WEL-COME TO THE
PRESENTATION
BY
SUDHAKAR V. JOSHI
I.A.S. (RETD.)
MANAGEMENT CONSULTANT
Sudhakar V. Joshi
TENDER
PROCEDURE FOR
CONTRACTS
Sudhakar V. Joshi
CONTRACTS
STORES
WORKS
SERVICES
Sudhakar V. Joshi
CONSTITUTION OF INDIA
Fundamental Rights
ARTICLE 14
The State shall not deny to any
person equality before the Law or
the equal protection of the laws
within the territory of India
Sudhakar V. Joshi
CONSTITUTION OF INDIA
Fundamental Rights
ARTICLE 12
In this part, unless the context otherwise
requires, “the state” includes the Government
and Parliament of India and the Government
and the Legislature of each of the States and
all local or other authorities within the
territory of India or under the control of the
Government of India.
Sudhakar V. Joshi
• Award of a Contract is a largess
• For grant of a contract every person
has to be afforded equal opportunity to
participate in the process.
Sudhakar V. Joshi

PROCEDURE FOR STORE
PURCHASE BY PUBLIC BODIES
Sudhakar V. Joshi
STORES
All articles and materials purchased or
otherwise acquired for the use of
Government, including not only expendable
and articles in use or accumulated for
specific purposes, but also articles of dead
stock of the nature of plant machinery,
instruments, furnitures, equipment, fixtures,
live-stock, etc…
Sudhakar V. Joshi
CONSTITUTION OF INDIA
Article 299 :
1) All contracts made in the exercise of the
executive power of the Union or of a State
shall be expressed to be made by the
President, or by the Governor of the State,
as the case may be, and all such contracts
and all assurance of property made in the
exercise of that power, shall be executed on
behalf of the President or the Governor by
such persons and in such manner as he may
Direct or authorise.
Sudhakar V. Joshi
The provisions are four fold :A) The contract must be executed by a person duly
authorised by the President or the Governor as the
case may be :
b) The contract must be executed by such person “ on
behalf of” the President or the Governor as the case
may be :
c) The contract must be “ expressed to be made by the
President or the Governor as the case may be, i.e. for
and on behalf of the President or the Governor”
d) The contract must be executed in such manner as the
President or the Governor may direct.
Sudhakar V. Joshi
 THESE FOUR RESTRICTIONS
ARE MANDATORYAND NONE
OF THE FOUR CONDITIONS
CAN BE WAIVED.
Sudhakar V. Joshi
Article 299 :
2) Neither the President nor the Governor
shall be personally liable in respect of any
contract or assurance made or executed for the
purpose of this Constitution, or for the purposes
of any enactment relating to the Government of
India heretofore in force, nor shall any person
making or executing any such contract or
assurance on behalf of any of them be personally
liable in respect thereof.
Sudhakar V. Joshi

THE PERSONAL IMMUNITY OF OFFICERS
OF
GOVERNMENT
CONTRACTS
IS
AVAILABLE ONLY IF THE CONTRACT DULY
COMPLIES WITH THE FORMALITIES LAID
DOWN IN CLAUSE (1) OF ARTICLE 299.
Sudhakar V. Joshi
CONSTITUTION OF INDIA
Article 77
Clause (1) : All executive action of the
Government of India shall be expressed to
be taken in the name of the President.
Clause (3) : The President shall make
rules for the more convenient transaction
of the business of the Government of
India ….
Sudhakar V. Joshi
CONSTITUTION OF INDIA
Article 166
Clause (3) :
The Governor shall make rules for
the more convenient transaction of
the business of the Government of
the State, ….
Sudhakar V. Joshi
FIANANCIAL PUBLICATION NO.V
MAHARASHTRA CONTINGENT
EXPENDITURE RULES 1965
RULE 94 TO 103
Prescribe maintenance of the Inventory of
Dead- Stock.
RULE 169 TO 186
Govern the Essential principles to be observed
in making Store Purchases.
Sudhakar V. Joshi

Procedure prescribed by • Statute
• Rules
• Administrative Orders
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Bombay Municipal Councils, Nagar Panchayats
and Industrial Townships Act, 1965
Section 93
Maharashtra Municipal Account Code, 1971
Rules 157 to 186 ….Works
Sudhakar V. Joshi
Hyderabad Municipal Corporations Act, 1955
Section 124, 124A, 125, 126, 127, 128, 129
129A
Municipal Corporation of Hyderabad Tender
Rules, 1970
Rules 3, 3A, 4 to 11 – Works
Rules 12 to 18 –Supplies of Material
Sudhakar V. Joshi
FUNDAMENTAL PRINCIPALES OF
PURCHASE PROCEDURE
CANON OF FINANCIAL PROPRIETY
Every public officer should exercise
the same vigilance in respect of
expenditure incurred from Government
Revenue, as a person of ordinary
prudence would exercise in spending his
own money.
Sudhakar V. Joshi
Procedure should attempt to ensure
purchase of stores :1.
2.
3.
4.
5.
6.
of Obvious Necessity
of Required Minimum Specifications
at the Most Competitive, Fair and
Reasonable Rates
within the Stipulated Time Frame
keeping in view the Government
Policy
with Absolute Transparency in the
process
Sudhakar V. Joshi

