Procurement Procedures/Manual For Goods and Services

Transcription

1 Procurement Procedures/Manual For Goods and Services 1

2 TABLE OF CONTENTS 1.0 INTRODUCTION PROCUREMENT STRATEGY SCOPE OF WORK (SOW)/ SPECIFICATIONS BID EVALUATION CRITERIA (BEC) RAISING OF PR MODE OF TENDERING FOR PROCUREMENT OF GOODS, WORKS AND SERVICES SYSTEM OF TENDERING BID INVITATION AND BID RECEIPT CANCELLATION / RE-INVITATION OF TENDERS RECEIPT OF TENDERS TENDER BOX AND ITS CUSTODY NOMINATION OF TENDER RECEIVING/OPENING OFFICER(S) ACCOUNTING OF TENDERS WITHDRAWAL OF BIDS OPENING OF TENDERS EXTENSION OF DUE DATE FOR SUBMISSION OF BID EARNEST MONEY DEPOSIT/BID SECURITY/BID BOND TENDER COMMITTEE TIME SCHEDULE FOR VARIOUS ACTIVITIES FOR EVALUATION AND AWARD EVALUATION OF BIDS CLARIFICATION FROM BIDDERS AFTER TENDER OPENING REASONABILITY OF RATES INSUFFICIENT ACCEPTABLE BIDS NEGOTIATION SPLITTING OF QUANTITIES PLACEMENT OF ORDER PERFORMANCE SECURITY REPEAT ORDERS FOR SUPPLY OF GOODS/MATERIALS (PURCHASE ORDERS) EXTENSION OF SERVICE CONTRACTS PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSES) E-PROCUREMENT E-REVERSE AUCTION EXPRESSION OF INTEREST (EOI)

3 34.0 PROCUREMENT FOR E&P JOB UNDER PRODUCTION SHARING CONTRACT (PSC) CENTRALIZED PROCUREMENT EMPANELMENT OF VENDOR / CONTRACTOR / CONSULTANT / SERVICE PROVIDER FOR LIMITED TENDERING STANDARDIZATION OF BEC CORRESPONDENCE WITH BIDDERS HANDLING OF COMPLAINT / REPRESENTATION / ARBITRATION THE INTEGRITY PACT (IP) PROCEDURE FOR OBTAINING DGCA PERMIT AND EXPLOSIVE LICENCE PROCUREMENT OF MEDICINE CONTRACT RELATING TO CIVIL WORKS / SERVICES AND HIRING OF TRANSPORT SERVICES AT FIELD HEADQUARTERS FOR MAINTENANCE & DAY TO DAY REQUIREMENT TRANSPORT SERVICE CONTRACTS MODIFICATION/AMENDMENT TO THE MANUAL DEVIATION TO THE MANUAL CLARIFICATION TO THE PROCEDURE CIRCULAR, INSTRUCTION, ADVICES ETC. REGARDING PROCUREMENT PROCESS NON-APPLICABILITY OF THIS PROCEDURE POST AWARD ACTIVITIES

4 1.0 INTRODUCTION 1.1 Oil India Limited is a wholly owned Government of India Enterprise engaged in the business of exploration, production and transportation of crude oil and natural gas. OIL is operating in various domestic as well as international blocks. OIL has operation overseas as well as participating interest in E&P business. Procurement of goods and services is of paramount requirement to ensure uninterrupted operational activities in OIL. The procurement system in OIL is de-centralized in federal manner. While the requirement of at Company's Field Headquarters is met through procurement at Duliajan, the other spheres / projects are doing procurement for materials, works, services and consultancy at respective unit. 1.2 C&P DEPARTMENT AT DULIAJAN All the requirements of the Company for its operation at Fields are met by the C&P Department situated at Duliajan. The requirement varies from the procurement of indigenous and imported goods to hiring of rigs, logging services, cementing services, vehicles and framing of works contracts, labour contracts, man management contract etc. In addition, requirement of other spheres may also be met from this office from time to time as and when required against specific request. 1.3 CONTRACT & PURCHASE DEPARTMENTAT CALCUTTA BRANCH Procurement from indigenous sources is also made by the Calcutta Branch situated at Kolkata. This Branch is responsible for procurement of the materials (from indigenous sources only) against requisitions raised by Duliajan C&P Department and other Spheres / Projects and transportation of goods to respective places. Further, the Calcutta Branch arranges opening of Letter of Credit etc. to the foreign suppliers, Shipment of goods (by sea, air, courier etc.), Customs clearance of the goods and transportation of the same to Duliajan and other Spheres/Projects of the Company. 1.4 CONTRACT & PURCHASE DEPARTMENT AT PIPELINE HEAD QUARTER AND OTHER PROJECTS All the Project offices and the Pipeline Headquarters at Guwahati are having C&P set up primarily to cater for their needs for acquiring goods and services / works. 4

