A Beginner’s Gui= de

for<= /p>

Finance Member

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Stores Tender Cases

Dr.C. Surya Lakshmi

Sr. Asst. Financial Ad= viser (Stores Finance)

E.Co.Rly., Bhubaneswar

Prologue:

&nbs= p; &= nbsp; This does not proclaim itself to be a magnum opus on the subject. It is b= ut a beginner’s effort to ensure that basic requirements are not lost in t= he ocean current of Stores procurement. Fine-tunning is invariably required to suit the specific requirement of a particular case. Please read on to find = the basic job to be done by a Finance Member in Stores Tender Case.<= /span>

Quantity:

Is = it a stock or Non-stock item ?

If stock, verify the indent.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø It should be original.<= /p>

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø PL No, description should match though the latte= r need not perfectly match. If the Indent is not system-generated, please point ou= t to Sr.AFA/SF.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø It has to be vetted by associate finance if it i= s an A,B= 1 or B2 item.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Compare EMC with average monthly consumption pattern.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Make sure that one indent only exists per contra= ct period. If more than one exist, please check whether they are adhoc (specif= ic purpose) or supplementary (caused by upward revision of EMC)

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Now call for latest position slip. If taken in t= he latter half of a month, that month need not be reckoned for calculating requirement.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Count the no. of months for contract period (forecasting period in the indent). If it has already begun, count the no. = of months left in the CP. Then, add the no. of months of buffer- 2 or 3 months= for safety items, 1 or 2 for the remaining (it will be given in the indent).

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Now take the EMC if average monthly consumption = is more or less matching. If not decide upon a rate if there is a wide gap bet= ween EMC and AMC. Place it on record in body of minutes.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Multiply months with this rate and deduct closing balance as available in the slip to arrive at quantity.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø If the quantity you arrived at is more than tend= ered quantity, stick to tendered quantity. If it is less than tendered quantity, stand by the quantity you have arrived at.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø If tendered quantity is higher than vetted quant= ity stick to vetted quantity if it is lower than the quantity you arrived at.

If it is a non-stock i= tem:

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Please check if it is vetted by associate financ= e in case it is more than 50K in value for normal items and > Rs.1 lakh in va= lue for safety items.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Please check whether sanction of competent autho= rity exists & placed on file (wherever applicable, but usually, if its value= is > 50K each).

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Please check whether funds are provided – = if it is a Pink Book item, it is to be got certified by the Sr.SO/Budget. Otherwise also (if procured through revenue as well) clear fund for the par= ticular year should exist.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Consignee is to be noted, so are the bill passing and bill-paying officers.

<= span style=3D'font-size:20.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Please note that if consignee is proposed to be changed, whether indenter’s request letter is placed in original on f= ile. Whether bill passing & paying officers will change on this count is to = be monitored.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø Requisition is to be countersigned by JAG officer upto Rs.1 lakhs, by SAG officer (ADRM included) upto Rs.5 lakhs and by PHOD beyond Rs.5 lakhs.

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt;font-family:Wingdings; mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings'>Ø In non-stock, the main issue is countersignature & funds but not quantity as it is only a sporadic requirement.

Check of the Tendering Procedure:

&nbs= p; Move on now to this procedural check.

- = Please check DOP for approval to Tenders regardi= ng quantities.

(Tip: It usually coinc= ides with acceptance powers. Your Convener cannot be Tender approving authority unless it was estimated at a lower value & L1’s value is itself i= n a higher domain).

- = For stock items, it is the Grouping & Rating Slip. Please ask for the rate based on which Tender value has been estimate= d. (You could be stumped to find a field unit vetted rate figuring there but at least at TC stage, insist on a copy being placed on file).

- = Please note the mode of tendering. For Limited/S= LT as well as ST, approving authority should be monitored & lacunae if any= set right before going ahead (as per SOP).

- = If it is against PAC, whether PAC has been signe= d by JAG upto Rs.25,000, SAG upto Rs.1 lakh and PHOD above Rs.1 lakh.=

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt'>

<= span style=3D'font-size:14.0pt;mso-bidi-font-size:12.0pt'>Approval of Tender Sch= edule:

= - = This is one level below tender appr= oving authority and your convener could be approving authority. See that approval exists.

= - = Each page of office copy should be = signed by gazetted officer. Retorts = that signature exists on the approval sheet, etc are not tenable.

Comparative Stateme= nt and Briefing Note:

v&nb= sp; Give it a good hard look = 211; it would have anyway been vetted by Finance, but it is important to note the relative rates and all points raised by Finance at the time of vetting.

v&nb= sp; All points raised by Finance= are to be discussed point-by-point.

v&nb= sp; Just note if normal time of 1 month is given in this tender or whether approval exists on file for short-notice tender.

Description matching/technical suitability:

üüBefore going into the an= alysis of the offer, please go through tender document office copy carefully and mentally take note of our terms and conditions, especially the special conditions like Inspection Clause, Delivery period, tender cost, EMD, etc. = If there are any restrictive conditions or those which contravene extant rules, please point out in the body of the minutes.

If it is a Retende= red item:

Please check if there is= any difference from previous terms and condition. If reasons are already availa= ble on file, please record their reference in the minutes. If not, please seek clarification on record. (Generally these items are pointed out by Finance = at the time of vetting of Briefing Notes and Comparative statements).

