i). Performance Guarantee as security deposit: For works whose estimated value is above Rs. 1 lakh and up to Rs. 10 lakh, EMD will be converted to security deposit and balance amount if any, of 5% will be deducted from the R. A. Bills. The total amount will be released on completion of defects liability period. (ii). For works of estimated cost above Rs. 10 lakhs, the PBG including the earnest money already deposited shall be 5% (five percent) of the contract value. Security deposit will not carry any interest. The contractor shall deposit immediately after receipt of letter of award of work or as per the prescribed time limit mentioned in the LOA the balance of security deposit of awarded value if any, in the form of an irrevocable Bank Guarantee of any Nationalised / Scheduled Bank in the prescribed form, after adjustment of the earnest money already paid as initial security deposit before execution of the agreement. In case, where agreements are not required to be executed, balance of initial security deposit should be deposited within the period to be mentioned in the work order/LOA and under no circumstances the period should be later to commencement of any payment made to the contractor. Security deposit shall be refunded on successful completion of work and on payment of final bill & completion of defects liability period. Performance Bond/Guarantee is not applicable in case of limited tenders of value less than Rs. 1 lakh.
Successful tenderer should invariably submit security deposit as per the provisions of the tender / contract. In case the contractor fails to submit the PBG despite of request for the same, the amount of SD to be recovered from his RA bills, however, this should not be done in routine manner. The full security deposit shall remain at the disposal of the Company as Security for the satisfactory execution and completion of the work in accordance with the provision of the contract.
28.10.3.2 Retention Money
All running on account bills shall be paid at 95% (ninety five percent) of work value. This 5% five percent) deduction as retention money will be the second part of security deposit. The amount so accrued shall be released after completion of maintenance/defect liability period.
Retention may be released against irrevocable Bank Guarantee from Nationalised / Scheduled Bank on its accumulation to a minimum amount of
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Rs.5.00 lac, subject to the condition that amount of any irrevocable Bank Guarantee except last one, if any shall not be less than Rs.5.00 lac.
The Bank Guarantee shall be valid for a minimum of defect liability/maintenance period plus 3months. Bank Guarantee is to be submitted in the standard prescribed form duly vetted by Finance and Legal Department of the GSL. It will stipulate that the Bank guarantee must be unconditional and should be encashable on presentation to the issuing Bank. A provision will be incorporated in the bank guarantee for exclusive jurisdiction of a Court at a location convenient to GSL for contesting legal cases arising out of encashment of the guarantee.
Before releasing the retention money, it is mandatory that the contractor has to take the completion certificate.
GSL shall have liberty to deduct/appropriate from the security deposit such sums as are due and payable by the contractor to GSL as may be determined in terms of the contract and the amount appropriated from the security deposit shall have to be made up by further deduction from the contractor’s subsequent on account bills, if any, so that the amount of S/D remains as per the Tender Conditions.
28.10.3.3 Refund of Security Deposit
The refund of security deposit shall be subject to GSL’s right to deduct/appropriate its dues against the contractor under the contract.
On completion of the entire work and certified as such by the Engineer-in- charge on passing of the final bill by the Civil Engineering Section, subjected to the condition
a) Any defect/defects in the work, if detected after issue of completion certificate is/ or rectified to the satisfaction of the Engineer-in-charge within the said period of defect liability/maintenance.
b) In the case of building work or other work of similar nature, the refund shall be made on the expiry of the said defect liability/maintenance or at the end of one full monsoon period i.e. June to September, whichever is later in point of time and any defects such as leakages such as leakages in roof, effloresces in walls, dampness, defects in drainage etc. should be rectified to the satisfaction of Engineer-in- charge.
28.10.3.4 Waterproofing Bank Guarantee
For works involving waterproofing, the contractor shall submit a separate Waterproofing Bank Guarantee in the prescribed format as mentioned in the conditions of contract of the tender document, in addition to performance bank guarantee stated above. The Waterproofing Bank Guarantee shall be valid for a period of 5 years from the satisfactory completion of waterproofing work and its amount shall be 10% of the total value of water proofing work or as mentioned in the tender conditions.
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28.11 SUSPENSION OF WORKS, TERMINATION OF CONTRACT, ARBITRATION & FORCE MAJEURE
Procedure for cancellation of order, Arbitration & Force Majeure shall be as per Procurement Manual chapter no: 26.15, APPENDIX-L (para 21) and APPENDIX-M (para 18) and 26.14 respectively.
28.11.1 Liquidated damages for delay
If the Contractor fails to complete the Works within the completion time period, the Contractor shall pay to GSL the relevant sum stated in the Contract Data as liquidated damages for such default for every day /every week as the case may be which shall elapse between the relevant time for completion and the date stated in the Completion Certificate except that the total payment shall not exceed the limit of liquidated damages (if any) stated in the Contract Data i.e 10% of the original contract price.
GSL may, without prejudice to any other method of recovery, deduct the amount of such damages from any monies due or to become due to the Contractor, either from the particular contract or other money what so ever available with GSL.
In the event of an extension of time being granted under the Contract, the amount due under the sub clause shall be re-calculated accordingly, and any over payment refunded. The payment or deduction of such damages shall not relieve the Contractor from his obligation to complete the Works or from any other of his duties obligations or responsibilities under the Contract.
28.12. VARIATION
Situations also may arise where variations have to be ordered on an existing contract to cater for changes required while the work is in progress, either due to technical requirements or due to user’s demands. Where the item of work thus ordered is contingent upon the work already entrusted to the contractor, the same should be ordered as a ‘Variation’ to the contract.
28.12. 1 Guidelines for Pricing of variation
Variations are to be priced in accordance with the conditions of the contract. These provide for the following order of precedence for pricing variations:-
a) Variations will be priced as Bill of Quantities rates where the items are already included in Bill of Quantities.
b) In respect of items not included in Bill of Quantities but where similar items are found in BOQ, the rates can be derived from the rates directly from Bill of Quantities items where such a direct variation is possible. or by analysis of rates as below and lower rate shall be considered.