5 1.5 CONTRACT & PURCHASE DEPARTMENT AT CORPORATE OFFICE Procurement of goods and hiring of services are processed by Contract & Purchase Department for Corporate office. In addition, this department also deals with the following: i. Processing for obtaining approval of the Board/ CBC/ Concerned Functional Director. ii. Liaison with DGH, various ministries & Govt. Offices. iii. This office expedites / follows up issuance of EC from DGH, clearance from DGCA. This office also co-ordinates with Transchart, Ministry of Surface Transport in relation to freight charges in case of imports so as to take decision, whether order should be placed on C&F or FOB basis. 1.6 OBJECTIVE OF THIS MANUAL The primary purpose of this Manual is to constitute a reference, provide basic guidance and to outline the general methodology to be considered while exercising procurement functions for timely availability of goods and services in the most transparent and competitive manner. The Manual is designed considering standard strategies, policies and best procurement practices in the industry. The objective of this Manual is to effectively ensure i. Economy and quality procurement of goods, services and works ii. Uniform practice and methodology/procedures across OIL iii. Transparency and fairness in procurement iv. Responsibility and accountability v. Compliance to statutory regulations This Manual is to be followed uniformly throughout the company in the manner defined and designated. The laid down principles and procedures detailed in the Manual is not restrictive. Deviation from the Manual shall not tantamount to violation of procedure provided appropriate approval is obtained for such departures which are within the basic philosophy of procurement. 5

6 2.0 PROCUREMENT STRATEGY 2.1 PROJECT PROCUREMENT STRATEGY: Process of designing procurement strategy for large projects (Cost estimate > Rs100 Crores) should normally be aimed to decide what parts can be done in- house and which parts need to be outsourced for timely completion of the project in an effective manner, also by maintaining competition and ensuring performance Procurement strategy shall be decided by a committee consisting of members from indenting department, C&P department and Finance. This committee shall examine the project requirement and recommend efficient, manageable and cost effective strategy for procurement Procurement strategies for large projects: a. EPC/LSTK: The entire project from engineering, procurement and construction maybe contracted out to a single contractor on a lumpsum turnkey basis. The contractor could then use subcontractors as necessary and will do the project management for the same as well. Necessary provision should be provided in the tender document regarding acceptability of sub-contractors with the approval of OIL. b. Mixed contracting : The project management role will be carried out by OIL and there will be separate contractors for Engineering/Procurement and Construction. This type of contract allows better control for OIL and could lead to improved project performance in terms of timely completion, expected performance, cost competitiveness Guideline about deciding on level of outsourcing in projects: Two key considerations to be considered by OIL in determining the contracting strategy are (a) OIL's expertise in project management (including ability to manage multiple interfaces) in specific type of project being considered and (b) criticality of the project. (i) If the project is critical and OIL does not possess the requisite experience in project management (including ability to manage multiple interfaces) in the specific type of project then EPC / LSTK contracts should be preferred. 6

7 (ii) (iii) If the project is critical and OIL possesses the requisite experience in project management (including ability to manage multiple interfaces), then OIL should prefer Mixed type of contracting. If the project is not critical and OIL possesses some reasonable experience in project management (including ability to manage multiple interfaces) in the specific type of project then Mixed contracting should be considered subject to availability of the professionals. The engagement of project management consultant may be considered for Sl. No. (i) & (ii) above. 2.2 BID PACKAGE CREATION: The objective of bid packaging is to divide the requirement of the project into a manageable number of suitable bid packages so as to produce the maximum competitive response from bidders. This exercise of dividing the procurement in different packages is done in the interest of economy, efficiency and timely completion/delivery. The packaging should be done in such a manner that it does not limit the participation by bidders. While doing this exercise apart from nature and value of goods, works and services being grouped into packages, one must also know the conditions of potential market of sources of supply of materials, works and services. In the process of breaking-down the total project cost into a smaller packages the following factors may be considered: (i) (ii) Such packages should be compatible considering the prospective bidders. Thus, the contents of the package should be inter related in such a manner that prospective bidder can tie up with suppliers of the various equipments, works and services involved in order to be able to bid for the entire package. This will ensure adequate participation in bidding and consequent procurement at optimum cost. The number of packages and the sizes should be at an optimum level for effective implementation. (iii) The terminal points of each package should be clearly defined and proper tie-ups of these terminal points between packages ensured. (iv) While forming the packages it should be ensured that scope and 7

8 2.2.2 APPROVAL: specification of the package is made in such a manner that it ensures enough participation by the bidders. The recommendation of the committee consisting of members from C&P, indenting Department and Finance in respect of procurement strategy and packaging shall require approval of LMC / Head of Project. 2.3 PROCUREMENT STRATEGY FOR GOODS/SERVICES Purchase of frequently ordered goods/services : a. For common items required continuously throughout the year in large quantities, common services hired repeatedly through the year, rate contracts should preferably be entered into. b. Items/Services for which rate contract should be concluded will be identified and the list will be reviewed and additions made every year depending upon the past consumption or on anticipated consumption. Rate contracts will not be entered in the case of items/services for which the market shows marked downward trend. In order to provide against a rise/fall in the market price during the currency of the rate contracts, the contract may include the standard Fall Clause. c. Alternatively in case of the items and services where sharp price fluctuation is envisaged a Frame work Agreement may be made after freezing all technical and commercial conditions. This shall enable to seek only prices against such agreement after giving short notice. d. A rate contract or framework agreement should be entered into on the basis of open competitive bidding. 3.0 SCOPE OF WORK (SOW) / SPECIFICATIONS In order to have proper and competitive offers the specification and scope of work for materials, goods, services /works should be complete and unambiguous. Wherever necessary, the relevant drawings, data sheets, samples in relation to the works involved should be provided. 3.1 The specification should be drawn up in general terms without quoting reference to any particular firm or referring the model of a particular firm. 8