OBIVIOUS NECESSITY
Careful Indenting
Canon of financial propriety –
“No money should be drawn from
the treasury unless it is required for
Immediate Payment”
Sudhakar V. Joshi
Factors determining the quantity to be
purchased (Inventory Control)
A) Office work and/or activity shall never
suffer for want of store;
B) shall never be in Excess of requirement
which results in –
i) Locking of scarce resources
ii) Increase in the cost of Godowning
and Security
iii) Deterioration of the Quality.
Sudhakar V. Joshi
Required Minimum Specifications
Factors:i) COST
- Minimum
ii) UTILITY - Fulfill the Purpose
Drawing of Specifications:UNAMBIGUOUS:i) ISI make (BIS-Number)
ii) As drawn by Laboratories/ Technical
Institutions, Recognised by the Government
Sudhakar V. Joshi
AT THE MOST COMPETITIVE
FAIR AND REASONABLE
RATES
i) Wide Publicity
ii) Maximum participation of Tenderers
(minimum three)
iii) Ascertaining prevailing market prices
for retail/bulk quantities.
iv) Cost plus Formula
Sudhakar V. Joshi
 The lowest rate offered
may not necessary be the
Fair and Reasonable Rate.
Sudhakar V. Joshi
REASONABLENESS
OF RATE
In all events purchasing officer /
Technical Expert should certify
the reasonableness of Rate
Applied in the following format
Sudhakar V. Joshi
CERTIFICATE
For the specifications mentioned in the above
tender, I have Ascertained the present market
trend, evaluated the estimated cost,compared
previous rates in this transaction and I certify
that the Rate of Rs.
per
proposed for
acceptance is reasonable.
Date
Name and Designation
Sudhakar V. Joshi
WITHIN THE STIPULATED
TIME FRAME
The process involves cost and time
Types of Tender Enquiries
i) Single Tender
(Normally when the Value is less than Rs.500/-as a
Rule)
ii) Limited Tenders
a) When the Value is more than Rs.500/- but less
than Rs.50,000
b) Urgent Order Procedure
Sudhakar V. Joshi
iii)By Negotiations with one or
more
firms
(Proprietary
articles)
iv) By Repeat orders (Placing
Orders on the contractor on the
basis of previous contract.)
v) Open Tenders In all other
Cases.
Sudhakar V. Joshi
KEEPING IN VIEW
GOVERNMENT POLICY
Marketing support through
i) Purchase Preference.
ii) Price Preference.
To.
a) Government Departments e.g. jail
b) Government undertakings helping SSI,Village
artisans,
Ex-Servicemen
backward/under
privileged classes, women.
c) NGOs running institutions for the Rehabilitation /
welfare of physically handicapped, mentally
retarded, blind, ex victims of dreadful deceases etc.
Sudhakar V. Joshi
TRANSPARENCY
Maxim Of Justice
‘Justice must not merely be
done but it is seen to be done’
Entire process including Receipt,
Storage,opening of tenders should be
open to the participants.
Sudhakar V. Joshi
CONTRACTS
Rate Contract
Quantity Contract
Sudhakar V. Joshi
RATE CONTRACT
Rate contract is for the supply of
stores at specified rates during the period
covered by the Contract.
No quantity is mentioned in such a
contract and the contractor is bound to
execute any order which may be placed
upon him, during the currency of the
contract, by the Direct Demanding
Officers, at the rates specified therein.
Sudhakar V. Joshi
QUANTITY CONTRACT
Quantity Contract is a contract entered
into where the suppliers are called upon
to offer to supply definite number of
quantity [ 25% plus or minus] by a date
or dates as may be specified in the tender
notice.
Sudhakar V. Joshi
REPEAT ORDERS
Conditions

Original contract by open Tenders.

Within Six months of the original
contract.

Certificate that market trend is not
downward.