Where the rates cannot directly be derived from Bill of Quantities the same will be worked out with reference to Bill of Quantities and standard Schedule of rates with contractor’s profit & overheads as applicable
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Where the above alternatives are not possible and rate is to be derived from standard schedule of rates and increased by the contractor’s profit & Overheads. In case the rate for extra item is to be derived by analysis of rate, the same shall be fixed by analysis on prevalent market rate of materials and labour involved based on standard norms of analysis Standard Schedule of Rates to be adopted from CPWD or GSR from Goa PWD or MPT SR and Market rates for items not covered in schedule of rates or rates from past data bank may also be considered.
c) Where it is not possible to derive the rate from the Standard Schedule of Rates, the same will be based on the actual cost to the contractor plus a profit and overhead. In this case, the contractor has to produce satisfactory evidence/vouchers as proof of expenditure.
In order to avoid disputes, it is essential that all deviation orders/ amendments issued to contractors are issued in writing; and the rates for the works so ordered are finalised at the earliest possible.
In case of any difference between the contractor and the Engineer In charge as to the fixation of rates the matter may be referred to Section Head in first place / HOD whose decision shall be final and binding on the contractor.
28.12.2 Part Rate
The payment of incomplete items of works is followed as specified in CPWD Manual.
28.13 AMENDMENTS
Where an item of work which is altogether new or is not contingent upon the work already entrusted to the contractor, or is likely to effect the scope of the contract substantially, is proposed to be ordered on the contractor, the same should be ordered through an "amendment" to the contract.
Amendments seeking to order fresh items falling beyond the scope of contract are to be treated as single tender contracts and require the approval of CFA at the appropriate level for the total value of the contract including amended works. The itemized increase will not generally exceed 100% of original quantity and also shall not exceed 100% of original contract value. In case where the rates do not exist, prior approval of CFA shall be taken to invite offer form the contractor (on single nomination basis) and price negotiation has to be held to justify the same. In case existing quantity is likely to increase beyond 100%, prior approval of functional director confirming that L1 position has remained unaffected due to such increase must be obtained provided overall increase in order value does not exceed 100% of original value taking in to account all amendments.
28.14 PAYMENT
The payment for work done will be made through RTGS /NEFT/ ECS as per the actual quantities of the work executed by way of running account bills per item
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basis (R. A. R). The bills must be submitted as specified in the contract along with the joint measurement taken at site with the designated representative of civil section or OIC.Any exceptions to the payment mode as specified above require approval from competent authority.
28.14.1 Running Account Bills
The contractor’s bill is to be prepared in the Bill Forms by the person recording the measurements. Before passing a contractor’s bill for payment, the bill is being checked and pre-audited by the Finance Section as per the provisions of the respective contracts and standard practice. The accounts checking is done after the technical checking .by Engineer in charge of the work.
28.14.2 The Finance section will thereafter carryout checking of quantities, rates, amounts of respective items, rate and quantities of recoveries on account of stores of stores issued, hire charges and deduction towards S.D., Taxes and duties as applicable.
28.14.3 The Finance section will prepare the memo of payment in M.B. and Bill Form and pay-order and release the necessary payments due to the contractors.
The stage involved for preparation and payment of Contractor’s Bill would be as under:-
a) Signature of Civil Asst. (C)/ DJE /Supervisor in MB’s, on required pages recording measurements, abstract of bill & the duly filled in bill form.
b) Signature of Engineer in charge of the work with appropriate check measurements in MB’s & the bill form.
c) Signatures of Section Head and HOD are to be recorded as a token of acceptance for payment of the bill.
28.14.4 Payment in respect of materials collected at site other than that supplied by GSL and if specifically & explicitly mentioned in tender documents with prior approval, the same will l be authorised only by the Engineer-in-charge certifying that:
a) The stores have physically been brought to site for incorporation in the work;
b) The stores are required for the work;
c) They have been stored satisfactorily and are not likely to deteriorate in stock; and
d) They have been valued at rates not higher than the current market rates.
28.14.5 Payment in respect of work done will be based on a certificate from the OIC as to the value of work done. The certificate should be supported by a bill from the contractor indicating the quantities of work done and the rates adopted for valuation of the work or percentage of work.
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While making running account payment, the following deductions be made:
a) All previous running account payments;
b) Cost of stores issued by GSL, if any.
c) Charges for electricity and water supplied by GSL as stipulated in contract.
d) Balance mobilisation advance with interest recoverable from the contractor, if any; and
e) Any other dues recoverable by GSL from the contractor under the present or any other contract.
28.15 PRICE ADJUSTMENT CLAUSE
No Price escalation/variation clause is included in the tenders however for special works the same may be included as per CPWD works manual on approval from competent authorities.
28.15.1 Increase or Decrease of Quantities and Cost
In any running work, modification of original plans to suit ground realities becomes often necessary. These modifications in turn affect the original schedule of quantities appended to the agreement.
The right is reserved by GSL at any time during which the contract is in force, to make such alterations, in the plans or the quantities of the work as may be necessary. Such alteration shall be ordered in writing by the Engineer-In- Charge after approval from competent authority. Further, the quantities of any items of work may vary from the quantities indicated in the schedule of work due to unforeseen or other conditions. Alterations in quantities shall not be considered as a change in the conditions of the contractor nor invalidate any of the provision thereof.
However, such deviation in quantities or total amount in a particular contract shall be dealt with as under:
a) Upto 10% deviation, approval should require of next higher authority but total amount should be within the power of the next higher authority.
b) in case of Board being the original sanctioning authority power for approval of the revised estimate beyond10%should be put up to Board for approval.
c) in case of deviation of more than 10% in respect of individual items in item rate contracts and if the Revised Estimate value remains within or equal to the Agreement Value/Work order value, only technical sanction of HOD or competent authority will be enough for such revised estimates.