9 3.2 The indentor should avoid drawing of specification which ends up in procurement of proprietary item except in cases where proprietary procurement is unavoidable. The specification for standard items which are commonly in use should be standardized for uniform use in OIL. While raising requirement for such item, no further specification be prepared and the one which is standardized must be used. 3.3 The scope of work/services/supply and specification shall be prepared by indenting department and will have the approval of competent authority who approves the PR as per DoP. 3.4 The bidder should be given a reasonable time for mobilization of equipment, delivery of goods/materials, completion of jobs by specifying appropriate time period in the tenders. This shall enable bidders to quote competitive price and avoid unnecessarily loading their price for likely compensation for delay (liquidated damages). While raising PR where installation and commissioning is involved, specific time frame towards installation and commissioning period to be indicated which will help in getting competitive offers and no ambiguity during evaluation. Wherever there is requirement of installation and commissioning a separate period shall be defined in the tender document for the same within the overall completion schedule. 3.5 In addition to above, in case of LSTK and civil works all necessary information, service detail etc. which are available with OIL to be provided in the tender documents. 4.0 BID EVALUATION CRITERIA (BEC) 4.1 The Bid Evaluation Criteria (BEC) is to be formulated while seeking the bids on open tender basis. The purpose of BEC is that only the competent bidders who can supply / execute the job and provide the services as per technical and commercial criteria, scope of the tender document, are shortlisted. The BEC shall have technical as well as commercial criteria for examining the bids. In case of limited tenders where vendor empanelment has not been done, the BEC shall be incorporated in such tenders also and uploaded in the OIL / Govt. websites so that any capable bidder may download and submit the bid. 4.2 Utmost care should be taken in formulating BEC so that the ultimate 9

10 objective of purchasing function, i.e. procuring the required materials / services / works as per required specifications, delivery/completion schedule at most competitive prices, is met. 4.3 The capability / eligibility of a bidder is assessed for technical competence based on the similar past experience of execution / manufacturing / service providing and availability of relevant facilities for performing the job as per relevant standard. The financial strength of the bidder is assessed through a scrutiny of financial document such as profit & loss statement, balance sheet with reference to turnover, net worth and other financial parameters. 4.4 While the factors relating to experience and manufacturing / fabrication capability are more relevant and important for orders pertaining to supplies; experience and financial soundness assume relatively higher importance and relevance while assessing capability of contractors for construction works, turnkey jobs and services to be provided by them. 4.5 The BEC and other relevant tender condition should be made in such a manner that the competent bidders participate in the tender and there is sufficient participation, the BEC should never be framed keeping in view a particular bidder / bidders. As far as possible the BEC should be general in nature meeting the job requirement ensuring adequate competition without compromising on quality / competence of the bidder. 4.6 FINANCIAL CRITERIA: The following financial criteria should be included in open tender in order to ascertain financial soundness of the bidders: Sl. No. Financial Criteria (to be considered from the original bid closing date) 1 Annual Turnover Value (i) 50% (*) of the estimated value for all cases where execution / delivery period is less than one year. For consortium (ii) 50% (*) of the annualized estimated value for all cases where execution/delivery period is more than one year. At least one member of the consortium 10

11 to meet the above criteria of 50% turnover. The other members of consortium should meet minimum 25% turnover requirement. Period for In any of preceding 3 financial years consideration 2 Net worth Positive for preceding financial / accounting year * In case of civil / service contracts up to a ceiling of Rs. 5 Crores, the turnover shall be 30% of the estimate, which are normally executed by local contractors; the socio-economic condition is also under consideration. 4.7 TECHNICAL CRITERIA: Purchase: i) Experience of manufacturing and supply of similar equipment / materials / plant in previous 5 (five) years to be reckoned from the original stipulated bid closing date of the tender. ii) Availability of manufacturing / fabrication facility with adequate testing /quality assurance facility as per applicable codes, if required considering the nature of items. iii) The bidder should have experience of successfully executing at least 1(one) similar order for 50% of the estimated value in preceding 5(five) years. In case of rate contract for supply of bulk materials / off the shelf items / consumables etc. the bidder should have executed at least 50% of the annualized value of the estimate under the tender in one year, of the preceding 5(five) years. iv) If the experience can be specified in terms of technical parameters, the criterion of similar works experience may not be necessary to be specified in terms of value. v) Similar order if specified in BEC must be clearly defined in the tender documents Works (including LSTK) / Services / Consultancy : 11

