GENERAL PRINCIPLES OF
PROCUREMENT
PROF. SANJEEV CHADDHA
HEAD MDC, MGSIPA
GOVT OF PUNJAB
OBJECTIVES
• Understand General Principles of Procurement
• Caselet discussions
INTRODUCTION
• Trustee- Public Funds
• Prudence, diligence – required for funds use
• Accountability
• Transparency
• Proprietary
Caselet 1
• Box seats.
• You are invited by a private sector company to join other
departmental personnel in a corporate "box" at a local IPL Match for
the game between Mumbai Indians and Chennai SuperKings playoffs.
You reflect that the cost of these boxes may average to about Rs
75000 or more per person in the regular season, but often exceed Rs
1,50,000 in the playoffs. This company has earlier applied for a tender
for installation of IT equipment’s in all the offices of Govt. of Punjab.
What should you do?
Caselet 2
• Missing supplies.
• You are the Store Officer for a Govt Deptt. On the day that a supply
arrives, you are asked to sign for a quantity of 100 of a particular
item, when only 70 are in the box. Thirty have been skimmed off. No
signature, no delivery. You need the item badly. What should you do?
Caselet 3
• Employment offers.
• You are in a position to recommend and approve giving a contract to
a firm that has made overtures to hire you. What should you do?
Caselet 4
• Request for lenient inspection.
• You are inspecting the books of a Department and come across
documents that clearly indicate violations of rules. At noon you break
for lunch and go to a restaurant. The HOD joins you there and asks
you to be lenient and subtly suggests that you would be suitably
taken care of. At the end of the meal, the HOD pays for your lunch.
What should you do?
Caselet 5
• You require the services of a luxury bus to ferry your staff to New
Delhi to attend an official meeting. You discuss with a bus operator
and he quotes a price and hands over a quotation but you tell him
that three more quotations are required. He comes back with three
more quotations with his firm demanding the lowest amount. What
should you do?
Caselet 6
• You require 100 Air conditioners for upgrading your office premises.
In the bids received the lowest quote is from a local manufacturer
and reputed manufactures like Voltas, O General and even SAMSUNG
and LG have quoted much higher. What should you do?
Caselet 7
• Statement of qualifications.
• You have to prepare a statement of qualifications for a competitive
bidding process and are under pressure from the HOD to write it
narrowly so as to favour a particular candidate or to screen out as
many candidates as possible in order to speed up the process. What
should you do?
Caselet 8
• Insufficient budget.
• You are on the review board for a major equipment acquisition
project. The project manager is suggesting that the project budget is
insufficient to get all the requested equipment, unless auxiliary
components are removed from the main project package. You know
that once the purchase is decided, the department will have no
choice but to find additional funding for the auxiliary components.
What should you do?
Caselet 9
• The HOD in a meeting with the Procurement Officer has advised to
initiate a process for purchase of 100 computers, related software
and other hardware for the department. The estimated cost is Rs 2
crores. The procurement Officer knows that 100 computers are not
required for 47 employees working in the organization. What should
he do.
Caselet 10
• Over estimation.
• An Officer has prepared a financial estimate that you feel contains
gross errors and is in some respects dishonest. In spite of your efforts
to correct the mistakes, he continues to push through the estimate.
The easy approach is to keep quiet and call the bids based on the
estimate; the difficult one is to challenge the accuracy of the
document. What should you do?
Caselet 11
• The Deptt has issued a tender for purchase of office stationary and
stores. One of the bid received is from your brother in law. What
should you do?
Caselet 12
• One fine evening you receive a courier and you find a jewelry box
with some ornaments in it estimated around Rs 2 lakhs. Later you get
a call on your landline that tomorrow the tender for construction of
Secretariat building will be opened and you are requested to take care
of M/s XYZ Constructions. What should you do?
Caselet 13
• You know that a breach has taken place in the procurement and one
of the vendors has manipulated the process. What should you do?
Caselet 14
• While granting liquor contract, it was noticed that there are just three
bidders and the majority of the eminent bidders in the line did not
appear in the process. The bid amount quoted by the successful
vendor was slightly higher than the reserved price. Later it came to be
known that these eminent bidders were threatened not to participate
in the bids and were physically obstructed and assaulted while they
were on the way to the bidding place. What should you do?
FUNDAMENTAL PRINCIPLES
• Ensure efficiency, economy, transparency
• Fair & Equitable Treatment to all bidders
• Promote Competition
• Processes & systems- ensure corruption free
DOCUMENTARY PROOFS
• Relating to
• Need for procurement
• Description of product/ service being procured
• Any method for purchase – other than Open bidding- reasons
• Details-participating bidders
• Bid price/ other financial terms
• Summary – evaluation of bids
• Appeal if any
Code of Integrity of Officials
• Prohibiting
• Conflict of interest
Prohibiting
• Bribe – cash/ kind/ any which way
• Any Omission – to get favours from bidders
• Collusion/bid rigging- to reduce competition
• Use/ abuse/ misinformation sharing- to gain advantage
• Any financial transaction with bidder
• Coercion/ threat to any party- to influence procurement
• Obstruction – to audit, investigation
Conflict of interest
• Timely disclosure
Breach – Steps to be taken
• Exclusion
• Call off process
• Forfeit bid security
• Recovery of payments made- with interest
• Cancellation of contract
• Blacklist – erring party
THANK YOU