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28.16 MEASUREMENT
Measurements of only completed work/portion of work should be recorded in measurement Book.
The location of measurement should be described so as to facilitate their easy identification.
All work shall be measured net in the decimal system subject to the tolerances specified unless otherwise stated. IS 1200 shall be referred to the relevant parts for the method of measurement of works.
28.16.1 Measurements for Inadmissible Items
In case of items which are claimed by the contractor but are not admissible according to the Department, measurements should be taken for record purpose only and without prejudice so that in case it is subsequently decided to admit the contractor’s claims, there should be no difficulty in determining the quantities of such work. A suitable remark should however, be made against such measurements to guard against payment in the ordinary way.
As measurement forms the basis of payment; prompt measurement of work done and simultaneous recording thereof is of paramount importance. The following general instructions will be observed in addition to any other requirements that may be prescribed by the conditions of the contract:
Recording of measurements by the technical staff & check measurements by the officers are important aspects of executes of any civil engineering work. Proper recording of measurements, check measurements. The following instructions should be strictly followed to avoid possible tampering of measurements:
a). The entries in the measurement books are made in ink and no line shall be left blank. Any blank page left between shall be crossed and attested by the concerned officers. All corrections in the MB should be attested by the Contractor’s representative and the respective supervisor or OIC.
b) The “Contents or area” column shall be filled before check- measurement and the check measuring officer as a rule shall see that the “Contents or area” column is duly filled in ink by the staff who recorded the measurements.
c) The recording shall be consistent and generally in the sequence of length, width & height or depth or thickness.
d) The location of work should be clearly described so as to facilitate their easy identification and checking.
e) The method of measurements shall be as per I.S.1200 and relevant parts shall be referred to for different works.
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As all payments for work of supplies are based on the quantities recorded in the M.B., it is incumbent upon the person taking the measurements to record the quantities clearly and accurately. He will also be responsible for the correctness of the entries in the column “Content” for the measurements recorded by him. If the measurements are taken in connection with a running contract account on which work has been previously measured, he is further responsible to ensure (1) that reference to the last set of measurements is recorded and (2) that if the entire job or contract has been completed, the date of completion is duly noted in M/B if the measurements taken are the first set of measurements on a running account, or the first and final measurements, this fact should be suitably noted against the entries in the measurement book and in the later case the actual date of completion shall be recorded.
28.16.2 The check measurement by the Supervisor/ Officer In charge shall be as per the norms given below:
a) All M.B’s at the issue office should be serially numbered. Each new M.B. should be checked and certified by the EIC/Designated Officer In charge that the same contain so many printed pages and issued to the concerned technical staff.
b) Measurements shall normally be recorded by the Supervisor concerned directly in the M.B. Measurement may also be recorded by a designated Engineer irrespective of rank.
c) All the measurements for concealed items (reinforcement, earth work, foundation work etc.) shall be directly entered in the measurement book & check measurement for the same should be done by the Supervisor/OIC.
d) Officers making check measurement shall record at the end of the measurement in the MB, the items and the pages check measured by them with dated signature.
28.16.3 Acceptance of Measurement & Check Measurement
In order to avoid disputes, it is essential that the contractor signs in token of his acceptance of measurement as well as check-measurement of materials supplied or work performed. The date of measurement or check measurement should therefore be initiated to the contractor in advance requiring him to be present at the site of the work for the purpose of attending the measurement or check measurement.
If the contractor accepts the measurement of check measurement he should certify his acceptance on the last page of the set of measurements by recording “measurements acceptance” with his dated signature. If the contractor is not present in spite of reasonable notice, the officer shall proceed with the measurement or check measurement and the contractor’s acceptance should be obtained as soon as possible. In case of disagreement, the Section head should himself inspect the work, perform such
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check measurements as are necessary, and his decision will be binding on the contractor.
Measurements can also be recorded through E.computerised Measurement Books as per the procedures of CPWD for a thresh hold value of contracts as approved by the management from time to time.
28.17 TAKING OVER CERTIFICATE
As soon as the contractor completes the work assigned to him the same will be inspected and if found satisfactory will be taken over by the Engineer-in- charge. A `Completion certificate’ will be issued to the contractor.
a) Particulars of the work and contract number;
b) The date of work order to commence the work;
c) Date of completion as per original contract agreement;
d) Extension of time, if any granted,
e) Date on which contractor was required to complete the work;
f) Actual date of completion and taking over by GSL; and
g) Completion drawing of the structure as finally constructed (including layout plan of all services) in case of new constructions.
h) If there are very minor defects which can be rectified even after the building / work has been taken over the defects will be listed out in the completion certificate and the contractor will be asked to rectify the same before the final bill is submitted.
A copy of the “Completion/Taking over certificate” should be attached to the final bill.
28.18 FINAL BILL
a)On completion of the work and recording of all measurements, a final bill will be presented by the contractor on the Performa prescribed within one month. To enable the contractor to do so, the Engineer-in-charge will furnish to him necessary statements showing recoveries to be made on account of stores issued, hire charges for tools and plant supplied, charges recoverable for electricity and water consumed etc.
b) On receipt of the final bill duly signed by the contractor, the same will be scrutinized by the Engineer-in-charge to see that the claim is in order..
c) The final bill duly signed by the Engineer-in-charge will be submitted along with all Measurement Books to Accounts section and arranging payment.
In case of final bills the following additional aspects are to be seen and checked:
i) Work completion certificate.