12 i) Experience of at least one similar work of about 50% of value of work under tender in previous 7 (seven) years to be reckoned from the original bid closing date. In case of Rate / Maintenance / Service Contract, experience of at least one similar work of about 50% of annualized value of work under tender in previous 7(seven) years is to be considered. ii) Similar Works if specified in BEC must be clearly defined in the tender documents. iii) If the experience can be specified in terms of technical parameters, the criterion of similar works experience may not be necessary to be specified in terms of value In case of tenders for Annual rate contracts / Maintenance and Service contracts, if the prospective bidder is executing rate / maintenance / service contract which is still running and the contract value / quantity executed prior to due date of bid submission is equal to or more than the minimum prescribed value in the BEC such experience will also be taken in to consideration provided that the bidder has submitted satisfactory work / supply / service execution certificate issued by end user The above regarding the BEC are the general guidelines to be considered while formulating bid evaluation criteria. The indenting department concerned, with due reasoning, may suitably formulate the BEC depending upon the job requirements and the same shall not be treated as deviation to the procedure. While making BEC, the prime objective is that only capable bidders are qualified. At the same time, there should be sufficient participation A job executed by a bidder for its own organization / subsidiary cannot be considered as experience for the purpose of meeting BEC. 4.8 APPROVAL OF BID EVALUATION CRITERIA: In case of tender being processed through open advertisement a suitable BEC needs to be formulated covering technical as well as commercial aspects. On recommendation of tender committee the competent authority as per Delegation of Power (DOP) shall approve the proposed BEC. 4.9 MODIFICATION / AMENDMENT TO BEC: 12

13 Modification to BEC is not desirable and shall be avoided. However, as a result of Pre-Bid Conference or any other valid reason, if modification to BEC is inevitable, on recommendation of Tender Committee with full justification the modification can be approved by the competent authority as per DoP. Modification to BEC is not permitted after the receipt of the bids BID REJECTION CRITERIA (BRC): It is important to explicitly include all such terms and conditions which are considered absolutely necessary to be accepted by bidder without any deviation. Tender document should have a stipulation that deviation to such criteria shall make the bid liable for rejection. Broadly the following are to be included in the tender as bid rejection criteria : a) Deviation to the following provision of the tender document : i. Firm price ii. EMD / Bid Bond iii. Scope of work iv. Specifications v. Price Schedule vi. Delivery / Completion Schedule vii. Period of Validity of Bid viii. Liquidated Damages ix. Performance Bank Guarantee / Security deposit x. Guarantee of material / work xi. Arbitration / Resolution of Dispute xii. Force Majeure xiii. Applicable Laws xiv. Integrity Pact, if applicable xv. Any other condition specifically mentioned in the tender documents elsewhere that non-compliance of the clause lead to rejection of the bid LOADING CRITERIA: In case there are certain foreseen acceptable deviations which can be loaded financially, the same needs to be indicated in the tender document along with quantum / rate of loading In case OIL opts to supply cement, steel etc. to the contractor, the bidders are required to quote the consumption and OIL is to indicate in 13

14 the tender upfront the rate for loading of price for such items in case of turnkey packages The stipulation in case of OIL providing steam, power and other such utilities for consumption by the contractor, the bidder to quote the consumption and the tender should have the rate for loading such consumption In addition to above, if there are any other factors which impact the price evaluation, the same needs to be mentioned in the tender document. Further the tender document should contain the method of evaluation for such factors in unambiguous manner while evaluating the price bid. 5.0 RAISING OF PR 5.1 For procurement of stock items, purchase requisition shall be raised by C&P department, being indentor for such items. 5.2 In case of non-stock items, the procurement requisition shall be raised by user department for supply, services, works, LSTK jobs etc The indentor will provide along with PR the following : i) Scope and specification for supply, services, works involved under the PR in a manner as explained herein before in para 3.0. ii) The estimate for the scope covered under the PR for goods, works and services which shall be used for tendering purpose and decision making process for award while comparing with the actual price received against the tender. Wherever it is not possible for complex cases to give very accurate estimate as it may require further inputs, an estimate for tendering purpose may be provided with the PR. The detail estimate shall be provided before the due date of bid submission which shall be considered for decision making process for award. iii) It is desirable that the indenter who shall frame qualifying criteria (technical & experience) also indicate the numbers and names of the prospective bidders who are likely to qualify under the proposed BEC. However, it may happen that during the actual tendering the response may be more or less as compared to mentioned in the PR. This shall give fair idea about participation. 14