Analysis of the of= fer:

Take each offer, from lo= west technically suitable upwards till you zero on the right supplier, and check each and every item viz. wheth= er all pages have been signed, ECS mandate given, tender cost given, etc. and recheck arithmetical accuracy of rates, source restriction, inspection clau= se, delivery period etc. Any special conditions quoted by the tenderer should be discussed and recommendation made. A cursory look at the IRS conditions of contract may prove helpful.

The general exemptions w= hich exist as per rules are:

&Oslas= h; Tender cost need not be given by NSIC registered firms for the groups that they are registered.

&Oslas= h; EMD need not be given by NSIC registered firms or firms on approv= ed lists of the different Indian Railways for the groups for which they are registered.

&Oslas= h; Price Preference – upto 15% on NSIC firms. <= /o:p>

Ø Purchase Preference on certain items on certain sources like ACASH , etc. This is to be monitored.=

(The words given in bold= are to be remembered. Please watch out whether they are registered for the item)

Please watch out for specification No. which should tally in toto (alteration difference is subj= ect to technical member’s opinion).

Point to note: If = it is a Limited/Special Limited Tender, Railway’s letter requesting offer sho= uld accompany the offer.

Even if specification doe= s not tally and EMD has not been submitted by the firm, unlike in works contracts, one need not reject the offer. The firm can be asked, while issuing the let= ter of acceptance, to submit tender cost/EMD/SD. But please reiterate this fact= in recommendation. If all pages are not signed, please identify the pages unsi= gned in the recommendation so that it can be got done before issue of PO.

Provenness of the s= upplier:

Where source restriction = does not exist, it is always better to enquire from other Railways about the reliabi= lity of the supplier. Otherwise, we may end up burning our fingers by putting all eggs into one basket.

Unit rate:

It should be basic rate+ = ED if applicable +CST/VAT +Freight +P&F charges etc.

Entry tax in the state of= Orissa need not be reckoned as it will not be paid by Railways.

VAT/MODVAT/CENVAT credit = from the date of opening till date of supply should be passed on to Railways. In cas= e of P.Way materials in general the formula of Railway Board is available.

For VAT the recent declar= ation as enunciated in the recent VAT rules may be utilized. In other cases, TC may = have to deliberate and decide on it.

The lowest tenderer would= be a consignee-wise lowest tenderer. If more than 1 item is being procured and/o= r if the item has to be delivered to more than one consignee, item-wise, consignee-wise L= 1 has to be arrived at. In this freight generally plays an important part.

Quantity:

There is no hard and fast rule that= the lowest eligible tenderer should get the entire procurable quantity.

In fact, in source restri= cted items, Part-II sources may not get more than 15% of procurable quantity (or last supplied quantity to the same railway which ever is higher). In ascend= ing order of value of technically suitable offers, each part-II supplier (only = in case he has been successful previously for the same item on the same railwa= y) will get 15% or previously executed quantity whichever is higher and the remaining would go to a part-I source.

There is no need for unif= ormness of rates but if varied rates are recommended reasons should invariably be placed on record.

Recommending higher rate = for earlier delivery is also possible, but reasons should be placed on record. Splitting of quantities can be done on the following grounds with reasons recorded:

a)&n= bsp; Vital/critical nature of the items<= /span>

b)&n= bsp; Quantity to be procured

c)&n= bsp; Delivery requirements

d)&n= bsp; Capacity of firms in the zone of co= nsideration

e)&n= bsp; Past performance of the firms

(p.318 of “Rules f= or Entering into Supply Contracts”)

Last Purchase Rate= :

It is the best possible = scenario if the PO of LPR is recent and the description tallies perfectly. In case of variation of alteration, etc. the technical member will have to spell out whether the compositional property of the items remains the same or in case= of fabrication, whether superior fabrication technique is offered.

It is always better to t= ry for information from sister railways based on performance sheet which is usually enclosed to offers. It is also important to check up if the supply has been successful and within the delivery period.

If not, rate analysis ca= n be made based on the composition of the item as declared by technical member and ru= ling prices of raw material. The finance member’s role is limited to verif= ying whether correct rates are taken and whether the calculation is accurate.

Recommendation:

It should be a summary o= f the entire discussion where differences are highlighted or where some complianc= e is to be made, in addition to the acceptance of rates.

Terms & Condit= ions:

They should be very clear and preci= se, indicating what is advertised by us or what has been offered by the firm, if something different, whichever is accepted. Wherever counter offer is made = to the firm, it should be clearly mentioned.

After comparing rates, t= erms & conditions, etc., please make sure that there is no term/condition figuring therein which is contravening advertised conditions and which has = not been discussed in the body of the minutes.

While arriving at total = value, multiplying unit rate as given in a rounded off position with quantity may = be avoided. Rounding off may only be done at the time of arriving at total val= ue only.

Before signing the minut= es, please verify them once again.

Wishing you a happy time= as Finance Member of a Stores Tender Committee.

= Epilogue:

Kindly help to improve the quality and content of this little booklet by giving yo= ur valuable suggestions and sharing your invaluable experience as TC member at phone No.085-58670 or at dr_csl@yahoo= .co.in.

(Dr. C. Surya Lakshmi)