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ii) Clearance of ESI/PF certificates
iii) Certificate of leak proofness/ waterproofing of building roof or similar structure and certificate in respect of the fact that 6 months or one full monsoon has passed after completion of the construction of building/ structure or bridge etc. and that the defects if any has been rectified. This Certificate will be required only if the final bill is presented after expiry of the defect liability period.
iv) Registration under Service tax if applicable
v) It should be ensured that the revised estimate regularising the variation in quantities and / or extra items executed and the extension of time of completion etc. have been sanctioned by the competent authority.
vi) It should be ensured that a complete list of materials issued to the contractors against the particulars of recoveries already made from the on account bills is enclosed with the final bill.
vii) It should be ensured that all recovery on account of hire charges, electricity, water supply etc. are fully made.
28.19 SITE RECORD
The OIC of the work will maintain a “Site Order Book” for each contract in which he will record all orders on the contractor for commencement of work, deviation, stopping of work and the contractor should be required to note these instructions and sign in token thereof. Any objections raised by the contractor should be promptly attended to and resolved without any delay.
a) A Site order Book is a register duly certified by the OIC regarding number of pages it contains, each page being numbered. Name of work, name of contractor, reference of contract/work order etc. and the aforesaid certificate should be recorded on its first page.
b) The complaisance shall be reported by the contractor to the OIC or his authority representative in time so that it can be checked and recorded.
c) The Order Books should invariably be consulted at the time of preparation of running account bills and final bill of the contractor.
d) The Engineer-in-charge or his representative(s) shall also maintain the following site registers / documents in order to control the quality of works as per relevant specifications and also to ensure passing of materials / works at appropriate stage, as per the terms of contract:
i) Works diary and site order book.
ii) Works passing Register / Material Passing Register.
iii) Cement & cube test Register.
iv) Hindrance register: For works costing more than Rs.10Lakhs and duration of work not less than 4 months.
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v) Any other Register prescribed by HOD.
Note: Works passing Register / Material Passing Register will not be required if the material is not separately paid for by GSL
28.20 INSPECTION OF WORKS
a) The contractor shall either himself supervise the execution of the works or shall appoint a competent agent approved by the Engineer-in-charge to act on his behalf where the contractor is not a qualified Engineer or even if he is qualified, in the opinion of the Engineer-in-charge the contractor has himself not sufficient knowledge and experience of receiving instructions or cannot give his full attention to the works, the contractor shall at his own expense, employ as his accredited agent a qualified Engineer approved by the Engineer-in-charge. Orders given to the contractor’s agent shall be considered to have the same force as if these had been given to the contractor himself. If the contractor fails to the appoint a suitable agent as directed by the Engineer-in-charge, the Engineer-in-charge shall have full powers to suspend the execution of the work until such date a suitable agent is appointed and the contractor shall be held responsible for the delay so caused to the works.
b) All works shall be subject to examination and be approved by the Engineer- in charge. No work shall be covered up or put out of view prior to such approval and the contractor shall give due notice to the Engineer-in-charge or his authorised Representative, whenever any such work is ready and the Engineer-in-charge or his authorised representative shall, without unreasonable delay, attend for the purpose of examining such works.
c) In the event of the failure of the contractor to give such a notice, he shall uncover any part of the works and/or make openings in or through the same as the Engineer-in-charge may direct for his verification and shall make good such part to the satisfaction of the Engineer-in-charge at contractor’s expense.
d) If any such part covered up or put out of view after being approved by the Engineer-in-charge, is required to be uncovered subsequently, the same shall be done by the contractor. If it is found on uncovering, the work was executed in accordance with the contract, the expenses of uncovering and/or making opening in and making good the same shall be borne by GSL.
28.20.1 Final Inspection
The Engineer-in-Charge shall make final inspection of all work included in the contract/work order or any portion thereof or any completed structure forming part of a Project as soon as practicable after notification by the contractor that the work is completed and ready for acceptance. If the work is not acceptable to the Engineer in Charge at the time of such inspection, he shall inform the contractor in writing as to the particular defects to be rectified before final acceptance can be made.
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28.20.2 Devaluation of Work
In lieu of rejecting a work done or materials supplied not in conformity with the contract/work order, the Engineer-in-charge may allow such work or materials to remain with the approval of Section head, provided the Engineer-in-charge is satisfied with the quality of such materials or the strength and structural safety of the work and in that case he shall make such deduction for the difference in value as in his opinion may be reasonable with the approval of Section head.
28.20.3 Defects appearing after acceptance
Any defects which may appear within the defect liability period and arising in the opinion of the Engineer in Charge from lack of conformance with the drawings. And specifications, shall, if so required by the Engineer in Charge in writing be rectified by the contractor at his own cost within the time stipulated by the Engineer in charge. If the contractor fails to comply, the Engineer in Charge may employ agencies to rectify the defects and recover the cost thereof from the dues of the contractor.
28.21 OVERPAYMENTS / UNDERPAYMENTS
a) GSL reserves the right to carry out post-payment checks of the Running / Final bill including all supporting vouchers, abstracts etc., GSL further reserves the right to enforce recovery of any overpayment when detected, notwithstanding the fact the amount of the running/final bill may be included by the one of the parties as an item of disputes before an arbitrator appointed and notwithstanding the fact that the amount of the running/final bill figures in the arbitration award.
b) If, as a result of such checks any overpayment is discovered in respect of any work done by the contractor or alleged to have been done by him under the contract, it shall be recovered by the Company from the contractor or if any underpayment is discovered, the amount shall be duly paid to the contractor by GSL.
c) Provided that the aforesaid right of the company to adjust over-payments against amounts due to the contractor under any other contract with GSL shall not extend beyond the period of two years from the date of payment of the final bill or in case the final bill is a minus bill, from the date of the amount payable by the contractor under the minus final bill is communicated to the contractor.
28.21.1 Guidelines (Quality Assurance)
All works to be carried as per the Quality assurance provisions specified in the tender.
28.21.2 Removal of Improper Work and Materials
The Engineer in Charge or his representative/supervisor shall, during the progress of the works, have to order in writing from time to time.