15 Further procurement personnel may inform such bidders in advance about the tender as proactive action. iv) For stock items last order reference/budgetary quotation may be used for price comparison purpose. v) Budget provision and Expenditure Sanction with fund allocation. vi) Schedule of Rates, with full description of items, their quantities, blank price column. vii) Detailed technical specification for bidding purposes. viii) The date by which the delivery/work to be completed. ix) The delivery/completion period should be realistic as the bids become liable for rejection on the same grounds. x) The Purchase Requisition must indicate the type of budget with job number. xi) If the invitation of bids is to be done on limited tender basis beyond the threshold limit for limited tender, the Purchase Requisition shall indicate about the approval of competent authority as per DOP duly mentioning the grounds of resorting to limited tendering and the names of the parties whom the indentor considers as capable and competent may be specified in the Purchase Requisition. xii) If the invitation of bids is to be done on single source/nomination basis, the indentor should provide the approval of competent authority as per DOP with full justification as to resorting on nomination basis for the particular item/services/works and selection of a particular source. The hard copy of the Purchase Requisition shall accompany the original approval of the competent authority for invitation of the bid on single bid basis. xii) In case an item is to be procured on proprietary basis, the PR shall be approved by the competent authority as per DoP certifying in the PR itself that the item/services is proprietary and there is no other alternative. Further the PR should include the name and address of the party from whom the item is to be procured. xiii) In case of emergency as defined at para no.6.14 and declared by 15

16 the Management, the normal procurement procedure may not be applicable. However, the procurement should be done with application of normal prudence and maintaining transparency. xiv) In the event of breakdown / capital overhaul of an equipment or major facility revamp works & services, where it may not be possible to assess the extent of repair action (at bidding stage) and cost estimates, the expenditure sanction may be obtained post inspection but before start of works. This is applicable only in case of equipment repairs through OEM / their authorized workshop. In case of facility repair / revamp such assessments should be carried out by a committee of representatives from Indenting Department, Finance Department & Contracts Department. In all the above cases, approval of the competent authority and expenditure sanction for emergency works as per DOP is required. xiv) As per Notification No: 12/2012-Customs dated issued by Ministry of Finance under Srl. No. 356, 357, 358 & 359, there are benefit of Zero Custom Duty and other benefit of Deemed Export as covered under Exim Policy. Therefore it is essential that PR contains the name of the items which falls under such category, name of area of use so as to have suitable provision in the tender document. xv) Time schedule for utilisation of material/equipment being procured including schedule of readiness of the front/site for erection and commissioning, if any. xvi) Bid Evaluation Criteria xvii) Special Conditions of Contract. 5.3 COST ESTIMATE: a) The cost estimate is a very important factor in decision making process for procurement. Therefore, the cost estimate should be realistic and real time so as to achieve economy and efficiency in procurement. In cost estimation, important factor inter alia following may be considered: i) The established engineering practices for cost estimation. ii) iii) Last purchase price for similar items / works / services. CPWD, DGS&D rates and DSR. 16

17 iv) Costing details and data available from other sources like CPSUs. v) Market price trend analysis. vi) While drawing reference to the last purchase price, indices like Wholesale Price Index (WPI), Consumer Price Index (CPI), Metal indices, Foreign exchange fluctuation, oil price movement etc. may also be considered for a realistic estimate. vii) Budgetary quotation. While estimate based on budgetary quotation is not a preferred method, wherever necessary the budgetary quotation should be obtained after giving complete detail and scope of specification. It is preferred to have minimum 3 (three) budgetary quotations and draw an average out of this. b) Both the item wise and total cost estimates are important for taking decision for procurement and are also important for evaluation of bids If in-house expertise is not available for estimation, service of the reputed project management consultants who have the facilities for cost estimation can also be availed for complex and major cases Review of Estimate The variation between cost estimate and the lowest of evaluated bid price shall call for review of the estimate. Such review needs to be done more exhaustively where the variation of the price is more than 10% of the cost estimate. This analysis is required to arrive at proper decision for placing order as well as keeping in view the other aspects like project schedule / operation etc. 5.4 BUDGET & TECHNICAL SANCTION: TECHNICAL SANCTION A proper detailed cost estimate based on specification, essential drawings and preliminary structural and service designs shall be prepared to accord approval by the competent authority. The Sanction to the estimate must be obtained before the bids are invited. It indicates only to the extent that the proposals are structurally sound and the estimates are accurately calculated and based on adequate data BUDGET SANCTION 17

18 Budget Sanction to a project or part thereof shall be accorded by the competent authority according to DOP. Budget sanction shall be accorded on the basis of cost estimates and the scope of work. 5.5 EXCESS OVER BUDGET SANCTION: In case, any excess over the sanctioned amount is known before bidding or during bidding, the bidding process shall not be held up for want of additional Budget sanction. However, LOI /Award of work/ Letter of Award (LOA) shall not be issued without obtaining expenditure sanction inclusive of additional sanction, if any. Parallel action shall be taken by Indenting Department for additional budget sanction. 5.6 BID EVALUATION CRITERIA (BEC): The Bid Evaluation Criteria (BEC), wherever applicable, shall be prepared by the user department and forwarded to Commercial department along with the Purchase Requisition for the Works / Goods / services. 6.0 MODE OF TENDERING FOR PROCUREMENT OF GOODS, WORKS AND SERVICES 6.1 In Public Procurement the preferred mode is procurement through invitation of open tender. However, same may not be feasible for procurement of goods, works and services in case of, lower values, operational requirement at various sites. Therefore, there are other methods of procurement to cater the necessary requirement. 6.2 Generally the following methods of procurements for goods, works and services are considered : a. Procurement through DGS&D b. Open Domestic Tender c. Limited Domestic Tender d. Open International Competitive Bidding (ICB) e. Limited International Competitive Bidding (LICB) f. Procurement on nomination basis g. OEM / Proprietary procurement h. Petty procurement of goods / works / services through hand quotation i. Annual Rate Contract j. Purchase by a Board of Officers 18

