Procurement Goods

Sri Gangadhar Mallick,

AFA-Cum-Joint secretary,
Home Department.
 Procurements

 The relevant Rules of OGFR, 2023.

These Rules to be followed along with provisions of “ Manual on

Policies & Procedures for Purchase of Goods” issued by the
Department of Expenditure, Ministry of Finance, Govt. of India from
time to time & available in the website ([Link]).

 Procurement for EAP funded by loan or grants from bilateral or

multi lateral donor agencies would be guided by relevant respective
loan/ credit agreement.
Rule-217: Goods means “includes all articles, materials, commodities,
livestock, furniture, fixtures, raw materials, spare parts, instruments,
machinery, equipment, industrial plant etc. purchased or otherwise
acquired for the use of Government but excludes books, publications,
periodicals, etc. for a library.”

Rule-202: Fundamental principles of public procurement –

- efficiency, economy & transparency in public procurement

- fair & equitable treatment of suppliers & promotion

of competition in public procurement
 Basic Principles as enshrined Rule-202:

 The specifications in terms of quality, type and quantity should be clearly

spelt out
 Excess purchases should be avoided as it results in inventory carrying costs

 Offers should be invited following a fair, transparent & reasonable

procedure

 Authority should satisfy that price of selected offer is reasonable &

consistent with the required quality

 Purchases are made in accordance with definite requirements of public

service. Care should be taken not to make unnecessary purchase of goods in
advance of actual requirements

 Where scales/ consumption/ usage limits have been laid down, the
purchasing officer should certify on the purchase order that the limits are not
exceeded
 Procurements

Financial limits as per F.D. O.M. No.7460/F., Date 04.03.2025

FIN-COD-RULE-0002-2018

Authorities competent to purchase goods within the financial limits

prescribed below:

Power to execute contract & sanction purchase

[Link] Up to Rs.10.00 Cr in each case.

[Link] of the Deptt. Up to Rs.20.00 Cr in each case.

[Link]’ble Minister of Deptt. Up to Rs.50.00 Cr in each case.
[Link]’ble CM Up to Rs.100.00 Cr in each case.
[Link] Above Rs.100.00 Cr in each case.

( Rule 12 of DFPR, 1978 is also applicable)

 Procurements Methods:-

1. Registration of suppliers with Deptts requiring bulk supply of goods: (Rule-

219)

 Administrative Deptt. requiring bulk supply may prepare & maintain

item wise approved list of eligible suppliers as “ registered suppliers”
by verifying their credentials, manufacturing capability, past
performance, quality control system, financial background, etc.
 They will be regd. for a fixed period (1 to 3 years) & may apply afresh
for renewal of registration.
 The performance & conduct will be watched by concerned Deptt &
they may be removed from list.
 Other AD/ HoD/ Agencies may utilise the lists for procurement through
Limited Tender Enquiry.
 The list of registered suppliers for the subject matter of procurement
be
exhibited on the websites of the procuring entity/e-procurement
 Procurements Methods

2. Purchase of goods without quotations (Rule-220):

Up to value of Rs.50,000/- on each occasion by the competent
authority by giving a certificate in following format.
"I,……………………, (designation) am personally satisfied that these goods
purchased are of the requisite quality and have been purchased from a reliable
supplier at a reasonable price."
Signature with designation

3. Purchase through Local Purchase Committee (Rule-221):

Procurement of goods costing more than Rs.50,000.00 & up to
Rs.3,00,000.00 on each occasion on the recommendation of local
purchase Committee consisting of 3 members of appropriate level. The
Committee will survey the market to ascertain reasonableness of rate,
quality, specifications & identify appropriate supplier. The members of
the committee will jointly record a certificate as under.
 Procurements Methods

"Certified that we,_ _______members of the Purchase Committee are jointly and
individually satisfied that the goods recommended for purchase are of the requisite
specification and quality, priced at the prevailing market rate and the supplier
recommended is reliable and competent to supply the goods in question and it is not
debarred by State Government."
Signature with designation

4. Purchase from Exclusive Lists (Rule-208): Ommitted.


 Procurements Methods

6. Purchase by obtaining Bids (Rule-222):

There are 3 standard methods :-

(i) Limited tender Enquiry ( for less than 25 lakh).

(ii) Advertised tender Enquiry ( for 25 lakh & above).

(iii) Single tender Enquiry.

 (i) Procurements through Advertised tender Enquiry ( Rule-223)

- Advt in one local & one national Newspaper having wide circulation
& details in website.

- Minimum 3 weeks time for obtaining bids (this can be relaxed

where there is an urgency/emergency, after obtaining approval from
next higher authority & in case of AD, after FD concurrence).

- Hard copies of bidding documents be prepared for sale. Deptts

may post complete bidding documents in website or e-procurement
portal & permit download & allow payment of price along with bids.

- Copies of tender notices may be sent to Indian Embassies abroad &

foreign Embassies in India in order to find competitive offers for certain
quality & specifications. Minimum 4 weeks time to be given to domestic
& foreign bidders.