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a) The removal from the site of any materials which in the opinion of the Engineer, are not in accordance with the Contract/work order.
b) The substitution with proper and suitable materials.
c) The removal and proper re-execution, notwithstanding any previous test thereof or interim payment therefore of any work which in respect of materials or workmanship is not in accordance with the contract.
d) In case of default on the part of the contractor in carrying out such order, the engineer shall be entitled to employ and pay other agency to carry out the same and all expenses consequent there upon shall be recoverable from the contractor or may be deducted from any amount due or which may become due to the contractor.
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CHAPTER – 29
SUPPLIERS EVALUATION
29.1 PURPOSE
The purpose of evaluation is to review the performance of suppliers against various contracts awarded to them and to retain the dedicated ones and weed out delinquent suppliers. This evaluation shall be an ongoing process. The inputs for analysis may be drawn from BaaN system, which contains relevant data such as price, delivery, inspection etc. The data on quality and service may be fed into the system based on inputs received from user dept. and contracting dept. Supplier Rating system module will compute these data to furnish the overall rating of the suppliers.
29.2 RATING SYSTEM
The following attributes shall be considered for evaluation of performance.
a. Price b. Delivery c. Quality d. Inspection e. Service
29.3 WEIGHTAGE FACTORS
Each of the above attributes shall have the following weightages:
Attribute Maximum Weightage
a. Quality 20 b. Delivery 30
c. Price 20 d. Inspection 20 e. Service 10
Total 100
Where the service attribute is not applicable, this weightage of 10 shall get added to delivery weightage and it shall become 40.
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29.4 QUALITY POINT AND RATING
Quality Point (QP) shall be determined on whether the supplier is having ISO Certification and / or inspection accreditation by Surveyors like IRS, ABS, LRS, DNV etc wherever applicable. An item which does not involve Surveyors Accreditation shall get full 100 points for ISO Certification. An overseas supplier shall get equivalent of ISO or international certification. However, where Surveyors Accreditation is also involved, ISO certification shall receive 60 points and the Accreditation shall receive 40 points. The firms who deployed certified welders on the contracted job shall also be eligible for the 40 points. The input on the QP shall be provided by the concerned tendering officer based on the documents available with him. The Quality rating (QR) shall be
Quality Rating (QR) = Quality Point (QP) x 0.20
29.5 DELIVERY POINT AND RATING
The Delivery Point (DP) shall depend on meeting the contracted schedule of supply. The following points shall be allotted while determining DP.
No of months goods delayed in Delivery Point(DP) delivery beyond contractual delivery month
Same month 100
Next month 75
2nd month 40
3rd month 20
Beyond 3rd month 0
Percentage of part supply made during any particular month shall get proportionate DP. In the case of staggered delivery schedule, delay against each schedule shall be reckoned and proportionate DP shall be allotted. For the purpose of determining contracted delivery month, the amendments issued on delivery dates shall also be considered. The Delivery Rating (DR) shall be
Delivery Rating (DR) = Delivery Point (DP) X .30
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29.6 PRICE POINT AND RATING
Price Point (PP) shall depend on how many times a supplier is able to offer the L-1 price.
No. of times offered L-1 price x 100
Price Point (PP) = ------
No. of times participated in the bidding
Price Rating (PR) = Price Point x .20
29.7 INSPECTION POINT AND RATING Inspection Point (IP) of a firm shall depend on number of inspections required for acceptance of items against each order. For the purpose of determining IR, only the inspections carried out at GSL shall be considered. It shall be determined as follows: Acceptance of items Inspection Point ( IP)
In the first inspection 100 In two inspections 60 In three inspections 30 Beyond three inspections 0 Inspection Rating (IR) = Inspection Point (IP) x .20
29.8 SERVICE POINT AND RATING
The Service Point (SP) shall be based on the quality, promptness, and flexibility of service provided. It shall be allotted as follows:
Attributes Service Point( SP)
Quality 40 Promptness 40 Flexibility 20 Total 100 Service Rating (SR) = Service Point (SP) x .10
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29.9 FINAL RATING
The overall rating shall be sum of all above ratings. The suppliers may be graded based on the overall rating as follows:-
a. 81-100 Excellent b. 61-80 Good c. 51-60 Fair Poor. To be kept on the ‘watch list’. If no improvement is found in 2- consecutive d. 26-50 reviews, they may be referred to Supplier Holiday Committee. To be referred to the Supplier Holiday e. 0-25 Committee.
29.10 REVIEW The suppliers’ evaluation shall be done every year. The result of evaluation may be communicated to the suppliers so that they may improve on their performance. Approval of Functional Director shall be obtained for changing the weightages on any of the attributes. *****
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CHAPTER – 30 DELINQUENT SUPPLIERS
30.1 VENDOR HOLIDAY
Delinquent suppliers shall be put under Vendor holiday for a specified period by “Standing Committee for Vendor Holiday” and the committee shall assess the time period of holiday on case to case basis in the following instances.
a. In situations other than force majeure, wherever applicable.
i. If he withdraws from the procurement process after opening of financial bids or after being declared the successful bidder. (In such case, Vendor holiday for a period of three years).
ii. If he fails to enter into procurement contract or fails to provide performance security or any other document or security required in terms of the bidding documents after being declared as successful bidder.
b. In case of litigation.
c. Due to poor performance.
d. Firm has no longer the earlier assessed technical staff or equipment.
e. Violation of the terms & conditions specified during bidder registration and the contractual obligation if any.
f. Poor vendor rating.
g. False declaration either to GSL or to any other Government Department or Agency.
h. Continuous Lack of response.
i. Firm ceases to exist or becomes bankrupt.
I Firm has been acquired by or merged with another firm and there is no clarity in honoring the contractual obligations against the orders placed by GSL.
j. Firm switched over to other sector of business operation and there is no clarity in honoring the contractual obligations against the orders placed by GSL.
k. Firm has breached the code of conduct stipulated in Chapter 29.
l. Firm has been debarred by CVC or by other Govt. institutions or other DPSUs and the relevant written information is available in GSL.