19 k. Emergency Purchases l. Procurement from Govt. Cooperatives, such as Kendriya Bhandar, State Emporium, Govt. Department, Central & State PSUs. 6.3 PURCHASE THROUGH DGS&D OIL should consider taking advantage of the DGS&D Rate/Running Contract when such contract exists and the delivery period suits our requirement as no separate tenders need be invited when the delivery period stipulated in the DGS&D Rate/Running Contracts is acceptable leading to time and cost savings. Such orders can be placed on DGS&D's terms and conditions with the option of inspection being done by OIL or third party nominated by OIL or with OIL terms and conditions with consent from the rate contractor. The Purchase Officer may place a direct supply order on the DGS&D Rate contractors on DGS&D rates with the approval of Competent Authority. The order can be placed directly on the rate contractor with lowest DGS&D rate. If there are multiple contractors offering the lowest DGS&D rate, contractors will be selected on rotation basis List of DGS&D rate contracts is available on DGS&D's website. All Spheres / Projects are required to use the same, as required, to take advantage of DGS&D rate contracts. In case the DGS&D rate contract also includes the name of dealer/distributor in addition to the OEM, then first effort should be made to procure directly from OEM. In case, OEM does not respond, then the procurement can be done through the dealer/distributor mentioned in the DGS&D rate contract In case such direct/referral supply orders are placed, OIL is liable to pay a nominal fee as Departmental Charges (as informed by DGS&D from time to time). Such departmental charges will be first deposited by vendor to the concerned Controller of Accounts and then claimed for reimbursement from OIL against supporting documents. 6.4 OPEN TENDERS: All procurement of Materials/Works/Services whose value is more than Rs lakhs shall be procured through open tenders Open tender shall be advertised through Press Advertisement which shall be published at least in two National Daily and in one Hindi Newspaper and / or local language daily published locally in the state where the site of work is located. 19

20 6.4.3 The Notice inviting Tender (NIT) shall be published by the PR Department who shall provide a copy of advertised NIT to the concerned tender issuing department The concerned section of C&P Department shall forward the copy of Invitation to Bid to PR Department for publishing Tender Notice in the newspapers in the formats: OIL INDIA LIMITED (A Government of India Enterprise) P.O. Duliajan , Assam, India INVITATION FOR BID OIL INDIA LIMITED invites Local Competitive Bid (LCB)/International Competitive Bid (ICB) through its e-procurement portal for the following items: TENDER NO BID CLOSING/ OPENING DATE ITEM & QTY Tender fee (Non-refundable): Rs ; Bid Closing/Opening Time: ; Last date for submission of tender fee-one week prior to bid closing date. The complete bid documents and details for purchasing bid documents, participation in E-tenders are available on OIL s e-procurement portal well as OIL s website NOTE: All addenda, Corrigenda, time extension etc. to the tenders will be hosted on above website and e- portal only and no separate notification shall be issued in the press. Bidders should regularly visit above website and e-portal to keep themselves updated Amendments to the NIT after its issue will be published on OIL s website only. The following disclaimer to be included in all NITs : 20

21 Revision, clarification, addendum, corrigendum, time extension etc. to the tender will be hosted on OIL website only. No separate notification shall be issued in the press. Prospective bidders are requested to visit website regularly to keep themselves updated. If the original tender is substantially modified affecting the important tender condition like scope of work / specification / delivery period / mobilization period / completion period, for better transparency and participation by maximum prospective bidders, it shall be prudent to extend the due date of submission so as to provide required time for bidder to take care of the changes C&P In-charge shall designate an officer well conversant with the procedure, who shall be responsible for correctness of NITs being uploaded on the web-site or published in the newspaper Tender document shall be uploaded on OIL website, CPPP as well as Govt. website Sale of document (in case of physical tendering) shall continue up to one day prior to the Bid closing date as advertised in the NIT In case of e-tendering the bidder shall require User ID and Password for online submission of Bid. The tender document should specify clearly that in case of new prospective bidders who do not have User ID and Password, the bidder shall request OIL for the issue of the same well in advance and OIL will take up to 5 working days to issue the same. Therefore bidder should not delay in making request till the last moment in their own interest. In case of delay because of late request by the bidders OIL shall not be responsible for non-submission of Bid in absence of user ID and Password. Alternatively, User ID and Password may be generated online by the bidders by using the link for supplier enlistment given in OIL s e-tender portal In cases where open tender is not resorted to for any procurement of materials / works / services, even though the value exceeds the limit as stated in para and it is considered expeditious and appropriate, the limited tender may be resorted to with due approval by the LMC / Head of the Project concerned. While seeking approval for resorting to limited tendering instead of open tendering the reasons for same shall be recorded in writing. List of the supplier / contractor to whom the tender is to be issued shall also be provided by indentor The cases, for 21