Advertised tender Enquiry may be adopted for procurements of less

than 10 lakh rupee wherever felt necessary if number of approved
suppliers are not definitely not known.
(ii) Procurements through Limited tender Enquiry ( Rule-224)

- By obtaining bids from more than 3 approved firms. Wherever

necessary, efforts should be made to identify a higher number of
approved suppliers to obtain more responsive bids on competitive basis.

- Tender documents will be sent directly by speed post/ regd.

post/courier/email.

- Procurement of goods having value of 25 lakh & more may also

be made through Limited tender enquiry in case of urgency/ public
interest/ where possibility of fresh source is remote.

- Efforts be made to identify higher number of approved suppliers to

obtain more responsive bids.
(iii) Single Tender enquiry (Rule-225):

•Where there is a single manufacturer.

•In case of emergency after obtaining approval from next higher

authority.

•For compatibility of machinery & spare parts with the existing set of
equipment on the advice of competent technical expert approved by the
Govt or next higher authority.
•A proprietary article certificate in prescribed format be given by the
competent authority.
• Advice of a competent technical expert for single source procurement
be obtained and kept in file for approval of Government or next higher
authority.
 Two Bid system (Rule-228):
For high value plant, machinery etc. of a complex & technical nature, bids
in 2 parts be obtained:
• Technical Bid consisting of all technical details along with
commercial terms & conditions.
• Financial bid indicating item wise price for the items mentioned in
the technical bid.

 Both bids be sealed in separate covers duly superscribed & put in

a bigger cover under seal. Technical bids are to be opened first be
evaluated by a technical committee or authority & then the
financial bids of technically acceptable offers should be opened for
further evaluation & ranking before awarding the contract.
 Single responsive Bid Rule-204(xxii)

The department is to check whether while floating/issuing the enquiry all

necessary requirements like standard conditions, industry friendly
specifications, wide publicity, sufficient time etc. were fulfilled.
 If after scrutiny it is found that all such aspects were fully taken care
of, then single responsive bid be opened & if the quoted price is
reasonable, contract may be placed after obtaining approval from
Govt or next higher authority recording the following certificate.
"I ____________(designation) certify that the procurement was satisfactorily
advertised, the qualification criteria were not unduly restrictive, and prices are
reasonable in comparison to market value."
Signature with designation
 Splitting up of Demand (Rule-215)

A demand for goods/service should not be divided into small

quantities to make piecemeal purchases to avoid the necessity of
obtaining the sanction of higher authority required with reference
to the estimated value of the total demand.

Code of Integrity Rule-207:

No official of a procuring entity or a bidder shall act in
contravention of the following principles of public procurement.
Price/Purchase preference System:

Rule-210: Purchase preference system for MSEs and Local Start-ups : The
quantum and manner of purchase preference to local MSEs/Start-ups in
Public Procurement should be as notified by MSME Department under
respective Rules / Guidelines.

Rule-211: Deleted:
(i) The State Government, may, by notification, provide for mandatory
procurement of any goods or services from any category of bidders, or
provide for preference to bidders on the ground of promotion of locally
manufactured goods or locally provided services under Make in Odisha
initiatives.
(ii) MSME Department shall act as nodal Department for issue of
necessary order for special provisions for local Suppliers under “Make in
Odisha” initiative in line with Public Procurement (Preference to Make in
India) order, 2017 issued by Government of India.
 Bid Security Rule-212

EMD should generally be between 2% to 5% of the estimated value of

goods now it is Nil as new FD circular.
Bid security be obtained in terms of A/C payee DD, FDR, Banker’s cheque,
Bank Guarantee including e-BG.
Bid Security be normally remain valid for 45 days beyond final bid validity
period. Model Bank Guarantee format is at Annexure-C.
Bid Security of unsuccessful bidders be returned after expiry of final bid
period & latest by 30th day after award of contract.
The Micro and Small Enterprises (MSEs) and start-ups shall be exempted
for payment of Bid security.
EMD will be forfeited if the tenderers withdraws or impairs or derogates
from the tender within the validity period.
EMD is also forfeited if successful bidder does not furnish performance
security within specified period.
 Performance Security Rule-213
To ensure due performance this is to be obtained from the successful bidder
Normally this should be 3% to 5% of the contract value.
Micro and Small Enterprises (MSEs) and start-ups are allowed concessional
payment of performance security @ 25% of performance security prescribed
for
normal bidders.
 Performance security may be obtained in terms of A/C payee DD, FDR,
Bank Guarantee including e-BG to safeguard the purchaser’s interest in all
respects
Bid Security be normally remain valid for 60 days beyond the date of
completion of all contractual obligations of the supplier including warranty
obligations & it is refundable.
 Model Bank Guarantee format is at Annexure-D.
Bid Security be returned to the successful bidder on receipt of performance
security.
 It can be forfeited in the event of breach of contract.
 Performance Security
Performance Security and Performance
There shall be no Performance security / PBG requirement for contracts
placed under Direct Purchase Option on GeM.