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30.2 STANDING COMMITTEE
In line with MOD’s directive, as per Minutes of Meeting dtd. 27 Jul 07, promulgated vide MOD ID No. 9(1)/2007/D(SY), dated 25 Oct 07, the following committee shall be constituted to assess periodically the quantum of 'Vendor Holiday' to be imposed on delinquent vendors:
a) CGM (Senior most) Chairman From Technical Stream
b) HOD (F) Member
c) HOD (Plg/SR&GES/ Member HOD from Vendor Holiday recommending Dept. Comm/SMP)
d) HOD (TS) Member
e) HOD (QA&MR) Member
f) Dealing officer Member From Vendor Holiday Secretary recommending Dept.
g) Rep - IHQ(N) Member In case of IHQ (N) nominated/recommended/ empanelled vendors only.
h) Rep – DQA (WP/N) Member - do –
i) Rep – CGHQ Member In case of CGHQ nominated/ recommended/ empanelled vendors only.
30.3 TERMS OF REFERENCE:
a. To examine on a case to case basis the performance of delinquent vendors based on both the past performance and current deficiencies, which have been noticed in execution of the present order.
b) To ascertain response of the vendor and possible reasons as to why the situation has arisen.
c) To verify if the firm have indulged in quality compromises.
d) To check gravity of failure or failure in the product support.
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30.4 PROCEDURE
The dealing officer from the concerned department shall put up a proposal to the Standing Committee for putting any delinquent vendor on Vendor Holiday, for which, the following inputs would be necessary for consideration :
a) External factors contributing to defaults by the vendor.
b) Availability of other vendors in the Vendor Registration List
c) Availability of other vendors indigenously and overseas.
d) Pre-requisites of GSL/IHQ, MOD (N)/CGHQ to develop alternate source.
e) Void of competition.
f) Any other factor requiring consideration.
The committee shall meet once every quarter on need basis and address all cases, which may have arisen in the past 3 months. Each case shall be examined based on past records of performance. The complaint shall be analyzed to assess the nature of delinquency and corrective measures taken by vendor to rectify the same. It shall also study whether the vendor is a habitual defaulter or not. A fair opportunity must be given to vendors to present their case either through direct interaction or through correspondence. The gravity of the case shall determine the disciplinary measures required to be taken.
(As Amendmed in line with CMD memo No. CMD/39/2017 dated 11.10.2017
30.5 PROCEDURE FOR LEVY OF FINANCIAL PENALTIES AND / OR SUSPENSION /
BANNING OF BUSINESS DEALINGS WITH DELINQUENT ENTITIES
1. General Terms
1.1 "Entities" includes companies, vendors, contractors, societies, MSEs as well as an individual and their associations with whom Goa Shipyard Ltd., has entered into, or intends to enter into, or could place orders on/enter into contracts or agreements for the procurement of goods and services.
1.2 All firms/companies that come within the sphere of effective influence of the entities shall be treated as its allied firms. In determining this, the following factors shall be taken into consideration: -
(a) Whether the management is common or the majority interest in the management is held by the partners or directors of the entities.
(b) Majority shares are owned by the entity, their directors/shareholders and by virtue of this it has a controlling voice.
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2. Grounds for Levy of Penalties and / or Suspension / Banning. The grounds for levy of financial penalties and/or suspension/banning of business dealings with an Entity shall be as follows: -
(a) Violation of Pre-Contract Integrity Pact (PCIP) (where such PCIP(s) is entered into between the Goa Shipyard Ltd and entity for the threshold financial limit of order/contract prescribed vide CMD memo no.18/2014 dt.10.04.2014 or as applicable based on amendment to the memo, if any, from time to time.
(b) Resort to corrupt practices/ unfair means / illegal activities during any stage of bid/order/contract to secure an order/ contract, even in cases where PCIP is not mandated.
(c) Violation of Standard Clause(s) in the contract of agents/agency commissions.
(d) If national security considerations so warrant.
(e) Violation of Code of Integrity as per chapter 32 of GSL Procurement Manual.
(f) Any other ground for which the competent authority may determine that suspension or banning of business dealings with an entity shall be in the public/GSL interest.
3. Applicability
3.1 The proceedings for Levy of Financial Penalties and / or Suspension / Banning of Business Dealings will be applicable on entities seeking to enter into contract with / having entered into a contract for the procurement of goods and services to GSL, within the ambit of Procurement Procedures laid down in GSL Procurement Manual 2014 and amendments thereafter. Those orders/contract(s) for procurement/services, in connection with which business dealings with an entity are suspended, will be held in abeyance. However, other orders/contracts involving such entity shall continue unless a decision to the contrary is taken by the competent authority, on a case by case basis.
3.2 The effect of Banning & Suspension on case, at different stages of procurement is as follows:
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(a) L1 Not Determined. Case will be progressed after excluding the bid of the entity with which the business dealings are banned. In case there are only two bidders, one being the entity with which business dealings is banned; the procurement will be progressed as per extant provisions of GSL Procurement Manual after excluding such an entity.
(b) L1 is Determined. Any on-going procurement process where the lowest bidder is an entity with which the business dealings are banned, will be terminated and fresh procurement process, if required, may be initiated.
(c) If banned entity is a firm other than L1 then the case will be progressed and the banned entity will be intimated regarding the ban from participating in future tenders till the expiry of ban period.
3.3 Orders of banning of business dealings with an entity may be extended to its allied firms also by specific order of the Competent Authority.
3.4 Any employee or agent of an entity with which business dealings are suspended or banned and who is involved in a case of alleged impropriety for which investigation or judicial proceedings is in progress, will not be allowed to engage in any bid process in any capacity with the Goa Shipyard Ltd., even after the expiry of the period of suspension / banning of business dealing with the entity. 3.5 If it becomes necessary on grounds of national security and operational preparedness / export obligations, to deal with an entity with which business dealings have been suspended or banned, in a procurement process and which is the only source that can supply/manufacture an equipment / weapon systems, the Competent Authority will be approached for approval of issuance of tender or conclusion of order/contract with such an entity.