22 which the competent approving authority is Director / CBC / Board, the LMC / Head of Project or Sphere shall be competent authority for approval to issue limited tender. In processing the limited tendering cases it should be ensured that the parties meet the bid evaluation criteria as the rejection of the bid on technical suitability grounds is not desirable in such cases. Such tender shall be hosted on the web site with qualifying criteria and bidder, other than those to whom the tender enquiry is addressed, shall request OIL with their credentials for enlistment for that specific items/services for future procurement, which will be decided by OIL after verifying the credentials. 6.5 LIMITED TENDERING: All procurement of Materials/Works/Services whose value is less than the threshold value for open tenders (presently Rs Lakhs) may be through limited tenders. Limited Tendering shall be resorted to and enquiry be issued to only those vendors/contractors who have been empanelled / prequalified as per the laid down procedure. However, if number of vendors in such cases is less than 5(five), the tender should be floated either on open tender basis or should have approval of one level above the competent authority In case of limited tendering where vendors are empanelled through a transparent laid down procedure giving opportunity to all such empanelled bidders, the tender shall be hosted on website only for information In case, limited tenders are proposed to be invited (as against open tender based on value of the tender) and the vendors for this specific requirement are not empanelled, then the bidders should be identified and short-listed by the indentor, who should also determine and certify that short-listed bidders meet the pre-qualification criteria. Such tender should contain the Bid Evaluation Criteria (BEC). The tender should be hosted on website and any bidder who is interested can download the tender document and submit the bid. Thus all bids submitted by vendors suggested by the indentor or who had downloaded the tender and quoted shall be evaluated in accordance with BEC for qualification and award. Approval for such limited tendering shall be taken from LMC / Head of 22

23 Project or Sphere In case of limited tendering the enquiry shall be issued to all the vendors who are on the empanelled list of OIL for the tendered item. 6.6 PROCUREMENT ON NOMINATION BASIS: Award of any contract without following the norms of competitive bidding, for other than Goods and Services from OEM / Proprietary items / Proprietary spares; shall be considered as award on Nomination basis. All efforts should be made for timely processing of procurement cases so as to meet the operational requirement and avoid last minute urgency leading to procurement on nomination basis. A justification for nomination award due to urgency created solely on account of delay in processing the normal tender for procurement is not desirable Procurement on Nomination Basis is an exception to the normal procurement procedure. However, to tide over the organisational exigencies, procurement on nomination basis may be resorted to. In such situation the user / indentor shall give appropriate justification for procurement on Nomination basis observing the following guidelines. - It must be clarified that the procurement on nomination basis is made only to tide over contingent requirements, meeting quality standards as would be critical from the organizational perspective, technical compatibility and if not proceeded with are likely to jeopardize normal operation and business of the company. - The user / indenting department shall provide a complete proposal fully substantiated / justified for selected vendor / contractor and the proposed methodology for award. - The proposal shall include inter-alia the cost estimate and its basis. If the cost estimate is based on the budgetary quotation from proposed bidder then analysis shall be made by the proposer about the reasonableness of the same. - The proposal shall also include detailed scope of work, specification, deliverables, schedule of activities and payment mechanism. - The concerned department shall carry out the necessary assessment of the vendor / contractor / service provider along with their suitability / credibility for executing the job. 23

24 - In processing a case on nomination basis the technical and commercial acceptability must be ensured as rejection of the bid is not desirable in such cases The concerned user / indenter shall obtain the approval of competent authority before resorting to procurement on nomination basis After approval by the Competent Authority a PR/SR will be raised for processing the case for procurement and then forwarded to C&P Department. The C&P Department shall issue the request for quotation (RFQ) indicating specification and scope, delivery and completion schedule and other terms and conditions Evaluation and Award : The technical evaluation will be done by the user department and the commercial evaluation by C&P department A tender committee consisting of members from user department, C&P and Finance shall deliberate and examine the case and put up final recommendation for award which shall be approved by Competent Authority as per DOP. The tender committee recommendation should contain inter alia the following : (i) (ii) (iii) Reasons and justification for award on nomination basis instead of competitive bidding. Reasons and justification for recommending a particular vendor/service provider for nomination contract. The price reasonableness of the quoted price. 6.7 PROCUREMENT OF PROPRIETARY ITEMS / SERVICES / OEM: The procurement of goods / services on proprietary basis should be done only to meet operational exigencies. The proprietary article certificate shall be issued by an authority as defined in the DoP. The proprietary article certificate shall be provided along with PR / SR. The concerned HOD (or designated officer) shall declare a service, component, accessories, sub assemblies / assemblies, standby equipment as OEM item related to original equipment and the same to be procured from the OEM or authorized dealer of OEM. However it is to be certified by indentor that no other substitute can be used as replacement. For these items / services no proprietary article certificate will be required. 24