Quantity not more than 200% of
the original contract.
Sudhakar V. Joshi
URGENT ORDER PROCEDURE
( UOP)
 Sanction of the Secretary to the Government
in the concerned Administrative Department.
 Limited Tenders
registered and recommended Suppliers
 Short Period (10 days)
Sudhakar V. Joshi
TWO BID SYSTEM
(GOM-RESOLUTION 30/3/94)
TWO ENVELOPES
PREQUALIFICATION
i) Technical Bid
ii) Commercial Bid
(Price)
Sudhakar V. Joshi
Documents Constituting
Contract
1] Tender Notice
2] Tender Enquiry
3] Tender Form
4] Pre-Bid Conference Proceedings
5] Letter of Acceptance (A.L.)
6] Agreement
7] Acceptance of Tender (A.T.)
UNILATERAL CHANGES IN THE DOCUMENTS
LEGALLY NOT PERMISSIBLE.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
A )Invitation of tenders For and on behalf of the
President of India or the the Governor, as the
case may be.
B) Eligibility of tenderer
I ) In case of items of Purchase Preference
II ) In case of other items.
C)Last date, Duration of Time and Place of
availability of the Priced Tender Forms.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
D) Last date, Time and Place of submission of
Sealed Tenders in two Envelopes as per Two
Bid System, in Duplicate.
E) Amount and Mode of payment of the Earnest
Money Deposit.
F) List of Essential Documents to accompany the
Technical Bid.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
G) Date, Time and Place fixed for opening of
the Technical Bids.
H) Validity period of the tender.
I) Duration of the Rate Contract
with Extension Clause,
OR
Period
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
J) Approximate Quantity (plus-minus 25%) for
which the Quantity Contract is to be executed.
K)Description of goods with details of
Specifications, such as, I.S Mark No., if any,
General Description, materials, Manufacture
(Origin, Indigenous or Foreign) Dimensions,
Workmanship
and
Finish,
Tests,
Marking,preservation, Packing and Delivery
installation,Successful Demonstration etc.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
L) Inspection of Goods/Samples i.e. before
opening the envelope containing Commercial
(Price ) Bid, ii. Predespatch, iii.pre-delivery,iv.
Post-delivery etc. etc.
M)Indication of rates in Metric System of
weights and Measures.
N)Mode of delivery i.e. F.D./F.O.R. Destination
/F.O.B. etc etc.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
O) Terms of payment of Bills of the Contractors.
P) Date/Period of completion of delivery.
Q) All-inclusive Price to be quoted
R) Post tender Revision of Rates not to be
generally entertained.
S) Amount and mode of Security Deposit.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
T) Inclusion of warrantee clause and service
after warrantee period etc.
U) Application of FALL CLAUSE
V) Inclusion of RISK PURCHASE CLAUSE.
W) Penalty on Contractor’s failure to comply
with the terms and conditions of the
Contract.
X) Right of purchase officer to reject all or any
tender without assigning reasons therefore.
Sudhakar V. Joshi
INVITATION TO TENDER
Essential Ingredients
Y) Refund of EMD and Security Deposit.
Z ) Any other Condition as may be fixed.
Sudhakar V. Joshi
PRE-BID CONFERENCE
 Proceedings discussing queries
and clarifications form part of the
tender document and also the
contract.
Sudhakar V. Joshi
Post Tender Revision of Rates not to be
generally entertained.
Normally no communication revising the
rates after receipt/opening of tenders shall
be considered.
Three types of Revision of Rates:
i) A tenderer gains at the expense of the Government
ii) A tenderer may secure the order at the expense
of some other tenderer
iii) The Government may gain and no one suffers
Sudhakar V. Joshi
Post Tender Revision of Rates
not to be generally entertained.
While the first two types of Revision
(i) and (ii) shall not to be accepted, the
third type of Revision shall invariably
be accepted.
Sudhakar V. Joshi
FALL CLAUSE
The prices charged for the stores supplied under the
contract by the contractor shall in no event exceed the
lowest price at which the Contractor sells the stores
of identical description to any persons/Organisations
including the Purchaser of any Department of the
Central Government or of a State Government or any
statutory undertaking as the case may be during the
currency under the quantity contract is completed or
during the currency of the Rate contract.
Sudhakar V. Joshi
FAILURE OF CONTRACTORS
i) After issue of Letter of Acceptance
Consequences :a) Forfeiture of the earnest Money deposit.
b) Awarding of fresh contract.
Sudhakar V. Joshi
ii) After agreement executed and A/T issued
Consequences –
a) Forfeiture of Security deposit and termination of
Contract /Black listing the Contractor after
following procedure.
b) Risk Purchase :
De novo tender procedure.
Sudhakar V. Joshi
PRINCIPELS OF NATURAL JUSTICE
TO BE OBSERVED
Black listing has the effect of preventing a
person from the privilege and advantage of
entering in to Lawful relationship with the
Government for purposes of gains…
fundamentals of fair play require that the
person concerned should be given an
opportunity to represent his case before he is
put on the black list.
( AIR 1975SC266)
Sudhakar V. Joshi
“ Thank You ”
Sudhakar V. Joshi