4. Show-Cause Notices. Before issuing the order of Levy of Financial Penalties and / or Suspension / Banning of Business Dealings with an entity, it is necessary to give show-cause notice to the entity explaining the grounds for the proposed action and providing an opportunity to the entity to explain its case. The show-cause notice shall contain the following:- (a) The reason for the proposed action and the grounds relied upon. (b) That, the entity should submit its response in writing within 30 days after the receipt of the Notice.
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Draft Show Cause notice may be vetted by Legal Section, if required. In case no reply to show cause notice is received within stipulated time, action against the concerned entity .shall be initiated by the concerned procurement section ex-parte.
5. Competent Authority Particulars Suspension Banning Financial Penalty Grounds Listed in Para Listed in Para (i) Underperformance / non 2 2 performance of contract (ii) Violation of PCIP under GSL Procurement Procedure Competent Chairman & Chairman & Functional Director for Sr (i) above Authority Managing Managing CMD for Sr. (ii) above Director Director
6. Procedure for Initiating Penal Action and Suspension of Business Dealings
6.1 On receipt of information regarding allegations or facts on the basis of which it is proposed to suspend business dealings with an entity, the Competent Authority may constitute a Committee to further examine the facts and make recommendation for suspension or otherwise.
6.2 A review of order of suspension shall be undertaken before expiry of the period specified therein or within six months of the issue of such order, whichever is earlier. The concerned procurement section shall examine the case for review and submit the proposal for extension or revocation of suspension order or otherwise, to the Competent Authority for consideration and appropriate decision.
6.3 The Competent Authority may constitute a Committee to further examine and make recommendation for extension or revocation of suspension or otherwise. Such Committee shall be headed by HOD (Procuring Dept).
6.4 Similar procedure as mentioned above shall be followed for subsequent reviews on six monthly basis and the order of revocation or further extension of the order of suspension shall be issued before the expiry of the order of suspension in vogue, with the approval of the Competent Authority.
7. Banning of Business Dealings
7.1 It is not necessary to first suspend the business dealings with an entity before initiating the proceedings for banning of business dealings with an entity.
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7.2 The written response to the Show cause notice, if any, shall be examined by the Standing Committee as per para 30.2 of GSL Procurement Manual. For the purpose of the examination, the Standing Committee shall call for all related files and documents from concerned Procuring Officer. The Standing Committee may also seek the advice or comments of (Finance) and/ or Legal section of GSL.
7.3 After examination of the written response and on receipt of recommendations from the Standing Committee, the concerned Procuring Officer shall submit the proposal for banning of business dealings or otherwise to the Competent Authority for consideration and appropriate decision.
7.4 The order of banning of business dealings with an entity shall be issued for such specified period as the Competent Authority may deem fit. The period of banning of business dealings with an entity for grounds specified in para 2 (a ) to (e ) above shall not be less than five years and not more than ten years.
7.5 If in the view of the Competent Authority, the grounds for action are such that continuation of business dealings with the entity would be detrimental to public / GSL interest (Para 2 (f) above) then, the period of banning of business dealings with an entity shall not ordinarily exceed three years. 7.6 The period of Banning of business dealings with an entity will be inclusive of period of suspension of business dealings with an entity, if any, for the same cause of action.
7.7 ln exceptional cases and those involving national security considerations, the competent authority may order a longer period of banning of business dealings with an Entity, as deemed appropriate.
8. Order for Suspension/Banning. The order of suspension / banning of business dealings with an entity will be issued by the Head of concerned Procurement department. The order shall contain the facts that the decision has been taken after the issuance of show cause notice and consideration of representation of entity, if any, in reply thereto. Such order shall be communicated through Vigilance HOD to all other Department of GSL
9. Maintenance of Records. The complete record/register, including show-cause notices to such entities and their replies shall be maintained by the concerned Procuring Department.
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CHAPTER – 31
FILE RETENTION PERIOD
31.1 CLOSURE OF PROCUREMENT FILES
On completion of all activities against a contract, the purchase file preserved in the record room may be destroyed after expiry of applicable mandatory retention period with the approval of the competent authority. The records relating to procurements shall be maintained during the relevant period for reference as and when required. Duration of preservation of records shall be, as given below:
Category Definition of Records Duration of Preservation
Documents that pertain to 10 years or till the procurement of high value completion of ongoing Vital goods and services costing litigations or enquiries, if more than Rs 50 Lac. any, whichever is later.
Minimum 3 years after Documents that pertain to completion of project. In procurement of goods costing non-project nature of Important less than Rs 50 lacs but above Rs procurements, 5-yrs after 5 lacs. complete execution of order in all respects.
6 months after completion of project or 3- years, in Documents pertain to case of non-project nature Useful procurement less than Rs 5 lacs. of procurements, after complete execution of order in all respects.
Receipt documents like unsolicited letters which are not relevant to any bid document issued but excluding complaints, unwanted 6 months after completion catalogues, intimation of Non Essential of activity or receipt business exhibition etc that whichever is later. have predictable value to the organization, preservation of which would serve no useful purpose in future to the organization.
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Documents pertaining to vendor registration shall have to be preserved all the time. If required, they may be stored in the electronic mode. Vital and important documents may also be preserved in the electronic mode. Directives received from Govt., orders issued by CMD, Directors and HODs shall be preserved for all time to come. Procurement manuals of past and present shall be preserved for reference. Documents pertaining to litigation, CAG query, insurance claim etc shall be preserved up to 3-yrs after the settlement of the case.