25 The equipment, accessories, sub assemblies / assemblies and any other item supplied along with main equipment by OEM, which are supplied by their (OEM) sub vendor; for these items such vendors shall be considered as OEM equipment manufacturers. However it is to be certified by indentor that no other substitute can be used as replacement. For these items also no proprietary article certificate will be required The proprietary requirement shall be justified on technical and operational ground and a proprietary article certificate shall be provided as under : The items / services required are manufactured and provided only by M/s.. No other make / service is acceptable as substitute for technical / operational reason The purchase of proprietary item shall be made from manufacturer or from dealer if nominated by the manufacturer on exclusive basis The tools, equipment and spare parts for the machineries for which no substitute are available are to be treated as proprietary and no proprietary certificate is required. However, the indentor has to confirm that no other substitute / spares can be used. These are to be procured from original manufacturer (OEM) or from Dealer or Firm nominated by OEM on exclusive basis. 6.8 PROCUREMENT OF SPARE PARTS: It is desirable to procure spare parts directly from OEM. Further, in case of imported supply OIL is entitled to import at zero customs duty once Oil India Limited is the importer from overseas Spare Parts need to be procured directly from OEM only and not from their dealer / distributor / stockist. In exceptional circumstances, if OEM advises that the spare should be purchased from their authorised distributor / dealer / stockist / supply house and as a principle they do not supply spares directly, then procurement can be done from authorised distributor / dealer / stockist / supply house In case of overseas supplier, if OEM has a joint venture in India or has opened their own subsidiary then offer from such JV or subsidiary can also be considered for procurement of spare subject to technical suitability. 25

26 6.8.4 In case overseas OEM supplier does not agree to directly supply the spare parts then they may supply on high sea sales basis through their authorised dealers / distributors / stockists Under no circumstances bids from Indian Agent for spares shall be considered In case of overseas OEM, if supply is made by authorised Indian dealers / distributors / stockists / JVs / subsidiary of OEM, the bidder shall certify that in respect of goods covered under the contract the vendor has paid proper custom and other duties as per Govt. guideline and has complied with all Govt. regulation. The bidder shall further indemnify OIL in this respect from any claim in future by any Authority in India or abroad, from where import is sourced. 6.9 ANNUAL RATE CONTRACT: The items and spares which are continuously required throughout the year for operation and maintenance of main equipment by the major manufacturer, OIL should enter into the rate contract for supply of such items with these OEMs. Duration of these contracts will not be more than two years Items for which Rate Contract is existing, no tender is processed and order is placed against PR based on the rate and terms &conditions of the rate contract PETTY PROCUREMENT: Spot purchase of stock and non-stock items are made by Materials Department if the total value of the individual item does not exceed Rs. 25, or such limit as specified in DOP. The purchases are made from parties as per the vendor list maintained by the Spot purchase wing of Materials Department on rotation basis at the rate fixed for the item by the Materials Department. Wherever the rate is not available, the supplier has to submit Manufacturer's Price list/quotation for justification of price. On the basis of a statement generated from the system (ERP) in regard to the spot and petty purchases, user departments and Materials Department may, on quarterly basis, decide whether any of the items in the statement are to be categorized as stock item for regular Procurement. 26

27 6.11 PURCHASE AGAINST HAND QUOTATIONS: Purchases above Rs.25, up to Rs.100, shall be made on hand quotation basis by User Departments themselves by obtaining at least three hand quotations for all types of procurement. A list of prominent and reliable local firms will be maintained by all concerned. Hand quotations will be collected on rotation basis whenever there is scope for rotation. A certificate will be given by the Officer making such purchase that hand quotations were obtained on rotation basis. The names and addresses of the firms from whom quotations are obtained will be given in the certificate. Where the number of dealers is limited i.e. less than six (6), rotation system need not apply PURCHASE FROM STATE EMPORIUM/GOVERNMENT DEPARTMENT /UNDERTAKINGS: Whenever items are available in State / Centre run Emporium / State Govt. Or Central Govt. Undertakings, purchases are to be made from them only and in such cases, the requirement of obtaining three hand quotations will not be necessary PURCHASE THROUGH BOARD OF OFFICERS: Purchase by board of Officers (Committee) will be resorted to only in exceptional circumstances when the materials /services/works are either required urgently to overcome an exigency or because the indentor is not able to give firmed up / detailed specifications (necessitating on the spot decision based on the availability in the market)so that procurement cannot be made under the normal purchase procedure, provided further that prior approval of the Head of the Sphere/Project is obtained and furnished along with the Purchase Indent, before resorting to purchase through a board of officers The Committee purchase shall be constituted by the GM of indenting department consisting of members from C&P, Finance and Indenting Department. The Committee shall consist of officers of equivalent level from each department under whose power the procurement falls as per DOP If for any reason it is not possible to constitute a Purchase Committee with competent officers in accordance with the DoP, the Committee may be constituted with an officer of the next below rank. However, the 27