For procurement through reverse Auction/e-bidding, Security Deposit /

Performance Bank Guarantee (PBG) @2% of contract value, shall be
applicable in respect of contracts valuing above Rs.25.00 Lakh, as per special
terms and conditions applicable for e-bidding / RA.

Such Performance Bank Guarantee from a scheduled commercial bank must

be submitted by seller to the Buyer within 15 days of award of contract and
shall be in the format provided on GeM.

Payments against such contract shall not be released till acceptable

Performance Bank Guarantee is furnished by the seller.

There shall be no Performance security / PBG requirement for contracts

placed against the seller ‘Energy Efficiency Services Limited (EESL)’ under
Direct Purchase/e-bidding/Reverse Auction option on GeM, since such
contracts shall be governed by MoU/ Agreement signed between EESL and
DGS&D.
 Advance payment to suppliers Rule-232
(i) Payments should be released only after the supplies have been made.
However, it may become necessary to make advance payments in the
following types of cases:
(a) Advance payment demanded by firms holding maintenance contracts
for servicing of Air- conditioners, Computers, other costly equipment etc.
(b) Advance payment demanded by firms against fabrication contracts and
turnkey contracts.
(c) Advance payment demanded by Central Government PSUs / State PSUs
in respect of supplies of goods.
(ii) Such advance payments should not exceed the following
limits :
(a) 30% of the contract value to private firms subject to furnishing of Bank
Guarantee of equal amount;
(b) 40% of the contract value to a State or Central Government agency or
a Public Sector Undertaking; or
(c) 100% advance payment for procurement of arms and
ammunitions from Ordnance Factories.
(d) In case of maintenance contract, the amount should not exceed the
amount payable for six months under the contract subject to furnishing
of Bank Guarantee of equal amount.
Advance payment Rule-232:

(iii) In exceptional cases, Administrative Departments may

relax the ceilings mentioned above with prior concurrence of
the Finance Department. While making any advance payment
as above, adequate safeguards in the form of Bank Guarantee
should be obtained from the firm. The Model Agreement for
Supply of Goods and Bank Guarantee Format for Advance
Payment are at Annexure-E and Annexure-F respectively.

(iv) Part Payment to Suppliers - Depending on the terms

of delivery incorporated in a contract, part payment to the
supplier may be released after it dispatches the goods from
its premises in terms of the contract.
Some imp points:

 The text of bid document should be self contained , comprehensive,

unambiguous, in simple language.

 It should include eligibility criteria of bidders, date, time & place for
bidding and that of opening of bids, terms of delivery, suitable provision
for settlement of disputes, suitable provision for enabling a bidder to
question the bidding conditions/ bidding process/ rejection of bids etc.

 The specifications/ standard specifications should be clearly stated.

 While inviting competitive bidding, brand name or model name

should not be mentioned.
Some imp points

The text of Tender Notice

 Descriptions & specifications of the goods & quantity.

 Period & terms of delivery.
 Cost of the tender document.
 Place & timing of sale of tender documents.
 Place & deadline for receipt of tenders.
 Place, time & date for opening of tenders.
 Amount & Form of Bid security/ EMD.
 Any other imp information.
Some imp points

 Bids should be opened in public & authorised representatives of bidders

should be permitted to attend the bid opening.

 Late bids are not to be considered.

 In case of Turn key contracts, contracts of special nature for

procurement of sophisticated & costly equipment, provision for Pre- bid
conference in order to clarify issues & doubts about specifications &
technical details etc be made in bidding document.

 No new conditions be brought in for evaluation of the bids.

Some imp points:
 Negotiations after bid opening must be discouraged. Where price
negotiation is necessary in exceptional cases due to some unavoidable
circumstances, only L1responsive bidder be chosen for that.

 Where L1responsive bidder is not in a position to supply full quantity

remaining quantity be given to next higher responsive bidder after
obtaining specific approval from the competent authority on the specific
recommendation of the Purchase committee.

 The name of successful bidders should be mentioned in the Deptt Notice

Board, bulletin, website.
 Buy Back Offer Rule-233:
When it is decided with the approval of the competent authority to replace
existing old item(s) with a new and better version, the department may
trade the existing old item while purchasing the new one. For this purpose,
a suitable clause is to be incorporated in the bidding document, so that the
prospective and interested bidders formulate their bids accordingly.
Depending on the value and condition of the old item to be traded, the
time as well as the mode of handing over the old item to the successful
bidder should be suitably incorporated in the bidding document.

E-Publishing Rule-216:
 It is mandatory for all Departments of the State Government, their
attached and Subordinate Offices and Autonomous / Statutory Bodies to
publish their tender enquiries, corrigenda thereon and details of bid
awards on e-procurement portal of State Government. They may also
publish the same in their Departmental or other website of the State
Government.

The above instructions apply to all Tender Enquiries, Requests for

Proposals, Requests for Expressions of Interest, Notice for pre-
Qualification/ Registration or any other notice inviting bids or proposals in
any form whether they are advertised, issued to limited number of parties
or to a single party.
Thank You…..