31.2 Filing System
The procurement files are important and sensitive documents. The pages of the files shall be numbered and files stored in a filing cabinet under lock and key arrangements. Vendors who come for discussions shall not be permitted access to any of these documents. Every filing cabinet shall have a list of files contained in the cabinet and this list shall be pasted outside of each filing cabinet. In case of loss of any file, it shall be reported to the concerned officer immediately. After opening part I of tender covers, in the case of two bid system, the manual / offline price bids shall have to be in the custody of HODs till it is opened. A register shall have to be maintained to account for price bids in the custody at any point of time.
31.3 e-PROCUREMENT DATA
Disaster Recovery System (DRS) shall have to be in place for all electronic data that are being processed. The back ups are to be done on periodical basis. Needless to mention that the system shall have adequate Fire walls, Intrusion Preventive System, Intrusion Detection System etc. The backup discs shall be assigned name or number or both for easy retrieval.
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CHAPTER – 32
CODE OF INTEGRITY
32.1 CODE OF CONDUCT FOR PROCURER AND BIDDER
The code of integrity for a procurer and a bidder shall include prohibition of the following:
(i) Making offer, solicitation or acceptance of bribe, reward or gift or any material benefit, either directly or indirectly, in exchange for an unfair advantage in the procurement process or otherwise to influence the procurement process. (ii) Any omission, or misrepresentation with intent to mislead or attempt to mislead so that financial or other benefit may be obtained or an obligation avoided. (iii) Any collusion, bid rigging or anti-competitive behavior with an intent to impair the transparency, fairness and the progress of the procurement process. (iv) Improper use of information provided by the procuring officer to the bidder with an intent to gain unfair advantage in the procurement process or for personal gain. (v) Any personal, financial or business transactions between a bidder and any procuring officer, directly or indirectly. (vi) Any coercion or any threat to impair or harm, directly or indirectly, any party or its property to influence the procurement process. (vii) Obstruction of any investigation or auditing of a procurement process. (viii) Disclosure of conflict of interest. (ix) Non-Disclosure by bidder of any previous transgressions made with any procuring authority in any country during the last three years or of being debarred by any other procuring authority.
(As Amendmed in line with CMD memo No. CMD/39/2017 dated 11.10.2017
32.2 LEVY OF FINANCIAL PENALTY
1) Financial penalties may be levied as provided for in the PCIP and / or the Contract/Purchase Order which may be governed under the extant provisions of the GSL Procurement Manual.
a) In cases involving non performance or under performance of contract, the PBG shall be invoked as per specific provision of the contract/Purchase order apart from other actions including cancellations of the contract/purchase order.
b) In cases involving violation of PCIP, apart from other actions including cancellation / rescinding of concerned or all Contracts, any one or all of the following actions can be taken towards levying financial penalty:-
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i) Forfeiture of the PBG / Performance-cum-Warranty Bond either fully or partially.
ii) Recovery of all sums already paid by GSL. In case of an Indian Bidder with interest thereon at 2% higher than the prevailing Base Rate of SBI and in case of a Bidder from a country other than India with interest thereon at 2% higher than the LIBOR. If any outstanding payment is due to the Bidder from GSL in connection with any other contract for any other stores/ Services, such outstanding payment could also be utilized to recover the aforesaid sum and interest.
iii) Encashment of the advance bank guarantee and Performance-cum Warranty Bond if furnished by the Bidder, in order to recover the payments, already made by GSL, along with interest.
iv) Recovery of all sums paid by Bidder(s) to any Agent or broker, in violation of this Pact, with a view to securing the contract.
The proceedings for levy of financial penalty shall be under the specific clauses of the PCIP and / or Contract and show-cause notice (if required) / orders letters for invoking Bank Guarantees etc may be vetted by GSL Legal Department.
2) The orders for imposing financial penalty shall be issued with the approval of Competent Authority.
3). Standing Committee.The standing committee shall be as per Para 30.2 GSL Procurement Manual.
4) Display on Official Website of GSL. An updated list of entities with which business dealings have been suspended or banned by the competent authority and/or against which financial penalties have been imposed shall be maintained on the official Web-site of Goa Shipyard Ltd. However, such notice shall not be required in cases where an entity has already accepted the misconduct related to any of the grounds enumerated at Para 2 above or under/non performance of contract.
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32.3 PUNISHMENT FOR PROCURER
If an officer involved in the procurement process accepts or agrees to accept or obtains or attempts to obtain from any person, for himself or for any other person, any gratification or any valuable thing without consideration or for a consideration which he knows to be inadequate, in connection with any procurement, as a motive or reward, for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official duties, favours to any person or, rendering or attempting to render any service or disservice to any person shall be punishable in accordance with the relevant Service and Conduct rule. In all cases of commission and omission by a tendering officer, due consideration shall be given if it was done in good faith or intended to do in accordance with the Procurement Manual or without any malafide intention.
32.4 INTERFERENCE WITH PROCUREMENT PROCESS
Whoever,
(a) Interferes with or influences any procurement process with the intention of securing any wrongful gain or undue advantage for any prospective bidder or bidder; or (b) Interferes with the procurement process with the intention of causing any unfair disadvantage for any prospective bidder or bidder; or (c) Engages in any action or lobbying, directly or indirectly, with the objective of unduly restricting fair competition; or (d) Influences any procuring entity or any official thereof or wilfully or fraudulently makes any assertion or representation that shall restrict or constrain fair competition in any procurement process; or (e) Engages a former tendering officer as an employee, director, consultant, adviser or otherwise, within a period of one year after the former officer was disassociated with a procurement in which the employer had an interest; or (f) Engages in any form of bid-rigging, collusive bidding or anticompetitive behavior in the procurement process; or (g) Breaches confidentiality for any undue gain, shall be punishable in accordance with the relevant rules and laws
32.5 INTEGRITY PACT
Applicability of Integrity Pact with the firms to be as per CMD Memo no CMD/21/2012 dtd. 06.08.2012.
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